##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934  Commission File
    No. 1-12173
      Navigant Consulting,
    Inc.
 (Exact name of Registrant as
    specified in its charter)
      Delaware

36-4094854(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   30 South Wacker Drive, Suite 3550, Chicago, Illinois
    60606
 (Address of principal executive
    offices, including zip code)
  (312) 573-5600
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share

New York Stock ExchangePreferred Stock Purchase Rights

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act: None
      þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
  Form 10-K.




---



##### 





NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  FORM 10-K
  FOR THE
    FISCAL YEAR ENDED DECEMBER 31, 2007
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


7Item 1B.


Unresolved Staff Comments


12Item 2.


Properties


12Item 3.


Legal Proceedings


12Item 4.


Submission of Matters to a Vote of Security
    Holders


12Executive Officers of the Registrant


13PART IIItem 5.


Market for Registrants Common Stock,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


14Item 6.


Selected Financial Data


17Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


18Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


32Item 8.


Financial Statements and Supplementary Data


32Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


32Item 9A.


Controls and Procedures


33Item 9B.


Other Information


33PART IIIItem 10.


Directors, Executive Officers, and Corporate
    Governance


35Item 11.


Executive Compensation


35Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


35Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


35Item 14.


Principal Accountant Fees and Services


35PART IVItem 15.


Exhibits and Financial Statement Schedules


35Report of Independent Registered Public Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Income


F-4Consolidated Statements of Stockholders Equity


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7Significant SubsidiariesConsent of Independent Registered Public Accounting FirmCertification of Chairman and Chief Executive OfficerCertification of Executive Vice President and Chief Financial OfficerSection 1350 Certifications   2




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##### Table of Contents



PART I  Form 10-K, Form 10-K
  Item 1.
    Business.    (312) 573-5600.
  (a)
    General
    Development of Business    (b)
    Financial
    Information about Business Segments     3




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##### Table of Contents



For the year ended December 31,2007


2006


2005North American Dispute and Investigative Services


42.3
%


43.4
%


47.7
%North American Business Consulting Services


49.4
%


52.3
%


52.0
%International Consulting Operations


8.3
%


4.3
%


0.3
%     For the year ended December 31,2007


2006


2005North American Dispute and Investigative Services


46.4
%


48.4
%


54.6
%North American Business Consulting Services


45.4
%


46.4
%


44.8
%International Consulting Operations


8.2
%


5.2
%


0.6
%     For the year ended December 31,2007


2006


2005North American Dispute and Investigative Services


42.4
%


47.2
%


47.9
%North American Business Consulting Services


37.8
%


40.2
%


37.5
%International Consulting Operations


40.3
%


56.2
%


67.2
%Total segment operating profit


40.0
%


44.0
%


42.7
%     December 31,2007


2006North American Dispute and Investigative Services

$
325,426


$
293,905North American Business Consulting Services


246,656



203,745International Consulting Operations


106,058



68,532Unallocated assets


100,557



86,176Total assets

$
778,697


$
652,358    4




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##### Table of Contents



(c)
    Narrative
    Description of Business  Overview
  on-site
  on-site
      Service
    Offerings
    Industry
    Sectors
    Human
    Capital
   5




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##### Table of Contents



and/or
          Competition
    (d)
    Other
    Matters  Concentration
    of Revenues
    Non
    U.S. Operations
   6




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##### Table of Contents



New
    York Stock Exchange Disclosures
    Form 10-K
  Available
    Information
  Form 8-K
  Item 1A.
    Risk
    Factors.  Form 10-K
  Our
    inability to retain and, as necessary, strengthen our executive
    management team would be detrimental to the success of our
    business.
    Our
    inability to retain highly skilled consulting professionals
    could have a material adverse effect on our
    success.
    Our
    profitability will suffer if we are not able to maintain current
    pricing and utilization rates.
   7




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##### Table of Contents




    Our ability to predict future demand for services and maintain
    the appropriate headcount without significant underutilized
    personnel;
    Our ability to transition employees from completed projects to
    new engagements;
    Our clients perceptions of our ability to add value
    through our services;
    Our competitors pricing of services;
    The market demand for our services;
    Our ability to manage our human capital resources; and
    Our ability to manage significantly larger and more diverse
    workforces as we increase the number of our professionals and
    execute our growth strategies.  Our
    use of equity-based compensation could impact our ability to
    attract, retain and motivate key employees.
    We
    face significant challenges in achieving and managing growth.
    Failure to meet these challenges could have a material adverse
    effect on our future profitability.
    We may
    be exposed to potential risks if we are unable to achieve and
    maintain effective internal controls.
    Regulatory
    and legislative changes affecting us, our clients, competitors,
    or staff could have an impact on our business.
    Our
    client engagements are generally short term in nature, less than
    one year, and may be terminated. Our inability to attract
    business from new or existing clients could have a material
    adverse effect on us.
   8




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##### Table of Contents



Our
    client engagements and revenues are frequently event-driven and
    therefore difficult to forecast.
    We
    have invested in specialized systems, processes and intellectual
    capital for which we may fail to recover our investment or which
    may become obsolete.
    Unsuccessful
    client engagements could result in damage to our professional
    reputation or legal liability which could have a material
    adverse effect on us.
      Some
    of the work that we do involves greater risk than ordinary
    consulting engagements.
    
    Interim management engagements, usually in hospitals and other
    healthcare providers;
    Expert witness engagements;
    Corporate restructuring engagements, both inside and outside
    bankruptcy proceedings;
    Engagements where we deliver a fairness opinion;
    Engagements where we deliver a compliance effectiveness opinion; 9




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##### Table of Contents




    Engagements where we deliver an actuarial opinion with respect
    to insurance company loss reserves; and
    Engagements involving independent consultants reports in
    support of bond financings.  As we
    become larger, we increasingly encounter professional conflicts
    of interest.
    Our
    international operations create special risks.
    
    Cultural and language differences;
    Employment laws and related factors that could result in lower
    utilization and cyclical fluctuations of utilization and
    revenues;
    Currency fluctuations that adversely affect our financial
    position and operating results;
    Burdensome regulatory requirements and other barriers to
    conducting business;
    Greater difficulties in managing and staffing foreign operations;
    Restrictions on the repatriation of earnings; and
    Potentially adverse tax consequences, such as trapped foreign
    losses.    We
    cannot be assured that we will be able to raise capital or
    obtain debt financing to consummate future acquisitions or to
    meet required working capital needs.
      We may
    not be able to acquire businesses in the future and already
    acquired businesses may not achieve expected
    results.
   10




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##### Table of Contents



We may
    not be able to effectively integrate the businesses we acquire,
    which may adversely affect us.
    Our
    work with governmental clients has inherent risks related to the
    governmental contracting process.
    
    Government entities reserve the right to audit our contract
    costs, including allocated indirect costs, and conduct inquiries
    and investigations of our business practices with respect to
    government contracts. If the government finds that the costs are
    not reimbursable, then we will not be allowed to bill for them,
    or the cost must be refunded to the government if it has already
    been paid to us. Findings from an audit also may result in our
    being required to prospectively adjust previously agreed rates
    for work and affect future margins.
    If a government client discovers improper or illegal activities
    in the course of audits or investigations, we may become subject
    to various civil and criminal penalties and administrative
    sanctions, which may include termination of contracts,
    forfeiture of profits, suspension of payments, fines and
    suspensions or debarment from doing business with other agencies
    of that government. The inherent limitations of internal
    controls may not prevent or detect all improper or illegal
    activities, regardless of the adequacy of such controls.
    Government contracts, and the proceedings surrounding them, are
    often subject to more extensive scrutiny and publicity than
    other commercial contracts. Negative publicity related to our
    government contracts, regardless of whether it is accurate, may
    further damage our business by affecting our ability to compete
    for new contracts.    Compliance
    with the Foreign Corrupt Practices Act could adversely affect
    our competitive position; failure to comply could subject us to
    penalties and other adverse consequences.
   11




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##### Table of Contents



We are
    subject to unpredictable risks of litigation.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.    United States:

Outside of the United States:Atlanta, Georgia

Asia  Hong KongChicago, Illinois

Canada  TorontoLos Angeles, California

United Kingdom  LondonNew York, New YorkSan Francisco, CaliforniaWashington D.C.   Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   12




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##### Table of Contents



Executive
    Officers of the Registrant    Name

Office

AgeWilliam M. Goodyear

Chairman of the Board and Chief Executive Officer


59Julie M. Howard

President and Chief Operating Officer


45Scott J. Krenz

Executive Vice President and Chief Financial Officer


55Richard X. Fischer

Vice President, General Counsel and Secretary


46   William M. Goodyear 28-year
  Julie M. Howard
  Scott J. Krenz
  Richard X. Fischer
 13




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Stock, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information
    High


Low2007Fourth quarter

$
15.01


$
12.12Third quarter

$
19.47


$
12.66Second quarter

$
20.93


$
18.38First quarter

$
21.60


$
18.402006Fourth quarter

$
20.56


$
17.45Third quarter

$
23.28


$
18.05Second quarter

$
22.65


$
18.58First quarter

$
23.01


$
18.06   Holders
    Distributions
   14




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##### Table of Contents



Shareholder
    Return Performance Graph
      Comparison
    of 5 Year Cumulative Total Return
    Assumes Initial investment of $100
    December 2007
  
  NavigantNYSE


Peer


Consulting,Measurement Period


Index


Group (a)


Inc.FYE 12/31/02


$
100.00



$
100.00



$
100.00FYE 12/31/03



129.03




103.18




319.72FYE 12/31/04



145.02




123.53




450.89FYE 12/31/05



154.26




125.65




372.57FYE 12/31/06



178.85




140.28




334.93FYE 12/31/07



189.92




151.40




231.67       (a)
    
    The Peer Group consists of the following companies: ChoicePoint,
    Inc., CRA International Inc. (formerly known as Charles River
    Associates, Inc.), Gartner Group, Inc., FTI Consulting, Inc.,
    Huron Consulting Group Inc., LECG Corporation and Resources
    Connection, Inc. The Peer Group is weighted by market
    capitalization. 15




---



##### Table of Contents



Issuance
    of Unregistered Securities
    Number ofType of

Shares in


Exemption



AssetsDate

Securities

Consideration(a)


Claimed(b)

Purchaser or Recipient

PurchasedJanuary 5, 2007

Common Stock


49,911


Section 4(2)

Abros Enterprise Limited

(d)January 31, 2007

Common Stock


20,126


Section 4(2)

Haddon Jackson Associates

(d)January 31, 2007

Common Stock


38,553


Section 4(2)

LeClerc Juricomptables, Inc

(d)January 31, 2007

Common Stock


5,031


Section 4(2)

Devito Consulting, Inc

(c)February 8, 2007

Common Stock


143,379


Section 4(2)

Casas, Benjamin & White, LLC

(c)February 21, 2007

Common Stock


14,866


Section 4(2)

Tedd Avey & Associates Ltd.

(e)April 15, 2007

Common Stock


18,019


Section 4(2)

Tiber Group, LLP

(c)June 19, 2007

Common Stock


100,000


Section 4(2)

AMDC Corporation

(f)July 2, 2007

Common Stock


12,459


Section 4(2)

Architech Corporation

(c)July 16, 2007

Common Stock


52,174


Section 4(2)

Bluepress Limited

(d)August 1, 2007

Common Stock


93,365


Section 4(2)

A.W. Hutchinson & Assoc. LLC

(c)August 1, 2007

Common Stock


37,860


Section 4(2)

LAC, Limited

(e)September 14, 2007

Common Stock


239,880


Section 4(2)

Troika (UK) Limited

(d)November 30, 2007

Common Stock


4,118


Section 4(2)

SoundBuild, Inc.

(e)     (a)
    
    Does not take into account additional cash or other
    consideration paid or payable as a part of the transactions.(b)
    
    The shares of common stock were issued without registration in
    private placements in reliance on the exemption from
    registration under Section 4(2) of the Securities Act.(c)
    
    Shares represent deferred payment consideration of the purchase
    agreement to purchase substantially all of the assets of the
    recipient.(d)
    
    We purchased all of the outstanding equity interests of this
    entity and, as such, these shares were issued to the owner(s) of
    the entity.(e)
    
    Shares represent deferred payment consideration of the purchase
    agreement to purchase substantially all of the equity interests
    of the entity and, as such, these shares were issued to the
    owner(s) of the entity.(f)
    
    Shares represent closing date payment consideration of the
    purchase agreement to purchase substantially all of the assets
    of the recipient.  Purchase
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   16




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    For the Years Ended December 31,2007


2006


2005


2004


2003Revenues before reimbursements

$
681,238


$
605,105


$
508,874


$
426,867


$
276,130Reimbursements


85,820



76,640



66,618



55,252



41,652Total revenues


767,058



681,745



575,492



482,119



317,782Cost of services before reimbursable expenses


421,032



349,103



299,180



255,674



167,768Reimbursable expenses


85,820



76,640



66,618



55,252



41,652Total cost of services


506,852



425,743



365,798



310,926



209,420General and administrative expenses


141,430



127,579



100,452



87,542



66,711Depreciation expense


16,179



13,400



10,213



8,312



7,488Amortization expense


17,494



9,959



8,538



3,562



1,880Other operating costs:Separation and severance costs


7,288











1,091



Office consolidation


6,750















Gain on sale of property


(2,201
)














Litigation charge






7,400



1,250



385



440Operating income


73,266



97,664



89,241



70,301



31,843Interest expense


15,438



4,915



3,976



2,481



482Interest income


(667
)


(402
)


(290
)


(330
)


(246
)Other income, net


(43
)


(209
)


(403
)


(287
)


(500
)Income before income taxes


58,538



93,360



85,958



68,437



32,107Income tax expense


25,142



40,386



36,102



28,062



13,399Net income

$
33,396


$
52,974


$
49,856


$
40,375


$
18,708Basic income per share

$
0.67


$
1.00


$
1.00


$
0.86


$
0.43Shares used in computing income per basic share


49,511



52,990



50,011



47,187



43,236Diluted income per share

$
0.66


$
0.97


$
0.95


$
0.80


$
0.40Shares used in computing income per diluted share


50,757



54,703



52,390



50,247



47,029   As of December 31,2007


2006


2005


2004


2003Balance Sheet Data:Cash and cash equivalents

$
11,656


$
11,745


$
14,871


$
36,897


$
38,402Working capital

$
102,040


$
70,503


$
41,640


$
48,473


$
51,866Total assets

$
778,697


$
652,358


$
542,863


$
418,807


$
255,316Non-current liabilities

$
309,425


$
36,040


$
20,148


$
12,248


$
1,761Total stockholders equity

$
342,753


$
486,576


$
384,448


$
288,674


$
188,758  17




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Form 10-K.
  Overview
          Critical
    Accounting Policies
    Revenue
    Recognition
   18




---



##### Table of Contents



Accounts
    Receivable Realization
    Goodwill
    and Intangible Assets
        Share-Based
    Payments
    Income
    Taxes
     19




---



##### Table of Contents



Other
    Operating Costs
    Recent
    Accounting Pronouncements
        Acquisitions
  2007
    Acquisitions
   20




---



##### Table of Contents



2006
    Acquisitions
   21




---



##### Table of Contents



2005
    Acquisitions
         22




---



##### Table of Contents



Accounting
    for Acquisitions
    Results
    of Operations
  Annual
    Comparisons for the Years ended December 31, 2007, 2006 and
    2005
   23




---



##### Table of Contents



2007 over


2006 over2006


2005Percent


Percent2007


2006


2005


Increase


IncreaseRevenues before reimbursementsNorth American Dispute and Investigative Services

$
298,699


$
273,090


$
247,689



9.4
%


10.3
%North American Business Consulting Services


327,511



307,580



259,238



6.5
%


18.6
%International Consulting Operations


55,028



24,435



1,947



125.2
%


1150.0
%Total Revenues before reimbursements

$
681,238


$
605,105


$
508,874



12.6
%


18.9
%Total RevenuesNorth American Dispute and Investigative Services

$
324,734


$
296,066


$
274,367



9.7
%


7.9
%North American Business Consulting Services


379,152



356,452



298,994



6.4
%


19.2
%International Consulting Operations


63,172



29,227



2,131



116.1
%


1271.5
%Total Revenues

$
767,058


$
681,745


$
575,492



12.5
%


18.5
%Average FTE consultantsNorth American Dispute and Investigative Services


790



774



690



2.1
%


12.2
%North American Business Consulting Services


1,018



945



916



7.7
%


3.2
%International Consulting Operations


154



40



2



285.0
%


1900.0
%Total Company


1,962



1,759



1,608



11.5
%


9.4
%Average Utilization rates based on 1,850 hoursNorth American Dispute and Investigative Services


77
%


77
%


78
%


0.0
%


(1.3
)%North American Business Consulting Services


78
%


79
%


79
%


(1.3
)%


0.0
%International Consulting Operations


75
%


97
%


103
%


(22.7
)%


(5.8
)%Total Company


77
%


78
%


78
%


(1.3
)%


0.0
%Bill Rate(1)North American Dispute and Investigative

$
277


$
255


$
237



8.6
%


7.6
%North American Business Consulting

$
200


$
201


$
190



(0.5
)%


5.8
%International Consulting Operations

$
267


$
240


$
254



11.3
%


(5.5
)%Total Company

$
236


$
226


$
210



4.4
%


7.6
%     (1)
    
    Excludes the impact of contingency based fees  Total Revenues before Reimbursements.
 24




---



##### Table of Contents



North American Dispute and Investigative
    Services.
  North American Business Consulting
    Services.
  International Consulting Operations.
  Cost of Services before Reimbursable
    Expenses.
     25




---



##### Table of Contents



General and Administrative Expenses.
      Other Operating Costs.
          Amortization Expense.
   26




---



##### Table of Contents



Interest Expense.
      Income Tax Expense.
 27




---



##### Table of Contents



Unaudited
    Quarterly Results
  Form 10-K.
    Quarters Ended(1)Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,2007


2007


2007


2007


2006


2006


2006


2006Revenues:Revenues before reimbursements

$
179,693


$
167,057


$
169,650


$
164,838


$
157,915


$
150,380


$
147,691


$
149,119Reimbursements


23,595



23,790



19,983



18,452



21,305



20,906



17,298



17,131Total revenues


203,288



190,847



189,633



183,290



179,220



171,286



164,989



166,250Cost of services:Cost of services before reimbursable expenses


109,544



104,405



105,849



101,234



91,648



85,259



84,668



87,528Reimbursable expenses


23,595



23,790



19,983



18,452



21,305



20,906



17,298



17,131Total costs of services


133,139



128,195



125,832



119,686



112,953



106,165



101,966



104,659General and administrative expenses


37,203



35,680



34,144



34,403



32,196



32,445



32,018



30,920Depreciation expense


4,274



4,189



3,995



3,721



3,520



3,709



3,221



2,950Amortization expense


4,696



5,378



3,784



3,636



2,663



2,401



2,616



2,279Other operating costs:Separation and severance costs


2,663



3,348







1,277















Office consolidation


4,600



2,150























Gain on sale of property






(2,201
)






















Litigation charge (credit)


















(1,934
)


9,334







Operating income


16,713



14,108



21,878



20,567



29,822



17,232



25,168



25,442Interest expense


5,977



6,021



2,469



971



880



1,316



1,622



1,097Interest income


(236
)


(158
)


(144
)


(129
)


(36
)


(51
)


(75
)


(240
)Other expense, net


7



58



(117
)


9



30



(19
)


(21
)


(199
)Income before income tax expense


10,965



8,187



19,670



19,716



28,948



15,986



23,642



24,784Income tax expense


4,989



3,454



8,320



8,379



12,303



7,425



9,680



10,978Net income

$
5,976


$
4,733


$
11,350


$
11,337


$
16,645


$
8,561


$
13,962


$
13,806Net income per diluted share

$
0.13


$
0.10


$
0.21


$
0.20


$
0.30


$
0.16


$
0.26


$
0.26Diluted shares


46,533



46,462



54,126



55,907



55,529



55,090



54,664



53,527     (1)
    
    The sum of quarterly net income per diluted share does not equal
    annual amounts in 2006 and 2007 because of rounding and changes
    in the weighted average number of shares.   28




---



##### Table of Contents



Human
    Capital Resources
      2007


2006


2005Number of FTE consultants as of December 31,


1,944



1,871



1,705Average number of FTE consultants for the year


1,962



1,759



1,608Average utilization of consultants, based on industry standard
    of 1,850 hours


77
%


78
%


78
%Number of administrative and management personnel as of
    December 31,


525



502



454           Liquidity
    and Capital Resources
     29




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##### Table of Contents



Operating
    Activities
    Investing
    Activities
    Financing
    Activities
    Debt,
    Commitments and Capital
     30




---



##### Table of Contents



Contractual Obligations

Total


2008


2009 to 2010


2011 to 2012


ThereafterDeferred purchase price obligations

$
8,434


$
7,684


$
750


$



$
Notes payable


11,696



6,348



5,348







Line of credit


32,741











32,741



Term Loan


223,875



2,250



14,625



207,000



Lease commitments


114,300



23,690



38,411



27,080



25,119$
391,046


$
39,972


$
59,134


$
266,821


$
25,119        31




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##### Table of Contents



Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.              Item 8.
    Financial
    Statements and Supplementary Data.  page F-1.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.   32




---



##### Table of Contents



Item 9A.
    Controls
    and Procedures.  (1)
    Evaluation
    of Disclosure Controls and Procedures  Rule 13a-15(e) 15d-15(e))
    (2)
    Managements
    Report on Internal Control over Financial Reporting  Rule 13a-15(f) 15d-15(f)
  Internal Control  Integrated
    Framework
  (3)
    Changes
    in Internal Control over Financial Reporting    Item 9B.
    Other
    Information.   33




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated Framework
        Internal Control  Integrated
    Framework
    KPMG
    LLP
    34




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.      Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.   35




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##### Table of Contents



Exhibits:
  ExhibitNo.

Description2
.1

Asset Purchase Agreement dated as of February 8, 2005 among
    Navigant Consulting, Inc., Casas, Benjamin & White,
    LLC and certain other parties thereto (Incorporated by reference
    from our Current Report on
    Form 8-K
    dated February 14, 2005.)3
.1

Amended and Restated Certificate of Incorporation of Navigant
    Consulting, Inc. (Incorporated by reference from our
    Registration Statement on
    Form S-1
    (Registration
    No. 333-9019)
    filed with the SEC on July 26, 1996.)3
.2

Amendment No. 1 to Amended and Restated Certificate of
    Incorporation of Navigant Consulting, Inc. (Incorporated by
    reference from our Registration Statement on
    Form S-3
    (Registration
    No. 333-40489)
    filed with the SEC on November 18, 1997.)3
.3

Amendment No. 2 to Amended and Restated Certificate of
    Incorporation of Navigant Consulting, Inc. (Incorporated by
    reference from our
    Form 8-A12B
    filed with the SEC on July 20, 1999.)3
.4

Amendment No. 3 to Amended and Restated Certificate of
    Incorporation of Navigant Consulting, Inc. (Incorporated by
    reference from our Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2005.)3
.5

Amended and Restated By laws of the Company as of July 25,
    2007 (Incorporated by reference from our Current Report on
    Form 8-K
    dated July 25, 2007.)4
.1

Rights Agreement dated as of December 15, 1999 between
    Navigant Consulting, Inc. and American Stock
    Transfer & Trust Company, as Rights Agent, (which
    includes the form of Certificate of Designations setting forth
    the terms of the Series A Junior Participating Preferred
    Stock as Exhibit A, the form of Rights Certificate as
    Exhibit B and the Summary of Rights to Purchase Preferred
    Stock as Exhibit C) (Incorporated by reference from our
    Current Report on
    Form 8-K
    dated December 17, 1999.)4
.2

Substitution of Successor Rights Agent and Amendment No. 1
    to Rights Agreement dated as of June 1, 2005 between
    Navigant Consulting, Inc. and LaSalle Bank, as Successor Rights
    Agent (Incorporated by reference from our Annual Report on
    Form 10-K
    for the year ended December 31, 2005.)10
.1

Long-Term Incentive Plan of Navigant Consulting, Inc.
    (Incorporated by reference from our Annual Report on
    Form 10-K
    for the year ended December 31, 2000.)10
.2

2005 Long-Term Incentive Plan of Navigant Consulting, Inc., as
    amended (Incorporated by reference from our Definitive Notice
    and Proxy Statement dated March 28, 2007.)10
.3

2001 Supplemental Equity Incentive Plan of Navigant Consulting,
    Inc. (Incorporated by reference from our Registration Statement
    on
    Form S-8
    (Registration
    No. 333-81680)
    filed with the SEC on January 30, 2002.)10
.4

First Amendment of the Navigant Consulting, Inc. 2001
    Supplemental Equity Incentive Plan Third, effective as of
    April 16, 2007 (Incorporated by reference from our Current
    Report on
    Form 8-K
    dated April 17, 2007.)10
.5

Employee Stock Purchase Plan of Navigant Consulting, Inc.
    (Incorporated by reference from our Registration Statement on
    Form S-8
    (Registration
    No. 333-53506)
    filed with the SEC on January 10, 2001.)10
.6

Amendment No. 1 Employee Stock Purchase Plan of Navigant
    Consulting, Inc. (Incorporated by reference from our Annual
    Report on
    Form 10-K
    for the year ended December 31, 1998.)10
.7

Amendment No. 2 Employee Stock Purchase Plan of Navigant
    Consulting, Inc. (Incorporated by reference from our Annual
    Report on
    Form 10-K
    for the year ended December 31, 1998.)10
.8

Amendment No. 3 Employee Stock Purchase Plan of Navigant
    Consulting, Inc. (Incorporated by reference from our Annual
    Report on
    Form 10-K
    for the year ended December 31, 1999.)10
.9

Amendment No. 4 Employee Stock Purchase Plan of Navigant
    Consulting, Inc. (Incorporated by reference from our Annual
    Report on
    Form 10-K
    for the year ended December 31, 1999.)10
.10

Amendment No. 5 Employee Stock Purchase Plan of Navigant
    Consulting, Inc. (Incorporated by reference from our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2000.) 36




---



##### Table of Contents



ExhibitNo.

Description10
.11

Navigant Consulting, Inc. Employee Stock Purchase Plan,
    effective January 1, 2007 (Incorporated by reference from
    our Definitive Notice and Proxy Statement dated March 27,
    2006.)10
.12

Form of Restricted Stock Award Agreement (Incorporated by
    reference from our Current Report on
    Form 8-K
    dated March 9, 2007.)10
.13

Form Non-Qualified
    Stock Option Award (Incorporated by reference from our Current
    Report on
    Form 8-K
    dated March 9, 2007.)10
.14

Navigant Consulting, Inc. Directors Deferred Fees Plan
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated March 9, 2007.)10
.15

Employment Agreement dated January 1, 2003 between Navigant
    Consulting, Inc. and William M. Goodyear (Incorporated by
    reference from our Annual Report on
    Form 10-K
    for the year ended December 31, 2002.)10
.16

Employment Agreement dated May 19, 2000 between Navigant
    Consulting, Inc. and Ben W. Perks (Incorporated by reference
    from our Annual Report on
    Form 10-K
    for the year ended December 31, 2000.)10
.17

Employment Agreement dated November 3, 2003 between
    Navigant Consulting, Inc. and Julie M. Howard (Incorporated by
    reference from our Annual Report on
    Form 10-K
    for the year ended December 31, 2003.)10
.18

Employment Agreement dated May 3, 2006 between Navigant
    Consulting, Inc. and David E. Wartner (Incorporated by reference
    from our Current Report on
    Form 8-K
    dated May 8, 2006.)10
.19

Employment Agreement dated July 24, 2006 between Navigant
    Consulting, Inc. and Richard X. Fischer (Incorporated by
    reference from our Current Report on
    Form 8-K
    dated July 20, 2006.)10
.20

Employment Agreement dated as of July 25, 2007 between the
    Company and Scott J. Krenz (Incorporated by reference from our
    Current Report on
    Form 8-K
    dated August 6, 2007.)10
.21

Amendment dated December 23, 2003 between Navigant
    Consulting, Inc. and Ben W. Perks (Incorporated by reference
    from our Annual Report on
    Form 10-K
    for the year ended December 31, 2003.)10
.22

Fourth Amended and Restated Credit Agreement among Navigant
    Consulting, Inc., the foreign borrowers identified therein,
    certain subsidiaries of Navigant Consulting, Inc. identified
    therein, Bank of America, N.A., as Administrative Agent, Swing
    Line Lender and L/C Issuer, LaSalle Bank National Association,
    as Syndication Agent and the other lenders party thereto
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated May 31, 2007.)21
.1*

Significant Subsidiaries of Navigant Consulting, Inc.23
.1*

Consent of Independent Registered Public Accounting Firm31
.1*

Certification of Chairman and Chief Executive Officer required
    by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.31
.2*

Certification of Executive Vice President and Chief Financial
    Officer required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.32
.1*

Certification of Chairman and Chief Executive Officer and
    Executive Vice President and Chief Financial Officer Pursuant to
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code.     *
    
    Indicates filed herewith.
    
    Indicates a management contract or compensatory plan or
    arrangement required to be filed as an exhibit to this
    Form 10-K. 37




---



##### Table of Contents



SIGNATURES
        By: /s/  WILLIAM
    M. GOODYEAR  William M. Goodyear
 Chairman and Chief Executive Officer
   Pursuant to the requirements of the Securities Exchange Act
    of 1934, this report has been signed below by the following
    persons on behalf of the Registrant and in the capacity and on
    the dates indicated.
  Signature

Title

Date/s/  WILLIAM
    M. GOODYEARWilliam
    M. Goodyear

Chairman and Chief Executive Officer and Director (Principal
    Executive Officer)

February 28, 2008/s/  SCOTT
    J. KRENZScott
    J. Krenz

Executive Vice President and Chief Financial Officer (Principal
    Financial Officer)

February 28, 2008/s/  DAVID
    E. WARTNERDavid
    E. Wartner

Vice President and Controller (Principal Accounting Officer)

February 28, 2008/s/  THOMAS
    A. GILDEHAUSThomas
    A. Gildehaus

Director

February 28, 2008/s/  VALERIE
    B. JARRETTValerie
    B. Jarrett

Director

February 28, 2008/s/  PETER
    B. PONDPeter
    B. Pond

Director

February 28, 2008/s/  SAMUEL
    K. SKINNERSamuel
    K. Skinner

Director

February 28, 2008/s/  GOVERNOR
    JAMES R. THOMPSONGovernor
    James R. Thompson

Director

February 28, 2008  38




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  INDEX TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Financial Statements as of December 31, 2007
    and 2006, and for each of the years in the three-year period
    ended December 31, 2007:Consolidated Balance Sheets


F-3Consolidated Statements of Income


F-4Consolidated Statements of Stockholders
    Equity


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-71. Description of Business


F-72. Summary of Significant Accounting
    Policies


F-73. Acquisitions


F-104. Segment Information


F-135. Goodwill and Intangible Assets, Net


F-156. Net Income per Share (EPS)


F-177. Stockholders Equity


F-188. Share-based Compensation Expense


F-199. Supplemental Consolidated Balance Sheet
    Information


F-2510. Supplemental Consolidated Cash Flow
    Information


F-2611. Comprehensive Income


F-2812. Current and Long Term Bank Debt


F-2813. Other Operating Costs


F-3114. Lease Commitments


F-3115. Income Taxes


F-3216. Employee Benefits Plans


F-3417. Related Party Transactions


F-3518. Litigation and Settlements


F-35Financial Statement Schedule 


S-1Schedule II  Valuation and
    Qualifying Accounts


S-1   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Internal Control  Integrated Framework
  KPMG
    LLP
    F-2




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
 CONSOLIDATED
    BALANCE SHEETS  December 31,


December 31,2007


2006(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
11,656


$
11,745Accounts receivable, net


189,616



168,062Prepaid expenses and other current assets


11,827



9,396Deferred income tax assets


15,460



11,042Total current assets


228,559



200,245Property and equipment, net


54,687



51,164Intangible assets, net


57,755



38,416Goodwill


430,768



359,705Other assets


6,928



2,828Total assets

$
778,697


$
652,358LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
7,547


$
11,667Accrued liabilities


9,771



5,254Accrued compensation-related costs


62,150



48,926Income taxes payable


5,904



5,907Notes payable


6,348



1,000Bank debt


2,250



33,567Other current liabilities


32,549



23,421Total current liabilities


126,519



129,742Non-current liabilitiesDeferred income tax liabilities


29,756



19,164Notes payable


5,348



5,786Other non-current liabilities


19,955



11,090Term loan non-current


221,625



Bank borrowings non-current


32,741



Total non-current liabilities


309,425



36,040Total liabilities


435,944



165,782Stockholders equity:Preferred stock, $.001 par value per share;
    3,000 shares authorized; no shares issued or outstanding






Common stock, $.001 par value per share;
    150,000 shares authorized; 45,800 and 53,881 shares
    issued and outstanding at December 31, 2007 and 2006


58



56Additional paid-in capital


546,870



519,073Deferred stock issuance, net


2,847



7,150Treasury stock


(242,302
)


(38,663
)Retained earnings (accumulated deficit)


29,182



(4,214
)Accumulated other comprehensive income


6,098



3,174Total stockholders equity


342,753



486,576Total liabilities and stockholders equity

$
778,697


$
652,358    F-3




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF INCOME  For the Years Ended December 31,2007


2006


2005(In thousands, except per share data)Revenues before reimbursements

$
681,238


$
605,105


$
508,874Reimbursements


85,820



76,640



66,618Total revenues


767,058



681,745



575,492Cost of services before reimbursable expenses


421,032



349,103



299,180Reimbursable expenses


85,820



76,640



66,618Total costs of services


506,852



425,743



365,798General and administrative expenses


141,430



127,579



100,452Depreciation expense


16,179



13,400



10,213Amortization expense


17,494



9,959



8,538Other operating costs:Separation and severance costs


7,288







Office consolidation


6,750







Gain on sale of property


(2,201
)






Litigation charge






7,400



1,250Operating income


73,266



97,664



89,241Interest expense


15,438



4,915



3,976Interest income


(667
)


(402
)


(290
)Other income, net


(43
)


(209
)


(403
)Income before income taxes


58,538



93,360



85,958Income tax expense


25,142



40,386



36,102Net income

$
33,396


$
52,974


$
49,856Basic income per share

$
0.67


$
1.00


$
1.00Shares used in computing income per basic share


49,511



52,990



50,011Diluted income per share

$
0.66


$
0.97


$
0.95Shares used in computing income per diluted share


50,757



54,703



52,390    F-4




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY  Common











Accumulated


Retained


TotalCommon


Treasury


Stock


Additional


Deferred


Treasury


Other


Earnings


Stock-Stock


Stock


Par


Paid-In


Stock


Stock


Comprehensive


(Accumulated


holdersShares


Shares


Value


Capital


Issuance


Cost


Income (Loss)


Deficit)


Equity(In thousands)Balance at December 31, 2004


52,774



(4,906
)

$
53


$
433,807


$
19,612


$
(63,853
)

$
325


$
(101,270
)

$
288,674Comprehensive income


























(393
)


49,856



49,463Issuances of common stock related to business combinations






791







12,969



(12,331
)


3,263











3,901Deferred purchase price commitments to issue stock


















9,021















9,021Other issuances of common stock


789



48



1



8,473



81



166











8,721Tax benefit on stock options exercised and restricted stock
    vested














5,856



















5,856Issuances of restricted stock


1,105







1



9,993



(9,994
)














Grants of restricted stock awards


















10,241















10,241Share-based compensation expense  variable accounting
    stock options














(173
)


















(173
)Share-based compensation expense  restricted stock
    and units














8,901



(157
)














8,744Balance at December 31, 2005


54,668



(4,067
)

$
55


$
479,826


$
16,473


$
(60,424
)

$
(68
)

$
(51,414
)

$
384,448Cumulative effect of accounting change of SAB No. 108






























(5,774
)


(5,774
)Comprehensive income


























3,242



52,974



56,216Issuances of common stock related to business combinations






1,486







7,581



(10,566
)


20,949











17,964Deferred purchase price commitments to issue stock


















1,314















1,314Other issuances of common stock


754



53







9,229







812











10,041Tax benefit on stock options exercised and restricted stock
    vested














4,327



















4,327Issuances of restricted stock


987







1



6,437



(6,438
)














Grants of restricted stock awards














656



5,462















6,118Share-based compensation expense  variable accounting
    stock options














(60
)


















(60
)Share-based compensation expense  restricted stock
    and units














11,077



905















11,982Balance at December 31, 2006


56,409



(2,528
)

$
56


$
519,073


$
7,150


$
(38,663
)

$
3,174


$
(4,214
)

$
486,576Comprehensive income


























2,924



33,396



36,320Issuances of common stock related to business combinations






830







(1,472
)


(4,006
)


15,064











9,586Other issuances of common stock


702



16







8,872







245











9,117Tax benefit on stock options exercised and restricted stock
    vested














1,633



















1,633Issuances of restricted stock


995







2



4,829



(5,767
)














(936
)Grants of restricted stock awards














221



5,546















5,767Share-based compensation expense  variable accounting
    stock options














(130
)


1















(129
)Share-based compensation expense  restricted stock
    and units














13,844



(77
)














13,767Treasury Stock purchase






(10,624
)














(218,948
)










(218,948
)Balance at December 31, 2007


58,106



(12,306
)

$
58


$
546,870


$
2,847


$
(242,302
)

$
6,098


$
29,182


$
342,753    F-5




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  For the Years Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income

$
33,396


$
52,974


$
49,856Adjustments to reconcile net income to net cash provided by
    operating activities, net of acquisitions:Depreciation expense


16,179



13,400



10,213Amortization expense


17,494



9,959



8,538Share-based compensation expense


15,410



13,661



9,079Payments related to stock appreciation rights obligations










(1,387
)Tax benefit of issuances of common stock










5,856Amortization of consultants non-solicitation agreements










915Payments related to consultants non-solicitation agreements










(1,062
)Accretion of interest expense


794



780



1,153Provision for bad debts


9,518



10,015



7,987Deferred income taxes


(982
)


3,444



685Gain on sale of property, net


(2,201
)






Other, net


934



62



70Changes in assets and liabilities:Accounts receivable


(19,627
)


(20,462
)


(31,865
)Prepaid expenses and other current assets


(3,139
)


(751
)


(5,377
)Accounts payable


(5,620
)


(932
)


2,431Accrued liabilities


3,004



(3,182
)


1,342Accrued compensation-related costs


15,375



7,223



(8,778
)Income taxes payable


(2,395
)


(2,421
)


6,264Other current liabilities


13,703



4,142



2,477Net cash provided by operating activities


91,843



87,912



58,397Cash flows from investing activities:Purchases of property and equipment


(24,080
)


(23,771
)


(21,345
)Proceeds from divestiture of assets held for sale


4,088







3,220Acquisitions of businesses, net of cash acquired


(65,250
)


(56,326
)


(82,875
)Payments of acquisition liabilities


(4,518
)


(13,365
)


(26,723
)Other, net


(3,448
)


(951
)


(2,221
)Net cash used in investing activities


(93,208
)


(94,413
)


(129,944
)Cash flows from financing activities:Issuances of common stock


7,512



9,132



8,721Repurchases of common stock


(218,429
)






(Repayments)/Borrowings from banks, net


(2,105
)


(10,495
)


40,800Payment of bank borrowings assumed from business acquisitions


(2,420
)






Payments of notes payable


(6,978
)






Term loan proceeds


225,000







Payments of term loan installments


(1,125
)






Other, net


(179
)


4,738



Net cash provided by financing activities


1,276



3,375



49,521Net decrease in cash and cash equivalents


(89
)


(3,126
)


(22,026
)Cash and cash equivalents at beginning of the year


11,745



14,871



36,897Cash and cash equivalents at end of the year

$
11,656


$
11,745


$
14,871    F-6




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    DESCRIPTION
    OF BUSINESS      2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles
    of Consolidation
    Use of
    Estimates
    Reclassifications
    Cash
    and Cash Equivalents
    Fair
    Value of Financial Instruments
    Accounts
    Receivable Realization
    Property
    and Equipment
   F-7




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Operating
    Leases
      Goodwill
    and Intangible Assets
        Revenue
    Recognition
    Legal
   F-8




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based
    Payments  SFAS No. 123(R)
    Accounting
    for Certain Financial Instruments with Characteristics of Both
    Liabilities and Equity 
    SFAS No. 150
    Income
    Taxes
      Treasury
    Stock
    Foreign
    Currency Translation
   F-9




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Interest
    Rate Derivative
    Comprehensive
    Income
    3.
    ACQUISITIONS  2007
    Acquisitions
     F-10




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2006
    Acquisitions
     F-11




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2005
    Acquisitions
         F-12




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting
    for Acquisitions
    Pro
    Forma Information
    For the Years EndedDecember 31,2007


2006Total revenues

$
792,675


$
761,090Net income

$
32,472


$
51,231Basic net income per share

$
0.66


$
0.97Diluted net income per share

$
0.64


$
0.94   4.
    SEGMENT
    INFORMATION           F-13




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005Total revenues:North American Dispute and Investigative Services

$
324,734


$
296,066


$
274,367North American Business Consulting Services


379,152



356,452



298,994International Consulting Operations


63,172



29,227



2,131Total revenues

$
767,058


$
681,745


$
575,492Segment operating profit:North American Dispute and Investigative Services

$
126,529


$
128,858


$
118,662North American Business Consulting Services


123,764



123,669



97,226International Consulting Operations


22,160



13,740



1,310Total combined segment operating profit


272,453



266,267



217,198Segment reconciliation to income before taxes:Unallocated:General and administrative expenses


141,430



127,579



100,452Depreciation expense


16,179



13,400



10,213Amortization expense


17,494



9,959



8,538Share-based compensation expense related to consulting personnel


12,247



10,265



7,504Other operating expenses


11,837



7,400



1,250Other expense, net (including interest expense)


14,728



4,304



3,283Total unallocated expenses, net


213,915



172,907



131,240Income before income tax expense

$
58,538


$
93,360


$
85,958      F-14




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006North American Dispute and Investigative Services

$
325,426


$
293,905North American Business Consulting Services


246,656



203,745International Consulting Operations


106,058



68,532Unallocated assets


100,557



86,176Total assets

$
778,697


$
652,358Geographic data     For the Year Ended December 31,2007


2006


2005Total revenue:U.S

$
658,325


$
619,899


$
557,419United Kingdom


79,831



36,064



9,281All other


28,902



25,782



8,792Total

$
767,058


$
681,745


$
575,492   December 31,


December 31,2007


2006Total assets:U.S.

$
569,406


$
538,909United Kingdom


163,562



80,462All other


45,729



32,987Total

$
778,697


$
652,358   5.
    GOODWILL
    AND INTANGIBLE ASSETS, NET    2007


2006Goodwill

$
436,193


$
365,130Less  accumulated amortization


(5,425
)


(5,425
)Goodwill, net


430,768



359,705Intangible assets:Customer lists and relationships


65,705



39,565Non-compete agreements


21,082



13,381Other


16,840



12,263Intangible assets, at cost


103,627



65,209Less: accumulated amortization


(45,872
)


(26,793
)Intangible assets, net


57,755



38,416Goodwill and intangible assets, net

$
488,523


$
398,121  F-15




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006Balance as of the beginning of the period  Goodwill,
    net

$
359,705


$
298,332Cumulative effect of accounting change for goodwill (see
    note 7)






(8,267
)Goodwill acquired during the period


66,059



64,698Foreign currency translation  goodwill


5,004



4,942Balance as of the end of the period  Total

$
430,768


$
359,705Balance as of the beginning of the period  Intangible
    assets, net

$
38,416


$
20,423Cumulative effect of accounting change for intangible assets
    (see note 7)






5,143Cumulative effect of accounting change for amortization of
    intangible assets (see note 7)






(217
)Intangible assets acquired during the period


34,388



21,341Foreign currency translation  intangible assets, net


2,445



1,685Less  amortization expense


(17,494
)


(9,959
)Balance as of the end of the period  Total

$
57,755


$
38,416      F-16




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ending December 31,

Amount2008

$
15,6282009


13,4922010


9,3332011


8,3922012


5,087Thereafter


5,823Total

$
57,755     6.
    NET
    INCOME PER SHARE (EPS)      2007


2006


2005Common shares outstanding


49,236



52,561



49,422Business combination obligations payable in a fixed number of
    shares


275



429



589Basic shares


49,511



52,990



50,011Employee stock options


577



728



1,018Restricted shares and stock units


439



558



783Business combination obligations payable in a fixed dollar
    amount of shares


132



252



363Contingently issuable shares


98



175



215Diluted shares


50,757



54,703



52,390      F-17




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      7.
    STOCKHOLDERS
    EQUITY  For
    the year ended December 31, 2007
        For
    the year ended December 31, 2006
         F-18




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For
    the year ended December 31, 2005
      Stockholder
    Rights Plan
    Other
    Information
    8.
    SHARE-BASED
    COMPENSATION EXPENSE  Summary
   F-19




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share-based
    Compensation Plans
    Restricted
    Stock Outstanding
       F-20




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005Weighted





Weighted





WeightedNumber


Average


Number


Average


Number


Averageof Shares


Measurement


of Shares


Measurement


of Shares


Measurement(000s)


Date Price


(000s)


Date Price


(000s)


Date PriceRestricted stock and equivalents outstanding at beginning of year


1,963


$
19.07



1,562


$
16.45



1,691


$
10.38Granted


1,986



18.71



1,602



19.73



1,177



24.18Exercised (vested)


(1,054
)


17.50



(985
)


15.79



(1,104
)


15.61Forfeited


(631
)


19.20



(216
)


19.33



(202
)


15.83Restricted stock and equivalents outstanding at end of year


2,264


$
19.45



1,963


$
19.07



1,562


$
16.45       December 31, 2007


December 31, 2006Weighted





WeightedOutstanding


Average


Outstanding


AverageShares


Measurement


Shares


MeasurementRange of Measurement Date Prices

(000s)


Date Price


(000s)


Date Price$0.00  $17.99


41


$
16.96



238


$
8.42$18.00  $18.99


1,067



18.55



116



18.30$19.00  $20.99


958



19.59



1,211



19.66$21.00  $24.99


107



22.54



240



22.41$25.00 and above


91



26.00



158



25.97Total


2,264


$
19.45



1,963


$
19.07     Stock
    Options Outstanding
   F-21




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005Weighted





Weighted





WeightedNumber


Average


Number


Average


Number


Averageof Shares


Exercise


of Shares


Exercise


of Shares


Exercise(000s)


Price


(000s)


Price


(000s)


PriceOptions outstanding at beginning of year


1,917


$
9.13



2,395


$
8.21



3,065


$
7.31Granted


109



18.86



82



19.73



65



25.60Exercised


(310
)


6.02



(520
)


6.03



(613
)


4.75Forfeited or exchanged


(37
)


21.32



(40
)


16.25



(122
)


8.69Options outstanding at end of year


1,679


$
10.10



1,917


$
9.13



2,395


$
8.21Options exercisable at end of year


1,492


$
8.87



1,737


$
8.03



2,110


$
7.31     December 31, 2007


December 31, 2006Weighted


Remaining





Weighted


RemainingOutstanding


Average


Exercise


Outstanding


Average


ExerciseShares


Exercise


Period


Shares


Exercise


PeriodRange of Exercise Prices

(000s)


Price


(Years)


(000s)


Price


(Years)$0.00 to $3.74


199


$
3.68



3.7



244


$
3.68



4.4$3.75 to $4.99


614



3.94



2.5



743



3.94



3.7$5.00 to $9.99


355



6.17



4.6



456



6.21



5.6$10.00 to $19.99


245



18.46



4.9



188



17.40



4.8$20.00 and above


266



26.65



2.0



286



26.52



3.1Total


1,679


$
10.10



3.4



1,917


$
9.13



4.3     Weighted


RemainingOutstanding


Average


ExerciseShares


Exercise


PeriodRange of Exercise Prices

(000s)


Price


(Years)$0.00 to $3.74


199


$
3.68



3.7$3.75 to $4.99


614



3.94



2.5$5.00 to $9.99


355



6.17



4.6$10.00 to $19.99


89



17.44



4.8$20.00 and above


235



26.86



1.8Total


1,492


$
8.87



3.2  F-22




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SharesRemainingWeighted


AvailableOutstanding


Average


for FutureShares


Exercise


IssuancesPlan Category

(000s)


Price


(000s)Long-Term Incentive Plan


1,544


$
9.95



3,389Supplemental Equity Incentive Plan


135



11.84



214Total


1,679


$
10.10



3,603     Stock
    Options Grants
    2007


2006Fair value of options granted

$
10.00


$
10.52Expected volatility


61
%


64
%Risk free interest rate


4.7
%


4.3
%Forfeiture rate


0
%


0
%Dividend yield


0
%


0
%Contractual or expected lives (years)


4.5



4.2     Share-based
    Compensation Expense
     F-23




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the years ended December 31,2007


2006


2005Amortization of restricted stock awards

$
13,244


$
10,894


$
8,824Amortization of stock option awards


860



1,089



Fair value adjustment for variable accounting awards


(130
)


(61
)


(305
)Discount given on employee stock purchase transactions through
    our Employee Stock Purchase Plan


1,011



909



Other share-based compensation expense


425



830



560Total share-based compensation expense

$
15,410


$
13,661


$
9,079         2007


2006


2005Cost of services

$
12,247


$
10,265


$
7,504General and administrative expenses


3,163



3,396



1,575Total share-based compensation expense

$
15,410


$
13,661


$
9,079      F-24




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    Stock Purchase Plan
        For
    the Years Ended December 31, 2005
      2005Net income, as reported

$
49,856Add: Share-based compensation expense included in reported net
    income, net of related tax effects


5,266Deduct: Total share-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects


(5,955
)Pro forma net income

$
49,167Earnings per share:Basic, as reported

$
1.00Basic, pro forma

$
0.98Diluted, as reported

$
0.95Diluted, pro forma

$
0.94    F-25




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005Fair value of options granted

$
9.70Expected volatility


64
%Risk free interest rate


4.3
%Forfeiture rate


15
%Dividend yield


0
%Contractual or expected lives (years)


4.2   9.
    SUPPLEMENTAL
    CONSOLIDATED BALANCE SHEET INFORMATION  Accounts
    Receivable
    2007


2006Billed amounts

$
150,792


$
132,566Engagements in process


51,498



47,466Allowance for uncollectible accounts


(12,674
)


(11,970
)$
189,616


$
168,062     Property
    and Equipment
    2007


2006Furniture, fixtures and equipment

$
52,994


$
48,334Software


20,754



18,696Leasehold improvements


39,510



31,458Land and buildings






3,555113,258



102,043Less: accumulated depreciation and amortization


(58,571
)


(50,879
)Property and equipment, net

$
54,687


$
51,164      F-26




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    Current Liabilities
    2007


2006Deferred business acquisition obligations

$
5,132


$
6,177Deferred revenue


16,521



13,426Deferred rent


2,136



929Commitments on abandoned real estate


3,445



Other liabilities


5,315



2,889$
32,549


$
23,421         Other
    Non-Current Liabilities
    2007


2006Deferred business acquisition obligations

$
465


$
2,294Deferred rent  long-term


10,873



6,508Commitments on abandoned real estate


1,767



Interest rate swap liability


6,030



Other non-current liabilities


820



2,288$
19,955


$
11,090     Notes
    Payable  Current and Non-Current
   F-27




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006Note related to the HP3 acquisition

$
1,000


$
1,000Note related to the Abros acquisition


499



Note related to the Troika acquisition


4,849



Total current notes payable

$
6,348


$
1,000     2007


2006Note related to the Precept acquisition

$



$
4,786Note related to the HP3 acquisition






1,000Note related to the Abros acquisition


499



Note related to the Troika acquisition


4,849



Total non-current notes payable

$
5,348


$
5,786     10.
    SUPPLEMENTAL
    CONSOLIDATED CASH FLOW INFORMATION  2007
    Non-Cash Transactions
    2006
    Non-Cash Transactions
    2005
    Non-Cash Transactions
    Other
    Information
     F-28




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11.
    COMPREHENSIVE
    INCOME    2007


2006


2005Net income

$
33,396


$
52,974


$
49,856Foreign currency translation adjustment


6,391



3,242



(393
)Unrealized net loss on interest rate derivative, net of income
    tax benefits.


(3,467
)






Comprehensive income

$
36,320


$
56,216


$
49,463     12.
    CURRENT
    AND LONG TERM BANK DEBT       F-29




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Amount2008

$
2,2502009


2,2502010


12,3752011


22,5002012, through May 31


217,241Total

$
256,616      F-30




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    OTHER
    OPERATING COSTS    2007


2006


2005Separation costs and severance

$
7,288


$



$
Office closures obligations, discounted and net of expected
    sublease income


3,346







Write down of leasehold improvements


3,404







Gain on sale of property


(2,201
)






Litigation charge






7,400



1,250Other operating costs

$
11,837


$
7,400


$
1,250             Office Space


WorkforceReductions


ReductionsCharges to operations during the year ended December 31,
    2007

$
6,750


$
7,288Utilized during the year ended December 31, 2007


(1,538
)


(6,089
)Balance at December 31, 2007

$
5,212


$
1,199     14.
    LEASE
    COMMITMENTS   F-31




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ending December 31,

Amount2008

$
23,6902009


20,7782010


17,6332011


16,2442012


10,836Thereafter


25,119$
114,300       15.
    INCOME
    TAXES    For the Year EndedDecember 31,2007


2006


2005Federal:Current

$
19,122


$
27,290


$
24,748Deferred


1,930



3,322



3,222Total


21,052



30,612



27,970State:Current


4,946



6,850



6,619Deferred


493



847



822Total


5,439



7,697



7,441Foreign:Current


2,056



2,802



689Deferred


(3,405
)


(725
)


2Total


(1,349
)


2,077



691Total federal, state and foreign income tax expense

$
25,142


$
40,386


$
36,102  F-32




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended December 31,2007


2006


2005Federal tax expense at the statutory rate


35.0
%


35.0
%


35.0
%State tax expense at the statutory rate, net of federal tax
    benefits


6.0



5.5



5.4Foreign taxes


0.5



1.4



0.7Effect of non-deductible meals and entertainment expense


1.3



0.7



0.6Effect of enacted tax rate changes


(1.3
)






Effect of other transactions, net


1.5



0.7



0.343.0
%


43.3
%


42.0
%       December 31,2007


2006Deferred tax assets (liabilities) attributable to:Allowance for uncollectible receivables

$
5,184


$
5,604Deferred revenue


3,648



3,865Accrued compensation


3,556



Interest rate derivative


2,563



Depreciation and amortization


1,199



718Share-based compensation programs


4,791



5,144Tax credits and capital loss carry forward


130



364Other


1,336



130Deferred tax assets


22,407



15,825Acquisition costs  domestic acquisitions


(23,183
)


(15,558
)Acquisition costs  foreign acquisitions


(12,637
)


(7,152
)Change in accounting method


(883
)


(1,231
)Investments






(6
)Deferred tax liabilities


(36,703
)


(23,947
)Net deferred tax assets (liabilities)

$
(14,296
)

$
(8,122
)    F-33




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Adoption
    of FASB Interpretation No. 48
    Amount(In thousands)Balance at January 1, 2007

$
2,245Additions based on tax positions of the current year


Additions based on tax positions of prior years


945Reductions based on tax positions of prior years


(1,197
)Settlements


(914
)Balance at December 31, 2007

$
1,079         16.
    EMPLOYEE
    BENEFIT PLANS   F-34




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      17.
    RELATED
    PARTY TRANSACTIONS      18.
    LITIGATION
    AND SETTLEMENTS     F-35




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##### Table of Contents



SCHEDULE II  NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
  VALUATION AND QUALIFYING ACCOUNTS
 Years ended December 31, 2007, 2006 and 2005
 (Amounts in thousands)
  Balance at


Charged





BalanceBeginning


to





at EndDescription

of Year


Expenses


Deductions(1)


of YearYear ended December 31, 2007Allowance for doubtful accounts

$
11,970


$
9,518


$
(8,814
)

$
12,674Year ended December 31, 2006Allowance for doubtful accounts

$
10,586


$
10,015


$
(8,631
)

$
11,970Year ended December 31, 2005Allowance for doubtful accounts

$
7,814


$
7,987


$
(5,215
)

$
10,586     (1)
    
    Represents write-offs.   S-1