##### 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,
    2009ORo

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(State or other jurisdiction
    of
    incorporation or organization)

36-4094854(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 Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
      þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    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, 2009
  TABLE OF CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


8Item 1B.


Unresolved Staff Comments


13Item 2.


Properties


13Item 3.


Legal Proceedings


13Item 4.


Submission of Matters to a Vote of Security
    Holders


14Executive Officers of the Registrant


14PART IIItem 5.


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


15Item 6.


Selected Financial Data


18Item 7.


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


19Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


37Item 8.


Financial Statements and Supplementary Data


38Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


38Item 9A.


Controls and Procedures


38Item 9B.


Other Information


38PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


40Item 11.


Executive Compensation


40Item 12.


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


40Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


40Item 14.


Principal Accountant Fees and Services


40PART IVItem 15.


Exhibits and Financial Statement Schedules


41Report 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-7EX-10.4EX-10.15EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   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



Note 4-Segment
    For the Year EndedDecember 31,2009


2008


2007North American Dispute and Investigative Services


40.6
%


41.7
%


42.3
%North American Business Consulting Services


41.2
%


43.9
%


49.4
%International Consulting Operations


10.3
%


9.8
%


8.3
%Economic Consulting Services


7.9
%


4.6
%


     For the Year EndedDecember 31,2009


2008


2007North American Dispute and Investigative Services


44.8
%


44.4
%


46.4
%North American Business Consulting Services


41.1
%


42.9
%


45.4
%International Consulting Operations


6.2
%


7.9
%


8.2
%Economic Consulting Services


7.9
%


4.8
%


     For the Year Ended December 31,2009


2008


2007North American Dispute and Investigative Services


39.6
%


42.8
%


42.4
%North American Business Consulting Services


36.1
%


40.4
%


37.8
%International Consulting Operations


24.1
%


33.3
%


40.3
%Economic Consulting Services


35.3
%


39.5
%


Total segment operating profit


36.3
%


40.7
%


40.0
%  4




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##### Table of Contents



December 31,2009


2008North American Dispute and Investigative Services

$
294,439


$
287,225North American Business Consulting Services


232,892



236,419International Consulting Operations


73,197



73,897Economic Consulting Services


78,533



74,089Unallocated assets


141,184



120,763Total assets

$
820,245


$
792,393     (c)
    Narrative
    Description of Business  Overview
  on-site
  on-site
     5




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##### Table of Contents



Service
    Offerings
    Industry
    Sectors
    Human
    Capital
  and/or
            Competition
   6




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##### Table of Contents



(d)
    Other
    Matters  Concentration
    of Revenues
    Non-U.S.
    Operations
  non-U.S. subsidiaries,
  New
    York Stock Exchange Disclosures
    NominatingandAudit


Compensation


Executive


GovernanceCommittee


Committee


Committee


CommitteeThomas A. Gildehaus


x
(1)


xWilliam M.
    Goodyear(2)










xCynthia A. Glassman














xStephan A. James


x



x







xPeter B. Pond


x











x
(1)Samuel K. Skinner






x
(1)


x



xJames R. Thompson










x
(1)Michael L. Tipsord


x



x     (1)
    
    Chairman(2)
    
    Chairman of the board of directors    Form 10-K
  Available
    Information
  Form 8-K
 7




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##### Table of Contents



Item 1A.
    Risk
    Factors.  Form 10-K
  Our
    results of operations could be adversely affected by disruptions
    in the marketplace caused by economic and political
    conditions.
  and/or
  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 or repay amounts owed under
    our long term credit arrangements.
      Our
    business could be impacted by competition and regulatory and
    legislative changes.
   8




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##### Table of Contents



Our
    inability to hire and retain appropriate level of skilled
    professionals could have an adverse effect on the success of our
    business.
    Our
    profitability will suffer if we are not able to maintain current
    pricing and utilization rates.
    
    Our ability to predict future demand for services and maintain
    the appropriate staffing 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 overhead
    costs, including real estate obligations;
    Our ability to manage significantly larger and more diverse
    workforces as we increase the number of our professionals and
    execute our growth strategies; and
    The economic, political and regulatory environment as noted
    above.  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. Our client engagements and revenues are
    frequently event-driven and therefore difficult to
    forecast.
   9




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##### Table of Contents



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;
    Corporate restructuring engagements, both inside and outside
    bankruptcy proceedings;
    Engagements where we deliver a fairness opinion;
    Engagements where we deliver project management services for
    large construction projects;
    Engagements where we deliver a compliance effectiveness
    opinion; and
    Engagements involving independent consultants reports in
    support of financings.  As we
    become larger, we increasingly encounter professional conflicts
    of interest.
   10




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##### Table of Contents



Our
    international operations create special risks.
    
    Cultural and language differences;
    Employment laws and related factors that could result in lower
    utilization, higher staffing costs, 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;
    Managing the risks associated with engagements with foreign
    officials and governmental agencies, including the risks arising
    from the Foreign Corrupt Practices Act;
    Greater difficulties in managing and staffing foreign operations;
    Successful entry and execution in new markets;
    Restrictions on the repatriation of earnings; and
    Potentially adverse tax consequences, such as trapped foreign
    losses.    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.   11




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##### Table of Contents



We
    have invested in specialized systems, processes and intellectual
    capital for which we may fail to recover our investment or which
    may become obsolete.
    Our
    information technology systems will require improvements as our
    business grows.
    We may
    be exposed to potential risks if we are unable to achieve and
    maintain effective internal controls.
    Acquired
    businesses may not achieve expected results which could
    adversely affect our financial performance.
    An
    impairment charge could have a material adverse effect on our
    financial condition and results of operations.
   12




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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

China  Hong KongChicago, Illinois

Canada  TorontoLos Angeles, California

United Kingdom  LondonNew York, New YorkSan Francisco, CaliforniaWashington D.C.   Item 3.
    Legal
    Proceedings.   13




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders.   Executive
    Officers of the Registrant    Name

Office

AgeWilliam M. Goodyear

Chairman of the Board and Chief Executive Officer


61Julie M. Howard

President and Chief Operating Officer


47Thomas A. Nardi

Executive Vice President and Chief Financial Officer


55Monica M. Weed

Vice President, General Counsel and Secretary


49   William M. Goodyear 28-year
  Julie M. Howard
  Thomas A. Nardi
  Monica M. Weed
 14




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##### Table of Contents



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


Low2009Fourth quarter

$
15.46


$
12.51Third quarter

$
14.24


$
11.90Second quarter

$
14.71


$
11.66First quarter

$
15.44


$
11.072008Fourth quarter

$
20.44


$
13.14Third quarter

$
20.72


$
15.90Second quarter

$
21.78


$
17.87First quarter

$
19.61


$
11.19   Holders
    Distributions
     15




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##### Table of Contents



Shareholder
    Return Performance Graph
      Comparison
    of 5 Year Cumulative Total Return
    Assumes Initial Investment of $100
    December 2009
  
  Navigant







New



OldConsulting



NYSE



Peer



PeerMeasurement Period


Inc.



Index



Group(a)(b)



Group(b)FYE 12/31/04


$
100.00



$
100.00



$
100.00



$
100.00FYE 12/31/05



82.63




109.41




114.10




105.63FYE 12/31/06



74.28




132.01




131.24




136.95FYE 12/31/07



51.38




144.06




139.88




160.18FYE 12/31/08



59.64




87.67




104.87




130.00FYE 12/31/09



55.86




112.71




106.58




121.22      (a)
    
    The New Peer Group consists of the following companies: Advisory
    Board Co., Corporate Executive Board, CRA International Inc.
    (formerly known as Charles River Associates, Inc.), Duff and
    Phelps, Exponent, Inc., FTI Consulting, Inc., Gartner Group,
    Inc., Huron Consulting Group Inc., ICF International, Inc., LECG
    Corporation, Maximus, Inc., Resources Connection, Inc. and Tetra
    Tech, Inc. The Peer Group is weighted by market capitalization.(b)
    
    The peer group in our Annual Report on
    Form 10-K
    for the year ended December 31, 2008 (the Prior Year Peer
    Group) included Choice Point, Inc., Towers Watson and Diamond
    Management & Technology Consultants, Inc. During the
    year ended December 31, 2009 Choice Point was acquired and
    no longer is publicly traded, and has been removed from the New
    Peer Group. In addition, we removed Towers Watson 16




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##### Table of Contents



and Diamond Managements & Technology Consultants from
    the New Peer Group because their business model and size are not
    comparable to our business model and size. We have added Duff
    and Phelps and Exponent to the New Peer Group because their
    business model and size are comparable to our business model and
    size.  Issuance
    of Unregistered Securities
    Number ofType of

Shares in

Exemption



AssetsDate

Securities

Consideration(a)

Claimed(b)

Purchaser or Recipient

PurchasedJanuary 24, 2009

Common Stock


14,865


Section 4(2)

Tedd Avey & Associates Ltd.

(c)March 16, 2009

Common Stock


47,016


Section 4(2)

Chicago Partners, LLC

(d)April 28, 2009

Common Stock


440,849


Section 4(2)

Chicago Partners, LLC

(d)May 15, 2009

Common Stock


101,539


Section 4(2)

Casas, Benjamin & White, LLC

(d)     (a)
    
    Does not take into account additional cash or other
    consideration paid or payable by us as 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 to purchase
    substantially all of the equity interests of the entity and, as
    such, these shares were issued to the owners of the entity.(d)
    
    Shares represent deferred payment consideration to purchase
    substantially all of the assets of the recipient.  Purchase
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   17




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##### Table of Contents



Item 6.
    Selected
    Financial Data.    For the Year Ended December 31,2009


2008


2007


2006


2005Revenues before reimbursements

$
636,748


$
727,062


$
681,238


$
605,105


$
508,874Reimbursements


70,491



83,578



85,820



76,640



66,618Total revenues


707,239



810,640



767,058



681,745



575,492Cost of services before reimbursable expenses


416,545



444,035



421,032



349,103



299,180Reimbursable expenses


70,491



83,578



85,820



76,640



66,618Total cost of services


487,036



527,613



506,852



425,743



365,798General and administrative expenses


129,048



155,378



141,430



127,579



100,452Depreciation expense


17,600



17,302



16,179



13,400



10,213Amortization expense


13,014



16,386



17,494



9,959



8,538Other operating costs:Separation and severance costs










7,288







Office consolidation


8,810



5,207



6,750







Gain on sale of property










(2,201
)






Litigation charge














7,400



1,250Operating income


51,731



88,754



73,266



97,664



89,241Interest expense


15,076



20,146



15,438



4,915



3,976Interest income


(1,211
)


(1,182
)


(667
)


(402
)


(290
)Other income, net


(182
)


(62
)


(43
)


(209
)


(403
)Income before income taxes


38,048



69,852



58,538



93,360



85,958Income tax expense


16,101



29,795



25,142



40,386



36,102Net income

$
21,947


$
40,057


$
33,396


$
52,974


$
49,856Basic income per share

$
0.46


$
0.86


$
0.67


$
1.00


$
1.00Shares used in computing income per basic share


48,184



46,601



49,511



52,990



50,011Diluted income per share

$
0.44


$
0.83


$
0.66


$
0.97


$
0.95Shares used in computing income per diluted share


49,795



48,285



50,757



54,703



52,390   As of December 31,2009

2008

2007

2006

2005Balance Sheet Data:Cash and cash equivalents

$
49,144


$
23,134


$
11,656


$
11,745


$
14,871Working capital

$
114,744


$
97,988


$
102,040


$
70,503


$
41,640Total assets

$
820,245


$
792,393


$
778,697


$
652,358


$
542,863Non-current liabilities

$
268,019


$
296,076


$
309,425


$
36,040


$
20,148Total stockholders equity

$
418,792


$
365,758


$
342,753


$
486,576


$
384,448  18




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Form 10-K.
  Overview
          Human
    Capital Resources
         19




---



##### Table of Contents



Acquisitions
  2009
    Acquisitions
        2008
    Acquisitions
     20




---



##### Table of Contents



2007
    Acquisitions
       21




---



##### Table of Contents



Accounting
    for Acquisitions
   22




---



##### Table of Contents



Results
    of Operations
  2009 over


2008 over2008


2007Increase


Increase(Amounts in thousands, except

For the Year Ended December 31,


(Decrease)


(Decrease)per share data and metrics)

2009


2008


2007


Percentage


PercentageRevenues before reimbursements

$
636,748


$
727,062


$
681,238



(12.4
)


6.7Reimbursements


70,491



83,578



85,820



(15.7
)


(2.6
)Total revenues


707,239



810,640



767,058



(12.8
)


5.7Cost of services before reimbursable expenses


416,545



444,035



421,032



(6.2
)


5.5Reimbursable expenses


70,491



83,578



85,820



(15.7
)


(2.6
)Total cost of services


487,036



527,613



506,852



(7.7
)


4.1General and administrative expenses


129,048



155,378



141,430



(16.9
)


9.9Depreciation expense


17,600



17,302



16,179



1.7



6.9Amortization expense


13,014



16,386



17,494



(20.6
)


(6.3
)Other operating costs:Separation and severance costs










7,288







(100.0
)Office consolidation


8,810



5,207



6,750



69.2



(22.9
)Gain on sale of property










(2,201
)






100.0Operating income


51,731



88,754



73,266



(41.7
)


21.1Interest expense


15,076



20,146



15,438



(25.2
)


30.5Interest income


(1,211
)


(1,182
)


(667
)


2.5



77.2Other income, net


(182
)


(62
)


(43
)


193.5



44.2Income before income tax expense


38,048



69,852



58,538



(45.5
)


19.3Income tax expense


16,101



29,795



25,142



(46.0
)


18.5Net income

$
21,947


$
40,057


$
33,396



(45.2
)


19.9Basic net income per share

$
0.46


$
0.86


$
0.67



(46.5
)


28.4Diluted net income per share

$
0.44


$
0.83


$
0.66



(47.0
)


25.8Key operating metrics:Average FTEBillable


1,797



1,926



1,962



(6.7
)


(1.8
)Non-billable


539



563



532



(4.3
)


5.8Period End FTEBillable


1,666



1,931



1,944



(13.7
)


(0.7
)Non-billable


511



577



525



(11.4
)


9.9Bill Rate

$
254


$
260


$
236



(2.3
)


10.2Utilization


75
%


79
%


77
%


(5.1
)


2.6   Results
    for the year ended December 31, 2009 compared to the year
    ended December 31, 2008
  Earnings Summary.
 23




---



##### Table of Contents



Revenues before Reimbursements.
  Cost of Services before Reimbursable
    Expenses.
  General and Administrative Expenses.
  Other Operating Costs  Office
    Consolidation.
 24




---



##### Table of Contents



Amortization Expense.
  Interest Expense.
  Income Tax Expense.
  Results
    for the year ended December 31, 2008 compared to the year
    ended December 31, 2007
  Earnings Summary.
      Revenues before Reimbursements.
  Cost of Services before Reimbursable
    Expenses.
 25




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##### Table of Contents



General and Administrative Expenses.
  Other Operating Costs  Office
    Consolidation.
  Other Operating Costs  Separation and Severance
    Costs.
  Other Operating Costs  Gain on Sale of
    Property.
  Amortization Expense.
  Interest Expense.
  Income Tax Expense.
  Segment
    Results
     26




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##### Table of Contents



North American Dispute and
    Investigative Services2009 over

2008 over2008

2007Increase

IncreaseFor the Year Ended December 31,

(Decrease)

(Decrease)2009

2008

2007

Percentage

PercentageRevenues before reimbursements(in 000s)

$
261,892


$
306,850


$
298,699



(14.7
)


2.7Total revenues(in 000s)


287,387



338,230



324,734



(15.0
)


4.2Segment operating profit(in 000s)


103,645



131,440



126,529



(21.1
)


3.9Segment operating profit margin


39.6
%


42.8
%


42.4
%


(7.5
)


0.9Average FTE consultants


704



775



790



(9.2
)


(1.9
)Average utilization rates based on 1,850 hours


73
%


77
%


77
%


(5.2
)


0.0Bill rate

$
284


$
290


$
277



(2.1
)


4.7       North American Business
    Consulting Services2009 over

2008 over2008

2007Increase

IncreaseFor the Year Ended December 31,

(Decrease)

(Decrease)2009

2008

2007

Percentage

PercentageRevenues before reimbursements(in 000s)

$
263,263


$
314,677


$
327,511



(16.3
)


(3.9
)Total revenues(in 000s)


291,607



355,991



379,152



(18.1
)


(6.1
)Segment operating profit(in 000s)


94,950



127,065



123,764



(25.3
)


2.7Segment operating profit margin


36.1
%


40.4
%


37.8
%


(10.6
)


6.9Average FTE consultants


786



904



1,018



(13.1
)


(11.2
)Average utilization rates based on 1,850 hours


77
%


80
%


78
%


(3.8
)


2.6Bill rate

$
218


$
224


$
200



(2.7
)


12.0  27




---



##### Table of Contents



International Consulting
    Services2009 over

2008 over2008

2007Increase

IncreaseFor the Year Ended December 31,

(Decrease)

(Decrease)2009

2008

2007

Percentage

PercentageRevenues before reimbursements(in 000s)

$
60,107


$
69,793


$
55,028



(13.9
)


26.8Total revenues(in 000s)


72,820



79,526



63,172



(8.4
)


25.9Segment operating profit(in 000s)


14,463



23,251



22,160



(37.8
)


4.9Segment operating profit margin


24.1
%


33.3
%


40.3
%


(27.6
)


(17.4
)Average FTE consultants


205



185



154



10.8



20.1Average utilization rates based on 1,850 hours


67
%


72
%


75
%


(6.9
)


(4.0
)Bill rate

$
237


$
280


$
267



(15.4
)


4.9    28




---



##### Table of Contents



Economic Consulting
    Services2009 over

2008 over2008

2007Increase

IncreaseFor the Year Ended December 31,

(Decrease)

(Decrease)2009

2008

2007

Percentage

PercentageRevenues before reimbursements(in 000s)

$
51,486


$
35,742



n/a



44.0



n/aTotal revenues(in 000s)


55,425



36,893



n/a



50.2



n/aSegment operating profit(in 000s)


18,173



14,121



n/a



28.7



n/aSegment operating profit margin


35.3
%


39.5
%


n/a



(10.6
)


n/aAverage FTE consultants


102



62



n/a



64.5



n/aAverage utilization rates based on 1,850 hours


82
%


96
%


n/a



(14.6
)


n/aBill rate

$
344


$
332



n/a



3.6



n/a     2010
    Outlook
   29




---



##### Table of Contents



Unaudited
    Quarterly Results
  Form 10-K.
    Quarter EndedDec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,2009


2009


2009


2009


2008


2008


2008


2008Revenues:Revenues before reimbursements

$
153,051


$
159,153


$
157,332


$
167,212


$
174,475


$
178,908


$
189,385


$
184,294Reimbursements


20,907



18,210



16,224



15,150



19,526



19,184



22,023



22,845Total revenues


173,958



177,363



173,556



182,362



194,001



198,092



211,408



207,139Cost of services:Cost of services before reimbursable expenses


103,766



100,545



101,967



110,267



107,027



110,083



113,852



113,073Reimbursable expenses


20,907



18,210



16,224



15,150



19,526



19,184



22,023



22,845Total costs of services


124,673



118,755



118,191



125,417



126,553



129,267



135,875



135,918General and administrative expenses


28,142



32,500



33,513



34,893



34,877



41,417



41,071



38,013Depreciation expense


4,288



4,352



4,320



4,640



4,426



4,330



4,381



4,165Amortization expense


2,947



3,055



3,392



3,620



3,607



3,955



4,597



4,227Other operating costs:Office consolidation


2,305



985



4,612



908



561



553



2,575



1,518Operating income


11,603



17,716



9,528



12,884



23,977



18,570



22,909



23,298Interest expense


3,485



3,671



3,952



3,968



4,756



5,170



5,618



4,602Interest income


(303
)


(300
)


(312
)


(296
)


(305
)


(380
)


(225
)


(272
)Other expense, net


12



214



(87
)


(321
)


(92
)


93



(68
)


5Income before income tax expense


8,409



14,131



5,975



9,533



19,618



13,687



17,584



18,963Income tax expense


3,620



5,791



2,590



4,100



8,289



5,851



7,598



8,057Net income

$
4,789


$
8,340


$
3,385


$
5,433


$
11,329


$
7,836


$
9,986


$
10,906Net income per diluted share(1)

$
0.10


$
0.17


$
0.07


$
0.11


$
0.23


$
0.16


$
0.21


$
0.23Diluted shares


50,018



49,954



49,756



49,449



49,145



48,895



48,257



46,838     (1)
    
    The sum of quarterly net income per diluted share does not equal
    annual amounts in 2009 because of rounding and changes in the
    weighted average number of shares.   30




---



##### Table of Contents



Liquidity
    and Capital Resources
    Operating
    Activities
  Note 9-Supplemental
    Investing
    Activities
      Financing
    Activities
   31




---



##### Table of Contents



Debt,
    Commitments and Capital
            Contractual Obligations

Total


2010


2011 to 2012


2013 to 2014


ThereafterDeferred purchase price obligations

$
13,899


$
7,588


$
6,311


$



$
Software license agreements


984



480



504







Term loan


219,375



12,375



207,000







Lease commitments


133,294



24,818



43,541



30,916



34,019$
367,552


$
45,261


$
257,356


$
30,916


$
34,019  32




---



##### Table of Contents



Critical
    Accounting Policies
    Revenue
    Recognition
    Accounts
    Receivable Realization
   33




---



##### Table of Contents



Goodwill
    and Intangible Assets
             34




---



##### Table of Contents



Share-Based
    Payments
    Income
    Taxes
     35




---



##### Table of Contents



Other
    Operating Costs
    Recent
    Accounting Pronouncements
  New
    Accounting Pronouncements
    Recently
    Issued Standards
    Recently
    Adopted Standards
         36




---



##### Table of Contents



Note 3-Acquisitions
      Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.         37




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data.  page F-1.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    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
  Form 10-K,
  (3)
    Changes
    in Internal Control over Financial Reporting    Item 9B.
    Other
    Information.   38




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated Framework
        Internal Control  Integrated
    Framework
    KPMG
    LLP
    39




---



##### 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.   40




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules      Exhibits:
  ExhibitNo.

Description2
.1

Purchase and Sale Agreement dated as of April 18, 2008
    among Navigant Consulting, Inc., Chicago Partners, L.L.C. and
    certain members of Chicago Partners, L.L.C. (Pursuant to
    Item 601(b)(2) of
    Regulation S-K,
    the schedules and exhibits to this agreement are omitted but
    will be provided supplementally to the Commission upon request.)
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated April 24, 2008).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.)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

First Amendment of the Navigant Consulting, Inc. 2005 Long Term
    Incentive Plan, as amended, effective as of April 22, 2008
    (incorporated by reference from our Current Report on
    Form 8-K
    dated April 24, 2008).10
.4*

Second Amendment of the Navigant Consulting, Inc. 2005 Long Term
    Incentive Plan, as amended, effective as of December 18,
    2009.10
.5

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
.6

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
.7

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
.8

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
.9

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.) 41




---



##### Table of Contents



ExhibitNo.

Description10
.10

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
.11

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
.12

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.)10
.13

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
.14

First Amendment to the Navigant Consulting, Inc. Employee Stock
    Purchase Plan. (Incorporated by reference from our Current
    Report on
    Form 8-K
    dated December 24, 2008.)10
.15*

Second Amendment to the Navigant Consulting, Inc. Employee Stock
    Purchase Plan, effective as of December 31, 2009.10
.16

Form of Restricted Stock Award Agreement. (Incorporated by
    reference from our Current Report on
    Form 8-K
    dated March 9, 2007.)10
.17

Form Non-Qualified
    Stock Option Award. (Incorporated by reference from our Current
    Report on
    Form 8-K
    dated March 9, 2007.)10
.18

Navigant Consulting, Inc. Directors Deferred Fees Plan.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated March 9, 2007.)10
.19

Amendment Number One to the Navigant Consulting, Inc.
    Directors Deferred Fees Plan. (Incorporated by reference
    from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.20

Amended and Restated Employment Agreement between William M.
    Goodyear and the Company, dated December 19, 2008.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.21

Amended and Restated Employment Agreement between Julie M.
    Howard and the Company, dated December 19, 2008.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.22

Amended and Restated Employment Agreement between David E.
    Wartner and the Company, dated December 19, 2008.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.23

Employment Agreement dated as of November 10, 2008 between
    the Company and Thomas A. Nardi. (Incorporated by reference from
    our Current Report on
    Form 8-K
    dated October 31, 2008.)10
.24

First Amendment to Employment Agreement between Thomas A. Nardi
    and the Company, dated December 19, 2008. (Incorporated by
    reference from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.25

Sign-On Incentive Recovery Agreement dated as of
    November 10, 2008 between the Company and Thomas A. Nardi.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated October 31, 2008.)10
.26

Employment Agreement dated as of November 3, 2008 between
    the Company and Monica M. Weed. (Incorporated by reference from
    our Current Report on
    Form 8-K
    dated October 22, 2008.)10
.27

First Amendment to Employment Agreement between Monica M. Weed
    and the Company, dated December 19, 2008. (Incorporated by
    reference from our Current Report on
    Form 8-K
    dated December 24, 2008.)10
.28

Sign-On Incentive Recovery Agreement dated as of
    September 24, 2008 between the Company and Monica M. Weed.
    (Incorporated by reference from our Current Report on
    Form 8-K
    dated October 22, 2008.)10
.29

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). 42




---



##### Table of Contents



ExhibitNo.

Description21
.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. 43




---



##### 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 19, 2010/s/  THOMAS
    A. NARDIThomas
    A. Nardi

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

February 19, 2010/s/  DAVID
    E. WARTNERDavid
    E. Wartner

Vice President and Controller (Principal Accounting Officer)

February 19, 2010/s/  THOMAS
    A. GILDEHAUSThomas
    A. Gildehaus

Director

February 19, 2010/s/  CYNTHIA
    A. GLASSMANCynthia
    A. Glassman

Director

February 19, 2010/s/  STEPHAN
    A. JAMESStephan
    A. James

Director

February 19, 2010/s/  PETER
    B. PONDPeter
    B. Pond

Director

February 19, 2010/s/  SAMUEL
    K. SKINNERSamuel
    K. Skinner

Director

February 19, 2010/s/  GOVERNOR
    JAMES R. THOMPSONGovernor
    James R. Thompson

Director

February 19, 2010/s/  MICHAEL
    L. TIPSORDMichael
    L. Tipsord

Director

February 19, 2010  44




---



##### 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, 2009
    and 2008, and for each of the years in the three-year period
    ended December 31, 2009: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-114. Segment Information


F-145. Goodwill and Intangible Assets, Net


F-176. Net Income per Share (EPS)


F-207. Stockholders Equity


F-218. Share-based Compensation Expense


F-229. Supplemental Consolidated Balance Sheet
    Information


F-2710. Supplemental Consolidated Cash Flow
    Information


F-3011. Comprehensive Income


F-3112. Current and Long Term Bank Debt


F-3113. Other Operating Costs


F-3214. Lease Commitments


F-3415. Income Taxes


F-3416. Fair Value


F-3717. Employee Benefits Plans


F-3818. Related Party Transactions


F-3819. Litigation and Settlements


F-38Financial Statement Schedule Schedule II  Valuation and
    Qualifying Accounts


S-1   F-1




---



##### Table of Contents



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




---



##### Table of Contents



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


December 31,2009


2008(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
49,144


$
23,134Accounts receivable, net


163,608



170,464Prepaid expenses and other current assets


16,374



13,455Deferred income tax assets


19,052



21,494Total current assets


248,178



228,547Property and equipment, net


42,975



45,151Intangible assets, net


30,352



38,108Goodwill


485,101



463,058Other assets


13,639



17,529Total assets

$
820,245


$
792,393LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
8,203


$
8,511Accrued liabilities


8,664



10,086Accrued compensation-related costs


69,751



72,701Income taxes payable






1,371Notes payable






4,173Term loan  current


12,375



2,250Other current liabilities


34,441



31,467Total current liabilities


133,434



130,559Non-current liabilities:Deferred income tax liabilities


37,096



28,511Other non-current liabilities


23,923



37,336Bank debt  non-current






10,854Term loan  non-current


207,000



219,375Total non-current liabilities


268,019



296,076Total liabilities


401,453



426,635Stockholders equity:Common stock, $.001 par value per share;
    150,000 shares authorized; 48,651 and 47,319 shares
    issued and outstanding at December 31, 2009 and 2008


60



59Additional paid-in capital


559,368



555,737Deferred stock issuance, net






985Treasury stock


(218,798
)


(231,071
)Retained earnings


91,186



69,239Accumulated other comprehensive loss


(13,024
)


(29,191
)Total stockholders equity


418,792



365,758Total liabilities and stockholders equity

$
820,245


$
792,393    F-3




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
  For the Year Ended December 31,2009


2008


2007(In thousands, except per share data)Revenues before reimbursements

$
636,748


$
727,062


$
681,238Reimbursements


70,491



83,578



85,820Total revenues


707,239



810,640



767,058Cost of services before reimbursable expenses


416,545



444,035



421,032Reimbursable expenses


70,491



83,578



85,820Total costs of services


487,036



527,613



506,852General and administrative expenses


129,048



155,378



141,430Depreciation expense


17,600



17,302



16,179Amortization expense


13,014



16,386



17,494Other operating costs:Separation and severance costs










7,288Office consolidation


8,810



5,207



6,750Gain on sale of property










(2,201
)Operating income


51,731



88,754



73,266Interest expense


15,076



20,146



15,438Interest income


(1,211
)


(1,182
)


(667
)Other income, net


(182
)


(62
)


(43
)Income before income tax expense


38,048



69,852



58,538Income tax expense


16,101



29,795



25,142Net income

$
21,947


$
40,057


$
33,396Basic net income per share

$
0.46


$
0.86


$
0.67Shares used in computing income per basic share


48,184



46,601



49,511Diluted net income per share

$
0.44


$
0.83


$
0.66Shares used in computing income per diluted share


49,795



48,285



50,757    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


StockStock


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, 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







7,861







245











8,106Tax benefits (deficits) on stock options exercised and
    restricted stock vested














1,633



















1,633Issuances of restricted stock, net of forfeitures


995







2



4,829



(6,103
)














(1,272
)Grants of restricted stock awards














221



5,546















5,767Share-based compensation expense














14,725



260















14,985Repurchases of common stock






(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


$
342,753Comprehensive income (loss)


























(35,289
)


40,057



4,768Issuances of common stock related to business combinations






558







(2,003
)


(1,853
)


10,989











7,133Fair value adjustment of shares issued in acquisitions














(6,844
)


















(6,844
)Other issuances of common stock


548



12



1



6,407







242











6,650Tax benefits (deficits) on stock options exercised and
    restricted stock vested














567



















567Issuances of restricted stock, net of forfeitures


401











(1,350
)


















(1,350
)Share-based compensation expense














12,090



(9
)














12,081Balance at December 31, 2008


59,055



(11,736
)

$
59


$
555,737


$
985


$
(231,071
)

$
(29,191
)

$
69,239


$
365,758Comprehensive income


























16,167



21,947



38,114Issuances of common stock related to business combinations






596



1



(3,921
)


(985
)


11,899











6,994Other issuances of common stock


315



20







2,799







374











3,173Tax benefits (deficits) on stock options exercised and
    restricted stock vested














(1,314
)


















(1,314
)Issuances of restricted stock, net of forfeitures


401











(1,411
)


















(1,411
)Share-based compensation expense














7,478



















7,478Balance at December 31, 2009


59,771



(11,120
)

$
60


$
559,368


$



$
(218,798
)

$
(13,024
)

$
91,186


$
418,792    F-5




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Year Ended December 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net income

$
21,947


$
40,057


$
33,396Adjustments to reconcile net income to net cash provided by
    operating activities, net of acquisitions:Depreciation expense


17,600



17,302



16,179Depreciation expense-office consolidation


1,285



2,534



Amortization expense


13,014



16,386



17,494Share-based compensation expense


7,478



11,839



15,410Accretion of interest expense


887



996



794Deferred income taxes


6,366



(4,461
)


(982
)Allowance for doubtful accounts receivable


15,053



20,292



9,518Gain on sale of property, net










(2,201
)Other, net










934Changes in assets and liabilities:Accounts receivable


(4,631
)


4,280



(19,627
)Prepaid expenses and other assets


1,088



(12,708
)


(3,139
)Accounts payable


(344
)


1,442



(5,620
)Accrued liabilities


(989
)


(159
)


3,004Accrued compensation-related costs


(3,305
)


5,268



15,375Income taxes payable


1,063



(2,621
)


(2,395
)Other current liabilities


979



(8,744
)


13,703Net cash provided by operating activities


77,491



91,703



91,843Cash flows from investing activities:Purchases of property and equipment


(17,641
)


(7,398
)


(24,080
)Acquisitions of businesses, net of cash acquired


(12,875
)


(54,222
)


(65,250
)Payments of acquisition liabilities


(3,821
)


(3,154
)


(4,518
)Proceeds from sale of property










4,088Other, net


28



(865
)


(3,682
)Net cash used in investing activities


(34,309
)


(65,639
)


(93,442
)Cash flows from financing activities:Issuances of common stock


3,173



6,650



7,512Payments of notes payable


(4,482
)


(5,976
)


(6,978
)Repayments to banks, net of borrowings


(12,313
)


(11,456
)


(2,105
)Payments of bank borrowings assumed from business acquisitions










(2,420
)Term loan proceeds










225,000Payments of term loan installments


(2,250
)


(2,250
)


(1,125
)Repurchases of common stock










(218,429
)Other, net


(1,009
)


(283
)


(179
)Net cash (used in) provided by financing activities


(16,881
)


(13,315
)


1,276Effect of exchange rate changes on cash


(291
)


(1,271
)


234Net increase (decrease) in cash and cash equivalents


26,010



11,478



(89
)Cash and cash equivalents at beginning of the year


23,134



11,656



11,745Cash and cash equivalents at end of the year

$
49,144


$
23,134


$
11,656    F-6




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    DESCRIPTION
    OF BUSINESS    non-U.S. subsidiaries,
  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
   F-7




---



##### Table of Contents



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




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             F-9




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
    Legal
    Share-Based
    Payments
    Accounting
    for Certain Financial Instruments with Characteristics of Both
    Liabilities and Equity
    Income
    Taxes
    Treasury
    Stock
    Foreign
    Currency Translation
   F-10




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Interest
    Rate Derivatives
    Accounting
    for Acquisitions
    Comprehensive
    Income
    3.
    ACQUISITIONS  2009
    Acquisitions
       F-11




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008
    Acquisitions
         F-12




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007
    Acquisitions
         F-13




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accounting
    for Acquisitions
    Pro
    Forma Information
    For the Year Ended December 31,2009

2008Total revenues

$
722,250


$
858,532Net income

$
22,443


$
44,523Basic net income per share

$
0.47


$
0.93Diluted net income per share

$
0.45


$
0.90   4.
    SEGMENT
    INFORMATION       F-14




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          For the Year Ended December 31,2009


2008


2007Revenue before reimbursements:North American Dispute and Investigative Services

$
261,892


$
306,850


$
298,699North American Business Consulting Services


263,263



314,677



327,511International Consulting Operations


60,107



69,793



55,028Economic Consulting Services


51,486



35,742



Total revenue before reimbursements

$
636,748


$
727,062


$
681,238Total revenues:North American Dispute and Investigative Services

$
287,387


$
338,230


$
324,734North American Business Consulting Services


291,607



355,991



379,152International Consulting Operations


72,820



79,526



63,172Economic Consulting Services


55,425



36,893



Total revenues

$
707,239


$
810,640


$
767,058Segment operating profit:North American Dispute and Investigative Services

$
103,645


$
131,440


$
126,529North American Business Consulting Services


94,950



127,065



123,764International Consulting Operations


14,463



23,251



22,160Economic Consulting Services


18,173



14,121



Total combined segment operating profit


231,231



295,877



272,453Segment reconciliation to income before income tax expense:Unallocated:General and administrative expenses


129,048



155,378



141,430Depreciation expense


17,600



17,302



16,179Amortization expense


13,014



16,386



17,494Long term compensation expense related to consulting personnel
    (including share based compensation)


11,028



12,850



12,247Other operating expenses


8,810



5,207



11,837Operating Income


51,731



88,754



73,266Other expense, net


13,683



18,902



14,728Total unallocated expenses, net


193,183



226,025



213,915Income before income tax expense

$
38,048


$
69,852


$
58,538  F-15




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          December 31,2009


2008North American Dispute and Investigative Services

$
294,439


$
287,225North American Business Consulting Services


232,892



236,419International Consulting Operations


73,197



73,897Economic Consulting Services


78,533



74,089Unallocated assets


141,184



120,763Total assets

$
820,245


$
792,393   Geographic
    data
    For the Year Ended December 31,2009


2008


2007Total revenue:United States

$
592,663


$
676,610


$
658,325United Kingdom


80,021



93,567



79,831All other


34,555



40,463



28,902Total

$
707,239


$
810,640


$
767,058   December 31,


December 31,2009


2008Total assets:United States

$
658,398


$
639,048United Kingdom


119,996



110,966All other


41,851



42,379Total

$
820,245


$
792,393  F-16




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    GOODWILL
    AND INTANGIBLE ASSETS, NET    2009


2008Goodwill

$
490,526


$
468,483Less  accumulated amortization


(5,425
)


(5,425
)Goodwill, net


485,101



463,058Intangible assets:Customer lists and relationships


63,697



58,834Non-compete agreements


19,701



18,878Other


19,589



17,470Intangible assets, at cost


102,987



95,182Less: accumulated amortization


(72,635
)


(57,074
)Intangible assets, net


30,352



38,108Goodwill and intangible assets, net

$
515,453


$
501,166        F-17




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           F-18




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended December 31,2009


2008Balance as of the beginning of the period  Goodwill,
    net

$
463,058


$
430,768Goodwill acquired during the period


12,061



69,801Adjustments to goodwill






(6,905
)Foreign currency translation  goodwill, net


9,982



(30,606
)Balance as of the end of the period  Goodwill, net

$
485,101


$
463,058Balance as of the beginning of the period  Intangible
    assets, net

$
38,108


$
57,755Intangible assets acquired during the period


2,861



5,894Adjustments to intangible assets


(270
)


Foreign currency translation  intangible assets, net


2,667



(9,155
)Less  amortization expense


(13,014
)


(16,386
)Balance as of the end of the period  Intangible
    assets, net

$
30,352


$
38,108     paid-in-capital
   F-19




---



##### Table of Contents



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

Amount2010

$
10,0662011


7,6012012


5,1782013


4,0602014


2,537Thereafter


910Total

$
30,352   6.
    NET
    INCOME PER SHARE (EPS)      For the Year Ended December 31,2009


2008


2007Common shares outstanding


48,173



46,522



49,236Business combination obligations payable in a fixed number of
    shares


11



79



275Basic shares


48,184



46,601



49,511Employee stock options


350



446



577Restricted shares and stock units


194



375



439Business combination obligations payable in a fixed dollar
    amount of shares


1,029



846



132Contingently issuable shares


38



17



98Diluted shares


49,795



48,285



50,757      F-20




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      7.
    STOCKHOLDERS
    EQUITY  For
    the year ended December 31, 2009
    For
    the year ended December 31, 2008
    For
    the year ended December 31, 2007
        Stockholder
    Rights Plan
    Other
    Information
   F-21




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    SHARE-BASED
    COMPENSATION EXPENSE  Summary
      Share-based
    Compensation Plans
    Restricted
    Stock Outstanding
       F-22




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
      For the Year Ended December 31,2009


2008


2007Weighted





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


1,678


$
19.00



2,264


$
19.45



1,963


$
19.07Granted


327



12.68



172



17.72



1,986



18.71Vested


(511
)


20.19



(479
)


20.02



(1,054
)


17.50Forfeited


(138
)


19.13



(279
)


19.43



(631
)


19.20Restricted stock and equivalents outstanding at end of year


1,356


$
17.25



1,678


$
19.00



2,264


$
19.45    F-23




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2009


December 31, 2008Weighted





WeightedOutstanding


Average


Outstanding


AverageShares


Measurement


Shares


MeasurementRange of Measurement Date Prices

(000s)


Date Price


(000s)


Date Price$0.00  $17.99


416


$
13.37



135


$
16.05$18.00  $18.99


560



18.56



820



18.56$19.00  $20.99


374



19.52



641



19.56$21.00  $24.99


6



21.36



45



22.26$25.00 and above










37



25.97Total


1,356


$
17.25



1,678


$
19.00     Stock
    Options Outstanding
      For the Year Ended December 31,2009


2008


2007Weighted





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


1,329


$
9.24



1,679


$
10.10



1,917


$
9.13Granted


267



12.07



10



16.68



109



18.86Exercised


(111
)


4.55



(221
)


5.33



(310
)


6.02Forfeited or exchanged


(75
)


24.40



(139
)


26.39



(37
)


21.32Options outstanding at end of year


1,410


$
9.33



1,329


$
9.24



1,679


$
10.10Options exercisable at end of year


1,079


$
8.08



1,212


$
8.23



1,492


$
8.87  F-24




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2009


December 31, 2008Weighted


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


161


$
3.68



1.6



183


$
3.68



2.6$3.75 to $4.99


401



3.93



0.7



482



3.94



1.7$5.00 to $9.99


288



6.08



2.6



292



6.09



3.7$10.00 to $19.99


472



15.03



4.3



217



18.53



4.0$20.00 and above


88



24.30



1.6



155



25.22



1.8Total


1,410


$
9.33



2.5



1,329


$
9.24



2.6     Weighted


RemainingOutstanding


Average


ExerciseShares


Exercise


PeriodRange of Exercise Prices

(000s)


Price


(Years)$0.00 to $3.74


161


$
3.68



1.6$3.75 to $4.99


401



3.93



0.7$5.00 to $9.99


288



6.08



2.6$10.00 to $19.99


141



18.84



3.1$20.00 and above


88



24.30



1.6Total


1,079


$
8.08



1.7     SharesRemainingWeighted


AvailableOutstanding


Average


for FutureShares


Exercise


IssuancesPlan Category

(000s)


Price


(000s)Long-Term Incentive Plan


1,323


$
9.07



3,185Supplemental Equity Incentive Plan


87



13.34



224Total


1,410


$
9.33



3,409    F-25




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Options Grants
    2009

2008

2007Fair value of options granted

$
5.97


$
8.69


$
10.00Expected volatility


60
%


60
%


61
%Risk free interest rate


2.1
%


2.9
%


4.7
%Forfeiture rate


0
%


0
%


0
%Dividend yield


0
%


0
%


0
%Contractual or expected lives (years)


4.5



4.5



4.5     Share-based
    Compensation Expense
      For the Year Ended December 31,2009

2008

2007Amortization of restricted stock awards

$
6,378


$
10,372


$
13,244Amortization of stock option awards


734



697



860Fair value adjustment for variable stock option accounting awards


(16
)


62



(130
)Discount given on employee stock purchase transactions through
    our Employee Stock Purchase Plan


382



950



1,011Other share-based compensation expense






(242
)


425Total share-based compensation expense

$
7,478


$
11,839


$
15,410      F-26




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended December 31,2009


2008


2007Cost of services

$
5,083


$
9,087


$
12,247General and administrative expenses


2,395



2,752



3,163Total share-based compensation expense

$
7,478


$
11,839


$
15,410       Employee
    Stock Purchase Plan
      9.
    SUPPLEMENTAL
    CONSOLIDATED BALANCE SHEET INFORMATION  Accounts
    Receivable
    2009


2008Billed amounts

$
138,114


$
142,503Engagements in process


45,291



49,319Allowance for uncollectible accounts


(19,797
)


(21,358
)$
163,608


$
170,464    F-27




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Prepaid
    expenses and other current assets
    2009


2008Notes receivable  current

$
4,845


$
4,595Income taxes receivable


3,174



Other prepaid expenses and other current assets


8,355



8,860Prepaid expenses and other current assets

$
16,374


$
13,455   Other
    assets
    2009


2008Notes receivable  non-current

$
10,131


$
13,905Prepaid expenses and other non-current assets


3,508



3,624Other assets

$
13,639


$
17,529     Property
    and Equipment
    2009


2008Furniture, fixtures and equipment

$
54,169


$
49,668Software


27,308



24,056Leasehold improvements


39,587



40,159Property and equipment, at cost


121,064



113,883Less: accumulated depreciation and amortization


(78,089
)


(68,732
)Property and equipment, net

$
42,975


$
45,151  F-28




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other
    Current Liabilities
    2009


2008Deferred business acquisition obligations

$
7,588


$
10,899Deferred revenue


13,039



13,685Deferred rent


1,401



2,470Commitments on abandoned real estate (see Note 13)


4,141



1,112Interest rate swap liability (see Note 11)


4,116



Other liabilities


4,156



3,301$
34,441


$
31,467         Other
    Non-Current Liabilities
    2009


2008Deferred business acquisition obligations

$
6,311


$
11,277Deferred rent  long-term


9,740



9,995Commitments on abandoned real estate (see Note 13)


4,660



2,884Interest rate swap liability (asset) (see Note 11)


(168
)


9,585Other non-current liabilities


3,380



3,595$
23,923


$
37,336    F-29




---



##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Notes
    Payable  Current and Non-Current
    2009


2008Note related to the Abros acquisition

$



$
362Note related to the Troika acquisition






3,811Total current notes payable

$



$
4,173   10.
    SUPPLEMENTAL
    CONSOLIDATED CASH FLOW INFORMATION  2009
    Non-Cash Transactions
    2008
    Non-Cash Transactions
    2007
    Non-Cash Transactions
    Other
    Information
   F-30




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    COMPREHENSIVE
    INCOME    For the Year Ended December 31,2009


2008


2007Net income

$
21,947


$
40,057


$
33,396Foreign currency translation adjustment


13,088



(33,321
)


6,391Unrealized net gain (loss) on interest rate derivative, net of
    income taxes


3,079



(1,968
)


(3,467
)Comprehensive income

$
38,114


$
4,768


$
36,320         12.
    CURRENT
    AND LONG TERM BANK DEBT   F-31




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Amount2010

$
12,3752011


22,5002012, through May 31


184,500Total

$
219,375   13.
    OTHER
    OPERATING COSTS    2009


2008


2007Separation costs and severance

$



$



$
7,288Office consolidation:Adjustments to office closures obligations, discounted and net
    of expected sublease income


7,525



2,173



3,346Write down of leasehold improvements






500



3,404Accelerated depreciation on leasehold improvements due to
    expected office closures


1,285



2,534



Gain on sale of property










(2,201
)Other operating costs

$
8,810


$
5,207


$
11,837  F-32




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Separation
    costs and severance:
    Office
    consolidation:
      Gain
    on sale of property:
    Balance
    Sheet:
    OfficeSpace


WorkforceReductions


ReductionsBalance at December 31, 2007

$
5,212


$
1,199Charges to operations during the year ended December 31,
    2008


2,673



Utilized during the year ended December 31, 2008


(3,889
)


(1,199
)Balance at December 31, 2008

$
3,996


$
Charges to operations during the year ended December 31,
    2009


7,525



Utilized during the year ended December 31, 2009


(2,720
)


Balance at December 31, 2009

$
8,801


$
  F-33




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    LEASE
    COMMITMENTS      Year Ending December 31,

Amount2010

$
24,8182011


23,9002012


19,6412013


16,4902014


14,426Thereafter


34,019$
133,294       15.
    INCOME
    TAXES    For the Year EndedDecember 31,2009


2008


2007United States

$
39,860


$
66,509


$
63,420Other


(1,812
)


3,343



(4,882
)Total income before income tax expense

$
38,048


$
69,852


$
58,538  F-34




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For The Year EndedDecember 31,2009


2008


2007Federal:Current

$
6,366


$
23,548


$
19,122Deferred


6,614



(1,093
)


1,930Total


12,980



22,455



21,052State:Current


1,382



6,002



4,946Deferred


1,688



(279
)


493Total


3,070



5,723



5,439Foreign:Current


1,987



4,706



2,056Deferred


(1,936
)


(3,089
)


(3,405
)Total


51



1,617



(1,349
)Total federal, state and foreign income tax expense

$
16,101


$
29,795


$
25,142     For the Year Ended December 31,2009


2008


2007Federal tax expense at the statutory rate


35.0
%


35.0
%


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


5.8



5.3



6.0Foreign taxes


0.6



0.8



0.5Effect of non-deductible meals and entertainment expense


1.3



1.2



1.3Effect of enacted tax rate changes










(1.3
)Effect of other transactions, net


(0.4
)


0.4



1.542.3
%


42.7
%


43.0
%    F-35




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2009


2008Deferred tax assets (liabilities) attributable to:Allowance for uncollectible receivables

$
7,879


$
8,558Deferred revenue


3,626



3,330Accrued compensation


3,734



2,468Accrued office consolidation costs


2,754



2,683Interest rate derivatives


1,706



4,150Depreciation and amortization


1,412



1,850Share-based compensation


3,415



4,977Forgivable loans


1,989



1,318Tax credits and capital loss carry forward






396Other


1,192



1,028Deferred tax assets


27,707



30,758Acquisition costs  domestic acquisitions


(38,166
)


(29,907
)Acquisition costs  foreign acquisitions


(6,591
)


(7,427
)Prepaid expenses


(994
)


Change in accounting method






(441
)Deferred tax liabilities


(45,751
)


(37,775
)Net deferred tax liabilities

$
(18,044
)

$
(7,017
)       Unrecognized
    Tax Benefits
    Amount(In thousands)Balance at January 1, 2009

$
818Reductions based on tax positions of prior years


(565
)Settlements


459Balance at December 31, 2009

$
712  F-36




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        16.
    FAIR
    VALUE            over-the-counter
   F-37




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##### Table of Contents



NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Quoted Prices inActive Markets for

Significant Other

SignificantIdentical Assets

Observable Inputs

Unobservable Inputs(Level 1)

(Level 2)

(Level 3)

TotalAs of December 31, 2009Interest rate swaps, net (recorded in other liabilities)





$
3,948






$
3,948As of December 31, 2008Interest rate swap (recorded in other liabilities)





$
9,585






$
9,585   17.
    EMPLOYEE
    BENEFIT PLANS      18.
    RELATED
    PARTY TRANSACTIONS    19.
    LITIGATION
    AND SETTLEMENTS   F-38




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##### Table of Contents



SCHEDULE II
  NAVIGANT
    CONSULTING, INC. AND SUBSIDIARIES
    VALUATION AND QUALIFYING ACCOUNTS
    Years ended December 31, 2009, 2008 and 2007
  Balance at





Balance atBeginning of

Charged to



End ofDescription

Year

Expenses

Deductions(1)

Year(In thousands)Year ended December 31, 2009Allowance for doubtful accounts

$
21,358


$
15,053


$
(16,614
)

$
19,797Year ended December 31, 2008Allowance for doubtful accounts

$
12,674


$
20,292


$
(11,608
)

$
21,358Year ended December 31, 2007Allowance for doubtful accounts

$
11,970


$
9,518


$
(8,814
)

$
12,674     (1)
    
    Represents write-offs.   S-1