<PAGE>

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                ----------------

                                   FORM 10-K

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
   OF 1934

  For the fiscal year ended December 31, 2000

                                       OR

[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
   ACT OF 1934

  For the transition period from                        to


                      Commission file number

                                ----------------

                          NAVIGANT INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                52-2080967
  (State or other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                Identification No.)

      84 INVERNESS CIRCLE EAST
        ENGLEWOOD, COLORADO                             80112
  (Address of principal executive                     (Zip Code)
              offices)
                 Registrant's telephone number: (303) 706-0800

          Securities registered pursuant to Section 12(b) of the Act:

Title
 of
each
class  Name of each exchange on which registered
-----  -----------------------------------------
None.                    None.

          Securities registered pursuant to Section 12(g) of the Act:

     Common Stock, $.001 par                                (Title of Class)
           value per share


                                ----------------

   Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days. Yes   X   No

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [_]

   The aggregate market value of the Registrant's voting stock held as of
February 28, 2001 by non-affiliates of the Registrant was $121,437,236. This
calculation assumes that certain parties may be affiliates of the Registrant
and that, therefore, 11,565,451 shares of voting stock are held by non-
affiliates. As of February 28, 2001, the Registrant had 13,177,000 shares of
its common stock and 1,194,000 of its treasury stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

   The information required by Part III of this Report, to the extent not set
forth herein, is incorporated by reference from the Registrant's definitive
proxy statement relating to the annual meeting of stockholders to be held in
2001, which definitive proxy statement shall be filed with the Securities and
Exchange Commission within 120 days after the end of the fiscal year to which
this Report relates.

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<PAGE>

                           FORWARD-LOOKING STATEMENTS

   Statements contained in this Annual Report on Form 10-K ("Annual Report") of
Navigant International, Inc. ("Navigant," or the "Company"), which are not
historical in nature, are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, without limitation, statements in Items 1. and 2.,
"Business and Properties," Item 5., "Market for Registrant's Common Equity and
Related Stockholder Matters" and Item 7., "Management's Discussion and Analysis
of Financial Condition and Results of Operations," regarding intent, belief or
current expectations of the Company or its officers with respect to, among
other things, trends in the travel industry, the Company's business and growth
strategies, the Company's use of technology, the Company's distribution of
services, the continued use of travel management companies by corporate
clients, the use of co-branding involving the Company's subsidiaries, the
Company's payment or non-payment of dividends, implementation by the Company of
management contracts and service fees with corporate clients, planned cost-
reduction measures, and fluctuations in the Company's quarterly results of
operations.

   Forward-looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from anticipated results. These
risks and uncertainties include changes or reductions in the commission
structure in the travel service industry, changes in laws or regulations
concerning the travel service industry, trends in the travel service industry
(including competition, consolidation and increased use of the Internet and
computer on-line services), the ability of the Company to successfully
integrate the operations of existing or acquired travel management companies,
limitations on the availability of funds or other capital resources to finance
future acquisitions, limitations on the Company's use of the pooling-of-
interest method to account for future acquisitions, the Company's ability to
negotiate favorable travel management contracts with its current and future
clients, any loss or modification of material contracts the Company has with
travel suppliers or current clients, liabilities arising under indemnification
and contribution agreements entered into by the Company in connection with its
spin-off from U.S. Office Products Company ("U.S. Office Products") in June
1998, changes in the Company's ability to amortize goodwill, an impairment of
goodwill due to downturn in the cash flows relating to past acquisitions, and a
variety of factors such as a recession or slower economic growth, weather
conditions and concerns for passenger safety that could cause a decline in
travel demand, as well as the risk factors set forth in Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Risk
Factors," and other factors as may be identified from time to time in the
Company's filings with the Securities and Exchange Commission or in the
Company's press releases.

                                       2
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                                ANNUAL REPORT ON

                                   FORM 10-K

                    FOR FISCAL YEAR ENDED DECEMBER 31, 2000

                                     PART I

ITEMS 1 AND 2. BUSINESS AND PROPERTIES.

General

   Navigant is one of the largest providers of corporate travel management
services in the United States based on airline ticket sales. Navigant
differentiates itself from its larger competitors by primarily focusing on
middle market clients, which Navigant defines as businesses with between
$500,000 and $20 million in annual travel spend, although a few of our clients
spend upwards of $40 million. With locations throughout the United States, in
Canada, in the United Kingdom and in Brazil, Navigant manages all aspects of
its clients' travel processes, focusing on reducing their travel expenses,
typically one of the largest controllable expenses in a corporate budget.
Navigant believes that by providing high quality service and by entering into
management contracts, which may have terms of up to five years, Navigant is
able to retain a significant proportion of its clients from year to year.
Navigant also provides specific group, leisure and special event management
travel services, largely to its corporate clients. On December 31, 2000,
Navigant had approximately 140 regional and branch offices and approximately
500 on-site locations.

   With its technology and experienced personnel, Navigant creates, implements
and manages corporate travel policies, helping its clients reduce travel costs.
Navigant provides its clients with extensive data about individual,
departmental and company travel activity and patterns to help identify
potential cost savings. Navigant also provides comprehensive accounting systems
that track and reconcile travel expenses, process and classify billing
information and provide management reports, all of which can be tailored to
meet a client's particular needs.

   Navigant's proprietary AQUA(TM) quality control software products are the
industry leaders. AQUA's FareBuster(TM) cost avoidance system checks each
travel record for a lower airline fare or hotel rate and continuously checks
wait-list flight inventories for discount fares that become available prior to
travel. AQUA's Trip Auditor(TM) system repetitively searches airline seat maps
for each traveler's preferred seat assignments and frequent flier upgrade
opportunities.

   The Internet has the potential to allow Navigant to provide an even higher
level of service to its corporate clients while significantly reducing
distribution costs, especially labor costs. Navigant currently provides
reservation and ticketing services, as well as quality control and cost
reduction systems, and other travel management products, including its travel
accounting and management reporting services, through its consolidated Web
site, navigant.com, and its suite of Internet products and services,
BusinessFLYR(TM) and ReportFLYR(TM). These services allow Navigant's clients to
take advantage of its existing offline services more quickly and efficiently.

   Navigant's Internet subsidiary, FireVine, LLC ("FireVine"), (formerly known
as "NavigantVacations.com") expects to leverage the existing client and
customer base of Navigant to create an expanded leisure travel revenue source.
Through agreements with Navigant's clients using private label and co-branding
arrangements, FireVine plans to reach both employees of clients and customers
of clients. The Company believes its CruiseCenter.com website provides
exceptional value to customers, and the Company plans to augment the site with
additional technology to further meet the demands of leisure travel customers
for exceptional value and service.


                                       3
<PAGE>

   As of December 31, 2000, Navigant believes that at least 95% of its total
transactions are generated from clients under management contracts or service
fee arrangements. Although the terms of its management contracts vary depending
on the type of services provided and by client, Navigant typically is entitled
to receive a pre-negotiated management fee and to be reimbursed for its direct
operating expenses and indirect overhead costs.

Development of Business

   In the late 1970s, Edward S. Adams, Navigant's Chairman and Chief Executive
Officer, started a company in Denver, Colorado, focused on managing corporate
travel. In 1983, Mr. Adams formed Professional Travel Corporation by merging
his company with three of the largest corporate travel management companies in
Colorado. By 1995, Professional Travel Corporation had become one of the 20
largest travel management companies in the United States.

   In 1997, U.S. Office Products purchased Professional Travel Corporation, and
Mr. Adams became president of U.S. Office Products' Corporate Travel Services
Division. He was charged with building a national corporate travel management
company focused on middle market clients. Under U.S. Office Products'
ownership, the management team led by Mr. Adams acquired an additional eleven
regional corporate travel management companies and significantly increased the
geographical scale and client-base of the business. In June 1998, U.S. Office
Products distributed 10,984,000 shares of Navigant's common stock to the
stockholders of U.S. Office Products (the "Travel Distribution"). Additionally,
Navigant completed an initial public offering of 2,000,000 shares of Navigant
common stock simultaneously with the Travel Distribution (the "Stock
Offering"). The Travel Distribution was part of a restructuring plan (the
"Strategic Restructuring"), in which U.S. Office Products spun-off its print
management, technology solutions, educational supplies and corporate travel
services businesses. Following the Travel Distribution, Navigant acquired seven
more regional corporate travel management companies in 1998, nine regional
corporate travel management companies and an incentive and meeting company in
1999, and six more regional corporate travel management companies in 2000. As
of December 31, 2000, Navigant owned the following regional corporate travel
management companies:

<TABLE>
<CAPTION>
Name                                           Headquarters        Date Founded
----                                           ------------        ------------
<S>                                      <C>                       <C>
Akra Travel (1)                          Jacksonville, Florida         1985
Arrington Travel Center, d/b/a Navigant  Chicago, Illinois
 International/
 North Central (9)                                                     1969
Associated Travel, d/b/a Navigant        Santa Ana, California
 International/Southwest (6) (9)                                       1961
Atlas Travel, d/b/a Navigant             Houston, Texas
 International/South Central (2) (3)
 (12)                                                                  1958
Atlas Travel (4)                         Vancouver, British
                                         Columbia                      1961
Belle Meade Travel, Inc. (5)             Nashville, Tennessee          1991
Bowers Worldwide Travel (6) (9)          Phoenix, Arizona              1978
Chartrek International (7)               Norwalk, Connecticut          1978
Cornerstone Enterprises, d/b/a           Marlboro, Massachusetts
 Cornerstone, A Navigant International
 Company                                                               1983
Couch/Mollica Travel (8)                 Pittsburgh, Pennsylvania      1984
Dawson's Travel, Inc., d/b/a Navigant    Santa Clara, California
 International/Silicon Valley                                          1978
Dollinger Travel, d/b/a Navigant         Rochester, New York
 International/Western New York                                        1986
Evans Travel Group, d/b/a Navigant       New Orleans, Louisiana
 International/Louisiana                                               1986
First Travelcorp, d/b/a Navigant         Raleigh, North Carolina
 International/Southeast (1) (5)                                       1991
Forbes Travel Service, d/b/a Navigant    Pittsburgh, Pennsylvania
 International/Pittsburgh (8)                                          1972
Getz International Travel (9)            San Francisco, California     1985
GTS Global Travel Solutions, d/b/a GTS   Toronto, Ontario
 Navigant                                                              1995
Jarvis Travel (4)                        Calgary, Alberta              1971
</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
Name                                             Headquarters      Date Founded
----                                             ------------      ------------
<S>                                         <C>                    <C>
K.R. International Travel, d/b/a Navigant   Rio de Janeiro, Brazil
 International/Brazil
Lovejoy-Tiffany & Associates, Inc., d/b/a   Ann Arbor, Michigan        1973
 Navigant International/ Southeastern
 Michigan
McGregor Travel Management, d/b/a Navigant  Stamford, Connecticut      1977
 International/
 Northeast (7) (10)
M.D. Travel Management, d/b/a Navigant      London, England            1988
 International/United Kingdom
Moran Travel Bureau, d/b/a Navigant         Boston, Massachusetts      1988
 International/Boston (11)
Mutual Travel, d/b/a Navigant               Seattle, Washington        1984
 International/Northwest
Oaks Travel (3)                             Houston, Texas             1983
                                            Cambridge,                 1979
Omni Travel (11)                            Massachusetts
Professional Travel, d/b/a Navigant         Denver, Colorado           1983
 International/Rocky Mountain
S.B. Wood Investments (12)                  Houston, Texas             1967
Simmons Associates, d/b/a Navigant          Alexandria, Virginia       1975
 International/District of Columbia
Travel Consultants, d/b/a Navigant          Grand Rapids, Michigan     1972
 International/Grand Rapids
TravelCorp, d/b/a Navigant                  Minneapolis, Minnesota     1974
 International/Twin Cites
World Express Travel, d/b/a Navigant        Anchorage, Alaska          1987
International/Alaska
1377665 Ontario Inc. (4)                    Toronto, Ontario           1999
</TABLE>
--------
(1)  On December 31, 2000, Akra Travel was merged into First Travelcorp Inc.
(2)  On December 28, 1998, Travel Arrangements, Inc. and St. Pierre
     Enterprises, Inc., which had been doing business as "Supertravel," and
     Atlas Travel Services, LLC, were all restructured into a common entity,
     Atlas Travel Services, L.P.
(3)  On February 22, 2000, Oaks Travel Corp. was merged into Atlas Travel
     Services, L.P.
(4)  On December 31, 2000, Atlas Travel Services, Jarvis Travel and 1377665
     Ontario Inc. were amalgamated into Navigant International/Canada Inc.
(5)  On August 31, 2000, Belle Meade Travel merged into First Travelcorp Inc.
(6)  On December 31, 2000, Bowers Worldwide Travel was merged into Associated
     Travel Services.
(7)  On December 29, 1999, Chartrek International, Inc., was merged into
     McGregor Travel Management, Inc.
(8)  On December 31, 2000, Couch/Mollica Travel was merged into Forbes Travel
     Service, Inc.
(9)  On April 13, April 27, and June 19, 2000, the assets of Getz International
     Travel were distributed to Bowers Travel, Arrington Travel Center and
     Associated Travel Services, respectively.
(10)  On September 10, 1999, Wareheim Travel Services, Inc. (which had been
      doing business as "Travel Guide") was merged into McGregor Travel
      Management, Inc.
(11)  On May 31, 2000, Omni Travel was merger into Moran Travel Bureau. Inc.
(12)  On April 17, 2000, S.B. Wood Investments (which had been doing business
      as All Seasons Travel) merged into Atlas Travel Services, L.P.

   Beginning January 1, 2000, all Navigant companies began doing business as
Navigant International with the individual identifiers shown in the table
above.

Travel Services Industry

   Navigant believes the travel services industry can be divided into two
sectors: the unmanaged leisure and small business sector, and the managed
corporate sector. Navigant competes in the managed corporate sector, which
Navigant believes is made up of approximately 300 travel management companies.
According to the Travel Industry Association of America and the United States
Department of Commerce, Americans spent a total of $446 billion on domestic
travel in 1999, of which Navigant believes a significant portion was for
business travel.


                                       5
<PAGE>

   The corporate travel management industry grew dramatically as a result of
the deregulation of the airline industry in 1978. The complex pricing
strategies adopted by the airlines to maximize their yields and loads created
an opportunity for travel management companies to assist mid-sized and large
companies in managing their travel expenses. Over the years, the industry has
progressed from merely delivering low-cost airline tickets to providing end-to-
end support and services.

   Travel is among the largest controllable expense for most companies.
Businesses hire corporate travel management companies to reduce these expenses,
and to manage the travel process. Corporate travel management companies can cut
travel expenses for their clients in many ways, including creating travel
policies that take advantage of savings opportunities inherent in complex
airline pricing structures, collecting data for greater leverage with
suppliers, negotiating favorable pricing directly with travel suppliers for the
benefit of a particular client, and passing on cost savings and price
reductions negotiated for the benefit of all clients.

   The corporate travel management industry has changed significantly since
1995. Some of the major changes are:

  .  Conversion to management contracts and service fee arrangements;

  .  Reduction in commission rates from airlines;

  .  Increasing industry reliance on technology; and

  .  Expansion of services offered to clients.

   Navigant believes that a successful response to these changes requires
significant technological and financial resources, and that larger corporate
travel management companies therefore may have a competitive advantage.
Accordingly, Navigant believes the business travel management industry is
undergoing a period of consolidation and that significant growth opportunity
exists. Navigant believes that large companies providing integrated systems
from purchasing to data collection will eventually dominate the industry.

   The industry's role and capacity as a distribution channel, and its
relationship with both clients and suppliers, is also undergoing significant
change as a result of the Internet and other technological innovations.
Navigant believes these innovations offer opportunities for corporate travel
management companies to increase the efficiency of their distribution
capacities and enhance services provided to travelers and management.

Business Strategy

   Navigant's mission is to provide progressive travel management services
delivered globally by its unified team of locally based professionals who are
committed to exceeding the expectations of shareholders, clients, and fellow
associates (Navigant refers to its employees as "associates").

   The principal elements of Navigant's business strategy are to:

  .  Generate internal growth through:

    .  Local marketing focused on increasing its middle market client
       base. Navigant intends to expand its client base of middle market
       companies by capitalizing on the breadth of its services, size,
       geographic scope and financial resources while maintaining its local
       and regional relationships and service. Navigant believes that its
       global presence will attract middle market corporate clients that
       have locations in more than one geographic region;

    .  Cross-selling. Navigant plans to market its incentive, meeting and
       special event travel services to corporate clients, sell corporate
       travel management services to current incentive and group clients,
       and market leisure travel to its clients' employees through
       NavigantVacations.com; and


                                       6
<PAGE>

    .  Continuing to shift clients to management contracts and service fee
       arrangements. Navigant's shift toward a compensation structure based
       primarily on management contracts and service fee arrangements
       enables Navigant to share with clients the cost savings it achieves
       through operating efficiencies.

   Use the Internet to attract new clients and increase efficiency. The
Internet provides a multi-faceted opportunity for Navigant, which can be
exploited both in its existing corporate business and in its growing leisure
travel operations. On the corporate side, the Internet can be used to attract
new clients and to serve existing clients more efficiently. By serving its
clients electronically, whether over the Internet or through corporate
Intranets, Navigant can reduce transaction costs. In addition, both the
Internet and client Intranets should allow FireVine to more effectively market
leisure travel service to employees of Navigant's existing corporate clients
and to reach substantial new markets for leisure travel through private label
and co-branding initiatives. Further, by leveraging its technology platforms
and its consolidated purchasing power with Navigant, FireVine should be able to
provide a leisure travel sales operation with low costs and improved margins.

   Leverage Navigant's size to decrease costs and increase revenues. As one of
the largest corporate travel management companies, Navigant negotiates
favorable contracts with vendors and travel suppliers, including incentive
override contracts. These contracts include agreements with selected computer
reservation system vendors, hotel commission clearinghouses, rental car
companies and airlines. Some of these agreements provide payments to Navigant
of up-front incentives, as well as annual payments or costs savings that
management believes are significantly higher than amounts that would have been
offered to any of its individual subsidiary companies. In addition, Navigant
believes that it can benefit from greater purchasing power in such key expense
areas as telecommunication, advertising, insurance, overnight delivery,
employee benefits, office supplies and printing. Navigant believes that it will
achieve economies of scale through the integration of its back-office
operations, technology development and information and management systems at
its current operations, while freeing local management to focus on growth and
customer service. For instance, Navigant has approximately 90% of its
transactions being processed on a single, company-wide information technology
platform to service its accounting and reporting requirements. Navigant also
believes that it can reduce total operating expenses by eliminating or
consolidating certain duplicative facilities and administrative functions, such
as ARC processing, 24-hour toll-free number services, as well as research and
development. In addition, Navigant is consolidating regional locations and
eliminating unnecessary facilities.

   Continue to acquire established, profitable and well-managed corporate
travel management companies. Navigant continues to believe that the corporate
travel management industry is highly fragmented with significant opportunities
to consolidate through selective acquisitions of leading regional and local
companies. Navigant will seek to acquire companies that (i) have demonstrated
growth and profitability, (ii) have desirable geographical locations, (iii) are
run by successful, experienced entrepreneurs whom Navigant will endeavor to
retain, (iv) predominantly serve the corporate market and (v) emphasize
customer service. Navigant routinely reviews, and conducts investigations of,
potential acquisitions of domestic and foreign travel management companies.
When Navigant believes a favorable opportunity exists, Navigant seeks to enter
into discussions with the owners of such businesses regarding the possibility
of an acquisition by Navigant. At any given time, Navigant may be in discussion
with one or more corporate travel management company owners. Navigant may also
make other strategic investments in and acquisitions of travel-related
businesses.

Services

 Travel Management Services

   Navigant provides its clients with a wide range of travel management
services in addition to reservation and ticketing, including:

     . Developing corporate travel policies;

     . Managing adherence to travel policies;


                                       7
<PAGE>

     . Outsourcing travel management consulting services;

     . Designing information and management reporting systems;

     . Negotiating favorable pricing with travel suppliers; and

     . Planning and organizing incentive programs, corporate meetings and
  special events.

   Navigant books travel reservations for its clients with a variety of travel
suppliers, including airlines, hotels and rental car companies. Navigant uses
three major computer reservation systems, SABRE, Galileo/Apollo and Worldspan
to book airline tickets, hotel reservations and rental car reservations. After
making travel reservations for its clients, Navigant issues tickets, both paper
and electronic, and provides its customers with detailed itineraries, which
include confirmation numbers for hotel and car rental reservations.

   Navigant can assist its clients in developing travel policies that enable
the client to manage its travel expenses. These policies can mandate the use of
particular vendors, set parameters on the class of service used by travelers,
require advance purchase of airline tickets and define the use of "frequent
flier" program benefits. These policies may also have risk management features,
such as limiting the number of officers and employees who may travel on the
same flight.

   Navigant's management reports provide detailed and comprehensive information
about each client's travel expenses and patterns. These reports show savings
achieved through the use of preferred vendors and adherence to travel policies,
and analyze destinations, airlines and hotel usage and rental car expense. The
information collected helps Navigant and the client negotiate discounts and
pricing with vendors, and allows the client to monitor and enforce its travel
policies.

   Navigant operates a 24-hour toll free telephone service to provide emergency
assistance to travelers. Many other travel management companies use this
service and Navigant believes it is regarded as one of the best 24-hour
services in the travel industry.

   As a growing part of its business, Navigant has created an incentive,
corporate meeting and special-event subsidiary called Cornerstone. Cornerstone
is comprised of some existing meetings and incentive operations within
Navigant's various subsidiaries, and Cornerstone Enterprises, and it provides
innovation and expertise in the areas of incentive programs, meetings and
special events. Cornerstone operates out of regional offices throughout the
United States and the United Kingdom. Services provided by Cornerstone include,
but are not limited to, strategic planning, promotion support, site selection,
contract negotiations, program planning, registration, creative support and on-
site management.

   In addition to corporate travel management, Navigant provides leisure travel
services to both individuals and groups as a small portion of its overall
business. Navigant derives part of its leisure travel business through its
existing corporate client base. Navigant expects that FireVine will utilize
Navigant's existing resources to increase revenues and operating profits from
leisure travel sales.

 Use of Technology

   Navigant embraces technology as a key to future success in the corporate
travel management industry. Navigant's information technology can provide its
clients' corporate travel managers as well as financial officers with extensive
data about individual, departmental and company travel activity and patterns.
Navigant can use this information to consult with its corporate clients
regarding the structure, operation and efficiency of a variety of corporate
travel policies. In addition, Navigant can provide corporate clients with
comprehensive information about cost-saving opportunities for the travel
undertaken by their employees.

   Navigant has developed a fully-automated quality assurance program,
AQUA(TM), which features both a quality auditing system and a computerized cost
avoidance system. AQUA's Trip Auditor(TM) system checks each travel record for
accuracy and completeness and repetitively searches airline seat maps for each
traveler's

                                       8
<PAGE>

preferred seat assignments and frequent-flier upgrade opportunities. AQUA's
FareBuster(TM) cost avoidance system is a computerized cost avoidance program
which checks each record for a lower airline fare or hotel rate and
continuously checks wait list flights and flight inventories for discount fares
that become available prior to travel. AQUA(TM) also advises travel managers of
travelers who are not taking advantage of the lowest fare. Currently, Navigant
has the AQUA(TM) system installed to process approximately 80% of its
transactions, and plans to continue conversions of newly acquired companies
during 2001. Approximately 70% of the top ten travel management companies in
the United States license portions of the AQUA(TM) system.

   During 1999, Navigant embarked upon a concerted accounting and client
reporting standardization program. This resulted in converting accounting
systems to a single system and reporting systems to a standard system.
Conversions are ongoing, but approximately 90% of all travel transactions
processed by Navigant are now processed on its consolidated system.

   The Internet has the potential to allow Navigant to provide an even higher
level of service to its corporate clients while significantly reducing
distribution costs, especially labor costs. Navigant serves its corporate
clients through its consolidated Web site, navigant.com and its suite of
Internet products and services, BusinessFLYR(TM) and ReportFLYR(TM).
BusinessFLYR(TM) allows Navigant's corporate clients to book air, car and hotel
travel online while enforcing corporate travel policy and capturing their
travel spending patterns. Several different online booking systems can be
configured based on the corporate client's requirements. Through
ReportFLYR(TM), the corporate client can view trip information sorted at every
level of corporate organization, from individual travel to department, division
or entire company. ReportFLYR(TM) allows corporate travel managers and other
executives the ability to view their company's travel activities and real-time
data 24 hours a day using a password protected system.

   Through its existing Internet subsidiaries, FireVine and CruiseCenter.com,
and client Intranet presence, Navigant is also expanding its efforts to cross-
sell leisure travel to employees of its corporate clients, members of affinity
group clients and to provide reservation and ticketing, as well as its quality
control and cost reduction services, to other leisure consumers.

 Distribution of Services

   Navigant provides corporate travel management services to its clients
through several channels, including on-site offices, regional travel management
offices and on-site satellite ticket printers ("STPs").

   At December 31, 2000, Navigant had approximately 500 on-site offices on
client premises, where it provides customized trip planning, reservation and
ticketing services to the employees of corporate clients. On-site operations
are typically desirable for clients with airline expenditures in excess of $1.0
million per year. Through an on-site office, Navigant is able to work one-on-
one with the client's travel manager to meet the client's travel needs,
including the need for customized corporate travel information and negotiations
with travel suppliers frequently used by the customer.

   As of December 31, 2000, Navigant had approximately 140 regional and branch
offices. These offices are typically used by corporate customers with less than
$1.0 million in travel expenditures per year. The regional offices provide
local companies with comprehensive travel management services, including trip
planning, reservation and ticketing services, accounting, corporate travel
reporting, negotiations with frequently used travel suppliers and consulting.
The regional nature of these offices allows them to leverage their local market
expertise and to provide quick, responsive and personalized service. In
addition, regional offices provide backup to nearby on-site locations.

   As of December 31, 2000, Navigant also operated approximately 500 STPs at
client locations across the country. Navigant uses these printers to distribute
tickets instantly to clients' field locations that have enough volume to
justify the STP. Locations with lower volume can receive tickets via overnight
delivery services. Navigant believes that the growth of electronic ticketing
will eventually eliminate the need for STPs and overnight delivery, thus
lowering distribution costs.


                                       9
<PAGE>

   Navigant has entered into arrangements with third parties pursuant to which
it fulfills travel reservations placed on the Internet. In addition, Navigant,
through its navigant.com Web site, allows clients to, among other things, check
flight times, make reservations, access and sort password-protected corporate
travel data, find restaurants and automatic teller machines, and access the
latest currency conversions.

   Navigant offers reservation services to its clients through the Internet, e-
mail and facsimile. These distribution methods offer clients the option of
performing reservation services directly, while Navigant provides a supporting
role. Navigant's role includes performing quality control on the reservation,
travel policy compliance, assisting the traveler with the use of the
reservation system and issuing and delivering tickets reserved by the client.
Additionally, Navigant reports to management on matters such as pre- and post-
travel activity, cost-saving opportunities and the development and assessment
of the client's travel policy and negotiated rate opportunities.

Marketing and Sales

   Navigant's marketing continually targets both new and existing customers.
Navigant's sales staff identifies potential clients, and develops opportunities
to provide additional travel services to existing clients. Over the past few
years, travel policy and travel purchasing decisions in larger companies have
been centralized in purchasing departments, with travel managers, or within the
offices of chief financial officers. The selection of a travel agency has also
become more formal, with larger accounts soliciting bids through "requests for
proposals." Navigant has adapted to these changes by relying on a sales force
specially trained in the business of corporate travel, supported by experienced
marketing staff. Navigant has approximately 125 associates in its sales and
marketing departments.

Competition

   The corporate travel management industry is extremely competitive. Navigant
competes primarily with other corporate travel management companies. Some of
its competitors are larger and have greater brand-name recognition and
financial resources than Navigant does. Competition within the corporate travel
management industry is increasing as the industry undergoes a period of
consolidation. Certain of Navigant's competitors are expanding their size and
financial resources through consolidation. Some travel management companies may
have relationships with certain travel suppliers, that give them access to
favorable availability of products (including airplane seats and hotels room).
Furthermore, some corporate travel management companies have a strong presence
in particular geographic areas that may make it difficult for Navigant to
attract clients in those areas. As a result of competitive pressures, Navigant
may suffer a loss of clients, and its revenues or margins may decline.

   Navigant also competes with travel suppliers, including airlines, hotels and
rental car companies. Innovations in technology, such as the Internet and
computer on-line services, have increased the ability of travel suppliers to
distribute their travel products and some limited services directly to the
consumer. Although corporate travel management companies and travel agencies
remain the primary channel for travel distribution, businesses and consumers
can use the Internet to access information about travel products and services
and to purchase such products and services directly from the suppliers, thereby
bypassing corporate travel management companies and travel agents. Navigant
believes that no single Internet-based service presently provides access to the
full range of information that is available through Navigant. An Internet-based
travel service may, however, provide such access in the future.

   Navigant believes that it competes for clients based upon service, price and
specialized knowledge. Navigant believes that it is well-positioned to compete
on these bases due to its combination of size and regional focus. Navigant uses
its size to achieve operating efficiencies by implementing customized and
industry-standard technologies and by consolidating administrative functions.
Navigant's size also provides opportunities to negotiate favorable arrangements
with travel suppliers, such as airlines, hotels and rental car companies.
Navigant's regional focus, conversely, fosters personalized customer service
and specialized local

                                       10
<PAGE>

market knowledge, which helps improve customer service, solidify customer
relationships and expand the Company's customer base.

Management Information Systems

   Navigant uses networked management information systems for financial
management, reporting, and communication. These systems provide management with
current financial information from all Navigant offices, and allow management
to share that information easily and quickly with others. The systems also
allow management to communicate efficiently with associates and each other
throughout the business day. Navigant employs technicians to administer,
install, and maintain its computer hardware and software, as well as computer
programmers to create software solutions for Navigant and its customers.
Navigant began implementing a single, Company-wide information technology
platform to service its accounting and reporting requirements in 1998, and
approximately 90% of the Company's transactions are currently being transacted
on the new system. The Company expects the remaining transactions, except for
additional acquisitions, to be on the new system by the end of its 2001 fiscal
year.

Employees

   As of December 31, 2000, Navigant had approximately 4,000 full-time
associates, none of whom is subject to collective bargaining agreements. The
Company believes that it enjoys good relations with its associates.

                                       11
<PAGE>

Properties

   As of December 31, 2000, Navigant operated at 140 travel agency facilities,
2 of which are owned and 138 of which are leased. The following are the
Company's primary properties:

<TABLE>
<CAPTION>
                                         Approximate
                                           Square    Owned/
 Region             Location               Footage   Leased Expiration
 ------             ------------------   ----------- ------ -------------------
 <C>                <S>                  <C>         <C>    <C>
                    Vancouver, British
 Canada             Columbia                6,684    Leased August 31, 2001
 Canada             Calgary, Alberta       10,277    Leased October 31, 2001
                    Mississauga,
 Canada             Ontario                17,256    Leased June 30, 2004
 Canada             Toronto, Ontario        2,446    Leased August 14, 2005
 North Central      Chicago, Illinois      28,253    Leased July 21, 2001(1)
 North Central      Edina, Minnesota       12,624    Leased May 31, 2003
                    Ann Arbor,
 North Central      Michigan               12,600    Leased July 31, 2004
                    Grand Rapids,
 North Central      Michigan                4,700    Leased July 31, 2003
                    Grand Rapids,
 North Central      Michigan               29,142    Owned  N/A
                    Stamford,
 Northeast          Connecticut            10,000    Leased May 18, 2004
                    Marlboro,
 Northeast          Massachusetts           7,661    Leased September 1, 2004
                    Pittsburgh,
 Northeast          Pennsylvania            3,276    Leased June 24, 2002
                    Pittsburgh,
 Northeast          Pennsylvania            4,245    Leased June 29, 2002
                    Rochester, New
 Northeast          York                    4,674    Leased July 31, 2004
                    Boston,
 Northeast          Massachusetts          16,247    Leased February 28, 2005
                    Seattle,
 Northwest          Washington             18,538    Leased August 31, 2001
 Northwest          Anchorage, Alaska       8,726    Leased August 31, 1999
                    Englewood,
 Rocky Mountain     Colorado               29,420    Leased August 30, 2005
                    New Orleans,
 South Central      Louisiana               7,590    Leased September 30, 2003
 South Central      Houston, Texas         26,723    Leased April 30, 2001(2)
 South Central      Houston, Texas         13,617    Leased September, 30, 2002
                    Raleigh, North
 Southeast          Carolina               12,002    Leased March 31, 2001
                    Jacksonville,
 Southeast          Florida                 4,849    Leased June 30, 2006
 Southwest          Phoenix, Arizona       14,615    Leased September 30, 2004
                    Santa Ana,
 Southwest          California             25,439    Leased November 15, 2003
 United Kingdom     London, England         4,110    Leased December 26, 2001
                    Englewood,
 World Headquarters Colorado               49,900    Owned  N/A
</TABLE>
--------
(1)  On October 26, 2000, Arrington Travel, d/b/a Navigant International/North
     Central entered into a lease with a commencement date of July 22, 2001 for
     20,164 square feet. This lease expires on July 31, 2006.

(2)  On January 12, 2001, Atlas Travel, d/b/a Navigant International/South
     Central entered into a lease with a commencement date of May 1, 2001 for
     46,380 square feet. This lease expires on April 30, 2011.

   The office building owned by Navigant and located at 84 Inverness Circle
East, Englewood, Colorado is subject to first and second deeds of trust. The
first deed of trust secures payment of a Promissory Note dated May 16, 1995 and
payable to Colorado National Bank, in the principal amount of $1,556,000. The
second deed of trust secures payment of a Promissory Note dated June 20, 1995
and payable to Colorado National Bank, in the principal amount of $225,000.

   Navigant believes that its properties are adequate to support its operations
for the foreseeable future.

Executive Offices

   Navigant's principal executive offices are located at 84 Inverness Circle
East, Englewood, Colorado 80112, and our telephone number is (303) 706-0800.

                                       12
<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

   The Company has been named as a defendant in a lawsuit filed by the previous
stockholders of two of the Company's subsidiaries. The lawsuit also names U.S.
Office Products and certain former and present executive officers of U.S.
Office Products as defendants. The lawsuit was instituted on January 19, 1999,
in the Circuit Court for the County of Kent, State of Michigan. The defendants
removed the suit to the Southern Division of the United States District Court
for the Western District of Michigan. The case was subsequently transferred to
the United States District Court for the District of Columbia, to be
consolidated with other pending actions against U. S. Office Products.

   The plaintiffs allege that U.S. Office Products and the named U.S. Office
Products executive officers made fraudulent misrepresentations and omissions
about, among other things, U.S. Office Products' plans to engage in the
strategic restructuring, which included a spin-off of its travel business to
its existing shareholders. The plaintiffs contend that such alleged
misrepresentations and omissions induced the plaintiffs to sell their
businesses to U.S. Office Products. The Company has been named in the lawsuit
as a successor to U.S. Office Products' travel businesses. The plaintiffs
contend that they may seek rescission of the purchases of these two
subsidiaries or damages for the value of the assets of the two subsidiaries
from the Company and have requested that the Company be required to hold such
assets in a constructive trust for the plaintiffs. As of December 31, 2000, the
approximate book value of these two subsidiaries was $13.1 million. The Company
has been, and intends to continue vigorously defending against this lawsuit.

   Individuals purporting to represent various classes composed of stockholders
who purchased shares of U.S. Office Products common stock between June 5, 1997
and November 2, 1998 filed six actions in the United States District Court for
the Southern District of New York and four actions in the United States
District Court of the District of Columbia in late 1998 and early 1999. Each of
the actions named Jonathan Ledecky (a former director of Navigant), U.S. Office
Products, and, in some cases, Sands Brothers & Co. Ltd. as defendants. Navigant
has not been named as a defendant in any of these actions. The actions claim
that the defendants made misstatements, failed to disclose material
information, and otherwise violated Sections 10(b) and/or 14 of the Securities
Exchange Act of 1934 and Rules 10b-5 and 14a-9 thereunder in connection with
U.S. Office Products' Strategic Restructuring. Two of the actions alleged a
violation of Sections 11, 12 and/or 15 of the Securities Act of 1933 and/or
breach of contract under California law relating to U.S. Office Products'
acquisition of Mail Boxes Etcetera. The actions seek declaratory relief,
unspecified money damages and attorney's fees. All of these actions have been
consolidated and transferred to the United States District Court for the
District of Columbia. The plaintiffs in these cases filed a single consolidated
amended complaint on July 29, 1999, naming only U.S. Office Products and Mr.
Ledecky as defendants. An additional action making factual allegations
essentially the same as those in the consolidated amended complaint was filed
in the United States District Court for the District of Columbia on January 3,
2000.

   Sellers of two businesses that U.S. Office Products acquired in the fall of
1997 and that were spun off in connection with U.S. Office Products' Strategic
Restructuring (which included the Travel Distribution) also have filed
complaints in the United States District Court for the District of Delaware,
and the United States District Court for the District of Connecticut. These
lawsuits were filed on February 10, 1999 and March 3, 1999, respectively, and
name, among others, U.S. Office Products as a defendant. Both of these cases
have been transferred and consolidated for pretrial purposes with the purported
class-action pending in the United States District Court for the District of
Columbia.

   Sellers of two other businesses acquired in October 1997 and December 1997
that were not spun off by U.S. Office Products have also filed complaints in
state court in Kentucky and state court in Indiana in which U.S. Office
Products is named as defendant. Those complaints were filed on or about
September 2, 1999, and September 30, 1999. These cases have been removed to
federal district court, and in 1999 and early 2000 all of these cases were
transferred and consolidated for practical purposes with the purported class
action pending in the United States District Court for the District of
Columbia. Each of these disputes generally relates to events

                                       13
<PAGE>

surrounding the Strategic Restructuring, and the complaints that have been
filed assert claims of violation of federal and/or state securities and other
laws, fraud, misrepresentation, conspiracy, breach of contract, negligence,
and/or breach of fiduciary duty.

   In October 1999, the United States District Court for the District of
Columbia ordered that all parties engage in mediation, and "administratively
closed" the cases. When mediation efforts were unsuccessful, the Court re-
opened the cases in November of 2000. The Court set a briefing schedule for
motions to dismiss in some of the consolidated cases. This order did not
include the one case to which the Company is a party.

   On April 14, 1998, a stockholder purporting to represent a class composed of
all U.S. Office Products' stockholders filed an action in the Delaware Chancery
Court. The action names U.S. Office Products and its directors, including Mr.
Ledecky, as defendants, and claims that the directors breached their fiduciary
duty to stockholders of U.S. Office Products by changing the terms of the self
tender offer for U.S. Office Products' common stock that was a part of the
Strategic Restructuring Plan to include employee stock options. The complaint
seeks injunctive relief, damages and attorneys' fees. The directors filed an
answer denying the claims against them, and U.S. Office Products has moved to
dismiss all claims against it.

   In connection with the Travel Distribution, the Company agreed to indemnify
U.S. Office Products for certain liabilities, which could include claims such
as those made against U.S. Office Products in all the lawsuits described in
this section. If U.S. Office Products were entitled to indemnification under
this agreement, the Company's indemnification obligation, however, likely would
be limited to 5.2% of U.S. Office Products' indemnifiable loss, up to a maximum
of $1.75 million.

   On March 5, 2001 U.S. Office Products filed for bankruptcy protection in the
United States Bankruptcy Court for the District of Delaware. Consequently, all
of the above actions are currently stayed against U.S. Office Products. The
plaintiffs in each action, however, may pursue their claims against all
remaining defendants, including the Company.

   Navigant is also involved in various other legal actions arising in the
ordinary course of its business. Navigant believes that none of these actions
will have a material adverse effect on its business, financial condition and
results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

   No matter was submitted to a vote of the Company's stockholders, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal year
2000.

                                       14
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information

   The Company's Common Stock ("Common Stock") is quoted on the Nasdaq Stock
Market National Market under the symbol "FLYR." The following table sets forth,
for the period indicated, the range of high and low sales prices per share of
Common Stock, as reported on the Nasdaq Stock Market National Market:

<TABLE>
<CAPTION>
                                                                    High   Low
                                                                   ------ -----
2000
----
<S>                                                                <C>    <C>
First Quarter (December 27, 1999 through March 26, 2000).......... $11.75 $8.75
Second Quarter (March 27, 2000 through June 25, 2000)............. $ 9.50 $8.50
Third Quarter (June 26, 2000 through September 24, 2000).......... $11.75 $9.06
Fourth Quarter (September 25, 2000 through December 31, 2000)..... $10.50 $8.00

<CAPTION>
1999
----
<S>                                                                <C>    <C>
First Quarter (December 28, 1998 through March 28, 1999).......... $ 8.31 $5.00
Second Quarter (March 29, 1999 through June 27, 1999)............. $ 8.81 $4.81
Third Quarter (June 28, 1999 through September 26, 1999).......... $ 9.13 $7.38
Fourth Quarter (September 27, 1999 through December 26, 1999)..... $12.00 $6.31

<CAPTION>
1998
----
<S>                                                                <C>    <C>
Second Quarter (June 9, 1998 (1) through June 27, 1998)........... $ 8.63 $6.25
Third Quarter (June 28, 1998 through September 26, 1998).......... $ 8.75 $5.38
Fourth Quarter (September 27, 1998 through December 27, 1998)..... $ 7.13 $4.00
</TABLE>
--------
(1)  Prior to June 9, 1998, Navigant was a division of U.S. Office Products.

Holders

   At March 12, 2001, the last reported sales price of the Common Stock was
$10.94 per share, and the number of holders of record of the Common Stock was
approximately 3,173.

Dividends

   The Company has not declared or paid dividends on its Common Stock since its
formation, and the Company does not anticipate paying dividends in the
foreseeable future. The decision whether to apply legally available funds to
the payment of dividends on Navigant Common Stock will be made by the Board of
Directors from time to time in the exercise of its business judgment, taking
into account, among other things, Navigant's results of operations and
financial condition, any then existing or proposed commitments by Navigant for
the use of available funds, and Navigant's obligations with respect to the
holders of any then outstanding indebtedness or preferred stock. Furthermore,
Navigant's ability to pay dividends may be restricted from time to time by
financial covenants in its credit agreements.

Sales of Unregistered Securities

   During the fiscal year ended December 31, 2000, there were no sales by the
Company of unregistered securities.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA.

   The historical financial data presented below should be read in conjunction
with the consolidated financial statements, including the notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that appear elsewhere in this Annual Report.

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                 Fiscal Year Ended
                          ----------------------------------------------------------------
                          December 31, December 26, December 27, December 28, December 29,
                              2000         1999         1998         1997         1996
                          ------------ ------------ ------------ ------------ ------------
                                       (In thousands, except per share data)
<S>                       <C>          <C>          <C>          <C>          <C>
Statement of Income Data
 (1):
Revenues................    $315,029     $229,161     $171,368     $ 90,917     $54,749
Operating expenses......     176,359      128,971       99,734       52,517      29,060
General and
 administrative
 expenses...............      88,635       61,320       47,988       27,377      19,707
Depreciation and
 amortization expense...      12,433        9,752        7,167        3,090       1,386
Non-recurring and
 restructuring charges
 (2)....................       1,900                     8,236        1,156
                            --------     --------     --------     --------     -------
Operating income........      35,702       29,118        8,243        6,777       4,596
Interest expense........      13,070        5,929        2,070          685         540
Interest income.........        (673)        (199)        (227)        (400)       (452)
Other, net..............          27           15          (30)         (29)         60
                            --------     --------     --------     --------     -------
Income before provision
 for income taxes.......      23,278       23,373        6,430        6,521       4,448
Provision for income
 taxes..................       9,918       10,217        3,987        2,975         709
                            --------     --------     --------     --------     -------
Income before minority
 interest...............      13,360       13,156        2,443        3,546       3,739
Minority interest.......        (869)         120
                            --------     --------     --------     --------     -------
Net income..............    $ 14,229     $ 13,036     $  2,443     $  3,546     $ 3,739
                            ========     ========     ========     ========     =======
Net income per share:
  Basic.................    $   1.16     $   1.02     $   0.19     $   0.33     $  0.45
  Diluted...............    $   1.15     $   1.01     $   0.18     $   0.32     $  0.44
Weighted average number
 of common shares
 outstanding:
  Basic.................      12,262       12,841       13,156       10,858       8,250
  Diluted...............      12,385       12,868       13,250       11,078       8,425

<CAPTION>
                          December 31, December 26, December 27, December 28, December 29,
                              2000         1999         1998         1997         1996
                          ------------ ------------ ------------ ------------ ------------
                                                                              (unaudited)
                                                   (In thousands)
<S>                       <C>          <C>          <C>          <C>          <C>
Balance Sheet Data (1):
Working capital.........    $ 22,956     $ 20,067     $  1,208     $ 12,379     $ 5,828
Total assets............     331,311      287,311      206,848      137,861      25,967
Total debt..............     140,859      107,219       62,463       16,806       5,655
Stockholders' equity....     132,487      124,963      114,125       99,644      13,569

<CAPTION>
                                                 Fiscal Year Ended
                          ----------------------------------------------------------------
                          December 31, December 26, December 27, December 28, December 29,
                              2000         1999         1998         1997         1996
                          ------------ ------------ ------------ ------------ ------------
                                                   (In thousands)
<S>                       <C>          <C>          <C>          <C>          <C>
Other Data (1):
EBITDA (3)..............    $ 48,135     $ 38,870     $ 15,410     $  9,867     $ 5,982
Cash flow--operating
 activities.............      20,867        9,988       10,078        6,527       5,814
Cash flow--investing
 activities.............     (40,196)     (47,175)     (65,381)      (2,588)     (1,796)
Cash flow--financing
 activities.............      21,347       38,961       49,341       (7,733)       (350)
Increase (decrease) in
 cash...................       1,097        1,688       (5,733)      (3,837)      3,668
Capital expenditures....      10,539        5,234        4,313        1,424       1,796
</TABLE>
--------
(1)  The historical financial information of the businesses that were acquired
     in business combinations accounted for under the pooling-of-interests
     method during the period from January through April 1997 have been
     combined on a historical basis in accordance with accounting principles
     generally accepted in the United States ("GAAP") to present this financial
     data as if these pooled businesses had always been members of the same
     operating group. The financial information of the businesses acquired in
     business combinations accounted for under the purchase method is included
     from the dates of their respective acquisitions.


                                       16
<PAGE>

(2)  For a discussion of non-recurring and restructuring charges, see
     "Management's Discussion and Analysis of Financial Condition and Results
     of Operations--Introduction."

(3)  "EBITDA" is defined as income from operations, plus depreciation and
     amortization. EBITDA is not intended to represent cash flow from
     operations in accordance with GAAP and should not be used as an
     alternative to net income as an indicator of operating performance or to
     cash flow as a measure of liquidity. EBITDA is included in this Annual
     Report because it is a basis upon which Navigant assesses its financial
     performance. While EBITDA is frequently used as a measure of operations
     and the ability to meet debt service requirements, it is not necessarily
     comparable to other similarly titled captions of other companies due to
     potential inconsistencies in the method of calculation.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Introduction

   The Company provides corporate travel management services and, to a more
limited extent, other travel services, throughout the United States, in Canada,
in the United Kingdom and in Brazil.

   The Company's consolidated financial statements treat the eight companies
acquired in business combinations in 1998 accounted for under the purchase
method (the "1998 Purchased Companies"), the ten companies acquired in business
combinations in 1999 accounted for under the purchase method (the "1999
Purchased Companies") and the six companies acquired in business combinations
in 2000 accounted for under the purchase method (the "2000 Purchased
companies") from their respective dates of acquisition.

 Sources of Revenue

   Historically, arrangements between corporate travel management companies and
their clients generally did not provide for any direct compensation from
clients for travel bookings and services completed on their behalf.
Consequently, corporate travel management companies were largely dependent for
their revenues on the point of sale percentage commissions paid by the airlines
for each ticket issued and to a lesser extent on hotel and car rental
commissions. In 1995, the airlines instituted a commission cap of $50 on round-
trip domestic tickets and $25 on one-way domestic tickets. In October 1997, the
airlines cut the base commission on domestic and international tickets from 10%
to 8% of the ticket price. The Company and other travel management companies
were significantly affected by these commission reductions, particularly the
October 1997 reduction, which resulted in a decrease in gross revenue per
transaction. In October 1998, the airlines instituted a commission cap of $100
on round-trip international tickets and $50 on one-way international tickets.
Most recently, in October 1999, the airlines further cut the base commission on
domestic and international tickets from 8% to 5% of the ticket price. The
previous commission caps of $50 on round-trip domestic tickets and $25 on one-
way domestic tickets and $100 on round-trip international tickets and $50 on
one-way international tickets remained in effect.

   In response to the reduction in airline commissions and consistent with
growing industry practice, the Company has entered into management contracts
and service fee arrangements with a significant number of its clients. Although
the terms of the Company's management contracts vary depending on the type of
services provided and by client, the Company typically deducts a pre-negotiated
management fee, its direct operating expenses and its indirect overhead costs
from commissions collected for travel arrangements made on behalf of the
client. If the commissions do not exceed the amounts deducted, the client pays
the difference to the Company. If the commissions exceed the amounts deducted,
the Company typically pays the excess to the client. In addition, the Company
typically charges a service fee for each ticket and other transactions to
clients who do not have a management contract with the Company. The Company
charges between $20 and $40 for each air travel ticket issued to such clients
and retains all of the related commissions collected from the airlines.


                                       17
<PAGE>

   The Company believes that its management contracts and service fee
arrangements should minimize the financial impact of the above noted
commission caps, as well as any future changes in the airline commission
rates. The Company believes that at least 95% of its total transactions are
currently generated from clients under management contracts and service fee
arrangements and expects this percentage to increase to 98% to 100% during
2001 as contracts are renegotiated.

   The Company has entered into agreements with major airlines for the payment
of "incentive override" commissions in addition to the base commissions
described above. Under these agreements, the airlines generally pay additional
commissions on domestic and international air travel if the volume of the
Company's ticket sales surpasses specified thresholds, which typically are
based on the airlines' share of the relevant markets. Additionally, the
Company has negotiated favorable contracts with selected computer reservation
systems vendors, hotel commission clearinghouses, and rental car companies.
Some of these contracts provide payments to the Company of up-front fees or
annual payments or cost savings to Navigant.

 Expenses

   The Company's direct operating expenses include principally labor (which
comprised approximately 69.8%, 76.3% and 70.7% of total direct operating
expenses in 2000, 1999 and 1998, respectively), net commission payments to
clients under management contracts, communication costs and other costs
associated with the selling and processing of travel reservations.

   The Company's general and administrative expenses include principally labor
(which comprised approximately 49.5%, 50.4% and 52.1% of total general and
administrative expenses in 2000, 1999 and 1998, respectively), occupancy and
other costs.

 1998 Non-Recurring and Restructuring Charges

   During 1998, the Company incurred the following non-recurring and
restructuring charges (in thousands):

<TABLE>
<CAPTION>
                                                         Cash  Non-cash Total
                                                        ------ -------- ------
<S>                                                     <C>    <C>      <C>
Prior to or in conjunction with the Distribution:
Impaired Goodwill--March 1998..........................         $  613  $  613
Operation consolidation................................ $  365     333     698
Allocated charges associated with the Distribution.....  1,073   2,677   3,750

Subsequent to the Distribution:
Operational consolidation and elimination of redundant
 facilities............................................  2,602     573   3,175
                                                        ------  ------  ------
  Total non-recurring and restructuring charges........ $4,040  $4,196  $8,236
                                                        ======  ======  ======
</TABLE>

   On March 13, 1998, the Company received 90 days' notice of termination of a
business relationship that contributed approximately $600,000 to net operating
income during 1997. In March 1998, the Company wrote off $613,000 in
intangible assets relating to the original acquisition of this contract. In
addition to this charge, the Company took a charge in April 1998 of
approximately $698,000 in connection with the disposition of certain
equipment, severance charges and other costs associated with a change in
operational strategy to a centralized management structure at one of its
locations. This switch to a centralized management structure from a regional
structure at this location is consistent with the existing structure at the
other regional travel management companies acquired.

   The Company incurred strategic restructuring costs of $3.75 million in
connection with the Travel Distribution as an allocation from U.S. Office
Products. Of this amount, $1.0 million was an allocation to the Company for a
portion of the strategic restructuring charge incurred by U.S. Office Products
and the remaining $2.75 million was as a result of U.S. Office Products
Company's purchase of a pro rata portion of the Company's stock options
pursuant to a tender offer made in connection with the Travel Distribution. Of
the $2.75 million, $2.68 million was recorded as a non-cash compensation
charge while the $73,000 relates to the Company's portion of payroll taxes on
the compensation.

                                      18
<PAGE>

   As part of the Company's increased focus on operational matters subsequent
to the Travel Distribution, it undertook a formal plan approved by its Board of
Directors for cost reduction measures including the elimination of duplicative
facilities, the consolidation of certain operating functions and the deployment
of common information systems. The implementation of the cost reduction
measures commenced in November 1998 and resulted in the Company recording a
restructuring charge of $3.18 million in November and December 1998. The 1998
charge included the closure of 20 facilities, the sale of one building and the
severance associated with the termination of 127 employees. Through December
1999, 18 facilities were closed or consolidated and 142 employees were
terminated. The following table summarizes non-recurring charges associated
with the 1998 cost reduction plan and sets forth their usage for the periods
indicated (in thousands):

<TABLE>
<CAPTION>
                                             Employee
                                             Severance     Facility
                                                and        Closures
                                            Termination      and
                                               Costs    Consolidations  Total
                                            ----------- -------------- -------
<S>                                         <C>         <C>            <C>
1998 Charge................................   $1,172       $ 2,003     $ 3,175
Payments...................................     (513)         (472)       (985)
Non-cash usage.............................                   (573)       (573)
                                              ------       -------     -------
Balance at December 27, 1998...............      659           958       1,617
Payments...................................     (905)       (1,004)     (1,909)
Additional expense recorded during 1999....      246            46         292
                                              ------       -------     -------
Balance at December 26, 1999...............   $    0       $     0     $     0
                                              ======       =======     =======
</TABLE>

 2000 Restructuring Charges

   The Company implemented a cost reduction measure that commenced in March
2000 and resulted in the Company's recording a restructuring charge of $1.9
million in February and March 2000. The 2000 charge provides for the closure of
five facilities and the severance associated with the elimination of
approximately 130 employee positions. As of December 31, 2000, five facilities
have been closed or consolidated and 130 employee positions have been
eliminated. The activity in the restructuring liability during 2000 is as
follows (in thousands):

<TABLE>
<CAPTION>
                                              Employee
                                              Severance     Facility
                                                 and        Closures
                                             Termination      and
                                                Costs    Consolidations  Total
                                             ----------- -------------- -------
<S>                                          <C>         <C>            <C>
2000 restructuring charge...................   $ 1,584       $ 316       $1,900
Payments....................................    (1,584)       (103)      (1,687)
Non-cash usage..............................                  (213)        (213)
                                               -------       -----      -------
Balance at December 31, 2000................   $     0       $   0      $     0
                                               =======       =====      =======
</TABLE>

   The following discussion should be read in conjunction with Navigant's
consolidated financial statements and related notes thereto appearing elsewhere
in the Annual Report.


                                       19
<PAGE>

Results of Operations

   The following table sets forth various items as a percentage of revenues for
2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                               For the Fiscal Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
<S>                                      <C>          <C>          <C>
Revenues...............................     100.0%       100.0%       100.0%
Operating expenses.....................      56.0         56.3         58.2
General and administrative expenses....      28.1         26.8         28.0
Depreciation and amortization expense..       4.0          4.2          4.2
Non-recurring and restructuring costs..       0.6                       4.8
                                            -----        -----        -----
Operating income.......................      11.3         12.7          4.8
Interest expense, net..................       3.9          2.5          1.1
Other (income) expense.................       0.0          0.0          0.0
                                            -----        -----        -----
Income before provision for income
 taxes.................................       7.4         10.2          3.7
Provision for income taxes.............       3.2          4.5          2.3
                                            -----        -----        -----
Income before minority interest........       4.2%         5.7%         1.4%
                                            =====        =====        =====
</TABLE>

Consolidated Results of Operations

 Fiscal Year Ended December 31, 2000 Compared to Fiscal Year Ended December 26,
 1999

   Consolidated revenues increased 37.5%, from $229.2 million for 1999 to
$315.0 million for 2000. This increase was primarily due to the inclusion of
the revenues from the 1999 and 2000 Purchased Companies from their respective
dates of acquisition, which added approximately $63.1 million in consolidated
revenues. Additionally, the Company has increased revenues in 2000 through
internal growth and improved national contracts with certain of its vendors.

   Operating expenses increased 36.7%, from $129.0 million, or 56.3% of
revenues, for 1999 to $176.4 million, or 56.0% of revenues, for 2000. The
decrease in operating expense as a percentage of revenues was due primarily to
the spreading of certain fixed operating expenses over a larger revenue base
and an increase in revenue from certain vendors, due to the Company's
negotiation of improved national contracts with these vendors.

   General and administrative expenses increased 44.5%, from $61.3 million, or
26.8% of revenues, for 1999 to $88.6 million, or 28.1% of revenues, for 2000.
The increase in general and administrative expenses as a percentage of revenues
was due primarily to incremental costs associated with the start-up of FireVine
adding approximately $3.4 million of additional general and overhead costs.
Excluding the start-up costs associated with FireVine, the general and
administrative expense for Navigant for 2000 was 27.0% which approximates the
1999 general and administrative expense.

   As part of the Company's increased focus on regional operational structures
and process flow in 2000, it undertook a formal plan approved by its Board of
Directors for cost reduction measures including the elimination of duplicative
facilities and the consolidation of certain regional operating functions. The
implementation of the cost reduction measures commenced in March 2000 and
resulted in the Company recording an aggregate restructuring charge of $1.9
million in February and March 2000. The Company did not incur any restructuring
charges in 1999.

   Depreciation and amortization expense increased 27.5%, from $9.8 million, or
4.2% of revenues, for 1999 to $12.4 million, or 4.0% of revenues, for 2000.
This increase was due to the increase in the number of purchase acquisitions
and the resultant higher goodwill amortization included in the results for 2000
compared to 1999.

                                       20
<PAGE>

   Interest expense, net, increased from $5.7 million or 2.5% of revenues, for
1999 to $12.4 million, or 3.9% of revenues, for 2000. The increase was
attributable to financing the acquisition of the 1999 and 2000 Purchased
Companies with borrowings under the Company's credit facility as the average
debt balance for 2000 increased to $129.9 million compared to $75.5 million for
1999 resulting in approximately $4.2 million in interest expense. Additionally,
the increase in interest rates associated with the Federal Reserve rate
increases in 2000 resulted in $2.9 million additional interest expense as the
Company's average effective interest rate, including debt issue cost
amortization, increased from 7.8% in 1999 to 10.0% in 2000.

   Provision for income taxes decreased from $10.2 million for 1999 to $9.9
million for 2000, reflecting effective income tax rates of 43.7% and 42.6%,
respectively. The high effective income tax rate compared to the federal
statutory rate of 35% was primarily due to an increase in non-deductible
goodwill amortization resulting from acquisition activity. The effective rate
in 2000 was lower than the effective rate in 1999 due to a lower ratio of non-
deductible goodwill amortization to pre-tax income in the later period.

 Fiscal Year Ended December 26, 1999 Compared to Fiscal Year Ended December 27,
 1998

   Consolidated revenues increased 33.7%, from $171.4 million for 1998 to
$229.2 million for 1999. This increase was primarily due to the inclusion of
the revenues from the 1998 and 1999 Purchased Companies from their respective
dates of acquisition, which added approximately $52.5 million in consolidated
revenues. Additionally, the Company has increased revenues in 1999 through
improved national contracts with certain of its vendors and internal growth.

   Operating expenses increased 29.3%, from $99.7 million, or 58.2% of
revenues, for 1998 to $129.0 million, or 56.3% of revenues, for 1999. The
decrease in operating expense as a percentage of revenues was due primarily to
the spreading of certain fixed operating expenses over a larger revenue base
and an increase in revenue from certain vendors, due to the Company's
negotiation of improved national contracts with these vendors.

   General and administrative expenses increased 27.8%, from $48.0 million, or
28.0% of revenues, for 1998 to $61.3 million, or 26.8% of revenues, for 1999.
The decrease in general and administrative expenses as a percentage of revenues
was due primarily to the 1998 and the 1999 Purchased Companies having lower
general and administrative expenses as a percentage of revenues than the
Company and as a result of spreading certain fixed general and administrative
expenses over a larger revenue base. Additionally, the Company has begun
implementing integration efforts to reduce redundant facilities and functions,
resulting in a decrease in general and administrative expenses during 1999.

   Depreciation and amortization expense increased 36.1%, from $7.2 million, or
4.2% of revenues, for 1998 to $9.8 million, or 4.2% of revenues, for 1999. This
increase was due to the increase in the number of purchase acquisitions and the
resultant higher goodwill amortization included in the results for 1999
compared to 1998.

   The Company did not incur any non-recurring and restructuring charges in
1999 compared to $8.2 million during 1998. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Introduction--1998
Non-Recurring and Restructuring Charges."

   Interest expense, net, increased from $1.8 million or 1.1% of revenues, for
1998 to $5.7 million, or 2.5% of revenues, for 1999. The increase was
attributable to financing the acquisition of the 1998 and 1999 Purchased
Companies with borrowings under the Company's credit facility as the average
debt balance for 1999 increased to $75.5 million compared to $31.7 million for
1998 resulting in approximately $2.9 million in interest expense. Additionally,
the increase in interest rates associated with the Federal Reserve rate
increases resulted in $1.0 million additional interest expense as the Company's
average interest rate increased from 6.5% in 1998 to 7.8% in 1999.


                                       21
<PAGE>

   Provision for income taxes increased from $4.0 million for 1998 to $10.2
million for 1999, reflecting effective income tax rates of 62.0% and 43.7%,
respectively. The high effective income tax rate compared to the federal
statutory rate of 35% was primarily due to an increase in non-deductible
goodwill amortization resulting from acquisition activity. The effective rate
in 1999 was lower than the effective rate in 1998 due to a lower ratio of non-
deductible goodwill amortization to pre-tax income in the later periods.
Additionally, the 1998 effective rate is adversely affected by the large non-
recurring charges, which increased the ratio of non-deductible goodwill
amortization to pre-tax income in 1998 from 16.1% to 36.8%.

Liquidity and Capital Resources

   At December 31, 2000, the Company had cash of $3.1 million, excluding
restricted cash in FireVine, working capital of $23.0 million ($16.3 excluding
restricted cash in FireVine), borrowings of $47.0 million under the Amended and
Restated Credit Agreement from NationsBank, N.A. as Administrative Agent (the
"Credit Facility"), $80.0 million in Senior Secured Notes (the "Notes"), $13.9
million of other indebtedness, including capital lease obligations, and
available capacity under the Credit Facility of $103 million. The Company's
capitalization, defined as the sum of long-term debt and stockholders' equity
at December 31, 2000 was approximately $273.4 million.

   The Company has financed its operational growth and acquisitions primarily
from internally generated cash flow from operations and borrowings under the
Credit Facility and the Notes. These borrowings are secured by the accounts
receivable and other assets of the Company.

   The Company anticipates that its cash flow from operations and borrowings
available under the Credit Facility will provide sufficient cash to enable the
Company to meet its working capital needs, debt service requirements and
planned capital expenditures for property and equipment through at least fiscal
2002 based on current budgets.

   During 2000, net cash provided by operating activities was $20.9 million.
Net cash used in investing activities was $40.2 million, including $10.5
million for additions to property and equipment, such as computer equipment and
office furniture and $37.7 million for the acquisition of the 2000 Purchased
Companies, offset by $8.3 million for the purchase of investments with the
restricted cash equivalents in FireVine. Net cash provided by financing
activities was $21.3 million, consisting of $80.0 million in proceeds from the
issuance of the Notes, offset by $7.8 million for repayments by the Company of
long-term indebtedness, $42.9 million for repayments of the Company's credit
facilities, $1.9 million for payment of debt issuance costs attributable to the
Company's new Notes, $6.4 million for the repurchase of common stock and a net
increase of $241,000 for the proceeds from the exercise of stock options.

   During 1999, net cash provided by operating activities was $10.0 million.
Net cash used in investing activities was $47.2 million, including $5.2 million
for additions to property and equipment, such as computer equipment and office
furniture, and $28.0 million for the acquisition of the 1999 Purchased
Companies, offset by the proceeds from the sale of a building for $1.0 million,
and $15.0 million for the purchase of investments with the restricted cash in
FireVine. Net cash provided by financing activities was $39.0 million,
consisting of $8.1 million for repayments by the Company of long-term
indebtedness, $2.2 million for payment of debt issuance costs attributable to
the Company's new revolving credit facility and $3.2 million for the repurchase
of common stock offset by net increases of $36.7 million in the Company's
Credit Facility and $800,000 for the proceeds from the exercise of stock
options.

   During 1998, net cash provided by operating activities was $10.1 million.
Net cash used in investing activities was $65.4 million, including $4.3 million
for additions to property and equipment, such as computer equipment and office
furniture, and $59.5 million for the acquisition of the 1998 Purchased
Companies. Net cash provided by financing activities was $49.3 million,
consisting of $53.3 million in proceeds from the Company's Credit Facility and
$15.0 million from the Stock Offering, partially offset by repayment to U.S.
Office Products of the $8.8 million of indebtedness allocated to the Company in
the Travel Distribution (net of advances from U.S. Office Products in 1998) and
by $6.9 million of dividends to U.S. Office Products.

                                       22
<PAGE>

   In August 1999, the Company obtained the Credit Facility, a secured $125.0
million revolving credit facility to replace the Company's previous $60.0
million revolving credit facility and a $15.0 million short term bridge loan
agreement. On August 31, 2000, the Company signed an amendment to the Credit
Facility, increasing the revolving credit facility to $150.0 million with the
same terms and conditions. The Credit Facility is available for working
capital, capital expenditures, and acquisitions, subject to compliance with the
applicable covenants. The Credit Facility is scheduled to expire in August
2004. Interest on borrowings under the Credit Facility accrues at a rate of, at
the Company's option, either (i) LIBOR plus a margin of between 1.25% and
2.75%, depending on the Company's funded debt to EBITDA ratio, or (ii) the
Alternative Base Rate (defined as the higher of (x) the NationsBank, N.A. prime
rate and (y) the Federal Funds rate plus .50%) plus a margin of between .25%
and 1.75%, depending on the Company's funded debt to EBITDA ratio. Indebtedness
under the Credit Facility is secured by substantially all of the assets of the
Company. The Credit Facility is subject to terms and conditions typical of
facilities of such size and includes certain financial covenants.

   On November 15, 2000, the Company authorized the issuance and sale of $80
million aggregate principal amount of its 9.84% Senior Secured Notes. The Notes
are payable in three equal installments of $26.7 million due November 15, 2004,
November 15, 2005 and November 15, 2006, respectively. The financial covenants
are consistent with those of the Credit Facility.

   The Company intends to continue to pursue acquisition opportunities and may
be in various stages of negotiation, due diligence and documentation of
potential acquisitions at any time. The timing, size or success of any
acquisition effort and the associated potential capital commitments cannot be
predicted. The Company expects to fund future acquisitions primarily with cash
flow from operations and borrowings, including borrowings under the Credit
Facility, as well as issuance of additional equity or debt. To the extent the
Company funds a significant portion of the consideration for future
acquisitions with cash, it may have to increase the amount available for
borrowing under the Credit Facility or obtain other sources of financing
through the public or private sale of debt or equity securities. There can be
no assurance that the Company will be able to secure such financing if and when
it is needed or on terms the Company deems acceptable. If the Company is unable
to secure acceptable financing, its acquisition program could be negatively
affected. Capital expenditures for equipment and expansion of facilities are
expected to be funded from cash flow from operations and supplemented as
necessary by borrowings under the Credit Facility.

Fluctuations in Quarterly Results of Operations

   The business travel industry is seasonal and the Company's results have
fluctuated because of these seasonal variations. Net revenues and net income
for the Company are generally higher in the second and third calendar quarters.
The Company expects this seasonality to continue in the future. The Company's
quarterly results of operations may also be subject to fluctuations as a result
of changes in relationships with certain travel suppliers, changes in the mix
of services offered by the Company, extreme weather conditions or other factors
affecting travel. Unexpected variations in quarterly results could also
adversely affect the price of the Company's common stock, which in turn could
limit the ability of the Company to make acquisitions.

   As the Company continues to complete acquisitions, it may become subject to
additional seasonal influences. Quarterly results also may be materially
affected by the timing of acquisitions, the timing and magnitude of costs
related to such acquisitions, variations in the prices paid by the Company for
the products it sells, the mix of products sold and general economic
conditions. Moreover, the operating margins of companies acquired may differ
substantially from those of the Company, which could contribute to the further
fluctuation in its quarterly operating results. Therefore, results for any
quarter are not necessarily indicative of the results that the Company may
achieve for any subsequent fiscal quarter or for a full fiscal year.

Inflation

   The Company does not believe that inflation has had a material impact on its
results of operations.


                                       23
<PAGE>

New Accounting Pronouncements

   On June 15, 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133, as subsequently
amended, is effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000 (January 1, 2001 for the Company). SFAS 133 requires that
all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are to be recorded each period
in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. The Company believes that, due to its limited use of
derivative instruments, the adoption of SFAS 133 will not have a significant
effect on the Company's results of operations or its financial position.

Risk Factors

 Significant Indebtedness and Interest Payment Obligations

   Navigant is significantly leveraged. At December 31, 2000, Navigant had
$140.9 million of consolidated outstanding debt and its total consolidated
debt, as a percentage of capitalization, was 51.5%. Navigant may also need to
incur additional debt in the future to complete acquisitions or capital
projects or for working capital even though its Credit Facility and Senior
Secured Notes imposes some limits on its ability to do so. Navigant's high
level of indebtedness could have important consequences to its stockholders,
which include the following:

  .  its ability to obtain additional financing to fund its business
     strategy, debt service requirements, capital expenditures, working
     capital or other purposes may be impaired;

  .  its ability to use operating cash flow in other areas of its business
     will be limited because Navigant must dedicate a substantial portion of
     these funds to pay interest and principal on its debt;

  .  certain of its borrowings bear interest at variable rates, which could
     result in higher interest expense in the event of increases in interest
     rates;

  .  it may not be able to compete with others who are not as highly
     leveraged; and

  .  its significant leverage may limit its flexibility to adjust to changing
     market conditions, changes in its industry and economic downturns.

   Navigant's ability to pay interest on its debt obligations will depend upon
its future operating performance and its ability to obtain additional debt or
equity financing. Prevailing economic conditions and financial, business and
other factors, many of which are beyond Navigant's control, will affect its
ability to make these payments. If in the future Navigant cannot generate
sufficient cash from operations to meet its obligations, Navigant will need to
refinance, obtain additional financing or sell assets. Navigant cannot assure
its stockholders that its business will generate cash flow, or that it will be
able to obtain funding, sufficient to satisfy its debt service requirements.

 Restrictions Imposed by Terms of Indebtedness

   The covenants in Navigant's existing debt agreements, including the Credit
Facility, the Senior Secured Notes and any future financing agreements may
adversely affect its ability to finance future operations or capital needs or
to engage in other business activities. These covenants limit or restrict
Navigant's ability to:

  .  incur additional debt or prepay or modify any additional debt that may
     be incurred;

  .  make certain acquisitions or investments;

  .  pay dividends and make distributions;

                                       24
<PAGE>

  .  repurchase its securities;

  .  create liens;

  .  transfer or sell assets;

  .  enter into transactions with affiliates;

  .  issue or sell stock of subsidiaries;

  .  merge or consolidate; or

  .  materially change the nature of its business.

   In addition, Navigant's Credit Facility also requires it to comply with
certain financial ratios. Navigant's ability to comply with these ratios may be
affected by events beyond its control. If Navigant breaches any of these
covenants in its Credit Facility or Senior Secured Notes, or if Navigant is
unable to comply with the required financial ratios, it may be in default under
its Credit Facility or Senior Secured Notes. A significant portion of
Navigant's indebtedness then may become immediately due and payable. Navigant
is not certain whether it would have, or be able to obtain, sufficient funds to
make these accelerated payments. Compliance with the covenants is also a
condition to revolver borrowings under the Credit Facility on which Navigant
relies to fund its liquidity.

 Holding Company Structure

   Navigant is a holding company. Navigant's subsidiaries conduct substantially
all of its consolidated operations and own substantially all of its
consolidated assets. Consequently, Navigant's cash flow and its ability to meet
its debt service obligations depends upon the cash flow of its subsidiaries,
the payment of funds by its subsidiaries to Navigant in the form of loans,
dividends or otherwise. Navigant's subsidiaries are not obligated to make funds
available to Navigant for payment on debt or otherwise. In addition, their
ability to make any payments will depend on their earnings, the terms of their
indebtedness, business and tax considerations and legal restrictions.

 Risks Related to Revenue

   Historically, corporate travel management companies were largely dependent
for their air travel ticketing revenues on the point of sale percentage
commissions paid by airlines for each ticket issued. Since 1995, most airlines
have substantially reduced the amount of commissions paid to travel agents for
booking domestic and international flights. The airlines have both capped the
total commissions paid per ticket and reduced the commission rates per ticket
payable to travel agents and may further reduce commissions in the future.
Further reductions in commissions may reduce Navigant's revenue. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Navigant--Introduction--Sources of Revenue" in Item 7. There can
be no assurance that the airlines will not further reduce commissions.

   Navigant has responded to the reductions in the commissions paid by airlines
by entering into management contracts and service fee arrangements with many of
its corporate clients. Although the terms of its management contracts vary
depending on the type of services provided and by client, Navigant typically
deducts a pre-negotiated management fee, its direct operating expenses and its
indirect overhead costs from commissions collected for travel arrangements made
on behalf of the client. If the commissions do not exceed the amounts deducted,
the client pays the difference to Navigant. If the commissions exceed the
amounts deducted, Navigant typically pays the excess to the client. In
addition, Navigant typically charges a service fee for each ticket and other
transactions to clients who do not have a management contract with Navigant. In
the future Navigant may not be able to maintain or continue to negotiate
management contracts or continue to receive current levels of fees from those
contracts, and also may not be to charge service fees or maintain the level of
such service fees.


                                       25
<PAGE>

   Navigant also derives part of its revenues from incentive override
commissions paid by the major airlines. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Introduction--
Sources of Revenue" in Item 7. If, during any period, Navigant fails to meet
incentive levels, revenues could decrease. In addition, the airlines may reduce
or terminate incentive override commissions and Navigant may not be able to
extend its current incentive override commission arrangements or enter into new
arrangements that are as favorable as its current arrangements.

 Substantial Competition and Industry Consolidation; New Methods of
 Distribution

   The corporate travel management industry is extremely competitive. Navigant
competes primarily with other corporate travel management companies. Some of
Navigant's competitors are larger and have greater brand-name recognition and
financial resources than Navigant. Competition within the corporate travel
management industry is increasing as the industry undergoes a period of
consolidation. Certain of Navigant's competitors are expanding their size and
financial resources through consolidation. Some travel management companies may
have relationships with certain travel suppliers which give them access to
favorable availability of products (including airplane seats and hotel rooms)
or more competitive pricing than that offered by Navigant. Furthermore, some
corporate travel management companies have a strong presence in particular
geographic areas which may make it difficult for Navigant to attract customers
in those areas. As a result of competitive pressures, Navigant may suffer a
loss of clients, and its revenues or margins may decline.

   Navigant also competes with travel suppliers, including airlines, hotels and
rental car companies. Innovations in technology, such as the Internet and
computer on-line services, have increased the ability of travel suppliers to
distribute their travel products and services directly to consumers. Although
corporate travel management companies and travel agencies remain the primary
channel for travel distribution, businesses and consumers can now use the
Internet to access information about travel products and services and to
purchase such products and services directly from the suppliers, thereby
bypassing corporate travel management companies and travel agents. Navigant
believes that no single Internet-based service presently provides access to the
full range of information available to Navigant and its agents. An Internet-
based travel service may, however, provide such access in the future. In
addition, although Navigant believes the service, knowledge and skills of its
employees and its incorporation of new, alternative distribution channels,
position it to compete effectively in the changing industry, there can be no
assurance that Navigant will compete successfully or that the failure to
compete successfully will not have a material adverse effect on Navigant's
financial condition and results of operations.

 Dependence on Travel Suppliers

   Navigant is dependent upon travel suppliers for access to their products and
services (including airplane seats and hotel rooms). Certain travel suppliers
offer Navigant pricing that is preferential to published fares, enabling
Navigant to offer prices lower than would be generally available to travelers
and other corporation travel management companies or travel agents. Travel
suppliers can generally cancel or modify their agreements with Navigant upon
relatively short notice, leaving Navigant subject to the loss of contracts,
changes in its pricing agreements, commission schedules and incentive override
commission arrangements, and more restricted access to travel suppliers'
products and services, which could have a material adverse effect on Navigant's
business, financial condition and results of operations.

 Dependence Upon Technology

   Navigant's business is dependent upon a number of different information and
telecommunications technologies. In addition, Navigant's ability to quote air
travel ticket prices, make reservations and sell tickets is dependent upon its
contractual right to use, and the performance of, computer reservation systems
operated by SABRE, Galileo/Apollo, Worldspan and Amadeus. Navigant's business,
financial condition and results of operations may be materially adversely
affected if these technologies or systems fail, or if Navigant's access to
these systems is restricted.

                                       26
<PAGE>

 Risks Associated with the Corporate Travel Management Industry; General
 Economic Conditions

   Navigant's operating results generally depend upon factors affecting the
corporate travel management industry. Navigant's revenues and earnings are
especially sensitive to events that affect business air travel, and the level
of car rentals and hotel reservations. A number of factors, including recession
or slower economic growth, rising travel costs, extreme weather conditions and
concerns about passenger safety, could result in a temporary or longer-term
overall decline in demand for business travel. Advances in technology and
communications, such as videoconferencing and Internet-based teleconferencing,
may also adversely impact travel patterns and travel demand. Navigant believes
that price-based competition will continue in the airline industry for the
foreseeable future. The continuation of such competition and the occurrence of
any of the events described above could have a material adverse effect on
Navigant's business, financial condition and results of operations.

 Risks Related to Integration of Operations and Acquisitions

   One of Navigant's strategies is to increase operating margins by
consolidating and integrating certain administrative functions common to all of
its subsidiaries. Each new acquisition results in additional integration of
operations. This integration will require substantial attention from senior
management and may require future substantial capital expenditures. The
integration process may disrupt Navigant's operations as well as those of its
subsidiaries as its management's attention is diverted from other tasks, and as
technological, practical or personnel issues arise.

   Currently, Navigant and some of its subsidiaries operate on separate
computer systems and Navigant and most of its subsidiaries operate on separate
telephone systems, several of which use different technologies. Navigant
expects that it will integrate these systems, but it has not yet established a
definitive timetable for integration of all of such systems or its definitive
capital needs for the integration. The contemplated integration of these
systems may cause disruption to Navigant's business and may not result in the
intended cost efficiencies. In addition, rapid changes in technologies may
require capital expenditures to improve or upgrade client service.

 Risks Related to Navigant's Acquisition Strategy

   General. One of Navigant's strategies is to increase its revenues and the
markets it serves through the acquisition of additional corporate travel
companies. Navigant may not be able to make acquisitions at the pace it desires
or on favorable terms, if at all. In addition, the consolidation of the travel
management industry has reduced the number of companies available for sale,
which could lead to higher prices being paid for the acquisition of the
remaining travel management companies.

   The companies Navigant has acquired, or which Navigant may acquire in the
future, may not achieve sales and profitability that would justify Navigant's
investment in them. Navigant's acquisitions of companies outside the United
States may subject it to certain risks inherent in conducting business
internationally. These risks include fluctuations in currency exchange rates,
new and different legal and regulatory requirements and difficulties in
staffing and managing foreign operations.

   Integration. Integration of operations of the companies Navigant acquired or
may acquire in the future may also involve a number of special risks, which may
have adverse short-term effects on Navigant's operating results. These may be
caused by:

   . severance payments to employees of acquired companies;

   . restructuring charges associated with the acquisitions; and

   . other expenses associated with a change in control.

   Integration of acquire companies may also result in:

   . diversion of management's attention;


                                       27
<PAGE>

   . difficulties with retention;

   . the need to hire and train key employees;

   . risks associated with unanticipated problems or legal liabilities; and

   . amortization of acquired intangible assets, including goodwill.

   Navigant conducts due diligence and generally requires representations,
warranties and indemnifications from the former owners of acquired companies.
Navigant cannot be certain, however, that such owners will have accurately
represented the financial and operating conditions of their companies. If an
acquired company's financial or operating results were misrepresented, the
acquisition could have a material adverse effect on Navigant's results of
operations and financial condition.

   Financing. Navigant currently intends to finance its future acquisitions by
using cash, borrowed funds, shares of its Common Stock or a combination
thereof. If Navigant's Common Stock does not maintain a sufficient market
value, if its price is highly volatile, or if, for other reasons, potential
acquisition candidates are unwilling to accept Navigant's Common Stock as part
of the consideration for the sale of their businesses, Navigant may then be
required to use more of its cash resources or more borrowed funds in order to
maintain its acquisition program. If Navigant is unable to use Common Stock for
acquisitions and Navigant does not have sufficient cash resources, its growth
could be limited unless Navigant is able to obtain additional capital through
debt or other financing. Navigant may not be able to obtain additional capital,
if and when needed, on terms Navigant deems acceptable. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Risk
Factors--Restrictions Imposed by Terms of Indebtedness" in Item 7.

 Reliance on Key Personnel

   Navigant's operations depend on the continued efforts of Edward S. Adams,
its Chief Executive Officer, C. Thomas Nulty, its President and Chief Operating
Officer, Robert C. Griffith, its Chief Financial Officer and Treasurer, its
other executive officers and the senior management of its subsidiaries.
Furthermore, Navigant's operations will likely depend on the senior management
of the companies that may be acquired in the future. If any of these people
become unable to continue in his or her present role, or if Navigant is unable
to attract and retain other skilled employees, its business could be adversely
affected.

 Material Amount of Goodwill

   As of December 31, 2000, approximately $227.0 million, or 68.5%, of
Navigant's total assets and 171.3% of Navigant's stockholders' equity represent
intangible assets, the significant majority of which is goodwill. Goodwill
represents the excess of cost over the fair market value of net assets acquired
in business combinations accounted for under the purchase method. Navigant
amortizes goodwill on a straight-line method over a period of 35 years with the
amount amortized in a particular period constituting a non-cash expense that
reduces its net income. Amortization of goodwill resulting from certain past
acquisitions, and additional goodwill recorded in certain future acquisitions
may not be deductible for tax purposes. In addition, Navigant is required to
periodically evaluate the recoverability of goodwill by reviewing the
anticipated undiscounted future cash flows from the operations of the acquired
companies and comparing such cash flows to the carrying value of the associated
goodwill. If Navigant determines that goodwill has become impaired in later
years, earnings in such years will be significantly adversely affected.

   A reduction in net income resulting from the amortization or write down of
goodwill would currently affect financial results and could have a material and
adverse impact upon the market price of Navigant Common Stock. Navigant
believes that anticipated cash flows associated with intangible assets
recognized in connection with its acquisitions will continue over the period
during which the associated goodwill will be amortized, and there presently is
no persuasive evidence that any material portion will dissipate during such
period.


                                       28
<PAGE>

 Seasonality and Quarterly Fluctuations

   The domestic and international travel service industry is extremely
seasonal. Navigant's past results have fluctuated because of seasonal
variations in the travel services industry. Navigant's net revenues and net
income are generally higher in the second and third calendar quarters and
lowest in the fourth calendar quarter. Navigant expects this seasonality to
continue in the future. Navigant's quarterly results of operations may also be
subject to fluctuations as a result of the timing and cost of acquisitions,
changes in relationships with certain travel suppliers, changes in the mix of
services offered by Navigant, the timing of the payment of incentive override
commissions by travel suppliers, extreme weather conditions or other factors
affecting travel.

 Risk of Rapid Growth; Limited History as a Stand-Alone Company

   Navigant was formed through the acquisition of twelve corporate travel
management companies from January 1997 through May 1998, and Navigant has made
twenty-three acquisitions since that time. Navigant expects to continue to grow
in part through acquisitions. The rapid pace of acquisitions has, and will
continue to, put pressure on Navigant's executive management, personnel and
corporate support systems. Any inadequacy of Navigant's systems to manage the
increased size and scope of operations resulting from growth could adversely
affect Navigant's operations, business and financial results and condition.

   Navigant has been an independent company since its initial public offering
in June 1998. Navigant's future performance will depend on its ability to
function as a stand-alone entity, to finance and manage expanding operations
and to adapt its information systems to changes in its business. Furthermore,
the financial information included herein may not necessarily reflect what the
results of operations and financial condition would have been had Navigant been
a separate, stand-alone entity during the periods presented. The financial
information also may not be indicative of Navigant's future results of
operations and financial condition.

 Potential Liabilities Related to Distributions

   In connection with the distributions of the shares of four U.S. Office
Products' businesses (including Navigant) in June 1998, Navigant and three
other companies whose shares were distributed by U.S. Office Products entered
into a series of agreements providing the allocation of certain liabilities.
Navigant and the other companies agreed in a Tax Allocation Agreement to
jointly and severally indemnify U.S. Office Products for tax losses relating to
the distribution that are attributable to acts or omissions of Navigant and the
other companies. A Tax Indemnification Agreement among Navigant and the other
spun-off companies requires each company responsible for tax losses to
indemnify the other companies for those losses and their liabilities to U.S.
Office Products under the Tax Allocation Agreement. If the tax losses are not
attributable to either U.S. Office Products or any of the other companies, each
of the companies and U.S. Office Products is liable for its pro rata portion of
the losses based on the value of each company's common stock after the
distributions.

   Navigant also entered into a Distribution Agreement with U.S. Office
Products under which Navigant is responsible for liabilities related to its
business; certain employee benefits liabilities; securities laws liabilities
arising from the distribution of Navigant shares, its initial public offering
and information related to its business supplied to U.S. Office Products; and
U.S. Office Products' liabilities for earn-outs from acquisitions of its
subsidiaries made prior to the distribution. Navigant and the other companies
that were spun off have also agreed to bear a pro rata portion of certain
United States securities law and general corporate liabilities of U.S. Office
Products incurred prior to the distribution (including a pro rata portion of
any liability of another spun off company to U.S. Office Products that is not
paid) up to a maximum of $1.75 million for each company.

   Jonathan J. Ledecky, a previous member of Navigant's Board of Directors, and
U.S. Office Products have been named as defendants in at least 10 lawsuits
alleging that Mr. Ledecky and U.S. Office Products violated various United
States securities laws. The plaintiffs in those lawsuits generally claim that
Mr. Ledecky, on behalf of U.S. Office Products, made a series of materially
false and misleading statements in connection with the distributions of the
shares of Navigant and the other companies and the related tender offer and

                                       29
<PAGE>

restructuring. Although neither Navigant nor its executive officers have been
named as defendants in these lawsuits, Navigant could be required pursuant to
the Distribution Agreement to indemnify U.S. Office Products for a portion of
its liability in connection with these lawsuits.

   On March 5, 2001 U.S. Office Products filed for bankruptcy protection in the
United States Bankruptcy Court for the District of Delaware. Consequently, all
pending lawsuits are currently stayed as against U.S. Office Products. The
plaintiffs in each action, however, may pursue their claims against all
remaining defendants, including Navigant.

 Dependence on ARC Agreements

   Navigant depends on the ability to sell airline tickets for a substantial
portion of its revenue. To sell airline tickets, Navigant must enter into, and
maintain, an Agent Reporting Agreement for each operating subsidiary with the
Airlines Reporting Company ("ARC"). Agent Reporting Agreements impose numerous
financial, operational, and administrative obligations on Navigant. These
agreements allow ARC to cancel an Agent Reporting Agreement for failure to meet
any of these obligations. If Navigant's Agent Reporting Agreements are
cancelled by ARC, Navigant would be unable to sell airline tickets and its
results of operations would be materially adversely affected.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

   Market risks related to the Company's operations result primarily from
changes in interest rates. The Company's interest rate exposure relates
primarily to long-term debt obligations. A significant portion of the Company's
interest expense is based upon variable interest rates of its bank's prime rate
or the Eurodollar rate, as discussed in Footnote 9 of the Notes to Consolidated
Financial Statements included elsewhere herein. Based upon the Company's 2000
average borrowings under the Credit Facility, a 50 basis point movement in the
base rate or LIBOR rate would approximate a $522,000 annual increase or
decrease in interest expense. However, in November 2000, the Company sold $80
million in Senior Secured Notes with a fixed interest rate of 9.84%, thus the
remaining outstanding long term debt subject to variable interest rates under
the Credit Facility at December 31, 2000 was $47 million. Based upon this
outstanding balance, a 50 basis point movement in the base rate or the LIBOR
rate would approximate a $235,000 annual increase or decrease in interest
expense.


                                       30
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

   The following financial information is included on the pages indicated:

<TABLE>
<S>                                                                     <C>
Report of Independent Accountants......................................     32

Consolidated Balance Sheets as of December 31, 2000 and December 26,
 1999..................................................................     33

Consolidated Statements of Income for each of the three years in the
 period ended December 31, 2000........................................     34

Consolidated Statement of Stockholders' Equity for each of the three
 years in the period ended December 31, 2000...........................     35

Consolidated Statements of Cash Flows for each of the three years in
 the period ended December 31, 2000.................................... 36--37

Notes to Consolidated Financial Statements............................. 38--57
</TABLE>


                                       31
<PAGE>

              MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

   Management is responsible for the preparation of the Company's consolidated
financial statements and related information appearing in this report.
Management believes that the consolidated financial statements fairly reflect
the form and substance of transactions and that the financial statements
reasonably present the Company's financial position and results of operations
in conformity with generally accepted accounting principles. Management also
has included in the Company's financial statements amounts that are based on
estimates and judgments which it believes are reasonable under the
circumstances.

   The independent accountants audit the Company's consolidated financial
statements in accordance with generally accepted auditing standards and provide
an objective, independent review of the fairness of reported operating results
and financial position.

   The Board of Directors of the Company has an Audit Committee composed of
three non-management directors. The Committee meets periodically with financial
management and the independent accountants to review accounting, control,
auditing and financial reporting matters.

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
Navigant International, Inc.

   In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Navigant International, Inc. and its subsidiaries (the "Company")
at December 31, 2000 and December 26, 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Denver, Colorado
February 16, 2001

                                       32
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                          CONSOLIDATED BALANCE SHEETS
                       (In Thousands, Except Share Data)

<TABLE>
<CAPTION>
                                                      December 31, December 26,
                                                          2000         1999
                                                      ------------ ------------
<S>                                                   <C>          <C>
                       ASSETS

Current assets:
  Cash and cash equivalents..........................   $  3,100     $  2,003
  Restricted cash in FireVine........................      6,690       14,965
  Accounts receivable, less allowance for doubtful
   accounts of $696 and $424, respectively...........     50,487       42,278
  Prepaid expenses and other current assets..........      4,117        3,168
  Deferred income taxes..............................      2,534        1,551
  Income tax receivable..............................      3,720        2,368
                                                        --------     --------
    Total current assets.............................     70,648       66,333
                                                        --------     --------
Property and equipment, net..........................     28,079       22,282
Intangible assets, net...............................    226,971      193,387
Deferred income taxes................................                   1,160
Other assets.........................................      5,613        4,149
                                                        --------     --------
    Total assets.....................................   $331,311     $287,311
                                                        ========     ========

        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Short-term portion of long-term debt...............   $  9,375     $ 11,867
  Short-term portion of capital lease obligations....        658          800
  Accounts payable...................................      3,664        4,880
  Accrued compensation...............................      7,697        8,740
  Other accrued liabilities..........................     26,298       19,979
                                                        --------     --------
    Total current liabilities........................     47,692       46,266
                                                        --------     --------
Long-term debt.......................................    130,790       93,844
Capital lease obligations............................         36          708
Deferred income taxes................................      1,535
Other long-term liabilities..........................      5,199        6,410
                                                        --------     --------
    Total liabilities................................    185,252      147,228
                                                        --------     --------
Minority interest in FireVine........................     13,572       15,120
                                                        --------     --------
Commitments and contingencies (Notes 11 and 13)

Stockholders' equity:
  Common stock; $.001 par value, 150,000,000 shares
   authorized; 13,163,000 and 13,075,000 issued and
   outstanding, respectively.........................         13           13
Additional paid-in capital...........................    115,085      114,044
Treasury stock at cost; 1,154,000 and 460,000 shares
 outstanding, respectively...........................     (9,922)      (3,520)
  Retained earnings..................................     28,533       14,304
  Accumulated other comprehensive income (loss)......     (1,222)         122
                                                        --------     --------
    Total stockholders' equity.......................    132,487      124,963
                                                        --------     --------
    Total liabilities and stockholders' equity.......   $331,311     $287,311
                                                        ========     ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       33
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                       CONSOLIDATED STATEMENTS OF INCOME
                    (In Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
<S>                                      <C>          <C>          <C>
Revenues...............................    $315,029     $229,161     $171,368
Operating expenses.....................     176,359      128,971       99,734
General and administrative expenses....      88,635       61,320       47,988
Depreciation and amortization expense..      12,433        9,752        7,167
Non-recurring and restructuring
 charges...............................       1,900                     8,236
                                           --------     --------     --------
Operating income.......................      35,702       29,118        8,243
Other (income) expenses:
  Interest expense.....................      13,070        5,929        2,070
  Interest income......................        (673)        (199)        (227)
  Other, net...........................          27           15          (30)
                                           --------     --------     --------
Income before provision for income
 taxes.................................      23,278       23,373        6,430
Provision for income taxes.............       9,918       10,217        3,987
                                           --------     --------     --------
Income before minority interest........      13,360       13,156        2,443
Minority interest......................        (869)         120
                                           --------     --------     --------
Net income.............................    $ 14,229     $ 13,036     $  2,443
                                           ========     ========     ========
Weighted average number of common
 shares outstanding:
  Basic................................      12,262       12,841       13,156
  Diluted..............................      12,385       12,868       13,250
Net income per share:
  Basic................................    $   1.16     $   1.02     $   0.19
  Diluted..............................    $   1.15     $   1.01     $   0.18
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       34
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                         Accumulated
                                                   Additional               Other               Comprehensive     Total
                         Divisional         Common  Paid-in   Treasury  Comprehensive Retained     Income     Stockholders'
                           Equity   Shares  Stock   Capital    Stock       Income     Earnings     (Loss)        Equity
                         ---------- ------  ------ ---------- --------  ------------- --------  ------------- -------------
<S>                      <C>        <C>     <C>    <C>        <C>       <C>           <C>       <C>           <C>
Balance at December
28,1997.................  $94,100                                          $  (170)   $ 5,714                   $ 99,644
 Capital contribution by
  U.S. Office Products..    1,495                                                                                  1,495
 Dividend to U.S. Office
  Products..............                                                               (6,889)                    (6,889)
 Distribution of Shares
  in Strategic
  Restructuring.........  (95,595)  10,984   $11    $ 95,584
 Initial public
  offering, net of
  costs.................             2,000     2      14,990                                                      14,992
 Compensation charge for
  options tendered......                               2,677                                                       2,677
 Share repurchase
  program...............               (55)                   $  (312)                                              (312)
 Comprehensive income:
 Net income.............                                                                2,443      $ 2,443         2,443
 Other comprehensive
  income, net of tax:
   Foreign currency
    translation
    adjustment..........                                                        75                      75            75
                                                                                                   -------
   Total comprehensive
    income..............                                                                           $ 2,518
                          -------   ------   ---    --------  -------      -------    -------      =======      --------
Balance at December 27,
1998....................            12,929    13     113,251     (312)         (95)     1,268                    114,125
 Exercise of stock
  options, net of tax
  benefit...............                91               793                                                         793
 Share repurchase
  program...............              (405)                    (3,208)                                            (3,208)
 Comprehensive income:
 Net income.............                                                               13,036      $13,036        13,036
 Other comprehensive
  income, net of tax:
   Foreign currency
    translation
    adjustment..........                                                       217                     217           217
                                                                                                   -------
   Total comprehensive
    income..............                                                                           $13,253
                          -------   ------   ---    --------  -------      -------    -------      =======      --------
Balance at December 26,
1999....................            12,615    13     114,044   (3,520)         122     14,304                    124,963
 Exercise of stock
  options, net of tax
  benefit...............                27               241                                                         241
 Share repurchase
  program...............              (696)                    (6,402)                                            (6,402)
 Shares issued in
  repayment of notes....                63               800                                                         800
 Comprehensive income:
 Net income.............                                                               14,229      $14,229        14,229
 Other comprehensive
  income (loss), net of
  tax:
   Foreign currency
    translation
    adjustment..........                                                    (1,344)                 (1,344)       (1,344)
                                                                                                   -------
   Total comprehensive
    income (loss).......                                                                           $12,885
                          -------   ------   ---    --------  -------      -------    -------      =======      --------
Balance at December 31,
2000....................  $         12,009   $13    $115,085  $(9,922)     $(1,222)   $28,533                   $132,487
                          =======   ======   ===    ========  =======      =======    =======                   ========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       35
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                    For the Year Ended
                                          --------------------------------------
                                          December 31, December 26, December 27,
                                              2000         1999         1998
                                          ------------ ------------ ------------
<S>                                       <C>          <C>          <C>
Cash flows from operating activities:
  Net income............................    $ 14,229     $ 13,036     $  2,443
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
   Depreciation and amortization
    expense.............................      12,433        9,752        7,167
   Non-recurring and restructuring
    charges.............................         213                     4,196
   Deferred tax provision (benefit).....       1,712         (936)        (232)
   Minority interest....................      (1,548)         120
   Changes in current assets and
    liabilities (net of assets acquired
    and liabilities assumed in
    combinations accounted for under
    the purchase method):
     Accounts receivable................       1,418       (2,231)         389
     Prepaid expenses and other
      assets............................       1,809           19         (840)
     Accounts payable...................      (2,929)        (530)      (4,744)
     Income taxes payable
      (receivable)......................      (1,342)      (4,165)       1,334
     Accrued liabilities and other
      liabilities.......................      (5,128)      (5,077)         365
                                            --------     --------     --------
       Net cash provided by operating
        activities......................      20,867        9,988       10,078
                                            --------     --------     --------
Cash flows from investing activities:
  Additions to property and equipment,
   net of disposals.....................     (10,539)      (5,234)      (4,313)
  Proceeds from disposal of building....                    1,025
  Cash paid in acquisitions, net of cash
   received.............................     (37,667)     (28,001)     (59,505)
  Cash paid for earn-outs related to
   prior acquisitions...................        (265)                   (1,563)
  Purchase of investments/sale of
   investments (restricted cash)........       8,275      (14,965)
                                            --------     --------     --------
       Net cash used in investing
        activities......................     (40,196)     (47,175)     (65,381)
                                            --------     --------     --------
Cash flows from financing activities:
  Proceeds from issuance of long-term
   debt.................................      80,000                       149
  Payments of long-term debt............      (7,770)      (8,099)      (2,457)
  Proceeds from (payments of) credit
   facilities, net......................     (42,850)      36,700       53,300
  Payment of debt issue costs...........      (1,873)      (2,225)        (656)
  Proceeds from issuance of common
   stock................................                                14,992
  Proceeds from issuance of minority
   interest in FireVine.................                   15,000
  Proceeds from exercise of stock
   options, net.........................         241          793
  Repurchase of common stock............      (6,401)      (3,208)        (312)
  Payment of dividend to U.S. Office
   Products.............................                                (6,889)
  Net payments to U.S. Office Products
   Company..............................                                (8,786)
                                            --------     --------     --------
       Net cash provided by financing
        activities......................      21,347       38,961       49,341
                                            --------     --------     --------
Effect of exchange rate changes on
 cash...................................        (921)         (86)         229
                                            --------     --------     --------
Net increase (decrease) in cash and cash
 equivalents............................       1,097        1,688       (5,733)
Cash and cash equivalents at beginning
 of period..............................       2,003          315        6,048
                                            --------     --------     --------
Cash and cash equivalents at end of
 period.................................    $  3,100     $  2,003     $    315
                                            ========     ========     ========
Supplemental disclosures of cash flow
 information:
  Interest paid.........................    $ 11,816     $  5,410     $  1,442
  Income taxes paid.....................    $  9,548     $ 14,382     $  1,819
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       36
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
                                 (In Thousands)

   The Company issued notes payable and cash in connection with certain
business combinations accounted for under the purchase method in the years
ended December 31, 2000, December 26, 1999 and December 27, 1998. The fair
values of the assets and liabilities of the acquired companies at the dates of
the acquisitions are presented as follows:

<TABLE>
<CAPTION>
                                                  For the Year Ended
                                        --------------------------------------
                                        December 31, December 26, December 27,
                                            2000         1999         1998
                                        ------------ ------------ ------------
<S>                                     <C>          <C>          <C>
Accounts receivable....................   $ 9,827      $ 12,303     $ 6,583
Prepaid expenses and other current
 assets................................     1,928           523         757
Property and equipment.................       960           924       1,705
Intangible assets......................    39,002        45,043      61,926
Other assets...........................       634           531         135
Short-term debt........................      (458)       (4,392)       (850)
Accounts payable.......................    (1,713)       (2,568)     (1,002)
Accrued liabilities....................    (5,107)      (10,676)     (5,012)
Long-term debt.........................                                (161)
Other long-term liabilities............    (1,074)       (2,087)     (1,020)
                                          -------      --------     -------
  Net assets acquired..................   $43,999      $ 39,601     $63,061
                                          =======      ========     =======
The acquisitions were funded as
 follows:
  Notes payable due to former owners...   $ 6,332      $ 11,600     $ 3,556
  Cash paid, net of cash received......    37,667        28,001      59,505
                                          -------      --------     -------
    Total..............................   $43,999      $ 39,601     $63,061
                                          =======      ========     =======
</TABLE>

Noncash transactions:
--------
 .  During the year ended December 27, 1998, U.S. Office Products contributed
   $1,495 of capital to the Company.

 .  During the year ended December 27, 1998, the Company acquired $1,590 in
   fixed assets by capital lease transactions.

 .  During the year ended December 31, 2000, the Company repaid $800 of notes
   payable to former owners using common stock.

          See accompanying notes to consolidated financial statements.

                                       37
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 (Dollars in Thousands, Unless Otherwise Noted)

NOTE 1--BACKGROUND

   Navigant International, Inc. (the "Company"), a Delaware corporation, is one
of the four largest corporate travel management companies in the United States.
The Company manages all aspects of its client's travel processes, focusing on
reducing their travel expenses.

   Prior to June 9, 1998, the Company was a wholly-owned subsidiary of U.S.
Office Products Company ("U.S. Office Products"). On June 9, 1998, as part of
its comprehensive restructuring plan, U.S. Office Products spun off its
Corporate Travel Services division as an independent publicly owned company
through the distribution of shares of the Company to U.S. Office Products
shareholders (the "Travel Distribution"). U.S. Office Products and the Company
also entered into a number of agreements to facilitate the Travel Distribution
and the transition of the Company to an independent business enterprise. At the
date of the Travel Distribution, U.S. Office Products allocated to the Company
$15,000 in debt plus an additional $1,400 in debt incurred by U.S. Office
Products for a business travel acquisition prior to the Travel Distribution to
the Company. The Company was allocated $1,000 in strategic restructuring costs
which represents the Company's portion of the costs incurred by U.S. Office
Products as a result of the Travel Distribution. These costs were paid upon the
completion of the Travel Distribution. Additionally, in connection with the
Travel Distribution, the Company sold 2.0 million shares of the Company's
common stock in an initial public offering (the "Stock Offering"). The Company
used the net proceeds in the Stock Offering of $14,992 to repay a portion of
the outstanding indebtedness the Company borrowed under its line of credit
facility to repay the indebtedness allocated to it in the Travel Distribution.

   The Company's operations are primarily concentrated in one market segment--
airline travel--and the customers are geographically diverse with no single
customer base concentrated in a single industry. Management considers a
downturn in this market segment to be unlikely. The Company's operations are
seasonal, with the November and December periods having the lowest airline
bookings. The majority of the leisure travel services the Company provides are
directed to the Company's corporate customers and the related financial
information is not separately stated in the Company's internal reports.

NOTE 2--BASIS OF PRESENTATION

   Subsequent to the Travel Distribution, the consolidated financial statements
of the Company include the accounts of Navigant International, Inc. and its
subsidiaries after elimination of inter-company accounts and transactions.

   Prior to the Travel Distribution, the consolidated financial statements
reflect the assets, liabilities, divisional equity, revenues and expenses that
were directly related to the Company as it was operated within U.S. Office
Products. In cases involving assets and liabilities not specifically
identifiable to any particular business of U.S. Office Products, only those
assets and liabilities expected to be transferred to the Company prior to the
Travel Distribution were included in the Company's separate consolidated
balance sheet. The Company's statement of income includes all of the related
costs of doing business including an allocation of certain general corporate
expenses of U.S. Office Products which were not directly related to these
businesses including certain corporate executives' salaries, accounting and
legal fees, departmental costs for accounting, finance, legal, purchasing,
marketing and human resources as well as other general overhead costs. These
allocations were based on a variety of factors, dependent upon the nature of
the costs being allocated, including revenues, number and size of acquisitions
and number of employees. Management believes these allocations were made on a
reasonable basis.

                                       38
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   U.S. Office Products used a centralized approach to cash management and the
financing of its operations. As a result, minimal amounts of cash and cash
equivalents were allocated to the Company at the time of the Travel
Distribution. The consolidated statement of income includes an allocation of
interest expense on all debt allocated to the Company.

NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

   The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and footnotes thereto. Actual results could differ from those
estimates.

Fiscal Year

   The Company reports its financial results on a 52- or 53-week fiscal year
ending on the Sunday closest to December 31. Each fiscal quarter consists of a
13-week period with one 14-week period in a 53-week year. Fiscal year 2000 is a
53-week period and all other fiscal years presented are 52-week periods.

Cash and Cash Equivalents

   The Company considers temporary cash investments with original maturities of
three months or less from the date of purchase to be cash equivalents.

Restricted Cash Equivalents in FireVine

   The Company received a $15 million investment from an unrelated venture
capital fund for an ownership interest in FireVine LLC ("FireVine"), (formerly,
NavigantVacations.com LLC) which was previously wholly owned (see additional
discussion in Note 12). The proceeds of this investment are restricted and can
only be used to fund the operations of FireVine.

Concentration of Credit Risk

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
Receivables arising from sales to customers are not collateralized and, as a
result, management continually monitors the financial condition of its
customers to reduce the risk of loss.

Property and Equipment

   Property and equipment are stated at cost. Additions and improvements are
capitalized. Maintenance and repairs are expensed as incurred. Depreciation of
property and equipment is calculated using the straight-line method over the
estimated useful lives of the respective assets. The estimated useful lives
range from 25 to 40 years for buildings and their components and 3 to 10 years
for furniture, fixtures and equipment. Property and equipment leased under
capital leases is being amortized over the lesser of its useful life or its
lease terms.


                                       39
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

Intangible Assets

   Intangible assets consist of goodwill, which represents the excess of cost
over the fair value of assets acquired in business combinations accounted for
under the purchase method. Substantially all goodwill is amortized on a
straight-line basis over an estimated useful life of 35 years. Management
periodically evaluates the recoverability of the carrying value whenever events
or changes in circumstances indicate the carrying amounts of such assets may
not be recoverable. Recoverability of these assets is evaluated by comparing
the forecasted undiscounted future cash flows of the operation to which the
assets relate to the net book value, including associated intangible assets, of
such operation. If the operation is determined to be unable to recover the
carrying amount of its assets, then intangible assets are written down first,
followed by the other long-lived assets of the operation, to fair value. Fair
value is determined based on discounted cash flows or appraised values,
whichever is more readily available, depending upon the nature of the assets.

Translation of Foreign Currencies

   Functional currencies of foreign subsidiaries are their local currency.
Balance sheet accounts of foreign subsidiaries are translated using the year-
end exchange rate, and statement of income accounts are translated using the
average exchange rate for the year. Translation adjustments are recorded in
stockholders' equity as a component of comprehensive income.

Fair Value of Financial Instruments

   The carrying amounts of the Company's financial instruments including cash
and cash equivalents, accounts receivable, accounts payable, accrued
liabilities and indebtedness approximate fair value.

Income Taxes

   Subsequent to the Travel Distribution, the Company began recognizing and
paying taxes as a separate legal entity. Prior to the Travel Distribution and
as a division of U.S. Office Products, the Company did not file separate
federal income tax returns but rather was included in the federal income tax
returns filed by U.S. Office Products through the date of the Travel
Distribution. Prior to the Travel Distribution, for purposes of the
consolidated financial statements, the Company's allocated share of U.S. Office
Products' income tax provision was based on the "separate return" method.

Revenue Recognition

   Revenues consist of commissions and fees on travel services and volume
bonuses from travel service providers. The Company records revenues from air
reservations, hotel and car reservations and management and service fee
arrangements when earned, which is at the time a reservation is booked and
ticketed. The Company provides a reserve for cancellations and reservation
changes, and provisions for such amounts are reflected in net revenues. The
reserves that have been netted against net revenues are not material in the
periods reflected. The Company's estimate for cancellations and reservation
changes could vary significantly from actual results based upon changes in
economic and political conditions that impact corporate travel patterns. Cruise
revenues are recorded when the Company's service obligation is complete, which
is at the time the customer is no longer entitled to a full refund of the cost
of the cruise.

                                       40
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

The Company records incentive override commissions on an accrual basis in the
month they are earned based upon the Company's estimated ticket sales in excess
of required thresholds. Incentive payments from vendors for signing extended
contracts are deferred and recognized as income over the life of the contract.

Operating Expenses

   Operating expenses include travel agent salaries, communications, revenue
sharing expense and other costs associated with the selling and processing of
travel reservations.

Advertising Costs

   The Company expenses advertising costs when the advertisement occurs.
Advertising costs are included in the consolidated statement of income as a
component of general and administrative expenses.

Net Income Per Share

   Basic earnings per share amounts are based upon the weighted average number
of common shares outstanding during the year. Diluted earnings per share
amounts are based upon the weighted average number of common and common
equivalent shares outstanding during the year. The difference between basic and
diluted earnings per share, for the Company, is solely attributable to stock
options. Common equivalent shares are excluded from the computation in periods
in which they have an anti-dilutive effect. For the years ended December 31,
2000, December 26, 1999 and December 27, 1998, options for 3.1 million; 3.4
million; and 3.1 million shares, respectively, were excluded from diluted
earnings per share.

Distribution Ratio

   On May 14, 1998, the U.S. Office Products Board of Directors approved the
distribution ratio for the Company in connection with the Travel Distribution.
At the date of the Travel Distribution, the Company issued to U.S. Office
Products shareholders one share of its common stock for every ten shares of
U.S. Office Products common stock held by each respective shareholder. The
share data reflected in the accompanying financial statements represents the
historical share data for U.S. Office Products for the period, or as of the
date indicated, and retroactively adjusted to give effect to the one for ten
distribution ratio.

New Accounting Pronouncements

   On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133, as subsequently
amended, is effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000 (January 1, 2001 for the Company). SFAS 133 requires that
all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each period in
current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. Management of the Company anticipates that, due to its
limited use of derivative instruments, the adoption of SFAS 133 will not have a
significant effect on the Company's results of operations or its financial
position.


                                       41
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

NOTE 4--BUSINESS COMBINATIONS

Purchase Method

   In 2000, the Company made six acquisitions accounted for under the purchase
method for an aggregate purchase price of $43,999 consisting of cash, net of
cash acquired, of $37,667 and notes payable of $6,332. None of these
acquisitions was significant on a relative basis. The total assets related to
these six acquisitions were $52,351 including intangible assets of $39,002. The
results of these acquisitions have been included in the Company's results from
their respective dates of acquisition. Additionally, additional purchase
consideration aggregating $265 has been paid in 2000 based on subsequent
earnings or completion of financial audits of the previously acquired entities.

   In 1999, the Company made ten acquisitions accounted for under the purchase
method. The aggregate purchase price for these acquisitions was $39,601
consisting of cash, net of cash acquired, of $28,001 and notes payable of
$11,600. None of these acquisitions was significant on a relative basis. The
total assets acquired in these ten acquisitions were $59,324, including
intangible assets of $45,043. The results of these acquisitions have been
included in the Company's results from their respective dates of acquisition.
Some of these acquisitions have earn-out provisions that could result in
additional purchase consideration payable in 2000 depending upon the earnings
of these acquisitions. At the time of acquisition no accrual has been recorded
on the balance sheet for these potential payments.

   In 1998, the Company made eight acquisitions accounted for under the
purchase method for an aggregate purchase price of $63,061 consisting of cash,
net of cash acquired, of $59,505 and notes payable of $3,556. The total assets
related to these eight acquisitions were $71,106, including intangible assets
of $61,926. Included in this aggregate purchase price is the acquisition of
Arrington Travel Center, Inc. for $17.1 million in cash and World Express
Travel, Inc. for $8.2 million. The other six acquisition were individually
insignificant acquisitions. The results of these acquisitions have been
included in the Company's results from their respective dates of acquisition.
Several of these acquisitions have earn-out provisions that could result in
additional purchase consideration payable in 1999 and 2000 dependent upon the
earnings of these acquisitions. During 1999, there were no additional payments
related to these earn-out provisions. At the time of acquisition no accrual has
been recorded on the balance sheet for any additional potential payments.

   The following presents the unaudited pro forma results of operations of the
Company for the years ended December 31, 2000 and December 26, 1999 which gives
retroactive effect to the results of the companies acquired in purchase
acquisitions as if all such purchase acquisitions had been made at the
beginning of each period presented. The results presented below include certain
pro forma adjustments of $(2,181) and $(6,992) for the years ended December 31,
2000 and December 26, 1999, respectively, to reflect the amortization of
intangible assets, adjustments in executive compensation, the interest expense
associated with the debt incurred to finance the acquisitions, and the
inclusion of a federal income tax provision on all earnings:

<TABLE>
<CAPTION>
                                                          For the Year Ended
                                                       -------------------------
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
                                                              (unaudited)
<S>                                                    <C>          <C>
Revenues..............................................   $326,182     $307,455
Net income............................................   $ 16,239     $ 12,386
Net income per share--basic...........................   $   1.32     $   0.96
Net income per share--diluted.........................   $   1.31     $   0.96
</TABLE>

                                       42
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   The unaudited pro forma results of operations are prepared for comparative
purposes only and do not necessarily reflect the results that would have
occurred had the acquisitions occurred at the beginning of each period or the
results which may occur in the future.

   Acquisitions for 2000, 1999 and 1998 accounted for under the purchase method
and their purchase price and related date of acquisition are as follows:

<TABLE>
<CAPTION>
                                                     Date of
     Name of Acquisition                           Acquisition
     -------------------                         ---------------
     <S>                                         <C>
     2000 Acquisitions
       All Seasons Travel Group, Inc              February, 2000
       Belle Meade Travel, Inc                         July 2000
       Dawson's Travel, Inc.                       January, 2000
       Getz International Travel, Inc.             January, 2000
       Global Travel Solutions, Ltd.              September 2000
       K. R. Agencia de Viagens, Ltda. (Brazil)  September, 2000

     1999 Acquisitions
       Cornerstone Enterprises, Inc.              September 1999
       Couch/Mollica Travel, Inc.                      July 1999
       Dollinger Travel, Inc.                      November 1999
       First Travelcorp, Inc.                     September 1999
       Forbes Travel Service, Inc.                     June 1999
       Lovejoy-Tiffany and Associates, Inc.         October 1999
       M.D. Travel Management Limited              December 1999
       Moran Travel Bureau, Inc.                        May 1999
       Oaks Travel Corp.                           November 1999
       Travel Resources Inc.                        October 1999

     1998 Acquisitions
       Akra Travel, Inc.                           December 1998
       Arrington Travel Center, Inc.                   July 1998
       Atlas Travel Services Ltd. (Houston)            July 1998
       Bowers Worldwide Travel Management, Inc.    November 1998
       Chartrek International, Inc.                November 1998
       Jarvis Travel, Ltd.                          October 1998
       TravelCorp, Inc.                                 May 1998
       World Express Travel, Inc.                 September 1998
</TABLE>


                                       43
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

NOTE 5--NON-RECURRING AND RESTRUCTURING CHARGES

   The Company implemented a cost reduction measure that commenced in March
2000 and resulted in the Company's recording a restructuring charge of $1.9
million in February and March 2000. The 2000 charge provides for the closure of
five facilities and the severance associated with the elimination of
approximately 130 employee positions. As of December 31, 2000, the five
facilities have been closed or consolidated and 130 employee positions have
been eliminated. The activity in the restructuring liability during 2000 is as
follows:

<TABLE>
<CAPTION>
                                               Employee      Facility
                                             Severance and   Closures
                                              Termination       and
                                                 Costs     Consolidation Total
                                             ------------- ------------- ------
<S>                                          <C>           <C>           <C>
2000 restructuring charge...................    $1,584         $316      $1,900
Payments....................................    (1,584)        (103)     (1,687)
Non-cash usage..............................                   (213)       (213)
                                                ------         ----      ------
Balance at December 31, 2000................    $    0         $  0      $    0
                                                ======         ====      ======
</TABLE>

   During 1998, the Company incurred the following non-recurring and
restructuring charges:

<TABLE>
<CAPTION>
                                                         Cash  Non-cash Total
                                                        ------ -------- ------
<S>                                                     <C>    <C>      <C>
Prior to or in conjunction with the Distribution:
Impaired goodwill--March 1998..........................         $  613  $  613
Operation consolidation................................ $  365     333     698
Allocated charges associated with the Distribution.....  1,073   2,677   3,750

Subsequent to the Distribution:
Operational consolidation and elimination of redundant
 facilities............................................  2,602     573   3,175
                                                        ------  ------  ------
Total non-recurring and restructuring charges.......... $4,040  $4,196  $8,236
                                                        ======  ======  ======
</TABLE>

   On March 13, 1998, the Company received 90 days' notice of termination of a
business relationship that contributed approximately $600 to net operating
income during 1997. The Company had provided travel administration services to
this client under a five-year agreement based on a fee per transaction basis,
with all commissions being remitted back to this client. During March 1998, the
Company wrote off $613 in intangible assets relating to the original
acquisition of this contract. In addition to this charge, the Company took a
charge in April 1998 of approximately $698 in connection with the disposition
of certain equipment, severance charges and other costs associated with a
change in operational strategy to a centralized management structure at one of
its locations. This switch to a centralized management structure from a
regional structure at this location is consistent with the existing structure
at the other regional travel management companies acquired.

   The Company incurred a strategic restructuring cost of $3,750 in connection
with the Travel Distribution as an allocation from U.S. Office Products. Of
this amount, $1,000 was an allocation to the Company for a portion of the
strategic restructuring charge incurred by U.S. Office Products and the
remaining $2,750 was as a result of U.S. Office Products Company's purchase of
a pro rata portion of the Company's stock options pursuant to a tender offer
made in connection with the Travel Distribution. Of the $2,750, $2,677 was
recorded as a non-cash compensation charge while the $73 relates to the
Company's portion of payroll taxes on the compensation.


                                       44
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

   As part of the Company's increased focus on operational matters subsequent
to the Travel Distribution, it undertook a formal plan approved by its Board of
Directors for cost reduction measures including the elimination of duplicative
facilities, the consolidation of certain operating functions and the deployment
of common information systems. The implementation of the cost reduction
measures commenced in November 1998 and resulted in the Company recording a
restructuring charge of $3,175 in November and December 1998. The 1998 charge
included the closure of 20 facilities, the sale of one building and the
severance associated with the termination of 127 employees. Through December
1999, 18 facilities were closed or consolidated and 142 employees were
terminated. The following table summarizes restructuring charges associated
with the 1998 cost reduction plan and sets forth their usage for the periods
indicated.

<TABLE>
<CAPTION>
                                             Employee       Facility
                                           Severance and    Closures
                                            Termination       and
                                               Costs     Consolidations Total
                                           ------------- -------------- ------
<S>                                        <C>           <C>            <C>
1998 Charge...............................    $1,172         $2,003     $3,175
Payments..................................      (513)          (472)      (985)
Non-cash usage............................                     (573)      (573)
                                              ------         ------     ------
Balance at December 27, 1998..............       659            958      1,617
Payments..................................      (905)        (1,004)    (1,909)
Additional expense recorded during 1999...       246             46        292
                                              ------         ------     ------
Balance at December 26, 1999..............    $    0         $    0     $    0
                                              ======         ======     ======
</TABLE>

NOTE 6--PROPERTY AND EQUIPMENT

   Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
<S>                                                    <C>          <C>
Land..................................................   $   325      $   325
Buildings.............................................     6,294        6,305
Furniture and fixtures................................    32,508       23,037
Leasehold improvements................................     4,927        4,332
Assets under capital leases...........................     1,590        1,590
                                                         -------      -------
                                                          45,644       35,589
Less: Accumulated depreciation........................   (17,565)     (13,307)
                                                         -------      -------
Net property and equipment............................   $28,079      $22,282
                                                         =======      =======
</TABLE>

   Depreciation expense for the years ended December 31, 2000, December 26,
1999 and December 27, 1998 was $5,583, $4,592 and $3,467, respectively.
Amortization expense for assets under capital leases for the years ended
December 31, 2000, December 26, 1999 and December 27, 1998 was $87, $95 and
$124, respectively.


                                       45
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

NOTE 7--INTANGIBLE ASSETS

   Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
     <S>                                               <C>          <C>
     Goodwill.........................................   $244,459     $204,150
     Less: Accumulated amortization...................    (17,488)     (10,763)
                                                         --------     --------
     Net intangible assets............................   $226,971     $193,387
                                                         ========     ========
</TABLE>

   Amortization expense for the years ended December 31, 2000, December 26,
1999 and December 27, 1998 was $6,763, $5,065 and $3,576, respectively.

NOTE 8--OTHER ACCRUED LIABILITIES

   Other accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
     <S>                                               <C>          <C>
     Customer deposits................................   $13,439      $ 9,381
     Customer revenue share...........................     4,472        3,357
     Accrued interest payable.........................     1,419          844
     Allowance for refunds and exchanges..............       485          471
     Other............................................     6,483        5,926
                                                         -------      -------
       Total other accrued liabilities................   $26,298      $19,979
                                                         =======      =======
</TABLE>

NOTE 9--CREDIT FACILITIES

Long-Term Debt

   Long-Term debt consists of:

<TABLE>
<CAPTION>
                                                     December 31, December 26,
                                                         2000         1999
                                                     ------------ ------------
     <S>                                             <C>          <C>
     Line of credit facility, weighted average
     interest rate of 9.25% and 8.37% at December
     31, 2000 and December 26, 1999.................   $ 47,000     $90,000
     Senior Secured Notes, fixed interest rate of
     9.84% payable in three equal installments of
     $26.7 million on November 2004, November 2005
     and November 2006..............................     80,000
     Mortgages payable, collateralized by certain
     assets of the Company, 9.08% to 9.4% interest
     rates, due 2015, monthly payments of $19.......      1,667       1,716
     Notes payable due to former owners, unsecured,
     interest rates ranging from 5.5% to 7.0%,
     maturities through 2002........................     11,498      13,995
                                                       --------     -------
                                                        140,165     105,711
     Less: Current maturities of long-term debt.....      9,375      11,867
                                                       --------     -------
       Total long-term debt.........................   $130,790     $93,844
                                                       ========     =======
</TABLE>


                                       46
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

   On the date of the Travel Distribution, the Company executed a credit
agreement with NationsBank, N.A., as administrative agent. Effective August 6,
1999, this credit agreement was expanded to $125 million and the new facility
matures on August 2004. On August 31, 2000, the Company signed an amendment to
the Credit Facility, increasing the revolving credit facility to $150 million
with the same terms and conditions. The facility is secured by substantially
all of the Company's assets and the credit is subject to terms and conditions
typical of facilities of such size, including certain financial covenants. At
December 31, 2000, the Company was in compliance with these debt covenants.
Interest rate options available to the Company vary depending upon the
satisfaction of certain specified financial ratios.

   On November 15, 2000, the Company authorized the issuance and sale of $80
million aggregate principal amount of 9.84% Senior Secured Notes (the "Notes")
with three equal installments of $26.7 million due November 15, 2004, November
15, 2005 and November 15, 2006, respectively. The financial covenants are
consistent with the Credit Facility.

   The Company withholds typically between 20% and 30% of the purchase price
for acquisitions and executes an unsecured note payable for these amounts with
the former owners with an interest rate ranging from 5.5% to 7.0%. Maturities
are typically one to two years and are subject to the acquired company meeting
certain revenue thresholds for the period immediately following the
acquisition. Additionally, repayment of the note payable is subject to the
satisfaction of certain representations and warranties.

Maturities of Long-Term Debt

   Maturities of long-term debt are as follows:

<TABLE>
            <S>                                  <C>
            2001................................ $  9,375
            2002................................    2,190
            2003................................      112
            2004................................   73,739
            2005................................   26,746
            Thereafter..........................   28,003
                                                 --------
              Total maturities of long-term
               debt............................. $140,165
                                                 ========
</TABLE>

NOTE 10--INCOME TAXES

   Income before income taxes consists of the following:

<TABLE>
<CAPTION>
                                                    For the Year Ended
                                          --------------------------------------
                                          December 31, December 26, December 27,
                                              2000         1999         1998
                                          ------------ ------------ ------------
     <S>                                  <C>          <C>          <C>
     Domestic............................   $21,523      $22,217       $5,916
     Foreign.............................     1,755        1,156          514
                                            -------      -------       ------
                                            $23,278      $23,373       $6,430
                                            =======      =======       ======
</TABLE>


                                       47
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

   The provision for income taxes consists of:

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
     <S>                                 <C>          <C>          <C>
     Income taxes currently payable:
       Federal.........................     $6,427      $ 9,046       $3,331
       Foreign.........................        378          494          281
       State...........................        849        1,613          607
                                            ------      -------       ------
                                             7,654       11,153        4,219
     Deferred income tax expense
      (benefit):
       Federal.........................      1,969         (795)        (197)
       State...........................        295         (141)         (35)
                                            ------      -------       ------
                                             2,264         (936)        (232)
                                            ------      -------       ------
     Total provision for income taxes..     $9,918      $10,217       $3,987
                                            ======      =======       ======
</TABLE>

   Deferred taxes are comprised of the following:

<TABLE>
<CAPTION>
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
     <S>                                               <C>          <C>
     Deferred tax assets:
       Allowance for doubtful accounts................   $   278      $   156
       Accrued salary and vacation....................     1,632        1,220
       Property and equipment.........................                    121
       Other accrued liabilities......................     2,658        2,588
                                                         -------      -------
         Total deferred tax assets                       $ 4,568      $ 4,085
                                                         =======      =======
     Deferred tax liabilities:
       Property and equipment.........................   $  (835)     $
       Intangible assets..............................    (2,641)      (1,374)
       Other..........................................       (93)
                                                         -------      -------
         Total deferred tax liabilities...............   $(3,569)     $(1,374)
                                                         =======      =======
     Net deferred tax asset...........................   $   999      $ 2,711
                                                         =======      =======
</TABLE>


                                       48
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

   The Company's effective income tax rate varied from the U.S. federal
statutory tax rate as follows:

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
     <S>                                 <C>          <C>          <C>
     U.S. federal statutory rate.......      35.0%        35.0%        35.0%
     State income taxes, net of federal
      income tax benefit...............       4.1          3.8          5.7
     Nondeductible goodwill............       4.6          4.1         13.4
     Nondeductible non-recurring
      charges..........................                                 5.4
     Other.............................      (1.1)         0.8          2.5
                                             ----         ----         ----
     Effective income tax rate.........      42.6%        43.7%        62.0%
                                             ====         ====         ====
</TABLE>

NOTE 11--LEASE COMMITMENTS

   The Company leases various types of office facilities, equipment and
furniture and fixtures under non-cancelable lease agreements, which expire at
various dates. Future minimum lease payments under non-cancelable capital and
operating leases are as follows:

<TABLE>
<CAPTION>
                                                             Capital Operating
                                                             Leases   Leases
                                                             ------- ---------
     <S>                                                     <C>     <C>
     2001...................................................  $673    $11,906
     2002...................................................    40     10,514
     2003...................................................            7,328
     2004...................................................            5,410
     2005...................................................            3,481
     Thereafter.............................................           14,195
                                                              ----    -------
         Total minimum lease payments.......................   713    $52,834
                                                                      =======
     Less: Amounts representing interest....................  (19)
                                                              ----
     Present value of net minimum lease payments including
      current portion of $658...............................  $694
                                                              ====
</TABLE>

   Rent expense for all operating leases for the years ended December 31, 2000,
December 26, 1999 and December 27, 1998 was $8,964, $6,936, and $5,632,
respectively.

NOTE 12--MINORITY INTEREST IN FIREVINE

   On October 13, 1999, the Company sold a minority interest in its FireVine
subsidiary to third party venture capital firms for $15 million. This minority
interest can ultimately be converted to an approximately 22.5% stake in the
subsidiary. Of the $15 million investment, $2.5 million was for 125,000 common
units and the remaining $12.5 million was for 12,500 convertible preferred
units with a 6% guaranteed dividend rate. The holders of the $12.5 million of
Convertible Preferred Units may require that FireVine redeem the Units upon
certain conditions, including if an initial public offering of the subsidiary
does not occur within two years, if the Company defaults under its Credit
Facility, or if the Company undergoes a change of control as defined in the
Credit Facility. Should the subsidiary not redeem the units, the holders of the
preferred units have the right to have the Company redeem them. The Preferred
Stock is convertible into common units at a ratio of ten to

                                       49
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

one, plus an additional amount equal to the accrued but unpaid dividends any
time prior to an initial public offering or if FireVine is sold. Additionally,
FireVine issued a warrant to these third party venture capital firms for an
additional 50,000 common units, at an exercise price of $60 per share that are
exercisable anytime through October 13, 2009.

NOTE 13--COMMITMENTS AND CONTINGENCIES

Litigation

   The Company and its subsidiaries are involved in various legal actions in
the ordinary course of their business. The Company believes that none of these
actions will have a material adverse effect on its business, financial
condition and results of operations.

   The Company has been named as a defendant in a lawsuit filed by the previous
stockholders of two of the Company's subsidiaries. The lawsuit also names U.S.
Office Products and certain former and present executive officers of U.S.
Office Products as defendants. The lawsuit was instituted on January 19, 1999,
in the Circuit Court for the County of Kent, State of Michigan. The defendants
removed the suit to the Southern Division of the United States District Court
for the Western District of Michigan. The case was subsequently transferred to
the United States District Court for the District of Columbia, to be
consolidated with other pending actions against U.S. Office Products.

   The plaintiffs allege that U.S. Office Products and the named U.S. Office
Products executive officers made fraudulent misrepresentations and omissions
about, among other things, U.S. Office Products' plans to engage in the
strategic restructuring, which included a spin-off of its travel business to
its existing shareholders. The plaintiffs contend that such alleged
misrepresentations and omissions induced the plaintiffs to sell their
businesses to U.S. Office Products. The Company has been named in the lawsuit
as a successor to U.S. Office Products' travel businesses. The plaintiffs
contend that they may seek rescission of the purchases of these two
subsidiaries or damages for the value of the assets of the two subsidiaries
from the Company and have requested that the Company be required to hold such
assets in a constructive trust for the plaintiffs. As of December 31, 2000, the
approximate book value of these two subsidiaries was $13.1 million. The Company
has been and intends to continue vigorously defending against this lawsuit.

   Individuals purporting to represent various classes composed of stockholders
who purchased shares of U.S. Office Products common stock between June 5, 1997
and November 2, 1998 filed six actions in the United States District Court for
the Southern District of New York and four actions in the United States
District Court of the District of Columbia in late 1998 and early 1999. Each of
the actions named Jonathan Ledecky (a former director of the Company), U.S.
Office Products, and, in some cases, Sands Brothers & Co. Ltd. as defendants.
The Company has not been named as a defendant in any of these actions. The
actions claim that the defendants made misstatements, failed to disclose
material information, and otherwise violated Sections 10(b) and/or 14 of the
Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 thereunder in
connection with U.S. Office Products' Strategic Restructuring. Two of the
actions alleged a violation of Sections 11, 12 and/or 15 of the Securities Act
of 1933 and/or breach of contract under California law relating to U.S. Office
Products' acquisition of Mail Boxes Etcetera. The actions seek declaratory
relief, unspecified money damages and attorney's fees. All of these actions
have been consolidated and transferred to the United States District Court for
the District of Columbia. The plaintiffs in these cases filed a single
consolidated amended complaint on July 29, 1999, naming only U.S. Office
Products and Mr. Ledecky as defendants. An additional action making factual
allegations essentially the same as those in the consolidated amended complaint
was filed in the United States District Court for the District of Columbia on
January 3, 2000.

                                       50
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   Sellers of two businesses that U.S. Office Products acquired in the fall of
1997 and that were spun off in connection with U.S. Office Products' Strategic
Restructuring (which included the Travel Distribution) also have filed
complaints in the United States District Court for the District of Delaware,
and the United States District Court for the District of Connecticut. These
lawsuits were filed on February 10, 1999 and March 3, 1999, respectively, and
name, among others, U.S. Office Products as a defendant. Both of these cases
have been transferred and consolidated for pretrial purposes with the purported
class-action pending in the United States District Court for the District of
Columbia.

   Sellers of two other businesses acquired in October 1997 and December 1997
that were not spun off by U.S. Office Products have also filed complaints in
state court in Kentucky and state court in Indiana in which U.S. Office
Products is named as defendant. Those complaints were filed on or about
September 2, 1999, and September 30, 1999. These cases have been removed to
federal district court, and in 1999 and early 2000 all of these cases were
transferred and consolidated for pretrial purposes with the purported class
action pending in the United States District Court for the District of
Columbia. Each of these disputes generally relates to events surrounding the
Strategic Restructuring, and the complaints that have been filed assert claims
of violation of federal and/or state securities and other laws, fraud,
misrepresentation, conspiracy, breach of contract, negligence, and/or breach of
fiduciary duty.

   In October 1999, the United States District Court for the District of
Columbia ordered that all parties engage in mediation, and "administratively
closed" the cases. When the mediation efforts were unsuccessful, the Court re-
opened the cases in November 2000. The court set a briefing schedule for
motions to dismiss in some of the consolidated cases. This order did not
include the one case to which the Company is a party.

   On April 14, 1998, a stockholder purporting to represent a class composed of
all U.S. Office Products' stockholders filed an action in the Delaware Chancery
Court. The action names U.S. Office Products and its directors, including Mr.
Ledecky, as defendants, and claims that the directors breached their fiduciary
duty to stockholders of U.S. Office Products by changing the terms of the self
tender offer for U.S. Office Products' common stock that was a part of the
Strategic Restructuring Plan to include employee stock options. The complaint
seeks injunctive relief, damages and attorneys' fees. The directors filed an
answer denying the claims against them, and U.S. Office Products has moved to
dismiss all claims against it.

   In connection with the Travel Distribution, the Company agreed to indemnify
U.S. Office Products for certain liabilities, which could include claims such
as those made against U.S. Office Products in all the lawsuits described in
this section. If U.S. Office Products were entitled to indemnification under
this agreement, the Company's indemnification obligation, however, likely would
be limited to 5.2% of U.S. Office Products' indemnifiable loss, up to a maximum
of $1.75 million.

   On March 5, 2001, U.S. Office Products filed for bankruptcy protection in
the United States Bankruptcy Court for the District of Delaware. Consequently,
all of the above actions are currently stayed as against U. S. Office Products.
The Plaintiffs in each action, however, may pursue their claims against all
remaining defendants, including the Company.

Post Employment Benefits

   The Company has entered into employment agreements with several employees
that would result in payments to these employees upon a change of control or
certain other events. No amounts have been accrued at December 31, 2000 and
December 26, 1999 related to these agreements, as no change of control has
occurred.


                                       51
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

Travel Distribution

   At the date of the Travel Distribution, the Company, U.S. Office Products
and the other Spin-Off Companies entered into the Distribution Agreement, the
Tax Allocation Agreement and the Employee Benefits Agreement, and the Spin-Off
Companies entered into the Tax Indemnification Agreement and may enter into
other agreements, including agreements related to referral of customers to one
another. These agreements provided, among other things, for U.S. Office
Products and the Company to indemnify each other from tax and other liabilities
relating to their respective businesses prior to and following the Travel
Distribution. Certain of the obligations of the Company and the other Spin-Off
Companies to indemnify U.S. Office Products are joint and several. Therefore,
if one of the other Spin-Off Companies fails to indemnify U.S. Office Products
when such a loss occurs, the Company may be required to reimburse U.S. Office
Products for all or a portion of the losses that otherwise would have been
allocated to other Spin-Off Companies. In addition, the agreements allocate
liabilities, including general corporate and securities liabilities of U.S.
Office Products not specifically related to the business travel agency
business, between U.S. Office Products and each Spin-Off Company.

NOTE 14--EMPLOYEE BENEFIT PLANS

   The Company maintains a qualified 401(k) Retirement Plan (the "401(k) Plan")
which allows eligible associates to contribute a portion of their salary on a
pre-tax basis. The Company matches a portion of employee contributions and all
full-time employees are eligible to participate in the 401(k) Plan after six
months of service.

   Certain subsidiaries of the Company have, or had prior to implementation of
the 401(k) Plan, qualified defined contribution benefit plans, which allow for
voluntary pre-tax contributions by the employees. Within one year following
their acquisition by the Company, the assets of these plans are rolled into the
Company's 401(k) Plan.

   For the years ended December 31, 2000, December 26, 1999 and December 27,
1998, the Company incurred expenses totaling $1,039, $736 and $678,
respectively, related to this plan.

NOTE 15--STOCKHOLDERS' EQUITY

Capital Contribution by U.S. Office Products

   During the year ended December 27, 1998, U.S. Office Products contributed
$1,495 of capital to the Company. The contribution reflects the forgiveness of
inter-company debt by U.S. Office Products, as it was agreed that the Company
would be allocated only $15,000 of debt plus the amount of any additional debt
incurred after January 12, 1998 in connection with the acquisition of entities
that will become subsidiaries of the Company.

Employee Stock Plans--Navigant

   In June 1998, the Company adopted the 1998 Stock Incentive Plan (the
"Plan"), which allows the Company to issue options under the plan up to 30% of
the outstanding common stock. All employees of the Company and its
subsidiaries, as well as non-employee directors of the Company, are eligible
for awards under the Plan.

                                       52
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

Incentive stock options and non-qualified stock options granted to employees
are generally exercisable beginning one year from the date of grant in
cumulative yearly amounts of 25% of the shares under option and generally
expire ten years from the date of grant. Generally, options are issued at
exercise prices equal to the market price at the date of grant. At December 31,
2000, the Company had 630,912 shares available for future option grants.

   The Company accounts for options issued in accordance with APB Opinion No.
25. Accordingly, because the exercise prices of the options have equaled the
market price on the date of grant, no compensation expense has been recognized
for the options granted. Had compensation cost for the Company's stock options
been recognized based upon the fair value of the stock options on the grant
date under the methodology prescribed by SFAS No. 123, "Accounting for Stock-
Based Compensation," the Company's net income and net income per share would
have been impacted as indicated in the following table:

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
     <S>                                 <C>          <C>          <C>
     Net income (loss):
       As reported......................   $14,229      $13,036       $2,443
       Pro forma........................    12,286        9,524         (112)
     Net income (loss) per share:
       As reported:
         Basic..........................   $  1.16      $  1.02       $ 0.19
         Diluted........................   $  1.15      $  1.01       $ 0.18
       Pro forma:
         Basic..........................   $  1.00      $  0.74       $(0.01)
         Diluted........................   $   .99      $  0.74       $(0.01)
</TABLE>

   The fair value of the options granted (which is amortized over the option
vesting period in determining the pro forma impact) is estimated on the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions:

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 31, December 26, December 27,
                                             2000         1999         1998
                                         ------------ ------------ ------------
     <S>                                 <C>          <C>          <C>
     Expected life of option............   7 years      7 years      7 years
     Risk free interest rate............      6.25%        5.94%        5.56%
     Expected volatility of stock.......     46.71%       66.87%       85.06%
     Dividends..........................   $     0      $     0      $     0
</TABLE>

   The weighted-average fair value of options granted was $5.93, $5.17 and
$8.36 for the years ended December 31, 2000, December 26, 1999 and December 27,
1998, respectively.

                                       53
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   A summary of option transactions follows:

<TABLE>
<CAPTION>
                                                 Weighted             Weighted
                                                 Average              Average
                                                 Exercise   Options   Exercise
                                       Options    Price   Exercisable  Price
                                      ---------  -------- ----------- --------
     <S>                              <C>        <C>      <C>         <C>
     Balance at December 28, 1997....   863,134   $10.82
       Granted....................... 2,730,540    10.02
       Exercised.....................  (418,682)   10.96
       Canceled......................   (27,011)    9.44
                                      ---------
     Balance at December 27,1998..... 3,147,981    10.12      77,670   $8.55
       Granted.......................   324,749     8.19
       Exercised.....................   (90,852)    7.80
       Canceled......................   (81,410)    9.57
                                      ---------
     Balance at December 26, 1999.... 3,300,468    10.01   1,962,380   $9.46
       Granted.......................   117,500    10.31
       Exercised.....................   (27,653)    8.88
       Canceled......................  (204,069)   11.79
                                      ---------
     Balance at December 31, 2000.... 3,186,246   $ 9.91   2,265,009   $9.61
                                      =========
</TABLE>

   As part of the Travel Distribution, U.S. Office Products allowed
optionholders the opportunity to tender up to 23.2% of their outstanding
options for a price of $17.36 per share (the pre-Travel Distribution price was
$27.00 per share). All of the options exercised in 1998, were tendered in
connection with the Travel Distribution.

   The following table summarizes information about stock options outstanding
and exercisable at December 31, 2000:

<TABLE>
<CAPTION>
                                                            Options
                             Options Outstanding          Exercisable
                       ------------------------------- ------------------
                                              Weighted           Weighted
                                              Average            Average
         Range of                  Weighted   Exercise           Exercise
      Exercise Price    Options  Average Life  Price    Options   Price
      --------------   --------- ------------ -------- --------- --------
      <S>              <C>       <C>          <C>      <C>       <C>
      $4.56--$8.96       258,822     8.26      $ 7.31     99,641  $ 7.40
      $9.00--$9.00     1,622,171     7.51        9.00  1,553,171    9.00
      $9.03--$11.75      420,320     7.33       10.61    243,442   10.60
      $11.89--$14.90     884,933     7.22       12.01    368,755   12.10
                       ---------                       ---------
      $4.56--$14.90    3,186,246     7.46      $ 9.91  2,265,009  $ 9.61
                       =========                       =========
</TABLE>

   Under a service agreement entered into with Jonathan J. Ledecky, the Board
of Directors of U.S. Office Products agreed that Mr. Ledecky would receive from
the Company a stock option for the Company's common stock as of the date of the
Travel Distribution. The Board intended the option to be compensation for
Mr. Ledecky's services as a director of the Company, and certain services as an
employee of the Company. The option was to cover 7.5% of the outstanding
Company common stock determined as of the date of the Travel Distribution, with
no anti-dilution provisions in the event of issuance of additional shares of
common stock (other than with respect to stock splits or reverse stock splits).
The total number of options issued to Mr. Ledecky in connection with this grant
was 823,000 shares with an exercise price equal to the IPO price of $9.00 per
share. These options vested immediately but could not be exercised by Mr.
Ledecky for one year.

                                       54
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   Immediately following the effective date of the registration statement filed
in connection with the IPO and the Distribution, the Company's Board of
Directors granted 823,000 options covering 7.5% of the outstanding shares of
the Company's common stock, to certain executive management personnel and non-
employee directors. The options were granted under the Plan and had a per share
exercise price equal to the IPO price of $9.00 per share, and although these
options vested immediately, they could not be exercised for one year.

Employee Stock Plans--FireVine

   The Operating Agreement of FireVine allows the Company to issue up to
226,111 options for FireVine common units to any one or more FireVine employees
or independent contractors. Options are generally exercisable either
immediately or beginning one year from the date of grant in cumulative yearly
amounts of 25% of the units under option, and generally expire ten years from
the date of grant. Options are issued at exercise prices equal to or greater
than the market value at the date of grant. At December 31, 2000, the Company
had 55,275 shares available for future option grants.

   Had compensation cost for these stock options been recognized based upon the
fair value of the stock options on the date of grant under the methodology
prescribed by SFAS No. 123, "Accounting for Stock-Based Compensation," the
expense for 2000 would have been $317,476, of which 25%, or $79,369, would have
been allocated to the minority shareholder. During 1999, the entire expense of
$286,317 would have been allocated to the minority shareholder.

   The fair value of the options granted (which is amortized over the option
vesting period in determining the pro forma impact) is estimated on the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions:

<TABLE>
<CAPTION>
                                                          For the Year Ended
                                                       -------------------------
                                                       December 31, December 26,
                                                           2000         1999
                                                       ------------ ------------
     <S>                                               <C>          <C>
     Expected life of option..........................   7 years      7 years
     Risk free interest rate..........................      6.25%        5.94%
     Expected volatility of stock.....................     46.71%       66.87%
     Dividends........................................   $     0      $     0
</TABLE>

   The weighted-average fair value of options granted was $28.89 and $3.32 for
the years ended December 31, 2000 and December 26, 1999, respectively.

                                       55
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   A summary of FireVine option transactions follows:

<TABLE>
<CAPTION>
                                                 Weighted             Weighted
                                                 Average              Average
                                                 Exercise   Options   Exercise
                                        Options   Price   Exercisable  Price
                                        -------  -------- ----------- --------
     <S>                                <C>      <C>      <C>         <C>
     Balance at December 27, 1998......      --   $   --
       Granted......................... 111,111    10.00
       Exercised.......................      --
       Canceled........................      --
                                        -------
     Balance at December 26, 1999...... 111,111    10.00    111,111    $10.00
       Granted.........................  60,575    79.57
       Exercised.......................      --       --
       Canceled........................    (850)  100.00
                                        -------
     Balance at December 31, 2000...... 170,836   $34.22    124,345    $19.58
                                        =======
</TABLE>

   The following table summarizes information about FireVine stock options
outstanding and exercisable at December 31, 2000:

<TABLE>
<CAPTION>
                                                                Options
                             Options Outstanding              Exercisable
                       ----------------------------------  -------------------
                                                Weighted             Weighted
                                                Average              Average
        Range of                   Weighted     Exercise             Exercise
     Exercise Price    Options   Average Life    Price     Options    Price
     --------------    -------   ------------   --------   -------   --------
     <S>               <C>       <C>            <C>        <C>       <C>
     $10.00            111,111       8.30       $ 10.00    111,111   $ 10.00
     $60.00             30,950       9.48         60.00         --        --
     $100.00            28,775       9.11        100.00     13,234    100.00
                       -------                             -------
     $10.00--$100.00   170,836       8.65       $ 34.22    124,345   $ 19.58
                       =======                             =======
</TABLE>

NOTE 16--QUARTERLY FINANCIAL DATA (UNAUDITED)

   The following presents certain unaudited quarterly financial data for the
years ended December 31, 2000 and December 26, 1999:

<TABLE>
<CAPTION>
                                              Year Ended December 31, 2000
                                        ----------------------------------------
                                         First  Second   Third  Fourth   Total
                                        ------- ------- ------- ------- --------
<S>                                     <C>     <C>     <C>     <C>     <C>
Revenues............................... $73,313 $81,838 $79,777 $80,101 $315,029
Operating income.......................   7,831  11,741   9,847   6,283   35,702
Net income.............................   3,055   5,515   4,491   1,168   14,229
Per share amounts:
  Basic................................ $  0.24 $  0.45 $  0.37 $  0.10 $   1.16
  Diluted.............................. $  0.24 $  0.45 $  0.37 $  0.10 $   1.15
</TABLE>

                                       56
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


<TABLE>
<CAPTION>
                                              Year Ended December 26, 1999
                                        ----------------------------------------
                                         First  Second   Third  Fourth   Total
                                        ------- ------- ------- ------- --------
<S>                                     <C>     <C>     <C>     <C>     <C>
Revenues............................... $54,603 $58,035 $55,682 $60,841 $229,161
Operating income (loss)................   7,223   9,291   7,914   4,691   29,119
Net income (loss)......................   3,463   4,631   3,693   1,250   13,037
Per share amounts:
  Basic................................ $  0.27 $  0.36 $  0.29 $  0.10 $   1.02
  Diluted.............................. $  0.27 $  0.36 $  0.29 $  0.10 $   1.01
</TABLE>

                                       57
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

   None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

   This information is incorporated by reference from the Company's Proxy
Statement to be filed with the Securities and Exchange Commission in connection
with the Company's annual meeting of stockholders.

ITEM 11. EXECUTIVE COMPENSATION.

   This information is incorporated by reference from the Company's Proxy
Statement to be filed with the Securities and Exchange Commission in connection
with the Company's annual meeting of stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

   This information is incorporated by reference from the Company's Proxy
Statement to be filed with the Securities and Exchange Commission in connection
with the Company's annual meeting of stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

   This information is incorporated by reference from the Company's Proxy
Statement to be filed with the Securities and Exchange Commission in connection
with the Company's annual meeting of stockholders.

                                       58
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

 (a) Financial Statement Schedules:

     All schedules called for by Form 10-K are omitted because they are
  inapplicable or the required information is shown in the financial
  statements, or notes thereto, included herein.

 (b) Reports on Form 8-K:

     None.

 (c) Exhibits:

                                 Exhibit Index

<TABLE>
<CAPTION>
 Exhibit
  Number                         Description of Document
 -------                         -----------------------
 <C>      <S>
  2.1+    Stock Purchase Agreement dated July 28, 1998 by and among Navigant
          International, Inc., Professional Travel Corporation, Arrington
          Travel Center, Inc. and Michael B. Arrington

  2.2++   Interest Purchase Agreement dated July 24, 1998 by and among Navigant
          International, Inc., Professional Travel Corporation, Atlas Travel
          Services, Ltd., Ariel Leibovitz, Doreen N. Leibovitz and Gary Pearce.

  2.3+++  Stock Purchase Agreement dated September 17, 1998 by and among
          Navigant International, Inc., Professional Travel Corporation, World
          Express Travel, Inc. and Robert B. Acree.

  3.1++++ Form of Amended and Restated Certificate of Incorporation

  3.2++++ Bylaws

  3.3++++ Form of Amendment to Bylaws

  4.1++++ Form of certificate representing shares of Common Stock

 10.1++++ Form of Distribution Agreement among U.S. Office Products Company,
          Workflow Management, Inc., Aztec Technology Partners, Inc., Navigant
          International, Inc. and School Specialty, Inc.

 10.2++++ Form of Tax Allocation Agreement among U.S. Office Products Company,
          Workflow Management, Inc., Aztec Technology Partners, Inc., Navigant
          International, Inc. and School Specialty, Inc.

 10.3++++ Form of Tax Indemnification Agreement among Workflow Management,
          Inc., Aztec Technology Partners, Inc., Navigant International, Inc.
          and School Specialty, Inc.

 10.4++++ Amended and Restated Employment Agreement dated as of July 25, 2000
          between Edward S. Adams and Navigant International, Inc.

 10.5++++ Amended and Restated Employment Agreement dated as of July 25, 2000
          between Robert C. Griffith and Navigant International, Inc.

 10.6     Amended and Restated Employment Agreement dated as of January 22,
          2001 between C. Thomas Nulty and Navigant International, Inc.

 10.7++++ Form of Agreement between U.S. Office Products and Jonathan J.
          Ledecky, as amended.

 10.8++++ Form of Employee Benefits Agreement among U.S. Office Products
          Company, Workflow Management, Inc., Aztec Technology Partners, Inc.,
          Navigant International, Inc. and School Specialty, Inc.
</TABLE>


                                       59
<PAGE>

<TABLE>
<CAPTION>
  Exhibit
  Number                         Description of Document
  -------                        -----------------------
 <C>       <S>
 10.9++++  Form of Agent Reporting Agreement with Airline Reporting Company.

 10.10++++ Form of Employment Agreement between Jonathan J. Ledecky and
           Navigant International, Inc.

 10.11++++ Form of 1998 Stock Incentive Plan of Navigant International, Inc.

 10.12**   Amended and Restated Credit Agreement dated as of August 6, 1999
           between NationsBank, N.A., as Agent, and Navigant International,
           Inc.

 10.13+    Form of Amendment to Employment Agreement between Edward S. Adams,
           Professional Travel Corporation and Navigant International, Inc.

 10.14+    Form of Amendment to Employment Agreement between Robert C.
           Griffith, Professional Travel Corporation and Navigant
           International, Inc.

 10.17*    Limited Liability Company Agreement of NavigantVacations.com dated
           October 13, 1999.

 21.1      Subsidiaries of Registrant

 23.1      Consent of Independent Accountants

 24.1      Power of Attorney (included on signature page hereto)
</TABLE>
--------
+    Incorporated by reference herein from Navigant's Report on Form 8-K filed
     with the Securities and Exchange Commission on August 11, 1998, as amended
     by Form 8-K/A filed with the Securities and Exchange Commission on
     October, 9, 1998.
++   Incorporated by reference herein from Navigant's Report on Form 10-Q for
     the quarterly period ended July 25, 1998, filed with the Securities and
     Exchange Commission on September 8, 1999.
+++  Incorporated by reference herein from Navigant's Report on Form 8-K filed
     with the Securities and Exchange Commission on October 1, 1998, as amended
     by Form 8-K/A filed with the Securities and Exchange Commission on
     November 30, 1998.
++++  Incorporated by reference herein from Navigant's Registration Statement
      on Form S-1 initially filed with the Securities and Exchange Commission
      on February 19, 1998 (File No. 333-46539).
*    Incorporated by reference to Exhibit 10.1 of Navigant's Current Report on
     Form 8-K filed with the Securities and Exchange Commission on October 27,
     1999 (File No. 0-24387).
**   Incorporated by reference to Exhibit 10.1 of Navigant's Quarterly Report
     on Form 10-K for the quarterly period ended September 26, 1999, filed with
     the Securities and Exchange Commission on November 10, 1999 (File No. 0-
     24387).

                                       60
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

   Date: March 27, 2001

                                          Navigant International, Inc.
                                          a Delaware corporation

                                                  /s/ Edward S. Adams
                                          By: _________________________________
                                                      Edward S. Adams
                                                Chairman of the Board, Chief
                                              Executive Officer, and Director
                                               (Principal Executive Officer)

   KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Edward S. Adams his true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution, for him or
in his name, place and stead, in any and all capacities to sign to this report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitutes, may lawfully do or cause to be done by virtue hereof.

   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 in the capacities indicated as of March 27, 2001.

                                                 /s/ Robert C. Griffith
                                          By: _________________________________
                                                     Robert C. Griffith
                                                Chief Financial Officer and
                                               Treasurer (Principal Financial
                                                  and Accounting Officer)

                                                  /s/ C. Thomas Nulty
                                          By: _________________________________
                                                      C. Thomas Nulty
                                               President and Chief Operating
                                                          Officer

                                                 /s/ Eugene A. Over, Jr.
                                          By: _________________________________
                                                    Eugene A. Over, Jr.
                                              Vice President, General Counsel
                                                       and Secretary

                                                /s/ Vassilios Sirpolaidis
                                          By: _________________________________
                                                   Vassilios Sirpolaidis
                                                          Director

                                                    /s/ Ned A. Minor
                                          By: _________________________________
                                                        Ned A. Minor
                                                          Director

                                                   /s/ D. Craig Young
                                          By: _________________________________
                                                       D. Craig Young
                                                          Director


                                       61