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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 30, 2001

                                       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                            80112
         ENGLEWOOD, COLORADO                           (Zip Code)
   (Address of principal executive
              offices)

                 Registrant's telephone number: (303) 706-0800

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

<TABLE>
<CAPTION>
      Title of each class            Name of each exchange on which registered
      -------------------            -----------------------------------------
      <S>                            <C>
             None.                                     None.
</TABLE>

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

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

   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 March
8, 2002 by non-affiliates of the Registrant was $155,941,000. This calculation
assumes that certain parties may be affiliates of the Registrant and that,
therefore, 12,231,000 shares of voting stock are held by non-affiliates. As of
March 8, 2002, the Registrant had 14,816,000 shares of its common stock and
1,231,000 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
2002, 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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                           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 online 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, 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, 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 30, 2001

                                     PART I

ITEMS 1. AND 2. BUSINESS AND PROPERTIES.

General

   Navigant is the second largest provider of corporate travel management
services in the United States based on airline ticket sales. With locations
throughout the United States, various U.S. territories and 16 foreign
countries, 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
portion of its clients from year to year. Navigant, through Scheduled Airlines
Traffic Offices, Inc. ("SatoTravel"), which was acquired June 2001, provides
airline travel reservation services to the U.S. government and its employees
and other private sector organizations. Navigant also provides specific group,
leisure and special event management travel services, largely to its corporate
clients. On December 30, 2001, Navigant had approximately 110 regional and
branch offices and approximately 740 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. 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 subsidiary, FireVine, LLC ("FireVine") or NavigantVacations.com,
leverages 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 reaches both
employees of clients and customers of clients. The Company believes its
CruiseCenter.com Web site 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.

   As of December 30, 2001, Navigant believes that nearly all 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

                                       3
<PAGE>

receive a pre-negotiated management fee per transaction 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 continued to
acquire regional corporate travel management companies. From 1998 through 2000,
Navigant acquired 22 regional travel management companies and an incentive and
meeting company. In 2001, five more regional travel management companies,
including SatoTravel, were acquired. During 2001, Navigant consolidated its
operations by merging several U.S. companies and amalgamating Navigant United
Kingdom and Navigant Canada companies. In addition, all travel management
company names were changed to use the Navigant International trademark, along
with individual geographic identifiers. As of December 30, 2001, Navigant had
the following significant subsidiaries:

<TABLE>
<CAPTION>
Name                                                         Headquarters
----                                                         ------------
<S>                                                     <C>
AQUA Software Products, Inc.                              Santa Ana, California
Cornerstone Enterprises, d/b/a Cornerstone, a Navigant
 International Company                                  Marlboro, Massachusetts
K.R. International Travel, d/b/a Navigant
 International/Brazil                                    Rio de Janeiro, Brazil
Navigant Cruise Center, Inc.                                     Houston, Texas
Navigant International/Canada, Inc.                            Toronto, Ontario
Navigant International/North Central, Inc.                    Chicago, Illinois
Navigant International/Northeast, Inc.                    Stamford, Connecticut
Navigant International/Northwest, Inc.                      Seattle, Washington
Navigant International/Rocky Mountain, Inc.                    Denver, Colorado
Navigant International/South Central, L.P.                       Houston, Texas
Navigant International/Southeast, Inc.                  Raleigh, North Carolina
Navigant International/Southwest, L.L.C.                  Santa Ana, California
Navigant International/United Kingdom Limited                   London, England
Scheduled Airlines Traffic Offices, Inc., d/b/a
 SatoTravel, a Navigant International Company               Arlington, Virginia
</TABLE>

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 250 travel management companies.
According to the Travel Industry Association of America and the United States
Department of Commerce, Americans spent a total of $482 billion on domestic
travel in 2000, of which Navigant believes a significant portion was for
business travel.

                                       4
<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 responsive 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.

     .  Increasing Military and Government client base. The SatoTravel
        acquisition has increased Navigant's ability to compete for
        military and U.S. government clients. In the 50 years that
        SatoTravel has served the travel needs of military and U.S.
        government clients it has gained a strong understanding of the
        intricacies of military and government travel standards and
        protocol.

                                       5
<PAGE>

       SatoTravel has developed customized programs, technology and
       services to fit the unique needs of military and government
       travelers.

     .  Expanding client base to large-scale corporate clients. Through the
        acquisition of SatoTravel and the formation of Navigant Integrated
        Services, Navigant has obtained the ability to service and compete
        for large-scale corporate clients. Navigant Integrated Services
        operates state-of-the-art call centers, which provide clients with
        premium service, flexibility and cost-saving opportunities.

     .  Cross-selling. Navigant will continue 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.

  .  Use the Internet to attract new clients and increase efficiency. The
     Internet provides a multifaceted 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 allow
     Navigant to more effectively market leisure travel service to employees
     of its existing corporate clients and to reach substantial new markets
     for leisure travel through private label and co-branding initiatives.

  .  Leverage Navigant's size to decrease costs and increase revenues. As the
     second largest corporate travel management company, 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, hotel property management
     companies and airlines. Some of these agreements provide payments to
     Navigant of up-front incentives, as well as annual payments or cost
     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
     telecommunications, 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, with the exception
     of its most recent acquisition, SatoTravel, as of November 2001, 100% of
     Navigant's North American transactions are now 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 and 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. Although the number of acquisitions in 2002
     is expected to be significantly lower than prior years, 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.

                                       6
<PAGE>

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;

  .  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, Canada 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 2001, Navigant Integrated Services ("NIS"), a new division to serve the
company's large-scale corporate accounts, was formed. Through state-of-the-art
call centers, NIS delivers leading edge technology, which provides clients with
premium service, flexibility and cost-saving opportunities.

   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.

                                       7
<PAGE>

 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 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 85% of its
transactions, and plans to continue conversions of newly acquired companies
during 2002. Eighty percent of the top five travel management companies in the
United States license portions of the AQUA(TM) system.

   In 1999, Navigant embarked upon a standardized program to consolidate its
accounting and client reporting systems. This resulted in converting accounting
systems to a single system and reporting systems to a standard system. With the
exception of Navigant's most recent acquisition, SatoTravel, 100% of all travel
transactions processed by Navigant's North American offices 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.

   Navigant is also expanding its efforts to cross-sell leisure travel to
employees of its corporate clients and 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, call centers and on-site satellite ticket printers ("STPs").

   At December 30, 2001, Navigant had approximately 740 on-site offices on
client premises, where it provides customized trip planning, reservation and
ticketing services to the employees of corporate and governmental 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 travel information and negotiations
with travel suppliers frequently used by the customer.

   As of December 30, 2001, Navigant had approximately 110 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

                                       8
<PAGE>

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 30, 2001, Navigant operated four call centers, which serve
the Company's large-scale corporate clients and several military and
governmental customers. Call centers are typically used by corporate, military
and government clients with more than $40 million in travel expenditures per
year. The call centers provide clients with premium service, flexibility and
cost-saving opportunities.

   As of December 30, 2001, Navigant also operated approximately 700 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.

   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 115 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 may 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 hotel rooms). 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.

                                       9
<PAGE>

   Navigant also competes with travel suppliers, including airlines, hotels and
rental car companies. Innovations in technology, such as the Internet and
computer online 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 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 1999, and with
the exception of its most recent acquisition, SatoTravel, 100% of the Company's
North American transactions are currently being transacted on the new system.
The Company expects the SatoTravel transactions to be on a consolidated system
with the rest of Navigant's transactions by the end of its 2003 fiscal year.

Employees

   As of March 8, 2002, Navigant had approximately 4,400 full-time associates,
none of whom is subject to collective bargaining agreements. The Company
believes that it enjoys good relations with its associates.

Recent Developments

   On February 8, 2002, the Company signed an amendment to the Amended and
Restated Credit Agreement dated as of August 6, 1999 (the "Credit Facility")
modifying certain of its terms and conditions. The amendment decreased the
amount available under the Credit Facility to $135.0 million and adjusted
certain ratios including the consolidated leverage ratio. For the fiscal
quarter ended March 31, 2002, the consolidated leverage ratio may not exceed
4.75:1.00. The maximum consolidated leverage ratio allowed is decreased until
March 31, 2003, where it returns to its original level of 2.50:1.00. As a
condition of the increase in the ratio, the Company will incur an increase in
interest expense. Based on the average outstanding balance on the Credit
Facility in 2001 of approximately $100 million, the increased interest rate for
2002 may result in up to $1.3 million of additional interest expense for the
year.

   On February 11, 2002, the Company signed an amendment to the Note Purchase
Agreements dated November 15, 2000 modifying certain terms and conditions of
the Note Purchase Agreements for the 9.84%

                                       10
<PAGE>

Senior Secured Notes, including an increase in the maximum allowable debt to
EBITDA ratio. As a condition of the increase in the ratio, the Company is
required to pay additional interest on a quarterly basis based on the debt to
EBITDA ratio. The additional consideration could result in up to $1.0 million
of additional interest expense for 2002.

   In March 2002, several U.S. airlines eliminated all payments of base
commissions to travel management companies in North America and the remaining
U.S. airlines are expected to follow. The Company does not believe it will be
impacted by the elimination of base commissions since it has entered into
management contracts and service fee agreements with nearly all of its
customers. Management contracts vary by customer depending on the type of
service provided, but the Company typically charges the client a pre-negotiated
fee and direct and overhead expenses, which are offset by the commissions
collected from the airlines. As commissions are reduced or eliminated, there is
less to deduct from the fee, and therefore, the reduction is passed onto the
customer. For customers not on management contracts, the Company retains the
commissions and charges a service fee. As the commissions are reduced or
eliminated, the Company increases the amount of service fees charged. The
Company believes that its management contracts and service fee arrangements
will minimize the financial impact of the elimination of base commissions.

                                       11
<PAGE>

Properties

   As of December 30, 2001, Navigant operated at 110 travel agency facilities,
one of which is owned and 109 of which are leased. The following are the
Company's primary properties:

<TABLE>
<CAPTION>
                                            Square  Owned/
Region                   Location           Footage Leased     Expiration
------          --------------------------- ------- ------ ------------------
<S>             <C>                         <C>     <C>    <C>
Canada          Vancouver, British Columbia  6,684  Leased August 31, 2006
Canada          Calgary, Alberta             9,747  Leased October 31, 2006
Canada          Mississauga, Ontario        17,256  Leased June 30, 2004
Canada          Toronto, Ontario             5,412  Leased August 31, 2006
North Central   Chicago, Illinois           20,164  Leased July 31, 2006
North Central   Edina, Minnesota            14,440  Leased May 31, 2003
North Central   Ann Arbor, Michigan         12,600  Leased July 31, 2004
North Central   Grand Rapids, Michigan      29,142   Owned N/A
North Central   Indianapolis, Indiana        7,392  Leased April 30, 2002
Northeast       Stamford, Connecticut       10,000  Leased May 18, 2004
Northeast       Marlboro, Massachusetts      7,661  Leased September 1, 2004
Northeast       Pittsburgh, Pennsylvania     3,276  Leased June 30, 2002
Northeast       Pittsburgh, Pennsylvania     4,245  Leased June 29, 2002
Northeast       Rochester, New York          4,674  Leased July 31, 2004
Northeast       Boston, Massachusetts       11,816  Leased February 28, 2005
Northeast       Portsmouth, New Hampshire    6,850  Leased May 31, 2004
Northeast       Norwalk, Connecticut         7,235  Leased June, 30, 2004
Northwest       Seattle, Washington         25,500  Leased March 31, 2011
Northwest       Anchorage, Alaska            5,650  Leased September 30, 2003
Rocky Mountain  Englewood, Colorado         18,295  Leased August 31, 2005
SatoTravel      Arlington, Virginia         63,205  Leased January 11, 2004
SatoTravel      Tukwila, Washington         31,497  Leased November 4, 2006
SatoTravel      Ely, Minnesota              14,500  Leased September 30, 2005
SatoTravel      San Antonio, Texas          14,668  Leased April 30, 2005
South Central   New Orleans, Louisiana       7,590  Leased September 30, 2003
South Central   Houston, Texas              46,380  Leased April 30, 2011
South Central   Houston, Texas              13,617  Leased March 31, 2004
Southeast       Raleigh, North Carolina     12,002  Leased March 31, 2004
Southeast       Jacksonville, Florida        4,849  Leased June 30, 2006
Southeast       Atlanta, Georgia            16,156  Leased August 31, 2005
Southeast       Greensboro, North Carolina   7,352  Leased January 31, 2007
Southwest       Phoenix, Arizona            14,615  Leased September 30, 2004
Southwest       Santa Ana, California       22,892  Leased November 20, 2003
Southwest       Santa Clara, California     11,850  Leased January 31, 2005
United Kingdom  London, England              4,000  Leased July 6, 2002
World
 Headquarters   Englewood, Colorado         49,000  Leased June 30, 2011
</TABLE>

   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 30, 2001, the
approximate book value of these two subsidiaries was $12.6 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 surrounding the
Strategic Restructuring, and the complaints that have been filed assert claims
of violation of

                                       13
<PAGE>

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.

   On March 5, 2001 U.S. Office Products filed for bankruptcy protection in the
United States Bankruptcy Court for the District of Delaware. On December 28,
2001, the United States Bankruptcy Court for the District of Delaware approved
U.S. Office Product's Joint Liquidating Plan of Reorganization, and the
Plaintiffs in the various actions pending against U.S. Office Products could
again pursue their claims. To that end, the class-action plaintiffs have asked
the United States District Court for the District of Columbia to reopen the
cases, and return them to the Court's active docket. The Court has yet to act
on this request.

   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.

   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
2001.

                                       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
                                                                 ------ ------
<S>                                                              <C>    <C>
2001
First Quarter (January 1, 2001 through April 1, 2001)........... $12.19 $ 8.06
Second Quarter (April 2, 2001 through July 1, 2001)............. $16.97 $10.30
Third Quarter (July 2, 2001 through September 30, 2001)......... $17.25 $ 5.79
Fourth Quarter (October 1, 2001 through December 30, 2001)...... $11.68 $ 6.93
2000
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
</TABLE>

Holders

   At March 8, 2002, the last reported sales price of the Common Stock was
$12.75 per share, and the number of holders of record of the Common Stock was
3,124.

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

   On June 12, 2001, the Company issued 1,485,000 shares of its common stock to
the four stockholders of SatoTravel, in partial payment for the acquisition of
all outstanding stock of SatoTravel owned by them. These shares were issued in
reliance upon the exemption from registration under the Securities Act of 1933
("the Act") provided by Section 4(2) of the Act. The purchasers were
sophisticated investors who had adequate access to information concerning the
Company. The purchasers represented they were acquiring the shares for
investment, and not with a view to the distribution of such shares. Legends
restricting transfer except in compliance with the Act were placed on the
certificate representing the shares.

                                       15
<PAGE>

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.

<TABLE>
<CAPTION>
                                                 Fiscal Year Ended
                          ----------------------------------------------------------------
                          December 30, December 31, December 26, December 27, December 28,
                              2001         2000         1999         1998         1997
                          ------------ ------------ ------------ ------------ ------------
                                       (In thousands, except per share data)
<S>                       <C>          <C>          <C>          <C>          <C>
Statement of Income Data
 (1):
Revenues................    $350,331     $315,029     $229,161     $171,368     $90,917
Operating expenses......     205,953      176,359      128,971       99,734      52,517
General and
 administrative
 expenses...............     103,801       88,635       61,320       47,988      27,377
Depreciation and
 amortization expense...      18,028       12,433        9,752        7,167       3,090
Non-recurring and
 restructuring charges
 (2)....................       3,550        1,900                     8,236       1,156
                            --------     --------     --------     --------     -------
Operating income........      18,999       35,702       29,118        8,243       6,777
Interest expense........      16,248       13,070        5,929        2,070         685
Interest income.........        (299)        (673)        (199)        (227)       (400)
Other, net..............         237           27           15          (30)        (29)
                            --------     --------     --------     --------     -------
Income before provision
 for income taxes.......       2,813       23,278       23,373        6,430       6,521
Provision for income
 taxes..................       2,238        9,918       10,217        3,987       2,975
                            --------     --------     --------     --------     -------
Income before minority
 interest...............         575       13,360       13,156        2,443       3,546
Minority interest.......         135         (869)         120
                            --------     --------     --------     --------     -------
Net income..............    $    440     $ 14,229     $ 13,036     $  2,443     $ 3,546
                            ========     ========     ========     ========     =======
Net income per share:
  Basic.................    $   0.03     $   1.16     $   1.02     $   0.19     $  0.33
  Diluted...............    $   0.03     $   1.15     $   1.01     $   0.18     $  0.32
Weighted average number
 of common shares
 outstanding:
  Basic.................      12,829       12,262       12,841       13,156      10,858
  Diluted...............      13,219       12,385       12,868       13,250      11,078

<CAPTION>
                          December 30, December 31, December 26, December 27, December 28,
                              2001         2000         1999         1998         1997
                          ------------ ------------ ------------ ------------ ------------
                                                   (In thousands)
<S>                       <C>          <C>          <C>          <C>          <C>
Balance Sheet Data (1):
Working capital.........    $ 26,605     $ 22,956     $ 20,067     $  1,208     $12,379
Total assets............     424,467      331,311      287,311      206,848     137,861
Total debt..............     210,158      140,859      107,219       62,463      16,806
Stockholders' equity....     156,371      132,487      124,963      114,125      99,644

<CAPTION>
                                                 Fiscal Year Ended
                          ----------------------------------------------------------------
                          December 30, December 31, December 26, December 27, December 28,
                              2001         2000         1999         1998         1997
                          ------------ ------------ ------------ ------------ ------------
                                                   (In thousands)
<S>                       <C>          <C>          <C>          <C>          <C>
Other Data (1):
EBITDA (3)..............    $ 37,027     $ 48,135     $ 38,870     $ 15,410     $ 9,867
Cash flow--operating
 activities.............      18,261       20,907       10,179       10,078       6,527
Cash flow--investing
 activities.............     (42,086)     (40,196)     (47,175)     (65,381)     (2,588)
Cash flow--financing
 activities.............      25,261       21,307       38,770       49,341      (7,733)
Increase (decrease) in
 cash...................       1,136        1,097        1,688       (5,733)     (3,837)
Capital expenditures....       7,296       10,539        5,234        4,313       1,424
</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

                                       16
<PAGE>

    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.
(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 to corporations,
government agencies and the military and, to a more limited extent, other
travel services, throughout the United States, Canada, the United Kingdom,
Brazil and thirteen other countries.

   The Company's consolidated financial statements include the ten companies
acquired in business combinations in 1999 accounted for under the purchase
method (the "1999 Purchased Companies"), the six companies acquired in
business combinations in 2000 accounted for under the purchase method (the
"2000 Purchased Companies") and the five companies acquired in business
combinations in 2001 accounted for under the purchase method (the "2001
Purchased Companies") from their respective dates of acquisition.

   On September 11, 2001, the United States was the target of terrorist
attacks that have had a significant adverse effect on the global economy and
commercial aviation industry. These attacks caused a quick and severe decline
in air travel. For days after the attacks, air traffic within the United
States stopped. International air traffic was also affected. When the nation's
air space was opened to commercial flights, there were fewer passengers. While
air travel resumed, it remained depressed for the balance of the year, and
most airlines have said that they do not expect travel to return to prior
levels until late 2002 or 2003.

   The major airlines responded to the effects of the attacks by reducing
schedules, decreasing service levels and making deep cuts in their work force.
In addition, governmental authorities increased security requirements, which
tended to cause boarding delays and make air travel less enticing for many
travelers. All of these actions have impacted the Company subsequent to
September 11 and are expected to continue to impact the Company's operating
results through most of 2002.

   In response, the Company instituted several cost-cutting measures the week
of September 24, 2001, including an approximate 20% workforce reduction and
across-the-board salary and benefit reductions, which aggregates approximately
$27 million in annual savings.

   In October 2001, and again in February 2002, the Company negotiated
amendments to both of its long-term debt facilities, which changed certain
financial covenants resulting in the Company being in compliance with its
credit agreements as of December 30, 2001.

                                      17
<PAGE>

 Sources of Revenue

   Historically, arrangements between 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, 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. Since 1995, the airlines
instituted various commission caps and cut the base commission on domestic and
international tickets. In March 2002, several U.S. airlines eliminated base
commissions and most of the other U.S. airlines are expected to follow.

   In response to the reduction in airline commissions and consistent with
industry practice, the Company has entered into management contracts and
service fee arrangements with nearly all 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
monthly. 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 $25 and $45 for each air travel ticket issued to such clients
and retains all of the related commissions collected from the airlines.

   The Company believes that its management contracts and service fee
arrangements will minimize the financial impact of past commission caps and
cuts, as well as the elimination of airline commissions. The Company believes
that nearly all of its total transactions are currently generated from clients
under management contracts and service fee arrangements.

   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 expense
(which comprised approximately 70.5%, 69.8% and 76.3% of total direct operating
expenses in 2001, 2000 and 1999, 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
expense (which comprised approximately 54.9%, 49.5% and 50.4% of total general
and administrative expenses in 2001, 2000 and 1999, respectively), occupancy
and other costs.

   Labor expense as a percentage of direct operating expenses and general and
administrative expenses have been impacted by the reduction in transactions due
to the terrorist attacks on September 11, 2001 and the acquisition of
SatoTravel, which has larger call centers with sophisticated technology and
reporting tools, and the nature of SatoTravel's customer base with an emphasis
on military and government customers. SatoTravel has a higher percentage of
labor to direct operating expenses and a higher percentage of labor to general
and administrative expenses than Navigant. As integration continues throughout
2002 and transaction levels resume to historical levels, the Company expects
these percentages to fall back down to historical levels.

                                       18
<PAGE>

   In response to the reduction in transactions due to the terrorist attacks on
September 11, 2001, the Company instituted several cost-cutting measures,
including an approximate 20% workforce reduction and across-the-board salary
and benefit reductions, which aggregates approximately $27 million in annual
savings.

 2001 Restructuring Charges

   The Company recorded a $3.6 million Restructuring charge in December 2001.
The charge relates to an asset impairment to write down long-lived assets of
its subsidiary, FireVine, as a result of the consolidation of FireVine
operations and infrastructure within Navigant. The restructuring of FireVine
eliminates several redundant assets and investments in infrastructure and
partnerships and write-down of technology that is no longer necessary based on
integration with Navigant's infrastructure. The activity in the restructuring
liability during 2001 was as follows (in thousands):

<TABLE>
<CAPTION>
                                                 Fixed
                                                 Asset        Other
                                               Impairment Restructuring
                                                 Costs        Costs      Total
                                               ---------- ------------- -------
   <S>                                         <C>        <C>           <C>
   2001 restructuring charge..................  $ 3,148       $ 402     $ 3,550
   Payments...................................                 (132)       (132)
   Non-cash usage.............................   (3,148)        (40)     (3,188)
                                                -------       -----     -------
   Balance at December 30, 2001...............  $     0       $ 230     $   230
                                                =======       =====     =======
</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
were closed or consolidated and 130 employee positions were eliminated. The
activity in the restructuring liability during 2000 was as follows (in
thousands):

<TABLE>
<CAPTION>
                                            Employee        Facility
                                          Severance and   Closures and
                                        Termination 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>

 Critical Accounting Policies and Estimates

   Navigant's discussion and analysis of its financial condition and results of
operations are based upon Navigant's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires
Navigant to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an ongoing basis, Navigant evaluates
these estimates. Navigant bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances. The results of these estimates form the basis for making
judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

   Navigant's critical accounting policies are as follows:

  .  Revenue recognition;

                                       19
<PAGE>

  .  Estimating valuation allowances and accrued liabilities; and

  .  Valuation of long-lived, tangible and intangible assets and goodwill.

   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 service fee
arrangements when earned, which is at the time a reservation is booked and
ticketed. Management fees are recognized as revenue in the period benefited,
which is generally on a monthly basis. 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. 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.

   Estimating valuation allowances and accrued liabilities. The Company
provides a reserve for cancellations and reservation changes, and provisions
for such amounts are reflected in net revenues. The provisions that have been
netted against revenues are not material in the periods reflected. The
Company's estimate for cancellations and reservation changes is based on
historical levels and current economic trends and could vary significantly from
actual results based upon changes in economic and political conditions that
impact corporate travel patterns.

   Valuation of long-lived, tangible and intangible assets and goodwill. The
Company periodically evaluates the recoverability of the carrying value of its
long-lived, tangible and intangible assets and goodwill 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 tangible assets of the operation, to fair value. Fair
value is determined based on discounted cash flows or appraised values,
whichever is more readily determinable, depending on the nature of the assets.
Net long-lived tangible and intangible assets and goodwill amounted to $334.8
million as of December 30, 2001.

   In 2002, Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets, ("FAS 142") became effective and as a result, Navigant
will cease to amortize goodwill. The Company estimates that the reduction of
amortization expense following the implementation of FAS 142 will result in a
$0.63 increase in earnings per diluted common share in 2002. In lieu of
amortization, Navigant will perform an initial impairment review of its
goodwill in 2002 and an annual impairment review thereafter. Navigant is
currently in the process of completing the initial impairment review. The
Company does not expect to record an impairment charge upon completion of the
initial impairment review, however, there can be no assurance that at the time
the review is completed a material impairment charge will not be recorded.

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

                                       20
<PAGE>

Results of Operations

   The following table sets forth various items as a percentage of revenues for
2001, 2000 and 1999:

<TABLE>
<CAPTION>
                                               For the Fiscal Year Ended
                                         --------------------------------------
                                         December 30, December 31, December 26,
                                             2001         2000         1999
                                         ------------ ------------ ------------
<S>                                      <C>          <C>          <C>
Revenues...............................     100.0%       100.0%       100.0%
Operating expenses.....................      58.8         56.0         56.3
General and administrative expenses....      29.6         28.1         26.8
Depreciation and amortization expense..       5.2          4.0          4.2
Non-recurring and restructuring costs..       1.0          0.6
                                            -----        -----        -----
Operating income.......................       5.4         11.3         12.7
Interest expense, net..................       4.6          3.9          2.5
Other (income) expense.................       0.0          0.0          0.0
                                            -----        -----        -----
Income before provision for income
 taxes.................................       0.8          7.4         10.2
Provision for income taxes.............       0.6          3.2          4.5
                                            -----        -----        -----
Income before minority interest........       0.2%         4.2%         5.7%
                                            =====        =====        =====
</TABLE>

Consolidated Results of Operations

   Fiscal Year Ended December 30, 2001 Compared to Fiscal Year Ended December
31, 2000

   Consolidated revenues increased 11.2%, from $315.0 million for 2000 to
$350.3 million for 2001. This increase was due to the inclusion of the revenues
from the 2000 and 2001 Purchased Companies from their respective dates of
acquisition, which added approximately $81.5 million in consolidated revenues.
This increase was offset by a decrease in revenues in the last three quarters
of 2001 associated with the overall downturn in the economy and the impact of
the September 11 attacks, which reduced air travel by over 20% for the balance
of 2001. These factors resulted in an overall reduction in business travel
across all sectors, and for the Company, transactions were down approximately
15.0% in 2001 from 2000.

   Operating expenses increased 16.8%, from $176.4 million, or 56.0% of
revenues, for 2000 to $206.0 million, or 58.8% of revenues, for 2001. The
increase in operating expenses as a percentage of revenues was due primarily to
the substantial reduction in business travel in the last three quarters of
2001, as the Company was unable to reduce staffing levels at the same pace and
certain fixed operating expenses were being spread over a smaller revenue base.
Additionally, during the first quarter of 2001, operating expense as a
percentage of revenues increased due to increased customer service demands
during that quarter associated with continued labor related issues at United
Airlines and Delta Air Lines, the poor weather and some decline in productivity
associated with a decline in travel bookings in certain parts of the country,
partially offset by internal growth and the results of spreading certain fixed
operating expenses over a larger revenue base during the quarter.

   General and administrative expenses increased 17.1%, from $88.6 million, or
28.1% of revenues, for 2000 to $103.8 million, or 29.6% of revenues, for 2001.
The increase in general and administrative expenses as a percentage of revenues
was due primarily to the substantial reduction in business travel during the
last three quarters of the year, as the Company was unable to reduce staffing
levels at the same pace and certain fixed general and administrative costs were
being spread over a smaller revenue base.

   The Company recorded a $3.6 million restructuring charge in 2001 and a $1.9
million restructuring charge in 2000. The 2001 restructuring charge was related
to an asset impairment charge to write down long-lived assets of FireVine as a
result of the consolidation of FireVine operations within Navigant. In 2000, as
part of the Company's increased focus on regional operational structures and
process flow, it undertook a formal plan approved by its Board of Directors for
cost reduction measures including the elimination of duplicative

                                       21
<PAGE>

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.

   Depreciation and amortization expense increased 45.0%, from $12.4 million,
or 4.0% of revenues, for 2000 to $18.0 million, or 5.2% of revenues, for 2001.
This increase was due to the increase in the number of purchase acquisitions
and the resultant higher goodwill amortization included in the results for 2001
compared to 2000.

   Interest expense, net, increased from $12.4 million or 3.9% of revenues, for
2000 to $15.9 million, or 4.6% of revenues, for 2001. The increase was
primarily attributable to the acquisition financing of the 2000 and 2001
Purchased Companies with borrowings under the Company's Credit Facility. The
average debt balance for 2001 increased to $183.4 million compared to $129.9
million for 2000 resulting in approximately $4.8 million in additional interest
expense. This increase was offset by the decrease in interest rates in 2001
resulting in $2.0 million less interest expense as the Company's average
interest rate decreased from 10.0% in 2000 to 8.9% in 2001.

   Provision for income taxes decreased from $9.9 million for 2000 to $2.2
million for 2001, reflecting effective income tax rates of 42.6% and 79.6%,
respectively. The high effective income tax rate compared to the federal
statutory rate of 35% was primarily due to amortization of goodwill from
acquisition activity that was not deductible for tax purposes. The effective
rate in 2001 was higher than the effective rate in 2000 due to an increase in
the proportion of nondeductible goodwill amortization to total goodwill
amortization in 2001 from acquisition activity and a decrease of pre-tax income
due to the September 11 attacks.

 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 expenses 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 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

                                       22
<PAGE>

purchase acquisitions and the resultant higher goodwill amortization included
in the results for 2000 compared to 1999.

   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.

Liquidity and Capital Resources

   At December 30, 2001, the Company had cash and cash equivalents of $4.2
million, working capital of $26.6 million, borrowings of $117.5 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"), $12.0 million of other indebtedness, including capital
lease obligations, and available capacity under the Credit Facility of $17.5
million after the $15 million reduction in availability as a result of the
February 8, 2002 amendment discussed below. The Company's capitalization,
defined as the sum of long-term debt and stockholders' equity at December 30,
2001 was approximately $366.5 million.

   The Company has financed its operational growth and acquisitions primarily
from internally generated cash flow from operations and borrowings under the
Credit Facility.

   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
2003 based on current budgets.

   During 2001, net cash provided by operating activities was $18.3 million.
Net cash used in investing activities was $42.1 million, including $7.3 million
for additions to property and equipment, such as computer equipment and office
furniture and $46.8 million for the acquisitions of the 2000 and 2001 Purchased
Companies, offset by $5.4 million net proceeds from the disposal of the
corporate headquarter's building and $6.7 million for the sale of restricted
cash equivalents in FireVine. Net cash provided by financing activities was
$25.3 million, consisting of $49.0 million in proceeds from the Company's
credit facilities primarily to finance the 2001 Purchased Companies and
proceeds from the exercise of stock options of $1.3 million, offset by $13.5
million for repayments of the Company's credit facilities, $10.5 million for
repurchase of minority interest in FireVine and $1.0 million for the repurchase
of common stock.

   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 $37.9 million for the acquisition of the 1999 and 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 and $6.4 million for the repurchase of
common stock.

                                       23
<PAGE>

   During 1999, net cash provided by operating activities was $10.2 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, $28.0 million for the acquisition of the 1999 Purchased Companies
and $15.0 million for the purchase of investments with the restricted cash
equivalents in FireVine, offset by the proceeds from the sale of a building for
$1.0 million. Net cash provided by financing activities was $38.8 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, $15.0 million in proceeds from the issuance of
minority interest in FireVine and $602,000 for the proceeds from the exercise
of stock options.

   On October 13, 1999, the Company sold a minority interest in its FireVine
subsidiary to a third party venture capital firm for $15 million. This minority
interest could have been converted to an approximate 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 holder of the $12.5 million of
Convertible Preferred Units had the right to require that FireVine redeem the
Units upon certain conditions, including if an initial public offering of the
subsidiary did not occur within two years. If the subsidiary did not redeem the
units, the holder of the preferred units had the right to have the Company
redeem them. Additionally, FireVine issued a warrant to this third party
venture capital firm for an additional 50,000 common units, at an exercise
price of $60 per share that was exercisable anytime through October 13, 2009.

   In October 2001, the holder of the Convertible Preferred Units notified
FireVine that they were exercising their put right requiring FireVine to redeem
the Units. Since an initial public offering of FireVine had not occurred within
two years of the original agreement, FireVine was required to pay the
redemption price of $14 million (original price plus accrued dividends). On
December 12, 2001, Navigant negotiated a new agreement with the holder, wherein
the holder surrendered all of their interest in FireVine, including their
common units and the 50,000 common units warrants, for a promise to pay the
full redemption price in three installments: $3.5 million upon the signing of
the new agreement, $7.0 million due December 31, 2001 and the balance of $3.5
million due March 31, 2002.

   On August 31, 2000, the Company signed an amendment to its secured $125.0
million Credit Facility, increasing the 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 February 8, 2002, the Company signed an amendment to the Credit Facility
modifying certain of its terms and conditions. The amendment decreased the
amount available under the Credit Facility to $135.0 million and adjusted
certain ratios including the consolidated leverage ratio. For the fiscal
quarter ended March 31, 2002, the consolidated leverage ratio may not exceed
4.75:1.00. The maximum consolidated leverage ratio allowed is decreased until
March 31, 2003, where it returns to its original level of 2.50:1.00. As a
condition of the increase in the ratio, the Company will incur an increase in
interest expense. Based on the average outstanding balance on the Credit
Facility in 2001 of approximately $100 million, the increased interest rate for
2002 will result in up to $1.3 million of additional interest expense for the
year.

   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

                                       24
<PAGE>

due November 15, 2004, 2005 and 2006, respectively. The financial covenants are
consistent with those of the Credit Facility.

   On February 11, 2002, the Company signed an amendment to the Note Purchase
Agreements dated November 15, 2000 modifying certain terms and conditions of
the Note Purchase Agreements, including an increase in the maximum allowable
debt to EBITDA ratio. As a condition of the increase in the ratio, the Company
is required to pay additional interest on a quarterly basis based on the debt
to EBITDA ratio. The additional consideration could result in up to $1.0
million of additional interest expense for 2002.

   The Company intends to continue to evaluate acquisition opportunities,
although management does not intend to complete as many acquisitions in 2002 as
the Company completed in prior years. In addition, the amendments to the Credit
Facility and the Senior Secured Notes, restrict the size and form of
acquisitions the Company can complete during the term of the amendments.
Nevertheless, the Company 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 flows
from operations and supplemented as necessary by borrowings under the Credit
Facility.

Derivatives

   The Company may enter into derivative financial instruments to mitigate or
eliminate certain risks, primarily interest changes, associated with the
Company's debt structure. The Company entered into an interest rate swap to
convert a part of its nonprepayable fixed rate long-term debt to floating-rate.
The notional amount of these types of interest rate swaps aggregated $50
million. The Company's policy is to convert between 40% and 70% of all
nonprepayable fixed-rate debt to floating-rate debt, with the percentage
depending on contract interest rates, maturities and expected balance on the
Company's floating-rate revolving debt facility. This interest rate swap is
accounted for as a fair-value hedge. For the year ended December 30, 2001, the
Company recognized a net gain of $10 (reported as a reduction of interest
expense), which represented the swap's ineffectiveness. All components of each
derivative's gain or loss were included in the assessment of hedge
effectiveness. As December 30, 2001, the fair value of the swap was $714, which
is recorded in Other Assets and Other Long-Term Liabilities.

   The Company also entered into a forward interest rate swap to convert
floating-rate loans to fixed-rate loans. Specific amounts that the Company
hedges are determined based on the prevailing market conditions and the current
shape of the yield curve. The specific terms and notional amounts of the swaps
are determined based on management's assessment of future interest rates, as
well as other factors, including short-term strategic initiatives. The notional
amount of these types of interest rate swaps aggregated $75 million. For
derivatives qualifying as hedges of future cash flows, the effective portion of
changes in fair value is recorded temporarily as a component of equity, and is
then recognized in earnings along with the related effects of the hedged items.
Any ineffective portion of a hedge is reported in earnings as it occurs. For
the year ended December 30, 2001, the Company did not report a loss or a gain
associated with the total ineffectiveness of all cash flow hedges. All
components of each derivative's gain or loss were included in the assessment of
hedge effectiveness. As of December 30, 2001, the fair value of the cash flow
hedges aggregates ($1,877), which is recorded in Other Long-Term Liabilities
and as an offset to Accumulated Other Comprehensive Loss.

                                       25
<PAGE>

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.

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 ("FAS 133"). FAS 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). FAS 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 adoption of FAS 133 in the first quarter of 2001 did
not have a significant effect on the Company's results of operations or its
financial position.

   In June of 2001, the FASB issued Statement of Financial Accounting Standards
No. 141, Business Combinations ("FAS 141") and Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets ("FAS 142").
FAS 141 is effective for all business combinations initiated after June 30,
2001 and FAS 142 is effective for all fiscal quarters of all fiscal years
beginning after December 15, 2001 (December 31, 2001 for the Company). FAS 141
eliminates pooling of interest as a method of accounting for acquisitions
subsequent to June 30, 2001. FAS 142 eliminates the amortization of goodwill on
an annual basis and requires an initial and subsequent annual impairment test
to determine whether the goodwill should be adjusted downward to fair market
value. The Company is currently in the process of determining the effect that
these pronouncements will have on its operating results, particularly the
impairment provisions. However, the Company will cease amortizing goodwill
effective December 30, 2001. Goodwill amortization expense recorded during the
year ended December 30, 2001 and December 31, 2000 was $8.4 million and $6.8
million, respectively.

   In June of 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations ("FAS 143"). The Company
will adopt FAS 143 no later than December 30, 2002. Under FAS 143, the fair
value of a liability for an asset retirement obligation covered under the scope
of FAS 143 would be recognized in the period in which the liability is
incurred, with an offsetting increase in the carrying amount of the related
long-lived asset. Over time, the liability would be accreted to its present
value, and the capitalized cost would be depreciated over the useful life of
the related asset. Upon settlement of the liability, an entity would either
settle the obligation for its recorded amount or incur a gain or loss upon

                                       26
<PAGE>

settlement. The adoption of FAS 143 will not have a significant effect on the
Company's results of operations or its financial position.

   On October 3, 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("FAS 144"). The Company will adopt FAS 144 no later than December 30,
2001. FAS 144 retains the fundamental provisions of existing generally accepted
accounting principles with respect to the recognition and measurement of long-
lived asset impairment contained in FAS No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of ("FAS 121").
However, FAS 144 provides new guidance intended to address certain significant
implementation issues associated with FAS 121, including expanded guidance with
respect to appropriate cash flows to be used to determine whether recognition
of any long-lived asset impairment is required, and if required how to measure
the amount of the impairment. FAS 144 also requires that any net assets to be
disposed of by sale be reported at the lower of carrying value or fair value
less cost to sell, and expands the reporting of discontinued operations to
include any component of an entity with operations and cash flows that can be
clearly distinguished from the rest of the entity. The Company believes the
adoption of FAS 144 will not presently 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 30, 2001, Navigant had
$210.2 million of consolidated outstanding debt and its total consolidated
debt, as a percentage of capitalization, was 57.3%. 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 impose 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;

                                       27
<PAGE>

  .  Make certain acquisitions or investments;

  .  Pay dividends and make distributions;

  .  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.

   The amendments to Navigant's Credit Facility and the Senior Secured Notes
executed in November of 2001 and February 2002 also limit Navigant's ability to
consummate certain acquisitions without the consent of the participating banks
and institutional note holders. These limitations may reduce Navigant's ability
to continue its acquisition program.

   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 depend upon the cash flow of its subsidiaries and
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

                                       28
<PAGE>

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 able to charge service fees or maintain the level of such
service fees.

   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 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 online 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 corporate 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.

                                       29
<PAGE>

 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 and Worldspan. 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.

 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 its subsidiaries, SatoTravel, Navigant UK and
Navigant Brazil, 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.

                                       30
<PAGE>

   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 acquired companies may also result in:

  .  Diversion of management's attention;

  .  Difficulties with retention;

  .  The need to hire and train key employees;

  .  Risks associated with unanticipated problems or legal liabilities; and

  .  Impairment of goodwill under FAS 142.

   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 30, 2001, approximately $306.3 million, or 72.2%, of
Navigant's total assets and 195.9% 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. Through
December 30, 2001, Navigant amortized 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. In fiscal year
2002, the Company will adopt the provisions of FAS 142 and discontinue the
amortization of goodwill. Goodwill will no longer be amortized,

                                       31
<PAGE>

instead it will be tested for impairment upon adoption and then annually or
more frequently if events or changes in circumstances indicate that the asset
might be impaired.

   A reduction in net income resulting from the write down or impairment of
goodwill would 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 and fair value associated with intangible assets
recognized in connection with its acquisitions will continue and there
presently is no persuasive evidence that any material portion will be impaired
when the rules of FAS 142 are applied.

 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

   Navigant was formed through the acquisition of twelve corporate travel
management companies from January 1997 through May 1998, and Navigant has made
28 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.

 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

                                       32
<PAGE>

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
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 and, on December
28, 2001, the United States Bankruptcy Court for the District of Delaware
approved U.S. Office Product's Joint Liquidating Plan of Reorganization.

 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 Note 8 of the Notes to Consolidated
Financial Statements included elsewhere herein. Based upon the Company's
outstanding long term debt subject to variable interest rates under the Credit
Facility at December 30, 2001 of $117.5 million, a 50 basis point movement in
the base rate or the LIBOR rate would approximate a $588,000 annual increase or
decrease in interest expense.

                                       33
<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.......................................     35

Consolidated Balance Sheets as of December 30, 2001 and December 31,
 2000...................................................................     36

Consolidated Statements of Income for each of the three years in the
 period ended
 December 30, 2001......................................................     37

Consolidated Statement of Stockholders' Equity for each of the three
 years in the period ended December 30, 2001............................     38

Consolidated Statements of Cash Flows for each of the three years in the
 period ended
 December 30, 2001......................................................  39-40

Notes to Consolidated Financial Statements..............................  41-59
</TABLE>

                                       34
<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 accounting principles generally accepted in the United
States of America. 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.

/s/ Edward S. Adams
Chairman of the Board and Chief Executive Officer

/s/ Robert C. Griffith
Chief Financial Officer and Treasurer

                       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 30, 2001 and December 31, 2000, and the results of their operations
and their cash flows for each of the three years in the period ended December
30, 2001, in conformity with accounting principles generally accepted in the
United States of America. These consolidated financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these consolidated 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
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 8, 2002

                                       35
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                          CONSOLIDATED BALANCE SHEETS
                       (In Thousands, Except Share Data)

<TABLE>
<CAPTION>
                                                      December 30, December 31,
                                                          2001         2000
                                                      ------------ ------------
                       ASSETS
                       ------
<S>                                                   <C>          <C>
Current assets:
  Cash and cash equivalents..........................   $  4,236     $  3,100
  Restricted cash equivalents in FireVine............                   6,690
  Accounts receivable, less allowance for doubtful
   accounts of $1,569 and $696, respectively.........     60,939       50,487
  Prepaid expenses and other current assets..........      7,075        4,117
  Deferred income taxes..............................      3,699        2,534
  Income tax receivable..............................      7,046        3,720
                                                        --------     --------
    Total current assets.............................     82,995       70,648
                                                        --------     --------
Property and equipment, net..........................     28,519       28,079
Intangible assets, net...............................    306,285      226,971
Other assets.........................................      6,668        5,613
                                                        --------     --------
    Total assets.....................................   $424,467     $331,311
                                                        ========     ========

<CAPTION>
        LIABILITIES AND STOCKHOLDERS' EQUITY
        ------------------------------------
<S>                                                   <C>          <C>
Current liabilities:
  Short-term portion of long-term debt...............   $ 10,753     $  9,375
  Short-term portion of capital lease obligations....        410          658
  Accounts payable...................................      7,132        3,664
  Accrued compensation...............................      9,586        7,697
  Other accrued liabilities..........................     28,509       26,298
                                                        --------     --------
    Total current liabilities........................     56,390       47,692
                                                        --------     --------
Long-term debt.......................................    198,762      130,790
Capital lease obligations............................        233           36
Deferred income taxes................................      2,104        1,535
Other long-term liabilities..........................     10,607        5,199
                                                        --------     --------
    Total liabilities................................    268,096      185,252
                                                        --------     --------
Minority interest in FireVine........................                  13,572
                                                        --------     --------
Commitments and contingencies (Notes 10 and 12)

Stockholders' equity:
  Common stock; $.001 par value, 150,000,000 shares
   authorized; 14,796,000 and 13,163,000 issued,
   respectively......................................         14           13
Additional paid-in capital...........................    143,915      115,085
Treasury stock at cost; 1,231,000 and 1,154,000
 shares outstanding, respectively....................    (10,928)      (9,922)
  Retained earnings..................................     28,973       28,533
  Accumulated other comprehensive loss...............     (5,603)      (1,222)
                                                        --------     --------
    Total stockholders' equity.......................    156,371      132,487
                                                        --------     --------
    Total liabilities and stockholders' equity.......   $424,467     $331,311
                                                        ========     ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       36
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

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

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 30, December 31, December 26,
                                             2001         2000         1999
                                         ------------ ------------ ------------
<S>                                      <C>          <C>          <C>
Revenues...............................    $350,331     $315,029     $229,161

Operating expenses.....................     205,953      176,359      128,971
General and administrative expenses....     103,801       88,635       61,320
Depreciation and amortization expense..      18,028       12,433        9,752
Non-recurring and restructuring
 charges...............................       3,550        1,900
                                           --------     --------     --------
Operating income.......................      18,999       35,702       29,118

Other (income) expenses:
  Interest expense.....................      16,248       13,070        5,929
  Interest income......................        (299)        (673)        (199)
  Other, net...........................         237           27           15
                                           --------     --------     --------
Income before provision for income
 taxes.................................       2,813       23,278       23,373
Provision for income taxes.............       2,238        9,918       10,217
                                           --------     --------     --------
Income before minority interest........         575       13,360       13,156
Minority interest......................         135         (869)         120
                                           --------     --------     --------
Net income.............................    $    440     $ 14,229     $ 13,036
                                           ========     ========     ========
Weighted average number of common
 shares outstanding:
  Basic................................      12,829       12,262       12,841
  Diluted..............................      13,219       12,385       12,868

Net income per share:
  Basic................................    $   0.03     $   1.16     $   1.02
  Diluted..............................    $   0.03     $   1.15     $   1.01
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       37
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                              Accumulated
                                        Additional               Other                                Total
                                 Common  Paid-in   Treasury  Comprehensive Retained Comprehensive Stockholders'
                         Shares  Stock   Capital    Stock       Income     Earnings Income (Loss)    Equity
                         ------  ------ ---------- --------  ------------- -------- ------------- -------------
<S>                      <C>     <C>    <C>        <C>       <C>           <C>      <C>           <C>
Balance at December 27,
 1998................... 12,929   $13    $113,251  $   (312)    $   (95)   $ 1,268                  $114,125
 Exercise of stock
  options...............     91               602                                                        602
 Tax impact of exercise
  of stock options......                      191                                                        191
 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...............     27               201                                                        201
 Tax impact of exercise
  of stock options......                       40                                                         40
 Share repurchase
  program...............   (696)                     (6,402)                                          (6,402)
 Shares issued in
  repayment of notes....     63               800                                                        800
 Comprehensive income
  (loss):
 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
 Exercise of stock
  options...............    146             1,267                                                      1,267
 Tax impact of exercise
  of stock options......                      655                                                        655
 Issuance of common
  stock and stock
  options for the
  purchase of
  SatoTravel............  1,485     1      26,908                                                     26,909
 Share repurchase
  program...............    (75)                     (1,006)                                          (1,006)
 Comprehensive income
  (loss):
 Net income.............                                                       440     $   440           440
 Other comprehensive
  loss, net of tax:
   Foreign currency
    translation
    adjustment..........                                         (2,504)                (2,504)       (2,504)
   Effect of interest
    rate swaps..........                                         (1,877)                (1,877)       (1,877)
                                                                                       -------
   Total comprehensive
    loss................                                                               $(3,941)
                         ------   ---    --------  --------     -------    -------     =======      --------
Balance at December 30,
 2001................... 13,565   $14    $143,915  $(10,928)    $(5,603)   $28,973                  $156,371
                         ======   ===    ========  ========     =======    =======                  ========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       38
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                   For the Year Ended
                                         --------------------------------------
                                         December 30, December 31, December 26,
                                             2001         2000         1999
                                         ------------ ------------ ------------
<S>                                      <C>          <C>          <C>
Cash flows from operating activities:
  Net income............................   $    440     $ 14,229     $ 13,036
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
   Depreciation and amortization
    expense.............................     18,028       12,433        9,752
   Non-recurring and restructuring
    charges.............................      3,188          213
   Income tax benefit from employee
    exercise of stock options...........        655           40          191
   Deferred tax provision (benefit).....      2,662        1,712         (936)
   Minority interest....................        428       (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................     14,965        1,418       (2,231)
     Prepaid expenses and other
      assets............................      1,169        1,809           19
     Accounts payable...................       (998)      (2,929)        (530)
     Income taxes receivable............     (5,983)      (1,342)      (4,165)
     Accrued liabilities and other
      liabilities.......................    (16,293)      (5,128)      (5,077)
                                           --------     --------     --------
       Net cash provided by operating
        activities......................     18,261       20,907       10,179
                                           --------     --------     --------
Cash flows from investing activities:
  Additions to property and equipment,
   net of disposals.....................     (7,296)     (10,539)      (5,234)
  Proceeds from disposal of building....      5,350                     1,025
  Cash paid in acquisitions, net of cash
   received.............................    (39,316)     (37,667)     (28,001)
  Cash paid for earn-outs related to
   prior acquisitions...................     (7,514)        (265)
  Purchase of investments/sale of
   investments (restricted cash)........      6,690        8,275      (14,965)
                                           --------     --------     --------
       Net cash used in investing
        activities......................    (42,086)     (40,196)     (47,175)
                                           --------     --------     --------
Cash flows from financing activities:
  Proceeds from issuance of long-term
   debt.................................                  80,000
  Payments of long-term debt............    (13,470)      (7,770)      (8,099)
  Proceeds from (payments of) credit
   facilities, net......................     48,970      (42,850)      36,700
  Payment of debt issue costs...........                  (1,873)      (2,225)
  Proceeds from issuance (repayment) of
   minority interest in FireVine........    (10,500)                   15,000
  Proceeds from exercise of stock
   options..............................      1,267          201          602
  Repurchase of common stock............     (1,006)      (6,401)      (3,208)
                                           --------     --------     --------
       Net cash provided by financing
        activities......................     25,261       21,307       38,770
                                           --------     --------     --------
Effect of exchange rate changes on
 cash...................................       (300)        (921)         (86)
                                           --------     --------     --------
Net increase in cash and cash
 equivalents............................      1,136        1,097        1,688
Cash and cash equivalents at beginning
 of period..............................      3,100        2,003          315
                                           --------     --------     --------
Cash and cash equivalents at end of
 period.................................   $  4,236     $  3,100     $  2,003
                                           ========     ========     ========
Supplemental disclosures of cash flow
 information:
  Interest paid.........................   $ 14,036     $ 11,816     $  5,410
  Income taxes paid.....................   $  6,613     $  9,548     $ 14,382
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       39
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
                                 (In Thousands)

   The Company issued notes payable, common stock and options and cash in
connection with certain business combinations accounted for under the purchase
method in the years ended December 30, 2001, December 31, 2000 and December 26,
1999. 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 30, December 31, December 26,
                                            2001         2000         1999
                                        ------------ ------------ ------------
<S>                                     <C>          <C>          <C>
Accounts receivable....................   $ 25,911     $ 9,827      $ 12,303
Prepaid expenses and other current
 assets................................      3,419       1,928           523
Property and equipment.................      8,180         960           924
Intangible assets......................     78,885      39,002        45,043
Other assets...........................      1,029         634           531
Short-term debt........................        (35)       (458)       (4,392)
Accounts payable.......................     (4,466)     (1,713)       (2,568)
Accrued liabilities....................    (16,505)     (5,107)      (10,676)
Long-term debt.........................    (22,130)
Other long-term liabilities............     (3,779)     (1,074)       (2,087)
                                          --------     -------      --------
  Net assets acquired..................   $ 70,509     $43,999      $ 39,601
                                          ========     =======      ========
The acquisitions were funded as
 follows:
  Notes payable due to former owners...   $  4,285     $ 6,332      $ 11,600
  Issuance of common stock and
   options.............................     26,908
  Cash paid, net of cash received......     39,316      37,667        28,001
                                          --------     -------      --------
    Total..............................   $ 70,509     $43,999      $ 39,601
                                          ========     =======      ========
</TABLE>

   Noncash transactions:
--------
..  During the year ended December 30, 2001, the Company acquired $643 in fixed
   assets through 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.

                                       40
<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 largest corporate travel management companies in the United States
based on airline ticket sales. The Company manages all aspects of its client's
travel processes, focusing on reducing their travel expenses. The Company
through Scheduled Airlines Traffic Offices, Inc. ("SatoTravel"), which was
acquired in June 2001, provides airline travel reservation services to the
U.S. Government and its employees and private sector organizations.

   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.

   The Company's operations are primarily concentrated in one market segment--
airline travel--and its customers are geographically diverse with no single
customer base concentrated in a single industry. 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--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

   The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All inter-company accounts and
transactions have been eliminated.

Use of Estimates

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

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.

Reclassifications

   Certain reclassifications have been made to prior years' balances to
conform to current year presentation.

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.

                                      41
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


Restricted Cash Equivalents in FireVine

   In 1999, the Company received a $15 million investment from an unrelated
venture capital fund for an ownership interest in FireVine, LLC ("FireVine") or
NavigantVacations.com, which was previously wholly owned. The proceeds of this
investment were restricted 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 amortized over the lesser of its useful life or its lease
terms.

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. In fiscal year
2002 the Company will adopt the provisions of Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets ("FAS 142"), and
discontinue the amortization of goodwill. See additional details on this
pronouncement in the "New Accounting Pronouncements" section below.

Impairment of Long-Lived Assets

   Management periodically evaluates the recoverability of the carrying value
of its long-lived tangible and intangible assets 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 determinable, 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.

                                       42
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


Fair Value of Financial Instruments

   The carrying amounts of the Company's financial instruments including cash
and cash equivalents, accounts receivable, accounts payable and accrued
liabilities approximate fair value due to the short-term maturity of these
instruments. The fair value of long-term obligations for notes payable and
capital leases was estimated by discounting the future cash flows using market
interest rates and does not differ significantly from the amounts reflected in
the consolidated financial statements.

Income Taxes

   Income tax includes U.S. and international income taxes. Certain items are
not reported in tax returns and financial statements in the same year. The tax
effects of these differences are reported as deferred income taxes.

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 service fee arrangements when
earned, which is at the time a reservation is booked and ticketed. Management
fees are recognized as revenue over the period benefited, which is generally on
a monthly basis. The Company provides a reserve for cancellations and
reservation changes, and provisions for such amounts are reflected in net
revenues. The provisions that have been netted against 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. 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 30,
2001, December 31, 2000 and December 26, 1999, options for 0.9 million, 3.1
million and 3.4 million shares, respectively, were excluded from diluted
earnings per share.

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 ("FAS 133").

                                       43
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

FAS 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).
FAS 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. The adoption of FAS 133 in the
first quarter of 2001 did not have a significant effect on the Company's
results of operations or its financial position.

   In June of 2001, the FASB issued Statement of Financial Accounting Standards
No. 141, Business Combinations ("FAS 141") and Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets ("FAS 142").

   FAS 141 requires that all business combinations be accounted for using the
purchase method. Under this method, the purchase price of an acquired business
is allocated to the individual tangible and intangible assets acquired and
liabilities assumed based upon the estimated fair values at the date of
acquisition. If the purchase price exceeds the amounts assigned to assets
acquired and liabilities assumed, the excess is recognized as goodwill. After
initial recognition, goodwill and intangible assets acquired in the business
combination must be accounted for under FAS 142. FAS 141 is effective for the
Company for all business combinations initiated after June 30, 2001.

   FAS 142 addresses financial accounting and reporting for (i) intangible
assets acquired individually or with a group of other assets at acquisition and
(ii) goodwill and other intangible assets subsequent to their acquisition.
Under the provisions of FAS 142, if an intangible asset is determined to have
an indefinite useful life, it shall not be amortized until its useful life is
determined to be no longer indefinite. An intangible asset that is not subject
to amortization shall be tested for impairment annually, or more frequently if
events or changes in circumstances indicate that the asset might be impaired.
Goodwill will also no longer be amortized. Rather, it will be tested for
impairment upon adoption of this standard and thereafter on an annual basis and
between annual tests in certain circumstances. FAS 142 is required to be
applied starting with fiscal years beginning after December 15, 2001 (December
31, 2001 for the Company). The Company estimates that the reduction of
amortization expense following the implementation of FAS 142 will result in a
$0.63 increase in earnings per diluted common share in 2002.

   In June of 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations ("FAS 143"). FAS 143
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. The statement requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. FAS 143 is effective for financial statements issued for
fiscal years beginning after June 15, 2002. The Company does not believe the
adoption of this standard will have a significant effect on the Company's
results of operations or its financial position.

   On October 3, 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("FAS 144"). FAS 144 addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. The statement retains the
requirements to (a) recognize an impairment loss only if the carrying amount of
a long-lived asset is not recoverable from its undiscounted cash flows and (b)
measure an impairment loss as the difference between the carrying amount and
fair value of the asset. It does, however, remove goodwill from its scope,
eliminating the requirement to allocate goodwill to long-lived assets to be
tested for impairment. The statement also requires that a long-lived asset to
be abandoned, exchanged for a similar productive asset or distributed to owners
in a spin-off be

                                       44
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

considered held and used until it is disposed of. Discontinued operations are
no longer measured on a net realizable value basis, and future operating losses
are no longer recognized before they occur. FAS 144 broadens the presentation
of discontinued operations in the income statement to include a component of an
entity (rather than a segment of a business). A component of an entity
comprises operations and cash flows that can be clearly distinguished,
operationally and for financial reporting purposes, from the rest of the
entity. The provisions of FAS 144 are effective for financial statements issued
for fiscal years beginning after December 15, 2001, and interim periods within
those fiscal years. The Company does not believe the adoption of this standard
will have a significant effect on the Company's results of operations or its
financial position.

NOTE 3--BUSINESS COMBINATIONS

Purchase Method

   In 2001, the Company made five acquisitions accounted for under the purchase
method for an aggregate purchase price of $70,509 consisting of cash, net of
cash acquired, of $39,316, issuance of 1,485,000 shares of common stock and
182,118 options at a weighted average exercise price of $3.19 for a total value
of $26,908 and notes payable of $4,285. Included in this aggregate purchase
price is the acquisition of SatoTravel for $53.9 million, consisting of cash
($27.0 million), stock ($24.2 million) and conversion of stock options ($2.7
million). The total assets related to these five acquisitions were $117,424
including intangible assets of $78,885. The results of these acquisitions have
been included in the Company's results from their respective dates of
acquisition.

   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. In addition to the above noted
consideration, additional purchase consideration aggregating $7,514 and $265
has been paid in 2001 and 2000, respectively, 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.

                                       45
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   The following presents the unaudited pro forma results of operations of the
Company for the years ended December 30, 2001 and December 31, 2000, which
gives retroactive effect to the results of the companies acquired in 2001 and
2000 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 $(511) and $(3,319) for the years ended
December 30, 2001 and December 30, 2000, respectively, to reflect the
amortization of intangible assets, adjustments in executive compensation,
interest expense associated with the debt incurred to finance the acquisitions
and inclusion of a federal income tax provision on all earnings:

<TABLE>
<CAPTION>
                                                          For the Year Ended
                                                       -------------------------
                                                       December 30, December 31,
                                                           2001         2000
                                                       ------------ ------------
                                                              (unaudited)
<S>                                                    <C>          <C>
Revenues..............................................   $411,901     $467,115
Net income............................................   $    658     $ 18,905
Net income per share--basic...........................   $   0.05     $   1.38
Net income per share--diluted.........................   $   0.05     $   1.36
</TABLE>

   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 2001, 2000 and 1999 accounted for under the purchase method
and related date of acquisition are as follows:
<TABLE>
<CAPTION>
                                                     Date of
                 Name of Acquisition               Acquisition
                 -------------------              --------------
      <S>                                         <C>
      2001 Acquisitions:
        Travel Services International, Ltd.         January 2001
        C & J Travel, Inc.                              May 2001
        Meritek Travel Company                         June 2001
        Scheduled Airlines Traffic Offices, Inc.
         ("SatoTravel")                                June 2001
        I.T.A. Travel Agency Limited                 August 2001(1)
      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
        GTS Global Travel Solutions               September 2000
        K. R. Agencia de Viagens, Ltda. (Brazil)  September 2000
      1999 Acquisitions:
        Cornerstone Enterprises, Inc.             September 1999
        Couch/Mollica Travel, Ltd.                     July 1999
        Dollinger Travel, Inc.                     November 1999
        First Travelcorp, Inc.                    September 1999
        Forbes Travel Service, Inc.                    June 1999
        Lovejoy-Tiffany & 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
</TABLE>

(1) As this acquisition occurred subsequent to the effective date of FAS 141,
    the resulting goodwill of $1,605 was not subject to amortization in 2001.

                                       46
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


NOTE 4--NON-RECURRING AND RESTRUCTURING CHARGES

   The Company recorded a $3.6 million restructuring charge in December 2001.
The charge relates to an asset impairment to write down long-lived assets of
its subsidiary, FireVine, as a result of the consolidation of FireVine
operations and infrastructure within Navigant. The restructuring of FireVine
eliminates several redundant assets and investments in infrastructure and
partnerships and writes down technology that is no longer necessary based on
integration with Navigant's infrastructure. The activity in the restructuring
liability during 2001 was as follows (in thousands):

<TABLE>
<CAPTION>
                                                 Fixed
                                                 Asset        Other
                                               Impairment Restructuring
                                                 Costs        Costs      Total
                                               ---------- ------------- -------
<S>                                            <C>        <C>           <C>
2001 restructuring charge.....................  $ 3,148       $ 402     $ 3,550
Payments......................................                 (132)       (132)
Non-cash usage................................   (3,148)        (40)     (3,188)
                                                -------       -----     -------
Balance at December 30, 2001..................  $     0       $ 230     $   230
                                                =======       =====     =======
</TABLE>

   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 provided 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 had been closed or consolidated and all 130 employee positions had
been eliminated. The activity in the restructuring liability during 2000 was as
follows:

<TABLE>
<CAPTION>
                                             Employee
                                           Severance and    Facility
                                            Termination   Closures 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>

NOTE 5--PROPERTY AND EQUIPMENT

   Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                       December 30, December 31,
                                                           2001         2000
                                                       ------------ ------------
<S>                                                    <C>          <C>
Land..................................................   $      0     $    325
Buildings.............................................      3,156        6,294
Furniture and fixtures................................     36,523       32,508
Leasehold improvements................................      7,074        4,927
Assets under capital leases...........................      1,245        1,590
                                                         --------     --------
                                                           47,998       45,644
Less: Accumulated depreciation........................    (19,479)     (17,565)
                                                         --------     --------
Net property and equipment............................   $ 28,519     $ 28,079
                                                         ========     ========
</TABLE>

                                       47
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   Depreciation expense for the years ended December 30, 2001, December 31,
2000 and December 26, 1999 was $9,272, $5,583 and $4,592, respectively.
Amortization expense for assets under capital leases for the years ended
December 30, 2001, December 31, 2000 and December 26, 1999 was $363, $87 and
$95, respectively.

NOTE 6--INTANGIBLE ASSETS

   Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                       December 30, December 31,
                                                           2001         2000
                                                       ------------ ------------
   <S>                                                 <C>          <C>
   Goodwill...........................................   $332,166     $244,459
   Less: Accumulated amortization.....................    (25,881)     (17,488)
                                                         --------     --------
   Net intangible assets..............................   $306,285     $226,971
                                                         ========     ========
</TABLE>

   Amortization expense for the years ended December 30, 2001, December 31,
2000 and December 26, 1999 was $8,393, $6,763 and $5,065, respectively.

NOTE 7--OTHER ACCRUED LIABILITIES

   Other accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                       December 30, December 31,
                                                           2001         2000
                                                       ------------ ------------
   <S>                                                 <C>          <C>
   Customer deposits..................................   $17,948      $13,439
   Customer revenue share.............................       226        4,472
   Accrued interest payable...........................     1,505        1,419
   Allowance for refunds and exchanges................     1,032          485
   Other..............................................     7,798        6,483
                                                         -------      -------
     Total other accrued liabilities..................   $28,509      $26,298
                                                         =======      =======
</TABLE>

NOTE 8--CREDIT FACILITIES

Long-Term Debt

   Long-term debt consists of:

<TABLE>
<CAPTION>
                                                     December 30, December 31,
                                                         2001         2000
                                                     ------------ ------------
<S>                                                  <C>          <C>
Line of Credit Facility, weighted average interest
 rate of 4.85% and 9.25% at December 30, 2001 and
 December 31, 2000..................................   $117,500     $ 47,000
Senior Secured Notes, fixed interest rate of 9.84%
 payable in three equal installments of $26.7
 million on November 2004, 2005 and 2006............     80,000       80,000
Notes payable due to former owners, unsecured,
 interest rates ranging from 5.5% to 7.0%,
 maturities through 2003............................      7,915       11,498
Installment payment due to Och Ziff, due March
 2002...............................................      3,500           --
Payable to State of Minnesota, interest rate of
 3.5%, due 2007, quarterly payments of $25..........        600           --
Mortgages payable, collateralized by certain assets
 of the Company, 9.08% to 9.4% interest rates, paid
 off in full through sale/leaseback transaction.....         --        1,667
                                                       --------     --------
                                                        209,515      140,165
Less: Current maturities of long-term debt..........     10,753        9,375
                                                       --------     --------
  Total long-term debt..............................   $198,762     $130,790
                                                       ========     ========
</TABLE>

                                       48
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   The Company maintains a Credit Facility with NationsBank, N.A., as
administrative agent that matures on August 2004. On August 31, 2000, the
Company signed an amendment to the Credit Facility, increasing it to $150
million with the same terms and conditions. The Facility is collateralized 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. Interest rate options available to the Company vary depending upon
the satisfaction of certain specified financial ratios.

   On February 8, 2002, the Company signed an amendment to the Credit Facility
modifying certain of its terms and conditions. The amendment decreased the
amount available under the Credit Facility to $135.0 million and adjusted
certain ratios including the consolidated leverage ratio. For the fiscal
quarter ended March 31, 2002, the consolidated leverage ratio may not exceed
4.75:1.00. The maximum consolidated leverage ratio allowed is decreased until
March 31, 2003, where it returns to its original level of 2.50:1.00. As a
condition of the increase in the ratio, the Company will incur an increase in
interest expense. Based on the average outstanding balance on the Credit
Facility in 2001 of approximately $100 million, the increased interest rate for
2002 may result in up to $1.3 million of additional interest expense for the
year.

   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, 2005 and
2006, respectively. The financial covenants are consistent with the Credit
Facility. On February 11, 2002, the Company signed an amendment to the Note
Purchase Agreements modifying certain terms and conditions including an
increase in the maximum allowable debt to EBITDA ratio. As a condition of the
increase in the ratio, the Company is required to pay additional interest on a
quarterly basis based on the debt to EBITDA ratio. The additional consideration
could result in up to $1.0 million of additional interest expense for 2002.

   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>
      2002............................................................ $ 10,753
      2003............................................................    1,262
      2004............................................................  144,166
      2005............................................................   26,667
      2006............................................................   26,667
                                                                       --------
        Total maturities of long-term debt............................ $209,515
                                                                       ========
</TABLE>

                                       49
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


NOTE 9--INCOME TAXES

   Income before income taxes consists of the following:

<TABLE>
<CAPTION>
                                                    For the Year Ended
                                          --------------------------------------
                                          December 30, December 31, December 26,
                                              2001         2000         1999
                                          ------------ ------------ ------------
   <S>                                    <C>          <C>          <C>
   Domestic..............................    $1,409      $21,523      $22,217
   Foreign...............................     1,404        1,755        1,156
                                             ------      -------      -------
                                             $2,813      $23,278      $23,373
                                             ======      =======      =======
</TABLE>

   The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                 For the Year Ended
                                       --------------------------------------
                                       December 30, December 31, December 26,
                                           2001         2000         1999
                                       ------------ ------------ ------------
   <S>                                 <C>          <C>          <C>
   Income taxes currently payable
    (receivable):
     Federal..........................   $(2,301)      $6,427      $ 9,046
     Foreign..........................     1,380          378          494
     State............................        (6)         849        1,613
                                         -------       ------      -------
                                            (927)       7,654       11,153
   Deferred income tax expense
    (benefit):
     Federal..........................     2,858        1,969         (795)
     State............................       307          295         (141)
                                         -------       ------      -------
                                           3,165        2,264         (936)
                                         -------       ------      -------
   Total provision for income taxes...   $ 2,238       $9,918      $10,217
                                         =======       ======      =======
</TABLE>

   Deferred taxes are comprised of the following:

<TABLE>
<CAPTION>
                                                       December 30, December 31,
                                                           2001         2000
                                                       ------------ ------------
   <S>                                                 <C>          <C>
   Deferred tax assets:
     Allowance for doubtful accounts..................   $   566      $   278
     Accrued salary and vacation......................     1,475        1,632
     Deferred revenue.................................     1,977        1,941
     Deferred rent....................................       450
     Other accrued liabilities........................     1,734          717
                                                         -------      -------
       Total deferred tax assets......................   $ 6,202      $ 4,568
                                                         =======      =======
   Deferred tax liabilities:
     Property and equipment...........................   $  (673)     $  (835)
     Intangible assets................................    (3,736)      (2,641)
     Other............................................      (198)         (93)
                                                         -------      -------
       Total deferred tax liabilities.................   $(4,607)     $(3,569)
                                                         =======      =======
   Net deferred tax asset.............................   $ 1,595      $   999
                                                         =======      =======
</TABLE>

   Management believes that it will obtain the full benefit of the deferred tax
assets on the basis of the Company's historical profitability and its
evaluation of the Company's anticipated profitability over the period of years
that the temporary differences are expected to become tax deductions.
Therefore, no valuation allowance is necessary.

                                       50
<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 30, December 31, December 26,
                                            2001         2000         1999
                                        ------------ ------------ ------------
   <S>                                  <C>          <C>          <C>
   U.S. federal statutory rate.........     35.0%        35.0%        35.0%
   State income taxes, net of federal
    income tax benefit.................      3.3          4.1          3.8
   Nondeductible goodwill..............     44.0          4.6          4.1
   Other...............................     (2.7)        (1.1)         0.8
                                            ----         ----         ----
   Effective income tax rate...........     79.6%        42.6%        43.7%
                                            ====         ====         ====
</TABLE>

NOTE 10--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   Capital
                                                              ------- ---------
   <S>                                                        <C>     <C>
   2002......................................................  $450    $18,004
   2003......................................................   221     15,002
   2004......................................................    35      9,864
   2005......................................................            6,914
   2006......................................................            5,198
   Thereafter................................................           12,836
                                                               ----    -------
       Total minimum lease payments..........................   706    $67,818
                                                                       =======
   Less: Amounts representing interest.......................   (63)
                                                               ----
   Present value of net minimum lease payments including
    current portion
    of $410..................................................  $643
                                                               ====
</TABLE>

   Rent expense for all operating leases for the years ended December 30, 2001,
December 31, 2000 and December 26, 1999 was $12,600, $8,964 and $6,936,
respectively.

   On June 25, 2001, the Company completed a sale/leaseback transaction for its
headquarters facility. The building with a net book value of $3,113 was sold
for $5,350 after deducting selling expenses and other related costs. The
resultant gain of $2,237 was deferred and will be amortized over the life of
the new lease agreement.

NOTE 11--MINORITY INTEREST IN FIREVINE

   On October 13, 1999, the Company sold a minority interest in its FireVine
subsidiary to a third party venture capital firm for $15 million. This minority
interest could have been converted to an approximate 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 holder of the $12.5 million of
Convertible Preferred Units had the right to require that FireVine redeem the
Units upon certain conditions, including if an initial public offering of the
subsidiary did not occur within two years, if the Company defaults under its
Credit Facility, or if the Company undergoes a change of control as

                                       51
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

defined in the Credit Facility. If the subsidiary did not redeem the units, the
holder of the preferred units had the right to have the Company redeem them.
The Preferred Stock was convertible into common units at a ratio of ten to one,
plus an additional amount equal to the accrued but unpaid dividends any time
prior to an initial public offering or if FireVine was sold. Additionally,
FireVine issued a warrant to this third party venture capital firm for an
additional 50,000 common units, at an exercise price of $60 per share that were
exercisable anytime through October 13, 2009.

   In October 2001, the holder of the Convertible Preferred Units notified
FireVine that it was exercising its put right requiring FireVine to redeem the
Units. Since an initial public offering of FireVine had not occurred within two
years of the original agreement, FireVine was required to pay the redemption
price of $14.0 million (original principal plus accrued dividend). On December
12, 2001, Navigant negotiated a new agreement with the holder, wherein the
holder surrendered all of their interests in FireVine, including their common
units and warrants that were not originally covered by their put rights, for a
promise to pay the full redemption price in three installments: $3.5 million
due upon signing, $7.0 million due December 31, 2001 and the balance of $3.5
million due March 31, 2002.

NOTE 12--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 30, 2001, the
approximate book value of these two subsidiaries was $12.6 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.

                                       52
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)

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 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.

   On March 5, 2001 U.S. Office Products filed for bankruptcy protection in the
United States Bankruptcy Court for the District of Delaware. On December 28,
2001, the United States Bankruptcy Court for the District of Delaware approved
U.S. Office Product's Joint Liquidating Plan of Reorganization, and the
Plaintiffs in the various actions pending against U.S. Office Products could
again pursue their claims. To that end, the class-action plaintiffs have asked
the United States District Court for the District of Columbia to reopen the
cases, and return them to the Court's active docket. The Court has yet to act
on this request.

                                       53
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   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.

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 30, 2001 and
December 31, 2000 related to these agreements, as no change of control has
occurred.

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. 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 13--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. All full-time employees are eligible to participate in the
401(k) Plan after six months of service. It is the Company's policy to match a
portion of employee contributions, however, after the September 11, 2001
terrorist attacks, the Company has temporarily suspended all matching
contributions as part of its cost reduction plan.

   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 30, 2001, December 31, 2000 and December 26,
1999, the Company incurred expenses totaling $828, $1,039 and $736,
respectively, related to these plans.

                                       54
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


NOTE 14--STOCKHOLDERS' EQUITY

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. 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 30, 2001, the Company had 772,939 shares available for
future option grants.

   The Company accounts for options issued to employees and non-employee
directors 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. Any
grants to non-employees under these plans are accounted for in accordance with
EITF Issue No. 96-18.

   In June 2001, in connection with the Company's acquisition of SatoTravel,
certain options were granted to former SatoTravel employees who became
employees of the Company. Some of these options were granted at prices other
than fair market value and include vesting credit for their period of service
at SatoTravel. These options otherwise followed the normal provisions of the
Company's fixed stock option plans. These options were valued under FASB
Interpretation No. 44, an interpretation of APB Opinion 25. The options'
calculated value of $2,670 was recorded as part of the purchase price of the
acquisition (see Note 3).

   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 FAS 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 30, December 31, December 26,
                                             2001         2000         1999
                                         ------------ ------------ ------------
   <S>                                   <C>          <C>          <C>
   Net income (loss):
     As reported........................    $  440      $14,229      $13,036
     Pro forma..........................    (1,282)      12,286        9,524
   Net income (loss) per share:
     As reported:
       Basic............................    $ 0.03      $  1.16      $  1.02
       Diluted..........................    $ 0.03      $  1.15      $  1.01
     Pro forma:
       Basic............................    $(0.10)     $  1.00      $  0.74
       Diluted..........................    $(0.10)     $   .99      $  0.74
</TABLE>

                                       55
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   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 30, December 31, December 26,
                                              2001         2000         1999
                                          ------------ ------------ ------------
   <S>                                    <C>          <C>          <C>
   Expected life of option...............   7 years      7 years      7 years
   Risk free interest rate...............      4.06%        6.25%        5.94%
   Expected volatility of stock..........     60.21%       46.71%       66.87%
   Dividends.............................   $     0      $     0      $     0
</TABLE>

   The weighted-average fair value of options granted was $6.29, $5.93 and
$5.17 for the years ended December 30, 2001, December 31, 2000 and December 26,
1999, respectively.

   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 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
     Granted.........................    62,500     9.95
     Conversion of SatoTravel
      options........................   182,118     3.19
     Exercised.......................  (145,606)    8.69
     Canceled........................  (109,297)   10.22
                                      ---------
   Balance at December 30, 2001...... 3,175,961   $ 9.57   2,677,187   $9.40
                                      =========
</TABLE>

   The following table summarizes information about stock options outstanding
and exercisable at December 30, 2001:

<TABLE>
<CAPTION>
                            Options Outstanding               Options Exercisable
                      -------------------------------------   ------------------------
                                                 Weighted                   Weighted
                                    Weighted     Average                    Average
      Range of                      Average      Exercise                   Exercise
   Exercise Price      Options        Life        Price        Options       Price
   --------------     ---------     --------     --------     ---------     --------
   <S>                <C>           <C>          <C>          <C>           <C>
   $3.19--$8.96         365,748       8.13        $5.24         265,607      $4.63
   $9.00--$9.00       1,617,171       6.51         9.00       1,571,171       9.00
   $9.03--$11.89      1,067,489       6.38        11.52         745,990      11.52
   $12.00--$16.56       125,553       6.60        13.06          94,419      12.80
                      ---------                               ---------
   $3.19--$16.56      3,175,961       6.66        $9.57       2,677,187      $9.40
                      =========                               =========
</TABLE>

                                       56
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


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 30, 2001, the Company
had 66,300 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 FAS 123, the expense for 2001 would have been $330,439, of which
25%, or $65,182, would have been allocated to the minority shareholder, and 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 30, December 31, December 26,
                                              2001         2000         1999
                                          ------------ ------------ ------------
   <S>                                    <C>          <C>          <C>
   Expected life of option...............   7 years      7 years      7 years
   Risk free interest rate...............      4.06%        6.25%        5.94%
   Expected volatility of stock..........     60.21%       46.71%       66.87%
   Dividends.............................   $     0      $     0      $     0
</TABLE>

   The weighted-average fair value of options granted was $2.56, $28.89 and
$3.32 for the years ended December 30, 2001, December 31, 2000 and December 26,
1999, respectively.

   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
     Granted.............................     800    60.00
     Exercised...........................      --       --
     Canceled............................ (11,825)   61.35
                                          -------
   Balance at December 30, 2001.......... 159,811   $32.34    137,683    $25.54
                                          =======
</TABLE>

                                       57
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


   The following table summarizes information about FireVine unit options
outstanding and exercisable at December 30, 2001:

<TABLE>
<CAPTION>
                                                                 Options
                           Options Outstanding                 Exercisable
                      -----------------------------------   ----------------------
                                               Weighted                 Weighted
                                  Weighted     Average                  Average
      Range of                    Average      Exercise                 Exercise
   Exercise Price     Options       Life        Price       Options      Price
   --------------     -------     --------     --------     -------     --------
   <S>                <C>         <C>          <C>          <C>         <C>
   $10.00             111,111       7.30        $10.00      111,111      $10.00
   $60.00              20,325       8.50         60.00        6,298       60.00
   $100.00             28,375       8.11        100.00       20,274      100.00
                      -------                               -------
   $10.00--$100.00    159,811       7.60        $32.34      137,683      $25.54
                      =======                               =======
</TABLE>

NOTE 15--QUARTERLY FINANCIAL DATA (UNAUDITED)

   The following presents certain unaudited quarterly financial data for the
years ended December 30, 2001 and December 31, 2000:

<TABLE>
<CAPTION>
                                            Year Ended December 30, 2001
                                      ------------------------------------------
                                       First  Second   Third   Fourth    Total
                                      ------- ------- -------  -------  --------
   <S>                                <C>     <C>     <C>      <C>      <C>
   Revenues.......................... $82,913 $95,055 $90,015  $82,348  $350,331
   Operating income (loss)...........  10,358  11,511  (3,191)     321    18,999
   Net income (loss).................   4,031   4,764  (5,346)  (3,009)      440
   Per share amounts:
     Basic........................... $  0.34 $  0.39 $ (0.39) $ (0.22) $   0.03
     Diluted......................... $  0.34 $  0.38 $ (0.39) $ (0.22) $   0.03

<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>

NOTE 16--INTEREST RATE SWAP DERIVATIVES

   FAS 133 became effective for the Company on January 1, 2001. Under FAS 133,
as amended, all derivative instruments are recognized in the balance sheet at
their fair values and changes in fair value are recognized immediately in
earnings, unless the derivatives qualify as hedges of future cash flows. The
nature of the Company's debt structure necessarily involves the management of
various financial risks, primarily those related to changes in interest rates.
Management has recently entered into derivative interest rate swaps, which are
financial instruments, to mitigate or eliminate certain of those risks.

                                       58
<PAGE>

                          NAVIGANT INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 (Dollars in Thousands, Unless Otherwise Noted)


Fair-Value Hedges

   The Company may enter into derivative financial instruments to mitigate or
eliminate certain risks, primarily interest changes, associated with the
Company's debt structure. The Company entered into an interest rate swap to
convert a part of its nonprepayable fixed rate long-term debt to floating-rate.
The notional amount of these types of interest rate swaps aggregated $50
million. The Company's policy is to convert between 40% and 70% of all
nonprepayable fixed-rate debt to floating-rate debt, with the percentage
depending on contract interest rates, maturities and expected balance on the
Company's floating-rate revolving debt facility. This interest rate swap is
accounted for as a fair-value hedge. For the year ended December 30, 2001, the
Company recognized a net gain of $10 (reported as a reduction of interest
expense), which represented the swap's ineffectiveness. All components of each
derivative's gain or loss were included in the assessment of hedge
effectiveness. As December 30, 2001, the fair value of the swap was $714, which
is recorded in Other Assets and Other Long-Term Liabilities.

Cash Flow Hedges

   The Company also entered into a forward interest rate swap to convert
floating-rate loans to fixed-rate loans. Specific amounts that the Company
hedges are determined based on the prevailing market conditions and the current
shape of the yield curve. The specific terms and notional amounts of the swaps
are determined based on management's assessment of future interest rates, as
well as other factors, including short-term strategic initiatives. The notional
amount of these types of interest rate swaps aggregated $75 million. For
derivatives qualifying as hedges of future cash flows, the effective portion of
changes in fair value is recorded temporarily as a component of equity, and is
then recognized in earnings along with the related effects of the hedged items.
Any ineffective portion of a hedge is reported in earnings as it occurs. For
the year ended December 30, 2001, the Company did not report a loss or a gain
associated with the total ineffectiveness of all cash flow hedges. All
components of each derivative's gain or loss were included in the assessment of
hedge effectiveness. As of December 30, 2001, the fair value of the cash flow
hedges aggregates ($1,877), which is recorded in Other Long-Term Liabilities
and as an offset to Accumulated Other Comprehensive Loss.

                                       59
<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.

                                       60
<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.

 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.
</TABLE>

                                       61
<PAGE>

<TABLE>
<CAPTION>
  Exhibit
  Number                          Description of Document
  -------                         -----------------------

 <C>       <S>
 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.

 10.15***  Amendment to the Amended and Restated Credit Agreement dated as of
           August 6, 1999 between NationsBank, N.A., as agent, and Navigant
           International, Inc.

 10.16***  Amendment to Form of Note Purchase Agreement, 9.84% Senior Secured
           Notes due November 15, 2006.

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

 10.18     Consent dated October 5, 2001 to the Amended and Restated Credit
           Agreement dated as of August 6, 1999.

 10.19     Amendment to Note Purchase Agreements dated as of November 15, 2000.

 10.20**** Fourth Amendment to the Amended and Restated Credit Agreement dated
           as of August 6, 1999.

 10.21**** Second Amendment to the Note Purchase Agreements dated as of
           November 15, 2000.

 10.22     Ownership Interest Purchase Agreement between Navigant International
           and OZ Domestic Partners, L.P., dated December 12, 2001.

 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 herein from Navigant's Report on Form 10-Q for
      the quarterly period ended September 24, 2000, filed with the Securities
      and Exchange Commission on November 7, 2000 (File No. 0-24387).
*    Incorporated by reference to Exhibit 10.1 of Navigant's 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-Q for the quarterly period ended September 26, 1999, filed with
     the Securities and Exchange Commission on November 10, 1999 (File No. 0-
     24387).
***  Incorporated by reference herein from Navigant's Report on Form 10-Q for
     the quarterly period ended September 30, 2001, filed with the Securities
     and Exchange Commission on November 14, 2001 (File No. 0-24387).
**** Incorporated by reference herein from Navigant's Report on Form 8-K filed
     with the Securities and Exchange Commission on February 25, 2002 (File No.
     0-24387).
#    Incorporated by reference to Exhibit 10.6 of Navigant's Annual Report on
     Form 10-K for the fiscal year ended December 31, 2000, filed with the
     Securities and Exchange Commission on March 29, 2001 (File No. 0-24387).

                                       62
<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 26, 2002

                                          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 26, 2002.


                                                 /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.
                                                        Senior Vice
                                                  President/Administration

                                                /s/ Vassilios Sirpolaidis
                                          By: _________________________________
                                                   Vassilios Sirpolaidis
                                                          Director

                                       63
<PAGE>

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

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

                                                  /s/ Lawrence A. Hough
                                          By: _________________________________
                                                     Lawrence A. Hough
                                                          Director

                                                 /s/ David W. Weiderecht
                                          By: _________________________________
                                                    David W. Weiderecht
                                                          Director


                                       64