SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

   (Mark one)

       [ X ]             Annual Report Pursuant to Section 13 or 15(d)
                         of the Securities Exchange Act of 1934

                         For the year ended December 31, 1999

       [   ]             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 1-12577
                                SITEL CORPORATION
             (Exact name of registrant as specified in its charter)
                 MINNESOTA                              47-0684333
(State or jurisdiction of incorporation     (I.R.S. Employer Identification No.)
              or organization)

                111 SOUTH CALVERT, STE. 1900 BALTIMORE, MD 21202
                                 (410) 246-1505
(Address,  including zip code,  and telephone  number,  including  area code, of
registrant's principal executive offices)

                  --------------------------------------------
           Securities Registered Pursuant to Section 12(b) of the Act:
     Title of Each Class               Name of Each Exchange On Which Registered
COMMON STOCK, $.001 PAR VALUE                  THE NEW YORK STOCK EXCHANGE

           Securities Registered Pursuant to Section 12(g) of the Act:
                                      NONE
                  --------------------------------------------

     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 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 voting stock held by  non-affiliates  of
the registrant as of March 9, 2000 was $393,439,227 based upon the closing price
of $8.8125  for such stock as  reported  by the New York Stock  Exchange on such
date.  Solely for purposes of this  calculation,  persons holding of record more
than 5% of the Company's stock have been included as "affiliates".

     As of March 9, 2000 the  Company  had  69,663,316  shares  of Common  Stock
outstanding.

DOCUMENTS  INCORPORATED BY REFERENCE:  Portions of the  registrant's  definitive
proxy  statement for the annual meeting of  stockholders  to be held May 5, 2000
are  incorporated  into Part III.  This 10-K  consists of 99 pages.  The Exhibit
index is on page 27.
<PAGE>
                                     PART I
                                     ------

ITEM 1. BUSINESS
        --------

General

     SITEL Corporation is the worldwide leader in executing  electronic Customer
Relationship  Management  (eCRM)  solutions for large  corporations.  Founded in
1985, the Company has grown both internally and through  acquisitions to include
operations in North America, Europe, Asia Pacific and Latin America. Over 24,000
SITEL employees worldwide represent many of the world's leading brand names. The
Company  operates  from over  17,000  workstations  in over 75  contact  centers
located  around the globe in 18  countries  and offers  services in more than 25
languages and dialects.

     Electronic Customer  Relationship  Management (eCRM) is a business strategy
that is focused on maximizing  the lifetime  value of customers.  At the core of
this strategy is the recognition of the importance of knowledge-enabled customer
interaction to enhance customer satisfaction,  as well as gather attitudinal and
behavioral  data to strengthen  customer  relationships  and build  loyalty.  In
practical  terms, a successful  eCRM program  requires an investment in tangible
assets such as systems integration,  software and hardware,  but the real key is
the "human" investment.

     SITEL's  eCRM  services  are  built  around a core  belief  that  people do
business  with  people,  a reality  that  persists  even in the age of anonymous
online  communications and one-click  shopping.  SITEL's solution is designed to
enhance   interaction   at  every  stage  in  the   customer   lifecycle,   from
identification  and  acquisition  of new  customers,  to  customer  service  for
existing  customers,  to the  provision  of  technical  support,  help desks and
assistance in managing  receivables.  Most  importantly,  SITEL facilitates this
remote  customer  communication  across all e-media,  including  telephone,  and
increasingly via e-mail and interactive chat on the Internet.

Industry Overview

     Over  the  last 10  years  the  Company's  industry  has  transformed  from
primarily  executing  telesales  and  telemarketing   campaigns,   to  providing
long-term outsourced customer relationship  management programs. The traditional
advantages of call center activity include low cost per call, direct interaction
with customers and on-line access to detailed  customer or product  information,
which enables immediate  response and resolution of customer  inquiries.  Today,
the industry is  increasingly  focused on its  clients' key business  processes.
Fueling  this trend is the growth in  consumer  telephone,  Internet  and e-mail
usage,  combined with the business  imperative for consistent  levels of quality
customer service,  the continuing  reduction in the cost of computer  databases,
and the arrival of sophisticated computer telephony integration (CTI).

     With the new technologies,  each customer `touch',  via e-mail,  the web or
directly with a customer  service  professional,  allows companies to learn more
about their customer's profile,  decision-making process and channel preference.
This data can then update customer information in the client's database enabling
true one to one marketing. As a result of these advantages, contact center-based
customer relationship management activity is becoming central to the way leading
organizations choose to build and maintain customer relationships.

     The  Company  estimates  that  worldwide  expenditures  to operate  contact
centers  exceed $200 billion  annually.  The eCRM market in 2000 is estimated to
total $30 billion.  The outsourced  portion of the overall contact center market
has grown  significantly  since 1984 to around 8% of the market, as corporations
increasingly shift key business processes from internal operations to outsourced
partners.  This  trend has been  further  fueled by the  growing  complexity  of
integrating technology and communication. The Company expects to see outsourcing
increase  as  companies  increasingly  focus on their core  competencies  and as
service  and  competency  levels  within the  customer  relationship  management
industry continue to rapidly improve.

                                       1
<PAGE>
SITEL's Business

         The Company plans,  implements and manages long-term eCRM programs that
allow its clients to enhance the value of their customer contacts, relationships
and information. At every stage of the customer lifecycle, the Company endeavors
to give its clients'  customers an experience that will reinforce their trust in
the brand;  compel them to stay loyal;  and encourage their advocacy and support
regardless of how they communicate with the Company's  clients and their brands.
Whether  that is an  individual  customer or a business  customer,  whether they
phone, e-mail or are browsing the client's website,  the Company's mission is to
create customer  loyalty and value, to increase sales and to  differentiate  the
client's brand in a positive manner.

     SITEL operates from more than 75 facilities in 18 countries  throughout the
four major regions of the globe,  and has the  capability to provide  service in
more than 25 languages  and  dialects.  The Company  brings  industry  focus and
expertise in the consumer,  financial services,  insurance,  telecommunications,
technology and utilities sectors.

SITEL's Solutions

     The Company provides services at every stage of the customer  lifecycle via
all e-media,  including  telephone,  FAX,  Interactive Voice Response (IVR), and
increasingly via e-mail and interactive chat on the Internet.  The following are
the Company's traditional solutions:

Customer  Acquisition  -- SITEL  contacts  that relate to finding  customers  or
acquiring customers. Typical applications include list building, outbound sales,
inbound   sales   or   order   taking,   lead   generation,    Direct   Response
Television/bureau,  product  information  requests  related to potential  sales,
subscription  renewals and  database  cleaning and  updating.  New  applications
include  webservicing,  or human interaction via voice or text chat, designed to
increase sales generated from a client's website.

Customer Care -- SITEL  contacts,  whether  inbound or outbound,  that relate to
handling  customer  service  issues.   Typical  applications  include  complaint
handling; billing information;  thank-you or other client-initiated  information
contacts;  reservations;   loyalty  (frequent  flyer)  clubs;  investor  account
inquiries;  government information;  dealer location contacts;  insurance claims
processing;  fraud  detection/prevention  calls;  back office requests,  such as
connecting a new line, disconnecting service and requesting maintenance support;
warranty  call  handling;  and  administrative  support  regarding a  customer's
policy, lease or account.

Technical  Support/Help  Desk -- Distinguished  from customer service  contacts,
these are troubleshooting interactions where the agent must diagnose and resolve
software, Internet or computer hardware product or service problems.

Receivables   Management  --  SITEL  makes  pre-charge-off  and  post-charge-off
contacts with customers to collect overdue balances and to prevent fraud.

Consulting -- SITEL offers  consulting  services to help its clients  design and
improve their internal and outsourced contact center operational processes.

SITEL's Internet-Based Services

     As the Internet  becomes an increasingly  important  communications  medium
between the Company's  clients and their  customers,  SITEL has  integrated  the
Internet into its Customer  Relationship  Management programs.  SITEL's Internet
strategy is to bring human  interaction  to  Internet-based  contacts and to use
technology  enabled by the Internet to handle customer contacts more efficiently
and effectively.

                                       2
<PAGE>

     SITEL  believes  that every remote  customer  contact,  whether  telephone,
Internet or regular mail should be handled in an integrated fashion,  leveraging
the same agent  training and systems  integration.  The Company sees it as a key
goal  within  eCRM to deliver a high level of  integration  to provide a unified
view of the  customer.  This is seen as essential to building  strong one to one
customer relationships.

     SITEL performed  Internet-based  services for more than 50 clients in 1999,
including 20 of its 50 largest clients. SITEL's Internet-based services include:

E-mail Handling:  SITEL's customer service professionals provide  knowledgeable,
comprehensive  and timely  replies to incoming  e-mails  that  request  customer
service and technical  support.  SITEL's  contact center  platform also provides
automated e-mail response based on key word recognition.

Voice  and  Text-Based  Chat Web Site  Support:  Voice  chat  support,  enabling
browsers to  simultaneously  talk to an agent while  visiting their web site, is
currently provided by SITEL using the Internet Call Center that was co-developed
by SITEL and Lucent  Technologies in 1998.  Text-based chat allows for proactive
or responsive  communications with any web site visitor to provide sales support
or customer service.  These chat services are further enabled by capabilities to
push  web  pages  to web  visitors  and the  ability  of the web  agent  to work
collaboratively with the web visitor.

Self-Service and Browsing Support:  The Internet can enable customers in certain
situations to resolve their problems without human assistance. SITEL is actively
working  with its  clients to  incorporate  self-service  capabilities  into its
solutions  to  improve  customer  satisfaction  and  reduce  cost.  Examples  of
self-service  support are customers  accessing  the answers to frequently  asked
questions via `intelligent'  search of a data or "Knowledge Base" or prospective
customers  completing  online  insurance   applications  that  are  subsequently
reviewed by licensed insurance service professionals employed by SITEL.

Telephone  Support:  Telephone  support,  by far the largest revenue  generator,
includes  technical  support and  customer  service  call  handling for Internet
services and  products as well as closed loop  calling in support of  electronic
processes.  For example,  SITEL makes and  receives  phone calls inside a client
organization  ensuring  that cases have been  successfully  closed when web site
visitors  ask the client  organization  to contact  them or provide a service or
information.

Industries Served

     SITEL provides eCRM solutions primarily across the following industries:

Consumer.  The Company  services leading  consumer  products  companies and mass
marketing  manufacturers,  including  automotive  companies,  in  responding  to
customer  inquiries,  developing and launching new product and sales  campaigns,
managing product recalls, and performing quality surveys and market analyses.

Financial  Services.   The  Company  works  with  financial  services  companies
including  major banks,  leasing  companies,  credit card  issuers,  mutual fund
companies,  auto finance  companies/subsidiaries,  retail  financing  companies,
brokerage  firms,  service  providers,  mortgage  companies and other  financial
institutions.  SITEL provides personal care service activities such as answering
questions  regarding lease terms,  handling service  requests,  arranging credit
card balance  transfers,  taking and processing  loan  applications,  and making
accounts  receivable  management and fraud  prevention  calls.  The Company also
conducts  integrated  sales activities on behalf of clients such as merchant and
customer  acquisition,  account  retention  and  renewal,  lead  generation  and
appointment scheduling.

                                       3
<PAGE>

Insurance.  SITEL  provides  a broad  range  of  teleservices  to the  insurance
industry, including direct marketing of non-underwritten insurance products such
as hospital accident  protection,  hospital  indemnity  protection,  health care
discount plans,  mechanical  breakdown and credit  protection.  The Company also
provides  personal  care  services  such as  sales  support,  after-hours  agent
support,  emergency roadside assistance,  claims processing and full back-office
support.  SITEL also offers sales and service  activities for fully underwritten
products such as term life,  automobile and  homeowner's  insurance,  as well as
tax-deferred annuities.

Telecommunications.  The  Company  provides a full  range of sales and  customer
service  activities  primarily  to  domestic  and  international  long  distance
providers,  local exchange  carriers,  and cellular and PCS providers  including
account management,  fulfillment, facilities management,  new product launch and
database management.  The Company provides these services for product lines such
as access lines, vertical services, Internet access, long distance, cellular PCS
and ISDN data services.

Technology.  SITEL works with  Internet  Service  Providers,  computer  hardware
manufacturers  and software  publishers.  The Company provides  technical sales,
technical  support and customer support  services  including  product  launches,
complete  sales and account  management  programs,  strategic  product  support,
corporate  help desk,  warranty or  post-warranty  support,  and sunset  product
support.  The Company provides these support  services through  traditional call
handling, as well as alternative  electronic methods,  such as e-mail,  advanced
integrated  voice-response,  automated  self-help  tools and computer  telephony
integration.

Utilities.  SITEL provides telephone and  Internet-based  services to public and
private  energy  companies,  including  electric  power,  natural gas, water and
integrated energy providers. The services include customer acquisition, customer
service,  direct sale and  cross-sale  activities,  brand  development,  loyalty
campaigns,  database  management,  and  development  and call center  consulting
services.

Strategic Alliances

     Because of the size and scale of CRM solutions  today, the Company believes
successful  providers  will be those that can harness the  resources of multiple
vendors  to fast track  major  project  implementation  and  rollout.  SITEL has
developed alliances with technology and thought-leadership firms such as Siebel,
IBM Global  Services,  Call  Interactive,  Genesys,  New Channel and The Centric
Group. The Company plans to continue to develop world class partners, as well as
senior  level  relationships,  with the  consultants  and third  party  advisors
developing the projects and programs, which represent SITEL's target market.

Clients

     The Company serves over 400 clients in 18 countries.  The Company's clients
include four independently  managed  subsidiaries of General Motors Corporation.
Total revenues from these four clients was 12.2% of the Company's total revenues
in 1999. No other clients under common  control  generated  more than 10% of the
Company's revenues.

Information Technology

     SITEL uses industry-standard  software from Microsoft and Oracle across its
business  units.  Within industry  sectors,  SITEL uses  industry-specific  call
processing  application  systems.  SITEL has designed and implemented client (or
industry)  specific  applications  to provide  highly  customized  solutions  to
clients'  specific   requirements.   SITEL  also  utilizes  a   state-of-the-art
technology  platform  (UNIX and NT  architecture)  with Windows  95/98/2000  and
NT-based Compaq,  Dell and IBM  workstations,  predictive  dialers and automated
call distributors.  SITEL representatives have the tools to initiate and receive
effectively and efficiently millions of service transactions per month.

                                       4
<PAGE>

     SITEL is in the process of migrating to a common set of preferred operating
platforms which includes:  Siebel 99; Oracle DataBase;  and Genesys for Computer
Telephony Integration.  This will position SITEL to support the current business
requirements  for eCRM.  Along  with the eCRM  technology  infrastructure,  this
common set of technologies  will position the Company to provide enhanced global
services  for  clients  and  more   cost-effectively   replicate  its  processes
throughout  its network of contact  centers.  SITEL  Corporation  has designated
Siebel 99 as its preferred  technology  platform.  Siebel 99 is an  object-based
system which  supports  SITEL's goal of a common system while still  providing a
solution  that can be customized  to meet each  client's  unique  needs.  Siebel
contains the necessary elements to enable a true eCRM service offering.

     Siebel  interfaces  with Oracle as the database  engine and Genesys for the
Computer Telephony  Integration.  This provides flexibility and continued return
from SITEL's investment in existing switch and dialer platforms.

Human Resource Management

     Efficient management and operation of large-scale eCRM programs is a highly
people  intensive  business.  One of SITEL's  core  competencies  is  managing a
diverse,  worldwide  workforce.  SITEL places great  emphasis on its  integrated
human resource management  strategies,  including the recruitment,  training and
on-going  development,  and  retention  of its  employees  at all  levels of the
organization.   The  Company  seeks  to  locate  customer   contact  centers  in
communities  and cities with favorable  workforce  demographics  and populations
with  necessary  language  skills.   SITEL  is  committed  to  equal  employment
opportunity in every market served by the Company.

     To build rewarding  careers for its 24,000  employees and enable  effective
planning for future  growth,  the Company has  developed  training and education
programs,  as well as  performance  management  and career  planning  processes,
designed to enable  people to learn (both in  classrooms  as well as on-the job)
and perform at optimum  levels on the diverse  range of daily  e-media  customer
contacts, on behalf of the Company's multiple-industry clients.

     The Company encourages employee  self-development,  is establishing its own
corporate virtual university (SITEL University), and aims to develop and promote
individuals from within the organization as much as possible.

     As of December 31, 1999, SITEL had over 24,000 employees.  In the Company's
European region,  employees in Belgium, Sweden and Spain are within the scope of
government  sponsored  collective  bargaining  agreements and are represented by
either a labor union or a statutory work council arrangement.  In countries with
labor unions or work councils,  the Company's ability to reduce its workforce or
its wage rates is subject to  agreement  or  consultation  with the  appropriate
labor union or works council.  SITEL  considers its relations with its employees
to be good.

Competition

     SITEL is one of the largest independent companies executing eCRM solutions.
SITEL's largest direct competitors  include Teletech Holdings,  Inc.,  Convergys
Corporation, EDS's Business Process Management division, Sykes Enterprises Inc.,
Teleperformance   International   Group,  APAC  Teleservices,   Inc.,  and  West
Teleservices Corporation.  With the growth of consumer online usage, there are a
number of new, smaller competitors  focusing on providing e-mail and interactive
chat services. The Company also competes with in-house teleservices  departments
throughout  the world.  In-house  departments  continue to comprise  the largest
segment  of  call  center  expenditures.  Additional  competitors  with  greater
resources  than the  Company  may enter  the  customer  relationship  management
industry.

                                       5
<PAGE>

     Most of the  major  outsourcing  companies,  like  SITEL,  are  positioning
themselves as providers of Customer Relationship Management solutions.  However,
SITEL believes it is in a leadership  position in terms of  large-scale  project
implementation  and  operational  experience,  global  presence  and  industries
served. The Company has implemented and now manages integrated  programs via all
e-media  and across the broad  range of CRM  solutions  designed  to support the
entire customer lifecycle.

Government Regulation

     The  Company's  business  is  subject  to laws and  regulations  concerning
teleservices,  web-services,  collection  agencies,  consumer  privacy,  and the
collection and use of consumer data.

     In the United  States,  the Federal Trade  Commission  (the "FTC") and many
states regulate teleservices,  web-services, consumer privacy and the collection
and use of consumer data. The federal Telephone Consumer  Protection Act of 1991
(the   "TCPA")   prohibits   teleservices   firms  from   initiating   telephone
solicitations  to  residential   telephone  subscribers  during  certain  times,
prohibits  the use of  automated  telephone  dialing  equipment  to call certain
telephone numbers,  and requires  teleservices firms to maintain a "do not call"
list of residential  customers.  FTC regulations  issued pursuant to the federal
Telemarketing  and  Consumer  Fraud and Abuse  Prevention  Act of 1994  prohibit
misrepresentation   regarding   products  or  services   offered  by   telephone
solicitation and address other perceived telemarketing abuses in the offering of
prizes  and the sale of  business  opportunities  or  investments.  The  Company
believes it is in compliance with the TCPA and FTC rules. The Company trains its
telephone service  representatives to comply with the TCPA and programs its call
management  system  to  avoid  telephone  calls  during  restricted  hours or to
individuals  maintained  on the  Company's  "do not call"  list.  There are many
existing  federal and state  regulations  concerning  the  collection and use of
information  regarding individuals and the federal and various state governments
have  recently  proposed  limitations  on the  collection  and use of personally
identifiable   information   regarding  consumers.   The  Company's  receivables
management  business is required to be licensed  under state  collection  agency
laws and  regulations  and to comply  with  various  federal and state fair debt
collection practices and consumer credit laws and regulations.

     Countries  outside the United  States in which the Company has  substantial
operations  generally  have yet to enact a  detailed  regulatory  framework  for
teleservices.  Many  countries,  including the European  Union,  have,  however,
enacted or proposed data protection laws which regulate consumer privacy and the
collection and use of consumer data. Many of these laws are based on the privacy
principles which were established by the Organisation for Economic  Co-operation
and  Development  (OCED) in its  Guidelines  on the  Protection  of Privacy  and
Transborder  Flows of Personal Data.  These laws generally  provide  individuals
with a right to access and correct  incorrect  information and many provide that
personally identifiable  information can only be used or disclosed for specified
and lawful purposes.  Civil and criminal penalties can be imposed for violations
under many of these laws.

     The teleservices and web-service industries, consumer groups and regulatory
and  legislative  bodies are  increasingly  concerned  about  "right of privacy"
issues as technological advances have dramatically increased the availability of
information about consumers.  This focus, and any resulting laws, regulations or
standards,  could impact the Company. It is possible that laws, regulations,  or
standards will be enacted for the teleservices and web-service  industries which
would,  among other  things,  require the Company to modify  current  methods of
consumer data  collection  and limit the use of consumer data by the Company and
its clients.

     The  industries  served by the Company  are  subject to varying  degrees of
government regulation.  For example,  Company employees who complete the sale of
certain U.S.  insurance  products are required to be variously  licensed by some
state  insurance  commissions and may also be required to participate in regular
continuing  education  programs,  which are currently  provided  in-house by the
Company.

     The Company  generally  relies on its clients and their advisors to develop
the scripts and client  information  to be used by SITEL in making or  receiving
customer  contacts.  The Company generally  requires its clients to indemnify it
against claims and expenses arising from clients' products, services, scripts or
directives with respect to the services performed on its clients' behalf.

                                       6
<PAGE>

Quarterly Results and Seasonality

     The Company has experienced and expects to continue to experience quarterly
variations  in its  results  of  operations  principally  due to the  timing  of
clients'  customer   relationship   management   initiatives  and  teleservicing
campaigns and the commencement and terms of new contracts,  revenue mix, and the
timing of additional selling, general and administrative expenses to support new
business.  The Company  experiences  periodic  fluctuations  related to both the
start-up  costs  associated  with expansion and the  implementation  of clients'
customer relationship management activities. In addition, the Company's business
tends to be slower in the third quarter due to summer holidays in Europe and, to
a lesser degree,  in the first quarter due to the changeover of client marketing
strategies that often occur at the beginning of the year.

ITEM 2. PROPERTIES
        ----------

     The Company's executive offices are located in Baltimore, Maryland.

     As of December 31, 1999, the Company  operated  contact  centers in various
leased  facilities  and on client  premises  and utilized the services of remote
operations sites in various locations as follows:
<TABLE>
<CAPTION>
                                Company        Client           ROPS/          Total          Number of
Facility Location               Centers        Centers        Off-site      Facilities      Workstations
--------------------          ------------   ------------    ------------   ------------   ----------------
<S>                                     <C>          <C>              <C>             <C>              <C>
Australia                               1             --              --              1                325
Belgium                                 2             --              --              2                445
Brazil                                  1              2              --              3                 94
Canada                                  3              1              --              4                367
Colombia                                1             --              --              1                276
France                                  2             --               2              4                269
Germany                                 1             --              --              1                475
Ireland                                 1             --              --              1                232
Japan                                   1             --              --              1                287
Mexico                                  2             --              --              2                514
Netherlands                             1             --              --              1                128
New Zealand                            --              3              --              3                262
Portugal                                1             --              --              1                 96
Singapore                               1             --              --              1                159
Spain                                   7              3               6             16              2,782
Sweden                                  1             --               1              2                260
United Kingdom                          7             --              --              7              2,155
United States                          33              3               5             41              8,209
                              ------------   ------------    ------------   ------------   ----------------
                Totals:                66             12              14             92             17,335
                              ============   ============    ============   ============   ================
</TABLE>

     SITEL utilizes a number of remote operations sites ("ROPS") which are owned
and  operated  by  independent  third  parties  and are  used by SITEL to meet a
portion of its teleservicing needs.  Additionally,  SITEL contracts and operates
out of several client sites to support specific client initiatives.

     The Company  believes its current  facilities are suitable and adequate for
its current  operations,  but additional  facilities will be required to support
growth.  SITEL  believes  suitable  additional  or  alternative  space  will  be
available as needed on commercially reasonable terms. The Company's policy is to
rent contact  center space  although it has from time to time built or purchased
facilities  and, in certain  cases,  subsequently  sold them in  sales-leaseback
transactions.

                                       7
<PAGE>

ITEM 3. LEGAL PROCEEDINGS
        -----------------

     From time to time, the Company is involved in litigation  incidental to its
business.  Although the ultimate outcome of such litigation  cannot be predicted
with certainty,  management believes,  after consultation with counsel, that the
resolution  of such  matters  will not have a  material  adverse  effect  on the
Company's consolidated financial position or results of operations.

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

     There  were no  matters  submitted  to a vote of  security  holders  of the
Company during the fourth quarter of 1999.

                                       8
<PAGE>
                           **************************
                      Executive Officers of the Registrant

The executive officers of the Company are:
<TABLE>
<CAPTION>
Name                                       Age    Position

<S>                                        <C>   <C>
James F. Lynch........................     50    Chairman of the Board and Director
Phillip A. Clough.....................     38    Chief Executive Officer, President and Director
W. Gar Richlin........................     54    Executive Vice President, Chief Operating Officer and
                                                 Chief Financial Officer
Antoon Vanparys.......................     42    Executive Vice President, Global Business Development
Timothy P. Keyser.....................     53    Executive Vice President, Corporate Development
</TABLE>
     Mr. Lynch  founded  SITEL in 1985 and has served as Chairman and a director
since its inception. From SITEL's inception to January 1997, Mr. Lynch served as
Chief Executive Officer.

     Mr.  Clough  has  served  as Chief  Executive  Officer  since  May 1998 and
President  since  January  1997.  From 1990 until  January 1997, he served as an
investment  banker  with  Alex.  Brown & Sons  Incorporated,  most  recently  as
Principal,  focusing on a variety of consumer and business  services  companies,
including teleservices companies.

     Mr. Richlin has served as Chief  Operating  Officer since December 1998 and
as Executive Vice President and Chief  Financial  Officer since March 1998. From
September 1997 until joining SITEL,  he served as Managing  Director and Co-Head
of Corporate Finance for BT Alex. Brown Incorporated.  From 1991 until September
1997, Mr. Richlin served as Managing Director and Head of Investment  Banking of
Alex. Brown & Sons Incorporated.

     Mr.  Vanparys  has  served as  Executive  Vice  President--Global  Business
Development  since  December  1998.  From September 1996 until December 1998, he
served as Senior Vice  President--Global  Business Development and as a director
and a member of the  Executive  Review  Committee  of SITEL  Europe plc.  Before
joining the Company in  September  1996 with the merger of the Company and Mitre
plc, Mr.  Vanparys served as a Managing  Partner and Managing  Director of Mitre
plc since 1992 and co-founded  Merit Direct  Limited,  Mitre's  predecessor,  in
1985.

     Mr. Keyser has served as Executive  Vice  President--Corporate  Development
since December 1998, as President of SITEL Latin America since November 1997 and
as Senior Vice President - Mergers and Acquisitions  since the Company's initial
public  offering  in 1995.  Mr.  Keyser  joined the  Company  in 1992,  with the
Company's acquisition of May Telemarketing,  Inc., and served as Group President
responsible  for the  publishing  and  motorclub  divisions  until the Company's
initial public offering in 1995.

                                       9
<PAGE>
                                     PART II
                                     -------

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

     The Company's  common stock is traded on the New York Stock  Exchange under
the symbol SWW. The following table sets forth, for the quarter  indicated,  the
high and low sale  prices of the common  stock as reported by the New York Stock
Exchange.

                                     HIGH                   LOW
      1998
      ------------------------------------------------------------------
      First Quarter            $       13.56            $        8.94
      Second Quarter           $       13.31            $        5.75
      Third Quarter            $        6.56            $        2.94
      Fourth Quarter           $        3.94            $        1.75

      1999
      ------------------------------------------------------------------
      First Quarter            $        4.94            $        2.13
      Second Quarter           $        3.94            $        2.00
      Third Quarter            $        5.31            $        2.56
      Fourth Quarter           $        7.63            $        3.88


     As  of  March  9,  2000,  SITEL  had  69,663,316  shares  of  common  stock
outstanding and 580 record holders of the Company's common stock.

     The Company has not declared or paid any cash dividends on its common stock
since its inception,  and the Board of Directors currently intends to retain all
earnings for use in the business for the foreseeable  future.  Furthermore,  the
Company's  revolving  credit  facility  and Senior  Subordinated  Notes  contain
restrictions on the payment of cash dividends.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
        --------------------------------------------------

     The following  table presents  selected  historical  financial data for the
Company for the years ended 1995,  1996,  1997,  1998 and 1999. The  information
should be read in  conjunction  with  "Management's  Discussion  and Analysis of
Financial  Condition and Results of Operations" and the  Consolidated  Financial
Statements and related notes thereto, included elsewhere herein.

                                       10
<PAGE>
<TABLE>
<CAPTION>
                                                                          Years Ended December 31,
                                                     ------------------------------------------------------------------
                                                        1995         1996          1997          1998          1999
                                                     -----------  ------------  ------------  -----------   -----------
Income Statement Data:                                               (in thousands, except per share data)
<S>                                               <C>             <C>           <C>           <C>          <C>
Revenues                                          $     187,215   $   312,750   $   491,474   $  586,318   $   737,522
Cost of services                                        101,617       163,717       270,942      331,586       397,250
Selling, general and administrative
     expenses                                            69,213       120,695       185,589      235,900       312,376
Special compensation expense (1)                         34,585            --            --           --            --
Asset impairment and restructuring
     expenses (2)                                            --            --        15,681        6,607         9,596
                                                     -----------  ------------  ------------  -----------   -----------
                Operating income (loss)                 (18,200)       28,338        19,262       12,225        18,300

Transaction related expense (3)                              --         6,988            --           --            --
Interest expense, net                                       702           227         5,096       12,747        12,785
Other income, net                                           118            32           126          263           316
                                                     -----------  ------------  ------------  -----------   -----------
                Income (loss) before taxes
                   and minority interest                (18,784)       21,155        14,292         (259)        5,831

Income tax expense (benefit)                             (6,593)       10,221        11,306          966         6,336
Minority interest                                         1,262            77           174         (651)          304
                                                     -----------  ------------  ------------  -----------   -----------
                Net income (loss) from
                   continuing operations                (13,453)       10,857         2,812         (574)         (809)

Extraordinary loss on refinancing of debt,
     net of taxes                                            --            --            --         (514)           --
                                                     -----------  ------------  ------------  -----------   -----------
                Net income (loss)                 $     (13,453)  $    10,857   $     2,812   $   (1,088)   $     (809)
                                                     ===========  ============  ============  ===========   ===========
 Income (loss) from continuing operations
  per common share:
         Basic                                    $       (0.33)  $      0.19   $      0.05   $    (0.01)   $    (0.01)
         Diluted                                  $       (0.29)  $      0.16   $      0.04   $    (0.01)   $    (0.01)

Weighted average common shares
  outstanding (4):
         Basic                                           40,565        57,793        61,764       63,888        66,550
         Diluted                                         46,477        65,929        68,811       63,888        66,550

Balance Sheet and Other Data:
Working capital                                   $      24,182   $    36,836   $    39,545   $   41,660   $    87,384
Total assets                                            100,960       211,684       385,880      405,610       432,246
Long-term debt, net of current portion                    4,305         4,861       115,488      116,237       148,330
Stockholders' equity                                     65,380       126,725       158,388      161,854       160,698
</TABLE>
----------------

(1)      Represents a non-cash  compensation  expense  incurred in February 1995
         resulting  from the grant of stock  options  with an exercise  price of
         $.0025 per share to 265  employees  of the  Company  to  replace  stock
         appreciation  rights  previously  granted under the Company's  Employee
         Equity Benefit Plan and previously granted stock options. Excluding the
         special compensation expense and a one-time forgiveness of debt of $0.5
         million owed by two stockholders,  operating income, net income,  basic
         income per share and  diluted  income  per share  would have been $16.9
         million, $9.7 million, $0.24 and $0.21, respectively, for 1995.

(2)      Represents a  restructuring  expense and a writedown  of the  Company's
         investment in its Telebusiness  business unit of $5.2 million and $10.5
         million,  respectively,  for  the  year  ended  December  31,  1997,  a
         restructuring  expense of $6.6 million for the year ended  December 31,
         1998 and asset  impairment  expense of $9.6  million for the year ended
         December  31,  1999.  Excluding  those  operating  expenses,  operating
         income, net income, basic income per share and diluted income per share
         would  have  been  $34.9  million,  $18.5  million,  $0.30  and  $0.27,
         respectively,  for 1997, $18.8 million, $3.5 million,  $0.05 and $0.05,
         respectively for 1998 and $27.9 million, $7.5 million, $0.11 and $0.10,
         respectively, for 1999.

                                       11
<PAGE>

(3)      Represents  expenses  resulting from the  acquisitions of Mitre plc and
         National Action Financial Services,  Inc.,  accounted for as pooling of
         interest  transactions.  Excluding certain one-time  operating expenses
         and the transaction  related expenses,  operating  income,  net income,
         basic  income per share and  diluted  income per share  would have been
         $30.5 million, $19.5 million, $0.34 and $0.30, respectively, for 1996.

(4)      See  Note  1 to  Notes  to  Consolidated  Financial  Statements  for an
         explanation of the determination of weighted average common shares used
         in computing net income (loss) per share.

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

General

     SITEL Corporation ("SITEL") and subsidiaries (collectively,  the "Company")
provide customer relationship  management services on behalf of clients in North
America, Europe, Asia Pacific and Latin America. The Company finds, acquires and
retains customers and helps  organizations  enhance and grow these relationships
through a variety of value-added  services via electronic  media,  including the
telephone and the  Internet,  and, to a lesser  extent,  traditional  mail.  The
Company  provides  services to clients  principally  in the consumer,  financial
services, insurance, telecommunications, technology and utilities sectors.

     SITEL was  founded in 1985 by its  current  chairman,  James F.  Lynch,  in
Omaha, Nebraska.  SITEL completed its initial public offering of common stock in
1995,  and  was  the  first  major  independent  publicly  held  company  in the
teleservices  industry.  In 1996, the Company began its international  expansion
with  acquisitions  in Canada  and Spain  (which  also  included  operations  in
Portugal)  and, in  particular,  with the merger with Mitre plc  ("Mitre" or the
"Mitre  Merger") which was completed in September 1996. At the time of the Mitre
Merger, Mitre had operations in the United Kingdom, Belgium and Japan and was in
the final stages of completing plans to enter Singapore,  Hong Kong and Germany.
In 1997,  SITEL  entered  Australia,  New  Zealand,  Sweden and Ireland  through
acquisitions;   entered  Mexico  and  Colombia  through  a  joint  venture  with
Corporacion Interamericana de Entretenimiento, S.A. de C.V. ("CIE"); and entered
France on the basis of a client  contract.  In 1996 and 1997,  the Company  also
completed  acquisitions  that  gave  it  the  capability  to  offer  receivables
management, consulting and technical support services.

     The  Mitre  Merger  was  accounted  for  as a  pooling  of  interests,  and
accordingly the financial  results of the Company for 1996 have been restated as
if SITEL and Mitre  were  operated  as a single  company  for this  period.  The
results for this period have also been restated to reflect the 1996  acquisition
of National Action Financial Services,  Inc. ("NAFS"),  which was also accounted
for as a pooling of interests.

Results of Operations

1999 Compared to 1998

     Revenues. Revenues increased $151.2 million, or 25.8%, to $737.5 million in
1999  from  $586.3  million  in  1998.  Of  this  increase,  $91.0  million  was
attributable to increased  revenues from existing  clients and $60.2 million was
attributable  to services  initiated for new clients.  The  implementation  of a
significant  new contract for an existing  client  resulted in $72.3  million of
revenues in 1999.  These  revenues  included $33.5 million  associated  with the
pass-through of certain third-party technology expenses.

                                       12
<PAGE>

     Cost of Services. Cost of services represents primarily labor and telephone
expenses  directly related to providing remote customer contacts for our clients
via  e-media  (telephone,  FAX,  Internet,  e-mail,  mobile  communication)  and
traditional mail. Cost of services as a percent of revenue can vary based on the
nature  of the  contract,  the  nature  of the work and the  market in which the
service  is  provided.   Implementations   of  large   contracts  in  which  the
implementation  costs are  reflected  in  selling,  general  and  administrative
services  can  significantly  impact  cost of services as of percent of revenue.
Accordingly,  cost of  services  as a percent  of  revenue  can vary,  sometimes
significantly,  from  quarter to quarter.  Cost of services  increased  19.8% to
$397.3 million in 1999 from $331.6 million in 1998. As a percentage of revenues,
cost of services  decreased  from 56.6% in 1998 to 53.9% in 1999.  This decrease
was primarily  attributable to revenues  associated with the implementation of a
significant  contract in 1999 in which significant related costs are included in
selling,  general  and  administrative  expenses.  Excluding  the impact of this
contract, cost of services as a percent of revenues was 56.4%, approximately the
same as 1998.  Cost of services as a  percentage  of  revenues  was  impacted by
improved labor  utilization in the United Kingdom and Central Europe,  offset by
higher labor costs in Spain  associated  with a new national  labor contract and
lower labor  utilization in certain  contact centers in the United States due to
variability of outbound sales campaigns.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  represent  expenses  incurred to directly  support and
manage  the   operations,   including   costs  of  management,   administration,
technology,  facilities,  depreciation and amortization,  maintenance, sales and
marketing,  and client support  services.  Selling,  general and  administrative
expenses  increased 32.4% to $312.4 million in 1999 from $235.9 million in 1998.
As a  percentage  of  revenues,  selling,  general and  administrative  expenses
increased  to 42.4% of revenues  in 1999 from 40.2% in 1998.  The  increase  was
primarily  attributable  to $33.5  million of  third-party  technology  expenses
associated  with the  implementation  of a  significant  new  contract  in 1999.
Excluding  the  impact  of  these  technology   costs,   selling,   general  and
administrative expenses decreased to 39.6% of revenue in 1999. This decrease was
primarily  attributable  to the  leveraging of overhead  costs  through  revenue
growth in the third and fourth quarters of 1999, offset by re-engineering  costs
in the United Kingdom and severance and consolidation  costs in the Asia Pacific
region in the first six months of 1999.

     Asset Impairment and Restructuring  Expenses. In the third quarter of 1999,
the Company  recorded a net  expense of $9.6  million  primarily  related to the
write down of capitalized  software and related  technology  assets.  During the
quarter,  the Company reviewed its capitalized  software and related  technology
assets for impairment in connection  with the change in its technology  strategy
as it related to the adoption of a new  platform  for its Customer  Relationship
Management  software  applications.  As a result, the Company wrote down certain
capitalized software and related technology assets by $10.1 million to estimated
fair value.

     In the second quarter of 1998,  the Company  recorded a $6.6 million charge
for  restructuring  expenses  primarily  related  to  its  European  operations.
Included in that charge were  severance and other costs of $6.4 million  related
to statutory or  contractual  severance  and other costs for  approximately  250
employees. The restructuring expenses also included $0.2 million for the cost of
excess leased facilities.  The Company substantially completed its restructuring
plan and  recorded a reversal of  approximately  $459,000  to the  restructuring
accrual during the third quarter of 1999.

     Operating Income (Loss).  Operating income increased 49.7% to $18.3 million
in 1999  from  $12.2  million  in  1998.  Excluding  the  asset  impairment  and
restructuring  expenses  discussed  above,  operating  income increased 48.1% to
$27.9  million in 1999 from $18.8  million in 1998.  This increase was primarily
attributable to the implementation of a significant new contract in the U.S. and
substantially  higher earnings in the Company's U.S.-based technical support and
Central  European  businesses,  offset by declines  in the Spain and  U.S.-based
customer acquisition businesses.

                                       13
<PAGE>

     Interest Expense,  Net. Interest expense, net of interest income, was $12.8
million  in 1999 and  $12.7  million  in 1998 as an  increase  in total  average
borrowings was offset by lower interest rates in Latin America and Europe.

     Income Tax Expense.  Income tax expense was $6.3 million on pre-tax  income
of $5.8 million in 1999 compared to $1.0 million on pre-tax loss of $0.3 million
in 1998. The  difference  between income tax expense and the expense which would
result from applying the Federal  statutory  rate to pre-tax income is primarily
due to non-deductible  goodwill,  non-deductible asset impairment expenses,  net
operating  losses in certain Asia Pacific  subsidiaries for which no tax benefit
is recognized,  higher international tax rates in certain jurisdictions and U.S.
state and local income taxes.

     Net Loss From Continuing  Operations and Net Loss. Net loss from continuing
operations  increased  from  $0.6  million  in  1998 to $0.8  million  in  1999.
Excluding  asset  impairment  and  restructuring   expenses,   net  income  from
continuing  operations  increased  from $4.0  million in 1998 to $7.5 million in
1999 for the  reasons  described  above.  The  difference  between net loss from
continuing  operations  and net  loss in 1998  was an  extraordinary  loss  that
related to the write off of the deferred costs on the Company's  original Credit
Agreement that was amended in 1998.

1998 Compared to 1997

     Revenues.  Revenues increased $94.8 million, or 19.3%, to $586.3 million in
1998  from  $491.5  million  in  1997.  Of  this  increase,  $76.3  million  was
attributable  to  services   initiated  for  new  clients,   $13.0  million  was
attributable  to increased  revenues from existing  clients and $5.5 million was
attributable  to revenues  from  businesses  acquired in 1998 under the purchase
method of  accounting.  The  increase  in  revenues  from  existing  clients was
primarily the result of higher calling volumes rather than higher rates.

     Cost of Services. Cost of services represents primarily labor and telephone
expenses directly related to customer relationship  management activities.  Cost
of services  increased  $60.6 million,  or 22.4%, to $331.6 million in 1998 from
$270.9 million in 1997. As a percentage of revenues,  cost of services increased
to 56.6% in 1998 from 55.1% in 1997. This increase was primarily attributable to
increases in European and North  American  expenses.  The increase in Europe was
primarily due to higher labor expenses  incurred in  anticipation  of additional
teleservicing campaign business which did not materialize.  The increase in cost
of  services  in  North  America   reflects  lower  labor   utilization  in  the
telecommunications  group and ramp-up and  training  expenses in the  technology
group.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  represent  expenses  incurred to directly  support and
manage the operations, including costs of management, administration, facilities
expenses,  depreciation  and  maintenance,  amortization,  sales  and  marketing
activities  and client support  services.  Selling,  general and  administrative
expenses  increased  $50.3  million,  or 27.1%,  to $235.9  million in 1998 from
$185.6  million in 1997.  This  increase was primarily a result of the Company's
continued  growth both  internally  and  through  acquisitions  and  includes an
increase of $11.7 million,  or 40.7%, in depreciation  and  amortization in 1998
compared  to  1997.   As  a  percentage  of  revenues,   selling,   general  and
administrative  expenses  increased  to 40.2% in 1998 from  37.8% in 1997.  This
increase  relates  primarily to lower than expected  revenues during most of the
year from European  operations and higher  expenses  associated with the startup
operations in Latin America and Asia Pacific.

     Restructuring Expenses. The Company recorded restructuring expenses of $6.6
million  in  1998.  The  restructuring  expenses  primarily  represent  expenses
associated  with statutory or  contractual  severance  arrangements  and related
costs. The charge was driven by two principal factors: a lower level of campaign
business,  which  historically  has represented a large portion of the Company's
business in Europe, and the need to reposition the Company's  infrastructure for
increasing amounts of outsourcing business.

                                       14
<PAGE>

     Operating  Income.  Operating income  decreased $7.1 million,  or 36.5%, to
$12.2  million in 1998 from $19.3 million in 1997.  Excluding the  restructuring
expenses of $5.2  million and $6.6 million in 1997 and 1998,  respectively,  and
the write down of the  investment  in the  Telebusiness  business  unit of $10.5
million in 1997,  operating  income  decreased $16.1 million to $18.8 million in
1998 from $34.9 million in 1997. The decrease in operating  income was primarily
attributable to the Company's European operations as described earlier.

     Interest  Expense,  Net. Net interest expense increased to $12.7 million in
1998 from $5.1 million in 1997.  This  increase was  primarily  due to increased
borrowings,  including the Company's  high yield bonds that were issued in 1998.
The  increased  borrowings  were  utilized  to  support  the  Company's  growth,
including acquisitions.

     Income Tax  Expense.  Income tax expense  decreased to $1.0 million in 1998
from $11.3  million in 1997  primarily due to a decrease in income before income
taxes  and  minority   interest  in  1998   compared  to  1997.   Excluding  the
restructuring  expenses in 1998 and 1997 and the write down of the  Telebusiness
business unit in 1997, income tax expense was $3.0 million and $11.3 million for
1998 and 1997,  respectively,  or 47.5% and 37.8% of income  before income taxes
and minority  interest.  The difference between the Company's income tax expense
and that which would be calculated  using the statutory  Federal income tax rate
of  34% on  income  is  primarily  due to  non-deductible  business  acquisition
expenses and international, state and local income taxes. The increase in income
tax expense as a percentage of income before income taxes and minority  interest
in 1998  compared to 1997 was due to the impact of the  non-deductible  business
acquisition  expenses  which do not  change  materially  from  period to period,
combined with lower income before income taxes and minority interest.

     Net Income (Loss) From  Continuing  Operations and Net Income  (Loss).  Net
income (loss) from continuing  operations  decreased to a $(0.6) million loss in
1998 from $2.8 million of income in 1997.  Excluding the restructuring  expenses
in 1998 and 1997 and the write down of the  Telebusiness  business unit in 1997,
net of tax, net income from  continuing  operations was $4.0 million in 1998 and
$18.5  million in 1997.  The  decrease in 1998  compared  to 1997 was  primarily
attributable  to the  Company's  European  operations  as described  earlier and
additional interest expense. Net income (loss) was a $(1.1) million loss in 1998
compared to $2.8 million of income in 1997.  The  difference  between net income
(loss)  from  continuing  operations  and  net  income  (loss)  in  1998  was an
extraordinary  loss that the Company  recognized to write off the deferred costs
of its original Credit Agreement which was amended during 1998.

Liquidity and Capital Resources

     Net cash  provided  by  operating  activities  was $39.3  million  in 1999,
consisting  primarily of income before non-cash expenses of $54.6 million and an
increase in accrued expenses and short-term  payables of $28.1 million offset by
increases in accounts receivable of $38.9 million.  The Company anticipates that
accounts  receivable  balances will continue to grow as the Company  grows.  Net
cash used in investing activities was $34.5 million in 1999 primarily related to
purchases   of  property   and   equipment,   offset  by  cash   proceeds   from
sale-leasebacks  of property and equipment.  In addition,  the Company  acquired
property and equipment of $9.0 million in connection  with  capitalized  leases.
Net cash provided by financing  activities  was $1.2 million as payments on debt
and capital lease obligations were offset by additional borrowings.

     Net cash  provided  by  operating  activities  was $17.7  million  in 1998.
Included  in the  net  cash  provided  from  operations  was a net  loss of $1.1
million,  however that loss  included  non-cash  depreciation  and  amortization
expenses of $40.4 million. Also included in cash flows from operating activities
was $21.5 million of cash used  primarily as a result of an increase in accounts
receivable  needed to support  growth.  The Company  anticipates  that  accounts
receivable balances will continue to grow as the Company grows. Net cash used in
investing  activities  was $43.1  million  for 1998.  Included in this total was
$52.0 million used for capital expenditures  (primarily call and data management
equipment) and $2.2 million used for

                                       15
<PAGE>

acquisitions.  These uses of cash were partially  offset by $9.4 million of cash
received  from  sale-leasebacks  of  facilities.  Net cash provided by financing
activities during 1998 was $16.1 million,  primarily  attributable to additional
borrowings on notes payable. During 1998, the Company also completed the private
placement  of $100  million of 9.25%  Senior  Subordinated  Notes due 2006.  The
proceeds from the offering were used to repay borrowings  outstanding  under the
Company's long term revolving credit facility.

     Net cash provided by operating  activities  was $19.0 million in 1997.  The
Company recorded net income of $2.8 million  (including a non-cash tax charge of
$5.6  million),  depreciation  and  amortization  of $28.7 million and primarily
non-cash  restructuring  expenses of $15.5 million. This cash flow was offset by
$33.6 million of cash used in operating  activities  primarily as a result of an
increase  in  accounts  receivable  needed to support  growth.  Net cash used in
investing  activities was $131.4 million for 1997. Of this total,  $69.4 million
was used for capital expenditures  (primarily call and data management equipment
and facilities) and $61.0 million was used for  acquisitions.  Net cash provided
by financing activities during 1997 was $113.7 million,  primarily  attributable
to borrowings on the Company's available credit lines and other notes payable.

     The Company has  historically  used equity  capital,  funds  generated from
operations,  leases of property and  equipment,  senior  subordinated  notes and
borrowings under credit facilities with banks to finance business  acquisitions,
capital expenditures and working capital requirements. At December 31, 1999, the
Company had unused lines of credit totaling $19.7 million.  The Company obtained
an additional  line of credit in January 2000 of $8.1  million.  During 1998 and
1999,  the Company  sought and obtained  certain  modifications  to its existing
long-term  credit facility to permit  continued  availability of borrowing under
such  facility.  The Company  believes  that funds  generated  from  operations,
existing cash,  leases of property and equipment and the funds  available  under
its credit  facilities  will be  sufficient  to finance its current  operations,
planned capital  expenditures  and internal  growth for the foreseeable  future.
Future acquisitions, if any, may require additional debt or equity financing.

Year 2000 Issue

     The Year 2000 statement which follows is a Year 2000 Readiness  Disclosure,
pursuant to the Year 2000  Information and Readiness  Disclosure Act, Public Law
No. 105-271.

     The Company  recognized  the need to ensure Year 2000 software and embedded
system  failures  would  not  adversely  impact  its  operations.  Specifically,
computational errors and system failures were a known risk with respect to dates
after December 31, 1999. The Company established a central Y2K compliance office
that reported directly to the Chief Information  Officer.  Each of the Company's
operating units also designated information technology (IT) personnel to address
the  issues  that the unit  faced and to report to the  central  Y2K  compliance
office.  The Company  implemented  a system which allowed it to track all IT and
non-IT  systems  and  facility   functions  for  compliance  with  industry  Y2K
standards.  This tracking  system  allowed the Company to monitor and track each
functional  point as a single item  grouped by how  critical the item was in the
Company's ability to perform its daily functions.  Based on the output from this
data and an  analysis  of the system  reports,  the  Company  believed  that all
functional  points  which were  critical  to the  Company's  functions  had been
identified and assessed.  Further,  the Company developed a remediation plan for
each item in the critical list. Part of the Company's  remediation  strategy was
in concert with its efforts to acquire or develop new and innovative systems for
its internal operations. The Company has transitioned into the year 2000 with no
major impact on our  commitment  to servicing  our clients.  In instances  where
minor incidents were reported, contingency plans were invoked and service levels
to our  clients  were  maintained.  These  minor  occurrences  had no  impact on
day-to-day operations and have since been repaired with no financial impact.

                                       16
<PAGE>

     IT issues. Internal  systems  represented  approximately 28% of the overall
effort in the IT  applications  area. The remaining 72% of the overall effort in
the IT area was in the interface and  integration of external  client and vendor
application  systems. The Company implemented a three-step process of contacting
significant vendors and clients to request information about the status of their
Y2K compliance efforts.  In addition to communicating with significant  vendors,
the  Company  tested  certain  critical  vendor  application   systems  for  Y2K
compliance.  The Company identified mitigation and contingency plans at both the
business and technical IT levels. In addition to communicating  with significant
clients,  the Company had a strategy to deal with non-compliant  external client
customer data by enabling data to be used by the Company's systems.

     Non IT issues  (facilities).  Non-IT issues, with few exceptions,  had been
classified into a non-critical  category.  The few exceptions included dial tone
for the Company's  telephony and power from the Company's energy providers.  The
Company included these functional  points in the critical  category for purposes
of scheduling. Based on communications with the providers of these services, the
Company  believed  that these  services  would not be  interrupted  by Year 2000
failures.  The  Company's  contingency  plan  for  the  loss of  power  included
generator systems in the Company's major facilities.  The Company's  contingency
plan for loss of dial tone included the  distribution of network services across
several  providers.  This would  allow the  Company to  minimally  maintain  its
service levels in the event of a failure.

     Phases.  The  Company  employed a  four-phase,  nine-process  step  Project
Methodology that covered each aspect of Y2K compliance. The four phases are:

                  Phase 1           Assessment
                  Phase 2           Remediation
                  Phase 3           Verification and Testing
                  Phase 4           Implementation

     Each process  step is necessary  within the  framework  and provides  clear
management  checkpoints for gauging the progress of activity during execution of
the project plan. The following table outlines the phases and process steps:
<TABLE>
<CAPTION>
                                               Phase 1            Phase 2             Phase 3             Phase 4
                                                                                   Verification/
         Process Steps                       Assessment         Remediation           Testing           Implementation
-----------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                <C>                 <C>                 <C>
1.  Recognition/Awareness                         X                  X                   X                   X
2.  Inventory                                     X
3.  Evaluation                                    X
4.  Determination                                 X
5.  Remediation                                                      X
6.  Re-engineering                                                   X
7.  Multi-level testing                           X                  X                   X                   X
8.  Implementation                                                                                           X
9.  Post-implementation                                                                                      X
</TABLE>

     The  Company  clearly  defined  each of the  process  steps in the  Project
Methodology.  The  Recognition/Awareness  step included communication of the Y2K
issues and their importance  throughout the Company. The Inventory step included
the  identification  and  cataloging  of each  item that  must be  verified  for
compliance with Y2K processing.  The Evaluation step involved the evaluation and
categorization  of the  critical  nature  of  each  item  based  on  established
criteria.  The Determination step included making informed management  decisions
regarding the strategy to be taken for each  individual  item.  The  Remediation
step  involved  repair of all  components  of a process  that  could  improperly
process dates. The Re-engineering

                                       17
<PAGE>

step consisted of rewriting  and/or  replacing whole units of software code. The
Multi-level  testing step involved the development of detailed  testing criteria
and the implementation of those testing plans. The Implementation  step involved
the  coordination of the release of  applications/systems  into the live systems
environment.  The  Post-implementation  step included the on-going monitoring of
applications/systems  that have been  repaired  and placed into the live systems
environment.

     Contingency  Plans.  The Company  developed Year 2000 Business  Contingency
Plans for conducting its business operations in the event of crises. This effort
was not limited to the risks posed by the  potential  Year 2000  failures of the
Company's internal information systems or infrastructures, but also included the
potential  secondary  impact on the  Company  of Year 2000  failures,  including
potential  systems  failures of business  partners  and  infrastructure  service
providers.

     Costs of Y2K Compliance. The Company estimates that the costs to become Y2K
compliant  approximate $11 million.  Substantially  all of these costs have been
incurred through December 31, 1999. Minor internal costs will be incurred in the
first  quarter  of 2000 in  connection  with  monitoring  the impact of the year
change on systems and operations and winding down the Y2K project office.

Quarterly Results and Seasonality

The Company has  experienced  and  expects to continue to  experience  quarterly
variations  in its  results  of  operations  principally  due to the  timing  of
clients'  customer   relationship   management   initiatives  and  teleservicing
campaigns and the commencement and terms of new contracts,  revenue mix, and the
timing of additional selling, general and administrative expenses to support new
business.  The Company  experiences  periodic  fluctuations  related to both the
start-up  costs  associated  with expansion and the  implementation  of clients'
customer relationship management activities. In addition, the Company's business
tends to be slower in the third quarter due to summer holidays in Europe and, to
a lesser degree,  in the first quarter due to the changeover of client marketing
strategies that often occur at the beginning of the year.

Effects of Inflation

Inflation has not had a significant effect on the Company's operations. However,
there can be no assurance that inflation will not have a material  effect on the
Company's operations in the future.

Accounting Pronouncements

Statement  of  Financial  Accounting  Standards  ("SFAS")  133,  Accounting  for
Derivative Investments and Hedging Activities, was issued in June 1998. SFAS 133
establishes  accounting  standards for  derivative  instruments  and for hedging
activities.  The  standard,  as amended by SFAS 137, is effective for all fiscal
quarters of fiscal years beginning after June 15, 2001. The Company  anticipates
adopting this accounting  pronouncement  in the third quarter of 2001;  however,
management  believes that it will not have a significant impact on the Company's
consolidated financial statements.

Forward-Looking Statements

This Form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities  Act and Section 21E of the Exchange Act. Such  statements
are identified by the use of forward-looking  words or phrases which may include
but are not limited to, "intended," "will be positioned," "expects," "expected,"
"anticipates,"   "anticipated,"   "believes"   and  similar   expressions.   The
forward-looking statements are based on the Company's current expectations.  All
statements other than statements of historical facts included in this Form 10-K,
including those regarding the Company's financial  position,  business strategy,
projected  costs and plans and objectives of management  for future  operations,
are  forward-looking   statements.   Although  the  Company  believes  that  the
expectations reflected in such forward-looking statements are reasonable,  there
can be no assurance  that such  expectations  will prove to be correct.  Because
forward-looking statements involve risks and uncertainties, the Company's actual
results  could  differ  materially.  Important  factors  that

                                       18
<PAGE>

could cause actual results to differ materially from the Company's  expectations
may  include,  but are not  limited to, the  effects of  leverage,  restrictions
imposed  by  the  terms  of  indebtedness,  reliance  on  major  clients,  risks
associated with managing a global business,  fluctuations in operating  results,
reliance on  telecommunications  and computer technology,  risks associated with
the Company's  acquisition  strategy,  the dependence on telephone service,  the
competitive  industry,  dependence on labor force,  foreign  currency risks, the
effects of  business  regulation,  dependence  on key  personnel  and control by
management,  and risks  associated with Year 2000 failures (see discussion above
under  the  caption  "Year  2000  Issue").   All  subsequent  written  and  oral
forward-looking  statements  attributable  to the  Company or persons  acting on
behalf  of the  Company  are  expressly  qualified  in  their  entirety  by this
paragraph.  The Company disclaims,  however,  any intent or obligation to update
its forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

     The Company is exposed to market risks associated primarily with changes in
foreign currency exchange rates. The Company has operations in many parts of the
world;  however,  both revenues and expenses of those  operations  are typically
denominated  in the currency of the country of  operations,  providing a natural
hedge.  The Company  entered into certain hedging  transactions  during 1998 and
1999  designed to hedge  foreign  currency  exchange  risk related to short term
intercompany loans, however the amounts involved were not material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
        -------------------------------------------

     The  information  called for by this item  (other than  selected  quarterly
information,  which is set forth as follows) is  incorporated  by reference from
the Company's  Consolidated  Financial Statements set forth on pages F-3 through
F-31 hereof.

     The following  table sets forth income  statement data for each of the four
quarters of 1999 and 1998. This quarterly  information is unaudited but has been
prepared on a basis consistent with the Company's audited  financial  statements
presented  elsewhere  herein  and,  in  the  Company's  opinion,   includes  all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair presentation of the information for the quarters  presented.  The operating
results for any quarter are not necessarily indicative of results for any future
period.

                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                             --------------------------------------------------------------------
                                               March 31,        June 30,      September 30,        December 31,
(in thousands, except per share data)            1999             1999            1999                 1999
                                             ------------     -----------     -----------          -----------
<S>                                        <C>              <C>             <C>                  <C>
Revenues                                   $     164,185    $    177,996    $    189,597         $    205,744
Operating expenses:
     Cost of services                             88,465          95,343         100,446              112,996
     Selling, general and administrative
         expenses                                 74,382          77,989          79,181               80,824
     Asset impairment and restructuring
         expenses                                     --              --           9,596                   --
                                             ------------     -----------     -----------          -----------
                Operating income                   1,338           4,664             374 (a)           11,924

Interest expense, net                             (3,156)         (2,994)         (3,203)              (3,432)
Other income (expense), net                           63              57             (69)                 265
                                             ------------     -----------     -----------          -----------

                Income (loss) before
                   income taxes and
                   minority interest              (1,755)          1,727          (2,898)               8,757

Income tax expense (benefit)                        (203)          1,086           1,762                3,691
Minority interest                                    (69)            133              58                  182
                                             ------------     -----------     -----------          -----------
                Net income (loss)          $      (1,483)   $        508    $     (4,718)(a)     $      4,884
                                             ============     ===========     ===========          ===========

Income (loss) per common share:
     Basic                                 $       (0.02)   $       0.01    $      (0.07)(a)     $       0.07
     Diluted                                       (0.02)           0.01           (0.07)(a)             0.07

Weighted average common shares
  outstanding:
         Basic                                    64,842          65,917          67,544               67,854
         Diluted                                  64,842          72,197          67,544               74,398
</TABLE>

(a)  Includes asset  impairment  expenses of $9.6 million.  For the three months
     ended  September  30, 1999,  excluding  the asset  impairment  expenses and
     related tax effects,  operating income, net income,  basic income per share
     and diluted income per share would have been $10.0  million,  $3.6 million,
     $0.05 and $0.05, respectively.

                                       20
<PAGE>
<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                 ----------------------------------------------------------------------
                                                   March 31,        June 30,         September 30,      December 31,
(in thousands, except per share data)                1998             1998                1998              1998
                                                 ------------     ------------        ------------      ------------

<S>                                            <C>              <C>                 <C>               <C>
Revenues                                       $     137,748    $     147,307       $     146,755     $     154,508
Operating expenses:
     Cost of services                                 77,820           82,585              82,636            88,545
     Selling, general and administrative
         expenses                                     54,672           61,096              59,045            61,087
     Restructuring expenses                               --            6,607                  --                --
                                                 ------------     ------------        ------------      ------------
                Operating income (loss)                5,256           (2,981)(a)           5,074             4,876

Interest expense, net                                 (2,590)          (3,375)             (3,457)           (3,325)
Other income, net                                        135               34                  19                75
                                                 ------------     ------------        ------------      ------------

                Income (loss) before
                   income taxes and
                   minority interest                   2,801           (6,322)              1,636             1,626

Income tax expense (benefit)                           1,117           (1,878)                836               891
Minority interest                                       (294)              31                  13              (401)
                                                 ------------     ------------        ------------      ------------

                Net income (loss) from
                   continuing operations               1,978           (4,475)(a)             787             1,136

Extraordinary loss on refinancing of
     debt, net of tax                                    514               --                  --                --
                                                 ------------     ------------        ------------      ------------
                Net income (loss)              $       1,464    $      (4,475)(a)   $         787     $       1,136
                                                 ============     ============        ============      ============

Income (loss) from continuing
  operations per common share:
         Basic                                 $        0.03    $       (0.07)      $        0.01     $        0.02
         Diluted                                        0.03            (0.07)               0.01              0.02

Net income (loss) per share:
         Basic                                 $        0.02    $       (0.07)(a)   $        0.01     $        0.02
         Diluted                                        0.02            (0.07)(a)            0.01              0.02

Weighted average common shares
  outstanding:
         Basic                                        63,295           63,871              64,081            64,291
         Diluted                                      69,611           63,871              70,640            71,364
</TABLE>
(a)  Includes restructuring expenses of $6.6 million. For the three months ended
     June 30,  1998,  excluding  the  restructuring  expenses  and  related  tax
     effects,  operating income, net income,  basic income per share and diluted
     income per share  would have been $3.6  million,  $0.1  million,  $0.00 and
     $0.00, respectively.

                                       21
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.
         -----------------------------------------------------------
     None.

                                    PART III
                                    --------

     The information required by this Part III is incorporated by reference from
the  registrant's  definitive proxy statement for the 2000 annual meeting of the
registrant's stockholders to be held on May 5, 2000, which involves the election
of directors.  The definitive  proxy statement will be filed with the Securities
and  Exchange  Commission  not  later  than 120 days  after  the end of the year
covered by this Form 10-K.

                                     PART IV
                                     -------

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

(a)  The following documents are filed as a part of this report:

     1. Financial Statements. The following Consolidated Financial Statements of
SITEL  Corporation  and Independent  Auditors'  Report are included at pages F-1
through F-31 of this Form 10-K:

          -    Independent Auditors' Report.

          -    Consolidated Balance Sheets at December 31, 1998 and 1999.

          -    Consolidated  Statements  of Income  (Loss)  For The Years  Ended
                 December 31, 1997, 1998 and 1999.

          -    Consolidated  Statements  of  Stockholders'  Equity For The Years
                 Ended December 31, 1997, 1998 and 1999.

          -    Consolidated  Statements  of  Cash  Flows  For  The  Years  Ended
                 December 31, 1997, 1998 and 1999.

          -    Notes to Consolidated Financial Statements.

     2. Financial  Statement  Schedules.  The following  consolidated  financial
statement  schedules of SITEL Corporation for the years ended December 31, 1997,
1998 and 1999 are included at pages S-1 through S-2 of this Form 10-K and should
be read in conjunction with the Consolidated Financial Statements:

          -    Independent Auditors' Report.

          -    Schedule II - Valuation and Qualifying Accounts.

     All other  schedules  of the  Company  for which  provision  is made in the
applicable accounting  regulations of the Securities and Exchange Commission are
not  required  under the related  instructions,  are  inapplicable  or have been
disclosed in the Notes to Consolidated Financial Statements and, therefore, have
been omitted.

                                       22
<PAGE>

     3.  Exhibits.  The  following  Exhibits  are  filed  as  part  of,  or  are
incorporated by reference into, this Form 10-K:
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S>       <C>         <C>
(1)       3.1         Amended and Restated Articles of Incorporation
(5)       3.1(a)      Articles of Amendment filed September 10, 1996 to the Amended and Restated Articles of Incorporation
(1)       3.4         Amended and Restated Bylaws.
(9)       3.4(a)      Amended and Restated Bylaws (conformed copy including Amendment No. 1)
(21)      3.4(b)      Amendment No. 2 to Amended and Restated Bylaws
(18)      3.5         Certificate of Designation of Series A Participating Preferred Stock.
(6)       4.2         Specimen Common Stock Certificate.
(19)      4.3         Rights Agreement.
(1)       9.1         Form of General Voting Agreement.
(1)       10.1        SITEL Corporation Stock Option Plan for Replacement of Existing Options.
(6)       10.1(a)     Amendment No. 1 to SITEL Corporation Stock Option Plan for  Replacement of Existing Options
(1)       10.2        SITEL Corporation Stock Option Plan for Replacement of EEBs.
(6)       10.2(a)     Amendment No. 1 to SITEL Corporation Stock Option Plan for  Replacement of EEBs.
(4)       10.3        Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(6)       10.3(a)     Amendment No. 1 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(8)       10.3(b)     Amendment No. 2 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan
(12)      10.3(c)     Amendment No. 3 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(7)       10.4        Amended and Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan.
(22)      10.4(a)     Amendment No. 1 to Amended and Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan
(1)       10.5        SITEL Corporation Executive Wealth Accumulation Plan.
(13)      10.5(a)     Second Amendment to SITEL Corporation Executive Wealth Accumulation Plan.
(25)      10.5(b)     Third Amendment to SITEL Corporation Executive Wealth Accumulation Plan.
(23)      10.6        SITEL Corporation 1999 Stock Incentive Plan.
(24)      10.6(a)     Amendment No. 1 to SITEL Corporation 1999 Stock Incentive Plan.
(1)       10.7        Form of Right of First Refusal.
(2)       10.8        Form of Indemnification Agreement with Outside Directors.
(3)       10.9        Form of Indemnification Agreement with Executive Officers.
(14)      10.10       Amended and Restated SITEL Corporation Employee Stock Purchase Plan.
(10)      10.11       Amended Credit Agreement with Bankers Trust Company.
(16)      10.11(a)    First Amendment dated as of June 19, 1998 to Amended Credit Agreement.
(20)      10.11(b)    Second Amendment dated as of September 30, 1998 to Amended Credit Agreement.
(26)      10.11(c)    Third Amendment dated as of September 30, 1999 to Amended Credit Agreement.
(11)      10.12       Indenture governing $100,000,000 9 1/4% Senior Subordinated Notes due 2006.
(17)      10.12(a)    First Supplemental Indenture
(15)      10.12(b)    Registration Rights Agreement
          10.13       Amended and Restated Employment Agreement with James F. Lynch.
          10.14       Employment Agreement with Antoon Vanparys
          21          Subsidiaries.
          23.1        Consent of KPMG LLP
          27          Financial Data Schedule.
-------------------------------------
<FN>
                           (1)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Registration Statement on Form S-1 (Registration No. 33-91092).

                           (2)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Form 10-Q for the quarter ended August 31, 1995.

                                       23
<PAGE>

                           (3)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Registration Statement on Form S-8 (Registration No. 33-99434).

                           (4)      Previously filed as Appendix B to the Company's definitive Proxy Statement for
                                    the Annual Meeting of  Stockholders, filed on September 27, 1996.

                           (5)      Previously filed as Exhibit 4.1(a)  to the Company's Registration Statement on
                                    Form S-3 (Registration No. 333-13403).

                           (6)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Annual Report on Form 10-K for the year ended December 31, 1996.

                           (7)      Previously filed as Appendix B to the Company's definitive Proxy Statement for
                                    the Annual Meeting of Stockholders, filed on April 30, 1997.

                           (8)      Previously filed as Appendix C to the Company's definitive Proxy Statement for
                                    the Annual Meeting of Stockholders, filed on April 30, 1997.

                           (9)      Previously filed as Exhibit 4.2 to the Company's Registration Statement on Form
                                    S-3 (Registration No. 333-28131).

                           (10)     Previously filed as Exhibit 10.1 to the Company's Form 8-K filed on March 16, 1998.

                           (11)     Previously filed as Exhibit 10.2 to the Company's Form 8-K filed on March 16, 1998.

                           (12)     Previously filed as Exhibit 10.3(c) to the Company's Form 10-Q for the quarter
                                    ended March 31, 1998.

                           (13)     Previously filed as an exhibit under the same exhibit number to the Company's
                                    Form 10-Q for the quarter ended March 31, 1998.

                           (14)     Previously filed as Exhibit 10.12 to the Company's Form 10-Q for the quarter
                                    ended March 31, 1998.

                           (15)     Previously filed as Exhibit 4.2 to the Company's Registration Statement
                                    on Form S-4 filed on April 24, 1998.

                           (16)     Previously filed as Exhibit 10.1 to the Company's Form 8-K filed on July 1, 1998.

                           (17)     Previously filed as Exhibit 4.2 to the Company's Amendment No. 1 to Form S-4
                                    filed on August 21, 1998.

                           (18)     Previously  filed as Exhibit A to the Rights Agreement included as Exhibit 1 to
                                    the Company's Registration Statement on Form 8-A filed on August 24, 1998.

                                       24
<PAGE>

                           (19)     Previously filed as Exhibit 1 to the Company's Registration Statement on Form
                                    8-A filed on August 24, 1998.

                           (20)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1998.

                           (21)     Previously filed as Exhibit 3.2 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1998.

                           (22)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended March 31, 1999.

                           (23)     Previously filed as Exhibit 4.1 to the Company's Registration Statement on
                                    Form S-8 (Registration No. 333-78241).

                           (24)     Previously filed as Exhibit 4.2 to the Company's Registration Statement on
                                    Form S-8 (Registration No. 333-78241).

                           (25)     Previously filed as Exhibit 10.2 to the Company's Form 10-Q for the quarter
                                    ended June 30, 1999.

                           (26)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1999.

(b) There were no reports on Form 8-K filed by the Registrant  during the fourth
quarter of the fiscal year ended December 31, 1999.
</FN>
</TABLE>
                                       25

<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 22, 2000                  SITEL Corporation


                                         By:  /s/Phillip A. Clough
                                              --------------------------------
                                              Chief Executive Officer

         PURSUANT TO THE  REQUIREMENTS  OF THE SECURITIES  EXCHANGE ACT OF 1934,
THIS  REPORT HAS BEEN  SIGNED  BELOW BY THE  FOLLOWING  PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.


/s/James F. Lynch          Chairman of the Board                 March 22, 2000
-------------------------  and Director
James F. Lynch


/s/Phillip A. Clough       Chief Executive Officer and           March 22, 2000
-------------------------  Director
Phillip A. Clough


/s/W. Gar Richlin          Executive Vice President and          March 22, 2000
-------------------------  Chief Financial Officer
W. Gar Richlin             (Principal Financial Officer)


/s/James E. Stevenson      Corporate Controller                  March 22, 2000
-------------------------  (Principal Accounting Officer)
James E. Stevenson


/s/Bill L. Fairfield       Director                              March 22, 2000
-------------------------
Bill L. Fairfield


/s/Kelvin C. Berens        Director                              March 22, 2000
-------------------------
Kelvin C. Berens


/s/George J. Kubat         Director                              March 22, 2000
-------------------------
George J. Kubat

                                       26

<PAGE>
                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S>       <C>         <C>
(1)       3.1         Amended and Restated Articles of Incorporation
(5)       3.1(a)      Articles of Amendment filed September 10, 1996 to the Amended and Restated Articles of Incorporation
(1)       3.4         Amended and Restated Bylaws.
(9)       3.4(a)      Amended and Restated Bylaws (conformed copy including Amendment No. 1)
(21)      3.4(b)      Amendment No. 2 to Amended and Restated Bylaws
(18)      3.5         Certificate of Designation of Series A Participating Preferred Stock.
(6)       4.2         Specimen Common Stock Certificate.
(19)      4.3         Rights Agreement.
(1)       9.1         Form of General Voting Agreement.
(1)       10.1        SITEL Corporation Stock Option Plan for Replacement of Existing Options.
(6)       10.1(a)     Amendment No. 1 to SITEL Corporation Stock Option Plan for  Replacement of Existing Options
(1)       10.2        SITEL Corporation Stock Option Plan for Replacement of EEBs.
(6)       10.2(a)     Amendment No. 1 to SITEL Corporation Stock Option Plan for  Replacement of EEBs.
(4)       10.3        Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(6)       10.3(a)     Amendment No. 1 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(8)       10.3(b)     Amendment No. 2 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan
(12)      10.3(c)     Amendment No. 3 to Amended and Restated SITEL Corporation 1995 Employee Stock Option Plan.
(7)       10.4        Amended and Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan.
(22)      10.4(a)     Amendment No. 1 to Amended and Restated SITEL Corporation 1995 Non-Employee Directors Stock Option Plan
(1)       10.5        SITEL Corporation Executive Wealth Accumulation Plan.
(13)      10.5(a)     Second Amendment to SITEL Corporation Executive Wealth Accumulation Plan.
(25)      10.5(b)     Third Amendment to SITEL Corporation Executive Wealth Accumulation Plan.
(23)      10.6        SITEL Corporation 1999 Stock Incentive Plan.
(24)      10.6(a)     Amendment No. 1 to SITEL Corporation 1999 Stock Incentive Plan.
(1)       10.7        Form of Right of First Refusal.
(2)       10.8        Form of Indemnification Agreement with Outside Directors.
(3)       10.9        Form of Indemnification Agreement with Executive Officers.
(14)      10.10       Amended and Restated SITEL Corporation Employee Stock Purchase Plan.
(10)      10.11       Amended Credit Agreement with Bankers Trust Company.
(16)      10.11(a)    First Amendment dated as of June 19, 1998 to Amended Credit Agreement.
(20)      10.11(b)    Second Amendment dated as of September 30, 1998 to Amended Credit Agreement.
(26)      10.11(c)    Third Amendment dated as of September 30, 1999 to Amended Credit Agreement.
(11)      10.12       Indenture governing $100,000,000 9 1/4% Senior Subordinated Notes due 2006.
(17)      10.12(a)    First Supplemental Indenture
(15)      10.12(b)    Registration Rights Agreement
          10.13       Amended and Restated Employment Agreement with James F. Lynch.
          10.14       Employment Agreement with Antoon Vanparys
          21          Subsidiaries.
          23.1        Consent of KPMG LLP
          27          Financial Data Schedule.
-------------------------------------
<FN>
                           (1)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Registration Statement on Form S-1 (Registration No. 33-91092).

                           (2)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Form 10-Q for the quarter ended August 31, 1995.

                                       27
<PAGE>

                           (3)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Registration Statement on Form S-8 (Registration No. 33-99434).

                           (4)      Previously filed as Appendix B to the Company's definitive Proxy Statement for
                                    the Annual Meeting of Stockholders, filed on September 27, 1996.

                           (5)      Previously filed as Exhibit 4.1(a) to the Company's Registration Statement on
                                    Form S-3 (Registration No. 333-13403).

                           (6)      Previously filed as an exhibit under the same exhibit number to the Company's
                                    Annual Report on Form 10-K for the year ended December 31, 1996.

                           (7)      Previously filed as Appendix B to the Company's definitive Proxy Statement for
                                    the Annual Meeting of Stockholders, filed on April 30, 1997.

                           (8)      Previously filed as Appendix C to the Company's definitive Proxy Statement for
                                    the Annual Meeting of Stockholders, filed on April 30, 1997.

                           (9)      Previously filed as Exhibit 4.2 to the Company's Registration Statement on
                                    Form S-3 (Registration No. 333-28131).

                           (10)     Previously filed as Exhibit 10.1 to the Company's Form 8-K filed on March 16, 1998.

                           (11)     Previously filed as Exhibit 10.2 to the Company's Form 8-K filed on March 16, 1998.

                           (12)     Previously filed as Exhibit 10.3(c) to the Company's Form 10-Q for the quarter
                                    ended March 31, 1998.

                           (13)     Previously filed as an exhibit under the same exhibit number to the Company's
                                    Form 10-Q for the quarter ended March 31, 1998.

                           (14)     Previously filed as Exhibit 10.12 to the Company's Form 10-Q for the quarter
                                    ended March 31, 1998.

                           (15)     Previously filed as Exhibit 4.2 to the Company's Registration Statement on
                                    Form S-4 filed on April 24, 1998.

                           (16)     Previously filed as Exhibit 10.1 to the Company's Form 8-K filed on July 1, 1998.

                           (17)     Previously filed as Exhibit 4.2 to the Company's Amendment No. 1 to Form S-4
                                    filed on August 21, 1998.

                           (18)     Previously filed as Exhibit A to the Rights Agreement included as Exhibit 1 to
                                    the Company's Registration Statement on Form 8-A filed on August 24, 1998.

                                       28
<PAGE>

                           (19)     Previously filed as Exhibit 1 to the Company's Registration Statement on Form
                                    8-A filed on August 24, 1998.

                           (20)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1998.

                           (21)     Previously filed as Exhibit 3.2 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1998.

                           (22)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended March 31, 1999.

                           (23)     Previously filed as Exhibit 4.1 to the Company's Registration Statement on
                                    Form S-8 (Registration No. 333-78241).

                           (24)     Previously filed as Exhibit 4.2 to the Company's Registration Statement on
                                    Form S-8 (Registration No. 333-78241).

                           (25)     Previously filed as Exhibit 10.2 to the Company's Form 10-Q for the quarter
                                    ended June 30, 1999.

                           (26)     Previously filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter
                                    ended September 30, 1999.
</FN>
</TABLE>

                                       29
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                 Index to Consolidated Financial Statements and
                         Financial Statement Schedules

Consolidated Financial Statements
---------------------------------

Independent Auditors' Report.................................................F-2

Consolidated Balance Sheets at December 31, 1998 and 1999................... F-3

Consolidated Statements of Income (Loss) For The Years Ended
December 31, 1997, 1998 and 1999............................................ F-4

Consolidated Statements of Stockholders' Equity For The Years Ended
December 31, 1997, 1998 and 1999............................................ F-5

Consolidated Statements of Cash Flows For The Years Ended December 31,
1997, 1998, and 1999........................................................ F-6

Notes to Consolidated Financial Statements.................................. F-7

Financial Statement Schedules
-----------------------------

Independent Auditors' Report................................................ S-1

Schedule II - Valuation and Qualifying Accounts............................. S-2

                                      F-1
<PAGE>
                          Independent Auditors' Report
                          ----------------------------

The Board of Directors
SITEL Corporation:

     We have  audited  the  accompanying  consolidated  balance  sheets of SITEL
Corporation  and  subsidiaries as of December 31, 1998 and 1999, and the related
consolidated  statements of income (loss),  stockholders' equity, and cash flows
for each of the years in the three-year  period ended  December 31, 1999.  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 in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all  material  respects,  the  financial  position of SITEL
Corporation  and  subsidiaries as of December 31, 1998 and 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

                                                      KPMG LLP

Omaha, Nebraska
February 7, 2000

                                      F-2                            (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                              DECEMBER 31,
                                                                                         ---------------------
                              ASSETS                                                        1998        1999
                                                                                            ----        ----

Current assets:
<S>                                                                                      <C>         <C>
     Cash and cash equivalents                                                           $  14,472   $  22,305
     Trade accounts receivable (net of allowance for doubtful accounts of
       $3,970 and $5,622 in 1998 and 1999, respectively)                                   129,809     164,473
     Prepaid expenses                                                                        5,257       7,997
     Deferred income taxes                                                                   1,658       1,950
     Other assets                                                                            6,024       7,825
                                                                                         ---------   ---------
                     Total current assets                                                  157,220     204,550

Property and equipment, net                                                                127,613     118,349
Goodwill, net                                                                               93,288      85,258
Deferred income taxes                                                                       15,425      15,649
Other assets                                                                                12,064       8,440
                                                                                         ---------   ---------
                     Total assets                                                        $ 405,610   $ 432,246
                                                                                         =========   =========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable                                                                       $  30,545   $   7,337
     Current portion of long-term debt                                                       3,671       2,838
     Current portion of capitalized lease obligations                                        3,650       4,308
     Trade accounts payable                                                                 30,784      37,592
     Income taxes payable                                                                    3,875       7,135
     Accrued wages, salaries and bonuses                                                    15,620      19,893
     Accrued operating expenses                                                             23,527      28,922
     Deferred revenue and other                                                              3,888       9,141
                                                                                         ---------   ---------
                     Total current liabilities                                             115,560     117,166

Long-term debt, excluding current portion                                                  107,027     136,077
Capitalized lease obligations, excluding current portion                                     9,210      12,253
Deferred compensation                                                                        1,591       1,905
Minority interest                                                                           10,368       4,147

Commitments and contingencies

Stockholders' equity:
     Common stock, voting, $.001 par value 200,000,000 shares authorized,
         64,399,645 and 68,170,828 shares issued and outstanding in 1998
         and 1999, respectively                                                                 64          68
     Paid-in capital                                                                       157,892     165,870
     Accumulated other comprehensive income                                                 (4,428)    (12,757)
     Retained earnings                                                                       8,326       7,517
                                                                                         ---------   ---------
                     Total stockholders' equity                                            161,854     160,698
                                                                                         ---------   ---------
                     Total liabilities and stockholders' equity                          $ 405,610   $ 432,246
                                                                                         =========   =========
</TABLE>
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                      F-3
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED DECEMBER 31,
                                                              -----------------------------------
                                                                  1997        1998         1999
                                                                  ----        ----         ----
<S>                                                            <C>          <C>          <C>
Revenues                                                       $ 491,474    $ 586,318    $ 737,522
                                                               ---------    ---------    ---------
Operating expenses:
     Cost of services                                            270,942      331,586      397,250
     Selling, general and administrative expenses                185,589      235,900      312,376
     Asset impairment and restructuring expenses                  15,681        6,607        9,596
                                                               ---------    ---------    ---------
                Total operating expenses                         472,212      574,093      719,222
                                                               ---------    ---------    ---------
                Operating income                                  19,262       12,225       18,300
                                                               ---------    ---------    ---------

Other income (expense):
     Interest income                                                 561          925          523
     Interest expense                                             (5,657)     (13,672)     (13,308)
     Other income, net                                               126          263          316
                                                               ---------    ---------    ---------
                Total other income (expense)                      (4,970)     (12,484)     (12,469)
                                                               ---------    ---------    ---------

Income (loss) before income taxes and minority interest           14,292         (259)       5,831
Income tax expense                                                11,306          966        6,336
Minority interest                                                    174         (651)         304
                                                               ---------    ---------    ---------
                Net income (loss) from continuing operations       2,812         (574)        (809)

Extraordinary loss on refinancing of debt, net of taxes               --         (514)          --
                                                               ---------    ---------    ---------
                Net income (loss)                              $   2,812    $  (1,088)   $    (809)
                                                               =========    =========    =========
Income (loss) from continuing operations per common share:
     Basic                                                     $    0.05    $   (0.01)   $   (0.01)
     Diluted                                                   $    0.04    $   (0.01)   $   (0.01)

Income (loss) per common share:
     Basic                                                     $    0.05    $   (0.02)   $   (0.01)
     Diluted                                                   $    0.04    $   (0.02)   $   (0.01)

Weighted average common shares outstanding:
     Basic                                                        61,764       63,888       66,550
     Diluted                                                      68,811       63,888       66,550
</TABLE>
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                      F-4
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For The Years Ended December 31, 1997, 1998, and 1999
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                       ACCUMULATED
                                                                          OTHER       RETAINED      TOTAL
                                                 COMMON     PAID-IN    COMPREHENSIVE  EARNINGS   STOCKHOLDERS'
                                                 STOCK      CAPITAL       INCOME      (DEFICIT)     EQUITY
                                                 -----      -------       ------      ---------     ------
<S>                                             <C>         <C>         <C>          <C>          <C>
BALANCE, DECEMBER 31, 1996                      $      59   $ 117,736   $   2,328    $   6,602    $ 126,725
Issuance of 1,891,562 shares of common stock
     for options exercised                              2         226          --           --          228
Tax benefit of stock options exercised                 --       7,685          --           --        7,685
Issuance of 2,332,375 shares of common stock
     for acquisitions                                   2      29,679          --           --       29,681
Comprehensive income (loss):
     Net income                                        --          --          --        2,812        2,812
     Currency exchange adjustment                      --          --      (7,798)          --       (7,798)
     Change in unrealized gain, net of taxes           --          --        (945)          --         (945)
                                                                                                  ---------
     Total comprehensive income (loss)                 --          --          --           --       (5,931)
                                                ---------   ---------   ---------    ---------    ---------
BALANCE, DECEMBER 31, 1997                             63     155,326      (6,415)       9,414      158,388
Issuance of 1,192,348 shares of common stock
     for options exercised                              1           2          --           --            3
Tax benefit of stock options exercised                 --       2,175          --           --        2,175
Issuance of  41,353 shares of common stock
     for acquisitions                                  --         295          --           --          295
Other                                                  --          94          --           --           94
Comprehensive income (loss):
     Net loss                                          --          --          --       (1,088)      (1,088)
     Currency exchange adjustment                      --          --       2,059           --        2,059
     Change in unrealized gain, net of taxes           --          --         (72)          --          (72)
                                                                                                  ---------
     Total comprehensive income (loss)                 --          --          --           --          899
                                                ---------   ---------   ---------    ---------    ---------
BALANCE, DECEMBER 31, 1998                             64     157,892      (4,428)       8,326      161,854
Issuance of 1,616,087 shares of common stock
     for options exercised                              2         769          --           --          771
Tax benefit of stock options exercised                 --         541          --           --          541
Issuance of  2,205,333 shares of common stock
     for acquisition of minority interest               2       6,614          --           --        6,616
Other                                                  --          54          --           --           54
Comprehensive income (loss):
     Net loss                                          --          --          --         (809)        (809)
     Currency exchange adjustment                      --          --      (8,329)          --       (8,329)
                                                                                                  ---------
     Total comprehensive income (loss)                 --          --          --           --       (9,138)
                                                ---------   ---------   ---------    ---------    ---------
BALANCE, DECEMBER 31, 1999                      $      68   $ 165,870   $ (12,757)   $   7,517    $ 160,698
                                                =========   =========   =========    =========    =========
</TABLE>
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                      F-5
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                           FOR THE YEARS ENDED DECEMBER 31,
                                                                         ------------------------------------
                                                                             1997         1998         1999
                                                                             ----         ----         ----
Cash flows from operating activities:
<S>                                                                      <C>          <C>          <C>
    Net income (loss)                                                    $   2,812    $  (1,088)   $    (809)
    Adjustments to reconcile net income (loss) to net cash provided by
       operating activities:
          Extraordinary loss on refinancing of debt                             --          792           --
          Asset impairment and restructuring provision                      15,513        4,100        9,596
          Depreciation and amortization                                     28,687       40,355       45,996
          Provision for deferred income taxes                               (1,498)      (2,816)        (516)
          Deferred compensation                                                (53)         184          314
          Gain on sale of marketable securities                               (407)        (208)          --
          Change in assets and liabilities:
             Trade accounts receivable                                     (36,977)     (18,123)     (38,915)
             Other assets                                                   (7,677)       2,482       (4,423)
             Trade accounts payable                                          5,694        4,063        7,623
             Other liabilities                                              12,920      (11,998)      20,449
                                                                         ---------    ---------    ---------
             Net cash provided by operating activities                      19,014       17,743       39,315
                                                                         ---------    ---------    ---------
Cash flows from investing activities:
    Purchases of property and equipment                                    (69,437)     (52,033)     (38,585)
    Proceeds from sale-leasebacks of facilities and equipment                   --        9,397        3,467
    Proceeds from sales of property and equipment                            2,711        1,513          639
    Acquisitions, net of cash acquired                                     (47,023)      (2,193)          --
    Settlement of purchase price payable                                   (13,934)          --           --
    Sale of marketable securities                                              558          257           --
    Changes in other assets, net                                            (4,228)          --           --
                                                                         ---------    ---------    ---------
             Net cash used in investing activities                        (131,353)     (43,059)     (34,479)
                                                                         ---------    ---------    ---------
Cash flows from financing activities:
    Borrowings on notes payable                                             83,307       20,294        3,706
    Repayments of notes payable                                            (68,440)      (4,398)     (26,174)
    Borrowings  on long-term debt                                          360,398      149,917       57,789
    Repayment of long-term debt                                           (260,499)    (149,399)     (29,823)
    Payment of long-term debt issuance costs                                    --       (3,228)          --
    Payments on capital lease obligations                                   (2,211)      (5,061)      (5,056)
    Common stock issued, net of expenses                                       228            3          771
    Capital contribution from subsidiary shareholder                            --        1,400           --
    Sale of stock of subsidiaries                                               --        6,541           --
    Other                                                                      900           (9)         (63)
                                                                         ---------    ---------    ---------
             Net cash provided by financing activities                     113,683       16,060        1,150
                                                                         ---------    ---------    ---------
Effect of exchange rates on cash                                            (2,769)        (557)       1,847
                                                                         ---------    ---------    ---------
             Net increase (decrease) in cash                                (1,425)      (9,813)       7,833
Cash and cash equivalents, beginning of year                                25,710       24,285       14,472
                                                                         ---------    ---------    ---------
Cash and cash equivalents, end of year                                   $  24,285    $  14,472    $  22,305
                                                                         =========    =========    =========
Supplemental disclosures of cash flow information:
    Interest paid                                                        $   4,712    $   8,986    $  12,170
    Income taxes paid                                                    $   7,859    $   6,235    $   2,654
</TABLE>
Supplemental disclosures of non-cash investing and financing activities:
     The tax benefit of stock options  exercised was $7,685,  $2,175 and $541 in
     1997, 1998 and 1999, respectively.
     The Company  incurred  capitalized  leases of  $13,225,  $757 and $9,015 in
     1997, 1998 and 1999, respectively.
     The Company issued stock in connection  with the  acquisition of businesses
     and  minority  interest  with a value of $29,681,  $295 and $6,616 in 1997,
     1998 and 1999, respectively.

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                      F-6
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies and Practices:

     (a) Description of Business.  SITEL Corporation  ("SITEL") and subsidiaries
(collectively,  the "Company") provide customer relationship management services
in North America,  Europe,  Asia Pacific and Latin  America.  The Company finds,
acquires and retains  customers and helps  enhance and grow these  relationships
through a variety of  value-added  services via electronic  media  including the
telephone and the  Internet,  and, to a lesser  extent,  traditional  mail.  The
Company  provides  services to clients  principally  in the consumer,  financial
services, insurance, telecommunications, technology and utilities sectors.

     (b) Principles of  Consolidation.  The  consolidated  financial  statements
include the financial statements of SITEL Corporation and its subsidiaries.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

     (c) Translation of Foreign Currencies. The Company's non-U.S. subsidiaries,
except in  Mexico  prior to 1999,  use as their  functional  currency  the local
currency of the  countries in which they operate.  Their assets and  liabilities
are translated into U.S.  dollars at the exchange rates in effect at the balance
sheet date.  Revenues  and  expenses  are  translated  at the  average  rates of
exchange prevailing during the period. Translation gains and losses are included
as a component of equity.  Transaction  gains and losses  related to  short-term
intercompany accounts are included in the determination of net income.

     Prior to 1999, the Company's  subsidiary in Mexico used the U.S.  dollar as
its functional currency.  In 1997 and 1998, the effect of remeasurement into the
functional  currency was not material and was included in the  determination  of
net income (loss).

     (d) Revenue  Recognition.  The Company recognizes  revenues as services are
performed for its clients. Certain contracts allow for the provision of services
whereby the Company is able to invoice and receive  payment for its  services in
advance of the performance of those services. Such advance payments are recorded
as deferred revenue until such time as the services are performed.

     (e) Cash Equivalents.  Cash equivalents  generally consist of highly liquid
debt instruments purchased with an original maturity of three months or less.

     (f) Accounts  Receivable.  Current receivables include unbilled revenues of
$23.6  million and $34.1  million at December  31, 1998 and 1999,  respectively.
These items are  expected  to be billed and  collected  in the normal  course of
business.

     (g) Property and  Equipment.  Property  and  equipment  are stated at cost.
Equipment  under capital  leases is stated at the present value of minimum lease
payments.  Depreciation  is  calculated  on the  straight-line  method  over the
estimated  useful  lives of the assets  which  range from 3 to 20 years.  Assets
recorded for leasehold  improvements and under capital leases are amortized on a
straight-line  basis over the shorter of the lease term or estimated useful life
of the asset.

                                 F-7                                 (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (h)  Income  Taxes.  Income  taxes  are  accounted  for under the asset and
liability  method.  Deferred tax assets and  liabilities  are recognized for the
future tax  consequences  attributable  to  differences  between  the  financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective tax bases and operating loss and tax credit  carryforwards.  Deferred
tax assets and  liabilities  are measured  using  enacted tax rates  expected to
apply to taxable income in the years in which those  temporary  differences  are
expected  to be  recovered  or settled.  The effect on  deferred  tax assets and
liabilities  of a change in tax rates is recognized in income in the period that
includes the enactment date. Valuation allowances,  if any, are established when
necessary  to reduce  deferred tax assets to the amount that is more likely than
not to be  realized.  Income  taxes are not accrued for  unremitted  earnings of
international  operations  that have been,  or are  intended  to be,  reinvested
indefinitely.

     (i)  Goodwill.  Goodwill  consists of the  difference  between the purchase
price incurred in  acquisitions  using the purchase method of accounting and the
fair value of net assets acquired and is being amortized using the straight-line
method over 25 years.  Accumulated amortization of goodwill at December 31, 1998
and 1999 was $8.8 million and $12.2 million,  respectively. The Company monitors
events and changes in  circumstances  which may require a review of the carrying
value  of  goodwill  at  each   consolidated   balance   sheet  date  to  assess
recoverability  based on estimated  undiscounted  future  operating  cash flows.
Impairments are recognized in operating  results when a permanent  diminution in
value  occurs  based on fair value.  The  assessment  of the  recoverability  of
goodwill  will be  impacted if  estimated  future  operating  cash flows are not
achieved.

     (j) Income (Loss) Per Share.  Income (loss) per common share is computed by
dividing net income (loss) by the weighted  average  number of common shares and
common  equivalent  shares  outstanding  during each period.  The  difference in
shares utilized in calculating basic and diluted income per share represents the
number of shares  assumed  to be issued  from the  exercise  of  dilutive  stock
options  under the  Company's  stock  option  plans  less  shares  assumed to be
purchased  with  proceeds from the exercise of the stock options and the related
tax benefit  credited to additional  paid-in  capital.  There are no reconciling
items between the  Company's  reported net income or loss and net income or loss
used in the computation of basic and diluted income (loss) per share.

     (k)  Use  of  Estimates.  The  preparation  of the  consolidated  financial
statements in conformity with generally accepted accounting  principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and disclosures of contingent  assets and liabilities at
the date of the  consolidated  financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

     (l) Stock  Compensation.  The Company recognizes  stock-based  compensation
expense using the intrinsic  value method.  Under that method,  no  compensation
expense is recorded if the exercise  price of the employee  stock options equals
or exceeds the market price of the  underlying  stock on the date of grant.  For
disclosure purposes, pro forma net income (loss) and income (loss) per share are
provided as if the fair value method had been applied.

     (m)  Financial  Instruments.  Fair  values  of cash and  cash  equivalents,
accounts receivable,  accounts payable,  marketable  securities,  long term debt
(primarily  with  variable  interest  rates)  other  than the  Company's  Senior
Subordinated Notes due 2006 (the "Notes"),  capital leases and notes payable are
estimated to approximate  carrying  values due to the short  maturities or other
characteristics of these financial instruments.  The fair value of the Notes was
approximately  $91 million at December  31, 1999,  based on market  transactions
near that date.

                                      F-8                            (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     During 1997, the Company entered into forward contracts  designed to manage
the  Company's  exposure to  fluctuations  in the value of currencies of certain
foreign  countries  in which  the  Company  had  significant  operations.  These
contracts were marked to market with gains or losses recognized in the Company's
statements  of income  (loss) as other income  (expense).  Such amounts were not
material.

     During 1998 and 1999,  SITEL also entered into forward  exchange  contracts
designed  to manage  the  Company's  exposure  to  fluctuations  in the value of
currencies  of  certain  foreign   countries   where  it  had   foreign-currency
denominated short-term  intercompany loans. The forward contracts were marked to
market with gains or losses  recognized  in the  Company's  statements of income
(loss) as other income (expense). Such amounts were not material.

     (n) Comprehensive Income (Loss). The Company's  comprehensive income (loss)
was $(5.9)  million,  $0.9 million and $(9.1)  million for 1997,  1998 and 1999,
respectively.  The difference  between the Company's  reported net income (loss)
and comprehensive income (loss) for those periods is primarily due to the change
in the currency exchange adjustment.  The accumulated other comprehensive income
included in the Company's  consolidated  balance sheets at December 31, 1998 and
1999 is primarily the accumulated currency exchange adjustment.

     (o) Reclassifications.  Certain amounts from 1998 have been reclassified to
conform to the current year's presentation.

2.   Acquisitions:

     In January 1997, the Company acquired all of the outstanding  capital stock
of Telebusiness  Holdings,  a systems integration company based in Australia and
New Zealand.  In February 1997, the Company  acquired  substantially  all of the
assets of Exton  Technology  Group, a  teleservicing  technical  support company
based in Madison,  Wisconsin.  In March 1997,  the Company  acquired  all of the
outstanding  stock of Levita Group Pty Ltd., an Australian  based  teleservicing
company, and all of the outstanding stock of L&R Group Limited, a United Kingdom
based  teleservicing  consulting  firm. In May 1997, the Company acquired all of
the  outstanding  stock of Support  Systems  Developers,  Inc.,  a  teleservices
technical support company based in Vienna,  Virginia.  In July 1997, the Company
acquired  all of the  outstanding  stock of  Svanberg & Co.  Intressenter  AB, a
teleservices  firm based in Sweden.  In September 1997, the Company acquired all
of the outstanding  stock of Telephone  Marketing  Services  (Ireland),  Ltd., a
teleservices firm based in Ireland. In November 1997, the Company acquired a 49%
equity interest in Grupo de Commercialization  Integrada S.A. de C.V. ("GCI"), a
teleservicing subsidiary of Corporacion Interamericana de Entretenimiento,  S.A.
de C.V. ("CIE"), an event promotion and management company in Latin America. The
terms of the  acquisition  provided for the Company's  effective  control of GCI
through the Company's  ability to elect a majority of the board of directors and
through  responsibility  of the  board  for the  day-to-day  operations  of GCI.
Therefore,  the Company has accounted for the transaction as an acquisition of a
subsidiary and  consolidated  the results of operations of GCI since the date of
acquisition. Under the terms of the acquisition, the other shareholder of GCI is
also provided certain protective rights which, in the opinion of management,  do
not impair the Company's  ability to effectively  exercise its control over GCI.
Those  protective  rights  include the ability of the other  shareholder to veto
actions of the subsidiary  resulting in its dissolution or  reorganization,  its
filing of bankruptcy or insolvency, sale of a significant portion of its assets,
amendment to its by-laws,  issuance of additional  capital stock or  significant
reacquisition  of its capital stock,  and its  contracting  with related parties
among other rights.

                                      F-9                            (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The total cost of the Company's 1997 acquisitions was  approximately  $76.7
million,  subject to certain  adjustments  and excluding  transaction  costs and
liabilities   assumed.   Included  in  the  total  cost  was  the   issuance  of
approximately  2.3  million  shares  of the  Company's  common  stock  valued at
approximately $29.7 million.  These 1997 acquisitions have been accounted for as
purchases  and  accordingly,  the  acquired  assets  and  liabilities  have been
recorded at their  estimated  fair values at the dates of  acquisition,  and the
results  of  operations  have been  included  in the  accompanying  consolidated
financial statements since the dates of acquisition. The total purchase price in
excess of the fair  market  value of the net assets  acquired  was  recorded  as
goodwill ($65.6 million).

     In May, 1998, the Company  acquired all of the outstanding  stock of MSC 24
S.A.,  which  owned  100%  of  Intuiparc   Assistance  S.A.   ("Intuiparc"),   a
teleservicing company based in France, through the payment of approximately $1.5
million in cash, including  acquisition costs, and the issuance of approximately
41,000 shares of stock valued at approximately $0.3 million.  The acquisition of
Intuiparc has been accounted for as a purchase.  Accordingly, the purchase price
has been allocated to the assets and liabilities  acquired based upon their fair
values at the date of  acquisition  and the results of  operations  of Intuiparc
have been included in the  consolidated  results of operations since the date of
acquisition.  Goodwill of approximately $2.5 million was recorded for the excess
of  purchase  price  over the fair value of net  assets  acquired.  Prior to the
acquisition date, the results of operations of Intuiparc were not significant.

3.   Sale and Reacquisition of Stock of Subsidiaries:

     During 1998 the Company  sold newly  issued  stock of certain  subsidiaries
located in the Asia Pacific region to Lend Lease  Corporation  Limited,  Sydney,
Australia  and  certain  of its  subsidiaries  ("Lend  Lease").  Lend Lease paid
approximately  $6.6  million  for a 20%  interest in these  subsidiaries,  which
provide outsourced call center solutions throughout the region.

     In  June  1999,  the  Company  reacquired  the  minority  interest  in such
subsidiaries from Lend Lease in exchange for 2.2 million shares of the Company's
common  stock.  Additionally,  Lend Lease  purchased  1.5 million  shares of the
Company's  common  stock for $4.5  million  in cash  from two SITEL  Corporation
shareholders  in a related  transaction.  The shares  issued by the Company were
valued at $6.6 million, based on quoted market prices of the Company's stock.

4.   Property and Equipment:

     Property  and  equipment  at December  31, 1998 and 1999  consisted  of the
following:

                                                       (in thousands)
                                                    1998            1999
                                                -------------    ------------

Computer equipment and software              $       131,362  $      148,737
Furniture, equipment and other                        42,690          43,828
Leasehold improvements                                24,596          31,467
Buildings                                             13,464          11,789
Other                                                    459             324
                                                -------------    ------------
                                                     212,571         236,145
     Less accumulated depreciation                    84,958         117,796
                                                -------------    ------------
                                             $       127,613  $      118,349
                                                =============    ============

                                      F-10                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.   Long-term Debt:

     Long-term debt at December 31, 1998 and 1999 consisted of the following:
<TABLE>
<CAPTION>
                                                                                         (in thousands)
                                                                                      1998            1999
                                                                                  ------------    ------------
<S>                                                                            <C>             <C>
9.25% Senior Subordinated Notes due in
     March, 2006                                                               $      100,000  $      100,000

Long-term revolving credit facility at variable interest rates
     (8.5% at December 31, 1999)                                                        3,500          30,000

Various notes payable acquired at acquisition of GCI, with variable
     interest rates (22.6% at December 31, 1999)                                        1,288             290

Other notes payable with weighted-average interest rates of 6.1% at
     December 31, 1999                                                                  5,910           8,625
                                                                                  ------------    ------------
                                                                                      110,698         138,915

Less current portion                                                                    3,671           2,838
                                                                                  ------------    ------------
                Total                                                          $      107,027  $      136,077
                                                                                  ============    ============
</TABLE>

     In March 1998, the Company  completed the private placement of $100 million
of 9.25% Senior Subordinated Notes due 2006 (the "Notes"). The proceeds from the
offering were used to repay  borrowings  outstanding  under the  Company's  then
outstanding long term revolving credit facility (the "Credit  Facility"),  which
was also amended on that date.

     The  Notes  which  include  interest  payable  semiannually,   are  general
unsecured obligations of the Company and are subordinated in right of payment to
all existing and future senior debt of the Company.  The Notes are guaranteed by
certain of the Company's  subsidiaries and contain certain  covenants that limit
the  ability of the  Company and  certain of its  subsidiaries  to,  among other
things,  incur  additional  indebtedness,  pay  dividends or make certain  other
restricted  payments,   consummate  certain  asset  sales,  enter  into  certain
transactions  with  affiliates,  incur liens,  merge or consolidate with another
company and sell or otherwise  dispose of all or substantially all of the assets
of the Company.

     The Notes are redeemable, at the Company's option, in whole or in part from
time to time on or after March 15,  2002.  If redeemed  during the  twelve-month
period commencing on March 15 of the year set forth below, the redemption prices
are as follows,  plus in each case, accrued and unpaid interest thereon, if any,
to the date of redemption:

  Year                                                        Percentage
---------                                                    --------------

2002                                                            104.63%
2003                                                            103.08%
2004                                                            101.54%
2005 and thereafter                                             100.00%

                                      F-11                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In addition,  the Company may redeem up to 35% of the  aggregate  principal
amount of the Notes at any time on or prior to March 15,  2001 at 109.25% of the
principal amount thereof, plus accrued interest to the date of redemption,  from
the net proceeds of one or more public equity offerings,  as defined. Also, upon
a change of control of the Company,  as defined,  the Company may be required to
repurchase the Notes at a price equal to 101% of the principal  amount  thereof,
plus accrued interest to the date of repurchase.

     In  connection  with the  repayment  of the amounts due under the  existing
Credit  Facility  from the  proceeds of the Notes,  the Company  also reached an
agreement with a syndicate of commercial  banks to amend the Company's  existing
Credit  Facility in 1998.  Certain of the financial  covenants and  restrictions
from the existing  facility  were amended and the  Company's  eligible  domestic
accounts receivable were pledged as security.  The amended facility provides for
interest payable monthly on outstanding borrowings and a variable commitment fee
paid quarterly on any unused balances.  The obligations of the Company under the
facility have been  guaranteed by the Company's  domestic  subsidiaries  and are
secured by a pledge of the  Company's  shares in such  subsidiaries  and certain
other foreign  subsidiaries.  The facility contains certain financial  covenants
and certain  restrictions on, among other things, the Company's ability to incur
additional debt, pay dividends or make certain other restricted  payments,  make
certain investments, and sell assets or merge with another company. The facility
becomes  due and  payable  upon a change of control of the Company as defined in
the facility  agreement.  The  borrowings  were limited under the amended Credit
Facility to an amount based upon a percentage of the Company's eligible domestic
accounts  receivable,  as  defined,  up to  $75  million.  As a  result  of  the
amendment,  the Company recognized an extraordinary  charge of $514,000,  net of
tax,  to  write  off  the  deferred  costs  of the  original  Credit  Agreement.
Additionally,  in 1998  and  1999,  the  Company  sought  and  obtained  certain
modifications to the amended Credit Facility to permit continued availability of
borrowing under such facility.  In connection with the  modification in 1998 the
total available was reduced to $50 million. As of December 31, 1999, the Company
was in  compliance  with all of the covenants  and  restrictions  of the amended
facility.

     Additionally,  several  international lines of credit are available to fund
local  working  capital   requirements.   The  maximum  borrowings  under  these
facilities  are $22.3  million.  At  December  31,  1999,  the  total  amount of
short-term  notes payable  outstanding  under these  facilities was $7.3 million
with a  weighted-average  interest rate of 4.4%.  The Company had total domestic
and international  unused lines of credit of $19.7 million at December 31, 1999.
The Company obtained an additional  international line of credit in January 2000
of $8.1 million.

     The  aggregate  maturities  of  long-term  debt for each of the five  years
following December 31, 1999 are as follows:

                                                    (in thousands)
                                                    Maturities of
                                                      Long-term
Year Ending December 31,                                 Debt
--------------------------------                   -----------------

2000                                                $         2,838
2001                                                          4,857
2002                                                          1,220
2003                                                         30,000
2004 and thereafter                                         100,000

                                      F-12                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.   Income Taxes:

     For financial reporting purposes,  income (loss) from continuing operations
before income taxes and minority interest includes the following components:

                                                 (in thousands)
                                        For The Years Ended December 31,
                                      1997            1998           1999
                                   ------------    ------------   ------------
Pretax income (loss):
     United States              $       15,005  $        9,958  $      12,001
     Foreign                              (713)        (10,217)        (6,170)
                                   ------------    ------------   ------------
                   Total        $       14,292  $         (259) $       5,831
                                   ============    ============   ============

     The  components of the provision for income tax expense  (benefit)  consist
of:

                                                   (in thousands)
                                           For The Years Ended December 31,
                                           1997          1998          1999
                                        -----------  ------------   -----------
Current:
     Federal                           $    5,805  $      1,899  $       2,740
     Foreign                                7,112         1,950          3,699
     State                                   (113)          (67)           413
                                        ----------  ------------   ------------
                                           12,804         3,782          6,852
Deferred:
     Federal                                1,237           960          1,716
     Foreign                               (2,735)       (3,776)        (2,232)
     State                                     --            --             --
                                        ----------  ------------   ------------
                                           (1,498)       (2,816)          (516)
                                        ----------  ------------   ------------
Provision for income tax expense       $   11,306  $        966  $       6,336
                                        ==========  ============   ============

     In 1998 a tax benefit of $0.3 million was  allocated  to the  extraordinary
loss on the refinancing of debt.  Certain of the income tax benefits  related to
the exercise of stock options reduce taxes currently payable and are credited to
paid-in  capital.  The amount  credited was $7.7 million,  $2.2 million and $0.5
million in 1997, 1998 and 1999, respectively.

                                      F-13                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The tax  effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets and deferred tax  liabilities  are presented
below:
<TABLE>
<CAPTION>
                                                                                        (in thousands)
                                                                                          December 31,
                                                                                     1998            1999
                                                                                  ------------    ------------
Deferred tax assets:
<S>                                                                            <C>             <C>
     Accrued compensation and other liabilities                                $        9,013  $        7,611
     Net operating loss and other credit carryforwards                                  2,984           2,908
     Net operating losses related to international operations                           4,680           5,193
     Depreciation timing differences related to international operations                1,529           3,249
     Other                                                                                696             928
                                                                                  ------------    ------------
                Total deferred tax assets                                              18,902          19,889
                                                                                  ------------    ------------

Deferred tax liabilities:
     Leased assets and depreciation                                                     1,358           1,648
     Other                                                                                461             642
                                                                                  ------------    ------------
                Total deferred tax liabilities                                          1,819           2,290
                                                                                  ------------    ------------
                Net deferred tax assets                                        $       17,083  $       17,599
                                                                                  ============    ============
</TABLE>
     The Company has not recorded a valuation  allowance related to its deferred
tax assets.  Based upon the Company's  current and historical  pretax  earnings,
adjusted for significant  deductions estimated to be available from the exercise
of nonqualified stock options,  management  believes that it is more likely than
not that the Company will generate  sufficient  taxable  income to fully realize
the benefits of its recorded deferred tax assets.

     At December  31,  1999,  the Company had U.S.  Federal net  operating  loss
carryforwards  of $0.9 million,  which expire in 2004. At December 31, 1999, the
Company had $5.2 million in foreign net operating  losses, of which $3.5 million
expire  in  2002  and  the  remaining  $1.7  million  can  be  carried   forward
indefinitely.  At December 31,  1999,  the Company had  alternative  minimum tax
credit carryforwards of approximately $3.0 million.

                                      F-14                           (Continued)
<PAGE>

                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The reconciliation  between the Company's income tax expense as reported in
the  accompanying  consolidated  financial  statements  and that which  would be
calculated  applying the U.S.  Federal  income tax rate of 34% on pretax  income
(loss) is as follows:
<TABLE>
<CAPTION>
                                                                                (in thousands)
                                                                       For The Years Ended December 31,
                                                                     1997            1998           1999
                                                                  ------------    ------------   ------------

<S>                                                            <C>             <C>             <C>
Expected Federal income taxes                                  $        4,859  $          (88) $       1,983
State taxes, net of Federal effect                                        (74)            (44)           325
Amortization of goodwill                                                  159             222            350
Impact of foreign operations, including goodwill                        1,278           1,647          1,199
State incentive tax credits (see note 12)                               1,446              --             --
Impairment losses on intangible assets                                  3,400              --          2,181
Other                                                                     238            (771)           298
                                                                  ------------    ------------   ------------
                Total                                          $       11,306  $          966  $       6,336
                                                                  ============    ============   ============
</TABLE>

7.   Lease Obligations:

     The Company is  obligated  under  various  capital  leases for property and
certain equipment that expire at various dates through 2015.  Capitalized leased
property and  equipment  included in property and  equipment  was  approximately
$11.8 million and $17.5 million at December 31, 1998 and 1999, respectively, net
of accumulated amortization.

     The Company also leases property and certain equipment under  noncancelable
operating  lease  arrangements  which expire at various dates through 2014. Rent
expense was approximately $15.4 million, $23.0 million and $26.3 million for the
years ended December 31, 1997,  1998 and 1999,  respectively.  Certain leases of
real property provide options to extend the lease terms.

     Future  minimum lease  payments under  noncancelable  operating  leases and
future minimum capital lease payments as of December 31, 1999 are as follows:

                                                          (in thousands)
                                                      Capital       Operating
                                                      Leases         Leases
                                                    ------------   ------------

2000                                               $      5,276  $      25,288
2001                                                      4,530         23,035
2002                                                      2,336         17,431
2003                                                      1,218         13,748
2004 and thereafter                                       7,498         48,216
                                                    ------------   ------------
                                                         20,858  $     127,718
                                                                   ============
Less amount representing interest                         4,297
                                                    ------------

Present value of net minimum lease obligations
     including current maturities of $4,308        $     16,561
                                                    ============

                                      F-15                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.   Stock-Based Compensation:

     The Company's stock option plans are described as follows:

     (a)  Stock Plan for Replacement of Existing Options  ("Replacement  Plan").
          Under this plan,  options for  4,541,780  shares were granted in 1995,
          with an  option  price  of  $.0025  per  share,  as  replacements  for
          3,110,000 options outstanding at February 28, 1995.

     (b)  Stock Option Plan ("EEB Replacement  Plan").  Under this plan, options
          for  7,381,720  shares were  granted in 1995,  with an option price of
          $.0025 per share,  as replacements  for the Company's  employee equity
          benefit  plan  ("EEB  Plan").   The  EEB  Plan  had  12,655,000  units
          outstanding with base values ranging from $0.85 to $1.71.

          The  following  applies  to  both  the  Replacement  Plan  and the EEB
          Replacement Plan (collectively, the "Replacement Plans"): Options were
          originally  exercisable in five equal annual installments from January
          1996 to May 2000.  The Company  recorded  these  option  grants to 265
          employees at the estimated fair value at date of grant ($2.91), with a
          corresponding  charge to special  compensation  expense totaling $34.6
          million in 1995.  All  options  granted  were vested as of the date of
          grant.  The optionees  were required to enter into certain  voting and
          resale  agreements which place certain  restrictions on actions of the
          optionee.  No further  options will be granted  under these plans.  On
          June 3, 1999, the Company's board of directors amended the Replacement
          Plans   and  the   Compensation   Committee   amended   the  terms  of
          approximately  6.3 million  outstanding and fully vested stock options
          issued under the Replacement  Plans.  The amendment to the Replacement
          Plans  permitted  the  Company  to extend the  expiration  date of the
          options  held  by  persons   currently   employed  by  or  serving  as
          consultants to the Company to up to ten years after the original grant
          date. Pursuant to this authority,  the Compensation Committee extended
          the  expirations of the options held by such employees and consultants
          from May 29, 2000 to May 29, 2001. All other  contractual terms of the
          options  were  unchanged.  The quoted  market  price of the  Company's
          common stock on the date of the  modification was less than the sum of
          the  exercise   price  of  the  options  and   previously   recognized
          compensation  expense  recorded upon the initial grant of the options.
          Consequently,  no compensation  expense was recorded for the amendment
          of the options.

     (c)  1999 Stock Incentive Plan ("1999 Plan"). On May 6, 1999, the Company's
          stockholders  approved the 1999 Plan which  replaced the 1995 Employee
          Stock  Option Plan and the 1995  Non-Employee  Directors  Stock Option
          Plan.  The 1999 Plan  provides  for the  granting of various  types of
          incentive  awards  (including  incentive  stock options,  nonqualified
          options, stock appreciation rights, restricted shares, and performance
          shares or units) for the  issuance of up to an  aggregate of 7,000,000
          shares of common  stock to  employees,  consultants  and  non-employee
          directors of the Company and its subsidiaries. Vesting terms vary with
          each grant, and option terms may not exceed ten years.  Option prices,
          set by the Compensation  Committee of the Board of Directors,  may not
          be less  than the fair  market  value at date of grant  for  incentive
          stock options or less than par value for  nonqualified  stock options.
          At December  31, 1999,  there were  approximately  6.2 million  shares
          available for issuance pursuant to future grants under the 1999 Plan.

                                      F-16                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (d)  1995 Employee Stock Option Plan  ("Employee  Plan").  The terms of the
          Employee Plan were substantially the same as the 1999 Plan. No further
          options will be granted under the Employee Plan.

     (e)  1995 Non-Employee  Directors Stock Option Plan ("Directors Plan"). The
          Directors Plan provided for automatic  formula grants of  nonqualified
          options to each independent director of the Company.  Each independent
          director was granted options to purchase 18,000 shares of common stock
          upon  election or  re-election  to a  three-year  term on the Board of
          Directors.  Option prices  equaled the fair market value of the common
          stock on the date of grant.  Options vested and became  exercisable in
          three equal annual  installments  commencing one year after grant.  On
          January  18,  1999,  the  Company's  Board of  Directors  amended  the
          Directors  Plan  to  permit  discretionary  grants  of  options.  Each
          independent  director  was  granted  additional  options  that date to
          purchase 67,000 shares of common stock at the fair market value of the
          common stock on the grant date. These  additional  options have a term
          of ten  years  and  become  exercisable  in  five  equal  installments
          commencing one year after grant.  The Directors Plan was  administered
          by the Board members who were not eligible to participate in the Plan.
          No further options will be granted under the Directors Plan.

     Additional information as to shares subject to options is as follows:

                                                              Weighted-
                                                               Average
                                                               Exercise
                                           Number of            Price
                                            Options           per Share
                                         ---------------     -------------

Balance, January 1, 1997                     16,377,412    $         0.44
Granted                                       6,478,211             13.08
Exercised                                    (1,891,562)             0.12
Canceled                                     (5,343,144)            15.69
                                         ---------------     -------------
Balance, December 31, 1997                   15,620,917              5.78
Granted                                       7,197,652              4.58
Exercised                                    (1,192,348)            .0025
Canceled                                     (7,721,832)            12.63
                                         ---------------     -------------
Balance, December 31, 1998                   13,904,389              1.96
Granted                                       2,038,469              4.20
Exercised                                    (1,616,087)             0.48
Canceled                                       (480,819)             3.83
                                         ---------------     -------------
Balance, December 31, 1999                   13,845,952    $         2.40
                                         ===============     =============
Exercisable at December 31, 1999              4,493,502    $         1.34
                                         ===============     =============

                                      F-17                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The number of options  granted and  canceled  in 1997 and 1998  include the
effect of amendments to the terms of pre-existing option agreements issued under
the Employee Plan. The number of options subject to the amendments and therefore
shown as granted and canceled  were  4,222,405  and  5,590,225 in 1997 and 1998,
respectively.  The  amendments to the terms of the options in both 1997 and 1998
lowered the exercise prices to prevailing  market values of the common stock and
altered certain vesting provisions of the options.

     In January 2000,  options to purchase 1,570,705 shares at an exercise price
of $6.66 per share were  granted  under the 1999 Plan.  Generally,  the  options
serially vest over five years and terminate after 10 years.

     The following table summarizes  information about stock options outstanding
at December 31, 1999.

                                              Options Outstanding
                               ------------------------------------------------
                                  Number          Weighted-
                                Outstanding at     Average          Weighted-
                                    at            Remaining          Average
Range of                         December 31,    Contractual         Exercise
Exercise Prices                    1999              Life             Price
--------------------           -------------     -------------      -----------

$.0025                            5,685,486          1.02         $     0.0025
$2.34 to $3.50                    5,701,653          7.88         $       3.39
$3.72 to $9.75                    2,370,863          7.32         $       5.32
$10.53 to $19.50                     87,950          6.73         $      16.51

                                                      Options Exercisable
                                                  ----------------------------
                                                     Exercisable    Weighted
                                                        at           Average
Range of                                            December 31,    Exercise
Exercise Prices                                       1999            Price
-----------------------                           -------------     ----------

$.0025                                               3,304,896    $    0.0025
$2.34 to $3.50                                         672,476    $      3.43
$3.72 to $9.75                                         463,990    $      6.06
$10.53 to $19.50                                        52,140    $     17.09

     The per share  weighted-average  fair value of stock options granted during
1997, 1998 and 1999, was $7.72,  $3.22 and $0.90,  respectively,  on the date of
grant  using  the   Black-Scholes   option-pricing   model  with  the  following
weighted-average assumptions:  expected dividend yield 0.0%, expected volatility
factor 30.0%,  risk-free  interest rate of 6.3%, 5.4% and 5.2% in 1997, 1998 and
1999, respectively, and an expected life of 9.0, 8.0 and 8.3 years in 1997, 1998
and 1999, respectively.

                                      F-18                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Had the Company determined compensation cost based on the fair value at the
grant date for its stock  options,  the  Company's  net income (loss) and income
(loss) per share  would have been  reduced  to the pro forma  amounts  indicated
below:

                                        (in thousands, except per share data)
                                          For The Years Ended December 31,

                                         1997           1998           1999
                                      -----------    -----------    ------------
Net income (loss):
     As Reported                   $       2,812  $      (1,088) $         (809)
     Pro Forma                            (1,473)        (2,861)         (3,346)

Income (loss) per share:
As Reported:
     Basic                         $        0.05  $       (0.02) $        (0.01)
     Diluted                                0.04          (0.02)          (0.01)
Pro Forma:
     Basic                         $       (0.02) $       (0.04) $        (0.05)
     Diluted                               (0.02)         (0.04)          (0.05)

     During  1998,  the Company  implemented  an Employee  Stock  Purchase  Plan
("ESPP") which enables eligible employees to purchase the Company's stock at 85%
of the current  market value on a quarterly  basis.  Total  purchases and shares
purchased under the ESPP were $200,000 and 56,634 shares, respectively, for 1998
and $206,000 and 52,262 shares, respectively,  for 1999. No compensation expense
has been recognized in connection with this plan.

9.   Benefit Plans:

     The Company's 401(k) plan,  adopted in January 1994,  covers  substantially
all domestic employees who are 18 years of age with 6 months or more of service.
Participants may elect to contribute 1% to 17% of compensation.  The Company may
elect to make a year end contribution to the 401(k) plan. No contributions  were
made in 1997, 1998 or 1999.

     The  Company  also  makes  contributions  to  certain  executive  and other
employee personal retirement programs,  primarily in Europe. Amounts contributed
to those plans were $0.2  million,  $1.0 million and $1.2 million in 1997,  1998
and 1999, respectively.

     Effective May 15, 1994, the Company  adopted a deferred  compensation  plan
for certain executive employees who elect to contribute to the plan. The Company
may  voluntarily  match all or a  portion  of the  participants'  contributions.
Participants  are  100%  vested  in  their   contributions   and  the  Company's
contributions vest over a 15-year period. No contributions were made to the plan
in 1997, 1998 or 1999.

                                      F-19                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.  Segment Data:

     The  Company's  operations  are  conducted  in one  business  segment:  the
provision of customer  relationship  management  services via  electronic  media
including telephone and the Internet, and, to a lesser extent, traditional mail.
The Company's  services are provided through a number of operating  subsidiaries
in a variety of locations around the world. However, the nature of services, the
nature of the  processes  involved in  providing  those  services,  the types of
customers and the expected  long-term  operating income from these  subsidiaries
are similar.

     A summary of the Company's operations by geographic area follows.


                                               (in thousands)
                                        For The Years Ended December 31,
                                   --------------------------------------------
                                       1997           1998            1999
                                   -------------   ------------    ------------
Revenue:
     United States              $       250,160  $     314,500  $      389,523
     United Kingdom                     116,055        102,895         114,053
     Spain                               57,449         52,820          69,403
     Other foreign countries             67,810        116,103         164,543
                                   -------------   ------------    ------------
                                $       491,474  $     586,318  $      737,522
                                   =============   ============    ============

                                                            December 31,
                                                   ----------------------------
                                                      1998            1999
                                                   ------------    ------------
Long-Lived Assets:
     United States                               $      87,314  $       84,621
     United Kingdom                                     31,972          24,322
     Spain                                              37,964          33,146
     Other foreign countries                            75,715          69,958
                                                   ------------    ------------
                                                 $     232,965  $      212,047
                                                   ============    ============

Revenues are primarily attributed to countries based upon the location where the
services are performed.

     Major Customers

     The total  revenue of various  independently  managed  subsidiaries  of one
customer  aggregated  to  12.2% of the  Company's  revenues  for the year  ended
December 31, 1999. No single customer  accounted for 10% of the revenues for the
years ended December 31, 1997 and 1998.

11.  Contingencies:

     From time to time, the Company is involved in litigation  incidental to its
business.  Although the ultimate outcome of such litigation  cannot be predicted
with certainty,  management believes,  after consultation with counsel, that the
resolution  of such  matters  will not have a  material  adverse  effect  on the
Company's consolidated financial position or results of operations.

                                      F-20                           (Continued)
<PAGE>

                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.  Restructuring and Impairment of Assets:

     In 1997, the Company recorded provisions of $15.7 million for restructuring
expenses and impairment  losses.  Included in this charge were impairment losses
on  long-lived  assets  of $11.0  million,  severance  and  other  costs of $3.6
million, and costs related to losses on contractual obligations of $1.1 million.
The Company's restructuring plan included the following initiatives:

     o    Concurrent  with the  decision  to pursue a new  joint-venture  equity
          partner in the Asia Pacific region,  management discontinued virtually
          all third party operations of its  Telebusiness  unit. The decision to
          discontinue these operations  resulted from the disappointing  results
          of  operations  during 1997  combined  with the  recognition  that the
          Company's  joint-venture  partner would not participate in managing or
          funding   these   operations.   The  resulting   impairment   loss  of
          approximately  $10.0  million  represented  primarily the write-off of
          unamortized goodwill.  The Company also accrued certain other costs of
          $0.5 million related to this  initiative,  including  severance for 18
          employees.  Revenues  and  operating  loss of  these  operations  were
          approximately  $3.5  million and $1.2  million,  before the effects of
          these charges, in 1997.

     o    The  Company  relocated  its  corporate  headquarters  and  closed  or
          consolidated certain  under-performing call centers. Costs incurred as
          a result of these plans consisted  principally of commitments  related
          to abandoned or excess space for leased  facilities  of  approximately
          $1.1 million and impairment losses of $1.0 million which were recorded
          by the Company for obsolete technology to record these assets at their
          estimated  fair  value,  less  costs of  disposal.  The  Company  also
          incurred  severance  for 17 employees  and other costs of $0.2 million
          related to this plan.

          The  plan  to  close   under-performing  call  centers  also  affected
          management's  assessment of the carrying value of certain deferred tax
          assets of $1.4 million  originating  from state  incentive tax credits
          related to  employment  incentives.  These  deferred  tax assets  were
          expensed in 1997 because  management  believed that it was more likely
          than not that these benefits would ultimately not be utilized.

     o    The  Company  reorganized  its  corporate  management  in Europe.  The
          substantial  majority  of costs  related  to this plan were  severance
          costs of $2.8 million for the involuntary termination of 31 employees.
          The Company also incurred other costs of $0.1 million  related to this
          plan.

     The amount of actual  severance  and other  costs  paid and  actual  losses
charged against the liability for contractual  obligations  during 1998 and 1999
was approximately $0.7 million and $0.1 million, respectively.

     In 1998,  the  Company  recorded a $6.6  million  charge for  restructuring
expenses primarily related to its European  operations.  Included in that charge
was $6.4 million  related to statutory or contractual  severance and other costs
for  approximately 250 employees.  The restructuring  expenses also include $0.2
million for the cost of excess  leased  facilities.  The  Company  substantially
completed its restructuring  plan and recorded a reversal of $0.5 million to the
restructuring accrual in the third quarter of 1999.

                                      F-21                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In the  third  quarter  of 1999,  the  Company  recorded  asset  impairment
expenses of $10.1 million primarily related to capitalized  software and related
technology assets.  These impairment expenses were precipitated by the Company's
decision to select an outside  vendor to provide its call center  software and a
detailed  assessment  made by  management  of the  utility  and plans for future
deployment of existing  software assets.  The Company's  impairment  expenses of
$10.1 million in 1999 consist of the following components:

     o    A write-off of approximately  $1.4 million was recorded for a software
          platform that will  continue to be used by the Company,  although used
          on a much more limited basis.  The amount of the  impairment  loss was
          determined by estimating  future  discounted  cash flows that would be
          provided from utilizing the software.

     o    A  write-off  of $6.4  million was  recorded  for the  abandonment  of
          internally  developed  software and software licenses that will not be
          deployed  as a result of  management's  decision  to deploy  the third
          party software.

     o    A write-off of $2.3  million was recorded for an  other-than-temporary
          decline  of the  fair  value  of an  investment  by the  Company  in a
          software  development firm. The deteriorating  financial  condition of
          the investee and  management's  decision to abandon  plans to purchase
          its software contributed to the determination of the impairment loss.

13.  Shareholder Rights Plan:

     In August 1998,  the  Company's  Board of Directors  adopted a  Shareholder
Rights Plan (the  "Rights  Plan") that  provides  for the  issuance of preferred
share purchase rights that expire in August,  2008. The rights generally will be
exercisable  and  transferable  apart from the common stock only after the tenth
day  following  public  disclosure  that a  person  or group  of  affiliated  or
associated  persons has acquired 20% or more of the outstanding shares of common
stock  (thereby  becoming  an  "Acquiring  Person").  The  rights  will  also be
exercisable  on  such  date as the  Board  of  Directors  determines  after  the
commencement  or announcement of a tender or exchange offer by a person or group
for 20% or more of the outstanding shares of common stock.

     If any person or group of affiliated or associated  persons acquires 20% or
more of the  outstanding  shares of common  stock and the  Company's  redemption
right has expired,  each holder of a right  (except  those held by the Acquiring
Person) will have the right to purchase shares of the Company's common stock (or
in certain circumstances, shares of preferred stock or similar securities of the
Company)  having a value  equal to two times the  exercise  price of the  right.
Alternatively,  if, in a transaction not approved by the Board of Directors, the
Company is acquired in a merger or other business  combination or 50% or more of
its assets or earnings  power are sold, and the Company's  redemption  right has
expired,  each holder of a right will have the right to purchase  that number of
shares of common stock of the acquiring  company  having the market value of two
times the exercise price of the right.  The rights may not be exercisable  while
they are redeemable. The rights, which have a $30 exercise price, are redeemable
by the Company at a price of $.001 per right at any time up to and including the
10th day after the time that a person or group has become an Acquiring Person.

                                      F-22                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.  Supplemental Guarantor Financial Information:

     The Company's 9.25% Senior  Subordinated  Notes are guaranteed,  on a full,
unconditional  and joint and several basis,  by  substantially  all wholly owned
domestic  subsidiaries  of the Company.  Separate  financial  statements  of the
guarantor  subsidiaries are not presented because management has determined that
they would not be  material  to  investors.  However,  the  following  condensed
consolidating information presents:

     (1)  Condensed  consolidating  financial statements as of December 31, 1998
          and December 31, 1999, and for the years ended December 31, 1997, 1998
          and 1999 of (a)  SITEL  Corporation,  the  parent,  (b) the  guarantor
          subsidiaries,   (c)  the  nonguarantor   subsidiaries  and  (d)  SITEL
          Corporation on a consolidated basis,

     (2)  SITEL   Corporation,   the  parent,   with  the   investments  in  all
          subsidiaries  accounted  for on the equity  method,  and the guarantor
          subsidiaries with the nonguarantor  subsidiaries  accounted for on the
          equity method (one of the guarantor  subsidiaries is the parent of the
          nonguarantor subsidiaries), and

     (3)  Elimination  entries necessary to consolidate SITEL  Corporation,  the
          parent, with all subsidiaries.

     Effective August 1, 1999, the Company merged certain guarantor subsidiaries
into SITEL Corporation and transferred the operations of certain other guarantor
subsidiaries to SITEL Corporation.  Accordingly,  from and after August 1, 1999,
the financial information of such guarantor subsidiaries is reported under SITEL
Corporation,  the parent, in the condensed  consolidating  financial statements.
The total revenues and total assets  represented by such guarantor  subsidiaries
as of July 31, 1999, were $97.5 million and $71.1 million, respectively.

                                      F-23                           (Continued)

<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      Condensed Consolidating Balance Sheet
                                December 31, 1998
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                           GUARANTOR    NONGUARANTOR
                    ASSETS                       PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
                                                 ------   ------------  ------------  ------------  ------------
Current assets:
<S>                                            <C>          <C>         <C>           <C>          <C>
      Cash and cash equivalents                 $   2,410   $   1,190   $  10,872     $      --    $  14,472
      Trade accounts receivable, net               33,676      33,179      75,540       (12,586)     129,809
      Prepaid expenses and other
          current assets                            2,956         241       9,742            --       12,939
                                                ---------   ---------   ---------     ---------    ---------
                 Total current assets              39,042      34,610      96,154       (12,586)     157,220

Property and equipment, net                        33,300      22,523      71,790            --      127,613
Goodwill, net                                       1,537      21,021      70,730            --       93,288
Deferred income taxes                               9,390          --       6,035            --       15,425
Other assets                                        8,807         126       3,131            --       12,064
Investments in subsidiaries                       188,690      88,293          --      (276,983)          --
Notes receivable, intercompany                         --      28,833          --       (28,833)          --
                                                ---------   ---------   ---------     ---------    ---------
                 Total assets                   $ 280,766   $ 195,406   $ 247,840     $(318,402)   $ 405,610
                                                =========   =========   =========     =========    =========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Notes payable                             $      --   $      --   $  30,545     $      --    $  30,545
      Current portion of long-term debt             2,136          --       1,535            --        3,671
      Current portion of capitalized
          lease obligations                           328          81       3,241            --        3,650
      Trade accounts payable                        1,338       1,655      40,377       (12,586)      30,784
      Accrued expenses and other
          current liabilities                       9,963       4,922      32,025            --       46,910
                                                ---------   ---------   ---------      ---------    ---------
                 Total current liabilities         13,765       6,658     107,723       (12,586)     115,560

Long-term debt, excluding
      current portion                             103,556          --       3,471            --      107,027
Capitalized lease obligations,
      excluding current portion                        --          58       9,152            --        9,210
Notes payable, intercompany                            --          --      28,833       (28,833)          --
Deferred compensation                               1,591          --          --            --        1,591
Minority interest                                      --          --      10,368            --       10,368
Stockholders' equity                              161,854     188,690      88,293      (276,983)     161,854
                                                ---------   ---------   ---------     ---------    ---------
              Total liabilities and
                 stockholders' equity           $ 280,766   $ 195,406   $ 247,840     $(318,402)   $ 405,610
                                                =========   =========   =========     =========    =========
</TABLE>
                                      F-24                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      Condensed Consolidating Balance Sheet
                                December 31, 1999
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                            GUARANTOR      NONGUARANTOR
                     ASSETS                   PARENT      SUBSIDIARIES     SUBSIDIARIES     ELIMINATIONS      CONSOLIDATED
                                              ------      ------------     ------------     ------------      ------------
Current assets:
<S>                                          <C>             <C>              <C>            <C>                <C>
      Cash and cash equivalents              $   7,477       $    2,102       $   12,726     $       --         $   22,305
      Trade accounts receivable, net           120,500            4,310           85,204        (45,541)           164,473
      Prepaid expenses and other
          current assets                         4,024               (7)          13,755             --             17,772
                                             ---------       ----------       ----------     ----------         ----------
                 Total current assets          132,001            6,405          111,685        (45,541)           204,550

Property and equipment, net                     51,231            3,793           63,325             --            118,349
Goodwill, net                                   21,564               --           63,694             --             85,258
Deferred income taxes                            8,111               --            7,538             --             15,649
Other assets                                     7,945               89              406             --              8,440
Investments in subsidiaries                    113,151           84,945               --       (198,096)                --
Notes receivable, intercompany                      --           20,259               --        (20,259)                --
                                             ---------       ----------       ----------     ----------         ----------
                 Total assets                $ 334,003       $  115,491       $  246,648     $ (263,896)        $  432,246
                                             =========       ==========       ==========     ==========         ==========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Notes payable                          $      --       $       --       $    7,337     $       --         $    7,337
      Current portion of long-term debt            695               --            2,143             --              2,838
      Current portion of capitalized
          lease obligations                      1,496               48            2,764             --              4,308
      Trade accounts payable                    12,143            1,085           69,905        (45,541)            37,592
      Accrued expenses and other
          current liabilities                   22,555            1,207           41,329             --             65,091
                                             ---------       ----------       ----------     ----------         ----------
                 Total current liabilities      36,889            2,340          123,478        (45,541)           117,166

Long-term debt, excluding
      current portion                          130,000               --            6,077             --            136,077
Capitalized lease obligations,
      excluding current portion                  4,511               --            7,742             --             12,253
Notes payable, intercompany                         --               --           20,259        (20,259)                --
Deferred compensation                            1,905               --               --             --              1,905
Minority interest                                   --               --            4,147             --              4,147
Stockholders' equity                           160,698          113,151           84,945       (198,096)           160,698
                                             ---------       ----------       ----------     ----------         ----------
              Total liabilities and
                 stockholders' equity        $ 334,003       $  115,491       $  246,648     $ (263,896)        $  432,246
                                             =========       ==========       ==========     ==========         ==========
</TABLE>

                                      F-25                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

               Condensed Consolidating Statement of Income (Loss)
                      For the year ended December 31, 1997
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                         GUARANTOR      NONGUARANTOR
                                           PARENT      SUBSIDIARIES     SUBSIDIARIES     ELIMINATIONS      CONSOLIDATED
                                           ------      ------------     ------------     ------------      ------------
<S>                                        <C>              <C>              <C>              <C>               <C>
Revenues                                   $117,118         $133,042         $241,314         $    --           $491,474
                                           --------         --------         --------         -------           --------
Operating expenses:
      Cost of services                       60,391           71,703          138,848              --            270,942
      Selling, general and
          Administrative expenses            52,950           47,634           85,005              --            185,589
      Restructuring expenses                  2,148               --           13,533              --             15,681
                                           --------         --------         --------         -------           --------
                 Total operating
                     expenses               115,489          119,337          237,386              --            472,212
                                           --------         --------         --------         -------           --------
                 Operating income             1,629           13,705            3,928              --             19,262
                                           --------         --------         --------         -------           --------
Other income (expense):
      Equity in earnings (losses) of
          Subsidiaries, net of tax            4,390           (4,958)              --             568                 --
      Intercompany charges                      673            1,877           (2,550)             --                 --
      Interest income                           213               --              348              --                561
      Interest expense                       (2,632)            (889)          (2,136)             --             (5,657)
      Other income (expense)                    178              (55)               3              --                126
                                           --------         --------         --------         -------           --------
                 Total other income
                     (expense)                2,822           (4,025)          (4,335)            568             (4,970)
                                           --------         --------         --------         -------           --------
Income (loss) before income
      taxes and minority interest             4,451            9,680             (407)            568             14,292
Income tax expense                            1,639            5,290            4,377              --             11,306
Minority interest                                --               --              174              --                174
                                           --------         --------         --------         -------           --------
                 Net income (loss)         $  2,812         $  4,390         $ (4,958)        $   568           $  2,812
                                           ========         ========         ========         =======           ========
</TABLE>

                                      F-26                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

               Condensed Consolidating Statement of Income (Loss)
                      For the year ended December 31, 1998
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                    GUARANTOR    NONGUARANTOR
                                        PARENT     SUBSIDIARIES  SUBSIDIARIES ELIMINATIONS  CONSOLIDATED
                                        ------     ------------  ------------ ------------  ------------

<S>                                     <C>          <C>          <C>          <C>         <C>
Revenues                                $ 133,640    $ 180,860    $ 271,818    $      --   $ 586,318
                                        ---------    ---------    ---------    ---------   ---------
Operating expenses:
      Cost of services                     72,446       99,121      160,019           --     331,586
      Selling, general and
      administrative expenses              65,881       62,246      107,773           --     235,900
      Restructuring expenses                   --           --        6,607           --       6,607
                                        ---------    ---------    ---------    ---------   ---------
                     Total operating
                     expenses             138,327      161,367      274,399           --     574,093
                                        ---------    ---------    ---------    ---------   ---------
                 Operating income
                     (loss)                (4,687)      19,493       (2,581)          --      12,225
                                        ---------    ---------    ---------    ---------   ---------
Other income (expense):
      Equity in earnings (losses) of
          subsidiaries, net of tax          6,297       (7,740)          --        1,443          --
      Intercompany charges                  1,387        2,812       (4,199)          --          --
      Interest income                         455           --          470           --         925
      Interest expense                     (9,004)        (807)      (3,861)          --     (13,672)
      Other income (expense)                  310           (1)         (46)          --         263
                                        ---------    ---------    ---------    ---------   ---------
                 Total other income
                     (expense)               (555)      (5,736)      (7,636)       1,443     (12,484)
                                        ---------    ---------    ---------    ---------   ---------
                 Income (loss) before
                     income taxes
                     and minority
                     interest              (5,242)      13,757      (10,217)       1,443        (259)

Income tax expense (benefit)               (4,668)       7,460       (1,826)          --         966
Minority interest                              --           --         (651)          --        (651)
                                        ---------    ---------    ---------    ---------   ---------

                 Net income (loss)
                     from continuing
                     operations              (574)       6,297       (7,740)       1,443        (574)

Extraordinary loss on
      refinancing of debt, net of
      taxes                                  (514)          --           --           --        (514)
                                        ---------    ---------    ---------    ---------   ---------
                 Net income (loss)      $  (1,088)   $   6,297    $  (7,740)   $   1,443   $  (1,088)
                                        =========    =========    =========    =========   =========
</TABLE>

                                      F-27                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

               Condensed Consolidating Statement of Income (Loss)
                      For the year ended December 31, 1999
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                      GUARANTOR   NONGUARANTOR
                                          PARENT     SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
                                          ------     ------------ ------------ ------------ ------------
<S>                                       <C>          <C>          <C>          <C>         <C>
Revenues                                  $ 258,905    $ 130,619    $ 347,998    $      --   $ 737,522
                                          ---------    ---------    ---------    ---------   ---------
Operating expenses:
      Cost of services                      124,442       77,003      195,805           --     397,250
      Selling, general and
          administrative expenses           124,351       40,464      147,561           --     312,376
      Asset impairment and
          restructuring expenses              3,585           --        6,011           --       9,596
                                          ---------    ---------    ---------    ---------   ---------
                 Total operating
                     expenses               252,378      117,467      349,377           --     719,222
                                          ---------    ---------    ---------    ---------   ---------
                 Operating income
                     (loss)                   6,527       13,152       (1,379)          --      18,300
                                          ---------    ---------    ---------    ---------   ---------
Other income (expense):
      Equity  in  earnings  (losses) of
          subsidiaries, net of tax            1,840       (7,942)          --        6,102          --
      Intercompany charges                      220        2,727       (2,947)          --          --
      Interest income                           275           --          248           --         523
      Interest expense                      (10,276)        (829)      (2,203)          --     (13,308)
      Other income                              205           --          111           --         316
                                          ---------    ---------    ---------    ---------   ---------
                 Total other income
                     (expense)               (7,736)      (6,044)      (4,791)       6,102     (12,469)
                                          ---------    ---------    ---------    ---------   ---------
                 Income (loss) before
                     income taxes
                     and minority
                     interest                (1,209)       7,108       (6,170)       6,102       5,831

Income tax expense (benefit)                   (400)       5,268        1,468           --       6,336
Minority interest                                --           --          304           --         304
                                          ---------    ---------    ---------    ---------   ---------
                 Net income (loss)        $    (809)   $   1,840    $  (7,942)   $   6,102   $    (809)
                                          =========    =========    =========    =========   =========
</TABLE>

                                      F-28                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Condensed Consolidating Statement of Cash Flows
                      For the year ended December 31, 1997
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                      GUARANTOR   NONGUARANTOR
                                          PARENT     SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
                                          ------     ------------ ------------ ------------ ------------
<S>                                       <C>          <C>          <C>          <C>          <C>
Net cash provided by
      operating activities                $   7,157    $   8,466    $   3,391    $      --    $  19,014
                                          ---------    ---------    ---------    ---------    ---------
Cash  flows from investing activities:
         Investments in subsidiaries        (61,787)     (42,917)          --      104,704           --
         Purchases of property
             and equipment                  (29,569)     (14,463)     (25,405)          --      (69,437)
         Proceeds from sales of
             property and equipment           2,196           --          515           --        2,711
         Acquisitions, net of
             cash acquired                  (19,722)     (12,207)     (15,094)          --      (47,023)
         Settlement of purchase
             price payable                       --           --      (13,934)          --      (13,934)
         Sale of marketable securities          558           --           --           --          558
         Changes in other assets, net        (1,925)          --       (2,303)          --       (4,228)
                                          ---------    ---------    ---------    ---------    ---------
                Net cash used in
                   investing activities    (110,249)     (69,587)     (56,221)     104,704     (131,353)
                                          ---------    ---------    ---------    ---------    ---------
Cash  flows from financing activities:
         Borrowings on notes payable         68,291           --       15,016           --       83,307
         Repayments of notes payable        (68,291)          --         (149)          --      (68,440)
         Borrowings on long-term debt       360,124           --          274           --      360,398
         Repayment of long-term debt       (259,948)          --         (551)          --     (260,499)
         Net capital contribution
             from parent                         --       61,787       42,917     (104,704)          --
         Common stock issued,
             net of expenses                    228           --           --           --          228
         Payments on capital
             lease obligations                   --         (450)      (1,761)          --       (2,211)
         Other                                  900           --           --           --          900
                                          ---------    ---------    ---------    ---------    ---------
                Net cash provided by
                   financing activities     101,304       61,337       55,746     (104,704)     113,683
                                          ---------    ---------    ---------    ---------    ---------
Effect of exchange rates on cash                 --           --       (2,769)          --       (2,769)
                                          ---------    ---------    ---------    ---------    ---------
                Net increase (decrease)
                   in cash                   (1,788)         216          147           --       (1,425)

Cash and cash equivalents,
      beginning of year                      13,302        1,859       10,549           --       25,710
                                          ---------    ---------    ---------    ---------    ---------
Cash and equivalents, end of year         $  11,514    $   2,075    $  10,696    $      --    $  24,285
                                          =========    =========    =========    =========    =========
</TABLE>

                                      F-29                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Condensed Consolidating Statement of Cash Flows
                      For the year ended December 31, 1998
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                               GUARANTOR      NONGUARANTOR
                                                   PARENT      SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
                                                   ------      ------------   ------------  ------------  ------------
<S>                                              <C>           <C>            <C>          <C>          <C>
Net cash provided by (used in) operating
      activities                                 $ (14,118)    $    23,289    $   8,572    $      --    $  17,743
                                                 ---------     -----------    ---------    ---------    ---------
Cash flows from investing activities:
      Investments in subsidiaries                   13,372          (6,526)          --       (6,846)          --
      Dividend on common stock                          --          10,000           --      (10,000)          --
      Purchases of property and equipment          (15,925)         (6,979)     (29,129)          --      (52,033)
      Proceeds from sales of property and
         equipment                                      --              --        1,513           --        1,513
      Proceeds from sale-leasebacks of
         facilities                                  9,397              --           --           --        9,397
      Acquisitions, net of cash acquired                --              --       (2,193)          --       (2,193)
      Sale of marketable securities                    257              --           --           --          257
                                                 ---------     -----------    ---------    ---------    ---------
               Net cash provided by (used in)
                  investing activities               7,101          (3,505)     (29,809)     (16,846)     (43,059)
                                                 ---------     -----------    ---------    ---------    ---------
Cash flows from financing activities:
      Borrowings on notes payable                       --              --       20,294           --       20,294
      Repayments of notes payable                       --              --       (4,398)          --       (4,398)
      Borrowings on long-term debt                 147,767              --        2,150           --      149,917
      Repayment of long-term debt and
         capital lease obligations                (146,620)             --       (7,840)          --     (154,460)
      Payment of long-term debt issuance costs      (3,228)             --           --           --       (3,228)
      Net capital contribution from parent              --         (13,372)       6,526        6,846           --
      Net borrowings and payments on
         note to parent                                 --          (7,297)       7,297           --           --
      Dividend on common stock                          --              --      (10,000)      10,000           --
      Capital contribution from subsidiary
         shareholder                                    --              --        1,400           --        1,400
      Sale of stock of subsidiaries                     --              --        6,541           --        6,541
      Common stock issued, net of expenses               3              --           --           --            3
      Other                                             (9)             --           --           --           (9)
                                                 ---------     -----------    ---------    ---------    ---------
               Net cash provided by (used in)
                  financing activities              (2,087)        (20,669)      21,970       16,846       16,060
                                                 ---------     -----------    ---------    ---------    ---------
Effect of exchange rates on cash                        --              --         (557)          --         (557)
                                                 ---------     -----------    ---------    ---------    ---------
               Net increase (decrease) in cash      (9,104)           (885)         176           --       (9,813)

Cash and cash equivalents,
      beginning of year                             11,514           2,075       10,696           --       24,285
                                                 ---------     -----------    ---------    ---------    ---------
Cash and equivalents, end of year                $   2,410     $     1,190    $  10,872    $      --    $  14,472
                                                 =========     ===========    =========    =========    =========
</TABLE>

                                      F-30                           (Continued)
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Condensed Consolidating Statement of Cash Flows
                      For the year ended December 31, 1999
                                 (in thousands)

14.  Supplemental Guarantor Financial Information (Continued):
<TABLE>
<CAPTION>
                                                          GUARANTOR   NONGUARANTOR
                                                PARENT   SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
                                                ------   ------------ ------------ ------------ ------------

<S>                                             <C>         <C>         <C>         <C>         <C>
Net cash provided by operating activities       $ 21,791    $  6,545    $ 10,979    $     --    $ 39,315
                                                --------    --------    --------    --------    --------
Cash flows from investing activities:
      Investments in subsidiaries                  6,592       3,528          --     (10,120)         --
      Purchases of property and equipment        (18,351)     (2,569)    (17,665)         --     (38,585)
      Proceeds from sale-leasebacks of
         facilities                                3,467          --          --          --       3,467
      Proceeds from sales of property and
         equipment                                    14          --         625          --         639
                                                --------    --------    --------    --------    --------
               Net cash provided by (used in)
                  investing activities            (8,278)        959     (17,040)    (10,120)    (34,479)
                                                --------    --------    --------    --------    --------
Cash flows from financing activities:
      Borrowings on notes payable                     --          --       3,706          --       3,706
      Repayments of notes payable                     --          --     (26,174)         --     (26,174)
      Borrowings on long-term debt                50,150          --       7,639          --      57,789
      Repayment of long-term debt                (25,785)         --      (4,038)         --     (29,823)
      Net capital contribution from parent            --      (6,592)     (3,528)     10,120          --
      Net borrowings and payments on
         intercompany balances                   (32,955)         --      32,955          --          --
      Common stock issued, net of expenses           771          --          --          --         771
      Payments on capital lease obligations         (564)         --      (4,492)         --      (5,056)
      Other                                          (63)         --          --          --         (63)
                                                --------    --------    --------    --------    --------
               Net cash provided by (used in)
                  financing activities            (8,446)     (6,592)      6,068      10,120       1,150
                                                --------    --------    --------    --------    --------
Effect of exchange rates on cash                      --          --       1,847          --       1,847
                                                --------    --------    --------    --------    --------
               Net increase in cash                5,067         912       1,854          --       7,833

Cash and cash equivalents,
      beginning of period                          2,410       1,190      10,872          --      14,472
                                                --------    --------    --------    --------    --------
Cash and equivalents, end of period             $  7,477    $  2,102    $ 12,726    $     --    $ 22,305
                                                ========    ========    ========    ========    ========
</TABLE>

                                      F-31                           (Continued)
<PAGE>
                       INDEPENDENT AUDITORS' REPORT ON THE
                          FINANCIAL STATEMENT SCHEDULE




The Board of Directors
SITEL Corporation:

Under date of February 7, 2000, we reported on the  consolidated  balance sheets
of SITEL  Corporation and subsidiaries as of December 31, 1998 and 1999, and the
related consolidated statements of income (loss), stockholders' equity, and cash
flows for each of the years in the  three-year  period ended  December 31, 1999.
These consolidated  financial statements and our report thereon are incorporated
by reference in the annual  report on Form 10-K for the year ended  December 31,
1999,  which are included in the Form 10-K. In connection with our audits of the
aforementioned  consolidated  financial statements,  we also audited the related
consolidated  financial  statement  schedule  in the Form 10-K.  This  financial
statement  schedule  is the  responsibility  of the  Company's  management.  Our
responsibility  is to express an opinion on this  financial  statement  schedule
based on our audits.

In our opinion,  such financial statement schedule,  when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects the information set forth therein.

                                                      /s/KPMG LLP


Omaha, Nebraska
February 7, 2000

                                      S-1
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

                                   Schedule II
                        Valuation and Qualifying Accounts
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                             Accounts
                                                             Beginning       Bad debt       charged to       Ending
  Description                                                 balance        expense        allowance       balance
  -----------                                                 -------        -------        ---------       -------
<S>                                                       <C>               <C>            <C>             <C>
Allowance for doubtful accounts for trade
     receivables-- Year ended December 31, 1997           $        3,188    $     2,410    $      499      $     5,099

Allowance for doubtful accounts for trade
     receivables-- Year ended December 31, 1998           $        5,099    $     1,087    $    2,216      $     3,970

Allowance for doubtful accounts for trade
     receivables-- Year ended December 31, 1999           $        3,970    $     3,170    $    1,518      $     5,622

See accompanying independent auditors' report.
</TABLE>

                                      S-2