SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

(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, 1997

              [ ] 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

          MINNESOTA                                     47-0684333
  (State or jurisdiction of                          (I.R.S. Employer
incorporation or organization)                      Identification No.)

                          111 SOUTH CALVERT, STE. 1910
                               BALTIMORE, MD 21202
                                 (410) 659-5700
  (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 16,  1998 was  $411,569,556  based upon the closing
price of $10.125 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 16, 1998, the Company had 63,309,055 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 on May 13,
1998, are incorporated into Part III. This 10-K/A consists of 31 pages.
<PAGE>
                                    PART II.

     The registrant  hereby amends Part II, Item 8 of its Form 10-K for the year
ended  December  31,  1997 to present  comprehensive  income  (loss)  within the
Consolidated   Statements  of  Stockholders'   Equity,  to  provide   additional
disclosure  regarding its restructuring and impairment of assets in Note #14 and
to provide additional  disclosure  regarding  Supplemental  Guarantor  Financial
Information in Note #16 to its financial  statements.  The Consolidated  Balance
Sheets,  Statement of Income (Loss), and Statement of Cash Flows included in the
10-K are not changed by this amendment.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The  information  called for by this item  (other than  selected  quarterly
information,  which is set forth below) is  incorporated  by reference  from the
Company's  Consolidated Financial Statements set forth on pages F-1 through F-23
hereof.

     The following table sets forth statement of operations data for each of the
four quarters of 1997 and 1996. 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.
<TABLE>
<CAPTION>
(in thousands, except per share data)                         Three Months Ended
                                              ---------------------------------------------------
                                               March 31,  June 30,   September 30,   December 31,
                                                 1997       1997         1997           1997
                                              ----------  --------   -------------   ------------
<S>                                          <C>          <C>         <C>            <C>
Revenues ..................................  $ 104,260    $ 125,267   $ 120,248      $ 141,699
Operating expenses:
       Cost of services ...................     56,357       67,105      67,913         79,566
       Selling, general and administrative
         expenses .........................     37,242       46,301      49,471         52,576
       Restructuring expenses .............         --           --          --         15,681
                                              --------     --------    --------       --------

          Operating income (loss)               10,661       11,861       2,864         (6,124)(a)
Interest income (expense), net ............       (534)      (1,153)     (1,512)        (1,897)
Other income (expense), net ...............         --          (61)        123             64
                                              --------     --------    --------       --------
       Income (loss) before income taxes
          and minority interest ...........     10,127       10,647       1,475         (7,957)
Income tax expense ........................      3,643        3,995         739          2,929
Minority interest .........................         30           46          10             88
                                              --------     --------    --------       --------
Net income (loss) .........................      6,454        6,606         726        (10,974)(a)
                                              ========     ========    ========       ========
Net income (loss) per share: 
       Basic ..............................  $    0.11    $    0.11   $    0.01      $   (0.17)(a)
       Diluted ............................       0.10         0.10        0.01          (0.17)(a)

Weighted average common shares outstanding:
       Basic ..............................     59,875      61,622       62,484         63,031
       Diluted ............................     67,509      68,800       69,327         63,031
<FN>
(a)  Includes  non-recurring  restructuring  expenses  and a  write  down of SITEL's Telebusiness
     business  of $5.2  million and $10.5  million,  respectively. Excluding those  non-recurring
     operating  expenses,  operating  income, net  income,  basic  income  per share and  diluted  
     income  per  share  were $9.6  million, $4.7  million, $0.07 and $0.07 respectively, for the
     fourth quarter of 1997.
</FN>
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
(in thousands, except per share data)                          Three Months Ended
                                               ---------------------------------------------------
                                               March 31,  June 30,     September 30,  December 31,
                                                 1996       1996          1996            1996
                                               ---------  --------     -------------  ------------
<S>                                           <C>         <C>            <C>           <C>
Revenues ..................................   $ 59,519    $ 69,266       $85,144       $ 98,821
Operating expenses:
   Cost of services .......................     31,593      36,746        44,433         50,945
   Selling, general and administrative
           expenses .......................     22,010      27,267        33,040         38,378
                                              --------    --------       -------        --------
         Operating income .................      5,916       5,253 (a)     7,671 (b)      9,498
Transaction related expenses ..............         --         666         6,322             --
Interest income (expense), net ............        101          25          (130)          (223)
Other income (expense), net ...............         --          --           (19)            51
                                              --------    --------       -------       --------
         Income before income taxes and
              minority interest ...........      6,017       4,612         1,200          9,326
Income tax expense ........................      2,211       2,271         2,514          3,225
Minority Interest .........................         --          18            23             36
                                              --------     -------      --------       --------
Net income (loss) .........................   $  3,806    $  2,323 (a)  $ (1,337)(b)   $  6,065
                                              ========    ========      ========       ========
Net income (loss) per share: 
         Basic ............................   $  0.07     $   0.04 (a)  $  (0.02)(b)   $   0.10
         Diluted ..........................      0.06         0.03 (a)     (0.02)(b)       0.09

Weighted average common shares outstanding:
         Basic ............................    55,502       58,326        58,503         58,823
         Diluted ..........................    64,252       66,403        58,503         66,607
<FN>
 (a) Includes  non-recurring  operating  expenses  related to the acquisition of National Action
     Financial  Services,  Inc. (NAFS).  Excluding  those  one-time  operating  expenses and the
     transaction related expenses,  operating  income, net  income,  basic income  per share and
     diluted  income per share were $6.9 million, $4.3 million, $0.07 and  $0.06,  respectively,
     for the second quarter of 1996.
 (b) Includes  non-recurring  operating  expenses related to the merger with Mitre  plc and  the
     acquisition of  NAFS.  Excluding  those  one-time  operating expenses  and the  transaction
     related expenses, operating income, net income, basic income per share and  diluted  income
     per  share  were  $8.2 million,  $5.4 million, $0.09 and $0.08, respectively, for the third
     quarter of 1996.
</FN>
</TABLE>
                                       3
<PAGE>
                                     PART IV

The registrant  hereby amends Part IV, Item  14(a)(3),  of its Form 10-K for the
year ended  December 31,  1997,  to include a new consent from KPMG Peat Marwick
LLP as Exhibit 23.1 and to modify or add  references to Exhibits  3.4,  10.3(b),
10.4, and 10.11.

    3.  Exhibits.  The following Exhibits are filed as part of, or are
        incorporated by reference into, this Form 10-K:

       Exhibit
       No
---------------
(1)    3.1         Amended and Restated Articles of Incorporation
(2)    3.1(a)      Articles of Amendment filed September 10, 1996 to the Amended
                   and Restated Articles of Incorporation
(9)    3.4         Amended and Restated Bylaws.
(7)    4.2         Specimen Common Stock Certificate.
(1)    9.1         Form of General Voting Agreement.
(1)    9.2         Form of Voting Agreement with World Investments, Inc.
(1)    10.1        SITEL  Corporation  Stock  Option  Plan  for  Replacement  of
                   Existing Options.
(7)    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.
(7)    10.2(a)     Amendment  No. 1 to  SITEL  Corporation Stock Option Plan for
                   Replacement of EEBs.
(3)    10.3        Amended  and  Restated  SITEL Corporation 1995 Employee Stock
                   Option Plan.
(7)    10.3(a)     Amendment  No. 1  to  Amended  and Restated SITEL Corporation
                   1995 Employee Stock Option Plan.
(10)   10.3(b)     Amendment  No. 2  to  Amended  and Restated SITEL Corporation
                   1995 Employee Stock Option Plan
(11)   10.4        Amended  and  Restated  SITEL  Corporation  1995 Non-Employee
                   Directors Stock Option Plan.
(1)    10.5        SITEL Corporation Executive Wealth Accumulation Plan.
(1)    10.6        Employment Agreement with James F. Lynch.
(1)    10.7        Employment Agreement with Michael P. May.
(1)    10.8        Form of Right of First Refusal.
(4)    10.9        Form of Indemnification Agreement with Outside Directors.
(5)    10.10       Form of Indemnification Agreement with Executive Officers.
(12)   10.11       Credit Agreement with Bankers Trust Company as Agent
(6)    16.1        Letter from Coopers & Lybrand L.L.P. dated February 6, 1997.
(8)    21          Subsidiaries.
       23.1        Consent of KPMG Peat Marwick LLP
(8)    27          Financial Data Schedule.
--------------------------------------

                                       4
<PAGE>
                   (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 Exhibit  4.1(a)  to  the   Company's
                        Registration   Statement   on   Form   S-3 (Registration
                        No. 333-13403).

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

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

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

                   (6)  Previously  filed as an  exhibit  under the same exhibit
                        number  to the  Company's Form 8-K  filed on February 6,
                        1997.

                   (7)  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.

                   (8)  Previously filed herewith.

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

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

                  (12)  Previously  filed as an  exhibit  under the same exhibit
                        number to the  Company's Form 10-Q for the quarter ended
                        September 30, 1997.

                                       5
<PAGE>
                                   SIGNATURES

     Pursuant  to  the  requirements 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:  August 17, 1998       SITEL Corporation


                             By: /s/ W. Gar Richlin
                                 -----------------------------------------------
                                 W. Gar Richlin
                                 Executive Vice-President  and Chief   Financial
                                 Officer (Principal Financial Officer)

                                       6
<PAGE>
                                 EXHIBIT INDEX

       Exhibit
       No
---------------
(1)    3.1         Amended and Restated Articles of Incorporation
(2)    3.1(a)      Articles of Amendment filed September 10, 1996 to the Amended
                   and Restated Articles of Incorporation
(9)    3.4         Amended and Restated Bylaws.
(7)    4.2         Specimen Common Stock Certificate.
(1)    9.1         Form of General Voting Agreement.
(1)    9.2         Form of Voting Agreement with World Investments, Inc.
(1)    10.1        SITEL  Corporation  Stock  Option  Plan  for  Replacement  of
                   Existing Options.
(7)    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.
(7)    10.2(a)     Amendment  No. 1 to  SITEL  Corporation Stock Option Plan for
                   Replacement of EEBs.
(3)    10.3        Amended  and  Restated  SITEL Corporation 1995 Employee Stock
                   Option Plan.
(7)    10.3(a)     Amendment  No. 1  to  Amended  and Restated SITEL Corporation
                   1995 Employee Stock Option Plan.
(10)   10.3(b)     Amendment  No. 2  to  Amended  and Restated SITEL Corporation
                   1995 Employee Stock Option Plan
(11)   10.4        Amended  and  Restated  SITEL  Corporation  1995 Non-Employee
                   Directors Stock Option Plan.
(1)    10.5        SITEL Corporation Executive Wealth Accumulation Plan.
(1)    10.6        Employment Agreement with James F. Lynch.
(1)    10.7        Employment Agreement with Michael P. May.
(1)    10.8        Form of Right of First Refusal.
(4)    10.9        Form of Indemnification Agreement with Outside Directors.
(5)    10.10       Form of Indemnification Agreement with Executive Officers.
(12)   10.11       Credit Agreement with Bankers Trust Company as Agent
(6)    16.1        Letter from Coopers & Lybrand L.L.P. dated February 6, 1997.
(8)    21          Subsidiaries.
       23.1        Consent of KPMG Peat Marwick LLP
(8)    27          Financial Data Schedule.
--------------------------------------
<PAGE>
                   (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 Exhibit  4.1(a)  to  the   Company's
                        Registration   Statement   on   Form   S-3 (Registration
                        No. 333-13403).

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

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

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

                   (6)  Previously  filed as an  exhibit  under the same exhibit
                        number  to the  Company's Form 8-K  filed on February 6,
                        1997.

                   (7)  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.

                   (8)  Previously filed herewith.

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

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

                  (12)  Previously  filed as an  exhibit  under the same exhibit
                        number to the  Company's Form 10-Q for the quarter ended
                        September 30, 1997.
<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, 1996 and 1997..............      F-3

Consolidated Statements of Income (Loss) For the Years Ended
December 31, 1995, 1996 and 1997.......................................      F-4

Consolidated Statements  of Stockholders' Equity For
the Years Ended December 31, 1995, 1996 and 1997.......................      F-5

Consolidated Statements of Cash Flows For the Years Ended December 31,
1995,1996, and 1997....................................................      F-7

Notes to Consolidated Financial Statements.............................      F-8

<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, 1996 and 1997, 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, 1997.  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, 1996 and 1997, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted accounting
principles.



                                         KPMG Peat Marwick LLP

Omaha, Nebraska
February 17, 1998, except
Note 15 which is as of
March 10, 1998

                                      F-2
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                   ASSETS                  December 31,
                                                  ------------------------------
(in thousands, except share data)                     1996            1997
                                                  -------------   --------------
Current assets:
   Cash and cash equivalents....................  $      25,710   $      24,285
   Trade accounts receivable (net of allowance
     for doubtful accounts of $3,188 and $5,099,
     in 1996 and 1997, respectively)............         65,477         107,697
   Marketable securities........................          1,740             159
   Prepaid expenses.............................          3,007           3,916
   Other assets.................................          2,907           9,548
   Deferred income taxes........................            512           3,153
                                                  -------------   -------------
       Total current assets.....................         99,353         148,758
                                                  -------------   -------------
Property and equipment, net.....................         59,109         120,600
Deferred income taxes...........................         11,187          11,114
Goodwill, net...................................         40,110          94,381
Other assets....................................          1,925          11,027
                                                  -------------   -------------
        Total assets............................  $     211,684   $     385,880
                                                  =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Notes payable................................  $       3,638   $      14,376
   Current portion of long-term debt............            759          10,793
   Current portion of capitalized lease
      obligations...............................          3,032           4,934
   Trade accounts payable.......................         18,775          27,322
   Income taxes payable.........................          3,815           8,398
   Accrued wages, salaries and bonuses..........         14,812          14,120
   Accrued operating expenses...................          9,026          22,984
   Deferred revenue and other...................          8,660           6,286
                                                  -------------   -------------
        Total current liabilities...............         62,517         109,213
                                                  -------------   -------------
Long-term debt, excluding current portion.......          1,720         102,505
Capitalized lease obligations, excluding current
   portion......................................          3,141          12,983
Purchase price payable..........................         15,928              --
Deferred compensation ..........................          1,461           1,407

Minority interest...............................            192           1,384

Commitments and contingencies

Stockholders' equity:
   Common stock, voting, $.001 par value 200,000,000
     shares authorized, 58,875,660 and 63,099,597
     shares issued and outstanding in 1996 and
     1997, respectively.........................             59              63
   Paid-in capital..............................        117,736         155,326
   Currency exchange adjustment.................          1,311          (6,487)
   Unrealized gain on marketable securities, net
     of taxes...................................          1,017              72
   Retained earnings............................          6,602           9,414
                                                  -------------   -------------
        Total stockholders' equity..............        126,725         158,388
                                                  -------------   -------------
        Total liabilities and stockholders'
          equity................................  $     211,684   $     385,880
                                                  =============   =============

    The  accompanying  notes  are an integral part of the consolidated financial
statements.
                                      F-3
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)

                                            For The Years Ended December 31,
                                        ----------------------------------------
                                            1995          1996          1997
                                        ------------  ------------  ------------
(in thousands, except per share data)
Revenues............................    $  187,215    $  312,750    $  491,474
                                        ----------    ----------    ----------
Operating expenses:
   Cost of services.................       101,617       163,717       270,942
   Selling, general an
     administrative expenses........        69,213       120,695       185,589
   Special compensation expense.....        34,585            --            --
   Restructuring expenses...........            --            --        15,681
                                        ----------    ----------    ----------
        Total operating expenses....       205,415       284,412       472,212
                                        ----------    ----------    ----------
        Operating income (loss).....       (18,200)       28,338        19,262
                                        ----------    ----------    ----------
Other income (expense):
   Transaction related expenses.....            --        (6,988)           --
   Interest income..................           613         1,108           561
   Interest expense.................        (1,315)       (1,335)       (5,657)
   Other income.....................           118            32           126
                                        ----------    ----------    ----------
        Total other income (expense)          (584)       (7,183)       (4,970)
                                        ----------    ----------    ----------

Income (loss) before income taxes
 and minority interest..............       (18,784)       21,155        14,292

Income tax expense (benefit)........        (6,593)       10,221        11,306

Minority interest...................         1,262            77           174
                                        ----------    ----------    ----------

        Net income (loss)...........    $  (13,453)   $   10,857    $    2,812
                                        ==========    ==========    ==========

Income (loss) per common share:
      Basic.........................    $    (0.33)   $     0.19    $     0.05
      Diluted.......................         (0.29)         0.16          0.04
Weighted average common shares outstanding:
      Basic.........................        40,565        57,793        61,764
      Diluted.......................        46,477        65,929        68,811

   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, 1995, 1996, and 1997
<TABLE>
<CAPTION>

                                                       -----------    -----------    -----------    ----------    --------------
                                                         Class A        Class B        Class C                     Options Less
                                                          Common         Common         Common        Common         Deferred
(dollars in thousands)                                    Stock          Stock          Stock          Stock       Compensation
                                                       -----------    -----------    -----------    ----------    --------------
<S>                                                    <C>            <C>            <C>            <C>           <C>
Balance, December 31, 1994...........................  $       20     $       11     $        1     $      --     $          82
     Issuance of 100,592 shares of Class C common
      stock less 80,472 shares subject to put option.          --             --             --            --                --
     Special compensation - option issues............          --             --             --            --               (82)
     Accretion of put option.........................          --             --             --            --                --
     Conversion of 20,263,458 shares of Class A,
      10,660,000 shares of Class B, and 739,652 shares
      of Class C common into a single class of
      common stock due to reincorporation............         (20)           (11)            (1)           32                --
     Issuance of 7,600,000 shares of common stock, net
      of offering expenses...........................          --             --             --             8                --
     Cancellation of the put option on 3,070,584
      shares...........................                        --             --             --             3                --
     Transaction by pooled companies:
        Issuance of 8,507,904 shares of common stock.          --             --             --             8                --
     Comprehensive income (loss)
        Net loss.....................................          --             --             --            --                --
        Currency exchange adjustment.................          --             --             --            --                --
        Total comprehensive income (loss)............
                                                       ----------     ----------    -----------     ---------     -------------
Balance, December 31, 1995...........................          --             --             --            51                --
     Issuance of 5,982,220 shares of common stock, net
      of offering expenses...........................          --             --             --             6                --
     Issuance of 1,719,642 shares of common stock for
      options exercised..............................          --             --             --             2                --
     Tax benefit of stock options exercised..........          --             --             --            --                --
     Transactions by pooled companies:
        Issuance of 332,196 shares of common stock...          --             --             --            --                --
     Comprehensive income
        Net income...................................          --             --             --            --                --
        Currency exchange adjustment.................          --             --             --            --                --
        Change in unrealized gain, net of taxes of $723        --             --             --            --                --
        Total comprehensive income...................
                                                       ----------     ----------   ------------     ---------     -------------
Balance, December 31, 1996...........................          --             --             --            59                --
     Issuance of 1,891,562 shares of common stock for
      options exercised..............................          --             --             --             2                --
     Tax benefit of stock options exercised..........          --             --             --            --                --
     Issuance of 2,332,375 shares of common stock
      for acquisitions...............................          --             --             --             2                --
     Comprehensive income (loss)
        Net income...................................          --             --             --            --                --
        Currency exchange adjustment.................          --             --             --            --                --
        Change in unrealized gain, net of taxes of $(636)      --             --             --            --                --
        Total comprehensive income (loss)............
                                                       ----------     ----------   ------------     ---------     -------------
Balance, December 31, 1997...........................  $       --     $       --   $         --     $      63     $          --
                                                       ==========     ==========   ============     =========     =============
</TABLE>
                                      F-5
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
              For The Years Ended December 31, 1995, 1996, and 1997

<TABLE>
<CAPTION>
                                                                 Accumulated Other Comprehensive Income
                                                                     ----------------------------
                                                                      Currency    Unrealized Gain     Retained        Total
                                                         Paid-in      Exchange     on Marketable      Earnings     Stockholders'
                                                         Capital     Adjustment     Securities        (Deficit)       Equity
                                                        --------     ----------   ---------------     ---------    -------------
<S>                                                     <C>          <C>            <C>               <C>           <C>
Balance, December 31, 1994............................  $  3,285     $       42     $       --        $   9,411     $   12,852
   Issuance of 100,592 shares of Class C common
    stock less 80,472 shares subject to put option....        59             --             --               --             59
   Special compensation - option issues...............    34,707             --             --               --         34,625
   Accretion of put option............................        --             --             --             (213)          (213)
   Conversion of 20,263,458 shares of Class A,
     10,660,000 shares of Class B, and 739,652 shares
     of Class C common into a single class of
     common stock due to reincorporation..............        --             --             --               --             --
   Issuance of 7,600,000 shares of common stock, net
     of offering expenses.............................    23,163             --             --               --         23,171
   Cancellation of the put option on 3,070,584 shares.     2,797             --             --               --          2,800
   Transaction by pooled companies:
        Issuance of 8,507,904 shares of common stock..     5,519             --             --               --          5,527
   Comprehensive income (loss)
        Net loss......................................        --             --             --          (13,453)       (13,453)
        Currency exchange adjustment..................        --             12             --               --             12
                                                                                                                    ----------
        Total comprehensive income (loss).............                                                                 (13,441)
                                                        --------    -----------     ----------        ---------     ----------
Balance, December 31, 1995............................    69,530             54             --           (4,255)        65,380
     Issuance of 5,982,220 shares of common stock, net
      of offering expenses............................    42,239             --             --               --         42,245
     Issuance of 1,719,642 shares of common stock for
      options exercised...............................        92             --             --               --             94
     Tax benefit of stock options exercised...........     5,040             --             --               --          5,040
     Transactions by pooled companies:
        Issuance of 332,196 shares of common stock....       835             --             --               --            835
     Comprehensive income
        Net income....................................        --             --             --           10,857         10,857
        Currency exchange adjustment..................        --          1,257             --               --          1,257
        Change in unrealized gain, net of taxes
          of $723.....................................        --             --          1,017               --          1,017
                                                                                                                   -----------
        Total comprehensive income....................                                                                  13,131
                                                        --------    -----------     ----------       ----------    -----------
Balance, December 31, 1996............................   117,736          1,311          1,017            6,602        126,725
     Issuance of 1,891,562 shares of common stock for
      options exercised...............................       226             --             --               --            228
     Tax benefit of stock options exercised...........     7,685             --             --               --          7,685
     Issuance of 2,332,375 shares of common stock
      for acquisitions................................    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 of $(636)     --             --           (945)              --           (945)
                                                                                                                   -----------
        Total comprehensive income (loss).............                                                                  (5,931)
                                                        --------    -----------     ----------       ----------    -----------
Balance, December 31, 1997............................  $155,326    $    (6,487)    $       72       $    9,414    $   158,388
                                                        ========    ===========     ==========       ===========   ===========
</TABLE>
   The  accompanying  notes  are  an integral part of the consolidated financial
statements.

                                      F-6
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(in thousands)                                                           For The Years Ended December 31,
                                                                   --------------------------------------------
                                                                        1995           1996           1997
                                                                   -------------   ------------  --------------
<S>                                                                <C>             <C>           <C>
Cash flows from operating activities:
   Net income (loss).............................................  $    (13,453)   $     10,857  $        2,812
   Adjustments to  reconcile  net income  (loss) to net cash
    provided by operating activities:
        Special compensation expense.............................        34,585              --              --
        Restructuring provision..................................            --              --          15,513
        Depreciation and amortization............................         7,090          13,256          28,687
        Provision for deferred income taxes......................       (12,219)          1,823          (1,498)
        Deferred compensation....................................            70             557             (53)
        Gain on sale of marketable securities....................            --              --            (407)
        Forgiveness of loans receivable from related parties.....           449              --              --
        Change in assets and liabilities:
           Trade accounts receivable.............................        (9,408)        (17,083)        (36,977)
           Other assets..........................................          (716)          4,060          (7,677)
           Trade accounts payable................................         4,302           6,662           5,694
           Other liabilities.....................................         4,573          15,711          12,920
                                                                   ------------    ------------  --------------
              Net cash provided by operating activities..........        15,273          35,843          19,014
                                                                   ------------    ------------  --------------
Cash flows from investing activities:
   Purchases of property and equipment...........................       (13,279)        (39,954)        (69,437)
   Proceeds from sales of property and equipment.................           126             199           2,711
   Acquisitions, net of cash acquired............................            --         (27,936)        (47,023)
   Settlement of purchase price payable..........................            --              --         (13,934)
   Investments in marketable securities..........................       (22,196)        (63,793)             --
   Sale of marketable securities.................................         9,150          76,840             558
   Changes in other assets.......................................          (349)           (380)         (4,228)
                                                                   ------------     -----------  --------------
              Net cash used in investing activities..............       (26,548)        (55,024)       (131,353)
                                                                   ------------     -----------  --------------
 Cash flows from financing activities:
    Borrowings on notes payable..................................        21,929          17,169          83,307
    Repayments of notes payable..................................       (21,429)        (16,026)        (68,440)
    Borrowings  on long-term debt................................         7,319             500         360,398
    Repayment of long-term debt..................................       (13,237)         (2,048)       (260,499)
    Repayment of note payable to related party...................          (492)             --              --
    Repayment of  redeemable preference shares...................          (464)         (2,075)             --
    Common stock issued, net of expenses.........................        23,171          42,339             228
    Payments on capital lease obligations........................        (2,449)           (259)         (2,211)
    Other........................................................           800              --             900
                                                                   ------------     -----------  --------------
              Net cash provided by  financing activities.........        15,148          39,600         113,683
                                                                   ------------     -----------  --------------
Effect of exchange rates on cash................................           (104)            760          (2,769)
                                                                   ------------     -----------  --------------
              Net increase (decrease) in cash...................          3,769          21,179          (1,425)

Cash and cash equivalents, beginning of year....................            762           4,531          25,710
                                                                   ------------     -----------  --------------
Cash and cash equivalents, end of year                             $      4,531     $    25,710  $       24,285
                                                                   ============     ===========  ==============
Supplemental disclosures of cash flow information:
   Interest paid................................................   $      1,212     $       846  $        4,712
   Income taxes paid............................................   $      4,170     $     4,311  $        7,859

Supplemental  disclosures  of non-cash  investing and financing  activities:
  In 1995,  upon  completion  of the IPO, the put option on common stock was canceled causing a  reclassification
  of  $2,800 to stockholders' equity. The tax benefit of stock options  exercised  was $5,040 and  $7,685 in 1996
  and 1997,  respectively.  The Company incurred capitalized leases of $2,960,  $2,101, and $13,225 in 1995, 1996
  and 1997,  respectively.  The Company  issued stock in connection  with the acquisition  of  businesses  with a
  value of $28,  $5,498,  and $29,681 in 1995, 1996,and 1997 respectively.
</TABLE>
    The  accompanying  notes  are an integral part of the consolidated financial
statements.

                                      F-7
<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  outsourced  telephone and  interactive
customer  service and sales  programs on behalf of its clients in North America,
Europe, Asia Pacific and Latin America. The Company provides services to clients
principally   in  the   insurance,   financial   services,   telecommunications,
technology, media and entertainment,  utilities, consumer, automotive and travel
and hospitality industries.

     (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.

     During 1996, the Company  acquired all of the  outstanding  common stock of
National Action Financial Services, Inc. ("NAFS") by issuing 2,742,452 shares of
its common stock and all of the outstanding  common stock of Mitre plc ("Mitre")
by  issuing  18,341,106  shares of its  common  stock in two  separate  business
combinations accounted for using the pooling-of-interests  method of accounting.
Accordingly,  the  consolidated  financial  statements for periods prior to each
business  combination  have been restated to include the accounts and results of
operations  of NAFS and Mitre.  No  significant  adjustments  were  required  to
conform the accounting policies of the combining enterprises.

     The results of operations  previously reported by the separate  enterprises
and the combined amounts  presented in the accompanying  consolidated  financial
statements are summarized below:

                                           (in thousands)
                                    1995                     1996
                               ---------------          ---------------
        Revenues:
            SITEL                $ 120,617                $ 196,279
            NAFS                     8,258                   15,685
            Mitre                   58,340                  100,786
                               ---------------          ---------------
              Combined           $ 187,215                $ 312,750
                               ===============          ===============

        Net income (loss)
            SITEL                $ (16,349)               $   6,016
            NAFS                       773                   (1,132)
            Mitre                    2,123                    5,973
                                ---------------         ---------------
              Combined           $ (13,453)               $  10,857
                                ===============         ===============

     Transaction related expenses of approximately $0.7 million and $6.3 million
for the  combinations  with NAFS and Mitre,  respectively,  were expensed during
1996 at the closing of each transaction.

     (c)  Translation of Foreign  Currencies.  The translation of the applicable
foreign  currencies  into U.S.  dollars is performed for balance sheet  accounts
using current  exchange  rates in effect at the balance sheet date.  Revenue and
expense accounts are translated  using average exchange rates prevailing  during
the year.  Gains or losses  resulting from currency  translation are included in
stockholders' equity.

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

     (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) 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.

     (g) Investments in Marketable Securities. All marketable securities held by
the Company at December 31, 1996 and 1997, were classified as available-for-sale
and  recorded at fair value.  Unrealized  holding  gains and losses,  net of the
related tax effect,  on  available-for-sale  securities are excluded from income
and are reported as a separate component of stockholders' equity until realized.
Realized  gains and losses from the sale of  available-for-sale  securities  are
determined on a specific  identification  basis. Fair values are estimated based
upon quoted market values.

     (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, 1996
and 1997 was $1.4 million and $5.0 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. The Company has adopted SFAS 128 "Earnings Per
Share" ("SFAS  128"),  which has changed the method for  calculating  income per
share.  SFAS 128 requires the  presentation of "basic" and "diluted"  income per
share on the face of the income  statement.  Prior period  income per share data
has been  restated  in  accordance  with SFAS 128.  Income per  common  share is
computed by dividing net income by the weighted  average number of common shares
and common  equivalent  shares  outstanding  during each  period,  after  giving
retroactive  effect  to  the  stock  splits  (see  also  Note  6)  and  business
combinations accounted for using the pooling-of-interests  method of accounting.
Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No. 98,
options to purchase common stock for nominal  consideration  are included in the
calculation of diluted income or loss per share, as if they were outstanding for
all of the pre-initial public offering periods.

                                      F-9

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

     The difference in shares  utilized in calculating  basic and diluted income
per share  represents  the number of shares  issued  under the  Company's  stock
option plans less shares assumed to be purchased with proceeds from the exercise
of the stock options.  Due to the net loss in 1995, the anti-dilutive  effect of
the Company's  stock option plans is not included in the  calculation of diluted
earnings  per share except as noted above in relation to the  Company's  initial
public offering.  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 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  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,
receivables,  accounts payable, marketable securities, long term debt (primarily
with variable interest rates), capital leases and notes payable are estimated to
approximate carrying values due to the short maturities or other characteristics
of these financial instruments.

     During 1997,  the Company also 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 has significant operations. These
contracts are marked to market with gains or losses  recognized in the Company's
statements  of income  (loss) as other  income  (expense).  The  Company  had no
unsettled forward contracts at December 31, 1997.

     (n)  Reclassification.  Certain  amounts in 1996 have been  reclassified to
conform with the current year presentation.

2.   ACQUISITIONS:

     In  December  1995,  the  Company  acquired  all  stock  held  by  minority
stockholders in three  subsidiaries of Mitre by issuing Mitre stock with a value
of  approximately  $5.5 million.  The  acquisition of the minority  holdings was
accounted for using the purchase method of accounting. Accordingly, the purchase
price was allocated  based on estimated fair values at the date of  acquisition.
The excess of purchase price over the fair value of the net assets  acquired was
approximately $4.8 million.

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

     In February  1996,  the Company  acquired the  teleservicing  businesses of
C.T.C.  Canadian Telephone  Corporation and 2965496 Canada, Inc.  (collectively,
"CTC")  through  purchases  of  certain  assets  and the  assumption  of certain
liabilities of each business for a purchase price of approximately $4.2 million,
including  acquisition costs. The acquisition of CTC 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 CTC have been included in the consolidated  results
of operations  since the date of  acquisition.  Goodwill of  approximately  $4.2
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 CTC
were not significant.

     In June 1996,  the  Company  acquired  Teleaction  S.A.  ("Teleaction"),  a
Spanish teleservicing company,  through the payment of approximately $25 million
for 69.2% of the capital stock, and, an unconditional  commitment (the "purchase
price  payable") to close the purchase of the remaining  30.8% in June 1998. The
purchase  price  payable in 1996 includes an  unconditional  commitment to pay a
minimum  of 1.4  billion  Spanish  pesetas  (approximately  US $10.8  million at
acquisition) plus additional amounts of contingent  consideration based upon the
attainment of specified  levels of earnings before interest,  depreciation,  and
income taxes as defined in the acquisition agreement.  The Company accounted for
the  transaction as an acquisition  of all of the  outstanding  capital stock of
Teleaction because it acquired the risks and rewards of ownership except for the
contingent  consideration,  which has been accounted for as additional  purchase
price paid. In the fourth quarter of 1997, the Company completed the acquisition
of the remaining 30.8% for  approximately  $14 million,  a valuation  consistent
with  the  terms  of the  original  agreement.  The  Company  accounted  for the
acquisition as a purchase. Accordingly, the purchase price has been allocated to
assets and liabilities acquired based on their estimated fair values at the date
of acquisition and the results of operations of Teleaction have been included in
the  consolidated  results of operations  since the date of  acquisition.  As of
December 31,  1997,  the Company has recorded  goodwill of  approximately  $28.7
million for the excess of purchase price over net assets acquired, including the
additional  payments  made in the  settlement of the  remaining  purchase  price
payable during 1997.

     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  Comercializacion  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  provide 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.

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

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.

     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).

     The  following  pro forma  information  shows the results of the Company as
though the  acquisitions  described  earlier  for 1996 and 1997  occurred  as of
January 1, 1996. These results include certain  adjustments  consistent with the
Company's policy related to amortization of intangible assets. These results are
not necessarily indicative of the results that actually would have been obtained
if the  acquisitions had been in effect at the beginning of each period or which
may be attained in the future.

                                     For the Years Ended December 31,
                                             1996             1997
                                          -----------       ----------
                                   (in thousands, except per share data)
                                                (unaudited)
 Revenue                               $     373,602     $    510,553
 Net income                            $       9,348     $      1,814
 Income per common share:
       Basic                           $        0.16     $       0.03
       Diluted                         $        0.14     $       0.03

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

3.   INVESTMENTS IN MARKETABLE SECURITIES:

     The  amortized  cost,  gross  unrealized  holding  gains and fair value for
available-for-sale securities at December 31, 1996 and 1997 were as follows:


                                                (in thousands)
                                                    Gross
                                                  Unrealized
                                    Amortized      Holding            Fair
                                      Cost          Gains            Value
                                      ----          -----            -----
December 31, 1996

       Equity securities       $      200        $   1,540       $      1,740
                               ==========        =========       ============
December 31, 1997

       Equity securities       $       49        $     110       $        159
                               ==========        =========       ============

     Proceeds from the sale of  marketable  securities  available-for-sale  were
$9.2  million,  $76.8  million,  and $0.6  million  in  1995,  1996,  and  1997,
respectively.  Gross  realized  gains of $0.4 million were  realized in 1997. No
gross  realized  losses  were  realized in 1997 and no gross  realized  gains or
losses were realized in 1995 and 1996.

4.   PROPERTY AND EQUIPMENT:

     Property  and  equipment  at December  31, 1996 and 1997  consisted  of the
following:

                                                       (in thousands)
                                                   1996             1997
                                               ------------     ------------
  Telecommunications equipment                 $      53,821    $      89,067
  Furniture, equipment, and other                     25,343           43,985
  Leasehold improvements                              10,241           18,707
  Buildings                                            4,063           19,591
  Other                                                  426            1,080
                                               -------------    -------------
                                                      93,894          172,430
  Less accumulated depreciation                       34,785           51,830
                                               -------------    -------------
                                               $      59,109    $     120,600
                                               =============    =============

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

5.   LONG-TERM DEBT:

     Long-term debt at December 31, 1996 and 1997, consisted of the following:

                                                         (in thousands)
                                                For The Years Ended December 31,
                                                --------------------------------
                                                     1996             1997
                                                 -------------    -------------
Long-term revolving credit facility at
variable interest rates (6.52% at
December 31, 1997) due in July, 2002........       $        --      $   99,500

Various notes payable acquired at
acquisition of GCI, with variable interest
rates (22.0% at December 31, 1997)..........                --           3,859

8% note payable in monthly installments,
including interest, secured by property.....             1,270              --

Other notes payable with weighted-average
interest rates of 6.4% and 6.6% in 1996 and
1997, respectively; secured by property and
equipment and non domestic accounts
receivable..................................             1,209            9,939
                                                   -----------      -----------
                                                         2,479          113,298

Less current portion........................               759           10,793
                                                   -----------      -----------
Total.......................................       $     1,720      $   102,505
                                                   ===========      ===========

     In July 1997, the Company reached  agreement with a syndicate of commercial
banks for the long-term $150 million  revolving credit facility noted above. The
facility provides for interest payable  quarterly and a variable  commitment fee
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, make certain  investments,  and sell assets or merge with another company.
The  facility  also  prohibits  the payment of cash  dividends  on common  stock
without the banks' consent.  The facility  becomes due and payable upon a change
of control of the Company as defined in the facility agreement.  At December 31,
1997,  the Company was in  compliance  or has obtained  waivers for all of these
covenants and restrictions.

     Additionally,  several  international lines of credit are available to fund
local  working  capital   requirements.   The  maximum  borrowings  under  these
facilities  are  approximately  $33.1  million.  At December 31, 1997, the total
amount of notes payable  outstanding under these facilities  approximated  $14.4
million with a weighted-average interest rate of 7.3%.

     Including unused lines of credit in Europe, the Company had unused lines of
credit totaling approximately $69.2 million at December 31, 1997.

                                      F-14
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  aggregate maturities  of  long-term  debt  for  each of the five years
following December 31, 1997 are as follows:
                                                (in thousands)
                                                 Maturities of
            Year Ending December 31,             Long-term Debt
            ------------------------             --------------
            1998                                   $ 10,793
            1999                                      1,926
            2000                                        518
            2001                                        165
            2002 and thereafter                      99,896

     Redeemable  preference shares were issued by Mitre and certain subsidiaries
of Mitre prior to the  acquisition  by the  Company.  The shares were  generally
redeemable at par in equal  installments  at the option of the holder,  and paid
cumulative  dividends of 7.5% to 10%. As a result of the  acquisition  of Mitre,
substantially all of the shares were redeemed.

 6.  COMMON STOCK:

     On May 13,  1996,  the  Company  effected  a  two-for-one  stock  split  to
shareholders of record on May 3, 1996. On October 21, 1996, the Company effected
a second  two-for-one stock split to shareholders of record on October 14, 1996.
Both  of  these  stock  splits  have  been  given  retroactive   effect  in  the
accompanying consolidated financial statements.

     In May 1995, the Company was  reincorporated in the State of Minnesota.  As
part of the  reincorporation,  each  outstanding  share of Class A, Class B, and
Class C common stock was converted  automatically to 2.5 shares of new $.001 par
value common stock.

     During June 1995, the Company  completed an initial public offering ("IPO")
of its common stock. In that IPO, the Company issued 7,600,000 shares at a price
of $3.38 per share,  as adjusted for  subsequent  stock splits.  Net proceeds of
approximately  $23.2 million were  realized by the Company  after  deducting the
underwriting discount and offering costs.

     Prior  to  its  IPO,  the  Company's  outstanding  capital  stock  included
3,070,584  shares of Class C common  stock that was issued  with a put option in
connection  with a previous  acquisition of a business.  The put option entitled
the shareholder to put those shares back to the Company between July 1, 1997 and
November 30, 1997 in exchange for a note payable of $4.5 million less the amount
of certain  expenditures  made by the  stockholder  relating to obligations  not
assumed by the Company in that previous acquisition. The value of the put option
was being  accreted  by charges to  retained  earnings  over the life of the put
option until its  cancellation,  which occurred  concurrently with the Company's
IPO.

     The Company  completed  an  additional  public  offering of common stock in
February 1996. The Company sold 5,982,220  shares at a price of $7.50 per share,
as adjusted for the stock splits. Net proceeds of $42.3 million were realized by
the Company after deducting the underwriting discount and offering expenses.

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

7.   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,
                          --------------------------------------
                            1995            1996          1997
                          --------        --------      --------

Pretax income (loss):
  United States           $ (23,834)     $   8,653     $  15,005
  Foreign                     5,050         12,502          (713)
                          ---------      ---------     ---------
       Total              $ (18,784)     $  21,155      $ 14,292
                          =========      ========      =========

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

                                         (in thousands)
                                  For The Years Ended December 31,
                        ------------------------------------------------
                           1995              1996              1997
                        -----------       -----------      -------------
  Current:
    Federal             $  3,804          $  3,929           $  5,805
    Foreign                1,681             4,529              7,112
    State                    141               (60)              (113)
                        --------          --------           --------
                           5,626             8,398             12,804
  Deferred:
    Federal              (12,203)            1,521              1,237
    Foreign                  (16)              302             (2,735)
    State                     --                --                 --
                        --------          --------           --------
                         (12,219)            1,823             (1,498)
                        --------          --------           --------
    Provision for
    income tax          $ (6,593)         $ 10,221           $  11,306
    expense (benefit)   ==========        ==========         =========

     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 approximately $5,040 and $7,685 in 1996 and 1997, respectively.

                                      F-16
<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:

                                                       (in thousands)
                                               For The Years Ended December 31,
                                               ---------------------------------
                                                   1996               1997
                                               --------------     --------------

Deferred tax assets:
  Accrued compensation and other liabilities   $      11,198      $      10,362
  Net operating loss and other credit
    carryforwards                                      2,558              1,846
  Deferred tax items related to international
    operations                                           320              2,433
  Other                                                  297                346
                                               -------------      -------------
        Total deferred tax assets                     14,373             14,987
                                               -------------      -------------

Deferred tax liabilities:
  Deferred tax items related to international
    operations                                         1,137                 --
  Leased assets and depreciation                         640                319
  Unrealized gain on marketable securities               523                 37
  Other                                                  374                364
                                               -------------      -------------
        Total deferred tax liabilities                 2,674                720
                                               -------------      -------------
        Net deferred tax assets                $      11,699      $      14,267
                                               =============      =============

     Based upon the Company's current and historical  pretax earnings,  adjusted
for significant  deductions  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.

     Undistributed earnings of international consolidated subsidiaries for which
no deferred income tax provision has been made for possible  future  remittances
totaled  approximately  $5.6 million at December 31, 1997.  Substantially all of
this amount  represents  earnings  reinvested as part of the  Company's  ongoing
business. It is not practical to estimate the amount of U.S. taxes that might be
payable on the eventual  remittance of such  earnings.  On  remittance,  certain
countries impose  withholding taxes that,  subject to certain  limitations,  are
then available for use as tax credits against a U.S. tax liability,  if any. The
Company  estimates  withholding  taxes of  approximately  $0.5 million  would be
payable upon remittance of those earnings. At December 31, 1997, the Company had
U.S. Federal net operating loss  carryforwards  of  approximately  $1.3 million,
which will expire in 2004.  At December  31, 1997,  the Company had  alternative
minimum tax credit carryforwards of approximately $1.4 million.

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

     The  difference  between  the  Company's  income tax expense  (benefit)  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, less minority interest, is as follows:

                                                      (in thousands)
                                             For The Years Ended December 31,
                                          --------------------------------------
                                             1995          1996         1997
                                          ------------ ------------- -----------

Expected Federal income taxes              $ (6,816)   $   7,166    $  4,859
State taxes, net of Federal effects              83          (40)        (74)
Amortization of goodwill                         18          266         159
Impact of foreign operations                      4          438       1,278
Merger related costs                             --        2,257          --
State incentive tax credits (See note 14)        --           --       1,446
Impairment losses on intangible assets           --           --       3,400
Other                                           108          134         238
                                          =========    =========    ========
       Total                              $  (6,593)   $  10,221    $ 11,306
                                          =========    =========    ========

8.   LEASE OBLIGATIONS:

     The Company is  obligated  under  various  capital  leases for property and
certain equipment that expire at various dates through 2015.  Capitalized leased
equipment  included in property and equipment was approximately $7.3 million and
$17.8 million at December 31, 1996 and 1997,  respectively,  net of  accumulated
amortization.

     The Company also leases property and certain equipment under  noncancelable
operating  lease  arrangements  which expire at various dates through 2015. Rent
expense was approximately $3.8 million,  $6.7 million, and $15.4 million for the
years ended December 31, 1995,  1996 and 1997,  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, 1997 are as follows:

                                                 (in thousands)
                                           Capital           Operating
                                           Leases             Leases
                                        --------------     --------------
 Year ending December 31,
     1998                                     $ 6,406           $ 17,737
     1999                                       4,116             16,008
     2000                                       1,604             14,464
     2001                                         934             12,991
     2002 and thereafter                        9,625             10,586
                                        -------------      -------------
                                               22,685           $ 71,786
                                                           ==============
 Less amount representing interest              4,768
                                        --------------
 Present value of net minimum lease
        obligations                          $ 17,917
                                        ==============

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

9.   STOCK-BASED COMPENSATION:

     The Company has four stock option plans 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.

         a)   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  $.85 to  $1.71.  With  respect  to both the
              Replacement  Plan  and the EEB  Replacement  Plan,  the  following
              applies: Options are 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. No further options will be granted
              under these plans.

         a)   1995 Employee Stock Option Plan  ("Employee  Plan").  The Employee
              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
              9,800,000  shares of common  stock to  employees  and  independent
              consultants  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,  1997,  there were
              approximately  2.5 million shares available for issuance  pursuant
              to future grants under the Employee Plan.

         a)   1995 Non-Employee  Directors Stock Option Plan ("Directors Plan").
              The  Directors  Plan  provides  for  automatic  formula  grants of
              nonqualified  options to each independent director of the Company.
              Each  independent  director is 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 equal the
              fair  market  value of the  common  stock  on the  date of  grant.
              Options  vest  and  become   exercisable  in  three  equal  annual
              installments  commencing one year after grant.  The Directors Plan
              is  administered  by the Board  members  who are not  eligible  to
              participate in the plan. At December 31, 1997,  there were 224,000
              shares available for issuance  pursuant to future grants under the
              Directors Plan.

     All four plans  require  optionees to enter into certain  voting and resale
agreements which place certain restrictions on actions of the optionee.

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

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


                                                              Weighted-Average
                                        Number of              Exercise Price
                                         Options                 per Option
                                   --------------------    --------------------
  Balance, January 1,1995                            -                       -
      Granted                               12,539,500     $               .29
      Exercised                                      -                       -
      Canceled                                       -                       -
                                   --------------------    --------------------
  Balance, December 31,1995                 12,539,500                     .29
      Granted                                5,608,462                   15.39
      Exercised                             (1,719,642)                    .05
      Canceled                                 (50,908)                  15.75
                                   --------------------    --------------------
  Balance, December 31,1996                 16,377,412                     .44
      Granted                                6,478,211                   13.08
      Exercised                             (1,891,562)                    .12
      Canceled                              (5,343,144)                  15.69
                                   --------------------    --------------------
  Balance, December 31,1997                 15,620,917     $              5.78
                                   ====================    ====================
  Exercisable at December 31,1997            1,614,601     $              2.38
                                   ====================    ====================

     The number of options  granted and canceled in 1997  includes the effect of
an  amendment  to the terms of  pre-existing  option  agreements  for  4,222,405
options  issued under the 1995 Plan.  The  amendment to the terms of the options
lowered the exercise prices to prevailing  market values of the common stock and
altered the conditions for accelerated vesting of the options.

     The following table summarizes  information about stock options outstanding
at December 31, 1997.
<TABLE>
<CAPTION>

                                    Options Outstanding                        Options Exercisable
                     -------------------------------------------------- -----------------------------------
                         Number      Weighted-Average  Weighted-Average                       Weighted
Range of             Outstanding at     Remaining         Exercise        Exercisable at       Average
Exercise Prices         12/31/97    Contractual Life        Price           12/31/97       Exercise Price
----------------------------------------------------------------------- -----------------------------------
<S>                   <C>                 <C>              <C>             <C>                 <C>
           $.0025     8,343,496           2.41             $.0025          1,188,522           $.0025
  $4.39 to $12.38     1,517,458           6.09             $ 8.84            262,200           $ 6.04
           $12.50     4,197,797           8.21             $12.50            113,419           $12.50
 $12.75 to $15.75     1,098,926           8.07             $15.10             38,460           $15.54
 $16.50 to $20.50       463,240           9.01             $16.94             12,000           $19.50
</TABLE>

     The per share  weighted-average  fair value of stock options granted during
1995, 1996, and 1997, was $2.16, $7.84, and $7.72, 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 5.82%, 6.48%, and 6.31% in 1995, 1996,
and 1997,  respectively,  and an expected life of 5 years,  8.62 years, and 9.04
years in 1995, 1996, and 1997, respectively.

                                      F-20
<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  under SFAS No. 123, 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,
                                         -------------------------------------
                                            1995        1996          1997
                                         ----------  ----------    -----------
Net income (loss):        As Reported    $(13,453)      $10,857    $  2,812
                          Pro Forma       (13,493)       10,186      (1,473)

Income (loss) per share:  As Reported
                             Basic         $(0.33)       $ 0.19      $ 0.05
                             Diluted        (0.29)         0.16        0.04
                          Pro Forma
                             Basic         $(0.33)       $ 0.18      $(0.02)
                             Diluted        (0.29)         0.15       (0.02)

     In June 1995, NAFS entered into an agreement with one employee  whereby the
Company  committed to grant options  amounting to 2% of the common stock of NAFS
to the employee in connection with his initial employment contract. In May 1996,
NAFS fulfilled this commitment by issuing the options and recording compensation
expense,  which has been  classified  as selling,  general,  and  administrative
expense, of approximately $0.6 million.

10.  RELATED PARTY TRANSACTIONS:

     For the period of December 1994 to June 30, 1996, a common  shareholder  of
NAFS held 30,000 shares of Series A redeemable  preference  shares in the amount
of $0.3  million  and  earning  dividends  at a rate of 10% per  annum,  payable
quarterly.  Each share of preference  stock was convertible  into shares of NAFS
common stock and was  converted to common stock prior to the merger of SITEL and
NAFS. The same NAFS common  shareholder held an installment note payable of $0.5
million,  bearing interest at 10%, and secured by the assets  subordinate to the
bank debt for the period of December  1994 to June 30, 1996.  The debt  included
contingent  warrants  that  allowed  for the  issuance  of stock to  purchase  a
percentage of the Company's  outstanding common stock contingent upon the number
of months  required to repay the note payable.  In connection with the merger of
SITEL and NAFS,  the note payable was repaid and the  contingent  warrants  were
canceled.

11.  BENEFIT PLANS:

     The Company's 401(k) plan, formed in January 1994, covers substantially all
domestic  employees  who are 18 years  of age  with 60 days 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. Company  contributions
to the plan were $50,000 in 1996. No contributions were made in 1995 and 1997.

     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 1995, 1996, and 1997.

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

12.  SEGMENT DATA:

     The Company's operations are primarily conducted in one business segment. A
summary of the Company's operations by geographic area follows.


                                              (in thousands)
                                    For The Years Ended December 31,
                           ----------------------------------------------
                               1995            1996             1997
                           ------------    -------------    -------------

REVENUE:
  - North America           $  128,875     $    184,366     $    261,240
  - Europe                      58,340          128,384          200,291
  - Other                            -                -           29,943
                            ----------     ------------     ------------
                            $  187,215     $    312,750     $    491,474
                            ==========     ============     ============

OPERATING INCOME (LOSS):
  - North America           $  (23,872)    $     14,455     $     18,412
  - Europe                       5,672           13,883           15,499
  - Other                            -                -          (14,649)
                            ----------     ------------     ------------
                            $  (18,200)    $     28,338     $     19,262
                            ==========     ============     ============

IDENTIFIABLE ASSETS:
  - North America                          $     96,440     $    179,951
  - Europe                                      115,244          157,806
  - Other                                             -           48,123
                                           ------------     ------------
                                           $    211,684     $    385,880
                                           ============     ============

13.  CONTINGENCIES:

     From time to time, the Company is involved in litigation  incidental to its
business.  In the opinion of  management,  no litigation to which the Company is
currently a party is likely to have a materially adverse effect on the Company's
results of operations,  financial condition, or cash flows, if decided adversely
to the Company.

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

14.  RESTRUCTURING AND IMPAIRMENT OF ASSETS:

     In the fourth  quarter of 1997,  the Company  recorded  provisions of $15.7
million for  restructuring  expenses.  Included  in this  charge are  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 commitments in 1997, which are expected to be
fully completed in 1998, included the following initiatives:

o    Concurrent with the decision to pursue a new  joint-venture  equity partner
     in the Asia Pacific region, management committed to sell or abandon certain
     other  operations in 1998. The decision to sell or abandon 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. Management expects the
     plans to sell or abandon these  operations to be completed by mid 1998. The
     resulting impairment loss of approximately $10.0 million, which represented
     primarily the write-off of unamortized goodwill, was recorded in the fourth
     quarter of 1997.  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    Management   committed  to  plans  to  relocate  the  Company's   corporate
     headquarters  and to close or  consolidate  certain  under-performing  call
     centers.  Costs incurred as a result of these plans consist  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 the fourth quarter
     of 1997 because  management  believes  that it is more likely than not that
     these benefits will ultimately not be utilized. (See note 7.)

o    Management  committed to a plan to reorganize  its corporate  management in
     Europe.  The  substantial  majority  of  costs  related  to this  plan  are
     severance  costs of $2.8  million  for the  involuntary  termination  of 31
     employees,  which are accrued and unpaid at December 31, 1997.  The Company
     also incurred other costs of $0.1 million related to this plan.

After income  taxes,  these actions  reduced  fiscal year 1997 earnings by $15.7
million or $0.23 per diluted share.

15.  SUBSEQUENT EVENTS:

     On March 10,  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
long term revolving credit facility (the "Credit  Facility" - see Note 5), which
was also amended on that date. No  significant  gain or loss was recognized as a
result of this refunding.

                                      F-23
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  Notes,  which  include  interest  payable  semiannually,  are  general
unsecured  obligations  of the  Company  and  will be  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...........................................104.625%
          2003...........................................103.083%
          2004...........................................101.542%
          2005 and thereafter............................100.000%

     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.

     The Company also reached an agreement with a syndicate of commercial  banks
to amend the Company's  existing Credit Facility to limit  borrowings  under the
Credit  Facility to an amount based upon a percentage of the Company's  eligible
domestic  accounts  receivable,  as defined,  up to $75 million.  Certain of the
financial  covenants and  restrictions  were amended and the Company's  eligible
domestic accounts receivable were pledged as security.

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:

     The Notes are guaranteed,  on a full,  unconditional  and joint and several
basis,  by 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, 1996 and
     1997, and for the years ended December 31, 1995, 1996 and 1997 of (a) SITEL
     Corporation,   the  parent,  (b)  the  guarantor   subsidiaries,   (c)  the
     nonguarantor  subsidiaries  and (d)  SITEL  Corporation  on a  consolidated
     basis,
(1)  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
(1)  Elimination entries necessary to consolidate SITEL Corporation, the parent,
     with all subsidiaries.

                                      F-24
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      Condensed Consolidating Balance Sheet
                                December 31, 1996
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Current assets:
  Cash and cash equivalents ................  $  13,302   $   1,859       $  10,549       $    --        $  25,710
  Trade accounts receivable, net ...........     16,510       7,246          42,578          (857)          65,477
  Marketable securities ....................      1,740          --              --            --            1,740
  Prepaid expenses and other current assets.      1,909         711           3,806            --            6,426
                                              ---------   ---------       ---------       -------        ---------
    Total current assets ...................     33,461       9,816          56,933          (857)          99,353
                                              ---------   ---------       ---------       -------        ---------
  Property and equipment, net ..............     23,671       6,936          28,502            --           59,109
  Deferred income taxes ....................     12,317        (280)           (850)           --           11,187
  Goodwill, net ............................      1,718          --          38,392            --           40,110
  Other assets .............................      1,369         135             421            --            1,925
  Investments in subsidiaries ..............     67,765      34,023              --      (101,788)              --
  Notes receivable, intercompany ...........         --      20,415              --       (20,415)              --
                                              ---------   ---------       ---------     ---------        ---------
    Total assets ...........................  $ 140,301   $  71,045       $ 123,398     $(123,060)       $ 211,684
                                              =========   =========       =========     =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Notes payable ............................  $      --   $     --        $   3,638     $      --        $   3,638
  Current portion of long-term debt.........         15         --              744            --              759
  Current portion of capitalized
    lease obligations.......................         --         76            2,956            --            3,032
  Trade accounts payable ...................      1,396      1,264           16,972          (857)          18,775
  Accrued expenses and other current
    liabilities.............................     10,589      1,707           24,017            --           36,313
                                              ---------   --------        ---------     ---------        ---------
    Total current liabilities ..............     12,000      3,047           48,327          (857)          62,517
                                              ---------   --------        ---------     ---------        ---------
  Long-term debt, excluding current portion.        115         --            1,605            --            1,720
  Capitalized lease obligations,
    excluding current portion ..............         --        233            2,908            --            3,141
  Notes payable, intercompany ..............         --         --           20,415       (20,415)              --
  Purchase price payable ...................         --         --           15,928            --           15,928
  Deferred compensation ....................      1,461         --               --            --            1,461
  Minority interest ........................         --         --              192            --              192

  Stockholders' equity .....................    126,725     67,765           34,023      (101,788)         126,725
                                              ---------   --------        ---------     ---------        ---------
    Total liabilities and
      stockholders' equity .................  $ 140,301   $ 71,045        $ 123,398     $(123,060)       $ 211,684
                                              =========   ========        =========     =========        =========
</TABLE>

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

                      Condensed Consolidating Balance Sheet
                                December 31, 1997
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Current assets:
  Cash and cash equivalents ................  $  11,514   $   2,075       $  10,696     $      --        $  24,285
  Trade accounts receivable, net ...........     21,832      22,167          65,313        (1,615)         107,697
  Marketable securities ....................        159          --              --            --              159
  Prepaid expenses and other current assets.      6,523         264           9,830            --           16,617
                                              ---------   ---------       ---------     ---------        ---------
     Total current assets ..................     40,028      24,506          85,839        (1,615)         148,758
                                              ---------   ---------       ---------     ---------        ---------
  Property and equipment, net ..............     37,585      24,251          58,764            --          120,600
  Deferred income taxes.....................     11,070          --              44            --           11,114
  Goodwill, net ............................      1,627      21,926          70,828            --           94,381
  Other assets .............................      7,532         121           3,374            --           11,027
  Investments in subsidiaries ..............    180,112      94,999              --      (275,111)              --
  Notes receivable, intercompany ...........         --      22,203              --       (22,203)              --
                                              ---------   ---------       ---------     ---------        ---------
     Total assets ..........................  $ 277,954   $ 188,006       $ 218,849     $(298,929)       $ 385,880
                                              =========   =========       =========     =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Notes payable ............................   $     --   $      --       $  14,376     $      --        $  14,376
  Current portion of long-term debt ........      2,026          --           8,767            --           10,793
  Current portion of capitalized
    lease obligations ......................        308          98           4,528            --            4,934
  Trade accounts payable ...................      2,841       1,202          24,894        (1,615)          27,322
  Accrued expenses and other current
     liabilities ...........................     11,168       6,210          34,410            --           51,788
                                              ---------   ---------       ---------     ---------        ---------
     Total current liabilities .............     16,343       7,510          86,975        (1,615)         109,213
                                              ---------   ---------       ---------     ---------        ---------
  Long-term debt, excluding current
    portion ................................    101,488          --           1,017            --          102,505
  Capitalized lease obligations,
    excluding current portion ..............        328         140          12,515            --           12,983
  Notes payable, intercompany and other ....         --         244          21,959       (22,203)              --
  Deferred compensation ....................      1,407          --              --            --            1,407

  Minority interest ........................         --          --           1,384            --            1,384

  Stockholders' equity .....................    158,388     180,112          94,999      (275,111)         158,388
                                               ---------  ---------       ---------     ---------        ---------
     Total liabilities and shareholders'
      equity ...............................  $ 277,954   $ 188,006       $ 218,849     $(298,929)       $ 385,880
                                              =========   =========       =========     =========        =========
</TABLE>

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

                   Condensed Consolidating Statement of Income
                      For the year ended December 31, 1995
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Revenues ...................................  $  84,841   $  44,034       $  58,340     $      --        $ 187,215
                                              ---------   ---------       ---------     ---------        ---------
Operating expenses:
  Cost of services .........................     46,510      22,967          32,140            --          101,617
  Selling, general and administrative 
    expenses ...............................     36,310      12,375          20,528            --           69,213
  Special compensation expense .............     34,585          --              --            --           34,585
                                              ---------   ---------       ---------     ---------        ---------
    Total operating expenses ...............    117,405      35,342          52,668            --          205,415
                                              ---------   ---------       ---------     ---------        ---------

    Operating income (loss) ................    (32,564)      8,692           5,672            --          (18,200)
                                              ---------   ---------       ---------     ---------        ---------
Other income (expense):
  Equity in earnings of subsidiaries,
    net of tax .............................      7,557       2,123              --        (9,680)              --
     
  Interest income ..........................        474           6             133            --              613
  Interest expense .........................       (300)       (260)           (755)           --           (1,315)
  Other income .............................        118          --              --            --              118
                                              ---------   ---------       ---------     ---------        ---------

Total other income (expense)................      7,849       1,869            (622)       (9,680)            (584)
                                              ---------   ---------       ---------     ---------        ---------
Income (loss) before income taxes and
     minority interest .....................    (24,715)     10,561           5,050        (9,680)         (18,784)

Income tax expense (benefit) ...............    (11,262)      3,004           1,665            --           (6,593)

Minority interest ..........................         --          --           1,262            --            1,262
                                              ---------   ---------       ---------     ---------        ---------

     Net income (loss) .....................  $ (13,453)  $   7,557       $   2,123     $  (9,680)       $ (13,453)
                                              =========   =========       =========     =========        =========
</TABLE>
                                      F-27
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  Condensed Consolidating Statement of Income
                      For the year ended December 31, 1996
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Revenues ...................................  $ 122,582   $  56,752       $ 133,416     $      --        $ 312,750
                                              ---------   ---------       ---------     ---------        ---------
Operating expenses:
  Cost of services .........................     63,839      30,595          69,283            --          163,717
  Selling, general and administrative
    expenses ...............................     52,913      20,117          47,665            --          120,695
                                              ---------   ---------       ---------     ---------        ---------
     Total operating expenses ..............    116,752      50,712         116,948            --          284,412
                                              ---------   ---------       ---------     ---------        ---------
  Operating income .........................      5,830       6,040          16,468            --           28,338
                                              ---------   ---------       ---------     ---------        ---------
Other income (expense):
  Equity in earnings of
    subsidiaries, net of tax ...............     11,465       7,594              --       (19,059)              --
  Transaction related expense ..............     (5,700)       (666)           (622)           --           (6,988)
  Intercompany charges .....................        378       1,515          (1,893)           --               --
  Interest income ..........................      1,076          --              32            --            1,108
  Interest expense .........................        169        (117)         (1,387)           --           (1,335)
  Other income (expense) ...................        128          --             (96)           --               32
                                              ---------   ---------       ---------     ---------        ---------    

    Total other income (expense) ...........      7,516       8,326          (3,966)      (19,059)          (7,183)
                                              ---------   ---------       ---------     ---------        ---------
Income before income taxes and
  minority interest ........................     13,346      14,366          12,502       (19,059)          21,155
Income tax expense .........................      2,489       2,901           4,831            --           10,221

Minority interest ..........................         --          --              77            --               77
                                              ---------   ---------       ---------     ---------        ---------
Net income .................................  $  10,857   $  11,465       $   7,594     $ (19,059)       $  10,857
                                              =========   =========       =========     =========        =========
</TABLE>
                                      F-28
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<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 .............................        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-29
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Condensed Consolidating Statement of Cash Flows
                      For the year ended December 31, 1995
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Net cash provided by operating
  activities ...............................  $   6,733   $   4,703       $   3,837     $      --        $  15,273
                                              ---------   ---------       ---------     ---------        ---------
Cash flows from investing activities:
  Net cash receipts from subsidiary ........      2,415          --              --        (2,415)              --
  Purchases of property and equipment ......     (7,618)     (2,497)         (3,164)           --          (13,279)
  Proceeds from sales of property and
    equipment ..............................         --          --             126            --              126
  Investment in marketable securities ......    (22,196)         --              --            --          (22,196)
  Sale of marketable securities ............      9,150          --              --            --            9,150
  Changes in other assets, net .............       (269)        (80)             --            --             (349)
                                              ---------   ---------       ---------     ---------        ---------
Net cash used in investing
  activities ...............................    (18,518)     (2,577)         (3,038)       (2,415)         (26,548)
                                              ---------   ---------       ---------     ---------        ---------

Cash flows from financing activities:
  Borrowings on notes payable ..............     21,314         191             424            --           21,929
  Repayments of notes payable ..............    (21,394)        (35)             --            --          (21,429)
  Borrowings on long-term debt .............      5,525          --           1,794            --            7,319
  Repayment of long-term debt and
    capital lease obligations ..............    (13,295)        (66)         (2,325)           --          (15,686)
  Repayment of note payable to related
    party ..................................       (492)         --              --            --             (492)
  Prepayment of redeemable preference
    shares .................................         --          --            (464)           --             (464)
  State incentive credits received .........        800          --              --            --              800
  Common stock issued, net of expenses .....     23,171          --              --            --           23,171
  Net cash payments to parent ..............         --      (2,415)             --        (2,415)              --
                                              ---------   ---------       ---------     ---------        ---------
Net cash provided by (used in)
  financing activities .....................     15,629      (2,325)           (571)        2,415           15,148
                                              ---------   ---------       ---------     ---------        ---------
Effect of exchange rates on cash ...........         --          --            (104)           --             (104)
                                              ---------   ---------       ---------     ---------        ---------
Net increase (decrease) in cash ............      3,844        (199)            124            --            3,769

Cash and cash equivalents, beginning
  of year ..................................       (396)        833             325            --              762
                                              ---------   ---------       ---------     ---------        ---------
Cash and equivalents, end of year ..........  $   3,448   $     634       $     449     $      --        $   4,531
                                              =========   =========       =========     =========        =========
</TABLE>
                                      F-30
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Condensed Consolidating Statement of Cash Flows
                      For the year ended December 31, 1996
                                 (in thousands)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<S>                                           <C>         <C>             <C>             <C>           <C>
Net cash provided by operating
  activities ...............................  $  13,942   $   3,525       $  18,376     $      --        $  35,843
                                              ---------   ---------       ---------     ---------        ---------
Cash flows from investing activities:
  Investments in subsidiaries ..............    (37,823)    (11,131)             --        48,954               --
  Acquisitions net of cash acquired ........         --      (4,216)        (23,720)           --          (27,936)
  Purchases of property and equipment ......    (21,362)     (3,539)        (15,053)           --          (39,954)
  Proceeds from sales of property
    and equipment ..........................         --          --             199            --              199
  Investment in marketable securities ......    (63,793)         --              --            --          (63,793)
  Sale of marketable securities ............     76,840          --              --            --           76,840
  Changes in other assets, net .............       (274)         --            (106)           --             (380)
                                              ---------   ---------       ---------     ---------        ---------

Net cash used in investing activities ......    (46,412)    (18,886)        (38,680)       48,954          (55,024)
                                              ---------   ---------       ---------     ---------        ---------
Cash flows from financing activities:
  Borrowings on notes payable ..............     15,835          --           1,334            --           17,169
  Repayments of notes payable ..............    (15,835)       (191)             --            --          (16,026)
  Borrowings on long-term debt .............        500          --              --            --              500
  Repayment of long-term debt and
    capital lease obligations ..............       (515)       (631)         (1,161)           --           (2,307)
  Net borrowings and payments on note
    to parent ..............................         --     (20,415)         20,415            --               --
  Net capital contribution from parent .....         --      37,823          11,131       (48,954)              --
  Repayment of redeemable preference shares.         --          --          (2,075)           --           (2,075)
  Common stock issued, net of expenses .....     42,339          --              --            --           42,339
                                              ---------   ---------       ---------     ---------        ---------
Net cash provided by financing activities ..     42,324      16,586          29,644       (48,954)          39,600
                                              ---------   ---------       ---------     ---------        ---------
Effect of exchange rates on cash ...........         --          --             760            --              760
                                              ---------   ---------       ---------     ---------        ---------
Net increase in cash .......................      9,854       1,225          10,100            --           21,179
                                              ---------   ---------       ---------     ---------        ---------
Cash and cash equivalents, beginning
  of year ..................................      3,448         634             449            --            4,531
                                              ---------   ---------       ---------     ---------        ---------
Cash and equivalents, end of year ..........  $  13,302   $   1,859       $  10,549     $      --        $  25,710
                                              =========   =========       =========     =========        =========
</TABLE>
                                      F-31
<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)

16.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED):
<TABLE>
<CAPTION>
                                                             Guarantor    Nonguarantor
                                                Parent     Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------     ------------   ------------   ------------   ------------
ASSETS
<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 ..................     (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-32