================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q
--------------------------------------------------------------------------------

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended JUNE 30, 2002


  Commission              Exact name of registrant as          IRS Employer
 File Number                specified in its charter         Identification No.

   1-12577                      SITEL CORPORATION                47-0684333



                                    MINNESOTA
                    ----------------------------------------
         (State or Other Jurisdiction of Incorporation or Organization)

          111 S. CALVERT STREET, SUITE 1900 BALTIMORE,  MARYLAND        21202
--------------------------------------------------------------------------------
                (Address of Principal Executive Offices)              (Zip Code)

                                 (410) 246-1505
                       ---------------------------------
              (Registrant's Telephone Number, Including Area Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                                      NAME OF EACH EXCHANGE
                TITLE OF EACH CLASS                    ON WHICH REGISTERED
                -------------------                    -------------------
          Common Stock, $.001 Par Value            The New York Stock Exchange



           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                 Not Applicable



     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 ____


COMMON STOCK,  $.001 PAR VALUE - 74,357,431  SHARES  OUTSTANDING  AS OF JULY 31,
2002

================================================================================

<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS



                                                                            PAGE
PART I - FINANCIAL INFORMATION

  Item 1 - Financial Statements

           Consolidated Condensed Statements of Income (Loss)................. 1
           Consolidated Condensed Balance Sheets.............................. 2
           Consolidated Condensed Statements of Cash Flows.................... 3
           Notes to Consolidated Financial Statements......................... 4


  Item 2 - Management's Discussion and Analysis of Financial
           Condition and Results of Operations

           General............................................................15
           General Business Risks, Critical Accounting Policies and Estimates.15
           Results of Operations..............................................17
           Financial Condition and Liquidity..................................21
           Other Matters......................................................22


  Item 3 - Quantitative and Qualitative Disclosures About Market Risk.........23


PART II - OTHER INFORMATION

  Item 4 - Submission of Matters to a Vote of Security Holders................24

  Item 5 - Other Information..................................................24

  Item 6 - Exhibits and Reports on Form 8-K...................................24

  Signature...................................................................25

  Exhibit Index...............................................................26


<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                       SITEL CORPORATION AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED       SIX MONTHS ENDED
                                                                  JUNE 30,                JUNE 30,
                                                        ------------------------    -----------------------
                                                           2002          2001          2002        2001
                                                        ----------    ----------    ---------    ----------
                                                              (in thousands, except per share data)
<S>                                                       <C>          <C>          <C>          <C>
REVENUES                                                  $ 196,747    $ 177,787    $ 389,779    $ 361,791
-----------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses             110,651      100,537      222,667      202,166
   Subcontracted and other services expenses                 13,898        9,034       25,491       18,324
   Operating, selling and administrative expenses            63,335       70,717      125,095      139,310
   Asset impairment and restructuring expenses                   --       23,788           --       23,788
-----------------------------------------------------------------------------------------------------------
   Total operating expenses                                 187,884      204,076      373,253      383,588
-----------------------------------------------------------------------------------------------------------

OPERATING INCOME (LOSS)                                       8,863      (26,289)      16,526      (21,797)
-----------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest expense, net                                     (2,805)      (2,916)      (5,536)      (5,766)
   Equity in earnings (loss) of subsidiary                    1,012          (72)       1,347         (109)
   Other expense, net                                           (35)      (1,257)        (223)      (1,363)
-----------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST       7,035      (30,534)      12,114      (29,035)

Income tax expense (benefit)                                  2,743         (466)       4,724       (9,651)
Minority interest                                               781          173        1,141          227
-----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                         $   3,511    $ (30,241)   $   6,249    $ (19,611)
===========================================================================================================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
   Basic                                                     74,221       73,646      74,219        72,930
   Diluted                                                   74,572       73,646      74,423        72,930

INCOME (LOSS) PER COMMON SHARE:
   Basic                                                  $    0.05    $   (0.41)   $   0.08     $   (0.27)
   Diluted                                                $    0.05    $   (0.41)   $   0.08     $   (0.27)
</TABLE>
See Notes to Consolidated Financial Statements.

                                        1
<PAGE>

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 1. FINANCIAL STATEMENTS

                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                              (UNAUDITED)
                                                                                JUNE 30,    DECEMBER 31,
                                                                                  2002         2001
                                                                               ---------    ------------
                                                                           (in thousands, except share data)
ASSETS
   CURRENT ASSETS:
<S>                                                                            <C>          <C>
     Cash and cash equivalents                                                 $  28,775    $  22,156
     Trade accounts receivable (net of allowance for doubtful accounts of
       $4,935 and $5,208, respectively)                                          133,316      129,180
     Prepaid expenses                                                              7,760        6,200
     Deferred income taxes                                                         5,703        6,358
     Other assets                                                                  7,104        7,133
------------------------------------------------------------------------------------------------------
     Total current assets                                                        182,658      171,027
------------------------------------------------------------------------------------------------------
   PROPERTY AND EQUIPMENT, NET                                                    94,828       91,293
------------------------------------------------------------------------------------------------------
   OTHER ASSETS:
     Goodwill, net                                                                76,266       73,216
     Deferred income taxes                                                         9,441        9,398
     Other assets                                                                 11,980       10,532
------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                   $ 375,173    $ 355,466
======================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Current portion of capital lease obligations                              $   1,520    $   2,366
     Trade accounts payable                                                       26,776       25,068
     Income taxes payable                                                          3,557        4,087
     Deferred income taxes                                                           562          717
     Accrued wages, salaries and bonuses                                          26,517       26,014
     Accrued operating expenses                                                   39,063       34,953
     Deferred revenue and other                                                    5,413        5,145
------------------------------------------------------------------------------------------------------
     Total current liabilities                                                   103,408       98,350

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt                                                              100,000      100,000
     Capital lease obligations, excluding current portion                          7,042        7,040
     Deferred compensation                                                         1,668        1,755
     Deferred income taxes                                                           559          533
------------------------------------------------------------------------------------------------------
     Total liabilities                                                           212,677      207,678
------------------------------------------------------------------------------------------------------
   MINORITY INTERESTS                                                              8,752        7,748
------------------------------------------------------------------------------------------------------

   STOCKHOLDERS' EQUITY:
     Common stock, voting, $.001 par value 200,000,000 shares authorized,
       74,357,431 and 74,357,579 shares issued and outstanding, respectively          74           74
     Paid-in capital                                                             168,718      168,731
     Accumulated other comprehensive loss                                        (18,695)     (26,148)
     Retained earnings (accumulated deficit)                                       3,865       (2,369)
     Less treasury stock, at cost                                                   (218)        (248)
------------------------------------------------------------------------------------------------------
     Total stockholders' equity                                                  153,744      140,040
------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $ 375,173    $ 355,466
======================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.

                                        2
<PAGE>
PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 1. FINANCIAL STATEMENTS

                       SITEL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                             SIX MONTHS ENDED
                                                                 JUNE 30,
                                                           ---------------------
                                                             2002         2001
                                                           --------    ---------
                                                               (in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                       $  6,249    $(19,611)
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
     Asset impairment and restructuring provision                --      23,788
     Depreciation and amortization                           17,106      20,988
     Loss on disposal of assets                                  69       1,254
     Provision for deferred income taxes                        483      (6,411)
     Deferred compensation                                     (251)       (985)
     Changes in operating assets and liabilities:
       Trade accounts receivable                             (3,621)      6,121
       Other assets                                          (1,366)      2,194
       Trade accounts payable                                 2,656        (506)
       Other liabilities                                      3,286      (3,276)
--------------------------------------------------------------------------------
   Net cash provided by operating activities                 24,611      23,556
--------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                      (17,559)    (26,644)
   Proceeds from sales of property and equipment                  4          46
   Increase in other assets                                     (53)     (1,466)
--------------------------------------------------------------------------------
   Net cash used in investing activities                    (17,608)    (28,064)
--------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of notes payable                                   --        (302)
   Borrowings on debt                                        33,915      65,475
   Repayment of debt                                        (33,915)    (50,269)
   Repayment of capital lease obligations                    (1,339)     (2,250)
   Common stock issued, net of expenses                          --          95
   Treasury stock (purchases) reissuances, net                   30        (226)
   Capital contribution from minority interest                   --         250
   Other                                                        (13)         11
--------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities       (1,322)     12,784
--------------------------------------------------------------------------------
Effect of exchange rates on cash                                938      (1,554)
--------------------------------------------------------------------------------
NET INCREASE IN CASH                                          6,619       6,722
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD               22,156      19,897
--------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                   $ 28,775    $ 26,619
================================================================================

See Notes to Consolidated Financial Statements.

                                       3
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

DESCRIPTION OF OUR BUSINESS
References in the Notes to Consolidated  Financial  Statements to "we" and "our"
are to SITEL Corporation and its subsidiaries, collectively.

We are a leading global provider of outsourced  customer  support  services.  We
specialize   in  the  design,   implementation,   and   operation   of  complex,
multi-channel contact centers. We support the Customer  Relationship  Management
(CRM) strategies of large corporations in North America,  Europe,  Asia Pacific,
and Latin America.  We provide customer  acquisition,  customer care,  technical
support  and  risk  management  services  on an  outsourced  basis,  as  well as
operational and information technology professional services for both outsourced
and  internal  contact  centers.  We serve  clients  primarily  in the  consumer
products,  financial services,  insurance,  telecommunications,  technology, and
utilities industries.

USE OF ACCOUNTING ESTIMATES
Management makes estimates and assumptions when preparing  financial  statements
under accounting  principles  generally accepted in the United States of America
that affect:

o    our  reported  amounts  of  assets  and  liabilities  at the  dates  of the
     financial statements,
o    our  disclosure of contingent  assets and  liabilities  at the dates of the
     financial statements, and
o    our reported amounts of revenues and expenses during the reporting periods.

These estimates  involve  judgments with respect to, among other things,  future
economic  factors  that are  difficult  to predict  and are beyond  management's
control. As a result, actual amounts could differ from these estimates.

QUARTERLY RESULTS AND SEASONALITY
We have experienced, and expect to continue to experience,  quarterly variations
in our results of operations mostly due to:

o    the timing of our clients' customer relationship management initiatives and
     customer acquisition and loyalty campaigns,
o    the commencement and terms of new contracts,
o    revenue mix,
o    the timing of additional operating, selling, and administrative expenses to
     support new business, and
o    the timing of recognition of incentive fees.

We experience periodic fluctuations in our results of operations related to both
the start-up costs associated with expansion and the  implementation of clients'
CRM activities.  In addition,  our business  generally tends to be slower in the
third quarter due to summer holidays in Europe,  and in the first quarter due to
the changeover of client marketing strategies that often occurs at the beginning
of the year.

FINANCIAL STATEMENTS
Our Consolidated  Condensed Balance Sheet at December 31, 2001 was obtained from
our  audited  balance  sheet as of that  date.  All other  financial  statements
contained  in this  report are  unaudited  and,  in the  opinion of  management,
contain all  adjustments  necessary  for a fair  presentation  of the  financial
position,  operating results,  and cash flows for the periods  presented.  These
adjustments are of a normal recurring nature.

You should read our consolidated  condensed financial  statements in this report
in conjunction with Management's  Discussion and Analysis of Financial Condition
and Results of Operations,  the Consolidated Financial Statements, and the Notes
to  Consolidated  Financial  Statements  in our Report on Form 10-K for the year
ended December 31, 2001.

GOODWILL, NET
In June 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 142,
Goodwill and Other Intangible Assets. This statement:

o    replaces the requirement to amortize  goodwill and certain other intangible
     assets with an annual impairment test, and
o    requires an  evaluation  of the useful  lives of  intangible  assets and an
     impairment test for goodwill upon adoption.

We adopted the  provisions of SFAS No. 142 as of January 1, 2002. As a result of
the adoption of this  standard,  we stopped  amortizing  our goodwill  effective
January 1, 2002, which means that we have not recorded any goodwill amortization
expense in our  Consolidated  Statements  of Income for the three and six months
ended June 30, 2002 and we will not record such amortization in the remainder of
2002 and in future years.

                                       4
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total goodwill amortization expense was:

o    $0.9 million for the three months ended June 30, 2001, and
o    $1.8 million for the six months ended June 30, 2001.

If we had adopted the  provisions  of SFAS No. 142 on January 1, 2001,  we would
have had:

o    a net loss of $29.3 million, or $0.40 per share, for the three months ended
     June 30, 2001, and
o    a net loss of $17.8 million,  or $0.25 per share,  for the six months ended
     June 30, 2001.

During 2002, we must perform a transitional  goodwill  impairment  review in two
phases to  determine  if goodwill  that was stated in our  Consolidated  Balance
Sheet at January 1, 2002 was  impaired.  During the second  quarter of 2002,  we
completed the first phase of the required impairment review, and determined that
the goodwill in certain  reporting  units was impaired at January 1, 2002.  As a
result,  we expect to record a pre-tax goodwill  impairment loss in the range of
$12 million to $16 million as a cumulative effect of an accounting change in the
2002  financial  statements.  We will determine the exact amount of the goodwill
impairment  loss  upon  completion  of the  second  phase  of  the  transitional
impairment review, which we must complete by December 31, 2002.

ASSET IMPAIRMENT
In October 2001, the Financial  Accounting  Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived  Assets.  We adopted the
provisions of SFAS No. 144 effective  January 1, 2002.  Under this standard,  we
monitor  events and changes in  circumstances  that may require us to review the
carrying value of our long-lived  assets.  We assess the  recoverability  of our
long-lived assets based on estimated  undiscounted  future operating cash flows.
Our assessment of the  recoverability  of our long-lived assets will be impacted
if estimated future operating cash flows are not achieved.

RECLASSIFICATIONS
We have  reclassified  certain  prior-period  amounts for comparative  purposes.
These  reclassifications  did not affect consolidated net income for the periods
presented.

NOTE 2. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) was:

o    $13.9  million for the three months ended June 30, 2002 compared to ($32.4)
     million for the three months ended June 30, 2001, and
o    $13.7  million for the six months  ended June 30, 2002 and ($28.9)  million
     for the six months ended June 30, 2001.

The difference  between our reported net income (loss) and comprehensive  income
(loss)  for  each  period  presented  is  the  change  in our  foreign  currency
translation  adjustment.  Accumulated other comprehensive income included in our
Consolidated   Balance  Sheets  represents  the  accumulated   foreign  currency
translation adjustment.

NOTE 3.  ASSET IMPAIRMENT AND RESTRUCTURING EXPENSES

In June 2001, we announced a restructuring  plan designed to intensify our focus
on core competencies,  accelerate revenue growth, and improve profitability. The
key components of the  restructuring  plan include several major  organizational
changes and the streamlining of contact center  operations and corporate support
services  to improve  effectiveness  and drive  revenue  growth.  As part of our
restructuring  plan,  we reduced  fixed  overhead  to improve  profitability  by
substantially completing the following by December 31, 2001:

o    eliminating  approximately  350  operating,   selling,  and  administrative
     positions globally, and
o    reducing  excess  capacity  by  closing  nine  contact  centers  plus three
     administrative  offices,  and downsizing  another five contact centers plus
     two administrative  offices,  resulting in the elimination of approximately
     2,100 workstations.

In  connection  with this  restructuring,  we  recorded  $26.2  million of asset
impairment  and  restructuring  charges  in 2001,  or $24.6  million  after tax.
Approximately  $16.9 million of these charges are liabilities  that we have paid
or will pay in cash. At June 30, 2002, we had paid approximately $9.5 million of
the  liabilities of which $2.7 million was paid during the six months ended June
30, 2002. We have classified the remaining $7.4 million of unpaid liabilities as
accrued operating expenses in our June 30, 2002 Consolidated  Balance Sheet. The
charges also  included $9.3 million of asset  write-downs  that we recorded as a
reduction of fixed assets.

                                       5
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We summarize  the  components of the  restructuring  charges that we recorded as
asset impairment and restructuring expenses in 2001 in the following table:

                    SECOND      THIRD
                    QUARTER    QUARTER                 TOTAL
                      2001       2001    ADJUSTMENTS   2001
--------------------------------------------------------------
                                  (in millions)
Severance            $ 5.3      $ 0.1    $ (0.4)    $  5.0
Facility closure
   or reduction        9.1        1.3       0.6       11.0
Other                  0.7        0.1       0.1        0.9
--------------------------------------------------------------
Subtotal              15.1        1.5       0.3       16.9
Asset write-downs      8.7        0.9      (0.3)       9.3
--------------------------------------------------------------
Total                $23.8      $ 2.4    $  --      $ 26.2
--------------------------------------------------------------

We  summarize  the  components  of  the  accrued   operating   expenses  in  our
Consolidated Balance Sheets in the following table:

                          ACCRUAL                          ACCRUAL
                         BALANCE AT                        BALANCE AT
                         DECEMBER 31,   2002                JUNE 30,
                             2001     PAYMENTS  ADJUSTMENTS   2002
-----------------------------------------------------------------------
                                        (in millions)
Severance                   $ 0.9      $ 0.5    $  0.1     $  0.5
Facility closure
   or reduction               8.5        2.1       --         6.4
Other                         0.7        0.1      (0.1)       0.5
-----------------------------------------------------------------------
Total                       $10.1      $ 2.7    $  --      $  7.4
-----------------------------------------------------------------------

NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Our 9.25% Senior Subordinated Notes are guaranteed, on a full, unconditional and
joint and several  basis,  by  substantially  all of our wholly  owned  domestic
subsidiaries.   Separate   financial   statements  for  each  of  the  guarantor
subsidiaries are not presented  because they would not be material to investors.
However,  on the following  pages we have presented the following  statements of
(a) SITEL  Corporation,  the parent,  (b) the  guarantor  subsidiaries,  (c) the
nonguarantor subsidiaries, and (d) SITEL Corporation on a consolidated basis:

o    Condensed  Consolidating  Statements  of Income  (Loss)  and  Comprehensive
     Income  (Loss) for the three and six month  periods ended June 30, 2002 and
     2001,
o    Condensed  Consolidating  Balance  Sheets at June 30, 2002 and December 31,
     2001, and
o    Condensed  Consolidating  Statements of Cash Flows for the six months ended
     June 30, 2002 and 2001.

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


NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
 CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

                                                                 GUARANTOR    NONGUARANTOR
Three Months Ended June 30, 2002                     PARENT    SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------
                                                                             (in thousands)
<S>                                                 <C>          <C>          <C>          <C>            <C>
REVENUES                                            $  99,989    $  11,939    $  86,097    $  (1,278)     $ 196,747
----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses        51,639        6,886       52,126           --        110,651
   Subcontracted and other services expenses           11,436          676        1,786           --         13,898
   Operating, selling and administrative expenses      30,991        3,067       30,555       (1,278)        63,335
----------------------------------------------------------------------------------------------------------------------
Total operating expenses                               94,066       10,629       84,467       (1,278)       187,884
----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME                                        5,923        1,310        1,630           --          8,863
----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest expense, net                               (2,467)        (226)        (112)          --         (2,805)
   Equity in earnings (losses) of subsidiaries            204         (390)       1,012          186          1,012
   Other income (expense), net                             35           --          (70)          --            (35)
----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                           (2,228)        (616)         830          186         (1,828)
----------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST        3,695          694        2,460          186          7,035

Income tax expense (benefit)                              (70)         490        2,323           --          2,743
Minority interest                                         254           --          527           --            781
----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                   $   3,511    $     204    $    (390)   $     186      $   3,511
======================================================================================================================

Currency translation adjustment                        10,392        7,410        8,710      (16,120)        10,392
----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                         $  13,903    $   7,614    $   8,320    $ (15,934)     $  13,903
======================================================================================================================
</TABLE>
                                       7
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
 CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)


                                                                  GUARANTOR   NONGUARANTOR
Three Months Ended June 30, 2001                     PARENT     SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                 <C>          <C>          <C>            <C>          <C>
REVENUES                                            $  96,891    $   9,891    $  71,319      $    (314)   $ 177,787
----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses        55,533        5,291       39,713             --      100,537
   Subcontracted and other services expenses            7,224          578        1,232             --        9,034
   Operating, selling and administrative expenses      33,234        3,555       34,242           (314)      70,717
   Asset impairment and restructuring expenses         13,318           --       10,470             --       23,788
----------------------------------------------------------------------------------------------------------------------
Total operating expenses                              109,309        9,424       85,657           (314)     204,076
----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME (LOSS)                               (12,418)         467      (14,338)            --      (26,289)
----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest income (expense), net                      (2,871)          10          (55)            --       (2,916)
   Equity in earnings (losses) of subsidiaries        (15,852)     (16,143)         (72)        31,995          (72)
   Other income (expense), net                             33           --       (1,290)            --       (1,257)
----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                          (18,690)     (16,133)      (1,417)        31,995       (4,245)
----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                              (31,108)     (15,666)     (15,755)        31,995      (30,534)

Income tax expense (benefit)                             (867)         186          215             --         (466)
Minority interest                                          --           --          173             --          173
----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                   $ (30,241)   $ (15,852)   $ (16,143)     $  31,995    $ (30,241)
======================================================================================================================

Currency translation adjustment                        (2,125)      (2,179)      (2,543)         4,722       (2,125)
----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                         $ (32,366)   $ (18,031)   $ (18,686)     $  36,717    $ (32,366)
======================================================================================================================
</TABLE>
                                       8
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
 CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

                                                                  GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2002                       PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                 <C>          <C>          <C>            <C>          <C>
REVENUES                                            $ 199,504    $  23,975    $ 168,233      $  (1,933)   $ 389,779
----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses       108,655       13,022      100,990             --      222,667
   Subcontracted and other services expenses           20,902        1,330        3,259             --       25,491
   Operating, selling and administrative expenses      61,248        6,148       59,632         (1,933)     125,095
----------------------------------------------------------------------------------------------------------------------
Total operating expenses                              190,805       20,500      163,881         (1,933)     373,253
----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME                                        8,699        3,475        4,352             --       16,526
----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest expense, net                               (5,204)        (139)        (193)            --       (5,536)
   Equity in earnings (losses) of subsidiaries          3,440        1,405        1,347         (4,845)       1,347
   Other income (expense), net                             40           --         (263)            --         (223)
----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                           (1,724)       1,266          891         (4,845)      (4,412)
----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                                6,975        4,741        5,243         (4,845)      12,114

Income tax expense                                        375        1,301        3,048             --        4,724
Minority interest                                         351           --          790             --        1,141
----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                   $   6,249    $   3,440    $   1,405      $  (4,845)   $   6,249
======================================================================================================================

Currency translation adjustment                         7,453        5,314        6,247        (11,561)       7,453
----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                         $  13,702    $   8,754    $   7,652      $ (16,406)   $  13,702
======================================================================================================================
</TABLE>
                                       9

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


NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
 CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

                                                                  GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2001                       PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                 <C>          <C>          <C>            <C>          <C>
REVENUES                                            $ 199,002    $  20,267    $ 143,316      $    (794)   $ 361,791
----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses       111,323       11,253       79,590             --      202,166
   Subcontracted and other services expenses           14,764        1,124        2,436             --       18,324
   Operating, selling and administrative expenses      66,903        6,052       67,149           (794)     139,310
   Asset impairment and restructuring expenses         13,318           --       10,470             --       23,788
----------------------------------------------------------------------------------------------------------------------
Total operating expenses                              206,308       18,429      159,645           (794)     383,588
----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME (LOSS)                                (7,306)       1,838      (16,329)            --      (21,797)
----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest expense, net                               (5,420)         (99)        (247)            --       (5,766)
   Equity in earnings (losses) of subsidiaries        (17,863)     (18,924)        (109)        36,787         (109)
   Other income (expense), net                             27           --       (1,390)            --       (1,363)
----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                          (23,256)     (19,023)      (1,746)        36,787       (7,238)
----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                              (30,562)     (17,185)     (18,075)        36,787      (29,035)

Income tax expense (benefit)                          (10,951)         678          622             --       (9,651)
Minority interest                                          --           --          227             --          227
----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                   $ (19,611)   $ (17,863)   $ (18,924)     $  36,787    $ (19,611)
======================================================================================================================

Currency translation adjustment                        (9,318)      (9,249)      (9,509)        18,758       (9,318)
----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                         $ (28,929)   $ (27,112)   $ (28,433)     $  55,545    $ (28,929)
======================================================================================================================
</TABLE>
                                       10

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

NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                      CONDENSED CONSOLIDATING BALANCE SHEET

                                                          GUARANTOR    NONGUARANTOR
At June 30, 2002                                PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
---------------------------------------------------------------------------------------------------------------
                                                                      (in thousands)
ASSETS
   CURRENT ASSETS:
<S>                                          <C>         <C>            <C>          <C>           <C>
     Cash and cash equivalents               $  13,801   $   3,566      $  11,408    $      --     $  28,775
     Trade accounts receivable, net            100,493       4,548         58,178      (29,903)      133,316
     Prepaid expenses and other
       current assets                            6,240          52         14,275           --        20,567
---------------------------------------------------------------------------------------------------------------
     Total current assets                      120,534       8,166         83,861      (29,903)      182,658
---------------------------------------------------------------------------------------------------------------

   PROPERTY AND EQUIPMENT, NET                  29,891       3,976         60,961           --        94,828
---------------------------------------------------------------------------------------------------------------

   OTHER ASSETS:
     Goodwill, net                              19,577          --         56,689           --        76,266
     Deferred income taxes                       6,100          --          3,341           --         9,441
     Other assets                                7,283          72          4,625           --        11,980
     Investments in subsidiaries               131,864     110,606             --     (242,470)           --
     Notes receivable, intercompany                 --      14,009         11,943      (25,952)           --
---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                 $ 315,249   $ 136,829      $ 221,420    $(298,325)    $ 375,173
===============================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Current portion of capital
       lease obligations                     $   1,005   $      --      $     515    $      --     $   1,520
     Trade accounts payable                     15,718       2,603         38,358      (29,903)       26,776
     Accrued expenses and other
       current liabilities                      30,206       2,362         42,544           --        75,112
---------------------------------------------------------------------------------------------------------------
     Total current liabilities                  46,929       4,965         81,417      (29,903)      103,408

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt                            100,000          --             --           --       100,000
     Capital lease obligations,
       excluding current portion                   965          --          6,077           --         7,042
     Notes payable, intercompany                11,943          --         14,009      (25,952)           --
     Deferred compensation                       1,668          --             --           --         1,668
     Deferred income taxes                          --          --            559           --           559
---------------------------------------------------------------------------------------------------------------
     Total liabilities                         161,505       4,965        102,062      (55,855)      212,677
---------------------------------------------------------------------------------------------------------------

   MINORITY INTERESTS                               --          --          8,752           --         8,752
---------------------------------------------------------------------------------------------------------------

   STOCKHOLDERS' EQUITY                        153,744     131,864        110,606     (242,470)      153,744
---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 315,249   $ 136,829      $ 221,420    $(298,325)    $ 375,173
===============================================================================================================
</TABLE>
                                       11

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


NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                      CONDENSED CONSOLIDATING BALANCE SHEET

                                                          GUARANTOR    NONGUARANTOR
At December 31, 2001                            PARENT   SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
---------------------------------------------------------------------------------------------------------------
                                                                      (in thousands)
ASSETS
   CURRENT ASSETS:
<S>                                          <C>         <C>          <C>           <C>           <C>
     Cash and cash equivalents               $   6,814   $   2,202    $  13,140     $      --     $  22,156
     Trade accounts receivable, net             90,744       4,061       54,466       (20,091)      129,180
     Prepaid expenses and other
       current assets                            8,237          13       11,441            --        19,691
---------------------------------------------------------------------------------------------------------------
     Total current assets                      105,795       6,276       79,047       (20,091)      171,027
---------------------------------------------------------------------------------------------------------------

   PROPERTY AND EQUIPMENT, NET                  31,729       2,266       57,298            --        91,293
---------------------------------------------------------------------------------------------------------------

   OTHER ASSETS:
     Goodwill, net                              19,576          --       53,640            --        73,216
     Deferred income taxes                       6,099          --        3,299            --         9,398
     Other assets                                7,771          72        2,689            --        10,532
     Investments in subsidiaries               120,230     102,763           --      (222,993)           --
     Notes receivable, intercompany                 --      14,086       10,804       (24,890)           --
---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                 $ 291,200   $ 125,463    $ 206,777     $(267,974)    $ 355,466
===============================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Current portion of capital
       lease obligations                     $   1,668   $      --    $     698     $      --     $   2,366
     Trade accounts payable                      5,176       3,745       36,238       (20,091)       25,068
     Accrued expenses and other
       current liabilities                      30,345       1,488       39,083            --        70,916
---------------------------------------------------------------------------------------------------------------
     Total current liabilities                  37,189       5,233       76,019       (20,091)       98,350

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt                            100,000          --           --            --       100,000
     Capital lease obligations,
       excluding current portion                 1,412          --        5,628            --         7,040
     Notes payable, intercompany                10,804          --       14,086       (24,890)           --
     Deferred compensation                       1,755          --           --            --         1,755
     Deferred income taxes                          --          --          533            --           533
---------------------------------------------------------------------------------------------------------------
     Total liabilities                         151,160       5,233       96,266       (44,981)      207,678
---------------------------------------------------------------------------------------------------------------

   MINORITY INTERESTS                               --          --        7,748            --         7,748
---------------------------------------------------------------------------------------------------------------

   STOCKHOLDERS' EQUITY                        140,040     120,230      102,763      (222,993)      140,040
---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 291,200   $ 125,463    $ 206,777     $(267,974)    $ 355,466
===============================================================================================================
</TABLE>
                                       12
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



                                                                     GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2002                            PARENT    SUBSIDIARIES  SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
--------------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)
<S>                                                      <C>         <C>            <C>         <C>            <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES      $ 14,923    $ (3,014)      $ 12,702    $     --       $ 24,611
--------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in subsidiaries                              1,782       6,160             --      (7,942)            --
   Purchases of property and equipment                     (8,220)         --         (9,339)         --        (17,559)
   Proceeds from sales of property and equipment                4          --             --          --              4
   Increase in other assets                                   (47)         --             (6)         --            (53)
--------------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) investing activities     (6,481)      6,160         (9,345)     (7,942)       (17,608)
--------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings on debt                                      31,750          --          2,165          --         33,915
   Repayment of debt                                      (31,750)         --         (2,165)         --        (33,915)
   Repayment of capital lease obligations                  (1,107)         --           (232)         --         (1,339)
   Net capital contribution from parent                        --      (1,782)        (6,160)      7,942             --
   Net borrowings and payments on
     intercompany balances                                    338          --           (338)         --             --
   Treasury stock (purchases) reissuances, net                 30          --             --          --             30
   Other                                                      (13)         --             --          --            (13)
--------------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities       (752)     (1,782)        (6,730)      7,942         (1,322)
--------------------------------------------------------------------------------------------------------------------------

Effect of exchange rates on cash                             (733)         --          1,671          --            938
--------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                             6,957       1,364         (1,702)         --          6,619
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              6,814       2,202         13,140          --         22,156
--------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS, END OF PERIOD                      $ 13,771    $  3,566       $ 11,438    $     --       $ 28,775
==========================================================================================================================
</TABLE>
                                       13

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

NOTE 4. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                                                                    GUARANTOR   NONGUARANTOR
Six Months Ended June 30, 2001                             PARENT  SUBSIDIARIES SUBSIDIARIES  ELIMINATIONS  CONSOLIDATED
------------------------------------------------------------------------------------------------------------------------
                                                                               (in thousands)
<S>                                                      <C>         <C>         <C>           <C>           <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES                $  5,535    $ 10,009    $  8,012      $     --      $ 23,556
------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in subsidiaries                                586      (8,203)         --         7,617            --
   Purchases of property and equipment                     (5,628)       (197)    (20,819)           --       (26,644)
   Proceeds from sales of property and equipment                6          --          40            --            46
   Increase in other assets                                  (174)         --      (1,292)           --        (1,466)
------------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) investing activities     (5,210)     (8,400)    (22,071)        7,617       (28,064)
------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of notes payable                                 --          --        (302)           --          (302)
   Borrowings on debt                                      47,500          --      17,975            --        65,475
   Repayment of debt                                      (47,500)         --      (2,769)           --       (50,269)
   Repayment of capital lease obligations                  (1,362)         --        (888)           --        (2,250)
   Net capital contribution from parent                        --        (586)      8,203        (7,617)           --
   Net borrowings and payments on
     intercompany balances                                 (3,701)         --       3,701            --            --
   Common stock issued, net of expenses                        95          --          --            --            95
   Treasury stock (purchases) reissuances, net               (226)         --          --            --          (226)
   Capital contribution from minority interest                 --          --         250            --           250
   Other                                                       11          --          --            --            11
------------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities     (5,183)       (586)     26,170        (7,617)       12,784
------------------------------------------------------------------------------------------------------------------------

Effect of exchange rates on cash                               --          --      (1,554)           --        (1,554)
------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                            (4,858)      1,023      10,557            --         6,722
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              4,970       1,730      13,197            --        19,897
------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS, END OF PERIOD                      $    112    $  2,753    $ 23,754      $     --      $ 26,619
========================================================================================================================
</TABLE>
                                       14
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

References  in this  report to "we" and "our" are to SITEL  Corporation  and its
subsidiaries, collectively.

We are a leading global provider of outsourced  customer  support  services.  We
specialize   in  the  design,   implementation,   and   operation   of  complex,
multi-channel contact centers. We support the Customer  Relationship  Management
(CRM) strategies of large corporations in North America,  Europe,  Asia Pacific,
and Latin America.  We provide customer  acquisition,  customer care,  technical
support  and  risk  management  services  on an  outsourced  basis,  as  well as
professional services for both outsourced and internal contact centers. We serve
clients  primarily  in the consumer  products,  financial  services,  insurance,
telecommunications,   technology,  and  utilities  industries.

In  Management's  Discussion  and  Analysis,  we provide  information  about our
general business risks,  critical accounting policies and estimates,  results of
operations,  financial  condition  and  liquidity,  and  certain  other  matters
affecting our operating results for the periods covered by this report.

As you read this discussion and analysis,  refer to our Consolidated  Statements
of Income (Loss),  which present the results of our operations for the three and
six months ended June 30, 2002 and 2001,  and are  summarized  on the  following
pages. We analyze and explain the differences between periods for the components
of net income  (loss) in the  following  sections.  Our analysis is important in
making decisions about your investment in SITEL Corporation.

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

GENERAL BUSINESS RISKS, CRITICAL ACCOUNTING POLICIES AND ESTIMATES

GENERAL BUSINESS RISKS
----------------------
Our business success depends on our ability to efficiently  deploy our human and
capital resources in the delivery of services to our clients.  Consequently, the
needs of our  clients  may  significantly  impact  our  results  of  operations,
financial condition, and liquidity.

Our results of operations  and operating  cash flows may vary with periodic wins
and  losses  of  client  contracts  and with  changes  in the  scope  of  client
requirements. Our top 20 clients accounted for 68.2% of our revenues for the six
months ended June 30, 2002,  and include three  independently  managed  business
units of General Motors  Corporation.  These General Motors  business units were
responsible  for 23.7% of our total  revenues  for the six months ended June 30,
2002. We did not have any other clients under common control that generated more
than  10% of our  revenues.  The  financial  failure  of any of our  significant
clients or the loss of any or all of their business could have an adverse impact
on our operating results.

Our liquidity,  including our ability to comply with restrictive debt covenants,
may be adversely affected if we were to lose a significant client or as a result
of  significant  changes  in  client  demand  if we are  unable  to  efficiently
re-deploy our human and capital resources.

In the  following  sections,  we also  discuss the  importance  of our  critical
accounting  policies and the use of accounting  estimates,  and their  potential
impacts on our results of operations.

CRITICAL ACCOUNTING POLICIES
----------------------------
Our significant accounting policies and practices are described in Note 1 to the
Consolidated  Financial Statements,  which are included in our Form 10-K for the
year  ended  December  31,  2001.  Of those  policies,  we have  identified  the
following to be critical accounting policies because they are the most important
to the portrayal of our results of operations and financial condition,  and they
require management's most difficult, subjective, or complex judgments:

o    estimates  of  uncollectible  trade  accounts  receivable  to  determine an
     allowance for doubtful accounts,
o    estimates of the useful lives for property and equipment,
o    estimates of the fair values of our reporting  units to determine  goodwill
     impairment, and
o    estimates of future taxable income that is required to support the carrying
     value of  deferred  tax  assets  and  estimates  of the  related  valuation
     allowance.

                                       15
<PAGE>

TRADE ACCOUNTS RECEIVABLE
We  report  our trade  accounts  receivable  net of an  allowance  for  doubtful
accounts,   which  represents  management's  estimates  of  the  amount  of  our
receivables that may not be collectible, net of recoveries of amounts previously
written off. These  estimates are based on a detailed aging analysis of accounts
receivable,  historical bad debts, client credit-worthiness,  and changes in our
client payment terms.

The financial condition of our clients may deteriorate,  which may require us to
increase our allowance for doubtful accounts. We would record an increase in the
allowance for doubtful accounts as operating, selling and administrative expense
in our Consolidated  Statements of Income (Loss), which would reduce our results
of  operations.  Our  accounts  receivable  balance at June 30,  2002 was $133.3
million, net of an allowance for doubtful accounts of $4.9 million.

PROPERTY AND EQUIPMENT
We record property and equipment at cost, and calculate  depreciation  using the
straight-line  method over the estimated useful lives of the assets, which range
from 3 to 20 years. We amortize leasehold  improvements and assets under capital
leases on a  straight-line  basis  over the  shorter  of the  lease  term or the
estimated useful life of the asset.

In October 2001, the Financial  Accounting  Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived  Assets.  We adopted the
provisions of SFAS No. 144 effective  January 1, 2002.  Under this standard,  we
monitor  events and changes in  circumstances  that may require us to review the
carrying value of our long-lived  assets.  We assess the  recoverability  of our
long-lived assets based on estimated  undiscounted  future operating cash flows.
Our assessment of the  recoverability  of our long-lived assets will be impacted
if estimated future operating cash flows are not achieved.

GOODWILL
Goodwill  represents  the  difference  between  the  purchase  price  we paid in
acquisitions, using the purchase method of accounting, and the fair value of the
net assets we acquired.  Goodwill as of June 30, 2002 was $76.3 million,  net of
accumulated amortization of $19.6 million.

In June 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 142,
Goodwill and Other Intangible Assets. This statement:

o    replaces the requirement to amortize  goodwill and certain other intangible
     assets with an annual impairment test, and
o    requires an  evaluation  of the useful  lives of  intangible  assets and an
     impairment test for goodwill upon adoption.

We adopted the  provisions of SFAS No. 142 as of January 1, 2002. As a result of
the adoption of this  standard,  we stopped  amortizing  our goodwill  effective
January 1, 2002, which means that we have not recorded any goodwill amortization
expense in our  Consolidated  Statements  of Income for the three and six months
ended June 30, 2002 and we will not record such amortization in the remainder of
2002 and in future years.

Total goodwill amortization expense was:

o    $0.9 million for the three months ended June 30, 2001, and
o    $1.8 million for the six months ended June 30, 2001.

If we had adopted the  provisions  of SFAS No. 142 on January 1, 2001,  we would
have had:

o    a net loss of $29.3 million, or $0.40 per share, for the three months ended
     June 30, 2001, and
o    a net loss of $17.8 million,  or $0.25 per share,  for the six months ended
     June 30, 2001.

During 2002, we must perform a transitional  goodwill  impairment  review in two
phases to  determine  if goodwill  that was stated in our  Consolidated  Balance
Sheet at January 1, 2002 was  impaired.  During the second  quarter of 2002,  we
completed the first phase of the required impairment review, and determined that
the goodwill in certain  reporting  units was impaired at January 1, 2002.  As a
result,  we expect to record a pre-tax goodwill  impairment loss in the range of
$12 million to $16 million as a cumulative effect of an accounting change in the
2002  financial  statements.  We will determine the exact amount of the goodwill
impairment  loss  upon  completion  of the  second  phase  of  the  transitional
impairment review, which we must complete by December 31, 2002.

DEFERRED INCOME TAXES
We must report some of our revenues and expenses  differently  for our financial
statements  than we do for income tax  purposes.  The future tax  effects of the
differences  in  these  items,   as  well  as  operating  loss  and  tax  credit
carryforwards,  are  reported  as  deferred  tax  assets or  liabilities  in our
Consolidated Balance Sheets.

We assess the  likelihood  that our deferred  tax assets will be recovered  from
future estimated  taxable income.  To the extent we believe that recovery is not
likely, we establish  valuation  allowances to reduce the deferred tax assets to
the amount that is more likely than not to be  realized.  The net  deferred  tax
asset as of June 30, 2002 was $15.1  million,  net of a valuation  allowance  of
$40.4 million.

                                       16
<PAGE>

Significant  management  judgment  is  required  in  determining  any  valuation
allowance recorded against our deferred tax assets. We have recorded a valuation
allowance of $40.4 million as of June 30, 2002, due to uncertainties  related to
our ability to utilize some of our deferred tax assets before they expire. These
assets consist of tax amortization in excess of book amortization related to the
acquisition  of a business  and  certain  net  operating  losses and foreign tax
credits carried  forward.  The valuation  allowance is based on our estimates of
future  taxable income by  jurisdiction  in which we operate and the period over
which our deferred tax assets can be recovered. In the event that actual results
differ from these estimates or we revise these  estimates in future periods,  we
may need to adjust the valuation  allowance  which could  materially  impact our
financial position and results of operations.

USE OF ACCOUNTING ESTIMATES
---------------------------
Management makes estimates and assumptions when preparing  financial  statements
under accounting  principles  generally accepted in the United States of America
that affect:

o    our  reported  amounts  of  assets  and  liabilities  at the  dates  of the
     financial statements,
o    our  disclosure of contingent  assets and  liabilities  at the dates of the
     financial statements, and
o    our reported amounts of revenues and expenses during the reporting periods.

These estimates  involve  judgments with respect to, among other things,  future
economic  factors  that are  difficult  to predict  and are beyond  management's
control. As a result, actual amounts could differ from these estimates.

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

RESULTS OF  OPERATIONS  FOR THE THREE AND SIX MONTH  PERIODS ENDED JUNE 30, 2002
COMPARED WITH THE SAME PERIODS OF 2001

In this  section,  we discuss our  operating  results and the factors  affecting
them. We begin with a general overview,  then separately  discuss the components
of net income  (loss) in more detail.  We describe our general  business  risks,
critical accounting policies,  and estimates that are important to our operating
results on the previous pages.  Please refer to that discussion as you read this
section.

OVERVIEW
--------
We  summarize  our net income  (loss) and net income  (loss) per common  share -
diluted, and the impacts of special items, in the following tables:

NET INCOME (LOSS)

                               THREE MONTHS          SIX MONTHS
                               ENDED JUNE 30,       ENDED JUNE 30,
                               --------------       --------------
                               2002     2001        2002      2001
--------------------------------------------------------------------
                                        (in millions)
Net income (loss),
   before special items     $   3.5   $  (3.1)   $   6.2   $  (1.4)
Asset impairment and
   restructuring expenses,
   net of tax                    --     (22.1)        --     (22.1)
Losses on disposals
   of fixed assets,
   net of tax                    --      (0.8)        --      (0.8)
Valuation allowance
   on deferred tax assets        --      (3.3)        --      (3.3)
Goodwill amortization
   expense, net of tax           --      (0.9)        --      (1.8)
Tax benefit expected to
   to be realized in
   future years                  --        --         --       9.8
--------------------------------------------------------------------
Net income (loss)           $   3.5   $ (30.2)   $   6.2   $ (19.6)
====================================================================

NET INCOME (LOSS) PER COMMON SHARE-DILUTED

                                 THREE MONTHS          SIX MONTHS
                                 ENDED JUNE 30,       ENDED JUNE 30,
                                 --------------      ---------------
                                 2002      2001      2002      2001
--------------------------------------------------------------------
Net income (loss) per share,
   before special items      $   0.05  $   (0.04)  $ 0.08   $ (0.02)
Asset impairment and
   restructuring expenses,
   net of tax                      --      (0.30)      --     (0.30)
Losses on disposals
   of fixed assets,
   net of tax                      --      (0.01)      --     (0.01)
Valuation allowance on
   deferred tax assets             --      (0.05)      --     (0.05)
Goodwill amortization
   expense, net of tax             --      (0.01)      --     (0.02)
Tax benefit expected
   to be realized in
   future years                    --         --       --      0.13
--------------------------------------------------------------------
Net income (loss)
   per share                 $   0.05  $   (0.41)  $ 0.08   $ (0.27)
====================================================================

                                       17
<PAGE>

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SAME PERIOD OF 2001

We had net income of $3.5 million,  or $0.05 per share, in the second quarter of
2002,  compared to a net loss of $30.2  million,  or ($0.41)  per share,  in the
second quarter of 2001.

Excluding  the special  items noted in the tables on the previous  page from the
second quarter of 2001, we had a net loss of $3.1 million, or ($0.04) per share,
in the  second  quarter  of 2001.  Net  income in the  second  quarter  of 2002,
compared  to net  income  before  special  items  in the  same  period  of 2001,
increased  mostly  due to a 10.7%  increase  in  revenues  and lower  operating,
selling  and  administrative  expenses,  offset  partially  by  an  increase  in
subcontracted and other services expenses.

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SAME PERIOD OF 2001

We had net income of $6.2 million,  or $0.08 per share,  in the six months ended
June 30, 2002, compared to a net loss of $19.6 million, or ($0.27) per share, in
the same period of 2001.

Excluding  the special  items noted in the tables on the previous  page from the
six months ended June 30, 2001,  we had a net loss of $1.4  million,  or ($0.02)
per share,  in the first six months of 2001.  Net income in the six months ended
June 30, 2002, compared to net income before special items in the same period of
2001,  increased  mostly due to a 7.7% increase in revenues and lower operating,
selling and  administrative  expenses,  offset  partially by increases in direct
labor and  telecommunications  expenses  and  subcontracted  and other  services
expenses.

We describe the factors  affecting our second  quarter and  six-month  operating
results in more detail in the following section.

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

COMPONENTS OF NET INCOME (LOSS)
-------------------------------
The   following   table    summarizes   our   income   statement   data   on   a
percentage-of-revenue basis.
<TABLE>
<CAPTION>

                                           THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                    ---------------------------------------     ---------------------------------------
                                           2002                  2001                  2002                  2001
                                    -----------------     -----------------     -----------------    ------------------
                                        $          %          $          %          $          %          $          %
                                    --------   ------     --------   ------     --------  -------    ---------  -------
                                                                       (in thousands)
<S>                                <C>         <C>       <C>         <C>       <C>         <C>      <C>          <C>
REVENUES                           $196,747    100.0%    $177,787    100.0%    $389,779    100.0%   $ 361,791    100.0%
-----------------------------------------------------------------------------------------------------------------------

Direct labor and
   telecommunications expenses      110,651     56.2%     100,537     56.5%     222,667     57.1%     202,166     55.9%
Subcontracted and
   other services expenses           13,898      7.1%       9,034      5.1%      25,491      6.6%      18,324      5.1%
Operating, selling and
   administrative expenses           63,335     32.2%      70,717     39.8%     125,095     32.1%     139,310     38.5%
Asset impairment and
   restructuring expenses                --       --       23,788     13.4%          --       --       23,788      6.5%
------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS)               8,863      4.5%     (26,289)   (14.8%)     16,526      4.2%     (21,797)    (6.0%)

Interest expense, net                (2,805)    (1.4%)     (2,916)    (1.6%)     (5,536)    (1.4%)     (5,766)    (1.6%)
Equity in earnings (loss)
   of subsidiary                      1,012      0.5%         (72)      --        1,347      0.4%        (109)      --
Other expense, net                      (35)      --       (1,257)    (0.8%)       (223)    (0.1%)     (1,363)    (0.4%)
------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
   TAXES AND MINORITY INTEREST        7,035      3.6%     (30,534)   (17.2%)     12,114      3.1%     (29,035)    (8.0%)

Income tax expense (benefit)          2,743      1.4%        (466)    (0.3%)      4,724      1.2%      (9,651)    (2.7%)
Minority interest                       781      0.4%         173      0.1%       1,141      0.3%         227      0.1%
------------------------------------------------------------------------------------------------------------------------
Net income (loss)                  $  3,511      1.8%    $(30,241)   (17.0%)   $  6,249      1.6%   $ (19,611)    (5.4%)
========================================================================================================================
</TABLE>
                                       18

<PAGE>

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SAME PERIOD OF 2001

REVENUES
Revenues  increased  $18.9  million,  or 10.7%,  in the  second  quarter of 2002
compared  to the same period of 2001.  The  changes in  revenues  by  geographic
region are shown in the following table:

Three Months                             $         %
Ended June 30,     2002      2001      Change    Change
--------------------------------------------------------
                              (in millions)
North America    $ 124.9   $ 114.0     $ 10.9     9.6%
Europe              49.2      48.1        1.1     2.3%
Asia Pacific         7.6       6.1        1.5    24.6%
Latin America       15.0       9.6        5.4    56.3%
--------------------------------------------------------
Totals           $ 196.7   $ 177.8     $ 18.9    10.7%
--------------------------------------------------------

The increase in North  America  revenues was mostly due to  additional  customer
care  services we provided to a number of our large  global  clients,  which was
partially offset by a reduction in technical support  services.  The increase in
Latin  America  revenues was mostly due to new work we performed  for clients in
Mexico and to revenues from our Panama site,  as we began  serving  clients from
that facility during the fourth quarter of 2001.

DIRECT LABOR AND TELECOMMUNICATIONS EXPENSES
Direct labor and  telecommunications  expenses  include the  compensation of our
customer  service  professionals  and their first line supervisors and telephone
usage expenses directly related to the production of revenues.

Direct labor and  telecommunications  expenses as a  percentage  of revenues can
vary based on the nature of the contract, the nature of the work, and the market
in  which  the   services   are   provided.   Accordingly,   direct   labor  and
telecommunications  expenses as a  percentage  of revenues  can vary,  sometimes
significantly, from period to period.

Direct labor and telecommunications  expenses increased $10.1 million, or 10.1%,
in the second quarter of 2002 compared to the same period of 2001. This increase
is attributable to the increase in revenues. As a percentage of revenues, direct
labor and telecommunications  expenses were about the same in the second quarter
of 2002 as they were in the same period of 2001.  However,  as we discuss in the
following  section,  we subcontract  certain client  services to our India joint
venture. We do not incur direct labor and  telecommunication  expenses for these
subcontracted  services,  as such  costs  are  incurred  by the  joint  venture.
Excluding the revenues we have recorded from clients where we have subcontracted
the services to our India joint  venture,  direct  labor and  telecommunications
expenses as a percentage of revenues  increased from 56.5% in the second quarter
of 2001 to 57.6% in the  second  quarter  of 2002,  primarily  due to lower unit
prices from our clients.

SUBCONTRACTED AND OTHER SERVICES EXPENSES
Subcontracted  and other services  expenses include services provided to clients
through   subcontractors  and  through  our  India  joint  venture,   and  other
out-of-pocket expenses. Subcontracted and other services expenses increased $4.9
million,  or 53.8%, in the second quarter of 2002 compared to the same period of
2001.  The increase in these expenses was mostly due to  subcontracted  expenses
paid to our India joint venture as we began  serving  clients from that facility
during the third quarter of 2001.

OPERATING, SELLING AND ADMINISTRATIVE EXPENSES
Operating,  selling and  administrative  expenses represent expenses incurred to
directly  support  and  manage  the  business,  including  costs of  management,
administration,   technology,   facilities,   depreciation   and   amortization,
maintenance, sales and marketing, and client support services.

Operating, selling and administrative expenses decreased $7.4 million, or 10.4%,
in the second  quarter of 2002  compared to the same  period of 2001.  Excluding
goodwill  amortization  expense of $0.9 million from the second quarter of 2001,
operating,  selling and administrative expenses decreased $6.5 million, or 9.3%.
The  decline in these  expenses  was mostly due to our  restructuring  plan that
began at the end of the second  quarter of 2001.  As a  percentage  of revenues,
operating,  selling  and  administrative  expenses  decreased  from 39.3% in the
second quarter of 2001, excluding goodwill amortization expense, to 32.2% in the
second quarter of 2002.

ASSET IMPAIRMENT AND RESTRUCTURING EXPENSES
In June 2001, we announced a restructuring  plan designed to intensify our focus
on core competencies,  accelerate revenue growth, and improve profitability. The
key components of the  restructuring  plan include several major  organizational
changes and the streamlining of contact center  operations and corporate support
services to improve effectiveness and drive revenue growth.

As  part of our  restructuring  plan,  we  reduced  fixed  overhead  to  improve
profitability by substantially completing the following by December 31, 2001:

o    eliminating  approximately  350  operating,   selling,  and  administrative
     positions globally, and
o    reducing  excess  capacity  by  closing  nine  contact  centers  plus three
     administrative  offices,  and downsizing  another five contact centers plus
     two administrative  offices,  resulting in the elimination of approximately
     2,100 workstations.

                                       19
<PAGE>

In  connection  with this  restructuring,  we  recorded  a $23.8  million  asset
impairment and restructuring  charge, or $22.1 million net of tax, in the second
quarter of 2001.

OPERATING INCOME (LOSS)
We had operating income of $8.9 million in the second quarter of 2002,  compared
to an  operating  loss of $26.3  million in the same  period of 2001.  Excluding
asset impairment and restructuring  expenses and goodwill  amortization  expense
from the second quarter of 2001,  operating  income increased $10.5 million from
an  operating  loss of $1.6  million in the second  quarter of 2001 to operating
income of $8.9  million  in the  second  quarter  of 2002.  As a  percentage  of
revenues,  we had an  operating  loss of (0.9%) in the  second  quarter of 2001,
excluding asset impairment and restructuring  expenses and goodwill amortization
expense,  compared to  operating  income of 4.5% in the second  quarter of 2002.
This change  resulted  from all of the factors  affecting  revenues and expenses
discussed above.

INTEREST EXPENSE, NET
Interest  expense,  net of  interest  income,  was about the same in the  second
quarter of 2002 as it was in the same period of 2001.

EQUITY IN EARNINGS (LOSS) OF SUBSIDIARY
Equity in earnings (loss) of subsidiary  represents our percentage  share of the
earnings  (loss)  from our  investment  in a joint  venture in India.  Equity in
earnings  (loss) of subsidiary  increased  $1.1 million in the second quarter of
2002  compared to the same period of 2001 as we began  serving  clients from the
India facility in the third quarter of 2001.

OTHER EXPENSE, NET
Other expense, net of other income, decreased $1.2 million in the second quarter
of 2002  compared  to the same period of 2001  mostly  because we recorded  $1.3
million of losses on disposals of certain  assets  during the second  quarter of
2001.

INCOME TAX EXPENSE (BENEFIT)
We recorded an income tax expense of $2.7 million in the second  quarter of 2002
compared to an income tax benefit of $0.5 million in the second quarter of 2001.
The second quarter 2001 benefit  reflects a $2.2 million tax benefit we recorded
on the asset impairment and  restructuring  expenses and the losses on disposals
of assets. This benefit was offset by a $3.3 million deferred income tax expense
we recorded to establish a valuation  allowance on deferred tax assets that were
recorded in prior years related to our United Kingdom operations.

Our second  quarter  2002 income tax expense as a  percentage  of income  before
income taxes and minority interest was 39%. The difference between this rate and
the statutory U.S. Federal rate of 34% was primarily due to net operating losses
in certain non-U.S.  subsidiaries  for which no tax benefit was recognized,  and
U.S. state and local income taxes.

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SAME PERIOD OF 2001

REVENUES
Revenues increased $28.0 million, or 7.7%, in the six months ended June 30, 2002
compared  to the same period of 2001.  The  changes in  revenues  by  geographic
region are shown in the following table:

Six Months                               $         %
Ended June 30,     2002      2001      Change    Change
---------------------------------------------------------
                              (in millions)
North America    $ 248.2   $ 230.6     $ 17.6     7.6%
Europe              97.7     101.3       (3.6)   (3.6%)
Asia Pacific        13.9      12.4        1.5    12.1%
Latin America       30.0      17.5       12.5    71.4%
---------------------------------------------------------
Totals           $ 389.8   $ 361.8     $ 28.0     7.7%
---------------------------------------------------------

The reasons for the revenue  increases in North America and Latin America during
the six months ended June 30, 2002 are the same as those described in the second
quarter  discussion  above.  The  decrease in Europe  revenues was due mostly to
reduced business with certain clients in Central Europe and Spain.

DIRECT LABOR AND TELECOMMUNICATIONS EXPENSES
Direct labor and telecommunications  expenses increased $20.5 million, or 10.1%,
in the six months ended June 30, 2002  compared to the same period of 2001. As a
percentage of revenues,  direct labor and telecommunications  expenses increased
from  55.9% in the six  months  ended  June 30,  2001 to 57.1% in the six months
ended June 30, 2002.  However,  as discussed  earlier,  we  subcontract  certain
client  services to our India joint  venture.  We do not incur  direct labor and
telecommunication  expenses for these subcontracted  services, as such costs are
incurred by the joint  venture.  Excluding  the revenues we have  recorded  from
clients  where we have  subcontracted  the services to our India joint  venture,
direct  labor  and  telecommunications  expenses  as a  percentage  of  revenues
increased  from 55.9% in the six months  ended June 30, 2001 to 58.1% in the six
months ended June 30, 2002, primarily due to lower unit prices from our clients.

SUBCONTRACTED AND OTHER SERVICES EXPENSES
Subcontracted and other services expenses  increased $7.2 million,  or 39.1%, in
the six months  ended June 30, 2002  compared  to the same  period of 2001.  The
increase in these expenses was mostly due to subcontracted  expenses paid to our
India joint  venture as we began serving  clients from that facility  during the
third quarter of 2001.

                                       20
<PAGE>

OPERATING, SELLING AND ADMINISTRATIVE EXPENSES
Operating,  selling and  administrative  expenses  decreased  $14.2 million,  or
10.2%,  in the six months  ended June 30,  2002  compared  to the same period of
2001.  Excluding  goodwill  amortization  expense of $1.8  million  from the six
months  ended June 30,  2001,  operating,  selling and  administrative  expenses
decreased  $12.4 million,  or 9.0%. The decline in these expenses was mostly due
to our  restructuring  plan that began at the end of the second quarter of 2001.
As a percentage  of revenues,  operating,  selling and  administrative  expenses
decreased from 38.0% in the six months ended June 30, 2001,  excluding  goodwill
amortization expense, to 32.1% in the six months ended June 30, 2002.

ASSET IMPAIRMENT AND RESTRUCTURING EXPENSES
In the second quarter of 2001, we recorded a $23.8 million asset  impairment and
restructuring  charge, or $22.1 million net of tax, related to the restructuring
plan we announced in June 2001 as described above.

OPERATING INCOME (LOSS)
We had operating  income of $16.5 million in the six months ended June 30, 2002,
compared  to an  operating  loss of $21.8  million  in the same  period of 2001.
Excluding asset impairment and restructuring  expenses and goodwill amortization
expense  from the six months  ended June 30, 2001,  operating  income  increased
$12.7  million  from $3.8 million in the six months ended June 30, 2001 to $16.5
million in the six months  ended June 30,  2002.  As a  percentage  of revenues,
operating  income  increased  from 1.1% in the six months  ended June 30,  2001,
excluding asset impairment and restructuring  expenses and goodwill amortization
expense,  to 4.2% in the six months  ended June 30, 2002.  This change  resulted
from all of the factors affecting revenues and expenses discussed above.

INTEREST EXPENSE, NET
Interest expense,  net of interest income,  was about the same in the six months
ended June 30, 2002 as it was in the same period of 2001.

EQUITY IN EARNINGS (LOSS) OF SUBSIDIARY
Equity in earnings (loss) of subsidiary  represents our percentage  share of the
earnings  (loss)  from our  investment  in a joint  venture in India.  Equity in
earnings  (loss) of  subsidiary  increased  $1.5 million in the six months ended
June 30, 2002  compared to the same period of 2001 as we began  serving  clients
from the India facility in the third quarter of 2001.

OTHER EXPENSE, NET
Other  expense,  net of other income,  decreased  $1.1 million in the six months
ended  June 30,  2002  compared  to the same  period of 2001  mostly  because we
recorded $1.3 million of losses on disposals of certain assets during the second
quarter of 2001.

INCOME TAX EXPENSE (BENEFIT)
We recorded  income tax expense of $4.7 million in the six months ended June 30,
2002  compared  to an income tax  benefit of $9.7  million in the same period of
2001. The 2001 benefit reflects:

o    a $9.8  million  net  deferred  income tax benefit we recorded in the first
     quarter  that  resulted  from an election  to treat  certain of our foreign
     operations  as branches of our U.S.  company for U.S.  income tax purposes,
     and
o    the $2.2  million  tax  benefit we  recorded  on the asset  impairment  and
     restructuring  charges and the losses on  disposals of assets in the second
     quarter.

These  benefits  were offset by a $3.3  million  deferred  income tax expense we
recorded to  establish a valuation  allowance  on deferred  tax assets that were
recorded in prior years related to our United Kingdom operations.

Our income tax expense for the six months ended June 30, 2002 as a percentage of
income before income taxes and minority interest was 39%. The difference between
this rate and the  statutory  U.S.  Federal rate of 34% was primarily due to net
operating losses in certain  non-U.S.  subsidiaries for which no tax benefit was
recognized, and U.S. state and local income taxes.

FINANCIAL CONDITION AND LIQUIDITY

In this  section,  we discuss our  financial  condition  and  liquidity  and the
factors affecting them. We separately discuss cash flows, capital resources, and
contractual obligations and commitments. We describe our general business risks,
critical accounting policies,  and estimates that are important to our financial
condition and liquidity earlier in this report.  Please refer to that discussion
as you read this section.

CASH FLOWS
----------
The following table sets forth summary cash flow data for the periods indicated.
Please refer to this summary as you read our  discussion of the sources and uses
of cash in each year.

Six Months Ended June 30,              2002        2001
-------------------------------------------------------------
                                         (in millions)
NET CASH PROVIDED BY (USED IN):
   Operating activities            $   24.6    $   23.6
   Investing activities               (17.6)      (28.1)
   Financing activities                (1.3)       12.8

2002
In the six months ended June 30,  2002,  cash  provided by operating  activities
came from income before non-cash expenses of $23.4 million.

                                       21
<PAGE>

In the six months ended June 30, 2002, we used cash for investing  activities to
purchase $17.6 million of property and equipment.

In the six months ended June 30, 2002, we used cash for financing  activities to
repay $1.3 million of capital lease obligations.

2001
In the six months ended June 30,  2001,  cash  provided by operating  activities
came from income  before  non-cash  expenses of $26.4 million and a $6.1 million
decrease in trade  receivables,  which were  partially  offset by a $6.4 million
provision  for  deferred  income  taxes  and a $3.3  million  decrease  in other
liabilities.  The provision for deferred income taxes was primarily attributable
to the $9.8 million  deferred  income tax asset we recorded in the first quarter
that  resulted  from an election to treat  certain of our foreign  operations as
branches of our U.S. company for U.S. income tax purposes.

In the six months ended June 30,  2001,  we used cash for  investing  activities
mostly to purchase $26.6 million of property and equipment, and we invested $1.2
million in a joint venture in India.

In the six months ended June 30,  2001,  cash  provided by financing  activities
came from additional borrowings,  net of repayments,  of $15.2 million under our
revolving credit facility.

CAPITAL RESOURCES
-----------------
We have  historically  used funds generated from operations,  leases of property
and equipment,  equity capital,  senior subordinated notes, and borrowings under
credit  facilities  with  banks  to  finance  business   acquisitions,   capital
expenditures, and working capital requirements.

We have a $50 million senior secured credit facility that expires in April 2003,
under which we may borrow in U.S. dollars,  British pounds sterling,  and Euros,
which allows us to  consolidate  our U.S. and European  bank lines into a single
multi-borrower, multi-currency facility.

Our  obligations  under  the  facility  have  been  guaranteed  by our  domestic
subsidiaries  and  certain  foreign  subsidiaries  and are  secured  by liens on
substantially  all of the  assets of SITEL  Corporation  and such  subsidiaries,
including a pledge of our shares in such  subsidiaries and certain other foreign
subsidiaries.  The facility  contains  certain  financial  covenants and certain
restrictions on, among other things, our ability to:

o    incur additional indebtedness,
o    pay dividends, repurchase stock, or make other restricted payments,
o    purchase property and equipment,
o    make certain investments,
o    sell assets, or
o    merge with another company.

The facility  becomes due and payable upon a change of control of the Company as
defined in the  credit  agreement.  At June 30,  2002,  we had $50.0  million of
available borrowings under this facility.

We expect to finance our current operations,  planned capital expenditures,  and
internal  growth  for  the   foreseeable   future  using  funds  generated  from
operations,  existing  cash,  leases of property  and  equipment,  and the funds
available  under  our  credit  facility.   We  generally  estimate  our  capital
expenditures  will be $5 to $8 million per  quarter  excluding  any  significant
expansion of contact center capacity.  We estimate that our capital expenditures
for the third quarter of 2002 will range from $10 million to $12 million. Future
acquisitions, if any, may require additional debt or equity financing.

Under a stock  repurchase  program that was authorized by our Board of Directors
in February 2001, we may repurchase up to $10 million of our shares from time to
time in the open market or in privately  negotiated  transactions,  depending on
general  business and market  conditions.  Through  December  31,  2001,  we had
repurchased a total of 171,800 shares at a total cost of $0.3 million. No shares
have been purchased in 2002. Our credit  facility limits the amount of aggregate
restricted payments,  including stock repurchases,  to $1.0 million plus certain
equity transaction proceeds not currently applicable.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS
---------------------------------------
We summarize various contractual obligations and commitments in the Notes to our
Consolidated  Financial Statements in our Report on Form 10-K for the year ended
December 31, 2001. These contractual obligations and commitments include:

o    $100.0 million of long-term debt as shown in our Consolidated Balance Sheet
     at June 30, 2002,
o    $8.6  million of capital  lease  obligations  as shown in our  Consolidated
     Balance Sheet at June 30, 2002, and
o    operating  lease  obligations  for  property  and certain  equipment  under
     noncancelable  operating lease arrangements,  which expire at various dates
     through 2015.

OTHER MATTERS

QUARTERLY RESULTS AND SEASONALITY
We have experienced, and expect to continue to experience,  quarterly variations
in our results of operations mostly due to:

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<PAGE>

o    the timing of our clients' customer relationship management initiatives and
     customer acquisition and loyalty campaigns,
o    the commencement and terms of new contracts,
o    revenue mix,
o    the timing of additional operating, selling, and administrative expenses to
     support new business, and
o    the timing of recognition of incentive fees.

We experience periodic fluctuations in our results of operations related to both
the start-up costs associated with expansion and the  implementation of clients'
CRM activities.  In addition,  our business  generally tends to be slower in the
third quarter due to summer holidays in Europe,  and in the first quarter due to
the changeover of client marketing strategies that often occurs at the beginning
of the year.

EFFECTS OF INFLATION
Inflation has not had a significant effect on our operations. However, there can
be no assurance that inflation will not have a material effect on our operations
in the future.

ACCOUNTING PRONOUNCEMENTS
In June 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 142,
Goodwill and Other Intangible Assets. This statement:

o    replaces the requirement to amortize  goodwill and certain other intangible
     assets with an annual impairment test, and
o    requires an  evaluation  of the useful  lives of  intangible  assets and an
     impairment test for goodwill upon adoption.

We adopted the  provisions of SFAS No. 142 as of January 1, 2002. As a result of
the adoption of this  standard,  we stopped  amortizing  our goodwill  effective
January 1, 2002, which means that we have not recorded any goodwill amortization
expense in our  Consolidated  Statements  of Income for the three and six months
ended June 30, 2002 and we will not record such amortization in the remainder of
2002 and in future years.

Total goodwill amortization expense was:

o    $0.9 million for the three months ended June 30, 2001, and
o    $1.8 million for the six months ended June 30, 2001.

If we had adopted the  provisions  of SFAS No. 142 on January 1, 2001,  we would
have had:

o    a net loss of $29.3 million, or $0.40 per share, for the three months ended
     June 30, 2001, and
o    a net loss of $17.8 million,  or $0.25 per share,  for the six months ended
     June 30, 2001.

During 2002, we must perform a transitional  goodwill  impairment  review in two
phases to  determine  if goodwill  that was stated in our  Consolidated  Balance
Sheet at January 1, 2002 was  impaired.  During the second  quarter of 2002,  we
completed the first phase of the required impairment review, and determined that
the goodwill in certain  reporting  units was impaired at January 1, 2002.  As a
result,  we expect to record a pre-tax goodwill  impairment loss in the range of
$12 million to $16 million as a cumulative effect of an accounting change in the
2002  financial  statements.  We will determine the exact amount of the goodwill
impairment  loss  upon  completion  of the  second  phase  of  the  transitional
impairment review, which we must complete by December 31, 2002.

In October 2001, the Financial  Accounting  Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived  Assets.  We adopted the
provisions  of SFAS No. 144  effective  January 1, 2002.  The  adoption  of this
standard did not impact our consolidated financial statements.

In July 2002,  the  Financial  Accounting  Standards  Board issued SFAS No. 146,
Accounting for Costs  Associated  with Exit or Disposal  Activities,  which will
spread out the reporting of expenses related to  restructurings  initiated after
December 31, 2002.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market  risks  associated  primarily  with  changes in foreign
currency exchange rates. We have operations in many parts of the world; however,
both revenues and expenses of those operations are typically  denominated in the
currency of the country of operations,  providing a natural hedge.  From time to
time,  we enter into  certain  hedging  transactions  designed to hedge  foreign
currency  exchange  risk related to short-term  intercompany  loans and specific
foreign  currency  transactions,  however  the  amounts  involved  have not been
material.

We  are  also  exposed  to  changes  in  interest  rates  on our  variable  rate
borrowings.  Interest rates on our Senior  Subordinated  Notes and capital lease
obligations  are fixed,  but rates on borrowings  under our bank credit facility
are variable.  During the six months ended June 30, 2002, our average borrowings
under our bank credit  facility were $0.8 million.  Based on our projected  cash
needs for the foreseeable  future, we do not expect that our exposure to changes
in interest rates will have a material impact on our interest expense.

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<PAGE>

PART II - OTHER INFORMATION

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

(a)  DATE AND TYPE OF MEETING
     ------------------------
     The Company held its Annual Meeting of Stockholders on May 3, 2002.

(b)  MATTERS VOTED UPON AND NUMBER OF VOTES CAST
     -------------------------------------------
     There were 64,276,677  shares of Common Stock represented at the meeting in
     person or by proxy.  Two proposals were presented to the  stockholders  and
     all were approved. The voting on the proposals was as follows:

     1. Election of two directors for a three-year term:

                                              FOR              WITHHELD
         Bill L. Fairfield             56,764,759             7,511,918
         Rohit M. Desai                63,312,602               964,075

     2.  Ratification  of  the selection of KPMG LLP as independent  accountants
         for the year ended December 31, 2002:

         Number of Affirmative Votes Cast                    63,960,043
         Number of Negative Votes Cast                          265,518
         Number of Abstentions                                   51,116

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

ITEM 5. OTHER INFORMATION

FORWARD-LOOKING STATEMENTS

We make statements in this report that are considered forward-looking statements
within the  meaning of the  Securities  Exchange  Act of 1934.  Sometimes  these
statements  will  contain  words  such  as  "believes,"   "expects,"  "intends,"
"should,"  "will,"  "plans," and other similar words.  These  statements are not
guarantees of our future  performance  and are subject to risks,  uncertainties,
and  other  important  factors  that  could  cause  our  actual  performance  or
achievements  to be  materially  different  from those we project.  These risks,
uncertainties, and factors include, but are not limited to:

o    reliance on major clients,
o    conditions affecting clients' industries,
o    clients' budgets and plans,
o    unanticipated labor, contract or technical difficulties,
o    delays in ramp up of services under contracts,
o    reliance on major subcontractors and strategic partners,
o    risks associated with managing a global business,
o    fluctuations in operating results,
o    reliance on telecommunications and computer technology,
o    dependence on labor force,
o    industry regulation,
o    general and local economic conditions,
o    competitive pressures in our industry,
o    foreign currency risks,
o    the effects of leverage,
o    dependency on credit availability,
o    restrictions imposed by the terms of indebtedness, and
o    dependence on key personnel and control by management.

Given  these  uncertainties,  you  should  not  place  undue  reliance  on these
forward-looking statements. Please see the other sections of this report and our
other periodic  reports filed with the  Securities  and Exchange  Commission for
more information on these factors.

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

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

     Exhibit No.
     -----------
        99.1       Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        99.2       Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K:
     None.

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<PAGE>
                                    SIGNATURE

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


                                                  SITEL Corporation
                                                    (REGISTRANT)


Date:    August 14, 2002             By  /s/   James E. Stevenson, Jr.
                                            --------------------------------
                                               JAMES E. STEVENSON, JR.
                                               Chief Financial Officer
                                            (Duly Authorized Officer and
                                            Principal Financial Officer)

                                       25
<PAGE>
                                  EXHIBIT INDEX


Exhibit No.
-----------

   99.1    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002

   99.2    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002

                                       26