SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 1999

                                       or

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

                    For the transition period _____ to ______

                         Commission File Number 1-12577

                                SITEL CORPORATION
             (Exact name of registrant as specified in its charter)

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

                            111 SOUTH CALVERT STREET
                               BALTIMORE, MD 21202
                                 (410) 246-1505

       (Address, including zip code, and telephone number, including area
               code, of registrant's principal executive offices)

     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 __

     As of October  31,1999,  the Company had 67,649,623  shares of Common Stock
outstanding.
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

           Consolidated Condensed Balance Sheets...........................  1

           Consolidated Condensed Statements of Income (Loss)..............  2

           Consolidated Condensed Statements of Cash Flows.................  3

           Notes to Consolidated Condensed Financial Statements............  4


Item 2.  Management's Discussion and Analysis of Results of
           Operations and Financial Condition.............................. 14

Item 3.  Quantitative and Qualitative Disclosures about Market Risk........ 21


PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.................................. 22

Signature.................................................................. 23

<PAGE>

                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                    DECEMBER 31, 1998 AND SEPTEMBER 30, 1999
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                           ASSETS                                   DECEMBER 31,  SEPTEMBER 30,
                                                                                        1998          1999
                                                                                     -----------  ------------
Current assets:                                                                                    (unaudited)
<S>                                                                                   <C>         <C>
     Cash and cash equivalents ...................................................... $   14,472  $   12,166
     Trade accounts receivable (net of allowance for doubtful accounts of $3,970 and
      $4,667, respectively) .........................................................    129,809     165,685
     Prepaid expenses ...............................................................      5,257       7,549
     Other assets ...................................................................      6,024       4,383
     Deferred income taxes ..........................................................      1,658       2,360
                                                                                      ----------  ----------
                    Total current assets ............................................    157,220     192,143
Property and equipment, net .........................................................    125,615     110,740
Deferred income taxes ...............................................................     15,425      14,208
Goodwill, net .......................................................................     93,288      88,017
Other assets ........................................................................     14,062      15,707
                                                                                      ----------  ----------
                    Total assets .................................................... $  405,610  $  420,815
                                                                                      ==========  ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable .................................................................. $   30,545  $    8,357
     Current portion of long-term debt ..............................................      3,671       1,985
     Current portion of capitalized lease obligations ...............................      3,650       2,020
     Trade accounts payable .........................................................     30,784      30,206
     Income taxes payable ...........................................................      3,875       2,481
     Accrued compensation ...........................................................     15,620      26,891
     Accrued operating expenses .....................................................     23,527      25,161
     Deferred revenue and other .....................................................      3,888      13,979
                                                                                      ----------  ----------
                    Total current liabilities .......................................    115,560     111,080
Long-term debt, excluding current portion ...........................................    107,027     137,130
Capitalized lease obligations, excluding current portion ............................      9,210       9,162
Deferred compensation ...............................................................      1,591       1,799

Minority interest ...................................................................     10,368       3,965

Stockholders' equity:
     Common stock, voting, $.001 par value 200,000,000 shares authorized, 64,399,645,
        and 67,619,469 shares issued and outstanding, in 1998 and 1999, respectively          64          68
     Paid-in capital ................................................................    157,892     164,728
     Accumulated other comprehensive (loss) .........................................     (4,428)     (9,750)
     Retained earnings ..............................................................      8,326       2,633
                                                                                      ----------  ----------
                    Total stockholders' equity ......................................    161,854     157,679
                                                                                      ----------  ----------

                    Total liabilities and stockholders' equity ...................... $  405,610  $  420,815
                                                                                      ==========  ==========
</TABLE>

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

                                       1
<PAGE>

                       SITEL CORPORATION AND SUBSIDIARIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                            For The Three Months Ended       For The Nine Months Ended
                                                          September 30,    September 30,   September 30,   September 30,
                                                              1998             1999           1998             1999
                                                       ----------------    -------------   -------------   -------------
(in thousands, except per share data)
<S>                                                       <C>               <C>            <C>              <C>
Revenues .................................................$    146,755      $    189,597   $   431,810      $   531,778
                                                          ------------      ------------   -----------      -----------
Operating expenses:
     Cost of services ....................................      82,636           100,446       243,041          284,254
     Selling, general and administrative
          expenses .......................................      59,045            79,181       174,813          231,552
     Asset impairment and restructuring expenses..........          --             9,596         6,607            9,596
                                                          ------------      ------------   -----------      -----------
                    Total operating expense ..............     141,681           189,223       424,461          525,402
                                                          ------------      ------------   -----------      -----------

                   Operating income ......................       5,074               374         7,349            6,376
Other income (expense):
     Interest expense, net ...............................      (3,457)           (3,203)       (9,422)          (9,353)
     Other income (expense), net .........................          19               (69)          188               51
                                                          ------------      ------------   -----------      -----------
Income (loss) before income taxes
     and minority interest ...............................       1,636            (2,898)       (1,885)          (2,926)

Income tax expense .......................................         836             1,762            75            2,645
Minority interest ........................................          13                58          (250)             122
                                                          ------------      ------------   -----------      -----------

Net income (loss) from continuing operations .............         787            (4,718)       (1,710)          (5,693)
Extraordinary loss on refinancing of debt, net
  of taxes ...............................................          --                --           514               --
                                                          ------------      ------------   -----------      -----------
Net income (loss) ........................................$        787      $     (4,718)  $    (2,224)     $    (5,693)
                                                          ============      ============   ===========      ===========

Income (loss) from continuing operations per common share:
  Basic ..................................................$       0.01      $      (0.07)  $     (0.03)     $     (0.09)
  Diluted ................................................$       0.01      $      (0.07)  $     (0.03)     $     (0.09)
Income (loss) per common share:
  Basic ..................................................$       0.01      $      (0.07)  $     (0.03)     $     (0.09)
  Diluted ................................................$       0.01      $      (0.07)  $     (0.03)     $     (0.09)
Weighted average common shares outstanding:
  Basic ..................................................      64,081            67,544        63,752           66,111
  Diluted ................................................      70,640            67,544        63,752           66,111
</TABLE>
The  accompanying  notes  are an  integral  part of the  consolidated  condensed
financial statements.
                                       2

<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     For The Nine Months Ended
(dollars in thousands)                                              September 30,   September 30,
                                                                        1998            1999
                                                                    ------------  ---------------
<S>                                                                  <C>             <C>
Net income (loss) ................................................   $  (2,224)      $  (5,693)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
  Depreciation and amortization ..................................      29,261          34,266
  Extraordinary loss on refinancing of debt ......................         792              --
  Gain on marketable securities ..................................        (208)             --
  Restructuring provision and asset impairment expenses ..........       5,029           9,596
  Change in assets and liabilities:
    Trade accounts receivable ....................................      (9,843)        (37,647)
    Other assets .................................................      (4,037)           (214)
    Trade accounts payable .......................................      (6,424)           (202)
    Other liabilities ............................................       1,364          23,002
                                                                     ---------       ---------
         Net cash provided by operating activities ...............      13,710          23,108
                                                                     ---------       ---------
Cash flows from investing activities:
     Purchases of property and equipment .........................     (32,456)        (31,679)
     Proceeds from sale-leasebacks of facilities .................       9,397              --
     Proceeds from sales of property and equipment ...............          --             555
     Acquisition of businesses, net of cash acquired .............      (2,406)             --
     Acquisition of minority interest ............................        (628)             --
     Sale of marketable securities ...............................         257              --
     Changes in other assets, net ................................        (438)             --
                                                                     ---------       ---------
         Net cash used in investing activities ...................     (26,274)        (31,124)
                                                                     ---------       ---------
Cash flows from financing activities:
     Borrowings on notes payable .................................      15,504           3,296
     Repayments of notes payable .................................      (2,866)        (24,900)
     Borrowings on long-term debt ................................     126,533          44,024
     Repayment of long-term debt and capitalized lease obligations    (135,797)        (17,534)
     Capital contribution from subsidiary shareholder ............       1,400              --
     Sale of stock of subsidiaries ...............................       6,541              --
     Other .......................................................          (7)            (21)
                                                                     ---------       ---------
         Net cash provided by financing activities ...............      11,308           4,865
                                                                     ---------       ---------
Effect of exchange rates on cash .................................        (544)            845
                                                                     ---------       ---------
         Net decrease in cash ....................................      (1,800)         (2,306)
Cash and cash equivalents, beginning of period ...................      24,285          14,472
                                                                     ---------       ---------
Cash and cash equivalents, end of period .........................   $  22,485       $  12,166
                                                                     =========       =========
</TABLE>

Supplemental schedule of non-cash financing and investing activities:
--------------------------------------------------------------------
The Company issued  approximately  41,000 and 2,205,333  shares of the Company's
common stock in connection  with  acquisitions  in the first nine months of 1998
and 1999, respectively.

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

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

1.   BASIS OF PRESENTATION:

The consolidated  condensed  balance sheet of SITEL Corporation and Subsidiaries
(the  "Company") at December 31, 1998 was obtained  from the  Company's  audited
balance sheet as of that date. All other financial  statements  contained herein
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.  Such  adjustments  consist  only of
normal recurring items. The consolidated  condensed financial  statements should
be read in  conjunction  with the  consolidated  financial  statements and notes
thereto,  together  with  management's  discussion  and  analysis  of  financial
condition and results of  operations,  contained in the Company's  Form 10-K for
the year ended December 31, 1998.

2.   INCOME TAXES:

The  difference  between  the  Company's  income tax  expense as reported in the
accompanying  financial  statements and that which would be calculated using the
statutory  Federal  income tax rate of 34% on income before tax is primarily due
to net  operating  losses  in  certain  subsidiaries  for  which no  benefit  is
recognized, non-deductible goodwill amortization, higher international tax rates
in certain jurisdictions and state and local income taxes.

3.   COMPREHENSIVE INCOME (LOSS):

The Company's  comprehensive  income (loss) was $3,871,000 and  ($1,841,000) for
the three month periods ended  September  30, 1998 and 1999,  respectively,  and
($158,000) and ($11,015,000) for the nine month periods ended September 30, 1998
and 1999, respectively. The difference between the Company's reported net income
(loss) and comprehensive income (loss) for those periods is due to the change in
the currency  exchange  adjustment.  The accumulated  other  comprehensive  loss
included in the Company's  Consolidated  Condensed Balance Sheet at December 31,
1998 and  September  30,  1999  represents  the  accumulated  currency  exchange
adjustment.

4.   ASSET IMPAIRMENT AND RESTRUCTURING:

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

In the second  quarter of 1998,  the Company  recorded a $6.6 million charge for
restructuring expenses primarily related to its European operations. Included in
that charge were severance and other costs of $6.4 million  related to statutory
or contractual  severance and other costs for approximately  270 employees.  The
restructuring  expenses also included $0.2 million for the cost of excess leased
facilities.  The Company  substantially  completed  its  restructuring  plan and
recorded a reversal  of  approximately  $459,000  to the  restructuring  accrual
during the third quarter of 1999.

5.   ACQUISITION OF MINORITY INTEREST:

In June  1999,  the  Company  acquired  minority  interests  of  certain  of its
Asia-Pacific  subsidiaries  by issuing  approximately  2.2 million shares of the
Company's  common stock to Lend Lease Securities and Investments Pty Limited and
Lend Lease International Pty Limited (collectively "Lend Lease").  Additionally,
Lend Lease purchased  approximately  1.5 million shares of the Company's  common
stock  for  approximately  $4.5  million  in cash  from  two  SITEL  Corporation
shareholders  in a related  transaction.  The shares  issued by the Company were
valued at  approximately  $6.6  million,  based on quoted  market  prices of the
Company's  stock.  There was no  goodwill  recorded  on the  acquisition  of the
minority interests as the carrying value of the minority interests  approximated
the fair value of consideration issued in the transaction.

                                       4
<PAGE>

6.   STOCK OPTION PLANS:

On May 6, 1999,  the Company's  stockholders  approved the 1999 Stock  Incentive
Plan,  as  amended  (the  "1999  Plan").  Under the 1999  Plan,  the  Company is
authorized to grant incentive and nonqualified stock options, stock appreciation
rights, restricted stock awards, performance unit awards, stock bonus awards and
other stock-based awards to eligible employees,  consultants and directors.  The
1999 Plan  limits the  aggregate  number of shares of common  stock which may be
issued  under the Plan's  various  forms of stock  awards to  7,000,000  shares.
Through  September 30, 1999, the Company had granted options to purchase 688,000
shares of common  stock  under the 1999 Plan,  at exercise  prices  equal to the
quoted market price of the Company's  common stock on the date of the grant.  No
other types of awards have been made under the Plan through September 30, 1999.

On June 3, 1999, the Company's  board of directors  amended the Company's  Stock
Option Plan (for  replacement of EEBs) and Stock Option Plan for  Replacement of
Existing  Options  (collectively,  the "Plans") and the  Compensation  Committee
amended the terms of  approximately  6.3 million  outstanding  and  fully-vested
stock options issued under the Plans.  The amended  options were held by persons
currently employed or serving as consultant to the Company. The amendment to the
Plans  permitted the Company to extend the expiration  date of the options to up
to ten years after the original grant date. The amendment to the certain options
extended  their  expiration  date from May 29, 2000 to May 29,  2001.  All other
contractual terms of the options were unchanged.  The quoted market price of the
Company's  common stock on the date of the modification was less than the sum of
the exercise price of the options and previously recognized compensation expense
recorded upon the initial grant of the options.  Consequently,  no  compensation
expense was recorded for the amendment of the options.

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:

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

     (1) Condensed  consolidating  financial  statements as of December 31, 1998
and  September 30, 1999,  and for the three and nine months ended  September 30,
1998  and  1999  of  (a)  SITEL  Corporation,  the  parent,  (b)  the  guarantor
subsidiaries,  (c) the nonguarantor  subsidiaries and (d) SITEL Corporation on a
consolidated basis,

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

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

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

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

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
ASSETS
Current assets:
<S>                                        <C>         <C>             <C>            <C>            <C>
      Cash and cash equivalents ........   $   2,410   $   1,190       $  10,872      $      --      $  14,472
      Trade accounts receivable, net ...      33,676      33,179          75,540        (12,586)       129,809
      Prepaid expenses and other current
      assets ...........................       2,956         241           9,742             --         12,939
                                           ---------   ---------       ---------      ---------      ---------
      Total current assets .............      39,042      34,610          96,154        (12,586)       157,220
Property and equipment, net ............      31,302      22,523          71,790             --        125,615
Deferred income taxes ..................       9,390          --           6,035             --         15,425
Goodwill, net ..........................       1,537      21,021          70,730             --         93,288
Other assets ...........................      10,805         126           3,131             --         14,062
Investments in subsidiaries ............     188,690      88,293              --       (276,983)            --
Notes receivable, intercompany .........          --      28,833              --        (28,833)            --
                                           ---------   ---------       ---------      ---------      ---------
      Total assets .....................   $ 280,766   $ 195,406       $ 247,840      $(318,402)     $ 405,610
                                           =========   =========       =========      =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Notes payable ......................   $      --   $      --       $  30,545   $         --      $  30,545
    Current portion of long-term
    debt ...............................       2,136          --           1,535             --          3,671
    Current portion of capitalized lease
    obligations ........................         328          81           3,241             --          3,650
    Trade accounts payable .............       1,338       1,655          40,377        (12,586)        30,784
    Accrued expenses and other current
    liabilities ........................       9,963       4,922          32,025             --         46,910
                                           ---------   ---------       ---------      ---------      ---------
          Total current liabilities ....      13,765       6,658         107,723        (12,586)       115,560
    Long-term debt, excluding current
    portion ............................     103,556          --           3,471             --        107,027
    Capitalized lease obligations,
    excluding current portion ..........          --          58           9,152             --          9,210
    Notes payable, intercompany ........          --          --          28,833        (28,833)            --

    Deferred compensation ..............       1,591          --              --             --          1,591

    Minority interest ..................          --          --          10,368             --         10,368

    Stockholders' equity ...............     161,854     188,690          88,293       (276,983)       161,854
                                           ---------   ---------       ---------      ---------      ---------
    Total liabilities and
    stockholders' equity ...............   $ 280,766   $ 195,406       $ 247,840      $(318,402)     $ 405,610
                                           =========   =========       =========      =========      =========
</TABLE>
                                       6
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                      CONDENSED CONSOLIDATING BALANCE SHEET
                               SEPTEMBER 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
ASSETS
Current assets:
<S>                                        <C>         <C>            <C>            <C>            <C>
   Cash and cash equivalents ...........   $       --  $    1,433     $    10,733    $        --    $    12,166
   Trade accounts receivable, net.......      120,042       5,236          90,322        (49,915)       165,685
   Prepaid expenses and other
     current assets.....................        2,608          38          11,646             --         14,292
                                           ----------  ----------     -----------    -----------    -----------
   Total current assets ................      122,650       6,707         112,701        (49,915)       192,143

Property and equipment, net ............       41,849       4,093          64,798             --        110,740
Deferred income taxes ..................        7,709          --           6,499             --         14,208
Goodwill, net ..........................       21,813          --          66,204             --         88,017
Other assets ...........................       15,315          34             358                        15,707
Investments in subsidiaries ............      114,190      85,361              --       (199,551)            --
Notes receivable, intercompany .........           --      20,502              --        (20,502)            --
                                           ----------  ----------     -----------    -----------    -----------
   Total assets ........................   $  323,526  $  116,697     $   250,560    $  (269,968)   $   420,815
                                           ==========  ==========     ===========    ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Notes payable .......................   $       --  $       --     $     8,357    $        --    $     8,357
   Current portion of long-term debt....          407          --           1,578             --          1,985
   Current portion of capitalized lease
     obligations........................           93          76           1,851             --          2,020
   Trade accounts payable ..............        8,057         953          71,111        (49,915)        30,206
   Accrued expenses and other current
     liabilities........................       25,491       1,478          41,543             --         68,512
                                           ----------  ----------     -----------    -----------    -----------
        Total current liabilities ......       34,048       2,507         124,440        (49,915)       111,080

   Long-term debt, excluding current
     portion............................      130,000          --           7,130             --        137,130
   Capitalized lease obligations, excluding
     current portion ...................           --          --           9,162             --          9,162
     Notes payable, intercompany .......           --          --          20,502        (20,502)            --
     Deferred compensation .............        1,799          --              --             --          1,799

     Minority interest .................           --          --           3,965             --          3,965

     Stockholders' equity ..............      157,679     114,190          85,361       (199,551)       157,679
                                           ----------  ----------     -----------    -----------    -----------
     Total liabilities and stockholders'
       equity ..........................   $  323,526  $  116,697     $   250,560    $  (269,968)   $   420,815
                                           ==========  ==========     ===========    ===========    ===========
</TABLE>
                                       7
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>            <C>            <C>            <C>
Revenues                                   $   32,921  $   46,295     $    67,539    $        --    $   146,755
                                           ----------  ----------      ----------     ----------     ----------
Operating expenses:
     Cost of services ..................       17,793      25,306          39,537             --         82,636
     Selling, general and
     administrative expenses ...........       16,656      15,281          27,108             --         59,045
                                           ----------  ----------      ----------     ----------     ----------
     Total operating expenses ..........       34,449      40,587          66,645             --        141,681
                                           ----------  ----------      ----------     ----------     ----------
     Operating income ..................       (1,528)      5,708             894             --          5,074
                                           ----------  ----------      ----------     ----------     ----------

Other income (expense):
     Equity in earnings (losses) of
     subsidiaries, net of tax...........        3,255        (704)             --         (2,551)            --
     Intercompany charges ..............           82         503            (585)            --             --
     Interest expense, net .............       (2,362)       (120)           (975)            --         (3,457)
     Other income (expense) ............         (173)          1             191             --             19
                                           ----------  ----------      ----------     ----------     ----------
       Total other income (expense) ....          802        (320)         (1,369)        (2,551)        (3,438)
                                           ----------  ----------      ----------     ----------     ----------
Income (loss) before income
     taxes and minority interest .......         (726)      5,388            (475)        (2,551)         1,636

Income tax expense  (benefit) ..........       (1,513)      2,133             216             --            836

Minority interest ......................           --          --              13             --             13
                                           ----------  ----------      ----------     ----------     ----------
Net income (loss) ......................   $      787  $    3,255      $     (704)    $   (2,551)    $      787
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>

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

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>             <C>            <C>            <C>
Revenues ...............................   $   77,930  $   21,813      $   89,854     $       --     $  189,597
                                           ----------  ----------      ----------     ----------     ----------
Operating expenses:
   Cost of services ....................       37,159      13,033          50,254             --        100,446
   Selling, general and
     administrative expenses ...........       35,543       6,915          36,723             --         79,181
   Asset impairment expense ............        3,585          --           6,011             --          9,596
                                           ----------  ----------      ----------     ----------     ----------
   Total operating expenses.............       76,287      19,948          92,988             --        189,223
                                           ----------  ----------      ----------     ----------     ----------
   Operating income ....................        1,643       1,865          (3,134)            --            374
                                           ----------  ----------      ----------     ----------     ----------
Other income (expense):
   Equity in earnings
     (losses) of subsidiaries,
      net of tax .......................       (3,844)     (5,315)             --          9,159             --
   Intercompany charges ................           --         398            (398)            --             --
   Interest expense, net ...............       (2,684)         --            (519)            --         (3,203)
   Other income (expense) ..............           (4)         --             (65)            --            (69)
                                           ----------  ----------      ----------     ----------     ----------
Total other income (expense) ...........       (6,532)     (4,917)           (982)         9,159         (3,272)
                                           ----------  ----------      ----------     ----------     ----------
Income (loss) before income
taxes and minority interest ............       (4,889)     (3,052)         (4,116)         9,159         (2,898)

Income tax expense (benefit)............         (171)        792           1,141             --          1,762

Minority interest ......................           --          --              58             --             58
                                           ----------  ----------      ----------     ----------     ----------
Net income (loss) ......................   $   (4,718) $   (3,844)     $   (5,315)    $    9,159     $   (4,718)
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>
                                       9
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>             <C>            <C>            <C>
Revenues ...............................   $  103,252  $  133,111      $  195,447     $       --     $  431,810
                                           ----------  ----------      ----------     ----------     ----------
Operating expenses:
   Cost of services ....................       54,685      73,653         114,703             --        243,041
   Selling, general and
     administrative expenses ...........       48,978      45,337          80,498             --        174,813
   Restructuring expenses ..............           --          --           6,607             --          6,607
                                           ----------  ----------      ----------     ----------     ----------
   Total operating expenses ............      103,663     118,990         201,808             --        424,461
                                           ----------  ----------      ----------     ----------     ----------
Operating income (loss) ................         (411)     14,121          (6,361)            --          7,349
                                           ----------  ----------      ----------     ----------     ----------
Other income (expense):
Equity in earnings (losses) of
     subsidiaries, net of tax ..........        1,925      (7,578)             --          5,653             --
Intercompany charges ...................          203       1,379          (1,582)            --             --
Interest expense, net ..................       (5,942)       (880)         (2,600)            --         (9,422)
Other income (expense) .................           (5)         --             193             --            188
                                           ----------  ----------      ----------     ----------     ----------
Total other income (expense) ...........       (3,819)     (7,079)         (3,989)         5,653         (9,234)
                                           ----------  ----------      ----------     ----------     ----------
Income (loss) before income taxes
     and minority interest .............       (4,230)      7,042         (10,350)         5,653         (1,885)

Income tax expense (benefit) ...........       (2,520)      5,117          (2,522)            --             75

Minority interest ......................           --          --            (250)            --           (250)
                                           ----------  ----------      ----------     ----------     ----------
Net income (loss) from continuing
     operations ........................       (1,710)      1,925          (7,578)         5,653         (1,710)

Extraordinary loss on refinancing
     of debt, net of taxes .............          514          --              --             --            514
                                           ----------  ----------      ----------     ----------     ----------
Net income (loss) ......................   $   (2,224) $    1,925      $   (7,578)    $    5,653     $   (2,224)
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>
                                       10
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>             <C>            <C>            <C>
Revenues ...............................   $  156,803  $  122,652      $  252,323     $       --     $  531,778
                                           ----------  ----------      ----------     ----------     ----------
Operating expenses:
   Cost of services ....................       71,281      72,512         140,461             --        284,254
   Selling, general and
     administrative expenses ...........       81,459      38,245         111,848             --        231,552
   Asset impairment expense ............        3,585          --           6,011             --          9,596
                                           ----------  ----------      ----------     ----------     ----------
   Total operating expenses ...........       156,325     110,757         258,320             --        525,402
                                           ----------  ----------      ----------     ----------     ----------
Operating income (loss) ................          478      11,895          (5,997)            --          6,376
                                           ----------  ----------      ----------     ----------     ----------
Other income (expense):
Equity in earnings (losses)
     of subsidiaries, net of tax .......       (1,351)     (9,424)             --         10,775             --
Intercompany charges ...................           98       1,339          (1,437)            --             --
Interest expense, net ..................       (6,908)       (814)         (1,631)            --         (9,353)
Other income (expense) .................          163          --            (112)            --             51
                                           ----------  ----------      ----------     ----------     ----------
Total other income (expense) ...........       (7,998)     (8,899)         (3,180)        10,775         (9,302)
                                           ----------  ----------      ----------     ----------     ----------
Income (loss) before income
     taxes and minority
     interest ..........................       (7,520)      2,996          (9,177)        10,775         (2,926)

Income tax expense (benefit) ...........       (1,827)      4,347             125             --          2,645

Minority interest ......................           --          --             122             --            122
                                           ----------  ----------      ----------     ----------     ----------
Net income (loss) ......................   $   (5,693) $   (1,351)     $   (9,424)    $   10,775     $   (5,693)
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>
                                       11
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>             <C>            <C>            <C>
Net cash provided by (used in)
operating activities ...................   $   (7,627) $   18,205      $    3,132     $       --     $   13,710
                                           ----------  ----------      ----------     ----------     ----------
Cash flows from investing activities:
     Investments in subsidiaries .......        6,692      (6,637)             --            (55)            --
     Dividend on common stock ..........           --      10,000              --        (10,000)            --
     Purchases of property and
     equipment .........................       (9,302)     (6,489)        (16,665)            --        (32,456)
     Proceeds from sale-lease
     backs of facilities ...............        9,397          --              --             --          9,397
     Acquisition of subsidiary .........           --          --          (2,406)            --         (2,406)
     Acquisition of minority interest ..           --          --            (628)            --           (628)
     Sale of marketable securities .....          257          --              --             --            257
     Changes in other assets ...........           --          --            (438)            --           (438)
                                           ----------  ----------      ----------     ----------     ----------
     Net cash provided by
     (used in) investing activities ....        7,044      (3,126)        (20,137)       (10,055)       (26,274)
                                           ----------  ----------      ----------     ----------     ----------
Cash flows from financing activities:
     Borrowings on notes payable .......           --          --          15,504             --         15,504
     Repayments of notes payable .......           --          --          (2,866)            --         (2,866)
     Borrowings on long-term debt ......      124,383          --           2,150             --        126,533
     Repayment of long-term debt and
     capital lease obligations .........     (128,906)         --          (6,891)            --       (135,797)
     Net capital contribution
     from parent .......................           --      (6,692)          6,637             55             --
     Net borrowings and
     payments on note to parent ........           --      (7,297)          7,297             --             --
     Dividend on common stock ..........           --          --         (10,000)        10,000             --
     Capital contribution
       from subsidiary shareholder .....           --          --           1,400             --          1,400

     Sale of stock of subsidiaries .....           --          --           6,541             --          6,541
     Common stock issued
       for option exercises and other ..           (7)         --              --             --             (7)
                                           ----------  ----------      ----------     ----------     ----------
     Net cash provided by (used in)
     financing activities ..............       (4,530)    (13,989)         19,772         10,055         11,308
                                           ----------  ----------      ----------     ----------     ----------
     Effect of exchange rates on cash ..           --          --            (544)            --           (544)
                                           ----------  ----------      ----------     ----------     ----------
Net increase (decrease) in cash ........       (5,113)      1,090           2,223             --         (1,800)

Cash and cash equivalents,
beginning of period ....................       11,514       2,075          10,696             --         24,285
                                           ----------  ----------      ----------     ----------     ----------
Cash and equivalents, end of period ....   $    6,401  $    3,165      $   12,919     $       --     $   22,485
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>
                                       12
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                        GUARANTOR     NONGUARANTOR
                                             PARENT    SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                             ------    ------------   ------------   ------------   ------------
<S>                                        <C>         <C>             <C>            <C>            <C>
Net cash provided by (used in)
     operating activities ..............   $   20,199  $    3,771      $     (862)    $       --     $   23,108
                                           ----------  ----------      ----------     ----------     ----------
Cash flows from investing activities:
  Investments in subsidiaries ..........        5,256       3,923              --         (9,179)            --
  Purchases of property and equipment ..      (14,947)     (2,195)        (14,537)            --        (31,679)
  Proceeds from sales of
    property and equipment .............           14          --             541             --            555
                                           ----------  ----------      ----------     ----------     ----------
Net cash provided by (used in)
     investing activities ..............       (9,677)      1,728         (13,996)        (9,179)       (31,124)
                                           ----------  ----------      ----------     ----------     ----------
Cash flows from financing activities:
  Borrowings on notes payable ..........           --          --           3,296             --          3,296
  Repayments of notes payable ..........           --          --         (24,900)            --        (24,900)
  Borrowings on long-term debt .........       38,000          --           6,024             --         44,024
  Repayment of long-term debt and capital
    lease obligations ..................      (13,582)         --          (3,952)            --        (17,534)
  Net capital contribution from parent .           --      (5,256)         (3,923)         9,179             --
  Net borrowings and payments
    on intercompany balances ...........      (37,329)         --          37,329             --             --
  Other ................................          (21)         --              --             --            (21)
                                           ----------  ----------      ----------     ----------     ----------
Net cash provided by (used in)
     financing activities ..............      (12,932)     (5,256)         13,874          9,179          4,865
                                           ----------  ----------      ----------     ----------     ----------
Effect of exchange rates on cash .......           --          --             845             --            845
                                           ----------  ----------      ----------     ----------     ----------

Net increase (decrease) in cash ........       (2,410)        243            (139)            --         (2,306)

Cash and cash equivalents,
     beginning of period ...............        2,410       1,190          10,872             --         14,472
                                           ----------  ----------      ----------     ----------     ----------
Cash and equivalents, end of period ....   $       --  $    1,433      $   10,733     $       --     $   12,166
                                           ==========  ==========      ==========     ==========     ==========
</TABLE>

                                       13
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

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

OVERVIEW

SITEL Corporation and subsidiaries (the "Company") provide customer relationship
management  services on behalf of clients principally in the financial services,
insurance,   telecommunications,   technology,   utilities,   consumer,   media,
government and travel sectors located in North America, Europe, the Asia Pacific
region, and Latin America.

The following  table sets forth  certain  financial  data and the  percentage of
total  revenues of the Company  for the  periods  indicated.  All amounts are in
thousands.
<TABLE>
<CAPTION>
                                         Three Months Ended September  30,           Nine Months Ended September 30,
                                             1998                  1999 (2)              1998 (1)             1999 (2)
                                   ---------------------  ---------------------  ---------------------  ---------------------

<S>                                <C>            <C>     <C>            <C>     <C>            <C>     <C>            <C>
Revenues .......................   $ 146,755      100%    $ 189,597      100%    $ 431,810      100%    $ 531,778      100%
                                   ---------------------  ---------------------  ---------------------  ---------------------
Operating expenses:
   Cost of services ............      82,636       56.3%    100,446       53.0%    243,041       56.3%    284,254       53.5%
   Selling, general, and
   administrative expenses .....      59,045       40.2%     79,181       41.8%    174,813       40.5%    231,552       43.5%
   Asset impairment and
      restructuring expenses ...          --        0.0%      9,596        5.0%      6,607        1.5%      9,596        1.8%
                                   ---------------------  ---------------------  ---------------------  ---------------------
        Total operating expenses     141,681       96.5%    189,223       99.8%    424,461       98.3%    525,402       98.8%
                                   ---------------------  ---------------------  ---------------------  ---------------------

        Operating income .......       5,074        3.5%        374        0.2%      7,349        1.7%      6,376        1.2%

Interest income (expense), net .      (3,457)      (2.4%)    (3,203)      (1.7%)    (9,422)      (2.2%)    (9,353)      (1.8%)
Other income (expense) .........          19        0.0%        (69)       0.0%        188        0.0%         51        0.0%
                                   ---------------------  ---------------------  ---------------------  ---------------------
Income (loss) before income
taxes and minority interest ....       1,636        1.1%     (2,898)      (1.5%)    (1,885)      (0.4%)    (2,926)      (0.6%)

Income tax expense .............         836        0.6%      1,762        1.0%         75        0.0%      2,645        0.5%
Minority interest
(income) .......................          13        0.0%         58        0.0%       (250)      (0.1%)       122        0.0%
                                   ---------------------  ---------------------  ---------------------  ---------------------
Net income (loss) from
continuing operations ..........         787        0.5%     (4,718)      (2.5%)    (1,710)      (0.4%)    (5,693)      (1.1%)

Extraordinary loss on
refinancing of debt, net of
taxes ..........................          --        0.0%         --        0.0%        514        0.1%         --        0.0%
                                   ---------------------  ---------------------  ---------------------  ---------------------
Net income (loss) ..............   $     787        0.5%  $  (4,718)      (2.5%) $  (2,224)      (0.5%) $  (5,693)      (1.1%)
                                   =====================  =====================  =====================  =====================
</TABLE>
(1)   Includes restructuring expenses.  Excluding those expenses and related tax
      effect,  operating income, net income,  basic income per share and diluted
      income  per share  were  $14.0  million,  $2.3  million,  $0.04 and $0.03,
      respectively, for the nine month period ended September 30, 1998.

(2)   Includes asset  impairment  expense.  Excluding the charge and related tax
      effect,  operating income, net income,  basic income per share and diluted
      income  per share  were  $10.0  million,  $3.6  million,  $0.05 and $0.05,
      respectively,  for the three month  period  ended  September  30, 1999 and
      $16.0 million, $2.6 million, $0.04 and $0.04,  respectively,  for the nine
      month period ended September 30, 1999.

                                       14
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

THREE MONTHS ENDED SEPTEMBER 30, 1999 VS. THREE MONTHS ENDED SEPTEMBER 30, 1998

REVENUES:

Revenues  increased  $42.8  million,  or 29.2%,  to $189.6  million in the three
months ended  September  30, 1999 from $146.8  million in the three months ended
September 30, 1998. Of this increase, $25.3 million was attributable to services
initiated for new clients and  approximately  $17.5 million was  attributable to
increased revenues from existing clients.

COST OF SERVICES:

Cost of services  represents  primarily  labor and telephone  expenses  directly
related to teleservicing  activities.  Cost of services increased $17.8 million,
or 21.6%,  to $100.4  million in the three months ended  September 30, 1999 from
$82.6  million in the three months ended  September 30, 1998. As a percentage of
revenues,  cost of services decreased to 53.0% in the third quarter of 1999 from
56.3% in the third  quarter  of 1998.  The  decrease  in cost of  services  as a
percentage  of revenues was  primarily  attributable  to lower costs of services
associated  with  certain  revenues  relating to the  implementation  phase of a
significant  contract.  In addition,  the contract  includes certain  technology
revenues for which the  associated  costs are  included in selling,  general and
administrative  expenses.  Excluding  the  impact  of this  contract,  costs  of
services as a percentage of revenues  would have been 57.5% in the third quarter
of 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling,  general and  administrative  expenses  represent  expenses incurred to
directly  support  and  manage the  operations  including  costs of  management,
administration,   technology,   facilities,   depreciation   and   amortization,
maintenance,  sales and marketing, and client support services. Selling, general
and administrative  expenses increased $20.1 million, or 34.1%, to $79.2 million
in the three months  ended  September  30, 1999 from $59.0  million in the three
months ended September 30, 1998. As a percentage of revenues,  selling,  general
and administrative expenses increased to 41.8% in the third quarter of 1999 from
40.2% in the third quarter of 1998.  Approximately $7.7 million of this increase
was directly  attributed  to the  technology  costs for a large  contract  noted
above.  Excluding the impact of these  technology  costs,  selling,  general and
administrative expense decreased to 39.3% for the third quarter of 1999.

RESTRUCTURING AND ASSET IMPAIRMENT EXPENSES:

In the third quarter of 1999, the Company recorded an asset  impairment  expense
of $9.6 million primarily related to the write down of capitalized  software and
related  technology  assets.  During the second  quarter  of 1999,  the  Company
announced a strategic  alliance with Siebel Systems Inc. pursuant to which SITEL
was stipulated as Siebel's  preferred  partner for outsourced call centers,  and
Siebel was named as SITEL's  preferred  partner  for its  Customer  Relationship
Management  call center  software  applications.  During the third quarter,  the
Company completed its first  implementations of the Siebel platform and reviewed
its  capitalized  software  and  related  technology  assets for  impairment  in
connection  with the  change in its  technology  strategy  as it  related to the
adoption of the Siebel  platform.  As a result,  the Company  wrote down certain
capitalized software and related technology assets to estimated fair value.

OPERATING INCOME (LOSS):

Operating  income  (loss)  decreased  to  $374,000  in the  three  months  ended
September  30, 1999 from $5.1 million in the three months  ended  September  30,
1998. As a percentage  of revenues,  operating  income  decreased to 0.2% in the
third quarter of 1999 from 3.5% in the third  quarter 1998.  Excluding the asset
impairment expense, operating income increased $4.9 million to $10.0 million for
the three months ended  September  30, 1999.  This increase was primarily due to
the revenue from the  implementation  and production  ramp up associated  with a
significant  new contract and growth in the U.S.  technology  business offset by
declines in the U.S. financial services and telecommunications sectors.

                                       15
<PAGE>
INTEREST EXPENSE, NET:

Interest expense, net of interest income, decreased to $3.2 million in the three
months  ended  September  30, 1999 from $3.5  million in the three  months ended
September  30,  1998.  This  decrease  was  primarily  due to lower  outstanding
borrowings during the period.

INCOME TAX EXPENSE (BENEFIT):

Income tax  expense  for the three  months  ended  September  30,  1999 was $1.8
million  compared  to an  expense  of $0.8  million  in the three  months  ended
September  30, 1998.  Income tax expense as a percentage of income before income
taxes and minority interest,  excluding the asset impairment expense,  decreased
to 45.6% in the three  months ended  September  30, 1999 from 51.1% in the three
months ended September 30, 1998. The difference between the Company's income tax
rate of 45.6%,  excluding the impact of the asset  impairment  expense,  and the
statutory  Federal  income tax rate of 34% is  primarily  due to  non-deductible
goodwill, higher international tax rates in certain jurisdictions and U.S. state
and local income taxes.  The tax benefit  associated  with the asset  impairment
expense was $1.3 million.  The  difference  between this benefit and the benefit
based on the statutory  Federal rate is primarily due to the impairment  expense
occurring  in  certain  jurisdictions  with net  operating  losses  for which no
benefit was recognized.

NET INCOME (LOSS):

For the reasons  discussed  above,  net income (loss)  decreased to $4.7 million
loss in the three months ended September 30, 1999 from $0.8 million of income in
the three  months  ended  September  30, 1998.  Excluding  the asset  impairment
expense and the related tax  effects,  net income was $3.6  million in the third
quarter of 1999.

NINE MONTHS ENDED SEPTEMBER 30, 1999 VS. NINE MONTHS ENDED SEPTEMBER 30, 1998

REVENUES:

Revenues  increased  $100.0  million,  or 23.2%,  to $531.8  million in the nine
months  ended  September  30, 1999 from $431.8  million in the nine months ended
September 30, 1998. Of this increase, $60.4 million was attributable to services
initiated for new clients and  approximately  $39.6 million was  attributable to
increased revenue from existing clients.

COST OF SERVICES:

Cost of services  increased  $41.2 million,  or 17.0%,  to $284.3 million in the
nine months  ended  September  30,  1999 from $243.0  million in the nine months
ended  September  30,  1998.  As a  percentage  of  revenues,  cost of  services
decreased to 53.5% in the first nine months of 1999 from 56.3% in the first nine
months of 1998.  The  decrease  was  primarily  attributable  to lower  costs of
services  associated with certain revenues  relating to the  implementation of a
significant  contract.  In addition,  the contract  includes certain  technology
revenues for which the  associated  costs are  included in selling,  general and
administrative expenses. Excluding the impact of this contract, cost of services
as a  percentage  of revenues  would have been 57.3% for the nine  months  ended
September 30, 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling,  general and administrative expenses increased $56.7 million, or 32.5%,
to $231.6  million in the nine  months  ended  September  30,  1999 from  $174.8
million in the nine months ended September 30, 1998. This increase was primarily
a result of the  Company's  continued  growth  internally.  As a  percentage  of
revenues, selling, general and administrative expenses increased to 43.5% in the
first  nine  months  of 1999  from  40.5%  in the  first  nine  months  of 1998.
Approximately  $23.1  million of this  increase was directly  attributed  to the
technology costs for a large contract noted above. Excluding the impact of these
technology costs,  selling,  general and  administrative  expenses  increased to
41.0% in the first nine months of 1999. This increase was primarily attributable
to  re-engineering  costs in the United Kingdom and severance and  consolidation
costs incurred in the Asia Pacific region in the first six months of 1999 offset
by the leveraging of overhead costs through  revenue growth in the third quarter
of 1999.

OPERATING INCOME:

Operating  income  decreased to $6.4 million in the nine months ended  September
30, 1999 from $7.3 million in the nine months  ended  September  30, 1998.  This
decrease  was  primarily  due to  the  asset  impairment  expense  noted  above.
Excluding the asset  impairment  expense in 1999 and  restructuring  expenses in
1998,  operating  income  increased  to $16.0  million for the nine months ended
September 30, 1999 from $14.0 million for the  comparable  period in 1998.  This
increase  was  primarily  due  to  the  revenues  from  the  implementation

                                       16
<PAGE>
and production  ramp up associated with a significant new contract and growth in
the U.S.  technology  business offset by declines in the U.S. financial services
and telecommunications sectors and re-engineering costs in the United Kingdom.

INTEREST EXPENSE, NET:

Interest  expense,  net of interest income,  was $9.4 million in the nine months
ended September 30, 1999 and September 30, 1998.

INCOME TAX EXPENSE:

Income tax expense for the nine months ended September 30, 1999 was $2.6 million
compared to $0.1 million in the nine months ended September 30, 1998. Income tax
expense as a percentage  of income  before  income taxes and minority  interest,
excluding  the asset  impairment  expense,  was 59.1% in the nine  months  ended
September 30, 1999. The difference  between this rate and the statutory  Federal
income  tax  rate  of  34% is  primarily  due to  non-deductible  goodwill,  net
operating  losses  in  Asia  Pacific   subsidiaries  for  which  no  benefit  is
recognized,  higher  international  tax rates in certain  jurisdictions and U.S.
state and local income taxes.

NET INCOME (LOSS) FROM CONTINUING OPERATIONS AND NET INCOME (LOSS):

For the reasons discussed above, net loss from continuing  operations  increased
to $5.7 million in the nine months ended September 30, 1999 from $1.7 million in
the nine months  ended  September  30,  1998.  After the  extraordinary  loss on
refinancing of debt, net loss increased $3.5 million from a $2.2 million loss in
the nine months ended September 30, 1998. Excluding the asset impairment expense
in 1999 and  restructuring  expenses in 1998,  and the related tax effects,  net
income  from  continuing  operations  decreased  from $2.8  million for the nine
months  ended  September  30, 1998 to $2.6  million  for the nine  months  ended
September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES:

Cash provided by operating  activities  was $23.1 million  during the nine month
period ended  September 30, 1999. This was primarily the result of income before
depreciation  and  amortization and an increase in accrued expenses and deferred
revenue which was partially  offset by an increase in accounts  receivable.  The
Company  anticipates  that the accounts  receivable will continue to grow, using
working capital,  as the Company  continues to grow. The Company purchased $31.1
million of property and  equipment in the nine months ended  September 30, 1999.
While the Company will  continue to invest in property and  equipment to support
the growth of its business,  it anticipates that capital  expenditures  over the
next 12 months will be less than the previous 12 months.

The  Company  has  historically  used  equity  capital,   funds  generated  from
operations,  leases of property and  equipment,  senior  subordinated  notes and
borrowings under credit facilities with banks to finance business  acquisitions,
capital  expenditures and working capital  requirements.  At September 30, 1999,
the Company had available  unused lines of credit  totaling  $13.1  million.  In
light of the Company's  expectations  with respect to its operating  results for
the third quarter, the Company sought and obtained certain  modifications to its
long  term  revolving  credit  facility  to  permit  continued  availability  of
borrowing  under such facility.  The Company  believes that funds generated from
operations,  existing cash, leases of property and equipment and funds available
under  existing  credit  facilities  will be  sufficient  to finance its current
operations, planned capital expenditures and internal growth for the foreseeable
future.

YEAR 2000 ISSUE

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

The Company  recognizes the need to ensure its operations  will not be adversely
impacted by Year 2000  software  and  embedded  system  failures.  Specifically,
computational  errors and system failures are a known risk with respect to dates
after  December 31, 1999.  The Company has  established a central Y2K compliance
office that  reports  directly  to the Chief  Information  Officer.  Each of the
Company's  operating  units have also  designated  information  technology  (IT)
personnel to address the issues that the unit faces and to report to the central
Y2K compliance  office.  The Company has implemented a system which allows it to
track all IT and non-IT  systems and  facility  functions  for  compliance  with
industry Y2K standards.  This tracking  system allows the Company to monitor and
track each functional point as a single item grouped by how critical the item is
in the  Company's  ability to perform its daily  functions.  Based on the output
from this data and an analysis of the system reports,  the Company believes that
all  functional  points which are critical to the Company's  functions have been
identified and assessed.  Further,  the Company has developed a remediation plan
for

                                       17
<PAGE>
each item in this critical list. Part of the Company's  remediation  strategy is
in concert with its efforts to acquire or develop new and innovative systems for
its internal operations.

IT  issues  - The  Company  is  moving  all of its IT  systems  into a state  of
readiness for the year 2000. The Company believes that it is making satisfactory
progress  to  ensure  that it will be ready  with all IT  systems  by the end of
December  1999.  Internal  systems  represent  approximately  28% of the overall
effort in the IT  applications  area. The remaining 72% of the overall effort in
the IT area is in the interface and  integration  of external  client and vendor
application  systems.  The  Company  has  implemented  a  three-step  process of
contacting  significant  vendors  and clients to request  information  about the
status of their Y2K  compliance  efforts.  In  addition  to  communicating  with
significant  vendors, the Company is testing certain critical vendor application
systems for Y2K  compliance.  The Company has an  initiative  that will identify
mitigation and  contingency  plans at both the business and technical IT levels.
This  initiative  is scheduled to be completed by November 30, 1999. In addition
to communicating  with significant  clients,  the Company has a strategy to deal
with non-compliant  external client customer data by enabling data to be used by
the Company's systems.

Non IT issues  (facilities)  - Non-IT  issues,  with few  exceptions,  have been
classified into a non-critical  category.  The few exceptions  include dial tone
for the Company's  telephony and power from the Company's energy providers.  The
Company has  included  these  functional  points in the  critical  category  for
purposes  of  scheduling.  Based  on  communications  with  providers  of  these
services,  the Company  believes that these  services will not be interrupted by
Year  2000  failures.  The  Company's  contingency  plan  for the  loss of power
includes  generator  systems in the Company's  major  facilities.  The Company's
contingency  plan for loss of dial tone  includes  the  distribution  of network
services  across  several  providers.  This will allow the Company to  minimally
maintain its service levels in the event of a failure. The Company believes that
it is making  satisfactory  progress to ensure that all facility  related issues
will be compliant by the end of December 1999.

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

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

Each  process  step  is  necessary  within  the  framework  and  provides  clear
management  checkpoints for gauging the progress of activity during execution of
the project plan. The following table outlines the phases and process steps:
<TABLE>
<CAPTION>
                                    Phase 1          Phase 2           Phase 3          Phase 4
                                    Verification/
Process Steps                       Assessment       Remediation       Testing          Implementation
------------------------------------------------------------------------------------------------------
<S>                                       <C>              <C>              <C>              <C>
1.  Recognition/Awareness                 X                X                X                X
2.  Inventory                             X
3.  Evaluation                            X
4.  Determination                         X
5.  Remediation                           X
6.  Re-engineering                                         X
7.  Multi-level testing                   X                X                X                X
8.  Implementation                                                                           X
9.  Post-implementation                                                                      X
</TABLE>
The  Company  has  clearly  defined  each of the  process  steps in the  Project
Methodology.  The  Recognition/Awareness  step included communication of the Y2K
issues and their importance  throughout the Company. The Inventory step included
the  identification  and  cataloging  of each  item that  must be  verified  for
compliance with Y2K processing.  The Evaluation step involved the evaluation and
categorization  of the  critical  nature  of  each  item  based  on  established
criteria.  The Determination step includes making informed management  decisions
regarding the strategy to be taken for each  individual  item.  The  Remediation
step  involves  repair of all  components  of a process  that  could  improperly
process dates.  The  Re-engineering  step consists of rewriting and/or replacing
whole  units of  software  code.  The  Multi-level  testing  step  involves  the
development of detailed testing criteria and the implementation of those testing
plans.  The  Implementation  step  involves the  coordination  of the release of
applications/systems into the live systems environment.

                                       18
<PAGE>
The   Post-implementation   step  will  include  the  on-going   monitoring   of
applications/systems  that have been  repaired  and placed into the live systems
environment.

The  Company  has  completed  the  Assessment  Phase for all items.  The Company
estimates that approximately 92% of all items are entirely completed.  Completed
items are either  compliant,  will be retired prior to 2000, or are low priority
items that do not affect  business  and will be  addressed at a later time (work
around processes will be implemented).  In addition,  the Company estimates that
Phase 2 - Remediation is 96% complete, Phase 3 - Verification and Testing is 94%
complete and Phase 4 - Implementation is 93% complete.

Contingency  Plans - The Company is developing  Year 2000  Business  Contingency
Plans for conducting its business operations in the event of crises. This effort
is not limited to the risks  posed by the  potential  Year 2000  failures of the
Company's internal information systems or infrastructures, but also includes the
potential  secondary  impact on the  Company  of Year 2000  failures,  including
potential  systems  failures of business  partners  and  infrastructure  service
providers.  Completion of these  contingency plans is scheduled for November 30,
1999.

Costs of Y2K  Compliance  - The Company  currently  estimates  that the costs to
become Y2K  compliant  will  approximate  $11  million.  The  Company  currently
anticipates  that  approximately  50% of these  costs will be for  hardware  and
software and the  remainder  will be primarily  internal  personnel  costs.  The
Company estimates that it has incurred  approximately $10 million of these costs
through  September  30, 1999.  The  estimated  hardware  and software  costs are
included  in  the  Company's  definition  of  Y2K  costs  in  cases  where  such
expenditures have been accelerated in order to address Y2K issues.

Risks - There are many  risks  associated  with the Year 2000  issue,  including
without  limitation the  possibility  that the Company will be unable to receive
client phone calls or that the Company will be unable to initiate phone calls on
behalf of its clients.  Such possibilities  could have a material adverse effect
on the Company  depending on the nature of the cause and the speed with which it
could be corrected  or an  alternative  implemented.  If the  Company's  service
providers are unable to provide network switching  capability,  the Company will
be unable to perform its revenue-producing  activities.  If the Company's client
customer data does not have Year 2000  compliant  dates,  additional  processing
will be required  before  revenue-producing  activities  using these data can be
performed.  If internal systems or vendor application  systems fail, the Company
will be unable to perform  revenue-producing  activities  until such time as the
problem can be isolated and repaired.

As with  other  teleservices  providers,  there  exists  a worst  case  scenario
possibility  that a failure to correct a Year 2000 program in one or more of the
Company's mission critical systems or IT applications  could cause a significant
disruption  of or  interruption  in certain  of the  Company's  normal  business
functions.  Based on assessments and work to date,  management believes that any
such material  disruption to its operations due to failure of an internal system
is  unlikely.  However,  due to the  uncertainty  inherent  in Year 2000  issues
generally  and those that are beyond the Company's  control in particular  (e.g.
the final Year 2000 readiness of our clients, suppliers, electric, gas and other
public  utilities,  telecommunications  carriers,  and joint venture and foreign
investment interests),  there can be no assurance that one or more such failures
would  not have a  material  impact  on the  Company's  results  of  operations,
liquidity or financial condition.

The Company  contracted for an external review of its Y2K compliance  program by
an independent  third party in order to review and validate its program,  assess
its readiness,  and identify areas of additional need on a worldwide  basis. The
external  review has been  completed,  generally  validated  the  Company's  Y2K
compliance  program and concluded  that the Company was proceeding in due course
to become  Y2K  ready.  The  Company  has  addressed  areas of  additional  need
identified by the external review.

The above  information is based on the Company's  current best estimates,  which
were  derived  using  numerous  assumptions  of  future  events,  including  the
continued  availability  and  future  costs of certain  technological  and other
resources,  third  party  modification  actions,  and other  factors.  Given the
complexity of these issues and possible  unidentified  risks, actual results may
vary materially from those  anticipated and discussed  above.  Specific  factors
that might cause such differences  include,  among others,  the availability and
cost of  personnel  trained in this area,  the ability to locate and correct all
affected  computer code, the timing and success of Year 2000 remedial efforts of
our clients, suppliers and business partners, and similar uncertainties.

QUARTERLY RESULTS AND SEASONALITY

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

                                       19
<PAGE>
EFFECTS OF INFLATION

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

ACCOUNTING PRONOUNCEMENTS

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

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities  Act and Section 21E of the Exchange Act. Such  statements
are identified by the use of forward-looking  words or phrases which may include
but are not limited to, "intended," "will be positioned," "expects," "expected,"
"anticipates,"   "anticipated,"   "believes"   and  similar   expressions.   The
forward-looking statements are based on the Company's current expectations.  All
statements other than statements of historical facts included in this Form 10-Q,
including those regarding the Company's financial  position,  business strategy,
projected  costs and plans and objectives of management  for future  operations,
are  forward-looking   statements.   Although  the  Company  believes  that  the
expectations reflected in such forward-looking statements are reasonable,  there
can be no assurance  that such  expectations  will prove to be correct.  Because
forward-looking statements involve risks and uncertainties, the Company's actual
results  could  differ  materially.  Important  factors  that could cause actual
results to differ  materially from the Company's  expectations may include,  but
are not limited to, the effects of leverage,  restrictions  imposed by the terms
of  indebtedness,  reliance on major clients,  risks  associated with managing a
global   business,    fluctuations   in   operating    results,    reliance   on
telecommunications and computer technology,  risks associated with the Company's
acquisition  strategy,  the  dependence on telephone  service,  the  competitive
industry,  dependence on labor force,  foreign  currency  risks,  the effects of
business regulation,  dependence on key personnel and control by management, and
risks associated with Year 2000 failures (see discussion above under the caption
"Year 2000 Issue"). All subsequent written and oral  forward-looking  statements
attributable  to the  Company or  persons  acting on behalf of the  Company  are
expressly qualified in their entirety by this paragraph.  The Company disclaims,
however, any intent or obligation to update its forward-looking statements.

                                       20
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

                                       21
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 6.  Exhibits
         --------

(a)      Exhibits:
         --------

           10.1     Third Amendment dated September 30, 1999 to Amended
                    Credit Agreement
           27       Financial Data Schedule

                                       22
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date:  November 15, 1999              SITEL Corporation


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

                                       23
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES

EXHIBITS INDEX:
--------------

     10.1   Third Amendment dated September 30, 1999 to Amended Credit Agreement

     27     Financial Data Schedule

                                       24