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


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

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

                  For the quarterly period ended JUNE 30, 2001


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

 1-12577                      SITEL CORPORATION                   47-0684333


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

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

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

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

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

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

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO ____

COMMON STOCK,  $.001 PAR VALUE - 74,357,431  SHARES  OUTSTANDING  AS OF JULY 31,
2001

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

<PAGE>

                       SITEL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----
PART I - FINANCIAL INFORMATION

     Item 1  -  Financial Statements

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

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

                General.......................................................15
                Results of Operations.........................................15
                Financial Condition...........................................19
                Capital Resources.............................................20
                Other Matters.................................................20

     Item 3  -  Quantitative and Qualitative Disclosures About Market Risk....21

PART II - OTHER INFORMATION

     Item 4  -  Submission of Matters to a Vote of Security Holders...........22

     Item 5   - Other Information.............................................22

     Item 6  -  Exhibits and Reports on Form 8-K..............................23

     Signature................................................................24

     Exhibit Index............................................................25


<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                       SITEL CORPORATION AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (UNAUDITED)


                                                       THREE MONTHS ENDED         SIX MONTHS ENDED
                                                            JUNE 30,                   JUNE 30,
                                                     -----------------------   -----------------------
                                                        2001         2000         2001         2000
                                                     ----------   ----------   ----------   ----------
                                                            (in thousands, except per share data)
<S>                                                  <C>          <C>          <C>          <C>
REVENUES                                             $ 177,787    $ 193,805    $ 361,791    $ 392,416
-------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses        100,537       99,544      202,166      204,095
   Subcontracted and other services expenses             9,034       15,031       18,324       27,567
   Operating, selling, and administrative expenses      70,717       67,804      139,310      140,076
   Asset impairment and restructuring expenses          23,788        3,520       23,788        3,520
-------------------------------------------------------------------------------------------------------
   Total operating expenses                            204,076      185,899      383,588      375,258
-------------------------------------------------------------------------------------------------------

OPERATING INCOME (LOSS)                                (26,289)       7,906      (21,797)      17,158
-------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Interest expense, net                                (2,916)      (3,166)      (5,766)      (6,602)
   Other expense, net                                   (1,329)        (132)      (1,472)        (198)
-------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
   AND MINORITY INTEREST                               (30,534)       4,608      (29,035)      10,358

Income tax expense (benefit)                              (466)       1,981       (9,651)       4,455
Minority interest                                          173          201          227          459
-------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                    $ (30,241)   $   2,426    $ (19,611)   $   5,444
=======================================================================================================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
   Basic                                                73,646       71,246       72,930       70,209
   Diluted                                              73,646       75,415       72,930       75,599

INCOME (LOSS) PER COMMON SHARE:
   Basic                                              $  (0.41)   $   0.03     $   (0.27)   $    0.08
   Diluted                                            $  (0.41)   $   0.03     $   (0.27)   $    0.07


See Notes to Consolidated Financial Statements.
</TABLE>
                                       1
<PAGE>

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 1. FINANCIAL STATEMENTS

                       SITEL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                  (UNAUDITED)
                                                                   JUNE 30,          DECEMBER 31,
                                                                     2001                2000
                                                                -------------       --------------
                                                                  (in thousands, except share data)
ASSETS
<S>                                                              <C>                  <C>
   CURRENT ASSETS:
     Cash and cash equivalents                                   $    26,619          $    19,897
     Trade accounts receivable (net of allowance
       for doubtful accounts of
       $6,884 and $6,456, respectively)                              136,650              146,662
     Prepaid expenses                                                  8,364                8,376
     Deferred income taxes                                             6,570                3,769
     Other assets                                                      5,660                7,968
--------------------------------------------------------------------------------------------------
     Total current assets                                            183,863              186,672
--------------------------------------------------------------------------------------------------
   PROPERTY AND EQUIPMENT, NET                                        94,125               99,793
--------------------------------------------------------------------------------------------------
   OTHER ASSETS:
     Goodwill, net                                                    73,710               78,443
     Deferred income taxes                                            11,815                7,338
     Other assets                                                      9,520                7,976
--------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                     $   373,033          $   380,222
==================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Notes payable                                               $        --          $       302
     Current portion of long-term debt                                16,504                1,120
     Current portion of capital lease obligations                      3,258                3,964
     Trade accounts payable                                           26,972               27,906
     Income taxes payable                                                 --                4,099
     Deferred income taxes                                               725                  307
     Accrued wages, salaries and bonuses                              22,668               26,728
     Accrued operating expenses                                       37,427               23,446
     Deferred revenue and other                                        8,384                5,217
--------------------------------------------------------------------------------------------------
     Total current liabilities                                       115,938               93,089

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt, excluding current portion                       100,000              100,000
     Capital lease obligations, excluding current portion              7,148                8,341
     Deferred compensation                                             1,731                2,448
     Deferred income taxes                                               910                  461
--------------------------------------------------------------------------------------------------
     Total liabilities                                               225,727              204,339
--------------------------------------------------------------------------------------------------
   MINORITY INTERESTS                                                  6,777                6,301
--------------------------------------------------------------------------------------------------
   STOCKHOLDERS' EQUITY:
     Common stock                                                         74                   72
     Paid-in capital                                                 168,745              168,640
     Accumulated other comprehensive loss                            (28,706)             (19,388)
     Retained earnings                                                   642               20,258
     Less treasury stock, at cost, 66,361 common shares                 (226)                  --
--------------------------------------------------------------------------------------------------
     Total stockholders' equity                                      140,529              169,582
--------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $   373,033          $   380,222
==================================================================================================

See Notes to Consolidated Financial Statements.
</TABLE>
                                       2

<PAGE>

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 1. FINANCIAL STATEMENTS

                       SITEL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                             SIX MONTHS ENDED
                                                                                 JUNE 30,
                                                                     ----------------------------------
                                                                          2001                2000
                                                                     -------------        -------------
                                                                                (in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                   <C>                  <C>
   Net income (loss)                                                  $   (19,611)         $     5,444
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
     Asset impairment and restructuring provision                          23,788                3,520
     Depreciation and amortization                                         20,988               22,858
     Loss on disposal of assets                                             1,254                   --
     Changes in operating assets and liabilities:
       Trade accounts receivable                                            6,121                4,607
       Other assets                                                        (4,217)                 401
       Trade accounts payable                                                (506)              (6,381)
       Other liabilities                                                   (4,261)               6,280
-------------------------------------------------------------------------------------------------------
   Net cash provided by operating activities                               23,556               36,729
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                                    (26,644)             (12,603)
   Proceeds from sales of property and equipment                               46                   37
   Increase in other assets                                                (1,466)                  --
-------------------------------------------------------------------------------------------------------
   Net cash used in investing activities                                  (28,064)             (12,566)
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of notes payable                                               (302)             (10,756)
   Borrowings on debt                                                      63,220                9,108
   Repayment of debt and capital lease obligations                        (50,264)             (35,311)
   Common stock issued, net of expenses                                        95                2,638
   Purchases of treasury stock, net of reissuances                           (226)                  --
   Capital contribution from minority interest                                250                   --
   Other                                                                       11                  (15)
-------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities                     12,784              (34,336)
-------------------------------------------------------------------------------------------------------
Effect of exchange rates on cash                                           (1,554)               1,462
-------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                                             6,722               (8,711)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                             19,897               22,305
-------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                              $    26,619          $    13,594
=======================================================================================================

See Notes to Consolidated Financial Statements.
</TABLE>
                                       3

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

NOTE 1. BASIS OF PRESENTATION

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

We  are  the  world's  leading  contact  center  experts   supporting   Customer
Relationship  Management  (CRM) solutions for clients in North America,  Europe,
Asia Pacific, and Latin America. We provide customer acquisition, customer care,
technical  support and risk management  services on an outsourced basis, as well
as operational and information  technology  consulting services for the in-house
market.  We  serve  clients  primarily  in  the  consumer,  financial  services,
insurance, telecommunications, technology, and utilities sectors.

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

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

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

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

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

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

FINANCIAL STATEMENTS
Our Consolidated  Condensed Balance Sheet at December 31, 2000 was obtained from
our  audited  balance  sheet as of that  date.  All other  financial  statements
contained  in this  report are  unaudited  and,  in the  opinion of  Management,
contain all  adjustments  necessary  for a fair  presentation  of the  financial
position,  operating results,  and cash flows for the periods  presented.  These
adjustments are of a normal recurring nature.

You should read our consolidated  condensed financial  statements in this report
in conjunction with Management's  Discussion and Analysis of Financial Condition
and Results of Operations,  the Consolidated Financial Statements, and the Notes
to  Consolidated  Financial  Statements  in our Report on Form 10-K for the year
ended December 31, 2000.

FINANCIAL INSTRUMENTS
In June 2000,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards (SFAS) No. 138, Accounting for Certain Derivative
Investments  and  Certain  Hedging  Activities.   The  standard  amends  certain
provisions of SFAS No. 133,  Accounting for Derivative  Investments  and Hedging
Activities,  which was issued in June 1998 to establish accounting standards for
derivative  instruments and for hedging activities.  We adopted these accounting
pronouncements  effective  January 1, 2001.  The  adoption  of these  standards,
including the valuation of derivative  instruments  outstanding on the effective
date,  and the related  cumulative  effect of  adoption,  did not  significantly
impact our consolidated financial statements.

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

                                       4
<PAGE>

NOTE 2. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) was:

o    ($32.4)  million for the three  months ended June 30, 2001 and $0.1 million
     for the three months ended June 30, 2000, and
o    ($28.9)  million for the six months ended June 30, 2001 and ($0.2)  million
     for the six months ended June 30, 2000.

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

NOTE 3. LONG-TERM DEBT

At June 30, 2001, we were not in compliance with some of the original  financial
covenants of our long-term revolving credit facility dated April 11, 2000, which
are  determined  quarterly  based on the trailing  four  quarters  ended on each
determination  date.  In August  2001,  we obtained an  amendment  to the credit
facility that was effective as of June 30, 2001, which waived the  noncompliance
with those covenants and amended our financial covenants for future periods. The
amendment also:

o    reduced  the size of the  facility  from $75  million  to $50  million  and
     removed our option to request an  increase  in the size of the  facility to
     $100 million,
o    changed the expiration date of the facility from April 2005 to April 2003,
o    increased  the interest  rates on  borrowings 50 to 75 basis points and the
     unused commitment fee 50 basis points, and
o    further  restricted  our ability to make certain  acquisitions,  restricted
     payments, capital expenditures, and investments.

As a result of the amendment,  we will write off  approximately  $0.9 million of
credit  acquisition  costs related to the original facility in the third quarter
of 2001.

At June 30, 2001, we had $33.5 million of available borrowings under the amended
facility.

NOTE 4. INCOME TAXES

During the first quarter of 2001, we recorded a net deferred  income tax benefit
of $9.8  million  resulting  from an  election  to treat  certain of our foreign
operations as branches of our U.S.  company for U.S.  income tax purposes.  This
benefit is comprised of a $22.9  million  deferred  income tax asset,  resulting
from  current  and  future  tax-deductible  goodwill,  net  of a  $13.1  million
valuation allowance.

We  estimate  that $3.0  million of the net asset will be  realized  in 2001 and
have,  accordingly,  recorded this amount as a current deferred income tax asset
in our June 30, 2001 Consolidated  Balance Sheet. We have recorded the remaining
$6.8 million of this benefit as a non-current  deferred  income tax asset, as we
expect to realize this amount in years after 2001.

In the second  quarter of 2001, we recorded a $3.3 million  deferred  income tax
expense to  establish a  valuation  allowance  on deferred  tax assets that were
recorded in prior years related to our United Kingdom operations.

Based upon our current and historical  earnings,  Management believes that it is
more likely than not that we will generate  sufficient  taxable  income to fully
realize the benefits of our recorded net deferred tax assets.

NOTE 5. ASSET IMPAIRMENT AND RESTRUCTURING EXPENSES

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

As part of our  restructuring  plan, we plan to reduce fixed overhead to improve
profitability by:

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

We expect to substantially complete these efforts by December 31, 2001.

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

                                       5
<PAGE>

We expect to record additional  non-recurring  charges of approximately $2 to $3
million  related to the plan in the third quarter of 2001.  Approximately  $15.1
million of the second quarter charge requires cash payment. At June 30, 2001, we
had paid approximately $0.5 million of the cash portion of the charge. We expect
to pay an additional $7.0 million of the cash portion in 2001.

We have recorded $14.6 million of the second quarter charge as accrued operating
expenses in our June 30, 2001 Consolidated  Balance Sheet, and $8.7 million as a
reduction of fixed assets. The fixed asset reduction consists of the following:

o    in facilities  that are being closed or reduced  immediately,  we wrote off
     leasehold improvements and equipment that will no longer be used, and
o    in  facilities  that will continue to operate for a period prior to closure
     or space  reduction,  we wrote down assets to their  estimated  fair values
     considering estimated future cash flows from operations.

The  components  of the  restructuring  charge are  summarized  in the following
table:

                                                AMOUNT
------------------------------------------------------------------------
                                             (in millions)

Severance costs                                  $  5.3
Facility closure or reduction costs                 9.1
Other                                               0.7
------------------------------------------------------------------------
Subtotal                                           15.1
Asset write-downs                                   8.7
------------------------------------------------------------------------
Total asset impairment and restructuring charge  $ 23.8
------------------------------------------------------------------------

The restructuring plan calls for:

o    a  reorganization  of our  North  American  business  by  establishing  six
     industry  focused  Business  Units,  and  combining  our U.S.  and Canadian
     operations  into one  operating  unit  focused  on  delivering  operational
     excellence for our North American clients,
o    the continued  organization of our businesses outside of North America on a
     geographic  basis with five  Business  Units,  as follows:  UK and Ireland,
     Nordic,  Central Europe (Germany,  France,  Netherlands and Belgium),  Asia
     Pacific  (Australia,  New Zealand,  and  Singapore),  and IBERLAT  (Brazil,
     Mexico, Colombia, Portugal, and Spain),
o    establishment of a new Multi-National  Client and Design Business Unit that
     will have  responsibility  for selling,  designing,  building,  and running
     complex contact center services for our multi-national  clients.  This unit
     will ensure that these complex  programs  deliver  performance  consistency
     across all sites and countries, and will include our consulting entities,
o    SITEL  Risk  Management  to  continue  to  provide  receivables  management
     services in North  America and  leverage  our global  footprint to grow the
     business internationally, and
o    streamlined and realigned  corporate support functions to provide efficient
     and cost effective services to the Business Units.

We estimate that the ongoing annual savings from the  restructuring  will exceed
$20 million.

2000
In  the  second  quarter  of  2000,  we  formed  a  strategic  partnership  with
Bellsystem24,  Inc., Japan's largest  comprehensive  marketing agency. Under the
terms of the  partnership,  Bellsystem24  provides  services and support for our
clients in Japan and we provide services and support for Bellsystem24's  clients
in the United States.  In connection with the formation of the  partnership,  we
restructured  our  operations  in Japan and  transferred  our existing  Japanese
business to Bellsystem24.  In connection with this restructuring,  we recorded a
$3.5 million asset impairment and  restructuring  charge, or $2.0 million net of
tax, which included:

o    a $3.3  million  loss on the sale of the  assets  and the  transfer  of the
     business, and
o    $0.2 million of severance for 12 employees.

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

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

o    Condensed  Consolidating  Statements  of Income  (Loss)  and  Comprehensive
     Income  (Loss) for the three and six month  periods ended June 30, 2001 and
     2000,
o    Condensed  Consolidating  Balance  Sheets at June 30, 2001 and December 31,
     2000, and
o    Condensed  Consolidated  Statements  of Cash Flows for the six months ended
     June 30, 2001 and 2000.

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


NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)


               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                        AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
Three Months Ended June 30, 2001                     PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>             <C>        <C>
REVENUES                                           $  96,891     $   9,891       $ 71,319        $   (314)  $  177,787
-----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
   Direct labor and telecommunications expenses       55,533         5,291         39,713              --      100,537
   Subcontracted and other services expenses           7,224           578          1,232              --        9,034
   Operating, selling, and administrative expenses    33,234         3,555         34,242            (314)      70,717
   Asset impairment and restructuring expenses        13,318            --         10,470              --       23,788
-----------------------------------------------------------------------------------------------------------------------
Total operating expenses                             109,309         9,424         85,657            (314)     204,076
-----------------------------------------------------------------------------------------------------------------------

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

OTHER INCOME (EXPENSE):
   Equity in earnings (losses) of
     subsidiaries, net of tax                        (15,852)      (16,143)            --          31,995           --
   Interest income (expense), net                     (2,871)           10            (55)             --       (2,916)
   Other income (expense), net                            33            --         (1,362)             --       (1,329)
-----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                         (18,690)      (16,133)        (1,417)         31,995       (4,245)
-----------------------------------------------------------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
   AND MINORITY INTEREST                             (31,108)      (15,666)       (15,755)         31,995      (30,534)

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

Currency translation adjustment                       (2,125)       (2,179)        (2,543)          4,722       (2,125)
-----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                        $ (32,366)    $ (18,031)      $(18,686)       $ 36,717   $  (32,366)
=======================================================================================================================
</TABLE>
                                       7
<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                        AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
Three Months Ended June 30, 2000                     PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>             <C>        <C>
REVENUES                                           $  99,790     $   8,533       $ 85,807        $   (325)  $  193,805
-----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses       49,655         4,104         45,785              --       99,544
   Subcontracted and other services expenses          11,951           524          2,556              --       15,031
   Operating, selling, and administrative expenses    32,929         2,623         32,577            (325)      67,804
   Asset impairment and restructuring expenses         2,019            --          1,501                        3,520
-----------------------------------------------------------------------------------------------------------------------
Total operating expenses                              96,554         7,251         82,419            (325)     185,899
-----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME                                       3,236         1,282          3,388              --        7,906
-----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Equity in earnings (losses) of
     subsidiaries, net of tax                          2,564         1,355             --          (3,919)          --
   Intercompany charges                                   --           568           (568)             --           --
   Interest income (expense), net                     (2,851)            9           (324)             --       (3,166)
   Other income (expense), net                           (70)           --            (62)             --         (132)
-----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                            (357)        1,932           (954)         (3,919)      (3,298)
-----------------------------------------------------------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                               2,879         3,214          2,434          (3,919)       4,608

Income tax expense                                       453           650            878              --        1,981
Minority interest                                         --            --            201              --          201
-----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                  $   2,426     $   2,564       $  1,355        $ (3,919)  $    2,426
=======================================================================================================================

Currency translation adjustment                       (2,314)       (2,230)        (2,273)          4,503       (2,314)
-----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                        $     112     $     334       $   (918)       $    584   $      112
=======================================================================================================================
</TABLE>
                                       8

<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                        AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2001                       PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>             <C>        <C>
REVENUES                                           $ 199,002     $  20,267       $143,316        $   (794)  $  361,791
-----------------------------------------------------------------------------------------------------------------------

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

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

OTHER INCOME (EXPENSE):
   Equity in earnings (losses) of
     subsidiaries, net of tax                        (17,863)      (18,924)            --          36,787           --
   Interest income (expense), net                     (5,420)          (99)          (247)             --       (5,766)
   Other income (expense), net                            27            --         (1,499)             --       (1,472)
-----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                         (23,256)      (19,023)        (1,746)         36,787       (7,238)
-----------------------------------------------------------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
   AND MINORITY INTEREST                             (30,562)      (17,185)       (18,075)         36,787      (29,035)

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

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

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

               CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
                        AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2000                       PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>             <C>        <C>
REVENUES                                           $ 197,217     $  16,863       $179,029        $   (693)  $  392,416
-----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
   Direct labor and telecommunications expenses      100,193         7,945         95,957              --      204,095
   Subcontracted and other services expenses          20,901         1,124          5,542                       27,567
   Operating, selling, and administrative expenses    67,114         5,606         68,049            (693)     140,076
   Asset impairment and restructuring expense          2,019            --          1,501                        3,520
-----------------------------------------------------------------------------------------------------------------------
Total operating expenses                             190,227        14,675        171,049            (693)     375,258
-----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME                                       6,990         2,188          7,980              --       17,158
-----------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
   Equity in earnings (losses) of
     subsidiaries, net of tax                          4,719         2,679             --          (7,398)          --
   Intercompany charges                                   --         1,071         (1,071)             --           --
   Interest expense, net                              (5,815)         (121)          (666)             --       (6,602)
   Other expense, net                                    (76)           --           (122)             --         (198)
-----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                          (1,172)        3,629         (1,859)         (7,398)      (6,800)
-----------------------------------------------------------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                               5,818         5,817          6,121          (7,398)      10,358

Income tax expense                                       374         1,098          2,983              --        4,455
Minority interest                                         --            --            459              --          459
-----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                  $   5,444     $   4,719       $  2,679        $ (7,398)  $    5,444
=======================================================================================================================

Currency translation adjustment                       (5,673)       (4,330)        (5,001)          9,331       (5,673)
-----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                        $    (229)    $     389       $ (2,322)       $  1,933   $     (229)
=======================================================================================================================
</TABLE>
                                       10
<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

                      CONDENSED CONSOLIDATING BALANCE SHEET
<TABLE>
<CAPTION>

                                                                  GUARANTOR    NONGUARANTOR
At June 30, 2001                                     PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>            <C>         <C>
ASSETS
   CURRENT ASSETS:
     Cash and cash equivalents                     $     112     $   2,753       $ 23,754       $      --   $   26,619
     Trade accounts receivable, net                   76,868         4,203         65,662         (10,083)     136,650
     Prepaid expenses and other
       current assets                                  8,979            22         11,593              --       20,594
-----------------------------------------------------------------------------------------------------------------------
     Total current assets                             85,959         6,978        101,009         (10,083)     183,863
-----------------------------------------------------------------------------------------------------------------------

   PROPERTY AND EQUIPMENT, NET                        36,615         2,820         54,690              --       94,125
-----------------------------------------------------------------------------------------------------------------------

   OTHER ASSETS:
     Goodwill, net                                    20,073            --         53,637              --       73,710
     Deferred income taxes                             8,739            --          3,076              --       11,815
     Other assets                                      7,523            76          1,921              --        9,520
     Investments in subsidiaries                     137,584       116,695             --        (254,279)          --
     Notes receivable, intercompany                       --        13,934         10,242         (24,176)          --
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                       $ 296,493     $ 140,503       $224,575       $(288,538)  $  373,033
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Notes payable                                 $      --     $      --       $     --       $      --   $       --
     Current portion of long-term debt                    --            --         16,504              --       16,504
     Current portion of capital
       lease obligations                               2,462            --            796              --        3,258
     Trade accounts payable                           10,010         1,303         25,742         (10,083)      26,972
     Accrued expenses and other
       current liabilities                            29,075         1,616         38,513              --       69,204
-----------------------------------------------------------------------------------------------------------------------
     Total current liabilities                        41,547         2,919         81,555         (10,083)     115,938

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt, excluding current portion       100,000            --             --              --      100,000
     Capital lease obligations,
       excluding current portion                       1,898            --          5,250              --        7,148
     Notes payable, intercompany                      10,242            --         13,934         (24,176)          --
     Deferred compensation                             1,731            --             --              --        1,731
     Deferred income taxes                               546            --            364              --          910
-----------------------------------------------------------------------------------------------------------------------
     Total liabilities                               155,964         2,919        101,103         (34,259)     225,727
-----------------------------------------------------------------------------------------------------------------------

   MINORITY INTERESTS                                     --            --          6,777              --        6,777
-----------------------------------------------------------------------------------------------------------------------

   STOCKHOLDERS' EQUITY                              140,529       137,584        116,695        (254,279)     140,529
-----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 296,493     $ 140,503       $224,575       $(288,538)  $  373,033
=======================================================================================================================
</TABLE>
                                       11

<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

                      CONDENSED CONSOLIDATING BALANCE SHEET
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
At December 31, 2000                                 PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>            <C>         <C>
ASSETS
   CURRENT ASSETS:
     Cash and cash equivalents                     $   4,970     $   1,730       $ 13,197       $      --   $   19,897
     Trade accounts receivable, net                   80,979         3,114         68,221          (5,652)     146,662
     Prepaid expenses and other
       current assets                                  6,543            25         13,545              --       20,113
-----------------------------------------------------------------------------------------------------------------------
     Total current assets                             92,492         4,869         94,963          (5,652)     186,672
-----------------------------------------------------------------------------------------------------------------------

   PROPERTY AND EQUIPMENT, NET                        46,062         3,303         50,428              --       99,793
-----------------------------------------------------------------------------------------------------------------------

   OTHER ASSETS:
     Goodwill, net                                    20,571            --         57,872              --       78,443
     Deferred income taxes                               781            --          6,557              --        7,338
     Other assets                                      7,804            78             94              --        7,976
     Investments in subsidiaries                     158,086       137,491             --        (295,577)          --
     Notes receivable, intercompany                       --        14,914         11,400         (26,314)          --
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                       $ 325,796     $ 160,655       $221,314       $(327,543)  $  380,222
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
     Notes payable                                 $      --     $      --       $    302       $      --   $      302
     Current portion of long-term debt                    --            --          1,120              --        1,120
     Current portion of capital
       lease obligations                               2,570            --          1,394              --        3,964
     Trade accounts payable                            9,312           914         23,332          (5,652)      27,906
     Accrued expenses and other
       current liabilities                            27,990         1,655         30,152              --       59,797
-----------------------------------------------------------------------------------------------------------------------
     Total current liabilities                        39,872         2,569         56,300          (5,652)      93,089

   LONG-TERM DEBT AND OTHER LIABILITIES:
     Long-term debt, excluding current portion       100,000            --             --              --      100,000
     Capital lease obligations,
       excluding current portion                       2,494            --          5,847              --        8,341
     Notes payable, intercompany                      11,400            --         14,914         (26,314)          --
     Deferred compensation                             2,448            --             --              --        2,448
     Deferred income taxes                                --            --            461              --          461
-----------------------------------------------------------------------------------------------------------------------
     Total liabilities                               156,214         2,569         77,522         (31,966)     204,339
-----------------------------------------------------------------------------------------------------------------------

   MINORITY INTERESTS                                     --            --          6,301              --        6,301
-----------------------------------------------------------------------------------------------------------------------

   STOCKHOLDERS' EQUITY                              169,582       158,086        137,491        (295,577)     169,582
-----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 325,796     $ 160,655       $221,314       $(327,543)  $  380,222
=======================================================================================================================
</TABLE>
                                       12

<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

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

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

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of notes payable                            --            --           (302)             --         (302)
   Borrowings on debt                                 47,500            --         15,720              --       63,220
   Repayment of debt and capital lease obligations   (48,862)           --         (1,402)             --      (50,264)
   Net capital contribution from parent                   --          (586)         8,203          (7,617)          --
   Net borrowings and payments on
     intercompany balances                            (3,701)           --          3,701              --           --
   Common stock issued, net of expenses                   95            --             --              --           95
   Purchases of treasury stock, net of reissuances      (226)           --             --              --         (226)
   Capital contribution from minority interest            --            --            250              --          250
   Other                                                  11            --             --              --           11
-----------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in)
     financing activities                             (5,183)         (586)        26,170          (7,617)      12,784
-----------------------------------------------------------------------------------------------------------------------

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

<PAGE>

NOTE 6. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                  GUARANTOR    NONGUARANTOR
Six Months Ended June 30, 2000                       PARENT     SUBSIDIARIES   SUBSIDIARIES  ELIMINATIONS CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                <C>           <C>             <C>           <C>         <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES          $  21,085     $   4,185       $ 11,459      $     --    $   36,729
-----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in subsidiaries                         3,862         1,080             --        (4,942)           --
   Purchases of property and equipment                (6,050)         (102)        (6,451)           --       (12,603)
   Proceeds from sales of property and equipment           5            --             32            --            37
-----------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in)
      investing activities                            (2,183)          978         (6,419)       (4,942)      (12,566)
-----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of notes payable                            --            --        (10,756)           --       (10,756)
   Borrowings on debt                                  3,000            --          6,108            --         9,108
   Repayment of debt and capital lease obligations   (31,097)           --         (4,214)           --       (35,311)
   Net capital contribution from (to) parent              --        (3,862)        (1,080)        4,942            --
   Net borrowings and payments on
     intercompany balances                            (1,823)           --          1,823            --            --
   Common stock issued, net of expenses                2,638            --             --            --         2,638
   Other                                                 (15)           --             --            --           (15)
-----------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in)
      financing activities                           (27,297)       (3,862)        (8,119)        4,942       (34,336)
-----------------------------------------------------------------------------------------------------------------------

Effect of exchange rates on cash                          --            --          1,462            --         1,462
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                       (8,395)        1,301         (1,617)           --        (8,711)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         7,477         2,102         12,726            --        22,305
-----------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS, END OF PERIOD                $    (918)    $   3,403       $ 11,109      $     --    $   13,594
=======================================================================================================================
</TABLE>
                                       14

<PAGE>

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

GENERAL

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

We  are  the  world's  leading  contact  center  experts   supporting   Customer
Relationship  Management  (CRM) solutions for clients in North America,  Europe,
Asia Pacific, and Latin America. We provide customer acquisition, customer care,
technical  support and risk management  services on an outsourced basis, as well
as operational and information  technology  consulting services for the in-house
market.  We  serve  clients  primarily  in  the  consumer,  financial  services,
insurance, telecommunications, technology, and utilities sectors.

In  Management's  Discussion  and  Analysis,  we provide  information  about our
results of operations, financial condition, capital resources, and certain other
matters affecting our operating results for the periods covered by this report.

As you read this discussion and analysis,  refer to our Consolidated  Statements
of Income (Loss),  which present the results of our operations for the three and
six months ended June 30, 2001 and 2000,  and are  summarized  in the  following
table. We analyze and explain the differences between periods for the components
of net income (loss) in the following section.

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

RESULTS OF  OPERATIONS  FOR THE THREE AND SIX MONTH  PERIODS ENDED JUNE 30, 2001
COMPARED WITH THE SAME PERIODS OF 2000

In this  section,  we discuss our  operating  results and the factors  affecting
them. We begin with a general overview,  then separately  discuss the components
of net income (loss) in more detail.

OVERVIEW
--------

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

NET INCOME (LOSS)

                                     THREE MONTHS           SIX MONTHS
                                     ENDED JUNE 30,        ENDED JUNE 30,
                                 --------------------   --------------------
                                    2001       2000        2001      2000
----------------------------------------------------------------------------
                                               (in millions)
Net income (loss),
   before non-recurring
   expenses                      $  (4.0)    $  4.4     $  (0.2)    $  7.4
Asset impairment and
   restructuring expenses,
   net of tax                      (22.1)      (2.0)      (22.1)      (2.0)
Losses on disposals
   of fixed assets,
   net of tax                       (0.8)        --        (0.8)        --
Valuation allowance
   on deferred tax assets           (3.3)        --        (3.3)        --
Tax benefit expected to
   to be realized
   in future years                    --         --         6.8         --
---------------------------------------------------------------------------
Net income (loss)                $ (30.2)    $  2.4     $ (19.6)    $  5.4
===========================================================================

NET INCOME (LOSS) PER COMMON SHARE-DILUTED

                                     THREE MONTHS           SIX MONTHS
                                     ENDED JUNE 30,        ENDED JUNE 30,
                                 --------------------   --------------------
                                    2001       2000        2001      2000
----------------------------------------------------------------------------
                                               (in millions)

Net income (loss) per share,
   before non-recurring
   expenses                      $ (0.05)    $   0.06     $     --  $  0.10
Asset impairment and
   restructuring expenses,
   net of tax                      (0.30)       (0.03)       (0.30)   (0.03)
Losses on disposals
   of fixed assets,
   net of tax                      (0.01)          --        (0.01)      --
Valuation allowance on
   deferred tax assets             (0.05)          --        (0.05)      --
Tax benefit expected
   to be realized
   in future years                    --           --         0.09       --
-----------------------------------------------------------------------------
Net income (loss)
   per share                     $ (0.41)    $   0.03     $  (0.27) $  0.07
=============================================================================

                                       15
<PAGE>

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THE SAME PERIOD OF 2000
We had a net loss of $30.2  million,  or ($0.41) per share in the second quarter
of 2001,  compared  to net income of $2.4  million,  or $0.03 per share,  in the
second quarter of 2000. Results in 2001 were primarily impacted by $26.2 million
of asset impairment and restructuring  expenses and other non-recurring  charges
that we recorded during the second quarter.

Excluding  non-recurring  charges  in 2001 and  2000,  we had a net loss of $4.0
million,  or ($0.05)  per share in the second  quarter of 2001,  compared to net
income of $4.4 million, or $0.06 per share in the second quarter of 2000. We had
a net loss in the  second  quarter  of 2001  mostly  due to an 8.3%  decline  in
revenues and lower gross profit margins.

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

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO THE SAME PERIOD OF 2000
We had a net loss of $19.6 million, or ($0.27) per share in the six months ended
June 30, 2001,  compared to net income of $5.4 million,  or $0.07 per share,  in
the  same  period  of 2000.  Results  in 2001  were  primarily  impacted  by the
non-recurring charges that we recorded in the second quarter. These charges were
offset  partially  by a $9.8  million net income tax benefit that we recorded in
the first  quarter  resulting  from an election to treat  certain of our foreign
operations  as branches of our U.S.  company for U.S.  income tax  purposes.  We
expect to realize $6.8  million,  or $0.09 per share,  of this benefit in future
years.

Excluding  the  non-recurring  charges in 2001 and 2000 and the $6.8 million tax
benefit  relating  to  future  years,  we had a net  loss  of $0.2  million,  or
breakeven on a per share basis in 2001  compared to net income of $7.4  million,
or $0.10 per share in 2000.  We had a net loss in the six months  ended June 30,
2001 mostly due to a 7.8% decline in revenues and lower gross profit margins.

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

COMPONENTS OF NET INCOME (LOSS)

As you read this section,  please refer to the  following  summary of our income
statement data on a percentage-of-revenue basis.
<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                    ---------------------------------------     --------------------------------------
                                           2001                 2000                  2001                  2000
                                    -----------------    ------------------     ----------------      ----------------
                                      $           %         $           %         $          %          $          %
                                    -----       -----     -----       -----     -----      -----      -----      -----
                                                                       (in thousands)
<S>                               <C>          <C>      <C>          <C>      <C>          <C>     <C>           <C>
REVENUES                          $177,787     100.0%   $193,805     100.0%   $361,791     100.0%  $ 392,416     100.0%
-----------------------------------------------------------------------------------------------------------------------
Direct labor and
   telecommunications expenses     100,537      56.5%     99,544      51.4%    202,166      55.9%    204,095      52.0%
Subcontracted and
   other services expenses           9,034       5.1%     15,031       7.7%     18,324       5.1%     27,567       7.0%
Operating, selling, and
   administrative expenses          70,717      39.8%     67,804      35.0%    139,310      38.5%    140,076      35.7%
Asset impairment and
   restructuring expenses           23,788      13.4%      3,520       1.8%     23,788       6.5%      3,520       0.9%
-----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS)            (26,289)    (14.8%)     7,906       4.1%    (21,797)     (6.0%)    17,158       4.4%

Interest expense, net               (2,916)     (1.6%)    (3,166)     (1.6%)    (5,766)     (1.6%)    (6,602)     (1.7%)
Other expense, net                  (1,329)     (0.8%)      (132)     (0.1%)    (1,472)     (0.4%)      (198)     (0.1%)
-----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
   TAXES AND MINORITY INTEREST     (30,534)    (17.2%)     4,608       2.4%    (29,035)     (8.0%)    10,358       2.6%

Income tax expense (benefit)          (466)     (0.3%)     1,981       1.0%     (9,651)     (2.7%)     4,455       1.1%
Minority interest                      173       0.1%        201       0.1%        227       0.1%        459       0.1%
-----------------------------------------------------------------------------------------------------------------------
Net income (loss)                $ (30,241)    (17.0%) $   2,426       1.3%  $ (19,611)     (5.4%) $   5,444       1.4%
=======================================================================================================================
</TABLE>
                                       16

<PAGE>

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THE SAME PERIOD OF 2000

REVENUES
Revenues  decreased  $16.0  million,  or 8.3%,  in the  second  quarter  of 2001
compared  to the same period of 2000.  The  changes in  revenues  by  geographic
region are shown in the following table:

                                        $           %
--------------------------------------------------------
                                         (in millions)

North America                      $   1.0        0.9%
Europe                               (15.6)     (24.5%)
Asia Pacific                          (4.0)     (39.9%)
Latin America                          2.6       37.5%

Revenues  decreased in Europe mostly due to the loss of two large clients in the
United Kingdom,  which took their  acquisition  businesses  in-house,  and lower
revenues in Spain.  The strength of the U.S. dollar versus the British pound and
Euro accounted for about $3.8 million, or 24%, of this decrease. The decrease in
Asia Pacific  primarily  related to  restructuring  our  operations in Japan and
transferring  our  existing  Japanese  business  to  Bellsystem24  in the second
quarter of 2000.

The increase in North America was primarily  attributable to additional customer
care  services we provided to a number of our large  global  clients,  which was
partially offset by a reduction in customer acquisition  services.  The increase
in Latin America was attributable to new work we performed for clients in Brazil
and Mexico.

DIRECT LABOR AND TELECOMMUNICATIONS EXPENSES
Direct Labor and  Telecommunications  Expenses  include the  compensation of our
customer  service  professionals  and their first line supervisors and telephone
usage expenses directly related to the production of revenue.

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

Direct Labor and Telecommunications Expenses increased $1.0 million, or 1.0%, in
the second  quarter of 2001 compared to the same period of 2000. As a percentage
of revenues,  Direct Labor and Telecommunications  Expenses increased from 51.4%
in the  second  quarter of 2000 to 56.5% in the  second  quarter  of 2001.  This
increase  was due to reduced  labor  efficiency  caused by a higher  than normal
number of client  programs  ramping up and  ramping  down during the quarter and
some reductions in pricing.

SUBCONTRACTED AND OTHER SERVICES EXPENSES
Subcontracted  and Other Services  Expenses include services provided to clients
through subcontractors and other out-of-pocket expenses. Subcontracted and Other
Services  Expenses  decreased $6.0 million,  or 39.9%,  in the second quarter of
2001 compared to the same period of 2000.  The decline in these expenses was due
mostly to a reduction in the use of third party contact  centers in the U.S. due
to a reduction in customer acquisition services and lower reimbursable  expenses
in the U.S. and Europe.

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

Operating,  Selling and Administrative Expenses increased $2.9 million, or 4.3%,
in the  second  quarter  of 2001  compared  to the  same  period  of  2000.  Our
restructuring plan,  announced in June 2001, addresses this increase by reducing
these  expenses in future  periods.  We estimate that the ongoing annual savings
from the  restructuring  will exceed $20 million.  As a percentage  of revenues,
Operating,  Selling  and  Administrative  Expenses  increased  from 35.0% in the
second quarter of 2000 to 39.8% in the second quarter of 2001.

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

As part of our  restructuring  plan, we plan to reduce fixed overhead to improve
profitability by:

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

We expect to substantially complete these efforts by December 31, 2001.

                                       17
<PAGE>

In  connection  with this  restructuring,  we  recorded  a $23.8  million  asset
impairment and restructuring  charge, or $22.1 million net of tax, in the second
quarter  of 2001.  We expect  to  record  additional  non-recurring  charges  of
approximately $2 to $3 million related to the plan in the third quarter of 2001.

In  the  second  quarter  of  2000,  we  formed  a  strategic  partnership  with
Bellsystem24,  Inc., Japan's largest  comprehensive  marketing agency. Under the
terms of the  partnership,  Bellsystem24  provides  services and support for our
clients in Japan and we provide services and support for Bellsystem24's  clients
in the United States.  In connection with the formation of the  partnership,  we
restructured  our  operations  in Japan and  transferred  our existing  Japanese
business to Bellsystem24.  In connection with this restructuring,  we recorded a
$3.5 million asset impairment and  restructuring  charge, or $2.0 million net of
tax, in the second quarter of 2000.

We evaluate the  recoverability of our long-lived  assets,  including  goodwill,
based on estimated  undiscounted  future operating cash flows.  While Management
currently believes that estimated future operating cash flows will be sufficient
to recover such assets,  there can be no assurance  that such  estimates will be
achieved. If estimated future operating cash flows are not achieved, we may need
to record impairment losses on these assets in future periods.

OPERATING INCOME (LOSS)
We had an  operating  loss of  $26.3  million  in the  second  quarter  of 2001,
compared to operating income of $7.9 million in the second quarter of 2000. As a
percentage of revenues,  operating income was 4.1% in the second quarter of 2000
and declined to (14.8%) in the second quarter of 2001. This change resulted from
all of the factors affecting revenues and expenses discussed in this section.

INTEREST EXPENSE, NET
Interest expense,  net of interest income,  decreased $0.3 million,  or 7.9%, in
the second quarter of 2001 compared to the same period of 2000,  mostly due to a
lower level of average debt outstanding during 2001.

OTHER EXPENSE, NET
Other expense, net of other income, increased $1.2 million in the second quarter
of 2001  compared to the same  period of 2000 mostly  because we recorded a $1.3
million  non-recurring  charge for losses on disposals of certain  assets during
2001.

INCOME TAX EXPENSE (BENEFIT)
We recorded an income tax benefit of $0.5 million in the second  quarter of 2001
compared  to income tax expense of $2.0  million in the second  quarter of 2000.
The second quarter 2001 benefit  reflects a $2.2 million tax benefit we recorded
on the asset impairment and restructuring charges and the losses on disposals of
assets. This benefit was offset by a $3.3 million deferred income tax expense we
recorded to  establish a valuation  allowance  on deferred  tax assets that were
recorded in prior years related to our United Kingdom operations.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO THE SAME PERIOD OF 2000

REVENUES
Revenues decreased $30.6 million, or 7.8%, in the six months ended June 30, 2001
compared  to the same period of 2000.  The  changes in  revenues  by  geographic
region are shown in the following table:

                                        $           %
---------------------------------------------------------
                                         (in millions)

North America                      $   5.5        2.5%
Europe                               (32.8)     (24.5%)
Asia Pacific                          (6.8)     (35.6%)
Latin America                          3.5       24.5%

The reasons for the revenue  changes  during the six months  ended June 30, 2001
are the same as those described in the second quarter discussion above.

DIRECT LABOR AND TELECOMMUNICATIONS EXPENSES
Direct Labor and Telecommunications Expenses decreased $1.9 million, or 0.9%, in
the six months  ended June 30, 2001  compared  to the same period of 2000.  As a
percentage of revenues,  Direct Labor and Telecommunications  Expenses increased
from  52.0% in the six  months  ended  June 30,  2000 to 55.9% in the six months
ended June 30, 2001. This increase was primarily due to reduced labor efficiency
caused by an unanticipated decline in revenues during the first quarter and by a
higher than normal  number of client  programs  ramping up and ramping  down and
some price reductions during the second quarter.

SUBCONTRACTED AND OTHER SERVICES EXPENSES
Subcontracted and Other Services Expenses  decreased $9.2 million,  or 33.5%, in
the six months  ended June 30, 2001  compared  to the same  period of 2000.  The
decline  in these  expenses  was due mostly to a  reduction  in the use of third
party  contact  centers in the U.S. due to a reduction  in customer  acquisition
services and lower reimbursable expenses in the U.S. and Europe.

OPERATING, SELLING AND ADMINISTRATIVE EXPENSES
Operating,  Selling and Administrative Expenses decreased $0.8 million, or 0.5%,
in the six months ended June 30, 2001  compared to the same period of 2000. As a
percentage of revenues, Operating, Selling and Administrative Expenses increased
from  35.7% in the six  months  ended  June 30,  2000 to 38.5% in the six months
ended June 30, 2001.

                                       18
<PAGE>

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

In the second  quarter of 2000, we recorded a $3.5 million asset  impairment and
restructuring  charge,  or $2.0 million net of tax,  related to the  transaction
with Bellsystem24 as described above.

OPERATING INCOME (LOSS)
We had an operating loss of $21.8 million in the six months ended June 30, 2001,
compared to operating  income of $17.2  million in the same period of 2000. As a
percentage of revenues,  operating  income was 4.4% in the six months ended June
30, 2000 and  declined  to (6.0%) in the six months  ended June 30,  2001.  This
change  resulted  from  all of  the  factors  affecting  revenues  and  expenses
discussed in this section.

INTEREST EXPENSE, NET
Interest expense,  net of interest income,  decreased $0.8 million, or 12.7%, in
the six months ended June 30, 2001  compared to the same period of 2000,  mostly
due to a lower level of average debt outstanding during 2001.

OTHER EXPENSE, NET
Other  expense,  net of other income,  increased  $1.3 million in the six months
ended  June 30,  2001  compared  to the same  period of 2000  mostly  because we
recorded a $1.3 million  non-recurring charge for losses on disposals of certain
assets during the second quarter.

INCOME TAX EXPENSE (BENEFIT)
We recorded an income tax benefit of $9.7  million in the six months  ended June
30, 2001  compared  to income tax expense of $4.5  million in the same period of
2000. The 2001 benefit reflects:

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

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

FINANCIAL CONDITION

CASH FLOWS
----------

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

Six Months Ended June 30,              2001        2000
-----------------------------------------------------------
                                         (in millions)
NET CASH PROVIDED BY (USED IN):
   Operating activities            $   23.6    $   36.7
   Investing activities               (28.1)      (12.6)
   Financing activities                12.8       (34.3)

2001
In the six months ended June 30,  2001,  cash  provided by operating  activities
came from income  before  non-cash  expenses of $26.4 million and a $6.1 million
decrease in trade  receivables,  which were  partially  offset by a $4.2 million
increase in other assets and a $4.3 million decrease in other  liabilities.  The
increase in other assets was primarily attributable to the $9.8 million deferred
income tax asset we recorded in the first quarter that resulted from an election
to treat certain of our foreign  operations as branches of our U.S.  company for
U.S. income tax purposes. We estimate that $3.0 million of this tax benefit will
be realized in 2001,  with the  remaining  $6.8 million  realized in years after
2001. The realization of this tax benefit will positively  impact our cash flows
in those years.

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

In the six months ended June 30,  2001,  cash  provided by financing  activities
came from additional borrowings,  net of repayments,  of $13.0 million under our
revolving credit facility.

2000
In the six months ended June 30,  2000,  cash  provided by operating  activities
consisted  mostly  of income  before  non-cash  expenses  of $31.8  million,  an
increase  in  other  liabilities  of  $6.3  million,  and a  decrease  in  trade
receivables of $4.6 million.  This was partially  offset by a reduction in trade
accounts payable of $6.4 million.

In the six months ended June 30, 2000, we used cash for investing  activities to
purchase $12.6 million of property and equipment.

                                       19
<PAGE>

In the six months ended June 30,  2000,  we used cash for  financing  activities
primarily to repay borrowings under our revolving credit facility.

CAPITAL RESOURCES

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

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

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

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

The facility  becomes due and payable upon a change of control of the Company as
defined in the credit agreement.

At June 30, 2001, we were not in compliance with some of the original  financial
covenants of the facility,  which are determined quarterly based on the trailing
four quarters ended on each  determination  date. In August 2001, we obtained an
amendment to the credit  facility that was effective as of June 30, 2001,  which
waived  the  noncompliance  with  those  covenants  and  amended  our  financial
covenants for future periods. The amendment also:

o    reduced  the size of the  facility  from $75  million  to $50  million  and
     removed our option to request an  increase  in the size of the  facility to
     $100 million,
o    changed the expiration date of the facility from April 2005 to April 2003,
o    increased  the interest  rates on  borrowings 50 to 75 basis points and the
     unused commitment fee 50 basis points, and
o    further  restricted  our ability to make certain  acquisitions,  restricted
     payments, capital expenditures, and investments.

As a result of the amendment,  we will write off  approximately  $0.9 million of
credit  acquisition  costs related to the original facility in the third quarter
of 2001.

At June 30, 2001, we had $33.5 million of available borrowings under the amended
facility.

We expect to finance our current operations,  planned capital expenditures,  and
internal  growth  for  the   foreseeable   future  using  funds  generated  from
operations,  existing  cash,  leases of property  and  equipment,  and the funds
available under our credit facility.  Future  acquisitions,  if any, may require
additional debt or equity financing.

Under a stock  repurchase  program that was authorized by our Board of Directors
in February 2001, we may repurchase up to $10 million of our shares from time to
time in the open market or in privately  negotiated  transactions,  depending on
general  business and market  conditions.  During the first  quarter of 2001, we
repurchased  71,800 shares at a cost of $0.2 million under the program.  We have
not  purchased any shares since the first  quarter of 2001.  Our amended  credit
facility  limits the amount of aggregate  restricted  payments,  including stock
repurchases,  to $1.0  million  plus  certain  equity  transaction  proceeds not
currently applicable.

OTHER MATTERS

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

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

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

                                       20
<PAGE>

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

ACCOUNTING PRONOUNCEMENTS
In June 2000,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards (SFAS) No. 138, Accounting for Certain Derivative
Investments  and  Certain  Hedging  Activities.   The  standard  amends  certain
provisions of SFAS No. 133,  Accounting for Derivative  Investments  and Hedging
Activities,  which was issued in June 1998 to establish accounting standards for
derivative  instruments and for hedging activities.  We adopted these accounting
pronouncements  effective  January 1, 2001.  The  adoption  of these  standards,
including the valuation of derivative  instruments  outstanding on the effective
date,  and the related  cumulative  effect of  adoption,  did not  significantly
impact our consolidated financial statements.

In June 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
Business Combinations,  which requires all business combinations initiated after
June 30, 2001 to be accounted for using the purchase method. This statement does
not affect business combinations that were initiated prior to June 30, 2001.

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

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

The provisions of this statement are effective for fiscal years  beginning after
December  15,  2001,  so we must  adopt the  provisions  of SFAS No.  142 in our
financial  statements  for the  quarter  ended March 31,  2002.  We have not yet
evaluated  the impact of the  adoption  of this  statement  on our  consolidated
financial statements.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

We  are  also  exposed  to  changes  in  interest  rates  on our  variable  rate
borrowings.  Interest rates on our Senior  Subordinated  Notes and capital lease
obligations  are fixed,  but rates on borrowings  under our bank credit facility
are variable.  During the six months ended June 30, 2001, our average borrowings
under our bank credit  facility were $8.4 million.  Based on our projected  cash
needs for the foreseeable  future, we do not expect that our exposure to changes
in interest rates will have a material impact on our interest expense.

                                       21
<PAGE>

PART II - OTHER INFORMATION

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

(a)  DATE AND TYPE OF MEETING
     ------------------------

     The Company held its Annual Meeting of Stockholders on May 4, 2001.


(b)  MATTERS VOTED UPON AND NUMBER OF VOTES CAST
     -------------------------------------------

     There were 65,287,181  shares of Common Stock represented at the meeting in
     person or by proxy.  Four proposals were presented to the  stockholders and
     all were approved. The voting on the proposals was as follows:

     1.  Election of One Director for a Three-Year Term:

                                              FOR              WITHHELD
         James F. Lynch                57,339,643             7,947,538


     2.  Approval of an Amendment to the Bylaws:

         Number of Affirmative Votes Cast                    64,788,324
         Number of Negative Votes Cast                          305,972
         Number of Abstentions                                  192,885


     3.  Approval of an Amendment to the 1999 Stock Incentive Plan:

         Number of Affirmative Votes Cast                    51,901,056
         Number of Negative Votes Cast                       13,136,693
         Number of Abstentions                                  249,432


     4.  Ratification  of  the  Selection of KPMG LLP as Independent Accountants
         for the Year Ended December 31, 2001:

         Number of Affirmative Votes Cast                    64,599,803
         Number of Negative Votes Cast                          503,267
         Number of Abstentions                                  184,111

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

ITEM 5. OTHER MATTERS

On June 11, 2001,  Mathias J. DeVito was  appointed  to the Board of  Directors,
filling an existing  vacancy in Class III. That same date he was also  appointed
to the Audit and Compensation Committees of the Board of Directors.

                                       22
<PAGE>

FORWARD-LOOKING STATEMENTS

We make statements in this report that are considered forward-looking statements
within the  meaning of the  Securities  Exchange  Act of 1934.  Sometimes  these
statements  will  contain  words  such  as  "believes,"   "expects,"  "intends,"
"should,"  "will,"  "plans,"  and other  similar  words.  These  forward-looking
statements speak only as of the date of this report.  We assume no obligation to
update these forward-looking statements.  These statements are not guarantees of
our  future  performance  and are  subject  to risks,  uncertainties,  and other
important factors that could cause our actual  performance or achievements to be
materially  different  from those we project.  These risks,  uncertainties,  and
factors include, but are not limited to:

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

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

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

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

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

   3.1       Amendment No. 3 to Amended and Restated Bylaws
   3.2       Conformed Copy of Amended and Restated Bylaws, including amendments
  10.1       First Amendment dated June 30, 2001 to Credit Agreement

(b)  Reports on Form 8-K:

             Date Filed              Item Reported
             ----------              -------------

            April 2, 2001         Item 5. Other Events

                                       23
<PAGE>
                                    SIGNATURE


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


                                                       SITEL Corporation
                                                         (REGISTRANT)


Date:    August 14, 2001                  By  /s/     James E. Stevenson
                                                 -------------------------------
                                                      JAMES E. STEVENSON
                                                    Chief Financial Officer
                                                 (Duly Authorized Officer and
                                                 Principal Financial Officer)

                                       24

<PAGE>
                                  EXHIBIT INDEX


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

   3.1       Amendment No. 3 to Amended and Restated Bylaws

   3.2       Conformed Copy of Amended and Restated Bylaws, including amendments

  10.1       First Amendment Dated June 30, 2001 to Credit Agreement


                                       25