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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 29, 2002

OR

For the transition period from                      to                     

Commission file number                             

NAVIGANT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number:  (303) 706-0800

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value per share

(Title of Class)

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  þ    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  þ    No  ¨

The aggregate market value of the Registrant’s voting and non-voting common stock held by non-affiliates on June 28, 2002 was approximately $193,490,000, based on the closing price as reported on the NASDAQ National Market on such date of $15.47 per unit.

As of March 19, 2003, the Registrant had 15,286,000 shares of its common stock and 1,231,000 of its treasury stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this Report, to the extent not set forth herein, is incorporated by reference from the Registrant’s definitive proxy statement relating to the annual meeting of stockholders to be held in 2003, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates.

FORWARD-LOOKING STATEMENTS

Statements contained in this Annual Report on Form 10-K (“Annual Report”) of Navigant International, Inc. (“Navigant,” or the “Company”), which are not historical in nature, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements in Items 1. and 2., “Business and Properties,” Item 5., “Market for Registrant’s Common Equity and Related Stockholder Matters” and Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” regarding intent, belief or current expectations of the Company or its officers with respect to, among other things, trends in the travel industry, the Company’s business and growth strategies, the Company’s use of technology, the Company’s distribution of services, the continued use of travel management companies by corporate clients, the Company’s payment or non-payment of dividends, implementation by the Company of management contracts and service fees with corporate clients, planned cost-reduction measures, and fluctuations in the Company’s quarterly results of operations.

Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from anticipated results. These risks and uncertainties include changes or reductions in the commission structure in the travel service industry, changes in laws or regulations concerning the travel service industry, trends in the travel service industry (including competition, consolidation and increased use of the Internet and computer online services), the ability of the Company to successfully integrate the operations of existing or acquired travel management companies, limitations on the availability of funds or other capital resources to finance future acquisitions, the Company’s ability to negotiate favorable travel management contracts with its current and future clients, any loss or modification of material contracts the Company has with travel suppliers or current clients, liabilities arising under indemnification and contribution agreements entered into by the Company in connection with its spin-off from U.S. Office Products Company (“U.S. Office Products”) in June 1998, an impairment of goodwill due to downturn in the cash flows relating to past acquisitions, and a variety of factors such as a recession or slower economic growth, including changes or reductions in revenue as a consequence of, or related to, the failure, liquidation, bankruptcy or other reorganization of major travel suppliers, including airlines, rental car companies or hotel companies, and weather conditions and concerns for passenger safety that could cause a decline in travel demand, as well as the risk factors set forth in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Risk Factors,” and other factors as may be identified from time to time in the Company’s filings with the Securities and Exchange Commission or in the Company’s press releases.

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NAVIGANT INTERNATIONAL, INC.

ANNUAL REPORT ON

FORM 10-K

FOR FISCAL YEAR ENDED DECEMBER 29, 2002

PART I

ITEMS 1. AND 2.    BUSINESS AND PROPERTIES.

GENERAL

Navigant is the second largest provider of corporate travel management services in the United States based on airline ticket sales. With locations throughout the United States, various U.S. territories and 19 foreign countries, Navigant manages all aspects of its clients’ travel processes, focusing on reducing their travel expenses, typically one of the largest controllable expenses in a corporate budget. Navigant believes that by providing high quality service and by entering into management contracts, which may have terms of up to five years, Navigant is able to retain a significant portion of its clients from year to year. Navigant, through Scheduled Airlines Traffic Offices, Inc. (“SatoTravel^®”), which was acquired in June 2001, provides airline travel reservation services to the U.S. government and its employees and other private sector organizations. Navigant also provides specific group, leisure and special event management travel services, largely to its corporate clients. On December 29, 2002, Navigant had 98 regional and branch offices and approximately 580 on-site locations.

With its technology and experienced personnel, Navigant creates, implements and manages corporate travel policies, helping its clients reduce travel costs. Navigant provides its clients with extensive data about individual, departmental and company travel activity and patterns to help identify potential cost savings. Navigant also provides comprehensive accounting systems that track and reconcile travel expenses, process and classify billing information and provide management reports, all of which can be tailored to meet a client’s particular needs.

Navigant’s proprietary AQUA^™ quality control software products are the industry leaders. AQUA’s FareBuster^™ cost avoidance system checks each travel record for a lower airline fare or hotel rate and continuously checks wait-list flight inventories for discount fares that become available prior to travel. AQUA’s Trip Auditor^™ system repetitively searches airline seat maps for each traveler’s preferred seat assignments and frequent flier upgrade opportunities. In May 2002, the Company’s subsidiary, AQUA Software Products, Inc., signed an agreement with Orbitz, the online service created by five of the world’s leading airlines, for the creation of AQUAQuest^™, which is planned to offer travel agents direct access to Orbitz web-based search engine and its inventory of low fare ticket prices from numerous airlines.

The Internet has the potential to allow Navigant to provide an even higher level of service to its corporate clients while significantly reducing distribution costs, especially labor. Navigant currently provides reservation and ticketing services, as well as quality control and cost reduction systems, and other travel management products, including its travel accounting and management reporting services, through its consolidated website, Navigant.com, and its suite of Internet products and services, BusinessFLYR^™ and ReportFLYR^™. These services allow Navigant’s clients to take advantage of its existing offline services more quickly and efficiently. The Company is also introducing additional Internet products, including RescueFLYR^™, a product designed to help travelers salvage value from an unused, non-refundable ticket; AlertFLYR^™, a tool to organize and monitor valuable travel data in a single, customizable view; WebFLYR^™, a product to provide customers with access to the Orbitz inventory of low fare ticket prices from numerous airlines; and its BenefitVacations^® Corporate Affiliate program, allowing Navigant customers and their employees access to discount pricing, exclusive inventory and added incentives for leisure travel.

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Navigant believes that nearly all of its transactions currently are generated from clients under management contracts or service fee arrangements. Although the terms of its management contracts vary depending on the type of services provided and by client, Navigant typically is entitled to receive a pre-negotiated management fee and to be reimbursed for its direct operating expenses and indirect overhead costs.

Additional information on the Company can be found on its website, Navigant.com. Here the Company makes available free of charge its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practical after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).

The public may read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. For information on the operational hours and dates of the Public Reference Room the public may call 1-800-SEC-0330. The SEC also maintains an Internet site that contains electronically filed reports, proxy and information statements, and other information at http://www.sec.gov.

DEVELOPMENT OF BUSINESS

In the late 1970s, Edward S. Adams, Navigant’s Chairman, Chief Executive Officer and President, started a company in Denver, Colorado, focused on managing corporate travel. In 1983, Mr. Adams formed Professional Travel Corporation by merging his company with three of the largest corporate travel management companies in Colorado. By 1995, Professional Travel Corporation had become one of the 20 largest travel management companies in the United States.

In 1997, U.S. Office Products purchased Professional Travel Corporation, and Mr. Adams became president of U.S. Office Products’ Corporate Travel Services Division. He was charged with building a national corporate travel management company focused on middle market clients. Under U.S. Office Products’ ownership, the management team led by Mr. Adams acquired an additional eleven regional corporate travel management companies and significantly increased the geographical scale and client base of the business. In June 1998, U.S. Office Products distributed 10,984,000 shares of Navigant’s common stock to the stockholders of U.S. Office Products (the “Travel Distribution”). Additionally, Navigant completed an initial public offering of 2,000,000 shares of Navigant common stock simultaneously with the Travel Distribution (the “Stock Offering”). The Travel Distribution was part of a restructuring plan (the “Strategic Restructuring”), in which U.S. Office Products spun-off its print management, technology solutions, educational supplies and corporate travel services businesses. Following the Travel Distribution, Navigant continued to acquire regional corporate travel management companies. From 1998 through 2001, Navigant acquired 29 regional travel management companies, including SatoTravel and an incentive and meeting company. In 2002, one additional travel management company was acquired.

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During 2001, Navigant consolidated its operations by merging several U.S. companies and amalgamating various subsidiaries within the United Kingdom and Canada. In addition, all travel management company names were changed to use the Navigant International trademark, along with individual geographic identifiers. As of December 29, 2002, Navigant had the following significant subsidiaries:

TRAVEL SERVICES INDUSTRY

Navigant believes the travel services industry can be divided into two sectors: the unmanaged leisure and small business sector, and the managed corporate sector. Navigant competes in the managed corporate sector, which Navigant believes is made up of approximately 250 travel management companies. According to the Travel Industry Association of America, Americans spent a total of $464 billion on domestic travel in 2001, of which Navigant believes a significant portion was for business travel.

The corporate travel management industry grew dramatically as a result of the deregulation of the airline industry in 1978. The complex pricing strategies adopted by the airlines to maximize their yields and loads created an opportunity for travel management companies to assist mid-sized and large companies in managing their travel expenses. Over the years, the industry has progressed from merely delivering low-cost airline tickets to providing end-to-end support and services.

Travel is among the largest controllable expense for most companies. Businesses hire corporate travel management companies to reduce these expenses, and to manage the travel process. Corporate travel management companies can cut travel expenses for their clients in many ways, including creating travel policies that take advantage of savings opportunities inherent in complex airline pricing structures, collecting data for greater leverage with suppliers, negotiating favorable pricing directly with travel suppliers for the benefit of a particular client and passing on cost savings and price reductions negotiated for the benefit of all clients.

The corporate travel management industry has changed significantly since 1995. Some of the major changes are:

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Navigant believes that a successful response to these changes requires significant technological and financial resources, and that larger corporate travel management companies therefore may have a competitive advantage. Accordingly, Navigant believes the business travel management industry is undergoing a period of consolidation and that significant growth opportunity exists. Navigant believes that large companies providing integrated systems from purchasing to data collection will eventually dominate the industry.

The industry’s role and capacity as a distribution channel, and its relationship with both clients and suppliers, is also undergoing significant change as a result of the Internet and other technological innovations. Navigant believes these innovations offer opportunities for corporate travel management companies to increase the efficiency of their distribution capacities and enhance services provided to travelers and management.

The industry has been undergoing numerous challenges over the past year related to the September 11, 2001 terrorist attacks, the decline in the U.S. economy and issues associated with war. These challenges have led to bankruptcy issues for major airlines, including United Airlines and US Air. Should the U.S. economy remain at its current level and should issues associated with war continue, there is potential for other carriers to file for bankruptcy as well.

BUSINESS STRATEGY

Navigant’s mission is to provide progressive travel management services delivered globally by its unified team of responsive professionals who are committed to exceeding the expectations of shareholders, clients and fellow associates (Navigant refers to its employees as “associates”).

The principal elements of Navigant’s business strategy are to:

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SERVICES

Travel Management Services

Navigant provides its clients with a wide range of travel management services in addition to reservation and ticketing, including:

Navigant books travel reservations for its clients with a variety of travel suppliers, including airlines, hotels and rental car companies. Navigant uses three major computer reservation systems—Sabre, Galileo/Apollo and

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Worldspan—to book airline tickets, hotel reservations and rental car reservations. After making travel reservations for its clients, Navigant issues tickets, both paper and electronic, and provides its customers with detailed itineraries, which include confirmation numbers for hotel and car rental reservations.

Navigant can assist its clients in developing travel policies that enable the client to manage its travel expenses. These policies can mandate the use of particular vendors, set parameters on the class of service used by travelers, require advance purchase of airline tickets and define the use of “frequent flier” program benefits. These policies may also have risk management features, such as limiting the number of officers and employees who may travel on the same flight.

Navigant’s management reports provide detailed and comprehensive information about each client’s travel expenses and patterns. These reports show savings achieved through the use of preferred vendors and adherence to travel policies, and analyze destinations, airlines and hotel usage and rental car expense. The information collected helps Navigant and the client negotiate discounts and pricing with vendors, and allows the client to monitor and enforce its travel policies.

Navigant operates a 24-hour toll-free telephone service to provide emergency assistance to travelers. Many other travel management companies use this service and Navigant believes it is regarded as one of the best 24-hour services in the travel industry.

Navigant has an incentive, corporate meeting and special event subsidiary doing business as Navigant Performance Group (“NPG”), formerly Cornerstone. NPG operates out of regional offices throughout the United States, Canada and the United Kingdom and provides innovation and expertise in the areas of incentive programs, meetings and special events. Services provided by NPG include, but are not limited to, strategic planning, promotion support, site selection, contract negotiations, program planning, registration, creative support and on-site management.

In 2001, the Company formed Navigant Integrated Services (“NIS”) to serve the Company’s large-scale corporate accounts. Through state-of-the-art call centers, NIS delivers leading edge technology, which provides clients with premium service, flexibility and cost-saving opportunities.

In addition to corporate travel management, Navigant provides leisure travel services to both individuals and groups as a small portion of its overall business. Navigant derives part of its leisure travel business through its existing corporate client base.

Use of Technology

Navigant embraces technology as a key to future success in the corporate travel management industry. Navigant’s information technology can provide its clients’ corporate travel managers, as well as financial officers, with extensive data about individual, departmental and company travel activity and patterns. Navigant can use this information to consult with its corporate clients regarding the structure, operation and efficiency of a variety of corporate travel policies. In addition, Navigant can provide corporate clients with comprehensive information about cost-saving opportunities for the travel undertaken by their employees.

Navigant’s wholly owned subsidiary, AQUA Software Products, Inc., has developed a fully-automated quality assurance program, AQUAPlatinum^™, which features both a quality auditing system and a computerized cost avoidance system. Navigant has branded their version of this product AQUA. AQUA’s modular-based system checks each travel record for accuracy and completeness and repetitively searches airline seat maps for each traveler’s preferred seat assignments, hotel rate comparisons and frequent-flier upgrade opportunities. AQUA’s Fares^™ module is a computerized cost avoidance program which checks each record for a lower airline fare and continuously checks wait list flights and flight inventories for discount fares that become available prior to travel. AQUA also advises travel managers of travelers who are not taking advantage of the lowest fare. In

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May 2002, AQUA Software Products, Inc. signed an agreement with Orbitz, the online service created by five of the world’s leading airlines, for the creation of AQUAQuest^™, which will offer travel agents direct access to Orbitz web-based search engine and its inventory of low fare ticket prices from numerous airlines. Currently, Navigant has the AQUA system installed to process approximately 97% of its transactions, and plans to continue conversions of newly acquired companies during 2003. Eighty percent of the top five travel management companies in the United States license portions of the AQUA system.

In 1999, Navigant embarked upon a standardized program to consolidate its accounting and client reporting systems. This resulted in converting accounting systems to a single system and reporting systems to a standard system. With the exception of SatoTravel, 100% of Navigant’s North America transactions are now processed on its consolidated system.

The Internet has the potential to allow Navigant to provide an even higher level of service to its corporate clients while significantly reducing distribution costs, especially labor costs. Navigant serves its corporate clients through its consolidated website, Navigant.com, and its suite of Internet products and services, BusinessFLYR, ReportFLYR, RescueFLYR, AlertFLYR and WebFLYR. BusinessFLYR allows Navigant’s corporate clients to book air, car and hotel travel online while enforcing corporate travel policy and capturing their travel spending patterns. Several different online booking systems can be configured based on the corporate client’s requirements. Through ReportFLYR, the corporate client can view trip information sorted at every level of corporate organization, from individual travel to department, division or entire company. ReportFLYR allows corporate travel managers and other executives the ability to view their company’s travel activities and real-time data 24 hours a day using a password protected system. The Company is also introducing additional Internet products, including RescueFLYR, a product designed to help travelers salvage value from an unused, non-refundable ticket; AlertFLYR, a tool to organize and monitor valuable travel data in a single, customizable view; and WebFLYR, a product to provide customers with access to the Orbitz inventory of low fare ticket prices from numerous airlines.

Navigant is also expanding its efforts to cross-sell leisure travel to employees of its corporate clients and members of affinity group clients through its BenefitVacations Corporate Affiliate program and to provide reservation and ticketing, as well as its quality control and cost reduction services, to other leisure consumers. This program will allow Navigant customers and their employees access to discount pricing, exclusive inventory and added incentives for leisure travel.

Distribution of Services

Navigant provides corporate travel management services to its clients through several channels, including on-site offices, regional travel management offices, call centers and on-site satellite ticket printers (“STPs”).

At December 29, 2002, Navigant had approximately 580 on-site offices on client premises, where it provides customized trip planning and reservation and ticketing services to the employees of corporate and governmental clients. On-site operations are typically desirable for clients with airline expenditures in excess of $1.0 million per year. Through an on-site office, Navigant is able to work one-on-one with the client’s travel manager to meet the client’s travel needs, including the need for customized travel information and negotiations with travel suppliers frequently used by the customer.

As of December 29, 2002, Navigant had approximately 98 regional and branch offices. These offices are typically used by corporate customers with less than $1.0 million in travel expenditures per year. The regional offices provide local companies with comprehensive travel management services, including trip planning, reservation and ticketing services, accounting, corporate travel reporting, negotiations with frequently used travel suppliers and consulting. The regional nature of these offices allows them to leverage their local market expertise and to provide quick, responsive and personalized service. In addition, regional offices provide backup to nearby on-site locations.

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As of December 29, 2002, Navigant operated four call centers, which serve the Company’s large-scale corporate clients and several military and governmental customers. Call centers are typically used by corporate, military and government clients with more than $40.0 million in travel expenditures per year. The call centers provide clients with premium service, flexibility and cost-saving opportunities.

As of December 29, 2002, Navigant also operated approximately 540 STPs at client locations across the country. Navigant uses these printers to distribute tickets instantly to clients’ field locations that have enough volume to justify the STP. Locations with lower volume can receive tickets via overnight delivery services. Navigant believes that the growth of electronic ticketing will eventually eliminate the need for STPs and overnight delivery, thus lowering distribution costs.

Navigant has entered into arrangements with third parties pursuant to which it fulfills travel reservations placed on the Internet. In addition, Navigant, through its Navigant.com website, allows clients to, among other things, check flight times, make reservations, access and sort password-protected corporate travel data, find restaurants and automatic teller machines and access the latest currency conversions.

Navigant offers reservation services to its clients through the Internet, e-mail and facsimile. These distribution methods offer clients the option of performing reservation services directly, while Navigant provides a supporting role. Navigant’s role includes performing quality control on the reservation, assessing travel policy compliance, assisting the traveler with the use of the reservation system and issuing and delivering tickets reserved by the client. Additionally, Navigant reports to management on matters such as pre- and post-travel activity, cost-saving opportunities and the development and assessment of the client’s travel policy and negotiated rate opportunities.

MARKETING AND SALES

Navigant’s marketing continually targets both new and existing customers. Navigant’s sales staff identifies potential clients, and develops opportunities to provide additional travel services to existing clients. Over the past few years, travel policy and travel purchasing decisions in larger companies have been centralized in purchasing departments, with travel managers or within the offices of chief financial officers. The selection of a travel agency has also become more formal, with larger accounts soliciting bids through “requests for proposals.” Navigant has adapted to these changes by relying on a sales force specially trained in the business of corporate travel, supported by experienced marketing staff. Navigant has approximately 120 associates in its sales and marketing departments.

COMPETITION

The corporate travel management industry is extremely competitive. Navigant competes primarily with other corporate travel management companies. Some of its competitors may have greater brand-name recognition and financial resources than Navigant does. Competition within the corporate travel management industry is increasing as the industry undergoes a period of consolidation. Certain of Navigant’s competitors are expanding their size and financial resources through consolidation. Some travel management companies may have relationships with certain travel suppliers that give them access to favorable availability of products (including airplane seats and hotel rooms) or more competitive pricing than that offered by Navigant. Furthermore, some corporate travel management companies have a strong presence in particular geographic areas that may make it difficult for Navigant to attract clients in those areas. As a result of competitive pressures, Navigant may suffer a loss of clients, and its revenues or margins may decline.

Navigant also competes with travel suppliers, including airlines, hotels and rental car companies. Innovations in technology, such as the Internet and computer online services, have increased the ability of travel suppliers to distribute their travel products and some limited services directly to the consumer. Although corporate travel management companies and travel agencies remain the primary channel for travel distribution,

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businesses and consumers can use the Internet to access information about travel products and services and to purchase such products and services directly from the suppliers, thereby bypassing corporate travel management companies and travel agents. Navigant believes that no single Internet-based service presently provides access to the full range of information that is available through Navigant. An Internet-based travel service may, however, provide such access in the future.

Navigant believes that it competes for clients based upon service, price and specialized knowledge. Navigant believes that it is well-positioned to compete on these bases due to its combination of size and regional focus. Navigant uses its size to achieve operating efficiencies by implementing customized and industry-standard technologies and by consolidating administrative functions. Navigant’s size also provides opportunities to negotiate favorable arrangements with travel suppliers, such as airlines, hotels and rental car companies. Navigant’s regional focus, conversely, fosters personalized customer service and specialized local market knowledge, which helps improve customer service, solidify customer relationships and expand the Company’s customer base.

MANAGEMENT INFORMATION SYSTEMS

Navigant uses networked management information systems for financial management, reporting and communication. These systems provide management with current financial information from all Navigant offices, and allow management to share that information easily and quickly with others. The systems also allow management to communicate efficiently with associates and each other throughout the business day. Navigant employs technicians to administer, install and maintain its computer hardware and software, as well as computer programmers to create software solutions for Navigant and its customers. Navigant began implementing a single, company-wide information technology platform to service its accounting and reporting requirements in 1999, and with the exception of SatoTravel, 100% of the Company’s North American transactions are currently being transacted on the new system. The Company expects the SatoTravel transactions to be on a consolidated system with the rest of Navigant’s transactions by early 2004 fiscal year.

EMPLOYEES

As of March 3, 2003, Navigant had approximately 4,300 full-time associates, none of whom is subject to collective bargaining agreements. The Company believes that it enjoys good relations with its associates.

RECENT DEVELOPMENTS

On March 20, 2003, the Company signed an amendment to the Amended and Restated Credit Agreement dated as of August 6, 1999 (the “Credit Facility”) modifying certain of its terms and conditions. The amendment adjusted certain ratios including the consolidated leverage ratio. For the fiscal quarter ended March 28, 2003, the consolidated leverage ratio may not exceed 3.00:1.00. The maximum consolidated leverage ratio allowed is decreased until December 31, 2003, where it returns to its original level of 2.50:1.00. This amendment is valid through December 31, 2003.

On March 20, 2003, the Company signed an amendment to the Senior Secured Notes Purchase Agreements dated November 15, 2000 modifying certain of its terms and conditions. The amendment adjusted certain ratios including the consolidated leverage ratio. For the fiscal quarter ended March 28, 2003, the consolidated leverage ratio may not exceed 3.25:1.00. The maximum consolidated leverage ratio allowed is decreased until June 28, 2003, where it returns to its original level of 2.75:1.00. This amendment is valid through December 31, 2003.

On March 19, 2003, the United States of America and its coalition of partners launched an attacked on Iraq. Navigant has seen a decline in transactions of approximately 10% as a result of the start of the conflict and several carriers have reported declines in future bookings of up to 40% with the majority being in the transatlantic market. Predictions indicate that transactions could be down as much as 20% over the term of the war. Navigant has begun

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steps to reduce their cost structure based on its transaction volumes in manners similar to the steps taken following the September 11, 2001 terrorist attacks and believes that most variable costs can be adjusted accordingly. However, the decrease in transactions will negatively impact the Company’s first quarter results as the Company cannot eliminate the fixed costs and there are certain incremental costs associated with the removal of some of the variable costs. If the war should last for a sustained period, Navigant’s results of operations will be impacted accordingly.

PROPERTIES

As of December 29, 2002, Navigant operated 98 travel agency facilities, all of which are leased. The following are the Company’s primary properties: