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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended June 27, 2004

OR

For the transition period from                      to                     

Commission File Number 000-24387

NAVIGANT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

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

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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange

Act). Yes þ No ¨

As of August 3, 2004, the registrant had 15,350,000 shares of its common stock outstanding.

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INDEX TO FORM 10-Q

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NAVIGANT INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Data)

(Unaudited)

See accompanying notes to consolidated financial statements.

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NAVIGANT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)

See accompanying notes to consolidated financial statements.

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NAVIGANT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, unless otherwise noted)

(Unaudited)

See accompanying notes to consolidated financial statements.

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NAVIGANT INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands, unless otherwise noted)

(Unaudited)

NOTE 1—BACKGROUND

Navigant International, Inc. (the “Company” or “Navigant”), a Delaware corporation, is the second largest provider of corporate travel management services in the United States, based on the number of airline tickets sold in 2003. The Company serves corporate, government, military, leisure and meetings and incentive clients. The Company manages all aspects of its clients’ travel processes, focusing on reducing their travel expenses.

The Company’s operations are primarily concentrated in one market segment—airline travel—and its customers are geographically diverse with no single customer base concentrated in a single industry. The Company’s operations are seasonal, with the November and December periods having the lowest airline bookings. The majority of the leisure travel services the Company provides are directed to the Company’s corporate customers and the Company does not compile separate internal reporting of leisure travel activities.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 28, 2003.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 27, 2004, and the results of its operations and its cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three and six months ended June 27, 2004 are not necessarily indicative of the results that may be achieved for the full fiscal year and cannot be used to indicate financial performance for the entire year.

Reclassifications

Certain reclassifications have been made to prior years’ balances to conform with current year presentation.

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 27, 2004 are as follows:

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Intangible Assets

The Company has intangible assets related to technology and trade names. The majority of these intangible assets were acquired in acquisitions in 2003. The Company amortizes technology assets over a life of three to five years and trade name assets over a life of ten years. Intangible assets, excluding goodwill, as of June 27, 2004 and December 28, 2003 consist of:

Derivatives

The Company may enter into derivative financial instruments to mitigate or eliminate certain risks, primarily interest rate changes, associated with the Company’s debt structure. The Company has entered into interest rate swaps to convert floating-rate loans to fixed-rate loans. Specific amounts that the Company hedges are determined based on the prevailing market conditions and the current shape of the yield curve. The specific terms and notional amounts of the swaps are determined based on management’s assessment of future interest rates, as well as other factors, including short-term strategic initiatives. The notional amount of these types of interest rate swaps aggregated $75 million as of June 27, 2004. For derivatives qualifying as hedges of future cash flows, the effective portion of changes in fair value is recorded temporarily as a component of equity, and is then recognized as interest expense along with the related effects of the hedged items. Any ineffective portion of a hedge is reported as interest expense as it occurs. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. For the six months ended June 27, 2004 and June 29, 2003 the Company did not report a loss or a gain associated with the ineffectiveness of cash flow hedges. As of June 27, 2004 and December 28, 2003, the aggregate fair value of the cash flow hedges aggregates an unrealized gain of $581 and an unrealized loss of $1,310 and this is recorded in Other Long-Term Liabilities and as an offset to Accumulated Other Comprehensive Loss and Deferred Income Taxes. The change in fair value for the three and six months ended June 27, 2004 was a gain of $1,688 and $1,170, net of taxes of $1,029 and $721. The change in fair value for the three and six months ended June 29, 2003 was a gain of $288 and $506, net of taxes of $172 and $303.

Stock-Based Compensation

As permitted under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (“FAS 123”), the Company accounts for options issued to employees and non-employee directors in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“ABP No. 25”). Accordingly, because the exercise prices of the options have equaled the market price on the date of grant, no compensation expense has been recognized for the options granted. Any grants to non-employees under these plans are accounted for in accordance with Emerging Issues Task Force (“EITF”) Issue No. 96-18.

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Had compensation cost for the Company’s stock options been recognized based upon the fair value of the stock options on the grant date under the methodology prescribed by FAS 123, the Company’s net income and net income per share would have been impacted as indicated in the following table:

Net Income Per Share

Basic earnings per share amounts are based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period. The difference between basic and diluted earnings per share, for the Company, is solely attributable to stock options. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. For the three and six months ended June 27, 2004, options for approximately 11,000 and 26,000 shares were excluded from diluted earnings per share. For the three and six months ended June 29, 2003, options for approximately 1,094,000 and 1,133,000 shares were excluded from diluted earnings per share.

Contingently Convertible Securities

In April 2004, the Financial Accounting Standards Board (“FASB”) issued Staff Position No. 129-1, Disclosure of Information about Capital Structure Relating to Contingently Convertible Securities (“FAS 129-1”). FAS 129-1 requires companies to disclose the significant terms of the conversion features of contingently convertible securities to enable users of financial statements to understand the circumstances of the contingency and potential impact of conversion.

The Company has issued $72.0 million in principal amount of convertible subordinated debentures. These debentures are contingently convertible, which means that the holders have the right to convert the debentures into shares of Navigant’s common stock at a conversion rate of 60.4084 shares per $1,000 principal amount of debentures (equal to a conversion price of approximately $16.55 per share), subject to adjustment, under the following circumstances:

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If any one of these contingencies were met, the debentures could be converted into an aggregate of 4,349,405 shares of Navigant’s common stock. These shares are not currently included in the diluted earnings per share calculation as of June 27, 2004. If these debentures were converted, there would be no immediate impact on net income. However, earnings per share calculations could be significantly impacted by the realization of these contingencies and ongoing interest expense would be reduced by the reduction in ongoing interest payments. Upon conversion of the debentures, the Company has a right to deliver, in lieu of common stock, cash or a combination of cash and common stock.

NOTE 3—COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved in certain disputes and legal actions arising in the ordinary course of its business. While it is not feasible to predict or determine the outcome of these proceedings, in the Company’s opinion, based on a review with legal counsel, none of these disputes and legal actions is expected to have a material impact on its consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties, and an adverse result in these matters may arise from time to time that may harm the Company’s business.

Indemnities, Commitments and Guarantees

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include indemnities for liabilities associated with claims against its former corporate parent, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, commitments associated with certain vendor contracts and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. There have been no material changes in the Company’s contractual obligations and commercial commitments from those reported in the Company’s Annual Report on Form 10-K for the year ended December 28, 2003.

NOTE 4—BUSINESS COMBINATIONS

Effective February 1, 2004, the Company acquired a meetings and incentive company. This acquisition resulted in total goodwill of $6,953 and was accounted for under the purchase method for a purchase price of $5,500, consisting of cash of $3,500 and issuance of 120,772 shares of capital stock at a total value of $2,000.

In June 2004 the Company acquired privately-held Northwestern Travel Service, L.P. (“Northwestern”). Northwestern is the 12th largest travel management company in the United States. Navigant paid $775 in cash, $19,520 in the form of a short-term promissory note and issued to the sellers Navigant common stock valued at approximately $10,575 (approximately 611,000 shares). The stock consideration was valued at closing prices of Navigant stock around the closing date of this acquisition. Subject to contingencies, if Northwestern achieves certain revenue objectives by the first anniversary of the closing, the sellers will be entitled to up to approximately $10,200 in additional cash consideration. As of June 27, 2004, the Company recorded a $8,200 liability related to the contingent cash consideration. Effective May 24, 2004, this acquisition was accounted for under the purchase method and all excess of purchase price over tangible net assets acquired has been allocated to goodwill, pending final purchase price allocation.

The Company also acquired a general travel management company in the six months ended June 27, 2004. The results of this acquisition have been included in the Company’s results from the date of acquisition.

The following presents the unaudited pro forma results of operations of the Company for the three and six months ended June 27, 2004 and June 29, 2003, which gives retroactive effect to the results of the acquisition of Northwestern as if this acquisition had been made at the beginning of each period presented. The results presented below include certain pro forma adjustments of $291 and $1,198 for the three and six months ended June 27, 2004

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and $130 and $812 for the three and six months ended June 29, 2003, to reflect the interest expense associated with the debt incurred to finance the acquisition and the inclusion of a federal income tax provision on all earnings:

The unaudited pro forma results of operations are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of each period or the results which may occur in the future.

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

Statements contained in this Quarterly Report on Form 10-Q, 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 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “seek,” “could,” “predict,” “continue,” “future,” “may” and variations of such words and similar expressions are intended to identify such forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Our actual results could differ materially. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including:

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All of our forward-looking statements are expressly qualified by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Introduction

We provide travel management services to corporations, government agencies and the military and, to a more limited extent, other travel services to these customers. We have operations throughout the United States, Canada, England, Germany, France, Belgium, The Netherlands, Spain, Italy, Greece, Ireland, Scotland, Norway, Iceland, Turkey, Kuwait, Qatar, Japan, Singapore, Guam, Puerto Rico, Cuba and Brazil.

During the year ended December 28, 2003, including the three and six months ended June 29, 2003, we were adversely affected by the continued weak economic conditions in the United States, the war in Iraq and general concerns regarding Severe Acute Respiratory Syndrome, or SARS. Our 2003 transaction levels decreased when compared to 2002 as a result of these world conditions. Thus far in 2004 transaction levels have improved to a level relatively consistent with 2002 levels. We attribute the improvement in transaction levels primarily to an improving economy and our success in managing client retention.

On March 17, 2004, we agreed to join with TUI Business Travel Deutschland, GmbH as a fifty percent shareholder in TQ3 Travel Solutions GmbH, creating a strategic joint venture, which together with its two members is considered one of the world’s largest travel management companies based on combined revenues and geographic coverage. Our alliance with TQ3 expands our global reach and further solidifies our ability to effectively serve the interests of major customers in key worldwide markets. TQ3 Travel Solutions is a leading provider of quality, innovative travel expense management solutions to companies worldwide. Subsequent to our investment in TQ3, our network includes 1,200 locations in 80 countries throughout the Americas, Europe, Middle East, Africa and Asia-Pacific.

On June 16, 2004, we acquired Northwestern Travel Service, L.P. from Northwestern Travel Service, Inc., and the Noble Family Limited Partnership. Founded in 1969 and headquartered in Minneapolis, Northwestern, like Navigant, provides corporate travel management services combining personalized customer service and web-enabled technologies. Northwestern, with twenty-three offices and thirty-seven on-site locations, is the 12th largest travel management company in the United States.

Sources of Revenue

We have entered into management contracts and service fee arrangements with nearly all of our clients. Although the terms of our management contracts vary depending on the type of services provided and by client, we typically deduct a pre-negotiated management fee, our direct operating expenses and our indirect overhead costs from commissions collected for travel arrangements made on behalf of the client on a monthly basis. If the commissions do not exceed the amounts deducted, the client pays us the difference. If the commissions exceed the amounts deducted, we typically pay the excess to the client. With the elimination of commissions by most U.S. airlines and many international airlines, we do not expect to have any excess airline commissions available to pay to our clients. In addition, we typically charge a service fee for each ticket and other transactions to our clients who do not have a management contract with us. We charge between $25.00 and $50.00 for each air travel ticket issued to these clients and retain any commissions collected from the airlines and other vendors.

We have entered into agreements with major airlines for the payment of incentive override commissions. Under these agreements, the airlines generally pay commissions on domestic and international air travel if the volume of our ticket sales surpasses specified thresholds, which typically are based on the airlines’ share of the relevant markets. Additionally, we have negotiated favorable contracts with select global distribution systems

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vendors, hotel commission clearinghouses and rental car companies. Some of these contracts provide for payments to us of up-front fees, annual payments or cost savings to us.

We have also entered into agreements with customers for meetings and incentive business. Revenues and expenses for this business are generally recognized using percentage of completion methodology based on the terms of the contracts.

Expenses

Our direct operating expenses include principally labor expense, which comprised 61% and 57% of total direct operating expenses for the three and six months ended June 27, 2004 and 71% and 68% of total direct operating expenses for the three and six months ended June 29, 2003, net payments to clients under management contracts, communication costs and other costs associated with the selling and processing of travel reservations. Labor expense as a percentage of total direct operating expense decreased in 2004 as a result of our acquisition of a meetings and incentive company in the first quarter 2004, which has a higher ratio of cost of sales related to production of meetings and events compared to labor costs. During the second quarter 2004, there was less meeting and incentive activity than in the first quarter 2004 thus resulting in the higher percentage of labor expense in the three months ended June 27, 2004 as compared to the six months ended June 27, 2004.

Our general and administrative expenses include principally labor expense, which comprised 58% and 59% of total general and administrative expenses for the three and six months ended June 27, 2004 and 53% and 54% of total general and administrative expenses for the three and six months ended June 29, 2003, occupancy and other costs. Labor expense as a percentage of general and administrative expenses increased from prior year primarily as a result of higher health insurance costs, annual raises that were effective in the second quarter of 2004 and the hiring of additional resources in our internal technology and operation departments associated with the planned roll-out of two new product initiatives, Passportal and NetProfiler.

Critical Accounting Policies

Our critical accounting policies are described in Item 7. of our Annual Report on Form 10-K for the year ended December 28, 2003. The accounting policies used in preparing our interim consolidated financial statements for the three and six months ended June 27, 2004 are the same as those described in our Annual Report on Form 10-K for the year ended December 28, 2003.

Results of Operations

The following table sets forth various items as a percentage of revenues for the three months and six months ended June 27, 2004 and June 29, 2003:

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Revenues

Consolidated revenues increased 25.3%, from $85.6 million for the three months ended June 29, 2003 to $107.3 million for the three months ended June 27, 2004. This increase was due to a 9% internal growth in transactions from our existing customer base as well as an increase in our meetings and incentive business, which combined resulted in revenue growth of approximately $9 million. The balance of the growth was attributable to the acquisitions made in mid to late 2003 and in the first and second quarters of 2004, resulting in approximately $12 million in additional revenue.

Consolidated revenues increased 23.0%, from $174.5 million for the six months ended June 29, 2003 to $214.6 million for the six months ended June 27, 2004. This increase was due to an 8% internal growth in transactions from our existing customer base as well as an increase in our meetings and incentive business, which combined resulted in revenue growth of approximately $15 million. The balance of the growth was attributable to the acquisitions made in mid to late 2003 and in the first and second quarters of 2004, resulting in approximately $28 million in additional revenue. These increases in revenues are offset by a decrease in the revenue per transaction as some customers shift some transactions from a full service model to an on-line model at comparable margins.

Operating Expenses

Operating expenses increased 27.8%, from $45.6 million, or 53.2% of revenues, for the three months ended June 29, 2003 to $58.3 million, or 54.3% of revenues, for the three months ended June 27, 2004. This increase is primarily due to increases in transactions as well as the 2003 and 2004 acquisitions, primarily the acquisition of a meetings and incentive company in the first quarter of 2004 whose operating expenses as a percentage of revenues are higher than our historical combined operations.

Operating expenses increased 29.2%, from $93.5 million, or 53.6% of revenues, for the six months ended June 29, 2003 to $120.8 million, or 56.3% of revenues, for the six months ended June 27, 2004. This increase is primarily due to increases in transactions as well as the 2003 and 2004 acquisitions, primarily the acquisition of a meetings and incentive company in the first quarter of 2004 whose operating expenses as a percentage of revenues are higher than our historical combined operations.

General and Administrative Expenses

General and administrative expenses increased 14.9%, from $27.5 million, or 32.1% of revenues, for the three months ended June 29, 2003 to $31.5 million, or 29.4% of revenues, for the three months ended June 27, 2004. This increase was primarily due to annual raises that became effective in the second quarter of 2004, increased health insurance costs, costs absorbed as a result of the 2003 and 2004 acquisitions, a shift of some capital leases upon renewal to operating leases resulting in increased rental expense and other general increases in operating costs associated with our growth in transactions during the second quarter of 2004.

General and administrative expenses increased 12.3%, from $55.7 million, or 31.9% of revenues, for the six months ended June 29, 2003 to $62.6 million, or 29.2% of revenues, for the six months ended June 27, 2004. This increase was primarily due to annual raises which became effective in the second quarter of 2004, increased health insurance costs, costs absorbed as a result of the 2003 and 2004 acquisitions, a shift of some capital leases upon renewal to operating leases resulting in increased rental expense and other general increases in operating costs associated with our growth in transactions during the first and second quarters of 2004.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased 18.0% from $2.6 million, or 3.1% of revenues, for the three months ended June 29, 2003 to $2.2 million, or 2.0% of revenues, for the three months ended June 27, 2004. This decrease is primarily due to a change in the mix of equipment leases. The ratio of operating leases to capital leases increased as we aligned our equipment leases to match our expected use of technology equipment, which had

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recently been acquired to update existing equipment. This change in the mix of equipment leases serves to increase operating expenses and decrease depreciation expense.

Depreciation and amortization expense decreased 18.8% from $5.3 million, or 3.1% of revenues, for the six months ended June 29, 2003 to $4.3 million, or 2.0% of revenues, for the six months ended June 27, 2004. This decrease is primarily due to a change in the mix of equipment leases.

Interest Expense, Net

Interest expense, net, decreased from $3.9 million for the three months ended June 29, 2003 to $2.9 million for the three months ended June 27, 2004. This decrease is attributable to the decrease in the average interest rates incurred from 8.8% for the three months ended June 29, 2003 to 6.3% for the three months ended June 27, 2004 resulting in approximately $1.2 million in savings. This reduction in average interest rates reflects the Company’s new revolving credit facility, five year term loan, and the November 2003 offering of $72.0 million aggregate amount of 4.875% convertible subordinated debentures. This decrease is partially offset by the increase in the weighted average debt balance from $176.6 million for the three months ended June 29, 2003 to $185.3 million for the three months ended June 27, 2004, which resulted in an increase in interest expense of $157. The increase in the weighted average debt balance is attributable to the acquisitions the Company has made in 2004.

Interest expense, net, decreased from $7.2 million for the six months ended June 29, 2003 to $5.7 million for the six months ended June 27, 2004. This decrease is attributable to the decrease in the average interest rates incurred from 8.1% for the six months ended June 29, 2003 to 6.1% for the six months ended June 27, 2004 resulting in approximately $1.9 million in savings. This reduction in average interest rates reflects the Company’s new revolving credit facility, five year term loan, and the November 2003 offering of $72.0 million aggregate amount of 4.875% convertible subordinated debentures. This decrease is partially offset by the increase in the weighted average debt balance from $176.9 million for the six months ended June 29, 2003 to $187.6 million for the six months ended June 27, 2004, which resulted in an increase in interest expense of $326. The increase in the weighted average debt balance is attributable to the acquisitions the Company has made in 2004.

Liquidity and Capital Resources

On June 27, 2004, we had cash of $6.7 million, working capital of $38.0 million, borrowings of $100.4 million under the Credit Agreement from Bank of America, N.A. as Administrative Agent, or the Credit Facility, $72 million of convertible subordinated debentures, notes payable in the amount of $27.7 million due for the purchase of Northwestern, $1.0 million of other indebtedness, including capital lease obligations, and available capacity under the Credit Facility of $69.6 million. Our capitalization, defined as the sum of long-term debt and stockholders’ equity at July 27, 2004 was approximately $429.5 million.

During the first and second quarter of 2004, net cash provided by operating activities was $12.8 million. Net cash used in investing activities was $1.4 million, including $3.9 million for additions to property and equipment, net of disposals, such as computer equipment and office furniture, offset by net cash received from acquisitions of $2.5 million. Net cash used in financing activities was $6.6 million, including payments on our Credit Facility of $7.4 million and payments of long term debt of $402, offset by proceeds from the exercise of stock options of $1.2 million.

During the first and second quarter of 2003, net cash provided by operating activities was $3.9 million. Net cash used in investing activities was $5.8 million, including $2.3 million for additions to property and equipment, net of disposals, such as computer equipment and office furniture, and $3.5 million for earn-out consideration for the 2002 purchased companies. Net cash provided by financing activities was $23, including proceeds from our Credit Facility of $387 and proceeds from the exercise of stock options of $1.6 million, offset by payments of long term debt of $1.9 million.

On October 31, 2003, we executed the Credit Facility provided by a syndicate of lenders led by Bank of America, N.A., as administrative agent, for the purpose of replacing our previous credit facility. The Credit Facility consists of a revolving credit line for up to $120.0 million and a $50.0 million term loan and is guaranteed by all our

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existing and future direct and indirect domestic subsidiaries. We closed this Credit Facility on November 7, 2003. As of June 27, 2004, we were in compliance with the financial covenants of this Credit Facility. Please see “Risk Factors—Our Credit Facility imposes restrictions which may adversely affect our ability to finance future operations or capital needs or engage in other business activities” as detailed in our Annual Report on Form 10-K.

On November 7, 2003 we concluded an offering of $72.0 million in aggregate principal amount of our 4.875% convertible subordinated debentures due 2023. The debentures are convertible into shares of Navigant’s common stock at an initial conversion rate of 60.4084 shares per $1,000 principal amount of debentures, subject to adjustment. The debentures were offered only to qualified institutional buyers in a Rule 144A Offering under the Securities Act of 1933. Upon conversion of the debentures we have the right to deliver, in lieu of common stock, cash or a combination of cash and common stock.

We have financed our operational growth and acquisitions primarily from internally generated cash flow from operations and borrowings under the Credit Facility. We anticipate that our cash flow from operations and borrowings under the Credit Facility will provide sufficient cash to enable us to meet our working capital needs, debt service requirements and planned capital expenditures for property and equipment through at least the second quarter of fiscal 2005 based on current budgets. We also anticipate that our cash flows from operations and borrowings under the Credit Facility will provide sufficient cash to enable us to meet our long term obligations.

We intend to continue to evaluate acquisition opportunities. Our Credit Facility limits our ability to consummate acquisitions using total consideration in excess of $10 million without the consent of the participating banks. These provisions may limit our ability to continue our acquisition program. Nevertheless, we may be in various stages of negotiation, due diligence and documentation of potential acquisitions at any time. The timing, size or success of any acquisition effort and the associated potential capital commitments cannot be predicted. We expect to fund future acquisitions primarily with cash flow from operations and borrowings, including borrowings under the Credit Facility, as well as issuance of additional equity or debt. To the extent we fund a significant portion of the consideration for future acquisitions with cash, we may have to increase the amount available for borrowing under the Credit Facility or obtain other sources of financing through the public or private sale of debt or equity securities. There can be no assurance that we will be able to secure such financing if and when it is needed or on terms we deem acceptable. If we are unable to secure acceptable financing our acquisition program could be negatively affected. Capital expenditures for equipment and expansion of facilities are expected to be funded from cash flows from operations and supplemented as necessary by borrowings under the Credit Facility.

Fluctuations in Quarterly Results of Operations

The business travel industry is seasonal and our results have fluctuated because of these seasonal variations. Our revenues and net income are generally higher in the second and third calendar quarters. We expect this seasonality to continue in the future. Our quarterly results of operations may also be subject to fluctuations as a result of changes in relationships with travel suppliers, changes in the mix of services offered by us, extreme weather conditions, world political and health issues or other factors affecting travel. Unexpected variations in quarterly results could also adversely affect the price of our common stock, which in turn could limit our ability to make acquisitions.

As we continue to complete acquisitions, we may become subject to additional seasonal influences. Quarterly results may also be materially affected by the timing of acquisitions and the timing and magnitude of costs related to such acquisitions. Moreover, the operating margins of companies we acquire may differ substantially from our existing operating margins, which could contribute to the further fluctuation in our quarterly operating results. Our results may be affected by the mix of services we sell, as well as general economic conditions. Therefore, results for any quarter are not necessarily indicative of the results that we may achieve for any subsequent fiscal quarter or for a full fiscal year.

As mentioned above, we have issued $72.0 million in principal amount of convertible subordinated debentures. These debentures are contingently convertible, which means that the holders have the right to convert only when stated contingencies are resolved. One of the contingencies is that the holders do not have the right to convert the debentures to stock until after the fiscal quarter ended December 28, 2003 if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the first

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trading day of such quarter is greater than or equal to 120% of the applicable conversion price per share of our common stock on such first trading day. We cannot predict the price of our stock; however, the possibility exists that this contingency will be met in the near future. The conversion of the convertible debentures to stock will have no immediate impact on net income. However, our earnings per share calculations could be significantly impacted by the realization of this contingency and ongoing interest expense will be reduced by the reduction in ongoing interest payments.

At its June 2004 meeting the Financial Accounting Standards Board’s, or FASB, Emerging Issues Task Force reached a tentative conclusion that contingently convertible securities should be included in the calculation of diluted earning per share, regardless of whether the contingencies have been met or whether the market price contingency is substantive. This tentative conclusion, if finalized and ratified by the FASB, would require retroactive restatement of diluted earnings per share for periods ending after December 15, 2004. If this tentative conclusion had been effective as of June 27, 2004, the impact for the three and six months ending June 27, 2004 would have been a decrease to our diluted earnings per share by $0.08 and $0.13. This tentative conclusion would not have an impact to our earnings per share for periods prior to 2004.

New Accounting Pronouncements

In April 2004, the FASB issued Staff Position No. 129-1, Disclosure of Information about Capital Structure Relating to Contingently Convertible Securities, or FAS 129-1. FAS 129-1 requires companies to disclose the significant terms of the conversion features of contingently convertible securities to enable users of financial statements to understand the circumstances of the contingency and potential impact of conversion. FAS 129-1 is effective immediately and as a result we provide details on our contingently convertible securities in Note 2.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risks related to our operations result primarily from changes in interest rates and foreign currency exchange rates.

Our interest rate exposure relates primarily to long-term debt obligations. A significant portion of our interest expense is based upon variable interest rates of our bank’s prime rate or the LIBOR rate, as discussed in Note 8 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K. Based upon our borrowings under the Credit Facility at June 27, 2004 of $100.4 million, a 50 basis point movement in the base rate or the LIBOR rate would result in approximately $502 annualized increase or decrease in interest expense. We also enter into hedging activities that mitigate or offset the risk of changes in interest rates. See the “Derivatives” section in Note 2 of the Notes to Consolidated Financial Statements for details on these hedging activities.

We transact business in various foreign countries. A substantial portion of our revenue, expense and capital purchasing activities are transacted in U.S. dollars. However, we do enter into transactions in other currencies, primarily the Canadian Dollar, the Euro and the British Pound. We continue to monitor the possible impact of currency fluctuations on our operations and evaluate various methods to minimize the effects of currency.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our disclosure controls and procedures as of the end of the second quarter and have concluded that the disclosure controls and procedures are effective as of June 27, 2004 for purposes of recording, processing, summarizing and timely reporting material information required to be disclosed in reports we file under the Securities Exchange Act of 1934.

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Changes in Disclosure Controls and Procedures

There were no significant changes in our disclosure controls and procedures that occurred during our second quarter ended June 27, 2004 that materially affected, or are reasonably likely to materially affect, our disclosure controls and procedures.

PART II. OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

We are involved in certain disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, none of these disputes and legal actions is expected to have a material impact on our consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties, and an adverse result in these matters may arise from time to time that may harm our business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Sales of Unregistered Securities

During the second quarter ended June 27, 2004, we issued the following unregistered securities:

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

At our Annual Meeting of Stockholders, held on May 19, 2004, our stockholders elected the following directors for a three-year term:

The remaining directors whose terms continue after the meeting date are Ned A. Minor, John A. Ueberroth, David W. Wiederecht and D. Craig Young.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

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(b) Reports on Form 8-K

We filed a report on Form 8-K dated April 27, 2004 in relation to a press release issued that day setting forth our results of operations and financial condition for the quarter ended March 28, 2004.

We filed a report on Form 8-K dated April 28, 2004 setting forth supplemental information about fees that we reported in our proxy statement for the 2004 Annual Meeting of Shareholders and our future intentions regarding the establishment of a nominating committee of the Board of Directors.

We filed a report on Form 8-K dated June 3, 2004 in relation to a change in our independent registered public accounting firm of the Navigant International 401(k) Plan.

We filed a report on Form 8-K dated June 9, 2004 in relation to a change in our independent registered public accounting firm.

We filed a report on Form 8-K dated June 17, 2004 in relation to a press release issued that day announcing our acquisition of privately-held Northwestern Travel Service, L.P. and establishing revised 2004 guidance to reflect the acquisition.

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SIGNATURES

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.

Date: August 6, 2004.

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