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

                                    FORM 10-Q

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007.

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934.

For the transition period from ___________________ to ____________________

                        COMMISSION FILE NUMBER: 001-13577

                         PREMIERE GLOBAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

                                     GEORGIA
         (State or other jurisdiction of incorporation or organization)

                                   59-3074176
                      (I.R.S. Employer Identification No.)

                             3280 PEACHTREE ROAD NW
                        THE TERMINUS BUILDING, SUITE 1000
                             ATLANTA, GEORGIA 30305
          (Address of principal executive offices, including zip code)

                                 (404) 262-8400
               (Registrant's telephone number including area code)

                                       N/A
              (Former name, former address and former fiscal year,
                          if changed since last report)

      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 |_|

      Indicate  by check mark  whether  the  registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act (Check one):

Large accelerated filer |_|   Accelerated filer |X|    Non-accelerated filer |_|

      Indicate  by check mark  whether  the  Registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|

      Indicate the number of shares  outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                  Class                      Outstanding at November 5, 2007
                  -----                      -------------------------------
      Common Stock, $0.01 par value                 62,101,746 Shares

<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

                               INDEX TO FORM 10-Q

                                                                            Page
                                                                            ----

PART I          FINANCIAL INFORMATION

     Item 1     Condensed Consolidated Financial Statements

                Condensed Consolidated Balance Sheets
                as of September 30, 2007 and December 31, 2006                 1

                Condensed Consolidated Statements of Operations
                for the Three Months and Nine Months Ended
                September 30, 2007 and 2006                                    2

                Condensed Consolidated Statements of Cash Flows
                for the Nine Months Ended September 30, 2007
                and 2006                                                       3

                Notes to Condensed Consolidated Financial Statements           4

     Item 2     Management's Discussion and Analysis of
                Financial Condition and Results of Operations                 18

     Item 3     Quantitative and Qualitative Disclosures About
                Market Risk                                                   32

     Item 4     Controls and Procedures                                       32

PART II         OTHER INFORMATION

     Item 1     Legal Proceedings                                             33

     Item 1A.   Risk Factors                                                  34

     Item 2     Unregistered Sales of Equity Securities and
                Use of Proceeds                                               34

     Item 3     Defaults Upon Senior Securities                               34

     Item 4     Submission of Matters to a Vote of Security Holders           34

     Item 5     Other Information                                             34

     Item 6     Exhibits                                                      34

SIGNATURES                                                                    36

EXHIBIT INDEX                                                                 37

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                      September 30,     December 31,
                                                                                                          2007              2006
                                                                                                      -------------     ------------
                                       ASSETS                                                          (Unaudited)
<S>                                                                                                     <C>               <C>
CURRENT ASSETS
     Cash and equivalents                                                                               $  27,720         $  18,977
     Accounts receivable (less allowances of $5,145 and $7,551, respectively)                              97,493            82,875
     Prepaid expenses and other current assets                                                             11,548             7,742
     Deferred income taxes, net                                                                             8,770            11,972
                                                                                                        ---------         ---------
          Total current assets                                                                            145,531           121,566

PROPERTY AND EQUIPMENT, NET                                                                               101,799            88,062

OTHER ASSETS
     Goodwill                                                                                             317,094           295,185
     Intangibles, net of amortization                                                                      37,989            38,357
     Deferred income taxes, net                                                                               556                --
     Other assets                                                                                           5,382             6,145
                                                                                                        ---------         ---------
                                                                                                        $ 608,351         $ 549,315
                                                                                                        =========         =========

                        LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                                                   $  54,886         $  48,967
     Income taxes payable                                                                                   6,975               878
     Accrued taxes                                                                                          7,436             6,011
     Accrued expenses                                                                                      34,393            28,697
     Current maturities of long-term debt and capital lease obligations                                     1,560             2,044
     Accrued restructuring costs                                                                            2,366             4,800
                                                                                                        ---------         ---------
          Total current liabilities                                                                       107,616            91,397
                                                                                                        ---------         ---------

LONG-TERM LIABILITIES
     Long-term debt and capital lease obligations                                                         258,198           136,738
     Accrued restructuring costs                                                                            1,773             2,339
     Accrued expenses                                                                                       4,631             1,831
     Deferred income taxes, net                                                                                --               719
                                                                                                        ---------         ---------
          Total long-term liabilities                                                                     264,602           141,627
                                                                                                        ---------         ---------

COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDERS' EQUITY
     Common stock, $.01 par value; 150,000,000 shares authorized, 61,880,328 and
     70,151,998 shares issued and outstanding in 2007 and 2006, respectively                                  619               702
     Additional paid-in capital                                                                           552,966           663,232
     Notes receivable, shareholder                                                                         (2,090)           (2,004)
     Cumulative translation adjustment                                                                     10,094             2,088
     Accumulated deficit                                                                                 (325,456)         (347,727)
                                                                                                        ---------         ---------
          Total shareholders' equity                                                                      236,133           316,291
                                                                                                        ---------         ---------
                                                                                                        $ 608,351         $ 549,315
                                                                                                        =========         =========
                                                 Accompanying notes are integral to these
                                                condensed consolidated financial statements.

</TABLE>



                                       1
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                          Three Months Ended                 Nine Months Ended
                                                                             September 30,                      September 30,
                                                                       --------------------------        --------------------------
                                                                         2007             2006             2007             2006
                                                                       ---------        ---------        ---------        ---------
                                                                              (Unaudited)                        (Unaudited)
<S>                                                                    <C>              <C>              <C>              <C>
Revenues                                                               $ 139,845        $ 122,118        $ 413,490        $ 369,411

Operating Expenses:
     Cost of revenues (exclusive of depreciation and
        amortization shown separately below)                              57,428           49,571          168,106          147,171
     Selling and marketing                                                34,136           31,382          104,996           97,941
     General and administrative                                           15,928           15,442           49,798           44,021
     Research and development                                              3,625            3,118           10,404            8,768
     Depreciation                                                          7,239            6,208           21,554           17,973
     Amortization                                                          4,081            3,279           11,226            9,526
     Restructuring costs                                                      --              928            3,747            4,018
     Net legal settlements and related expenses                               --               --              284               --
                                                                       ---------        ---------        ---------        ---------
        Total operating expenses                                         122,437          109,928          370,115          329,418
                                                                       ---------        ---------        ---------        ---------

Operating income                                                          17,408           12,190           43,375           39,993
                                                                       ---------        ---------        ---------        ---------

Other (Expense) Income:
     Interest expense                                                     (4,253)          (2,548)          (9,159)          (6,454)
     Interest income                                                         202               74              443              305
     Other, net                                                              295             (228)             968             (197)
                                                                       ---------        ---------        ---------        ---------
        Total other (expense) income                                      (3,756)          (2,702)          (7,748)          (6,346)
                                                                       ---------        ---------        ---------        ---------

Income from continuing operations before income taxes                     13,652            9,488           35,627           33,647
Income tax expense                                                         4,884            2,771           12,078           13,264
                                                                       ---------        ---------        ---------        ---------
Income from continuing operations                                      $   8,768        $   6,717        $  23,549        $  20,383
                                                                       ---------        ---------        ---------        ---------

Net income                                                             $   8,768        $   6,717        $  23,549        $  20,383
                                                                       =========        =========        =========        =========

BASIC AND DILUTED EARNINGS:
     Income from continuing operations                                 $   8,768        $   6,717        $  23,549        $  20,383
                                                                       =========        =========        =========        =========
     Net income                                                        $   8,768        $   6,717        $  23,549        $  20,383
                                                                       =========        =========        =========        =========

BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                                 59,327           67,919           63,669           69,375
                                                                       =========        =========        =========        =========

Basic earnings per share:
     Continuing operations                                             $    0.15        $    0.10        $    0.37        $    0.29
                                                                       =========        =========        =========        =========
     Net income                                                        $    0.15        $    0.10        $    0.37        $    0.29
                                                                       =========        =========        =========        =========

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING                               60,402           68,611           64,949           70,147
                                                                       =========        =========        =========        =========

Diluted earnings per share:
     Continuing operations                                             $    0.15        $    0.10        $    0.36        $    0.29
                                                                       =========        =========        =========        =========
     Net income                                                        $    0.15        $    0.10        $    0.36        $    0.29
                                                                       =========        =========        =========        =========

                                                 Accompanying notes are integral to these
                                                condensed consolidated financial statements.

</TABLE>



                                       2
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                                            Nine Months Ended
                                                                                                               September 30,
                                                                                                        ---------------------------
                                                                                                          2007              2006
                                                                                                        ---------         ---------
                                                                                                                (Unaudited)
<S>                                                                                                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                                           $  23,549         $  20,383
   Adjustments to reconcile net income to cash provided by operating activities:
     Depreciation                                                                                          21,554            17,973
     Amortization                                                                                          11,226             9,526
     Amortization of deferred financing costs                                                                 385               366
     Net legal settlements and related expenses                                                               284                --
     Payments for legal settlements and related expenses                                                       --            (2,496)
     Deferred income taxes, net of effect of acquisitions                                                     500               (74)
     Restructuring costs                                                                                    3,747             4,018
     Payments for restructuring costs                                                                      (6,543)           (3,534)
     Payments for discontinued operations                                                                    (650)             (733)
     Equity-based compensation                                                                              7,908             7,830
     Excess tax benefits from share-based payment arrangements                                              2,510                --
     Payments for state sales tax                                                                            (480)           (1,204)
     Loss on disposal of assets                                                                               146               278
     Changes in assets and liabilities, net of effect of acquisitions:
      Accounts receivable, net                                                                            (11,343)           (5,260)
      Prepaid expenses and other current assets                                                              (866)           (1,503)
      Accounts payable and accrued expenses                                                                13,822            (4,477)
                                                                                                        ---------         ---------
        Total adjustments                                                                                  42,200            20,710
                                                                                                        ---------         ---------
         Net cash provided by operating activities                                                         65,749            41,093
                                                                                                        ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                                                    (30,545)          (26,824)
  Business acquisitions, net of cash acquired                                                             (20,958)          (43,291)
                                                                                                        ---------         ---------
         Net cash used in investing activities                                                            (51,503)          (70,115)
                                                                                                        ---------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Principal payments under borrowing arrangements                                                        (254,934)          (63,098)
  Principal proceeds under borrowing arrangements                                                         371,469           120,900
  Excess tax benefits for share-based payment arrangements                                                 (2,510)               --
  Purchase of treasury stock, at cost                                                                    (127,177)          (29,566)
  Exercise of stock options                                                                                 7,249             2,168
                                                                                                        ---------         ---------
         Net cash (used in) provided by financing activities                                               (5,903)           30,404
                                                                                                        ---------         ---------

Effect of exchange rate changes on cash and cash equivalents                                                  400               719
                                                                                                        ---------         ---------

NET INCREASE IN CASH AND EQUIVALENTS                                                                        8,743             2,101
                                                                                                        ---------         ---------
CASH AND EQUIVALENTS, beginning of period                                                                  18,977            20,508
                                                                                                        ---------         ---------
CASH AND EQUIVALENTS, end of period                                                                     $  27,720         $  22,609
                                                                                                        =========         =========

                                                 Accompanying notes are integral to these
                                                condensed consolidated financial statements.

</TABLE>



                                       3
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. THE COMPANY AND ITS BUSINESS

      We  are a  global  provider  of  on-demand  business  process  improvement
solutions.  Our Premiere Global Communications  Operating System (PGiCOS) offers
hundreds  of  industry  specific  business  applications  within  the  following
solutions:  Conferencing,  Desktop Fax, Document Delivery,  Accounts  Receivable
Management,  Notifications & Reminders and eMarketing.  The unaudited  condensed
consolidated  balance  sheet as of September 30, 2007,  the unaudited  condensed
consolidated  statements  of  operations  for the  three and nine  months  ended
September 30, 2007 and 2006, the unaudited condensed consolidated  statements of
cash flows for the nine  months  ended  September  30, 2007 and 2006 and related
footnotes have been prepared in accordance with accounting  principles generally
accepted in the United States (GAAP) for interim financial  information and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by accounting  principles  generally accepted in the U.S.
for complete financial  statements.  The results of operations for the three and
nine months ended  September 30, 2007 are not indicative of the results that may
be expected  for the full fiscal year of 2007 or for any other  interim  period.
The financial  information  presented  herein should be read in conjunction with
our  annual  report on Form 10-K for the year ended  December  31,  2006,  which
includes  information  and  disclosures  not included  herein.  All  significant
intercompany accounts and transactions have been eliminated in consolidation.

2. SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable

      Included in accounts  receivable  at  September  30, 2007 and December 31,
2006 was earned but  unbilled  revenue of  approximately  $7.3  million and $4.7
million,  respectively.  Unbilled  revenue consists of earned but not yet billed
revenue which results from  non-calendar  month billing cycles and the one-month
lag time in billing  related to certain  of our  services.  Unbilled  revenue is
billed within 30 days of calendar month end.

Software Development Costs

      Pursuant  to  the  American  Institute  of  Certified  Public  Accountants
Statement  of  Position  (SOP)  98-1,  "Accounting  for the  Costs  of  Software
Developed  or Obtained  for  Internal  Use," we  capitalized  development  costs
incurred on software  associated with new services and  enhancements to existing
services. For the three months ended September 30, 2007 and 2006, we capitalized
approximately  $4.3  million  and  $2.5  million,   respectively,   of  software
development  costs.  For the nine months ended  September  30, 2007 and 2006, we
capitalized  approximately  $10.0  million and $9.9  million,  respectively,  of
software   development  costs.  These  capitalized  costs  are  amortized  on  a
straight-line basis over the estimated life of the applicable  software,  not to
exceed three  years.  Depreciation  expense  recorded  for  completed  phases of
software  development in the three and nine months ended  September 30, 2007 was
$0.8 million and $2.3 million,  respectively.  Depreciation expense recorded for
completed  phases of software  development  in the three and nine  months  ended
September 30, 2006 was $0.6 million and $1.8 million, respectively.

Revenue Recognition

      We recognize revenues when persuasive  evidence of an arrangement  exists,
services have been rendered, the price to the buyer is fixed or determinable and
collectibility is reasonably  assured.  Revenues consist primarily of usage fees
generally  based on per minute,  per fax page or per transaction  methods.  To a
lesser extent,  we charge  subscription  fees and fixed period  minimum  revenue
commitments.  Unbilled  revenue  consists  of earned but not yet billed  revenue
which results from non-calendar  month billing cycles and the one-month lag time
in billing  related to certain of our  services.  Deferred  revenue  consists of
payments  made by customers in advance of the time  services are  rendered.  Our
revenue  recognition   policies  are  consistent  with  the  guidance  in  Staff
Accounting   Bulletin   (SAB)  No.  101,   "Revenue   Recognition  in  Financial
Statements," as amended by SAB 101A, 101B and SAB 104.


                                       4
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

State sales taxes

      We have  reserves for certain state sales tax  contingencies  based on the
likelihood of obligation in accordance  with  Statement of Financial  Accounting
Standards   (SFAS)  No.  5,  "Accounting  for   Contingencies"   (SFAS  No.  5).
Historically,  we have not  collected  and  remitted  state  sales  tax from our
Conferencing  Solutions  customers.  We  were  audited  by the  Commonwealth  of
Massachusetts  Department  of  Revenue  claiming  that  our  audio  conferencing
services  are subject to sales tax in  Massachusetts.  In March  2006,  we began
assessing sales tax to our customers in Massachusetts as a result of this audit.
In July 2006, we paid an initial  payment of  approximately  $1.2 million to the
Commonwealth of  Massachusetts  Department of Revenue for taxable years prior to
2005.  Amounts  associated  with 2005 and early 2006 are still under  review and
have yet to be  settled.  In March  2007,  we were  approached  by the  State of
Illinois  regarding the  taxability of  conferencing  services in the state.  In
April 2007, we began assessing  sales tax to our customers in Illinois.  Returns
were filed and approximately $0.5 million was paid to the Illinois Department of
Revenue for taxable period prior to March 2007. Additional amounts may be due as
these  returns  are  audited.  More  states may claim that we are  subject to an
assessment  of sales taxes.  As of September  30, 2007 and December 31, 2006, we
had reserved  approximately  $4.8 and $4.3  million,  respectively,  for certain
state sales tax contingencies.  These amounts are included in "Accrued taxes" in
the  accompanying  condensed  consolidated  balance  sheets.  We believe we have
appropriately accrued for these contingencies.  In the event that actual results
differ  from  these  reserves,  we may  need to  make  adjustments  which  could
materially   impact  our  financial   condition   and  results  of   operations.
Historically, we have collected and remitted sales tax from our non-Conferencing
Solutions  customers in applicable  states.  However,  it is possible states may
disagree with our method of assessing and remitting these state sales taxes.

Income taxes

      Income tax  expense,  income  taxes  payable and  deferred  tax assets and
liabilities  are determined in accordance with SFAS No. 109. Under SFAS No. 109,
the  deferred  tax  liabilities  and assets are  determined  based on  temporary
differences  between the basis of certain assets and  liabilities for income tax
and  financial   reporting   purposes,   in  addition  to  net  operating   loss
carryforwards which will more likely than not be utilized. These differences are
primarily  attributable to differences in the  recognition of  depreciation  and
amortization  of property,  equipment  and  intangible  assets,  allowances  for
doubtful accounts and certain employee benefit accruals. Deferred tax assets and
liabilities are measured by applying  enacted  statutory tax rates applicable to
future years in which the deferred tax assets or liabilities  are expected to be
settled or realized.  Valuation  allowances  are  established  when necessary to
reduce  deferred  tax assets to the amount  expected to be  realized.  Permanent
differences are primarily  attributable to non-deductible  employee compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended.

      On July 13, 2006, the Financial  Accounting  Standards Board (FASB) issued
Interpretation   No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes  -An
Interpretation  of FASB  Statement  No.  109" (FIN  48).  FIN 48  clarifies  the
accounting for uncertainty in income taxes  recognized in an entity's  financial
statements in accordance  with FASB  Statement No. 109,  "Accounting  for Income
Taxes" and  prescribes a recognition  threshold and  measurement  attributes for
financial  statement  disclosures of tax positions taken or expected to be taken
on an income tax  return.  Under FIN 48, the impact of an  uncertain  income tax
position on the income tax return must be recognized at the largest  amount that
is  more-than-likely-than-not  to be sustained upon audit by the relevant taxing
authority.  An uncertain  income tax position  will not be  recognized if it has
less than a 50%  likelihood of being  sustained.  Additionally,  FIN 48 provides
guidance on derecognition,  classification, interest, penalties and disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006.

      We adopted  the  provisions  of FIN 48 on January  1,  2007.  We  recorded
provisions for certain asserted international and state income tax uncertain tax
positions based on the  recognition  and  measurement  standards of FIN 48. As a
result of our adoption of FIN 48,  approximately  $1.3 million was recorded as a
reduction  to retained  earnings as an increase to reserves  for  uncertain  tax
positions.  At the adoption date of January 1, 2007, we had  approximately  $7.3
million of  unrecognized  tax benefits.  Included in the balance of unrecognized
tax  benefits at January 1, 2007 is  approximately  $5.6  million,  all of which
would affect our effective tax rate if recognized.  This amount is classified as
"Income taxes payable" in the accompanying condensed consolidated balance sheet.
We file


                                       5
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

federal  income  tax  returns  and income  tax  returns  in  various  states and
international  jurisdictions.  In  major  tax  jurisdictions,   tax  years  from
1997-2006 remain subject to income tax examinations by tax authorities.

      As   permitted   with  the  adoption  of  FIN  48,  we  have  changed  our
classification  of interest and penalties related to uncertain tax positions and
recognize these costs in interest and penalties expense.  As of January 1, 2007,
we had accrued interest and penalties of  approximately  $0.9 million related to
uncertain tax positions.

      In the normal  course of business,  we are subject to inquiries  from U.S.
and non-U.S. tax authorities  regarding the amount of taxes due. These inquiries
may  result  in  adjustments  of the  timing  or  amount  of  taxable  income or
deductions or the allocation of income among tax jurisdictions.  Further, during
the ordinary  course of business,  other  changing facts and  circumstances  may
impact our ability to utilize income tax benefits as well as the estimated taxes
to be paid in future periods. We believe we are appropriately accrued for income
taxes. In the event that actual results differ from these estimates, we may need
to adjust  "Income taxes payable"  which could  materially  impact our financial
condition and results of operations.

Treasury Stock

      All treasury stock transactions are recorded at cost. As part of our April
2007 settlement agreement with Crescendo Partners II, L.P., Series E and related
parties,  among other  things,  Crescendo  Partners  withdrew its proxy  contest
related to our 2007 annual  meeting of  shareholders,  and we commenced a $150.0
million self-tender offer to acquire up to 11,857,707 shares of our common stock
at a fixed price of $12.65 per share. During the nine months ended September 30,
2007,  we  repurchased  9,687,847  shares of our common stock in the open market
pursuant to our self-tender offer for approximately  $122.5 million and incurred
costs  associated  with the tender  offer of  approximately  $0.9  million  that
included  legal,  printing  and  dealer  manager  fees  that  were  included  in
"Additional  paid-in capital." We also repurchased  during the nine months ended
September  30,  2007  144,400  shares  of our  common  stock in the open  market
pursuant to our  Board-approved  stock repurchase program for approximately $1.6
million.  In addition,  we withheld  approximately  225,000 shares of our common
stock to satisfy certain of our employees' tax withholdings due upon the vesting
of their restricted stock grants and remitted  approximately $2.2 million to the
Internal Revenue Service on their behalf. During the nine months ended September
30, 2006, we repurchased 3,662,038 shares of our common stock in the open market
for approximately $28.0 million pursuant to our Board-approved  stock repurchase
programs.  In addition,  during the nine months  ended  September  30, 2006,  we
withheld  approximately 215,000 shares of our common stock to satisfy certain of
our employees' tax  withholdings  due upon the vesting of their restricted stock
grants and remitted approximately $1.6 million to the IRS on their behalf.

Other Comprehensive Income (Loss)

      Other  comprehensive  income (loss)  represents  the change in equity of a
business during a period,  except for investments by owners and distributions to
owners. Cumulative translation adjustments represent the only component of other
comprehensive income (loss) at September 30, 2007 and December 31, 2006. For the
nine months ended September 30, 2007 and 2006, total other comprehensive  income
was  approximately  $31.6 million and $24.7 million,  respectively.  Accumulated
other  comprehensive loss was $242.4 million and $274.0 million at September 30,
2007 and December 31, 2006, respectively.

New Accounting Pronouncements

      We will be required to adopt SFAS No. 157 "Fair Value  Measurements" (SFAS
No. 157) for the fiscal year beginning  January 1, 2008. SFAS No. 157 provides a
single  definition of fair value and a hierarchical  framework for measuring it,
as well as establishing additional disclosure requirements about the use of fair
value to measure assets and liabilities. We are in the process of evaluating the
impact of SFAS 157 on our results of operations and financial position.

      In February  2007,  FASB issued SFAS No. 159,  "The Fair Value  Option for
Financial  Assets and  Liabilities"  (SFAS No.  159).  SFAS No. 159 provides the
option to report certain  financial  assets and liabilities at fair value,  with
the intent to mitigate  volatility  in financial  reporting  that can occur when
related assets and  liabilities


                                       6
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

are recorded on  different  bases and is  effective  for fiscal years  beginning
after  November 15, 2007. We are in the process of evaluating the impact of SFAS
No. 159, if elected, on our results of operations and financial position.

Reclassifications

      Certain  prior  year  amounts  in  our  condensed  consolidated  financial
statements have been reclassified to conform to our new segment presentation. In
the fourth  quarter  of 2006,  we began  reporting  our  financial  results on a
geographic  regional basis and no longer report under our former  Conferencing &
Collaboration and Data Communications  business segments.  In the second quarter
of 2007, we completed a detailed review of approximately  $2.6 million in credit
balances   recorded  in   "Accounts   receivable"   and   determined   that  the
classification of these balances in the allowance account was a more appropriate
presentation.  The December 31, 2006  allowance  balance was adjusted to reflect
this reclassification.

Goodwill and Intangible Assets

      Summarized  below are the carrying value and  accumulated  amortization of
intangible assets that continue to be amortized under SFAS No. 142,  "Accounting
For Goodwill and Other Intangible Assets" (SFAS No. 142) (in thousands):

<TABLE>
<CAPTION>
                                         September 30, 2007                           December 31, 2006
                              ---------------------------------------       ---------------------------------------
                               Gross                            Net          Gross                            Net
                              Carrying      Accumulated      Carrying       Carrying      Accumulated      Carrying
                                Value       Amortization       Value         Value       Amortization        Value
                              --------      ------------     --------       --------     ------------      --------
<S>                           <C>            <C>              <C>           <C>           <C>               <C>
Intangible assets             $169,197       $(131,208)       $37,989       $157,788      $(119,431)        $38,357
</TABLE>

      Intangible assets are amortized on a straight-line basis with an estimated
useful life between one and five years.  Amortization expense for the intangible
assets above is expected to be  approximately  $4.1 million for the remainder of
2007,  $13.5 million in 2008,  $9.7 million in 2009,  $5.3 million in 2010, $3.3
million in 2011 and $0.9 million in 2012.

      Goodwill and intangible assets by reportable segment at September 30, 2007
and December 31, 2006 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                         North                             Asia
                                                                        America          Europe           Pacific           Total
                                                                       ---------        ---------        ---------        ---------
<S>                                                                    <C>              <C>              <C>              <C>
Goodwill carrying value at December 31, 2006                           $ 268,458        $  22,556        $   4,171        $ 295,185
Additions and adjustments                                                 19,186            2,221              502           21,909
                                                                       ---------        ---------        ---------        ---------
Goodwill carrying value at September 30, 2007                          $ 287,644        $  24,777        $   4,673        $ 317,094
                                                                       =========        =========        =========        =========

Intangibles carrying value at December 31, 2006                        $  33,327        $   3,582        $   1,448        $  38,357
Additions and adjustments                                                 10,401              302              155           10,858
Amortization                                                              (9,850)          (1,052)            (324)         (11,226)
                                                                       ---------        ---------        ---------        ---------
Intangibles carrying value at September 30, 2007                       $  33,878        $   2,832        $   1,279        $  37,989
                                                                       =========        =========        =========        =========
</TABLE>


                                       7
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

3. RESTRUCTURING COSTS

      Consolidated  restructuring  costs at December 31, 2006 and  September 30,
2007 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                        Accrued           2007                                            Accrued
                                                        Costs at        Charge To                       Adjustment       Costs at
                                                      December 31,     Continuing        Costs          of Accrued     September 30,
Consolidated                                              2006         Operations       Incurred          Costs            2007
------------                                          ------------     ----------       --------        ----------     -------------
<S>                                                     <C>             <C>             <C>              <C>              <C>
Accrued restructuring costs:
   Severance and exit costs                             $ 4,027         $ 4,098         $(6,097)         $  (452)         $ 1,576
   Contractual obligations                                3,112             100            (649)              --            2,563
                                                        -------         -------         -------          -------          -------
   Accrued restructuring costs                          $ 7,139         $ 4,198         $(6,746)         $  (452)         $ 4,139
                                                        =======         =======         =======          =======          =======
</TABLE>

Realignment of Workforce - 2007

      During the three months ended June 30, 2007,  we executed a  restructuring
plan  to   consolidate   our   non-Conferencing   Solutions   service   delivery
organizations.  As part of this  consolidation,  we eliminated  approximately 86
positions.  We incurred approximately $4.1 million in severance costs associated
with the elimination of these positions.  Additionally, we incurred $0.1 million
of lease  termination  costs  associated  with our Paris,  France  office.  On a
segment  basis,  these  restructuring  costs were $1.1 million in North America,
$2.7  million  in Europe  and $0.4  million in Asia  Pacific.  Estimated  annual
savings from this consolidation is approximately $6.0 million.  During the three
and nine months ended September 30, 2007, we paid approximately $2.0 million and
$2.8  million,  respectively,  related to these  severance  and exit  costs.  We
anticipate  the  majority  of this $4.1  million  restructuring  cost to be paid
during 2007. Our reserve for these restructuring costs at September 30, 2007 was
approximately  $1.3 million,  which reflects the impact of foreign exchange rate
movement of the reserve balance.

Realignment of Workforce - 2006

      In 2006, we executed a restructuring  plan to streamline the management of
our  business on a  geographic  regional  basis from our former  Conferencing  &
Collaboration  and  Data  Communications  business  segments.  As  part  of this
streamlining, we eliminated approximately 100 positions within customer service,
finance,  operations and sales and marketing.  In the fourth quarter of 2006, we
entered into a separation  agreement in connection  with the  resignation of our
former chief investment  officer. We incurred an aggregate of approximately $8.0
million in severance costs  associated with the elimination of these  positions,
which  included the issuance of  restricted  stock having a fair market value of
$0.6 million.  Additionally, we incurred $0.6 million of lease termination costs
associated with five locations within North America.  On a segment basis,  these
restructuring  costs were $4.6 million in North America,  $3.2 million in Europe
and $0.7 million in Asia Pacific.  In the three and nine months ended  September
30, 2007, we paid  approximately  $0.2 million and $3.4  million,  respectively,
related  to these  severance  and exit  costs.  During  the  nine  months  ended
September 30, 2007, we adjusted our restructuring  reserve by approximately $0.5
million as a result of actual severance  payments to certain  individuals  being
less than originally estimated.  Management expects to pay the majority of these
remaining severance obligations during 2007. Our reserve for these restructuring
costs at September  30, 2007 was  approximately  $0.2  million.  Our reserve for
restructuring  costs  incurred  in years  prior to 2006 was  approximately  $2.6
million at September 30, 2007.

4. ACQUISITIONS AND DISPOSITIONS

      We seek to acquire complementary  companies that increase our market share
and provide us with additional customers,  technologies,  applications and sales
personnel.  All revenues  and related  costs from these  transactions  have been
included in our condensed  consolidated financial statements as of the effective
date of each acquisition.


                                       8
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

North America

      In July 2007, we acquired assets and the stock of Budget  Conferencing,  a
Canadian-based  provider of audio and Web conferencing  services.  We paid $19.8
million in cash at closing  and $0.6  million in  transaction  fees and  closing
costs. We funded the purchase  through our line of credit.  We followed SFAS No.
141, "Business Combinations" (SFAS No. 141), and approximately, $0.2 million has
been  allocated to acquired  fixed  assets,  $1.4 million has been  allocated to
other acquisition  liabilities,  $6.6 million has been allocated to identifiable
customer  lists,  $1.3 million has been allocated to trademarks and $1.4 million
has been allocated to a non-compete  agreement,  with the identifiable  customer
lists,  trademarks and non-compete  agreements  amortized over five-year  useful
lives.  In addition,  $2.9 million has been allocated to long-term  deferred tax
liabilities  to record the step-up in basis for the customer lists and developed
technology  purchased.  Because  we  have  not  finalized  the  working  capital
component of the purchase  price,  the residual  $15.2  million of the aggregate
purchase  price has been  allocated to goodwill,  which is subject to a periodic
impairment assessment in accordance with SFAS No. 142.

      In  September  2006,  we  acquired  assets  and  the  stock  of  Enunciate
Corporation,  a Canadian-based  provider of audio and Web conferencing services.
We paid  CA$29.0  million in cash at closing and CA$0.7  million in  transaction
fees  and  closing  costs.  We  funded  the  purchase  through  Canadian  dollar
borrowings on our line of credit and Canadian dollar cash balances available. We
followed SFAS No. 141, "Business Combinations" (SFAS No. 141), and approximately
CA$0.3 million has been  allocated to acquired fixed assets,  CA$0.3 million has
been allocated to acquired working capital, CA$6.8 million has been allocated to
identifiable  customer  lists  and  CA$0.2  million  has  been  allocated  to  a
non-compete  agreement,  with the  identifiable  customer lists and  non-compete
agreement amortized over five-year useful lives. The residual CA$22.1 million of
the aggregate purchase price has been allocated to goodwill, which is subject to
a periodic impairment assessment in accordance with SFAS No. 142.

      In January  2006,  we acquired all of the  outstanding  stock of Accucast,
Inc.,  a U.S.-based  provider of e-mail  communication  services.  We paid $12.3
million in cash at closing and $0.5 million in  transaction  and closing  costs.
Subsequent to closing,  we paid an additional  $3.0 million cash purchase  price
upon the achievement of certain  milestone  targets as specified in the purchase
agreement.  We funded the purchase through our line of credit.  We followed SFAS
No. 141, and  approximately  $0.2 million has been  allocated to acquired  fixed
assets, $0.1 million has been allocated to other acquisition  liabilities,  $2.0
million has been  allocated  to developed  technology  and $1.0 million has been
allocated to identifiable  customer lists, with the identifiable  customer lists
and developed  technology  amortized over five-year  useful lives.  In addition,
$1.2 million has been allocated to long-term  deferred tax liabilities to record
the step-up in basis for the customer lists and developed technology  purchased.
The residual $13.9 million of the aggregate purchase price has been allocated to
goodwill,  which is subject to a periodic  impairment  assessment  in accordance
with SFAS No. 142.

Asia Pacific

      In  November  2006,  we  acquired   certain  assets  and  assumed  certain
liabilities of EC Teleconferencing Pty Ltd. (ECT), an Australian-based  provider
of audio  and Web  conferencing  services.  We paid  AU$5.7  million  in cash at
closing and AU$0.4 million in transaction  fees and closing costs. We funded the
purchase through a  Yen-denominated  line of credit with Sumitomo Mitsui Banking
and  Australian   dollar  cash   available.   We  followed  SFAS  No.  141,  and
approximately  AU$0.1 million of the aggregate purchase price has been allocated
to acquired fixed assets,  AU$0.5 million has been allocated to acquired working
capital,  AU$1.4 million has been allocated to  identifiable  customer lists and
AU$0.1  million  has  been  allocated  to  a  non-compete  agreement,  with  the
identifiable  customer lists and non-compete  agreement amortized over five-year
useful lives.  The residual  AU$4.0 million of the aggregate  purchase price has
been  preliminarily  allocated  to  goodwill,  which is  subject  to a  periodic
impairment assessment in accordance with SFAS No. 142.

5. INDEBTEDNESS

      In April  2006,  we closed an  amendment  to our credit  facility,  with a
syndicate led by Bank of America,  N.A., which increased the amount available to
us under our line of credit from $180.0 million to $300.0  million,


                                       9
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

reduced the  applicable  percentages  across the pricing  grid and  extended the
maturity of the credit  facility from February 2009 to April 2011. The amendment
also provided for an uncommitted  accordion  feature  allowing for an additional
increase  of $100.0  million to $400.0  million of the  revolving  credit  line,
subject  to the terms and  conditions  as set forth in the  amendment.  In April
2007, we entered into an amendment to our credit  facility  which  inserted into
the applicable margin pricing grid a new tier based on a total leverage ratio of
2.5 times or greater, increased the permitted covenant level of the consolidated
total  leverage  ratio  and  amended  certain  other  provisions  to allow us to
purchase,  redeem or otherwise acquire up to an additional $150.0 million of our
common stock during 2007, of which approximately $122.6 million has been used to
fund our self-tender offer in the second quarter of 2007. The credit facility is
subject to customary  covenants  for secured  credit  facilities of this nature.
Certain of our material  domestic  subsidiaries  have guaranteed our obligations
under the credit facility,  which is secured by substantially  all of our assets
and the assets of our  material  domestic  subsidiaries.  In  addition,  we have
pledged as collateral  all of the issued and  outstanding  stock of our material
domestic subsidiaries and 65.0% of our material foreign subsidiaries. We believe
that as of September 30, 2007,  we were in  compliance in all material  respects
with the covenants  under our line of credit.  Proceeds  drawn under this credit
agreement may be used for refinancing of existing debt, working capital, capital
expenditures,  acquisitions  and other general  corporate  purposes.  The annual
interest rate applicable to borrowings under the line of credit,  at our option,
is the base rate (the greater of the federal funds rate plus 0.5% or the Bank of
America prime rate) or LIBOR,  plus,  in each case,  an applicable  margin which
will vary based upon our leverage  ratio at the end of each fiscal  quarter.  At
September 30, 2007,  the  applicable  margin with respect to base rate loans was
0.0%,  and the  applicable  margin  with  respect to LIBOR  loans was 1.50%.  At
September 30, 2007, our interest rate on 30-day LIBOR loans was 6.62875%.  As of
September  30,  2007,  we  had   approximately   $255.0  million  of  borrowings
outstanding  and  approximately  $1.7  million in letters of credit  outstanding
under our line of credit.

      In February 2006, we entered into a three-year $50.0 million interest rate
swap at a fixed rate of 4.99% plus  applicable  spread,  and in August 2006,  we
entered into two separate three-year $12.5 million interest rate swaps at 5.135%
and 5.159%, respectively. These swaps were exclusive of our applicable margin as
stated in our credit facility. We did not designate these interest rate swaps as
hedges and accounted for them in accordance  with SFAS No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities."  During the second quarter of
2007,  we  terminated   these  interest  rate  swaps  and  recorded  a  gain  of
approximately $0.4 million in "Interest  expense" in the accompanying  condensed
consolidated  statements  of  operations.  Changes  in fair  value  prior to the
termination  of these swaps were  approximately  $0.1 million for the six months
ended June 30, 2007 and are recognized in earnings.

      In August and September 2007, we entered into two $100.0 million  two-year
interest  rate swaps at a fixed  rate of  approximately  4.99%  plus  applicable
spread.  These swaps are  exclusive  of our  applicable  margin as stated in our
credit  facility.  We did not designate  these interest rate swaps as hedges and
will  account  for  them in  accordance  with  SFAS  No.  133,  "Accounting  for
Derivative  Instruments and Hedging  Activities."  Changes in fair value,  which
were  approximately  $0.2 million for the three months ended  September 30, 2007
are recognized in earnings.

      In March and September 2006, we entered into our  Yen-denominated  line of
credit for (Y)200.0 million and (Y)300.0  million,  respectively,  with Sumitomo
Mitsui  Banking  which have  interest  rates of 1.875% and 1.61%,  respectively,
through March 2008. In May 2007, the (Y)200.0 million line of credit was amended
to  (Y)300.0  million.  As of  September  30,  2007,  there were no  outstanding
borrowings under these facilities.

      At September 30, 2007, we had no other indebtedness outstanding except for
the  borrowings  under our lines of credit and capital  lease  obligations  with
principal balances totaling approximately $4.8 million.

6. EQUITY-BASED COMPENSATION

      On  January  1,  2006,   we  adopted,   using  the  modified   prospective
application,  SFAS 123(R),  "Share Based  Payment"  (SFAS  123(R)).  SFAS 123(R)
requires all  share-based  payments to employees,  including  grants of employee
stock options, to be recognized in the financial  statements based on their fair
values.  It did not change  the  accounting  guidance  for  share-based  payment
transactions with parties other than employees provided in SFAS 123, "Accounting
for Stock Based  Compensation"  (SFAS 123),  as  originally  issued and Emerging
Issues Task Force


                                       10
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(EITF) 96-18,  "Accounting for Equity  Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services."

      Upon our adoption of SFAS 123(R),  we began  recording  compensation  cost
related to the continued  vesting of all stock options that remained unvested as
of  January  1,  2006,  as well as for all new  stock  option  grants  after our
adoption date. The  compensation  cost to be recorded is based on the fair value
at the grant  date.  The  adoption  of SFAS 123(R) did not have an effect on our
recognition of compensation  expense relating to the vesting of restricted stock
grants.  SFAS 123(R)  required  the  elimination  of the  unearned  compensation
related to earlier awards against the appropriate equity accounts.

      Prior to the adoption of SFAS 123(R),  cash flows  resulting  from the tax
benefit related to equity-based compensation was presented in our operating cash
flows,  along with other tax cash flows,  in accordance  with the  provisions of
EITF 00-15,  "Classification  in the  Statement  of Cash Flows of the Income Tax
Benefit  Received by a Company upon Exercise of a  Nonqualified  Employee  Stock
Option,"  (EITF  00-15).  SFAS 123(R)  superseded  EITF 00-15,  amended SFAS 95,
"Statement  of Cash  Flows,"  and  requires  tax  benefits  relating  to  excess
equity-based  compensation  deductions  to be  prospectively  presented  in  our
statements of cash flows as financing cash inflows.

      The  effect  of  adopting  SFAS  123(R)  on  our  income  from  continuing
operations,  income from continuing  operations  before income taxes, net income
and basic and diluted  earnings  per share for the three and nine  months  ended
September  30, 2007 and 2006 and net cash provided by operating  activities  and
net cash (used in)  provided by financing  activities  for the nine months ended
September 30, 2007 and 2006 is as follows (in thousands, except per share data):


                                       11
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Three Months Ended             Nine Months Ended
                                                                         ------------------------      -------------------------
                                                                         September      September      September       September
                                                                         30, 2007       30, 2006       30, 2007        30, 2006
                                                                         --------       --------       --------        --------
<S>                                                                      <C>            <C>            <C>             <C>
Income from continuing operations, as reported                           $  8,768       $  6,717       $ 23,549        $ 20,383
Effect of adopting SFAS 123(R) on income from
    operations                                                                 66            335            435           1,367
                                                                         --------       --------       --------        --------
Pro forma income from continuing operations                              $  8,834       $  7,052       $ 23,984        $ 21,750
                                                                         ========       ========       ========        ========

Income from continuing operations before income taxes,
    as reported                                                          $ 13,652       $  9,488       $ 35,627        $ 33,647
Effect of adopting SFAS 123(R) on income before
    income taxes                                                              103            515            677           2,100
                                                                         --------       --------       --------        --------
Pro forma income from continuing operations before
    income taxes                                                         $ 13,755       $ 10,003       $ 36,304        $ 35,747
                                                                         ========       ========       ========        ========

Net income, as reported                                                  $  8,768       $  6,717       $ 23,549        $ 20,383
Effect of adopting SFAS 123(R) on net income                                   66            335            435           1,367
                                                                         --------       --------       --------        --------
Pro forma net income                                                     $  8,834       $  7,052       $ 23,984        $ 21,750
                                                                         ========       ========       ========        ========

Net income per share, as reported:
    Basic                                                                $   0.15       $   0.10       $   0.37        $   0.29
    Diluted                                                              $   0.15       $   0.10       $   0.36        $   0.29

Effect of adopting SFAS 123(R) on net income per share,
    basic and diluted                                                    $   0.00       $   0.00       $   0.01        $   0.02

Pro forma net income per share:
    Basic                                                                $   0.15       $   0.10       $   0.38        $   0.31
    Diluted                                                              $   0.15       $   0.10       $   0.37        $   0.31

Net cash provided by operating activities                                       ~              ~       $ 65,749        $ 41,093
Effect of adopting SFAS 123(R) on cash provided by
    operating activities                                                        ~              ~         (2,510)             --
                                                                                                       --------        --------
Pro forma net cash provided by operating activities                             ~              ~       $ 63,239        $ 41,093
                                                                                                       ========        ========

Net cash (used in) provided by financing activities                             ~              ~       $ (5,903)       $ 30,404
Effect of adopting SFAS 123(R) on cash (used in)
    provided by  financing activities                                           ~              ~          2,510              --
                                                                                                       --------        --------
Pro forma  net cash (used in) provided by financing
    activities                                                                  ~              ~       $ (3,393)       $ 30,404
                                                                                                       ========        ========
</TABLE>

      We may issue restricted stock awards,  stock options,  stock  appreciation
rights,  restricted  stock  units and  other  stock-based  awards to  employees,
directors,   non-employee   consultants   and  advisors   under  the   following
equity-based  compensation plans: our 1995 stock plan, 2000 directors stock plan
and 2004 long-term  incentive plan. Options issued under these plans, other than
the directors plan, may be either  incentive stock options,  which permit income
tax deferral upon exercise of options,  or nonqualified  options not entitled to
such deferral.  These stock plans are administered by the compensation committee
of our board of directors.

      A total of 9.65 million  shares of our common stock have been  reserved in
connection with awards under our 1995 plan. The maximum number of awards and the
maximum fair market value of such awards that may be granted under our 1995 plan
during any one calendar  year to any one grantee is 1.0 million  shares and $4.0
million, respectively.


                                       12
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      Only  non-employee  directors can participate in our directors plan. Under
our directors  plan, a total of 2.0 million shares of our common stock have been
reserved  in  connection  with  awards.  No more  than 10% of  awards  under our
directors  plan  shall be granted in the form of  restricted  stock,  subject to
antidilution adjustments, and only nonqualified options may be granted under our
directors plan.

      Under our 2004 plan,  a total of 4.0  million  shares of our common  stock
have been reserved in connection  with awards.  The maximum number of awards and
the maximum fair market value of such awards that may be granted  under our 2004
plan during any one calendar  year to any one grantee is 1.0 million  shares and
$8.0 million,  respectively.  No more than 50% of awards under our 2004 plan may
be granted in the form of "full value" awards, such as restricted stock, subject
to anti-dilution adjustments.

      As of  January 1, 2006,  we had issued two types of  equity-based  payment
arrangements: stock options and restricted stock awards.

Stock Options

      The following table  summarizes the stock options activity under our stock
plans from December 31, 2006 to September 30, 2007:

<TABLE>
<CAPTION>
                                                                                                 Weighted
                                                                                                  Average             Aggregate
                                                                             Options           Exercise Price      Intrinsic Value
                                                                            ----------         --------------      ---------------
<S>                                                                         <C>                      <C>              <C>
Options outstanding at December 31, 2006:                                    2,651,473              $7.25
   Granted                                                                          --               0.00
   Exercised                                                                (1,120,888)              6.47             $6,628,913
   Expired                                                                    (216,411)              8.37
                                                                            ----------              -----
Options outstanding at September 30, 2007                                    1,314,174              $7.73             $6,471,521
                                                                            ==========              =====             ==========

Options exercisable at September 30, 2007                                    1,190,659              $7.41             $6,241,251
                                                                            ==========              =====             ==========
</TABLE>

      For the three and nine months  ended  September  30, 2007,  we  recognized
equity-based  compensation  expense  of  approximately  $0.1  million  and  $0.7
million,  respectively,  related to the vesting of stock options.  For the three
and  nine  months  ended   September  30,  2006,   we  recognized   equity-based
compensation   expense  of   approximately   $0.5  million  and  $2.1   million,
respectively, related to the vesting of stock options. As of September 30, 2007,
we had  approximately  $0.6  million of unvested  stock  options,  which we will
record in our  statements  of  operations  over a weighted  average  recognition
period of less than two years.

Restricted Stock

      The following  table  summarizes  the activity of restricted  stock awards
under our stock plans from December 31, 2006 to September 30, 2007:

<TABLE>
<CAPTION>
                                                                          Weighted Average       Aggregate
                                                          Shares               Price          Intrinsic Value
                                                        ---------         ----------------    ---------------
<S>                                                      <C>                     <C>             <C>
Outstanding at December 31, 2006                        2,498,168              $ 9.00
   Granted                                                753,158               12.00
   Vested/released                                       (726,775)               9.58            $8,849,630
   Forfeited                                              (98,667)               8.31
                                                        ---------              ------
Outstanding at September 30, 2007                       2,425,884              $ 9.79
                                                        =========              ======
</TABLE>


                                       13
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      For the three and nine months  ended  September  30, 2007,  we  recognized
equity-based  compensation  expense  of  approximately  $2.5 and  $7.2  million,
respectively, related to the vesting of restricted stock. For the three and nine
months ended September 30, 2006, we recognized equity-based compensation expense
of  approximately  $2.2 million and $5.7 million,  respectively,  related to the
vesting of restricted  stock.  As of September  30, 2007,  we had  approximately
$21.5  million  of  unvested  restricted  stock  which  we  will  record  in our
statements of operations over a weighted average recognition period of less than
five years.

7. EARNINGS PER SHARE

Basic and Diluted Net Income Per Share

      Basic  earnings per share is computed by dividing net income  available to
common  shareholders by the weighted average number of common shares outstanding
during the period. The weighted average number of common shares outstanding does
not include any  potentially  dilutive  securities  or any  unvested  restricted
shares of common stock. These unvested restricted shares, although classified as
issued and  outstanding  at  September  30,  2007 and  December  31,  2006,  are
considered  contingently returnable until the restrictions lapse and will not be
included in the basic net income (loss) per share  calculation  until the shares
are vested.

      Diluted  net income per share  gives  effect to all  potentially  dilutive
securities.  Our  outstanding  stock  options,  unvested  restricted  shares and
warrants are potentially  dilutive  securities  during the three and nine months
ended  September  30, 2007 and 2006.  The  difference  between basic and diluted
weighted  average shares  outstanding  was the dilutive effect of stock options,
unvested  restricted  shares and  warrants  computed as follows  (in  thousands,
except for share data):

<TABLE>
<CAPTION>
                                                          Three Months Ended                        Three Months Ended
                                                          September 30, 2007                        September 30, 2006
                                                 -------------------------------------     -------------------------------------
                                                               Weighted       Earnings                  Weighted        Earnings
                                                   Net          Average         Per          Net         Average          Per
                                                 Income          Share         Share       Income         Share          Share
                                                 ------       ----------      --------     ------       ----------      --------
<S>                                              <C>          <C>              <C>         <C>          <C>              <C>
Basic EPS                                        $8,768       59,327,119       $0.15       $6,717       67,918,830       $0.10
Effect of dilutive securities:
    Stock options                                     ~          462,893           ~            ~          548,882           ~
    Unvested restricted shares                        ~          573,872           ~            ~          143,410           ~
    Warrants                                          ~           38,156           ~            ~               --           ~
                                                              ----------                                ----------
Diluted EPS                                      $8,768       60,402,040       $0.15       $6,717       68,611,122       $0.10
                                                 ======       ==========       =====       ======       ==========       =====
</TABLE>

<TABLE>
<CAPTION>
                                                           Nine Months Ended                        Nine Months Ended
                                                           September 30, 2007                       September 30, 2006
                                                --------------------------------------     -------------------------------------
                                                               Weighted       Earnings                  Weighted        Earnings
                                                   Net          Average         Per          Net         Average          Per
                                                 Income          Share         Share       Income         Share          Share
                                                -------       ----------      --------     ------       ----------      --------
<S>                                             <C>           <C>              <C>         <C>          <C>              <C>
Basic EPS                                       $23,549       63,669,181       $0.37        $20,383     69,374,518       $0.29
Effect of dilutive securities:
    Stock options                                                623,770                                   609,214
    Unvested restricted shares                                   626,647                                   163,163
    Warrants                                                      29,437                                        --
                                                              ----------                                ----------
Diluted EPS                                     $23,549       64,949,035       $0.36        $20,383     70,146,895       $0.29
                                                =======       ==========       =====        =======     ==========       =====
</TABLE>


                                       14
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      The weighted  average diluted common shares  outstanding for the three and
nine months ended September 30, 2007 excludes the effect of approximately 71,000
and 42,000,  respectively,  of out-of-the-money options, warrants and restricted
shares because their effect would be anti-dilutive. The weighted average diluted
common shares outstanding for the three and nine months ended September 30, 2006
excludes the effect of approximately 2.4 million and 2.2 million,  respectively,
of out-of-the-money  options and restricted shares because their effect would be
anti-dilutive.

8. COMMITMENTS AND CONTINGENCIES

Asset retirement obligation

      In January 2006, we were notified by our current  landlord of their intent
to exercise a clause in our existing  corporate  headquarters  leases to require
certain site remediation costs to the space prior to us vacating in August 2007.
As a result,  in accordance with SFAS No. 143,  "Accounting for Asset Retirement
Obligations"  (SFAS  No.  143),  we  recorded  approximately  $0.8  million  for
remediation  costs at December 31, 2005. In 2006, we decreased  this estimate of
site remediation  costs by $0.3 million through  negotiations  with our landlord
and  contractors.  We anticipate  the majority of this  obligation  will be paid
during 2007. The remaining balance in this accrual at September 30, 2007 is $0.5
million.

Litigation and claims

      We have several  litigation  matters pending,  including matters described
below, which we are defending vigorously.  Due to the inherent  uncertainties of
the  litigation  process and the judicial  system,  we are unable to predict the
outcome  of  such  litigation  matters.  If the  outcome  of one or more of such
matters  is  adverse  to us,  it could  have a  material  adverse  effect on our
business, financial condition and results of operations.

      On February 2, 2007,  the United  States Court of Appeals for the Eleventh
Circuit  affirmed the district  court's order granting of our motion for summary
judgment in a lawsuit  alleging  violations of securities laws filed in November
1998  against us and  certain of our  officers  and  directors.  Plaintiffs  had
acquired our common stock in connection with our acquisition of Xpedite Systems,
Inc.  (n/k/a  Xpedite  Systems,  LLC).  Plaintiffs  sought  undisclosed  damages
together  with  pre-and  post-judgment  interest,  punitive  damages,  costs and
attorneys' fees. On February 23, 2007, plaintiffs filed a petition for rehearing
en banc and for panel rehearing with the Eleventh Circuit.  On May 30, 2007, the
Eleventh  Circuit denied both of plaintiffs'  petitions.  The plaintiffs did not
seek any further  appeals,  and the time to do so has now  expired.  We consider
this matter closed.

      On August 21, 2006, a lawsuit was filed in the U.S. District Court for the
Eastern District of Texas by Ronald A. Katz Technology  Licensing,  L.P. against
three  conferencing   service   providers,   including  us,  alleging  that  the
defendants'  "automated  telephone  conferencing  systems  that  enable  [their]
customers to perform  multiple-party  meetings and various other  functions over
the  telephone"  infringe  six  of  plaintiff's  patents.  The  complaint  seeks
undisclosed  monetary damages,  together with pre- and  post-judgment  interest,
treble damages for what is alleged to be willful  infringement,  attorneys' fees
and costs and  injunctive  relief.  On October  16,  2006,  we filed our answer,
affirmative  defenses  and  counterclaim  to the  complaint,  including  seeking
declaratory  judgment of noninfringement,  invalidity and  unenforceability  and
attorneys' fees and costs. On January 25, 2007,  plaintiff amended its complaint
to also add our  subsidiary,  American  Teleconferencing  Services,  Ltd.,  as a
party. On March 20, 2007, a multidistrict  litigation  panel granted a motion to
consolidate 25 pending  infringement suits,  including our suit, brought by Katz
against  various  defendants to the District Court in  California.  Discovery is
on-going.

      On May 18,  2007,  Gibson & Co.  Ins.  Brokers,  Inc.  served  an  amended
complaint  upon us and our  subsidiary,  Xpedite,  in a purported  class  action
entitled,  Gibson & Co. Ins. Brokers,  Inc., et al. v. The Quizno's Corporation,
et al.,  pending in U.S.  District Court for the Central District of California.
The  underlying  complaint  alleges that  Quizno's  sent  unsolicited  facsimile
advertisements  on or  about  November  1,  2005  in  violation  of the  federal
Telephone  Consumer  Protection  Act of 1991,  as amended,  and seeks damages of
$1,500 per facsimile for alleged  willful  conduct in sending of the faxes.  The
court has also granted Quizno's motion to file a third party


                                       15
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

complaint to add us and Xpedite as defendants. On June 26, 2007, we answered the
plaintiff's  amended complaint,  including  asserting  cross-claims  against the
Quizno's  defendants.  On June 29,  2007,  the Quizno's  defendants  filed their
answer and asserted  cross-claims  against us and Xpedite. On July 31, 2007, the
court entered an order in which it granted certain Quizno's  defendants'  motion
to dismiss  and denied the motion with  respect to other  Quino's  entities.  On
September 7, 2007, plaintiff proceeded to file another amended complaint against
the Quizno's defendants, Growth Partners (Quizno's consultant),  Xpedite and us.
On September 21, 2007, we filed our answer and affirmative  defenses. On October
1, 2007,  certain  Quizno's  defendants filed a motion to dismiss which is under
consideration by the Court.  When that motion is decided,  cross-claims  will be
filed by Xpedite and us. The case is  currently in  discovery,  and no class has
yet been  certified,  with the court granting  plaintiff's  motion to extend the
class certification deadline to November 30, 2007. We were served with non-party
subpoenas for certain  documents and information  prior to being served with the
amended complaint, for which we filed objections and provided certain responsive
documents.  We have asserted indemnity rights against our customer  Quizno's,  a
defendant in this case, and insurance coverage against our insurer. To date, our
indemnity  claim  against our customer  Quizno's has not been  resolved  through
litigation or otherwise. Our insurer has agreed to participate in the defense of
Xpedite and us in connection with the plaintiff's claims against Xpedite and us,
subject to certain reservations of rights and the terms of the policy, including
policy limits and deductibles.  We intend to vigorously defend ourselves against
these claims.  However, due to the inherent uncertainties of litigation,  we are
unable to predict the outcome of this matter,  and an adverse outcome could have
a material effect on our business, financial condition and results of operation.

      We are also  involved in various other legal  proceedings  which we do not
believe  will  have a  material  adverse  effect  upon our  business,  financial
condition or results of operations, although no assurance can be given as to the
ultimate outcome of any such proceedings.

9. SEGMENT REPORTING

      Beginning  in the  fourth  quarter of 2006,  we  realigned  our  reporting
segments  to be  consistent  with  the way we now  manage  our  operations  on a
geographic regional basis, with reportable segments in North America, Europe and
Asia Pacific.  We will no longer report results under our former  Conferencing &
Collaboration and Data Communications  segments,  consistent with the completion
of our One Company initiative.  We have changed our reportable segments in order
to  better  reflect  the way in which  areas of  management  responsibility  are
divided and the way our  management  monitors and reviews our financial  results
and  performance.  We have  reclassified  prior year  results in this  report to
conform to our new segment  presentation.  Our  unallocated  corporate costs are
included in our North America segment.

      Information  concerning the operations in these reportable  segments is as
follows (in millions):

<TABLE>
<CAPTION>
                                                                           Three Months Ended                  Nine Months Ended
                                                                              September 30,                       September 30,
                                                                        ------------------------            ------------------------
                                                                         2007              2006              2007              2006
                                                                        ------            ------            ------            ------
<S>                                                                     <C>               <C>               <C>               <C>
Revenues:
Revenues from continuing operations:
    North America                                                       $ 89.8            $ 78.2            $265.8            $238.0
    Europe                                                                24.4              22.4              74.7              69.7
    Asia Pacific                                                          25.6              21.5              73.0              61.7
                                                                        ------            ------            ------            ------
                                                                        $139.8            $122.1            $413.5            $369.4
                                                                        ======            ======            ======            ======
Income:
Income from continuing operations:
    North America                                                       $  5.5            $  3.1            $ 13.8            $ 13.4
    Europe                                                                 1.3               2.0               5.9               3.9
    Asia Pacific                                                           2.0               1.6               3.8               3.1
                                                                        ------            ------            ------            ------
                                                                        $  8.8            $  6.7            $ 23.5            $ 20.4
                                                                        ======            ======            ======            ======
</TABLE>


                                       16
<PAGE>

                 PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                                        Nine Months Ended
                                                 ------------------------------
                                                 September 30,     December 31,
                                                     2007              2006
                                                 -------------     ------------
Identifiable Assets:
    North America                                   $482.5            $439.7
    Europe                                            81.9              71.4
    Asia Pacific                                      44.0              38.2
                                                    ------            ------
                                                    $608.4            $549.3
                                                    ======            ======

10. STATEMENT OF CASH FLOW INFORMATION

      Supplemental disclosure of cash flow information (in thousands):

<TABLE>
<CAPTION>
                                                      Three Months Ended           Nine Months Ended
                                                         September 30,               September 30,
                                                     --------------------         --------------------
                                                      2007          2006           2007         2006
                                                     ------        ------         ------       -------
<S>                                                  <C>           <C>            <C>          <C>
Cash paid during the year for:
    Interest                                         $4,433        $1,941         $9,433       $ 5,231
    Income taxes, net                                $2,762        $3,805         $6,355       $14,565
</TABLE>

11. SUBSEQUENT EVENTS

      In November 2007, our chief  executive  officer,  Boland T. Jones,  repaid
approximately  $0.4 million of his outstanding loans to us, which are classified
as "Notes  receivable,  shareholder"  on the face of the condensed  consolidated
balance sheets.  The principal amount outstanding under all remaining loans owed
to us by Mr. Jones is approximately $1.7 million as of November 6, 2007.

      In November 2007, we acquired all of the outstanding  equity  interests in
NetConnect  Systems  AS,  a  Norwegian-based   conferencing  services  provider,
offering  services  under the Meet24  brand.  We paid  approximately  NOK $150.0
million in cash at closing.  We funded the purchase through cash on hand and our
existing credit  facility.  We are in the process of completing our valuation of
certain intangible assets in accordance with SFAS No. 141.


                                       17
<PAGE>

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

OVERVIEW

      We  are a  global  provider  of  on-demand  business  process  improvement
solutions.  Our Premiere Global Communications  Operating System (PGiCOS) offers
hundreds  of  industry  specific  business  applications  within  the  following
solutions:  Conferencing,  Desktop Fax, Document Delivery,  Accounts  Receivable
Management, Notifications & Reminders and eMarketing.

      Key highlights of our financial  accomplishments  during the third quarter
of 2007 include:

      o     Grew  consolidated  revenues  by  approximately  14.5% in the  third
            quarter of 2007 compared to the third quarter of 2006;

      o     Continued  to grow  revenue from our  Conferencing  Solutions,  with
            approximately  30.3%  growth in this  solution  set  compared to the
            comparable prior year period; and

      o     Grew cash flows  provided by operating  activities by  approximately
            133.9% compared to the third quarter of 2006.

      For the remainder of 2007, we plan to continue to focus on our initiatives
to move all of our company's  capabilities  online and to continue to refine and
improve our market  strategy,  which we believe will assist us in our objectives
of increased solutions-based revenue growth and improved profitability.

      We  believe  that  our  online  initiative,  which  will  make  all of our
solutions  and  applications  accessible  through a single  point of presence at
PGiConnect.com,  opens a new sales channel that will improve our revenue  growth
by  increasing  our  geographic  and  customer  reach.  We believe that our more
focused  cross-selling  efforts under our unified sales  management team and the
systematic  introduction  of PGiCOS to all of our enterprise  customers to drive
adoption of  additional  solutions  per customer  will help  accelerate  revenue
growth in our core solution  sets.  In addition,  by continuing to drive many of
our customer service and support capabilities into a self-serve Web environment,
we believe we will  improve our  customer  experience  and  generate  additional
efficiencies   throughout  our  business.   We  believe  that  over  time  these
efficiencies  will help us reduce our service and support  costs as a percent of
revenues and further our goal of improving profitability.

      We also  intend to explore  new  packaging  and  pricing  options  for our
solutions,   including  offering  subscription-based  and  license  pricing  and
application  bundles  targeted at specific  vertical  markets,  which we plan to
continue to introduce  through our Web sales channel.  We believe that a gradual
migration over time towards this type of pricing is consistent  with the pricing
of other on-demand services and will lead to more predictable revenues.

      We also plan to improve our  profitability  by  continuing to automate our
internal  processes  and by focusing our  development  efforts on  continuing to
enhance open access to our platform and solutions  and on more highly  automated
applications  that have  quicker  sales  cycles  and  implementation  times.  We
recently launched a developer community within PGiConnect.com and have partnered
with  third  party  developers  and  systems  integrators  to assist us in these
efforts.

      We believe our success against these objectives will enable us to continue
to increase our market share and to improve  shareholder  value  throughout  the
remainder of 2007.

      The results of  operations  for the three and nine months ended  September
30, 2007,  are not  indicative  of the results that may be expected for the full
fiscal year of 2007 or for any other interim period.  The financial  information
presented  herein should be read in  conjunction  with our annual report on Form
10-K for the year ended  December  31,  2006,  which  includes  information  and
disclosures  not included  herein.  All  significant  intercompany  accounts and
transactions have been eliminated in consolidation.


                                       18
<PAGE>

RESULTS OF OPERATIONS

      Beginning  in the  fourth  quarter of 2006,  we  realigned  our  reporting
segments  to be  consistent  with  the way we now  manage  our  operations  on a
geographic regional basis. Our new management structure is a matrix organization
with single  functional  management  worldwide  and regional  management  in our
current  reportable  segments in North  America,  Europe and Asia Pacific.  As a
result, we no longer report our financial results under our former  Conferencing
& Collaborations and Data Communications business segments. We have reclassified
prior year  results in this  report to  conform  to our new  geographic  segment
presentation.  Our unallocated corporate costs are included in our North America
segment.

      The following  table  presents  certain  financial  information  about our
segments for the periods presented (in millions),  with amortization expense and
asset impairments allocated to the appropriate geographic segment:

<TABLE>
<CAPTION>
                                                                           Three Months Ended                  Nine Months Ended
                                                                              September 30,                       September 30,
                                                                        ------------------------            ------------------------
                                                                         2007              2006              2007              2006
                                                                        ------            ------            ------            ------
<S>                                                                     <C>               <C>               <C>               <C>
Revenues:
Revenues from continuing operations:
    North America                                                       $ 89.8            $ 78.2            $265.8            $238.0
    Europe                                                                24.4              22.4              74.7              69.7
    Asia Pacific                                                          25.6              21.5              73.0              61.7
                                                                        ------            ------            ------            ------
                                                                        $139.8            $122.1            $413.5            $369.4
                                                                        ======            ======            ======            ======
Income:
Income from continuing operations:
    North America                                                       $  5.5            $  3.1            $ 13.8            $ 13.4
    Europe                                                                 1.3               2.0               5.9               3.9
    Asia Pacific                                                           2.0               1.6               3.8               3.1
                                                                        ------            ------            ------            ------
                                                                        $  8.8            $  6.7            $ 23.5            $ 20.4
                                                                        ======            ======            ======            ======
</TABLE>

Revenues

      Consolidated revenues from continuing operations increased 14.5% to $139.8
million for the three  months  ended  September  30, 2007  compared  with $122.1
million for the same period in 2006 and increased 11.9% to 413.5 million for the
nine months ended  September 30, 2007 compared with $369.4  million for the same
period in 2006.

      For the three  months ended  September  30, 2007 and 2006,  North  America
revenue was 64.2% and 64.1% of consolidated revenues,  respectively, and for the
nine months ended  September 30, 2007 and 2006,  North America revenue was 64.3%
and 64.4% of  consolidated  revenues,  respectively.  For the three months ended
September  30, 2007 and 2006,  North  America  experienced  a 14.7%  increase in
revenue  from $78.2  million to $89.8  million,  and for the nine  months  ended
September 30, 2007 and 2006,  North  America  experienced  an 11.7%  increase in
revenue from $238.0 million to $265.8  million.  These increases in revenue were
attributable  primarily to organic growth in our Conferencing  Solutions and our
acquisitions  of Enunciate,  Budget and Accucast,  offset in part by declines in
our broadcast fax


                                       19
<PAGE>

revenue.  Our Conferencing  Solutions revenue in North America was approximately
$67.7  million and $53.5  million for the three months ended  September 30, 2007
and 2006,  respectively,  and $199.1  million  and $161.1  million  for the nine
months  ended  September  30, 2007 and 2006,  respectively.  Our  broadcast  fax
revenue in North America was approximately $4.9 million and $6.6 million for the
three months ended September 30, 2007 and 2006, respectively,  and $15.7 million
and $22.7 million for the nine months ended September 30, 2007, respectively.

      For the three months ended September 30, 2007 and 2006, Europe revenue was
17.5% and 18.3% of consolidated revenues,  respectively, and for the nine months
ended  September  30,  2007 and  2006,  Europe  revenue  was  18.1% and 18.9% of
consolidated  revenues,  respectively.  For the three months ended September 30,
2007 and 2006, Europe  experienced a 9.2% increase in revenue from $22.4 million
to $24.4  million,  and for the nine months ended  September  30,  2007,  Europe
experienced  a 7.2%  increase in revenue  from $69.7  million to $74.7  million.
These increases in revenue were attributable  primarily to organic growth in our
Conferencing  Solutions and the  strengthening  of the Euro and British Pound to
the U.S.  dollar,  offset in part by  declines  in our  broadcast  fax  revenue.
Fluctuations   in  foreign   exchange   rates  resulted  in  revenue  growth  of
approximately  $1.7  and $5.5  million  for the  three  and  nine  months  ended
September 30, 2007,  respectively.  Our Conferencing Solutions revenue in Europe
was  approximately  $11.0  million and $7.8  million for the three  months ended
September 30, 2007 and 2006,  respectively,  and $31.6 million and $22.4 million
for the nine  months  ended  September  30,  2007 and  2006,  respectively.  Our
broadcast fax revenue in Europe was approximately  $5.5 million and $6.4 million
for the three months ended September 30, 2007 and 2006, respectively,  and $18.4
million and $22.7 million for the nine months ended September 30, 2007 and 2006,
respectively.

      For the three  months  ended  September  30, 2007 and 2006,  Asia  Pacific
revenue was 18.3% and 17.6% of consolidated revenues,  respectively, and for the
nine months ended  September 30, 2007 and 2006,  Asia Pacific  revenue was 17.6%
and 16.7% of  consolidated  revenues,  respectively.  For the three months ended
September  30,  2007 and 2006,  Asia  Pacific  experienced  a 19.4%  increase in
revenue  from  $21.5  million to $25.6  million  and for the nine  months  ended
September 30, 2007,  Asia Pacific  experienced an 18.2% increase in revenue from
$61.7 million to $73.0  million.  These  increases in revenue were  attributable
primarily to organic growth in our Conferencing Solutions,  the strengthening of
the  Australian  Dollar  and  Japanese  Yen to the U.S.  dollar,  growth  in our
maritime  Notifications & Reminders solution (which we resale from a third party
to shipping companies in this region) and our ECT acquisition, offset in part by
declines in our broadcast fax revenue.  Our  Conferencing  Solutions  revenue in
Asia  Pacific was  approximately  $11.3  million and $7.8  million for the three
months ended  September 30, 2007 and 2006,  respectively,  and $30.8 million and
$21.0  million  for  the  nine  months  ended   September  30,  2007  and  2006,
respectively.  Our broadcast fax revenue in Asia Pacific was approximately  $8.2
million and $8.3 million for the three months ended September 30, 2007 and 2006,
respectively,  and $24.3  million and $26.0  million  for the nine months  ended
September 30, 2007 and 2006, respectively.

Cost of revenues

      Consolidated cost of revenues  increased 15.9% to $57.4 million from $49.6
million and increased to 41.1% from 40.6% of consolidated revenues for the three
months ended  September 30, 2007 and 2006,  respectively.  Consolidated  cost of
revenues  increased 14.2% to $168.1 million from $147.2 million and increased to
40.7% from 39.8% of  consolidated  revenues for the nine months ended  September
30, 2007 and 2006, respectively.

      For the three months ended September 30, 2007 and 2006, North America cost
of revenue  was 40.5% and 39.9% of segment  revenue,  respectively,  and for the
nine months ended September 30, 2007 and 2006, North America cost of revenue was
39.7% and 38.3% of segment  revenue,  respectively.  For the three  months ended
September 30, 2007 and 2006, North America  experienced a 16.6% increase in cost
of revenue from $31.2  million to $36.4  million,  and for the nine months ended
September  30,  2007,  North  America  experienced  a 15.7%  increase in cost of
revenue  from $91.2  million to $105.5  million.  North  America cost of revenue
increased  as a  percentage  of segment  revenue  primarily as a result of price
compression in our  Conferencing  Solutions and broadcast fax services in excess
of cost  reductions  in the  underlying  telecommunications  network,  a greater
percentage of resold Web conferencing  services that carry an inherently  higher
cost of  revenue,  further  investment  in our  Conferencing  Solutions  support
operations,   offset   in  part  by  early   stage   savings   related   to  our
non-conferencing  solutions  operating support functions.  North America cost of
revenue  increased in dollar  amount as a result of minute  volume growth in our
Conferencing Solutions.

      For the three months  ended  September  30, 2007 and 2006,  Europe cost of
revenue was 36.9% and 35.7% of segment revenue,  respectively,  and for the nine
months ended  September 30, 2007 and 2006,  Europe cost of revenue was 35.9% and
37.8% of segment revenue, respectively. For the three months ended September 30,
2007 and 2006, Europe  experienced a 12.9% increase in cost of revenue from $8.0
million to $9.0  million,  and for the nine months  ended  September  30,  2007,
Europe  experienced  a 1.8%  increase in cost of revenue  from $26.3  million to
$26.8  million.  For the three months ended  September 30, 2007,  Europe cost of
revenue  increased as a percentage  of segment  revenue as a result of temporary
duplicative  re-engineering costs associated with our non-conferencing solutions
operating  support  functions.  For the nine months  ended  September  30, 2007,
Europe cost of revenue decreased as a percentage of segment revenue primarily as
a result of growth in higher margin Conferencing Solutions and declines in lower
margin  broadcast  fax  services.  In contrast to North  America,  broadcast fax
services in Europe have an  inherently  lower gross profit margin as a result of
lower revenue  yields and higher  underlying  telecommunications  network costs.
Europe cost of revenue increased in dollar amount in both comparative periods


                                       20
<PAGE>

as  a  result  of  minute  volume  growth  in  our  Conferencing  Solutions  and
duplicative  costs  associated  with our  non-conferencing  solutions  operating
support functions.

      For the three months ended  September 30, 2007 and 2006, Asia Pacific cost
of revenue  was 46.9% and 48.3% of segment  revenue,  respectively,  and for the
nine months ended  September 30, 2007 and 2006, Asia Pacific cost of revenue was
49.1% and 48.1% of segment  revenue,  respectively.  For the three  months ended
September 30, 2007 and 2006,  Asia Pacific  experienced a 15.8% increase in cost
of revenue from $10.4  million to $12.0  million,  and for the nine months ended
September 30, 2007, Asia Pacific experienced a 20.6% increase in cost of revenue
from $29.7 million to $35.8  million.  For the three months ended  September 30,
2007, Asia Pacific cost of revenues decreased as a percentage of segment revenue
as a result of initial  network  cost  savings  related to  upgrades  in our fax
delivery  platform.  For the nine months ended  September 30, 2007, Asia Pacific
cost of revenue  increased as a  percentage  of segment  revenue  primarily as a
result of growth in our lower margin maritime Notifications & Reminders solution
and price compression in our broadcast fax services, offset in part by growth in
our higher  margin  Conferencing  Solutions  and initial  network  cost  savings
related to upgrades in our fax delivery platform. The cost of revenue associated
with our maritime  Notifications & Reminders  solution is inherently higher than
other solutions  offered in the region because of its resale costs. Asia Pacific
cost of revenue increased in dollar amount as a result of growth in our maritime
Notifications & Reminders solution and costs associated with the introduction of
operator-assisted conferencing services.

Selling and marketing

      Consolidated  selling  and  marketing  expenses  increased  8.8% to  $34.1
million from $31.4  million and  decreased  to 24.4% from 25.6% of  consolidated
revenues for the three months ended  September 30, 2007 and 2006,  respectively.
Consolidated  selling and marketing  expenses  increased  7.2% to $105.0 million
from $97.9  million and decreased to 25.4% from 26.5% of  consolidated  revenues
for the nine months ended September 30, 2007 and 2006, respectively.

      For the three  months ended  September  30, 2007 and 2006,  North  America
selling  and  marketing   expense  was  23.7%  and  26.6%  of  segment  revenue,
respectively,  and for the nine months ended September 30, 2007 and 2006,  North
America  selling and marketing  expense was 25.1% and 27.3% of segment  revenue,
respectively.  For the three months  ended  September  30, 2007 and 2006,  North
America  experienced a 2.2% increase in selling and marketing expense from $20.8
million to $21.3  million,  and for the nine months  ended  September  30, 2007,
North America  experienced a 2.6% increase in selling and marketing expense from
$65.0 million to $66.7  million.  For the three and nine months ended  September
30,  2007,  the  increase  in North  America  selling and  marketing  expense is
primarily  the result of our  acquisition  of Budget,  Enunciate  and  Accucast,
increased  costs to  optimize  Web sales and  increased  sales  headcount.  This
increase was offset in part by marketing  and  advertising  expenses  during the
prior year associated with our One Company initiative.

      For the three months ended September 30, 2007 and 2006, Europe selling and
marketing expense was 31.2% and 26.4% of segment revenue,  respectively, and for
the nine months ended September 30, 2007 and 2006,  Europe selling and marketing
expense  was 30.4% and 27.2% of  segment  revenue,  respectively.  For the three
months ended September 30, 2007 and 2006, Europe experienced a 28.8% increase in
selling and  marketing  expense from $5.9 million to $7.6  million,  and for the
nine months ended  September 30, 2007,  Europe  experienced a 19.7%  increase in
selling and marketing expense from $19.0 million to $22.7 million. Approximately
half of the Europe selling and marketing expense increase is associated with the
strengthening  of the Euro and  British  Pound  against  the  U.S.  dollar.  The
remaining  half of this increase is associated  with increased  sales  headcount
associated with our new solutions sales strategy  implemented  during the fourth
quarter of 2006 and additional investment in our Conferencing Solutions.

      For the three  months  ended  September  30, 2007 and 2006,  Asia  Pacific
selling  and  marketing   expense  was  20.4%  and  21.7%  of  segment  revenue,
respectively,  and for the nine months ended  September 30, 2007 and 2006,  Asia
Pacific  selling and marketing  expense was 21.3% and 22.6% of segment  revenue,
respectively.  For the three  months  ended  September  30, 2007 and 2006,  Asia
Pacific  experienced a 12.5% increase in selling and marketing expense from $4.7
million to $5.2 million,  and for the nine months ended September 30, 2007, Asia
Pacific  experienced  an 11.6%  increase in selling and  marketing  expense from
$13.9  million to $15.6  million.  The  increase


                                       21
<PAGE>

in Asia Pacific selling and marketing  expense is primarily  associated with our
ECT  acquisition  and  increased  sales  headcount  associated  with  additional
investment in our Conferencing Solutions.

Research and development

      Consolidated  research and  development  expenses  increased 16.3% to $3.6
million  from $3.1  million  and  increased  to 2.6%  from 2.5% of  consolidated
revenues for the three months ended  September 30, 2007 and 2006,  respectively.
Consolidated  research and development expenses increased 18.8% to $10.4 million
from $8.8 million and increased to 2.5% from 2.4% of  consolidated  revenues for
the nine months ended  September 30, 2007 and 2006,  respectively.  Research and
development  costs  associated  with  product  development  are  capitalized  as
internally developed software, whereas management overhead, facilities costs and
maintenance activities are expensed as research and development.  We capitalized
software  development  costs of approximately  $4.3 million and $2.5 million for
the  three  months  ended  September  30,  2007  and  2006,  respectively,   and
approximately $10.0 million and $9.9 million for the nine months ended September
30,  2007 and 2006,  respectively.  The  majority of  research  and  development
expenses  were  incurred  in  North  America.   The  increase  in  research  and
development  expenses is primarily associated with additional resources invested
in the maintenance and support of our Conferencing Solutions and our e-Marketing
Solutions (primarily associated with our Accucast acquisition).  The increase in
capitalized  software  development costs is associated  primarily with increased
product development within all of our core solution sets.

General and administrative

      Consolidated  general and administrative  expenses increased 3.1% to $15.9
million from $15.4  million and  decreased  to 11.4% from 12.6% of  consolidated
revenues for the three months ended  September 30, 2007 and 2006,  respectively.
Consolidated  general  and  administrative  expenses  increased  13.1%  to $49.8
million from $44.0  million and  increased  to 12.0% from 11.9% of  consolidated
revenues for the nine months ended September 30, 2007 and 2006, respectively.

      For the three  months ended  September  30, 2007 and 2006,  North  America
general  and  administrative  expense  was 11.9% and 14.4% of  segment  revenue,
respectively,  and for the nine months ended September 30, 2007 and 2006,  North
America  general  and  administrative  expense  was 13.3%  and 13.4% of  segment
revenue,  respectively.  For the three months ended September 30, 2007 and 2006,
North America experienced a 4.9% decrease in general and administrative  expense
from $11.2 million to $10.7 million, and for the nine months ended September 30,
2007, North America  experienced a 10.9% increase in general and  administrative
expense  from $31.8  million to $35.3  million.  The  decrease in North  America
general and administrative expense for the three months ended September 30, 2007
was primarily  associated  with lower bad debt expense of $1.4 million and lower
stock option  expenses,  offset in part by increased  spending in facilities and
legal fees  associated  with certain  matters  disclosed in  "--Commitments  and
Contingencies."  The increase in general and  administrative  costs for the nine
months ended  September 30, 2007 was primarily  associated  with $2.9 million in
proxy-related costs.

      For the three months ended September 30, 2007 and 2006, Europe general and
administrative expense was 12.0% and 11.4% of segment revenue, respectively, and
for the nine  months  ended  September  30,  2007 and 2006,  Europe  general and
administrative expense was 11.5% and 10.7% of segment revenue, respectively. For
the three months ended September 30, 2007 and 2006,  Europe  experienced a 14.7%
increase  in  general  and  administrative  expense  from $2.6  million  to $2.9
million,  and for the nine months ended September 30, 2007, Europe experienced a
15.8% increase in general and  administrative  expense from $7.4 million to $8.6
million.  Approximately  half of the Europe general and  administrative  expense
increase is  associated  with the  strengthening  of the Euro and British  Pound
against the U.S. dollar.  The remaining half of this increase is associated with
duplicative costs associated with efforts to consolidate our former Conferencing
&   Collaboration   and  Data   Communications   operating   segments'   finance
organizations under one regional organization.

      For the three  months  ended  September  30, 2007 and 2006,  Asia  Pacific
general  and  administrative  expense  was  9.0% and  7.7% of  segment  revenue,
respectively,  and for the nine months ended  September 30, 2007 and 2006,  Asia
Pacific general and administrative expense was 8.1% and 7.8% of segment revenue,
respectively.  For the three  months  ended  September  30, 2007 and 2006,  Asia
Pacific experienced a 40.3% increase in general and administrative  expense from
$1.6 million to $2.3 million,  and for the nine months ended September 30, 2007,
Asia


                                       22
<PAGE>

Pacific experienced a 23.6% increase in general and administrative  expense from
$4.8  million  to $5.9  million.  This  increase  in Asia  Pacific  general  and
administrative expense is primarily associated with duplicative costs related to
our efforts to  consolidate  our former  Conferencing &  Collaboration  and Data
Communications  operating  segments'  finance  organizations  under one regional
organization,  bad debt associated  with one customer and  duplicative  rent and
relocation  costs  associated  with  the  consolidation  of  our  Tokyo,   Japan
facilities.

Depreciation

      Consolidated  depreciation  expenses from continuing  operations increased
16.6% to $7.2  million  from $6.2  million  and  increased  to 5.2% from 5.1% of
consolidated  revenues for the three months ended  September  30, 2007 and 2006,
respectively.  Consolidated  depreciation  expenses from  continuing  operations
increased  19.9% to $21.6  million from $18.0 million and increased to 5.2% from
4.9% of  consolidated  revenues for the nine months ended September 30, 2007 and
2006, respectively.

      North America  depreciation expense totaled $5.8 million and $4.6 million,
or 6.4% and 5.8% of segment  revenue,  for the three months ended  September 30,
2007 and 2006,  respectively,  and $17.1 million and $13.1 million,  or 6.4% and
5.5% of segment revenue,  for the nine months ended September 30, 2007 and 2006,
respectively. Europe depreciation expense totaled $0.9 million and $1.0 million,
or 3.6% and 4.4% of segment  revenue,  for the three months ended  September 30,
2007 and 2006, respectively, and $2.5 million and $2.9 million, or 3.3% and 4.2%
of segment  revenue,  for the nine  months  ended  September  30, 2007 and 2006,
respectively.  Asia Pacific  depreciation  expense totaled $0.6 million and $0.7
million,  or 2.3%  and 3.1% of  segment  revenue,  for the  three  months  ended
September 30, 2007 and 2006, respectively, and $2.0 million and $1.9 million, or
2.7% and 3.1% of segment  revenue,  for the nine months ended September 30, 2007
and 2006, respectively. The increase in depreciation expense in North America is
primarily  attributed  to  increased  capital  spending  during  2006  and  2007
associated  with added  capacity to our  Conferencing  Solutions  and  increased
product development in our non-conferencing solutions.

Amortization

      Consolidated  amortization from continuing  operations  increased 24.4% to
$4.1 million from $3.3 million and  increased to 2.9% from 2.7% of  consolidated
revenues for the three months ended  September 30, 2007 and 2006,  respectively.
Consolidated amortization expenses from continuing operations increased 17.9% to
$11.2 million from $9.5 million and increased to 2.7% from 2.6% of  consolidated
revenues for the nine months ended September 30, 2007 and 2006, respectively.

      North America  amortization totaled $3.6 million and $2.9 million, or 4.0%
and 3.7% of segment  revenue,  for the three months ended September 30, 2007 and
2006,  respectively,  and $9.9  million  and $8.1  million,  or 3.7% and 3.4% of
segment  revenue,  for the nine  months  ended  September  30,  2007  and  2006,
respectively. Europe amortization totaled $0.4 million and $0.3 million, or 1.5%
and 1.4% of segment  revenue,  for the three months ended September 30, 2007 and
2006,  respectively,  and $1.1  million  and $1.3  million,  or 1.4% and 1.8% of
segment  revenue,  for the nine  months  ended  September  30,  2007  and  2006,
respectively.  Asia Pacific  amortization  totaled $0.1 million and $43,000,  or
0.4% and 0.2% of segment revenue,  for the three months ended September 30, 2007
and 2006,  respectively,  and $0.3 million and $0.1 million, or 0.4% and 0.2% of
segment  revenue,  for the nine  months  ended  September  30,  2007  and  2006,
respectively. The increase in amortization expense in North America is primarily
associated with our acquisitions of Budget, Enunciate and Accucast. The increase
in  amortization  expense in Asia Pacific is primarily  associated  with our ECT
acquisition.

Restructuring costs

Realignment of Workforce - 2007

      During the three months ended June 30, 2007,  we executed a  restructuring
plan  to   consolidate   our   non-Conferencing   Solutions   service   delivery
organizations.  As part of this  consolidation,  we eliminated  approximately 86
positions.  We incurred approximately $4.1 million in severance costs associated
with the elimination of these positions.  Additionally, we incurred $0.1 million
of lease  termination  costs  associated  with our Paris,  France  office.  On a
segment  basis,  these  restructuring  costs were $1.1 million in North America,
$2.7  million  in Europe  and $0.4


                                       23
<PAGE>

million in Asia Pacific.  Estimated  annual savings from this  consolidation  is
approximately $6.0 million. During the three and nine months ended September 30,
2007, we paid approximately $2.0 million and $2.9 million, respectively, related
to these  severance  and exit costs.  We  anticipate  the  majority of this $4.1
million  restructuring  cost to be paid  during  2007.  Our  reserve  for  these
restructuring costs at September 30, 2007 was approximately $1.4 million,  which
reflects the impact of foreign exchange rate movement on the reserve balance.

Realignment of Workforce - 2006

      In 2006, we executed a restructuring  plan to streamline the management of
our  business on a  geographic  regional  basis from our former  Conferencing  &
Collaboration  and  Data  Communications  business  segments.  As  part  of this
streamlining, we eliminated approximately 100 positions within customer service,
finance,  operations and sales and marketing.  In the fourth quarter of 2006, we
entered into a separation  agreement in connection  with the  resignation of our
former chief investment  officer. We incurred an aggregate of approximately $8.0
million in severance costs  associated with the elimination of these  positions,
which  included the issuance of  restricted  stock having a fair market value of
$0.6 million.  Additionally, we incurred $0.6 million of lease termination costs
associated with five locations within North America.  On a segment basis,  these
restructuring  costs were $4.6 million in North America,  $3.2 million in Europe
and $0.7 million in Asia Pacific.  In the three and nine months ended  September
30, 2007, we paid  approximately  $0.2 million and $3.4  million,  respectively,
related  to these  severance  and exit  costs.  During  the  nine  months  ended
September 30, 2007, we adjusted our restructuring  reserve by approximately $0.5
million as a result of actual severance  payments to certain  individuals  being
less than originally estimated.  Management expects to pay the majority of these
remaining severance obligations during 2007. Our reserve for these restructuring
costs at September  30, 2007 was  approximately  $0.2  million.  Our reserve for
restructuring  costs  incurred  in years  prior to 2006 was  approximately  $2.6
million at September 30, 2007.

Interest expense, net

      Net interest  expense  increased to $4.1 million from $2.5 million for the
three months ended September 30, 2007 and 2006,  respectively,  and increased to
$8.7 million from $6.1  million for the nine months  ended  September  30, 2007,
respectively.  Interest expense increased  primarily as a result of an increased
average  outstanding  balance on our line of credit as a result of borrowings to
fund our  self-tender  offer,  with  average debt  outstanding  during the three
months ended  September 30, 2007 of $254.2  million  compared to $128.6  million
during the three months ended  September 30, 2006,  and as a result of increases
in our margin above LIBOR as a result of an increased  leverage  ratio.  Average
debt  outstanding  during the nine months ended  September 30, 2007 and 2006 was
$189.4 million and $118.5 million,  respectively.  During the three months ended
June 20, 2007, we terminated all of our prior interest rate swap contracts which
were  entered into in 2006 and recorded a gain of  approximately  $0.4  million.
During the three months  ended  September  30, 2007,  we entered into two $100.0
million two-year interest rate swaps at a fixed rate of approximately 4.99% plus
applicable spread.

Other, net

      Other,  net was $0.3 million and ($0.2) million for the three months ended
September 30, 2007 and 2006,  respectively,  and $1.0 million and ($0.2) for the
nine months ended  September  30, 2007 and 2006,  respectively.  Other,  net was
comprised  primarily of foreign  exchange gains and losses  associated  with the
settlement of transactions  in currencies  other than the currency in which they
were originally executed.

Effective income tax rate

      For the nine months ended  September 30, 2007,  our  effective  income tax
rate varied from the  statutory  rate  primarily  as a result of  non-deductible
executive  compensation  expenses  and  the  impact  of the  release  of the net
operating loss usage limitation related to a prior year's  acquisition.  Changes
in valuation  allowances and estimates are required when facts and circumstances
indicate that realization of tax benefits or the actual amount of taxes expected
to be paid has changed.

      We believe we have  appropriately  reserved  for income  taxes.  If we are
required to pay an amount less than or exceeding  our reserves for uncertain tax
matters,  the  financial  impact  will be  reflected  in the period in which the


                                       24
<PAGE>

matter  is  resolved.  In the  event  that  actual  results  differ  from  these
estimates,  we may  need to  adjust  our  "Income  taxes  payable"  which  could
materially impact our financial condition and results of operations.

Acquisitions

      We seek to acquire complementary  companies that increase our market share
and provide us with additional customers,  technologies,  applications and sales
personnel.  All revenues  and related  costs from these  transactions  have been
included in our  consolidated  financial  statements as of the effective date of
each acquisition.

      North America

      In July 2007,  we acquired  assets and the stock of Budget.  We paid $19.8
million in cash at closing  and $0.6  million in  transaction  fees and  closing
costs. We funded the purchase  through our line of credit.  We followed SFAS No.
141, "Business Combinations" (SFAS No. 141), and approximately, $0.2 million has
been  allocated to acquired  fixed  assets,  $1.4 million has been  allocated to
other acquisition  liabilities,  $6.6 million has been allocated to identifiable
customer  lists,  $1.3 million has been allocated to trademarks and $1.4 million
has been allocated to a non-compete  agreement,  with the identifiable  customer
lists,  trademarks and non-compete  agreements  amortized over five-year  useful
lives.  In addition,  $2.9 million has been allocated to long-term  deferred tax
liabilities  to record the step-up in basis for the customer lists and developed
technology  purchased.  Because  we  have  not  finalized  the  working  capital
component of the purchase  price,  the residual  $15.2  million of the aggregate
purchase  price has been  allocated to goodwill,  which is subject to a periodic
impairment assessment in accordance with SFAS No. 142.

      In September 2006, we acquired assets and the stock of Enunciate.  We paid
CA$29.0  million in cash at closing and CA$0.7 million in  transaction  fees and
closing costs. We funded the purchase through Canadian dollar  borrowings on our
line of credit and Canadian dollar cash balances available. We followed SFAS No.
141, "Business  Combinations"  (SFAS No. 141), and approximately  CA$0.3 million
has been allocated to acquired  fixed assets,  CA$0.3 million has been allocated
to acquired working  capital,  CA$6.8 million has been allocated to identifiable
customer lists and CA$0.2 million has been allocated to a non-compete agreement,
with the identifiable  customer lists and non-compete  agreement  amortized over
five-year useful lives.  The residual CA$22.1 million of the aggregate  purchase
price has been allocated to goodwill,  which is subject to a periodic impairment
assessment in accordance with SFAS No. 142.

      In January 2006, we acquired all of the outstanding stock of Accucast.  We
paid $12.3  million  in cash at closing  and $0.5  million  in  transaction  and
closing costs.  Subsequent to closing,  we paid an additional  $3.0 million cash
purchase price upon the achievement of certain milestone targets as specified in
the purchase  agreement.  We funded the purchase through our line of credit.  We
followed  SFAS No. 141, and  approximately  $0.2  million has been  allocated to
acquired  fixed  assets,  $0.1 million has been  allocated to other  acquisition
liabilities,  $2.0 million has been  allocated to developed  technology and $1.0
million has been allocated to identifiable customer lists, with the identifiable
customer lists and developed  technology  amortized over five-year useful lives.
In  addition,  $1.2  million  has  been  allocated  to  long-term  deferred  tax
liabilities  to record the step-up in basis for the customer lists and developed
technology  purchased.  Because  we  have  not  finalized  the  working  capital
component of the purchase  price,  the residual  $13.9  million of the aggregate
purchase price has been preliminarily allocated to goodwill, which is subject to
a periodic impairment assessment in accordance with SFAS No. 142.

Asia Pacific

      In  November  2006,  we  acquired   certain  assets  and  assumed  certain
liabilities of ECT. We paid AU$5.7 million in cash at closing and AU$0.4 million
in  transaction  fees and  closing  costs.  We  funded  the  purchase  through a
Yen-denominated  line of credit with  Sumitomo  Mitsui  Banking  and  Australian
dollar cash  available.  We  followed  SFAS No. 141,  and  approximately  AU$0.1
million of the aggregate  purchase  price has been  allocated to acquired  fixed
assets,  AU$0.5 million has been allocated to acquired working  capital,  AU$1.4
million has been allocated to identifiable customer lists and AU$0.1 million has
been allocated to a non-compete agreement,  with the identifiable customer lists
and non-compete  agreement  amortized over five-year  useful lives. The residual
AU$4.0 million of the aggregate purchase price has been preliminarily  allocated
to goodwill,  which is subject to a periodic impairment assessment in accordance
with SFAS No. 142.


                                       25
<PAGE>

Liquidity and capital resources

      As of September  30, 2007,  we had $27.7  million in cash and  equivalents
compared to $19.0 million at December 31, 2006. Cash balances  residing  outside
of the U.S. at September 30, 2007 were $26.0  million  compared to $18.4 million
at December  31,  2006.  We  repatriate  cash for  repayment  of  royalties  and
management  fees charged to  international  locations  from the U.S.  Therefore,
foreign exchange gains and losses resulting from these transactions are recorded
in  "Other,  net"  in the  accompanying  condensed  consolidated  statements  of
operations.   Inter-company  loans  with  foreign  subsidiaries   generally  are
considered to be permanently  invested for the  foreseeable  future.  Therefore,
foreign exchange gains and losses resulting from these transactions are recorded
in the  cumulative  translation  adjustment  account  on face  of the  condensed
consolidated  balance sheets. Based on our potential cash position and potential
conditions in the capital  markets,  we could  require  repayment of these loans
despite  the  long-term  intention  to hold them as  permanent  investments.  At
September 30, 2007, we had approximately $43.3 million of availability under our
existing  $300.0  million  line of  credit,  without  regard to the  uncommitted
accordion feature.  For a discussion of our line of credit, see "--Liquidity and
capital resources --Capital resources."

Cash provided by operating activities

      Net cash  provided by operating  activities  totaled  approximately  $65.7
million for the nine months ended  September  30, 2007 compared to cash provided
by operating  activities of  approximately  $41.1 million for the same period in
2006.  The increase in net cash  provided by operating  activities is associated
with favorable working capital results  primarily  associated with the timing of
income  tax  payments  and  increased  net  income  offset in part by  increased
restructuring payments.

Cash used in investing activities

      Cash used in  investing  activities  totaled  $51.5  million  for the nine
months ended September 30, 2007 compared to $70.1 million for the same period in
2006.  The  principal  uses of cash used in  investing  activities  for the nine
months ended September 30, 2007 included $30.5 million of capital  expenditures,
$18.6  million  for costs  associated  with our  acquisition  of  Budget  and an
aggregate  of $2.3  million  related  to the  payment  of  achieved  milestones,
severance  and  non-compete  obligations  from  prior  year  acquisitions.   The
principal  uses of cash from  investing  activities  for the nine  months  ended
September  30,  2006 were  primarily  associated  with $26.8  million of capital
expenditures  and $43.3 million for costs  associated  with the  acquisitions of
Enunciate and Accucast and costs associated with prior year acquisitions.

Cash used in/provided by financing activities

      Cash used in financing  activities for the nine months ended September 30,
2007 totaled $5.9 million compared with cash provided by financing activities of
$30.4 million for the same period in 2006. Cash used in financing activities for
the nine months ended  September  30, 2007 included  $127.2  million of treasury
stock  purchases  of  which  $122.5  million  was  associated  with  the  shares
repurchased  in  our  self-tender   offer,  $0.9  million  was  associated  with
capitalized costs related to our self-tender  offer and $2.2 million  associated
with the netting of shares to pay certain  employees' income tax withholding due
upon the vesting of restricted stock awards, offset in part by $116.5 million of
net  borrowings  on our line of credit and $7.2  million of proceeds  from stock
option  exercises.  Cash  provided by financing  activities  for the nine months
ended September 30, 2006 included $57.8 million of net borrowings on our line of
credit to fund treasury stock purchases of $29.6 million and proceeds from stock
option exercises of $2.2 million.

Off-balance sheet arrangements

      As  of  September  30,  2007,  we  did  not  have  any   off-balance-sheet
arrangements,  as defined  in Item  303(a)(4)(ii)  of  Securities  and  Exchange
Commission Regulation S-K.


                                       26
<PAGE>

State sales taxes

      We have  reserves for certain state sales tax  contingencies  based on the
likelihood of obligation in accordance  with  Statement of Financial  Accounting
Standards   (SFAS)  No.  5,  "Accounting  for   Contingencies"   (SFAS  No.  5).
Historically,  we have not  collected  and  remitted  state  sales  tax from our
Conferencing  Solutions  customers.  We  were  audited  by the  Commonwealth  of
Massachusetts  Department  of  Revenue  claiming  that  our  audio  conferencing
services  are subject to sales tax in  Massachusetts.  In March  2006,  we began
assessing sales tax to our customers in Massachusetts as a result of this audit.
In July 2006, we paid an initial  payment of  approximately  $1.2 million to the
Commonwealth of  Massachusetts  Department of Revenue for taxable years prior to
2005.  Amounts  associated  with 2005 and early 2006 are still under  review and
have yet to be  settled.  In March  2007,  we were  approached  by the  State of
Illinois  regarding the  taxability of  conferencing  services in the state.  In
April 2007, we began assessing  sales tax to our customers in Illinois.  Returns
were filed and approximately $0.5 million was paid to the Illinois Department of
Revenue for taxable period prior to March 2007. Additional amounts may be due as
these  returns  are  audited.  More  states may claim that we are  subject to an
assessment  of sales taxes.  As of September  30, 2007 and December 31, 2006, we
had reserved  approximately  $4.8 and $4.3  million,  respectively,  for certain
state sales tax contingencies.  These amounts are included in "Accrued taxes" in
the  accompanying  condensed  consolidated  balance  sheets.  We  believe we are
appropriately accrued for these contingencies.  In the event that actual results
differ  from  these  reserves,  we may  need to  make  adjustments  which  could
materially   impact  our  financial   condition   and  results  of   operations.
Historically, we have collected and remitted sales tax from our non-Conferencing
Solutions  customers in applicable  states.  However,  it is possible states may
disagree with our method of assessing and remitting these state sales taxes.

Income taxes

      Income tax  expense,  income  taxes  payable and  deferred  tax assets and
liabilities  are determined in accordance with SFAS No. 109. Under SFAS No. 109,
the  deferred  tax  liabilities  and assets are  determined  based on  temporary
differences  between the basis of certain assets and  liabilities for income tax
and  financial   reporting   purposes,   in  addition  to  net  operating   loss
carryforwards which will more likely than not be utilized. These differences are
primarily  attributable to differences in the  recognition of  depreciation  and
amortization  of property,  equipment  and  intangible  assets,  allowances  for
doubtful accounts and certain employee benefit accruals. Deferred tax assets and
liabilities are measured by applying  enacted  statutory tax rates applicable to
future years in which the deferred tax assets or liabilities  are expected to be
settled or realized.  Valuation  allowances  are  established  when necessary to
reduce  deferred  tax assets to the amount  expected to be  realized.  Permanent
differences are primarily  attributable to non-deductible  employee compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended.

      On July 13, 2006, the Financial  Accounting  Standards Board (FASB) issued
Interpretation   No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes  -An
Interpretation  of FASB  Statement  No.  109" (FIN  48).  FIN 48  clarifies  the
accounting for uncertainty in income taxes  recognized in an entity's  financial
statements in accordance  with FASB  Statement No. 109,  "Accounting  for Income
Taxes" and  prescribes a recognition  threshold and  measurement  attributes for
financial  statement  disclosures of tax positions taken or expected to be taken
on an income tax  return.  Under FIN 48, the impact of an  uncertain  income tax
position on the income tax return must be recognized at the largest  amount that
is  more-than-likely-than-not  to be sustained upon audit by the relevant taxing
authority.  An uncertain  income tax position  will not be  recognized if it has
less than a 50%  likelihood of being  sustained.  Additionally,  FIN 48 provides
guidance on derecognition,  classification, interest, penalties and disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006.

      We adopted  the  provisions  of FIN 48 on January  1,  2007.  We  recorded
provisions for certain asserted international and state income tax uncertain tax
positions based on the  recognition  and  measurement  standards of FIN 48. As a
result of our adoption of FIN 48,  approximately  $1.3 million was recorded as a
reduction  to retained  earnings as an increase to reserves  for  uncertain  tax
positions.  At the adoption date of January 1, 2007, we had  approximately  $7.3
million of  unrecognized  tax benefits.  Included in the balance of unrecognized
tax  benefits at January 1, 2007 is  approximately  $5.6  million,  all of which
would affect our effective tax rate if recognized.  This amount is classified as
"Income taxes payable" in the accompanying condensed consolidated balance sheet.
We file federal  income tax returns and income tax returns in various states and
international  jurisdictions.  In  major  tax  jurisdictions,   tax  years  from
1997-2006 remain subject to income tax examinations by tax authorities.


                                       27
<PAGE>

      As   permitted   with  the  adoption  of  FIN  48,  we  have  changed  our
classification  of interest and penalties related to uncertain tax positions and
recognize these costs in interest and penalties expense.  As of January 1, 2007,
we had accrued interest and penalties of  approximately  $0.9 million related to
uncertain tax positions.

      In the normal  course of business,  we are subject to inquiries  from U.S.
and non-U.S. tax authorities  regarding the amount of taxes due. These inquiries
may  result  in  adjustments  of the  timing  or  amount  of  taxable  income or
deductions or the allocation of income among tax jurisdictions.  Further, during
the ordinary  course of business,  other  changing facts and  circumstances  may
impact our ability to utilize income tax benefits as well as the estimated taxes
to be paid in future periods. We believe we are appropriately accrued for income
taxes. In the event that actual results differ from these estimates, we may need
to adjust  "Income taxes payable"  which could  materially  impact our financial
condition and results of operations.

Capital resources

      In April  2006,  we closed an  amendment  to our credit  facility,  with a
syndicate led by Bank of America,  N.A., which increased the amount available to
us under our line of credit from $180.0 million to $300.0  million,  reduced the
applicable  percentages across the pricing grid and extended the maturity of the
credit  facility from February 2009 to April 2011.  The amendment  also provided
for an  uncommitted  accordion  feature  allowing for an additional  increase of
$100.0  million to $400.0 million of the revolving  credit line,  subject to the
terms and  conditions as set forth in the  amendment.  In April 2007, we entered
into an amendment to our credit  facility  which  inserted  into the  applicable
margin  pricing grid a new tier based on a total  leverage ratio of 2.5 times or
greater,  increased  the  permitted  covenant  level of the  consolidated  total
leverage  ratio and amended  certain  other  provisions to allow us to purchase,
redeem or otherwise  acquire up to an  additional  $150.0  million of our common
stock during 2007, of which  approximately  $122.6 million has been used to fund
our  self-tender  offer in the second  quarter of 2007.  The credit  facility is
subject to customary  covenants  for secured  credit  facilities of this nature.
Certain of our material  domestic  subsidiaries  have guaranteed our obligations
under the credit facility,  which is secured by substantially  all of our assets
and the assets of our  material  domestic  subsidiaries.  In  addition,  we have
pledged as collateral  all of the issued and  outstanding  stock of our material
domestic subsidiaries and 65.0% of our material foreign subsidiaries. We believe
that as of September 30, 2007,  we were in  compliance in all material  respects
with the covenants  under our line of credit.  Proceeds  drawn under this credit
agreement may be used for refinancing of existing debt, working capital, capital
expenditures,  acquisitions  and other general  corporate  purposes.  The annual
interest rate applicable to borrowings under the line of credit,  at our option,
is the base rate (the greater of the federal funds rate plus 0.5% or the Bank of
America prime rate) or LIBOR,  plus,  in each case,  an applicable  margin which
will vary based upon our leverage  ratio at the end of each fiscal  quarter.  At
September 30, 2007,  the  applicable  margin with respect to base rate loans was
0.0%,  and the  applicable  margin  with  respect to LIBOR  loans was 1.50%.  At
September 30, 2007, our interest rate on 30-day LIBOR loans was 6.62875%.  As of
September  30,  2007,  we  had   approximately   $255.0  million  of  borrowings
outstanding  and  approximately  $1.7  million in letters of credit  outstanding
under our line of credit.

      In February 2006, we entered into a three-year $50.0 million interest rate
swap at a fixed rate of 4.99% plus  applicable  spread,  and in August 2006,  we
entered into two separate three-year $12.5 million interest rate swaps at 5.135%
and 5.159%, respectively. These swaps were exclusive of our applicable margin as
stated in our credit facility. We did not designate these interest rate swaps as
hedges and accounted for them in accordance  with SFAS No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities."  During the second quarter of
2007,  we  terminated   these  interest  rate  swaps  and  recorded  a  gain  of
approximately $0.4 million in "Interest  expense" in the accompanying  condensed
consolidated  statements  of  operations.  Changes  in fair  value  prior to the
termination  of these swaps were  approximately  $0.1 million for the six months
ended June 30, 2007 and are recognized in earnings.

      In August and September 2007, we entered into two $100.0 million  two-year
interest  rate swaps at a fixed  rate of  approximately  4.99%  plus  applicable
spread.  These swaps are  exclusive  of our  applicable  margin as stated in our
credit  facility.  We did not designate  these interest rate swaps as hedges and
will  account  for  them in  accordance  with  SFAS  No.  133,  "Accounting  for
Derivative  Instruments and Hedging  Activities."  Changes in fair value,  which
were  approximately  $0.2 million for the three months ended  September 30, 2007
are recognized in earnings.


                                       28
<PAGE>

      In March and September 2006, we entered into our  Yen-denominated  line of
credit for (Y)200.0 million and (Y)300.0  million,  respectively,  with Sumitomo
Mitsui  Banking  which have  interest  rates of 1.875% and 1.61%,  respectively,
through March 2008. In May 2007, the (Y)200.0 million line of credit was amended
to  (Y)300.0  million.  As of  September  30,  2007,  there were no  outstanding
borrowings under these facilities.

      At September 30, 2007, we had no other indebtedness outstanding except for
the  borrowings  under our lines of credit  discussed  above and  capital  lease
obligations with principal balances totaling approximately $4.8 million.

Liquidity

      As of September 30, 2007, we had $27.7 million of cash and equivalents. We
generated  positive  operating cash flows from each of our  geographic  business
segments for the nine months ended September 30, 2007. Each geographic  business
segment had  sufficient  cash flows from  operations  to service  existing  debt
obligations   and  to  fund  capital   expenditure   requirements,   which  have
historically been 4% to 6% of annual consolidated revenues, and to fund research
and development  costs for new services and  enhancements to existing  services,
which  have  historically  been  approximately  2% to 3% of annual  consolidated
revenues. In 2006, capital expenditure funding requirements were slightly higher
than  our  historical  averages  due to new  product  development  and  capacity
expansion.  In the first  nine  months  of 2007,  we spent  approximately  $30.5
million  in  capital  expenditures  to  fund  capacity  expansion,  new  product
development,  our automation  initiatives and investment in  re-engineering  our
service and support  organizations.  We expect capital expenditures in 2007 will
total approximately 9% of consolidated revenues. We funded our self-tender offer
through  borrowings under our credit facility and purchased  9,687,841 shares of
our common stock, representing approximately 14.0% of our outstanding shares, at
$12.65 per share for a total purchase  price of  approximately  $122.6  million,
excluding fees. We have historically  borrowed on our line of credit in order to
fund  acquisitions.  At September  30, 2007,  we had $43.3  million of available
credit on our  existing  $300.0  million line of credit,  without  regard to the
uncommitted accordion feature.  Hypothetical additional borrowing capacity under
our  uncommitted  accordion  feature is $25.0  million.  We believe that we will
generate adequate operating cash flows for capital  expenditures and contractual
commitments and to satisfy our  indebtedness and fund our liquidity needs for at
least the next 12 months.

      We  regularly  review  our  capital   structure  and  evaluate   potential
alternatives in light of current  conditions in the capital  markets.  Depending
upon  conditions in these  markets,  cash flows from our operating  segments and
other  factors,  we may  engage in other  capital  transactions.  These  capital
transactions  include but are not limited to debt or equity  issuances or credit
facilities with banking institutions.


                                       29
<PAGE>

SUBSEQUENT EVENTS

      In November 2007, our chief  executive  officer,  Boland T. Jones,  repaid
approximately  $0.4 million of his outstanding loans to us, which are classified
as "Notes  receivable,  shareholder"  on the face of the condensed  consolidated
balance sheets.  The principal amount outstanding under all remaining loans owed
to us by Mr. Jones is approximately $1.7 million as of November 6, 2007.

      In November 2007, we acquired all of the outstanding  equity  interests in
NetConnect  Systems  SA,  a  Norwegian-based   conferencing  services  provider,
offering  services  under the Meet24  brand.  We paid  approximately  NOK $150.0
million in cash at closing.  We funded the purchase through cash on hand and our
existing credit  facility.  We are in the process of completing our valuation of
certain intangible assets in accordance with SFAS No. 141.

CRITICAL ACCOUNTING POLICIES

      "Management's  Discussion and Analysis of Financial  Condition and Results
of Operations" is based upon our condensed consolidated financial statements and
the notes  thereto,  which have been  prepared  in  accordance  with  GAAP.  The
preparation of the condensed  consolidated  financial  statements requires us to
make  estimates  and  judgments  that  affect  the  reported  amounts of assets,
liabilities,  revenues and expenses and related  disclosure of contingent assets
and liabilities.  We have reviewed the accounting policies used in reporting our
financial results on a regular basis. We have reviewed these critical accounting
policies  and  related  disclosures  with the  audit  committee  of our board of
directors.  We have  identified  the policies  below as critical to our business
operations  and the  understanding  of our  financial  condition  and results of
operations:

      o     revenue recognition;

      o     allowance for uncollectible accounts receivable;

      o     goodwill and other intangible assets;

      o     income taxes;

      o     restructuring costs; and

      o     legal contingencies.

      For a detailed discussion on the application of these accounting policies,
see Item 7,  "Management's  Discussion  and Analysis of Financial  Condition and
Results of  Operations",  in our annual  report on Form 10-K for the fiscal year
ended December 31, 2006.

FORWARD LOOKING STATEMENTS

      When used in this quarterly  report on Form 10-Q and elsewhere by us or by
management from time to time, the words  "believes,"  "anticipates,"  "expects,"
"will,"  "may,"   "should,"   "intends,"   "plans,"   "estimates,"   "predicts,"
"potential,"  "continue"  and  similar  expressions  are  intended  to  identify
forward-looking  statements concerning our operations,  economic performance and
financial condition.  For those statements,  we claim the protection of the safe
harbor  for  forward-looking  statements  contained  in the  Private  Securities
Litigation  Reform  Act of 1995.  These  statements  are  based  on a number  of
assumptions and estimates that are inherently  subject to significant  risks and
uncertainties, many of which are beyond our control, and reflect future business
decisions  which are subject to change.  A variety of factors could cause actual
results to differ  materially  from  those  anticipated  in our  forward-looking
statements, including the following factors:


                                       30
<PAGE>

      o     Our ability to compete  based on price and against our  existing and
            future competitors;

      o     Our  ability  to  respond  to  rapid  technological  change  and the
            development of alternatives to our services;

      o     Market  acceptance  of new  services  and  enhancements  to existing
            services;

      o     Costs  or  difficulties  related  to the  integration  of any new or
            acquired businesses and technologies;

      o     Concerns  regarding the security of  transactions  and  transmitting
            confidential information over the Internet and public networks;

      o     Our  ability to  increase  our  network  capacity  to meet  customer
            demands;

      o     Our services may be interrupted  due to failure of the platforms and
            network infrastructure utilized in providing our services;

      o     Continued weakness in our legacy broadcast fax services;

      o     Our ability to efficiently utilize or re-negotiate  minimum purchase
            requirements in our telecommunications supply agreements;

      o     Increased  leverage may harm our financial  condition and results of
            operations;

      o     Our  dependence  on our  subsidiaries  for cash flow may  negatively
            affect our  business  and our  ability to pay  amounts due under our
            indebtedness;

      o     Our financial performance could cause future write-downs of goodwill
            or other intangible assets in future periods;

      o     Assessment of income,  state sales and other taxes for which we have
            not accrued;

      o     Our ability to attract and retain qualified key personnel;

      o     Possible adverse results of pending or future  litigation or adverse
            results of current or future infringement claims;

      o     Our   ability  to   successfully   identify   suitable   acquisition
            candidates,  complete  acquisitions,  integrate acquired  operations
            into our existing operations or expand into new markets;

      o     Our ability to protect our proprietary  technology and  intellectual
            property rights;

      o     Legislative or regulatory changes may adversely affect our business;

      o     Possible   adverse   results  if  our  services  become  subject  to
            government regulations applicable to traditional  telecommunications
            service providers;

      o     Risks associated with expansion of our international  operations and
            fluctuations in currency exchange rates;

      o     Domestic and  international  terrorist  activity,  war and political
            instability may adversely  affect the level of services  utilized by
            our customers and the ability of those customers to pay for services
            utilized;


                                       31
<PAGE>

      o     General economic or business conditions, internationally, nationally
            or in the local jurisdiction in which we are doing business,  may be
            less favorable than expected;

      o     Factors  described  under the caption "Item 1A. Risk Factors" in our
            annual report on Form 10-K for the year ended  December 31, 2006 and
            in our current reports on Form 10-Q for the quarters ended March 31,
            2007 and June 30, 2007; and

      o     Factors  described from time to time in our press releases,  reports
            and other filings made with the SEC.

We caution  that  these  factors  are not  exclusive.  Consequently,  all of the
forward-looking  statements  made in this  quarterly  report on Form 10-Q and in
other documents filed with the SEC are qualified by these cautionary statements.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which  speak only as of the date of this Form  10-Q.  We take on no
obligation   to  publicly   release  the  results  of  any  revisions  to  these
forward-looking  statements that may be made to reflect events or  circumstances
after the date of this Form 10-Q, or the date of the  statement,  if a different
date.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      We are exposed to market risk from  changes in interest  rates and foreign
currency  exchange  rates.  We manage our exposure to these market risks through
our regular  operating and financing  activities and the timing of  intercompany
payable settlements.

      At September 30, 2007, we had  borrowings of  approximately  $55.0 million
outstanding  under our line of credit that are  subject to  interest  rate risk.
Each 100 basis point  increase in interest  rates  relative to these  borrowings
would  impact  annual  pre-tax  earnings  and cash flows by  approximately  $0.5
million based on our September 30, 2007 debt level.

      Approximately   39.4%  of  our   consolidated   revenues  from  continuing
operations and 36.0% of our operating  expenses from continuing  operations were
transacted in foreign  currencies for the nine-month  period ended September 30,
2007.  As a result,  fluctuations  in  exchange  rates  impact the amount of our
reported sales and operating income. A hypothetical  positive or negative change
of 10% in foreign currency  exchange rates would positively or negatively change
revenues for the  nine-month  period ended  September 30, 2007 by  approximately
$16.3 million and operating  expenses for 2007 by  approximately  $13.3 million.
Our principal  exposure has been related to local  currency  sales and operating
costs in the Euro Zone, Canada, the United Kingdom, Australia and Japan. We have
not used  derivatives to manage foreign  currency  exchange risk, and no foreign
currency exchange derivatives were outstanding at September 30, 2007.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

      Our management,  with the participation of our chief executive officer and
chief financial officer,  evaluated the effectiveness of our disclosure controls
and  procedures as of September 30, 2007.  Based on that  evaluation,  our chief
executive officer and chief financial officer have concluded that our disclosure
controls and  procedures  were  effective,  as of September 30, 2007, to provide
reasonable  assurance that the information required to be disclosed by us in the
reports we file or submit under the Securities Exchange Act of 1934, as amended,
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in SEC rules and forms.

Changes in Internal Control Over Financial Reporting

      There were no changes in our  internal  control over  financial  reporting
during the quarter ended  September 30, 2007 that have materially  affected,  or
are reasonably likely to materially  affect, our internal control over financial
reporting.


                                       32
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      We have several  litigation  matters pending,  including matters described
below, which we are defending vigorously.  Due to the inherent  uncertainties of
the  litigation  process and the judicial  system,  we are unable to predict the
outcome  of  such  litigation  matters.  If the  outcome  of one or more of such
matters  is  adverse  to us,  it could  have a  material  adverse  effect on our
business, financial condition and results of operations.

      On February 2, 2007,  the United  States Court of Appeals for the Eleventh
Circuit  affirmed the district  court's order granting of our motion for summary
judgment in a lawsuit  alleging  violations of securities laws filed in November
1998  against us and  certain of our  officers  and  directors.  Plaintiffs  had
acquired  our  common  stock in  connection  with our  acquisition  of  Xpedite.
Plaintiffs  sought  undisclosed  damages  together  with  pre-and  post-judgment
interest,  punitive  damages,  costs and attorneys'  fees. On February 23, 2007,
plaintiffs  filed a petition for rehearing en banc and for panel  rehearing with
the Eleventh  Circuit.  On May 30, 2007,  the  Eleventh  Circuit  denied both of
plaintiffs' petitions.  The plaintiffs did not seek any further appeals, and the
time to do so has now expired. We consider this matter concluded.

      On August 21, 2006, a lawsuit was filed in the U.S. District Court for the
Eastern District of Texas by Ronald A. Katz Technology  Licensing  against three
conferencing  service  providers,  including us,  alleging that the  defendants'
"automated  telephone  conferencing  systems  that enable  [their]  customers to
perform multiple-party  meetings and various other functions over the telephone"
infringe six of plaintiff's  patents.  The complaint seeks undisclosed  monetary
damages,  together with pre- and post-judgment interest, treble damages for what
is alleged to be willful infringement,  attorneys' fees and costs and injunctive
relief.  On October 16,  2006,  we filed our answer,  affirmative  defenses  and
counterclaim  to  the  complaint,  including  seeking  declaratory  judgment  of
noninfringement,  invalidity and unenforceability and attorneys' fees and costs.
On January 25, 2007, plaintiff amended its complaint to also add our subsidiary,
ATS, as a party. On March 20, 2007, a multidistrict  litigation  panel granted a
motion to consolidate 25 pending infringement suits, including our suit, brought
by  Katz  against  various  defendants  to the  District  Court  in  California.
Discovery is on-going.

      On May 18, 2007,  Gibson & Co. Ins.  Brokers  served an amended  complaint
upon us and our  subsidiary,  Xpedite,  in a purported  class  action  entitled,
Gibson & Co. Ins.  Brokers,  Inc., et al. v. The Quizno's  Corporation,  et al.,
pending in U.S.  District  Court for the  Central  District of  California.  The
underlying   complaint   alleges  that  Quizno's  sent   unsolicited   facsimile
advertisements  on or  about  November  1,  2005  in  violation  of the  federal
Telephone  Consumer  Protection  Act of 1991,  as amended,  and seeks damages of
$1,500 per facsimile for alleged  willful  conduct in sending of the faxes.  The
court has also granted Quizno's motion to file a third party complaint to add us
and Xpedite as defendants. On June 26, 2007, we answered the plaintiff's amended
complaint,  including asserting cross-claims against the Quizno's defendants. On
June  29,  2007,  the  Quizno's  defendants  filed  their  answer  and  asserted
cross-claims  against us and  Xpedite.  On July 31, 2007,  the court  entered an
order in which it granted  certain  Quizno's  defendants'  motion to dismiss and
denied the motion with respect to other Quino's  entities. On September 7, 2007,
plaintiff  proceeded  to file  another  amended  complaint  against the Quizno's
defendants, Growth Partners (Quizno's consultant),  Xpedite and us. On September
21,  2007,  we filed our answer and  affirmative  defenses.  On October 1, 2007,
certain   Quizno's   defendants  filed  a  motion  to  dismiss  which  is  under
consideration by the Court.  When that motion is decided,  cross-claims  will be
filed by Xpedite and us. The case is  currently in  discovery,  and no class has
yet been  certified,  with the court granting  plaintiff's  motion to extend the
class certification deadline to November 30, 2007. We were served with non-party
subpoenas for certain  documents and information  prior to being served with the
amended complaint, for which we filed objections and provided certain responsive
documents.  We have asserted indemnity rights against our customer  Quizno's,  a
defendant in this case, and insurance coverage against our insurer. To date, our
indemnity  claim  against our customer  Quizno's has not been  resolved  through
litigation or otherwise. Our insurer has agreed to participate in the defense of
Xpedite and us in connection with the plaintiff's claims against us and Xpedite,
subject to certain reservations of rights and the terms of the policy, including
policy limits and deductibles.  We intend to vigorously defend ourselves against
these claims.  However, due to the inherent uncertainties of litigation,  we are
unable to predict the outcome of this matter,  and an adverse outcome could have
a material effect on our business, financial condition and results of operation.


                                       33
<PAGE>

      We are also  involved in various other legal  proceedings  which we do not
believe  will  have a  material  adverse  effect  upon our  business,  financial
condition or results of operations, although no assurance can be given as to the
ultimate outcome of any such proceedings.

ITEM 1A. RISK FACTORS.

      None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

<TABLE>
<CAPTION>
                                                                       Total Number of Shares        Maximum Number of Shares
                                                      Average           Purchased as Part of        that May Yet Be Purchased
                               Total Number of      Price Paid        Publicly Announced Plans          Under the Plans or
       Period                  Shares Purchased      per Share              or Programs                      Programs
--------------------           ----------------     ----------        ------------------------      -------------------------
<S>                                       <C>             <C>                        <C>                    <C>
July 1-31, 2007                           0               --                         0                      5,509,900
August 1-31, 2007                   144,400           $10.75                   144,400                      5,365,500
September 1-30, 2007                      0               --                         0                      5,365,500
                                    -------                                    -------                      ---------
Total                               144,400                                    144,400                      5,365,500
</TABLE>

      In June 2006, our board of directors authorized,  and we announced,  a new
stock repurchase  program under which we could purchase up to 7.0 million shares
of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5. OTHER INFORMATION

      None.

ITEM 6. EXHIBITS

      (a)   Exhibits

            10.1  Amendment to the Premiere Global  Services,  Inc. 401(k) Plan,
                  dated August 28, 2007.

            31.1  Certification  of Chief  Executive  Officer  pursuant  to Rule
                  13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

            31.2  Certification  of Chief  Financial  Officer  pursuant  to Rule
                  13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.


                                       34
<PAGE>

            32.1  Certification  of Chief  Executive  Officer  pursuant  to Rule
                  13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and
                  18 U.S.C. Section 1350.

            32.2  Certification of Chief Financial Officer,  as required by Rule
                  13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and
                  18 U.S.C. Section 1350.


                                       35
<PAGE>

                                    SIGNATURE

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

Date: November 8, 2007           PREMIERE GLOBAL SERVICES, INC.

                                 /s/ Michael E. Havener
                                 -----------------------------------------------
                                 Michael E. Havener
                                 Chief Financial Officer
                                 (principal financial and accounting officer and
                                 duly authorized signatory of the Registrant)


                                       36
<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number      Description
-------     -----------
  10.1      Amendment to the Premiere Global  Services,  Inc. 401(k) Plan, dated
            August 28, 2007.

  31.1      Certification   of  Chief   Executive   Officer   pursuant  to  Rule
            13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

  31.2      Certification   of  Chief   Financial   Officer   pursuant  to  Rule
            13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

  32.1      Certification   of  Chief   Executive   Officer   pursuant  to  Rule
            13a-14(b)/15d-14(b)  of the  Securities  Exchange Act of 1934 and 18
            U.S.C. Section 1350.

  32.2      Certification  of  Chief  Financial  Officer,  as  required  by Rule
            13a-14(b)/15d-14(b)  of the  Securities  Exchange Act of 1934 and 18
            U.S.C. Section 1350.


                                       37