UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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 JUNE 30, 2009.

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: 001-13577PREMIERE 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 NWTHE TERMINUS BUILDING, SUITE 1000ATLANTA, 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 has submitted electronically and posted on its corporate Web site,
  if any, every Interactive Data File required to be submitted and posted pursuant
  to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding
  12 months (or for such shorter period that the registrant was required to submit
  and post such files).

Yes |_| No |_|

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

|                        |     |                                               |                           |    
|----------------------- | --- | --------------------------------------------- | ------------------------- | ---
|Large accelerated filer | |X| |                                               | Accelerated filer         | |_|
|Non-accelerated filer   | |_| | (Do not check if a smaller reporting company) | Smaller reporting company | |_|

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 August 4, 2009
|Common Stock, $0.01 par value | 60,742,989 Shares            

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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 June 30, 2009 and December 31, 2008                                 | 1   
|              | Condensed Consolidated Statements of Operations for the Three and Six Months Ended June
      30, 2009 and 2008 | 2   
|              | Condensed Consolidated Statement of Shareholders
      Equity for the Six Months Ended June 30, 2009           | 3   
|              | Condensed Consolidated Statements of Cash
      Flows for the Six Months Ended June 30, 2009
      and 2008     | 4   
|              | Notes to Condensed Consolidated Financial
      Statements                                                      | 5   
|Item 2        | Managements Discussion and Analysis
      of Financial Condition and Results of Operations                     | 20  
|Item 3        | Quantitative and Qualitative Disclosures
      About Market Risk                                                | 37  
|Item 4        | Controls and Procedures                                                                                         | 38  
|PART II       | OTHER INFORMATION                                                                                               |     
|Item 1        | Legal Proceedings                                                                                               | 39  
|Item 1A.      | Risk Factors                                                                                                    | 39  
|Item 2        | Unregistered Sales of Equity Securities
      and Use of Proceeds                                               | 39  
|Item 3        | Defaults Upon Senior Securities                                                                                 | 39  
|Item 4        | Submission of Matters to a Vote of Security
      Holders                                                       | 40  
|Item 5        | Other Information                                                                                               | 40  
|Item 6        | Exhibits                                                                                                        | 40  
|SIGNATURE     | 41                                                                                                             
|EXHIBIT INDEX | 42                                                                                                             

i

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

|                                                                                  |                     |          |                         |   |          |  
|--------------------------------------------------------------------------------- | ------------------- | -------- | ----------------------- | - | -------- | -
|                                                                                  | June 30,
      2009 |          | December 31,
      2008 |  
|                                                                                  |                     |         
|                                                                                  |                     |          |                         |  
|                                                                                  | (Unaudited)         |         
|ASSETS                                                                            |                     |          |                         |   |          |  
|                                                                                 
|CURRENT ASSETS                                                                    |                     |          |                         |   |          |  
|Cash and equivalents                                                              | $                   | 35,296   |                         | $ | 27,535   |  
|Accounts receivable
      (less allowances of $1,650 and $2,069, respectively)    |                     | 99,147   |                         |   | 94,469   |  
|Prepaid expenses
      and other current assets                                   |                     | 12,945   |                         |   | 12,623   |  
|Deferred income
      taxes, net                                                  |                     | 8,411    |                         |   | 11,184   |  
|                                                                                  |                     |          |                         |  
|Total current assets                                                              |                     | 155,799  |                         |   | 145,811  |  
|                                                                                  |                     |          |                         |  
|                                                                                 
|PROPERTY AND EQUIPMENT, NET                                                       |                     | 140,219  |                         |   | 129,077  |  
|                                                                                 
|OTHER ASSETS                                                                      |                     |          |                         |   |          |  
|Goodwill                                                                          |                     | 351,529  |                         |   | 343,954  |  
|Intangibles,
      net of amortization                                            |                     | 28,603   |                         |   | 32,080   |  
|Restricted
      cash                                                             |                     | 244      |                         |   | 306      |  
|Other assets                                                                      |                     | 9,767    |                         |   | 9,779    |  
|                                                                                  |                     |          |                         |  
|TOTAL ASSETS                                                                      | $                   | 686,161  |                         | $ | 661,007  |  
|                                                                                  |                     |          |                         |  
|                                                                                 
|LIABILITIES AND SHAREHOLDERS EQUITY                                              |                     |          |                         |   |          |  
|                                                                                 
|CURRENT LIABILITIES                                                               |                     |          |                         |   |          |  
|Accounts payable                                                                  | $                   | 54,006   |                         | $ | 52,710   |  
|Income taxes
      payable                                                        |                     | 3,615    |                         |   | 3,063    |  
|Accrued taxes,
      other than income taxes                                      |                     | 10,016   |                         |   | 9,818    |  
|Accrued expenses                                                                  |                     | 25,997   |                         |   | 33,787   |  
|Current maturities
      of long-term debt and capital lease obligations          |                     | 1,953    |                         |   | 2,455    |  
|Accrued restructuring
      costs                                                 |                     | 5,621    |                         |   | 1,082    |  
|                                                                                  |                     |          |                         |  
|Total current liabilities                                                         |                     | 101,208  |                         |   | 102,915  |  
|                                                                                  |                     |          |                         |  
|                                                                                 
|LONG-TERM LIABILITIES                                                             |                     |          |                         |   |          |  
|Long-term debt
      and capital lease obligations                                |                     | 270,602  |                         |   | 269,034  |  
|Accrued restructuring
      costs                                                 |                     | 365      |                         |   | 771      |  
|Accrued expenses                                                                  |                     | 21,800   |                         |   | 20,150   |  
|Deferred income
      taxes, net                                                  |                     | 11,543   |                         |   | 14,303   |  
|                                                                                  |                     |          |                         |  
|Total long-term liabilities                                                       |                     | 304,310  |                         |   | 304,258  |  
|                                                                                  |                     |          |                         |  
|                                                                                 
|COMMITMENTS AND CONTINGENCIES (Note 8)                                            |                     |          |                         |   |          |  
|                                                                                 
|SHAREHOLDERS EQUITY                                                              |                     |          |                         |   |          |  
|Common stock,
      $.01 par value; 150,000,000 shares authorized, 60,752,956 and |                     |          |                         |   |          |  
|60,792,441
      shares issued and outstanding, respectively                      |                     | 608      |                         |   | 608      |  
|Additional
      paid-in capital                                                  |                     | 548,717  |                         |   | 545,801  |  
|Notes receivable,
      shareholder                                               |                     | (1,856   | )                       |   | (1,803   | )
|Accumulated
      other comprehensive loss                                        |                     | (2,374   | )                       |   | (8,312   | )
|Accumulated
      deficit                                                         |                     | (264,452 | )                       |   | (282,460 | )
|                                                                                  |                     |          |                         |  
|Total shareholders equity                                                        |                     | 280,643  |                         |   | 253,834  |  
|                                                                                  |                     |          |                         |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                        | $                   | 686,161  |                         | $ | 661,007  |  
|                                                                                  |                     |          |                         |  

Accompanying notes are integral to these condensed consolidated
  financial statements.

1

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

|                                                                           |                    |         |                  |   |         |         |      |         |         |   |         |         |  
|-------------------------------------------------------------------------- | ------------------ | ------- | ---------------- | - | ------- | ------- | ---- | ------- | ------- | - | ------- | ------- | -
|                                                                           | Three Months Ended |         | Six Months Ended |  
|                                                                           | June 30,           |         | June 30,         |  
|                                                                           |                    |         |                  |  
|                                                                           | 2009               |         | 2008             |   | 2009    |         | 2008 |        
|                                                                           |                    |         |                  |   |         |         |      |        
|                                                                           | (Unaudited)        |         | (Unaudited)      |  
|                                                                          
|Net revenues                                                               | $                  | 154,691 |                  | $ | 161,565 |         | $    | 310,562 |         | $ | 314,419 |        
|                                                                          
|Operating expenses                                                         |                    |         |                  |   |         |         |      |         |         |   |         |         |  
|Cost of revenues (exclusive
      of depreciation and                      |                    |         |                  |   |         |         |      |         |         |   |         |         |  
|amortization
      shown separately below)                                 |                    | 66,375  |                  |   |         | 66,202  |      |         | 132,590 |   |         | 127,864 |  
|Selling and marketing                                                      |                    | 35,848  |                  |   |         | 40,211  |      |         | 73,490  |   |         | 80,062  |  
|General and administrative                                                 |                    | 16,478  |                  |   |         | 16,738  |      |         | 32,189  |   |         | 32,971  |  
|Research and development                                                   |                    | 4,395   |                  |   |         | 4,163   |      |         | 8,625   |   |         | 8,222   |  
|Excise tax expense                                                         |                    |        |                  |   |         | 2,890   |      |         |        |   |         | 2,890   |  
|Depreciation                                                               |                    | 9,538   |                  |   |         | 8,600   |      |         | 18,629  |   |         | 15,847  |  
|Amortization                                                               |                    | 2,828   |                  |   |         | 3,914   |      |         | 5,858   |   |         | 8,157   |  
|Restructuring costs                                                        |                    | 4,686   |                  |   |         | 3,339   |      |         | 6,280   |   |         | 3,339   |  
|Net legal settlements and
      related expenses                           |                    | 161     |                  |   |         | 1,608   |      |         | 161     |   |         | 1,608   |  
|Acquisition-related costs                                                  |                    | 231     |                  |   |         |        |      |         | 571     |   |         |        |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|Total
      operating expenses                                             |                    | 140,540 |                  |   |         | 147,665 |      |         | 278,393 |   |         | 280,960 |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|Operating income                                                           |                    | 14,151  |                  |   |         | 13,900  |      |         | 32,169  |   |         | 33,459  |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|Other (expense) income                                                     |                    |         |                  |   |         |         |      |         |         |   |         |         |  
|Interest expense                                                           |                    | (3,767  | )                |   |         | (5,532  | )    |         | (7,792  | ) |         | (10,161 | )
|Unrealized gain (loss) on
      change in fair value of interestrate swaps |                    | 1,145   |                  |   |         | 4,223   |      |         | 2,086   |   |         | (369    | )
|Interest income                                                            |                    | 74      |                  |   |         | 138     |      |         | 180     |   |         | 351     |  
|Other, net                                                                 |                    | (153    | )                |   |         | (21     | )    |         | (91     | ) |         | 816     |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|Total other
      expense, net                                             |                    | (2,701  | )                |   |         | (1,192  | )    |         | (5,617  | ) |         | (9,363  | )
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|Income before income taxes                                                 |                    | 11,450  |                  |   |         | 12,708  |      |         | 26,552  |   |         | 24,096  |  
|Income tax expense                                                         |                    | 3,666   |                  |   |         | 4,170   |      |         | 8,544   |   |         | 6,523   |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|Net income                                                                 | $                  | 7,784   |                  |   | $       | 8,538   |      | $       | 18,008  |   | $       | 17,573  |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|                                                                          
|BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING                                  |                    | 58,840  |                  |   |         | 59,419  |      |         | 58,834  |   |         | 59,425  |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|Basic net income per share                                                 | $                  | 0.13    |                  |   | $       | 0.14    |      | $       | 0.31    |   | $       | 0.29    |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING                                |                    | 59,439  |                  |   |         | 60,603  |      |         | 59,400  |   |         | 60,646  |  
|                                                                           |                    |         |                  |   |         |         |      |         |        
|                                                                          
|Diluted net income per share                                               | $                  | 0.13    |                  |   | $       | 0.14    |      | $       | 0.30    |   | $       | 0.28    |  
|                                                                           |                    |         |                  |   |         |         |      |         |        

Accompanying notes are integral to these condensed consolidated financial statements.

2

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PREMIERE GLOBAL SERVICES, INC.
  AND SUBSIDIARIES 
  CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY(in thousands)

|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |   |   |          |   |   |         |  
|---------------------------------------------------- | ----------------- | --- | ------------------------ | - | ----------------------------------------- | - | ---------------------------------------- | ------ | ------------------------- | - | -------------------------------------- | - | - | -------- | - | - | ------- | -
|                                                     | CommonStockIssued |     | AdditionalPaid-InCapital |   | Notes
      Receivable,
      Shareholder |   | AccumulatedOtherComprehensive
      Loss |        | Accumulated
      Deficit |   | Total
      Shareholders
      Equity |  
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  
|                                                    
|BALANCE, December 31, 2008                           | $                 | 608 |                          | $ | 545,801                                   |   | $                                        | (1,803 | )                         | $ | (8,312                                 | ) | $ | (282,460 | ) | $ | 253,834 |  
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  
|                                                    
|Net income                                           |                   |    |                          |   |                                          |   |                                          |       |                           |   |                                       |   |   | 18,008   |   |   | 18,008  |  
|Translation adjustments, net of taxes                |                   |    |                          |   |                                          |   |                                          |       |                           |   | 5,062                                  |   |   |         |   |   | 5,062   |  
|Change in unrealized loss, derivatives, net of taxes |                   |    |                          |   |                                          |   |                                          |       |                           |   | 876                                    |   |   |         |   |   | 876     |  
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  
|Comprehensive income, net of taxes                   |                   |    |                          |   |                                          |   |                                          |       |                           |   | 5,938                                  |   |   | 18,008   |   |   | 23,946  |  
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  
|                                                    
|Exercise of stock options                            |                   | 2   |                          |   | 552                                       |   |                                          |       |                           |   |                                       |   |   |         |   |   | 554     |  
|Equity-based compensation                            |                   |    |                          |   | 5,778                                     |   |                                          |       |                           |   |                                       |   |   |         |   |   | 5,778   |  
|Treasury stock purchase and retirement               |                   | (4  | )                        |   | (2,717                                    | ) |                                          |       |                           |   |                                       |   |   |         |   |   | (2,721  | )
|Redemption of restricted shares, net                 |                   | 2   |                          |   | (1,184                                    | ) |                                          |       |                           |   |                                       |   |   |         |   |   | (1,182  | )
|Warrants issued                                      |                   |    |                          |   | 344                                       |   |                                          |       |                           |   |                                       |   |   |         |   |   | 344     |  
|Income tax benefit from exercise of stock options    |                   |    |                          |   | 143                                       |   |                                          |       |                           |   |                                       |   |   |         |   |   | 143     |  
|Interest related to shareholder notes receivable     |                   |    |                          |   |                                          |   |                                          | (53    | )                         |   |                                       |   |   |         |   |   | (53     | )
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  
|BALANCE, June 30, 2009                               | $                 | 608 |                          | $ | 548,717                                   |   | $                                        | (1,856 | )                         | $ | (2,374                                 | ) | $ | (264,452 | ) | $ | 280,643 |  
|                                                     |                   |     |                          |   |                                           |   |                                          |        |                           |   |                                        |  

Accompanying notes are integral to these condensed consolidated
  financial statements.

| 
|-
|3

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

|                                                                                        |                  |          |      |   |          |  
|--------------------------------------------------------------------------------------- | ---------------- | -------- | ---- | - | -------- | -
|                                                                                        | Six Months Ended |         
|                                                                                        | June 30,         |         
|                                                                                        |                  |         
|                                                                                        | 2009             |          | 2008 |  
|                                                                                        |                  |          |      |  
|                                                                                        | (Unaudited)      |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                    |                  |          |      |   |          |  
|Net income                                                                              | $                | 18,008   |      | $ | 17,573   |  
|Adjustments to reconcile
      net income to net cash provided by operating activities: |                  |          |      |   |          |  
|Depreciation                                                                            |                  | 18,629   |      |   | 15,847   |  
|Amortization                                                                            |                  | 5,858    |      |   | 8,157    |  
|Amortization
      of deferred financing costs                                          |                  | 296      |      |   | 282      |  
|Net legal settlements
      and related expenses                                        |                  | 161      |      |   | 1,608    |  
|Deferred income
      taxes, net of effect of acquisitions                              |                  | (206     | )    |   | (1,173   | )
|Restructuring
      costs                                                               |                  | 6,280    |      |   | 3,339    |  
|Payments for
      restructuring costs                                                  |                  | (2,196   | )    |   | (1,638   | )
|Equity-based
      compensation                                                         |                  | 5,809    |      |   | 6,463    |  
|Excess tax
      benefits from share-based payment arrangements                         |                  | (308     | )    |   | (832     | )
|Unrealized
      (gain) loss on change in fair value of interest rate swaps             |                  | (2,086   | )    |   | 369      |  
|Provision (recovery)
      for doubtful accounts                                        |                  | 549      |      |   | (467     | )
|Loss (gain)
      on disposal of assets                                                 |                  | 13       |      |   | (7       | )
|Changes in
      assets and liabilities, net of effect of acquisitions:                 |                  |          |      |   |          |  
|Accounts
      receivable, net                                                          |                  | (3,591   | )    |   | (13,794  | )
|Prepaid
      expenses and other assets                                                 |                  | (562     | )    |   | (1,144   | )
|Accounts
      payable and accrued expenses                                             |                  | (3,653   | )    |   | 5,031    |  
|                                                                                        |                  |          |      |  
|Total
      adjustments                                                                 |                  | 24,993   |      |   | 22,041   |  
|                                                                                        |                  |          |      |  
|Net
      cash provided by operating activities                                         |                  | 43,001   |      |   | 39,614   |  
|                                                                                        |                  |          |      |  
|                                                                                       
|CASH FLOWS FROM INVESTING ACTIVITIES                                                    |                  |          |      |   |          |  
|Capital expenditures                                                                    |                  | (24,684  | )    |   | (26,791  | )
|Other investing
      activities                                                        |                  | 103      |      |   |         |  
|Business acquisitions,
      net of cash acquired                                       |                  | (7,856   | )    |   | (8,443   | )
|                                                                                        |                  |          |      |  
|Net
      cash used in investing activities                                             |                  | (32,437  | )    |   | (35,234  | )
|                                                                                        |                  |          |      |  
|                                                                                       
|CASH FLOWS FROM FINANCING ACTIVITIES                                                    |                  |          |      |   |          |  
|Principal payments
      under borrowing arrangements                                   |                  | (116,996 | )    |   | (297,912 | )
|Proceeds from
      borrowing arrangements                                              |                  | 116,907  |      |   | 306,272  |  
|Payments of
      debt issuance costs                                                   |                  | (5       | )    |   | (8       | )
|Excess tax
      benefits from share-based payment arrangements                         |                  | 308      |      |   | 832      |  
|Purchase of
      treasury stock, at cost                                               |                  | (3,978   | )    |   | (9,164   | )
|Exercise of
      stock options                                                         |                  | 554      |      |   | 2,210    |  
|                                                                                        |                  |          |      |  
|Net
      cash (used in) provided by financing activities                               |                  | (3,210   | )    |   | 2,230    |  
|                                                                                        |                  |          |      |  
|                                                                                       
|Effect of exchange rate changes on cash and equivalents                                 |                  | 407      |      |   | (45      | )
|                                                                                        |                  |          |      |  
|                                                                                       
|NET INCREASE IN CASH AND EQUIVALENTS                                                    |                  | 7,761    |      |   | 6,565    |  
|                                                                                        |                  |          |      |  
|CASH AND EQUIVALENTS, beginning of period                                               |                  | 27,535   |      |   | 18,259   |  
|                                                                                        |                  |          |      |  
|CASH AND EQUIVALENTS, end of period                                                     | $                | 35,296   |      | $ | 24,824   |  
|                                                                                        |                  |          |      |  
|                                                                                       
|Supplemental Disclosure of Cash Flow Information:                                       |                  |          |      |   |          |  
|Cash paid for
      interest                                                            | $                | 7,163    |      | $ | 8,281    |  
|                                                                                        |                  |          |      |  
|Income tax
      payments                                                               | $                | 9,343    |      | $ | 7,353    |  
|                                                                                        |                  |          |      |  
|Income tax
      refunds                                                                | $                | 1,881    |      | $ | 1,072    |  
|                                                                                        |                  |          |      |  
|Capital lease
      additions                                                           | $                | 1,484    |      | $ | 3,024    |  
|                                                                                        |                  |          |      |  
|Capital expenditures
      in total current liabilities                                 | $                | 4,368    |      | $ | 3,597    |  
|                                                                                        |                  |          |      |  
|Capitalized
      interest                                                              | $                | 223      |      | $ | 575      |  
|                                                                                        |                  |          |      |  

Accompanying notes are integral to these condensed consolidated
  financial statements.

| 
|-
|4

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

1. BASIS OF PRESENTATION

We are a global provider of on-demand,
  applied communication technologies. Our PGi Communications Operating System,
  or PGiCOS, supports business applications within the following solution sets
  in our three segments in North America, Europe and Asia Pacific: PGiMeet, PGiSend,
  PGiNotify and PGiMarket. Our unaudited condensed consolidated financial statements
  and related footnotes have been prepared in accordance with generally accepted
  accounting principles in the United States, or GAAP, for interim financial information
  and Rule 10-01 of Regulation S-X issued by the Securities and Exchange Commission,
  or SEC. Accordingly, they do not include all of the information and footnotes
  required by accounting principles generally accepted in the United States for
  complete financial statements. We believe that these condensed consolidated
  financial statements include all adjustments (consisting only of normal recurring
  adjustments) necessary to present fairly the results for interim periods shown.
  All significant intercompany accounts and transactions have been eliminated
  in consolidation. Our results of operations for the three and six months ended
  June 30, 2009 are not indicative of the results that may be expected for the
  full fiscal year of 2009 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, 2008, which includes information and disclosures
  not included herein. We have evaluated the financial statements for subsequent
  events through August 7, 2009, the date of issuance of our financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable and Allowance for Doubtful Accounts

Included in accounts receivable at June 30, 2009 and December 31, 2008 was earned but unbilled revenue of $10.1 million and $5.9 million, respectively, which results from non-calendar month billing cycles and
the one-month lag time in billing related to certain of our services. Earned but unbilled revenue is billed within 30 days. Provision for doubtful accounts was $0.4 million for the three months ended June 30, 2009. Provision (recovery) for
doubtful accounts was $0.5 million and $(0.5) million for the six months ended June 30, 2009 and 2008, respectively. Write-offs against the allowance for doubtful accounts were $0.6 million and $0.7 million in the three months ended
June 30, 2009 and 2008, respectively. Write-offs against the allowance for doubtful accounts were $1.0 million and $0.8 million in the six months ended June 30, 2009 and 2008, respectively. Our allowance for doubtful accounts represents
reserves for receivables that reduce accounts receivable to amounts expected to be collected. Management uses significant judgment in estimating uncollectible amounts. In estimating uncollectible amounts, management considers factors such as
historical and anticipated customer payment performance and industry-specific economic conditions. Using these factors, management assigns reserves for uncollectible amounts by accounts receivable aging categories to specific customer accounts.

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 collectability 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 fixed period minimum revenue commitments and subscription fees. Unbilled revenue consists of earned but unbilled revenue that 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, or SAB, No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 101A, SAB No. 101B and SAB No. 104.

USF Charges

In accordance with Federal Communications Commission rules, we are required to contribute to the Federal Universal Service Fund, or USF, for some of our PGiMeet Solutions, which we recover from our applicable PGiMeet
customers and remit to the Universal Service Administrative Company, or USAC. EITF Issue 06-03: How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the

5

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

Income Statement (That Is, Gross Versus Net Presentation), or EITF 06-03, provides the choice of presenting this type of charge on a gross basis (included in revenues and costs) or a net basis (excluded from revenues). The USF charges that we
collect and remit are presented on a net basis, in accordance with EITF 06-03.

Sales and Excise Taxes

Sales and excise taxes that we
  collect and remit are presented on a net basis, in accordance with EITF 06-03.
  We have reserves for certain state sales and excise tax contingencies based
  on the likelihood of obligation in accordance with Statement of Financial Accounting
  Standards, or SFAS, No. 5, Accounting for Contingencies, or SFAS
  No. 5. Historically, we have collected and remitted state sales tax from our
  non-PGiMeet Solutions customers in applicable states, but we have not collected
  and remitted state sales tax from our PGiMeet Solutions customers in all applicable
  jurisdictions. In addition, we have learned that certain of our PGiMeet solutions
  may be subject to telecommunications excise tax statutes in certain states.
  During the six months ended June 30, 2008, we paid $2.5 million related
  to the settlement of certain of these state sales and excise tax contingencies.

At June 30, 2009 and December 31, 2008, we had reserved $4.6 million for certain state sales and excise tax contingencies. These amounts are included in Accrued taxes, other than income taxes in our
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. In addition, states may disagree with our method of assessing and remitting such taxes or additional states may subject us to inquiries regarding such taxes.

Income Taxes

Our effective income tax rate was 32.0% and 32.2% for the three and six months ended June 30, 2009, respectively, and 32.8% and 27.1% for the three and six months ended June 30, 2008, respectively. Our effective income
tax rate varied from statutory rates during the three and six months ended June 30, 2009 and 2008 as a result of non-deductible executive compensation expenses and the realization of net operating losses related to tax planning strategies associated
with the merger of our subsidiaries in the United Kingdom. The change in tax rates for the six months ended June 30, 2009 and 2008 is primarily attributable to the reversal of a valuation allowance associated with a United Kingdom subsidiary during
the three months ended March 31, 2008.

Treasury Stock

All treasury stock transactions are recorded at cost. During the six months ended June 30, 2009, we repurchased 375,800 shares of our common stock for $2.7 million in the open market pursuant to our board-approved
stock repurchase program. During the six months ended June 30, 2008, we repurchased 500,000 shares of our common stock for approximately $6.9 million in the open market pursuant to our Board-approved stock repurchase program. During the six
months ended June 30, 2009 and 2008, we withheld 156,087 and 181,000 shares, respectively, of our common stock to satisfy certain of our employees tax withholdings due upon the vesting of restricted stock grants and remitted $1.3 million
and $2.3 million, respectively, to the Internal Revenue Service on our employees behalf.

Preferred Stock

We have 5.0 million shares of authorized $0.01 par value preferred stock, none of which are issued or outstanding. Under the terms of our Amended and Restated Articles of Incorporation, our board of directors is
empowered to issue preferred stock without shareholder action.

6

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

Comprehensive Income

Comprehensive income represents the change in equity of a business during a period, except for investments by, and distributions to, owners. Comprehensive income was $17.5 million and $8.4 million for the three months ended June 30, 2009 and 2008, respectively, and $23.9 million and $22.8 million for the six months ended June 30, 2009 and 2008, respectively. The primary differences between net income as reported and comprehensive income are foreign currency translation adjustments, net of taxes, and changes in unrealized loss, derivatives, net of taxes.

Property and Equipment

Property and equipment are recorded
  at cost. Depreciation is recorded under the straight-line method over the estimated
  useful lives of the assets, commencing when the assets are placed in service.
  The estimated useful lives are five to seven years for furniture and fixtures,
  two to five years for software and three to ten years for computer servers and
  Internet and telecommunications equipment. Accumulated depreciation was $140.4
  million and $137.8 million as of June 30, 2009 and December 31, 2008, respectively.
  The cost of installation of equipment is capitalized as applicable. Amortization
  of assets recorded under capital leases is included in depreciation. Assets
  recorded under capital leases and leasehold improvements are depreciated over
  the shorter of their useful lives or the term of the related lease.

Goodwill

We account for goodwill under SFAS No. 142, Accounting for Goodwill and Other Intangible Assets, or SFAS No. 142. Summarized below is the carrying value of goodwill, and any changes to the carrying value of goodwill, from December 31, 2008 to June 30, 2009 (in thousands):

|                                    |              |         |        |   |             |  |       |       |  |   |        
|----------------------------------- | ------------ | ------- | ------ | - | ----------- |  | ----- | ----- |  | - | -------
|                                    | NorthAmerica |         | Europe |   | AsiaPacific |  | Total
|                                    |              |         |        |   |             |  |      
|Goodwill:                           |              |         |        |   |             |  |       |       |  |   |        
|Carrying value at December 31, 2008 | $            | 299,535 |        | $ | 40,644      |  | $     | 3,775 |  | $ | 343,954
|Additions                           |              | 4,970   |        |   |            |  |       |      |  |   | 4,970  
|Adjustments                         |              | 848     |        |   | 1,305       |  |       | 452   |  |   | 2,605  
|                                    |              |         |        |   |             |  |      
|Carrying value at June 30, 2009     | $            | 305,353 |        | $ | 41,949      |  | $     | 4,227 |  | $ | 351,529
|                                    |              |         |        |   |             |  |      

Goodwill is not subject to amortization
  consistent with SFAS No. 142 but is subject to periodic reviews for impairment.
  Additions to the goodwill carrying value since December 31, 2008 are due to
  our acquisition of certain assets of LINK Conference Service, LLC. Adjustments
  to the goodwill carrying value since December 31, 2008 are due to foreign currency
  fluctuations against the U.S. Dollar.

Other Intangible Assets

We account for other intangible assets
  under SFAS No. 142. Summarized below are the carrying value and accumulated
  amortization, if applicable, by intangible asset class (in thousands):

|                              |                    |         |                         |   |                  |   |                    |        |                         |   |                  |  |   |          |   |   |       
|----------------------------- | ------------------ | ------- | ----------------------- | - | ---------------- | - | ------------------ | ------ | ----------------------- | - | ---------------- |  | - | -------- | - | - | ------
|                              | June 30, 2009      |         | December 31, 2008      
|                              |                    |         |                        
|                              | GrossCarryingValue |         | AccumulatedAmortization |   | NetCarryingValue |   | GrossCarryingValue |        | AccumulatedAmortization |   | NetCarryingValue
|                              |                    |         |                         |   |                  |   |                    |        |                         |   |                 
|Other intangible assets:      |                    |         |                         |   |                  |   |                    |        |                         |   |                  |  |   |          |   |   |       
|Customer lists                | $                  | 131,142 |                         | $ | (108,647         | ) | $                  | 22,495 |                         | $ | 128,564          |  | $ | (102,705 | ) | $ | 25,859
|Non-compete agreements        |                    | 5,978   |                         |   | (3,407           | ) |                    | 2,571  |                         |   | 5,799            |  |   | (2,821   | ) |   | 2,978 
|Developed technology          |                    | 39,627  |                         |   | (39,289          | ) |                    | 338    |                         |   | 40,069           |  |   | (39,598  | ) |   | 471   
|Other                         |                    | 3,276   |                         |   | (77              | ) |                    | 3,199  |                         |   | 2,842            |  |   | (70      | ) |   | 2,772 
|                              |                    |         |                         |   |                  |   |                    |        |                         |   |                 
|Total other intangible assets | $                  | 180,023 |                         | $ | (151,420         | ) | $                  | 28,603 |                         | $ | 177,274          |  | $ | (145,194 | ) | $ | 32,080
|                              |                    |         |                         |   |                  |   |                    |        |                         |   |                 

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

Other intangible assets are amortized over an estimated useful life between one and ten years. Estimated amortization expense related to our other intangible assets for the full year 2009 and the next four years is as follows (in thousands):

|     |  |                              |       
|---- |  | ---------------------------- | ------
|Year |  | EstimatedAmortizationExpense
|2009 |  | $                            | 10,790
|2010 |  | $                            | 7,421 
|2011 |  | $                            | 5,722 
|2012 |  | $                            | 3,488 
|2013 |  | $                            | 1,102 

Foreign Currency Translation

In accordance with SFAS No. 52, Foreign
  Currency Translation, or SFAS No. 52, the assets and liabilities of subsidiaries
  with a functional currency other than the U.S. Dollar are translated at rates
  of exchange existing at the condensed consolidated balance sheet dates. Revenues
  and expenses are translated at average rates of exchange prevailing during the
  year. The resulting translation adjustments are recorded in the Accumulated
  other comprehensive loss component of shareholders equity. In addition,
  intercompany loans with foreign subsidiaries generally are considered to be
  permanently invested for the foreseeable future. Therefore, all foreign currency
  exchange gains and losses related to these balances are recorded in the Accumulated
  other comprehensive loss component of shareholders equity in our
  condensed consolidated balance sheets.

New Accounting Pronouncements Not Yet Adopted

In July 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification, and the Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162, or SFAS No. 168. SFAS No. 168 establishes the FASB Accounting Standards Codification, or the Codification, as the source of authoritative U.S. GAAP to be applied by nongovernmental entities. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. While not intended to change U.S. GAAP, the Codification significantly changes the way in which the accounting literature is organized. We will adopt this new accounting standard for our financial statements for the quarterly period ending September 30, 2009. The impact of adoption of SFAS No. 168 will change our references to U.S. GAAP in our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In June 2009, the FASB issued SFAS
  No. 165, Subsequent Events, or SFAS No. 165. SFAS No. 165 incorporates
  the subsequent events guidance contained in the auditing standards literature
  into authoritative accounting literature. It also requires entities to disclose
  the date through which they have evaluated subsequent events and whether the
  date corresponds with the release of their financial statements. SFAS No. 165
  is effective for all interim and annual periods ending after June 15, 2009.
  The impact of the adoption of SFAS No. 165 is limited to expanded disclosure
  in our consolidated financial statements.

In April 2009, the FASB issued three Staff Positions, or FSPs, that are intended to provide additional application guidance and enhance disclosures about fair value measurements and impairments of securities. FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, clarifies the objective and method of fair value measurement even when there has been a significant decrease in market activity for the asset being measured. FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, establishes a new model for measuring other-than-temporary impairments for debt securities, including establishing criteria for
when to recognize a write-down through earnings versus other comprehensive income. FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instruments, expands the fair value disclosures

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

required for all financial instruments within the scope of SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to interim periods. All of these FSPs were effective for us beginning April 1, 2009. The adoption of FSP FAS 157-4 and FSP FAS 115-2 and FAS 124-2 did not have a material impact on our financial statements. The impact of the adoption of FSP FAS 107-1 and APB 28-1 will be limited to expanded disclosures in our interim periods.

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets, or FSP FAS 142-3. FSP FAS 142-3 indicates that in developing assumptions about renewal or extension options used to determine the useful life of an intangible asset, an entity needs to consider its own historical experience adjusted for entity-specific factors. In the absence of that experience, an entity shall consider the assumptions that market participants would use about renewal or extension options. FSP FAS 142-3 is to be applied to intangible assets acquired after January 1, 2009. The adoption of FSP FAS 142-3 did not have a material impact on our condensed consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, or SFAS No. 161. SFAS No. 161 requires enhanced qualitative and quantitative disclosures about an entitys derivative and hedging activities and thereby improves the transparency of financial reporting. SFAS No. 161 was effective for us on January 1, 2009. The adoption had no financial impact other than expanded disclosure. See Note 9.

In December 2007, the FASB issued
  SFAS No. 141 (revised 2007), Business Combinations, or SFAS No.
  141(R). SFAS No. 141(R) amends the principles and requirements for how an acquiror
  recognizes and measures in its financial statements the identifiable assets
  acquired, the liabilities assumed, any noncontrolling interest in the acquiree
  and the goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements
  to enable the evaluation of the nature and financial effects of the business
  combination. SFAS No. 141(R) was effective for us on January 1, 2009, and we
  have applied SFAS No. 141(R) prospectively to all business combinations subsequent
  to the effective date. The adoption of SFAS No. 141(R) did not have a material
  impact on our condensed consolidated financial statements, and the impact of
  its adoption in future periods will depend on the nature and size of business
  combinations completed subsequent to the date of adoption.

3. RESTRUCTURING COSTS

Consolidated restructuring costs at
  June 30, 2009 and December 31, 2008 are as follows (in thousands):

|                             |                                  |       |            |   |              |  |                |        |          |   |                              |   |   |     |  |   |      
|---------------------------- | -------------------------------- | ----- | ---------- | - | ------------ |  | -------------- | ------ | -------- | - | ---------------------------- | - | - | --- |  | - | -----
|                             | Balance atDecember
      31,2008 |       | Provisions |   | CashPayments |  | EquityReleased |        | Non-Cash |   | Balance atJune
      30,2009
|                             |                                  |       |            |   |              |  |                |        |          |   |                             
|Accrued restructuring costs: |                                  |       |            |   |              |  |                |        |          |   |                              |   |   |     |  |   |      
|Severance and exit costs     | $                                | 270   |            | $ | 5,717        |  | $              | (1,712 | )        | $ | (71                          | ) | $ | 120 |  | $ | 4,324
|Contractual obligations      |                                  | 1,583 |            |   | 563          |  |                | (484   | )        |   |                             |   |   |    |  |   | 1,662
|                             |                                  |       |            |   |              |  |                |        |          |   |                             
|Total restructuring costs    | $                                | 1,853 |            | $ | 6,280        |  | $              | (2,196 | )        | $ | (71                          | ) | $ | 120 |  | $ | 5,986
|                             |                                  |       |            |   |              |  |                |        |          |   |                             

Realignment of Workforce  2009

During the three months ended June
  30, 2009, we executed a restructuring plan to consolidate and streamline various
  functions of our workforce. As part of these consolidations, we eliminated 136
  positions. During the three months ended June 30, 2009, we recorded total severance
  costs of $4.0 million in connection with this realignment of our workforce,
  which included the acceleration of vesting of restricted stock with a fair market
  value of $0.1 million. Additionally, we incurred $0.6 million of lease termination
  costs associated with a location in Europe. The expenses associated with these
  activities are reflected in Restructuring costs in our condensed
  consolidated statements of operations. On a segment basis, these restructuring
  costs totaled $1.2 million in North America, $3.2 million in Europe and $0.2
  million in Asia Pacific.

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

During the three months ended June
  30, 2009, we paid $0.4 million related to these severance costs in cash
  and $0.1 million in restricted stock awards. Our reserve for the second
  quarter 2009 restructuring costs was $4.1 million at June 30, 2009. We anticipate
  these remaining costs will be paid over the next 24 months.

During the three months ended March
  31, 2009, we executed a restructuring plan to close our company-owned data center
  in Europe and streamline various aspects of our sales force. As part of these
  consolidations, we eliminated 92 positions. During the three months ended March
  31, 2009, we recorded total restructuring costs of $1.7 million associated
  with this realignment of our workforce, representing severance costs associated
  with the elimination of these positions. The expenses associated with these
  activities are reflected in Restructuring costs in our condensed
  consolidated statements of operations. On a segment basis, these restructuring
  costs were $0.4 million in North America and $1.3 million in Europe,
  all expensed within the three months ended March 31, 2009. During the three
  and six months ended June 30, 2009, we paid $0.7 million and $1.1 million,
  respectively, related to these severance costs in cash. Our reserve for the
  first quarter 2009 restructuring costs was $0.7 million at June 30, 2009.
  We anticipate these remaining costs will be paid over the next 12 months.

Realignment of Workforce  2008

During the year ended December
  31, 2008, we executed a restructuring plan to consolidate the senior management
  of our technology development and network operations functions and to consolidate
  our corporate communications function into our marketing department. As part
  of these consolidations, we eliminated 11 positions, including entering into
  a separation agreement with our president, global operations. During the year
  ended December 31, 2008, we expensed total restructuring costs of $3.4 million
  associated with this realignment of our workforce, representing severance costs
  associated with the elimination of these positions. On a segment basis, the
  total restructuring costs initially incurred were $2.0 million in North
  America, $1.3 million in Europe and $0.1 million in Asia Pacific, with
  total adjustments in Europe of $(0.1) million during the three months ended
  March 31, 2009 and in North America of $0.1 million during the three months
  ended June 30, 2009. As of June 30, 2009, we have completed this restructuring
  plan and, accordingly, no reserves for the 2008 restructuring costs remain.

Realignment of Workforce  Prior to 2008

Amounts paid during the three months ended June 30, 2009 for restructuring costs incurred prior to 2007 totaled $0.2 million. At June 30, 2009, our reserve for restructuring costs incurred prior to 2008 totaled
$1.2 million and is associated with lease termination costs. We anticipate these remaining lease termination costs will be paid over the next seven years.

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 results of operations from these
transactions have been included in our condensed consolidated financial statements as of the effective date of each acquisition.

North America

In February 2009, we acquired certain
  technology assets of a provider of web collaboration services in exchange for
  warrants to purchase 105,000 shares of our common stock. We allocated the fair
  value of the warrants, $0.3 million, to in-process research and development
  in other intangible assets. The in-process research and development  is not currently being amortized but is subject
  to periodic impairment testing. We incurred transaction fees and closing costs
  of $0.2 million, which we expensed as incurred.

In February 2009, we acquired certain assets and assumed certain liabilities of LINK Conference Services, LLC, a U.S.-based provider of audio and web conferencing services. We paid $7.1 million in cash at closing
and $0.3 million in transaction fees and closing costs, which we expensed as incurred. We funded the purchase through our credit facility and cash and equivalents on hand. We followed SFAS No. 141(R) and preliminarily allocated

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

$0.7 million to accounts receivable, $0.1 million to prepaid assets, $0.3 million to acquired fixed assets, $0.3 million to other acquisition liabilities, $1.2 million to identifiable customer lists and $0.1 million to
non-compete agreements, with the customer lists and non-compete agreements amortized over five years. We have not yet finalized the working capital component of the purchase price. We allocated the residual $5.0 million of the purchase price to
goodwill.

In July 2008, we acquired certain assets of Soundpath Conferencing Services, LLC, a U.S.-based provider of audio conferencing services. We paid $20.1 million in cash at closing and $0.3 million in transaction
fees and closing costs. We funded the purchase through our credit facility and cash and equivalents on hand. We followed SFAS No. 141 and allocated $6.0 million to identifiable customer lists and $1.0 million to non-compete agreements, with
the customer lists amortized over ten years and the non-compete agreements amortized over five years. We allocated the residual $13.4 million of the aggregate purchase price to goodwill.

In May 2008, we acquired certain assets and assumed certain liabilities of the U.S.-based audio conferencing business of iLinc Communications, Inc. We paid $3.9 million in
cash at closing and $0.1 million in transaction fees and closing costs. We funded the purchase with cash and equivalents on hand. We followed SFAS No. 141 and allocated $0.6 million to acquired working capital, $0.8 million to other
acquisition liabilities and $1.2 million to identifiable intangible assets, which will be amortized over five years. We allocated the residual $3.0 million of the aggregate purchase price to goodwill.

5. INDEBTEDNESS

Long-term debt and capital lease obligations at June 30, 2009 and December 31, 2008 are as follows (in thousands):

|                              |          |         |              |   |         |  
|----------------------------- | -------- | ------- | ------------ | - | ------- | -
|                              | June 30, |         | December 31, |  
|                              | 2009     |         | 2008         |  
|                              |          |         |              |  
|                             
|Borrowings on credit facility | $        | 267,798 |              | $ | 266,199 |  
|Capital lease obligations     |          | 4,757   |              |   | 5,290   |  
|                              |          |         |              |  
|Subtotal                      | $        | 272,555 |              | $ | 271,489 |  
|Less current portion          |          | (1,953  | )            |   | (2,455  | )
|                              |          |         |              |  
|                              | $        | 270,602 |              | $ | 269,034 |  
|                              |          |         |              |  

We have a $375.0 million committed revolving credit facility, which consists of an original revolving credit facility of $300.0 million with a $100.0 million accordion feature, of which $75.0 million has
been exercised to date. This accordion feature allows for additional credit commitments to increase the revolving credit facility up to a maximum of $400.0 million, subject to its terms and conditions. Our credit facility matures in April 2011.
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.

At June 30, 2009, we were in compliance
  with the covenants under our credit facility. Proceeds drawn under our credit
  facility 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 credit facility, at our option,
  is the base rate (the greater of either the federal funds rate plus one-half
  of one percent, the prime rate or the Eurocurrency rate plus one and three-quarters
  of one percent) or one-month LIBOR plus an applicable margin that varies based
  upon our leverage ratio at the end of each fiscal quarter. At June 30, 2009,
  our applicable margin with respect to LIBOR loans was 1.25%. At June 30, 2009, our interest
  rate on one-month U.S. Dollar LIBOR loans, which comprise materially
  all of our outstanding borrowings, was 1.56% for our borrowings on which
  we did not have an interest rate swap agreement in place. At June 30, 2009,
  we had $267.8 million of borrowings and $1.2 million in letters of credit
  outstanding under our credit facility.

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

In August 2007, we entered into two $100.0 million two-year interest rate swaps at a fixed rate of 4.99%. In December 2007, we amended the life of one of the $100.0 million swaps to three years and reduced the
fixed rate to 4.75%. We did not initially designate these interest rate swaps as hedges and, as such, we did not account for them under hedge accounting in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, or SFAS No. 133. During the fourth quarter of 2008, we prospectively designated these interest rate swaps as hedges of our interest rate risk associated with our credit facility using the long-haul method of
effectiveness testing. Any changes in fair value prior to designation as a hedge and any ineffectiveness subsequent to such designation are recognized as Unrealized gain (loss) on change in fair value of interest rate swaps as a
component of Other (expense) income in our condensed consolidated statements of operations and amounted to $1.1 million and $4.2 million during the three months ended June 30, 2009 and 2008, respectively, and $2.1 million and
$(0.4) million during the six months ended June 30, 2009 and 2008, respectively. Any changes in fair value that are determined to be effective are recorded as a component of Accumulated other comprehensive loss in our condensed
consolidated balance sheets and amounted to a gain of $0.5 million, net of taxes, for the three months ended June 30, 2009. We recognize the fair value of derivatives in our condensed consolidated balance sheets as part of Accrued
expenses under Current Liabilities or Long-Term Liabilities depending on the maturity date of the contract. The amount recognized in current liabilities was $0.6 million and $2.6 million at June 30, 2009 and
December 31, 2008, respectively. The amount recognized in Long-Term Liabilities was $4.5 million and $6.0 million at June 30, 2009 and December 31, 2008, respectively.

We have entered into various capital leases for the purchase of operating equipment. These capital leases have interest rates ranging from 3.1% to 10.3% and terms ranging from 20 months to 60 months. The capital lease
obligation recorded on our condensed consolidated balance sheets for these leases was $4.8 million and $5.3 million at June 30, 2009 and December 31, 2008, respectively.

6. EQUITY-BASED COMPENSATION

We account for stock-based compensation under SFAS No. 123 (revised 2004), Share-Based Payment, or SFAS No. 123(R). We record the compensation cost related to stock option grants to parties other than
employees in accordance with SFAS No. 123, Accounting for Stock-Based Compensation, or SFAS No. 123, as originally issued and Emerging Issues Task Force (EITF) 96-18, Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services, or EITF No. 96-18.

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 our amended and
restated 2004 long-term incentive plan and our amended and restated 2000 directors stock plan. Options issued under these plans, other than the directors stock plan, may be either incentive stock options, which permit income tax deferral upon
exercise of options, or non-qualified options not entitled to such deferral. The compensation committee of our board of directors administers these stock plans.

In April 2008, our board of directors adopted and, in June 2008, our shareholders approved our amended and restated 2004 long-term incentive plan. The amendment and restatement of our 2004 plan increased the total
number of shares authorized for issuance by 2.0 million shares to 6.0 million shares. The maximum number of awards that we may grant under our 2004 plan during any one calendar year to any one grantee is 1.0 million shares. We may not grant more
than 3,975,176 of awards in the form of full value awards, such as restricted stock, subject to anti-dilution adjustments under our 2004 plan.

In April 2008, our board of directors adopted and, in June 2008, our shareholders approved our amended and restated 2000 directors stock plan. Only non-employee directors can participate in our directors stock plan.
Under our directors stock plan, we have reserved a total of 2.0 million shares of our common stock in connection with awards. We may not grant more than 325,431 of awards in the form of restricted stock, subject to anti-dilution adjustments, and may
only grant non-qualified stock options under our directors stock plan.

12

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

Equity-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized over the vesting periods. The following table presents total equity-based compensation expense for non-qualified stock options and restricted stock awards included in our condensed consolidated statements of operations (in thousands):

|                                          |                                   |       |                                 |   |        |   |   |        |   |   |        |  
|----------------------------------------- | --------------------------------- | ----- | ------------------------------- | - | ------ | - | - | ------ | - | - | ------ | -
|                                          | Three Months Ended
      June 30, |       | Six Months Ended
      June 30, |  
|                                          |                                   |       |                                 |  
|                                          |                                   | 2009  |                                 |   | 2008   |   |   | 2009   |   |   | 2008   |  
|                                          |                                   |       |                                 |   |        |   |   |       
|Cost of revenues                          | $                                 | 85    |                                 | $ | 32     |   | $ | 173    |   | $ | 129    |  
|Selling and marketing                     |                                   | 670   |                                 |   | 724    |   |   | 1,438  |   |   | 1,531  |  
|Research and development                  |                                   | 327   |                                 |   | 270    |   |   | 647    |   |   | 531    |  
|General and administrative                |                                   | 1,791 |                                 |   | 1,974  |   |   | 3,551  |   |   | 4,272  |  
|                                          |                                   |       |                                 |   |        |   |   |       
|Pre-tax equity-based compensation expense |                                   | 2,873 |                                 |   | 3,000  |   |   | 5,809  |   |   | 6,463  |  
|Income tax benefits                       |                                   | (919  | )                               |   | (1,020 | ) |   | (1,859 | ) |   | (2,198 | )
|                                          |                                   |       |                                 |   |        |   |   |       
|Total equity-based compensation expense   | $                                 | 1,954 |                                 | $ | 1,980  |   | $ | 3,950  |   | $ | 4,265  |  
|                                          |                                   |       |                                 |   |        |   |   |       

Restricted Stock Awards

The fair value of restricted stock
  awards used for the application of SFAS No. 123(R) is the market value of the
  stock on the date of grant. The effect of vesting conditions that apply only
  during the requisite service period is reflected by recognizing compensation
  cost only for the restricted stock awards for which the requisite service is
  rendered. As a result, we are required to estimate an expected forfeiture rate,
  as well as the probability that performance conditions that impact the vesting
  of certain awards will be achieved, and only recognize expense for those shares
  expected to vest. We estimate that forfeiture rate based on historical experience
  of our stock-based awards that are granted, exercised and voluntarily cancelled.
  If our actual forfeiture rate is materially different from our estimate, the
  stock-based compensation expense could be significantly different from what
  we have recorded in the current period. We continued to use a forfeiture rate
  of 1.5% for the three months ended June 30, 2009.

The following table summarizes the activity of restricted stock awards under our stock plans from December 31, 2008 to June 30, 2009:

|                              |           |   |                                      |   |      
|----------------------------- | --------- | - | ------------------------------------ | - | -----
|                              | Shares    |   | Weighted-AverageGrant DateFair Value
|                              |           |   |                                     
|                             
|Unvested at December 31, 2008 | 1,926,507 |   |                                      | $ | 11.18
|Granted                       | 344,148   |   |                                      |   | 9.79 
|Vested/released               | (522,336  | ) |                                      |   | 10.13
|Forfeited                     | (30,166   | ) |                                      |   | 11.56
|                              |           |   |                                      |  
|                             
|Unvested at June 30, 2009     | 1,718,153 |   |                                      | $ | 11.22
|                              |           |   |                                      |  

The weighted-average grant date fair
  value of restricted stock awards granted during the six months ended June 30,
  2009 and 2008 was $9.79 and $14.52, respectively. The fair value as of the vesting
  date of restricted stock released was $2.9 million and $5.1 million for the
  three and six months ended June 30, 2009, respectively, and $4.4 million and
  $8.3 million for the three and six months ended June 30, 2008, respectively.

For the three and six months ended
  June 30, 2009 we recognized equity-based compensation expense of $2.9 million
  and $5.8 million, respectively, associated with restricted stock awards. For
  the three and six months ended June 30, 2008 we recognized equity-based compensation
  expense of $3.0 million and $6.3 million, respectively, associated with restricted
  stock awards. As of June 30, 2009, we had $14.4 million of unvested restricted
  stock, which we will record in our consolidated statements of operations over
  a weighted average recognition period of less than five years.

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

Stock Options

The fair value of the options used for the application of SFAS No. 123(R) is estimated at the date of grant using the Black-Scholes option pricing model. In determining the fair value of options using the Black-Scholes option pricing model, various assumptions such as expected life, volatility, risk-free interest rate, dividend yield and forfeiture rates are used. The expected life of awards granted represents the period of time that they are expected to be outstanding and is estimated using historical data. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently
available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. We have not paid any cash dividends on our common
stock and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero in the Black-Scholes option valuation model. Finally, we use historical data to estimate pre-vesting option forfeitures. Stock-based compensation is recorded for only those awards that are expected to vest. No stock options have been issued since the year ended December 31, 2005.

The following table summarizes the stock options activity under our stock plans from December 31, 2008 to June 30, 2009.

|                                         |          |   |                               |       |                         |         
|---------------------------------------- | -------- | - | ----------------------------- | ----- | ----------------------- | --------
|                                         | Options  |   | WeightedAverageExercise Price |       | AggregateIntrinsicValue
|                                         |          |   |                               |       |                        
|Options outstanding at December 31, 2008 | 747,175  |   |                               | $8.22 |                         |         
|Granted                                  |         |   |                               |      |                         |         
|Exercised                                | (178,420 | ) |                               | 3.11  |                         |         
|Expired                                  | (500     | ) |                               | 6.13  |                         |         
|                                         |          |   |                               |       |                         |         
|                                        
|Options outstanding at June 30, 2009     | 568,255  |   |                               | $9.83 |                         | $731,739
|                                         |          |   |                               |       |                         |         
|                                        
|Options exercisable at June 30, 2009     | 568,255  |   |                               | $9.83 |                         | $731,739
|                                         |          |   |                               |       |                         |         

For the three months ended June 30,
  2009 and 2008, we did not recognize any equity-based compensation expense related
  to the vesting of stock options. For the six months ended June 30, 2008, we
  recognized equity-based compensation expense of $0.2 million related to the
  vesting of stock options. The total intrinsic value of stock options exercised
  during the six months ended June 30, 2009 and 2008 was $1.0 million and $1.4
  million, respectively. The total fair value of options vested during the three
  and six months ended June 30, 2008 was $0.1 and $0.5 million respectively. As
  of June 30, 2009, we had no remaining unvested stock options to be recorded
  as an expense in our condensed consolidated statements of operations for future
  periods.

7. EARNINGS PER SHAREBasic and Diluted Earnings 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 June 30, 2009 and June 30, 2008, are considered contingently returnable until the restrictions lapse and will not be included in the basic net income per share calculation until the shares are vested.

Diluted earnings per share gives the effect of all potentially dilutive securities on earnings per share. Our outstanding stock options, unvested restricted shares and warrants are potentially dilutive securities. The difference

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

between basic and diluted weighted-average shares outstanding is the dilutive effect of stock options, unvested restricted shares and warrants.

Pursuant to disclosure requirements contained in SFAS No. 128, Earnings Per Share, or SFAS No. 128, the following table represents a reconciliation of the basic and diluted earnings per share, or EPS, computations contained in our condensed consolidated financial statements (in thousands, except per share data):

|                                 |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |        |  |  |   |     
|-------------------------------- | -------------------------------------- | ------ | -------------------------------------- | ------ | ---------------- |  | --------- | ---- | ---------------------- | - | ---------------- |  | ------ |  |  | - | ----
|                                 | Three Months Ended
      June 30, 2009 |        | Three Months Ended
      June 30, 2008
|                                 | NetIncome                              |        | Weighted-AverageShares                 |        | EarningsPerShare |  | NetIncome |      | Weighted-AverageShares |   | EarningsPerShare
|Basic EPS                        | $                                      | 7,784  |                                        | 58,840 |                  |  | $         | 0.13 |                        | $ | 8,538            |  | 59,419 |  |  | $ | 0.14
|Effect of dilutive securities:   |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |        |  |  |   |     
|Stock options                    |                                        |        |                                        | 99     |                  |  |           |      |                        |   |                  |  | 377    |  |  |   |     
|Unvested restricted
      shares |                                        |        |                                        | 492    |                  |  |           |      |                        |   |                  |  | 807    |  |  |   |     
|Warrants                         |                                        |        |                                        | 8      |                  |  |           |      |                        |   |                  |  |       |  |  |   |     
|                                 |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |       
|Diluted EPS                      | $                                      | 7,784  |                                        | 59,439 |                  |  | $         | 0.13 |                        | $ | 8,538            |  | 60,603 |  |  | $ | 0.14
|                                 |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |       
|                                
|                                 | Six Months Ended
      June 30, 2009   |        | Six Months Ended
      June 30, 2008  
|                                 | NetIncome                              |        | Weighted-AverageShares                 |        | EarningsPerShare |  | NetIncome |      | Weighted-AverageShares |   | EarningsPerShare
|Basic EPS                        | $                                      | 18,008 |                                        | 58,834 |                  |  | $         | 0.31 |                        | $ | 17,573           |  | 59,425 |  |  | $ | 0.29
|Effect of dilutive securities:   |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |        |  |  |   |     
|Stock options                    |                                        |        |                                        | 122    |                  |  |           |      |                        |   |                  |  | 391    |  |  |   |     
|Unvested restricted
      shares |                                        |        |                                        | 440    |                  |  |           |      |                        |   |                  |  | 830    |  |  |   |     
|Warrants                         |                                        |        |                                        | 4      |                  |  |           |      |                        |   |                  |  |       |  |  |   |     
|                                 |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |       
|Diluted EPS                      | $                                      | 18,008 |                                        | 59,400 |                  |  | $         | 0.30 |                        | $ | 17,573           |  | 60,646 |  |  | $ | 0.28
|                                 |                                        |        |                                        |        |                  |  |           |      |                        |   |                  |  |       

The weighted-average diluted common
  shares outstanding for the three and six months ended June 30, 2009 excludes
  the effect of 0.4 million and 0.6 million, respectively, of restricted shares,
  warrants and out-of-the-money options because their effect would be anti-dilutive.
  The weighted-average diluted common shares outstanding for the six months ended
  June 30, 2008 excludes the effect of 1,900 restricted shares and out-of-the-money
  options because their effect would be anti-dilutive.

8. COMMITMENTS AND CONTINGENCIESAsset Retirement Obligation

Our recorded asset retirement obligation liability represents the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease. While our domestic operating leases generally do not contain make-whole provision clauses, in instances where our lease agreements subject us to remediation costs, we establish an asset retirement obligation liability with a corresponding increase to leasehold improvements consistent with SFAS No. 143, Accounting for Asset Retirement Obligations, or SFAS No. 143. Similarly, for our international operations, where we have either make-whole provision clauses in our leases or our lease agreements subject us to remediation costs, we establish an asset retirement obligation liability with
a corresponding increase to leasehold improvements. These amounts are included in Accrued expenses under Current Liabilities and Long-Term
Liabilities in our condensed consolidated balance sheets. For the six months ended June 30, 2009, asset retirement obligation liabilities increased by $0.2 million for remediation costs,

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

and no asset retirement obligations were satisfied. The current and long-term portion of the asset retirement obligation liability balance was $1.0 million and $0.9 million at June 30, 2009 and December 31, 2008, respectively.

State Income Tax Matter

In May 2009, one of our former
  subsidiaries, PTEKVentures.com, Inc., a Nevada corporation formally dissolved
  in 2002, received a notice of proposed income tax assessment from the Georgia
  Department of Revenue totaling approximately $22.7 million as of June 15,
  2009, which consists of approximately $9.8 million in tax, $2.4 million
  in penalties and $10.5 million in interest. PTEKVentures was part of our
  investment arm business, which we exited in 2001. The proposed tax assessment
  alleges that a transfer from us to PTEKVentures in 1999 of stock of various
  companies in which PTEKVentures invested was undertaken to avoid tax in Georgia.
  We filed a petition for redetermination of the proposed tax liability and intend
  to vigorously contest the assessment. Because we are at a preliminary stage
  of the process for resolving this dispute with the Georgia Department of Revenue,
  we cannot, at this time, reasonably estimate the amount, if any, of taxes or
  other interest, penalties or additions to tax that would ultimately be assessed
  at the conclusion of the process. Accordingly, we have not recorded any accrual
  as of June 30, 2009. We are not able to currently estimate when the administrative
  procedures and review within the Georgia Department of Revenue will be completed.
  If the Georgia Department of Revenues initial position is sustained, the
  amount assessed would result in a material adjustment to our consolidated financial
  statements and would materially impact our financial condition and results of
  operations.

Litigation and Claims

We are involved from time to time
  in legal proceedings that we do not believe will have a material adverse effect
  upon our business, financial condition or results of operations, although we
  can offer no assurance as to the ultimate outcome of any such proceedings.

9. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

The fair value amounts for cash and equivalents, accounts receivable, net, and payable and accrued expenses approximate carrying amounts due to the short maturities of these instruments. The carrying value of our
current and long-term maturities of capital lease obligations and debt do not vary materially from fair value at June 30, 2009. The fair value of our derivative instruments is calculated at the end of each period and carried on our condensed
consolidated balance sheets in the appropriate category, as further discussed below.

Effective January 1, 2008, SFAS No. 157 was applicable to our financial assets and liabilities. SFAS No. 157 is a technical standard, which provides a single definition of fair value and a hierarchical framework for
measuring it. SFAS No. 157 defines fair value as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability at the measurement date in an orderly transaction between market participants. As such,
fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 establishes a three-tier fair value hierarchy as a basis for such assumptions
which prioritizes the inputs used in measuring fair value as follows:

- Level 1  Quoted prices in active markets for identical assets or
      liabilities;
- Level 2  Inputs other than quoted prices included within Level 1
      that are observable for the asset or liability, either directly or indirectly;
      and
- Level 3  Unobservable inputs for the asset or liability in which
      there is little or no market data.

We value our interest rate swaps using a market approach based on interest rate yield curves observable in market transactions. The fair value of our interest rate swaps is based on models whose inputs are observable;
therefore, the fair value of these financial instruments is based on Level 2 inputs.

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

We have segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below (in thousands):

|                    |               |       |         |   |         |  |         |       |  |   |  
|------------------- | ------------- | ----- | ------- | - | ------- |  | ------- | ----- |  | - | -
|                    | June 30, 2009
|                    | Fair Value    |       | Level 1 |   | Level 2 |  | Level 3
|                    |               |       |         |   |         |  |        
|Liabilities:        |               |       |         |   |         |  |         |       |  |   |  
|Interest rate swaps | $             | 5,130 |         | $ |        |  | $       | 5,130 |  | $ | 
|                    |               |       |         |   |         |  |        
|Total               | $             | 5,130 |         | $ |        |  | $       | 5,130 |  | $ | 
|                    |               |       |         |   |         |  |        

We use derivative instruments to manage risks related to interest rates. During the three and six months ended June 30, 2009 and 2008, our derivative instruments are limited to interest rate swaps. During the three and six months ended June 30, 2008, our derivative instruments did not qualify for hedge accounting treatment under SFAS No. 133. We subsequently designated our interest rate swaps as hedges, in accordance with SFAS No. 133, using the long-haul method, and for the three and six months ended June 30, 2009, our derivative instruments qualified for hedge accounting treatment under SFAS No. 133. For further disclosure on our policy for accounting for derivatives and hedges, see Note 5.

We are exposed to one-month LIBOR interest rate risk on our $375.0 million credit facility. In August 2007, we entered into two $100.0 million pay fixed, receive floating interest rate swaps to hedge the variability in our cash flows associated with changes in one-month LIBOR interest rates. The interest rate swaps expire in August 2009 and August 2010. As of June 30, 2009, we have designated both of the interest rate swaps as hedges.

Fair Value of Derivative Instruments

|                        |                             |                     |  |   |      
|----------------------- | --------------------------- | ------------------- |  | - | -----
|                        | June 30, 2009(in thousands)
|                        |                             | Interest Rate Swaps |  |   | Total
|                        |                             |                     | 
|Liabilities:            |                             |                     |  |   |      
|Current liabilities     |                             |                     |  |   |      
|Accrued
      expenses  | $                           | 620                 |  | $ | 620  
|                       
|Long-term liabilities   |                             |                     |  |   |      
|Accrued
      expenses  |                             | 4,510               |  |   | 4,510
|                        |                             |                     | 
|Total
      liabilities | $                           | 5,130               |  | $ | 5,130
|                        |                             |                     | 

Cash-Flow Hedges

For a derivative instrument designated
  as a cash-flow hedge, the effective portion of the derivatives gain (loss)
  is initially reported as a component of other comprehensive income and is subsequently
  recognized in earnings in the same period or periods during which the hedged
  exposure is recognized in earnings. Gains and losses on the derivative representing
  hedge ineffectiveness are recognized in current earnings. Monthly settlements
  with the counterparties are recognized in the same line item, Interest
  expense, as the interest costs associated with our credit facility. Accordingly,
  cash settlements are included in operating cash flows in accordance with SFAS
  No. 95, Statement of Cash Flows, or SFAS No. 95, and were $4.4 million
  for the six months ended June 30, 2009. During the three and six months ended
  June 30, 2009, we recognized the following gains (losses) and interest expense
  related to interest rate swaps (in thousands):

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

|                                                                     |                                |        |   |                              |   |        |  
|-------------------------------------------------------------------- | ------------------------------ | ------ | - | ---------------------------- | - | ------ | -
|                                                                     | Three MonthsEndedJune 30, 2009 |        |   | Six MonthsEndedJune 30, 2009 |  
|                                                                     | Interest Rate Swaps            |       
|                                                                     |                                |       
|Effective portion:                                                   |                                |        |   |                              |   |        |  
|Gain recognized in other comprehensive
      income, net of tax      |                                |        |   |                              |   |        |  
|effect
      of $0.3 million and $0.5 million                        | $                              | 531    |   |                              | $ | 876    |  
|                                                                    
|Ineffective portion:                                                 |                                |        |   |                              |   |        |  
|Unrealized gain on change
      in fair value of interest rate swaps |                                |        |   |                              |   |        |  
|recognized
      in other (expense) income                           | $                              | 1,145  |   |                              | $ | 2,086  |  
|                                                                    
|Interest expense related to monthly cash settlements:                |                                |        |   |                              |   |        |  
|Interest expense                                                     | $                              | (2,252 | ) |                              | $ | (4,419 | )

10. SEGMENT REPORTING

We manage our operations on a geographic regional basis, with reportable segments in North America, Europe and Asia Pacific. The accounting policies as described in the summary of significant accounting policies are applied consistently across the segments. Our North America segment is comprised of operations in the United States and Canada. Beginning with our quarterly report on Form 10-Q for the three months ended March 31, 2009, we present Operating income for each of our reportable segments as a measure of segment profit, which differs from the presentation in our annual report on Form 10-K for the year ended December 31, 2008, where we reported Net income as a measure of segment profit. Beginning in 2009, our chief operating decision maker uses operating income
internally, as a means of analyzing segment performance, and believes that it more clearly represents our segment profit, without the impact of income taxes and other
non-operating items. Information concerning our operations in our reportable segments is as follows (in thousands):

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

|                              |                                   |         |                                  |   |         |  |      |         |  |   |        
|----------------------------- | --------------------------------- | ------- | -------------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                              | Three Months Ended
      June 30, |         | Six Months Ended,
      June 30,
|                              |                                   |         |                                 
|                              | 2009                              |         | 2008                             |   | 2009    |  | 2008
|                              |                                   |         |                                  |   |         |  |     
|Net revenues:                 |                                   |         |                                  |   |         |  |      |         |  |   |        
|North America                 |                                   |         |                                  |   |         |  |      |         |  |   |        
|PGiMeet
      Solutions       | $                                 | 81,175  |                                  | $ | 77,123  |  | $    | 164,574 |  | $ | 151,571
|Broadcast
      fax solutions |                                   | 1,833   |                                  |   | 3,123   |  |      | 4,218   |  |   | 6,717  
|Other
      solutions         |                                   | 13,797  |                                  |   | 16,858  |  |      | 27,850  |  |   | 33,821 
|                              |                                   |         |                                  |   |         |  |     
|Total North America           | $                                 | 96,805  |                                  | $ | 97,104  |  | $    | 196,642 |  | $ | 192,109
|                              |                                   |         |                                  |   |         |  |     
|                             
|Europe                        |                                   |         |                                  |   |         |  |      |         |  |   |        
|PGiMeet
      Solutions       | $                                 | 21,989  |                                  | $ | 21,230  |  | $    | 43,589  |  | $ | 39,018 
|Broadcast
      fax solutions |                                   | 1,819   |                                  |   | 3,943   |  |      | 3,687   |  |   | 7,942  
|Other
      solutions         |                                   | 5,585   |                                  |   | 8,164   |  |      | 11,024  |  |   | 16,335 
|                              |                                   |         |                                  |   |         |  |     
|Total Europe                  | $                                 | 29,393  |                                  | $ | 33,337  |  | $    | 58,300  |  | $ | 63,295 
|                              |                                   |         |                                  |   |         |  |     
|                             
|Asia Pacific                  |                                   |         |                                  |   |         |  |      |         |  |   |        
|PGiMeet
      Solutions       | $                                 | 13,545  |                                  | $ | 15,335  |  | $    | 26,407  |  | $ | 28,152 
|Broadcast
      fax solutions |                                   | 7,198   |                                  |   | 8,383   |  |      | 14,439  |  |   | 16,581 
|Other
      solutions         |                                   | 7,750   |                                  |   | 7,406   |  |      | 14,774  |  |   | 14,282 
|                              |                                   |         |                                  |   |         |  |     
|Total Asia Pacific            | $                                 | 28,493  |                                  | $ | 31,124  |  | $    | 55,620  |  | $ | 59,015 
|                              |                                   |         |                                  |   |         |  |     
|                             
|Consolidated                  |                                   |         |                                  |   |         |  |      |         |  |   |        
|PGiMeet
      Solutions       | $                                 | 116,709 |                                  | $ | 113,688 |  | $    | 234,570 |  | $ | 218,741
|Broadcast
      fax solutions |                                   | 10,850  |                                  |   | 15,449  |  |      | 22,344  |  |   | 31,240 
|Other
      solutions         |                                   | 27,132  |                                  |   | 32,428  |  |      | 53,648  |  |   | 64,438 
|                              |                                   |         |                                  |   |         |  |     
|Total consolidated            | $                                 | 154,691 |                                  | $ | 161,565 |  | $    | 310,562 |  | $ | 314,419
|                              |                                   |         |                                  |   |         |  |     
|                             
|Operating income:             |                                   |         |                                  |   |         |  |      |         |  |   |        
|North America                 | $                                 | 3,781   |                                  | $ | 1,436   |  | $    | 10,049  |  | $ | 10,010 
|Europe                        |                                   | 4,118   |                                  |   | 5,791   |  |      | 9,842   |  |   | 10,827 
|Asia Pacific                  |                                   | 6,252   |                                  |   | 6,673   |  |      | 12,278  |  |   | 12,622 
|                              |                                   |         |                                  |   |         |  |     
|Total operating income        | $                                 | 14,151  |                                  | $ | 13,900  |  | $    | 32,169  |  | $ | 33,459 
|                              |                                   |         |                                  |   |         |  |     

11. RELATED PARTY TRANSACTIONS

Notes receivable, shareholder

We have made loans in prior years
  to our chief executive officer and to a limited partnership in which he has
  an indirect interest, pursuant to extensions of credit agreed to by us prior
  to July 30, 2002. These loans were made pursuant to his then current employment
  agreement for the exercise price of certain stock options and the taxes related
  thereto. Each of these loans is evidenced by a recourse promissory note bearing
  interest at the applicable federal rate and secured by the common stock purchased.
  These loans mature between 2009 and 2010. These loans, including accrued interest,
  are recorded in the equity section of our condensed consolidated balance sheets
  in Notes receivable, shareholder. The amount of principal and accrued
  interest outstanding under all remaining loans owed to us by our chief executive
  officer is $1.9 million as of June 30, 2009.

19

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

OVERVIEW

We are a global provider of on-demand,
  applied communication technologies. Our PGi Communications Operating System,
  or PGiCOS, supports business applications within the following solution sets
  in our three segments in North America, Europe and Asia Pacific: PGiMeet, PGiSend,
  PGiNotify and PGiMarket.

Key highlights of our financial
  and strategic accomplishments for the second quarter and first six months of
  2009 include:

- Grew net revenue from our PGiMeet Solutions, the largest solution set
      within the PGiCOS, by 2.7% for the three months ended June 30, 2009 compared
      to the same period in 2008;
- Generated organic net revenue growth in our PGiMeet Solutions (which excludes
      impacts from foreign currency exchange rate fluctuations and acquisitions)
      of 4.3% for the three months ended June 30, 2009 compared to the same period
      in 2008 (see Non-GAAP Financial Measures);
- Grew net cash provided by operating activities by 8.6% compared
      to the six months ended June 30, 2008; and
- Grew free cash flow (net cash provided by operating activities less capital
      expenditures) by 42.8% compared to the six months ended June
      30, 2008 (see Non-GAAP Financial Measures).

Our primary corporate objectives for the remainder of 2009 are focused on sharpening our business strategy, advancing our technology innovation and refreshing our go-to-market strategy in order to build a foundation for
accelerated growth and profitability.

Specifically, in 2009, our strategic
  plan includes continued focus on:

- Developing and launching innovative products and customer self-service
      tools that improve our user experience;
- Migrating our network architecture to a global delivery platform of media
      servers to improve the quality, reliability and cost-effectiveness of our
      services;
- Building a brand that is a sustainable asset for us; and
- Optimizing and streamlining our expense structure in support of these
      efforts.

In the first six months of 2009, approximately 39% of our consolidated net revenues were generated outside of the United States. Consequently, movements in foreign currency exchange rates affect our reported results. We
estimate that changes in foreign currency exchange rates negatively affected our consolidated net revenues by $7.8 million and $15.9 million during the three and six months ended June 30, 2009, respectively, as compared to the same periods
in 2008. We anticipate movements in foreign currency exchange rates will continue to negatively affect our reported results in the third quarter of 2009 compared to the same period in 2008.

We have experienced net revenue
  growth in our PGiMeet Solutions through increases in volume, offset in part
  by declines in average selling prices. Traditional pricing for these services
  is on a per-minute basis. During 2008, we introduced a subscription-based pricing
  model similar to that of other on-demand service providers. Revenue from subscription-based
  pricing was $13.7 million for the six months ended June 30, 2009, or 5.8% of our PGiMeet Solutions net revenue.
  Net revenue from our PGiMeet Solutions for the three months ended June 30, 2009
  and 2008 was $116.7 million and $113.7 million, respectively.

We have experienced revenue volume
  declines in our broadcast fax, transactional fax and e-mail delivery services.
  Net revenue from these services for the three months ended

20

---



June 30, 2009 and 2008 was $18.9 million and $24.9 million,
  respectively. Revenue decreases in these fax services have been primarily associated
  with volume declines. Although we expect to continue to convert such customers
  to our alternative solutions, we expect this overall decline in revenue to continue.

We anticipate that our increased
  operating cash flows will continue to be driven by our PGiMeet Solutions, offset
  by declines in our broadcast fax, transactional fax and e-mail delivery services.

We have historically used our free cash flow for debt repayments, acquisitions and stock repurchases. At June 30, 2009, borrowings under our credit facility were $267.8 million. During the six months ended June 30,
2009 and 2008, our free cash flow was $18.3 million and $12.8 million, respectively (see Non-GAAP Financial Measures). We anticipate extending the tenure of, or refinancing, our existing credit facility prior to its
maturity in April 2011. In 2009, we anticipate using a portion of our free cash flow to pay down our debt or to build cash balances, while still continuing to evaluate possible acquisitions and share repurchases.

In addition, we intend to continue to prudently invest in our PGiMeet Solutions, specifically in technology innovation and platform development. We will also continue to evaluate our cost structure for the remainder of
2009 and streamline operations as warranted by the current economic environment. We expect to incur additional restructuring costs associated with these efforts in the second half of 2009.

The preparation of financial statements
  in conformity with GAAP requires us to make estimates and assumptions that affect
  the reported amounts of assets and liabilities and disclosure of contingent
  assets and liabilities at the date of the financial statements and reported
  amounts of net revenues and expenses during the reporting period. Actual results
  could differ from the estimates. See Critical Accounting Policies.
  The following discussion and analysis provides information that we believe is
  relevant to an assessment and understanding of our consolidated results of operations
  and financial condition. The results of operations for the three and six months
  ended June 30, 2009 are not indicative of the results that may be expected for
  the full fiscal year of 2009 or for any other interim period. The financial
  information and discussion presented herein should be read in conjunction with
  our annual report on Form 10-K for the year ended December 31, 2008, which includes
  information and disclosures not included herein. All significant intercompany
  accounts and transactions have been eliminated in consolidation.

21

---



RESULTS OF OPERATIONS

Net Revenues

The following tables present certain financial information about our segments for the periods presented (in thousands, except percentages):

|                              |                    |         |  |        |   |         |   |  |        |   |  |       |  
|----------------------------- | ------------------ | ------- |  | ------ | - | ------- | - |  | ------ | - |  | ----- | -
|                              | Three Months Ended
|                              |                   
|                              | June 30,           |         |  | Change
|                              |                    |         |  |       
|                              | 2009               |         |  | 2008   |   |         | $ |  | %     
|                              |                    |         |  |        |   |         |   |  |       
|Net revenues:                 |                    |         |  |        |   |         |   |  |        |   |  |       |  
|North America                 |                    |         |  |        |   |         |   |  |        |   |  |       |  
|PGiMeet
      Solutions       | $                  | 81,175  |  |        | $ | 77,123  |   |  | 4,052  |   |  | 5.3   |  
|Broadcast
      fax solutions |                    | 1,833   |  |        |   | 3,123   |   |  | (1,290 | ) |  | (41.3 | )
|Other
      solutions         |                    | 13,797  |  |        |   | 16,858  |   |  | (3,061 | ) |  | (18.2 | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|Total North America           | $                  | 96,805  |  |        | $ | 97,104  |   |  | (299   | ) |  | (0.3  | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|                             
|Europe                        |                    |         |  |        |   |         |   |  |        |   |  |       |  
|PGiMeet
      Solutions       | $                  | 21,989  |  |        | $ | 21,230  |   |  | 759    |   |  | 3.6   |  
|Broadcast
      fax solutions |                    | 1,819   |  |        |   | 3,943   |   |  | (2,124 | ) |  | (53.9 | )
|Other
      solutions         |                    | 5,585   |  |        |   | 8,164   |   |  | (2,579 | ) |  | (31.6 | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|Total Europe                  | $                  | 29,393  |  |        | $ | 33,337  |   |  | (3,944 | ) |  | (11.8 | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|                             
|Asia Pacific                  |                    |         |  |        |   |         |   |  |        |   |  |       |  
|PGiMeet
      Solutions       | $                  | 13,545  |  |        | $ | 15,335  |   |  | (1,790 | ) |  | (11.7 | )
|Broadcast
      fax solutions |                    | 7,198   |  |        |   | 8,383   |   |  | (1,185 | ) |  | (14.1 | )
|Other
      solutions         |                    | 7,750   |  |        |   | 7,406   |   |  | 344    |   |  | 4.6   |  
|                              |                    |         |  |        |   |         |   |  |        |   | 
|Total Asia Pacific            | $                  | 28,493  |  |        | $ | 31,124  |   |  | (2,631 | ) |  | (8.5  | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|                             
|Consolidated                  |                    |         |  |        |   |         |   |  |        |   |  |       |  
|PGiMeet
      Solutions       | $                  | 116,709 |  |        | $ | 113,688 |   |  | 3,021  |   |  | 2.7   |  
|Broadcast
      fax solutions |                    | 10,850  |  |        |   | 15,449  |   |  | (4,599 | ) |  | (29.8 | )
|Other
      solutions         |                    | 27,132  |  |        |   | 32,428  |   |  | (5,296 | ) |  | (16.3 | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|Total consolidated            | $                  | 154,691 |  |        | $ | 161,565 |   |  | (6,874 | ) |  | (4.3  | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|                             
|Operating income:             |                    |         |  |        |   |         |   |  |        |   |  |       |  
|North America                 | $                  | 3,781   |  |        | $ | 1,436   |   |  | 2,345  |   |  | 163.3 |  
|Europe                        |                    | 4,118   |  |        |   | 5,791   |   |  | (1,673 | ) |  | (28.9 | )
|Asia Pacific                  |                    | 6,252   |  |        |   | 6,673   |   |  | (421   | ) |  | (6.3  | )
|                              |                    |         |  |        |   |         |   |  |        |   | 
|Total operating income        | $                  | 14,151  |  |        | $ | 13,900  |   |  | 251    |   |  | 1.8   |  
|                              |                    |         |  |        |   |         |   |  |        |   | 
|                             

|Percent of net revenues:  |        |  |  |        |  |  |  |  |  |  | 
|------------------------- | ------ |  |  | ------ |  |  |  |  |  |  | 
|North America             | 62.6%  |  |  | 60.1%  |  |  |  |  |  |  | 
|Europe                    | 19.0%  |  |  | 20.6%  |  |  |  |  |  |  | 
|Asia Pacific              | 18.4%  |  |  | 19.3%  |  |  |  |  |  |  | 
|                          |        |  |  |        |  |  |  |  |  |  | 
|Consolidated net revenues | 100.0% |  |  | 100.0% |  |  |  |  |  |  | 
|                          |        |  |  |        |  |  |  |  |  |  | 

22

---



|                              |                  |         |  |        |   |         |   |  |         |   |  |       |  
|----------------------------- | ---------------- | ------- |  | ------ | - | ------- | - |  | ------- | - |  | ----- | -
|                              | Six Months Ended
|                              |                 
|                              | June 30,         |         |  | Change
|                              |                  |         |  |       
|                              | 2009             |         |  | 2008   |   |         | $ |  | %      
|                              |                  |         |  |        |   |         |   |  |        
|                             
|Net revenues:                 |                  |         |  |        |   |         |   |  |         |   |  |       |  
|North America                 |                  |         |  |        |   |         |   |  |         |   |  |       |  
|PGiMeet
      Solutions       | $                | 164,574 |  |        | $ | 151,571 |   |  | 13,003  |   |  | 8.6   |  
|Broadcast
      fax solutions |                  | 4,218   |  |        |   | 6,717   |   |  | (2,499  | ) |  | (37.2 | )
|Other
      solutions         |                  | 27,850  |  |        |   | 33,821  |   |  | (5,971  | ) |  | (17.7 | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|Total North America           | $                | 196,642 |  |        | $ | 192,109 |   |  | 4,533   |   |  | 2.4   |  
|                              |                  |         |  |        |   |         |   |  |         |   | 
|                             
|Europe                        |                  |         |  |        |   |         |   |  |         |   |  |       |  
|PGiMeet
      Solutions       | $                | 43,589  |  |        | $ | 39,018  |   |  | 4,571   |   |  | 11.7  |  
|Broadcast
      fax solutions |                  | 3,687   |  |        |   | 7,942   |   |  | (4,255  | ) |  | (53.6 | )
|Other
      solutions         |                  | 11,024  |  |        |   | 16,335  |   |  | (5,311  | ) |  | (32.5 | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|Total Europe                  | $                | 58,300  |  |        | $ | 63,295  |   |  | (4,995  | ) |  | (7.9  | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|                             
|Asia Pacific                  |                  |         |  |        |   |         |   |  |         |   |  |       |  
|PGiMeet
      Solutions       | $                | 26,407  |  |        | $ | 28,152  |   |  | (1,745  | ) |  | (6.2  | )
|Broadcast
      fax solutions |                  | 14,439  |  |        |   | 16,581  |   |  | (2,142  | ) |  | (12.9 | )
|Other
      solutions         |                  | 14,774  |  |        |   | 14,282  |   |  | 492     |   |  | 3.4   |  
|                              |                  |         |  |        |   |         |   |  |         |   | 
|Total Asia Pacific            | $                | 55,620  |  |        | $ | 59,015  |   |  | (3,395  | ) |  | (5.8  | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|                             
|Consolidated                  |                  |         |  |        |   |         |   |  |         |   |  |       |  
|PGiMeet
      Solutions       | $                | 234,570 |  |        | $ | 218,741 |   |  | 15,829  |   |  | 7.2   |  
|Broadcast
      fax solutions |                  | 22,344  |  |        |   | 31,240  |   |  | (8,896  | ) |  | (28.5 | )
|Other
      solutions         |                  | 53,648  |  |        |   | 64,438  |   |  | (10,790 | ) |  | (16.7 | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|Total consolidated            | $                | 310,562 |  |        | $ | 314,419 |   |  | (3,857  | ) |  | (1.2  | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|                             
|Operating income:             |                  |         |  |        |   |         |   |  |         |   |  |       |  
|North America                 | $                | 10,049  |  |        | $ | 10,010  |   |  | 39      |   |  | 0.4   |  
|Europe                        |                  | 9,842   |  |        |   | 10,827  |   |  | (985    | ) |  | (9.1  | )
|Asia Pacific                  |                  | 12,278  |  |        |   | 12,622  |   |  | (344    | ) |  | (2.7  | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|Total operating income        | $                | 32,169  |  |        | $ | 33,459  |   |  | (1,290  | ) |  | (3.9  | )
|                              |                  |         |  |        |   |         |   |  |         |   | 
|                             

|Percent of net revenues:  |        |  |  |        |  |  |  |  |  |  | 
|------------------------- | ------ |  |  | ------ |  |  |  |  |  |  | 
|North America             | 63.3%  |  |  | 61.1%  |  |  |  |  |  |  | 
|Europe                    | 18.8%  |  |  | 20.1%  |  |  |  |  |  |  | 
|Asia Pacific              | 17.9%  |  |  | 18.8%  |  |  |  |  |  |  | 
|                          |        |  |  |        |  |  |  |  |  |  | 
|Consolidated net revenues | 100.0% |  |  | 100.0% |  |  |  |  |  |  | 
|                          |        |  |  |        |  |  |  |  |  |  | 

23

---



Consolidated Net Revenues

The following table details the changes in consolidated net revenues from the three and six months ended June 30, 2008 to the three and six months ended June 30, 2009 (in millions):

|                                                                |                     |       |                   |   |       |  
|--------------------------------------------------------------- | ------------------- | ----- | ----------------- | - | ----- | -
|                                                                | Three 
      Months |       | Six 
      Months |  
|                                                                |                     |       |                   |  
|                                                               
|Consolidated Net Revenues 2008                                  | $                   | 161.6 |                   | $ | 314.4 |  
|Change in volume                                                |                     | 8.4   |                   |   | 26.2  |  
|Change in selling prices                                        |                     | (10.7 | )                 |   | (20.7 | )
|Impact of acquisitions                                          |                     | 3.2   |                   |   | 6.6   |  
|Impact of fluctuations in foreign
      currency exchange rates |                     | (7.8  | )                 |   | (15.9 | )
|                                                                |                     |       |                   |  
|Consolidated Net Revenues 2009                                  | $                   | 154.7 |                   | $ | 310.6 |  
|                                                                |                     |       |                   |  

Volume increases for the three and six months ended June 30, 2009
  were driven by our PGiMeet Solutions, offset in part by volume decreases in
  our broadcast fax and other solutions. The decreases in average selling prices
  resulted from a higher mix of large volume enterprise customers and price reductions
  from existing customers.

North America Net Revenue

The following table details the changes
  in North America net revenue from the three and six months ended June 30, 2008
  to three and six months ended June 30, 2009 (in millions):

|                                                                |                     |      |                   |   |       |  
|--------------------------------------------------------------- | ------------------- | ---- | ----------------- | - | ----- | -
|                                                                | Three 
      Months |      | Six 
      Months |  
|                                                                |                     |      |                   |  
|North America Net Revenue 2008                                  | $                   | 97.1 |                   | $ | 192.1 |  
|Change in volume                                                |                     | 6.4  |                   |   | 16.8  |  
|Change in selling prices                                        |                     | (9.1 | )                 |   | (16.4 | )
|Impact of acquisitions                                          |                     | 3.2  |                   |   | 6.6   |  
|Impact of fluctuations in foreign
      currency exchange rates |                     | (0.8 | )                 |   | (2.5  | )
|                                                                |                     |      |                   |  
|North America Net Revenue 2009                                  | $                   | 96.8 |                   | $ | 196.6 |  
|                                                                |                     |      |                   |  

Volume increases for the three and six months ended June 30, 2009
  were driven by our PGiMeet Solutions, offset in part by volume decreases in
  our broadcast fax and other solutions. The decreases in average selling prices
  were primarily associated with our PGiMeet Solutions.

Europe Net Revenue

The following table details the changes
  in Europe net revenue from the three and six months ended June 30, 2008 to the
  three and six months ended June 30, 2009 (in millions):

|                                                                |                     |      |                   |   |       |  
|--------------------------------------------------------------- | ------------------- | ---- | ----------------- | - | ----- | -
|                                                                | Three 
      Months |      | Six 
      Months |  
|                                                                |                     |      |                   |  
|Europe Net Revenue 2008                                         | $                   | 33.3 |                   | $ | 63.3  |  
|Change in volume                                                |                     | 4.0  |                   |   | 11.8  |  
|Change in selling prices                                        |                     | (2.6 | )                 |   | (6.1  | )
|Impact of fluctuations in foreign
      currency exchange rates |                     | (5.3 | )                 |   | (10.7 | )
|                                                                |                     |      |                   |  
|Europe Net Revenue 2009                                         | $                   | 29.4 |                   | $ | 58.3  |  
|                                                                |                     |      |                   |  

Volume increases for the three and six months ended June 30, 2009
  were driven by our PGiMeet Solutions, offset in part by volume decreases in
  our broadcast fax and other solutions. The decreases in average selling prices
  were primarily associated with our PGiMeet Solutions.

24

---



Asia Pacific Net Revenue

The following table details the changes in Asia Pacific net revenue from the three and six months ended June 30, 2008 to the three and six months ended June 30, 2009 (in millions):

|                                                                |                     |      |                   |   |      |  
|--------------------------------------------------------------- | ------------------- | ---- | ----------------- | - | ---- | -
|                                                                | Three 
      Months |      | Six 
      Months |  
|                                                                |                     |      |                   |  
|Asia Pacific Net Revenue 2008                                   | $                   | 31.1 |                   | $ | 59.0 |  
|Change in volume                                                |                     | (2.0 | )                 |   | (2.4 | )
|Change in selling prices                                        |                     | 1.0  |                   |   | 1.8  |  
|Impact of fluctuations in foreign
      currency exchange rates |                     | (1.6 | )                 |   | (2.8 | )
|                                                                |                     |      |                   |  
|Asia Pacific Net Revenue 2009                                   | $                   | 28.5 |                   | $ | 55.6 |  
|                                                                |                     |      |                   |  

Volume decreases for the three and six months ended June 30, 2009
  were driven by declines in our PGiMeet Solutions and broadcast fax services,
  offset in part by volume increases in our other solutions. The increases in
  average selling prices were associated with our PGiMeet Solutions and broadcast
  fax services.

Cost of Revenues

|                  |                                   |         |        |   |         |  |       |   |  |      |  
|----------------- | --------------------------------- | ------- | ------ | - | ------- |  | ----- | - |  | ---- | -
|                  | Three Months Ended
      June 30, |         | Change
|                  | 2009                              |         | 2008   |   | $       |  | %    
|                  | (in thousands)                    |         |        |   |         |  |      
|Cost of revenues: |                                   |         |        |   |         |  |       |   |  |      |  
|North America     | $                                 | 42,531  |        | $ | 41,008  |  | 1,523 |   |  | 3.7  |  
|Europe            |                                   | 10,132  |        |   | 11,068  |  | (936  | ) |  | (8.5 | )
|Asia Pacific      |                                   | 13,712  |        |   | 14,126  |  | (414  | ) |  | (2.9 | )
|                  |                                   |         |        |   |         |  |       |   | 
|Consolidated      | $                                 | 66,375  |        | $ | 66,202  |  | 173   |   |  | 0.3  |  
|                  |                                   |         |        |   |         |  |       |   | 
|                 
|                  | Six Months Ended
      June 30,   |         | Change
|                  | 2009                              |         | 2008   |   | $       |  | %    
|                  | (in thousands)                    |         |        |   |         |  |      
|Cost of revenues: |                                   |         |        |   |         |  |       |   |  |      |  
|North America     | $                                 | 85,936  |        | $ | 79,939  |  | 5,997 |   |  | 7.5  |  
|Europe            |                                   | 19,988  |        |   | 20,987  |  | (999  | ) |  | (4.8 | )
|Asia Pacific      |                                   | 26,666  |        |   | 26,938  |  | (272  | ) |  | (1.0 | )
|                  |                                   |         |        |   |         |  |       |   | 
|Consolidated      | $                                 | 132,590 |        | $ | 127,864 |  | 4,726 |   |  | 3.7  |  
|                  |                                   |         |        |   |         |  |       |   | 

|                                               |                              |   |                            |      |      |  |      |   |  |      |  
|---------------------------------------------- | ---------------------------- | - | -------------------------- | ---- | ---- |  | ---- | - |  | ---- | -
|                                               | Three Months Ended  June 30, |   | Six Months Ended  June 30,
|                                               | 2009                         |   | 2008                       |      | 2009 |  | 2008
|Cost of revenues as a percent of net revenues: |                              |   |                            |      |      |  |      |   |  |      |  
|North America                                  | 43.9                         | % |                            | 42.2 | %    |  | 43.7 | % |  | 41.6 | %
|Europe                                         | 34.5                         | % |                            | 33.2 | %    |  | 34.3 | % |  | 33.2 | %
|Asia Pacific                                   | 48.1                         | % |                            | 45.4 | %    |  | 47.9 | % |  | 45.6 | %
|                                               |                              |   |                            |      |      |  |      |   |  |      |  
|Consolidated                                   | 42.9                         | % |                            | 41.0 | %    |  | 42.7 | % |  | 40.7 | %
|                                               |                              |   |                            |      |      |  |      |   |  |      |  

Consolidated cost of revenues as a
  percentage of consolidated net revenues increased in the three and six months
  ended June 30, 2009 compared to the same periods in 2008 as a result of growth
  in higher cost of revenue large enterprise customers in our PGiMeet Solutions
  and declines in lower cost of revenue customers in our broadcast fax, transactional
  fax and e-mail delivery services. Following trends that impacted our results
  of operations in the first three months of 2009, fluctuations in foreign currency

25

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exchange rates resulted in decreased consolidated cost of revenues of $2.6 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The increase in North America cost
  of revenue as a percentage of operating segment net revenue for the three and
  six months ended June 30, 2009 as compared to the same periods in 2008 was attributable
  to growth in higher cost of revenue large enterprise customers in our PGiMeet
  Solutions and declines in our broadcast fax, transactional fax and e-mail delivery
  net revenues, which have a lower variable cost of revenue in North America than
  our other solutions. Fluctuations in foreign currency exchange rates related
  to the weakening of the Canadian Dollar against the U.S. Dollar resulted in
  decreased North America cost of revenue of $0.2 million for the three months
  ended June 30, 2009 as compared to the same period in 2008.

The increase in Europe cost of revenue
  as a percentage of operating segment net revenue for the three and six months
  ended June 30, 2009 as compared to the same periods in 2008 was attributable
  to growth in higher cost of revenue large enterprise customers in our PGiMeet
  Solutions, partially offset by lower costs incurred for broadcast fax net revenue
  due to network upgrades made in the first half of 2008. Fluctuations in foreign currency
  exchange rates related to the weakening of the Euro and British Pound against
  the U.S. Dollar resulted in decreased Europe cost of revenue of $1.8 million
  for the three months ended June 30, 2009 as compared to the same period in 2008.

The increase in Asia Pacific cost
  of revenue as a percentage of operating segment net revenue for the three and
  six months ended June 30, 2009 as compared to the same periods in 2008 was attributable
  to growth in higher cost of revenue large enterprise customers in our PGiMeet
  Solutions and Maritime PGiNotify Solutions. Fluctuations in foreign currency
  exchange rates related to the weakening of the Australian Dollar against the
  U.S. Dollar, partially offset by the strengthening of the Japanese Yen to the
  U.S. Dollar, resulted in decreased Asia Pacific cost of revenue of $0.6 million
  for the three months ended June 30, 2009 as compared to the same period in 2008.

Selling and Marketing Expenses

|                                |                                   |        |        |   |        |  |        |   |  |       |  
|------------------------------- | --------------------------------- | ------ | ------ | - | ------ |  | ------ | - |  | ----- | -
|                                | Three Months Ended
      June 30, |        | Change
|                                | 2009                              |        | 2008   |   | $      |  | %     
|                                | (in thousands)                    |        |        |   |        |  |       
|Selling and marketing expenses: |                                   |        |        |   |        |  |        |   |  |       |  
|North America                   | $                                 | 22,543 |        | $ | 23,647 |  | (1,104 | ) |  | (4.7  | )
|Europe                          |                                   | 7,621  |        |   | 9,935  |  | (2,314 | ) |  | (23.3 | )
|Asia Pacific                    |                                   | 5,684  |        |   | 6,629  |  | (945   | ) |  | (14.3 | )
|                                |                                   |        |        |   |        |  |        |   | 
|Consolidated                    | $                                 | 35,848 |        | $ | 40,211 |  | (4,363 | ) |  | (10.9 | )
|                                |                                   |        |        |   |        |  |        |   | 
|                               
|                                | Six Months Ended
      June 30,   |        | Change
|                                | 2009                              |        | 2008   |   | $      |  | %     
|                                | (in thousands)                    |        |        |   |        |  |       
|Selling and marketing expenses: |                                   |        |        |   |        |  |        |   |  |       |  
|North America                   | $                                 | 46,621 |        | $ | 47,127 |  | (506   | ) |  | (1.1  | )
|Europe                          |                                   | 15,775 |        |   | 20,075 |  | (4,300 | ) |  | (21.4 | )
|Asia Pacific                    |                                   | 11,094 |        |   | 12,860 |  | (1,766 | ) |  | (13.7 | )
|                                |                                   |        |        |   |        |  |        |   | 
|Consolidated                    | $                                 | 73,490 |        | $ | 80,062 |  | (6,572 | ) |  | (8.2  | )
|                                |                                   |        |        |   |        |  |        |   | 

26

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|                                                     |                            |   |                                 |      |      |  |      |   |  |      |  
|---------------------------------------------------- | -------------------------- | - | ------------------------------- | ---- | ---- |  | ---- | - |  | ---- | -
|                                                     | Three Months EndedJune 30, |   | Six Months Ended
      June 30,
|                                                     | 2009                       |   | 2008                            |      | 2009 |  | 2008
|Selling and marketing expenses as a percent
      of |                            |   |                                 |      |      |  |      |   |  |      |  
|net revenues:                                        |                            |   |                                 |      |      |  |      |   |  |      |  
|North
      America                                  | 23.3                       | % |                                 | 24.4 | %    |  | 23.7 | % |  | 24.5 | %
|Europe                                               | 25.9                       | % |                                 | 29.8 | %    |  | 27.1 | % |  | 31.7 | %
|Asia
      Pacific                                   | 19.9                       | % |                                 | 21.3 | %    |  | 19.9 | % |  | 21.8 | %
|                                                     |                            |   |                                 |      |      |  |      |   |  |      |  
|Consolidated                                         | 23.2                       | % |                                 | 24.9 | %    |  | 23.7 | % |  | 25.5 | %
|                                                     |                            |   |                                 |      |      |  |      |   |  |      |  

Consolidated selling and marketing expenses decreased for the three and six months ended June 30, 2009 as compared to the same periods in 2008 as a result of our expense structure optimization efforts and the weakening of various currencies to the U.S. Dollar, offset in part by our acquisitions of LINK, Soundpath and iLinc. Following trends that impacted our results of operations in the first three months of 2009, fluctuations in foreign currency exchange rates resulted in decreased selling and marketing expenses of $2.1 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The decrease in North America selling and marketing expenses for the three and six months ended June 30, 2009 as compared to the same periods in 2008 was attributable to our expense structure optimization efforts and the weakening of the Canadian Dollar against the U.S. Dollar, offset in part by our acquisitions of LINK, Soundpath and iLinc. Fluctuations in foreign currency exchange rates resulted in decreased North America selling and marketing expenses of $0.2 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The decrease in Europe selling and marketing expenses for the three and six months ended June 30, 2009 compared to the same periods in 2008 was attributable to our expense structure optimization efforts and the weakening of the Euro and British Pound to the U.S. Dollar. Fluctuations in foreign currency exchange rates resulted in decreased Europe selling and marketing expenses of $1.6 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The decrease in Asia Pacific selling and marketing expenses for the three and six months ended June 30, 2009 as compared to the same periods in 2008 was attributable to our expense structure optimization efforts and the weakening of the Australian Dollar against the U.S. Dollar. Fluctuations in foreign currency exchange rates resulted in decreased Asia Pacific selling and marketing expenses of $0.3 million for the three months ended June 30, 2009 as compared to the same period in 2008.

General and Administrative Expenses

|                                     |                                   |                |        |   |        |  |      |   |  |       |  
|------------------------------------ | --------------------------------- | -------------- | ------ | - | ------ |  | ---- | - |  | ----- | -
|                                     | Three Months Ended
      June 30, |                | Change
|                                     | 2009                              |                | 2008   |   | $      |  | %   
|                                     |                                   | (in thousands) |        |   |        |  |      |  
|General and administrative expenses: |                                   |                |        |   |        |  |      |   |  |       |  
|North America                        | $                                 | 11,634         |        | $ | 10,669 |  | 965  |   |  | 9.0   |  
|Europe                               |                                   | 2,923          |        |   | 3,452  |  | (529 | ) |  | (15.3 | )
|Asia Pacific                         |                                   | 1,921          |        |   | 2,617  |  | (696 | ) |  | (26.6 | )
|                                     |                                   |                |        |   |        |  |      |   | 
|Consolidated                         | $                                 | 16,478         |        | $ | 16,738 |  | (260 | ) |  | (1.6  | )
|                                     |                                   |                |        |   |        |  |      |   | 

27

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|                                     |                                 |        |        |   |        |  |      |   |  |       |  
|------------------------------------ | ------------------------------- | ------ | ------ | - | ------ |  | ---- | - |  | ----- | -
|                                     | Six Months Ended
      June 30, |        | Change
|                                     | 2009                            |        | 2008   |   | $      |  | %   
|                                     | (in thousands)                  |        |        |   |        |  |     
|General and administrative expenses: |                                 |        |        |   |        |  |      |   |  |       |  
|North America                        | $                               | 22,626 |        | $ | 21,808 |  | 818  |   |  | 3.8   |  
|Europe                               |                                 | 5,641  |        |   | 6,418  |  | (777 | ) |  | (12.1 | )
|Asia Pacific                         |                                 | 3,922  |        |   | 4,745  |  | (823 | ) |  | (17.3 | )
|                                     |                                 |        |        |   |        |  |      |   | 
|Consolidated                         | $                               | 32,189 |        | $ | 32,971 |  | (782 | ) |  | (2.4  | )
|                                     |                                 |        |        |   |        |  |      |   | 

|                                                 |                            |   |                                 |      |      |  |      |   |  |      |  
|------------------------------------------------ | -------------------------- | - | ------------------------------- | ---- | ---- |  | ---- | - |  | ---- | -
|                                                 | Three Months EndedJune 30, |   | Six Months Ended
      June 30,
|                                                 | 2009                       |   | 2008                            |      | 2009 |  | 2008
|General and administrative expenses as a percent |                            |   |                                 |      |      |  |      |   |  |      |  
|of net revenues:                                 |                            |   |                                 |      |      |  |      |   |  |      |  
|North America                                    | 12.0                       | % |                                 | 11.0 | %    |  | 11.5 | % |  | 11.4 | %
|Europe                                           | 9.9                        | % |                                 | 10.4 | %    |  | 9.7  | % |  | 10.1 | %
|Asia Pacific                                     | 6.7                        | % |                                 | 8.4  | %    |  | 7.1  | % |  | 8.0  | %
|                                                 |                            |   |                                 |      |      |  |      |   |  |      |  
|Consolidated                                     | 10.7                       | % |                                 | 10.4 | %    |  | 10.4 | % |  | 10.5 | %
|                                                 |                            |   |                                 |      |      |  |      |   |  |      |  

Consolidated general and administrative expenses decreased for the three and six months ended June 30, 2009 as compared to the same periods in 2008 as a result of our expense structure optimization efforts, decreased equity-based compensation expense and the weakening of various currencies to the U.S. Dollar, partially offset by our acquisitions of LINK, Soundpath and iLinc. Following trends that impacted our results of operations in the first three months of 2009, fluctuations in foreign currency exchange rates resulted in decreased general and administrative expenses of $0.7 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The increase in North America general and administrative expenses for the three and six months ended June 30, 2009 as compared to the same periods in 2008 was attributable to our acquisitions of LINK, Soundpath and iLinc, partially offset by our expense structure optimization efforts.

The decrease in Europe general and administrative expenses for the three and six months ended June 30, 2009 as compared to the same periods in 2008 was attributable to the weakening of the Euro and the British Pound against the U.S. Dollar. Fluctuations in foreign currency exchange rates resulted in decreased Europe general and administrative expenses of $0.6 million for the three months ended June 30, 2009 as compared to the same period in 2008.

The decrease in Asia Pacific general and administrative expenses for the three and six months ended June 30, 2009 as compared to the same periods in 2008 was attributable to our expense structure optimization efforts and the weakening of the Australian Dollar against the U.S. Dollar, partially offset by the strengthening of the Japanese Yen against the U.S. Dollar. Fluctuations in foreign currency exchange rates resulted in decreased Asia Pacific general and administrative expenses of $0.1 million for the three months ended June 30, 2009 as compared to the same period in 2008.

Research and Development Expenses

Consolidated research and development
  expenses as a percentage of consolidated net revenues increased to 2.8% for
  the three and six months ended June 30, 2009, as compared to 2.6% in the same
  periods in 2008. Consolidated research and development expenses increased 5.6%
  to $4.4 million for the three months ended June 30, 2009 compared with $4.2
  million for the same period in 2008, and increased 4.9% to $8.6 million for
  the six months ended June 30, 2009 compared with $8.2 million for the same period
  in 2008. We incurred the majority of research and development costs in North
  America.

28

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|                      |                                   |        |        |   |        |  |       |   |  |       |  
|--------------------- | --------------------------------- | ------ | ------ | - | ------ |  | ----- | - |  | ----- | -
|Depreciation          |                                   |        |        |   |        |  |       |   |  |       |  
|                     
|                      | Three Months Ended
      June 30, |        | Change
|                      | 2009                              |        | 2008   |   | $      |  | %    
|                      | (in thousands)                    |        |        |   |        |  |      
|Depreciation Expense: |                                   |        |        |   |        |  |       |   |  |       |  
|North America         | $                                 | 7,970  |        | $ | 6,800  |  | 1,170 |   |  | 17.2  |  
|Europe                |                                   | 926    |        |   | 949    |  | (23   | ) |  | (2.4  | )
|Asia Pacific          |                                   | 642    |        |   | 851    |  | (209  | ) |  | (24.6 | )
|                      |                                   |        |        |   |        |  |       |   | 
|Consolidated          | $                                 | 9,538  |        | $ | 8,600  |  | 938   |   |  | 10.9  |  
|                      |                                   |        |        |   |        |  |       |   | 
|                     
|                      | Six Months Ended
      June 30,   |        | Change
|                      | 2009                              |        | 2008   |   | $      |  | %    
|                      | (in thousands)                    |        |        |   |        |  |      
|Depreciation Expense: |                                   |        |        |   |        |  |       |   |  |       |  
|North America         | $                                 | 15,613 |        | $ | 12,506 |  | 3,107 |   |  | 24.8  |  
|Europe                |                                   | 1,758  |        |   | 1,882  |  | (124  | ) |  | (6.6  | )
|Asia Pacific          |                                   | 1,258  |        |   | 1,459  |  | (201  | ) |  | (13.8 | )
|                      |                                   |        |        |   |        |  |       |   | 
|Consolidated          | $                                 | 18,629 |        | $ | 15,847 |  | 2,782 |   |  | 17.6  |  
|                      |                                   |        |        |   |        |  |       |   | 

|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  
|-------------------------------------------------- | -------------------------- | - | ------------------------------- | --- | ---- |  | ---- | - |  | --- | -
|                                                   | Three Months EndedJune 30, |   | Six Months Ended
      June 30,
|                                                   | 2009                       |   | 2008                            |     | 2009 |  | 2008
|Depreciation Expense as a percent of net revenues: |                            |   |                                 |     |      |  |      |   |  |     |  
|North America                                      | 8.2                        | % |                                 | 7.0 | %    |  | 7.9  | % |  | 6.5 | %
|Europe                                             | 3.2                        | % |                                 | 2.8 | %    |  | 3.0  | % |  | 3.0 | %
|Asia Pacific                                       | 2.3                        | % |                                 | 2.7 | %    |  | 2.3  | % |  | 2.5 | %
|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  
|Consolidated                                       | 6.2                        | % |                                 | 5.3 | %    |  | 6.0  | % |  | 5.0 | %
|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  

Consolidated depreciation expense
  increased for the three and six months ended June 30, 2009 as compared to the
  same periods in 2008 as a result of increases in our productive asset base.
  In addition, the six-month increase is impacted by a non-recurring adjustment
  during the three months ended March 31, 2008 of $0.7 million for revisions made
  to the estimated remaining economic life of a specific group of assets as a
  result of managements periodic review of the continued appropriateness
  of such estimates.

Amortization

|                      |                                   |       |        |   |       |  |        |   |  |       |  
|--------------------- | --------------------------------- | ----- | ------ | - | ----- |  | ------ | - |  | ----- | -
|                      | Three Months Ended
      June 30, |       | Change
|                      | 2009                              |       | 2008   |   | $     |  | %     
|                      | (in thousands)                    |       |        |   |       |  |       
|Amortization Expense: |                                   |       |        |   |       |  |        |   |  |       |  
|North America         | $                                 | 2,365 |        | $ | 2,928 |  | (563   | ) |  | (19.2 | )
|Europe                |                                   | 406   |        |   | 860   |  | (454   | ) |  | (52.8 | )
|Asia Pacific          |                                   | 57    |        |   | 126   |  | (69    | ) |  | (54.8 | )
|                      |                                   |       |        |   |       |  |        |   | 
|Consolidated          | $                                 | 2,828 |        | $ | 3,914 |  | (1,086 | ) |  | (27.7 | )
|                      |                                   |       |        |   |       |  |        |   | 

29

---



|                      |                                 |       |        |   |       |  |        |   |  |       |  
|--------------------- | ------------------------------- | ----- | ------ | - | ----- |  | ------ | - |  | ----- | -
|                      | Six Months Ended
      June 30, |       | Change
|                      | 2009                            |       | 2008   |   | $     |  | %     
|                      | (in thousands)                  |       |        |   |       |  |       
|Amortization Expense: |                                 |       |        |   |       |  |        |   |  |       |  
|North America         | $                               | 4,956 |        | $ | 6,090 |  | (1,134 | ) |  | (18.6 | )
|Europe                |                                 | 795   |        |   | 1,824 |  | (1,029 | ) |  | (56.4 | )
|Asia Pacific          |                                 | 107   |        |   | 243   |  | (136   | ) |  | (56.0 | )
|                      |                                 |       |        |   |       |  |        |   | 
|Consolidated          | $                               | 5,858 |        | $ | 8,157 |  | (2,299 | ) |  | (28.2 | )
|                      |                                 |       |        |   |       |  |        |   | 

|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  
|-------------------------------------------------- | -------------------------- | - | ------------------------------- | --- | ---- |  | ---- | - |  | --- | -
|                                                   | Three Months EndedJune 30, |   | Six Months Ended
      June 30,
|                                                   | 2009                       |   | 2008                            |     | 2009 |  | 2008
|Amortization Expense as a percent of net revenues: |                            |   |                                 |     |      |  |      |   |  |     |  
|North America                                      | 2.4                        | % |                                 | 3.0 | %    |  | 2.5  | % |  | 3.2 | %
|Europe                                             | 1.4                        | % |                                 | 2.6 | %    |  | 1.4  | % |  | 2.9 | %
|Asia Pacific                                       | 0.2                        | % |                                 | 0.4 | %    |  | 0.2  | % |  | 0.4 | %
|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  
|Consolidated                                       | 1.8                        | % |                                 | 2.4 | %    |  | 1.9  | % |  | 2.6 | %
|                                                   |                            |   |                                 |     |      |  |      |   |  |     |  

Consolidated amortization expense decreased for the three and six months ended June 30, 2009 as compared to the same periods in 2008 as a result of the decrease in amortization expense in North America related to customer list intangible assets from acquisitions made in 2003 that have become fully amortized, partially offset by intangible amortization expense resulting from our acquisitions of LINK, Soundpath and iLinc.

Restructuring Costs

Consolidated restructuring costs as a percentage of consolidated revenues were 3.0% and 2.1% for the three months ended June 30, 2009 and 2008, respectively, and 2.0% and 1.1% for the six months ended June 30, 2009 and 2008, respectively. Consolidated restructuring costs were $4.7 million and $3.3 million for the three months ended June 30, 2009 and 2008, respectively, and $6.3 million and $3.3 million for the six months ended June 30, 2009 and 2008, respectively.

Realignment of Workforce  2009

During the three months ended June
  30, 2009, we executed a restructuring plan to consolidate and streamline various
  functions of our workforce. As part of these consolidations, we eliminated 136
  positions. During the three months ended June 30, 2009, we recorded total severance
  costs of $4.0 million in connection with this realignment of our workforce,
  which included the acceleration of vesting of restricted stock with a fair market
  value of $0.1 million. Additionally, we incurred $0.6 million of lease termination
  costs associated with a location in Europe. The expenses associated with these
  activities are reflected in Restructuring costs in our condensed
  consolidated statements of operations. On a segment basis, these restructuring
  costs totaled $1.2 million in North America, $3.2 million in Europe and $0.2
  million in Asia Pacific.

During the three months ended June
  30, 2009, we paid $0.4 million related to these severance costs in cash and
  $0.1 million in restricted stock awards. Our reserve for the second quarter
  2009 restructuring costs was $4.1 million at June 30, 2009. We anticipate these
  remaining costs will be paid over the next 24 months.

During the three months ended March 31, 2009, we executed a restructuring plan to close our company-owned data center in Europe and streamline various aspects of our sales force. As part of these consolidations, we eliminated 92 positions. During the three months ended March 31, 2009, we recorded total restructuring costs of $1.7 million associated with this realignment of our workforce, representing severance costs associated with the elimination of these positions. The expenses associated with these activities are reflected in Restructuring costs in our condensed consolidated statements of operations. On a segment basis, these restructuring costs were $0.4 million in North America and $1.3 million in Europe, all expensed within the three months ended March 31, 2009. During the three and six months ended June 30, 2009, we paid $0.7 million and $1.1 million, respectively, related to

30

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these severance costs in cash. Our reserve for the first quarter
  2009 restructuring costs was $0.7 million at June 30, 2009. We anticipate
  these remaining costs will be paid over the next 12 months.

Realignment of Workforce  2008

During the year ended December
  31, 2008, we executed a restructuring plan to consolidate the senior management
  of our technology development and network operations functions and to consolidate
  our corporate communications function into our marketing department. As part
  of these consolidations, we eliminated 11 positions, including entering into
  a separation agreement with our president, global operations. During the year
  ended December 31, 2008, we expensed total restructuring costs of $3.4 million
  associated with this realignment of our workforce, representing severance costs
  associated with the elimination of these positions. On a segment basis, the
  total restructuring costs initially incurred were $2.0 million in North
  America, $1.3 million in Europe and $0.1 million in Asia Pacific, with
  total adjustments in Europe of $(0.1) million during the three months ended
  March 31, 2009 and in North America of $0.1 million during the three months
  ended June 30, 2009. As of June 30, 2009, we have completed this restructuring
  plan and, accordingly, no reserves for the 2008 restructuring costs remain.

Realignment of Workforce  Prior to 2008

Amounts paid during the three months ended June 30, 2009 for restructuring costs incurred prior to 2007 totaled $0.2 million. At June 30, 2009, our reserve for restructuring costs incurred prior to 2008 totaled
$1.2 million and is associated with lease termination costs. We anticipate these remaining lease termination costs will be paid over the next seven years.

Acquisition-Related Costs

During the three and six months ended June 30, 2009, we expensed $0.2 million and $0.6 million, respectively, in acquisition-related costs in accordance with SFAS No. 141(R). We allocated similar costs in prior
years to the assets acquired and liabilities assumed in such acquisitions.

Interest Expense

Interest expense decreased to $3.8 million from $5.5 million for the three months ended June 30, 2009 and 2008, respectively, and decreased to $7.8 million from $10.2 million for the six months ended
June 30, 2009 and 2008, respectively. Interest expense decreased as a result of decreased interest rates effective for the unhedged portion of our credit facility along with a $1.1 million non-recurring charge for interest related to a
previously disclosed excise tax matter in the second quarter of 2008. The unhedged portion of our credit facility was $67.8 million and $75.3 million at June 30, 2009 and 2008, respectively. Our effective interest rate on the U.S. Dollar
amount of this unhedged portion of our credit facility was 1.56% and 3.96% at June 30, 2009 and 2008, respectively. As of June 30, 2009, we have two $100.0 million interest rate swaps, one of which has a fixed rate of 4.99% and expires in August
2009 and one of which has a fixed rate of 4.75% and expires in August 2010. The weighted-average outstanding balance on our credit facility was $288.0 million and $284.6 million for the three months ended June 30, 2009 and 2008,
respectively, and $288.0 million and $283.7 for the six months ended June 30, 2009 and 2008, respectively. The increase in our weighted average debt outstanding is related to our acquisitions of LINK, Soundpath and iLinc, which we funded in
part with borrowings under our credit facility and our purchase of treasury stock, partially offset by our free cash flow.

Income Tax Expense

Our effective income tax rate was 32.0% and 32.2% for the three and six months ended June 30, 2009, respectively, and 32.8% and 27.1% for the three and six months ended June 30, 2008, respectively. Our effective income
tax rate varied from statutory rates during the three and six months ended June 30, 2009 and 2008 as a result of non-deductible executive compensation expenses and the realization of net operating losses related to tax planning strategies associated
with the merger of our subsidiaries in the United Kingdom. The change in tax rates for the six months ended June 30, 2009 and 2008 is primarily attributable to the reversal of a valuation allowance associated with a United Kingdom subsidiary during
the three months ended March 31, 2008.

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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 results of operations from these
transactions have been included in our condensed consolidated financial statements as of the effective date of each acquisition.

North America

In February 2009, we acquired certain
  technology assets of a provider of web collaboration services in exchange for
  warrants to purchase 105,000 shares of our common stock. We allocated the fair
  value of the warrants, $0.3 million, to in-process research
  and development in other intangible assets. The in-process research and development is not currently being amortized
  but is subject to periodic impairment testing. We incurred transaction fees
  and closing costs of $0.2 million, which we expensed as incurred.

In February 2009, we acquired certain assets and assumed certain liabilities of LINK. We paid $7.1 million in cash at closing and $0.3 million in transaction fees and closing costs, which we expensed as
incurred. We funded the purchase through our credit facility and cash and equivalents on hand. We followed SFAS No. 141(R) and preliminarily allocated $0.7 million to accounts receivable, $0.1 million to prepaid assets, $0.3 million to
acquired fixed assets, $0.3 million to other acquisition liabilities, $1.2 million to identifiable customer lists and $0.1 million to non-compete agreements, with the customer lists and non-compete agreements amortized over five years.
We have not yet finalized the working capital component of the purchase price. We allocated the residual $5.0 million of the purchase price to goodwill.

In July 2008, we acquired certain assets of Soundpath. We paid $20.1 million in cash at closing and $0.3 million in transaction fees and closing costs. We funded the purchase through our credit facility and cash
and equivalents on hand. We followed SFAS No. 141 and allocated $6.0 million to identifiable customer lists and $1.0 million to non-compete agreements, with the customer lists amortized over ten years and the non-compete agreements amortized
over five years. We allocated the residual $13.4 million of the aggregate purchase price to goodwill.

In May 2008, we acquired certain assets and assumed certain liabilities of iLinc. We paid $3.9 million in cash at closing and $0.1 million in transaction fees and closing costs. We funded the purchase with cash
and equivalents on hand. We followed SFAS No. 141 and allocated $0.6 million to acquired working capital, $0.8 million to other acquisition liabilities and $1.2 million to identifiable intangible assets, which will be amortized over five
years. We allocated the residual $3.0 million of the aggregate purchase price to goodwill.

Liquidity and Capital Resources

At June 30, 2009, we have utilized $269.0 million of our $375.0 million credit facility, with $267.8 million in borrowings and $1.2 million in letters of credit outstanding. From time to time, we enter
into interest rate swaps to reduce our exposure to market risk from changes in interest rates on interest payments associated with our credit facility. As of June 30, 2009, we have two $100.0 million interest rate swaps, one of which has a fixed
rate of 4.99% and expires in August 2009 and one of which has a fixed rate of 4.75% and expires in August 2010.

At the maturity of our credit facility in April 2011 or in the event of an acceleration of the indebtedness under the credit facility following an event of default, the entire outstanding principal amount of the
indebtedness under the facility, together with all other amounts payable thereunder, will become due and payable. We may not have sufficient funds to pay such obligations in full at maturity or upon such acceleration. If we default and are not able
to pay any such obligations due, our lenders have liens on substantially all of our assets and could foreclose on our assets in order to satisfy our obligations.

As of June 30, 2009, we had $35.3
  million in cash and equivalents compared to $27.5 million as of December
  31, 2008. Cash balances residing outside of the United States as of June 30,
  2009 were $32.9 million compared to $26.5 million as of December 31,
  2008. We repatriate cash for repayment of royalties and management fees charged
  to international locations from the United States. Therefore, we record foreign
  currency exchange

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gains and losses resulting from these transactions in Other, net in our condensed consolidated statements of operations. We generally consider intercompany loans with foreign subsidiaries to be permanently invested for the foreseeable
future. Therefore, we record foreign currency exchange fluctuations resulting from these transactions in the cumulative translation adjustment account on our condensed consolidated balance sheets. Based on our potential cash position and potential
conditions in the capital markets, we could require repayment of these intercompany loans despite the long-term intention to hold them as permanent investments.

Cash provided by operating activities

Consolidated operating cash flows were $43.0 million and $39.6 million for the six months ended June 30, 2009 and 2008, respectively. The increase in net cash provided by operating activities was primarily due
to improved working capital management.

Cash used in investing activities

Consolidated investing activities
  used cash of $32.4 million and $35.2 million for the six months ended
  June 30, 2009 and 2008, respectively. The principal uses of cash in investing
  activities for the six months ended June 30, 2009 included $24.7 million
  of capital expenditures and $7.9 million related primarily to our acquisition of LINK.
  The principal uses of cash in investing activities for the six months ended
  June 30, 2008 included $26.8 million of capital expenditures and $8.4
  million relating to current year business acquisitions and working capital settlements
  for prior year acquisitions.

Cash provided by financing activities

Consolidated financing activities used cash of $3.2 million and provided cash of $2.2 million for the six months ended June 30, 2009 and 2008, respectively. Cash provided by financing activities for the six
months ended June 30, 2009 included $0.3 million from excess tax benefits from share-based payment arrangements and $0.6 million of proceeds from stock option exercises, offset by $4.0 million of treasury stock purchases. Cash provided
by financing activities for the six months ended June 30, 2008 was the result of net borrowings on our credit facility of $8.4 million and $2.2 million received from stock option exercises, offset by $9.2 million of treasury stock
purchases.

Off-balance sheet arrangements

At June 30, 2009, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Capital resources

We have a $375.0 million committed revolving credit facility, which consists of an original revolving credit facility of $300.0 million with a $100.0 million accordion feature, of which $75.0 million has
been exercised to date. This accordion feature allows for additional credit commitments to increase the revolving credit facility up to a maximum of $400.0 million, subject to its terms and conditions. Our credit facility matures in April 2011.
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.

At June 30, 2009, we were in compliance
  with the covenants under our credit facility. Proceeds drawn under our credit
  facility 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 credit facility, at our option,
  is the base rate (the greater of either the federal funds rate plus one-half
  of one percent, the prime rate or the Eurocurrency rate plus one and three-quarters
  of one percent) or one-month LIBOR plus an applicable margin that varies based
  upon our leverage ratio at the end of each fiscal quarter. At June 30, 2009,
  our applicable margin with respect to LIBOR loans was 1.25%. At June 30, 2009,
  our interest rate on one-month U.S. Dollar LIBOR loans, which comprise materially
  all of our outstanding borrowings, was 1.56% for our borrowings

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on which we did not have an interest rate swap agreement in place. At June 30, 2009, we had $267.8 million of borrowings and $1.2 million in letters of credit outstanding under our credit facility.

In August 2007, we entered into
  two $100.0 million two-year interest rate swaps at a fixed rate of 4.99%.
  In December 2007, we amended the life of one of the $100.0 million swaps
  to three years and reduced the fixed rate to 4.75%. We did not initially designate
  these interest rate swaps as hedges and, as such, we did not account for them
  under hedge accounting in accordance with SFAS No. 133. During the fourth quarter
  of 2008, we prospectively designated these interest rate swaps as hedges of
  our interest rate risk associated with our credit facility using the long-haul
  method of effectiveness testing. Any changes in fair value prior to designation
  as a hedge and any ineffectiveness subsequent to such designation are recognized
  as Unrealized gain (loss) on change in fair value of interest rate swaps
  as a component of Other (expense) income in our condensed consolidated
  statements of operations and amounted to $1.1 million and $4.2 million
  during the three months ended June 30, 2009 and 2008, respectively, and $2.1
  million and $(0.4) million during the six months ended June 30, 2009 and
  2008, respectively. Any changes in fair value that are determined to be effective
  are recorded as a component of Accumulated other comprehensive loss
  in our condensed consolidated balance sheets and amounted to a gain of $0.5
  million, net of taxes, for the three months ended June 30, 2009. We recognize
  the fair value of derivatives in our condensed consolidated balance sheets as
  part of Accrued expenses under Current Liabilities or
  Long-Term Liabilities depending on the maturity date of the contract.
  The amount recognized in current liabilities was $0.6 million and $2.6
  million at June 30, 2009 and December 31, 2008, respectively. The amount recognized
  in Long-Term Liabilities was $4.5 million and $6.0 million
  at June 30, 2009 and December 31, 2008, respectively.

We have entered into various capital leases for the purchase of operating equipment. These capital leases have interest rates ranging from 3.1% to 10.3% and terms ranging from 20 months to 60 months. The capital lease
obligations recorded on our condensed consolidated balance sheets for these leases was $4.8 million and $5.3 million at June 30, 2009 and December 31, 2008, respectively.

Liquidity

At June 30, 2009, we had $35.3
  million of cash and equivalents. We generated positive operating cash flows
  from each of our geographic business segments for the three months ended June
  30, 2009. Each geographic business segment had sufficient cash flows from operations
  to service existing debt obligations, to fund capital expenditure requirements,
  which historically have been 5% to 8% of annual consolidated net revenues, and
  to fund research and development costs for new services and enhancements to
  existing services, which historically have been 2% to 3% of annual consolidated
  net revenues. Assuming no material change to these costs, which we do not anticipate,
  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 have historically borrowed on our
  credit facility in order to fund acquisitions. At June 30, 2009, we had $106.0
  million of available credit on our existing $375.0 million credit facility,
  without regard to the uncommitted $25.0 million of the accordion feature.

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.

Non-GAAP Financial Measures

In order to supplement our condensed consolidated financial statements presented in accordance with GAAP, we have included organic growth of our PGiMeet Solutions revenue and free cash flow as non-GAAP measures of
financial performance. Management uses these measures internally as a means of analyzing our current and future financial performance and identifying trends in our financial condition and results of operations. We have provided this information to
investors to assist in meaningful comparisons of past, present and future operating results and to assist in highlighting the results of ongoing core operations. Please see the tables below for calculation of these non-GAAP financial measures and
for reconciliation to the most directly comparable GAAP measures. These non-GAAP financial measures may differ materially from comparable or similarly titled measures provided by other

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companies and should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP.

Organic growth

We define organic growth
  as revenue changes excluding the impact of foreign currency exchange rate fluctuations,
  using the average exchange rates from the current year period and applying them
  to prior period results, and acquisitions made during the periods presented.
  We present this non-GAAP financial measure for our PGiMeet Solutions to exclude
  the effect of those items that are not completely within managements control,
  such as foreign currency exchange rate fluctuations, or that do not reflect
  our ongoing core operations or underlying growth, such as acquisitions. The
  following table presents a reconciliation of organic revenue to net revenue
  for our PGiMeet Solutions for the periods indicated (in thousands, except percentages):

|                          |           |  |                                                       |  |                      |  |                         |  |          |  |                               |  
|------------------------- | --------- |  | ----------------------------------------------------- |  | -------------------- |  | ----------------------- |  | -------- |  | ----------------------------- | -
|                          | Q2 2008   |  | Impact offluctuationsin foreigncurrencyexchange rates |  | Impactofacquisitions |  | Organicnetrevenuegrowth |  | Q2 2009  |  | Organic netrevenuegrowth rate
|PGiMeet Solutions Revenue | $ 113,688 |  | $(5,042)                                              |  | $3,231               |  | $4,832                  |  | $116,709 |  | 4.3                           | %

Free cash flow

We define free cash flow
  as net cash provided by operating activities less capital expenditures. We believe
  this non-GAAP measure provides a relevant measure of our liquidity in evaluating
  our financial performance and our ability to generate cash without additional
  external financing in order to repay debt obligations, fund acquisitions and
  repurchase shares. The following table presents a reconciliation of net cash
  provided by operating activities to free cash flow for the periods indicated
  (in thousands):

|                                          |                          |         |   |      |   |         |  
|----------------------------------------- | ------------------------ | ------- | - | ---- | - | ------- | -
|                                          | Six Months EndedJune 30, |        
|                                          | 2009                     |         |   | 2008 |  
|                                         
|Net cash provided by operating activities | $                        | 43,001  |   |      | $ | 39,614  |  
|Capital expenditures                      |                          | (24,684 | ) |      |   | (26,791 | )
|                                          |                          |         |   |      |  
|Free cash flow                            | $                        | 18,317  |   |      | $ | 12,823  |  
|                                          |                          |         |   |      |  

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 review the accounting
  policies used in reporting our financial results on a regular basis and review
  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:

- Revenue recognition;
- Allowance for uncollectible accounts receivable;
- Goodwill and other intangible assets;
- Income taxes;

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- Restructuring costs;
- Legal contingencies; and
- Derivative instruments.

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, 2008.

FORWARD LOOKING STATEMENTS

When used in this quarterly report
  on Form 10-Q and elsewhere by us or our 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:

- Our ability to compete based on price and against our existing and future
      competitors;
- Our ability to respond to rapid technological changes and the development
      of alternatives to our services;
- Continued pricing pressures;
- General economic or business conditions, internationally, nationally or
      in the local jurisdiction in which we are doing business, may be less favorable
      than expected;
- Risks associated with weakening global economic and credit conditions,
      including customer consolidations, restructurings, bankruptcies and payment
      defaults;
- Market acceptance of new services and enhancements to existing services;
- Costs or difficulties related to the integration of any new or acquired
      businesses and technologies, services and systems;
- Concerns regarding the security of transactions and transmitting confidential
      information over the Internet and public networks;
- Our ability to upgrade our equipment or increase our network capacity
      to meet customer demands;
- Interruption in our services due to failure of the platforms and network
      infrastructure utilized in providing our services;
- Continued weakness in our legacy broadcast fax services, which are part
      of our PGiSend Solutions;
- Our ability to efficiently utilize or re-negotiate our telecommunications
      supply agreements;
- Increased leverage may harm our financial condition and results of operations;

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- Our dependence on our subsidiaries for cash flow may negatively affect
      our business and our ability to pay amounts due under our indebtedness;
- Our financial performance could cause future write-downs of goodwill or
      other intangible assets in future periods;
- Assessment of income, sales and other taxes for which we have not accrued;
- Our ability to attract and retain qualified key personnel;
- Our ability to successfully identify suitable acquisition candidates,
      complete acquisitions, integrate acquired operations into our existing operations
      or expand into new markets;
- Our ability to protect our proprietary technology and intellectual property
      rights;
- Possible adverse results of pending or future litigation or adverse results
      of current or future infringement claims;
- Regulatory or legislative changes may adversely affect our business;
- Possible adverse results if our services become subject to further government
      regulations applicable to traditional telecommunications service providers;
- Risks associated with expansion of our international operations and fluctuations
      in currency exchange rates;
- Factors described under the caption Part I, Item 1A. Risk Factors
      in our annual report on Form 10-K for the year ended December 31, 2008;
      and
- 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 undertake 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. In addition, in August 2007, we entered into two $100.0 million two-year interest rate swaps at a fixed rate of 4.99%. On December 17, 2007, we amended one of the $100.0 million swaps to reduce the rate to
a fixed rate of 4.75% and extend the maturity to August 16, 2010. These interest rate swaps effectively convert the interest payments of $200.0 million of our LIBOR-based borrowings to a fixed rate.

At June 30, 2009, we had borrowings of $67.8 million outstanding under our credit facility that are subject to interest rate risk. Each 100 basis point increase in interest rates relative to these borrowings would
affect annual pre-tax earnings and cash flows by $0.7 million based on our June 30, 2009 debt level.

Approximately 39% of our consolidated net revenues and 35% of our consolidated operating expenses were transacted in countries outside of the United States during the first six months of 2009. Additionally, we have
foreign currency denominated debt as part of our credit facility. At June 30, 2009, we had debt outstanding of $5.0

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million Canadian Dollars. As a result, fluctuations in exchange rates impact the amount of our reported net revenues, operating income and debt. For the six months ended June 30, 2009, a hypothetical positive or negative change of 10% in foreign
currency exchange rates would positively or negatively change net revenues by $12.3 million, operating expenses by $9.7 million and outstanding debt by $0.4 million. Our principal exposure has been related to local currency sales and
operating costs in Australia, Canada, Euro Zone, Japan, Norway and the United Kingdom. We have not used derivatives to manage foreign currency exchange risk, and no foreign currency exchange derivatives were outstanding at June 30, 2009.

ITEM 4. CONTROLS AND PROCEDURESDisclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures as of June
30, 2009. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2009, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, or the Exchange Act), were effective and designed to ensure that (a) information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the SECs rules and instructions, and (b) information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved from time to time
  in legal proceedings that we do not believe will have a material adverse effect
  upon our business, financial condition or results of operations, although we
  can offer no assurance as to the ultimate outcome of any such proceedings.

ITEM 1A. RISK FACTORS.

Part I, Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2008 includes a detailed discussion of risk factors that could materially affect our business, financial
condition or results of operations. Other than with respect to the following risk factor, there have been no material changes from the risk factors disclosed in our annual report.

We may be subject to assessment of income, sales and other taxes for which we have not accrued.

Historically, we have collected
  and remitted state sales tax from our non-PGiMeet Solutions customers in applicable
  states, but we have not collected and remitted state sales tax from our PGiMeet
  Solutions customers in all applicable jurisdictions. In addition, we have learned
  that certain of our PGiMeet solutions may be subject to telecommunications excise
  tax statutes in certain states. During the six months ended June 30, 2008, we
  paid $2.5 million related to the settlement of certain of these state sales
  and excise tax contingencies.

We have reserves for certain state
  sales and excise tax contingencies based on the likelihood of obligation in
  accordance with SFAS No. 5. At June 30, 2009 and December 31, 2008, we had reserved
  $4.6 million for certain state sales and excise tax contingencies. These
  reserved amounts are included in Accrued taxes, other than income taxes
  in our 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.

In addition, states may disagree
  with our method of assessing and remitting such taxes or additional states may
  subject us to inquiries regarding such taxes. For example, in May 2009, one
  of our former subsidiaries, PTEKVentures.com, Inc., a Nevada corporation formally
  dissolved in 2002, received a notice of proposed income tax assessment from
  the Georgia Department of Revenue totalling approximately $22.7 million
  as of June 15, 2009. Because we are at a preliminary stage of the process for
  resolving this dispute with the Georgia Department of Revenue, we cannot, at
  this time, reasonably estimate the amount, if any, of taxes or other interest,
  penalties or additions to tax that would ultimately be assessed at the conclusion
  of the process, and therefore have not accrued any amounts related to this assessment.
  We are also not able to currently estimate when the administrative procedures
  and review within the Georgia Department of Revenue will be completed. If the
  Georgia Department of Revenues initial position is sustained, the amount
  assessed would result in a material adjustment to our condensed consolidated
  financial statements and would materially impact our financial condition and
  results of operations.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
       None.

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

Our annual meeting of shareholders was held on June 10, 2009. At the annual meeting, the following matters were voted on with the following results:

Election of Directors. Boland T. Jones, Jeffrey T. Arnold, Wilkie S. Colyer, John R. Harris, W. Steven Jones, Raymond H. Pirtle, Jr. and J. Walker Smith, Jr. were elected to serve as directors for a term of one
year.

|                       |            |  |               
|---------------------- | ---------- |  | --------------
|Name of Director       | Votes For  |  | Votes Withheld
|Boland T. Jones        | 55,396,699 |  | 1,508,646     
|Jeffrey T. Arnold      | 54,755,140 |  | 2,150,205     
|Wilkie S. Colyer       | 51,684,998 |  | 5,220,347     
|John R. Harris         | 51,651,104 |  | 5,254,241     
|W. Steven Jones        | 51,401,017 |  | 5,504,328     
|Raymond H. Pirtle, Jr. | 51,246,208 |  | 5,659,137     
|J. Walker Smith, Jr.   | 55,804,913 |  | 1,100,432     

Ratification of appointment of
  independent registered public accounting firm. The appointment of Ernst &
  Young LLP as our independent registered public accounting firm was ratified.

|           |  |               |  |        
|---------- |  | ------------- |  | -------
|Votes For  |  | Votes Against |  | Abstain
|56,645,322 |  | 232,337       |  | 27,687 

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

The exhibits filed with this report
  are listed on the Exhibit Index following the signature page of
  this Form 10-Q, which are incorporated by reference.

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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: August 7, 2009 | PREMIERE GLOBAL SERVICES, INC.                 
|                    
|                     | /s/ David E. Trine                             
|                     | David E. Trine                                 
|                     | Chief Financial Officer                        
|                     | (principal financial and accounting officer and
|                     | duly authorized signatory of the registrant)   

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EXHIBIT INDEX

|               |  |                                                                                                                                                                                                                               
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                   
|              
|10.1           |  | Amendment No. 6 to Credit Agreement, dated April 9, 2009,
        by and among the Registrant as Borrower, Bank of America, N.A. as Administrative
        Agent, and the Guarantors and the Lenders that are parties thereto.
|              
|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.                                                          

42

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