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

FORM 10-Q

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

OR


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

For the transition period from
___________________ to ____________________

COMMISSION FILE
NUMBER: 001-13577

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

GEORGIA
                          (State or other jurisdiction of incorporation or organization)

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

3399 PEACHTREE ROAD
NE                           THE LENOX BUILDING, SUITE 700
                             ATLANTA, GEORGIA 30326                            (Address
of principal executive offices, including zip code)

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

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

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

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

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

Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes |_|   No |X|

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

|Class                         | Outstanding at August 3, 2007
|----------------------------- | -----------------------------
|Common Stock, $0.01 par value | 61,758,329 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 Sheetsas of June 30, 2007 and December 31, 2006                                      | 1   
|              |                                                                                                                     |     
|              | Condensed Consolidated
  Statements of Operationsfor the Three Months and Six
  Months Ended June 30, 2007 and 2006 | 2   
|              |                                                                                                                     |     
|              | Condensed Consolidated
  Statements of Cash Flowsfor the Six Months Ended June 30, 2007 and 2006                    | 3   
|              |                                                                                                                     |     
|              | Notes to Condensed Consolidated
  Financial Statements                                                              | 4   
|              |                                                                                                                     |     
|Item 2        | Managements Discussion and Analysis
  of Financial Conditionand Results of Operations                              | 17  
|              |                                                                                                                     |     
|Item 3        | Quantitative and Qualitative
  Disclosures About Market Risk                                                        | 30  
|              |                                                                                                                     |     
|Item 4        | Controls and Procedures                                                                                             | 30  
|              |                                                                                                                     |     
|PART II       | OTHER INFORMATION                                                                                                   |     
|              |                                                                                                                     |     
|Item
  1      | Legal Proceedings                                                                                                   | 31  
|              |                                                                                                                     |     
|Item 1A       | Risk Factors                                                                                                        | 32  
|              |                                                                                                                     |     
|Item 2        | Unregistered Sales of Equity
  Securities and Use of Proceeds                                                       | 33  
|              |                                                                                                                     |     
|Item 3        | Defaults Upon Senior Securities                                                                                     | 33  
|              |                                                                                                                     |     
|Item 4        | Submission of Matters to a Vote of
  Security Holders                                                               | 33  
|              |                                                                                                                     |     
|Item 5        | Other Information                                                                                                   | 33  
|              |                                                                                                                     |     
|Item 6        | Exhibits                                                                                                            | 34  
|              |                                                                                                                     |     
|SIGNATURES    |                                                                                                                     | 35  
|              |                                                                                                                     |     
|EXHIBIT INDEX |                                                                                                                     | 36  

| |  | 
| |  | 

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PART I. FINANCIAL
INFORMATION

ITEM 1.   FINANCIAL
STATEMENTS

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

|                                                                         | June 30, 
2007
      (Unaudited) | December 31, 
2006
|------------------------------------------------------------------------ | -------------------------------- | ------------------
|ASSETS                                                                   |                                  |                   
|CURRENT ASSETS                                                          
|Cash and equivalents                                                     | $  25,825                        |                   
|Accounts receivable (less allowances of $6,586 and $7,551, respectively) | 92,250                           |                   
|Prepaid expenses and other current assets                                | 10,559                           |                   
|Deferred income taxes, net                                               | 11,789                           |                   
|                                                                         |                                  |                   
|Total current assets                                                     | 140,423                          |                   
|                                                                         |                                  |                   
|PROPERTY AND EQUIPMENT, NET                                              | 96,405                           |                   
|                                                                        
|OTHER ASSETS                                                            
|Goodwill                                                                 | 298,005                          |                   
|Intangibles, net of amortization                                         | 32,155                           |                   
|Deferred income taxes, net                                               | 3,387                            |                   
|Other assets                                                             | 5,445                            |                   
|                                                                         |                                  |                   
|                                                                         | $575,820                         |                   
|                                                                         |                                  |                   
|LIABILITIES AND SHAREHOLDERS EQUITY                                    
|                                                                        
|CURRENT LIABILITIES                                                     
|Accounts payable                                                         | $  51,219                        |                   
|Income taxes payable                                                     | 7,285                            |                   
|Accrued taxes                                                            | 6,199                            |                   
|Accrued expenses                                                         | 31,143                           |                   
|Current maturities of long-term debt and capital lease obligations       | 1,755                            |                   
|Accrued restructuring costs                                              | 4,562                            |                   
|                                                                         |                                  |                   
|Total current liabilities                                                | 102,163                          |                   
|                                                                         |                                  |                   
|LONG-TERM LIABILITIES                                                   
|Long-term debt and capital lease obligations                             | 245,552                          |                   
|Accrued restructuring costs                                              | 1,972                            |                   
|Accrued expenses                                                         | 4,158                            |                   
|Deferred income taxes, net                                               |                                 |                   
|                                                                         |                                  |                   
|Total long-term liabilities                                              | 251,682                          |                   
|                                                                         |                                  |                   
|COMMITMENTS AND CONTINGENCIES (Note 8)                                  
|                                                                        
|SHAREHOLDERS EQUITY                                                    
|Common stock, $.01 par value; 150,000,000 shares authorized, 61,751,061 
|and 70,151,998 shares issued and                                         |                                  |                   
|outstanding in 2007 and 2006, respectively                               | 618                              |                   
|Additional paid-in capital                                               | 552,353                          |                   
|Notes receivable, shareholder                                            | (2,061                           | )                 
|Cumulative translation adjustment                                        | 5,289                            |                   
|Accumulated deficit                                                      | (334,224                         | )                 
|                                                                         |                                  |                   
|Total shareholders equity                                               | 221,975                          |                   
|                                                                         |                                  |                   
|                                                                         | $575,820                         |                   
|                                                                         |                                  |                   

Accompanying notes are
integral to these condensed consolidated financial statements.

| | 1 | 
| | - | 

---

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

|                                                      | Three Months Ended
      June 30, | Six Months Ended
                                              June 30,
|----------------------------------------------------- | --------------------------------- | -----------------------------------------------------------------------
|
|                                                      | (Unaudited)                       | (Unaudited)                                                            
|Revenues                                              | $138,019                          |                                                                        
|                                                     
|Operating Expenses:                                  
|Cost of revenues (exclusive of depreciation and      
|amortization shown separately below)                  | 56,782                            |                                                                        
|Selling and marketing                                 | 34,393                            |                                                                        
|General and administrative                            | 17,297                            |                                                                        
|Research and development                              | 3,348                             |                                                                        
|Depreciation                                          | 7,226                             |                                                                        
|Amortization                                          | 3,593                             |                                                                        
|Restructuring costs                                   | 3,877                             |                                                                        
|Net legal settlements and related expenses            | 284                               |                                                                        
|                                                      |                                   |                                                                        
|Total operating expenses                              | 126,800                           |                                                                        
|                                                      |                                   |                                                                        
|Operating income                                      | 11,219                            |                                                                        
|                                                      |                                   |                                                                        
|Other (Expense) Income:                              
|Interest expense                                      | (2,604                            | )                                                                      
|Interest income                                       | 141                               |                                                                        
|Other, net                                            | 215                               |                                                                        
|                                                      |                                   |                                                                        
|Total other (expense) income                          | (2,248                            | )                                                                      
|                                                      |                                   |                                                                        
|                                                      |                                   |                                                                        
|Income from continuing operations before income taxes | 8,971                             |                                                                        
|Income tax expense                                    | 3,138                             |                                                                        
|                                                      |                                   |                                                                        
|Income from continuing operations                     | $    5,833                        |                                                                        
|                                                      |                                   |                                                                        
|                                                      |                                   |                                                                        
|Net income                                            | $    5,833                        |                                                                        
|                                                      |                                   |                                                                        
|BASIC AND DILUTED EARNINGS:                          
|Income from continuing operations                     | $    5,833                        |                                                                        
|                                                      |                                   |                                                                        
|Net income                                            | $    5,833                        |                                                                        
|                                                      |                                   |                                                                        
|                                                      |                                   |                                                                        
|BASIC WEIGHTED AVERAGE SHARES OUTSTANDING             | 64,204                            |                                                                        
|                                                      |                                   |                                                                        
|                                                     
|Basic earnings per share:                            
|Continuing operations                                 | $      0.09                       |                                                                        
|                                                      |                                   |                                                                        
|Net income                                            | $      0.09                       |                                                                        
|                                                      |                                   |                                                                        
|                                                      |                                   |                                                                        
|DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING           | 65,526                            |                                                                        
|                                                      |                                   |                                                                        
|                                                     
|Diluted earnings per share:                          
|Continuing operations                                 | $      0.09                       |                                                                        
|                                                      |                                   |                                                                        
|Net income                                            | $      0.09                       |                                                                        
|                                                      |                                   |                                                                        

Accompanying notes are
integral to these condensed consolidated financial statements.

| | 2 | 
| | - | 

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

|                                                                              | Six Months Ended
                   
        June 30,
|----------------------------------------------------------------------------- | -----------------------------------------------------
|
|                                                                              | (Unaudited)                                          
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |                                                      
|Net income                                                                    | $   14,780                                           
|Adjustments to reconcile net income to cash provided by operating activities:
|Depreciation                                                                  | 14,315                                               
|Amortization                                                                  | 7,146                                                
|Amortization of deferred financing costs                                      | 258                                                  
|Net legal settlements and related expenses                                    | 284                                                  
|Payments for legal settlements and related expenses                           |                                                     
|Deferred income taxes, net of effect of acquisitions                          | (2,640                                               
|Restructuring costs                                                           | 3,746                                                
|Payments for restructuring costs                                              | (4,080                                               
|Equity-based compensation                                                     | 5,355                                                
|Excess tax benefits from share-based payment arrangements                     | 2,297                                                
|Payments for state sales tax                                                  | (480                                                 
|Loss on disposal of assets                                                    | 146                                                  
|Changes in assets and liabilities, net of effect of acquisitions:            
|Accounts receivable, net                                                      | (8,624                                               
|Prepaid expenses and other current assets                                     | (486                                                 
|Accounts payable and accrued expenses                                         | 10,030                                               
|                                                                              |                                                      
|Total adjustments                                                             | 27,267                                               
|                                                                              |                                                      
|Net cash provided by operating activities from continuing operations          | 42,047                                               
|                                                                              |                                                      
|Net cash used in operating activities from discontinued operations            | (488                                                 
|                                                                              |                                                      
|Net cash provided by operating activities                                     | 41,559                                               
|                                                                              |                                                      
|CASH FLOWS FROM INVESTING ACTIVITIES                                         
|Capital expenditures                                                          | (20,240                                              
|Business acquisitions, net of cash acquired                                   | (1,330                                               
|                                                                              |                                                      
|Net cash used in investing activities                                         | (21,570                                              
|                                                                              |                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES                                         
|Principal payments under borrowing arrangements                               | (167,952                                             
|Principal proceeds under borrowing arrangements                               | 275,100                                              
|Excess tax benefits for share-based payment arrangements                      | (2,297                                               
|Purchase of treasury stock, at cost                                           | (124,458                                             
|Exercise of stock options                                                     | 6,900                                                
|                                                                              |                                                      
|Net cash (used in) provided by financing activities                           | (12,707                                              
|                                                                              |                                                      
|                                                                              |                                                      
|Effect of exchange rate changes on cash and cash equivalents                  | (434                                                 
|                                                                              |                                                      
|                                                                              |                                                      
|NET INCREASE IN CASH AND EQUIVALENTS                                          | 6,848                                                
|                                                                              |                                                      
|CASH AND EQUIVALENTS, beginning of period                                     | 18,977                                               
|                                                                              |                                                      
|CASH AND EQUIVALENTS, end of period                                           | $   25,825                                           
|                                                                              |                                                      

Accompanying notes
are integral to these condensed consolidated financial statements.

| | 3 | 
| | - | 

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

1.       THE COMPANY
AND ITS BUSINESS

We
are a global provider of on-demand business process improvement solutions, which we call
the Premiere Global Communications Operating System (PGiCOS). We believe that our
industry-specific applications enable businesses to automate and simplify their business
processes and to communicate more efficiently and effectively with their constituents. We
go to market on a global basis in three regions in North America, Europe and Asia Pacific
and group our applications into six solution sets: Conferencing, Desktop Fax, Document
Delivery, Accounts Receivable Management, Notifications & Reminders and eMarketing. The
unaudited condensed consolidated balance sheet as of June 30, 2007, the unaudited
condensed consolidated statements of operations for the three and six months ended June
30, 2007 and 2006, the unaudited condensed consolidated statements of cash flows for the
six months ended June 30, 2007 and 2006 and related footnotes have been prepared in
accordance with accounting principles generally accepted in the United States (GAAP) for
interim financial information and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by accounting principles generally
accepted in the U.S. for complete financial statements. The results of operations for the
three and six months ended June 30, 2007 are not indicative of the results that may be
expected for the full fiscal year of 2007 or for any other interim period. The financial
information presented herein should be read in conjunction with our annual report on Form
10-K for the year ended December 31, 2006, which includes information and disclosures not
included herein. All significant intercompany accounts and transactions have been
eliminated in consolidation.

2.       SIGNIFICANT
ACCOUNTING POLICIES

Accounts Receivable

Included
in accounts receivable at June 30, 2007 and December 31, 2006 was earned but unbilled
revenue of approximately $7.1 million and $4.7 million, respectively. Unbilled revenue
consists of earned but not yet billed revenue which results from non-calendar month
billing cycles and the one-month lag time in billing related to certain of our services.
Unbilled revenue is billed within 30 days of calendar month end.

Software Development
Costs

Pursuant
to the American Institute of Certified Public Accountants Statement of Position (SOP)
98-1, Accounting for the Costs of Software Developed or Obtained for Internal Use, we
capitalized development costs incurred on software associated with new services and
enhancements to existing services. For the three months ended June 30, 2007 and 2006, we
capitalized approximately $3.3 million and $2.7 million, respectively, of software
development costs. For the six months ended June 30, 2007 and 2006, we capitalized
approximately $5.7 million and $7.4 million, respectively, of software development costs.
These capitalized costs are amortized on a straight-line basis over the estimated life of
the applicable software, not to exceed three years. Depreciation expense recorded for
completed phases of software development in the three and six months ended June 30, 2007
was $0.8 million and $1.5 million, respectively. Depreciation expense recorded for
completed phases of software development in the three and six months ended June 30, 2006
was $0.6 million and $1.2 million, respectively.

Revenue Recognition

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

| | 4 | 
| | - | 

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

State sales taxes

We
have reserves for certain state sales tax contingencies based on the likelihood of
obligation in accordance with Statement of Financial Accounting Standards (SFAS) No. 5,
Accounting for Contingencies (SFAS No. 5). Historically, we have not collected and
remitted state sales tax from our Conferencing Solutions customers. We were audited by
the Commonwealth of Massachusetts Department of Revenue claiming that our audio
conferencing services are subject to sales tax in Massachusetts. In March 2006, we began
assessing sales tax to our customers in Massachusetts as a result of this audit. In July
2006, we paid an initial payment of approximately $1.2 million to the Commonwealth of
Massachusetts Department of Revenue for taxable years prior to 2005. Amounts associated
with 2005 and early 2006 are still under review and have yet to be settled. In March
2007, we were approached by the State of Illinois regarding the taxability of
conferencing services in the state. In April 2007, we began assessing sales tax to our
customers in Illinois. Returns were filed and approximately $0.5 million was paid to the
Illinois Department of Revenue for taxable period prior to March 2007. Additional amounts
may be due as these returns are audited. More states may claim that we are subject to an
assessment of sales taxes. As of June 30, 2007 and December 31, 2006, we had reserved
approximately $4.6 and $4.3 million, respectively, for certain state sales tax
contingencies. These amounts are included in Accrued taxes in the accompanying
condensed consolidated balance sheets. We believe we are appropriately accrued for these
contingencies. In the event that actual results differ from these reserves, we may need
to make adjustments which could materially impact our financial condition and results of
operations. Historically, we have collected and remitted sales tax from our
non-Conferencing Solutions customers in applicable states. However, it is possible states
may disagree with our method of assessing and remitting these state sales taxes.

Income Taxes

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

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

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

| | 5 | 
| | - | 

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

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

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

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

Treasury Stock

All
treasury stock transactions are recorded at cost. As part of our April 2007 settlement
agreement with Crescendo Partners II, L.P., Series E and related parties, among other
things, Crescendo Partners withdrew its proxy contest related to our 2007 annual meeting
of shareholders, and we commenced a $150.0 million self-tender offer to acquire up to
11,857,707 shares of our common stock at a fixed price of $12.65 per share. During the
six months ended June 30, 2007, we repurchased 9,687,847 shares of our common stock in
the open market pursuant to our self-tender offer for approximately $122.6 million and
incurred capitalizable costs associated with the tender offer of approximately $0.9
million that included legal, printing and dealer manager fees. In addition, we withheld
approximately 150,000 shares of our common stock to satisfy certain of our employees tax
withholdings due upon the vesting of their restricted stock grants and remitted
approximately $1.0 million to the Internal Revenue Service on their behalf. During the
six months ended June 30, 2006, we repurchased 2,362,038 shares of our common stock in
the open market pursuant to our Board-approved stock repurchase program for approximately
$18.0 million. In addition, we withheld approximately 150,000 shares of our common stock
to satisfy certain of our employees tax withholdings due upon the vesting of their
restricted stock grants and remitted approximately $1.2 million to the IRS on their
behalf.

Other Comprehensive
Income (Loss)

Other
comprehensive income (loss) represents the change in equity of a business during a
period, except for investments by owners and distributions to owners. Cumulative
translation adjustments represent the only component of other comprehensive income (loss)
at June 30, 2007 and December 31, 2006. For the six months ended June 30, 2007 and 2006,
total other comprehensive income was approximately $8.1 million and $9.1 million,
respectively. Accumulated other comprehensive loss was $256.0 million and $274.0 million
at June 30, 2007 and December 31, 2006, respectively.

New Accounting
Pronouncements

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

| | 6 | 
| | - | 

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

Reclassifications

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

Goodwill and
Intangible Assets

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

|                              | June, 30, 2007 | December 31, 2006
|----------------------------- | -------------- | -----------------
|
|Intangible assets subject  to |                |                  
|amortization                  | $158,933       |                  

Intangible
assets are amortized on a straight-line basis with an estimated useful life between one
and five years. Amortization expense for the intangible assets above is expected to be
approximately $7.2 million for the remainder of 2007, $11.5 million in 2008, $7.7 million
in 2009, $3.3 million in 2010 and $1.4 million in 2011.

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

|                                                | North
America | Europe | Asia
Pacific | Total
|----------------------------------------------- | ------------- | ------ | ------------ | -----
|Goodwill carrying value at December 31, 2006    | $268,458      |        | $22,556      |      
|Additions and adjustments                       | 1,872         |        | 649          |      
|                                                |               |        |              |      
|Goodwill carrying value at June 30, 2007        | $270,330      |        | $23,205      |      
|                                                |               |        |              |      
|                                                |               |        |              |      
|Intangibles carrying value at December 31, 2006 | $  33,327     |        | $  3,582     |      
|Additions and adjustments                       | 699           |        | 146          |      
|Amortization                                    | (6,239        | )      | (692         | )    
|                                                |               |        |              |      
|Intangibles carrying value at June 30, 2007     | $  27,787     |        | $  3,036     |      
|                                                |               |        |              |      

| | 7 | 
| | - | 

---

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

3.       RESTRUCTURING
COSTS

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

|Consolidated                 | Accrued Costs at 
December 31, 2006 | 2007 
Charge To 
Continuing 
Operations | Costs Incurred | Adjustment of 
Accrued Costs | Accrued Costs at 
June 31, 2007
|---------------------------- | ----------------------------------- | --------------------------------------- | -------------- | ---------------------------- | -------------------------------
|Accrued restructuring costs: |                                     |                                         |                |                              |                                
|Severance and exit costs     | $4,027                              |                                         | $4,098         |                              | $(4,023                        
|Contractual obligations      | 3,112                               |                                         | 100            |                              | (328                           
|                             |                                     |                                         |                |                              |                                
|Accrued restructuring costs  | $7,139                              |                                         | $4,198         |                              | $(4,351                        
|                             |                                     |                                         |                |                              |                                

Realignment of
Workforce - 2007

During
the three months ended June 30, 2007, we executed a restructuring plan to consolidate our
service delivery organizations. As part of this consolidation, we eliminated
approximately 100 positions. We incurred approximately $4.1 million in severance costs
associated with the elimination of these positions. Additionally, we incurred $0.1
million of lease termination costs associated with our Paris, France office. On a segment
basis, these restructuring costs were $1.1 million in North America, $2.7 million in
Europe and $0.4 million in Asia Pacific. Estimated annual savings from this consolidation
is approximately $6.0 million. During the three months ended June 30, 2007, we paid
approximately $0.8 million related to these severance and exit costs. We anticipate the
majority of this $4.1 million restructuring cost to be paid during 2007. Our reserve for
these restructuring costs at June 30, 2007 was approximately $3.3 million.

Realignment of
Workforce - 2006

In
2006, we executed a restructuring plan to streamline the management of our business on a
geographic regional basis from our former Conferencing & Collaboration and Data
Communications business segments. As part of this streamlining, we eliminated
approximately 100 positions within customer service, finance, operations and sales and
marketing. In the fourth quarter of 2006, we entered into a separation agreement in
connection with the resignation of our former chief investment officer. We incurred an
aggregate of approximately $8.0 million in severance costs associated with the
elimination of these positions, which included the issuance of restricted stock having a
fair market value of $0.6 million. Additionally, we incurred $0.6 million of lease
termination costs associated with five locations within North America. On a segment
basis, these restructuring costs were $4.6 million in North America, $3.2 million in
Europe and $0.7 million in Asia Pacific. In the three and six months ended June 30, 2007,
we paid approximately $1.3 million and $3.2 million, respectively, related to these
severance and exit costs. During the three and six months ended June 30, 2007, we
adjusted our restructuring reserve by approximately $0.3 million and $0.5 million,
respectively, as a result of actual severance payments to certain individuals being less
than originally estimated. Management expects to pay these remaining severance
obligations during 2007. Our reserve for these restructuring costs at June 30, 2007 was
approximately $0.4 million. Our reserve for restructuring costs incurred in years prior
to 2006 was approximately $2.8 million at June 30, 2007.

4.       ACQUISITIONS
AND DISPOSITIONS

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

| | 8 | 
| | - | 

---

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

North America

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

In
January 2006, we acquired all of the outstanding stock of Accucast, Inc., a U.S.-based
provider of e-mail communication services. We paid $12.3 million in cash at closing and
$0.5 million in transaction and closing costs. Subsequent to closing, we paid an
additional $2.1 million cash purchase price upon the achievement of certain milestone
targets as specified in the purchase agreement. We may pay up to an additional $0.9
million in cash purchase price based upon the achievement of an additional milestone
integration target as specified in the purchase agreement. We funded the purchase through
our line of credit. We followed SFAS No. 141, and approximately $0.2 million has been
allocated to acquired fixed assets, $0.3 million has been allocated to other acquisition
liabilities, $2.0 million has been allocated to developed technology and $1.0 million has
been allocated to identifiable customer lists, with the identifiable customer lists and
developed technology amortized over five-year useful lives. In addition, $1.2 million has
been allocated to long-term deferred tax liabilities to record the step-up in basis for
the customer lists and developed technology purchased. Because we have not finalized the
working capital component of the purchase price, the residual $13.2 million of the
aggregate purchase price has been preliminarily allocated to goodwill, which is subject
to a periodic impairment assessment in accordance with SFAS No. 142.

Asia Pacific

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

5.       INDEBTEDNESS

In
April 2006, we closed an amendment to our credit facility, with a syndicate led by Bank
of America, N.A., which increased the amount available to us under our line of credit
from $180.0 million to $300.0 million, reduced the applicable percentages across the
pricing grid and extended the maturity of the credit facility from February 2009 to April
2011. The amendment also provided for an uncommitted accordion feature allowing for an
additional increase of $100.0 million to $400.0 million of the revolving credit line,
subject to the terms and conditions as set forth in the amendment. The credit facility is
subject to customary covenants for secured credit facilities of this nature. Certain of
our material domestic subsidiaries have guaranteed our obligations under the credit
facility, which is secured by substantially all of our assets and the assets of our
material domestic subsidiaries. In addition, we have pledged as collateral all of the
issued and outstanding stock of our material domestic subsidiaries and 65.0% of our
material foreign subsidiaries. We believe that as of June 30, 2007, we were in compliance
in all material respects with the covenants under our line of credit and have obtained
any required waivers or consents from lenders, as applicable. Proceeds drawn under this
credit agreement may be used for

| | 9 | 
| | - | 

---

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

refinancing of existing debt,
working capital, capital expenditures, acquisitions and other general corporate purposes.
The annual interest rate applicable to borrowings under the line of credit, at our
option, is the base rate (the greater of the federal funds rate plus 0.5% or the Bank of
America prime rate) or LIBOR, plus, in each case, an applicable margin which will vary
based upon our leverage ratio at the end of each fiscal quarter. At June 30, 2007, the
applicable margin with respect to base rate loans was 0.0%, and the applicable margin
with respect to LIBOR loans was 1.00%. At June 30, 2007, our interest rate on 30-day
LIBOR loans was 6.32%. As of June 30, 2007, we had approximately $243.8 million of
borrowings outstanding and approximately $1.5 million in letters of credit outstanding
under our line of credit. In April 2007, we entered into an amendment to our credit
facility which inserted into the applicable margin pricing grid a new tier based on a total leverage ratio of 2.5 times or greater, increased the permitted covenant level of the consolidated total leverage ratio and amended certain other provisions to allow us to purchase, redeem or otherwise
acquire up to an additional $150.0 million of our common stock during 2007, of which
approximately $122.6 million has been used to fund our self-tender offer in the second
quarter of 2007.

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

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

At
June 30, 2007, we had no other indebtedness outstanding except for the borrowings under
our lines of credit and capital lease obligations with principal balances totaling
approximately $3.5 million.

6.       EQUITY-BASED
COMPENSATION

On
January 1, 2006, we adopted, using the modified prospective application, SFAS 123(R),
Share Based Payment (SFAS 123(R)). SFAS 123(R) requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the financial
statements based on their fair values and did not change the accounting guidance for
share-based payment transactions with parties other than employees provided in SFAS 123,
Accounting for Stock Based Compensation (SFAS 123), as originally issued and Emerging
Issues Task Force (EITF) 96-18, Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.

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

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

| | 10 | 
| | -- | 

---

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

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

|                                                        | Three Months Ended | Six Months Ended
|------------------------------------------------------- | ------------------ | ----------------
|
|Income from continuing operations, as reported          | $  5,833           |                 
|Effect of adopting SFAS 123(R) on income from          
|operations                                              | 96                 |                 
|                                                        |                    |                 
|Pro forma income from continuing operations             | $  5,929           |                 
|                                                        |                    |                 
|Income from continuing operations before income taxes, 
|as reported                                             | $  8,971           |                 
|Effect of adopting SFAS 123(R) on income before        
|income taxes                                            | 147                |                 
|                                                        |                    |                 
|Pro forma income from continuing operations before      | $  9,118           |                 
|income taxes                                           
|                                                        |                    |                 
|Net income, as reported                                 | $  5,833           |                 
|Effect of adopting SFAS 123(R) on net income            | 96                 |                 
|                                                        |                    |                 
|Pro forma net income                                    | $  5,929           |                 
|                                                        |                    |                 
|Net income per share, as reported:                     
|Basic                                                   | $    0.09          |                 
|Diluted                                                 | $    0.09          |                 
|                                                       
|Effect of adopting SFAS 123(R) on net income per share,
|basic and diluted                                       | $    0.00          |                 
|                                                       
|Pro forma net income per share:                        
|Basic                                                   | $    0.09          |                 
|Diluted                                                 | $    0.09          |                 
|                                                        |                    |                 
|Net cash provided by operating activities               |                    |                 
|Effect of adopting SFAS 123(R) on cash provided by      |                    |                 
|operating activities                                    |                    |                 
|                                                        |                    |                 
|Pro forma net cash provided by operating activities     |                    |                 
|                                                        |                    |                 
|Net cash (used in) provided by financing activities     |                    |                 
|Effect of adopting SFAS 123(R) on cash (used in)       
|provided by  financing activities                       |                    |                 
|                                                        |                    |                 
|Pro forma  net cash (used in) provided by financing    
|activities                                              |                    |                 
|                                                        |                    |                 

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

| | 11 | 
| | -- | 

---

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

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

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

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

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

Stock Options

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

|                                          | Options    | Weighted 
Average 
Exercise Price | Aggregate 
       Intrinsic
Value
|----------------------------------------- | ---------- | --------------------------------- | ---------------------------------
|Options outstanding at December 31, 2006: | 2,651,473  |                                   | $7.25                            
|Granted                                   |           |                                   | 0.00                             
|Exercised                                 | (1,079,558 | )                                 | 6.39                             
|Expired                                   | (198,460   | )                                 | 8.41                             
|                                          |            |                                   |                                  
|Options outstanding at June 30, 2007      | 1,373,455  |                                   | $7.75                            
|                                          |            |                                   |                                  
|Options exercisable at June 30, 2007      | 1,231,270  |                                   | $7.43                            
|                                          |            |                                   |                                  

For
the three and six months ended June 30, 2007, we recognized equity-based compensation
expense of approximately $0.1 million and $0.6 million, respectively, related to the
vesting of stock options. For the three and six months ended June 30, 2006, we recognized
equity-based compensation expense of approximately $0.7 million and $1.6 million,
respectively, related to the vesting of stock options. As of June 30, 2007, we had
approximately $0.9 million of unvested stock options, which we will record in our
statements of operations over a weighted average recognition period of less than three
years.

| | 12 | 
| | -- | 

---

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

Restricted Stock

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

|                                 | Shares    | Weighted 
      Average Price | Aggregate 
      Intrinsic Value
|-------------------------------- | --------- | ----------------------------- | --------------------------------
|Outstanding at December 31, 2006 | 2,498,168 |                               | $  9.00                         
|Granted                          | 427,170   |                               | 11.56                           
|Vested/released                  | (473,534  | )                             | 9.76                            
|Forfeited                        | (75,333   | )                             | 8.12                            
|                                 |           |                               |                                 
|Outstanding at June 30, 2007     | 2,376,471 |                               | $  9.34                         
|                                 |           |                               |                                 

For
the three and six months ended June 30, 2007, we recognized equity-based compensation
expense of approximately $2.4 and $4.8 million, respectively, related to the vesting of
restricted stock. For the three and six months ended June 30, 2006, we recognized
equity-based compensation expense of approximately $2.1 million and $3.3 million,
respectively, related to the vesting of restricted stock. As of June 30, 2007, we had
approximately $20.1 million of unvested restricted stock which we will record in our
statements of operations over a weighted average recognition period of less than five
years.

7.       EARNINGS PER
SHARE

Basic and Diluted Net
Income per Share

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

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

|                              | Three Months Ended 
      June 30, 2007 | Three Months Ended
                                                            
      June 30, 2006
|----------------------------- | --------------------------------------- | ---------------------------------------------------------------------------------------------------
|
|Basic EPS                     | $5,833                                  |                                                                                                    
|Effect of dilutive securities |                                         |                                                                                                    
|Stock options                 |                                         |                                                                                                    
|Unvested restricted share     |                                         |                                                                                                    
|Warrants                      |                                         |                                                                                                    
|                              |                                         |                                                                                                    
|Diluted EPS                   | $5,833                                  |                                                                                                    
|                              |                                         |                                                                                                    

| | 13 | 
| | -- | 

---

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

|                              | Six  Months Ended
      June 30, 2007 | Six  Months Ended
                                                            
      June 30, 2006
|----------------------------- | ------------------------------------- | --------------------------------------------------------------------------------------------------
|
|Basic EPS                     | $14,780                               |                                                                                                   
|Effect of dilutive securities |                                       |                                                                                                   
|Stock options                 |                                       |                                                                                                   
|Unvested restricted share     |                                       |                                                                                                   
|Warrants                      |                                       |                                                                                                   
|                              |                                       |                                                                                                   
|Diluted EPS                   | $14,780                               |                                                                                                   
|                              |                                       |                                                                                                   

The
weighted average diluted common shares outstanding for the three and six months ended
June 30, 2007 excludes the effect of approximately 885 and 0.4 million, respectively, of
out-of-the-money options and restricted shares because their effect would be
anti-dilutive. The weighted average diluted common shares outstanding for the three and
six months ended June 30, 2006 excludes the effect of approximately 2.6 million and 2.4
million, respectively, of out-of-the-money options, restricted shares and warrants
because their effect would be anti-dilutive.

8.       COMMITMENTS
AND CONTINGENCIES

Asset retirement
obligation

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

Litigation and claims

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

On
February 2, 2007, the United States Court of Appeals for the Eleventh Circuit affirmed
the district courts order granting of our motion for summary judgment in a lawsuit
alleging violations of securities laws filed in November 1998 against us and certain of
our officers and directors. Plaintiffs had acquired our common stock in connection with
our acquisition of Xpedite Systems, Inc. (n/k/a Xpedite Systems, LLC). Plaintiffs sought
undisclosed damages together with pre-and post-judgment interest, punitive damages, costs
and attorneys fees. On February 23, 2007, plaintiffs filed a petition for rehearing en
banc and for panel rehearing with the Eleventh Circuit. On May 30, 2007, the Eleventh
Circuit denied both of plaintiffs petitions.

On
August 21, 2006, a lawsuit was filed in the U.S. District Court for the Eastern District
of Texas by Ronald A. Katz Technology Licensing, L.P. against three conferencing service
providers, including us, alleging that the defendants automated telephone conferencing
systems that enable [their] customers to perform multiple-party meetings and various
other functions over the telephone infringe six of plaintiffs patents. The complaint
seeks undisclosed monetary damages, together with pre- and post-judgment interest, treble
damages for what is alleged to be willful infringement, attorneys fees and costs and
injunctive relief. On October 16, 2006, we filed our answer, affirmative defenses and
counterclaim to the complaint, including seeking declaratory judgment of noninfringement,
invalidity and unenforceability and attorneys fees and costs. On January 25, 2007,
plaintiff amended its complaint

| | 14 | 
| | -- | 

---

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

to also add our subsidiary, American
Teleconferencing Services, Ltd., as a party. On March 20, 2007, a multidistrict
litigation panel granted a motion to consolidate 25 pending infringement suits, including
our suit, brought by Katz against various defendants to the District Court in California.
Discovery is on-going.

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

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

9.       SEGMENT
REPORTING

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

| | 15 | 
| | -- | 

---

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

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

|                                     | Three Months Ended
      June 30, | Six Months Ended 
      June 30,
|------------------------------------ | --------------------------------- | --------------------------------
|
|Revenues:                            |                                   |                                 
|Revenues from continuing operations:
|North America                        | $  88.1                           |                                 
|Europe                               | 25.3                              |                                 
|Asia Pacific                         | 24.6                              |                                 
|                                     |                                   |                                 
|                                     | $138.0                            |                                 
|                                     |                                   |                                 
|Income:                             
|Income from continuing operations:  
|North America                        | $  2.0                            |                                 
|Europe                               | 2.7                               |                                 
|Asia Pacific                         | 1.1                               |                                 
|                                     |                                   |                                 
|                                     | $  5.8                            |                                 
|                                     |                                   |                                 

|                     | Six Months Ended
|-------------------- | ----------------
|
|Identifiable Assets: |                 
|North America        | $453.4          
|Europe               | 81.1            
|Asia Pacific         | 41.3            
|                     |                 
|                     | $575.8          
|                     |                 



10. STATEMENT OF CASH
FLOW INFORMATION

Supplemental
disclosure of cash flow information (in thousands):

|                               | Three Months Ended                    
      June 30, | Six Months Ended
                                                                                 
      June 30,
|------------------------------ | ----------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------
|
|Cash paid during the year for: |                                                       |                                                                                                                  
|Interest                       | $3,124                                                |                                                                                                                  
|Income taxes, net              | $2,526                                                |                                                                                                                  

11.      SUBSEQUENT
EVENTS

In August 2007, we repurchased 100,000 shares of our common stock in the open market pursuant to our Board-approved stock repurchase program for approximately $1.1 million.

In
July 2007, we acquired all of the outstanding stock of Budget Conferencing Inc., a
Canadian-based Web conferencing services provider. We paid approximately US$19.0 million
in cash at closing. We funded the purchase with our existing credit facility. We are in
the process of completing our valuation of certain intangible assets in accordance with
SFAS No. 141.

| | 16 | 
| | -- | 

---

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

OVERVIEW

We
are a global provider of on-demand business process improvement solutions, which we call
the Premiere Global Communications Operating System (PGiCOS). We believe that our
industry-specific applications enable businesses to automate and simplify their business
processes and to communicate more efficiently and effectively with their constituents. We
go to market on a global basis in three regions in North America, Europe and Asia Pacific
and group our applications into six solution sets: Conferencing, Desktop Fax, Document
Delivery, Accounts Receivable Management, Notifications & Reminders and eMarketing.

Key
highlights of our financial and strategic accomplishments during the second quarter of
2007 include:

| |  |  | Increased
 consolidated  revenues by  approximately  10.0% in the second  quarter of 2007  compared
to the               second quarter of 2006;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Continued
to grow revenue from our Conferencing Solutions, with               approximately 26.0%
growth in this solution set compared to the               comparable prior year period;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Grew
cash flows provided by operating activities from continuing               operations by
approximately 58.0% compared to the second quarter               of 2006;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Purchased
9,687,841 shares of our common stock, representing               approximately 14.0% of
our outstanding shares, pursuant to our               self-tender offer; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Launched
our new Web portal, PGiConnect.com through which we will bring all of our capabilities
online.
| | - |  | -------------------------------------------------------------------------------------------------------

In
2007, we plan to continue to focus on our objectives of increased solutions-based revenue
growth, improved profitability and moving our companys capabilities online.

We
plan to continue to invest in our selling and marketing efforts as we move to a more
consultative sales approach. We believe that our more focused cross-selling efforts under
our unified sales management team will help accelerate revenue growth in our core
solution sets in 2007. To accomplish this objective, we intend to systematically
introduce the PGiCOS to all of our enterprise customers during the year to drive adoption
of additional solutions per customer.

In
2007, we plan to improve our profitability by continuing to automate our internal
processes and by focusing our development efforts on continuing to enhance open access to
our platform and solutions and on more highly automated applications that have quicker
sales cycles and implementation times. We recently launched a developer community within
PGiConnect.com and have partnered with systems integrators to assist us in these efforts.
In addition, during the second quarter of 2007, we incurred restructuring costs of
approximately $4.1 million related to the consolidation of our service delivery
organizations.

We
plan to continue to focus on our online initiative of making all of our companys
capabilities accessible through a single point of presence at PGiConnect.com, including
further improvements to our portal, such as additional content focused on the application
of our solutions. We believe that PGiConnect.com will open a new sales channel and will
improve our solutions-based revenue growth. In addition, by driving many of our customer
service and support capabilities into a self-serve Web environment, we believe we will
improve our customer experience and generate additional efficiencies throughout our
business. We believe that over time these efficiencies will help us reduce our service
and support costs and further our goal of improving profitability. We also intend to
explore new pricing options for our solutions, including offering subscription-based
pricing, which we recently introduced through our Web sales channel. We believe that a
gradual migration over time towards this type

| | 17 | 
| | -- | 

---

of pricing is consistent with the
pricing of other on-demand services and will support our efforts to bundle our solutions
into packaged offerings for our customers and lead to more predictable revenues.

We
expect that our capital expenditures will be higher than historical averages, in order to
fund capacity expansion, new product development, our automation initiatives and
investment in re-engineering our service and support organizations. We expect capital
expenditures in 2007 will total approximately 8% to 9% of consolidated revenues.

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

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

RESULTS OF OPERATIONS

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

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

|                                     | Three Months Ended                                                           
      June 30, | Six Months Ended 
      June 30,
|------------------------------------ | -------------------------------------------------------------------------------------------- | --------------------------------
|
|Revenues:                            |                                                                                              |                                 
|Revenues from continuing operations:
|North America                        | $  88.1                                                                                      |                                 
|Europe                               | 25.3                                                                                         |                                 
|Asia Pacific                         | 24.6                                                                                         |                                 
|                                     |                                                                                              |                                 
|                                     | $138.0                                                                                       |                                 
|                                     |                                                                                              |                                 
|Income:                             
|Income from continuing operations:  
|North America                        | $    2.0                                                                                     |                                 
|Europe                               | 2.7                                                                                          |                                 
|Asia Pacific                         | 1.1                                                                                          |                                 
|                                     |                                                                                              |                                 
|                                     | $    5.8                                                                                     |                                 
|                                     |                                                                                              |                                 

Revenues

Consolidated
revenues from continuing operations increased 9.9% to $138.0 million for the three months
ended June 30, 2007 compared with $125.6 million for the same period in 2006 and
increased 10.7% to 273.6 million for the six months ended June 30, 2007 compared with
$247.3 million for the same period in 2006.

For
the three months ended June 30, 2007 and 2006, North America revenue was 63.8% and 63.9%
of consolidated revenues, respectively, and for the six months ended June 30, 2007 and
2006,

| | 18 | 
| | -- | 

---

North America revenue was 64.3% and
64.6% of consolidated revenues, respectively. For the three months ended June 30, 2007
and 2006, North America experienced a 9.8% increase in revenue from $80.3 million to
$88.1 million, and for the six months ended June 30, 2007 and 2006, North America
experienced a 10.2% increase in revenue from $159.6 million to $176.1 million. These
increases in revenue were attributable primarily to organic growth in our Conferencing
Solutions and our acquisitions of Enunciate and Accucast, offset by declines in our
broadcast fax revenue. Our Conferencing Solutions revenue in North America was
approximately $65.6 million and $54.2 million for the three months ended June 30, 2007
and 2006, respectively, and $131.4 million and $107.6 million for the six months ended
June 30, 2007 and 2006, respectively. Our broadcast fax revenue in North America was
approximately $5.4 million and $7.9 million for the three months ended June 30, 2007 and
2006, respectively, and $10.7 million and $16.0 million for the six months ended June 30,
2007, respectively.

For
the three months ended June 30, 2007 and 2006, Europe revenue was 18.4% and 19.3% of
consolidated revenues, respectively, and for the six months ended June 30, 2007 and 2006,
Europe revenue was 18.4% and 19.1%, respectively. For the three months ended June 30,
2007 and 2006, Europe experienced a 4.4% increase in revenue from $24.3 million to $25.3
million, and for the six months ended June 30, 2007, Europe experienced a 6.2% increase
in revenue from $47.3 million to $50.2 million. These increases in revenue were
attributable primarily to organic growth in our Conferencing Solutions and the
strengthening of the Euro and British Pound to the U.S. dollar, offset by declines in our
broadcast fax revenues. Fluctuations in foreign exchange rates resulted in revenue growth
of approximately $1.7 and $3.8 million for the three and six months ended June 30, 2007,
respectively. Our Conferencing Solutions revenue in Europe was approximately $10.6
million and $7.5 million for the three months ended June 30, 2007 and 2006, respectively,
and $20.5 million and $14.6 million for the six months ended June 30, 2007 and 2006,
respectively. Our broadcast fax revenue in Europe was approximately $6.5 million and $8.3
million for the three months ended June 30, 2007 and 2006, respectively, and $12.9
million and $16.2 million for the six months ended June 30, 2007 and 2006, respectively.

For
the three months ended June 30, 2007 and 2006, Asia Pacific revenue was 17.8% and 16.8%
of consolidated revenues, respectively, and for the six months ended June 30, 2007 and
2006, Asia Pacific revenue was 17.3% and 16.3% of consolidated revenues, respectively.
For the three months ended June 30, 2007 and 2006, Asia Pacific experienced a 16.9%
increase in revenue from $21.0 million to $24.6 million and for the six months ended June
30, 2007, Asia Pacific experienced a 17.1% increase in revenue from $40.4 million in
$47.3 million. These increases in revenue were attributable primarily to organic growth
in our Conferencing Solutions, growth in our maritime Notifications & Reminders solution
(which we resale from a third party to shipping companies in this region) and our ECT
acquisition, offset by declines in our broadcast fax revenues. Our Conferencing Solutions
revenue in Asia Pacific was approximately $10.3 million and $6.9 million for the three
months ended June 30, 2007 and 2006, respectively, and $19.4 million and $13.2 million
for the six months ended June 30, 2007 and 2006, respectively. Our broadcast fax revenue
in Asia Pacific was approximately $8.2 million and $9.1 million for the three months
ended June 30, 2007 and 2006, respectively, and $16.1 million and $17.7 million for the
six months ended June 30, 2007 and 2006, respectively.

Cost of revenues

Consolidated
cost of revenues increased 15.4% to $56.8 million from $49.2 million and increased to
41.1% from 39.2% of consolidated revenues for the three months ended June 30, 2007 and
2006, respectively. Consolidated cost of revenues increased 13.4% to $110.7 million from
$97.6 million and increased to 40.4% from 39.5% of consolidated revenues, for the six
months ended June 30, 2007 and 2006, respectively.

For
the three months ended June 30, 2007 and 2006, North America cost of revenue was 40.0%
and 37.2% of segment revenue, respectively, and for the six months ended June 30, 2007
and 2006, North America cost of revenue was 39.3% and 37.5% of segment revenue,
respectively. For the three months ended June 30, 2007 and 2006, North America
experienced an 18.1% increase in cost of revenue from $29.8 million to $35.2 million, and
for the six months ended June 30, 2007, North America experienced a 15.3% increase in
cost of revenue from $60.0 million to $69.1 million. North America cost of revenue
increased as a percentage of segment revenue primarily as a result of price compression
in our Conferencing Solutions and broadcast fax services in excess of cost reductions in
the underlying telecommunications network, a greater percentage of resold Web
conferencing services that carry an inherently higher cost of revenue, duplicative costs
associated with the consolidation of certain international service and support centers
and further investment in our Conferencing Solutions. North America cost of revenue
increased in dollar amount as a result of minute volume growth in our Conferencing
Solutions.

| | 19 | 
| | -- | 

---

For
the three months ended June 30, 2007 and 2006, Europe cost of revenue was 36.3% and 38.0%
of segment revenue, respectively, and for the six months ended June 30, 2007 and 2006,
Europe cost of revenue was 35.4% and 38.8% of segment revenue, respectively. For the
three months ended June 30, 2007 and 2006, Europe experienced no change in cost of
revenue at $9.2 million, and for the six months ended June 30, 2007, Europe experienced a
3.1% decrease in cost of revenue from $18.3 million to $17.8 million. Europe cost of
revenue decreased as a percentage of segment revenue primarily as a result of growth in
higher margin Conferencing Solutions and declines in lower margin broadcast fax services.
In contrast to North America, broadcast fax services in Europe have an inherently lower
gross profit margin as a result of lower revenue yields and higher underlying
telecommunications network costs. Europe cost of revenue decreased in dollar amount as a
result of lower volume in our broadcast fax services.

For
the three months ended June 30, 2007 and 2006, Asia Pacific cost of revenue was 50.3% and
48.2% of segment revenue, respectively, and for the six months ended June 30, 2007 and
2006, Asia Pacific cost of revenue was 50.2% and 47.9% of segment revenue, respectively.
For the three months ended June 30, 2007 and 2006, Asia Pacific experienced a 21.8%
increase in cost of revenue from $10.2 million to $12.4 million, and for the six months
ended June 30, 2007, Asia Pacific experienced a 23.2% increase in cost of revenue from
$19.3 million to $23.8 million. Asia Pacific cost of revenue increased as a percentage of
segment revenue primarily as a result of growth in lower margin maritime Notifications & Reminders
solution and price compression in our broadcast fax services, offset in part by growth in
our higher margin Conferencing Solutions. The cost of revenue associated with our
maritime Notifications & Reminders solution is inherently higher than other solutions
offered in the region because of its resale costs. Asia Pacific cost of revenue increased
in dollar amount as a result of growth in our maritime Notifications & Reminders solution
and costs associated with the introduction of operator-assisted conferencing services.

Selling and marketing

Consolidated
selling and marketing expenses from continuing operations increased 1.7% to $34.4 million
from $33.8 million and decreased to 24.9% from 26.9% of consolidated revenues for the
three months ended June 30, 2007 and 2006, respectively. Consolidated selling and
marketing expenses from continuing operations increased 6.5% to $70.9 million from $66.6
million and decreased to 25.9% from 26.9% of consolidated revenues, for the six months
ended June 30, 2007 and 2006, respectively.

For
the three months ended June 30, 2007 and 2006, North America selling and marketing
expense was 24.8% and 27.9% of segment revenue, respectively, and for the six months
ended June 30, 2007 and 2006, North America selling and marketing expense was 25.8% and
27.7% of segment revenue, respectively. For the three months ended June 30, 2007 and
2006, North America experienced a 2.4% decrease in selling and marketing expense from
$22.4 million to $21.9 million, and for the six months ended June 30, 2007, North America
experienced a 2.8% increase in selling and marketing expense from $44.2 million to $45.4
million. For the three months ended June 30, 2007, the decrease in North America selling
and marketing dollars is primarily the result of increased marketing and advertising
expenses during the prior year associated with our One Company initiative. This decrease
in expense was offset in part by increases in expenses associated with our acquisitions
of Enunciate and Accucast. For the six months ended June 30, 2007, the increase in North
America selling and marketing dollars is primarily associated with our acquisitions of
Enunciate and Accucast in addition to increased sales headcount associated with the
change in our sales strategy with our former Data Communications operating unit, offset
in part by lower marketing expenditures.

For
the three months ended June 30, 2007 and 2006, Europe selling and marketing expense was
29.2% and 27.5% of segment revenue, respectively, and for the six months ended June 30,
2007 and 2006, Europe selling and marketing expense was 30.1% and 27.6% of segment
revenue, respectively. For the three months ended June 30, 2007 and 2006, Europe
experienced a 10.6% increase in selling and marketing expense from $6.7 million to $7.4
million, and for the six months ended June 30, 2007, Europe experienced a 15.6% increase
in selling and marketing expense from $13.1 million to $15.1 million. Approximately half
of the Europe selling and marketing expense increase is associated with the strengthening
of the Euro and British Pound against the U.S. dollar. The remaining half of this
increase is associated with increased sales headcount associated with our new solutions
sales strategy implemented during the fourth quarter of 2006 and additional investment in
Conferencing Solutions.

| | 20 | 
| | -- | 

---

For
the three months ended June 30, 2007 and 2006, Asia Pacific selling and marketing expense
was 20.9% and 22.6% of segment revenue, respectively, and for the six months ended June
30, 2007 and 2006, Asia Pacific selling and marketing expense was 21.8% and 23.1% of
segment revenue, respectively. For the three months ended June 30, 2007 and 2006, Asia
Pacific experienced an 8.3% increase in selling and marketing expense from $4.7 million
to $5.1 million, and for the six months ended June 30, 2007, Asia Pacific experienced an
11.1% increase in selling and marketing expense from $9.3 million to $10.3 million. The
increase in Asia Pacific selling and marketing expense is primarily associated with our
ECT acquisition and increased sales headcount associated with additional investment in
our Conferencing Solutions.

Research and
development

Consolidated
research and development expenses from continuing operations increased 18.1% to $3.3
million from $2.8 million, and increased to 2.4% from 2.3% of consolidated revenues for
the three months ended June 30, 2007 and 2006, respectively. Consolidated research and
development expenses from continuing operations increased 20.1% to $6.8 million from $5.7
million, and increased to 2.5% from 2.3% of consolidated revenues for the six months
ended June 30, 2007 and 2006, respectively. Research and development costs associated
with product development are capitalized as internally developed software, whereas
management overhead, facilities costs and maintenance activities are expensed as research
and development. We capitalized software development costs of approximately $3.3 million
and $2.7 million for the three months ended June 30, 2007 and 2006, respectively, and
approximately $5.7 million and $7.4 million for the six months ended June 20, 2007 and
2006, respectively. The majority of research and development expenses were incurred in
North America. The increase in research and development expenses is primarily associated
with additional resources invested in the maintenance and support of our Conferencing
Solutions and our e-Marketing Solutions (primarily associated with our Accucast
acquisition). The increase in capitalized software development costs is associated
primarily with increased product development within all of our core solution sets.

General and
administrative

For
the three months ended June 30, 2007 and 2006, North America general and administrative
expense was 14.6% and 13.5% of segment revenue, respectively, and for the six months
ended June 30, 2007 and 2006, North America general and administrative expense was 14.0%
and 13.0% of segment revenue, respectively. For the three months ended June 30, 2007 and
2006, North America experienced a 18.7% increase in general and administrative expense
from $10.8 million to $12.8 million, and for the six months ended June 30, 2007, North
America experienced a 18.3% increase in general and administrative expense from $20.8
million to $24.6 million. The increase in North America general and administrative
expense for the three months ended June 30, 2007 was primarily associated with $2.0
million in proxy-related costs. The increase in general and administrative costs for the
six months ended June 30, 2007 was primarily associated with $2.9 million in
proxy-related costs.

For
the three months ended June 30, 2007 and 2006, Europe general and administrative expense
was 11.2% and 10.4% of segment revenue, respectively, and for the six months ended June
30, 2007 and 2006, Europe general and administrative expense was 11.3% and 10.4% of
segment revenue, respectively. For the three months ended June 30, 2007 and 2006, Europe
experienced a 12.0% increase in general and administrative expense from $2.5 million to
$2.8 million, and for the six months ended June 30, 2007, Europe experienced a 15.0%
increase in general and administrative expense from $4.9 million to $5.7 million.
Approximately half of the Europe general and administrative expense increase is
associated with the strengthening of the Euro and British Pound against the U.S. dollar.
The remaining half of this increase is associated with duplicative costs associated with
efforts to consolidate our former Conferencing & Collaboration and Data Communications
operating segments finance organizations under one regional organization.

| | 21 | 
| | -- | 

---

For
the three months ended June 30, 2007 and 2006, Asia Pacific general and administrative
expense was 6.6% and 7.3% of segment revenue, respectively, and for the six months ended
June 30, 2007 and 2006, Asia Pacific general and administrative expense was 7.6% and 7.8%
of segment revenue, respectively. For the three months ended June 30, 2007 and 2006, Asia
Pacific experienced a 6.8% increase in general and administrative expense from $1.5
million to $1.6 million, and for the six months ended June 30, 2007, Asia Pacific
experienced a 14.7% increase in general and administrative expense from $3.1 million to
$3.6 million. This increase in Asia Pacific general and administrative expense is
primarily associated with duplicative costs related to our efforts to consolidate our
former Conferencing & Collaboration and Data Communications operating segments finance
organizations under one regional organization and duplicative rent and relocation costs
associated with the consolidation of our Tokyo, Japan facilities.

Depreciation

Consolidated
depreciation expenses from continuing operations increased 23.8% to $7.2 million from
$5.8 million and increased to 5.2% from 4.7% of consolidated revenues for the three
months ended June 30, 2007 and 2006, respectively. Consolidated depreciation expenses
from continuing operations increased 21.7% to $14.3 million from $11.8 million and
increased to 5.2% from 4.8% of consolidated revenues for the six months ended June 30,
2007 and 2006, respectively.

North
America depreciation expense totaled $5.8 million and $4.3 million, or 6.6% and 5.3% of
segment revenue, for the three months ended June 30, 2007 and 2006, respectively, and
$11.3 million and $8.6 million, or 6.4% and 5.4% of segment revenue, for the six months
ended June 30, 2007 and 2006, respectively. Europe depreciation expense totaled $0.8
million and $0.9 million, or 3.1% and 3.8% of segment revenue, for the three months ended
June 30, 2007 and 2006, respectively, and $1.6 million and $1.9 million, or 3.2% and 4.0%
of segment revenue, for the six months ended June 30, 2007 and 2006, respectively. Asia
Pacific depreciation expense totaled $0.7 million and $0.6 million, or 2.7% and 3.0% of
segment revenue, for the three months ended June 30, 2007 and 2006, respectively, and
$1.4 million and $1.3 million, or 2.9% and 3.1% of segment revenue, for the six months
ended June 30, 2007 and 2006, respectively. The increase in depreciation expense in North
America is primarily attributed to increased capital spending during 2006 and 2007
associated with added capacity to our Conferencing Solutions and increased product
development in our non-Conferencing solutions.

Amortization

Consolidated
amortization from continuing operations increased 14.1% to $3.6 million from $3.1 million
and increased to 2.6% from 2.5% of consolidated revenues for the three months ended June
30, 2007 and 2006, respectively. Consolidated amortization expenses from continuing
operations increased 14.4% to $7.1 million from $6.2 million and increased to 2.6% from
2.5% of consolidated revenues for the six months ended June 30, 2007 and 2006,
respectively.

North
America amortization totaled $3.1 million and $2.6 million, or 3.6% and 3.3% of segment
revenue, for the three months ended June 30, 2007 and 2006, respectively, and $6.2
million and $5.2 million, or 3.5% and 3.3% of segment revenue, for the six months ended
June 30, 2007 and 2006, respectively. Europe amortization totaled $0.4 million and $0.5
million, or 1.4% and 2.0% of segment revenue, for the three months ended June 30, 2007
and 2006, respectively, and $0.7 million and $1.0 million, or 1.4% and 2.0% of segment
revenue, for the six months ended June 30, 2007 and 2006, respectively. Asia Pacific
amortization totaled $0.1 million and $42,000, or 0.4% and 0.2% of segment revenue, for
the three months ended June 30, 2007 and 2006, respectively, and $0.2 million and $0.1
million, or 0.5% and 0.2% of segment revenue, for the six months ended June 30, 2007 and
2006, respectively. The increase in amortization expense in North America is primarily
associated with our acquisitions of Enunciate and Accucast. The increase in amortization
expense in Asia Pacific is primarily associated with our ECT acquisition.

| | 22 | 
| | -- | 

---

Restructuring costs

Realignment of
Workforce - 2007

During
the three months ended June 30, 2007, we executed a restructuring plan to consolidate our
service delivery organizations. As part of this consolidation, we eliminated
approximately 100 positions. We incurred approximately $4.1 million in severance costs
associated with the elimination of these positions. Additionally, we incurred $0.1
million of lease termination costs associated with our Paris, France office. On a segment
basis, these restructuring costs were $1.1 million in North America, $2.7 million in
Europe and $0.4 million in Asia Pacific. Estimated annual savings from this consolidation
is approximately $6.0 million. During the three months ended June 30, 2007, we paid approximately $0.8 million related to these severance and exit costs. We anticipate the majority of this $4.1 million restructuring cost to be paid during 2007. Our reserve for these restructuring costs at June 30, 2007 was approximately $3.3 million.

Realignment of
Workforce - 2006

In
2006, we executed a restructuring plan to streamline the management of our business on a
geographic regional basis from our former Conferencing & Collaboration and Data
Communications business segments. As part of this streamlining, we eliminated
approximately 100 positions within customer service, finance, operations and sales and
marketing. In the fourth quarter of 2006, we entered into a separation agreement in
connection with the resignation of our former chief investment officer. We incurred an
aggregate of approximately $8.0 million in severance costs associated with the
elimination of these positions, which included the issuance of restricted stock having a
fair market value of $0.6 million. Additionally, we incurred $0.6 million of lease
termination costs associated with five locations within North America. On a segment
basis, these restructuring costs were $4.6 million in North America, $3.2 million in
Europe and $0.7 million in Asia Pacific. In the three and six months ended June 30, 2007,
we paid approximately $1.3 million and $3.2 million, respectively, related to these
severance and exit costs. During the three and six months ended June 30, 2007, we
adjusted our restructuring reserve by approximately $0.3 million and $0.5 million,
respectively, as a result of actual severance payments to certain individuals being less
than originally estimated. Management expects to pay these remaining severance obligations during 2007. Our reserve for these restructuring costs at June 30, 2007 was approximately $0.4 million. Our reserve for restructuring costs incurred in years prior to 2006 was approximately $2.8 million at June 30, 2007.

Interest expense, net

Net
interest expense increased to $2.5 million from $2.0 million for the three months ended
June 30, 2007 and 2006, respectively, and increased to $4.7 million from $3.7 million for
the six months ended June 20, 2007, respectively. Interest expense increased primarily as
a result of an increased average outstanding balance on our line of credit as a result of
borrowings to fund our self-tender offer, with average debt outstanding during the three
months ended June 30, 2007 of $190.2 million compared to $116.3 million during the three
months ended June 30, 2006, and as a result of increases in our average interest rates
associated primarily with increases in LIBOR. Average debt outstanding during the six
months ended June 30, 2007 and 2006 was $156.4 million and $112.5 million, respectively.
Additionally, we terminated all of our interest rate swap contracts during the three
months ended June 30, 2007, realizing a gain of approximately $0.4 million.

Other, net

Other,
net was $0.2 million and $0.3 million for the three months ended June 30, 2007 and 2006,
respectively, and $0.7 million and $27,000 for the six months ended June 30, 2007 and
2006, respectively. Other, net was comprised primarily of foreign exchange gains and
losses associated with the settlement of transactions in currencies other than the
currency in which they were originally executed.

Effective income tax
rate

For
the six ended June 30, 2007, our effective income tax rate varied from the statutory rate
primarily as a result of non-deductible executive compensation expenses and the impact of
the release of the net operating loss usage limitation related to a prior years
acquisition. As a result, $0.6 million of valuation allowance was released as additional
net operating losses are usable. Changes in valuation allowances and estimates are
required when facts and circumstances indicate that realization of tax benefits or the
actual amount of taxes expected to be paid has changed.

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| | -- | 

---

We
believe we are appropriately reserved for income taxes. If we are required to pay an
amount less than or exceeding our reserves for uncertain tax matters, the financial
impact will be reflected in the period in which the matter is resolved. In the event that
actual results differ from these estimates, we may need to adjust our Income taxes
payable which could materially impact our financial condition and results of operations.

Acquisitions

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

North America

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

In
January 2006, we acquired all of the outstanding stock of Accucast. We paid $12.3 million
in cash at closing and $0.5 million in transaction and closing costs. Subsequent to
closing, we paid an additional $2.1 million cash purchase price upon the achievement of
certain milestone targets as specified in the purchase agreement. We may pay up to an
additional $0.9 million in cash purchase price based upon the achievement of an
additional milestone integration target as specified in the purchase agreement. We funded
the purchase through our line of credit. We followed SFAS No. 141, and approximately $0.2
million has been allocated to acquired fixed assets, $0.3 million has been allocated to
other acquisition liabilities, $2.0 million has been allocated to developed technology
and $1.0 million has been allocated to identifiable customer lists, with the identifiable
customer lists and developed technology amortized over five-year useful lives. In
addition, $1.2 million has been allocated to long-term deferred tax liabilities to record
the step-up in basis for the customer lists and developed technology purchased. Because
we have not finalized the working capital component of the purchase price, the residual
$13.2 million of the aggregate purchase price has been preliminarily allocated to
goodwill, which is subject to a periodic impairment assessment in accordance with SFAS
No. 142.

Asia Pacific

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

Liquidity and capital
resources

As
of June 30, 2007, we had $25.8 million in cash and equivalents compared to $19.0 million
at December 31, 2006. Cash balances residing outside of the U.S. at June 30, 2007 were
$25.1 million compared to $18.4 million at December 31, 2006. We repatriate cash for
repayment of royalties and management fees charged to international locations from the
U.S. Therefore, foreign exchange gains and losses resulting from these transactions are
recorded in Other, net in the accompanying consolidated statements of operations.
Inter-company loans with foreign

| | 24 | 
| | -- | 

---

subsidiaries generally are
considered to be permanently invested for the foreseeable future. Therefore, foreign
exchange gains and losses resulting from these transactions are recorded in the
cumulative translation adjustment account on face of the condensed consolidated balance
sheets. Based on our potential cash position and potential conditions in the capital
markets, we could require repayment of these loans despite the long-term intention to
hold them as permanent investments. At June 30, 2007, we had approximately $54.7 million
of availability under our existing $300.0 million line of credit, without regard to the
uncommitted accordion feature. Under our accordian feature we have the option of borrowing an additional $25.0 million as a result of our current leverage ratio from our most recent amendment. These funds have not been committed as of June 30, 2007. For a discussion of our line of credit, see Liquidity
and capital resources Capital resources.

Cash provided by
operating activities

Net
cash provided by operating activities totaled approximately $41.6 million for the six
months ended June 30, 2007 compared to cash provided by operating activities of
approximately $30.7 million for the same period in 2006. The increase in net cash
provided by operating activities is associated with favorable working capital results
primarily associated with the timing of income tax payments and increased net income
offset by increased restructuring payments.

Cash used in investing
activities

Cash
used in investing activities totaled $21.6 million for the six months ended June 30, 2007
compared to $34.5 million for the same period in 2006. The principal uses of cash used in
investing activities for the six months ended June 30, 2007 included $20.2 million of
capital expenditures and an aggregate of $1.3 million related to the payment of severance
and non-compete obligations from prior year acquisitions. The principal uses of cash from
investing activities for the six months ended June 30, 2006 were primarily associated
with $18.8 million of capital expenditures and $15.7 million for costs associated with
our acquisitions.

Cash used in/provided
by financing activities

Cash
used in financing activities for the six months ended June 30, 2007 totaled $12.7 million
compared with cash provided by financing activities of $4.4 million for the same period
in 2006. Cash used in financing activities for the six months ended June 30, 2007
included $124.5 million of treasury stock purchases of which $122.6 million was
associated with the shares repurchased in our self-tender offer, $0.9 million was
associated with capitalized costs related to our self-tender offer and $1.0 million
associated with the netting of shares to pay certain employees income tax withholding
due upon the vesting of restricted stock awards, offset by $107.2 million of net
borrowings on our line of credit and $6.9 million of proceeds from stock option
exercises. Cash provided by financing activities for the six months ended June 30, 2006
included $22.1 million of net borrowings on our line of credit to fund treasury stock
purchases of $19.0 million and proceeds from stock option exercises of $1.3 million.

Off-balance sheet
arrangements

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

State sales taxes

We
have reserves for certain state sales tax contingencies based on the likelihood of
obligation in accordance with SFAS No. 5. Historically, we have not collected and
remitted state sales tax from our Conferencing Solutions customers. We were audited by
the Commonwealth of Massachusetts Department of Revenue claiming that our audio
conferencing services are subject to sales tax in Massachusetts. In March 2006, we began
assessing sales tax to our customers in Massachusetts as a result of this audit. In July
2006, we paid an initial payment of approximately $1.2 million to the Commonwealth of
Massachusetts Department of Revenue for taxable years prior to 2005. Amounts associated
with 2005 and early 2006 are still under review and have yet to be settled. In March
2007, we were approached by the State of Illinois regarding the taxability of
conferencing services in the state. In April 2007, we began assessing sales tax to our
customers in Illinois. Returns were filed and approximately $0.5 million was paid to the
Illinois Department of Revenue for taxable period prior to March 2007. Additional amounts
may be due as these returns are audited. More states may claim that we are subject to an
assessment of sales taxes. As of June 30, 2007 and December 31, 2006, we had reserved
approximately $4.6 and $4.3 million, respectively, for

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---

certain state sales tax
contingencies. These amounts are included in Accrued taxes in the accompanying
condensed consolidated balance sheets. We believe we are appropriately accrued for these
contingencies. In the event that actual results differ from these reserves, we may need
to make adjustments which could materially impact our financial condition and results of
operations. Historically, we have collected and remitted sales tax from our
non-Conferencing Solutions customers in applicable states. However, it is possible states
may disagree with our method of assessing and remitting these state sales taxes.

Income taxes

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

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

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

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

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

Capital resources

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

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reduced the applicable percentages
across the pricing grid and extended the maturity of the credit facility from February
2009 to April 2011. The amendment also provided for an uncommitted accordion feature
allowing for an additional increase of $100.0 million to $400.0 million of the revolving
credit line, subject to the terms and conditions as set forth in the amendment. The
credit facility is subject to customary covenants for secured credit facilities of this
nature. Certain of our material domestic subsidiaries have guaranteed our obligations
under the credit facility, which is secured by substantially all of our assets and the
assets of our material domestic subsidiaries. In addition, we have pledged as collateral
all of the issued and outstanding stock of our material domestic subsidiaries and 65.0%
of our material foreign subsidiaries. We believe that as of June 30, 2007, we were in
compliance in all material respects with the covenants under our line of credit and have
obtained any required waivers or consents from lenders, as applicable. Proceeds drawn
under this credit agreement may be used for refinancing of existing debt, working
capital, capital expenditures, acquisitions and other general corporate purposes. The
annual interest rate applicable to borrowings under the line of credit, at our option, is
the base rate (the greater of the federal funds rate plus 0.5% or the Bank of America
prime rate) or LIBOR, plus, in each case, an applicable margin which will vary based upon
our leverage ratio at the end of each fiscal quarter. At June 30, 2007, the applicable
margin with respect to base rate loans was 0.0%, and the applicable margin with respect
to LIBOR loans was 1.00%. At June 30, 2007, our interest rate on 30-day LIBOR loans was
6.32%. As of June 30, 2007, we had approximately $243.8 million of borrowings outstanding
and approximately $1.5 million in letters of credit outstanding under our line of credit.
In April 2007, we entered into an amendment to our credit facility which inserted into the applicable margin pricing grid a new tier based on a total leverage ratio of 2.5 times or greater, increased the permitted covenant level of the consolidated total leverage ratio and amended certain other provisions to allow us to purchase, redeem or otherwise acquire up to an additional $150.0
million of our common stock during 2007, of which approximately $122.6 million has been
used to fund our self-tender offer in the second quarter of 2007.

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

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

At
June 30, 2007, we had no other indebtedness outstanding except for the borrowings under
our lines of credit and capital lease obligations with principal balances totaling
approximately $3.5 million.

Liquidity

As
of June 30, 2007, we had $25.8 million of cash and equivalents. We generated positive
operating cash flows from each of our geographic business segments for the six months
ended June 30, 2007. Each geographic business segment had sufficient cash flows from
operations to service existing debt obligations and to fund capital expenditure
requirements, which have historically been 4% to 6% of annual consolidated revenues, and
to fund research and development costs for new services and enhancements to existing
services, which have historically been approximately 2% to 3% of annual consolidated
revenues. In 2006, capital expenditure funding requirements were slightly higher than our
historical averages due to new product development and capacity expansion. In the first
six months of 2007, we spent approximately $20.2 million in capital expenditures to fund
capacity expansion, new product development, our automation initiatives and investment in
re-engineering our service and support organizations. We expect capital expenditures in
2007 will total approximately 8% to 9% of consolidated revenues. We funded our
self-tender offer through borrowings under our credit facility and purchased 9,687,841
shares of our common stock, representing approximately 14.0% of our outstanding shares,
at $12.65 per share for a total purchase price of approximately $122.6 million, excluding
fees. We have historically borrowed on our line of credit in order to fund acquisitions.
At June 30, 2007, we had $54.7 million of available credit on our existing $300.0 million
line

| | 27 | 
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---

of credit (without regard to the
uncommitted accordion feature). Under our accordian feature we have the option of borrowing an additional $25.0 million as a result of our current leverage ratio from our most recent amendment. These funds have not been committed as of June 30, 2007. We believe that we will generate adequate operating cash
flows for capital expenditures and contractual commitments and to satisfy our
indebtedness and fund our liquidity needs for at least the next 12 months.

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

SUBSEQUENT EVENTS

In August 2007, we repurchased 100,000 shares of our common stock in the open market pursuant to our Board-approved stock repurchase program for approximately $1.1 million.

In
July 2007, we acquired all of the outstanding stock of Budget Conferencing. We paid
approximately US$19.0 million in cash at closing. We funded the purchase with our
existing credit facility. We are in the process of completing our valuation of certain
intangible assets in accordance with SFAS No. 141.

CRITICAL ACCOUNTING
POLICIES

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

| |  |  | revenue
recognition;
| | - |  | --------------------

| |  |  | allowance
for uncollectible accounts receivable;
| | - |  | ------------------------------------------------

| |  |  | goodwill
and other intangible assets;
| | - |  | -------------------------------------

| |  |  | income
taxes;
| | - |  | -------------

| |  |  | restructuring
costs; and
| | - |  | ------------------------

| |  |  | legal
contingencies.
| | - |  | --------------------

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

FORWARD LOOKING
STATEMENTS

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

| | 28 | 
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---

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 change and the development of alternatives to
our services;
| | - |  | ---------------------------------------------------------------------------------------------------------

| |  |  | 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;
| | - |  | ----------------------------------------------------------------------------------------------------

| |  |  | Concerns
 regarding  the security of  transactions  and  transmitting  confidential  information
 over the               Internet and public networks;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Our
ability to increase our network capacity to meet customer demands;
| | - |  | ----------------------------------------------------------------------

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

| |  |  | Continued
weakness in our legacy broadcast fax services;
| | - |  | --------------------------------------------------------

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

| |  |  | Increased
leverage may harm our financial condition and results of operations;
| | - |  | ------------------------------------------------------------------------------

| |  |  | 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, state sales and other taxes for which we have not accrued;
| | - |  | --------------------------------------------------------------------------------

| |  |  | Our
ability to attract and retain qualified key personnel;
| | - |  | ----------------------------------------------------------

| |  |  | Possible
 adverse  results  of  pending  or future  litigation  or  adverse  results  of current
or future               infringement claims;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | 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;
| | - |  | -----------------------------------------------------------------------------------

| |  |  | Legislative
or regulatory changes may adversely affect our business;
| | - |  | --------------------------------------------------------------------

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

| |  |  | Risks
 associated with expansion of our  international  operations and  fluctuations in
currency  exchange               rates;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

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

| | 29 | 
| | -- | 

---

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

| |  |  | Factors
described under the caption Item 1A. Risk Factors in our               annual report on
Form 10-K for the year ended December 31, 2006               and in our Form 10-Q for the
quarter ended March 31, 2007; 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 take on
no obligation to publicly release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date of this
Form 10-Q, or the date of the statement, if a different date.

ITEM 3.   QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

At
June 30, 2007, we had borrowings of approximately $243.8 million outstanding under our
line of credit that are subject to interest rate risk. Each 100 basis point increase in
interest rates relative to these borrowings would impact annual pre-tax earnings and cash
flows by approximately $2.4 million based on our June 30, 2007 debt level.

Approximately
39.4% of our consolidated revenues from continuing operations and 35.9% of our operating
expenses from continuing operations were transacted in foreign currencies for the
six-month period ended June 30, 2007. As a result, fluctuations in exchange rates impact
the amount of our reported sales and operating income. A hypothetical positive or
negative change of 10% in foreign currency exchange rates would positively or negatively
change revenues for the six-month period ended June 30, 2007 by approximately $10.8
million and operating expenses for 2007 by approximately $8.9 million. Our principal
exposure has been related to local currency sales and operating costs in the Euro Zone,
Canada, the United Kingdom, Australia and Japan. We have not used derivatives to manage
foreign currency exchange risk, and no foreign currency exchange derivatives were
outstanding at June 30, 2007.

ITEM 4.   CONTROLS AND
PROCEDURES

Disclosure Controls
and Procedures

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

Changes in Internal
Control Over Financial Reporting

There
were no changes in our internal control over financial reporting during the quarter ended
June 30, 2007 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
have several litigation matters pending, including matters described below, which we are
defending vigorously. Due to the inherent uncertainties of the litigation process and the
judicial system, we are unable to predict the outcome of such litigation matters. If the
outcome of one or more of such matters is adverse to us, it could have a material adverse
effect on our business, financial condition and results of operations.

On
February 2, 2007, the United States Court of Appeals for the Eleventh Circuit affirmed
the district courts order granting of our motion for summary judgment in a lawsuit
alleging violations of securities laws filed in November 1998 against us and certain of
our officers and directors. Plaintiffs had acquired our common stock in connection with
our acquisition of Xpedite. Plaintiffs sought undisclosed damages together with pre-and
post-judgment interest, punitive damages, costs and attorneys fees. On February 23,
2007, plaintiffs filed a petition for rehearing en banc and for panel rehearing with the
Eleventh Circuit. On May 30, 2007, the Eleventh Circuit denied both of plaintiffs
petitions.

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

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

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

| | 31 | 
| | -- | 

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ITEM 1A.   RISK
FACTORS.

Part
I, Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December
31, 2006 and Part II, Item 1A. Risk Factors in our quarterly report on Form 10-Q for
the quarter ended March 31, 2007 include 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 factors previously disclosed in our SEC filings and
updated below to reflect the completion of our tender offer and the amendment to our
bylaws to declassify our board of directors, there have been no material changes from the
risk factors disclosed in those reports.

Our level of
indebtedness may harm our financial condition and results of operations.

We
have incurred a substantial amount of indebtedness under our credit facility. As of June
30, 2007, we had approximately $245.3 million of outstanding debt under our credit
facility, with approximately $243.8 million in borrowings and $1.5 million in letters of
credit outstanding. In April 2006, we increased our line of credit from $180.0 million to
$300.0 million.

On
April 19, 2007, we entered into an amendment to our existing credit facility, which
inserted into the applicable margin pricing grid a new tier based on a total leverage
ratio of 2.5 times or greater, increased the permitted covenant level of the consolidated
total leverage ratio and amended certain other provisions in the credit agreement to
allow us to purchase, redeem or otherwise acquire up to an additional $150.0 million of
the our common stock during 2007. We utilized borrowings of approximately $122.6 million
under our credit facility to finance our self-tender offer and accepted for purchase
9,687,841 shares of our common stock. The incurrence of debt to fund our tender offer may
reduce our ability to engage in significant cash acquisitions. Increased indebtedness
could reduce our ability to cover existing contingent or other future liabilities or
otherwise negatively impact our liquidity during periods of increased capital or
operating expenditures. There can be no assurance that we would be able to raise debt or
equity financing in the future. We intend to repay borrowings made to finance our tender
offer using cash from operations.

Our
level of indebtedness will have several important effects on our future operations,
including, without limitation:

| |  |  | a
portion  of our cash  flows  from  operations  will be  dedicated  to the  payment  of
any  interest  or               amortization required with respect to outstanding
indebtedness;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | increases
in our outstanding indebtedness and leverage will               increase our
vulnerability to adverse changes in general economic               and industry
conditions, as well as to competitive pressure; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | depending
on the levels of our outstanding debt, our ability to               obtain additional
financing for working capital, acquisitions,               capital expenditures, general
corporate and other purposes may be               limited.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At
the maturity of our credit facility 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 from time to time, will become due and payable. However,
it is possible that 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.

Our articles and
bylaws and Georgia corporate law may inhibit a takeover which may not be in the best
interests of our shareholders.

There
are several provisions in our articles and bylaws and under Georgia corporate law that
may inhibit a takeover, even when a takeover may be in the interests of our shareholders.
For example, our board of directors is empowered to issue preferred stock without
shareholder action. The existence of this blank-check preferred stock could render more
difficult or discourage an attempt to obtain control of us by means of a tender offer,
merger, proxy contest or otherwise. We are also subject to provisions of the Georgia
corporate law that relate to business

| | 32 | 
| | -- | 

---

combinations with interested
shareholders, which can serve to inhibit a takeover. In addition to considering the
effects of any action on us and our shareholders, our articles permit our board to
consider the interests of various constituencies, including employees, customers,
suppliers and creditors, communities in which we maintain offices or operations and other
factors which they deem pertinent, in carrying out and discharging their duties and
responsibilities and in determining what is believed to be in our best interests.

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

None.

ITEM 3.   DEFAULTS
UPON SENIOR SECURITIES

None.

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

Our
annual meeting of shareholders was held on June 27, 2007. At the annual meeting, the
following matters were voted on with the following results:

Election
 of  Directors.  W.  Steven  Jones and J.  Walker  Smith,  Jr.  were  elected to serve as
Class I directors.  Voting results were as follows:

| | Name of Director     | Votes For  | Votes Withheld
| | -------------------- | ---------- | --------------
| | W. Steven Jones      | 62,061,078 | 417,866       
| | J. Walker Smith, Jr. | 62,197,434 | 281,510       

The following  persons  continued as
directors  following the annual meeting:  Boland T. Jones,  Jeffrey T. Arnold, Wilkie S.
Colyer, John R. Harris and Raymond H. Pirtle, Jr.

Amendment
to Bylaws.  An amendment to our bylaws was approved to  declassify  our board of
directors  and provide for the annual election of all of our directors.  Voting results
were as follows:

| | Votes For  | Votes Withheld | Abstentions
| | ---------- | -------------- | -----------
| | 62,019,137 | 305,778        | 64,028     

Beginning with our 2008 annual
meeting, all members of our board of directors will be elected for one-year terms at each
annual meeting.

ITEM 5.   OTHER
INFORMATION

None.

| | 33 | 
| | -- | 

---

ITEM 6.   EXHIBITS

(a)      Exhibits

| | 3.1 |  | Amendment,
adopted as of April 18, 2007, to the Registrants                   Second Amended and
Restated Bylaws, adopted as of March 15,                   2006 (incorporated by
reference to Exhibit 3.1 to the                   Registrants Current Report on Form 8-K
dated April 18, 2007                   and filed on April 19, 2007).
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 |  | Amendment,
adopted as of June 27, 2007, to the Registrants                   Second Amended and
Restated Bylaws, adopted as of March 15,                   2006 (incorporated by
reference to Exhibit 3.1 to the                   Registrants Current Report on Form 8-K
dated and filed on                   June 27, 2007).
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 |  | Settlement
Agreement, dated April 19, 2007, by and among the                   Company, Crescendo
Partners II, L.P. Series E, Crescendo                   Investments II, LLC, Crescendo
Advisors II, LLC, Eric S.                   Rosenfeld, Delacourt Holdings, Ltd., Colin D.
Watson and the                   Premiere Full Value Committee (incorporated by reference
to                   Exhibit 10.1 to the Registrants Current Report on Form 8-K
                  dated April 18, 2007 and filed on April 19, 2007).
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 |  | Amendment
No. 5 and Waiver, dated April 19, 2007, to the                   Credit Agreement by and
among the Company as Borrower, Bank of                   America, N.A., as Administrative
Agent, and the Guarantors and                   the Lenders that are parties thereto
(incorporated by                   reference to Exhibit 10.2 to the Registrants Current
Report                   on Form 8-K dated April 18, 2007 and filed on April 19, 2007).
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

| | 34 | 
| | -- | 

---

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 9, 2007 | PREMIERE GLOBAL SERVICES, INC.
      /s/ Michael E. HavenerMichael E. Havener
                                                              
        Chief Financial Officer
                                                              (principal financial and
         accounting officer and
                                                              
        duly authorized signatory of the Registrant)
|--------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 35 | 
| | -- | 

---

EXHIBIT INDEX

(a)      Exhibits

| | 3.1 |  | Amendment,
adopted as of April 18, 2007, to the Registrants                   Second Amended and
Restated Bylaws, adopted as of March 15,                   2006 (incorporated by
reference to Exhibit 3.1 to the                   Registrants Current Report on Form 8-K
dated April 18, 2007                   and filed on April 19, 2007).
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 |  | Amendment,
adopted as of June 27, 2007, to the Registrants                   Second Amended and
Restated Bylaws, adopted as of March 15,                   2006 (incorporated by
reference to Exhibit 3.1 to the                   Registrants Current Report on Form 8-K
dated and filed on                   June 27, 2007).
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 |  | Settlement
Agreement, dated April 19, 2007, by and among the                   Company, Crescendo
Partners II, L.P. Series E, Crescendo                   Investments II, LLC, Crescendo
Advisors II, LLC, Eric S.                   Rosenfeld, Delacourt Holdings, Ltd., Colin D.
Watson and the                   Premiere Full Value Committee (incorporated by reference
to                   Exhibit 10.1 to the Registrants Current Report on Form 8-K
                  dated April 18, 2007 and filed on April 19, 2007).
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 |  | Amendment
No. 5 and Waiver, dated April 19, 2007, to the                   Credit Agreement by and
among the Company as Borrower, Bank of                   America, N.A., as Administrative
Agent, and the Guarantors and                   the Lenders that are parties thereto
(incorporated by                   reference to Exhibit 10.2 to the Registrants Current
Report                   on Form 8-K dated April 18, 2007 and filed on April 19, 2007).
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

| | 36 | 
| | -- | 

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