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

FORM 10-Q

|S |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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. YesSNo£

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 filerS |  | Non-accelerated filer£
|------------------------ |  | ------------------ |  | ----------------------

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

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

|Class                         |  | Outstanding at May 7, 2007
|----------------------------- |  | --------------------------
|Common Stock, $0.01 par value |  | 70,782,340 Shares         

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PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

|              |  |                                                             |  | Page
|------------- |  | ----------------------------------------------------------- |  | ----
|PART I        |  | FINANCIAL INFORMATION                                       |  |     
|              |  |                                                             |  |     
|Item 1        |  | Condensed Consolidated Financial Statements                 |  |     
|              |  |                                                             |  |     
|              |  | Condensed Consolidated Balance Sheets                       |  |     
|              |  | as of March 31, 2007 and December 31, 2006                  |  | 1   
|              |  |                                                             |  |     
|              |  | Condensed Consolidated Statements of Operations             |  |     
|              |  | for the Three Months Ended March 31, 2007 and 2006          |  | 2   
|              |  |                                                             |  |     
|              |  | Condensed Consolidated Statements of Cash Flows             |  |     
|              |  | for the Three Months Ended March 31, 2007 and 2006          |  | 3   
|              |  |                                                             |  |     
|              |  | Notes to Condensed Consolidated Financial Statements        |  | 4   
|              |  |                                                             |  |     
|Item 2        |  | Managements Discussion and Analysis of Financial Condition |  | 16  
|              |  | and Results of Operations                                   |  |     
|              |  |                                                             |  |     
|Item 3        |  | Quantitative and Qualitative Disclosures About Market Risk  |  | 28  
|              |  |                                                             |  |     
|Item 4        |  | Controls and Procedures                                     |  | 29  
|              |  |                                                             |  |     
|PART II       |  | OTHER INFORMATION                                           |  |     
|              |  |                                                             |  |     
|Item 1        |  | Legal Proceedings                                           |  | 30  
|              |  |                                                             |  |     
|Item 1A.      |  | Risk Factors                                                |  | 30  
|              |  |                                                             |  |     
|Item 2        |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 31  
|              |  |                                                             |  |     
|Item 3        |  | Defaults Upon Senior Securities                             |  | 31  
|              |  |                                                             |  |     
|Item 4        |  | Submission of Matters to a Vote of Security Holders         |  | 31  
|              |  |                                                             |  |     
|Item 5        |  | Other Information                                           |  | 31  
|              |  |                                                             |  |     
|Item 6        |  | Exhibits                                                    |  | 32  
|              |  |                                                            
|SIGNATURES    |  | 33                                                         
|              |  |                                                            
|EXHIBIT INDEX |  | 34                                                         

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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)

|                                                                                  |   | March 31,   |   |  |   | December 31, |  
|--------------------------------------------------------------------------------- | - | ----------- | - |  | - | ------------ | -
|                                                                                  |   | 2007        |   |  |   | 2006         |  
|ASSETS                                                                            |   | (Unaudited) |   |  |   |              |  
|CURRENT ASSETS                                                                    |   |             |   |  |   |              |  
|Cash and equivalents                                                              | $ | 19,971      |   |  | $ | 18,977       |  
|Accounts receivable (less allowances of $4,739 and $4,944, respectively)          |   | 90,871      |   |  |   | 82,875       |  
|Prepaid expenses and other current assets                                         |   | 6,712       |   |  |   | 7,742        |  
|Deferred income taxes, net                                                        |   | 12,480      |   |  |   | 11,972       |  
|Total current assets                                                              |   | 130,034     |   |  |   | 121,566      |  
|                                                                                  |   |             |   |  |   |              |  
|PROPERTY AND EQUIPMENT, NET                                                       |   | 90,773      |   |  |   | 88,062       |  
|                                                                                  |   |             |   |  |   |              |  
|OTHER ASSETS                                                                      |   |             |   |  |   |              |  
|Goodwill                                                                          |   | 295,543     |   |  |   | 295,185      |  
|Intangibles, net of amortization                                                  |   | 35,067      |   |  |   | 38,357       |  
|Deferred income taxes, net                                                        |   | 1,476       |   |  |   |             |  
|Other assets                                                                      |   | 6,074       |   |  |   | 6,145        |  
|                                                                                  | $ | 558,967     |   |  | $ | 549,315      |  
|                                                                                  |   |             |   |  |   |              |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                                              |   |             |   |  |   |              |  
|                                                                                  |   |             |   |  |   |              |  
|CURRENT LIABILITIES                                                               |   |             |   |  |   |              |  
|Accounts payable                                                                  | $ | 50,837      |   |  | $ | 48,967       |  
|Income taxes payable                                                              |   | 7,521       |   |  |   | 878          |  
|Accrued taxes                                                                     |   | 7,295       |   |  |   | 6,011        |  
|Accrued expenses                                                                  |   | 31,198      |   |  |   | 28,697       |  
|Current maturities of long-term debt and capital lease obligations                |   | 1,995       |   |  |   | 2,044        |  
|Accrued restructuring costs                                                       |   | 2,817       |   |  |   | 4,800        |  
|Total current liabilities                                                         |   | 101,663     |   |  |   | 91,397       |  
|                                                                                  |   |             |   |  |   |              |  
|LONG-TERM LIABILITIES                                                             |   |             |   |  |   |              |  
|Long-term debt and capital lease obligations                                      |   | 126,831     |   |  |   | 136,738      |  
|Accrued restructuring costs                                                       |   | 2,163       |   |  |   | 2,339        |  
|Accrued expenses                                                                  |   | 1,450       |   |  |   | 1,831        |  
|Deferred income taxes, net                                                        |   |            |   |  |   | 719          |  
|Total long-term liabilities                                                       |   | 130,444     |   |  |   | 141,627      |  
|                                                                                  |   |             |   |  |   |              |  
|COMMITMENTS AND CONTINGENCIES (Note 8)                                            |   |             |   |  |   |              |  
|                                                                                  |   |             |   |  |   |              |  
|SHAREHODERS' EQUITY                                                               |   |             |   |  |   |              |  
|Common stock, $.01
 par value; 150,000,000 shares authorized, 70,361,992 and      |   |             |   |  |   |              |  
|70,151,998
      shares issued and
    outstanding in 2007 and 2006, respectively |   | 704         |   |  |   | 702          |  
|Additional paid-in capital                                                        |   | 665,247     |   |  |   | 663,232      |  
|Notes receivable, shareholder                                                     |   | (2,033      | ) |  |   | (2,004       | )
|Cumulative translation adjustment                                                 |   | 2,999       |   |  |   | 2,088        |  
|Accumulated deficit                                                               |   | (340,057    | ) |  |   | (347,727     | )
|Total
 shareholders’ equity                                                       |   | 326,860     |   |  |   | 316,291      |  
|                                                                                  | $ | 558,967     |   |  | $ | 549,315      |  

Accompanying notes are integral to these condensed consolidated financial statements.

1

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| |  |  |  |  |  | 
| |  |  |  |  |  | 

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

|                                                                                     |   | Three Months Ended
|------------------------------------------------------------------------------------ | - | ------------------
|                                                                                     |   | March 31,         
|                                                                                     |   | 2007              
|                                                                                     |   | (Unaudited)       
|Revenues                                                                             | $ | 135,626           
|Operating Expenses                                                                   |   |                   
|Cost of revenues (exclusive of depreciation and amortization shown separately below) |   | 53,896            
|Selling and marketing                                                                |   | 36,468            
|General and administrative                                                           |   | 16,573            
|Research and development                                                             |   | 3,431             
|Depreciation                                                                         |   | 7,089             
|Amortization                                                                         |   | 3,552             
|Restructuring costs                                                                  |   | (130              
|Total operating expenses                                                             |   | 120,879           
|                                                                                     |   |                   
|Operating income                                                                     |   | 14,747            
|                                                                                     |   |                   
|Other (Expense) Income                                                               |   |                   
|Interest expense                                                                     |   | (2,302            
|Interest income                                                                      |   | 100               
|Other, net                                                                           |   | 458               
|Total other (expense) income                                                         |   | (1,744            
|                                                                                     |   |                   
|Income from continuing operations before income taxes                                |   | 13,003            
|Income tax expense                                                                   |   | 4,056             
|Income from continuing operations                                                    | $ | 8,947             
|                                                                                     |   |                   
|Net income                                                                           | $ | 8,947             
|                                                                                     |   |                   
|BASIC AND DILUTED EARNINGS:                                                          |   |                   
|Income from continuing operations                                                    | $ | 8,947             
|Net income                                                                           | $ | 8,947             
|                                                                                     |   |                   
|BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                                            |   | 67,697            
|                                                                                     |   |                   
|Basic earnings per share:                                                            |   |                   
|Continuing operations                                                                | $ | 0.13              
|Net income                                                                           | $ | 0.13              
|                                                                                     |   |                   
|                                                                                     |   |                   
|DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING                                          |   | 68,776            
|                                                                                     |   |                   
|Diluted earnings per share:                                                          |   |                   
|Continuing operations                                                                | $ | 0.13              
|Net income                                                                           | $ | 0.13              

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)

|                                                                              |  |   |   | Three Months Ended |  
|----------------------------------------------------------------------------- |  | - | - | ------------------ | -
|                                                                              |  |   |   | March
   31,       |  
|                                                                              |  |   |   | 2007               |  
|                                                                              |  |   |   | (Unaudited)        |  
|                                                                             
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |  |   |   |                    |  
|Net income                                                                    |  | $ |   | 8,947              |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |   |   |                    |  
|Depreciation                                                                  |  |   |   | 7,089              |  
|Amortization                                                                  |  |   |   | 3,552              |  
|Amortization of deferred financing costs                                      |  |   |   | 128                |  
|Payments for legal settlements and related expenses                           |  |   |   |                   |  
|Deferred income taxes, net of effect of acquisitions                          |  |   |   | (1,675             | )
|Restructuring costs                                                           |  |   |   | (130               | )
|Payments for restructuring costs                                              |  |   |   | (1,934             | )
|Equity-based compensation                                                     |  |   |   | 2,775              |  
|Excess tax benefits from share-based payment arrangements                     |  |   |   | (114               | )
|Loss on disposal of assets                                                    |  |   |   | 146                |  
|Changes in assets and liabilities, net of effect of acquisitions:             |  |   |   |                    |  
|Accounts receivable, net                                                      |  |   |   | (7,678             | )
|Prepaid
        expenses and other current assets                             |  |   |   | 919                |  
|Accounts payable and accrued expenses                                         |  |   |   | 7,473              |  
|Total adjustments                                                             |  |   |   | 10,551             |  
|Net cash provided by operating activities from continuing operations          |  |   |   | 19,498             |  
|Net cash used in operating activities from discontinued operations            |  |   |   | (244               | )
|Net cash provided by operating activities                                     |  |   |   | 19,254             |  
|                                                                             
|CASH FLOWS FROM INVESTING ACTIVITIES                                          |  |   |   |                    |  
|Capital expenditures                                                          |  |   |   | (7,250             | )
|Business acquisitions, net of cash acquired                                   |  |   |   | (412               | )
|Net cash used in investing activities                                         |  |   |   | (7,662             | )
|                                                                             
|CASH FLOWS FROM FINANCING ACTIVITIES                                          |  |   |   |                    |  
|Principal payments under borrowing arrangements                               |  |   |   | (94,364            | )
|Principal proceeds under borrowing arrangements                               |  |   |   | 84,280             |  
|Excess tax benefits for share-based payment arrangements                      |  |   |   | 114                |  
|Purchase of treasury stock, at cost                                           |  |   |   | (371               | )
|Exercise of stock options                                                     |  |   |   | 257                |  
|Net cash (used in) provided by financing activities                           |  |   |   | (10,084            | )
|                                                                             
|Effect of exchange rate changes on cash and cash equivalents                  |  |   |   | (514               | )
|                                                                             
|NET INCREASE IN CASH AND EQUIVALENTS                                          |  |   |   | 994                |  
|CASH AND EQUIVALENTS, beginning of period                                     |  |   |   | 18,977             |  
|CASH AND EQUIVALENTS, end of period                                           |  |   | $ | 19,971             |  

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

Premiere Global Services, Inc. is a global provider of communication technologies-based solutions that automate, simplify and improve communication-centric business processes.  We believe our
solutions help businesses increase sales, improve productivity and efficiency and enhance customer loyalty and retention by empowering them with new ways to communicate with, market to and service their constituents. We go to market on a global
basis in three regions in North America, Europe and Asia Pacific with the following core solution sets: Conferencing, Desktop Fax, Document Delivery, Accounts Receivable Management, Notifications & Reminders and eMarketing.  The unaudited
condensed consolidated balance sheet as of March 31, 2007, the unaudited condensed consolidated statements of operations for the three months ended March 31, 2007 and 2006, the unaudited condensed consolidated statements of cash flows for the months
ended March 31, 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 months ended March 31, 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 March 31, 2007 and December 31, 2006 was earned but unbilled revenue of approximately $7.9 million and $4.7 million, respectively. Unbilled revenue
consists of earned but not yet billed revenue at period end (March 31, 2007 and December 31, 2006), which results from non-calendar month billing cycles for Conferencing Solutions. 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 March 31, 2007 and 2006, we have capitalized software development of approximately $2.3 million and
$4.7 million, respectively. 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 developed software was approximately
$0.7 million and $0.6 million in the three months ended March 31, 2007 and 2006, 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  unbilled 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 recently 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. More states may claim that we are subject to an
assessment of sales taxes. As of March 31, 2007 and December 31, 2006, we had reserved approximately $4.9 and $4.3 million, respectively, for certain state sales tax contingencies.  This amount is included in Accrued taxes in the
accompanying condensed consolidated balance sheet. We believe we are adequately 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, Accounting for Income Taxes (SFAS No. 109).  Under
SAS 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 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 are 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.

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

5

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

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.

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.

Treasury Stock

All treasury stock transactions are recorded at cost. In the first quarter of 2007 and 2006, respectively, we withheld approximately 75,000 and 81,000 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 $0.4 million and $0.8 million to the Internal Revenue Service on our employees 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 March 31, 2007 and December 31, 2006. For the three months ended March 31, 2007 and 2006, total other comprehensive income was approximately $9.9 million and
$8.5 million, respectively. Accumulated other comprehensive loss was $264.1 million and $274.0 million at March 31, 2007 and December 31, 2006, respectively.

New Accounting Pronouncements

In June 2006, the EITF reached a consensus on EITF Issue No. 06-03, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross versus Net Presentation) (EITF 06-03).  EITF 06-03 provides that the presentation of taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer on
either a gross basis (included in revenues and costs) or on a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. The provisions of EITF 06-03 became effective as of January 1, 2007. EITF 06-03 did not have
a material impact on our condensed consolidated financial statements. We record taxes collected from customers and remitted to governmental authorities on a net basis.

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.

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):

6

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

|                             |  |   |                    |  |   | March, 31, 2007         |   |  |   |                  |  |   |                    |  |   | December 31, 2006       |   |  |   |                 
|---------------------------- |  | - | ------------------ |  | - | ----------------------- | - |  | - | ---------------- |  | - | ------------------ |  | - | ----------------------- | - |  | - | ----------------
|                             |  |   | GrossCarryingValue |  |   | AccumulatedAmortization |   |  |   | NetCarryingValue |  |   | GrossCarryingValue |  |   | AccumulatedAmortization |   |  |   | NetCarryingValue
|                             |  |   |                    |  |   |                         |   |  |   |                  |  |   |                    | 
|                             |  |   |                    |  |   |                         |   |  |   |                  |  |   |                    | 
|Intangible assets subject to |  |   |                    |  |   |                         |   |  |   |                  |  |   |                    |  |   |                         |   |  |   |                 
|amortization                 |  | $ | 158,126            |  | $ | (123,061                | ) |  | $ | 35,065           |  | $ | 157,788            |  | $ | (119,431                | ) |  | $ | 38,357          

Intangible assets are amortized on a straight-line basis with an estimated useful life between three and five years. Amortization expense for the intangible assets above is expected to be
approximately $10.7 million for the remainder of 2007, $11.4 million in 2008, $7.6 million in 2009, $3.2 million in 2010 and $1.2 million in 2011.

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

|                                                |  |   | North   |   |  |   |        |   |  |   | Asia    |   |  |   |         |  
|----------------------------------------------- |  | - | ------- | - |  | - | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                |  |   | America |   |  |   | Europe |   |  |   | Pacific |   |  |   | Total   |  
|                                                |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Goodwill carrying value at December 31, 2006    |  | $ | 268,458 |   |  | $ | 22,556 |   |  | $ | 4,171   |   |  | $ | 295,185 |  
|Additions and adjustments                       |  |   | (101    | ) |  |   | 346    |   |  |   | 113     |   |  |   | 358     |  
|Goodwill carrying value at March 31, 2007       |  | $ | 268,357 |   |  | $ | 22,902 |   |  | $ | 4,284   |   |  | $ | 295,543 |  
|                                                |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Intangibles carrying value at December 31, 2006 |  | $ | 33,327  |   |  | $ | 3,582  |   |  | $ | 1,448   |   |  | $ | 38,357  |  
|Additions and adjustments                       |  |   | 111     |   |  |   | 116    |   |  |   | 35      |   |  |   | 262     |  
|Amortization                                    |  |   | (3,108  | ) |  |   | (340   | ) |  |   | (104    | ) |  |   | (3,552  | )
|Intangibles carrying value at March 31, 2007    |  | $ | 30,330  |   |  | $ | 3,358  |   |  | $ | 1,379   |   |  | $ | 35,067  |  

3. RESTRUCTURING COSTS

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

|                             |                   |       | 2007       |   |          |  |            |        |            |  |          |      | Accrued
|---------------------------- | ----------------- | ----- | ---------- | - | -------- |  | ---------- | ------ | ---------- |  | -------- | ---- | -------
|                             | Accrued           |       | Charge To  |   |          |  |            |        | Adjustment |  | Costs at
|                             | Costs at          |       | Continuing |   | Cost     |  | of Accrued |        | March 31, 
|Consolidated                 | December 31, 2006 |       | Operations |   | Incurred |  | Costs      |        | 2007      
|                             |                   |       |            |   |          |  |            |        |            |  |          |      |        
|Accrued restructuring costs: |                   |       |            |   |          |  |            |        |            |  |          |      |        
|Severance and exit costs     | $                 | 4,027 |            | $ | 37       |  | $          | (1,894 | )          |  | $        | (167 | )      
|Contractual obligations      |                   | 3,112 |            |   |         |  |            | (135   | )          |  |          |     |        
|Accrued restructuring costs  | $                 | 7,139 |            | $ | 37       |  | $          | (2,029 | )          |  | $        | (167 | )      

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 months ended March

7

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

31, 2007, we paid approximately $1.9 million related to severance and exit costs. Management expects to pay the remaining severance obligations during 2007. Our reserve for these restructuring costs at March 31, 2007
was $1.9 million. Our reserve for restructuring costs incurred in years prior to 2006 was $3.1 million at March 31, 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.

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 CAD$29.0 million in cash at closing
and CAD$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 CAD$0.3 million has been allocated to acquired fixed assets, CAD$0.1 million has been allocated to acquired working capital, CAD$6.8 million has been allocated to identifiable customer lists and
CAD$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 CAD$22.3 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. During 2006, we paid an additional $1.5 million cash purchase price upon the achievement of the first milestone target as specified in the purchase agreement. We may pay up to an additional $1.5
million in cash purchase price based upon the achievement of additional milestone integration targets as specified in the purchase agreement. We funded the purchase through our line of credit. We followed SFAS No. 141, and approximately $0.2
million has been allocated to acquired fixed assets, $0.3 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 $12.6 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, 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.

8

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

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 March 31, 2007,
 we were in compliance in all material  respects with all 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 March 31, 2007, the applicable margin
 with respect to base rate loans was 0.0%, and the applicable  margin with respect
 to LIBOR loans was 1.25%. At March 31, 2007, our interest rate on 30-day LIBOR
 loans was 6.57%. As of March 31, 2007, we had approximately $124.9 million
 of borrowings outstanding and approximately $1.4 million in
letters of credit outstanding under our line of credit.

In February 2006, we entered into a three-year $50.0 million interest rate swap at a fixed rate of 4.99% plus applicable spread, and in August 2006, we entered into two separate three-year
$12.5 million interest rate swaps at 5.135% and 5.159%, respectively.  These swaps are exclusive of our applicable margin as stated in our credit facility. We have not designated these interest rate swaps as hedges and are accounting for them in
accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Changes in fair value, which were approximately $0.1 million for the three months ended March 31, 2007, are recognized in earnings.

In March and September 2006, we entered into our Yen-denominated line of credit for ¥200.0 million and ¥300.0 million, respectively, with Sumitomo Mitsui Banking, which has an
interest rate of 1.4% on ¥300.0 million and 1.6% on ¥200.0 million through April 2007. As of March 31, 2007, there were no outstanding borrowings.

In June 2006, we entered into a capital lease for the purchase of network equipment. This capital lease has an interest rate of 3.1% and a term of 36 months. The principal balance at March 31,
2007 was $0.4 million.

In April 2006, we entered into a capital lease for the purchase of network equipment. This capital lease has an interest rate of 10.3% and a term of 36 months. The principal balance at March
31, 2007 was $0.3 million.

In March 2005, we entered into a capital lease for the purchase of various operating and network equipment.  This capital lease line has an interest rate that varies between 2.5% and 10.5%,
depending on the operating equipment being leased, and a term of 36 months. The principal balance at March 31, 2007 was $2.7 million.

In September 2004, we entered into a capital lease for the purchase of network equipment. This capital lease has an interest rate of 3.3% and a term of 60 months. The principal balance at March
31, 2007 was $0.3 million.

At March 31, 2007, we had no other indebtedness outstanding except for the borrowings under our lines of credit, the capital lease obligations listed above and an acquired capital lease with a
principal balance of approximately $0.2 million.

9

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

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 statement of cash flows as financing cash inflows.

The effect of adopting SFAS 123(R) on our income from operations, income before income taxes, net income, net cash provided by operating activities, net cash provided by financing activities,
and basic and diluted earnings per share for the three-month period ended March 31, 2007, is as follows (in thousands, except per share data):

|                                                                   |  | Three Months Ended
|------------------------------------------------------------------ |  | ------------------
|                                                                   |  | March 31, 2007    
|                                                                   |  |                   
|Income from continuing operations, as reported                     |  | $                 
|Effect of adopting SFAS 123(R) on income from operations           |  |                   
|Pro forma income from continuing operations                        |  | $                 
|                                                                   |  |                   
|Income from continuing operations before income taxes, as reported |  | $                 
|Effect of adopting SFAS 123(R) on income before income taxes       |  |                   
|Pro forma income from continuing operations before income taxes    |  | $                 
|                                                                   |  |                   
|Net income, as reported                                            |  | $                 
|Effect of adopting SFAS 123(R) on net income                       |  |                   
|Pro forma net income                                               |  | $                 
|                                                                   |  |                   
|Net income per share, as reported:                                 |  |                   
|Basic                                                              |  | $                 
|Diluted                                                            |  | $                 
|                                                                   |  |                   
|Effect of adopting SFAS 123(R) on net income per share,            |  |                   
|basic and diluted                                                  |  | $                 
|                                                                   |  |                   
|Pro forma net income per share:                                    |  |                   
|Basic                                                              |  | $                 
|Diluted                                                            |  | $                 

10

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

Prior to our adoption of SFAS 123(R), we accounted for equity-based compensation under the provisions and related interpretations of Accounting Principles Board (APB) 25, Accounting for
Stock Issued to Employees (APB 25). Accordingly, we were not required to record compensation expense when stock options were granted to our employees as long as the exercise price was not less than the fair market value of the stock at the
grant date. In October 1995, FASB issued SFAS 123, which allowed us to continue to follow the guidelines of APB 25, but required pro-forma disclosures of net income and earnings per share as if we had adopted the provisions of SFAS 123. In December
2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an Amendment of FASB 123, which provided alternative methods of transition for an entity that voluntarily changes to the fair
value based method of accounting for equity-based employee compensation. We continued to account for equity-based compensation under the provisions of APB 25 using the intrinsic value method.

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

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

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 1995, 2000 and 2004 stock plans, from December 31, 2006 to March 31, 2007:

|                                          |  |           |   |                | Weighted |       | Aggregate
|----------------------------------------- |  | --------- | - | -------------- | -------- | ----- | ---------
|                                          |  |           |   |                | Average  |       | Intrinsic
|Fixed Options                             |  | Options   |   | Exercise Price |          | Value
|                                          |  |           |   |                |          |       |          
|Options outstanding at December 31, 2006: |  | 2,651,473 |   |                | $        | 7.25  |          
|Granted                                   |  |          |   |                |          | 0.00  |          
|Exercised                                 |  | (39,543   | ) |                |          | 6.51  |          
|Expired                                   |  | (59,832   | ) |                |          | 7.93  |          
|Options outstanding at March 31, 2007     |  | 2,552,098 |   |                | $        | 7.24  |          
|                                          |  |           |   |                |          |       |          
|Options exercisable at March 31, 2007     |  | 2,209,397 |   |                | $        | 6.82  |          

11

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

For the three months ended March 31, 2007 and 2006, respectively, we recognized equity-based compensation expense of approximately $0.4 million and $0.9 million, respectively, related
to the vesting of stock options. As of March 31, 2007, we had approximately $1.3 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.

Restricted Stock

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

|                                 |  |           |   |               | Weighted |                 | Aggregate
|-------------------------------- |  | --------- | - | ------------- | -------- | --------------- | ---------
|Restricted Stock                 |  | Shares    |   | Average Price |          | Intrinsic Value
|                                 |  |           |   |               |          |                 |          
|Outstanding at December 31, 2006 |  | 2,498,168 |   |               | $        | 9.00            |          
|Granted                          |  | 288,056   |   |               |          | 10.93           |          
|Vested/released                  |  | (213,256  | ) |               |          | 9.11            |          
|Forfeited                        |  | (52,333   | ) |               |          | 7.58            |          
|Outstanding at March 31, 2007    |  | 2,520,635 |   |               | $        | 9.24            |          

For the three months ended March 31, 2007 and 2006, we recognized equity-based compensation expense of approximately $2.3 and $1.2 million, respectively, related to the vesting of
restricted stock. As of March 31, 2007, we had approximately $20.9 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 March 31, 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 months ended March 31, 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 |       |         | Three Months Ended
|------------------------------ |  | ------------------ | ----- | ------- | ------------------
|                               |  | March 31, 2007     |       |         | March 31, 2006    
|                               |  |                    |       |         | Weighted          
|                               |  | Net                |       | Average |                   
|                               |  | Income             |       | Shares  |                   
|                               |  |                    |       |         |                   
|Basic EPS                      |  | $                  | 8,947 |         | 67,696,711        
|Effect of dilutive securities: |  |                    |       |         |                   
|Stock options                  |  |                    |       |         | 690,237           
|Unvested restricted shares     |  |                    |       |         | 381,832           
|Warrants                       |  |                    |       |         | 7,425             
|Diluted EPS                    |  | $                  | 8,947 |         | 68,776,205        

12

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

The weighted average diluted common shares outstanding for the three months ended March 31, 2007 and 2006 excludes the effect of approximately 0.9 million and 2.5 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 lease 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 March 31, 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 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 August 21, 2006, a lawsuit was filed in the U.S. District Court for the Eastern District of Texasby Ronald A. Katz
Technology Licensing, L.P. against three conferencing service providers, including us, alleging that the defendants automated telephone conferencing systems that enable [their] customers to perform multiple-party meetings and various
other functions over the telephone infringe six of plaintiffs patents. The complaint seeks undisclosed monetary damages, together with pre- and post-judgment interest, treble damages for what is alleged to be willful infringement,
attorneys fees and costs and injunctive relief. On October 16, 2006, we filed our answer, affirmative defenses and counterclaim to the complaint, including seeking declaratory judgment of noninfringement, invalidity and unenforceability and
attorneys fees and costs. On January 25, 2007, plaintiff amended its complaint to also add our subsidiary, American Teleconferencing Services, Ltd., as a party. Discovery is on-going. 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.

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

13

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

reportable segments in order to better reflect the way in which areas of management responsibility are divided and the way our management monitors and reviews our financial results and performance. We have reclassified
prior year results in this report to conform to our new segment presentation. Our unallocated corporate costs are included in our North America segment.

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

|                                     |  | Three Months Ended
|------------------------------------ |  | ------------------
|                                     |  | March 31,         
|                                     |  | 2007              
|Revenues:                            |  |                   
|Revenues from continuing operations: |  |                   
|North America                        |  | $                 
|Europe                               |  |                   
|Asia Pacific                         |  |                   
|                                     |  | $                 
|Income:                              |  |                   
|Income from continuing operations:   |  |                   
|North America                        |  | $                 
|Europe                               |  |                   
|Asia Pacific                         |  |                   
|                                     |  | $                 

|                     |  | Three Months Ended
|-------------------- |  | ------------------
|                     |  | March 31, 2007    
|Identifiable Assets: |  |                   
|North America        |  | $                 
|Europe               |  |                   
|Asia Pacific         |  |                   
|                     |  | $                 

10. STATEMENT OF CASH FLOW INFORMATION

Supplemental disclosure of cash flow information (in thousands):

|                               |  | Three Months Ended
|------------------------------ |  | ------------------
|                               |  | March 31,         
|                               |  | 2007              
|Cash paid during the year for: |  |                   
|Interest                       |  | $                 
|Income taxes, net              |  | $                 

11. SUBSEQUENT EVENTS

During the second quarter of 2007, we anticipate incurring restructuring costs related to the consolidation of certain of our customer service and data center operations across all of our
reportable segments.  The consolidation of these operations is associated with support centers for solutions provided by our former Data Communications operating segment.  As a result of this consolidation, we expect to record approximately $4.0
million to $4.5 million in severance and facility exit costs as restructuring costs for the second quarter of 2007.

14

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

On April 19, 2007, we entered into a settlement agreement with Crescendo Partners II, L.P., Series E and related parties relating to our 2007 annual meeting of shareholders.  Under the terms of
the agreement, we commenced a $150.0 million self-tender offer on April 23, 2007 to acquire up to 11,857,707 shares of our common stock, or approximately 17% of our outstanding shares, at a fixed price of $12.65 per share in cash. We also
agreed to recommend that our shareholders approve at our 2007 annual meeting a proposal to declassify our board of directors. If the proposal is approved, commencing in 2008 each of our directors will be elected for a one-year term and stand for
re-election annually thereafter.  As part of the settlement, Crescendo Partners withdrew its proxy contest and certain activities related to our 2007 annual meeting and agreed to vote its shares in favor of our boards nominees and proposals at
our 2007 annual meeting. Crescendo Partners also agreed to certain standstill provisions until the earlier of our 2008 annual meeting and June 30, 2008, however, the standstill provisions do not preclude Crescendo Partners from nominating up to two
directors for election to our board in connection with the 2008 annual meeting.

On April 19, 2007, we also 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 our common stock during 2007.  We will utilize borrowings under our credit facility to finance our tender offer for up to 11,857,707 shares of our common stock.

On April 26, 2007, we paid an additional $0.6 million of cash purchase price related to our Accucast acquisition upon the achievement of a milestone target as specified in the purchase
agreement. We may pay up to an additional $0.9 million of cash purchase price upon the achievement of additional milestone integration targets as specified in the purchase agreement.

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

OVERVIEW

We are a global provider of communication technologies-based solutions that automate, simplify and improve communication-centric business processes.  We believe our solutions help businesses
increase sales, improve productivity and efficiency and enhance our customer loyalty and retention by empowering them with new ways to communicate with, market to and service their constituents. We go to market on a global basis in three regions in
North America, Europe and Asia Pacific with the following core solution sets: Conferencing, Desktop Fax, Document Delivery, Accounts Receivable Management, Notifications & Reminders and eMarketing.

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

- Generated double digit growth in consolidated revenues in the first quarter of 2007 compared to the first quarter of 2006;
- Continued to grow revenue from our Conferencing Solutions, with 27.0% growth in this solution set compared to the comparable prior year period;
- Improved our gross margin by more than two percentage points during the first quarter of 2007 as compared to the fourth quarter of 2006;
- Completed our efforts to proactively manage our North America broadcast fax base of customers by migrating approximately 40% of this revenue to contracts containing minimum revenue
commitments; and
- Completed development of our new Web portal, PGiConnect.com, through which we will bring all of our capabilities online, which was formally launched on April 18, 2007.

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 Premiere Global Communications Operating System 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 internal development efforts on more highly automated applications that have
quicker sales cycles and implementation times. In addition, during the second quarter of 2007, we anticipate incurring approximately $4.0 million to $4.5 million in restructuring costs related to the consolidation of certain of our customer
service and data center operations associated with support centers for solutions provided by our former Data Communications business segment.

Following our April 18, 2007 formal launch of PGiConnect.com, we plan to continue our efforts to move our companys capabilities online, making all PGiConnect.com capabilities accessible
through a single point of presence on the Internet. This Web portal will open a new sales channel that we believe will improve 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.

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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 months ended March 31, 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
|------------------------------------ |  | ------------------
|                                     |  | March 31,         
|                                     |  | 2007              
|Revenues:                            |  |                   
|Revenues from continuing operations: |  |                   
|North America                        |  | $                 
|Europe                               |  |                   
|Asia Pacific                         |  |                   
|                                     |  | $                 
|Income:                              |  |                   
|Income from continuing operations:   |  |                   
|North America                        |  | $                 
|Europe                               |  |                   
|Asia Pacific                         |  |                   
|                                     |  | $                 
|                                     |  |                   
|Revenues                             |  |                   

Consolidated revenues from continuing operations increased 11.4% to $135.6 million for the three months ended March 31, 2007 compared with $121.7 million for the same period in 2006.

For the three months ended March 31, 2007 and 2006, North America revenue was 64.9% and 65.3% of consolidated revenues, respectively.  For the three months ended March 31, 2007 and 2006, North
America experienced a 10.7% increase in revenue from $79.5 million to $88.0 million.  This increase in revenue was attributable primarily to organic growth in our Conferencing Solutions and the acquisitions of Accucast and Enunciate, offset
by declines in our broadcast fax revenue. Our Conferencing Solutions revenue in North America was approximately $65.8 million and $53.4 million for the three months ended March 31, 2007 and 2006, respectively. Our broadcast fax revenue in
North America was approximately $5.4 million and $8.1 million for the three months ended March 31, 2007 and 2006, respectively.

For the three months ended March 31, 2007 and 2006, Europe revenue was 18.4% and 18.9% of consolidated revenues, respectively. For the three months ended March 31, 2007 and 2006, Europe
experienced an 8.2% increase in revenue from $23.0 million to $24.9 million. This increase in revenue was attributable primarily to

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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 $2.1 million for the comparable periods. Our Conferencing Solutions revenue in Europe was approximately $10.0 million and $7.1 million for the three months ended March 31, 2007 and 2006, respectively. Our
broadcast fax revenue in Europe was approximately $6.4 million and $7.9 million for the three months ended March 31, 2007 and 2006, respectively.

For the three months ended March 31, 2007 and 2006, Asia Pacific revenue was 16.8% and 15.8% of consolidated revenues, respectively.  For the three months ended March 31, 2007 and 2006, Asia
Pacific experienced an 18.2% increase in revenue from $19.2 million to $22.7 million.  This increase in revenue was 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 the acquisition of ECT, offset by declines in our broadcast fax revenues. Our Conferencing Solutions revenue in Asia Pacific was approximately $9.1 million
and $6.3 million for the three months ended March 31, 2007 and 2006, respectively. Our broadcast fax revenue in Asia Pacific was approximately $7.9 million and $8.6 million for the three months ended March 31, 2007 and 2006,
respectively.

Cost of revenues

Consolidated cost of revenues was 39.7% and 39.8% of consolidated revenues for the three months ended March 31, 2007 and 2006, respectively. Consolidated cost of revenues from continuing
operations increased 11.4% to $53.9 million for the three months ended March 31, 2007 compared with $48.3 million for the same period in 2006.

For the three months ended March 31, 2007 and 2006, North America cost of revenues was 38.5% and 37.9% of segment revenue, respectively. For the three months ended March 31, 2007 and 2006,
North America experienced a 12.5% increase in cost of revenue from $30.1 million to $33.9 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 in our broadcast fax services in excess of cost reductions in the underlying telecommunications network and as a result of a greater percentage of resold Web conferencing services that carry an inherently higher cost of revenue. North
America cost of revenue increased in dollar amount as a result of volume growth in our Conferencing Solutions.

For the three months ended March 31, 2007 and 2006, Europe cost of revenue was 34.4% and 39.6% of segment revenue, respectively. For the three months ended March 31, 2007 and 2006, Europe
experienced a 5.9% decrease in cost of revenue from $9.1 million to $8.6 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 March 31, 2007 and 2006, Asia Pacific cost of revenue was 50.2% and 47.5% of segment revenue, respectively. For the three months ended March 31, 2007 and 2006, Asia
Pacific experienced a 24.8% increase in cost of revenue from $9.1 million to $11.4 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 resale costs associated with it. 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 were 26.9% of consolidated revenues for each of the three months ended March 31, 2007 and 2006.  Consolidated selling and
marketing

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expenses from continuing operations increased 11.4% to $36.5 million for the three months ended March 31, 2007 compared with $32.8 million for the same period in 2006.

For the three months ended March 31, 2007 and 2006, North America selling and marketing expense was 26.8% and 27.4% of segment revenue, respectively. For the three months ended March 31, 2007
and 2006, North America experienced an 8.1% increase in selling and marketing expense from $21.8 million to $23.6 million. The increase in North America selling and marketing in dollars is primarily associated with the acquisition of
Enunciate and increased sales headcount associated with our new channel and solutions sales strategy implemented during the latter half of 2006.

For the three months ended March 31, 2007 and 2006, Europe selling and marketing expense was 31.0% and 27.8% of segment revenue, respectively.  For the three months ended March 31, 2007 and
2006, Europe experienced a 20.7% increase in selling and marketing expense from $6.4 million to $7.7 million. Approximately half of the Europe selling and marketing expense increase in dollars 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.

For the three months ended March 31, 2007 and 2006, Asia Pacific selling and marketing expense was 22.8% and 23.6% of segment revenue, respectively. For the three months ended March 31, 2007
and 2006, Asia Pacific experienced a 14.0% increase in selling and marketing expense from $4.5 million to $5.2 million.  The increase in Asia Pacific selling and marketing expense in dollars is primarily associated with the acquisition of
ECT and increased sales headcount associated with augmenting our growth in our Conferencing Solutions.

Research and development

Consolidated research
and development expenses from continuing operations increased 22.2% to $3.4
million from $2.8 million, and increased to 2.5% from 2.3% of consolidated
revenues for  the three months ended March 31, 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
approximately $2.3 million and $4.7 million, for the three months ended
March 31, 2007 and 2006, respectively, of software development costs. The majority
of research and  development expenses were incurred in North America. The increase
in research and development expenses in dollars is primarily associated with
additional resources invested in the maintenance and support of our Conferencing
Solutions and our  e-Marketing Solutions. The increase in capitalized software
development costs is associated primarily with increased product development
within all of our core solution sets.

General and administrative

Consolidated general and administrative expenses from continuing operations were 12.2% and 11.5% of consolidated revenues for the three months ended March 31, 2007 and 2006, respectively.
Consolidated general and administrative expenses from continuing operations increased 18.5% to $16.6 million for the three months ended March 31, 2007 compared with $13.8 million for the same period in 2006.

For the three months ended March 31, 2007 and 2006, North America general and administrative expense was 13.3% and 12.5% of segment revenue, respectively. For the three months ended March 31,
2007 and 2006, North America experienced a 18.0% increase in general and administrative expense from $10.0 million to $11.7 million. This increase in general and administrative expense was primarily attributable to $0.9 million related
to proxy costs, $0.4 million of duplicative rent associated with facilities transitions, $0.2 million associated with our acquisition of Enunciate and $0.2 million associated with incremental restricted stock grants for periods
subsequent to the first quarter of 2006.

For the three months ended March 31, 2007 and 2006, Europe general and administrative expense was 11.4% and 10.5% of segment revenue, respectively. For the three months ended March 31, 2007 and
2006, Europe experienced a 18.2% increase in general and administrative expense from $2.4 million to $2.9 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

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duplicative costs associated with efforts to consolidate our former Conferencing & Collaboration and Data Communications operating segments finance organizations under one regional organization.

For the three months ended March 31, 2007 and 2006, Asia Pacific general and administrative expense was 8.7% and 8.4% of segment revenue, respectively. For the three months ended March 31, 2007
and 2006, Asia Pacific experienced a 22.3% increase in general and administrative expense from $1.6 million to $2.0 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 as a percentage of consolidated revenues were 5.2% and 4.9% of consolidated revenues for the three months ended March 31, 2007 and
2006, respectively. Consolidated depreciation expenses from continuing operations increased 19.6% to $7.1 million for the three months ended March 31, 2007 compared with $5.9 million for the same period in 2006.

North America depreciation expense totaled $5.6 million and $4.3 million, or 6.3% and 5.4% of segment revenue, for the three months ended March 31, 2007 and 2006, respectively. Europe
depreciation expense totaled $0.8 million and $1.0 million, or 3.3% and 4.3% of segment revenue, for the three months ended March 31, 2007 and 2006, respectively. Asia Pacific depreciation expense totaled $0.7 million and $0.6
million, or 3.1% and 3.3% of segment revenue, for the three months ended March 31, 2007 and 2006, respectively.  The increase in depreciation expense in North America is primarily attributed to increased capital spending during 2006 associated with
added capacity to our Conferencing Solutions, increased product development in solutions from our former Data Communications operating segment and facility refurbishment costs associated with the consolidation and exit of various facilities in 2007.

Amortization

Consolidated amortization from continuing operations as a percentage of consolidated revenues was 2.6% and 2.5% of consolidated revenues for the three months ended March 31, 2007 and 2006,
respectively. Consolidated amortization from continuing operations was $3.6 million and $3.1 million for the three months ended March 31, 2007 and 2006, respectively. Amortization expense has increased in absolute dollars as a result of our
acquisitions.

North America amortization totaled $3.1 million and $2.6 million, or 3.5% and 3.2% of segment revenue, for the three months ended March 31, 2007 and 2006, respectively. Europe
amortization totaled $0.3 million and $0.5 million, or 1.4% and 2.1% of segment revenue, for the three months ended March 31, 2007 and 2006, respectively. Asia Pacific amortization totaled $0.1 million and $42,000, or 0.5% and 0.2%
of segment revenue, for the three months ended March 31, 2007 and 2006, respectively. The increase in amortization expense in North America is associated with our acquisitions of Accucast and Enunciate. The increase in amortization expense in Asia
Pacific is associated with our acquisition of ECT.

Restructuring costs

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

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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.

Interest expense, net

Net interest expense increased to $2.2 million from $1.7 million for the three months ended March 31, 2007 and 2006, respectively. Interest expense increased primarily as a result of an
increased average outstanding balance on our line of credit, with average debt outstanding during the three months ended March 31, 2007 of $122.3 million compared to $108.1 million during the three months ended March 31, 2006, and as a
result of increases in our average interest rates associated primarily with increases in LIBOR.

Other, net

Other, net was $0.5 million and $(0.2) million for the three months ended March 31, 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 three ended March 31, 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 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.

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 CAD$29.0 million in cash at closing and CAD$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 and approximately CAD$0.3 million has been allocated to acquired fixed assets, CAD$0.1 million has been
allocated to acquired working capital, CAD$6.8 million has been allocated to identifiable customer lists and CAD $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 CAD$22.3 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. During 2006, we paid
an additional $1.5 million cash purchase price upon the achievement of the first milestone target as specified in the purchase agreement. We may pay up to an additional $1.5 million in cash purchase price based upon the achievement of
additional milestone integration targets as specified in the purchase agreement. We funded the purchase through our line of credit. We followed SFAS No. 141, and approximately $0.2 million has been allocated to acquired fixed assets, $0.3
million

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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 $12.6 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 March 31, 2007, we had $20.0 million in cash and equivalents compared to $19.0 million at December 31, 2006. Cash balances residing outside of the U.S. at March 31, 2007 were
$20.6 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. Intercompany loans with foreign subsidiaries generally are considered to be permanently invested for the foreseeable future.
Therefore, foreign exchange gains and losses resulting from these transactions are recorded in the cumulative translation adjustment account on face of the condensed consolidated balance sheet. 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 March 31, 2007, we had approximately $173.7 million of availability under our existing
$300.0 million line of credit. 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 $19.3 million for the three months ended March 31, 2007 compared to cash provided by operating activities of approximately
$16.6 million for the same period in 2006. The increase in net cash provided by operating activities is associated with higher net income of $1.3 million, favorable changes in assets and liabilities of $2.1 million and no legal
settlement costs incurred during the first quarter of 2007, offset by greater restructuring cost payments of $1.2 million.

Cash used in investing activities

Cash used in investing activities totaled $7.7 million for the three months ended March 31, 2007 compared to cash used in investing activities totaling $22.9 million for the same period
in 2006. The principal uses of cash used in investing activities for the three months ended March 31, 2007 included $7.3 million of capital expenditures and an aggregate of $0.4 million related to the payment of severance and non-compete
obligations from prior year acquisitions. The principal uses of cash used in investing activities for the three months ended March 31, 2006 included $9.0 million of capital expenditures and an aggregate of $13.9 million for the purchase
price of the Accucast acquisition and the payment of severance and non-compete obligations from prior year acquisitions.

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Cash used in/provided by financing activities

Cash used in financing activities for the three months ended March 31, 2007 totaled $10.1 million compared with cash provided by financing activities of $8.2 million for the same period
in 2006. Cash used in financing activities for the three months ended March 31, 2007 included $10.1 million of net payments on our line of credit and approximately $0.3 million associated with the netting of shares to pay certain
employees income tax withholding due upon the vesting of restricted stock awards, offset by $0.3 million of proceeds from stock option exercises. Cash provided by financing activities for the three months ended March 31, 2006 included
$7.9 million of net borrowings on our line of credit to fund our acquisition activities and $1.1 million of proceeds from stock option exercises, offset by $0.8 million associated with the netting of shares to pay certain employees
income tax withholding due upon the vesting of restricted stock awards.

Off-balance sheet arrangements

As of March 31, 2007, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC 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 recently 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. More states may claim that we are subject to an assessment of sales taxes. As of March 31, 2007 and December 31, 2006, we had reserved approximately $4.9 and
$4.3 million, respectively, for certain state sales tax contingencies. This amount is included in Accrued taxes in the accompanying consolidated balance sheet. 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.

The provision for income taxes and corresponding balance sheet accounts 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 are reasonably assured of being 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

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reduce deferred tax assets to the amount expected to be realized.

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 are 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.

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.

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.

Capital resources

In April 2006, we closed an amendment to our credit facility, with a syndicate led by Bank of America, N.A., which increased the amount available to us under our line of credit from $180.0
million to $300.0 million, reduced the applicable percentages across the pricing grid and extended the maturity of the credit facility from February 2009 to April 2011. The amendment also provided for an uncommitted accordion feature allowing
for an additional increase of $100.0 million to $400.0 million of the revolving credit line, subject to the terms and conditions as set forth in the amendment. 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 March 31, 2007, we were in compliance in all material
respects with all 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 March 31, 2007, the applicable margin with respect to base rate loans was 0.0%, and the applicable
margin with respect to LIBOR loans was 1.25% . At March 31, 2007, our interest rate on 30-day LIBOR loans was 6.57% . As of March 31, 2007, we had approximately $124.9 million of borrowings outstanding and approximately $1.4 million in
letters of credit outstanding under our line of credit.

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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 are exclusive of our applicable margin as stated in our credit facility. We have not designated these interest rate swaps as hedges and are accounting for them in
accordance with SFAS No.133, Accounting for Derivative Instruments and Hedging Activities. Changes in fair value, which were approximately $0.1 million for the three months ended March 31, 2007, are recognized in earnings.

In March and September 2006, we entered into our Yen-denominated line of credit for ¥200.0 million and ¥300.0 million, respectively, with Sumitomo Mitsui Banking, which has an
interest rate of 1.4% on ¥300.0 million and 1.6% on ¥200.0 million through April 2007. As of March 31, 2007, there were no outstanding borrowings.

In June 2006, we entered into a capital lease for the purchase of network equipment. This capital lease has an interest rate of 3.1% and a term of 36 months. The principal balance at March 31,
2007 was $0.4 million.

In April 2006, we entered into a capital lease for the purchase of network equipment. This capital lease has an interest rate of 10.3% and a term of 36 months. The principal balance at March
31, 2007 was $0.3 million.

At March 31, 2007, we had no other indebtedness outstanding except for the borrowings under our lines of credit, the capital lease obligations listed above and an acquired capital lease with a
principal balance of approximately $0.2 million.

Liquidity

As of March 31, 2007, we had $20.0 million of cash and equivalents. We generated positive operating cash flows from each of our geographic business segments for the three months ended March
31, 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 quarter of 2007, we spent approximately $7.3 million in capital expenditures to fund capacity expansion, new product development and our automation
initiatives.  We expect capital expenditures in 2007 will total approximately 6.5% to 7% of consolidated revenues. As discussed in Subsequent Events below, we plan to fund our recently announced $150.0 million self-tender offer
through borrowings under our existing credit facility, which has been amended to accommodate the tender offer. We believe that we will generate adequate operating cash flows for capital expenditures and contractual commitments and to satisfy our
indebtedness and fund our liquidity needs for at least the next 12 months. We have historically borrowed on our line of credit in order to fund acquisitions. At March 31, 2007, we had $173.7 million of available credit on our existing $300.0
million line of credit (without regard to the uncommitted accordion feature).

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

SUBSEQUENT EVENTS

During the second quarter of 2007, we anticipate incurring restructuring costs related to the consolidation of certain of our customer service and data center operations across all of our
reportable segments.  The consolidation of these operations is associated with support centers for solutions provided by our former Data Communications operating segment.  As a result of this consolidation, we expect to record approximately $4.0
million to $4.5 million in severance and facility exit costs as restructuring costs for the second quarter of 2007.

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On April 19, 2007, we entered into a settlement agreement with Crescendo Partners II, L.P., Series E and related parties relating to our 2007 annual meeting of shareholders.  Under the terms of
the agreement, we commenced a $150.0 million self-tender offer on April 23, 2007 to acquire up to 11,857,707 shares of our common stock, or approximately 17% of our outstanding shares, at a fixed price of $12.65 per share in cash. We also
agreed to recommend that our shareholders approve at our 2007 annual meeting a proposal to declassify our board of directors. If the proposal is approved, commencing in 2008 each of our directors will be elected for a one-year term and stand for
re-election annually thereafter.  As part of the settlement, Crescendo Partners withdrew its proxy contest and certain activities related to our 2007 annual meeting and agreed to vote its shares in favor of our boards nominees and proposals at
our 2007 annual meeting. Crescendo Partners also agreed to certain standstill provisions until the earlier of our 2008 annual meeting and June 30, 2008, however, the standstill provisions do not preclude Crescendo Partners from nominating up to two
directors for election to our board in connection with the 2008 annual meeting.

On April 19, 2007, we also 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 our common stock during 2007.  We will utilize borrowings under our credit facility to finance our tender offer for up to 11,857,707 shares of our common stock.

On April 26, 2007, we paid an additional $0.6 million of cash purchase price related to our Accucast acquisition upon the achievement of a milestone target as specified in the purchase
agreement. We may pay up to an additional $0.9 million of cash purchase price upon the achievement of additional milestone integration targets as specified in the purchase agreement.

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.

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FORWARD LOOKING STATEMENTS

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

- 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,

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- 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,
- 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 this Form 10-Q, and
- Factors described from time to time in our press releases, reports and other filings made with the Securities and Exchange Commission.

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. In addition, in February 2006, we entered into a three-year $50.0 million interest rate swap at a fixed rate of 4.99%, and in August 2006, we entered into two separate three-year
$12.5 million interest rate swaps at 5.135% and 5.159%, respectively. All of these swaps are exclusive of our applicable margin as stated in our credit facility. These interest rate swaps effectively convert the interest payments of $75.0
million of our LIBOR-based borrowings to a fixed rate.

At March 31, 2007, we had borrowings of approximately $49.9 million outstanding under our line of credit that are subject to interest rate risk. Each 100 basis point increase in interest
rates relative to these borrowings would impact annual pre-tax earnings and cash flows by approximately $0.5 million based on our March 31, 2007 debt level.

Approximately 38.8% of our consolidated revenues from continuing operations and 35.1% of our operating expenses from continuing operations were transacted in foreign currencies for the
three-month period ended March 31, 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 three-month period ended March 31, 2007 by approximately $5.3 million and operating expenses for 2007 by approximately $4.2 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 March 31, 2007.

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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 March 31, 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 March 31, 2007, to provide reasonable assurance that the information required to be
disclosed by us in the reports we file or submit under the Exchange Act 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 March 31, 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 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 August 21, 2006, a lawsuit was filed in the U.S. District Court for the Eastern District of Texasby 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. Discovery is on-going. 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.

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

ITEM 1A. RISK FACTORS.

Part I, Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2006 includes a detailed discussion of risk factors that could materially affect our
business, financial condition or results of operations. Other than with respect to the following risk factor previously disclosed in our SEC filings and updated below, 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 March 31, 2007, we had approximately $126.3 million of outstanding debt under our credit facility,
with approximately $124.9 million in borrowings and $1.4 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 will utilize borrowings under our credit facility to finance our tender offer for up to 11,857,707 shares of our common stock. If we complete our tender offer, our indebtedness and interest expense will be
significant and the terms of any future indebtedness may be adversely affected. After giving pro forma effect to the tender offer and related borrowings as of March 31, 2007, we would have had total indebtedness of

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approximately $278.8 million and shareholders equity of approximately $176.9 million. By incurring debt, the 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 self-tender offer using cash from operations.

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 are exclusive of our applicable margin as stated in our credit facility.

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.

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

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

|(a) | Exhibits
|--- | --------
|   
|    | 10.1    
|   
|    | 10.2    
|   
|    | 10.3    
|   
|    | 10.4    
|   
|    | 10.5    
|   
|    | 31.1    
|   
|    | 31.2    
|   
|    | 32.1    
|   
|    | 32.2    
|   

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SIGNATURE

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

|Date: May 10, 2007 |  | PREMIERE GLOBAL SERVICES, INC.                 
|------------------ |  | -----------------------------------------------
|                  
|                  
|                   |  | /s/ Michael E. Havener                         
|                   |  | Michael E. Havener                             
|                   |  | Chief Financial Officer                        
|                   |  | (principal financial and accounting officer and
|                   |  | duly authorized signatory of the Registrant)   

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EXHIBIT INDEX

|Exhibit Number | Description                                                                                                                                                                                                                                                                                           
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                       
|10.1           | Separation Agreement between Jeffrey A. Allred and the Registrant, dated December 20, 2006 and effective January 1, 2007 (incorporated by reference to Exhibit 10.66 to the Registrants Annual Report on Form 10-K for
year ended December 31, 2006 and filed on March 15, 2007).                    
|              
|10.2           | Restricted Stock Agreement between Jeffrey A. Allred and the Registrant, effective December 30, 2006, under the Registrants 1995 Stock Plan (incorporated by reference to Exhibit 10.67 to the Registrants Annual
Report on Form 10-K for year ended December 31, 2006 and filed on March 15, 2007).
|              
|10.3           | First Amendment to Amended and Restated Employment Agreement between T. Lee Provow and the Registrant, dated January 23, 2007 (incorporated by reference to Exhibit 10.68 to the Registrants Annual Report on Form 10-K
for the year ended December 31, 2006 and filed on March 15, 2007).           
|              
|10.4           | Restricted Stock Agreement between T. Lee Provow and the Registrant, dated January 22, 2007, under the Registrants 1995 Stock Plan (incorporated by reference to Exhibit 10.69 to the Registrants Annual Report on
Form 10-K for the year ended December 31, 2006 and filed on March 15, 2007).     
|              
|10.5           | Agreement between Griffeon Group, LLC and the Registrant dated February 22, 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.                                                                                                                                                  
|              

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