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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | 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 000-26933



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LIONBRIDGE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Delaware                 |  | 04-3398462                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

1050 Winter Street, Waltham, MA 02451

(Address of Principal Executive Offices)



Registrants Telephone Number, Including Area Code: 781-434-6000



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

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

Large accelerated filer ̈Accelerated
filer  x    Non-accelerated filer ̈

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

The number of shares outstanding of the registrants common stock, par value $0.01 per share, as of April 30, 2007 was 60,512,863.



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LIONBRIDGE TECHNOLOGIES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007

TABLE OF CONTENTS



|                              |  |                                                                                                                |  |     
|----------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                                |  | Page
|PART I: FINANCIAL INFORMATION |  |                                                                                                               
|                              |  |                                                                                                               
|ITEM 1                        |  | Condensed Consolidated Financial Statements:                                                                   |  |     
|                              |  |                                                                                                               
|                              |  | Condensed Consolidated Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006                   |  | 3   
|                              |  |                                                                                                               
|                              |  | Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2007 and 2006 |  | 4   
|                              |  |                                                                                                               
|                              |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2007 and 2006 |  | 5   
|                              |  |                                                                                                               
|                              |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                               |  | 6   
|                              |  |                                                                                                               
|ITEM 2                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                          |  | 12  
|                              |  |                                                                                                               
|ITEM 3                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                     |  | 21  
|                              |  |                                                                                                               
|ITEM 4                        |  | Controls and Procedures                                                                                        |  | 22  
|                              | 
|PART II: OTHER INFORMATION    |  |                                                                                                               
|                              |  |                                                                                                               
|ITEM 1                        |  | Legal Proceedings                                                                                              |  | 23  
|                              |  |                                                                                                               
|ITEM 1A.                      |  | Risk Factors                                                                                                   |  | 24  
|                              |  |                                                                                                               
|ITEM 2                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                    |  | 24  
|                              |  |                                                                                                               
|ITEM 6                        |  | Exhibits                                                                                                       |  | 25  
|                              | 
|SIGNATURE                     |  | 26                                                                                                            
|                              | 
|EXHIBIT INDEX                 |  | 27                                                                                                            



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PART I. FINANCIAL INFORMATION



|Item 1. | Consolidated Financial Statements
|------- | ---------------------------------

LIONBRIDGE
TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)



|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ----------------- | - | -------- | -
|                                                                                                                                                                            |  | March 31, 2007 |          |   | December 31, 2006 |  
|                                                                                                                                                                            |  | (unaudited)    |          |   |                   |  
|ASSETS                                                                                                                                                                      |  |                |          |   |                   |   |          |  
|Current assets:                                                                                                                                                             |  |                |          |   |                   |   |          |  
|Cash and cash equivalents                                                                                                                                                   |  | $              | 16,925   |   |                   | $ | 27,354   |  
|Accounts receivable, net of allowance of $699 and $728 at March 31, 2007 and December 31, 2006, respectively                                                                |  |                | 76,000   |   |                   |   | 72,940   |  
|Work in process                                                                                                                                                             |  |                | 38,437   |   |                   |   | 29,311   |  
|Other current assets                                                                                                                                                        |  |                | 11,042   |   |                   |   | 7,153    |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Total current assets                                                                                                                                                        |  |                | 142,404  |   |                   |   | 136,758  |  
|Property and equipment, net                                                                                                                                                 |  |                | 13,241   |   |                   |   | 13,032   |  
|Goodwill                                                                                                                                                                    |  |                | 131,044  |   |                   |   | 131,044  |  
|Other intangible assets, net                                                                                                                                                |  |                | 34,780   |   |                   |   | 36,894   |  
|Other assets                                                                                                                                                                |  |                | 8,046    |   |                   |   | 3,772    |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Total assets                                                                                                                                                                |  | $              | 329,515  |   |                   | $ | 321,500  |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                        |  |                |          |   |                   |   |          |  
|Current liabilities:                                                                                                                                                        |  |                |          |   |                   |   |          |  
|Short-term debt and current portion of long-term debt                                                                                                                       |  | $              | 538      |   |                   | $ | 355      |  
|Accounts payable                                                                                                                                                            |  |                | 20,693   |   |                   |   | 18,730   |  
|Accrued compensation and benefits                                                                                                                                           |  |                | 17,484   |   |                   |   | 18,282   |  
|Accrued outsourcing                                                                                                                                                         |  |                | 12,575   |   |                   |   | 10,645   |  
|Accrued merger and restructuring                                                                                                                                            |  |                | 1,432    |   |                   |   | 1,507    |  
|Income taxes payable                                                                                                                                                        |  |                | 2,779    |   |                   |   | 4,199    |  
|Accrued expenses and other current liabilities                                                                                                                              |  |                | 12,939   |   |                   |   | 13,564   |  
|Deferred revenue                                                                                                                                                            |  |                | 9,070    |   |                   |   | 8,583    |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Total current liabilities                                                                                                                                                   |  |                | 77,510   |   |                   |   | 75,865   |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Long-term debt, less current portion                                                                                                                                        |  |                | 75,948   |   |                   |   | 77,855   |  
|Deferred income taxes, long-term                                                                                                                                            |  |                | 7,824    |   |                   |   | 7,685    |  
|Income tax reserves                                                                                                                                                         |  |                | 5,709    |   |                   |   |         |  
|Other long-term liabilities                                                                                                                                                 |  |                | 3,549    |   |                   |   | 3,407    |  
|Contingencies (Note 10)                                                                                                                                                     |  |                |          |   |                   |   |          |  
|Stockholders equity:                                                                                                                                                       |  |                |          |   |                   |   |          |  
|Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding                                                                             |  |                |         |   |                   |   |         |  
|Common stock, $0.01 par value; 100,000,000 shares authorized; 60,515,755 and 60,089,130 shares issued and outstanding at March 31, 2007
and December 31, 2006, respectively |  |                | 605      |   |                   |   | 601      |  
|Additional paid-in capital                                                                                                                                                  |  |                | 258,735  |   |                   |   | 257,077  |  
|Accumulated deficit                                                                                                                                                         |  |                | (107,656 | ) |                   |   | (107,704 | )
|Accumulated other comprehensive income                                                                                                                                      |  |                | 7,291    |   |                   |   | 6,714    |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Total stockholders equity                                                                                                                                                  |  |                | 158,975  |   |                   |   | 156,688  |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  
|Total liabilities and stockholders equity                                                                                                                                  |  | $              | 329,515  |   |                   | $ | 321,500  |  
|                                                                                                                                                                            |  |                |          |   |                   |   |          |  

The accompanying notes are an integral part of the condensed consolidated financial statements.



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LIONBRIDGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except per share data)



|                                                                            |  |                              |         |      |   |        |  
|--------------------------------------------------------------------------- |  | ---------------------------- | ------- | ---- | - | ------ | -
|                                                                            |  | Three Months Ended March 31, |        
|                                                                            |  | 2007                         |         | 2006 |  
|Revenue                                                                     |  | $                            | 108,616 |      | $ | 99,123 |  
|Operating expenses:                                                         |  |                              |         |      |   |        |  
|Cost of revenue (exclusive of depreciation and amortization included below) |  |                              | 72,218  |      |   | 64,828 |  
|Sales and marketing                                                         |  |                              | 7,951   |      |   | 8,026  |  
|General and administrative                                                  |  |                              | 20,582  |      |   | 18,486 |  
|Research and development                                                    |  |                              | 717     |      |   | 743    |  
|Depreciation and amortization                                               |  |                              | 1,294   |      |   | 1,492  |  
|Amortization of acquisition-related intangible assets                       |  |                              | 2,114   |      |   | 2,176  |  
|Merger, restructuring and other charges                                     |  |                              | 278     |      |   | 767    |  
|                                                                            |  |                              |         |      |   |        |  
|Total operating expenses                                                    |  |                              | 105,154 |      |   | 96,518 |  
|                                                                            |  |                              |         |      |   |        |  
|Income from operations                                                      |  |                              | 3,462   |      |   | 2,605  |  
|Interest expense:                                                           |  |                              |         |      |   |        |  
|Interest on outstanding debt                                                |  |                              | 1,418   |      |   | 1,865  |  
|Accretion of discount on debt                                               |  |                              | 46      |      |   | 222    |  
|Interest income                                                             |  |                              | 206     |      |   | 135    |  
|Other expense, net                                                          |  |                              | 491     |      |   | 360    |  
|                                                                            |  |                              |         |      |   |        |  
|Income before income taxes                                                  |  |                              | 1,713   |      |   | 293    |  
|Provision for income taxes                                                  |  |                              | 1,481   |      |   | 1,300  |  
|                                                                            |  |                              |         |      |   |        |  
|Net income (loss)                                                           |  | $                            | 232     |      | $ | (1,007 | )
|                                                                            |  |                              |         |      |   |        |  
|Net income (loss) per share of common stock:                                |  |                              |         |      |   |        |  
|Basic                                                                       |  | $                            | 0.00    |      | $ | (0.02  | )
|Diluted                                                                     |  | $                            | 0.00    |      | $ | (0.02  | )
|Weighted average number of common shares outstanding:                       |  |                              |         |      |   |        |  
|Basic                                                                       |  |                              | 59,320  |      |   | 58,750 |  
|Diluted                                                                     |  |                              | 60,791  |      |   | 58,750 |  

The accompanying notes are an integral part of the condensed consolidated financial statements.



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LIONBRIDGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)



|                                                                                         |  |                              |         |   |      |   |        |  
|---------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                         |  | Three Months Ended March 31, |        
|                                                                                         |  | 2007                         |         |   | 2006 |  
|Cash flows from operating activities:                                                    |  |                              |         |   |      |   |        |  
|Net income (loss)                                                                        |  | $                            | 232     |   |      | $ | (1,007 | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                              |         |   |      |   |        |  
|Stock-based compensation                                                                 |  |                              | 1,737   |   |      |   | 1,300  |  
|Amortization of deferred financing charges and discount on debt                          |  |                              | 46      |   |      |   | 222    |  
|Depreciation and amortization                                                            |  |                              | 1,294   |   |      |   | 1,492  |  
|Amortization of acquisition-related intangible assets                                    |  |                              | 2,114   |   |      |   | 2,176  |  
|Deferred income taxes                                                                    |  |                              | 116     |   |      |   | 69     |  
|Other                                                                                    |  |                              | 8       |   |      |   | 44     |  
|Changes in operating assets and liabilities, net of effects of acquisitions:             |  |                              |         |   |      |   |        |  
|Accounts receivable                                                                      |  |                              | (2,437  | ) |      |   | 2,840  |  
|Work in process                                                                          |  |                              | (8,808  | ) |      |   | (3,806 | )
|Other current assets                                                                     |  |                              | (3,790  | ) |      |   | (958   | )
|Other assets                                                                             |  |                              | (4,221  | ) |      |   | (95    | )
|Accounts payable                                                                         |  |                              | 2,022   |   |      |   | 3,900  |  
|Income tax payable                                                                       |  |                              | (1,274  | ) |      |   | 176    |  
|Accrued compensation and benefits                                                        |  |                              | (476    | ) |      |   | 1,795  |  
|Accrued outsourcing                                                                      |  |                              | 1,819   |   |      |   | 136    |  
|Accrued merger and restructuring                                                         |  |                              | (493    | ) |      |   | (1,569 | )
|Accrued expenses and other liabilities                                                   |  |                              | 4,182   |   |      |   | (6,194 | )
|Deferred revenue                                                                         |  |                              | 427     |   |      |   | (1,600 | )
|                                                                                         |  |                              |         |   |      |   |        |  
|Net cash used in operating activities                                                    |  |                              | (7,502  | ) |      |   | (1,079 | )
|                                                                                         |  |                              |         |   |      |   |        |  
|Cash flows from investing activities:                                                    |  |                              |         |   |      |   |        |  
|Purchases of property and equipment                                                      |  |                              | (1,407  | ) |      |   | (847   | )
|Proceeds from sale of property and equipment                                             |  |                              |        |   |      |   | 12     |  
|Net proceeds from forward contract hedges                                                |  |                              | 28      |   |      |   |       |  
|                                                                                         |  |                              |         |   |      |   |        |  
|Net cash used in investing activities                                                    |  |                              | (1,379  | ) |      |   | (835   | )
|                                                                                         |  |                              |         |   |      |   |        |  
|Cash flows from financing activities:                                                    |  |                              |         |   |      |   |        |  
|Proceeds from issuance of short-term debt                                                |  |                              | 300     |   |      |   |       |  
|Payments of short-term debt                                                              |  |                              | (326    | ) |      |   | (255   | )
|Payments of long-term debt                                                               |  |                              | (2,000  | ) |      |   |       |  
|Proceeds from issuance of common stock under stock option plans                          |  |                              | 249     |   |      |   | 632    |  
|Proceeds from issuance of capital lease obligations                                      |  |                              | 255     |   |      |   |       |  
|Payments of capital lease obligations                                                    |  |                              | (134    | ) |      |   | (22    | )
|                                                                                         |  |                              |         |   |      |   |        |  
|Net cash provided by (used in) financing activities                                      |  |                              | (1,656  | ) |      |   | 355    |  
|                                                                                         |  |                              |         |   |      |   |        |  
|Net decrease in cash and cash equivalents                                                |  |                              | (10,537 | ) |      |   | (1,559 | )
|Effects of exchange rate changes on cash and cash equivalents                            |  |                              | 108     |   |      |   | 112    |  
|Cash and cash equivalents at beginning of period                                         |  |                              | 27,354  |   |      |   | 25,147 |  
|                                                                                         |  |                              |         |   |      |   |        |  
|Cash and cash equivalents at end of period                                               |  | $                            | 16,925  |   |      | $ | 23,700 |  
|                                                                                         |  |                              |         |   |      |   |        |  

The accompanying notes are an integral part of the condensed consolidated financial statements.



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LIONBRIDGE TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying condensed
consolidated financial statements include the accounts of Lionbridge Technologies, Inc. and its wholly owned subsidiaries (collectively, Lionbridge or the Company). These financial statements are unaudited. However, in the
opinion of management, the consolidated financial statements include all adjustments, all of a normal nature, necessary for their fair presentation. Interim results are not necessarily indicative of results expected for a full year. The accompanying
unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes necessary for a complete presentation of the operations, financial position
and cash flows of the Company in conformity with U.S. generally accepted accounting principles. These statements should be read in conjunction with the Companys Annual Report on Form 10-K for the year ended December 31, 2006.

The Companys preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported
periods. Estimates are used when accounting for collectibility of receivables, calculating service revenue using a percentage-of-completion assessment and valuing intangible assets, deferred tax assets and net assets of businesses acquired. Actual
results could differ from these estimates.

2. STOCKHOLDERS EQUITY AND STOCK-BASED COMPENSATION

Stock Option Plans

The Company has stock-based
compensation plans for salaried employees and non-employee members of the Board of Directors. The plans provide for discretionary grants of stock options, restricted stock and stock units, and other stock-based awards. The plans are administered by
the Nominating and Compensation Committee of the Board of Directors, which consists of non-employee directors.

In November 2005, the
stockholders of Lionbridge Technologies, Inc. approved the Lionbridge 2005 Incentive Plan (the 2005 Plan), which had been previously adopted by the Lionbridge Board of Directors on October 7, 2005, for officers, employees,
non-employee directors and other key persons of Lionbridge and its subsidiaries. The maximum number of shares of common stock available for issuance under the 2005 Plan is 4,000,000 shares. At March 31, 2007, there were 1,216,402 options
available for future grant under the 2005 Plan. Options to purchase common stock are granted at the discretion of the Board of Directors and the Nominating and Compensation Committee. Generally, stock options vest over a four-year period: 25% of the
option shares vest one year from the date of grant and the remaining option shares vest at the rate of 12.5% each six month period thereafter. Stock options generally expire five years from the date of grant under the 2005 Plan. Under the terms of
the 2005 Plan, the exercise price of incentive and non-qualified stock option grants must not be less than 100% of the fair market value of the common stock on the date of grant. Options are amortized using a straight line basis over the option
vesting period.

Lionbridges 1998 Stock Option Plan (the Plan) provides for the issuance of incentive and nonqualified
stock options. The maximum number of shares of common stock available for issuance under the Plan is 11,722,032 shares. At March 31, 2007 there were 1,251,324 options available for future grant under the Plan. Options to purchase common
stock are granted at the discretion of the Board of Directors and the Nominating and Compensation Committee. Generally, stock options vest over a four-year period: 25% of the option shares vest one year from the date of grant and the remaining
option shares vest at the rate of 12.5% each six month period thereafter. Stock options generally expire ten years (five years in certain cases) from the date of grant under the Plan. Under the terms of the Plan, the exercise price of incentive
stock options granted must not be less than 100% (110% in certain cases) of the fair market value of the common stock on the date of grant, as determined by the Board of Directors. The exercise price of nonqualified stock options may be less than
the fair market value of the common stock on the date of grant, as determined by the Board of Directors, but in no case may the exercise price be less than the statutory minimum, the par value per share of Lionbridges common stock.

Restricted Stock Awards

On February 15,
2007, Lionbridge issued 231,500 shares of restricted common stock with a fair market value of $1.3 million for which restrictions on disposition lapse over four years from the date of grant on each anniversary date. Also on February 15, 2007,
Lionbridge issued 84,475 shares of restricted common stock with a fair market value of $485,000 for which restrictions on disposition lapse over two years from the date of grant on each anniversary date.



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The Company recognizes expense for stock options, market-based restricted stock awards and time-based
restricted stock awards pursuant to the guidance of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Share-Based Payment (SFAS 123R). In the
three months ended March 31, 2007 and 2006, the Company expensed $1.7 million and $1.3 million, respectively, for stock options, market-based restricted stock awards and time-based restricted stock awards, classified in the statement of
operations line items as follows:



|                                       |  |                             |           |      |   |          
|-------------------------------------- |  | --------------------------- | --------- | ---- | - | ---------
|                                       |  | Three Months EndedMarch 31,
|                                       |  | 2007                        |           | 2006
|Cost of revenue                        |  | $                           | 25,000    |      | $ | 41,000   
|Sales and marketing                    |  |                             | 267,000   |      |   | 261,000  
|General and administrative             |  |                             | 1,414,000 |      |   | 980,000  
|Research and development               |  |                             | 31,000    |      |   | 18,000   
|                                       |  |                             |           |      |   |          
|Total stock-based compensation expense |  | $                           | 1,737,000 |      | $ | 1,300,000
|                                       |  |                             |           |      |   |          

3. DEBT

On December 21, 2006, the Company entered into a Credit Agreement (the Credit Agreement), dated as of December 21, 2006, together with VeriTest, Inc. (VeriTest), Lionbridge US, Inc.
(Lionbridge US), Lionbridge Global Solutions Federal, Inc. (Federal) and Lionbridge Global Solutions II, Inc. (LGS II) (VeriTest, Lionbridge US, Federal and LGS II, are collectively the US Guarantors),
the several banks and financial institutions as may become parties to the HSBC Credit Agreement (collectively, the Lenders) and HSBC Bank USA, National Association, as administrative agent for the Lenders (HSBC). The
Credit Agreement replaced the Companys Term Loan B and Revolving Credit Facility with Wachovia Bank, National Association that had been in place since September 1, 2005. The Credit Agreement provides for a five-year $100.0 million
revolving credit facility. At March 31, 2007, $75.7 million was outstanding with an interest rate of 6.8%.

4. COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) consists of net income (loss) and the net change in foreign currency translation adjustment, which is
the only component of accumulated other comprehensive income. Total comprehensive income was $810,000 for the three-month period ended March 31, 2007 and total comprehensive loss was $313,000 for the three-month periods ended March 31,
2006.

5. NET INCOME (LOSS) PER SHARE

Basic earnings per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. For the purposes of calculating diluted earnings per share, the denominator includes both the weighted
average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options, unvested restricted stock and warrants, as determined using the treasury stock method.

Shares used in calculating basic and diluted earnings per share for the three-month periods ended March 31, 2007 and 2006, respectively, are as
follows:



|                                                                                     |  |                              |  |           
|------------------------------------------------------------------------------------ |  | ---------------------------- |  | ----------
|                                                                                     |  | Three Months Ended March 31,
|                                                                                     |  | 2007                         |  | 2006      
|Weighted average number of shares of common stock outstanding  basic                |  | 59,320,000                   |  | 58,750,000
|Dilutive common stock equivalents relating to options, restricted stock and warrants |  | 1,471,000                    |  |          
|                                                                                     |  |                              |  |           
|Weighted average number of shares of common stock outstanding  diluted              |  | 60,791,000                   |  | 58,750,000
|                                                                                     |  |                              |  |           



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Options, unvested restricted stock and warrants to purchase 4,540,000 and 6,279,000 shares of common
stock for the three-month periods ended March 31, 2007 and 2006, respectively, were not included in the calculation of diluted net loss per share, as their effect would be anti-dilutive.

6. MERGER, RESTRUCTURING AND OTHER CHARGES

During
the three-month period ended March 31, 2007 Lionbridge recorded $278,000 of restructuring and other charges. The $278,000 of restructuring and other charges recorded in the three-month period ended March 31, 2007 included $167,000 for
workforce reductions in Europe consisting of one technical and two administrative staff and $111,000 of additional costs recorded for a previously vacated facility in order to reflect a new sublease arrangement, recorded pursuant to the guidance in
FASB Statement of Financial Accounting Standards No. 146, Accounting for Costs associated with Exit or Disposal Activities(SFAS No. 146).The $278,000 of restructuring and other charges recorded
during the three-month period ended March 31, 2007 related to the Companys Global Language and Content (GLC) segment. The Company made $383,000 of cash payments in the three-month period ended March 31, 2007, $303,000 and
$80,000 related to the GLC and Global Development and Testing (GDT) segments, respectively.

During the three-month period
ended March 31, 2006 Lionbridge recorded $767,000 of restructuring and other charges. The $767,000 of restructuring and other charges recorded in the three-month period ended March 31, 2006 included $280,000 for workforce reductions in
Europe, consisting of five technical and one administrative staff, a $68,000 reduction of anticipated costs recorded in a prior period on a vacated facility as a result of a sublease arrangement, recorded pursuant to the guidance in SFAS
No. 146 and $555,000 of other charges, principally professional services fees, related to the integration of Bowne Global Solutions (BGS) recorded pursuant to the guidance in Emerging Issues Task Force Abstract 95-3,
Recognition of Liabilities in connection With a Purchase Business Combination (EITF 95-3), and related literature. Of these charges, $338,000 related to the Companys GLC segment, $29,000 to the GDT segment and $400,000
related to Corporate and Other. The Company made $1.7 million of cash payments in the three-month period ended March 31, 2006, $1.6 million and $53,000 related to the GLC and GDT segments, respectively, and $12,000 related to Corporate and
Other.

The following table summarizes the accrual activity for the three months ended March 31, 2007 and 2006, respectively, by
initiative:



|                                                                                   |  |      |           |   |      |   |           |  
|---------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                                                   |  | 2007 |           |   | 2006 |  
|Beginning balance, January 1                                                       |  | $    | 2,388,000 |   |      | $ | 4,210,000 |  
|Employee severance:                                                                |  |      |           |   |      |   |           |  
|Merger and restructuring charges recorded (1)                                      |  |      | 167,000   |   |      |   | 280,000   |  
|Liabilities assumed and recorded on business combinations (2)                      |  |      |          |   |      |   | 1,220,000 |  
|Cash payments related to liabilities assumed and recorded on business combinations |  |      | (3,000    | ) |      |   | (897,000  | )
|Cash payments related to liabilities recorded on exit or disposal activities       |  |      | (27,000   | ) |      |   | (282,000  | )
|                                                                                   |  |      |           |   |      |   |           |  
|                                                                                   |  |      | 137,000   |   |      |   | 321,000   |  
|                                                                                   |  |      |           |   |      |   |           |  
|Vacated facility/Lease termination:                                                |  |      |           |   |      |   |           |  
|Merger and restructuring charges recorded (1)                                      |  |      | 111,000   |   |      |   |          |  
|Liabilities assumed and recorded on business combinations (2)                      |  |      |          |   |      |   | 240,000   |  
|Revision of estimated liabilities                                                  |  |      |          |   |      |   | (68,000   | )
|Cash payments related to liabilities assumed and recorded on business combinations |  |      | (56,000   | ) |      |   | (309,000  | )
|Cash payments related to liabilities recorded on exit or disposal activities       |  |      | (297,000  | ) |      |   | (199,000  | )
|                                                                                   |  |      |           |   |      |   |           |  
|                                                                                   |  |      | (242,000  | ) |      |   | (336,000  | )
|                                                                                   |  |      |           |   |      |   |           |  
|Ending balance, March 31                                                           |  | $    | 2,283,000 |   |      | $ | 4,195,000 |  
|                                                                                   |  |      |           |   |      |   |           |  

---

|(1) | Charges recorded pursuant to the guidance in SFAS No. 146
|--- | ---------------------------------------------------------

|(2) | Liabilities assumed and recorded pursuant to the guidance in EITF 95-3 and related literature.
|--- | ----------------------------------------------------------------------------------------------

At March 31, 2007, the Companys consolidated balance sheet includes accruals totaling $2.3 million primarily related to employee termination
costs and vacated facilities. Lionbridge currently anticipates that $1.4 million of these will be fully utilized in twelve months. The remaining $852,000 relates to lease obligations on unused facilities expiring through 2011 and is included in
long-term liabilities.



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7. INCOME TAXES

On January 1, 2007, Lionbridge adopted Financial Accounting Standards Board Interpretation No. 48 (FIN 48). FIN 48 prescribes a recognition threshold that a tax position is required to meet
before being recognized in the financial statements and provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues.

At the adoption date the Company had gross unrecognized tax affected benefits of approximately $1.5 million, exclusive of certain pre-acquisition
indemnification items. As a result of adopting FIN 48, the Company recognized a charge of approximately $185,000 to the January 1, 2007 retained earnings balance for accrued taxes, interest and penalties related to the unrecognized tax
benefits, which if incurred, would be recognized as a component of income tax expense.

The Company conducts business globally and in the
normal course of business is subject to examination by local, state and federal jurisdictions in the United States as well as in multiple foreign jurisdictions. Currently, no Internal Revenue Service audits are underway and audits in foreign
jurisdictions are in varying stages of completion. Open audit years are dependent upon the tax jurisdiction and range from 1997 to 2006.

In connection with the acquisition of BGS, Bowne & Co. Inc. agreed to indemnify the Company for any tax liabilities accruing on or prior to the acquisition date of September 1, 2005. The Company determined that its gross
unrecognized tax affected benefits related to the acquisition of BGS and subject to indemnification were approximately $4.0 million. Accordingly, the Company adjusted its balance sheet by recording a long-term Indemnification Receivable and related
FIN 48 liability as of January 1, 2007 for this amount. The accounts were increased during the first quarter of 2007 to reflect additional interest of approximately $95,000.

The components of the provision for income taxes are as follows for the three-month periods ended March 31, 2007 and 2006:



|                                 |  |                              |           |      |   |          
|-------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                 |  | Three Months Ended March 31,
|                                 |  | 2007                         |           | 2006
|Current:                         |  |                              |           |      |   |          
|Federal                          |  | $                            |          |      | $ |         
|State                            |  |                              | 26,000    |      |   |         
|Foreign                          |  |                              | 1,339,000 |      |   | 1,231,000
|                                 |  |                              |           |      |   |          
|Total current provision          |  |                              | 1,365,000 |      |   | 1,231,000
|Deferred:                        |  |                              |           |      |   |          
|Federal                          |  | $                            | 116,000   |      | $ | 69,000   
|                                 |  |                              |           |      |   |          
|Total provision for income taxes |  | $                            | 1,481,000 |      | $ | 1,300,000
|                                 |  |                              |           |      |   |          

The tax provision for the three-month period ended March 31, 2007 consists primarily of taxes
on income in foreign jurisdictions, a deferred tax provision of $116,000 related to the tax-deductible goodwill from the BGS acquisition and a provision of $98,000 related to the Companys FIN 48 liability. The tax provision for the three-month
period ended March 31, 2006 consists primarily of taxes on income in foreign jurisdictions and the tax deductible goodwill from the BGS acquisition.

The tax provisions for both periods include non-cash tax expense that will be offset by pre-acquisition foreign net operating loss carryforwards. The tax benefits from utilization of pre-acquisition losses do not
reduce the foreign element of the tax provision, but instead reduce goodwill. The effective rate does not reflect a benefit of U.S. operating loss carryforward amounts due to a full valuation reserve against the U.S. deferred asset.

At March 31, 2007, no provision for U.S. income and foreign withholding taxes has been made for unrepatriated foreign earnings because it is
expected that such earnings will be reinvested indefinitely or the distribution of any remaining amount would be principally offset by foreign tax credits.



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Under the provisions of the Internal Revenue Code, certain substantial changes in Lionbridges
ownership may limit in the future the amount of net operating loss carryforwards that could be used annually to offset future taxable income and income tax liability.

8. SEGMENT INFORMATION

Lionbridge has determined that its operating segments are those that are
based on its method of internal reporting, which separately presents its business based on the service performed. The Company is reporting its results among the following three business segments:

Global Language and Content (GLC)this segment includes Lionbridges globalization, translation and localization services, as well
as content development and technical documentation. The GLC segment includes product and content globalization services. Globalization is the process of adapting content and products to meet the language and cultural requirements of users throughout
the world. Lionbridge GLC solutions enable the translation, adaptation and worldwide multilingual release of clients products, content and related technical support, training materials, and sales and marketing information. Lionbridge
GLC solutions also include the development of eLearning content and technical documentation.

Global Development and Testing
(GDT)this segment includes Lionbridges development, engineering and testing services for software, hardware, websites and content. Specifically, GDT includes the development and maintenance of applications as well as testing
to ensure the quality, interoperability, usability and performance of clients software, hardware, consumer technology products, web sites and content. Lionbridges testing services also include product certification and competitive
analysis. Lionbridge offers its testing services under the VeriTest brand.

Interpretationthis segment includes interpretation
services provided by Lionbridge to government organizations and businesses that require human interpreters.

The table below presents
information about the reported net income (loss) of the Company for the three-month periods ended March 31, 2007 and 2006. Asset information by reportable segment is not reported, since the Company does not produce such information internally.



|                                   |  |                              |             |   |      |   |             |  
|---------------------------------- |  | ---------------------------- | ----------- | - | ---- | - | ----------- | -
|                                   |  | Three Months Ended March 31, |            
|                                   |  | 2007                         |             |   | 2006 |  
|External revenue:                  |  |                              |             |   |      |   |             |  
|Global Language and Content        |  | $                            | 86,993,000  |   |      | $ | 79,112,000  |  
|Global Development and Testing     |  |                              | 15,923,000  |   |      |   | 14,279,000  |  
|Interpretation                     |  |                              | 5,700,000   |   |      |   | 5,732,000   |  
|                                   |  |                              |             |   |      |   |             |  
|                                   |  | $                            | 108,616,000 |   |      | $ | 99,123,000  |  
|                                   |  |                              |             |   |      |   |             |  
|Net income (loss):                 |  |                              |             |   |      |   |             |  
|Global Language and Content        |  | $                            | 9,987,000   |   |      | $ | 9,486,000   |  
|Global Development and Testing     |  |                              | 2,578,000   |   |      |   | 2,106,000   |  
|Interpretation                     |  |                              | 714,000     |   |      |   | 484,000     |  
|Less: corporate and other expenses |  |                              | (13,047,000 | ) |      |   | (13,083,000 | )
|                                   |  |                              |             |   |      |   |             |  
|                                   |  | $                            | 232,000     |   |      | $ | (1,007,000  | )
|                                   |  |                              |             |   |      |   |             |  

9. GOODWILL AND OTHER INTANGIBLE ASSETS

In connection with the September 1, 2005 acquisition of BGS, Lionbridge recorded $96.1 million of goodwill. Additionally, in connection with the
acquisition of BGS, Lionbridge recorded $48.3 million of amortizable intangible assets, including customer contracts, technology and customer relationships. The estimated useful life of acquired customer contracts ranges from 3.3 to 5.3 years and is
being amortized on a straight-line basis. The estimated useful life of acquired technology ranges from 1 to 4 years and is being amortized on a straight-line basis. The estimated useful life of acquired customer relationships is 12 years and is
being amortized using the economic consumption method to reflect diminishing cash flows from these relationships in the future. In determining the fair value of the acquired customer relationships, Lionbridge used a discounted cash flow model based
upon the estimated future income streams associated with the customer relationships considering their estimated remaining period of benefit. As part of this model, Lionbridge relied on historical attrition rates combined with a premium factor
related to the inherent risk of attrition in the newly acquired BGS customer base.



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The Company evaluates whether there has been an impairment in the carrying value of its long-lived
assets, including other intangibles assets and property and equipment, in accordance with SFAS No. 144, Accounting for Impairment of Long-Lived Assets, if circumstances indicate that a possible impairment may exist. An impairment in
the carrying value of an asset is assessed when the undiscounted expected future operating cash flows derived from the asset are less than its carrying value. If it is determined that the asset is impaired then it is written down to its estimated
fair value. Long-lived assets, other than goodwill and other intangible assets, which are held for disposal, are recorded at the lower of carrying value or fair market value less the estimated cost to sell. Factors that could lead to an impairment
of acquired customer relationships include a worsening in customer attrition rates compared to historical attrition rates, or lower than initially anticipated cash flows associated with customer relationships.

The following table summarizes other intangible assets at March 31, 2007 and December 31, 2006, respectively.



|                                    |  |                      |            |                          |   |            |  |                      |            |                          |   |            |  |   |            |  |   |           
|----------------------------------- |  | -------------------- | ---------- | ------------------------ | - | ---------- |  | -------------------- | ---------- | ------------------------ | - | ---------- |  | - | ---------- |  | - | ----------
|                                    |  | March 31, 2007       |            | December 31, 2006       
|                                    |  | Gross Carrying Value |            | Accumulated Amortization |   | Balance    |  | Gross Carrying Value |            | Accumulated Amortization |   | Balance   
|BGS acquired customer relationships |  | $                    | 32,000,000 |                          | $ | 7,459,000  |  | $                    | 24,541,000 |                          | $ | 32,000,000 |  | $ | 6,255,000  |  | $ | 25,745,000
|BGS acquired customer contracts     |  |                      | 14,000,000 |                          |   | 4,691,000  |  |                      | 9,309,000  |                          |   | 14,000,000 |  |   | 3,950,000  |  |   | 10,050,000
|BGS acquired technology             |  |                      | 2,317,000  |                          |   | 1,387,000  |  |                      | 930,000    |                          |   | 2,317,000  |  |   | 1,218,000  |  |   | 1,099,000 
|                                    |  |                      |            |                          |   |            |  |                      |            |                          |   |            |  |   |            |  |   |           
|                                    |  | $                    | 48,317,000 |                          | $ | 13,537,000 |  | $                    | 34,780,000 |                          | $ | 48,317,000 |  | $ | 11,423,000 |  | $ | 36,894,000
|                                    |  |                      |            |                          |   |            |  |                      |            |                          |   |            |  |   |            |  |   |           

Lionbridge currently expects to amortize the following remaining amounts of intangible assets held
at March 31, 2007 in the fiscal periods as follows:



|                         |  |   |           
|------------------------ |  | - | ----------
|Year ending December 31, |  |  
|2007                     |  | $ | 6,339,000 
|2008                     |  |   | 8,441,000 
|2009                     |  |   | 5,520,000 
|2010                     |  |   | 4,893,000 
|2011                     |  |   | 2,332,000 
|Thereafter               |  |   | 7,255,000 
|                         |  |   |           
|                         |  | $ | 34,780,000
|                         |  |   |           

10. CONTINGENCIES

On or about July 24, 2001, a purported securities class action lawsuit captioned Samet v. Lionbridge Technologies, Inc. et al. (01-CV-6770) was filed in the United States District Court for the
Southern District of New York (the Court) against the Company, certain of its officers and directors, and certain underwriters involved in the Companys initial public offering. The complaint in this action asserted, among other
things, that omissions regarding the underwriters alleged conduct in allocating shares in Lionbridges initial public offering to the underwriters customers. In March 2002, the United States District Court for the Southern District
of New York entered an order dismissing without prejudice the claims against Lionbridge and its officers and directors (the case remained pending against the underwriter defendants).

On April 19, 2002, the plaintiffs filed an amended complaint naming as defendants not only the underwriter defendants but also Lionbridge and
certain of its officers and directors. The amended complaint asserts claims under both the registration and antifraud provisions of the federal securities laws relating to, among other allegations, the underwriters alleged conduct in
allocating shares in the Companys initial public offering and the disclosures contained in the Companys registration statement. The Company understands that various plaintiffs have filed approximately 1,000 lawsuits making substantially
similar allegations against approximately 300 other publicly-traded companies in connection with the underwriting of their public offerings. On July 15, 2002, the Company, together with the other issuers named as defendants in these
coordinated proceedings, filed a collective motion to dismiss the complaint on various legal grounds common to all or most of the issuer defendants. In October 2002, the claims against officers and directors were dismissed without prejudice. In
February 2003, the Court issued its ruling on the motion to dismiss, ruling that the claims under the antifraud provisions of the securities laws could proceed against the Company and a majority of the other issuer defendants.

In June 2003, Lionbridge elected to participate in a proposed settlement agreement with the plaintiffs in this litigation. If ultimately approved by the
Court, this proposed settlement would result in the dismissal, with prejudice, of all claims in the



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litigation against Lionbridge and against any other of the issuer defendants who elect to participate in the proposed settlement, together with the current
or former officers and directors of participating issuers who were named as individual defendants. The proposed settlement does not provide for the resolution of any claims against underwriter defendants, and the litigation as against those
defendants is continuing. The proposed settlement provides that the class members in the class action cases brought against the participating issuer defendants will be guaranteed a recovery of $1 billion by insurers of the participating issuer
defendants. If recoveries totaling $1 billion or more are obtained by the class members from the underwriter defendants, however, the monetary obligations to the class members under the proposed settlement will be satisfied.

The proposed settlement contemplates that any amounts necessary to fund the settlement or settlement-related expenses would come from participating
issuers directors and officers liability insurance policy proceeds, as opposed to funds of the participating issuer defendants themselves. A participating issuer defendant could be required to contribute to the costs of the settlement if
that issuers insurance coverage were insufficient to pay that issuers allocable share of the settlement costs. Lionbridge expects that its insurance proceeds will be sufficient for these purposes and that it will not otherwise be
required to contribute to the proposed settlement.

Consummation of the proposed settlement is conditioned upon obtaining approval by the
Court. On September 1, 2005, the Court preliminarily approved the proposed settlement and directed that notice of the terms of the proposed settlement be provided to all class members. Thereafter, the Court held a fairness hearing on
April 24, 2006, at which objections to the proposed settlement were heard. After the fairness hearing, the Court took under advisement whether to grant final approval to the proposed settlement.

On December 5, 2006, the U.S. Court of Appeals for the Second Circuit issued a decision in In re Initial Public Offering Securities
Litigation that six purported class action lawsuits containing allegations substantially similar to those asserted against the Company may not be certified as class actions due, in part, to the Appeals Courts determination that individual
issues of reliance and knowledge would predominate over issues common to the proposed classes. On January 8, 2007, the plaintiffs filed a petition seeking rehearing en banc of the Second Circuit Court of Appeals decision. On
April 6, 2007 the Court of Appeals denied the plaintiffs petition for rehearing of the Courts December 5, 2006 ruling but noted that the plaintiffs remain free to ask the District Court to certify a different class which might
meet the standards for class certification that the Court of Appeals articulated in its December 5, 2006 decision. Because our proposed settlement with the plaintiffs involves the certification of the case against us as a class action for
settlement purposes, the impact of the Court of Appeals rulings on the possible settlement of the case cannot now be predicted.

If
the proposed settlement described above is not consummated, Lionbridge intends to continue to defend the litigation vigorously. Moreover, if the proposed settlement is not consummated, the Company believes that the underwriters may have an
obligation to indemnify Lionbridge for the legal fees and other costs of defending this suit. While Lionbridge cannot guarantee the outcome of these proceedings, the Company believes that the final result of this lawsuit will have no material effect
on its consolidated financial condition, results of operations, or cash flows.

11. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Accounting Standards (SFAS) No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities(SFAS No. 159) which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and
expands disclosures about fair value measurements. This statement does not require any new fair value measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of SFAS
No. 159 are effective for fiscal years beginning after November 15, 2007. The Company is currently assessing SFAS No. 159 and has not yet determined the impact, if any, that its adoption will have on its result of operations or
financial position.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The matters discussed in this Form 10-Q include forward-looking statements that involve risks or uncertainties. These statements are neither promises nor
guarantees, but are based on various assumptions by management regarding future circumstances many of which Lionbridge has little or no control over. A number of important risks and uncertainties, including those identified under the caption
Risk Factors in Lionbridges Annual Report on Form 10-K, filed March 16, 2007 (SEC File No. 000-26933) and subsequent filings as well as risks and uncertainties discussed elsewhere in this Form 10-Q could cause
Lionbridges actual results to differ materially from those in the forward-looking statements. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated or projected. The forward-looking statements in this Form 10-Q are made as of the date of this filing only, and Lionbridge does not undertake to update or supplement these statements due to changes in circumstances
or otherwise.



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Introduction

Lionbridge is a leading provider of globalization, development and testing services that enable clients to develop, release, manage and maintain their enterprise content and technology applications globally. The
Company reports financial performance in the following three segments: Global Language and Content (GLC), Global Development and Testing (GDT) and Interpretation.

Lionbridge Global Language and Content (GLC) solutions enable the globalization and worldwide multilingual release of clients
products, content and related technical support, training materials, and sales and marketing information. Globalization is the process of adapting content and products to meet the language and cultural requirements of users throughout the
world. Lionbridge GLC solutions are based on the Companys internet technology platform and global service delivery model which make the translation process more efficient for Lionbridge clients and translators. As part of its GLC solutions,
Lionbridge also develops eLearning content and technical documentation.

Lionbridges interpretation business
(Interpretation) pertains to the Companys interpretation services for government organizations and businesses that require human interpreters for non-English speaking individuals.

Through its Global Development and Testing (GDT) solutions, Lionbridge develops, re-engineers and optimizes IT applications and performs
testing to ensure the quality, interoperability, usability and performance of clients software, consumer technology products, web sites and content. Lionbridges testing services, which are offered under the VeriTest brand, also include
product certification and competitive analysis. Lionbridge has deep domain experience developing, testing and maintaining applications in a cost-efficient, blended on-site and offshore model.

Lionbridge provides a full suite of globalization, testing and development outsourcing services to businesses, particularly in the technology, consumer
products, life sciences, publishing, financial services, manufacturing, government automotive and retail industries. Lionbridges solutions include product and content globalization; content and eLearning courseware development; application
development and maintenance; software and hardware testing; product certification and competitive analysis. Lionbridges services enable global organizations to increase market penetration and speed adoption of global content and products,
enhance return on enterprise application investments, increase workforce productivity and reduce costs.

For the three-month period ended
March 31, 2007, Lionbridges income from operations was $3.5 million, with net income of $232,000. For the year ended December 31, 2006, the Companys income from operations was $15.0 million with a net loss of $4.9 million. As
of March 31, 2007, the Company had an accumulated deficit of $107.7 million.

Revenue Recognition

Lionbridge recognizes revenue as services are performed and amounts are earned in accordance with the Securities and Exchange Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue Recognition. Lionbridge considers amounts to be earned when (1) persuasive evidence of an arrangement
has been obtained; (2) services are delivered; (3) the fee is fixed or determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the
fixed nature of the fee charged for services rendered and products delivered and the collectibility of those fees.

Lionbridges
revenue is recorded from the provision of services to customers for GLC, GDT and Interpretation services which include content development, product and content globalization, interpretation, software and hardware testing, product certification and
application development and maintenance.

Content development, software and hardware testing, interpretations and application development
and maintenance projects are normally time and expense priced contracts, and revenue is recognized using a time and expense basis over the period of performance, primarily based on labor costs incurred to date.

Product and content globalization and product certification projects are fixed price contracts and revenue is recognized as services are delivered.
Depending on specific contractual provisions and nature of the deliverable, revenue is recognized on (1) a proportional performance model based on level of effort, (2) as milestones are achieved or (3) when final deliverables have
been met. Amounts billed in excess of revenue recognized are recorded as deferred revenue.

The delivery of Lionbridges GLC services
involve and are dependent on the translation of content by subcontractors and in-house employees. As the time and cost to translate each word of content within a project is relatively uniform, labor



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input is reflective of the delivery of the contracted service and an appropriate metric for the measurement of proportional performance in delivering such
services. The use of a proportional performance assessment of service delivery requires significant judgment relative to estimating total contract costs, including assumptions relative to the length of time to complete the project, the nature and
complexity of the work to be performed, anticipated increases in employee wages and prices for subcontractor services, and the availability of subcontractor services. When adjustments in estimated project costs are identified, anticipated losses, if
any, are recognized in the period in which they are determined.

Lionbridges GLC agreements with its customers may provide the
customer with a fixed and limited time period following delivery during which Lionbridge will attempt to address any non-conformity to previously agreed upon objective specifications relating to the work, either in the form of a limited acceptance
period or a post-delivery warranty period. Management believes recognition of revenue at the time the services are delivered is appropriate, because its obligations under such provisions are limited in time, limited in scope, and historically have
not involved significant costs. In the future, if the post delivery acceptance or warranty provisions become more complex or include subjective acceptance criteria, Lionbridge may have to revise its revenue recognition policy appropriately, which
could affect the timing of revenue recognition.

Lionbridge provides integrated full-service offerings throughout a clients product
and content lifecycle, including GLC and GDT services. Such multiple-element service offerings are governed by the Emerging Issues Task Force Issue 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. For these
arrangements where the GLC and GDT services have independent value to the customer, and there is evidence of fair value for each service, the combined service arrangement is bifurcated into separate units for accounting treatment. In instances where
it is not possible to bifurcate a project, direct and incremental costs attributable to each component are deferred and recognized together with the service revenue upon delivery. The determination of fair value requires the use of significant
judgment. Lionbridge determines the fair value of service revenues based upon its recent pricing for those services when sold separately and/or prevailing market rates for similar services.

Revenue includes reimbursement of travel and out-of-pocket expenses with equivalent amounts of expense recorded in cost of revenue.

Valuation of Goodwill and Long-Lived Assets

Lionbridge assesses the impairment of goodwill and other intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that Lionbridge considers important that could trigger
an impairment review include: significant underperformance relative to expected historical or projected future operating results; significant changes in the overall business strategy; and significant negative industry or economic trends. When
Lionbridge determines that the carrying value of intangibles and goodwill may not be recoverable based upon one or more of these indicators of impairment, the Company measures any impairment using fair value measurements based on projected
discounted cash flow valuation models. In addition in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill is reviewed for impairment on an annual basis. At December 31, 2006, the Company performed its
annual test of goodwill to determine if an impairment existed. This test determined that each reporting units fair value exceeded the carrying value of the net assets of each respective reporting unit, using projected discounted cash flow
modeling. As a result, no impairment was required to be recorded related to the Companys annual impairment testing for the year ended December 31, 2006. Estimating future cash flows requires management to make projections that can differ
materially from actual results.

The Company evaluates whether there has been an impairment in the carrying value of its long-lived assets,
including other intangibles assets and property and equipment, in accordance with SFAS No. 144, Accounting for Impairment of Long-Lived Assets, if circumstances indicate that a possible impairment may exist. An impairment in the
carrying value of an asset is assessed when the undiscounted expected future operating cash flows derived from the asset are less than its carrying value. If it is determined that the asset is impaired then it is written down to its estimated fair
value. Long-lived assets, other than goodwill and other intangible assets, which are held for disposal, are recorded at the lower of carrying value or fair market value less the estimated cost to sell. Factors that could lead to an impairment of
acquired customer relationships (recorded with the BGS acquisition) include a worsening in customer attrition rates compared to historical attrition rates, or lower than initially anticipated cash flows associated with customer relationships.

Merger, Restructuring and Other Charges

During the three-month period ended March 31, 2007 Lionbridge recorded $278,000 of restructuring and other charges. The $278,000 of restructuring and other charges recorded in the three-month period ended
March 31, 2007 included $167,000 for workforce reductions in Europe consisting of one technical and two administrative staff and $111,000 of additional costs recorded for a previously vacated facility as a result of a new sublease arrangement,
recorded pursuant to the



14



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##### Table of Contents

guidance in SFAS No. 146.The $278,000 of restructuring and other charges recorded during the three-month period ended March 31, 2007
related to the Companys GLC segment. The Company made $383,000 of cash payments in the three-month period ended March 31, 2007, $303,000 and $80,000 related to the GLC and GDT segments, respectively.

During the three-month period ended March 31, 2006 Lionbridge recorded $767,000 of restructuring and other charges. The $767,000 of restructuring
and other charges recorded in the three-month period ended March 31, 2006 included $280,000 for workforce reductions in Europe, consisting of five technical and one administrative staff, a $68,000 reduction of anticipated costs recorded in a
prior period on a vacated facility in order to factor in a sublease arrangement, recorded pursuant to the guidance in SFAS No. 146 and $555,000 of other charges, principally professional services fees, related to the integration of BGS recorded
pursuant to the guidance in EITF 95-3 and related literature. Of these charges, $338,000 related to the Companys GLC segment, $29,000 to the GDT segment and $400,000 related to Corporate and Other. The Company made $1.7 million of cash
payments in the three-month period ended March 31, 2006, $1.6 million and $53,000 related to the GLC and GDT segments, respectively, and $12,000 related to Corporate and Other.

Stock-based Compensation

Stock Option Plans

The Company has stock-based compensation plans for salaried employees and non-employee members of the Board of Directors. The plans provide for
discretionary grants of stock options, restricted stock and stock units, and other stock-based awards. The plans are administered by the Nominating and Compensation Committee of the Board of Directors, which consists of non-employee directors.

In November 2005, the stockholders of Lionbridge Technologies, Inc. approved the Lionbridge 2005 Incentive Plan (the 2005
Plan), which had been previously adopted by the Lionbridge Board of Directors on October 7, 2005, for officers, employees, non-employee directors and other key persons of Lionbridge and its subsidiaries. The maximum number of shares of
common stock available for issuance under the 2005 Plan is 4,000,000 shares. At March 31, 2007, there were 1,216,402 options available for future grant under the 2005 Plan. Options to purchase common stock are granted at the discretion of the
Board of Directors and the Nominating and Compensation Committee. Generally, stock options vest over a four-year period: 25% of the option shares vest one year from the date of grant and the remaining option shares vest at the rate of 12.5% each six
month period thereafter. Stock options generally expire five years from the date of grant under the 2005 Plan. Under the terms of the 2005 Plan, the exercise price of incentive and non-qualified stock option grants must not be less than 100% of the
fair market value of the common stock on the date of grant. Options are amortized using a straight line basis over the option vesting period.

Lionbridges 1998 Stock Option Plan (the Plan) provides for the issuance of incentive and nonqualified stock options. The maximum number of shares of common stock available for issuance under the Plan is 11,722,032 shares.
At March 31, 2007 there were 1,251,324 options available for future grant under the Plan. Options to purchase common stock are granted at the discretion of the Board of Directors and the Nominating and Compensation Committee. Generally,
stock options vest over a four-year period: 25% of the option shares vest one year from the date of grant and the remaining option shares vest at the rate of 12.5% each six month period thereafter. Stock options generally expire ten years (five
years in certain cases) from the date of grant under the Plan. Under the terms of the Plan, the exercise price of incentive stock options granted must not be less than 100% (110% in certain cases) of the fair market value of the common stock on the
date of grant, as determined by the Board of Directors. The exercise price of nonqualified stock options may be less than the fair market value of the common stock on the date of grant, as determined by the Board of Directors, but in no case may the
exercise price be less than the statutory minimum, the par value per share of Lionbridges common stock.

Restricted Stock Awards

On February 15, 2007, Lionbridge issued 231,500 shares of restricted common stock with a fair market value of $1.3 million for
which restrictions on disposition lapse over four years from the date of grant on each anniversary date. Also on February 15, 2007, Lionbridge issued 84,475 shares of restricted common stock with a fair market value of $485,000 for which
restrictions on disposition lapse over two years from the date of grant on each anniversary date.

The Company recognizes expense for stock
options, market-based restricted stock awards and time-based restricted stock awards pursuant to the guidance of SFAS No. 123, Share-Based Payment (SFAS No. 123R). In the three months ended March 31, 2007 and
2006, the Company expensed $1.7 million and $1.3 million, respectively, for stock options, market-based restricted stock awards and time-based restricted stock awards, classified in the statement of operations line items as follows:



|                                       |  |                              |           |      |   |          
|-------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                       |  | Three Months Ended March 31,
|                                       |  | 2007                         |           | 2006
|Cost of revenue                        |  | $                            | 25,000    |      | $ | 41,000   
|Sales and marketing                    |  |                              | 267,000   |      |   | 261,000  
|General and administrative             |  |                              | 1,414,000 |      |   | 980,000  
|Research and development               |  |                              | 31,000    |      |   | 18,000   
|                                       |  |                              |           |      |   |          
|Total stock-based compensation expense |  | $                            | 1,737,000 |      | $ | 1,300,000
|                                       |  |                              |           |      |   |          



15



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##### Table of Contents

Results of Operations

The following table sets forth for the periods indicated certain unaudited consolidated financial data as a percentage of total revenue.



|                                                                            |  |                              |   |  |       |   
|--------------------------------------------------------------------------- |  | ---------------------------- | - |  | ----- | --
|                                                                            |  | Three Months Ended March 31, |  
|                                                                            |  | 2007                         |   |  | 2006  |   
|Revenue                                                                     |  | 100.0                        | % |  | 100.0 | % 
|Operating expenses:                                                         |  |                              |   |  |       |   
|Cost of revenue (exclusive of depreciation and amortization included below) |  | 66.5                         |   |  | 65.5  |   
|Sales and marketing                                                         |  | 7.3                          |   |  | 8.1   |   
|General and administrative                                                  |  | 18.9                         |   |  | 18.6  |   
|Research and development                                                    |  | 0.7                          |   |  | 0.7   |   
|Depreciation and amortization                                               |  | 1.2                          |   |  | 1.5   |   
|Amortization of acquisition-related intangible assets                       |  | 1.9                          |   |  | 2.2   |   
|Merger, restructuring and other charges                                     |  | 0.3                          |   |  | 0.8   |   
|                                                                            |  |                              |   |  |       |   
|Total operating expenses                                                    |  | 96.8                         |   |  | 97.4  |   
|                                                                            |  |                              |   |  |       |   
|Income from operations                                                      |  | 3.2                          |   |  | 2.6   |   
|Interest expense:                                                           |  |                              |   |  |       |   
|Interest in outstanding debt                                                |  | 1.3                          |   |  | 1.9   |   
|Amortization of deferred financing costs                                    |  | 0.0                          |   |  | 0.2   |   
|Interest income                                                             |  | 0.2                          |   |  | 0.1   |   
|Other expense, net                                                          |  | 0.5                          |   |  | 0.4   |   
|                                                                            |  |                              |   |  |       |   
|Income before income taxes                                                  |  | 1.6                          |   |  | 0.3   |   
|Provision for income taxes                                                  |  | 1.4                          |   |  | 1.3   |   
|                                                                            |  |                              |   |  |       |   
|Net income (loss)                                                           |  | 0.2                          | % |  | (1.0  | )%
|                                                                            |  |                              |   |  |       |   

Revenue. The following table shows Global Language and Content (GLC), Global
Development and Testing (GDT), and Interpretation revenues in dollars and as a percentage of total revenue for the three months ended March 31, 2007 and 2006, respectively:



|               |  |                              |             |  |      |   |  |   |            |  |     |  
|-------------- |  | ---------------------------- | ----------- |  | ---- | - |  | - | ---------- |  | --- | -
|               |  | Three Months Ended March 31, |            
|               |  | 2007                         |             |  | 2006 |  
|GLC            |  | $                            | 86,993,000  |  | 80   | % |  | $ | 79,112,000 |  | 80  | %
|GDT            |  |                              | 15,923,000  |  | 15   | % |  |   | 14,279,000 |  | 14  | %
|Interpretation |  |                              | 5,700,000   |  | 5    | % |  |   | 5,732,000  |  | 6   | %
|               |  |                              |             |  |      |   |  |   |            |  |     |  
|Total revenue  |  | $                            | 108,616,000 |  | 100  | % |  | $ | 99,123,000 |  | 100 | %
|               |  |                              |             |  |      |   |  |   |            |  |     |  

Revenue for the quarter ended March 31, 2007 was $108.6 million, an increase of $9.5 million,
or 9.6%, from $99.1 million for the quarter ended March 31, 2006. Approximately $5.5 million of this increase is primarily the result of organic growth, and approximately $4.0 million is attributable to the impact of foreign exchange, primarily
affecting the GLC business, as the U.S. dollar declined against certain foreign currencies, in particular the Euro, during the quarter ended March 31, 2007. The increase consists of $7.9 million and $1.6 million of revenue growth in GLC and
GDT, respectively. Interpretation revenue for the quarter ended March 31, 2007 remained consistent with the comparable quarter of 2006.



16



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##### Table of Contents

Revenue from the Companys GLC business for the quarter ended March 31, 2007 increased $7.9
million, or 10.0%, to $87.0 million from $79.1 million for the quarter ended March 31, 2006. Approximately half of this increase is attributable to organic growth and the balance is the result of the impact of foreign exchange, as noted above.
Organic growth consisted of increased revenue from new and existing customers and in part reflects a growing demand for localized web services.

Revenue from the Companys GDT business was $15.9 million for the quarter ended March 31, 2007, an increase of $1.6 million, or 11.5%, from $14.3 million for the quarter ended March 31, 2006. The year-on-year increase in GDT
revenue was due to increased revenue from a large customer under a long-term engagement. This increase was partially offset by a reduction in testing revenues as compared to the quarter ended March 31, 2006.

Revenue from the Companys Interpretation business for the quarter ended March 31, 2007 remained consistent at $5.7 million as compared to the
quarter ended March 31, 2006.

Cost of Revenue. Cost of revenue, excluding depreciation and amortization, consists primarily of
expenses incurred for translation services provided by third parties as well as salaries and associated employee benefits for personnel related to client projects. The following table shows GLC, GDT and Interpretation cost of revenues, the
percentage change from the three-month period of the prior year and as a percentage of revenue for the three months ended March 31, 2007 and 2006, respectively:



|                      |  |                                   |            |   |                         |      |    |                                   |   |            |  
|--------------------- |  | --------------------------------- | ---------- | - | ----------------------- | ---- | -- | --------------------------------- | - | ---------- | -
|                      |  | Three Months Ended March 31,
2007 |            |   | % Change Q1 06 to Q1 07 |      |    | Three Months Ended March 31,
2006 |  
|GLC:                  |  |                                   |            |   |                         |      |    |                                   |   |            |  
|Cost of revenue       |  | $                                 | 57,786,000 |   |                         | 13.1 | %  |                                   | $ | 51,099,000 |  
|Percentage of revenue |  |                                   | 66.4       | % |                         |      |    |                                   |   | 64.6       | %
|GDT:                  |  |                                   |            |   |                         |      |    |                                   |   |            |  
|Cost of revenue       |  |                                   | 10,078,000 |   |                         | 11.3 | %  |                                   |   | 9,058,000  |  
|Percentage of revenue |  |                                   | 63.3       | % |                         |      |    |                                   |   | 63.4       | %
|Interpretation:       |  |                                   |            |   |                         |      |    |                                   |   |            |  
|Cost of revenue       |  |                                   | 4,354,000  |   |                         | (6.8 | )% |                                   |   | 4,671,000  |  
|Percentage of revenue |  |                                   | 76.4       | % |                         |      |    |                                   |   | 81.5       | %
|                      |  |                                   |            |   |                         |      |    |                                   |   |            |  
|Total cost of revenue |  | $                                 | 72,218,000 |   |                         |      |    |                                   | $ | 64,828,000 |  
|                      |  |                                   |            |   |                         |      |    |                                   |   |            |  
|Percentage of revenue |  |                                   | 66.5       | % |                         |      |    |                                   |   | 65.5       | %

For the quarter ended March 31, 2007, as a percentage of revenue, cost of revenue increased
to 66.5% as compared to 65.5% for the same quarter of 2006. The increase was primarily due to the changes in the revenue and service mix and the impact of foreign exchange, primarily in the GLC business. The U.S. dollar declined against certain
foreign currencies, in particular the Euro, in the quarter ended March 31, 2007 as compared to the quarter ended March 31, 2006.

For the quarter ended March 31, 2007, cost of revenue increased $7.4 million, or 11.4%, to $72.2 million compared to $64.8 million for the same quarter of the prior year. This increase was primarily in support of $9.5 million
incremental revenue as compared to the quarter ended March 31, 2006. Approximately $3.7 million of the increase is attributable to depreciation of the dollar against certain currencies as noted above.

Cost of revenue as a percentage of revenue in the Companys GLC business increased to 66.4% for the quarter ended March 31, 2007, as compared
to 64.6% for the same period of the prior year. This increase reflects higher costs for translation services, mainly due to variation in work mix and the impact of foreign exchange. These increases were partially offset by benefits realized from the
deployment and use of Logoport, Lionbridges language management technology platform, and lower internal operating costs resulting from the benefit of certain restructuring and cost reduction actions initiated in the prior year. For the
quarter ended March 31, 2007, GLC cost of revenue increased $6.7 million, or 13.1%, to $57.8 million as compared to $51.1 million for the corresponding quarter of the prior year. This increase includes approximately $3.7 million due to the
impact of foreign exchange, as compared to the quarter ended March 31, 2006. This increase was primarily associated with the $7.9 million revenue increase year over year.

Cost of revenue as a percentage of revenue in the Companys GDT business decreased slightly to 63.3% for the quarter ended March 31, 2007, as
compared 63.4% during the corresponding quarter of the prior year. This decrease reflects the impact of the ongoing GDT initiatives to offset increased compensation costs with productivity improvement. For the quarter ended March 31, 2007, GDT
cost of revenue increased $1.0 million or 11.3%, to $10.1 million as compared to $9.1 million for the corresponding quarter of the prior year. This increase was primarily associated with the $1.6 million increase in revenue year-over-year, and to a
lesser degree work mix variations in services as compared to the prior year.



17



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##### Table of Contents

Cost of revenue as a percentage of revenue in the Companys Interpretation business decreased to
76.4% for the quarter ended March 31, 2007, as compared to 81.5% for the corresponding quarter of the prior year. This decrease reflects the favorable impact of pricing and work mix variations in services as compared to the prior year.

Sales and Marketing.Sales and marketing expenses consist primarily of salaries, commissions and associated employee benefits,
travel expenses of sales and marketing personnel, promotional expenses, sales force automation/CRM system expense, training, and the costs of programs aimed at increasing revenue, such as advertising, trade shows, public relations and other market
development programs. The following table shows sales and marketing expenses in dollars, the dollar change from the three-month period of the prior year and as a percentage of revenue for the three months ended March 31, 2007 and 2006,
respectively:



|                                   |  |                              |           |   |      |   |           |  
|---------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                   |  | Three Months Ended March 31, |          
|                                   |  | 2007                         |           |   | 2006 |  
|Total sales and marketing expenses |  | $                            | 7,951,000 |   |      | $ | 8,026,000 |  
|Decrease from prior year           |  |                              | 75,000    |   |      |   |           |  
|Percentage of revenue              |  |                              | 7.3       | % |      |   | 8.1       | %

For the quarter ended March 31, 2007, sales and marketing expenses were essentially flat at
$8.0 million as compared with the corresponding quarter of 2006, primarily due to the benefit of the integration and restructuring of the sales and marketing organization. As part of the integration and merger of BGS into Lionbridge, sales and
marketing departments were combined and restructured. Additionally, new employees have been added and revised compensation plans have been implemented.

As a percentage of revenue, sales and marketing expenses decreased to 7.3% in the quarter ended March 31, 2007 from 8.1% in the corresponding period in 2006, reflecting the benefit of the integration and
restructuring of the sales and marketing organization, and the increased revenue levels from period to period.

General and
Administrative. General and administrative expenses consist of salaries of the management, purchasing, process and technology, finance and administrative groups, and associated employee benefits and travel; facilities costs; information systems
costs; professional fees; business reconfiguration costs and all other site and corporate costs. The following table shows general and administrative expenses in dollars, the dollar change from the three-month period of the prior year and as a
percentage of revenue for the three months ended March 31, 2007 and 2006, respectively:



|                                          |  |                              |            |   |      |   |            |  
|----------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                          |  | Three Months Ended March 31, |           
|                                          |  | 2007                         |            |   | 2006 |  
|Total general and administrative expenses |  | $                            | 20,582,000 |   |      | $ | 18,486,000 |  
|Increase from prior year                  |  |                              | 2,096,000  |   |      |   |            |  
|Percentage of revenue                     |  |                              | 18.9       | % |      |   | 18.6       | %

General and administrative expenses increased $2.1 million, or 11.3%, to $20.6 million for the
quarter ended March 31, 2007 as compared to $18.5 million for the quarter ended March 31, 2006.

Approximately $1.0 million of
the increase is attributable to the impact of foreign exchange, as the U.S. dollar declined against certain foreign currencies, in particular the Euro. The remainder is primarily due to $434,000 increased stock-based compensation and certain other
legal, audit, compensation and business tax expenses in the quarter ended March 31, 2007 as compared to the quarter ended March 31, 2006. As a percentage of revenue, general and administrative expenses increased to 18.9% for the quarter
ended March 31, 2007, as compared to 18.6%, for the same period of the prior year, due primarily to the items noted above, as well as the impact of supporting the increase in revenue from period to period.

Research and Development. Research and development expenses relate primarily to the Companys web-based hosted language management
technology platform used in the globalization process and the research and development of a globalization management system. The cost consists primarily of salaries and associated employee benefits and third-party contractor expenses. The following
table shows research and development expense in dollars, the dollar change from the three-month period of the prior year and as a percentage of revenue for the three months ended March 31, 2007 and 2006, respectively:



|                                       |  |                              |         |   |      |   |         |  
|-------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                       |  | Three Months Ended March 31, |        
|                                       |  | 2007                         |         |   | 2006 |  
|Total research and development expense |  | $                            | 717,000 |   |      | $ | 743,000 |  
|Decrease from prior year               |  |                              | 26,000  |   |      |   |         |  
|Percentage of revenue                  |  |                              | 0.7     | % |      |   | 0.7     | %



18



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##### Table of Contents

Research and development expense decreased 3.5% to $717,000 for the quarter ended March 31, 2007 as
compared to $743,000 for the quarter ended March 31, 2006. Research and development costs incurred for the three month periods ended March 31, 2007 and 2006 were each primarily attributable to costs incurred in development of a web-based
hosted language management technology platform.

Depreciation and Amortization.Depreciation and amortization consist of the expense
related to property and equipment that is being depreciated over the estimated useful lives of the assets using the straight-line method. The following table shows depreciation and amortization expense in dollars, the dollar change from the
three-month period of the prior year and as a percentage of revenue for the three months ended March 31, 2007 and 2006, respectively:



|                                            |  |                              |           |   |      |   |           |  
|------------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                            |  | Three Months Ended March 31, |          
|                                            |  | 2007                         |           |   | 2006 |  
|Total depreciation and amortization expense |  | $                            | 1,294,000 |   |      | $ | 1,492,000 |  
|Decrease from prior year                    |  |                              | 198,000   |   |      |   |           |  
|Percentage of revenue                       |  |                              | 1.2       | % |      |   | 1.5       | %

Depreciation and amortization expense decreased 13.3% to $1.3 million for the quarter ended
March 31, 2007 as compared to $1.5 million for the quarter ended March 31, 2006. The decrease for the three month period ended March 31, 2007 as compared to the corresponding quarter of the prior year is primarily due to the
culmination of depreciable lives of certain assets acquired in prior years.

Amortization of Acquisition-related Intangible Assets.Amortization of acquisition-related intangible assets consists of the amortization of identifiable intangible assets resulting from acquired businesses. Amortization expense for the three months ended March 31, 2007 and 2006 of $2.1 million
and $2.2 million, respectively, relates solely to the amortization of identifiable intangible assets.

Interest Expense.Interest
expense represents interest paid or payable on debt and the amortization of deferred financing costs. Interest expense for the three months ended March 31, 2007 of $1.5 million decreased $623,000 from $2.1 million for the three months ended
March 31, 2006, and primarily represents interest paid or payable on debt and for the three-month periods ended March 31, 2007 and 2006, respectively. The decrease reflects the impact of $16.6 million of principal debt reduction year over
year coupled with lower interest rates resulting from the Companys new financing arrangement.

Other Expense, Net.Other
expense, net primarily reflects the foreign currency transaction gains or losses arising from exchange rate fluctuations on transactions denominated in currencies other than the functional currencies of the countries in which the transactions are
recorded. The Company recognized $491,000 in other expense, net, in the quarter ended March 31, 2007, as compared to $360,000 in other expense, net, in the corresponding quarter of the prior year. This increase was primarily attributable to the
variances among the Euro and other currencies against the U.S. dollar in the quarter ended March 31, 2007, as compared to the net position and variance during the corresponding quarter of prior year and, to a lesser extent, by net realized and
unrealized foreign currency losses of $76,000 recorded in the quarter ended March 31, 2007 on forward contracts.

Provision for
Income Taxes. The following table shows the provision for income taxes expense in dollars, the dollar change from the three-month period of the prior year and as a percentage of revenue for the three months ended March 31, 2007 and
2006, respectively:



|                           |  |                              |           |   |      |   |           |  
|-------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                           |  | Three Months Ended March 31, |          
|                           |  | 2007                         |           |   | 2006 |  
|Provision for income taxes |  | $                            | 1,481,000 |   |      | $ | 1,300,000 |  
|Increase from prior year   |  |                              | 181,000   |   |      |   |           |  
|Percentage of revenue      |  |                              | 1.4       | % |      |   | 1.3       | %

The provision for income taxes consists primarily of taxes resulting from profits in foreign
jurisdictions and the increase in deferred tax liabilities related to the tax deductible goodwill from the BGS acquisition. The tax provision increased $181,000 to $1.5 million for the quarter ended March 31, 2007 from $1.3 million in the
corresponding quarter of the prior year due to the shift in the specific location of profits throughout the foreign jurisdictions.



19



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##### Table of Contents

Liquidity and Capital Resources

On December 21, 2006, the Company entered into a Credit Agreement (the Credit Agreement), replacing the Companys Term Loan B and Revolving Credit Facility that had been in place since
September 1, 2005. The Credit Agreement provides for a five-year $100.0 million revolving credit facility. At March 31, 2007, $75.7 million was outstanding with an interest rate of 6.8%.

The following table shows cash and cash equivalents and working capital at March 31, 2007 and at December 31, 2006:



|                          |  |                |            |                   |   |           
|------------------------- |  | -------------- | ---------- | ----------------- | - | ----------
|                          |  | March 31, 2007 |            | December 31, 2006
|Cash and cash equivalents |  | $              | 16,925,000 |                   | $ | 27,354,000
|Working capital           |  |                | 64,894,000 |                   |   | 60,893,000

Lionbridges working capital increased $4.0 million to $64.9 million at March 31, 2007
as compared to $60.9 million at December 31, 2006. The increase was driven by the growth of the business during the three months ended March 31, 2007. As of March 31, 2007, cash and cash equivalents totaled $16.9 million, a decrease
of $10.4 million from $27.4 million at December 31, 2006, primarily due to $7.5 million net cash used in operating activities of the business, $2.0 million in payments of long-term debt and $1.4 million for purchases of property and equipment.
Accounts receivable and work in process totaled $114.4 million, an increase of $12.2 million as compared to $102.3 million at December 31, 2006. Other current assets increased $3.9 million to $11.0 million as compared to $7.2 million at
December 31, 2006. Current liabilities totaled $77.5 million at March 31, 2007, an increase of $1.6 million as compared to $75.9 million at December 31, 2006.

The following table shows the net cash used in operating activities, net cash used in investing activities, and net cash provided by (used in) financing
activities for the three months ended March 31, 2007 and 2006, respectively:



|                                                    |  |                              |            |   |      |   |            |  
|--------------------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                    |  | Three Months Ended March 31, |           
|                                                    |  | 2007                         |            |   | 2006 |  
|Net cash used in operating activities               |  | $                            | (7,502,000 | ) |      | $ | (1,079,000 | )
|Net cash used in investing activities               |  |                              | (1,379,000 | ) |      |   | (835,000   | )
|Net cash provided by (used in) financing activities |  |                              | (1,656,000 | ) |      |   | 355,000    |  

Net cash used in operating activities was $7.5 million for the three months ended March 31,
2007, as compared to $1.1 million for the corresponding period of the prior year. The $7.5 million cash used in operating activities was due to net income of $232,000 (inclusive of $5.3 million in depreciation, amortization, stock based compensation
and other non-cash expenses), a $2.4 million increase in accounts receivable, a $8.8 million increase in work in process, a $8.0 million increase in other operating assets, a $5.8 million increase in accounts payable, accrued expenses and other
operating liabilities, and a $427,000 increase in deferred revenue.

In the three months ended March 31, 2006, net cash used in
operating activities was $1.1 million. The primary use of cash was due to the net loss of $1.0 million (inclusive of $5.3 million in depreciation, amortization, stock based compensation and other non-cash expenses), a $4.9 million increase in
work-in-process and other operating assets, a $5.8 million reduction in accrued expenses, a $1.6 million decrease in deferred revenue, partially offset by a $2.8 million increase in accounts receivable, and a $3.9 million increase in accounts
payable.

Lionbridge has not experienced any significant trends in accounts receivable and work in process other than changes relative to
the change in revenue, as previously noted. Fluctuations in accounts receivable from period to period relative to changes in revenue are a result of timing of customer invoicing and receipt of payments from customers.

Net cash used in investing activities decreased $544,000 to $1.4 million for the three months ended March 31, 2007, from $835,000 for the
corresponding period of the prior year. The primary investing activity in the three month periods ended March 31, 2007 and 2006 was $1.4 million and $847,000, respectively, for the purchase of property and equipment.

Net cash used in financing activities for the three months ended March 31, 2007 was $1.7 million, a decrease of $2.0 million as compared to $355,000
net cash provided by financing activities for the corresponding period of 2006. Cash used in financing activities consisted of $2.0 million of payments of long-term debt, $249,000 of proceeds from the issuance of common stock under option plans,
$255,000 in proceeds from the issuance of capital leases and $134,000 for payments of capital lease obligations.



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In the three months ended March 31, 2006, net cash provided by financing activities was $355,000.
Net cash provided by financing activities consisted of $632,000 in net proceeds from the issuance of common stock under option and employee stock purchase plans, partially offset by $255,000 of payments of short-term debt and $22,000 in payments of
capital lease obligations.

On February 10, 2005, Lionbridge filed with the Securities and Exchange Commission a shelf registration
statement on Form S-3 under the Securities Act of 1933, as amended (SEC File No. 333-122698), covering the registration of common stock (the Securities), in an aggregate amount of $130.0 million, which was declared effective by the
Commission on February 23, 2005. These Securities may be offered from time to time in amounts, at prices and on terms to be determined at the time of sale. The Company believes the shelf registration provides additional financing flexibility to
meet potential future funding requirements and the ability to take advantage of potentially attractive capital market conditions. Lionbridge anticipates that its present cash and short-term investments position, available financing and access to
capital markets should provide adequate cash to fund its currently anticipated cash needs for the next twelve months and foreseeable future.

Contractual Obligations

As of March 31, 2007, there are no material changes in Lionbridges contractual
obligations as disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2006 other than impact of the adoption of FIN No. 48 which resulted in an increase to income tax liabilities of approximately
$283,000 from the amount recorded at December 31, 2006. In addition, in connection with the acquisition of BGS, the Company has recorded a tax liability of approximately $4.1 million related to tax liabilities accruing on or prior to the
acquisition date of September 1, 2005 that Bowne & Co., Inc. agreed to indemnify. Accordingly, the Company adjusted its balance sheet by recording a long-term Indemnification Receivable and related FIN 48 liability for this amount. The
timing of settlement of these tax liabilities is uncertain at this time.

Off-Balance Sheet Arrangements

The Company does not have any special purpose entities or off-balance sheet financing arrangements.

Recent Accounting Pronouncements

In February 2007,
the Financial Accounting Standards Board (FASB) issued Statement of Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities(SFAS
No. 159) which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This statement does not require any new fair value
measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of SFAS No. 159 are effective for fiscal years beginning after November 15, 2007. The Company is
currently assessing SFAS No. 159 and has not yet determined the impact, if any, that its adoption will have on its result of operations or financial position.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

Lionbridge conducts its business globally and its earnings and cash flows are exposed to market risk from changes in interest rates and currency exchange rates. Lionbridge does not currently manage its risk to changes
in interest rates. The Company does address its risk to foreign currency exchange fluctuation through a risk management program that includes the use of derivative financial instruments. Lionbridge operates that program pursuant to documented
corporate risk management policies. Lionbridge does not enter into any derivative transactions for speculative purposes. Gains and losses on derivative financial instruments substantially offset gains and losses on underlying hedged exposures and
were immaterial for all periods presented.

Interest Rate Risk. Lionbridge is exposed to market risk from changes in interest
rates with respect to its revolving loan facility which bear interest at Prime or LIBOR (at the Companys discretion) plus an applicable margin based on certain financial covenants. As of March 31, 2007, $75.7 million was outstanding. A
hypothetical 10% increase or decrease in interest rates would have a $516,000 impact on the Companys interest expense based on the $75.7 million outstanding at March 31, 2007 with an interest rate of 6.8%. Additionally, Lionbridge is
exposed to market risk through its investing activities. The Companys portfolio consists primarily of investments in high quality commercial bank time deposits. A hypothetical 10% increase or decrease in interest rates would not have a
material impact on the carrying value of Lionbridges investments due to their immediately available liquidity.



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Foreign Currency Exchange Rate Risk. Lionbridge conducts a large portion of its business in
international markets. Although a majority of Lionbridges contracts with clients are denominated in U.S. dollars, 65% and 59% of its costs and expenses for the three-month periods ended March 31, 2007 and 2006, respectively, were
denominated in foreign currencies. In addition, 24% and 23% of the Companys assets were subject to foreign currency exchange fluctuations as of March 31, 2007 and December 31, 2006, respectively, while 7% and 6% of its liabilities
were subject to foreign currency exchange fluctuations as of March 31, 2007 and December 31, 2006, respectively. The principal foreign currency applicable to our business is the Euro. In addition, Lionbridge has assets and liabilities
denominated in currencies other than the functional currency of the relative entity. As a result, Lionbridge is exposed to foreign currency exchange fluctuations. The Company manages its risk to changes in foreign currency exchange rates through a
risk management program that partially mitigates its exposure to foreign currency assets or liabilities, primarily with respect to the Euro, and that includes the use of derivative financial instruments not designated as hedges in accordance with
FASB SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company had forward contracts outstanding in the notional amount of $42.0 million at March 31, 2007 and recorded $13,000 in other assets to
recognize the fair value of these forward contracts. A 10% appreciation or depreciation in the U.S. dollars value relative to the hedge currencies would increase or decrease the forward contracts fair value by $1.3 million at
March 31, 2007. Any increase or decrease in the fair value of the Companys currency exchange rate sensitive forward contracts would be substantially offset by a corresponding decrease or increase in the fair value of the hedged underlying
asset or liability.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation of Disclosure Controls and Procedures. Lionbridge maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the Companys filings under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported accurately within the time periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to management as
appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (pursuant to Exchange Act Rule 13a-15). Based upon this evaluation, the CEO and CFO concluded that the
Companys disclosure controls and procedures were effective as of March 31, 2007.

Changes in internal control over financial
reporting. There were no changes in the Companys internal control over financial reporting that occurred during the quarter ended March 31, 2007 that materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.



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LIONBRIDGE TECHNOLOGIES, INC.

PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

On or about
July 24, 2001, a purported securities class action lawsuit captioned Samet v. Lionbridge Technologies, Inc. et al. (01-CV-6770) was filed in the United States District Court for the Southern District of New York (the
Court) against the Company, certain of its officers and directors, and certain underwriters involved in the Companys initial public offering. The complaint in this action asserted, among other things, that omissions regarding the
underwriters alleged conduct in allocating shares in Lionbridges initial public offering to the underwriters customers. In March 2002, the United States District Court for the Southern District of New York entered an order
dismissing without prejudice the claims against Lionbridge and its officers and directors (the case remained pending against the underwriter defendants).

On April 19, 2002, the plaintiffs filed an amended complaint naming as defendants not only the underwriter defendants but also Lionbridge and certain of its officers and directors. The amended complaint asserts
claims under both the registration and antifraud provisions of the federal securities laws relating to, among other allegations, the underwriters alleged conduct in allocating shares in the Companys initial public offering and the
disclosures contained in the Companys registration statement. The Company understands that various plaintiffs have filed approximately 1,000 lawsuits making substantially similar allegations against approximately 300 other publicly-traded
companies in connection with the underwriting of their public offerings. On July 15, 2002, the Company, together with the other issuers named as defendants in these coordinated proceedings, filed a collective motion to dismiss the
complaint on various legal grounds common to all or most of the issuer defendants. In October 2002, the claims against officers and directors were dismissed without prejudice. In February 2003, the Court issued its ruling on the motion to dismiss,
ruling that the claims under the antifraud provisions of the securities laws could proceed against the Company and a majority of the other issuer defendants.

In June 2003, Lionbridge elected to participate in a proposed settlement agreement with the plaintiffs in this litigation. If ultimately approved by the Court, this proposed settlement would result in the dismissal,
with prejudice, of all claims in the litigation against Lionbridge and against any other of the issuer defendants who elect to participate in the proposed settlement, together with the current or former officers and directors of participating
issuers who were named as individual defendants. The proposed settlement does not provide for the resolution of any claims against underwriter defendants, and the litigation as against those defendants is continuing. The proposed settlement provides
that the class members in the class action cases brought against the participating issuer defendants will be guaranteed a recovery of $1 billion by insurers of the participating issuer defendants. If recoveries totaling $1 billion or more are
obtained by the class members from the underwriter defendants, however, the monetary obligations to the class members under the proposed settlement will be satisfied.

The proposed settlement contemplates that any amounts necessary to fund the settlement or settlement-related expenses would come from participating issuers directors and officers liability insurance policy
proceeds, as opposed to funds of the participating issuer defendants themselves. A participating issuer defendant could be required to contribute to the costs of the settlement if that issuers insurance coverage were insufficient to pay that
issuers allocable share of the settlement costs. Lionbridge expects that its insurance proceeds will be sufficient for these purposes and that it will not otherwise be required to contribute to the proposed settlement.

Consummation of the proposed settlement is conditioned upon obtaining approval by the Court. On September 1, 2005, the Court preliminarily approved
the proposed settlement and directed that notice of the terms of the proposed settlement be provided to all class members. Thereafter, the Court held a fairness hearing on April 24, 2006, at which objections to the proposed settlement were
heard. After the fairness hearing, the Court took under advisement whether to grant final approval to the proposed settlement.

On
December 5, 2006, the U.S. Court of Appeals for the Second Circuit issued a decision in In re Initial Public Offering Securities Litigation that six purported class action lawsuits containing allegations substantially similar to those
asserted against the Company may not be certified as class actions due, in part, to the Appeals Courts determination that individual issues of reliance and knowledge would predominate over issues common to the proposed classes. On
January 8, 2007, the plaintiffs filed a petition seeking rehearing en banc of the Second Circuit Court of Appeals decision. On April 6, 2007 the Court of Appeals denied the plaintiffs petition for rehearing of the
Courts December 5, 2006 ruling but noted that the plaintiffs remain free to ask the District Court to certify a different class which might meet the standards for class certification that the Court of Appeals articulated in its
December 5, 2006 decision. Because our proposed settlement with the plaintiffs involves the certification of the case against us as a class action for settlement purposes, the impact of the Court of Appeals rulings on the possible
settlement of the case cannot now be predicted.



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If the proposed settlement described above is not consummated, Lionbridge intends to continue to defend
the litigation vigorously. Moreover, if the proposed settlement is not consummated, the Company believes that the underwriters may have an obligation to indemnify Lionbridge for the legal fees and other costs of defending this suit. While Lionbridge
cannot guarantee the outcome of these proceedings, the Company believes that the final result of this lawsuit will have no material effect on its consolidated financial condition, results of operations, or cash flows.



|Item 1A. | Risk Factors
|-------- | ------------

The matters discussed
in this Form 10-Q include forward-looking statements that involve risks or uncertainties. These statements are neither promises nor guarantees, but are based on various assumptions by management regarding future circumstances many of which
Lionbridge has little or no control over. A number of important risks and uncertainties, including those identified under the caption Risk Factors in Lionbridges Annual Report on Form 10-K, filed March 16, 2007 (SEC File No.
000-26933), as well as risks and uncertainties discussed elsewhere in this Form 10-Q, could cause Lionbridges actual results to differ materially from those in the forward-looking statements.



|It
em 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|-------- | -----------------------------------------------------------

During the quarter ended March 31, 2007, the Company withheld 55,676 restricted shares from certain employees to cover certain withholding taxes due from the employees at the time the shares vested. The following
table provides information about Lionbridges purchases of equity securities for the quarter ended March 31, 2007:



|                                     |  |                                  |  |                              |     
|------------------------------------ |  | -------------------------------- |  | ---------------------------- | ----
|Period                               |  | Total Number of Shares Purchased |  | Average Price Paid Per Share
|January 1, 2007  January 31, 2007   |  | 855                              |  | $                            | 6.31
|February 1, 2007  February 28, 2007 |  | 54,821                           |  | $                            | 5.79

In addition, upon the termination of employees during the quarter ended March 31, 2007, 4,000
unvested restricted shares were forfeited. The following table provides information about Lionbridges forfeited restricted shares for the quarter ended March 31, 2007:



|                                   |  |                                 
|---------------------------------- |  | --------------------------------
|Period                             |  | Total Number of Shares Forfeited
|January 1, 2007  January 31, 2007 |  | 4,000                           



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------

(a) Exhibits.



|       |  |                                                                                                                                                                                                                                                                        
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1   |  | Amendment and Joinder Agreement dated as of January 22, 2007 among the Company, HSBC Bank USA, NA and the parties named therein (filed as Exhibit 10.1 to the Current Report on Form 8-K
on January 25, 2007 (File No. 000-26933) and incorporated herein by reference)
|       | 
|10.2   |  | Charge on Shares of Lionbridge International (filed as Exhibit 10.2 to the Current Report on Form 8-K on January 25, 2007 (File No. 000-26933) and incorporated herein by
reference)                                                                                   
|       | 
|10.3   |  | Charge on Shares of Lionbridge International Finance Limited (filed as Exhibit 10.3 to the Current Report on Form 8-K on January 25, 2007 (File No. 000-26933) and incorporated herein by
reference)                                                                   
|       | 
|10.4   |  | Notes issued by Lionbridge International Finance Limited to the Lenders under the Credit Agreement (filed as Exhibit 10.4 to the Current Report on Form 8-K on January 25, 2007 (File No.
000-26933) and incorporated herein by reference)                             
|       | 
|10.5*  |  | Lease dated as of March 14, 2007 between TCAM Core Property Fund Operating LP and Lionbridge US, Inc.                                                                                                                                                                  
|       | 
|31.1 * |  | Certification of Rory J. Cowan, the Companys principal executive officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                
|       | 
|31.2 * |  | Certification of Stephen J. Lifshatz, the Companys principal financial officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                          
|       | 
|32.1 * |  | Certifications of Rory J. Cowan, the Companys principal executive officer, and Stephen J. Lifshatz, the Companys principal financial officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              

---

|* | Filed herewith.
|- | ---------------



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##### Table of Contents

LIONBRIDGE TECHNOLOGIES, INC.

SI
GNATURE

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.



LIONBRIDGE TECHNOLOGIES, INC.By:

/s/ STEPHEN J. LIFSHATZStephen J. LifshatzSenior Vice President, Chief Financial Officer(Duly Authorized Officer and Principal Financial Officer)


Dated: May 10, 2007



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Exhibit Index



|               |  |                                                                                                                                                                                                                                                                        
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                                                            
|10.1           |  | Amendment and Joinder Agreement dated as of January 22, 2007 among the Company, HSBC Bank USA, NA and the parties named therein (filed as Exhibit 10.1 to the Current Report on Form 8-K on
January 25, 2007 (File No. 000-26933) and incorporated herein by reference)
|               | 
|10.2           |  | Charge on Shares of Lionbridge International (filed as Exhibit 10.2 to the Current Report on Form 8-K on January 25, 2007 (File No. 000-26933) and incorporated herein by
reference)                                                                                   
|               | 
|10.3           |  | Charge on Shares of Lionbridge International Finance Limited (filed as Exhibit 10.3 to the Current Report on Form 8-K on January 25, 2007 (File No. 000-26933) and incorporated herein by
reference)                                                                   
|               | 
|10.4           |  | Notes issued by Lionbridge International Finance Limited to the Lenders under the Credit Agreement (filed as Exhibit 10.4 to the Current Report on Form 8-K on January 25, 2007 (File No.
000-26933) and incorporated herein by reference)                             
|               | 
|10.5*          |  | Lease dated as of March 14, 2007 between TCAM Core Property Fund Operating LP and Lionbridge US, Inc.                                                                                                                                                                  
|               | 
|31.1 *         |  | Certification of Rory J. Cowan, the Companys principal executive officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                
|               | 
|31.2 *         |  | Certification of Stephen J. Lifshatz, the Companys principal financial officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                          
|               | 
|32.1 *         |  | Certifications of Rory J. Cowan, the Companys principal executive officer, and Stephen J. Lifshatz, the Companys principal financial officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              

---

|* | Filed herewith.
|- | ---------------



27