---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K

xANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006.

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934For
the transition period from ____________ to ____________

Commission
file number: 0-27778

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

|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Georgia                                                        | 59-3074176                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

3399
Peachtree Road, N.E., The Lenox Building, Suite 700, Atlanta, Georgia 30326
(address of principal executive office)

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

|                                                            |                                            
|----------------------------------------------------------- | -------------------------------------------
|Securities registered pursuant to Section 12(b) of the Act:
|                                                           
|Common Stock, Par Value $0.01 Per Share                     | New York Stock Exchange                    
|(Title of each class)                                       | (Name of each exchange on which registered)

Securities
registered pursuant to Section 12(g) of the Act:
None
(Title of class)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.o
Yes x No

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.o
Yes x No

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 o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o

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 o | Accelerated filer x | Non-accelerated filer o

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

The
aggregate market value of voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and ask price of such common equity, on June
30, 2006 as reported by the New York Stock Exchange was approximately
$493,096,525. As of March 9, 2007, there were 70,216,077 shares of the
registrants common stock outstanding.

List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated. Portions of the registrants proxy statement for its 2007 annual
meeting of shareholders are incorporated by reference in Part III of this Form
10-K.

---

---



INDEX

|           |  |                                                                                                                |  |     
|---------- |  | -------------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                                |  | Page
|           |  |                                                                                                                |  |     
|Part I     |  |                                                                                                                |  |     
|Item
  1.  |  | Business                                                                                                       |  | 1   
|Item
  1A. |  | Risk Factors                                                                                                   |  | 13  
|Item
  1B  |  | Unresolved Staff Comments                                                                                      |  | 23  
|Item
  2.  |  | Properties                                                                                                     |  | 23  
|Item
  3.  |  | Legal Proceedings                                                                                              |  | 23  
|Item
  4.  |  | Submission of Matters to a Vote of Security
  Holders                                                          |  | 24  
|           |  |                                                                                                                |  |     
|Part II    |  |                                                                                                                |  |     
|Item
  5.  |  | Market for Registrants Common Equity,
  Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 25  
|Item 6.    |  | Selected Financial Data                                                                                        |  | 27  
|Item 7.    |  | Managements Discussion and Analysis of
  Financial Condition and Results of Operations                        |  | 28  
|Item 7A.   |  | Quantitative and Qualitative Disclosures
  About Market Risk                                                   |  | 45  
|Item 8.    |  | Financial Statements and Supplementary
Data                                                                    |  | 46  
|Item 9.    |  | Changes in and Disagreements with
  Accountants on Accounting and Financial Disclosure                         |  | 75  
|Item 9A.   |  | Controls and Procedures                                                                                        |  | 75  
|Item 9B.   |  | Other Information                                                                                              |  | 77  
|           |  |                                                                                                                |  |     
|Part III   |  |                                                                                                                |  |     
|Item 10.   |  | Directors, Executive Officers and Corporate
  Governance                                                       |  | 78  
|Item 11.   |  | Executive Compensation                                                                                         |  | 78  
|Item 12.   |  | Security Ownership of Certain Beneficial
  Owners and Management and Related Stockholder Matters               |  | 78  
|Item 13.   |  | Certain Relationships and Related
  Transactions and Director Independence                                     |  | 78  
|Item 14.   |  | Principal Accountant Fees and Services                                                                         |  | 78  
|           |  |                                                                                                                |  |     
|Part IV    |  |                                                                                                                |  |     
|Item 15.   |  | Exhibits and Financial Statement
Schedules                                                                     |  | 79  
|           |  |                                                                                                                |  |     
|Signatures |  |                                                                                                                |  | 86  

---



FORWARD-LOOKING STATEMENTS

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

| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our ability
  to compete based on price and against our existing and future competitors;                                                                                                 
| |   |                                                                                                                                                                                          
| |  | Our ability
  to respond to rapid technological change and the development of alternatives
  to our services;                                                                            
| |   |                                                                                                                                                                                          
| |  | Market
  acceptance of new services and enhancements to existing services;                                                                                                               
| |   |                                                                                                                                                                                          
| |  | Costs or
  difficulties related to the integration of any new or acquired businesses and
  technologies;                                                                                 
| |   |                                                                                                                                                                                          
| |  | Concerns
  regarding the security of transactions and transmitting confidential
  information over the Internet and public networks;                                                     
| |   |                                                                                                                                                                                          
| |  | Our ability
  to increase our network capacity to meet customer demands;                                                                                                                 
| |   |                                                                                                                                                                                          
| |  | Our services
  may be interrupted due to failure of the platforms and network infrastructure
  utilized in providing our services;                                                       
| |   |                                                                                                                                                                                          
| |  | Continued
  weakness in our legacy broadcast fax services;                                                                                                                               
| |   |                                                                                                                                                                                          
| |  | Our ability
  to efficiently utilize or re-negotiate minimum purchase requirements in our
  telecommunications supply agreements;                                                        
| |   |                                                                                                                                                                                          
| |  | Increased
  leverage may harm our financial condition and results of operations;                                                                                                         
| |   |                                                                                                                                                                                          
| |  | Our
  dependence on our subsidiaries for cash flow may negatively affect our
  business and our ability to pay amounts due under our indebtedness;                                       
| |   |                                                                                                                                                                                          
| |  | Our
  financial performance could cause future write-downs of goodwill or other
  intangible assets in future periods;                                                                   
| |   |                                                                                                                                                                                          
| |  | Assessment
  of income, state sales and other taxes for which we have not accrued;                                                                                                       
| |   |                                                                                                                                                                                          
| |  | Our ability
  to attract and retain qualified key personnel;                                                                                                                             
| |   |                                                                                                                                                                                          
| |  | Possible
  adverse results of pending or future litigation or adverse results of current
  or future infringement claims;                                                                
| |   |                                                                                                                                                                                          
| |  | Our ability
  to successfully identify suitable acquisition candidates, complete
  acquisitions, integrate acquired operations into our existing operations or
  expand into new markets;
| |   |                                                                                                                                                                                          
| |  | Our ability
  to protect our proprietary technology and intellectual property rights;                                                                                                    
| |   |                                                                                                                                                                                          
| |  | Legislative
  or regulatory changes may adversely affect our business;                                                                                                                   

---



| |   |                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Possible
  adverse results if our services become subject to government regulations
  applicable to traditional telecommunications service providers;                                                                   
| |   |                                                                                                                                                                                                                         
| |  | Risks
  associated with expansion of our international operations and fluctuations in
  currency exchange rates;                                                                                                        
| |   |                                                                                                                                                                                                                         
| |  | Domestic and
  international terrorist activity, war and political instability may adversely
  affect the level of services utilized by our customers and the ability of
  those customers to pay for services utilized;
| |   |                                                                                                                                                                                                                         
| |  | General
  economic or business conditions, internationally, nationally or in the local
  jurisdiction in which we are doing business, may be less favorable than
  expected;                                            
| |   |                                                                                                                                                                                                                         
| |  | Factors
  described under the caption Item 1A. Risk Factors in this annual report on
  Form 10-K; and                                                                                                                 
| |   |                                                                                                                                                                                                                         
| |  | Factors
  described from time to time in our press releases, reports and other filings
  made with the Securities and Exchange Commission.                                                                              

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

---



PART I

Item
1. Business

Overview

Premiere
Global Services, Inc. is a global provider of communication technologies-based
solutions that automate, simplify and improve communication-centric business
processes. We believe our solutions help businesses increase sales, improve
productivity and efficiency and enhance customer loyalty and retention by
empowering them with new ways to communicate with, market to and service their
constituents.

Our
end-to-end suite of solutions, which we call the Premiere Global Communications
Operating System (PGiCOS), delivers hundreds of
industry-specific business applications. These applications, which we deliver
on-demand, are powered by our communication technologies, including Web and
audio conferencing, e-mail, short message services (SMS), fax, automated
speech, mobile and other technologies.

Our
applications are hosted on our unified network of platforms, which are comprised
of server centers and network operations centers located worldwide. We offer
open standards access to PGiCOS through our application programming interface
(API) suite branded PremiereConnect. Open access enables our
enterprise customers and technology partners to access and use our applications
directly from their desktop or mobile device via the Internet and to integrate
PGiCOS capabilities directly into their enterprise systems and custom
applications. In addition, open access enables enterprise users to combine
multiple PGiCOS applications together into composite applications that address
their specific needs.

For
sales and marketing purposes, our applications are grouped within six solution
sets: Conferencing, Desktop Fax, Document Delivery, Accounts Receivable
Management, Notifications & Reminders and eMarketing. Our strategy is to
continue to develop innovative new applications and enhancements to our
existing solution sets to better address the needs of our enterprise customers and
to increase the scope and size of the markets we address.

In
2006, more than 500,000 users from our established customer base of
approximately 60,000 corporate accounts used PGiCOS applications. These
enterprise customers, including nearly 80% of the Fortune 500, as well as
thousands of small- and mid-sized businesses, used our on-demand solutions to
improve daily communications with their constituents, such as employees,
customers, trade partners, suppliers, advisors, investors and other stakeholders.

We
have a multi-channel sales approach with dedicated sales and marketing
professionals within each of our six solution sets. We sell directly to
customers through these sales and marketing professionals and indirectly
through agents, wholesalers and strategic partners. Additionally, we are
developing a Web portal that will enable customers worldwide to access and use
the entire suite of PGiCOS applications, as well as manage and administer their
accounts with us. Our new portal, PGiConnect.com, is currently scheduled to
launch in the second quarter of 2007 and will provide a new sales channel for
our solutions. In addition, we believe PGiConnect.com will help lower our
service and support costs overtime, by empowering our enterprise customers with
self-service capabilities.

In
addition to growing our business organically, we have utilized our operating
cash flow and bank line of credit to acquire complementary companies and
technologies that we believe increase our market share and bring to us
additional customers, applications and sales personnel. By applying our scale
and purchasing power to these acquired companies, we believe we can often
reduce their operating costs and generate additional earnings.

We
historically reported our results of operations in two business segments:
Conferencing & Collaboration and Data Communications. In 2006, we
substantially completed our One Company initiative, unifying Premiere Global
under a single brand and vertical management structure. We now report our
results in three segments, North America, Europe and Asia Pacific, based on the
geographies in which we operate.

North
America revenue was $319.3 million in 2006, $321.4 million in 2005
and $293.3 million in 2004. Europe revenue was $93.0 million in 2006, $99.1 million in 2005 and $84.0 million in 2004. Asia
Pacific revenue was $84.2
million in 2006, $77.0
million in 2005 and $72.1 million in 2004. In 2006, sales in North America,

1

---



Europe and Asia Pacific
accounted for 64.3%, 18.7% and 17.0% of our consolidated revenues,
respectively. Financial information about our geographic areas can be found in
Note 19 Segment Reporting to our consolidated financial statements for the
year ended December 31, 2006 included in this annual report.

We
were incorporated in Florida in 1991 and reincorporated in Georgia in 1995.
Today, we have approximately 2,350 employees conducting business in 19
countries in North America, Europe and Asia Pacific. Our corporate headquarters
are located at 3399 Peachtree Road, NE, The Lenox Building, Suite 700, Atlanta,
GA 30326, and our telephone number is (404) 262-8400.

Industry Background

From
the acquisition, up-sale and ongoing care of customers, to collaboration,
service and support, billing, collections and other daily processes, the range
of communications incumbent upon businesses today is vast. Our goal is to be
the one source for solutions to these communication challenges for companies
around the world.

By
using the Premiere Global Communications Operating System, we believe our
enterprise customers can increase the automation and security of their
communication-centric business processes, at lower cost than traditional
methods. Simply put, our communication technologies-based solutions can be used
to replace existing manual and paper intensive processes with newer, more
automated methods. For example:

| |   |                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financial organizations
  are required to provide periodic account updates to their customers. Our
  Document Delivery Solutions can replace the traditional method of mailing
  paper statements with more cost-effective and secure electronic document
  delivery;
| |   |                                                                                                                                                                                                                                                                      
| |  | Mortgage brokers are
  required to collect several disparate paper documents for a typical mortgage
  application. Our Desktop Fax Solutions can streamline and accelerate the
  process by replacing paper documents with electronic files;                         
| |   |                                                                                                                                                                                                                                                                      
| |  | Most companies need to
  collect past due receivables. Our Accounts Receivable Management Solutions
  can automate and accelerate the collections process by replacing the need for
  manual collections agencies; and                                               
| |   |                                                                                                                                                                                                                                                                      
| |  | Training and managing
  employees in disparate locations is a growing challenge. Our Conferencing
  Solutions can replace the need for travel to in-person training meetings with
  cost-effective, easy-to-use virtual training sessions.                           

By
simplifying, automating and improving these and other communication-centric
business processes, we believe our PGiCOS solutions offer high customer value
and deliver meaningful returns on investment to our enterprise customers.

Solution Sets and Business Applications

We
go to market with a full suite of business applications, primarily focused
within the following vertical industries: financial services, manufacturing, retail,
healthcare, travel and hospitality, technology, transportation, communications
and utilities.

Our
strategy is to continue to develop industry-specific applications that are
easy-to-use and easy-to-access. We also enable businesses to be more
competitive in the areas of sales, service and support, by enabling them to
create their own custom applications. Finally, with PGiConnect.com we plan to
create an on-line community for our enterprise customers and technology
partners to share their successes in order to enhance and accelerate the
development of our application suite.

2

---



For
sales and marketing purposes, PGiCOS applications are grouped into the six
solution sets listed below:

Conferencing
Solutions

Our
Conferencing Solutions include a full-suite of traditional and voice over
Internet protocol (VoIP)-based audio conferencing and web conferencing services
for all forms of group meetings, from large events, such as investor relations
calls and training sessions, to smaller meetings, such as sales planning calls
and project team meetings. In 2006, more than 68 million people used the PGiCOS
for Conferencing meetings, lasting nearly 46 million hours. Conferencing
applications include automated reservationless conferencing, global
reservationless conferencing with approximately 75 local access points,
operator-assisted event conferencing and web conferencing. In addition, our
mobile application, ConferenceAnywhere, enables users to easily access
conference calls from their mobile devices without having to remember lengthy
dial-in numbers or passcodes.

A
few examples of our many industry-specific Conferencing applications are listed
below:

Manufacturing:

| |   |                                 
| | - | --------------------------------
| |  | Sales meetings;                 
| |   |                                 
| |  | Web seminars;                   
| |   |                                 
| |  | Focus groups;                   
| |   |                                 
| |  | Product rollouts and
  training;
| |   |                                 
| |  | Public relations calls;
  and   
| |   |                                 
| |  | Employee training               

Transportation:

| |   |                          
| | - | -------------------------
| |  | Travel promotions;       
| |   |                          
| |  | Benefits rollout;        
| |   |                          
| |  | Town hall meetings;      
| |   |                          
| |  | Investor relations calls;
| |   |                          
| |  | Executive team meetings; 
| |   |                          
| |  | Business continuity; and 
| |   |                          
| |  | Disaster recovery        

Desktop Fax
Solutions

Our
Desktop Fax Solutions include an easy-to-use, automated electronic fax
application called Fax2Mail. With this application, subscribers can send and
receive faxes using their computer and existing e-mail account instead of a
traditional fax machine. To send a fax, PGiCOS converts e-mail attachments into
fax documents and delivers them to the recipients fax machine. To receive a fax,
the sender faxes the document to a users personal fax number where it is
converted by PGiCOS into an e-mail attachment and delivered to the users
e-mail inbox. In addition, our PremiereAnywhere application enables mobile
users to send documents and e-mail attachments directly from their mobile
device to any fax machine in the world to be printed. In 2006, PGiCOS converted
more than 50 million documents on behalf of our enterprise users.

A
few examples of our many industry-specific Desktop Fax applications are listed
below:

Financial
services:

| |   |                                              
| | - | ---------------------------------------------
| |  | Mortgage application
  processing;           
| |   |                                              
| |  | Rate lock confirmations
  and authorizations;
| |   |                                              
| |  | Price quotes;                                
| |   |                                              
| |  | Insurance claims
  processing; and           
| |   |                                              
| |  | Accident reports receipt
  and delivery      

3

---



Healthcare:

| |   |                        
| | - | -----------------------
| |  | Insurance claims;      
| |   |                        
| |  | Confidential documents;
| |   |                        
| |  | Patient records; and   
| |   |                        
| |  | Medical test results;  

Document Delivery
Solutions

Our
Document Delivery Solutions automate paper-intensive business processes through
the conversion of paper documents into electronic files, which can be
forwarded, accessed and archived remotely through any existing e-mail account
or a web interface. Documents can be sent as an encrypted e-mail, an electronic
fax or made available on a secure web interface for online presentment. To
ensure document security, sensitive data can be delivered securely through our
proprietary technology. Online administration tools enable control of user
registration, account profiles and service settings and options, such as cover
sheet/e-mail design, billing and delivery reports. In 2006, PGiCOS delivered
approximately 400 million documents as electronic files within this solution
set.

A
few examples of our many industry-specific Document Delivery applications are
listed below:

Financial
Services:

| |   |                                            
| | - | -------------------------------------------
| |  | Research report
  distribution;            
| |   |                                            
| |  | Cash management
  settlements;             
| |   |                                            
| |  | Sweep accounts;                            
| |   |                                            
| |  | Rate sheets delivery;                      
| |   |                                            
| |  | Securities and investment
  statements; and
| |   |                                            
| |  | Stock trade confirmations                  

Technology:

| |   |                                 
| | - | --------------------------------
| |  | Inventory reports;              
| |   |                                 
| |  | Purchase orders;                
| |   |                                 
| |  | Pricing quotes;                 
| |   |                                 
| |  | Order processing receipts;
  and
| |   |                                 
| |  | Engineering change notices      

Accounts
Receivable Management Solutions

Our
Accounts Receivable Management Solutions enable businesses to contact their
past-due accounts and collect payments in a fast and cost-effective manner,
without the need for live agents. These solutions offer customizable features,
including automated payment, recipient authentication, personalized messages
with text-to-speech, hot key transfer to a live operator for assistance, call
throttling and transfer pacing to match available call center resources and
customizable reporting.

A
few examples of our many industry-specific Accounts Receivable Management
applications are listed below:

Utilities:

| |   |                                             
| | - | --------------------------------------------
| |  | Service disruption or
  cancellation alerts;
| |   |                                             
| |  | Agent or call center
  productivity;        
| |   |                                             
| |  | Payment verification; and                   
| |   |                                             
| |  | Payment due reminders                       

4

---



Healthcare:

| |   |                           
| | - | --------------------------
| |  | Payment processing;       
| |   |                           
| |  | Automated collections;    
| |   |                           
| |  | Dunning notifications; and
| |   |                           
| |  | Late payment notifications

Notifications
& Reminders Solutions

Our
Notifications & Reminders Solutions enable clear and compelling
communications between businesses and their constituents via automated speech,
e-mail, fax and SMS. Our enterprise customers can select the best delivery
method based on message content, urgency, required recipient action and
recipient preferences. We believe our multi-channel platform provides the
global scale required for the most demanding applications. Our suite of hosted
applications provides customizable features, including recipient
authentication, personalized messages with text-to-speech, hot key transfer for
interactive messaging, data collection and real-time, online summary reports.

A
few examples of our many industry-specific Notifications & Reminders
applications are listed below:

Retail:

| |   |                                            
| | - | -------------------------------------------
| |  | Account balance
  notifications;           
| |   |                                            
| |  | Back order notifications;                  
| |   |                                            
| |  | Inventory and out-of-stock
  notifications;
| |   |                                            
| |  | Voice or e-mail coupons;                   
| |   |                                            
| |  | Shipping confirmations;
  and              
| |   |                                            
| |  | Rebate notifications                       

Travel
and hospitality:

| |   |                                         
| | - | ----------------------------------------
| |  | Flight delay
  notifications;           
| |   |                                         
| |  | Travels alerts;                         
| |   |                                         
| |  | Itinerary change
  notifications;       
| |   |                                         
| |  | Pricing alerts; and                     
| |   |                                         
| |  | Reservation and schedule
  confirmations

eMarketing
Solutions

Our
eMarketing Solutions employ real-time event and customer data to create
highly-relevant, personalized e-mail marketing campaigns, that we believe
result in increased response rates, improved customer relationships and higher
sales for our enterprise customers. Our full suite of e-mail campaign management
tools and intuitive user interface empower our enterprise customers to unlock
the value of their customer data by translating it into actionable e-mail
marketing campaigns. These applications enable customers to deliver dynamic
content that is tailored to the individual customer with trigger-based e-mails
at every stage of the customer lifecycle. We led e-mail marketing vendors in
our category for market suitability in a 2006 JupiterResearch report.

A
few examples of our many industry-specific eMarketing applications are listed
below:

Retail

| |   |                               
| | - | ------------------------------
| |  | Behavioral marketing;         
| |   |                               
| |  | Customer loyalty programs;    
| |   |                               
| |  | Customer re-activation;       
| |   |                               
| |  | E-commerce direct
  marketing;
| |   |                               
| |  | Electronic coupons;           

5

---



| |             |                                  
| | ----------- | ---------------------------------
| |            | Lead-conversion
  automation;    
| |             |                                  
| |            | Lead generation; and             
| |             |                                  
| |            | Lifecycle relationship
  programs
| |             |                                  
| | Technology:
| |            
| |            | Channel management;              
| |             |                                  
| |            | Customer surveys;                
| |             |                                  
| |            | Market research;                 
| |             |                                  
| |            | New product introductions;       
| |             |                                  
| |            | Product upsell programs;         
| |             |                                  
| |            | Shopping cart management;
  and  
| |             |                                  
| |            | Subscription management          

Customers

Today,
nearly 80% of the Fortune 500, including leading commercial and investment
banks, retailers, travel and hospitality firms and technology companies,
utilize our solutions to automate and improve their communication-centric
business processes. Additionally, thousands of smaller customers, ranging from
regional law firms, to retail pharmacy chains, to local school districts and
PTAs use our solutions daily.

In
2006, more than 500,000 individuals used PGiCOS applications. Our customer base
includes users that span the range of job descriptions and responsibilities.
For instance, finance professionals use our Document Delivery Solutions to
distribute financial statements and invoices in a cost-effective manner and
then employ our suite of Accounts Receivable Management Solutions to facilitate
the collections process. Marketing professionals use our eMarketing Solutions
to attract, retain and upsell customers. IT professionals at companies of all
sizes look to us for solutions that assist with regulatory compliance, workflow
management and business process automation.

We
are a truly global Company, with nearly 36% of our consolidated revenues coming
from outside North America. Our commitment to our thousands of international
customers extends beyond just sales to include local language service and
support, as well as local currency billing.

As
we bring our capabilities online in the second quarter with our new Web portal,
PGiConnect.com, we expect to extend our reach to include thousands of potential
new customers that had been beyond the scope of our existing global footprint.
As part of this initiative, we plan to further empower our enterprise users
with self-provisioning, self-service and account management tools. Many of
these capabilities are already available at our existing microsites,
MyPortal.com and MyRCPlus.com.

In
2007 our sales commission plans are focused, in part, on encouraging greater customer
adoption of long-term contracts. Most of our customer agreements have initial
terms of one to three years, subject to automatic renewal unless a customer
sends a notice of non-renewal prior to the end of an initial or renewal term.
Customers may generally terminate without penalty, unless their agreement
contains a minimum revenue commitment that would require payment by the
customer of any unused shortfall amount upon termination. We are continuing our
efforts to seek to enter into annual or multi-year contracts with minimum
commitments.

While
our business is generally not seasonal, we typically experience lower levels of
sales and usage during periods which have reduced numbers of working days. For
example, our operating results have historically decreased during the summer
months (particularly in our international operations), as well as during
Thanksgiving, December and New Year holidays. We expect our revenues during
these periods will not grow at the same rates as compared with other periods of
the year because of decreased use of our services by our enterprise customers.

Sales and Marketing

To
promote domain expertise and a greater understanding of our enterprise
customers needs, we have segmented our sales professionals according to our
six solutions sets. Additionally, we have implemented a multi-

6

---



channel sales approach to
promote the transfer and adoption of best practices. Our current channels of
distribution include global, mid-market outside, mid-market inside, indirect
and web sales:

| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |  | We sell directly to
  customers through our approximately 785 global sales, support and marketing
  professionals worldwide;
| |   |                                                                                                                             
| |  | We sell indirectly through
  distribution partners, including agents and resellers;                                         
| |   |                                                                                                                             
| |  | We actively pursue
  strategic partners to integrate and resell our services with their own; and                            
| |   |                                                                                                                             
| |  | We employ Internet-based
  marketing and direct telesales to generate increased activity for our sales
  channels.          

As
a service organization, our customer service teams play a major role in
managing customer relationships as well as selling additional value-added
services to existing accounts. We currently employ approximately 835 customer
service professionals deployed in local markets around the world.

Platform, Technologies and Network Infrastructure

We
believe that our proprietary communications technologies platforms are a key
element of our success. We utilize various Internet and telecom-based
communications networks that allow customers to access our platform-based
services through the Internet, private data networks, local and toll-free
numbers and via VoIP.

Our
strategy is to facilitate customer access to our platform by continuing to
evolve toward open architecture based on standard access protocols. We believe
an open platform accelerates time to market for our new solutions and broadens
our distribution opportunities by enabling strategic partners to augment their
service offerings through direct integration with PGiCOS. Additionally, open
access to our platform and applications enables our enterprise customers to
combine a number of our applications together into composite applications that
address their specific needs.

We
operate over 142,000 conferencing and delivery ports on our worldwide
platforms. Conferencing services are provided from full-service operations
centers in Colorado Springs, Colorado; Lenexa, Kansas; Sydney and Melbourne,
Australia; and Clonakilty, Ireland. Automated bridging nodes are maintained in
the U.S., Canada, Australia, Hong Kong, Singapore, Japan, Malaysia, South
Korea, United Kingdom and Ireland. Complex, operator-assisted calls are
supported on various commercially available bridging platforms. Internally
developed conference bridge software is used to support automated conferencing
services. Customers access our conferencing platforms through direct inward
dialing, toll-free numbers, the Internet, VoIP-based data networks and virtual
network access. Our platforms support our proprietary Web conferencing
products, Netspoke Web Conferencing and ReadyConference® Plus. Our
delivery ports are attached to servers around the world, which perform all
primary processing and switching functions. Our proprietary platforms support
multiple input methods including, but not limited to, PC-based software, e-mail
gateways, extensible markup language (XML), application program interfaces
(APIs) and high-speed IP-based interconnects. Outgoing communications are
delivered through line group controllers, which are deployed in a decentralized
fashion to provide sufficient redundancy. The remote line group controllers are
connected to servers over a wide area network via either private lines, virtual
private networks (VPNs) or carriers global transmission control protocol (TCP)/IP-based
networks. Our platforms support data communications utilizing multiple
modalities, including via fax, automated speech, e-mail and SMS. We deliver
both dynamic eMarketing and transactional e-mails. Mission critical information
is transported from one location domain to another using a proprietary
protocol. Our current domains include Australia, Japan, South Korea, the United
Kingdom, the United States and France. Remote nodes on the network are located
in Germany, Switzerland, Canada, Spain, Italy, Malaysia, Hong Kong and
Singapore.

We
currently utilize VoIP networks for a growing portion of the origination and
termination of fax, voice and conferencing traffic within our Conferencing,
Desktop Fax, Document Delivery, Accounts Receivable Management and
Notifications & Reminders solution sets. We intend to continue to convert
additional traffic to VoIP networks.

7

---



Our
platform architecture and scale enable high volume business communications with
the ability to process and deliver greater than six billion communications
annually.

In
addition, we successfully completed the American Institute of Certified Public
Accountants Statement on Auditing Standards (SAS) No.70 Type II audit of
controls related to our transmission processing of automated data management
and delivery solutions and related general computer controls in our data
processing locations in the U.S. (New Jersey), U.K. (York), Japan (Tokyo) and
Korea (Seoul).

Research and Development

We
believe that our ability to design, develop, test and support innovative
technology for service enhancements in a timely manner is an important
contributor to our continued success. By innovating new services and
enhancements to existing services, we can better meet our enterprise customers
needs and position ourselves in larger market segments.

In
2006, we released our PremiereAnywhere mobile solutions, our IrgentSM
service which enables recipients to choose how they receive our Notifications
& Reminders via e-mail, voice, text or fax and enhancements to our Netspoke
Web conferencing service. Our session initiation protocol
(SIP)-based
conferencing service released in 2005 now supports approximately 40 million
minutes on a monthly basis. In 2006, we also upgraded our speech technology
platform and launched microsites of our new portal, PGiConnect.com, which is
currently scheduled for release in the second quarter of 2007.

We
devote significant resources to the innovation and development of new services,
enhancements to existing services and our new portal initiative, employing
approximately 100 research and development professionals. In 2005, we opened a
development center in India to continue to develop and enhance communications
technologies-based solutions in a more timely and cost-effective manner. Our
research and development costs for 2006, 2005 and 2004 were $12.1 million,
$10.8 million and $11.0 million, respectively.

Competition

We
compete with a range of companies in each of our six solution sets. For
Conferencing solutions, we compete with major telecommunications service
providers around the world such as AT&T Inc., Verizon Communications, Inc.,
Sprint Nextel Corp., Global Crossing Limited and international public telephone
companies, such as BT Group plc. Because these providers own the underlying
telecommunications network, they may have lower per minute long distance costs
than us. Although these providers hold a large market share, conferencing is
not the primary focus of their bundled service offerings, and we believe we can
compete effectively on the basis of quality of service and support, the breadth
of our service offerings and our global presence. Additionally, we compete with
independent conferencing service providers like West Corporation, ACT
Teleconferencing, Inc., Westell Technologies, Inc., WebEx Communications, Inc.,
Arkadin, Inc. and Genesys S.A. We also compete with traditional and IP-based
equipment manufacturers that sell communications equipment that enable
enterprises to host calls internally and business suite software providers,
such as Microsoft Corp., that sell software applications that allow online
collaboration. In eMarketing solutions we compete with companies, such as
Alliance Data Systems Corporation, Acxiom Corporation and Responsys. In
Notifications & Reminders and Account Receivable Management, our
competition includes CenterPost Communications, PAR3 Communications, Inc. and Experian.
In Document Delivery and Desktop Fax, we compete with companies such as Protus
IP Solutions, EasyLink Services Corporation and J2 Global Communications, Inc.
Additionally, we compete with a range of equipment and software providers that
enable enterprises to address these requirements internally.

Our
strategy is to gain a competitive advantage in winning and keeping customers by
innovating new technology-driven solutions within PGiCOS. We believe our broad
range of business process solutions and applications provide us with an
advantage over many of our competitors that have more limited service
offerings. In addition, our global reach allows us to pursue contract
opportunities with multinational enterprises providing an advantage over competitors
that only focus on limited geographies.

8

---



Suppliers

We
purchase telecommunications services pursuant to supply agreements with
telecommunications service providers. Some of our agreements with
telecommunications service providers contain commitments that require us to
purchase a minimum amount of services through 2009. These costs are
approximately $14.2 million, $5.8 million and $0.6 million in 2007 through
2009, respectively.

Government Regulation

Federal,
state, local and international laws regulating the provision of traditional
telecommunications services may adversely impact our business. We believe that
we operate as a provider of unregulated information services. Consequently, we
do not believe that we are subject to Federal Communications Commission (FCC)
or state public utility commission regulations applicable to providers of
traditional telecommunications services in the U.S. However, we are subject to
certain regulations imposed by international telecommunications regulatory
authorities and we may be affected by regulatory decisions, trends or policies
issued or implemented by federal, state, local or international
telecommunications regulatory authorities. In addition, federal, state, local
or additional international authorities may seek to regulate or impose
requirements with respect to the services provided by us. We have received, and
certain companies that we acquired had received, letters from the
Investigations and Hearing Division of the FCCs Enforcement Bureau regarding
registration, filing and regulatory surcharge remittance requirements
applicable to traditional telephone companies. In each case, we have responded
to the FCCs inquiries. We believe that we exercise reasonable efforts to
monitor telecommunications laws, regulations, decisions and trends and to
comply with any applicable legal requirements. However, if we fail to comply
with any applicable government regulations, or if we are required to submit to
the jurisdiction of such government authorities as a provider of traditional
telecommunications services, we could be temporarily prohibited from providing
portions of our services, be required to restructure portions of our services
or be subject to ongoing reporting and compliance obligations, including being
subject to litigation, fines, regulatory surcharge remittance requirements
(past and/or future) or other penalties for any non-compliance.

There
is regulatory uncertainty as to the imposition of certain traditional common
carrier regulations on VoIP telephony, which we use in the delivery of certain
of our services. The regulatory status of VoIP is still under review by federal
authorities and the courts. The FCC has stated that VoIP is an interstate
service subject to certain regulations, but the FCCs regulation of VoIP may be
curtailed or expanded by the FCC or the courts. The FCC and state public
utility commissions are conducting regulatory proceedings that could affect the
regulation of VoIP services. The adoption of, or changes in, such
telecommunications laws and regulations could increase the costs
of communicating over IP-based networks and may affect the available
delivery methods for and costs associated with our services, as well as the
growth of VoIP networks. Regulatory authorities may seek to regulate aspects of
our services under new VoIP regulations, which would require us to comply with
laws and regulations that currently are not applicable to us, and could
adversely affect our business.

International,
federal and state laws regulate telemarketing practices and may adversely
impact our business and the businesses of our customers and potential
customers. The FCC promulgated rules in 1992 to implement the federal Telephone
Consumer Protection Act of 1991 (TCPA). These rules, among others, regulate
telemarketing methods and activities, including the use of pre-recorded
messages, the time of day when telemarketing calls may be made, maintenance of
company-specific do not call databases and restrictions on unsolicited fax
advertising.

In
2003, the FCC amended its rules under the TCPA. The FCC retained an exemption
from liability for sending unsolicited commercial fax advertisements for fax
broadcast providers which solely transmit such advertisements on behalf of
others. However, the FCC ordered that a sender may fax unsolicited commercial
advertisements only to those from whom the sender has received prior express
consent in writing. The 2003 rule amendments modified the FCCs prior policy,
which permitted such faxes when an established business relationship (EBR)
existed between the sender of a commercial unsolicited fax advertisement and
the recipient. Several parties challenged the new rules and the FCC delayed the
requirement to have prior written consent and the deletion of the EBR
exemption. In July 2005, Congress passed the Junk Fax Prevention Act of 2005
(JFPA), amending the TCPA to expressly allow fax advertisements to be sent to
persons or entities with whom a sender has an EBR. This amendment essentially
nullified the FCCs 2003 revocation of the EBR exemption. The JFPA also imposed
new

9

---



notice
language for fax advertisements and mandated an opt-out mechanism. The FCC
issued rules implementing these amendments in April 2006, which became
effective in August 2006. However, the FCC may revise its rules and may impose
a time limitation on the EBR exception. Despite the passage of the JFPA, the
new notice requirements and potential time limits on the EBR exemption,
combined with the regulatory uncertainty resulting from the 2003 FCC rulings
and association litigation may have discouraged, and may continue to
discourage, use by some of our customers of our broadcast fax services.

In
addition, we may be subject to state laws and regulations regulating the
unsolicited transmission of faxes. For example, in October 2005, the state of
California passed a law purporting to regulate intrastate and interstate fax
advertisements which did not contain an EBR exemption. This law was challenged
by the U.S. Chamber of Commerce and us in federal district court in California,
with the court ruling that Californias regulation of interstate fax
transmissions was impermissible.

Fax
broadcast providers, such as us, generally are not liable for their customers
violations of the TCPA, although fax broadcast providers that have a high
degree of involvement in their customers fax advertisements or actual
knowledge of a customers violation of the TCPA may be held liable under the
TCPA. Although we have conducted our operations to meet the fax broadcaster
provider exemption, third parties may seek to challenge this exemption.

The
FCC, along with the Federal Trade Commission (FTC), has also instituted a
national do not call registry for residential and wireless telephone numbers.
Telemarketers are barred from calling consumers who register their telephone
numbers in the national database. In summary, with certain exceptions,
telemarketers are required to access the list before engaging in telemarketing
in any particular area code. As a service provider to companies that engage in
telemarketing, we subscribe to the federal do not call registry. Although we
believe we have taken the necessary steps to ensure compliance with the do not
call registry and other rule amendments, regulators or third parties could seek
to challenge our compliance with the federal do not call registry, federal
telemarketing laws, and FCC and FTC rules.

In
October 2006, the FTC proposed to bar prerecorded telemarketing calls except in
instances of prior express consent. The FCC generally permits prerecorded
telemarketing calls where there is either an EBR or prior express consent. The
FTC initiated a rulemaking proceeding and took public comments on its proposed restrictions
on prerecorded telemarketing calls. In December 2006, the FCC issued a notice
stating that it would not enforce the proposed ban until the completion of the
rulemaking proceeding provided prerecorded telemarketing calls comply with
certain safe harbor requirements. If ultimately adopted, the FTCs proposed
restriction on prerecorded telemarketing calls could impact customer use of our
broadcast voice services to the extent a customer sought to use this service
for marketing messages, distinct from informational or transactional
messages.

In
addition to the federal legislation and regulations, there are numerous state
laws and regulations governing telemarketing activities, including state do not
call list requirements and state registration and bonding requirements. For
instance, certain states regulate prerecorded telemarketing messages, and
pending legislation introduced in at least one state would make political calls
subject to do not call requirements in that state although such calls are
exempt from the federal do not call requirements.

Federal
legislation known as the Can Spam law regulates unsolicited commercial e-mails,
or spam. The Can Spam law requires unsolicited e-mail marketing messages to
have a valid postal address. E-mail marketers may not use false or misleading
headers or deceptive subject lines, must identify commercial e-mail and are
also required to remove customers from their mailing lists if requested.
Internet service providers may also bring lawsuits under the Can Spam law. The
Can Spam law allows the FTC to impose fines and gives state attorney generals
the power to bring lawsuits. The Can Spam law also preempts state laws in many
respects, although it allows states to continue to regulate deceptive e-mails.
A number of states have adopted laws restricting and/or governing the
distribution of unsolicited e-mails. Several states have adopted child
protection registry laws that generally prohibit certain communications, such
as e-mails, phone, fax or instant messages, to registered contact points
assessable by children as submitted by parents and guardians when the content
of the message includes an advertisement for or a link to content, products or
services that are restricted to minors due to their age. Schools and other
child-focused organizations may also submit domain names. Other states are
considering similar legislation. These laws are subject to some opposition by
certain industry groups and companies, and the FTC has noted certain concerns
about

10

---



security and privacy risks
inherent in such do not e-mail registries. We provide services for our
customers to distribute e-mails, including e-mails that may be subject to these
laws. The Can Spam requirements apply to senders of e-mail messages, but do not
apply to entities who engage in routine conveyance of e-mail messages, such
as the transmission, routing or relaying, through an automatic technical
process, e-mails for which another person has identified the recipients or
provided the recipient addresses. We believe that our eMarketing services,
where customers use our automated service to send e-mails to recipient
addresses designated by these customers, fall within Can Spams routine
conveyance exemption. We have implemented procedures that we believe comply
with our obligations under the law. We have a policy that prohibits the use of
our services to send spam and require our customers to comply with all laws and
regulations pertaining to spam, but there can be no assurance that we would not
be subject to litigation or enforcement actions alleging a violation of
applicable federal and state laws.

We
monitor applicable federal and state laws and regulations, have compliance
policies in place regarding such laws and regulations, and our service
agreements with customers generally state that our customers are responsible
for their compliance with all applicable laws and regulations. We could,
nevertheless, be subject to litigation by private parties and governmental
bodies, including governmental enforcement actions, alleging a violation of
such laws or regulations, and could result in damages, regulatory fines,
penalties and possible other relief under such laws and regulations and the
accompanying costs and uncertainties of such litigation and enforcement
actions.

A
number of legislative and regulatory proposals are under consideration by
federal and state lawmakers and regulatory bodies and may be adopted with
respect to the Internet. Some of the issues that such laws or regulations may
cover include user privacy, obscenity, fraud, pricing and characteristics and
quality of products and services. The adoption of any such laws or regulations
may decrease the growth of e-commerce, which could in turn decrease the
projected demand for our Web-based services or increase our costs of doing
business. Moreover, the applicability to the Internet of existing U.S. and
international laws governing issues such as property ownership, copyright,
trade secret, libel, taxation and personal privacy is uncertain and developing.
Any new legislation or regulation, or application or interpretation of existing
laws, could have a material adverse effect on our business, financial condition
and results of operations.

In
conducting our business, we are also subject to various laws and regulations
relating to commercial transactions generally, such as the Uniform Commercial
Code and are also subject to the electronic funds transfer rules embodied in
Regulation E promulgated by the Federal Reserve. It is possible that Congress,
the states or various government agencies could impose new or additional
requirements on the electronic commerce market or entities operating therein.
If enacted, such laws, rules and regulations could be imposed on our business
and industry and could have a material adverse effect on our business,
financial condition or results of operations.

In
addition, our international activities also are subject to regulation by
various international authorities and the inherent risk of unexpected changes
in such regulation. For example, individual countries within the
European Union have specific regulations related to sending personal
information from one country to another. The EU member states adopted a safe
harbor arrangement that provides that U.S. organizations can adopt procedures
that comply with European privacy regulations and can certify their compliance
through notice to the U.S. Department of Commerce. Participation in the safe
harbor is voluntary and indicates that the organization provides an adequate
level of privacy protection and qualifies the company to receive data from EU
member states. U.S. companies that avail themselves of the safe harbor
arrangement are subject to oversight and possible enforcement actions by the
FTC if they do not comply with the provisions of their certification. Our
subsidiary, Xpedite Systems, LLC, has certified compliance with the EU Safe
Harbor through the Department of Commerce. In addition, the European
Privacy and Communications Directive imposes restrictions on sending
unsolicited communications to individuals via automatic calling machines, fax,
e-mail and SMS messages. Generally, companies are required to obtain prior
explicit, or opt-in, consent before they can contact users via this type of
marketing.

Proprietary Rights
and Technology

Our
ability to compete is dependent in part upon our proprietary rights and
technology. We currently have four issued U.S. patents relating to our fax
distribution services, three of which will expire in 2013 and one which will
expire in 2016. We also have two pending Canadian patent applications relating
to our document generation and delivery services. We have three issued U.S.
patents, a Canadian patent, a U.K. patent, three pending U.S.

11

---



patent
applications and two pending Canadian patents relating to our conferencing
services. Of the patents relating to conferencing services, one U.S. patent
expires in 2007, one expires in 2010 and the other expires in 2022, and the
Canadian and U.K. patents each expire in 2008. We have four pending U.S. patent
applications and two pending international patent applications relating to our
newly introduced mobile solutions. We own and use a number of federally
registered trademarks and pending applications for trademarks, including
Premiere Global Services & DesignSM, PGI & DesignSM,
Powered by Premiere & DesignSM, Auditorium®, Fax2Mail
(Stylized)SM, faxREACH®, GlobalMeet®, IrgentSM,
messageREACH®, Netspoke (stylized)®,ReadyConference®,
ReadyConference® Plus, smsREACH® and voiceREACH®.
We own applications and registrations for many of these and other trademarks
and service marks in the U.S. and in other countries. We rely primarily on a
combination of intellectual property laws and contractual provisions to protect
our proprietary rights and technology. These laws and contractual provisions
provide only limited protection of our proprietary rights and technology, which
include confidential information and trade secrets that we attempt to protect through
confidentiality and nondisclosure provisions in our agreements. We typically
attempt to protect our confidential information and trade secrets through these
contractual provisions for the terms of the applicable agreement and, to the
extent permitted by applicable law, for some negotiated period of time
following termination of the agreement. Despite our efforts to protect our
proprietary rights and technology, there can be no assurance that third parties
will not misappropriate our proprietary rights or technology or independently
develop technologies that are similar or superior to our technology.

Available Information

Our
corporate Web site is premiereglobal.com. We make available free
of charge through our Web site (follow the Shareholder Information tab to
SEC Filings) our annual report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, as soon as practicable after such material is electronically filed
with, or furnished to, the SEC.

Employees

As
of December 31, 2006, we employed approximately 2,350 people worldwide. Our
employees are not represented by a labor union or covered by any collective
bargaining agreements. We consider our employee relations to be good.

Amendment and
Restatement of Our Articles of Incorporation and Bylaws

On
March 15, 2006, we amended and restated our articles of incorporation, which
were adopted and approved by our board of directors on March 15, 2006. The
amended and restated articles of incorporation consolidate into one document
our articles of incorporation filed with the Secretary of State of the State of
Georgia on December 6, 1995 and the five subsequent articles of amendment to
the articles of incorporation. Our board of directors also approved certain
other amendments not requiring shareholder approval under Georgia law. These
amendments correct typographical errors and delete provisions in the articles
of incorporation that are no longer applicable due to the passage of time
including the identification of the initial board of directors, the initial
registered agent and office and the incorporator. In addition, a prior amendment
relating to the establishment and designation of the Series B voting preferred
stock was deleted, thereby eliminating such series of preferred stock and
reclassifying all of the former shares thereof (none of which were issued) as
undesignated preferred stock.

On
March 15, 2006, our board of directors approved our second amended and restated
bylaws in order to consolidate into one document our amended and restated
bylaws and our nine amendments to the bylaws. Our board also approved certain other
amendments to correct typographical errors, make nominal revisions to officer
descriptions and to add provisions permitting certain board notices, consents
and waivers and certain shareholder waivers to be conducted by electronic
transmission, bringing the bylaws into conformity with amendments to Georgia
law.

12

---



Item
1A. Risk Factors

Risks Relating to Our Industry

The markets for our
services are intensely competitive, and we may not be able to compete
successfully against existing and future competitors that may make it difficult
to maintain or increase our market share and revenues.

The
markets for our services are intensely competitive, and we expect competition
to increase in the future. For information regarding the markets in which we
compete, see the section entitled Business  Competition. Many of our current
and potential competitors, such as major telecommunications service providers,
have longer operating histories, greater name recognition, more robust service
offerings, more comprehensive support organizations, larger customer bases and
substantially greater financial, personnel, marketing, engineering, technical
and other resources than we do. As a result, our competitors may be able to
respond more quickly than we can to new or emerging technologies and changes in
customer demands. They may also be able to devote greater resources than we can
to the development, promotion and sale of their products and services. We
believe that our current competitors are likely to expand their service
offerings and new competitors are likely to enter our markets. Some of our
existing and potential competitors may enter into or expand their positions in
the markets in which we compete through acquisitions, strategic alliances and
the development of integrated service offerings. For example, West Corporation
has acquired Raindance Communications, Inc., InterCall, Inc.,
ConferenceCall.com, ECI Conference Call Services LLC and Sprints conferencing
division. Microsoft Corp. acquired PlaceWare, Inc. and integrated PlaceWares
services into its suite of Office series of applications. Also, we compete with
companies with whom we have distribution relationships or with whom we resell
certain of their services. Increased competition could result in price pressure
on our products and services and a decrease in our market share in the various
markets in which we compete, either of which could hinder our ability to grow
our revenues.

Technological
changes and the development of alternatives to our services may cause us to
lose customers and market share and may hinder our ability to maintain or grow
our revenues.

The
market for our services is characterized by rapid technological change,
frequent new service introductions and evolving industry standards. We expect
new services and enhancements to existing services to be developed and
introduced that will compete with our services. Technological advances may
result in the development and commercial availability of alternatives to or new
methods of delivering our services and pricing options that could be more
attractive to our customers. These developments could cause our existing
services to become obsolete, result in significant pricing pressure on our
services or allow our existing and potential customers to meet their own
business communications needs without using our services. For example, if
customers more rapidly adopt IP-based conferencing services or IP-based PBX
systems, our results of operations could be adversely affected. Because we do not
typically have long-term or exclusive contractual agreements with our
customers, and many of our larger enterprise customers allocate their business
among several providers, any of these developments could result in significant
customer loss.

We
must continually introduce new services and enhancements to existing services
in response to technological changes, evolving industry standards and customer
demands. However, our new services and enhancements may not be as successful as
our competitors solutions. We will not be able to gain market share and
increase our revenues if we are unable to develop new services, or if we
experience delays in the introduction of new services. Our ability to
successfully develop and market new services and enhancements that respond to
technological changes, evolving industry standards or customer demands, is
dependent on our ability to:

| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | foresee
  changes in industry standards;                                  
| |   |                                                                           
| |  | anticipate
  and apply advances in technologies;                          
| |   |                                                                           
| |  | enhance our
  software, applications, equipment, systems and networks; and
| |   |                                                                           
| |  | attract and
  retain qualified and creative technical personnel.          

13

---



We are subject to
pricing pressures for our services which could cause us to lose market share
and decrease revenues and profitability.

We
compete for customers based on several factors, including price. A decrease in
the rates charged for services by our competitors could cause us to reduce the
rates we charge for our services. If we cannot compete based on price, we may lose
market share. If we reduce our rates without increasing our volume or our
market share, our revenues could decrease. For example, in 2006 and 2005,
increased competition and decreased demand for our legacy broadcast fax
services resulted in a decrease in revenue from these services. We expect
revenue from broadcast fax services to continue to decline in the future. We
have also experienced declines in the average selling price per minute of
services across our solution sets, including within our Conferencing Solutions.
In some cases, our competitors may offer their services at reduced rates for
free on a trial basis in order to win customers. In addition,
telecommunications service providers have lower telephony costs as a result of
their ownership of the underlying telecommunications network and can offer
services similar to ours at reduced rates as a result. Due to competitive
factors and the rapidly changing marketplace for our services, we have reduced
our pricing in certain circumstances and expect we may be required to further
reduce our pricing in the future. Further, if we reduce our rates and our costs
of providing our services do not decrease proportionately, or if they increase,
this could have a material adverse effect on our results of operations.

Risks Relating to Our Business

Our future success
depends on market acceptance of our new services.

Market
acceptance of our new services often requires that individuals and enterprises
accept new ways of communicating and exchanging information. Our growth depends
on the successful development and introduction of new services and enhancements
to our existing services. For example, in 2006, we introduced our
PremiereAnywhere mobile solutions and our Irgent service for Notifications
& Reminders. In addition, we intend to launch our new portal,
PGiConnect.com, in the second quarter of 2007 which we believe will open a new
sales channel for us and will assist in our objective to improve our revenue
growth. A failure to achieve broad market acceptance of or a decline in the
demand for our new services or portal could hinder our ability to maintain and
increase our revenues. We believe that broad market acceptance of our new
services and portal will depend on several factors, including:

| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | ease of use;                                                                                      
| |   |                                                                                                   
| |  | price;                                                                                            
| |   |                                                                                                   
| |  | reliability;                                                                                      
| |   |                                                                                                   
| |  | accessibility
  to our services;                                                                  
| |   |                                                                                                   
| |  | quality of
  service;                                                                             
| |   |                                                                                                   
| |  | system
  security;                                                                                
| |   |                                                                                                   
| |  | product
  functionality; and                                                                      
| |   |                                                                                                   
| |  | the
  effectiveness of our strategic marketing and sales efforts and distribution
  relationships.

If we do not
meet these challenges, our new services may not achieve broad market acceptance
or market acceptance may not occur quickly enough to justify our investment in
these services.

14

---



If we cannot
successfully integrate new technologies, services and systems, we may not
generate sufficient revenues and operational synergies may not develop.

We
continuously integrate new technologies, service offerings and systems. We have
experienced and may continue to experience difficulty integrating new
technologies into our networks. For example, we experienced delays in our
testing of our SIP-based voice/fax boards that we intended to launch in the
first quarter of 2006 which was delayed until the second quarter. These delays
resulted from the board manufacturers inability to support this service in the
time periods we initially anticipated. If we cannot successfully integrate new
technologies, services and systems, we may not generate sufficient revenues and
operational synergies may not develop.

Concerns regarding
security of transactions and transmitting confidential information over the
Internet and public networks may have an adverse impact on the use of our
Web-enabled services.

We
must securely receive and transmit confidential information for our customers
over the Internet and public networks. Concerns regarding the security of
confidential information transmitted over the Internet and public networks may
prevent customers from using our Web-based services. Despite the measures we
have taken, our infrastructure is potentially vulnerable to physical or
electronic break-ins, viruses or similar problems. If a person circumvents our
security measures, he or she could misappropriate proprietary information or
cause interruption in our operations. Security breaches that result in access
to confidential information could damage our reputation and expose us to a risk
of loss or liability. We may be required to make significant investments in
efforts to protect against and remedy these types of security breaches. As
electronic commerce becomes more widespread, our customers will become more
concerned about security. In addition, some of our customers are subject to
varying degrees of government regulation, particularly in the insurance and
financial services industries. Increased interest in data privacy protections
and information security obligations could impose additional regulatory
pressures on our customers businesses and indirectly, on our operations. If we
are unable to adequately address these concerns, our business and results of
operations could suffer.

Technological obsolescence of our equipment
could result in substantial capital expenditures.

Technological
advances may result in the development of new equipment and changing industry
standards, which could cause our equipment to become obsolete. These events
could require us to invest significant capital in upgrading or replacing our
equipment. For example, we are currently in the process of introducing IP-based
equipment into our services and may need to increase our number of IP-based
ports and discontinue use of some of our traditional telecommunications-based
ports if adoption of VoIP is more rapid than expected.

If we fail to
increase our network capacity to meet customer demands, the quality of our
service offerings may suffer.

As
network usage grows, we will need to add capacity to our hardware, software and
facilities with telecommunications equipment that route telephone calls. We
continuously attempt to predict growth in our network usage and add capacity
accordingly. If we do not accurately predict and efficiently manage growth in
our network usage, the quality of our service offerings may suffer and we may
lose customers. For example, as our VoIP usage continues to increase, we are
upgrading our network infrastructure to handle the new data volumes associated
with this VoIP-based traffic.

Downtime in our
network infrastructure could result in the loss of significant customers and
revenues.

We
currently maintain facilities with telecommunications equipment that routes
telephone calls and computer telephony equipment in locations throughout the
world. The delivery of our services is dependent, in part, upon our ability to
protect the equipment and data at our facilities against damage that may be
caused by fire, power loss, technical failures, unauthorized intrusion, natural
disasters, sabotage and other similar events. Despite taking a variety of
precautions, we have experienced downtime in our networks from time to time due
to service or network outages and periodic system upgrades, and we may
experience downtime in the future. For example, in 2006, we experienced
downtime as a result of one of our SIP-based carriers upgrade to its switches.
We have implemented changes to prevent this in the future, and we take
substantial precautions to protect ourselves and our customers from events that
could interrupt delivery of our services. These precautions include physical
security systems,

15

---



uninterruptible
power supplies, on-site power generators, upgraded back-up hardware, fire
protection systems and other contingency plans. In addition, some of our
networks are designed so that the data on each network server is duplicated on
a separate network server. However, despite these precautions, service
interruptions could result in the loss of significant customers, which could
cause us to lose revenues. We also maintain business interruption insurance
providing for aggregate coverage of approximately $78.6 million per policy
year. However, we may not be able to maintain insurance for this risk in the
future, or it may not continue to be available at reasonable prices. Even if we
maintain insurance for this risk, it may not be sufficient to compensate us for
losses that we experience due to our inability to provide services to our
customers.

Interruption in
third party services that we use could result in service delays and disruptions
and a loss of significant customers and revenues.

Our
ability to maintain and expand our business depends, in part, on our ability to
continue to obtain telecommunications, financial systems hosting services and
Web-based services on favorable terms from traditional and IP-based long distance
telecommunications service providers, local exchange carriers, financial
systems hosting providers and Internet service providers. We do not own a
telecommunications or IP-based network and host a significant portion of our
financial systems. As a result, we depend on a variety of third party providers
for traditional and IP-based telecommunications services, Web conferencing
services, call origination and termination local transmission, Internet access
and financial systems. We have experienced delays and disruptions in our
services in the past due to service interruptions from telecommunications
service providers. For example, we have experienced interruptions in service as
a result of our underlying carriers network outages and as a result of
increased traffic volumes. In addition, we depend on these service providers to
be financially solvent. If these service providers were to become insolvent, it
could temporarily interrupt our ability to bill our customers, make payments to
our vendors and delay our ability to report our financial results. Any
interruptions in the delivery of our services could result in a loss of
significant customers and revenues.

Continued
weakness in our legacy broadcast fax services may negatively impact our
financial performance.

We have
experienced an acceleration in the decline of revenue from our legacy broadcast
fax services and expect continued declines in the future. Our future success is
dependent in part upon our ability to transition our broadcast fax customers to
our newer technologies, such as e-mail and voice delivery services. For
example, in order to generate more predictable broadcast fax revenue, we are
continuing our efforts to transition these customers into minimum commitment
contracts or flat-rate service plans and to migrate these customers to our
newer technologies by extending pricing incentives to these customers in
attempts to accelerate adoption of these plans. We cannot guarantee that our
efforts will be successful, and these actions are expected to reduce near-term
revenues and earnings because the price for our newer technologies is
substantially below that of our broadcast fax services.

Our inability to
efficiently utilize or re-negotiate minimum purchase requirements in our
telecommunications supply agreements could decrease our profitability.

Our
ability to maintain and expand our business depends, in part, on our ability to
continue to obtain telecommunications services on favorable terms from
telecommunications service providers. Agreements with some of our
telecommunications service providers contain minimum purchase requirements
through 2009. These commitments total approximately $20.6 million, with
annual costs of approximately $14.2 million, $5.8 million and $0.6 million in
2007 through 2009, respectively. In addition, certain circuits that we
purchase are subject to term requirements, including penalties for early
termination of such circuits. The total amount of the minimum purchase
requirements in 2006 was approximately $18.5 million, and we incurred
telecommunications costs in excess of these minimums. It is possible that other
telecommunications suppliers may provide similar services at lower prices, and
we may not be able to re-negotiate our current supply agreements to achieve comparable
lower rates. Further, we can give no assurance that we will be able to utilize
the minimum amount of services that we are required to purchase under these
agreements. If we are unable to obtain telecommunications services on favorable
terms, or if we are required to purchase more services than we are able to
utilize in the operation of our business, the costs of providing our services
would likely increase, which could decrease our profitability and have a
material adverse effect on our business, financial condition and results of
operations.

16

---



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

We
have incurred a substantial amount of indebtedness under our credit
facility.  As of December 31, 2006, we
had approximately $135.9 million of outstanding debt under our credit facility,
with approximately $134.5 million in borrowings and $1.4 million in letters of
credit outstanding.  In April 2006, we
increased our line of credit from $180.0 million to $300 million.  In February 2006, we entered into a three-year
$50.0 million interest rate swap at a fixed rate of 4.99% plus applicable
spread, and in August 2006, we entered into two separate three-year $12.5
million interest rate swaps at 5.135% and 5.159% respectively.  These swaps are exclusive of our applicable
margin as stated in our credit facility.
Our level of indebtedness will have several important effects on our
future operations, including, without limitation:

| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a portion of
  our cash flows from operations will be dedicated to the payment of any
  interest or amortization required with respect to outstanding indebtedness;                                            
| |   |                                                                                                                                                                                                                
| |  | increases in
  our outstanding indebtedness and leverage will increase our vulnerability to
  adverse changes in general economic and industry conditions, as well as to
  competitive pressure; and           
| |   |                                                                                                                                                                                                                
| |  | depending on
  the levels of our outstanding debt, our ability to obtain additional
  financing for working capital, acquisitions, capital expenditures, general
  corporate and other purposes may be limited.

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

Our dependence on
our subsidiaries for cash flow may negatively affect our business and our
ability to meet our debt service obligations.

We
conduct substantially all of our business through our subsidiaries.  Our ability to pay amounts due under our
indebtedness in the future will be dependent upon the ability of our
subsidiaries to make cash distributions of earnings, loans or other payments to
us based on their earnings and cash flows.
The ability of our subsidiaries to make these distributions is and will
continue to be restricted by, among other limitations, applicable provisions of
governing law and contractual provisions.
Our subsidiaries may not have sufficient funds or may not be able to
distribute sufficient funds to us to enable us to service or repay such
indebtedness.

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

We
adopted SFAS No. 142, Accounting for Goodwill and Other Intangible Assets,
effective January 1, 2002.  With the
adoption of SFAS No. 142, we ceased amortizing approximately $123.1 million of
goodwill.  In lieu of amortization, we
were required to perform an initial impairment review of our goodwill in 2002
and are required to perform an annual impairment review thereafter.  Subsequent reviews could result in
impairment write-downs to goodwill and/or other intangible assets.  As of December 31, 2006, we had $295.2
million of goodwill and $38.4 million of other intangible assets reflected on
our financial statements for which amortization will continue.

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

We
have reserves for certain state sales tax contingencies based on the likelihood
of obligation in accordance with Statement of Financial Accounting Standards
(SFAS) No. 5, Accounting for Contingencies (SFAS No. 5).  Historically, we have not collected and
remitted state sales tax from Conferencing Solutions customers.  We were recently audited by the Commonwealth
of Massachusetts Department of Revenue claiming that our audio conferencing
services are subject to sales tax in Massachusetts.  In March 2006, we began assessing sales tax to our customers in
Massachusetts as a result of this audit.
In July 2006, we paid an initial payment of

17

---



approximately
$1.2 million to the Commonwealth of Massachusetts Department of Revenue for
taxable years prior to 2005.  Amounts
associated with 2005 and early 2006 are still under review and have yet to be
settled.  More states may claim that we
are subject to an assessment of sales taxes.
As of December 31, 2006 and December 31, 2005, we had reserved
approximately $4.3 million and $5.7 million, respectively, for certain state
sales tax contingencies.  This amount is
included in Accrued taxes on the face of the consolidated balance sheet.  We believe we are appropriately accrued for
these contingencies.  In the event that
actual results differ from these reserves, we may need to make adjustments
which could materially impact our financial condition and results of
operations.  Historically, we have
collected and remitted sales tax from our non-Conferencing Solutions customers
in applicable states.  However, it is
possible states may disagree with our method of assessing and remitting these
state sales taxes.

If our quarterly
results do not meet the expectations of public market analysts and investors,
our stock price may decrease.

Our
quarterly revenues are difficult to forecast because the market for our
services is rapidly evolving and our services are primarily usage-based and
event-driven without monthly subscription fees and historically without minimum
commitments.  Our expense levels are
based, in part, on our expectations as to future revenues.  If our revenue levels are below
expectations, we may be unable or unwilling to reduce expenses proportionately,
and our operating results would likely be adversely affected.  As a result, we believe that
period-to-period comparisons of our results of operations are not necessarily
meaningful and should not be relied upon as indications of future
performance.  It is likely that in some
future quarter our operating results may fail to meet the expectations of
public market analysts and investors. In this event, the market price of our
common stock will likely decline.

Our
operating results have varied significantly in the past and may vary
significantly in the future.  Specific
factors that may cause our future operating results to vary include:

| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | fluctuations
  in operating expenses;                                                                       
| |   |                                                                                                             
| |  | increased
  competition and pricing pressure;                                                               
| |   |                                                                                                             
| |  | the reliability
  and performance of our services;                                                          
| |   |                                                                                                             
| |  | the timing
  of new service announcements;                                                                  
| |   |                                                                                                             
| |  | market
  acceptance of new and enhanced versions of our services;                                           
| |   |                                                                                                             
| |  | changes in
  legislation and regulations that may affect the competitive environment for
  our services; and
| |   |                                                                                                             
| |  | general
  economic and seasonal factors.                                                                    

Our stock has been
volatile and we expect that it will continue to be volatile.

Our
stock price has been volatile, and we expect it will continue to be
volatile.  The volatility of our stock
price can be due to factors such as:

| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | fluctuating
  operating results;                                                                                                                                                  
| |   |                                                                                                                                                                                   
| |  | announcements
  by us or our competitors of significant technological innovations, contracts,
  acquisitions, strategic partnerships, joint ventures or capital commitments;
  and
| |   |                                                                                                                                                                                   
| |  | changes in
  security analysts estimates of our performance or our failure to meet
  analysts expectations.                                                                     

18

---



Many
of these factors are beyond our control.
In addition, broad market and industry factors may negatively impact our
stock price, regardless of our operating performance.

The performance of
our business depends on attracting and retaining qualified key personnel.

Our
performance depends on attracting and retaining key personnel, including
executive, sales and marketing personnel and customer support, product
development and other technical personnel. Failure to do so could have a
material adverse effect on the performance of our business and the results of
our operations.

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

There
are several provisions in our articles and bylaws and under Georgia corporate
law that may inhibit a takeover, even when a takeover may be in the interests
of our shareholders.  For example, our
board of directors is empowered to issue preferred stock without shareholder
action.  The existence of this
blank-check preferred stock could render more difficult or discourage an
attempt to obtain control of us by means of a tender offer, merger, proxy
contest or otherwise.  Our articles also
divide our board into three classes, as nearly equal in size as possible, with
staggered three-year terms.  The
classification of the board could make it more difficult for a third party to
acquire control of us because our shareholders elect only one-third of the
members of the board each year.  We are
also subject to provisions of the Georgia corporate law that relate to business
combinations with interested shareholders, which can serve to inhibit a
takeover.  In addition to considering
the effects of any action on us and our shareholders, our articles permit our
board to consider the interests of various constituencies, including employees,
customers, suppliers and creditors, communities in which we maintain offices or
operations and other factors which they deem pertinent, in carrying out and
discharging their duties and responsibilities and in determining what is
believed to be in our best interests.

Risks Related to Acquisitions

We face risks in
connection with completed or potential acquisitions.

Our
growth has been enhanced through acquisitions of businesses, products and
technologies that we believe will complement our business.  We regularly evaluate acquisition
opportunities, frequently engage in acquisition discussions, conduct due
diligence activities in connection with possible acquisitions, and, where
appropriate, engage in acquisition negotiations.  We may not be able to successfully identify suitable acquisition
candidates, complete acquisitions, integrate acquired operations into our
existing operations or expand into new markets.  In addition, we compete for acquisitions and expansion
opportunities with companies that have substantially greater resources, and
competition with these companies for acquisition targets could result in
increased prices for possible targets.
Acquisitions also involve numerous additional risks to us and our
investors, including:

| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | risk in retaining acquired
  management and employees;                                                 
| |   |                                                                                                        
| |  | difficulties
  in the assimilation of the operations, services and personnel of the acquired
  company;
| |   |                                                                                                        
| |  | diversion of
  our managements attention from other business concerns;                                
| |   |                                                                                                        
| |  | assumption
  of known and unknown or contingent liabilities;                                           
| |   |                                                                                                        
| |  | adverse
  financial impact from the amortization of expenses related to intangible
  assets;           
| |   |                                                                                                        
| |  | entry into
  markets in which we have little or no direct prior experience; and                        
| |   |                                                                                                        
| |  | potentially
  dilutive issuances of equity securities.                                                 

19

---



If we fail to
adequately manage these acquisition risks, the acquisitions may not result in
revenue growth, operational synergies or service or technology enhancements,
which could adversely affect out financial results.  For example, we have completed the integrations of 14 acquired
companies since January 1, 2004 and in certain instances, we experienced
increased costs and past due receivables due to delays in integrations and
technology enhancements required of our infrastructure.  The only acquisitions yet to be integrated
are Enunciate Corporation and EC Teleconferencing Pty Limited (ECT) due to the
complexities related to technology integration.

Risks Related to Intellectual Property

We may not be able
to protect our proprietary technology and intellectual property rights, which
could result in the loss of our rights or increased costs.

We
rely primarily on a combination of intellectual property laws and contractual
provisions to protect our proprietary rights and technology, brands and marks.  These laws and contractual provisions
provide only limited protection of our proprietary rights and technology.  If we are not able to protect our
intellectual property and our proprietary rights and technology, we could lose
those rights and incur substantial costs policing and defending those
rights.  Our means of protecting our
intellectual property, proprietary rights and technology may not be adequate,
and our competitors may independently develop similar or competitive
technologies.  In addition, the laws of
some foreign countries do not protect our proprietary rights to as great an
extent as the laws of the U.S.

If claims alleging
patent, copyright or trademark infringement are brought against us and
successfully prosecuted against us, they could result in substantial costs.

Many
patents, copyrights and trademarks have been issued in the general areas of
information services, telecommunications, computer telephony and the
Internet.  From time to time, in the
ordinary course of our business, we have received and expect to continue to
receive notices, or be subject to third party claims or proceedings, alleging
that our current or future products or services infringe the patent, copyright
or trademark rights or other intellectual property rights of third
parties.  For example, on August 21,
2006, a lawsuit was filed in the U.S. District Court for the Eastern District
of Texas by Ronald A. Katz Technology Licensing, L.P. against three
conferencing service providers, including us, alleging patent
infringement.  The complaint seeks
undisclosed monetary damages, together with pre- and post-judgment interest,
treble damages for what is alleged to be willful infringement, attorneys fees
and costs and injunctive relief.  In
addition, certain of our former Voicecom business segment customers have
alleged that we are obligated to indemnify them against patent infringement
claims made by Katz against such customers. We do not believe that we have an
obligation to indemnify such customers.
However, due to the inherent uncertainties of litigation, we are unable
to predict the outcome of this matter, and an adverse outcome could have a
material effect on our business, financial condition and results of operation.

We
ultimately may not prevail on any such claims and any claiming parties may have
significantly greater resources than we have to pursue litigation of these
types of claims.  Any infringement
claim, whether with or without merit, could:

| |   |                                                                
| | - | ---------------------------------------------------------------
| |  | be time
  consuming and a diversion to management;             
| |   |                                                                
| |  | result in
  costly litigation;                                 
| |   |                                                                
| |  | cause delays
  in introducing new services or enhancements; and
| |   |                                                                
| |  | result in
  costly royalty or licensing agreements.            

If a
successful claim is made against us and we fail to develop non-infringing technology,
our business, financial condition and results of operation could be materially
adversely affected.

20

---



Risks Related to Government Regulation

Regulatory and
legislative changes may discourage certain customers from using some of our
services and could adversely impact our results of operations.

Legislative
and regulatory changes have imposed additional restrictions that may impact our
business. Such changes include the passage of federal legislation to curb
unsolicited commercial e-mail, also known as the Can Spam law, and additional
restrictions on telemarketing and unsolicited fax advertising.  These changes include the establishment of a
nationwide do not call registry for residential and wireless telephone
numbers.  The Can Spam law places
certain requirements on senders of commercial e-mail, including requiring
senders to honor opt-out requests and banning false and deceptive headers and
subject lines.  The TCPA and associated
rules promulgated by the FCC prohibit the sending of unsolicited fax
advertisements and proscribe certain telemarketing practices.  Other federal laws implemented by the FTC
also substantially regulate telemarketing.
In October 2006, the FTC proposed to bar prerecorded telemarketing calls
except in instances of prior express consent.  The FTC subsequently had a public comment period on its proposed
restrictions on prerecorded telemarketing calls.  In December 2006, the FCC issued a notice stating that it would
not enforce the ban until he completion of the rulemaking proceeding provided
prerecorded telemarketing calls comply with certain safe harbor
requirements.  If ultimately adopted,
the FTCs proposed restriction on prerecorded telemarketing calls could impact
customer use of our broadcast voice services to the extent a customer sought to
use these services for marketing messages, distinct from informational or
transactional messages.  In addition to
federal laws and regulations, there are numerous state laws and regulations
governing such activities.  For instance,
certain states regulate prerecorded telemarketing messages and pending
legislation introduced in at least one state would make political calls subject
to do not call requirements in that state although such calls are exempt from
the federal do not call requirements.
Compliance with applicable laws and regulations could have an adverse
impact on the volume of fax, e-mail and voice messages sent utilizing our
platforms.  For example, although
Congress amended the TCPA by passing the JFPA to expressly permit the faxing of
advertisements to entities and persons that have an EBR with a sender provided
certain conditions are met, Congress also imposed new notice language for fax
advertisements and mandated an opt-out mechanism.  In April 2006, the FCC issued rules to implement the JFPA that
went into effect on August 1, 2006.  The
rules clarify the definition of EBR and also require that in addition to the
EBR, the sender must have obtained the facsimile number at issue directly from
the recipient, from a directory or Internet site voluntarily made available by
a recipient or that the EBR pre-dated July 9, 2005.  The FCC also clarified the requirements of the new opt-out
notice.  Among other requirements under
the new rules, opt-out requests submitted by fax recipients must be implemented
within 30 days.  Despite the passage of
the JFPA, new notice requirements and any future time limits on the EBR
exemption may discourage use by some of our broadcast fax customers and could
adversely impact our revenues.  In
addition, we could be subject to litigation concerning our compliance and our
customers compliance with these laws and regulations, as well as governmental
enforcement actions, regulatory fines and penalties.

Government
regulations in the U.S. and internationally and the legal uncertainties related
to the Internet and electronic communications may adversely affect the demand
for our services and place financial burdens on our business related to
compliance.

Our
operations are, and may be, subject to laws and regulations in the U.S. and
internationally regulating the unsolicited transmission of fax communications
and e-mail and telemarketing laws and regulations.  We monitor such laws and regulations, have compliance policies in
place and our service agreements with customers state that customers are
responsible for their compliance with all applicable laws and regulations.  We could, nevertheless, be subject to
litigation, fines, losses or other penalties under such laws and regulations.

New
laws and regulations directed specifically at electronic commerce and the
Internet may be adopted at the international, federal and state levels.  These laws and regulations may cover issues
such as collection and use of data from Web sites, privacy, e-mail, network and
information security, spamming, pricing, content, copyrights and other
intellectual property, VoIP, changes in telecommunications regulations, online
gambling and distribution and quality of goods and services.  The enactment of any additional laws or
regulations may impede the growth of our Web-enabled products and services and
place additional financial burdens on our business in order to comply with new
laws and regulations.

21

---



We may become
subject to various government regulations applicable to traditional
telecommunications service providers, which could impair our ability to deliver
our services and adversely impact our results of operations.

Our
business is affected by regulatory decisions, trends and policies made by
international, federal and state telecommunications regulatory agencies,
including the FCC and state public service commissions.  We do not believe that our enhanced
information services are subject to the same regulations as those applicable to
traditional telecommunications service providers in the U.S.  However, it is possible that regulatory
authorities may take a different position and may seek to require us to submit
to traditional telecommunications carrier regulation under the Communications
Act of 1934, as amended, and various state laws as a provider of
telecommunications services.  We have
received, and certain companies that we acquired had received, letters from the
Investigations and Hearing Division of the FCCs Enforcement Bureau regarding registration,
filing and regulatory surcharge remittance requirements applicable to
traditional telephone companies.  In
each case, we have responded to the FCCs inquiries.  We use reasonable efforts to ensure that our operations comply
with applicable regulatory requirements.
However, if we fail to comply with any applicable government
regulations, or if we were required to submit to the jurisdiction of such
government authorities as providers of traditional telecommunications services,
we could be temporarily prohibited from providing portions of our services,
could have to restructure portions of our services, could become subject to
ongoing reporting and compliance obligations or could be subject to fines,
forfeitures, regulatory surcharge remittance requirements (past and/or future)
or other penalties for noncompliance.
Subjecting our services to these regulations would increase our
operating costs and could have a material adverse affect on our financial results.

We may become
subject to new laws and regulations involving services and transactions in the
areas of electronic commerce, which could increase costs of compliance.

In
conducting our business, we are subject to various laws and regulations
relating to commercial transactions generally, such as the Uniform Commercial
Code, and we are also subject to the electronic funds transfer rules embodied
in Regulation E promulgated by the Board of Governors of the Federal Reserve
System.  Congress has held hearings
regarding, and various agencies are considering, whether to regulate providers
of services and transactions in the electronic commerce market.  It is possible that Congress, the states or
various government agencies could impose new or additional requirements on the
electronic commerce market or entities operating therein.  If enacted, these laws, rules and
regulations could be imposed on our business and industry and could result in
substantial compliance costs.

Risks Related to International Operations and
Expansion

There are risks inherent
in international operations that could hinder our international growth
strategy.

Our
ability to achieve future success will depend in part on the expansion of our
international operations. There are difficulties and risks inherent in doing
business on an international level that could prevent us from selling our
services in other countries or hinder our expansion once we have established
international operations, including, among other things, the following:

| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | burdensome
  regulatory requirements and unexpected changes in these requirements;                                                                                             
| |   |                                                                                                                                                                                
| |  | export
  restrictions and controls relating to technology;                                                                                                                     
| |   |                                                                                                                                                                                
| |  | tariffs and
  other trade barriers;                                                                                                                                            
| |   |                                                                                                                                                                                
| |  | difficulties
  in staffing and managing international operations;                                                                                                              
| |   |                                                                                                                                                                                
| |  | accounting
  (including managing internal control over financial reporting in our non-U.S.
  subsidiaries), tax and legal complexities arising from international
  operations;
| |   |                                                                                                                                                                                
| |  | longer
  payment cycles;                                                                                                                                                       

22

---



| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | problems in
  collecting accounts receivable;                                                                    
| |   |                                                                                                                  
| |  | political
  and economic instability;                                                                            
| |   |                                                                                                                  
| |  | fluctuations
  in currency exchange rates;                                                                       
| |   |                                                                                                                  
| |  | seasonal
  reductions in business activity during the summer months in Europe and other
  parts of the world; and
| |   |                                                                                                                  
| |  | potentially
  adverse tax consequences.                                                                          

We could experience
losses from fluctuations in currency exchange rates.

We
conduct business in 19 countries with approximately 34.6% of our operating
expenses and approximately 37.8% of our consolidated revenues derived in
foreign currencies.  Accordingly, we
could experience material losses in revenues and earnings due to fluctuations
in foreign currencies.  We have not
experienced any material losses in earnings from fluctuations in currency
exchange rates, but we could in the future.
We typically denominate foreign transactions in foreign currency and
have not regularly engaged in hedging transactions, although we may engage in
hedging transactions from time to time in the future.

Item
1B. Unresolved Staff Comments

None.

Item
2. Properties

Our
current corporate headquarters occupy approximately 42,000 square feet of
office space in Atlanta, Georgia under a lease expiring August 2007.  We occupy additional space of approximately
45,000 square feet in Tinton Falls, New Jersey under a lease expiring in May
2016, approximately 94,000 square feet in Colorado Springs, Colorado under a
lease expiring August 2010 and approximately 46,000 square feet of office space
in Lenexa, Kansas under a lease expiring in August 2009.

In
October 2005, we entered into leases through two of our subsidiaries which are
guaranteed by us for new corporate headquarters in Atlanta, Georgia of an
aggregate of approximately 47,000 square feet.
The leases are effective August 1, 2007 will expire in August 2014.

We
also lease various server equipment and sales offices within and outside the
U.S.  We believe that our current
facilities and office space are sufficient to meet our present needs and do not
anticipate any difficulty securing additional space, as needed, on terms
acceptable to us.

Item
3. Legal Proceedings

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

On February
2, 2007, the United States Court of Appeals for the Eleventh
Circuit affirmed the district courts granting of our motion for summary
judgment in a lawsuit alleging violations of securities laws filed in November
1998 against us and certain of our officers and directors.  Plaintiffs had acquired our common stock in
connection with our acquisition of Xpedite.
Plaintiffs sought undisclosed damages together with pre-and post-

23

---



judgment
interest, punitive damages, costs and attorneys fees.  On February 23, 2007, plaintiffs filed a
petition for rehearing en banc and for panel rehearing with the Eleventh
Circuit.

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

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

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

No
matter was submitted to a vote of our security holders during the fourth
quarter of the fiscal year covered by this report.

24

---



Part II

Item
5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities

Our
common stock, $.01 par value per share, is listed on the New York Stock
Exchange under the symbol PGI.  The
following table sets forth the high and low closing sales prices of our common
stock as reported on the NYSE for the periods indicated.

|                 |  |      |       |     |   |       | 
|---------------- |  | ---- | ----- | --- | - | ----- | 
|2006             |  | High |       | Low |  
|                 |  |      |       |     |  
|                 |  |      |       |     |   |       | 
|Fourth
  Quarter |  | $    | 9.44  |     | $ | 8.00  | 
|Third
  Quarter  |  |      | 8.86  |     |   | 7.13  | 
|Second
  Quarter |  |      | 8.09  |     |   | 7.28  | 
|First
  Quarter  |  | $    | 9.22  |     | $ | 7.98  | 
|                 |  |      |       |     |   |       | 
|2005             |  | High |       | Low |  
|                 |  |      |       |     |  
|                 |  |      |       |     |   |       | 
|Fourth
  Quarter |  | $    | 8.65  |     | $ | 7.27  | 
|Third
  Quarter  |  |      | 12.08 |     |   | 7.89  | 
|Second
  Quarter |  |      | 11.89 |     |   | 10.29 | 
|First
  Quarter  |  | $    | 11.32 |     | $ | 9.45  | 

The
closing price of our common stock as reported on the NYSE on March 12, 2007 was
$10.58.  As of March 12, 2007 there were 568
record holders of our common stock.

We
have never paid cash dividends on our common stock, and the current policy of
our board of directors is to retain any available earnings for use in the
operation and expansion of our business.
The payment of cash dividends on our common stock is unlikely in the
foreseeable future.  Any future
determination to pay cash dividends will be at the discretion of our board and
will depend upon our earnings, capital requirements, financial condition and
any other factors deemed relevant by our board.

In
June 2004, we entered into a three-year, senior secured revolving credit
facility with Bank of America, N.A., as agent, which we first amended in
February 2005 to increase the line to $180.0 million and then further amended
in April 2006, to increase the line to $300.0 million.  See Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations in this annual
report.  This credit agreement contains
customary prohibitions on our ability to declare any cash dividends on our common
stock until all obligations under the line of credit are paid in full and all
letters of credit have been terminated.

Issuer Purchases of Equity Securities

|                      |  |                                      |  |                                  |      |                                                                                        |  |                                                                                       |  |  |           |  | 
|--------------------- |  | ------------------------------------ |  | -------------------------------- | ---- | -------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  |  | --------- |  | 
|Period                |  | Total Number
  of Shares
  Purchased |  | Average
  Price Paid
  per Share |      | Total Number of Shares
  Purchased as Part of
  Publicly Announced
  Plans or Programs |  | Maximum Number  of
  Shares that May Yet Be
  Purchased Under the
  Plans or Programs | 
|                      |  |                                      |  |                                  |      |                                                                                        |  |                                                                                       | 
|                     
|October
  1-31, 2006  |  | 0                                    |  |                                  |     |                                                                                        |  | 0                                                                                     |  |  | 5,700,000 |  | 
|November
  1-30, 2006 |  | 155,100                              |  |                                  | 8.17 |                                                                                        |  | 155,100                                                                               |  |  | 5,544,900 |  | 
|December
  1-31, 2006 |  | 35,000                               |  |                                  | 9.23 |                                                                                        |  | 35,000                                                                                |  |  | 5,509,900 |  | 
|                      |  |                                      |  |                                  |      |                                                                                        |  |                                                                                       |  |  |           |  | 
|Total                 |  | 190,100                              |  |                                  | 8.37 |                                                                                        |  | 190,100                                                                               |  |  | 5,509,900 |  | 

In
June 2006, our board of directors authorized, and we announced, a new stock
repurchase program under which we could purchase up to 7.0 million shares of
our common stock.  In that same month,
we had reached our Board-authorized limit of 5.4 million shares from our prior
stock repurchase program, which had been approved by our board in May 2000, as
amended and increased in January 2003.

25

---



Stock Performance
Graph

The
following graph shows the cumulative total shareholder return on our common
stock, the Standard & Poors 500 Composite Stock Price Index and a
self-determined peer group for the period beginning December 31, 2001 and
ending December 31, 2006.  The graph
assumes an investment in our common stock, the S&P 500 and our peer group
of $100 on December 31, 2001, and that all dividends were reinvested.  Total return calculations were prepared by
the Research Data Group, Inc.  The stock
price performance in this graph is not necessarily indicative of the future
performance of our common stock.



12/31/01

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06Premiere
  Global Services, Inc.


100.00


129.41


259.12


315.00


239.12


277.65S&P 500


100.00


77.90


100.24


111.15


116.61


135.03Peer Group


100.00


59.86


97.96


115.54


136.20


170.37


Our
peer group consists of each of the companies in our 2006 peer group included in
our proxy statement for our 2006 annual meeting of shareholders, except for two
companies, West Corporation, which became a private company in 2006 and
Raindance Communications, Inc., which was acquired by West Corporation.  Our 2007 peer group includes the following
companies: ACT Teleconferencing, Inc., Critical Path, Inc., Docucorp
International, Inc., EasyLink Services Corporation, Genesys SA, J2 Global
Communications, Inc. and WebEx Communications, Inc.

26

---



Item
6. Selected Financial Data

The
following selected consolidated statement of operations data, balance sheet
data and cash flow data as of and for the years ended December 31, 2006, 2005,
2004, 2003 and 2002 have been derived from our audited consolidated financial
statements. The selected consolidated financial data should be read in
conjunction with Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations and our consolidated financial statements
and the notes hereto in Item 8. Financial Statements and Supplementary Data
included in this annual report.

|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|---------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------- | ---- | - | -------- | - | ---- | -------- | ---- | - | ------- | - | - | ------- | -
|                                                                                                                       |  | Year Ended
  December 31,               |        
|                                                                                                                       |  |                                         |        
|                                                                                                                       |  | 2006                                    |         | 2005 |   | 2004     |   | 2003 |          | 2002 |  
|                                                                                                                       |  |                                         |        
|                                                                                                                       |  | (in
  thousands, except per share data) |        
|Statement
  of Operations Data:                                                                                        |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Revenues                                                                                                               |  | $                                       | 496,472 |      | $ | 497,473  |   | $    | 449,371  |      | $ | 381,280 |   | $ | 341,253 |  
|Operating income                                                                                                       |  |                                         | 46,370  |      |   | 75,279   |   |      | 71,394   |      |   | 37,199  |   |   | 24,905  |  
|Income from continuing operations attributable to
common and common equivalent shares for:                             |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|basic income per share                                                                                                |  |                                         | 25,509  |      |   | 48,686   |   |      | 40,685   |      |   | 26,913  |   |   | 14,423  |  
|diluted income per share                                                                                              |  |                                         | 25,509  |      |   | 48,686   |   |      | 42,071   |      |   | 27,886  |   |   | 14,423  |  
|Income from continuing operations per common and
common equivalent shares for:                                         |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|basic (1)                                                                                                             |  | $                                       | 0.37    |      | $ | 0.69     |   | $    | 0.63     |      | $ | 0.50    |   | $ | 0.27    |  
|diluted (1)                                                                                                           |  | $                                       | 0.37    |      | $ | 0.67     |   | $    | 0.58     |      | $ | 0.45    |   | $ | 0.26    |  
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|(Loss) gain from discontinued operations                                                                               |  |                                         |        |      |   | (1,269   | ) |      | 1,195    |      |   | (976    | ) |   | (12,532 | )
|Net income attributable to common and common
equivalent shares for:                                                    |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|basic net income per share                                                                                            |  |                                         | 25,509  |      |   | 47,417   |   |      | 41,880   |      |   | 25,937  |   |   | 1,891   |  
|diluted net income per share                                                                                          |  |                                         | 25,509  |      |   | 47,417   |   |      | 43,266   |      |   | 26,910  |   |   | 1,891   |  
|Net income per common and common equivalent shares
for:                                                                |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|basic (1)                                                                                                             |  | $                                       | 0.37    |      | $ | 0.67     |   | $    | 0.65     |      | $ | 0.48    |   | $ | 0.04    |  
|diluted (1)                                                                                                           |  | $                                       | 0.37    |      | $ | 0.66     |   | $    | 0.60     |      | $ | 0.44    |   | $ | 0.03    |  
|Shares used in computing income from continuing
operations and net income per common and common equivalent shares for: |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|basic                                                                                                                 |  |                                         | 68,933  |      |   | 70,392   |   |      | 64,086   |      |   | 53,767  |   |   | 53,550  |  
|diluted                                                                                                               |  |                                         | 69,787  |      |   | 72,366   |   |      | 72,280   |      |   | 61,301  |   |   | 56,262  |  
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Balance
  Sheet Data (at period end):                                                                                  |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Cash, equivalents and marketable
securities                                                                            |  | $                                       | 18,977  |      | $ | 20,508   |   | $    | 26,458   |      | $ | 24,521  |   | $ | 69,418  |  
|Working capital                                                                                                        |  |                                         | 30,169  |      |   | 32,201   |   |      | 27,062   |      |   | 8,626   |   |   | 62,103  |  
|Total assets                                                                                                           |  |                                         | 549,315 |      |   | 495,290  |   |      | 435,476  |      |   | 339,297 |   |   | 352,093 |  
|Total debt                                                                                                             |  |                                         | 138,782 |      |   | 100,474  |   |      | 68,184   |      |   | 105,000 |   |   | 180,227 |  
|Total shareholders equity                                                                                             |  |                                         | 316,291 |      |   | 303,750  |   |      | 266,930  |      |   | 133,718 |   |   | 84,338  |  
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Statement
  of Cash Flows Data:                                                                                        |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Cash provided by (used in) operating activities
from:                                                                  |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Continuing operations                                                                                                  |  |                                         | 74,147  |      |   | 92,582   |   |      | 84,576   |      |   | 59,834  |   |   | 37,244  |  
|Discontinued operations                                                                                                |  |                                         | (987    | )    |   | (2,025   | ) |      | (2,081   | )    |   |        |   |   | (5,804  | )
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Total                                                                                                                  |  | $                                       | 73,160  |      | $ | 90,557   |   | $    | 82,495   |      | $ | 59,834  |   | $ | 31,440  |  
|Cash used in investing activities from:                                                                                |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Continuing operations                                                                                                  |  |                                         | (80,966 | )    |   | (107,640 | ) |      | (111,118 | )    |   | (41,860 | ) |   | (6,175  | )
|Discontinued operations                                                                                                |  |                                         |        |      |   |         |   |      |         |      |   |        |   |   | (155    | )
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Total                                                                                                                  |  | $                                       | (80,966 | )    | $ | (107,640 | ) | $    | (111,118 | )    | $ | (41,860 | ) | $ | (6,330  | )
|Cash provided by (used in) financing activities
from:                                                                  |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Continuing operations                                                                                                  |  |                                         | 5,712   |      |   | 15,447   |   |      | 30,481   |      |   | (62,573 | ) |   | (5,911  | )
|Discontinued operations                                                                                                |  |                                         |        |      |   |         |   |      |         |      |   |        |   |   | (1,086  | )
|                                                                                                                       |  |                                         |         |      |   |          |   |      |          |      |   |         |   |   |         |  
|Total                                                                                                                  |  | $                                       | 5,712   |      | $ | 15,447   |   | $    | 30,481   |      | $ | (62,573 | ) | $ | (6,997  | )

|    |                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Basic net
  income per share is computed using the weighted average number of shares of
  common stock outstanding during the period. Diluted net income per share is
  computed using the weighted average number of shares of

27

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | common stock
  and dilutive common stock equivalents outstanding during the period from
  convertible preferred stock, convertible subordinated notes (using the
  if-converted method), unvested restricted stock and from stock options (using
  the treasury stock method). Net income available to common shareholders
  was adjusted for the interest expense related to our convertible notes prior
  to conversion.

Our
results of operations include revenues and associated costs for all
acquisitions as discussed in Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations from the effective date of each
acquisition.

Item
7. Managements Discussion and Analysis of Financial Condition and Results of
Operations

Overview

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

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

Key
highlights of our financial and strategic accomplishments for our year ended
December 31, 2006 include:

| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Consolidated management of
  our former Conferencing & Collaboration and Data Communications business
  units under our One Company theme;                                           
| |   |                                                                                                                                                                                      
| |  | Aligned our operations
  under our recently appointed President, Ted Schrafft, who reports directly to
  our chief executive officer;                                                
| |   |                                                                                                                                                                                      
| |  | Launched micro-sites for
  online customer self-service, provisioning, support and account management,
  with nearly 6,000 enterprise customers and nearly 13,000 active users today;
| |   |                                                                                                                                                                                      
| |  | Began development of our
  new Web portal to bring all of our capabilities online;                                                                                                   
| |   |                                                                                                                                                                                      
| |  | Proactively managed an
  approximate $25.2 million revenue loss from our legacy broadcast fax services;                                                                              
| |   |                                                                                                                                                                                      
| |  | Grew our Conferencing
  Solutions revenue 11.2% year-over-year, despite an approximate $17.3 million
  decline in revenue from our largest Conferencing customer;                    
| |   |                                                                                                                                                                                      
| |  | Expanded our credit
  facility to $300.0 million to augment its access to capital;                                                                                                   
| |   |                                                                                                                                                                                      
| |  | Repurchased nearly 3.9
  million shares of our common stock, or greater than 5.0% of our total shares
  outstanding, in the open market; and                                         

28

---



| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Secured Board
  authorization for a new share repurchase plan for up to 7.0 million shares of
  our common stock, or approximately 10.0% of total shares outstanding.

In
2007, we plan to continue our focus on solutions-based revenue growth. We plan
to invest in additional sales headcount, compensation plans and training, as we
move to a more consultative sales approach. Additionally, we have aligned our
development, service and support organizations in order to support our
solution-sales efforts.

We
believe that our improved cross-selling efforts under our unified sales
management team will help accelerate revenue growth in our core solution sets
in 2007. To accomplish this objective, we intend to systematically introduce
PGiCOS to all of our enterprise customers during the year to drive adoption of
additional solutions per customer.

Additionally,
in 2007 we plan to improve our profitability by continuing to automate our
internal processes and by focusing our internal development efforts on more
highly automated applications that have quicker sales cycles and implementation
times.

Finally,
in 2007 we plan to move our Company on-line with our Web portal initiative,
making all PGiCOS capabilities accessible through a single point of presence on
the Internet at PGiConnect.com. This Web portal will open a new sales channel
that we believe will improve our solutions-based revenue growth. In addition,
by driving many of our customer service and support capabilities into a
self-serve Web environment, we believe we will improve our customer experience
and drive additional efficiencies throughout our business. We believe that over
time these efficiencies will help us reduce our service and support costs and
further our goal of improving profitability.

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

The
preparation of financial statements in conformity with GAAP requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from the estimates. See the
section in this annual report entitled Critical Accounting Policies. The
following discussion and analysis provides information which we believe is
relevant to an assessment and understanding of our consolidated results of
operations and financial condition. This discussion should be read in
conjunction with our consolidated financial statements contained herein and
notes thereto.

29

---



Results of Operations

The
following table presents the percentage relationship of certain statements of
operations line items to total revenues for our consolidated operating results
for the periods indicated:

|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|---------------------------------------------------------------------------------------- |  | ------------------------- | ----- | ---- |  | ----- | - |  | ----- | -
|                                                                                         |  | Year Ended
  December 31, |      
|                                                                                         |  |                           |      
|                                                                                         |  | 2006                      |       | 2005 |  | 2004  |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|                                                                                         |  |                           |      
|REVENUES                                                                                 |  |                           | 100.0 | %    |  | 100.0 | % |  | 100.0 | %
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|OPERATING EXPENSES                                                                       |  |                           |       |      |  |       |   |  |       |  
|Cost of revenues (exclusive of depreciation shown
separately below)                      |  |                           | 40.5  |      |  | 36.3  |   |  | 35.7  |  
|Selling and marketing                                                                    |  |                           | 26.7  |      |  | 25.8  |   |  | 26.3  |  
|General and administrative (exclusive of
  net legal settlements shown separately below) |  |                           | 11.8  |      |  | 11.8  |   |  | 11.8  |  
|Research and development                                                                 |  |                           | 2.4   |      |  | 2.2   |   |  | 2.4   |  
|Depreciation                                                                             |  |                           | 4.9   |      |  | 5.0   |   |  | 5.9   |  
|Amortization                                                                             |  |                           | 2.6   |      |  | 2.7   |   |  | 2.0   |  
|Restructuring costs                                                                      |  |                           | 1.7   |      |  | 0.7   |   |  |      |  
|Asset impairments                                                                        |  |                           | 0.0   |      |  |      |   |  |      |  
|Net legal settlements and related
expenses                                               |  |                           | 0.1   |      |  | 0.4   |   |  |      |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|Total operating expenses                                                                 |  |                           | 90.7  |      |  | 84.9  |   |  | 84.1  |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|OPERATING INCOME                                                                         |  |                           | 9.3   |      |  | 15.1  |   |  | 15.9  |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|OTHER (EXPENSE) INCOME                                                                   |  |                           |       |      |  |       |   |  |       |  
|Interest expense                                                                         |  |                           | (1.8  | )    |  | (1.1  | ) |  | (1.0  | )
|Interest income                                                                          |  |                           | 0.1   |      |  | 0.1   |   |  | 0.1   |  
|Debt conversion costs                                                                    |  |                           |      |      |  |      |   |  | (3.8  | )
|Loss on sale of marketable securities                                                    |  |                           |      |      |  | (0.0  | ) |  | (0.0  | )
|Gain on prepayment of note receivable                                                    |  |                           |      |      |  |      |   |  | 1.9   |  
|Other, net                                                                               |  |                           | 0.3   |      |  | 0.0   |   |  | 0.5   |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|Total other (expense) income                                                             |  |                           | (1.4  | )    |  | (1.0  | ) |  | (2.3  | )
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                    |  |                           | 7.9   |      |  | 14.1  |   |  | 13.6  |  
|INCOME TAX EXPENSE                                                                       |  |                           | 2.8   |      |  | 4.3   |   |  | 4.6   |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|INCOME FROM CONTINUING OPERATIONS                                                        |  |                           | 5.1   | %    |  | 9.8   | % |  | 9.0   | %
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|DISCONTINUED OPERATIONS:                                                                 |  |                           |       |      |  |       |   |  |       |  
|(Loss) gain from operations of Voicecom                                                  |  |                           |      |      |  | (0.4  | ) |  | 0.4   |  
|Income tax (benefit) expense                                                             |  |                           |      |      |  | (0.1  | ) |  | 0.1   |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|(Loss) gain on discontinued operations                                                   |  |                           |      |      |  | (0.3  | ) |  | 0.3   |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|                                                                                         |  |                           |       |      |  |       |   |  |       |  
|NET INCOME                                                                               |  |                           | 5.1   | %    |  | 9.5   | % |  | 9.3   | %
|                                                                                         |  |                           |       |      |  |       |   |  |       |  

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

30

---



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

|                                          |  |                           |       |      |   |       |   |   |       | 
|----------------------------------------- |  | ------------------------- | ----- | ---- | - | ----- | - | - | ----- | 
|                                          |  | Year Ended
  December 31, |      
|                                          |  |                           |      
|                                          |  | 2006                      |       | 2005 |   | 2004  |  
|                                          |  |                           |       |      |   |       |   |   |       | 
|REVENUES:                                 |  |                           |       |      |   |       |   |   |       | 
|Revenues from continuing operations:      |  |                           |       |      |   |       |   |   |       | 
|North America                             |  | $                         | 319.3 |      | $ | 321.4 |   | $ | 293.3 | 
|Europe                                    |  |                           | 93.0  |      |   | 99.1  |   |   | 84.0  | 
|Asia Pacific                              |  |                           | 84.2  |      |   | 77.0  |   |   | 72.1  | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|                                          |  | $                         | 496.5 |      | $ | 497.5 |   | $ | 449.4 | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|INCOME (LOSS):                            |  |                           |       |      |   |       |   |   |       | 
|Income (loss) from continuing operations: |  |                           |       |      |   |       |   |   |       | 
|North America                             |  | $                         | 21.5  |      | $ | 41.8  |   | $ | 34.8  | 
|Europe                                    |  |                           | (0.7  | )    |   | 2.3   |   |   | 1.5   | 
|Asia Pacific                              |  |                           | 4.7   |      |   | 4.6   |   |   | 4.4   | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|                                          |  | $                         | 25.5  |      | $ | 48.7  |   | $ | 40.7  | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|(Loss) gain from discontinued operations: |  |                           |       |      |   |       |   |   |       | 
|North America  Voicecom                  |  |                           |      |      |   | (1.3  | ) |   | 1.2   | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|Net income:                               |  | $                         | 25.5  |      | $ | 47.4  |   | $ | 41.9  | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|IDENTIFIABLE ASSETS:                      |  |                           |       |      |   |       |   |   |       | 
|North America                             |  | $                         | 439.7 |      | $ | 403.0 |   | $ | 357.9 | 
|Europe                                    |  |                           | 71.4  |      |   | 63.8  |   |   | 51.3  | 
|Asia Pacific                              |  |                           | 38.2  |      |   | 28.5  |   |   | 26.3  | 
|                                          |  |                           |       |      |   |       |   |   |       | 
|                                          |  | $                         | 549.3 |      | $ | 495.3 |   | $ | 435.5 | 
|                                          |  |                           |       |      |   |       |   |   |       | 

Revenues

Consolidated
revenues from continuing operations were $496.5 million in 2006, $497.5 million
in 2005 and $449.4 million in 2004. Consolidated revenues in 2006 decreased
from the previous year by 0.2% and in 2005 increased from the previous year by
10.7%.

North
America revenue was 64.3%, 64.6%, and 65.3% of consolidated revenues for 2006,
2005 and 2004, respectively. North America revenue was $319.3 million in 2006,
$321.4 million in 2005 and $293.3 million in 2004. North America revenue in
2006 decreased from the previous year by 0.7% and in 2005 increased from the
previous year by 9.6%. North America revenue decreased in 2006 from the
previous year primarily as a result of declines in broadcast fax services
revenue and conferencing revenue from International Business Machines
Corporation (IBM), offset by the acquisition of Accucast and
Enunciate, and organic growth in our non-IBM Conferencing Solutions and
Desktop Fax Solutions. North America revenue increased in 2005 from the
previous year as a result of our 2005 acquisitions of Citizens Communications
Company, Netspoke, Inc. and Intelligent Meetings Corporation and the full-year effect
of our 2004 acquisitions of Resource Communications Inc.,ClearOne
Communications, Inc.,Connect-us
Communications, LLC and Communications Network Enhancement Inc. d/b/a
ConferenceCallServices (CCS) In addition, we experienced organic growth in our
non-IBM Conferencing Solutions and Desktop Fax Solutions. These gains were
offset in part by declines in broadcast fax services revenue and conferencing
revenue from IBM.

Europe
revenue was 18.7%, 19.9%, and 18.7% of consolidated revenues for 2006, 2005 and
2004, respectively. Europe revenue was $93.0 million in 2006, $99.1 million in
2005 and $84.0 million in 2004. Europe revenue in 2006 decreased from the
previous year by 6.2% and in 2005 increased from the previous year by 18.0%.
Europe revenue declined in 2006 primarily as a result of declines in broadcast
fax services revenue, offset in part by organic growth in our Conferencing
Solutions. Europe revenue increased in 2005 as a result of our acquisition of
I-Media, SA in December 2004 and organic growth of our Conferencing Solutions,
offset in part by organic declines in broadcast fax.

31

---



Asia
Pacific revenue was 17.0%, 15.5%, and 16.0% of consolidated revenues for 2006,
2005 and 2004, respectively. Asia Pacific revenue was $84.2 million in 2006,
$77.0 million in 2005 and $72.1 million in 2004. Asia Pacific revenue in 2006
and 2005 increased from the previous year by 9.4% and 6.7%, respectively. Asia
Pacific revenue increased in 2006 primarily as a result of organic growth of
our six core solutions and the acquisition of ECT, offset in part by declines in the valuation of the Yen
on our Japanese broadcast fax services revenue and declines in broadcast fax
services revenue outside of Japan. Asia Pacific revenue increased in 2005 as a
result of organic growth of our six core solutions and in broadcast fax
services revenue.

Cost
of revenues

Consolidated
cost of revenues were 40.5%, 36.3%, and 35.7% of consolidated revenues in 2006,
2005 and 2004, respectively. Consolidated cost of revenues from continuing
operations increased 10.8% to $200.5 million in 2006 from $181.0 million in
2005 and increased 12.5% in 2005 from $160.8 million in 2004.

North
America cost of revenue totaled $124.4 million in 2006, $108.7 million in 2005
and $97.6 million in 2004, or 39.0%, 33.8% and 33.3% of segment revenue, in
2006, 2005 and 2004, respectively. North America cost of revenue includes
approximately $0.7 million, $0.2 million and $0.1 million for 2006, 2005 and
2004, respectively, of equity-based compensation costs which increased in 2006
as a result of our adoption of SFAS No. 123(R), Share Based Payment (SFAS
123(R)). In 2006, North America cost of revenue increased as a percentage of
segment revenue primarily due to regulatory telecommunications costs, the
acquisition of Accucast (which carries a higher cost of revenue as a percent of
segment revenue), price compression in our organic Conferencing Solutions, the
decline of IBM Conferencing Solutions, declines in lower cost of revenue for
broadcast fax services and growth in our Web conferencing services that carry a
higher percentage cost of revenue. In 2005, North America cost of revenue
increased modestly as a percent of segment revenue primarily as a result of
lowered telecommunications costs per minute and realization of approximately
$2.5 million in favorable settlements of telecommunications disputes, offset by
declines in higher margin broadcast fax services revenue, declines in IBM
conferencing revenue, price compression in our organic non-IBM conferencing
revenue and growth in our Web conferencing services that carry a higher
percentage cost of revenue.

Europe
cost of revenue totaled $35.4 million in 2006, $38.9 million in 2005 and $32.5
million in 2004, or 38.1%, 39.3% and 38.7% of segment revenue, in 2006, 2005
and 2004, respectively. In 2006, Europe cost of revenue declined as a
percentage of segment revenue primarily as a result of lower negotiated
telecommunications costs per minute and an increase in revenue mix towards
lower cost of revenue Conferencing Solutions from higher cost of revenue
broadcast fax services. In 2005, Europe cost of revenue increased as a
percentage of segment revenue primarily as a result of our acquisition of
I-Media in December 2004, which carried a higher cost of revenue as a
percentage of revenue than our historical European business.

Asia
Pacific cost of revenue totaled $40.7 million in 2006, $33.3 million in 2005
and $30.8 million in 2004, or 48.3%, 43.3% and 42.7% of segment revenue, in
2006, 2005 and 2004, respectively. In 2006, Asia Pacific cost of revenue
increased as a percentage of segment revenue primarily as a result of price
compression in broadcast fax services and Conferencing Solutions and
telecommunications cost increases in certain countries where telecommunications
are still highly regulated by the government. Increases in costs related to
certain of our reseller arrangements that carry higher costs of revenue also
contributed to this increase. In 2005, Asia Pacific cost of revenue increased
as a percentage of segment revenue primarily as a result of price compression
in broadcast fax services and Conferencing Solutions, offset in part by declines
in negotiated telecommunications costs per minute.

Selling
and marketing

Consolidated
selling and marketing expenses from continuing operations as a percent of
consolidated revenues were 26.7%, 25.8% and 26.3% in 2006, 2005 and 2004,
respectively. Consolidated selling and marketing expenses from continuing
operations increased 2.9% to $132.3 million in 2006 from $128.6 million in
2005, and increased 9.0% in 2005 from $118.0 million in 2004.

North
America selling and marketing expense totaled $88.0 million in 2006, $84.6
million in 2005 and $75.2 million in 2004, or 27.6%, 26.3% and 25.7% of segment
revenue, in 2006, 2005 and 2004, respectively.

32

---



North America
selling and marketing expense includes approximately $1.8 million, $1.0 million
and $0.3 million for 2006, 2005 and 2004, respectively, of equity-based
compensation expense which increased in 2006 as a result of our adoption of
SFAS 123(R). In 2006, North America selling and marketing expense increased as
a percentage of segment revenue primarily due to declines in our broadcast fax
services revenue and IBM conferencing revenue, both of which have minimal
dedicated resources. Additionally, in the second half of 2006, we made
significant investments in sales and marketing resources dedicated to the
growth of our core solution sets. In 2005, North America selling and marketing
expense increased as a percentage of segment revenue primarily as a result of
declines in broadcast fax services revenue and IBM conferencing revenue.

Europe
selling and marketing expense totaled $25.6 million in 2006, $25.8 million in
2005 and $24.2 million in 2004, or 27.5%, 26.0% and 28.8% of segment revenue,
in 2006, 2005 and 2004, respectively. Europe selling and marketing expense
includes approximately $0.2 million, $0.0 million and $0.0 million for 2006,
2005 and 2004, respectively, of equity-based compensation expense which
increased in 2006 as a result of our adoption of SFAS 123(R). In 2006, Europe
selling and marketing expense increased as a percentage of segment revenue
primarily due to declines in broadcast fax services revenue. In 2005, Europe
selling and marketing expense declined as a percentage of segment revenue
primarily due to our acquisition of I-Media in 2004, which had lower sales and
marketing expense as a percentage of segment revenue.

Asia
Pacific selling and marketing expense totaled $18.7 million in 2006, $18.2
million in 2005 and $18.5 million in 2004, or 22.2%, 23.7% and 25.7% of segment
revenue, in 2006, 2005 and 2004, respectively. Asia Pacific selling and
marketing expense includes approximately $0.1 million, $0.0 million and $0.0
million for 2006, 2005 and 2004, respectively, of equity-based compensation
expense which increased in 2006 as a result of our adoption of SFAS 123(R). In
2006 and 2005, Asia Pacific selling and marketing expense as a percentage of
segment revenue declined primarily as a result of growth in revenue generated
from our resellers and in our Conferencing Solutions and reductions in sales and
marketing resources associated with broadcast fax services revenue.

Research
and development

Consolidated
research and development expenses from continuing operations as a percentage of
consolidated revenues were 2.4%, 2.2% and 2.4% in 2006, 2005 and 2004,
respectively. Consolidated research and development expenses from continuing
operations increased 11.3% to $12.1 million in 2006 from $10.8 million in 2005,
and decreased 1.4% in 2005 from $11.0 million in 2004. Consolidated research
and development expense included approximately $0.8 million, $0.1 million and
$0.0 million for 2006, 2005 and 2004, respectively, of equity-based
compensation expense which increased in 2006 as a result of our adoption of
SFAS 123(R). These costs increased as a percentage
of consolidated revenues in 2006 as a result of a greater amount of internal
costs incurred for maintenance of our new and existing product platforms. In
2005, these costs decreased from the prior period as a percentage of
consolidated revenues as a result of increased capital development expenses and
our continued policy of capitalizing only those development projects with a
high probability of economic benefit. Research and development costs associated
with product development are capitalized as internally developed software,
whereas management overhead, facilities costs and maintenance activities are
expensed as research and development. We capitalized approximately $8.0
million, $9.1 million and $6.3 million, in 2006, 2005 and 2004, respectively, of
software development costs. All research and development expenses were incurred
in North America.

General
and administrative

Consolidated
general and administrative expenses from continuing operations as a percentage
of consolidated revenues was 11.8% in 2006, 2005 and 2004. Consolidated general
and administrative expenses from continuing operations increased 0.2% to $58.6
million in 2006 from $58.5 million in 2005, and increased 10.7% in 2005 from
$52.9 million in 2004.

North
America general and administrative expense totaled $41.2 million in 2006, $40.0
million in 2005 and $36.4 million in 2004, or 12.9%, 12.5% and 12.4% of segment
revenue, in 2006, 2005 and 2004, respectively. North America general and
administrative expense includes approximately $6.2 million, $5.7 million and
$2.8 million, respectively, of equity-based compensation expense which
increased in 2006 as a result of our adoption of SFAS 123(R). In 2006, North
America general and administrative expenses increased as a percentage of
segment

33

---



revenue primarily as a result of
declines in broadcast fax services revenue and in IBM conferencing revenue,
both of which have minimal dedicated resources and bad debt expenses associated
with various broadcast fax customers and certain acquired conferencing
customers. These costs were offset in part by the integration of personnel
associated with prior years acquisitions and the consolidation of our North
America finance department from the previous segment structure. In 2005, North
America general and administrative expense increased as a percentage of segment
revenue primarily due to acquisitions in 2004 and 2005 that were not fully
integrated until 2006.

Europe
general and administrative expense totaled $10.3 million in 2006, $11.5 million
in 2005 and $10.0 million in 2004, or 11.1%, 11.6% and 11.9% of segment
revenue, in 2006, 2005 and 2004, respectively. Europe general and
administrative expense includes approximately $0.2 million, $0.2 million and
$0.1 million for 2006, 2005 and 2004, respectively, of equity-based
compensation expense which increased in 2006 as a result of our adoption of SFAS 123(R).
In 2006 and 2005, Europe general and administrative expense as a percentage of
segment revenue has declined primarily as a result of the integration of our
I-Media acquisition. Additionally, reductions in finance personnel have
occurred primarily in our former Data Communications finance department as part
of our consolidation efforts.

Asia
Pacific general and administrative expense totaled $7.1 million in 2006, $7.0
million in 2005 and $6.5 million in 2004, or 8.4%, 9.1% and 9.0% of segment
revenue, in 2006, 2005 and 2004, respectively. Asia Pacific general and
administrative expense includes approximately $0.3 million, $0.2 million and
$0.1 million for 2006, 2005 and 2004, respectively, of equity-based
compensation expense which increased in 2006 as a result of our adoption of SFAS 123(R).
Asia Pacific general and administrative expense has remained flat to declining
as a percentage of segment revenue primarily as a result of the overall revenue
growth in this segment with no significant corresponding increase in general
and administrative resources.

Depreciation

Consolidated
depreciation expenses from continuing operations as a percentage of
consolidated revenues were 4.9%, 5.0% and 5.9% in 2006, 2005 and 2004,
respectively. Consolidated depreciation expenses from continuing operations
decreased 0.8% to $24.6 million in 2006 from $24.8 million in 2005 and
decreased 6.1% from $26.4 million in 2004. Depreciation expense has declined as
a percentage of consolidated revenues between 2004 and 2006 as a result of
increased revenues from acquisitions migrated to our existing platforms. We
expect depreciation to increase as a percentage of consolidated revenues as we
continue to invest in our solutions over the coming years.

North
America depreciation expense totaled $18.2 million in 2006, $17.9 million in
2005 and $18.9 million in 2004, or 5.7%, 5.6% and 6.4% of segment revenue, in
2006, 2005 and 2004, respectively. Europe depreciation expense totaled $3.8
million in 2006, $3.9 million in 2005 and $3.8 million in 2004, or 4.1%, 4.0%
and 4.6% of segment revenue, in 2006, 2005 and 2004, respectively. Asia Pacific
depreciation expense totaled $2.6 million in 2006, $2.9 million in 2005 and
$3.7 million in 2004, or 3.1%, 3.8% and 5.1% of segment revenue, in 2006, 2005
and 2004, respectively.

Amortization

Consolidated
amortization from continuing operations as a percentage of consolidated
revenues was 2.6%, 2.7% and 2.0% in 2006, 2005 and 2004, respectively.
Consolidated amortization from continuing operations was $13.0 million, $13.2
million and $8.9 million in 2006, 2005 and 2004, respectively. Amortization
expense has increased in absolute dollars as a result of our acquisitions.
Absent additional acquisitions, we expect amortization expense will remain at
current levels.

North
America amortization expense totaled $11.2 million in 2006, $10.5 million in
2005 and $7.1 million in 2004, or 3.5%, 3.3% and 2.4% of segment revenue, in
2006, 2005 and 2004, respectively. Europe depreciation expense totaled $1.6
million in 2006, $2.7 million in 2005 and $1.5 million in 2004, or 1.7%, 2.7%
and 1.8% of segment revenue, in 2006, 2005 and 2004, respectively. Asia Pacific
depreciation expense totaled $0.2 million in 2006, $0.0 million in 2005 and
$0.3 million in 2004, or 0.3%, 0.0% and 0.5% of segment revenue, in 2006, 2005
and 2004, respectively.

34

---



Restructuring
costs

Consolidated
restructuring costs from continuing operations as a percentage of consolidated
revenues was 1.7% and 0.7% in 2006 and 2005, respectively. Consolidated
restructuring costs from continuing operations were $8.4 million and $3.3
million in 2006 and 2005, respectively. We did not have any restructuring costs
in 2004.

In
2006, we executed a restructuring plan to streamline the management of our
business on a geographic regional basis from our former Conferencing &
Collaboration and Data Communications business segments. As part of this
streamlining, we eliminated approximately 100 positions within customer
service, finance, operations and sales and marketing. In the fourth quarter of
2006, we entered into a separation agreement in connection with the resignation
of our former chief investment officer. We incurred approximately $8.0 million
in severance costs associated with these positions, which included the issuance
of restricted stock having a fair market value of $0.6 million. Additionally,
we incurred $0.6 million of lease termination costs associated with five
locations within North America. On a segment basis, these restructuring costs
were $4.6 million in North America, $3.3 million in Europe and $0.7 million in
Asia Pacific.

In
2005, we incurred $3.3 million of restructuring costs. These costs were
associated with the reduction of approximately 90 employees in selling and
marketing, operations and finance functions, primarily in North America and Europe.
The reductions in non-financial functions are the result of the significant
declines in our North America and Europe broadcast fax services revenue. The
reductions in financial functions are the result of duplicative business
processes within North America and Europe finance departments.

Asset impairment

Asset
impairments were $0.1 million in 2006 relating to the discontinuation of
technology acquired in 2003 in our North America operating segment.

Net legal
settlements and related expenses

Net
legal settlements and related expenses were $0.6 million and $2.0 million in
2006 and 2005, respectively. In 2006, we resolved a dispute with one of our
telecommunications providers for approximately $0.6 million. In February 2006,
we settled contract litigation with Captaris relating to a license agreement
and a reseller agreement entered into in connection with our acquisition of
MedaLinq assets from Captaris in September 2003. As this lawsuit arose prior to
December 31, 2005, we were required to adjust the 2005 results to reflect this
settlement and related legal fees of $2.4 million, net of accruals of $0.4
million previously recorded.

Interest expense

Interest
expense from continuing operations was $9.1 million, $5.6 million and $4.7
million in 2006, 2005 and 2004, respectively. Interest expense increased in
2006 and 2005 as a result of increased average borrowings on our credit
facility resulting from acquisitions and increases in LIBOR. Average
outstanding borrowings on our credit facility during 2006, 2005 and 2004 were
$119.6 million, $99.8 million and $35.9 million, respectively.

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

Interest
income

Interest
income was $0.5 million, $0.6 million and $0.6 million in 2006, 2005 and 2004,
respectively. Interest income remained flat in all three periods as we
maintained a relatively stable cash and cash equivalent outstanding balance.
The average cash and cash equivalents were $19.7 million in 2006, $23.2 million
in 2005, and $20.6 million in 2004.

35

---



Debt conversion
costs

In
connection with the refinancing of our initial $60.0 million credit facility with
our June 2004 $120.0 million line of credit, we incurred $17.0 million of debt
conversion costs, comprised of $16.3 million of interest make-whole payment and
$0.7 million of deferred financing costs. For a discussion of our line of
credit, see Liquidity and Capital Resources - Capital resources.

Loss
on sale of marketable securities

Loss
on marketable securities was $(0.1) million and $(16,000) in 2005 and 2004,
respectively. During 2005, we sold the remaining securities we purchased during
2004 for a loss of $0.1 million. As of December 31, 2006, we do not hold any
marketable securities. During 2004, we bought and sold securities of various
companies in the same industry as us for aggregate proceeds less commission of
$1.8 million and realized losses of approximately $16,000.

Other, net

Other,
net was $1.4 million, $0.1 million and $2.4 million in 2006, 2005 and 2004,
respectively. In 2006, we incurred foreign exchange gains of approximately $1.4
million related to cash settlements of intercompany transactions and the
Canadian dollar component of our existing line of credit. In 2004, we incurred
gains of $2.0 million as a result of payments received from EasyLink in excess
of the original estimated carrying value of a note receivable of $1.9 million.
The remaining $0.4 million of gains in 2004 was the result of the acceptance of
early payment of the remaining deferred purchase price related to our
acquisition of the e-messaging business of C&W in January 2003 at a
discount resulting in a gain.

Income taxes

In
2006, 2005 and 2004, our effective income tax rate varied from the statutory
rate, primarily as a result of non-deductible compensation costs and changes in
valuation allowances. Changes in valuation allowances are required when facts
and circumstances surrounding these estimates have changed.

The
provision for income taxes and corresponding balance sheet accounts are
determined in accordance with SFAS No. 109, Accounting for Income Taxes (SFAS
109). Under SFAS 109, the deferred tax liabilities and assets are determined
based on temporary differences between the basis of certain assets and
liabilities for income tax and financial reporting purposes, in addition to net
operating loss carryforwards which are reasonably assured of being utilized.
These differences are primarily attributable to the recognition of depreciation
and amortization of property, equipment and intangible assets, allowances for
doubtful accounts and certain employee benefit accruals. Deferred tax assets
and liabilities are measured by applying enacted statutory tax rates applicable
to future years in which the deferred tax assets or liabilities are expected to
be settled or realized. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.

We
have reserves for certain asserted international and state income tax
contingencies based on the likelihood of obligation in accordance with SFAS No.
5. As of December 31, 2006 and 2005, we had approximately $4.6 million and $3.1
million, respectively, reserved for such contingencies. During 2006, we
provided for approximately $1.5 million of additional reserves based on the
preliminary results of an audit with a state that questioned our methodology
used in allocating taxable income to it from other states in which we are not
subject to income tax. We believe our methodology is consistent with generally
accepted methods used in other states but believe that it is more likely than not
we will incur this liability. This
amount is classified as Income taxes payable on the face of the consolidated
balance sheet. In the normal course of business, we are subject to inquiries
from U.S. and non-U.S. tax authorities regarding the amount of income taxes
due. These inquiries may result in adjustments of the timing or amount of
taxable income or deductions or the allocation of income among tax
jurisdictions. Further, during the ordinary course of business, other facts and
circumstances may impact our ability to utilize income tax benefits as well as
the estimated income taxes to be paid in future periods.

We
believe we are appropriately reserved for income taxes. If we are required to
pay amounts that differ from our reserves for uncertain tax matters, the
financial impact will be reflected in the period in which the uncertain

36

---



tax matter is
settled. In the event that actual results differ from these estimated reserves,
we may need to make an adjustment which could materially impact our financial
condition and results of operations.

Discontinued
operations

During
2005, we settled litigation with JOBA, Inc., a franchisee of our former
Voicecom business segment. The parties to the consolidated action and certain
other individuals and entities entered into a settlement agreement, which
provided for payment in the aggregate of approximately $1.1 million to JOBA by
our subsidiary, Voice-Tel Enterprises, LLC, and by Voicecom Telecommunications,
LLC, an unrelated party which purchased substantially all of the assets of our
Voicecom business segment in March 2002. Approximately $0.9 million of this
aggregate settlement payment was funded by Voice-Tel and approximately $0.2
million was funded by Voicecom, in consideration, for among other things,
dismissal of the litigation, with prejudice, mutual releases and covenants not
to sue and termination of the JOBA franchise. Voice-Tels portion of the
settlement amount and approximately $0.4 million in legal fees and expenses
were accrued as of June 30, 2005 and included in the Discontinued operations
line item in the consolidated statements of operations. During 2005, we also
changed the estimated liability for certain lease obligations associated with
the discontinued operations of our former Voicecom reportable segment. The
change is associated with the failure to sublease certain floor space that was
assumed in the original estimate.

During
2004, we adjusted the estimated liability for certain lease obligations
associated with the discontinued operations of our former Voicecom business
segment. This adjustment is attributable to certain sublease arrangements that
we entered into with regard to former Voicecom facilities and, as a result, we
recorded a gain on discontinued operations of $1.2 million, net of taxes.

Acquisitions

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

North America

In
September 2006, we acquired certain assets and the stock of eNunciate, a
Canadian-based provider of audio and Web conferencing. We paid $25.9 million in
cash at closing and $0.8 million in transaction fees and closing costs. We
funded the purchase through Canadian dollar borrowings on our line of credit
and Canadian dollar cash balances available. We followed SFAS No. 141, and
approximately $0.2 million has been allocated to acquired fixed assets, $0.1
million has been allocated to acquired working capital, $6.1 million has been
allocated to identifiable customer lists and $0.2 million has been allocated to
a non-compete agreement, with the identifiable customer lists and non-compete
agreement amortized over five-year useful lives. Because we have not finalized the working capital component of the purchase price, the residual $20.1 million of
the aggregate purchase price has been preliminarily allocated to goodwill, which is subject
to a periodic impairment assessment in accordance with SFAS No. 142.

In
January 2006, we acquired all of the outstanding stock of Accucast, a
U.S.-based provider of e-mail communication services. We paid $12.3 million in
cash at closing and $0.5 million in transaction and closing costs. During 2006,
we paid an additional $1.5 million cash purchase price upon the achievement of
the first milestone target as specified in the purchase agreement. We may pay
up to an additional $1.5 million in cash purchase price based upon the
achievement of additional milestone integration targets as specified in the
purchase agreement. We funded the
purchase through our line of credit. We followed SFAS No. 141, and
approximately $0.2 million has been allocated to acquired fixed assets, $0.3
million has been allocated to other acquisition liabilities, $2.0 million has
been allocated to developed technology and $1.0 million has been allocated to
identifiable customer lists, with the identifiable customer lists and developed
technology amortized over five-year useful lives. In addition, $1.2 million has
been allocated to long-term deferred tax liabilities to record the step-up in
basis for the customer lists and developed technology purchased. Because we
have not finalized the working capital component of the purchase price, the
residual $12.6 million of the aggregate purchase price has been
preliminarily allocated to goodwill, which is subject to a periodic impairment assessment
in accordance with SFAS No. 142.

37

---



In
August 2005, we acquired all of the outstanding stock of Netspoke, a U.S.-based
provider of audio and Web conferencing services. We paid $23.4 million in cash
at closing and $0.5 million in transaction fees and closing costs. We funded
the purchase through our line of credit. We followed SFAS No. 141, and
approximately $1.1 million of the aggregate purchase price has been allocated
to acquired working capital, $0.7 million has been allocated to acquired fixed
assets, $1.6 million has been allocated to severance and certain other
acquisition liabilities, $2.9 million has been allocated to identifiable
customer lists, $1.0 million has been allocated to developed technology and
$0.6 million has been allocated to a non-compete agreement, with the
identifiable customer lists, developed technology and non-compete agreement
amortized over five-year useful lives. In addition, $1.8 million has been
allocated to long-term deferred tax liabilities to record the step-up in basis
for the customer intangible assets purchased. The residual $21.0 million of the
aggregate purchase price has been allocated to goodwill, which is subject to a
periodic impairment assessment in accordance with SFAS No. 142.

In
June 2005, we acquired substantially all of the assets and assumed certain
liabilities of Intelligent Meetings, a U.S.-based provider of audio and Web
conferencing services. We paid $6.2 million in cash at closing and $0.1 million
in transaction fees and closing costs. We funded the purchase through our line
of credit. We followed SFAS No. 141, and approximately $0.4 million of the
aggregate purchase price has been allocated to acquired working capital, $0.1
million has been allocated to acquired fixed assets, $0.1 million has been
allocated to severance and certain other acquisition liabilities, $2.0 million
has been allocated to identifiable customer lists and $0.1 million has been
allocated to a non-compete agreement, with the identifiable customer lists and
non-compete agreement amortized over five-year useful lives. The residual $3.8
million of the aggregate purchase price has been allocated to goodwill, which
is subject to a periodic impairment assessment in accordance with SFAS No. 142.

In
March 2005, we acquired substantially all of the assets and assumed certain
liabilities of the audio and Web conferencing services business of Citizens,
primarily servicing customers in the U.S. We paid $43.2 million in cash at
closing and $0.2 million in transaction fees and closing costs. We funded the
purchase through our line of credit. We followed SFAS No. 141, and
approximately $2.1 million of the aggregate purchase price has been allocated
to acquired working capital, $0.9 million has been allocated to acquired fixed
assets, $2.5 million has been allocated to severance and certain other
acquisition liabilities and $6.0 million has been allocated to identifiable
customer lists which are being amortized over a five-year useful life. The
residual $36.9 million of the aggregate purchase price has been allocated to
goodwill, which is subject to a periodic impairment assessment in accordance
with SFAS No. 142.

Asia Pacific

In
November 2006, we acquired substantially all of the assets of ECT, an
Australian-based provider of audio and Web conferencing services. We paid $4.4
million in cash at closing and $0.2 million in transaction fees and closing
costs. We funded the purchase through our Yen-denominated line of credit with
Sumitomo Mitsui Banking Corporation and Australian dollar cash balances
available. We followed SFAS No. 141, Business Combinations (SFAS No. 141),
and approximately $0.1 million has been allocated to acquired fixed assets,
$0.1 million has been allocated to acquired working capital, $1.1 million has
been allocated to identifiable customer lists and $0.1 million has been
allocated to a non-compete agreement, with the identifiable customer lists and
non-compete agreement amortized over five-year useful lives. The residual $3.2
million of the aggregate purchase price has been
preliminarily allocated to goodwill, which is
subject to a periodic impairment assessment in accordance with SFAS No. 142.

Liquidity
and capital resources

As
of December 31, 2006, we had $19.0 million in cash and cash equivalents
compared to $20.5 million as of December 31, 2005. Cash balances residing
outside of the U.S. as of December 31, 2006 were $18.4 million compared to
$19.9 million as of December 31, 2005. We repatriate cash for repayment of
royalties and management fees charged to international locations from the U.S.
Therefore, foreign exchange gains and losses resulting from these transactions
are recorded in Other, net on the face of the consolidated statements of
operations. Intercompany loans with foreign subsidiaries generally are
considered to be permanently invested for the foreseeable future. Therefore,
foreign exchange gains and losses resulting from these transactions are
recorded in the cumulative translation adjustment account on face of the
consolidated balance sheet. Based on our potential cash position and potential
conditions in the capital markets, we could require repayment of these loans
despite the

38

---



long-term
intention to hold them as permanent investments. At December 31, 2006, we had
approximately $164.1 million of availability under our existing $300.0 million
line of credit. For a discussion of our line of credit, see Liquidity and
Capital Resources  Capital resources.

Cash provided by
operating activities

Consolidated
operating cash flows from continuing operations were $74.1 million, $92.6
million and $84.6 million in 2006, 2005 and 2004, respectively. Consolidated
operating cash flows from continuing operations decreased $18.5 million in 2006
from 2005 and increased $8.0 million in 2005 from 2004. In 2006, operating cash
flows before changes in assets and liabilities were $75.5 million. In
2006, changes to assets and liabilities were $(1.4) million. The change in
assets and liabilities was due primarily to new facility lease deposits and
software maintenance agreements. In 2005, operating cash flows before
changes in assets and liabilities were $103.5 million. In 2005, changes to assets and liabilities
were $(12.9) million. The change in assets and liabilities was primarily
attributable to growth in our receivables due to the integration of various
acquisitions and growth in non-IBM revenue which have longer payment terms, the
payment of federal income taxes accrued in 2004 at a greater amount than in
2005 and the favorable result of accrued vendor disputes resolved in 2005. In
2004, operating cash flows before changes in assets and liabilities were $90.4
million. In 2004, changes to assets and
liabilities were $(7.9) million. This change was attributable to growth in our
receivables due to revenue growth and acquisitions, reductions in payables
associated with the settlement of various disputed payables and our initiative
to reduce days payables outstanding.

Cash used in
investing activities

Consolidated
investing activities from continuing operations used cash of approximately
$81.0 million, $107.6 million and $111.1 million in 2006, 2005 and 2004,
respectively. Cash used in 2006 was primarily related to $49.0 million used to
fund our acquisitions and $31.9 million of capital expenditures. Cash used in
2005 was primarily related to $79.9 million to fund our acquisitions and $28.2
million of capital expenditures. Cash used in 2004 was primarily related to
$98.2 million used to fund our acquisitions. In 2004, we also paid $24.8
million in capital expenditures and received $11.7 million from EasyLink
related to payments received in connection with a note receivable refinancing.

Cash provided by
(used in) financing activities

Consolidated
financing activities provided cash of approximately $5.7 million, $15.4
million, and $30.5 million in 2006, 2005 and 2004, respectively. Cash provided
by financing activities in 2006 was the result of net borrowings on our credit
facility of $34.7 million, used primarily to fund our acquisitions, $2.5
million received from stock option exercises and $0.2 million from excess tax
benefits from share-based payment arrangements offset by treasury stock
purchases of $31.7 million. Cash provided by financing activities in 2005 was
the result of net borrowings on our credit facility of $29.4 million, used
primarily to fund our acquisitions, cash receipts from repayments of employee
loans of $4.0 million and $8.5 million received from stock option exercises
offset by treasury stock purchases of $26.5 million. Cash provided by financing
activities during 2004 was the result of net borrowings on our credit facility
of $63.0 million to fund acquisitions and $11.6 million received from stock
option exercises, offset in part by the redemption of the remaining outstanding
balance on our 2004 convertible notes of $15.0 million, the interest make-whole
payment associated with the early conversion of our 2008 convertible notes of
$16.3 million and treasury stock purchases of $12.8 million.

Off-balance sheet
arrangements

As
of December 31, 2006, we did not have any off-balance-sheet arrangements, as
defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Commitments and
contingencies

At
December 31, 2006, we had the following contractual obligations. We are
primarily obligated under operating leases for network facilities and office
space, outstanding balances, LIBOR interest and commitment fees under our line
of credit, remaining cash payments on current and prior year acquisitions and
telecommunications

39

---



service
contractual minimum purchase agreements.

The
following table displays contractual obligations as of December 31, 2006 (in
thousands):

|                                             |  |                             |         |                                                     |      |        |      |   |        |  |      |        |                |   |       |  |   |         |  |   |       | 
|-------------------------------------------- |  | --------------------------- | ------- | --------------------------------------------------- | ---- | ------ | ---- | - | ------ |  | ---- | ------ | -------------- | - | ----- |  | - | ------- |  | - | ----- | 
|                                             |  | Total
  Amounts
  Committed |         | Payments
  Due by Period
  Years Ended December 31, |     
|                                             |  |                             |         |                                                    
|Contractual obligation                       |  |                             | 2007    |                                                     | 2008 |        | 2009 |   | 2010   |  | 2011 |        | There-
  After |  
|                                             |  |                             |         |                                                     |      |        |      |   |        |  |      |        |                |   |      
|                                            
|Operating leases                             |  | $                           | 46,336  |                                                     | $    | 13,234 |      | $ | 11,688 |  | $    | 8,741  |                | $ | 5,521 |  | $ | 1,594   |  | $ | 5,558 | 
|Current borrowings on line of credit         |  |                             | 134,456 |                                                     |      |       |      |   |       |  |      |       |                |   |      |  |   | 134,456 |  |   |      | 
|Credit facility commitment fees and interest |  |                             | 15,869  |                                                     |      | 7,356  |      |   | 5,155  |  |      | 2,658  |                |   | 524   |  |   | 176     |  |   |      | 
|Restructuring costs                          |  |                             | 7,138   |                                                     |      | 4,800  |      |   | 384    |  |      | 384    |                |   | 384   |  |   | 384     |  |   | 802   | 
|Telecommunications service agreements        |  |                             | 20,667  |                                                     |      | 14,221 |      |   | 5,803  |  |      | 643    |                |   |      |  |   |        |  |   |      | 
|Acquisitions                                 |  |                             | 1,723   |                                                     |      | 462    |      |   | 799    |  |      | 396    |                |   | 66    |  |   |        |  |   |      | 
|Capital leases                               |  |                             | 4,326   |                                                     |      | 2,044  |      |   | 1,415  |  |      | 833    |                |   | 34    |  |   |        |  |   |      | 
|Voicecom lease liability                     |  |                             | 1,155   |                                                     |      | 1,155  |      |   |       |  |      |       |                |   |      |  |   |        |  |   |      | 
|Asset retirement obligation                  |  |                             | 501     |                                                     |      | 501    |      |   |       |  |      |       |                |   |      |  |   |        |  |   |      | 
|Other long-term liabilities                  |  |                             | 570     |                                                     |      |       |      |   | 570    |  |      |       |                |   |      |  |   |        |  |   |      | 
|                                             |  |                             |         |                                                     |      |        |      |   |        |  |      |        |                |   |       |  |   |         |  |   |       | 
|                                             |  | $                           | 232,741 |                                                     | $    | 43,773 |      | $ | 25,814 |  | $    | 13,655 |                | $ | 6,529 |  | $ | 136,610 |  | $ | 6,360 | 
|                                             |  |                             |         |                                                     |      |        |      |   |        |  |      |        |                |   |       |  |   |         |  |   |       | 

State sales taxes

We
have reserves for certain state sales tax contingencies based on the likelihood
of obligation in accordance with SFAS No. 5. Historically, we have not
collected and remitted state sales tax from our Conferencing Solutions
customers. We were recently audited by the Commonwealth of Massachusetts
Department of Revenue claiming that our audio conferencing services are subject
to sales tax in Massachusetts. In March 2006, we began assessing sales tax to
our customers in Massachusetts as a result of this audit. In July 2006, we paid
an initial payment of approximately $1.2 million to the Commonwealth of
Massachusetts Department of Revenue for taxable years prior to 2005. Amounts
associated with 2005 and early 2006 are still under review and have yet to be
settled. More states may claim that we are subject to an assessment of sales
taxes. As of December 31, 2006 and December 31, 2005, we had reserved
approximately $4.3 million and $5.7 million, respectively, for certain state
sales tax contingencies. This amount is included in Accrued taxes on the face
of the consolidated balance sheet. We believe we are appropriately accrued for
these contingencies. In the event that actual results differ from these
reserves, we may need to make adjustments which could materially impact our
financial condition and results of operations. Historically, we have collected
and remitted sales tax from our non-Conferencing Solutions customers in
applicable states. However, it is possible states may disagree with our method
of assessing and remitting these state sales taxes.

Capital
resources

In
April 2006, we closed an amendment to our credit facility, with a syndicate led
by Bank of America, N.A., that increased the amount available to us under our
line of credit from $180.0 million to $300.0 million, reduced the applicable percentages
across the pricing grid and extended the maturity of the credit facility from
February 2009 to April 2011. The amendment also provided for an uncommitted
accordion feature allowing for an additional increase of $100.0 million to
$400.0 million of the revolving credit line, subject to the terms and
conditions as set forth in the amendment. The credit facility is subject to
customary covenants for secured credit facilities of this nature. Certain of
our material domestic subsidiaries have guaranteed our obligations under the
credit facility, which is secured by substantially all of our assets and the
assets of our material domestic subsidiaries. In addition, we have pledged as
collateral all of the issued and outstanding stock of our material domestic
subsidiaries and 65.0% of our material foreign subsidiaries. We believe that as
of December 31, 2006, we were in compliance in all material respects with all
covenants under our line of credit and have obtained any required

40

---



waivers or consents from
lenders, as applicable. Proceeds drawn under this credit agreement may be used
for refinancing of existing debt, working capital, capital expenditures,
acquisitions and other general corporate purposes. The annual interest rate
applicable to borrowings under the line of credit, at our option, is the base
rate (the greater of the federal funds rate plus 0.5% or the Bank of America
prime rate) or LIBOR, plus, in each case, an applicable margin which will vary
based upon our leverage ratio at the end of each fiscal quarter. At December
31, 2006, the applicable margin with respect to base rate loans was 0.0%, and
the applicable margin with respect to LIBOR loans was 1.25%. At December 31,
2006, our interest rate on 30-day LIBOR loans was 6.57188%. As of December 31,
2006, we had approximately $134.5 million of borrowings outstanding and
approximately $1.4 million in letters of credit outstanding under our line of
credit.

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

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

In
June 2006, we entered into a capital lease for the purchase of network
equipment. This capital lease has an interest rate of 3.1% and a term of 36
months. The principal balance at December 31, 2006 was $0.5 million.

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

In
March 2005, we entered into a capital lease for the purchase of various
operating and network equipment. This capital lease line has an interest rate that
varies between 2.5% and 10.5%, depending on the operating equipment being
leased, and a term of 36 months. The principal balance at December 31, 2006 was
$3.1 million.

In
September 2004, we entered into a capital lease for the purchase of network
equipment. This capital lease has an interest rate of 3.3% and a term of 60
months. The principal balance at December 31, 2006 was $0.3 million.

At
December 31, 2006, we had no other indebtedness outstanding except for the
borrowings under our lines of credit, the capital lease obligations listed
above and an acquired capital lease with a principal balance of $0.1 million.

Liquidity

As
of December 31, 2006, we had $19.0 million of cash and cash equivalents. We
generated positive operating cash flows from each of our geographic business
segments for the twelve months ended December 31, 2006. Each geographic
business segment had sufficient cash flows from operations to service existing
debt obligations and to fund capital expenditure requirements, which have
historically been 4% to 6% of annual consolidated revenues, and to fund
research and development costs for new services and enhancements to existing
services, which have historically been approximately 2% to 3% of annual
consolidated revenues. In 2006, capital expenditure funding requirements were
slightly higher than our historical averages due to new product development and
capacity expansion. Assuming no material change to these costs, which we do not
anticipate, we believe that we will generate adequate operating cash flows for
capital expenditures and contractual commitments and to satisfy our
indebtedness and fund our liquidity needs for at least the next 12 months. We
have historically borrowed on our line of credit in order to fund acquisitions.
At December 31, 2006, we had $164.1 million of available credit on our existing
$300.0 million line of credit.

41

---



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

Critical Accounting
Policies

Managements
Discussion and Analysis of Financial Condition and Results of Operations is
based upon our consolidated financial statements and the notes thereto, which
have been prepared in accordance with generally accepted accounting principles
in the U.S. The preparation of these financial statements requires management
to make estimates and judgments that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reported periods. On an ongoing basis, management evaluates its
estimates and judgments, including those related to revenue recognition,
allowance for uncollectible accounts, goodwill and other intangible assets,
income taxes, investments, restructuring costs and legal contingencies.

Management
bases its estimates and judgments on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. There can
be no assurance that actual results will not differ from those estimates.

We
have identified the policies below as critical to our business operations and
the understanding of our results of operations. For a detailed discussion on
the application of these and other accounting policies, see Note 2 to our
consolidated financial statements.

Revenue recognition

We
recognize revenues when persuasive evidence of an arrangement exists, services
have been rendered, the price to the buyer is fixed or determinable and
collectibility is reasonably assured. Revenues consist primarily of usage fees
generally based on per minute, per fax page or per transaction methods. To a
lesser extent, we charge subscription fees and have fixed-period minimum revenue
commitments. Unbilled revenue consists of earned but unbilled revenue which
results from non-calendar month billing cycles. Deferred revenue consists of
payments made by customers in advance of the time services are rendered. Our
revenue recognition policies are consistent with the guidance in Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
Statements, as amended by SAB 101A, 101B and SAB 104.

Should
changes in conditions cause management to determine these criteria are not met
for certain future transactions, revenue recognized for any reporting period
could be adversely affected.

Allowance for
uncollectible accounts receivable

Prior
to the recognition of revenue, we make a decision that collectibility is
reasonably assured. Over time, management analyzes accounts receivable
balances, historical bad debts, customer concentrations, customer
creditworthiness, current economic trends, changes in our customer payment
terms and trends when evaluating the adequacy of the allowance for
uncollectible accounts receivable. Significant management judgment and
estimates must be made and used in connection with establishing the allowance
for uncollectible accounts receivable in any accounting period. The accounts
receivable balance was $82.9 million and $79.4 million, net of allowance for
uncollectible accounts receivable of $4.9 million and $7.6 million, as of
December 31, 2006 and 2005, respectively.

If
the financial condition of our customers were to deteriorate, resulting in an
impairment to their ability to make payments, additional allowances may be
required.

42

---



Goodwill and other
intangible assets

We evaluate intangible assets and long-lived assets for potential impairment
indicators whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors that management considers
important which could trigger an impairment review include the following:

| |   |                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | significant
  decrease in the market value of an asset;                                                                                                                                                                   
| |   |                                                                                                                                                                                                                           
| |  | significant
  adverse change in physical condition or manner of use of an asset;                                                                                                                                          
| |   |                                                                                                                                                                                                                           
| |  | significant
  adverse change in legal factors or negative industry or economic trends;                                                                                                                                    
| |   |                                                                                                                                                                                                                           
| |  | a current
  period operating or cash flow loss combined with a history of operating or
  cash flow losses or a projection or forecast that demonstrates continuing
  losses associated with the use of a long-lived asset;
| |   |                                                                                                                                                                                                                           
| |  | significant
  decline in our stock price for a sustained period; and                                                                                                                                                      
| |   |                                                                                                                                                                                                                           
| |  | an
  expectation that, more likely than not, an asset will be sold or otherwise
  disposed of before the end of its previously estimated useful life.                                                                     

In
2002, Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and
Other Intangible Assets, became effective and as a result, we ceased to
amortize approximately $123.1 million of goodwill. In lieu of amortization, we
were required to perform an initial impairment review of our goodwill in 2002
and an annual impairment review thereafter. We completed reviews as of January 1, 2007, 2006 and 2005 and immediately prior to the change in our segment reporting in the fourth quarter of 2006 with no impairments identified. Other
intangible assets with finite lives that do not meet the criteria of SFAS No.
142 continue to be amortized. We recognize an impairment loss when the fair
value is less than the carrying value of such assets and the carrying value of
these assets is not recoverable. The impairment loss, if applicable, is
calculated based on the discounted estimated future cash flows using our
weighted average cost of capital compared to the carrying value of the
long-lived asset. Net intangible assets, long-lived assets and goodwill
amounted to $333.5 million and $297.2 million as of December 31, 2006 and 2005,
respectively.

Future
events could cause us to conclude that the current estimates used should be
changed and that goodwill and intangible assets associated with acquired
businesses are impaired. Any resulting impairment loss could have a material
adverse impact on our financial condition and results of operations.

Income
taxes

As part of
the process of preparing our consolidated financial statements we are required
to estimate our taxes in each of the jurisdictions in which we operate. This
process involves management estimating the actual current tax exposure together
with assessing temporary differences resulting from differing treatment of
items for tax and accounting purposes. These differences result in deferred tax
assets and liabilities, which are included within our consolidated balance
sheet. We must then assess the likelihood that the deferred tax assets will be
recovered from future taxable income and, to the extent we believe that
recovery is not likely, we must establish a valuation allowance. To the extent
we establish a valuation allowance or increase this allowance in a period, an
expense is recorded within the tax provision in our consolidated statements of operations.

Significant
management judgment is required in determining our income taxes payable, our
deferred tax assets and liabilities and any valuation allowance recorded
against our net deferred tax assets. Our net deferred tax asset as of December
31, 2006 and 2005 was $11.3 million and $13.2 million, net of a valuation
allowance of $9.5 million and $9.3 million, respectively. We have recorded this
valuation allowance due to uncertainties related to our

43

---



ability to
utilize some of our deferred tax assets, primarily consisting of certain net
operating losses carried forward and foreign tax credits before they expire.
The valuation allowance is based on our estimates of taxable income by
jurisdiction in which we operate and the period over which the deferred tax
assets will be recoverable.

In
the event that actual results differ from these estimates or we adjust these
estimates in future periods, we may need to establish an additional valuation
allowance which could materially impact our financial condition and results of
operations.

We
also have reserves for certain asserted international, federal and state tax
contingencies based on the likelihood of obligation. In the normal course of
business, we are subject to inquiries from U.S. and non-U.S. tax authorities
regarding the amount of income taxes due. These challenges may result in
adjustments of the timing or amount of taxable income or deductions or the
allocation of income among tax jurisdictions. Further, during the ordinary
course of business, other facts and circumstances may impact our ability to
utilize tax benefits as well as the estimated income taxes to be paid in future
periods. We believe we have appropriately accrued for tax exposures. If we are
required to pay an amount less than or exceeding our provisions for uncertain
tax matters, the financial impact will be reflected in the period in which the
matter is resolved. In the event that actual results differ from these
estimates, we may need to adjust tax accounts which could materially impact our
financial condition and results of operations.

Restructuring
costs

Restructuring
reserves are based on certain estimates and judgments related to severance and
exit costs, contractual obligations and related costs. Our estimated severance
costs could be impacted if actual severance payments to individuals outside of
the U.S. are less than initial estimates. Contractual lease obligations could
be materially affected by factors such as our ability to secure sublessees, the
creditworthiness of sublessees and the success at negotiating early termination
agreements with lessors.

In
the event that actual results differ from these estimates, we may need to
establish additional restructuring accruals or reverse accrual amounts
accordingly.

Legal
contingencies

We are
currently involved in certain legal proceedings as disclosed in Item 3. Legal
Proceedings of this annual report on Form 10-K. In accordance with FAS No. 5,
we accrue an estimate of the probable costs for the resolution of legal claims.
These estimates are developed in consultation with outside counsel handling
these matters and based upon an analysis of potential results, assuming a
combination of litigation and settlement strategies.

In
many cases, the accounting treatment of a particular transaction is
specifically dictated by GAAP, with no need for managements judgment in their
application. There are also areas in which managements judgment in selecting
any available alternative would not produce a materially different result. Our
estimates are subject to change and we adjust the financial impact in the
period in which they are resolved. See the audited consolidated financial
statements and notes thereto which contain accounting policies and other
disclosures required by GAAP.

New Accounting
Pronouncements

In
September 2006, the SEC staff added Section N to Staff SAB Topic 1 through the
issuance of Financial Statements  Considering the Effects of Prior Year Misstatements
when Qualifying Misstatements in Current Year Financial Statements (SAB 108).
SAB 108 addresses how a registrant should evaluate whether an error in its
financial statements is material. The guidance in SAB 108 will be effective for
fiscal years ending after November 15, 2006. The adoption of SAB 108 did not
have a material impact on our consolidated financial statements.

In
June 2006, the FASB issued FASB Interpretation (FIN) 48, Accounting for
Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprises financial statements in
accordance with FASB SFAS 109, Accounting for Income Taxes. FIN 48 defines
the minimum recognition threshold a tax position is required to meet before
being recognized in the financial statements. FIN 48

44

---



is effective
for fiscal years beginning after December 15, 2006. We will adopt FIN 48 as of
our fiscal year beginning January 1, 2007, as required. The cumulative effect
of adopting FIN 48 will be recorded in retained earnings and other accounts, as
applicable. We have not determined the effect that the adoption of FIN 48 will
have on our financial position and results of operations.

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

Item
7A. Quantitative and Qualitative Disclosures About Market Risk

We
are exposed to market risk from changes in interest rates and foreign currency
exchange rates. We manage our exposure to these market risks through our
regular operating and financing activities and the timing of intercompany
payable settlements. In addition, in February 2006, we entered into a
three-year $50.0 million interest rate swap at a fixed rate of 4.99%, and in
August 2006, we entered into two separate three-year $12.5 million interest
rate swaps at 5.135% and 5.159% respectively. All of these swaps are exclusive
of our applicable margin as stated in our credit facility. These interest rate
swaps effectively convert the interest payments of $75.0 million of our
LIBOR-based borrowings to a fixed rate.

At
December 31, 2006, we had borrowings of approximately $59.5 million outstanding
under our line of credit that are subject to interest rate risk. Each 100 basis
point increase in interest rates relative to these borrowings would impact
annual pre-tax earnings and cash flows by approximately $0.6 million based on
our December 31, 2006 debt level.

Approximately
37.8% and 36.9% of our consolidated revenues from continuing operations and
34.6% and 37.3% of our operating expenses from continuing operations were
transacted in foreign currencies in 2006 and 2005, respectively. As a result,
fluctuations in exchange rates impact the amount of our reported sales and
operating income. A hypothetical positive or negative change of 10% in foreign
currency exchange rates would positively or negatively change revenues for 2006
by approximately $18.8 million and operating expenses for 2006 by approximately
$15.6 million. Our principal exposure has been related to local currency sales
and operating costs in the Euro Zone, Canada, the United Kingdom, Australia and
Japan. We have not used derivatives to manage foreign currency exchange risk,
and no foreign currency exchange derivatives were outstanding at December 31,
2006.

45

---



Item
8. Financial Statements and Supplementary Data

Premiere Global
Services, Inc. and Subsidiaries Index to Consolidated Financial Statements

|                                                                                                |     
|----------------------------------------------------------------------------------------------- | ----
|                                                                                                | Page
|                                                                                                |     
|Report of Independent Registered Public Accounting Firm                                         | 47  
|Consolidated Balance Sheets, December 31, 2006 and 2005                                         | 48  
|Consolidated Statements of Operations, Years Ended December 31, 2006,
  2005 and 2004           | 49  
|Consolidated Statements of Shareholders Equity, Years Ended December
  31, 2006, 2005 and 2004 | 50  
|Consolidated Statements of Cash Flows, Years Ended December 31, 2006,
  2005 and 2004           | 51  
|Notes to Consolidated Financial Statements                                                      | 52  

46

---



REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and Shareholders of
Premiere Global Services, Inc.
Atlanta, Georgia

We have audited the
accompanying consolidated balance sheets of Premiere Global Services, Inc. and
subsidiaries (the Company) as of December 31, 2006 and 2005, and the related
consolidated statements of operations, shareholders equity, and cash flows for
each of the three years in the period ended December 31, 2006. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on the consolidated financial statements based on
our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such
consolidated financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2006 and 2005, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America.

As described in Note 2 to
the consolidated financial statements, the Company adopted Statement of
Financial Accounting Standards No. 123(R), Share-Based Payment, effective January
1, 2006, based on the modified prospective application transition method.

We have also audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Companys internal control over
financial reporting as of December 31, 2006, based on the criteria established
in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated March 16, 2007,
expressed an unqualified opinion on managements assessment of the
effectiveness of the Companys internal control over financial reporting and an
unqualified opinion on the effectiveness of the Companys internal control over
financial reporting.

/s/ DELOITTE & TOUCHE
LLPAtlanta, GeorgiaMarch 15, 2007

47

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
December 31, 2006 and 2005
(in thousands, except share data)

|                                                                                                                                                        |  |      |          |      |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | ---- | - | -------- | -
|                                                                                                                                                        |  | 2006 |          | 2005 |  
|                                                                                                                                                        |  |      |          |      |  
|ASSETS                                                                                                                                                  |  |      |          |      |   |          |  
|CURRENT ASSETS                                                                                                                                          |  |      |          |      |   |          |  
|Cash and equivalents                                                                                                                                    |  | $    | 18,977   |      | $ | 20,508   |  
|Accounts receivable (less allowances of
  $4,944 and $7,560, respectively)                                                                              |  |      | 82,875   |      |   | 79,417   |  
|Prepaid expenses and other current assets                                                                                                               |  |      | 7,742    |      |   | 5,209    |  
|Deferred income taxes, net                                                                                                                              |  |      | 11,972   |      |   | 12,392   |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|Total current assets                                                                                                                                    |  |      | 121,566  |      |   | 117,526  |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|PROPERTY AND EQUIPMENT, NET                                                                                                                             |  |      | 88,062   |      |   | 75,742   |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|OTHER ASSETS                                                                                                                                            |  |      |          |      |   |          |  
|Goodwill                                                                                                                                                |  |      | 295,185  |      |   | 257,565  |  
|Intangibles, net of amortization                                                                                                                        |  |      | 38,357   |      |   | 39,662   |  
|Deferred income taxes, net                                                                                                                              |  |      |         |      |   | 837      |  
|Other assets                                                                                                                                            |  |      | 6,145    |      |   | 3,958    |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|                                                                                                                                                        |  | $    | 549,315  |      | $ | 495,290  |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                    |  |      |          |      |   |          |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|CURRENT LIABILITIES                                                                                                                                     |  |      |          |      |   |          |  
|Accounts payable                                                                                                                                        |  | $    | 48,967   |      | $ | 37,745   |  
|Income taxes payable                                                                                                                                    |  |      | 878      |      |   | 4,394    |  
|Accrued taxes                                                                                                                                           |  |      | 6,011    |      |   | 6,148    |  
|Accrued expenses                                                                                                                                        |  |      | 28,697   |      |   | 34,439   |  
|Current maturities of long-term debt and
  capital lease obligations                                                                                    |  |      | 2,044    |      |   | 799      |  
|Accrued restructuring costs                                                                                                                             |  |      | 4,800    |      |   | 1,800    |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|Total current liabilities                                                                                                                               |  |      | 91,397   |      |   | 85,325   |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|LONG-TERM LIABILITIES                                                                                                                                   |  |      |          |      |   |          |  
|Long-term debt and capital lease
  obligations                                                                                                          |  |      | 136,738  |      |   | 99,675   |  
|Accrued restructuring costs                                                                                                                             |  |      | 2,339    |      |   | 3,033    |  
|Accrued expenses                                                                                                                                        |  |      | 1,831    |      |   | 3,507    |  
|Deferred income taxes, net                                                                                                                              |  |      | 719      |      |   |         |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|Total long-term liabilities                                                                                                                             |  |      | 141,627  |      |   | 106,215  |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|COMMITMENTS AND CONTINGENCIES (Note 15)                                                                                                                 |  |      |          |      |   |          |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|SHAREHOLDERS EQUITY                                                                                                                                    |  |      |          |      |   |          |  
|Common stock, $.01 par value; 150,000,000
  shares authorized, 70,151,998 and 71,703,933 shares issued and outstanding in
  2006 and 2005, respectively |  |      | 702      |      |   | 717      |  
|Additional paid-in capital                                                                                                                              |  |      | 663,232  |      |   | 681,719  |  
|Notes receivable, shareholder                                                                                                                           |  |      | (2,004   | )    |   | (1,896   | )
|Cumulative translation adjustment                                                                                                                       |  |      | 2,088    |      |   | (3,554   | )
|Accumulated deficit                                                                                                                                     |  |      | (347,727 | )    |   | (373,236 | )
|                                                                                                                                                        |  |      |          |      |   |          |  
|Total shareholders equity                                                                                                                              |  |      | 316,291  |      |   | 303,750  |  
|                                                                                                                                                        |  |      |          |      |   |          |  
|                                                                                                                                                        |  | $    | 549,315  |      | $ | 495,290  |  
|                                                                                                                                                        |  |      |          |      |   |          |  

Accompanying notes are integral to these
consolidated financial statements.

48

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2006, 2005 and 2004
(in thousands, except share and per share data)

|                                                                                         |  |      |         |      |   |         |   |   |         |  
|---------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | - | - | ------- | -
|                                                                                         |  | 2006 |         | 2005 |   | 2004    |  
|                                                                                         |  |     
|                                                                                        
|Revenues                                                                                 |  | $    | 496,472 |      | $ | 497,473 |   | $ | 449,371 |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Operating Expenses                                                                       |  |      |         |      |   |         |   |   |         |  
|Cost of revenues (exclusive of depreciation shown
separately below)                      |  |      | 200,472 |      |   | 180,966 |   |   | 160,807 |  
|Selling and marketing                                                                    |  |      | 132,279 |      |   | 128,586 |   |   | 117,970 |  
|General and administrative (exclusive of net legal
settlements shown
  separately below) |  |      | 58,615  |      |   | 58,514  |   |   | 52,957  |  
|Research and development                                                                 |  |      | 12,052  |      |   | 10,824  |   |   | 10,980  |  
|Depreciation                                                                             |  |      | 24,567  |      |   | 24,757  |   |   | 26,372  |  
|Amortization                                                                             |  |      | 13,018  |      |   | 13,243  |   |   | 8,891   |  
|Restructuring costs                                                                      |  |      | 8,385   |      |   | 3,256   |   |   |        |  
|Asset impairments                                                                        |  |      | 111     |      |   |        |   |   |        |  
|Net legal settlements and related
expenses                                               |  |      | 603     |      |   | 2,048   |   |   |        |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Total operating expenses                                                                 |  |      | 450,102 |      |   | 422,194 |   |   | 377,977 |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Operating income                                                                         |  |      | 46,370  |      |   | 75,279  |   |   | 71,394  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Other (Expense) Income                                                                   |  |      |         |      |   |         |   |   |         |  
|Interest expense                                                                         |  |      | (9,146  | )    |   | (5,552  | ) |   | (4,687  | )
|Interest income                                                                          |  |      | 536     |      |   | 582     |   |   | 633     |  
|Debt conversion costs                                                                    |  |      |        |      |   |        |   |   | (17,027 | )
|Loss on sale of marketable securities                                                    |  |      |        |      |   | (116    | ) |   | (16     | )
|Gain on prepayment of notes receivable                                                   |  |      |        |      |   |        |   |   | 8,520   |  
|Other, net                                                                               |  |      | 1,401   |      |   | 103     |   |   | 2,433   |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Total other (expense) income                                                             |  |      | (7,209  | )    |   | (4,983  | ) |   | (10,144 | )
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Income from continuing operations before income taxes                                    |  |      | 39,161  |      |   | 70,296  |   |   | 61,250  |  
|Income tax expense                                                                       |  |      | 13,652  |      |   | 21,610  |   |   | 20,565  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Income from continuing operations                                                        |  | $    | 25,509  |      | $ | 48,686  |   | $ | 40,685  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|DISCONTINUED OPERATIONS                                                                  |  |      |         |      |   |         |   |   |         |  
|(Loss) gain from operations of Voicecom                                                  |  |      |        |      |   | (1,952  | ) |   | 1,956   |  
|Income tax (benefit) expense                                                             |  |      |        |      |   | (683    | ) |   | 761     |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|(Loss) gain on discontinued operations                                                   |  |      |        |      |   | (1,269  | ) |   | 1,195   |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Net income                                                                               |  | $    | 25,509  |      | $ | 47,417  |   | $ | 41,880  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|BASIC EARNINGS                                                                           |  |      |         |      |   |         |   |   |         |  
|Income from continuing operations                                                        |  | $    | 25,509  |      | $ | 48,686  |   | $ | 40,685  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Net income                                                                               |  | $    | 25,509  |      | $ | 47,417  |   | $ | 41,880  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                                                |  |      | 68,933  |      |   | 70,392  |   |   | 64,086  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Basic earnings (loss) per share                                                          |  |      |         |      |   |         |   |   |         |  
|Continuing operations                                                                    |  | $    | 0.37    |      | $ | 0.69    |   | $ | 0.63    |  
|Discontinued operations                                                                  |  |      |        |      |   | (0.02   | ) |   | 0.02    |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Net income                                                                               |  | $    | 0.37    |      | $ | 0.67    |   | $ | 0.65    |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|DILUTED EARNINGS                                                                         |  |      |         |      |   |         |   |   |         |  
|Income from continuing operations                                                        |  | $    | 25,509  |      | $ | 48,686  |   | $ | 42,071  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Net income                                                                               |  | $    | 25,509  |      | $ | 47,417  |   | $ | 43,266  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING                                              |  |      | 69,787  |      |   | 72,366  |   |   | 72,280  |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Diluted earnings (loss) per share:                                                       |  |      |         |      |   |         |   |   |         |  
|Continuing operations                                                                    |  | $    | 0.37    |      | $ | 0.67    |   | $ | 0.58    |  
|Discontinued operations                                                                  |  |      |        |      |   | (0.01   | ) |   | 0.02    |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  
|Net income                                                                               |  | $    | 0.37    |      | $ | 0.66    |   | $ | 0.60    |  
|                                                                                         |  |      |         |      |   |         |   |   |         |  

Accompanying notes are integral to these consolidated financial
statements.

49

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
Years Ended December 31, 2006, 2005 and 2004
(in thousands)

|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|--------------------------------------------------------------------------- |  | --------------------- | --- | ------------------------------ | - | --------------------------------- | - | --------------------- | ------ | ------------------------------------------------------ | - | ------------------------------------- | - | ------------------------------ | ---- | - | - | ------ | - | - | ------- | -
|                                                                            |  | Common
  Stock Issued |     | Additional
  Paid-In
  Capital |   | Notes
  Receivable,
  Shareholder |   | Accumulated
  Deficit |        | Unrealized
  Gain (Loss) on
  Marketable 
  Securities |   | Cumulative
  Translation
  Adjustment |   | Total
  Shareholders
  Equity |     
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |     
|                                                                           
|BALANCE, December 31, 2003                                                  |  | $                     | 572 |                                | $ | 601,639                           |   | $                     | (5,343 | )                                                      | $ | (462,533                              | ) | $                              | (110 | ) | $ | (507   | ) | $ | 133,718 |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income:                                                 |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Net income                                                                  |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   | 41,880                                |   |                                |     |   |   |       |   |   | 41,880  |  
|Translation adjustments                                                     |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                |     |   |   | 2,936  |   |   | 2,936   |  
|Change in unrealized net gain (loss) on marketable securities, net of
  tax |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                | 116  |   |   |       |   |   | 116     |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income                                                  |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   | 44,932  |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Issuance of common stock:                                                   |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Exercise of stock options                                                   |  |                       | 22  |                                |   | 11,532                            |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 11,554  |  
|Treasury stock purchase and retirement                                      |  |                       | (15 | )                              |   | (12,796                           | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (12,811 | )
|Stock compensation expense  variable accounting                            |  |                       |    |                                |   | 373                               |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 373     |  
|Stock compensation in exchange for services                                 |  |                       |    |                                |   | 607                               |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 607     |  
|Issuance of restricted shares and related stock based
compensation          |  |                       | 7   |                                |   | 2,892                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 2,899   |  
|Conversion of debt to equity                                                |  |                       | 127 |                                |   | 81,799                            |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 81,926  |  
|Income tax benefit from exercise of stock options                           |  |                       |    |                                |   | 4,051                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 4,051   |  
|Interest related to shareholder notes receivable                            |  |                       |    |                                |   |                                  |   |                       | (319   | )                                                      |   |                                      |   |                                |     |   |   |       |   |   | (319    | )
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|BALANCE, December 31, 2004                                                  |  | $                     | 713 |                                | $ | 690,097                           |   | $                     | (5,662 | )                                                      | $ | (420,653                              | ) | $                              | 6    |   | $ | 2,429  |   | $ | 266,930 |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income:                                                 |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Net income                                                                  |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   | 47,417                                |   |                                |     |   |   |       |   |   | 47,417  |  
|Translation adjustments                                                     |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                |     |   |   | (5,983 | ) |   | (5,983  | )
|Change in unrealized net gain (loss) on marketable securities, net of
  tax |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                | (6   | ) |   |       |   |   | (6      | )
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income                                                  |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   | 41,428  |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Issuance of common stock:                                                   |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Exercise of stock options                                                   |  |                       | 15  |                                |   | 8,508                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 8,523   |  
|Stock compensation expense  restricted shares                              |  |                       |    |                                |   | 4,295                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 4,295   |  
|Treasury stock purchase and retirement                                      |  |                       | (21 | )                              |   | (21,300                           | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (21,321 | )
|Stock compensation expense  variable accounting                            |  |                       |    |                                |   | (336                              | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (336    | )
|Stock compensation in exchange for services                                 |  |                       |    |                                |   | 712                               |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 712     |  
|Issuance of restricted shares and related stock based
compensation          |  |                       | 10  |                                |   | (2,975                            | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (2,965  | )
|Income tax benefit from exercise of stock options                           |  |                       |    |                                |   | 2,718                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 2,718   |  
|Payments and interest related to shareholder  notes
receivable              |  |                       |    |                                |   |                                  |   |                       | 3,766  |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 3,766   |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|BALANCE, December 31, 2005                                                  |  | $                     | 717 |                                | $ | 681,719                           |   | $                     | (1,896 | )                                                      | $ | (373,236                              | ) | $                              |     |   | $ | (3,554 | ) | $ | 303,750 |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income:                                                 |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Net income                                                                  |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   | 25,509                                |   |                                |     |   |   |       |   |   | 25,509  |  
|Translation adjustments                                                     |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                |     |   |   | 5,642  |   |   | 5,642   |  
|Change in unrealized net gain (loss) on marketable securities, net of
  tax |  |                       |    |                                |   |                                  |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   |        |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Other comprehensive income                                                  |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   | 31,151  |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Issuance of common stock:                                                   |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|Exercise of stock options                                                   |  |                       | 6   |                                |   | 2,509                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 2,515   |  
|Stock compensation expense  restricted shares                              |  |                       |    |                                |   | 5,810                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 5,810   |  
|Treasury stock purchase and retirement                                      |  |                       | (38 | )                              |   | (29,543                           | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (29,581 | )
|Stock compensation expense  variable accounting                            |  |                       |    |                                |   | 83                                |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 83      |  
|FAS 123R expense                                                            |  |                       |    |                                |   | 2,586                             |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 2,586   |  
|Stock compensation in exchange for services                                 |  |                       |    |                                |   | 481                               |   |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | 481     |  
|Issuance of restricted shares and related stock based
compensation          |  |                       | 17  |                                |   | (204                              | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (187    | )
|Income tax expense from exercise of stock options                           |  |                       |    |                                |   | (209                              | ) |                       |       |                                                        |   |                                      |   |                                |     |   |   |       |   |   | (209    | )
|Payments and interest related to shareholder  notes
receivable              |  |                       |    |                                |   |                                  |   |                       | (108   | )                                                      |   |                                      |   |                                |     |   |   |       |   |   | (108    | )
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  
|BALANCE, December 31, 2006                                                  |  | $                     | 702 |                                | $ | 663,232                           |   | $                     | (2,004 | )                                                      | $ | (347,727                              | ) | $                              |     |   | $ | 2,088  |   | $ | 316,291 |  
|                                                                            |  |                       |     |                                |   |                                   |   |                       |        |                                                        |   |                                       |   |                                |      |   |   |        |   |   |         |  

Accompanying notes are integral to these
consolidated financial statements.

50

---





PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2006, 2005 and 2004
(in thousands)

|                                                                                    |  |      |          |      |   |          |   |   |          |  
|----------------------------------------------------------------------------------- |  | ---- | -------- | ---- | - | -------- | - | - | -------- | -
|                                                                                    |  | 2006 |          | 2005 |   | 2004     |  
|                                                                                    |  |      |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                |  |      |          |      |   |          |   |   |          |  
|Net income                                                                          |  | $    | 25,509   |      | $ | 47,417   |   | $ | 41,880   |  
|Adjustments to reconcile net income to net
  cash provided by operating activities: |  |      |          |      |   |          |   |   |          |  
|Loss (gain) on discontinued operation                                               |  |      |         |      |   | 1,269    |   |   | (1,195   | )
|Depreciation                                                                        |  |      | 24,567   |      |   | 24,757   |   |   | 26,372   |  
|Debt conversion costs                                                               |  |      |         |      |   |         |   |   | 17,027   |  
|Amortization                                                                        |  |      | 13,018   |      |   | 13,243   |   |   | 8,891    |  
|Amortization of deferred financing costs                                            |  |      | 492      |      |   | 453      |   |   | 659      |  
|Loss on sale of marketable securities,
  available for sale                         |  |      |         |      |   | 116      |   |   | 16       |  
|Net legal settlements and related
expenses                                          |  |      | (3,099   | )    |   | 2,048    |   |   |         |  
|Deferred income taxes, net of effect of
  acquisitions                              |  |      | 2,912    |      |   | 8,746    |   |   | 10,095   |  
|Restructuring costs                                                                 |  |      | 8,385    |      |   | 3,256    |   |   |         |  
|Payments for restructuring costs                                                    |  |      | (5,395   | )    |   | (3,214   | ) |   | (3,974   | )
|Equity-based compensation                                                           |  |      | 10,370   |      |   | 7,484    |   |   | 3,568    |  
|Excess tax benefits from share-based
  payment arrangements                         |  |      | (209     | )    |   |         |   |   |         |  
|Asset impairment                                                                    |  |      | 111      |      |   |         |   |   |         |  
|Gain (loss) on disposal of assets                                                   |  |      | 278      |      |   | (45      | ) |   | 118      |  
|Gain on note receivable and other
  liabilities                                     |  |      |         |      |   |         |   |   | (10,968  | )
|Changes in assets and liabilities, net of
  effect of acquisitions:                 |  |      |          |      |   |          |   |   |          |  
|Accounts receivable, net                                                            |  |      | 701      |      |   | (3,834   | ) |   | (1,761   | )
|Prepaid expenses and other                                                          |  |      | (2,448   | )    |   | 317      |   |   | 2,738    |  
|Accounts payable and accrued expenses                                               |  |      | (1,045   | )    |   | (9,431   | ) |   | (8,890   | )
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Total adjustments                                                                   |  |      | 48,638   |      |   | 45,165   |   |   | 42,696   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Net cash provided by operating activities
  from continuing operations              |  |      | 74,147   |      |   | 92,582   |   |   | 84,576   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Net cash used in operating activities from
  discontinued operations                |  |      | (987     | )    |   | (2,025   | ) |   | (2,081   | )
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Net cash provided by operating activities                                           |  |      | 73,160   |      |   | 90,557   |   |   | 82,495   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                |  |      |          |      |   |          |   |   |          |  
|Capital expenditures                                                                |  |      | (31,926  | )    |   | (28,174  | ) |   | (24,783  | )
|Sale of marketable securities                                                       |  |      |         |      |   | 755      |   |   | 1,835    |  
|Purchase of marketable securities                                                   |  |      |         |      |   | (306     | ) |   | (1,663   | )
|Proceeds received on note receivable                                                |  |      |         |      |   |         |   |   | 11,720   |  
|Business acquisitions, net of cash
acquired                                         |  |      | (49,040  | )    |   | (79,915  | ) |   | (98,227  | )
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Net cash used in investing activities                                               |  |      | (80,966  | )    |   | (107,640 | ) |   | (111,118 | )
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                |  |      |          |      |   |          |   |   |          |  
|Principal payments under borrowing
  arrangements                                   |  |      | (164,391 | )    |   | (74,160  | ) |   | (15,000  | )
|Proceeds from long term borrowing
  arrangements                                    |  |      | 200,270  |      |   | 104,100  |   |   | 62,993   |  
|Payments of debt issuance costs                                                     |  |      | (1,200   | )    |   | (516     | ) |   |         |  
|Repayment of shareholder notes                                                      |  |      |         |      |   | 3,953    |   |   |         |  
|Excess tax benefits from share-based
  payment arrangements                         |  |      | 209      |      |   |          |   |   |          |  
|Make whole interest payment  convertible
  notes                                   |  |      |         |      |   |         |   |   | (16,255  | )
|Purchase of treasury stock, at cost                                                 |  |      | (31,691  | )    |   | (26,451  | ) |   | (12,811  | )
|Exercise of stock options                                                           |  |      | 2,515    |      |   | 8,521    |   |   | 11,554   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Net cash provided by financing
activities                                           |  |      | 5,712    |      |   | 15,447   |   |   | 30,481   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|Effect of exchange rate changes on cash and equivalents                             |  |      | 563      |      |   | (3,738   | ) |   | 78       |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|NET (DECREASE) INCREASE IN CASH AND
  EQUIVALENTS                                   |  |      | (1,531   | )    |   | (5,374   | ) |   | 1,936    |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|CASH AND EQUIVALENTS, beginning of period                                           |  |      | 20,508   |      |   | 25,882   |   |   | 23,946   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  
|CASH AND EQUIVALENTS, end of period                                                 |  | $    | 18,977   |      | $ | 20,508   |   | $ | 25,882   |  
|                                                                                    |  |      |          |      |   |          |   |   |          |  

Accompanying notes are integral to these
consolidated financial statements.

51

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|   |                             
|-- | ----------------------------
|1. | THE COMPANY AND ITS BUSINESS

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

|   |                                
|-- | -------------------------------
|2. | SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Preparation
of financial statements in conformity with accounting principles generally
accepted in the U.S. requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period.
Financial statement line items that include significant estimates consist of
goodwill, net intangibles, net restructuring costs, tax accounts, certain accrued
liabilities and the allowance for uncollectible accounts receivable. Changes in
the facts or circumstances underlying these estimates could result in material
changes and actual results could differ from those estimates. These changes in
estimates are recognized in the period they are realized.

Principles of
Consolidation

The
financial statements include our accounts consolidated with our wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Cash and Equivalents

Cash
and equivalents include cash on hand and highly liquid investments with a
maturity at date of purchase of three months or less.

Accounts Receivable

Included
in accounts receivable at December 31, 2006 and 2005 was earned but unbilled
revenue of approximately $4.7 million and $3.5 million, respectively, which
results from non-calendar month billing cycles. Earned but unbilled revenue is
billed within 30 days. Bad debt expense was approximately $2.4 million, $4.3
million and $1.2 million in 2006, 2005 and 2004, respectively. Write-offs
against the allowance for doubtful accounts were approximately $5.0 million,
$2.4 million and $1.0 million in 2006, 2005 and 2004, respectively.

Property and Equipment

Property
and equipment are recorded at cost. Depreciation is provided under the
straight-line method over the estimated useful lives of the assets, commencing
when the assets are placed in service. The estimated useful lives are five to
seven years for furniture and fixtures, two to five years for software and
three to ten years for computer servers, Internet and telecommunications
equipment. The cost of installed equipment includes expenditures for
installation. Assets recorded under capital leases and leasehold improvements
are depreciated over the shorter of their useful lives or the term of the
related lease.

Research and Development

Research
and development costs primarily related to developing new services, features
and enhancements to existing services are expensed as incurred.

52

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Software Development Costs

Pursuant
to the American Institute of Certified Public Accountants Statement of Position
(SOP) 98-1, Accounting for the Costs of Software Developed or Obtained for
Internal Use, costs incurred to develop significant enhancements to software
features to be sold as part of our service offerings and costs incurred to
implement a new billing system are being capitalized. For the years ended
December 31, 2006, 2005 and 2004, we have capitalized in North America
approximately $13.3 million, $6.7 million and $4.6 million, respectively,
related to these projects. These capitalized costs are being amortized on a
straight-line basis over the estimated life of the related software, not to
exceed three years. Depreciation expense recorded for phases completed for the
years ended December 31, 2006, 2005 and 2004 was approximately $6.2 million,
$2.1 million and $2.3 million, respectively.

Goodwill

Goodwill
is subject to a periodic impairment assessment by applying a fair value based
test based upon a two-step method. The first step is to identify potential
goodwill impairment by comparing the estimated fair value of the business
segments to their carrying amounts. The second step measures the amount of the
impairment based upon a comparison of implied fair value of goodwill with its
carrying amount. We have adopted January 1st of a given calendar
year as our valuation date and have evaluated goodwill as of January 1, 2005,
2006 and 2007, with no impairment identified.

Valuation of Long-Lived Assets

We
evaluate the carrying values of long-lived assets when significant adverse
changes in the economic value of these assets require an analysis, including
property and equipment and other intangible assets. Effective in January 2002,
with the adoption of SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets (SFAS No. 144), a long-lived asset is considered impaired
when its fair value is less than its carrying value. In that event, a loss is
calculated based on the amount the carrying value exceeds the future cash
flows, as calculated under the best-estimate approach, of such asset. Prior to
adopting SFAS No. 144, a long-lived asset was considered impaired when
undiscounted cash flows or fair value, whichever was more readily determinable,
to be realized from such asset was less than its carrying value. In that event,
a loss was determined based on the amount the carrying value exceeded the fair
value of such asset. We believe that long-lived assets in our accompanying
consolidated balance sheets are appropriately valued.

Revenue Recognition

We
recognize revenues when persuasive evidence of an arrangement exists, services
have been rendered, the price to the buyer is fixed or determinable and
collectibility is reasonably assured. Revenues consist primarily of usage fees
generally based on per minute, per fax page or per transaction methods. To a
lesser extent, we charge subscription fees and fixed period minimum revenue
commitments. Unbilled revenue consists of earned but unbilled revenue which
results from non-calendar month billing cycles and the one-month lag time in
billing related to certain of our services. Deferred revenue consists of
payments made by customers in advance of the time services are rendered. Our
revenue recognition policies are consistent with the guidance in Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
Statements, as amended by SAB 101A, 101B and SAB 104.

Foreign Currency Translation

The
assets and liabilities of subsidiaries domiciled outside the U.S. are
translated at rates of exchange existing at the balance sheet date. Revenues
and expenses are translated at average rates of exchange prevailing during the
year. The resulting translation adjustments are recorded in the Cumulative
translation adjustment component of shareholders equity. In addition,
intercompany loans with foreign subsidiaries generally are considered to be
permanently invested for the foreseeable future. Therefore, all foreign
exchange gains and losses related to these balances are recorded in the
cumulative translation account on the consolidated balance sheet.

Treasury Stock

All
treasury stock transactions are recorded at cost. In 2006 and 2005,
respectively, we repurchased approximately 3.9 million shares and 2.1 million
shares of our common stock in the open market for approximately

53

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$29.6 million
and $21.3 million, pursuant to our Board-approved stock repurchase programs. In
addition, in 2006 and 2005, respectively, we withheld approximately 300,000 and
522,000 shares of our common stock to satisfy certain of our employees tax
withholdings due upon the vesting of their restricted stock grants and remitted
approximately $2.5 million and $5.2 million to the Internal Revenue Service on
our employees behalf.

Other Comprehensive Income (Loss)

Other
comprehensive income (loss) represents the change in equity of a business
during a period, except for investments by owners and distributions to owners.
Cumulative translation adjustments and unrealized gains on available-for-sale
marketable securities represent components of other comprehensive income (loss)
at December 31, 2006 and 2005. For the years ended December 31, 2006, 2005 and
2004, total other comprehensive income was approximately $31.1 million, $41.4
million and $44.9 million, respectively. Accumulated other comprehensive loss
was $274.0 million at December 31, 2006.

Income Taxes

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

New Accounting Pronouncements

In
September 2006, the SEC staff added Section N to Staff SAB Topic 1 through the
issuance of Financial Statements  Considering the Effects of Prior Year
Misstatements when Qualifying Misstatements in Current Year Financial
Statements (SAB 108). SAB 108 addresses how a registrant should evaluate
whether an error in its financial statements is material. The guidance in SAB
108 will be effective for fiscal years ending after November 15, 2006. The
adoption of SAB 108 did not have a material impact on our consolidated
financial statements.

In
June 2006, the FASB issued FASB Interpretation (FIN) 48, Accounting for
Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprises financial statements in
accordance with FASB SFAS 109, Accounting for Income Taxes. FIN 48 defines
the minimum recognition threshold a tax position is required to meet before
being recognized in the financial statements. FIN 48 is effective for fiscal
years beginning after December 15, 2006. We will adopt FIN 48 as of our fiscal
year beginning January 1, 2007, as required. The cumulative effect of
adopting FIN 48 will be recorded in retained earnings and other accounts, as
applicable. We have not determined the effect that the adoption of FIN 48 will
have on our financial position and results of operations.

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

Reclassifications

Certain
prior year amounts in our consolidated financial statements have been
reclassified to conform to the 2006 presentation, in order to conform to our
new segment presentation and due to our adoption of SFAS No.

54

---



PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

123(R),
Share-Based Payment. In the fourth quarter of 2006, we began reporting our
financial results on a geographic regional basis and no longer report under our
former Conferencing & Collaboration and Data Communications business
segments. In 2006, equity-based compensation was reclassified to reflect these
costs in the individual operating expense line items as a result of SFAS
123(R). Accordingly, approximately $0.2 million and $0.1 million were allocated
to cost of revenues, approximately $0.1 million and $0.0 million were allocated
to research and development expense, approximately $1.0 million and $0.3
million were allocated to selling and marketing expense and approximately $6.1
million and $2.9 million were allocated to general and administrative expense
and in both periods for a total of approximately $7.4 million and $3.3 million
that were reclassified for the years ended December 31, 2005 and 2004,
respectively. Additionally, SFAS 123(R) required the elimination of the
unearned compensation related to earlier awards against the appropriate equity
accounts. As of December 31, 2005, approximately $12.6 million of unvested
restricted share compensation has been reclassified to Additional paid in
capital on the face of our consolidated balance sheet.

|   |                    
|-- | -------------------
|3. | RESTRUCTURING COSTS

Consolidated
restructuring costs for the years ended December 31, 2006, 2005 and 2004 are as
follows (in thousands):

|                             |  |                                            |       |                  |   |                                          |   |                                              |       |                  |   |                                 |  |   |        |   |   |      |  
|---------------------------- |  | ------------------------------------------ | ----- | ---------------- | - | ---------------------------------------- | - | -------------------------------------------- | ----- | ---------------- | - | ------------------------------- |  | - | ------ | - | - | ---- | -
|Consolidated                 |  | Accrued 
  Costs at
  December 
  31, 2003 |       | Cost 
  Incurred |   | Accrued 
  Costs at 
  December 31, 2004 |   | 2005
  Charge To 
  Continuing 
  Operations |       | Cost 
  Incurred |   | Reversal 
  of Accrued 
  Costs | 
|                             |  |                                            |       |                  |   |                                          |   |                                              |       |                  |   |                                 | 
|                            
|Accrued restructuring costs: |  |                                            |       |                  |   |                                          |   |                                              |       |                  |   |                                 |  |   |        |   |   |      |  
|Severance and exit costs     |  | $                                          | 3,183 |                  | $ | (3,069                                   | ) | $                                            | 114   |                  | $ | 3,452                           |  | $ | (2,478 | ) | $ | (179 | )
|Contractual obligations      |  |                                            | 5,558 |                  |   | (882                                     | ) |                                              | 4,676 |                  |   | 2                               |  |   | (736   | ) |   | (19  | )
|                             |  |                                            |       |                  |   |                                          |   |                                              |       |                  |   |                                 |  |   |        |   |   |      |  
|Total restructuring costs    |  | $                                          | 8,741 |                  | $ | (3,951                                   | ) | $                                            | 4,790 |                  | $ | 3,454                           |  | $ | (3,214 | ) | $ | (198 | )
|                             |  |                                            |       |                  |   |                                          |   |                                              |       |                  |   |                                 |  |   |        |   |   |      |  

|                             |  |                                          |       |                                              |   |                  |  |                    |        |                                |  |                                             |   |   |      |   |   |       | 
|---------------------------- |  | ---------------------------------------- | ----- | -------------------------------------------- | - | ---------------- |  | ------------------ | ------ | ------------------------------ |  | ------------------------------------------- | - | - | ---- | - | - | ----- | 
|Consolidated                 |  | Accrued 
  Costs at 
  December 31, 2005 |       | 2006
  Charge To 
  Continuing 
  Operations |   | Cost 
  Incurred |  | Equity 
  Released |        | Reversal of
  Accrued 
  Costs |  | Accrued 
  Costs at 
  December 
  31, 2006 |  
|                             |  |                                          |       |                                              |   |                  |  |                    |        |                                |  |                                             |  
|                            
|Accrued restructuring costs: |  |                                          |       |                                              |   |                  |  |                    |        |                                |  |                                             |   |   |      |   |   |       | 
|Severance and exit costs     |  | $                                        | 909   |                                              | $ | 8,057            |  | $                  | (3,981 | )                              |  | (683                                        | ) | $ | (275 | ) | $ | 4,027 | 
|Contractual obligations      |  |                                          | 3,923 |                                              |   | 603              |  |                    | (1,814 | )                              |  |                                            |   |   |     |   |   | 3,112 | 
|                             |  |                                          |       |                                              |   |                  |  |                    |        |                                |  |                                             |   |   |      |   |   |       | 
|Total restructuring costs    |  | $                                        | 4,832 |                                              | $ | 8,660            |  | $                  | (5,395 | )                              |  | (683                                        | ) | $ | (275 | ) | $ | 7,139 | 
|                             |  |                                          |       |                                              |   |                  |  |                    |        |                                |  |                                             |   |   |      |   |   |       | 

Realignment of Workforce  2006

In
2006, we executed a restructuring plan to streamline the management of our
business on a geographic regional basis from our former Conferencing &
Collaboration and Data Communications business segments. As part of this
streamlining, we eliminated approximately 100 positions within customer service,
finance, operations and sales and marketing. In the fourth quarter of 2006, we
entered into a separation agreement in connection with the resignation of our
former chief investment officer. We incurred approximately $8.0 million in
severance costs associated with these positions, which included the issuance of
restricted stock having a fair market value of $0.6 million. Additionally, we
incurred $0.6 million of lease termination costs associated with five locations
within North America. On a segment basis, these restructuring costs were $4.6
million in North America, $3.3 million in Europe and $0.7 million in Asia
Pacific.

Realignment of Workforce - 2005

In
2005, we incurred $3.3 million of restructuring costs. These costs were
associated with the reduction of approximately 90 employees in selling and
marketing, operations and finance functions, primarily in North America

55

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and Europe. The reductions in
non-financial functions are the result of the significant declines in our North
America and Europe broadcast fax services revenue. The reductions in financial
functions are the result of duplicative business processes within North America
and Europe finance departments.

Realignment of Workforce  2003

During
the third and fourth quarters of 2003, we executed a plan to reduce annual
operating expenses through a reduction in personnel costs related to our
operations, sales and administration and the abandonment of certain facilities
deemed to have no future economic benefit to us, net of estimated sublease
payments. A majority of the contractual obligations relate to a North America
real property lease which expires in 2016, and, as such, approximately $2.4
million of this liability has been classified in long-term accrued expenses on
the balance sheet at December 31, 2006. The remaining restructuring reserve was
approximately $3.1 million at December 31, 2006, which is expected to be paid
at approximately $0.4 million per year through the expiration of the lease term
2016.

|   |                                          
|-- | -----------------------------------------
|4. | MARKETABLE SECURITIES, AVAILABLE FOR SALE

Marketable
securities, available for sale at December 31, 2005 and 2004 are principally
common stock investments carried at fair value based on quoted market prices.

The
cost, gross unrealized gains, fair value, proceeds from sale and realized gains
and losses are as follows for the years ended December 31, 2005 and 2004 (in
thousands):

|                            |  |      |       |                            |   |              |  |                      |     |                        |   |       |  |   |      |  
|--------------------------- |  | ---- | ----- | -------------------------- | - | ------------ |  | -------------------- | --- | ---------------------- | - | ----- |  | - | ---- | -
|                            |  | Cost |       | Gross
  Unrealized
  Gains |   | Fair
  Value |  | Proceeds
  From Sale |     | Gross
  RealizedLosses |  
|                            |  |      |       |                            |   |              |  |                      |     |                        |  
|2005                        |  |      |       |                            |   |              |  |                      |     |                        |   |       |  |   |      |  
|EasyLink                    |  | $    | 871   |                            | $ |             |  | $                    |    |                        | $ | 755   |  | $ | (116 | )
|                            |  |      |       |                            |   |              |  |                      |     |                        |   |       |  |   |      |  
|2004                        |  |      |       |                            |   |              |  |                      |     |                        |   |       |  |   |      |  
|Various
  equity securities |  | $    | 1,663 |                            | $ | 10           |  | $                    | 576 |                        | $ | 1,835 |  | $ | (16  | )
|                            |  |      |       |                            |   |              |  |                      |     |                        |   |       |  |   |      |  

During
2005 and 2004, we bought and sold securities of various companies in the same
industries as us. During the first quarter of 2005, we sold the remaining
shares of these investment securities for aggregate proceeds of $0.8 million
less commissions, recognizing a loss of $0.1 million. As of December 31, 2006,
we do not hold any marketable securities of companies that are publicly traded.

|   |                              
|-- | -----------------------------
|5. | ACQUISITIONS AND DISPOSITIONS

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

North America

In
September 2006, we acquired assets and the stock of eNunciate. We paid $25.9
million in cash at closing and $0.8 million in transaction fees and closing
costs. We funded the purchase through Canadian dollar borrowings on our line of
credit and Canadian dollar cash balances available. We followed SFAS No. 141,
Business Combinations (SFAS No. 141), and approximately $0.2 million has been
allocated to acquired fixed assets, $0.1 million has been allocated to acquired
working capital, $6.1 million has been allocated to identifiable customer lists
and $0.2 million has been allocated to a non-compete agreement, with the
identifiable customer lists and non-compete agreement amortized over five-year
useful lives. Because we have not finalized the working capital component of the purchase price, the residual $20.1 million of the aggregate purchase price has
been preliminarily allocated to goodwill, which is subject to a periodic impairment
assessment in accordance with SFAS No. 142.

56

---



PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In
January 2006, we acquired all of the outstanding stock of Accucast. We paid
$12.3 million in cash at closing and $0.5 million in transaction and closing
costs. During 2006, we paid an additional $1.5 million cash purchase price upon
the achievement of the first milestone target as specified in the purchase
agreement. We may pay up to an additional $1.5 million in cash purchase price
based upon the achievement of additional milestone integration targets as
specified in the purchase agreement. We
funded the purchase through our line of credit. We followed SFAS No. 141, and
approximately $0.2 million has been allocated to acquired fixed assets, $0.3
million has been allocated to other acquisition liabilities, $2.0 million has
been allocated to developed technology and $1.0 million has been allocated to
identifiable customer lists, with the identifiable customer lists and developed
technology amortized over five-year useful lives. In addition, $1.2 million has
been allocated to long-term deferred tax liabilities to record the step-up in
basis for the customer lists and developed technology purchased. Because we
have not finalized the working capital component of the purchase price, the
residual $12.6 million of the aggregate purchase price has been preliminarily allocated
to goodwill, which is subject to a periodic impairment assessment
in accordance with SFAS No. 142.

In
August 2005, we acquired all of the outstanding stock of Netspoke. We paid
$23.4 million in cash at closing and $0.5 million in transaction fees and
closing costs. We funded the purchase through our line of credit. We followed
SFAS No. 141, and approximately $1.1 million of the aggregate purchase price
has been allocated to acquired working capital, $0.7 million has been allocated
to acquired fixed assets, $1.6 million has been allocated to severance and
certain other acquisition liabilities, $2.9 million has been allocated to
identifiable customer lists, $1.0 million has been allocated to developed
technology and $0.6 million has been allocated to a non-compete agreement, with
the identifiable customer lists, developed technology and non-compete agreement
amortized over five-year useful lives. In addition, $1.8 million has been
allocated to long-term deferred tax liabilities to record the step-up in basis
for the customer intangible assets purchased. The residual $21.0 million of the
aggregate purchase price has been allocated to goodwill, which is subject to a
periodic impairment assessment in accordance with SFAS No. 142.

In
June 2005, we acquired substantially all of the assets and assumed certain
liabilities of Intelligent Meetings. We paid $6.2 million in cash at closing
and $0.1 million in transaction fees and closing costs. We funded the purchase
through our line of credit. We followed SFAS No. 141, and approximately $0.4
million of the aggregate purchase price has been allocated to acquired working
capital, $0.1 million has been allocated to acquired fixed assets, $0.1 million
has been allocated to severance and certain other acquisition liabilities, $2.0
million has been allocated to identifiable customer lists and $0.1 million has
been allocated to a non-compete agreement, with the identifiable customer lists
and non-compete agreement amortized over five-year useful lives. The residual
$3.8 million of the aggregate purchase price has been allocated to goodwill,
which is subject to a periodic impairment assessment in accordance with SFAS
No. 142.

In
March 2005, we acquired substantially all of the assets and assumed certain
liabilities of the audio and Web conferencing services business of Citizens. We
paid $43.2 million in cash at closing and $0.2 million in transaction fees and
closing costs. We funded the purchase through our line of credit. We followed
SFAS No. 141, and approximately $2.1 million of the aggregate purchase price
has been allocated to acquired working capital, $0.9 million has been allocated
to acquired fixed assets, $2.5 million has been allocated to severance and
certain other acquisition liabilities and $6.0 million has been allocated to
identifiable customer lists which are being amortized over a five-year useful
life. The residual $36.9 million of the aggregate purchase price has been
allocated to goodwill, which is subject to a periodic impairment assessment in
accordance with SFAS No. 142.

Asia Pacific

In
November 2006, we acquired certain assets and assumed certain liabilities of
ECT. We paid $4.4 million (AU $5.3 million) in cash at closing and $0.2 million
in transaction fees and closing costs. We funded the purchase through a
Yen-denominated line of credit with Sumitomo Mitsui Banking and Australian
dollar cash available. We followed SFAS No. 141, and approximately $0.1 million
of the aggregate purchase price has been allocated to acquired fixed assets,
$0.1 million has been allocated to acquired working capital, $1.1 million has
been allocated to identifiable customer lists and $0.1 million has been
allocated to a non-compete agreement, with the identifiable customer lists and
non-compete agreement amortized over five-year useful lives. The residual $3.2
million of the aggregate purchase price has been preliminarily allocated to goodwill, which
is subject to a periodic impairment assessment in accordance with SFAS No. 142.

57

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Discontinued Operations

During
2005, we settled litigation with JOBA, Inc., a franchisee of our former Voicecom
business segment. The parties to the consolidated action and certain other
individuals and entities entered into a settlement agreement, which provided
for payment in the aggregate of approximately $1.1 million to JOBA by our
subsidiary, Voice-Tel Enterprises, LLC, and by Voicecom Telecommunications,
LLC, an unrelated party which purchased substantially all of the assets of our
Voicecom business segment in March 2002. Approximately $0.9 million of this
aggregate settlement payment was funded by Voice-Tel and approximately $0.2
million was funded by Voicecom, in consideration, for among other things,
dismissal of the litigation, with prejudice, mutual releases and covenants not
to sue, and termination of the JOBA franchise. Voice-Tels portion of the settlement
amount and approximately $0.4 million in legal fees and expenses were accrued
as of June 30, 2005 and included in the Discontinued operations line item in
the consolidated statements of operations. During 2005, we also changed the
estimated liability for certain lease obligations associated with the
discontinued operations of our former Voicecom reportable segment. The change
is associated with the failure to sublease certain floor space that was assumed
in the original estimate.

During
2004, we changed the estimated liability for certain lease obligations
associated with the discontinued operations of our former Voicecom business
segment. This change in estimate is attributable to certain sublease
arrangements that we entered into with regard to former Voicecom facilities
and, as a result, we recorded a gain on discontinued operations of $1.2
million, net of taxes.

|   |                       
|-- | ----------------------
|6. | PROPERTY AND EQUIPMENT

Property
and equipment at December 31, 2006 and 2005 is as follows (in thousands):

|                                            |  |      |         |      |   |         | 
|------------------------------------------- |  | ---- | ------- | ---- | - | ------- | 
|                                            |  | 2006 |         | 2005 |  
|                                            |  |      |         |      |  
|                                           
|Computer and
  telecommunications equipment |  | $    | 149,211 |      | $ | 138,859 | 
|Furniture
  and fixtures                    |  |      | 12,870  |      |   | 21,831  | 
|Office
  equipment                          |  |      | 22,075  |      |   | 9,919   | 
|Leasehold
  improvements                    |  |      | 19,308  |      |   | 17,431  | 
|Capitalized
  software                      |  |      | 47,053  |      |   | 33,709  | 
|Construction
  in progress                  |  |      | 14,305  |      |   | 7,085   | 
|Building                                    |  |      | 1,933   |      |   | 1,696   | 
|                                            |  |      |         |      |   |         | 
|                                            |  |      | 266,755 |      |   | 230,530 | 
|Less
  accumulated depreciation             |  |      | 178,693 |      |   | 154,788 | 
|                                            |  |      |         |      |   |         | 
|Property and
  equipment, net               |  | $    | 88,062  |      | $ | 75,742  | 
|                                            |  |      |         |      |   |         | 

Assets
under capital leases included in property and equipment at December 31, 2006
and 2005 are as follows (in thousands):

|                                            |  |      |        |      |   |       |  
|------------------------------------------- |  | ---- | ------ | ---- | - | ----- | -
|                                            |  | 2006 |        | 2005 |  
|                                            |  |      |        |      |  
|                                           
|Computer and
  telecommunications equipment |  | $    | 6,165  |      | $ | 2,446 |  
|Less
  accumulated depreciation             |  |      | (2,078 | )    |   | (466  | )
|                                            |  |      |        |      |   |       |  
|Property and
  equipment, net               |  | $    | 4,087  |      | $ | 1,980 |  
|                                            |  |      |        |      |   |       |  

58

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|   |                               
|-- | ------------------------------
|7. | GOODWILL AND INTANGIBLE ASSETS

Goodwill
and intangible assets consist of the following amounts for December 31, 2006
and 2005 (in thousands):

|                                |  |      |         |      |   |         | 
|------------------------------- |  | ---- | ------- | ---- | - | ------- | 
|                                |  | 2006 |         | 2005 |  
|                                |  |      |         |      |  
|                                |  |      |         |      |   |         | 
|Goodwill                        |  | $    | 295,185 |      | $ | 257,565 | 
|                                |  |      |         |      |   |         | 
|Customer
  lists                |  | $    | 116,012 |      | $ | 103,706 | 
|Non-compete
  agreements        |  |      | 4,264   |      |   | 2,736   | 
|Developed
  technology          |  |      | 36,630  |      |   | 39,570  | 
|Other                           |  |      | 882     |      |   |        | 
|                                |  |      |         |      |   |         | 
|                                |  | $    | 157,788 |      | $ | 146,012 | 
|                                |  |      |         |      |   |         | 
|Less
  accumulated amortization |  |      | 119,431 |      |   | 106,350 | 
|                                |  |      |         |      |   |         | 
|                                |  | $    | 38,357  |      | $ | 39,662  | 
|                                |  |      |         |      |   |         | 

Goodwill
and intangible assets by reportable business segment at December 31, 2006 and
2005 (in thousands):

|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|------------------------------------------------- |  | --------------- | ------- | ------ | - | -------------- | - | ----- | ----- | - | - | ------- | -
|                                                  |  | North
  America |         | Europe |   | Asia
  Pacific |   | Total |      
|                                                  |  |                 |         |        |   |                |   |       |      
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Goodwill
  carrying value at December 31, 2004    |  | $               | 168,790 |        | $ | 22,383         |   | $     | 974   |   | $ | 192,147 |  
|Additions
  and adjustments                       |  |                 | 66,663  |        |   | (1,197         | ) |       | (48   | ) |   | 65,418  |  
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Goodwill
  carrying value at December 31, 2005    |  |                 | 235,453 |        |   | 21,186         |   |       | 926   |   |   | 257,565 |  
|Additions
  and adjustments                       |  |                 | 33,005  |        |   | 1,370          |   |       | 3,245 |   |   | 37,620  |  
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Goodwill
  carrying value at December 31, 2006    |  | $               | 268,458 |        | $ | 22,556         |   | $     | 4,171 |   | $ | 295,185 |  
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Intangibles
  carrying value at December 31, 2004 |  |                 | 32,146  |        |   | 7,423          |   |       | 1,021 |   | $ | 40,590  |  
|Additions
  and adjustments                       |  |                 | 13,157  |        |   | (247           | ) |       | (595  | ) |   | 12,315  |  
|Amortization                                      |  |                 | (10,550 | )      |   | (2,717         | ) |       | 24    |   |   | (13,243 | )
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Intangibles
  carrying value at December 31, 2005 |  |                 | 34,753  |        |   | 4,459          |   |       | 450   |   |   | 39,662  |  
|Additions
  and adjustments                       |  |                 | 10,089  |        |   | 413            |   |       | 1,211 |   |   | 11,713  |  
|Amortization                                      |  |                 | (11,515 | )      |   | (1,290         | ) |       | (213  | ) |   | (13,018 | )
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  
|Intangibles
  carrying value at December 31, 2006 |  | $               | 33,327  |        | $ | 3,582          |   | $     | 1,448 |   | $ | 38,357  |  
|                                                  |  |                 |         |        |   |                |   |       |       |   |   |         |  

At
December 31, 2005, goodwill allocations from our acquisition of Netspoke was
preliminary as severance plans related to certain acquired employees had not
been finalized at year end. This purchase price allocation was finalized in
2006 in accordance with FAS No. 141, Business Acquisitions, and as such we
recorded adjustments to goodwill of approximately $0.4 million.

At
December 31, 2004, goodwill allocations from our acquisitions of I-Media and
CCS was preliminary as severance plans and fixed asset valuations had not been
finalized at year end. These purchase price allocations were finalized in 2005
in accordance with FAS No. 141, Business Acquisitions, and as such we
recorded adjustments to goodwill of approximately $1.2 million.

Intangible
assets are amortized on a straight-line basis with an estimated useful life
between three and five years. Amortization expense for the intangible assets
above is expected to be approximately $14.2 million in 2007, $11.3 million in
2008, $7.6 million in 2009, $3.2 million in 2010 and $1.2 million in 2011.

59

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|   |             
|-- | ------------
|8. | INDEBTEDNESS

Long-term
debt and capital lease obligations at December 31, 2006 and 2005 are as follows
(in thousands):

|                               |  |      |         |      |   |         | 
|------------------------------ |  | ---- | ------- | ---- | - | ------- | 
|                               |  | 2006 |         | 2005 |  
|                               |  |      |         |      |  
|                               |  |      |         |      |   |         | 
|Borrowings
  on line of credit |  | $    | 134,456 |      | $ | 98,500  | 
|Capital
  lease obligations    |  |      | 4,326   |      |   | 1,974   | 
|                               |  |      |         |      |   |         | 
|Subtotal                       |  | $    | 138,782 |      | $ | 100,474 | 
|Less current
  portion         |  |      | 2,044   |      |   | 799     | 
|                               |  |      |         |      |   |         | 
|                               |  | $    | 136,738 |      | $ | 99,675  | 
|                               |  |      |         |      |   |         | 

In
April 2006, we closed an amendment to our credit facility, with a syndicate led
by Bank of America, N.A., that increased the amount available to us under our
line of credit from $180.0 million to $300.0 million, reduced the applicable
percentages across the pricing grid and extended the maturity of the credit
facility from February 2009 to April 2011. The amendment also provided for an
uncommitted accordion feature allowing for an additional increase of $100.0
million to $400.0 million of the revolving credit line, subject to the terms
and conditions as set forth in the amendment. The credit facility is subject to
customary covenants for secured credit facilities of this nature. Certain of
our material domestic subsidiaries have guaranteed our obligations under the
credit facility, which is secured by substantially all of our assets and the
assets of our material domestic subsidiaries. In addition, we have pledged as
collateral all of the issued and outstanding stock of our material domestic
subsidiaries and 65.0% of our material foreign subsidiaries. We believe that as
of December 31, 2006, we were in compliance in all material respects with all
covenants under our line of credit and have obtained any required waivers or
consents from lenders, as applicable. Proceeds drawn under this credit
agreement may be used for refinancing of existing debt, working capital,
capital expenditures, acquisitions and other general corporate purposes. The
annual interest rate applicable to borrowings under the line of credit, at our
option, is the base rate (the greater of the federal funds rate plus 0.5% or
the Bank of America prime rate) or LIBOR, plus, in each case, an applicable
margin which will vary based upon our leverage ratio at the end of each fiscal
quarter. At December 31, 2006, the applicable margin with respect to base rate
loans was 0.0%, and the applicable margin with respect to LIBOR loans was
1.25%. At December 31, 2006, our interest rate on 30-day LIBOR loans was
6.57188%. As of December 31, 2006, we had approximately $134.5 million of
borrowings outstanding and approximately $1.4 million in letters of credit
outstanding under our line of credit.

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

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

In
June 2006, we entered into a capital lease for the purchase of network
equipment. This capital lease has an interest rate of 3.1% and a term of 36
months. The principal balance at December 31, 2006 was $0.5 million.

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

In
March 2005, we entered into a capital lease for the purchase of various
operating and network equipment. This capital lease line has an interest rate
that varies between 2.5% and 10.5%, depending on the operating equipment being
leased, and a term of 36 months. The principal balance at December 31, 2006 was
$3.1 million.

60

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In
September 2004, we entered into a capital lease for the purchase of network
equipment. This capital lease has an interest rate of 3.3% and a term of 60
months. The principal balance at December 31, 2006 was $0.3 million.

At
December 31, 2006, we had no other indebtedness outstanding except for the
borrowings under our lines of credit, the capital lease obligations listed
above and an acquired capital lease with a principal balance of approximately
$0.1 million.

|   |                          
|-- | -------------------------
|9. | EQUITY-BASED COMPENSATION

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

Upon
our adoption of SFAS 123(R), we began recording compensation cost related to
the continued vesting of all stock options that remained unvested as of January
1, 2006, as well as for all new stock option grants after our adoption date.
The compensation cost recorded is based on the fair value at the grant date.
The adoption of SFAS 123(R) did not have an effect on our recognition of
compensation expense relating to the vesting of restricted stock grants. SFAS
123(R) required the elimination of the unearned compensation related to earlier
awards against the appropriate equity accounts. As of December 31, 2006,
approximately $20.4 million of unvested restricted share compensation has been
reclassified to Additional paid in capital on the face of the consolidated
balance sheet.

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

61

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The
effect of adopting SFAS 123(R) on our income from operations, income before
income taxes, net income, net cash provided by operating activities, net cash
provided by financing activities and basic and diluted earnings per share for
the twelve-month period ended December 31, 2006, is as follows (in thousands,
except per share data):

|                                                                            |  |                                           |   |        |  | 
|--------------------------------------------------------------------------- |  | ----------------------------------------- | - | ------ |  | 
|                                                                            |  | Twelve Months
  Ended
  December 31, 2006 |  
|                                                                            |  |                                           |  
|                                                                            |  |                                           |   |       
|Income from continuing operations, as
  reported                            |  |                                           | $ | 25,509 |  | 
|Effect of adopting SFAS 123(R) on income
  from operations                  |  |                                           |   | 1,684  |  | 
|Pro forma income from continuing operations                                 |  |                                           | $ | 27,193 |  | 
|                                                                            |  |                                           |   |        |  | 
|Income from continuing operations before
  income taxes, as reported        |  |                                           | $ | 39,161 |  | 
|Effect of adopting SFAS 123(R) on income
  before income taxes              |  |                                           |   | 2,586  |  | 
|Pro forma income from continuing operations
  before income taxes           |  |                                           | $ | 41,747 |  | 
|                                                                            |  |                                           |   |        |  | 
|Net income, as reported                                                     |  |                                           | $ | 25,509 |  | 
|Effect of adopting SFAS 123(R) on net
  income                              |  |                                           |   | 1,684  |  | 
|Pro forma net income                                                        |  |                                           | $ | 27,193 |  | 
|                                                                            |  |                                           |   |        |  | 
|Net income per share, as reported:                                          |  |                                           |   |        |  | 
|Basic                                                                       |  |                                           | $ | 0.37   |  | 
|Diluted                                                                     |  |                                           | $ | 0.37   |  | 
|                                                                            |  |                                           |   |        |  | 
|Effect of adopting SFAS 123(R) on net
  income per share, basic and diluted |  |                                           | $ | 0.02   |  | 
|                                                                            |  |                                           |   |        |  | 
|Pro forma net income per share:                                             |  |                                           |   |        |  | 
|Basic                                                                       |  |                                           | $ | 0.39   |  | 
|Diluted                                                                     |  |                                           | $ | 0.39   |  | 

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

62

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If
compensation cost for our equity-based compensation plans had been determined
based on the fair value at the grant dates for awards under those plans in
accordance with the provisions of SFAS 123, our net income and net income per
share for the twelve-month period ended December 31, 2005, would have been as
follows (in thousands, except per share data):

|                                                                                                                                 |  |                                           |   |        |   | 
|-------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | - | ------ | - | 
|                                                                                                                                 |  | Twelve Months
  Ended
  December 31, 2005 |  
|                                                                                                                                 |  |                                           |  
|                                                                                                                                 |  |                                           |   |       
|Net income as reported                                                                                                           |  |                                           | $ | 47,417 |   | 
|Add: stock-based employee compensation
  expense included in reporting net income, net of related tax effect                     |  |                                           |   | 4,598  |   | 
|Deduct: stock-based compensation expense
  determined under fair value based method for all awards, net of related tax
  effects |  |                                           |   | (6,958 | ) | 
|Pro forma net income for calculating basic
  net income per share                                                                |  |                                           | $ | 45,057 |   | 
|                                                                                                                                 |  |                                           |   |        |   | 
|Basic net income per share:                                                                                                      |  |                                           |   |        |   | 
|As reported                                                                                                                      |  |                                           | $ | 0.67   |   | 
|Pro forma                                                                                                                        |  |                                           | $ | 0.64   |   | 
|                                                                                                                                 |  |                                           |   |        |   | 
|Diluted net income per share:                                                                                                    |  |                                           |   |        |   | 
|As reported                                                                                                                      |  |                                           | $ | 0.66   |   | 
|Pro forma                                                                                                                        |  |                                           | $ | 0.62   |   | 

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

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

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

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

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

63

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

The
following table summarizes the activity of stock options under our stock plans
from December 31, 2003 to December 31, 2006:

|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 
|------------------------------------------ |  | ------- | ---------- | ------------------------------------- |  | ----------------------------- | ----- |  |  | - | ---------- | 
|                                           |  | Options |            | Weighted
  Average
  Exercise
  Price |  | Aggregate
  Intrinsic
  Value |      
|                                           |  |         |            |                                       |  |                               |      
|Options
  outstanding at December 31, 2003 |  |         | 6,617,255  |                                       |  | $                             | 5.75  |  |  | $ | 22,506,428 | 
|Granted                                    |  |         | 796,000    |                                       |  |                               | 9.88  |  |  |   |            | 
|Exercised                                  |  |         | (2,163,153 | )                                     |  |                               | 5.34  |  |  | $ | 10,933,280 | 
|Forfeited                                  |  |         | (358,141   | )                                     |  |                               | 5.95  |  |  |   |            | 
|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 
|Options
  outstanding at December 31, 2004 |  |         | 4,891,961  |                                       |  | $                             | 6.59  |  |  | $ | 21,471,047 | 
|Granted                                    |  |         | 669,500    |                                       |  |                               | 9.70  |  |  |   |            | 
|Exercised                                  |  |         | (1,507,860 | )                                     |  |                               | 5.65  |  |  | $ | 7,339,585  | 
|Forfeited                                  |  |         | (260,209   | )                                     |  |                               | 11.07 |  |  |   |            | 
|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 
|Options
  outstanding at December 31, 2005 |  |         | 3,793,392  |                                       |  | $                             | 7.20  |  |  | $ | 6,887,563  | 
|Granted                                    |  |         |           |                                       |  |                               |      |  |  |   |            | 
|Exercised                                  |  |         | (601,312   | )                                     |  |                               | 4.18  |  |  | $ | 2,453,972  | 
|Expired                                    |  |         | (540,607   | )                                     |  |                               | 10.35 |  |  |   |            | 
|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 
|Options
  outstanding at December 31, 2006 |  |         | 2,651,473  |                                       |  | $                             | 7.25  |  |  | $ | 6,779,212  | 
|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 
|Options
  exercisable at December 31, 2006 |  |         | 2,182,939  |                                       |  | $                             | 6.66  |  |  | $ | 6,553,065  | 
|                                           |  |         |            |                                       |  |                               |       |  |  |   |            | 

The
following table summarizes information about stock options outstanding at
December 31, 2006:

|                           |       |                       |   |                                              |  |                                                              |  |                       |      |                                                              |  |  |   |       |  |  |           |  |  |  |   |       |  | 
|-------------------------- | ----- | --------------------- | - | -------------------------------------------- |  | ------------------------------------------------------------ |  | --------------------- | ---- | ------------------------------------------------------------ |  |  | - | ----- |  |  | --------- |  |  |  | - | ----- |  | 
|Range of
  Exercise Prices |       | Options
  Outstanding |   | Weighted
  Average Exercise
  Remaining Life |  | Weighted Average
  Exercise Price of
  Options
  Outstanding |  | Options
  Exercisable |      | Weighted Average
  Exercise Price
  of Options
  Exercisable | 
|                           |       |                       |   |                                              |  |                                                              |  |                       |      |                                                              | 
|                           |       |                       |   |                                              |  |                                                              |  |                       |      |                                                              |  |  |   |       |  |  |           |  |  | 
|$                          | 0     | -                     | $ | 4.08                                         |  | 541,853                                                      |  |                       | 3.41 |                                                              |  |  | $ | 3.40  |  |  | 541,853   |  |  |  | $ | 3.40  |  | 
|$                          | 5.04  | -                     | $ | 6.13                                         |  | 720,120                                                      |  |                       | 4.03 |                                                              |  |  | $ | 5.70  |  |  | 720,120   |  |  |  | $ | 5.70  |  | 
|$                          | 7.00  | -                     | $ | 8.53                                         |  | 457,500                                                      |  |                       | 5.73 |                                                              |  |  | $ | 8.22  |  |  | 286,497   |  |  |  | $ | 8.22  |  | 
|$                          | 8.57  | -                     | $ | 10.71                                        |  | 492,000                                                      |  |                       | 5.18 |                                                              |  |  | $ | 9.14  |  |  | 414,663   |  |  |  | $ | 8.98  |  | 
|$                          | 11.29 | -                     | $ | 11.34                                        |  | 292,500                                                      |  |                       | 6.36 |                                                              |  |  | $ | 11.31 |  |  | 121,483   |  |  |  | $ | 11.32 |  | 
|$                          | 11.53 | -                     | $ | 11.53                                        |  | 147,500                                                      |  |                       | 5.48 |                                                              |  |  | $ | 11.53 |  |  | 98,323    |  |  |  | $ | 11.53 |  | 
|                           |       |                       |   |                                              |  | 2,651,473                                                    |  |                       | 4.75 |                                                              |  |  | $ | 7.25  |  |  | 2,182,939 |  |  |  | $ | 6.66  |  | 

During
2006, no stock options were granted. During 2005, there were no stock options
granted whose exercise price was less than the market price of the stock on the
date of the grant. During 2004, we made one option grant with an exercise price
less than the market value on the date of grant. The difference between the
grant price and the fair market value on the date of grant was charged to
equity-based compensation. The total charge was less than $4,000. Options
exercisable at December 31, 2006, 2005 and 2004 were 2,182,939, 2,212,556, and
2,834,397, respectively.

64

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant
assumptions used in the Black-Scholes option pricing model computations are as
follows for 2005 and 2004:

|                                 |  |            |   |            |     |   | 
|-------------------------------- |  | ---------- | - | ---------- | --- | - | 
|                                 |  | 2005       |   | 2004       |    
|                                 |  |            |   |            |    
|Risk-free
  interest rate        |  | 3.3        | % |            | 3.1 | % | 
|Dividend
  yield                 |  | 0          | % |            | 0   | % | 
|Volatility
  factor              |  | 54         | % |            | 63  | % | 
|Weighted
  average expected life |  | 5.18 years |   | 3.74 years |    

The
pro forma amounts reflect options granted since January 1, 1996. Pro forma
compensation cost may not be representative of that expected in future years.

For
the twelve months ended December 31, 2006, we recognized equity-based
compensation expense of approximately $2.6 million related to the vesting of
stock options. As of December 31, 2006, we had approximately $1.7 million of
unvested stock options, which we will record in our statement of operations
over a weighted average recognition period of less than three years.

Restricted Stock

The
following table summarizes the activity of restricted stock awards under our
stock plans from December 31, 2005 to December 31, 2006:

|                                   |  |        |            |                            |  |                               |       |  |  |   |            | 
|---------------------------------- |  | ------ | ---------- | -------------------------- |  | ----------------------------- | ----- |  |  | - | ---------- | 
|                                   |  | Shares |            | Weighted
  Average
  Price |  | Aggregate
  Intrinsic
  Value |      
|                                   |  |        |            |                            |  |                               |      
|                                   |  |        |            |                            |  |                               |       |  |  |  
|Outstanding
  at December 31, 2003 |  |        | 880,000    |                            |  | $                             | 3.06  |  |  |   |            | 
|Granted                            |  |        | 686,300    |                            |  | $                             | 9.66  |  |  |   |            | 
|Vested/released                    |  |        | (238,300   | )                          |  | $                             | 6.18  |  |  | $ | 2,333,908  | 
|Forfeited                          |  |        |           |                            |  |                               |      |  |  |   |            | 
|                                   |  |        |            |                            |  |                               |       |  |  |   |            | 
|Outstanding
  at December 31, 2004 |  |        | 1,328,000  |                            |  | $                             | 5.91  |  |  |   |            | 
|Granted                            |  |        | 1,513,293  |                            |  | $                             | 10.29 |  |  |   |            | 
|Vested/released                    |  |        | (1,432,631 | )                          |  | $                             | 6.34  |  |  | $ | 14,662,575 | 
|Forfeited                          |  |        | (18,832    | )                          |  | $                             | 11.27 |  |  |   |            | 
|                                   |  |        |            |                            |  |                               |       |  |  |   |            | 
|Outstanding
  at December 31, 2005 |  |        | 1,389,830  |                            |  | $                             | 10.17 |  |  |   |            | 
|Granted                            |  |        | 2,100,579  |                            |  |                               | 8.20  |  |  |   |            | 
|Vested/released                    |  |        | (901,908   | )                          |  |                               | 9.01  |  |  | $ | 7,562,295  | 
|Forfeited                          |  |        | (90,333    | )                          |  |                               | 8.23  |  |  |   |            | 
|                                   |  |        |            |                            |  |                               |       |  |  |   |            | 
|Outstanding
  at December 31, 2006 |  |        | 2,498,168  |                            |  | $                             | 9.00  |  |  |   |            | 

For
the twelve months ended December 31, 2006, we recognized equity-based
compensation expense of approximately $7.2 million related to the vesting of
restricted stock. As of December 31, 2006, we had approximately $20.4 million
of unvested restricted stock which we will record in our statement of
operations over a weighted average recognition period of less than five years.

In
the twelve months ended December 31, 2005, we recognized approximately $7.5
million in non-cash stock compensation expense for restricted shares and
options issued for services. Of this expense, $4.9 million related to
restricted stock grants and stock bonuses associated with amended and restated
employment agreements and restricted stock agreements entered into in April
2005, effective as of January 1, 2005, with two named executive officers, $2.4
million related to restricted stock grants to other employees and board
members, $0.2 million related to payroll taxes withheld and remitted on behalf
of employees on the vesting of restricted stock grants, $(0.3) million related
to stock options accounted for under variable accounting because the market
value of

65

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

our common
stock was greater than the exercise price of a portion of the options, and $0.3
million was as a result of the modification of a director stock option grant in
connection with the resignation of a member of our board of directors in June
2004.

|    |                   
|--- | ------------------
|10. | EARNINGS PER SHARE

Basic and Diluted Net Income Per Share

Basic
earnings per share is computed by dividing net income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. The weighted-average number of common shares outstanding does not
include any potentially dilutive securities or any unvested restricted shares
of common stock. These unvested restricted shares, although classified as
issued and outstanding at December 31, 2006 and 2005, are considered
contingently returnable until the restrictions lapse and will not be included
in the basic net income per share calculation until the shares are vested.

Diluted
net income per share gives effect to all potentially dilutive securities. Our
outstanding stock options, warrants and unvested restricted shares are
potentially dilutive securities during the twelve months ended December 31,
2006 and 2005. The difference between basic and diluted weighted-average shares
outstanding was the dilutive effect of stock options, warrants and the unvested
restricted shares computed as follows:

|                               |  |                                         |        |                                         |  |                      |  |              |      |                            |   |                      |  |  |            |  |   |      | 
|------------------------------ |  | --------------------------------------- | ------ | --------------------------------------- |  | -------------------- |  | ------------ | ---- | -------------------------- | - | -------------------- |  |  | ---------- |  | - | ---- | 
|                               |  | Twelve Months Ended
  December 31, 2006 |        | Twelve Months Ended
  December 31, 2005 | 
|                               |  |                                         |        |                                         | 
|                               |  | Net
  Income                            |        | Weighted
  Average
  Share              |  | Earnings
  Per Share |  | Net
  Income |      | Weighted
  Average
  Share |   | Earnings
  Per Share | 
|                               |  |                                         |        |                                         |  |                      |  |              |      |                            |   |                      | 
|                               |  |                                         |        |                                         |  |                      |  |              |      |                            |   |                      |  |  |            |  |   |      | 
|Basic EPS                      |  | $                                       | 25,509 |                                         |  | 68,932,676           |  | $            | 0.37 |                            | $ | 47,417               |  |  | 70,391,912 |  | $ | 0.67 | 
|Effect of dilutive securities: |  |                                         |        |                                         |  |                      |  |              |      |                            |   |                      |  |  |            |  |   |      | 
|Stock options                  |  |                                         |       |                                         |  | 599,152              |  |              |     |                            |   |                     |  |  | 872,440    |  |   |     | 
|Warrants                       |  |                                         |       |                                         |  |                     |  |              |     |                            |   |                     |  |  | 6,240      |  |   |     | 
|Unvested restricted shares     |  |                                         |       |                                         |  | 254,853              |  |              |     |                            |   |                     |  |  | 1,094,952  |  |   |     | 
|                               |  |                                         |        |                                         |  |                      |  |              |      |                            |   |                      |  |  |            |  |   |      | 
|Diluted EPS                    |  | $                                       | 25,509 |                                         |  | 69,786,681           |  | $            | 0.37 |                            | $ | 47,417               |  |  | 72,365,544 |  | $ | 0.66 | 

The
weighted average diluted common shares outstanding for the twelve months ended
December 31, 2006 and 2005 excludes the effect of approximately 2.3 million and
1.7 million, respectively, of out-of-the-money options, warrants and restricted
shares because their effect would be anti-dilutive.

66

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|    |                 
|--- | ----------------
|11. | ACCRUED EXPENSES

Accrued
expenses at December 31, 2006 and 2005 are as follows (in thousands):

|                                                             |  |      |        |      |   |        | 
|------------------------------------------------------------ |  | ---- | ------ | ---- | - | ------ | 
|                                                             |  | 2006 |        | 2005 |  
|                                                             |  |      |        |      |  
|                                                             |  |      |        |      |   |        | 
|Accrued wages
  and wage related taxes                       |  | $    | 8,776  |      | $ | 9,286  | 
|Accrued
  sales commissions                                  |  |      | 3,713  |      |   | 3,373  | 
|Legal
  settlements                                          |  |      |       |      |   | 2,457  | 
|Office
  expenses (deferred rent, utilities, supplies, etc.) |  |      | 1,297  |      |   | 2,338  | 
|Acquisition
  liabilities                                    |  |      | 462    |      |   | 2,053  | 
|Employee
  benefits                                          |  |      | 2,340  |      |   | 1,759  | 
|Accrued
  professional fees                                  |  |      | 4,071  |      |   | 1,695  | 
|Voicecom
  lease liability                                   |  |      | 1,155  |      |   | 1,005  | 
|Travel and
  meeting expenses                                |  |      | 608    |      |   | 571    | 
|Interest
  payable                                           |  |      | 261    |      |   | 215    | 
|Asset
  retirement obligation                                |  |      | 501    |      |   |       | 
|Other                                                        |  |      | 5,513  |      |   | 9,687  | 
|                                                             |  |      |        |      |   |        | 
|                                                             |  | $    | 28,697 |      | $ | 34,439 | 
|                                                             |  |      |        |      |   |        | 

State sales taxes

We
have reserves for certain state sales tax contingencies based on the likelihood
of obligation in accordance with Statement of Financial Accounting Standards
(SFAS) No. 5, Accounting for Contingencies (SFAS No. 5).  Historically, we have not collected and
remitted state sales tax from our Conferencing Solutions customers.  We were recently audited by the Commonwealth
of Massachusetts Department of Revenue claiming that our audio conferencing
services are subject to sales tax in Massachusetts.  In March 2006, we began assessing sales tax to our customers in
Massachusetts as a result of this audit.
In July 2006, we paid an initial payment of approximately $1.2 million
to the Commonwealth of Massachusetts Department of Revenue for taxable years
prior to 2005.  Amounts associated with
2005 and early 2006 are still under review and have yet to be settled.  More states may claim that we are subject to
an assessment of sales taxes.  As of
December 31, 2006 and December 31, 2005, we had reserved approximately $4.3
million and $5.7 million, respectively, for certain state sales tax exposure
contingencies.  This amount is included
in Accrued taxes on the face of the consolidated balance sheet.  We believe we are appropriately accrued for
these contingencies.  In the event that
actual results differ from these reserves, we may need to make adjustments
which could materially impact our financial condition and results of
operations.  Historically, we have
collected and remitted sales tax from on non-Conferencing Solutions customers
in applicable states.  However, it is
possible states may disagree with our method of assessing and remitting these
state sales taxes.

|    |                      
|--- | ---------------------
|12. | FINANCIAL INSTRUMENTS

The carrying
amount of cash and cash equivalents, accounts receivable and payable and
accrued expenses approximates fair value due to their short maturities.  The carrying value of our lines of credit
and capital lease obligations do not vary materially from fair value at
December 31, 2006 and 2005.

|    |                       
|--- | ----------------------
|13. | EMPLOYEE BENEFIT PLANS

We
sponsor a defined contribution plan covering substantially all of our U.S.
employees.  We also sponsor similar
voluntary contribution arrangements for certain of our employees outside the
U.S. that meet applicable eligibility requirements.  We may make contributions for the benefit of
employees under these plans.  In 2006,
2005 and 2004, we paid cash of approximately $2.1 million, $1.9 million and
$1.8 million, respectively, to fund our discretionary employee contributions
under our defined contribution plans.

67

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|    |                           
|--- | --------------------------
|14. | RELATED-PARTY TRANSACTIONS

We
have in the past entered into agreements and arrangements with certain
officers, directors and principal shareholders.

Notes receivable, shareholder

We
have made loans in prior years to our chief executive officer and to a limited
partnership in which he has an indirect interest, pursuant to extensions of
credit agreed to by us prior to July 30, 2002.
These loans were made pursuant to his then current employment agreement
for the exercise price of certain stock options and the taxes related
thereto.  Each of these loans is
evidenced by a recourse promissory note bearing interest at the applicable federal
rate and secured by the common stock purchased.  These loans mature between 2007 and 2010.  These loans, including accrued interest,
are
recorded in the equity section of the consolidated balance sheet under the
caption Notes receivable, shareholder.
The principal amount outstanding under all remaining loans owed to us by
our chief executive officer is approximately $2.0 million as of December 31,
2006.

|    |                              
|--- | -----------------------------
|15. | COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments

We
lease computer equipment, automobiles, office space and other equipment under
noncancelable lease agreements.  The
leases generally provide that we pay the taxes, insurance and maintenance
expenses related to the leased assets.
Future minimum lease payments for noncancelable operating leases as of
December 31, 2006 are as follows (in thousands):

2007

$
13,2342008


11,6882009


8,7412010


5,5212011


1,594Thereafter


5,558Net minimum
  lease payments

$
46,336


Rent
expense under operating leases was approximately $11.4 million, $12.9 million
and $12.2 million for the years ended December 31, 2006, 2005 and 2004,
respectively.  Facilities rent is
reduced by sublease income of approximately $0.5 million, $0.6 million and $0.7
million for the years ended December 31, 2006, 2005 and 2004,
respectively.  In 2006, 2005 and 2004,
facilities rent was reduced by approximately $0.6 million, $0.7 million and
$0.9 million, respectively associated with contractual obligations provided for
in the restructuring charge.

In
October 2005, we entered into leases through two of our subsidiaries which are
guaranteed by us for new corporate headquarters in Atlanta, Georgia of an
aggregate of approximately 47,000 square feet.
The leases are effective August 1, 2007 will expire in August 2014.  The leases require an aggregate average
annual minimum rent payment of approximately $1.1 million, with the first year
estimated operating expenses unknown at this time.

Asset Retirement
Obligation

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

68

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supply Agreements

We
purchase telecommunications services pursuant to supply agreements with
telecommunications service providers.
Some of our agreements with telecommunications service providers contain
commitments that require us to purchase a minimum amount of services through
2009.  These costs are approximately
$14.2 million, $5.8 million and $0.6 million in 2007 through 2009,
respectively.  The total amount of the
minimum purchase requirements in 2006 was approximately $18.5 million, of which
we incurred costs in excess of these minimums.

Litigation and Claims

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

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

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

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

|    |             
|--- | ------------
|16. | INCOME TAXES

Income
tax expense (benefit) from continuing operations for 2006, 2005 and 2004 is as
follows (in thousands):

|              |  |      |        |      |   |        |  |   |        |  
|------------- |  | ---- | ------ | ---- | - | ------ |  | - | ------ | -
|              |  | 2006 |        | 2005 |   | 2004   | 
|              |  |      |        |      |   |        | 
|Current:      |  |      |        |      |   |        |  |   |        |  
|Federal       |  | $    | 5,555  |      | $ | 6,845  |  | $ | 1,024  |  
|State         |  |      | 2,546  |      |   | 1,576  |  |   | 2,687  |  
|International |  |      | 3,289  |      |   | 5,305  |  |   | 3,774  |  
|              |  |      |        |      |   |        |  |   |        |  
|              |  | $    | 11,390 |      | $ | 13,726 |  | $ | 7,485  |  
|              |  |      |        |      |   |        |  |   |        |  
|              |  |      |        |      |   |        |  |   |        |  
|Deferred:     |  |      |        |      |   |        |  |   |        |  
|Federal       |  | $    | 2,729  |      | $ | 4,544  |  | $ | 15,959 |  
|State         |  |      | (367   | )    |   | 1,167  |  |   | 996    |  
|International |  |      | (100   | )    |   | 2,173  |  |   | (3,875 | )
|              |  |      |        |      |   |        |  |   |        |  
|              |  |      | 2,262  |      |   | 7,884  |  |   | 13,080 |  
|              |  |      |        |      |   |        |  |   |        |  
|              |  | $    | 13,652 |      | $ | 21,610 |  | $ | 20,565 |  
|              |  |      |        |      |   |        |  |   |        |  

69

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The
difference between the statutory federal income tax rate and our effective
income tax rate applied to income before income taxes from continuing
operations for 2006, 2005 and 2004 is as follows (in thousands):

|                                         |  |      |        |      |   |        |   |   |        |  
|---------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|                                         |  | 2006 |        | 2005 |   | 2004   |  
|                                         |  |      |        |      |   |        |  
|                                         |  |      |        |      |   |        |   |   |        |  
|Income taxes
  at federal statutory rate |  | $    | 13,706 |      | $ | 24,603 |   | $ | 21,438 |  
|State taxes,
  net of federal benefit    |  |      | (209   | )    |   | 1,575  |   |   | 1,746  |  
|Foreign
  taxes                          |  |      | (59    | )    |   | (348   | ) |   | 584    |  
|APB 23
  Foreign Taxes                   |  |      | (548   | )    |   |       |   |   |       |  
|Change in
  valuation allowance          |  |      | 186    |      |   | (1,936 | ) |   |       |  
|Change in
  previous estimates           |  |      | 229    |      |   | (916   | ) |   | (3,628 | )
|Foreign tax
  credits, net               |  |      | (974   | )    |   | (1,885 | ) |   |       |  
|Research and
  development credits       |  |      | (500   | )    |   | (1,016 | ) |   |       |  
|Non-deductible employee compensation     |  |      | 791    |      |   | 1,408  |   |   | 506    |  
|Other permanent differences              |  |      | 1,030  |      |   | 125    |   |   | (81    | )
|                                         |  |      |        |      |   |        |   |   |        |  
|Income taxes
  at our effective rate     |  | $    | 13,652 |      | $ | 21,610 |   | $ | 20,565 |  
|                                         |  |      |        |      |   |        |   |   |        |  

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

We
have reserves for certain asserted international and state income tax
contingencies based on the likelihood of obligation, when needed, in accordance
with SFAS No. 5.  As of December 31,
2006 and 2005, we had approximately $4.6 million and $3.1 million,
respectively, reserved for such contingencies.
During 2006, we provided for approximately $1.5 million of additional
reserves based on the preliminary results of an audit with a state that
questioned our methodology used in allocating taxable income to it from other
states in which we are not subject to income tax.  We believe our methodology is consistent with generally accepted
methods used in other states but believe that it is more likely than not we
will incur this liability.  This amount
is classified as Income taxes payable on the face of the consolidated balance
sheet.  In the normal course of
business, we are subject to inquiries from U.S. and non-U.S. tax authorities
regarding the amount of income taxes due.
These inquiries may result in adjustments of the timing or amount of
taxable income or deductions or the allocation of income among tax
jurisdictions.  Further, during the ordinary
course of business, other changing facts and circumstances may impact our
ability to utilize income tax benefits as well as the estimated taxes to be
paid in future periods.  We believe we
are appropriately reserved for income tax exposures.  In the event that actual results differ from these estimates, we
may need to make adjustments which could materially impact our financial
condition and results of operations.

Differences
between the financial accounting and tax basis of assets and liabilities giving
rise to deferred tax assets and liabilities are as follows at December 31 (in
thousands):

|                                 |  |      |        |      |   |        | 
|-------------------------------- |  | ---- | ------ | ---- | - | ------ | 
|                                 |  | 2006 |        | 2005 |  
|                                 |  |      |        |      |  
|Deferred tax assets:             |  |      |        |      |   |        | 
|Net operating loss carryforwards |  | $    | 12,375 |      | $ | 10,591 | 
|Intangible assets                |  |      | 6,233  |      |   | 4,661  | 
|Restructuring costs              |  |      | 2,515  |      |   | 1,824  | 
|Accrued expenses                 |  |      | 2,381  |      |   | 8,059  | 
|Other tax credits                |  |      | 5,075  |      |   | 5,791  | 
|                                 |  |      |        |      |   |        | 
|                                 |  | $    | 28,579 |      | $ | 30,926 | 
|                                 |  |      |        |      |   |        | 

70

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                           |  |      |        |      |   |        |  
|-------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                           |  | 2006 |        | 2005 |  
|                           |  |      |        |      |  
|Deferred tax liabilities:  |  |      |        |      |   |        |  
|Property and equipment     |  | $    | (2,073 | )    | $ | (3,098 | )
|Intangible assets          |  |      | (5,200 | )    |   | (5,289 | )
|Other liabilities          |  |      | (557   | )    |   |       |  
|                           |  |      |        |      |   |        |  
|                           |  |      | (7,830 | )    |   | (8,387 | )
|Valuation allowance        |  |      | (9,496 | )    |   | (9,310 | )
|                           |  |      |        |      |   |        |  
|Deferred income taxes, net |  | $    | 11,253 |      | $ | 13,229 |  
|                           |  |      |        |      |   |        |  

We
are required to estimate our taxes in each jurisdiction in which we
operate.  This process involves
management estimating its tax exposure together with assessing temporary
differences resulting from differing treatment of items for tax and accounting purposes.  The ultimate recognition of uncertain tax
matters is realized in the period of resolution.

At
December 31, 2006, we had federal income tax net operating loss carryforwards
of approximately $8.2 million expiring in 2007 through 2019.  The utilization of some of our net operating
losses is subject to Section 382 limitations due to a prior change in control related to one of our previous acquisitions. At December 31, 2006, we had tax credit carryforwards of approximately $5.1 million expiring in 2012 through 2025.  Tax (expense) benefits of
approximately $(0.2) million, $2.7 million, and $4.1 million in 2006, 2005 and
2004, respectively, are associated with nonqualified stock option exercises,
the impact of which was (debited) credited directly to additional paid-in
capital.

We
intend to reinvest the unremitted earnings of our non-U.S. subsidiaries, with
the exception of Japan, and postpone their remittance indefinitely.  In 2006, we recorded approximately $0.2
million in future foreign tax credits associated with dividends expected to be
received from our Japanese subsidiaries.
No other foreign tax credits for U.S. income taxes for non-U.S.
subsidiaries was recorded in the accompanying consolidated statements of
earnings.

During
the year ended December 31, 2006, our valuation allowance increased by
approximately $0.2 million as a result of increases in the valuation reserves
placed on certain current-year state and foreign operating losses that, in
managements opinion, will more likely than not remain unutilized.

|    |                                   
|--- | ----------------------------------
|17. | STATEMENT OF CASH FLOW INFORMATION

Supplemental
disclosure of cash flow information (in thousands):

|                                                                          |  |      |        |      |   |        |  |   |        | 
|------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ |  | - | ------ | 
|                                                                          |  | 2006 |        | 2005 |   | 2004   | 
|                                                                          |  |      |        |      |   |        | 
|Cash paid (received) during the year for:                                 |  |      |        |      |   |        |  |   |        | 
|Interest                                                                  |  | $    | 7,872  |      | $ | 5,629  |  | $ | 6,111  | 
|Income taxes                                                              |  | $    | 16,454 |      | $ | 13,304 |  | $ | 3,344  | 
|                                                                          |  |      |        |      |   |        |  |   |        | 
|Net cash paid for acquisitions, including
  costs and liabilities assumed |  | $    | 49,040 |      | $ | 79,915 |  | $ | 98,227 | 

In
June 2006, we entered into a capital lease for the purchase of network
equipment.  This capital lease has an
implied interest rate of 3.1% and a term of 36 months.  The principal balance at December 31, 2006
was $0.5 million.

In
March 2005, we entered into a capital lease for the purchase of various
operating and network equipment.  This
capital lease line has an implied interest rate that varies between 2.5% and
10.5%, depending on the operating equipment being leased, and a term of 36
months.  The principal balance at
December 31, 2006 was $3.1 million.

In
September 2004, we entered into a capital lease for the purchase of network
equipment.  This capital lease has an
implied interest rate of 3.3% and a term of 60 months.  The principal balance at December 31, 2006
was $0.3 million.

71

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-cash investing and financing activities

During
2006, 2005 and 2004, we paid approximately $49.0 million, $79.9 million and
$98.2 million, respectively, for acquisitions accounted for as purchases.  On an aggregate basis, these costs were
allocated as follows and, as applicable, at the exchange rate on the date of
the transaction (in thousands):

|                                    |  |      |        |      |   |        |   |   |         |  
|----------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------- | -
|                                    |  | 2006 |        | 2005 |   | 2004   |  
|                                    |  |      |        |      |   |        |  
|                                    |  |      |        |      |   |        |   |   |         |  
|Accounts
  receivable               |  |      | 2,127  |      | $ | 5,030  |   | $ | 12,534  |  
|Prepaids and
  other current assets |  |      | 94     |      |   | 716    |   |   | 2,147   |  
|Property and
  equipment            |  |      | 625    |      |   | (3,079 | ) |   | 5,864   |  
|Deferred tax
  assets - Current     |  |      | 1,663  |      |   |       |   |   |        |  
|Goodwill                            |  |      | 35,601 |      |   | 66,079 |   |   | 68,631  |  
|Intangible
  assets                 |  |      | 11,581 |      |   | 12,967 |   |   | 24,775  |  
|Long-term
  assets                  |  |      | 9      |      |   | 21     |   |   | 121     |  
|                                    |  |      |        |      |   |        |   |   |         |  
|Total assets acquired               |  |      | 51,700 |      |   | 81,734 |   |   | 114,072 |  
|                                    |  |      |        |      |   |        |   |   |         |  
|Current
  liabilities               |  |      | (2,020 | )    |   | 460    |   |   | (14,383 | )
|Long-term
  liabilities             |  |      | (500   | )    |   | (2,326 | ) |   | (1,462  | )
|                                    |  |      |        |      |   |        |   |   |         |  
|Total liabilities assume            |  |      | (2,520 | )    |   | (1,866 | ) |   | (15,845 | )
|                                    |  |      |        |      |   |        |   |   |         |  
|Impact of foreign exchange          |  |      | (140   | )    |   | 47     |   |   |        |  
|                                    |  |      |        |      |   |        |   |   |         |  
|Net assets acquired                 |  | $    | 49,040 |      | $ | 79,915 |   | $ | 98,227  |  
|                                    |  |      |        |      |   |        |   |   |         |  

As
a result of fixed asset valuations from certain 2004 acquisitions not being
finalized until 2005, a non-cash adjustment of approximately $3.1 million to
the property and equipment line is reflected in the above table.

|    |                  
|--- | -----------------
|18. | SEGMENT REPORTING

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

One
of our Conferencing customers, IBM, historically accounted for a significant
amount of our revenues.  Sales to that
customer accounted for approximately 6% of consolidated revenues from
continuing operations in 2005, 11% of consolidated revenues from continuing
operations in 2004 and 11% of consolidated revenues from continuing operations
in 2003.  IBM has chosen to insource most
of its automated conferencing needs, and sales from IBM no longer represent a
significant amount of our consolidated revenues.

72

---



PREMIERE GLOBAL SERVICES, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

|                                            |  |                           |       |      |   |       |   |   |       | 
|------------------------------------------- |  | ------------------------- | ----- | ---- | - | ----- | - | - | ----- | 
|                                            |  | Year Ended
  December 31, |      
|                                            |  |                           |      
|                                            |  | 2006                      |       | 2005 |   | 2004  |  
|                                            |  |                           |       |      |   |       |  
|REVENUES:                                   |  |                           |       |      |   |       |   |   |       | 
|Revenues
  from continuing operations:      |  |                           |       |      |   |       |   |   |       | 
|North America                               |  | $                         | 319.3 |      | $ | 321.4 |   | $ | 293.3 | 
|Europe                                      |  |                           | 93.0  |      |   | 99.1  |   |   | 84.0  | 
|Asia Pacific                                |  |                           | 84.2  |      |   | 77.0  |   |   | 72.1  | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|                                            |  | $                         | 496.5 |      | $ | 497.5 |   | $ | 449.4 | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|INCOME (LOSS):                              |  |                           |       |      |   |       |   |   |       | 
|Income
  (loss) from continuing operations: |  |                           |       |      |   |       |   |   |       | 
|North America                               |  | $                         | 21.5  |      | $ | 41.8  |   | $ | 34.8  | 
|Europe                                      |  |                           | (0.7  | )    |   | 2.3   |   |   | 1.5   | 
|Asia Pacific                                |  |                           | 4.7   |      |   | 4.6   |   |   | 4.4   | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|                                            |  | $                         | 25.5  |      | $ | 48.7  |   | $ | 40.7  | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|(Loss) gain
  from discontinued operations: |  |                           |       |      |   |       |   |   |       | 
|North America  Voicecom                    |  |                           |      |      |   | (1.3  | ) |   | 1.2   | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|Net income:                                 |  | $                         | 25.5  |      | $ | 47.4  |   | $ | 41.9  | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|IDENTIFIABLE ASSETS                         |  |                           |       |      |   |       |   |   |       | 
|North America                               |  | $                         | 439.7 |      | $ | 403.0 |   | $ | 357.9 | 
|Europe                                      |  |                           | 71.4  |      |   | 63.8  |   |   | 51.3  | 
|Asia Pacific                                |  |                           | 38.2  |      |   | 28.5  |   |   | 26.3  | 
|                                            |  |                           |       |      |   |       |   |   |       | 
|                                            |  | $                         | 549.3 |      | $ | 495.3 |   | $ | 435.5 | 
|                                            |  |                           |       |      |   |       |   |   |       | 

Information
concerning depreciation expense for each reportable segment is as follows (in
millions):

|                                                         |  |      |      |      |   |      |  |   |      | 
|-------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- |  | - | ---- | 
|                                                         |  | 2006 |      | 2005 |   | 2004 | 
|                                                         |  |      |      |      |   |      | 
|                                                         |  |      |      |      |   |      |  |   |      | 
|North
  America                                          |  | $    | 18.2 |      | $ | 18.0 |  | $ | 18.9 | 
|Europe                                                   |  |      | 3.8  |      |   | 3.9  |  |   | 3.8  | 
|Asia Pacific                                             |  |      | 2.6  |      |   | 2.9  |  |   | 3.7  | 
|                                                         |  |      |      |      |   |      |  |   |      | 
|Total depreciation expense from continuing
  operations. |  | $    | 24.6 |      | $ | 24.8 |  | $ | 26.4 | 
|                                                         |  |      |      |      |   |      |  |   |      | 

Information
concerning accrued capital expenditures for each reportable segment is as
follows (in millions):

|                                                        |  |      |      |      |   |      |  |   |      | 
|------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- |  | - | ---- | 
|                                                        |  | 2006 |      | 2005 |   | 2004 | 
|                                                        |  |      |      |      |   |      | 
|                                                        |  |      |      |      |   |      |  |   |      | 
|North
  America                                         |  | $    | 28.4 |      | $ | 26.4 |  | $ | 23.6 | 
|Europe                                                  |  |      | 3.4  |      |   | 1.9  |  |   | 2.5  | 
|Asia Pacific                                            |  |      | 1.4  |      |   | 1.0  |  |   | 1.5  | 
|                                                        |  |      |      |      |   |      |  |   |      | 
|Total capital expenditures from continuing
  operations |  | $    | 33.2 |      | $ | 29.3 |  | $ | 27.6 | 
|                                                        |  |      |      |      |   |      |  |   |      | 

73

---



SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

The
following table presents certain unaudited quarterly consolidated statement of
operations data for each of the eight quarters in the periods ended December
31, 2006 and 2005.  Certain prior
quarter results have been reclassified to conform with current period
presentation.  The information has been
derived from our unaudited financial statements, which have been prepared on
substantially the same basis as the audited consolidated financial statements
contained in this annual report.  We
have presented quarterly earnings per share numbers as reported in our earnings
releases.  The sum of these quarterly
earnings per share numbers may differ from annual earnings per share numbers
due to rounding and the impact of the difference in the weighted shares outstanding
for the stand-alone periods.  The
results of operations for any quarter are not necessarily indicative of the
results to be expected for any future period.

|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|------------------------------------------------------- |  | --------------- | ------- | ---------------- | - | ------------ |  | ------------- | ------- | ----- | - | ------- |  | - | ------- | 
|                                                        |  | First
  Quarter |         | Second
  Quarter |   | ThirdQuarter |  | FourthQuarter |         | Total |  
|                                                        |  |                 |         |                  |   |              |  |               |         |       |  
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Year ended December 31, 2006                            |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Revenues                                                |  | $               | 121,726 |                  | $ | 125,566      |  | $             | 122,118 |       | $ | 127,062 |  | $ | 496,472 | 
|Operating income                                        |  |                 | 13,979  |                  |   | 13,822       |  |               | 12,190  |       |   | 6,379   |  |   | 46,370  | 
|Income from continuing operations                       |  |                 | 7,659   |                  |   | 6,006        |  |               | 6,717   |       |   | 5,127   |  |   | 25,509  | 
|Income from continuing operations per share
   basic   |  | $               | 0.11    |                  | $ | 0.09         |  | $             | 0.10    |       | $ | 0.08    |  | $ | 0.37    | 
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Income from continuing operations per share
   diluted |  | $               | 0.11    |                  | $ | 0.09         |  | $             | 0.10    |       | $ | 0.08    |  | $ | 0.37    | 
|Net income                                              |  |                 | 7,659   |                  |   | 6,006        |  |               | 6,717   |       |   | 5,127   |  |   | 25,509  | 
|Net income per share - basic                            |  | $               | 0.11    |                  | $ | 0.09         |  | $             | 0.10    |       | $ | 0.08    |  | $ | 0.37    | 
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Net income per share - diluted                          |  | $               | 0.11    |                  | $ | 0.09         |  | $             | 0.10    |       | $ | 0.08    |  | $ | 0.37    | 
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Year ended December 31, 2005                            |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Revenues                                                |  | $               | 127,264 |                  | $ | 132,053      |  | $             | 120,949 |       | $ | 117,207 |  | $ | 497,473 | 
|Operating income                                        |  |                 | 22,411  |                  |   | 23,253       |  |               | 17,086  |       |   | 12,529  |  |   | 75,279  | 
|Income from continuing operations                       |  |                 | 13,119  |                  |   | 13,499       |  |               | 9,522   |       |   | 12,546  |  |   | 48,686  | 
|Income from continuing operations per share
   basic   |  | $               | 0.19    |                  | $ | 0.19         |  | $             | 0.14    |       | $ | 0.17    |  | $ | 0.69    | 
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Income from continuing operations per share
   diluted |  | $               | 0.18    |                  | $ | 0.19         |  | $             | 0.13    |       | $ | 0.17    |  | $ | 0.67    | 
|Net income                                              |  |                 | 13,119  |                  |   | 12,230       |  |               | 9,522   |       |   | 12,546  |  |   | 47,417  | 
|Net income per share - basic                            |  | $               | 0.19    |                  | $ | 0.17         |  | $             | 0.14    |       | $ | 0.17    |  | $ | 0.67    | 
|                                                        |  |                 |         |                  |   |              |  |               |         |       |   |         |  |   |         | 
|Net income per share - diluted                          |  | $               | 0.18    |                  | $ | 0.17         |  | $             | 0.13    |       | $ | 0.18    |  | $ | 0.66    | 

The
results of operations in all the quarters in 2006 and 2005 include charges
associated with some or all of the following: equity-based compensation,
restructuring costs, asset impairments and net legal settlements and related
expenses.

74

---



Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure

Not
applicable.

Item 9A. Controls and Procedures

Disclosure Controls
and Procedures

Our
management, with the participation of our chief executive officer and chief
financial officer, evaluated the effectiveness of our disclosure controls and
procedures as of December 31, 2006.
Based on that evaluation, our chief executive officer and chief
financial officer have concluded that our disclosure controls and procedures
were effective, as of December 31, 2006, to provide reasonable assurance that
the information required to be disclosed by us in the reports we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms.

Managements Report on Internal Control Over
Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f)/15d-15(f). Under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of
our internal control over financial reporting based on the framework in Internal Control  Integrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on our evaluation under the framework in Internal
Control  Integrated Framework,our management concluded that our
internal control over financial reporting was effective as of December 31,
2005.

Deloitte
& Touche LLP, an independent registered public accounting firm, has audited
our consolidated financial statements included in this annual report on Form
10-K as of the three years ended December 31, 2006.  The Report of Independent Registered Public Accounting Firm on
their audit of managements assessment of our internal control over financial
reporting and their audit of the effectiveness of our internal control over
financial reporting follows.  The Report
of Independent Registered Public Accounting Firm on their audit of our
consolidated financial statements is included at page 47 of this annual report.

Changes in Internal Control Over Financial
Reporting

There
were no changes in our internal control over financial reporting during the
quarter ended December 31, 2006 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

75

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board
of Directors and Shareholders of 
Premiere Global Services, Inc.
Atlanta, Georgia

We have
audited managements assessment, included in the accompanying Management Report
on Internal Control over Financial Reporting, that Premiere Global Services,
Inc.and subsidiaries (the
Company) maintained effective internal control over financial reporting as of
December 31, 2006, based on criteria
established in Internal ControlIntegrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission.  The Companys
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting.  Our
responsibility is to express an opinion on managements assessment and an
opinion on the effectiveness of the Companys internal control over financial
reporting based on our audit.

We conducted
our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States).  Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over
financial reporting, evaluating managements assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances.  We believe that our audit provides a
reasonable basis for our opinions.

A companys
internal control over financial reporting is a process designed by, or under
the supervision of, the companys principal executive and principal financial
officers, or persons performing similar functions, and effected by the
companys board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
A companys internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and
that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.

Because of the
inherent limitations of internal control over financial reporting, including
the possibility of collusion or improper management override of controls,
material misstatements due to error or fraud may not be prevented or detected
on a timely basis.  Also, projections of
any evaluation of the effectiveness of the internal control over financial
reporting to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions or that the degree of
compliance with the policies or procedures may deteriorate.

In our
opinion, managements assessment that the Company maintained effective internal
control over financial reporting as of December 31, 2006, is fairly stated, in
all material respects, based on the criteria established in Internal ControlIntegrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission.  Also in our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting
as of December 31, 2006, based on the criteria established in Internal ControlIntegrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also
audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements as of
and for the year ended December 31, 2006, of the Company and our report dated
March 16, 2007, expressed an unqualified opinion on those consolidated
financial statements and included an explanatory paragraph regarding the
adoption of Statement of Financial Accounting Standards No. 123(R), Share
Based Payment.

/s/ DELOITTE & TOUCHE LLP

Atlanta,
Georgia
March 15, 2007

76

---



Item 9.B. Other Information

None.

77

---



PART III

Certain
information required by Part III is omitted from this report and is
incorporated by reference to our definitive proxy statement pursuant to
Regulation 14A for our 2007 annual meeting of shareholders, which we will file
not later than 120 days after the end of the fiscal year covered by this annual
report.

Item
10. Directors, Executive Officers and Corporate Governance

The
information required by this item is incorporated herein by reference to our
proxy statement under the headings Proposal 1: Election of Directors 
Information Regarding Nominees and Continuing Directors and Executive
Officers, Corporate Governance Matters  Audit Committee and Section 16(a)
Beneficial Ownership Reporting Compliance.

Our
board of directors adopted our Code of Conduct and Ethics that applies to all
employees, directors and officers, including our principal executive officer
and our principal financial officer and principal accounting officer. This code
is posted on our Web site at premiereglobal.com (follow the Shareholder
Information tab to Corporate Governance). We will satisfy any disclosure
requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver
from, any provision of this code with respect to our principal executive
officer and our principal financial officer and principal accounting officer or
persons performing similar functions by disclosing the nature of such amendment
or waiver on our Web site.

Item
11. Executive Compensation

The
information required by this item is incorporated herein by reference to our
proxy statement under the headings Corporate Governance Matters  Compensation
Committee  Compensation Committee Report, Compensation Discussion and
Analysis, Director and Executive Compensation and Compensation Committee
Interlocks and Insider Participation.

|         |                                                                                                 
|-------- | ------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
  Owners and Management and Related Stockholder Matters

The
information required by this item is incorporated herein by reference to our
proxy statement under the headings Security Ownership of Certain Beneficial
Owners and Management and Equity Compensation Plan Information.

Item
13. Certain Relationships and Related Transactions, and Director Independence

The
information required by this item is incorporated herein by reference to our
proxy statement under the headings Corporate Governance Matters  Independent
Directors, Audit Committee, Compensation Committee, Nominating and Governance
Committee and Certain Transactions.

Item 14. Principal Accountant Fees and
Services

The
information required by this item is incorporated herein by reference to our
proxy statement under the heading Audit Matters.

Certain
information required by Part III is omitted from this report and is
incorporated by reference to our definitive proxy statement pursuant to
Regulation 14A for our 2006 annual meeting of shareholders, which we will file
not later than 120 days after the end of the fiscal year covered by this annual
report.

78

---



PART IV

Item
15. Exhibits and Financial Statement Schedules

|    |                                                                                                                              |                              
|--- | ---------------------------------------------------------------------------------------------------------------------------- | -----------------------------
|(a) | 1.                                                                                                                           | Financial Statements         
|    |                                                                                                                              |                              
|    | The
  financial statements listed in the index set forth in Item 8 of this report
  are filed as part of this annual report.
|    |                                                                                                                             
|    | 2.                                                                                                                           | Financial Statement Schedules
|    |                                                                                                                              |                              
|    | There are no
  financial statement schedules included in this report.                                                       
|    |                                                                                                                             
|    | 3.                                                                                                                           | Exhibits                     

EXHIBIT INDEX

|                 |  |                                                                                                                                                                                                                                                                                                                                                                                      |  | 
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                         
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                      |  | 
|                
|2.1              |  | Agreement
  and Plan of Merger, together with exhibits, dated November 13, 1997, by and
  among the Registrant, Nets Acquisition Corp. and Xpedite Systems, Inc.
  (incorporated by reference to Exhibit 99.2 to the Registrants Current Report
  on Form 8-K dated November 13, 1997 and filed December 5, 1997, as amended by
  Form 8-K/A and filed on December 23, 1997).      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|2.2              |  | Agreement
  and Plan of Merger, dated April 22, 1998, by and among the Registrant,
  American Teleconferencing Services, Ltd. (ATS), PTEK Missouri Acquisition
  Corp. and the shareholders of ATS (incorporated by reference to Exhibit 99.1
  of the Companys Current Report on Form 8-K dated April 23, 1998 and filed on
  April 28, 1998).                                  
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|2.3              |  | Asset
  Purchase Agreement, dated September 15, 2003, by and among Captaris, Inc.,
  MediaTel Corporation (Delaware) and Xpedite Systems, Inc. (incorporated by
  reference to Exhibit 2.1 of the Current Report on Form 8-K of Captaris, Inc.
  filed on September 17, 2003).                                                                                                      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|2.4              |  | Asset
  Purchase Agreement, dated February 16, 2005, by and among Clarinet, Inc., the
  Registrant, American Teleconferencing Services, Ltd., Conference-Call USA,
  Inc. and Citizens Communications Company (incorporated by reference to
  Exhibit 2.7 to the Registrants Annual Report on Form 10-K for the fiscal
  year ended December 31, 2004 and filed on March 15, 2005).
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|3.1              |  | Amended and
  Restated Articles of Incorporation of the Registrant dated March 15, 2006
  (incorporated by reference to Exhibit 3.1 to the Registrants Annual Report
  on Form 10-K for the year ended December 31, 2005 and filed on March 16,
  2006).                                                                                                                           
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|3.2              |  | Second
  Amended and Restated Bylaws of the Registrant (incorporated by reference to
  Exhibit 3.2 to the Registrants Annual Report on Form 10-K for the year ended
  December 31, 2005 and filed on March 16, 2006).                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|4.1              |  | See Exhibits
  3.1-2. for provisions of the Articles of Incorporation and Bylaws defining
  the rights of the holders of common stock of the Registrant.                                                                                                                                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|4.2              |  | Specimen
  Stock Certificate.                                                                                                                                                                                                                                                                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     
|10.1             |  | Agreement of
  Lease between Corporate Property Investors and Premiere Communications, Inc.,
  dated March 3, 1997, as amended by Modification of Lease dated August 4,
  1997, as amended by Second Modification of Lease dated October 30, 1997
  (incorporated by reference to Exhibit 10.19 to Registrants Annual Report on
  Form 10-K for the year ended December 31, 1997). 

79

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | 
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | 
|                
|10.2             |  | Amended and
  Restated 1998 Stock Plan of the Registrant (incorporated by reference to
  Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q for the
  quarter ended June 30, 1999). +                                                                                                                                                                                                                                                                                                                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.3             |  | Amendment
  No. 1 to the Amended and Restated 1998 Stock Plan of the Registrant
  (incorporated by reference to Exhibit 10.45 to the Registrants Annual Report
  on Form 10-K for the year ended December 31, 1999). +                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.4             |  | Intellivoice
  Communications, Inc. 1955 Incentive Stock Plan (assumed by the Registrant)
  (incorporated by reference to Exhibit 10.52 to the Registrants Annual Report
  on Form 10-K for the year ended December 31, 1999).                                                                                                                                                                                                                                                                                                                                                                                          
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.5             |  | 2000
  Directors Stock Plan, as amended, of the Registrant (incorporated by
  reference to Appendix C to the Registrants Definitive Proxy Statement
  distributed in connection with the Registrants June 5, 2002 Annual Meeting
  of Shareholders, filed on April 30, 2002). +                                                                                                                                                                                                                                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.6             |  | 1995 Stock
  Plan of the Registrant (incorporated by reference to Appendix C to the
  Registrants Definitive Proxy Statement distributed in connection with the
  Registrants June 5, 2002 Annual Meeting of Shareholders, filed on April 30,
  2002). +                                                                                                                                                                                                                                                                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.7             |  | Third
  Modification of Lease, dated July 15, 1998, by and between The Retail
  Property Trust and Premiere Communications, Inc. to the Agreement of Lease
  between Corporate Property Investors and Premiere Communications, Inc. dated
  October 30, 1997, as amended by Fourth Modification of Lease dated August 27,
  1998, as amended by Fifth Modification of Lease dated April 1, 1999, as
  amended by Sixth Modification of Lease dated 1999 (incorporated by reference
  to Exhibit 10.51 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2002 and filed on March 31, 2003).
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.8             |  | Seventh
  Amendment to Lease, dated February 28, 2001, by and between Property Georgia
  OBJLW Two Corporation and Premiere Communications, Inc. to the Agreement of
  Lease between Corporate Property Investors and Premiere Communications, Inc.
  dated October 30, 1997, as amended by Eighth Amendment to Lease dated June
  24, 2001 (incorporated by reference to Exhibit 10.52 to the Registrants
  Annual Report on Form 10-K for the year ended December 31, 2002 and filed on
  March 31, 2003).                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.9             |  | Standard
  Office Lease, dated May 23, 1996, by and between 2221 Bijou, LLC and American
  Teleconferencing Services, Ltd., as amended by First Amendment to Standard
  Office Lease dated May 4, 1999, as amended by Second Amendment to Standard
  Office Lease dated May 1998, as amended by Third Amendment to Standard Office
  Lease dated September 1999 (incorporated by reference to Exhibit 10.53 to the
  Registrants Annual Report on Form 10-K for the year ended December 31, 2002
  and filed on March 31, 2003).                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.10            |  | Lease
  Agreement from Townsend XPD, LLC to Xpedite Systems, Inc., dated June 15,
  2000, (incorporated by reference to Exhibit 10.68 to the Registrants Annual
  Report on Form 10-K for the year ended December 31, 2002 and filed on March
  31, 2003).                                                                                                                                                                                                                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.11            |  | Pine Ridge
  Business Park Standard Office Lease, dated January 29, 1999, by and between
  Perg Buildings, LLC and American Teleconferencing Services, Ltd., as amended
  by First Amendment to Lease dated May 4, 1999 (incorporated by reference to
  Exhibit 10.69 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2002 and filed on March 31, 2003).                                                                                                                                                                                                                                
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.12            |  | Stock Pledge
  Agreement, dated December 29, 1997, by and between Boland T. Jones and the
  Registrant (incorporated by reference to Exhibit 10.71 to Amendment No. 1 to
  the Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                                                                                                                       

80

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                            |  | 
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                            |  | 
|                
|10.13            |  | Stock Pledge
  Agreement, dated December 15, 1999, by and between Boland T. Jones and the
  Registrant (incorporated by reference to Exhibit 10.73 to Amendment No. 1 to
  the Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.14            |  | Agreement
  for Assignment of Stock Options, dated February 5, 1999, by and among Boland
  T. Jones, Seven Gables Management Company, LLC, Seven Gables Partnership,
  L.P. and the Registrant (incorporated by reference to Exhibit 10.74 to
  Amendment No. 1 to the Registrants Annual Report on Form 10-K/A for the year
  ended December 31, 2002 and filed on December 23, 2003). +
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.15            |  | Promissory
  Note, dated October 31, 2000, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.75 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                     
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.16            |  | Stock Pledge
  Agreement, dated October 31, 2000, by and between Seven Gables Partnership,
  L.P. and the Registrant (incorporated by reference to Exhibit 10.76 to
  Amendment No. 1 to the Registrants Annual Report on Form 10-K/A for the year
  ended December 31, 2002 and filed on December 23, 2003). +                                                                          
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.17            |  | Stock Pledge
  Agreement, dated October 31, 2000, by and between Boland T. Jones and the
  Registrant (incorporated by reference to Exhibit 10.78 to Amendment No. 1 to
  the Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                         
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.18            |  | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.79 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.19            |  | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.80 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.20            |  | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.81 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.21            |  | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.82 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.22            |  | Warrant to
  Purchase 250,000 shares of common stock of the Registrant issued to AT&T
  Corp. dated October 20, 2003 (incorporated by reference to Exhibit 10.3 to
  the Registrants Quarterly Report on Form 10-Q for the quarter ended
  September 30, 2003 and filed on November 14, 2003).                                                                                           
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.23            |  | Form of
  Director Indemnification Agreement between the Registrant and Non-employee
  Directors (incorporated by reference to Exhibit 10.67 to the Registrants
  Annual Report of Form 10-K for the year ended December 31, 2003 and filed on
  March 14, 2004). +                                                                                                                      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.24            |  | Form of
  Officer Indemnification Agreement between the Registrant and each of the
  executive officers (incorporated by reference to Exhibit 10.68 to the
  Registrants Annual Report of Form 10-K for the year ended December 31, 2003
  and filed on March 14, 2004). +                                                                                                               

81

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 
|---------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 
|                
|10.25            |  | Credit
  Agreement, dated June 30, 2004, among the Registrant, as Borrower, Certain
  Subsidiaries and Affiliates of the Borrower, as Guarantors, the Lenders Party
  thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent,
  and LaSalle Bank National Association, as Syndication Agent and Co-Lead
  Arranger (incorporated by reference to Exhibit 10.1 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed
  on August 9, 2004).
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.26            |  | Security
  Agreement, dated June 30, 2004, among the Registrant, American
  Teleconferencing Services, Ltd., Premiere Conferencing Network Services,
  Inc., PTEK Services, Inc., Xpedite Network Services, Inc., Xpedite Systems,
  Inc., Xpedite Systems Worldwide, Inc. and Bank of America, N.A., as
  Collateral Agent (incorporated by reference to Exhibit 10.2 to the
  Registrants Quarterly Report on Form 10-Q for the quarter ended June 30,
  2004 and filed on August 9, 2004).             
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.27            |  | Pledge
  Agreement, dated June 30, 2004, among the Registrant, American
  Teleconferencing Services, Ltd., Premiere Conferencing Networks, Inc., PTEK
  Services, Inc., Xpedite Network Services, Inc., Xpedite Systems, Inc.,
  Xpedite Systems Worldwide, Inc. and Bank of America, N.A., as Collateral
  Agent (incorporated by reference to Exhibit 10.3 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed
  on August 9, 2004).                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.28            |  | Employment
  Letter, dated September 30, 2004, by and between the Registrant and Michael
  E. Havener (incorporated by reference to Exhibit 99.1 to the Registrants
  Current Report on From 8-K dated September 30, 2004 and filed October 1,
  2004). +                                                                                                                                                                                                                                                 
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.29            |  | Amendment
  No. 1 to Credit Agreement, dated February 2, 2005, by and among the
  Registrant, as Borrower, Bank of America, N.A., as Administrative Agent, and
  the Guarantors and the Lenders that are parties thereto (incorporated by
  reference Exhibit 10.1 to the Registrants Current Report on Form 8-K dated
  February 5, 2004 and filed on February 3, 2004).                                                                                                                                 
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.30            |  | 2004
  Long-Term Incentive Plan, as amended, of the Registrant (incorporated by
  reference to Appendix B to the Registrants Definitive Proxy Statement
  distributed in connection with the Registrants June 3, 2004 Annual Meeting
  of Shareholders, filed on April 28, 2004). +                                                                                                                                                                                                                      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.31            |  | Fourth
  Amendment to Standard Office Lease, effective March 1, 2005, by and between
  2221 Bijou, LLC and American Teleconferencing Services, Ltd. to the Standard
  Office Lease dated May 23, 1996, as amended (incorporated by reference to
  Exhibit 10.57 of the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2004 and filed on March 15, 2005).                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.32            |  | Partial
  Termination of Lease and Mutual Release, dated April 16, 2004, between
  Property Georgia OBJWL Two Corporation and Premiere Technologies, Inc. to the
  Agreement of Lease between Corporate Property Investors and Premiere
  Communications, Inc. dated October 30, 1997, as amended (incorporated by
  reference to Exhibit 10.58 of the Registrants Annual Report on Form 10-K for
  the year ended December 31, 2004 and filed on March 15, 2005).                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.33            |  | Fourth
  Amended and Restated Executive Employment Agreement between Boland T. Jones
  and the Registrant, effective January 1, 2005 (incorporated by reference to
  Exhibit 10.1 to the Registrants Current Report on Form 8-K dated April 20,
  2005 and filed on April 20, 2005). +                                                                                                                                                                                                                    
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.34            |  | Fourth
  Amended and Restated Executive Employment Agreement between Jeffrey A. Allred
  and the Registrant, effective January 1, 2005 (incorporated by reference to
  Exhibit 10.2 to the Registrants Current Report on Form 8-K dated and filed
  on April 20, 2005). +                                                                                                                                                                                                                                 
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.35            |  | Form of
  Restricted Stock Agreement to be issued to Boland T. Jones and Jeffrey A.
  Allred as Stock Bonuses pursuant to the terms of their Fourth Amended and Restated
  Executive Employment Agreements with the Registrant (incorporated by
  reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K
  dated and filed on April 20, 2005). +                                                                                                                                         

82

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     |  | 
|---------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                     |  | 
|                
|10.36            |  | Restricted
  Stock Agreement between Boland T. Jones and the Registrant, effective April
  18, 2005, under the Registrants 2004 Long-Term Incentive Plan (incorporated
  by reference to Exhibit 10.4 to the Registrants Current Report on Form 8-K
  dated and filed on April 20, 2005). +                                                                                      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.37            |  | Restricted
  Stock Agreement between Boland T. Jones and the Registrant, effective April
  18, 2005, under the Registrants 1995 Stock Plan (incorporated by reference
  to Exhibit 10.5 to the Registrants Current Report on Form 8-K dated and
  filed on April 20, 2005). +                                                                                                    
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.38            |  | Second
  Amendment to Employment Letter between the Registrant and Michael E. Havener,
  dated April 22, 2005 (incorporated by reference to Exhibit 10.3 to the
  Registrants Current Report on From 8-K dated and filed April 28, 2005). +                                                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.39            |  | Form of
  NonStatutory Stock Option Agreement under the Registrants 2004 Long-Term
  Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrants
  Quarterly Report on Form 10-Q for the quarter end March 31, 2005 and filed on
  May 6, 2005).                                                                                                                
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.40            |  | Form of
  Restricted Stock Agreement under the Registrants 2004 Long-Term Incentive
  Plan (incorporated by reference to Exhibit 10.5 to the Registrants Quarterly
  Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
  2005).                                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.41            |  | Form of
  NonStatutory Stock Option Agreement under the Registrants 1995 Stock Plan
  (incorporated by reference to Exhibit 10.6 to the Registrants Quarterly
  Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
  2005).                                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.42            |  | Form of
  Restricted Stock Award Agreement under the Registrants 1995 Stock Plan
  (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly
  Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
  2005).                                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.43            |  | Summary of
  the Registrants Non-Employee Director Compensation (incorporated by
  reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K
  dated and filed on December 22, 2005).                                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.44            |  | Lease
  Agreement, dated October 28, 2005, between Xpedite Systems, LLC and 3280
  Peachtree I LLC (incorporated by reference to Exhibit 10.1 to the
  Registrants Current Report on Form 8-K dated and filed on February 1, 2006).                                                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.45            |  | Guaranty to
  the Lease Agreement between Xpedite Systems, LLC and 3280 Peachtree I LLC,
  dated October 28, 2005, by the Registrant (incorporated by reference to
  Exhibit 10.2 to the Registrants Current Report on Form 8-K dated and filed
  on February 1, 2006).                                                                                                           
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.46            |  | Lease
  Agreement, dated October 28, 2005, between American Teleconferencing
  Services, Ltd. and 3280 Peachtree I LLC (incorporated by reference to Exhibit
  10.3 to the Registrants Current Report on Form 8-K dated and filed on
  February 1, 2006).                                                                                                                         
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.47            |  | Guaranty to
  the Lease Agreement between American Teleconferencing Services, Ltd. and 3280
  Peachtree I LLC, by the Registrant (incorporated by reference to Exhibit 10.4
  to the Registrants Current Report on Form 8-K dated and filed on February 1,
  2006).                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.48            |  | Fifth
  Amendment to Standard Office Lease, dated February 9, 2006, by and between
  2221 Bijou, LLC and American Teleconferencing Services, Ltd., to the Standard
  Office Lease, dated May 23, 1996, as amended (incorporated by reference to
  Exhibit 10.62 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2005 and filed on March 16, 2006).

83

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                     |  | 
|---------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                     |  | 
|                
|10.49            |  | Amendment
  No. 2 and Waiver to Credit Agreement, dated August 3, 2005, by and among the
  Registrant, as Borrower, Bank of America, N.A., as Administrative Agent, and
  the Guarantors and the Lenders that are parties thereto (incorporated by
  reference to Exhibit 10.65 of the Registrants Annual Report on Form 10-K for
  the year ended December 31, 2005 and filed on March 16, 2006).
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.50            |  | Amendment
  No. 3 to Credit Agreement, dated April 24, 2006, by and among the Registrant
  as Borrower, Bank of America, N.A. as Administrative Agent, and the
  Guarantors and the Lenders that are parties thereto (incorporated by
  reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K
  dated and filed April 25, 2006).                                                
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.51            |  | Restricted
  Stock Agreement by and between Jeffrey A. Allred and the Registrant, dated
  May 5, 2006, under the Registrants 1995 Stock Plan (incorporated by reference
  to Exhibit 10.1 to the Registrants Current Report on Form 8-K dated May 10,
  2006 and filed on May 11, 2006). +                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.52            |  | Amendment to
  Fifth Amendment to Standard Office Lease, effective March 13, 2006, by and
  between 2221 Bijou, LLC and American Teleconferencing Services, Ltd. to the
  Standard Office Lease, dated May 23, 1996, as amended (incorporated by
  reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q
  for the quarter ended March 31, 2006 and filed on May 9, 2006).   
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.53            |  | Restricted
  Stock Agreement by and between Theodore P. Schrafft and the Registrant, dated
  May 5, 2006, under the Registrants 1995 Stock Plan (incorporated by
  reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K
  dated May 10, 2006 and filed on May 11, 2006). +                                                                                                    
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.54            |  | Restricted
  Stock Agreement by and between T. Lee Provow and the Registrant, dated May 5,
  2006, under the Registrants 1995 Stock Plan (incorporated by reference to
  Exhibit 10.3 to the Registrants Current Report on Form 8-K dated May 10,
  2006 and filed on May 11, 2006). +                                                                                                           
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.55            |  | Form of
  Restriction Agreement for non-employee directors under the 2000 Directors
  Stock Plan (incorporated by reference to Exhibit 10.2 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and filed
  on May 9, 2006).                                                                                                                                  
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.56            |  | Revised
  Summary of the Equity Compensation Component to the Registrants Non-Employee
  Director Compensation (incorporated by reference to Exhibit 10.1 to the
  Registrants Current Report on Form 8-K dated and filed on July 26, 2006).                                                                                                                                                     
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.57            |  | Amended and
  Restated Employment Agreement between Theodore P. Schrafft and the
  Registrant, dated September 15, 2006 (incorporated by reference to Exhibit
  10.1 to the Registrants Current Report on From 8-K dated and filed September
  19, 2006). +                                                                                                                                       
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.58            |  | Amended and
  Restated Employment Agreement between T. Lee Provow and the Registrant, dated
  September 15, 2006 (incorporated by reference to Exhibit 10.2 to the
  Registrants Current Report on From 8-K dated and filed September 19, 2006).
  +                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.59            |  | First
  Amendment to Fourth Amended and Restated Executive Employment Agreement
  between Boland T. Jones and the Registrant, dated September 15, 2006
  (incorporated by reference to Exhibit 10.3 to the Registrants Current Report
  on Form 8-K dated and filed on September 19, 2006). +                                                                                                     
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.60            |  | First
  Amendment to Fourth Amended and Restated Executive Employment Agreement
  between Jeffrey A. Allred and the Registrant, dated September 15, 2006
  (incorporated by reference to Exhibit 10.4 to the Registrants Current Report
  on Form 8-K dated and filed on September 19, 2006). +                                                                                                   
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.61            |  | Amendment to
  Employment Letter between Michael E. Havener and the Registrant, dated
  September 15, 2006 (incorporated by reference to Exhibit 10.5 to the
  Registrants Current Report on Form 8-K dated and filed on September 19,
  2006). +                                                                                                                                                 

84

---



|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
|---------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
  Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
|                
|10.62            |  | Second
  Amendment to Fifth Amendment to the Standard Office Lease, dated September
  11, 2006, by and between 2221 Bijou, LLC and American Teleconferencing
  Services, Ltd., to the Standard Office Lease, dated May 23, 1996, as amended
  (incorporated by reference to Exhibit 10.9 of the Registrants Quarterly
  Report on Form 10-Q for the quarter ended September 30, 2006 and filed on
  November 9, 2006).
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.63            |  | Amendment to
  the Registrants 2004 Long-Term Incentive Plan, dated September 29, 2006
  (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly
  Report on Form 10-Q dated November 9, 2006 and filed on November 11, 2006). +                                                                                                                                                                     
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.64            |  | Amendment
  No. 4 and Waiver to Credit Agreement, dated October 3, 2006, by and among the
  Registrant as Borrower, Bank of America, N.A. as Administrative Agent, and
  the Guarantors and the Lenders that are parties thereto (incorporated by
  reference to Exhibit 10.8 to the Registrants Quarterly Report on Form 10-Q
  for quarter ended September 30, 2006 and filed on November 9, 2006).                 
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.65            |  | Amendment
  and Restatement of the Registrants 401(k) Plan, dated December 20, 2006 and
  effective January 1, 2006.                                                                                                                                                                                                                                                                                                  
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.66            |  | Separation
  Agreement between Jeffrey A. Allred and the Registrant, dated December 20,
  2006 and effective January 1, 2007. +                                                                                                                                                                                                                                                                                        
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.67            |  | Restricted
  Stock Agreement between Jeffrey A. Allred and the Registrant, effective
  December 30, 2006, under the Registrants 1995 Stock Plan. +                                                                                                                                                                                                                                                                    
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.68            |  | First
  Amendment to Amended and Restated Employment Agreement between T. Lee Provow
  and the Registrant, dated January 23, 2007. +                                                                                                                                                                                                                                                                                   
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.69            |  | Restricted
  Stock Agreement between T. Lee Provow and the Registrant, dated January 22,
  2007, under the Registrants 1995 Stock Plan. +                                                                                                                                                                                                                                                                             
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|21.1             |  | Subsidiaries
  of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                      
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|23.1             |  | Consent of
  Deloitte & Touche LLP.                                                                                                                                                                                                                                                                                                                                                                                    
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|31.1             |  | Certification of Chief
  Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
  Exchange Act of 1934.                                                                                                                                                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|31.2             |  | Certification of Chief
  Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
  Exchange Act of 1934.                                                                                                                                                                                                                                                                                              
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|32.1             |  | Certification of Chief
  Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities
  Exchange Act of 1934 and 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                                   
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|32.2             |  | Certification of Chief
  Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities
  Exchange Act of 1934 and 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                                   

+ Management contract or
compensatory plan or arrangement required to be filed as an exhibit to this
form pursuant to Item 15(b) of this report.

85

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) 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.

| |                                |                                       
| | ------------------------------ | --------------------------------------
| | Premiere Global Services, Inc.
|
| | By:                            | /s/ Boland T. Jones                   
| |                                |                                       
| |                                | Boland T. Jones, Chairman of the Board
| |                                | and Chief Executive Officer           
|
| |                                | Date: March 15, 2007                  

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant in the capacities and on the dates indicated.

|                           |  |                                   |  |                  |  |  |  |  |  | 
|-------------------------- |  | --------------------------------- |  | ---------------- |  |  |  |  |  | 
|Signature                  |  | Title                             |  | Date            
|                           |  |                                   |  |                 
|/s/ Boland T. Jones        |  | Chairman of
  the Board and Chief |  | March 15,
  2007
|                           |  | Executive Officer (principal      |  |                 
|Boland T. Jones            |  | executive officer) and Director   |  |                 
|                           |  |                                   |  |                 
|/s/ Michael E. Havener     |  | Chief Financial
  Officer         |  | March 15, 2007  
|                           |  | (principal financial and          |  |                 
|Michael E. Havener         |  | accounting officer)               |  |                 
|                           |  |                                   |  |                 
|/s/ Jeffrey T. Arnold      |  | Director                          |  | March 15,
  2007
|                           |  |                                   |  |                 
|Jeffrey T. Arnold          |  |                                   |  |                 
|                           |  |                                   |  |                 
|/s/ Wilkie S. Colyer       |  | Director                          |  | March 15,
  2007
|                           |  |                                   |  |                 
|Wilkie S. Colyer           |  |                                   |  |                 
|                           |  |                                   |  |                 
|/s/ John R. Harris         |  | Director                          |  | March 15,
  2007
|                           |  |                                   |  |                 
|John R. Harris             |  |                                   |  |                 
|                           |  |                                   |  |                 
|/s/ Raymond H. Pirtle, Jr. |  | Director                          |  | March 15,
  2007
|                           |  |                                   |  |                 
|Raymond H. Pirtle, Jr.     |  |                                   |  |                 
|                           |  |                                   |  |                 
|/s/ J. Walker Smith, Jr.   |  | Director                          |  | March 15,
  2007
|                           |  |                                   |  |                 
|J. Walker Smith, Jr.       |  |                                   |  |                 

86

---



EXHIBIT INDEX

|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|---------------- |  | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |            
|2.1              |  |             | Agreement and Plan of Merger, together with
  exhibits, dated November 13, 1997, by and among the Registrant, Nets
  Acquisition Corp. and Xpedite Systems, Inc. (incorporated by reference to
  Exhibit 99.2 to the Registrants Current Report on Form 8-K dated November
  13, 1997 and filed December 5, 1997, as amended by Form 8-K/A and filed on
  December 23, 1997).      
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|2.2              |  |             | Agreement
  and Plan of Merger, dated April 22, 1998, by and among the Registrant,
  American Teleconferencing Services, Ltd. (ATS), PTEK Missouri Acquisition
  Corp. and the shareholders of ATS (incorporated by reference to Exhibit 99.1
  of the Companys Current Report on Form 8-K dated April 23, 1998 and filed on
  April 28, 1998).                                  
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|2.3              |  |             | Asset
  Purchase Agreement, dated September 15, 2003, by and among Captaris, Inc.,
  MediaTel Corporation (Delaware) and Xpedite Systems, Inc. (incorporated by
  reference to Exhibit 2.1 of the Current Report on Form 8-K of Captaris, Inc.
  filed on September 17, 2003).                                                                                                      
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|2.4              |  |             | Asset
  Purchase Agreement, dated February 16, 2005, by and among Clarinet, Inc., the
  Registrant, American Teleconferencing Services, Ltd., Conference-Call USA,
  Inc. and Citizens Communications Company (incorporated by reference to Exhibit
  2.7 to the Registrants Annual Report on Form 10-K for the fiscal year ended
  December 31, 2004 and filed on March 15, 2005).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|3.1              |  |             | Amended
  and Restated Articles of Incorporation of the Registrant dated March 15, 2006
  (incorporated by reference to Exhibit 3.1 to the Registrants Annual Report
  on Form 10-K for the year ended December 31, 2005 and filed on March 16,
  2006).                                                                                                                           
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|3.2              |  |             | Second Amended and Restated Bylaws of the
  Registrant (incorporated by reference to Exhibit 3.2 to the Registrants
  Annual Report on Form 10-K for the year ended December 31, 2005 and filed on
  March 16, 2006).                                                                                                                                                              
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|4.1              |  |             | See
  Exhibits 3.1-2. for provisions of the Articles of Incorporation and Bylaws
  defining the rights of the holders of common stock of the Registrant.                                                                                                                                                                                                                            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|4.2              |  |             | Specimen
  Stock Certificate.                                                                                                                                                                                                                                                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|10.1             |  |             | Agreement
  of Lease between Corporate Property Investors and Premiere Communications,
  Inc., dated March 3, 1997, as amended by Modification of Lease dated August
  4, 1997, as amended by Second Modification of Lease dated October 30, 1997
  (incorporated by reference to Exhibit 10.19 to Registrants Annual Report on
  Form 10-K for the year ended December 31, 1997). 
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|10.2             |  |             | Amended and Restated 1998 Stock Plan of the
  Registrant (incorporated by reference to Exhibit 10.1 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended June 30, 1999). +                                                                                                                                                                                     
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|10.3             |  |             | Amendment No. 1 to the Amended and Restated
  1998 Stock Plan of the Registrant (incorporated by reference to Exhibit 10.45
  to the Registrants Annual Report on Form 10-K for the year ended December
  31, 1999). +                                                                                                                                                             
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|10.4             |  |             | Intellivoice Communications, Inc. 1955
  Incentive Stock Plan (assumed by the Registrant) (incorporated by reference
  to Exhibit 10.52 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 1999).                                                                                                                                                     
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                     
|10.5             |  |             | 2000 Directors Stock Plan, as amended, of
  the Registrant (incorporated by reference to Appendix C to the Registrants
  Definitive Proxy Statement distributed in connection with the Registrants
  June 5, 2002 Annual Meeting of Shareholders, filed on April 30, 2002). +                                                                                                     

---



|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---------------- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.6             |  |             | 1995
  Stock Plan of the Registrant (incorporated by reference to Appendix C to the
  Registrants Definitive Proxy Statement distributed in connection with the
  Registrants June 5, 2002 Annual Meeting of Shareholders, filed on April 30,
  2002). +                                                                                                                                                                                                                                                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.7             |  |             | Third
  Modification of Lease, dated July 15, 1998, by and between The Retail
  Property Trust and Premiere Communications, Inc. to the Agreement of Lease
  between Corporate Property Investors and Premiere Communications, Inc. dated
  October 30, 1997, as amended by Fourth Modification of Lease dated August 27,
  1998, as amended by Fifth Modification of Lease dated April 1, 1999, as
  amended by Sixth Modification of Lease dated 1999 (incorporated
  by reference to Exhibit 10.51 to the Registrants Annual Report on Form 10-K
  for the year ended December 31, 2002 and filed on March 31, 2003).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.8             |  |             | Seventh
  Amendment to Lease, dated February 28, 2001, by and between Property Georgia
  OBJLW Two Corporation and Premiere Communications, Inc. to the Agreement of
  Lease between Corporate Property Investors and Premiere Communications, Inc.
  dated October 30, 1997, as amended by Eighth Amendment to Lease dated June
  24, 2001 (incorporated by reference to Exhibit 10.52 to
  the Registrants Annual Report on Form 10-K for the year ended December 31,
  2002 and filed on March 31, 2003).                                                                                                            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.9             |  |             | Standard
  Office Lease, dated May 23, 1996, by and between 2221 Bijou, LLC and American
  Teleconferencing Services, Ltd., as amended by First Amendment to Standard
  Office Lease dated May 4, 1999, as amended by Second Amendment to Standard
  Office Lease dated May 1998, as amended by Third Amendment to Standard Office
  Lease dated September 1999 (incorporated by reference to
  Exhibit 10.53 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2002 and filed on March 31, 2003).                                                                                        
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.10            |  |             | Lease
  Agreement from Townsend XPD, LLC to Xpedite Systems, Inc., dated June 15,
  2000, (incorporated by reference to Exhibit 10.68 to the
  Registrants Annual Report on Form 10-K for the year ended December 31, 2002
  and filed on March 31, 2003).                                                                                                                                                                                                                                                                                                                                                              
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.11            |  |             | Pine Ridge Business Park Standard Office
  Lease, dated January 29, 1999, by and between Perg Buildings, LLC and
  American Teleconferencing Services, Ltd., as amended by First Amendment to
  Lease dated May 4, 1999 (incorporated by reference to
  Exhibit 10.69 to the Registrants Annual Report on Form 10-K for the year ended
  December 31, 2002 and filed on March 31, 2003).                                                                                                                                                                                                                                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.12            |  |             | Stock Pledge Agreement, dated December 29,
  1997, by and between Boland T. Jones and the Registrant (incorporated by
  reference to Exhibit 10.71 to Amendment No. 1 to the Registrants Annual Report
  on Form 10-K/A for the year ended December 31, 2002 and filed on December 23,
  2003). +                                                                                                                                                                                                                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.13            |  |             | Stock
  Pledge Agreement, dated December 15, 1999, by and between Boland T. Jones and
  the Registrant (incorporated by reference to Exhibit 10.73 to Amendment No. 1
  to the Registrants Annual Report on Form 10-K/A for the year ended December
  31, 2002 and filed on December 23, 2003). +                                                                                                                                                                                                                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.14            |  |             | Agreement for Assignment of Stock Options,
  dated February 5, 1999, by and among Boland T. Jones, Seven Gables Management
  Company, LLC, Seven Gables Partnership, L.P. and the Registrant (incorporated
  by reference to Exhibit 10.74 to Amendment No. 1 to the Registrants Annual
  Report on Form 10-K/A for the year ended December 31, 2002 and filed on
  December 23, 2003). +                                                                                                                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.15            |  |             | Promissory
  Note, dated October 31, 2000, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.75 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                                                                                                                                    
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.16            |  |             | Stock Pledge Agreement, dated October 31,
  2000, by and between Seven Gables Partnership, L.P. and the Registrant
  (incorporated by reference to Exhibit 10.76 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                                                                                                         

---



|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------- |  | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.17            |  |             | Stock
  Pledge Agreement, dated October 31, 2000, by and between Boland T. Jones and
  the Registrant (incorporated by reference to Exhibit 10.78 to Amendment No. 1
  to the Registrants Annual Report on Form 10-K/A for the year ended December
  31, 2002 and filed on December 23, 2003). +                                                                                                                                                                                                          
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.18            |  |             | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.79 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                        
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.19            |  |             | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.80 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                        
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.20            |  |             | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.81 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                        
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.21            |  |             | Promissory
  Note, dated April 17, 2001, payable to the Registrant by Boland T. Jones
  (incorporated by reference to Exhibit 10.82 to Amendment No. 1 to the
  Registrants Annual Report on Form 10-K/A for the year ended December 31,
  2002 and filed on December 23, 2003). +                                                                                                                                                                                                                        
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.22            |  |             | Warrant to Purchase 250,000 shares of
  common stock of the Registrant issued to AT&T Corp. dated October 20,
  2003 (incorporated by reference to Exhibit 10.3 to the Registrants Quarterly
  Report on Form 10-Q for the quarter ended September 30, 2003 and filed on
  November 14, 2003).                                                                                                                                                                                                            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.23            |  |             | Form
  of Director Indemnification Agreement between the Registrant and Non-employee
  Directors (incorporated by reference to Exhibit 10.67 to the Registrants
  Annual Report of Form 10-K for the year ended December 31, 2003 and filed on
  March 14, 2004). +                                                                                                                                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.24            |  |             | Form
  of Officer Indemnification Agreement between the Registrant and each of the
  executive officers (incorporated by reference to Exhibit 10.68 to the
  Registrants Annual Report of Form 10-K for the year ended December 31, 2003
  and filed on March 14, 2004). +                                                                                                                                                                                                                                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.25            |  |             | Credit
  Agreement, dated June 30, 2004, among the Registrant, as Borrower, Certain
  Subsidiaries and Affiliates of the Borrower, as Guarantors, the Lenders Party
  thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent,
  and LaSalle Bank National Association, as Syndication Agent and Co-Lead
  Arranger (incorporated by reference to Exhibit 10.1 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed
  on August 9, 2004).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.26            |  |             | Security
  Agreement, dated June 30, 2004, among the Registrant, American
  Teleconferencing Services, Ltd., Premiere Conferencing Network Services,
  Inc., PTEK Services, Inc., Xpedite Network Services, Inc., Xpedite Systems,
  Inc., Xpedite Systems Worldwide, Inc. and Bank of America, N.A., as
  Collateral Agent (incorporated by reference to Exhibit 10.2 to the
  Registrants Quarterly Report on Form 10-Q for the quarter ended June 30,
  2004 and filed on August 9, 2004).             
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.27            |  |             | Pledge Agreement, dated June 30, 2004,
  among the Registrant, American Teleconferencing Services, Ltd., Premiere
  Conferencing Networks, Inc., PTEK Services, Inc., Xpedite Network Services,
  Inc., Xpedite Systems, Inc., Xpedite Systems Worldwide, Inc. and Bank of
  America, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.3
  to the Registrants Quarterly Report on Form 10-Q for the quarter ended June
  30, 2004 and filed on August 9, 2004).                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.28            |  |             | Employment Letter, dated September 30,
  2004, by and between the Registrant and Michael E. Havener (incorporated by
  reference to Exhibit 99.1 to the Registrants Current Report on From 8-K
  dated September 30, 2004 and filed October 1, 2004). +                                                                                                                                                                                                                                                   

---



|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---------------- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.29            |  |             | Amendment No. 1 to Credit Agreement, dated
  February 2, 2005, by and among the Registrant, as Borrower, Bank of America,
  N.A., as Administrative Agent, and the Guarantors and the Lenders that are
  parties thereto (incorporated by reference Exhibit 10.1 to the Registrants
  Current Report on Form 8-K dated February 5, 2004 and filed on February 3,
  2004).                                                                                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.30            |  |             | 2004 Long-Term Incentive Plan, as amended,
  of the Registrant (incorporated by reference to Appendix B to the
  Registrants Definitive Proxy Statement distributed in connection with the
  Registrants June 3, 2004 Annual Meeting of Shareholders, filed on April 28,
  2004). +                                                                                                                                                                              
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.31            |  |             | Fourth Amendment to Standard Office Lease,
  effective March 1, 2005, by and between 2221 Bijou, LLC and American
  Teleconferencing Services, Ltd. to the Standard Office Lease dated May 23,
  1996, as amended (incorporated by reference to Exhibit 10.57 of the
  Registrants Annual Report on Form 10-K for the year ended December 31, 2004
  and filed on March 15, 2005).                                                                                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.32            |  |             | Partial
  Termination of Lease and Mutual Release, dated April 16, 2004, between
  Property Georgia OBJWL Two Corporation and Premiere Technologies, Inc. to the
  Agreement of Lease between Corporate Property Investors and Premiere
  Communications, Inc. dated October 30, 1997, as amended (incorporated by
  reference to Exhibit 10.58 of the Registrants Annual Report on Form 10-K for
  the year ended December 31, 2004 and filed on March 15, 2005).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.33            |  |             | Fourth
  Amended and Restated Executive Employment Agreement between Boland T. Jones
  and the Registrant, effective January 1, 2005 (incorporated by reference to
  Exhibit 10.1 to the Registrants Current Report on Form 8-K dated April 20,
  2005 and filed on April 20, 2005). +                                                                                                                                                                            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.34            |  |             | Fourth
  Amended and Restated Executive Employment Agreement between Jeffrey A. Allred
  and the Registrant, effective January 1, 2005 (incorporated by reference to
  Exhibit 10.2 to the Registrants Current Report on Form 8-K dated and filed
  on April 20, 2005). +                                                                                                                                                                                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.35            |  |             | Form
  of Restricted Stock Agreement to be issued to Boland T. Jones and Jeffrey A.
  Allred as Stock Bonuses pursuant to the terms of their Fourth Amended and
  Restated Executive Employment Agreements with the Registrant (incorporated by
  reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K
  dated and filed on April 20, 2005). +                                                                                                 
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.36            |  |             | Restricted
  Stock Agreement between Boland T. Jones and the Registrant, effective April
  18, 2005, under the Registrants 2004 Long-Term Incentive Plan (incorporated
  by reference to Exhibit 10.4 to the Registrants Current Report on Form 8-K
  dated and filed on April 20, 2005). +                                                                                                                                                                      
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.37            |  |             | Restricted Stock Agreement between Boland
  T. Jones and the Registrant, effective April 18, 2005, under the Registrants
  1995 Stock Plan (incorporated by reference to Exhibit 10.5 to the
  Registrants Current Report on Form 8-K dated and filed on April 20, 2005). +                                                                                                                                                                                      
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.38            |  |             | Second
  Amendment to Employment Letter between the Registrant and Michael E. Havener,
  dated April 22, 2005 (incorporated by reference to Exhibit 10.3 to the
  Registrants Current Report on From 8-K dated and filed April 28, 2005). +                                                                                                                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.39            |  |             | Form
  of NonStatutory Stock Option Agreement under the Registrants 2004 Long-Term
  Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrants
  Quarterly Report on Form 10-Q for the quarter end March 31, 2005 and filed on
  May 6, 2005).                                                                                                                                                                                                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.40            |  |             | Form of Restricted Stock Agreement under
  the Registrants 2004 Long-Term Incentive Plan (incorporated by reference to
  Exhibit 10.5 to the Registrants Quarterly Report on Form 10-Q for the
  quarter ended March 31, 2005 and filed on May 6, 2005).                                                                                                                                                                                                         

---



|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|---------------- |  | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.41            |  |             | Form of NonStatutory Stock Option Agreement
  under the Registrants 1995 Stock Plan (incorporated by reference to Exhibit
  10.6 to the Registrants Quarterly Report on Form 10-Q for the quarter ended
  March 31, 2005 and filed on May 6, 2005).                                                                                                                                              
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.42            |  |             | Form
  of Restricted Stock Award Agreement under the Registrants 1995 Stock Plan
  (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly
  Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
  2005).                                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.43            |  |             | Summary
  of the Registrants Non-Employee Director Compensation (incorporated by
  reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K
  dated and filed on December 22, 2005).                                                                                                                                                                                              
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.44            |  |             | Lease
  Agreement, dated October 28, 2005, between Xpedite Systems, LLC and 3280 Peachtree
  I LLC (incorporated by reference to Exhibit 10.1 to the Registrants Current
  Report on Form 8-K dated and filed on February 1, 2006).                                                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.45            |  |             | Guaranty
  to the Lease Agreement between Xpedite Systems, LLC and 3280 Peachtree I LLC,
  dated October 28, 2005, by the Registrant (incorporated by reference to
  Exhibit 10.2 to the Registrants Current Report on Form 8-K dated and filed
  on February 1, 2006).                                                                                                                           
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.46            |  |             | Lease
  Agreement, dated October 28, 2005, between American Teleconferencing
  Services, Ltd. and 3280 Peachtree I LLC (incorporated by reference to Exhibit
  10.3 to the Registrants Current Report on Form 8-K dated and filed on
  February 1, 2006).                                                                                                                                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.47            |  |             | Guaranty
  to the Lease Agreement between American Teleconferencing Services, Ltd. and 3280
  Peachtree I LLC, by the Registrant (incorporated by reference to Exhibit 10.4
  to the Registrants Current Report on Form 8-K dated and filed on February 1,
  2006).                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.48            |  |             | Fifth
  Amendment to Standard Office Lease, dated February 9, 2006, by and between
  2221 Bijou, LLC and American Teleconferencing Services, Ltd., to the Standard
  Office Lease, dated May 23, 1996, as amended (incorporated by reference to
  Exhibit 10.62 to the Registrants Annual Report on Form 10-K for the year
  ended December 31, 2005 and filed on March 16, 2006).                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.49            |  |             | Amendment No. 2 and Waiver to Credit
  Agreement, dated August 3, 2005, by and among the Registrant, as Borrower,
  Bank of America, N.A., as Administrative Agent, and the Guarantors and the
  Lenders that are parties thereto (incorporated by reference to Exhibit 10.65
  of the Registrants Annual Report on Form 10-K for the year ended December
  31, 2005 and filed on March 16, 2006).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.50            |  |             | Amendment
  No. 3 to Credit Agreement, dated April 24, 2006, by and among the Registrant
  as Borrower, Bank of America, N.A. as Administrative Agent, and the
  Guarantors and the Lenders that are parties thereto (incorporated by
  reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K
  dated and filed April 25, 2006).                                                
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.51            |  |             | Restricted
  Stock Agreement by and between Jeffrey A. Allred and the Registrant, dated
  May 5, 2006, under the Registrants 1995 Stock Plan (incorporated by
  reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K
  dated May 10, 2006 and filed on May 11, 2006). +                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.52            |  |             | Amendment
  to Fifth Amendment to Standard Office Lease, effective March 13, 2006, by and
  between 2221 Bijou, LLC and American Teleconferencing Services, Ltd. to the
  Standard Office Lease, dated May 23, 1996, as amended (incorporated by
  reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q
  for the quarter ended March 31, 2006 and filed on May 9, 2006).   
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                    
|10.53            |  |             | Restricted
  Stock Agreement by and between Theodore P. Schrafft and the Registrant, dated
  May 5, 2006, under the Registrants 1995 Stock Plan (incorporated by
  reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K
  dated May 10, 2006 and filed on May 11, 2006). +                                                                                                    

---



|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------- |  | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.54            |  |             | Restricted
  Stock Agreement by and between T. Lee Provow and the Registrant, dated May 5,
  2006, under the Registrants 1995 Stock Plan (incorporated by reference to
  Exhibit 10.3 to the Registrants Current Report on Form 8-K dated May 10,
  2006 and filed on May 11, 2006). +                                                                                                                               
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.55            |  |             | Form
  of Restriction Agreement for non-employee directors under the 2000 Directors
  Stock Plan (incorporated by reference to Exhibit 10.2 to the Registrants
  Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and filed
  on May 9, 2006).                                                                                                                                                      
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.56            |  |             | Revised
  Summary of the Equity Compensation Component to the Registrants Non-Employee
  Director Compensation (incorporated by reference to Exhibit 10.1 to the
  Registrants Current Report on Form 8-K dated and filed on July 26, 2006).                                                                                                                                                                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.57            |  |             | Amended
  and Restated Employment Agreement between Theodore P. Schrafft and the
  Registrant, dated September 15, 2006 (incorporated by reference to Exhibit
  10.1 to the Registrants Current Report on From 8-K dated and filed September
  19, 2006). +                                                                                                                                                           
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.58            |  |             | Amended
  and Restated Employment Agreement between T. Lee Provow and the Registrant,
  dated September 15, 2006 (incorporated by reference to Exhibit 10.2 to the
  Registrants Current Report on From 8-K dated and filed September 19, 2006).
  +                                                                                                                                                                  
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.59            |  |             | First
  Amendment to Fourth Amended and Restated Executive Employment Agreement
  between Boland T. Jones and the Registrant, dated September 15, 2006
  (incorporated by reference to Exhibit 10.3 to the Registrants Current Report
  on Form 8-K dated and filed on September 19, 2006). +                                                                                                                         
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.60            |  |             | First
  Amendment to Fourth Amended and Restated Executive Employment Agreement
  between Jeffrey A. Allred and the Registrant, dated September 15, 2006
  (incorporated by reference to Exhibit 10.4 to the Registrants Current Report
  on Form 8-K dated and filed on September 19, 2006). +                                                                                                                       
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.61            |  |             | Amendment
  to Employment Letter between Michael E. Havener and the Registrant, dated
  September 15, 2006 (incorporated by reference to Exhibit 10.5 to the
  Registrants Current Report on Form 8-K dated and filed on September 19,
  2006). +                                                                                                                                                                     
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.62            |  |             | Second
  Amendment to Fifth Amendment to the Standard Office Lease, dated September
  11, 2006, by and between 2221 Bijou, LLC and American Teleconferencing Services,
  Ltd., to the Standard Office Lease, dated May 23, 1996, as amended
  (incorporated by reference to Exhibit 10.9 of the Registrants Quarterly
  Report on Form 10-Q for the quarter ended September 30, 2006 and filed on
  November 9, 2006).
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.63            |  |             | Amendment
  to the Registrants 2004 Long-Term Incentive Plan, dated September 29, 2006
  (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly
  Report on Form 10-Q dated November 9, 2006 and filed on November 11, 2006). +                                                                                                                                                                     
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.64            |  |             | Amendment No. 4 and Waiver to Credit
  Agreement, dated October 3, 2006, by and among the Registrant as Borrower,
  Bank of America, N.A. as Administrative Agent, and the Guarantors and the
  Lenders that are parties thereto (incorporated by reference to Exhibit 10.8 to
  the Registrants Quarterly Report on Form 10-Q for quarter ended September
  30, 2006 and filed on November 9, 2006).                 
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.65            |  |             | Amendment
  and Restatement of the Registrants 401(k) Plan, dated December 20, 2006 and
  effective January 1, 2006.                                                                                                                                                                                                                                                                                                  
|                 |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.66            |  |             | Separation
  Agreement between Jeffrey A. Allred and the Registrant, dated December 20,
  2006 and effective January 1, 2007. +                                                                                                                                                                                                                                                                                        

---



|                 |  |             |                                                                                                                                                     
|---------------- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
|                 |  |            
|                 |  |             |                                                                                                                                                     
|10.67            |  |             | Restricted Stock Agreement between Jeffrey
  A. Allred and the Registrant, effective December 30, 2006, under the
  Registrants 1995 Stock Plan. + 
|                 |  |             |                                                                                                                                                     
|10.68            |  |             | First
  Amendment to Amended and Restated Employment Agreement between T. Lee Provow
  and the Registrant, dated January 23, 2007. +                
|                 |  |             |                                                                                                                                                     
|10.69            |  |             | Restricted
  Stock Agreement between T. Lee Provow and the Registrant, dated January 22,
  2007, under the Registrants 1995 Stock Plan. +          
|                 |  |             |                                                                                                                                                     
|21.1             |  |             | Subsidiaries
  of the Registrant.                                                                                                                   
|                 |  |             |                                                                                                                                                     
|23.1             |  |             | Consent
  of Deloitte & Touche LLP.                                                                                                                 
|                 |  |             |                                                                                                                                                     
|31.1             |  |             | Certification
  of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
  Securities Exchange Act of 1934.                           
|                 |  |             |                                                                                                                                                     
|31.2             |  |             | Certification
  of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
  Securities Exchange Act of 1934.                           
|                 |  |             |                                                                                                                                                     
|32.1             |  |             | Certification of Chief Executive Officer pursuant to Rule
  13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
  Section 1350.
|                 |  |             |                                                                                                                                                     
|32.2             |  |             | Certification
  of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the
  Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.

+
Management contract or compensatory plan or arrangement required to be filed as
an exhibit to this form pursuant to Item 15(b) of this report.

---