SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ___________________ to ____________________

COMMISSION FILE NUMBER: 0-27778

PTEK HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

GEORGIA
(State or other jurisdiction of incorporation or organization)

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

3399 PEACHTREE ROAD NE
THE LENOX BUILDING, SUITE 600
ATLANTA, GEORGIA 30326
(Address of principal executive offices, including zip code)

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

(1) Yes [X] No [ ] (2) Yes [X] No [ ]

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

Class Outstanding at November 7, 2000
----- -------------------------------
Common Stock, $0.01 par value 49,191,950 Shares

PTEK HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

Page
--------

PART I FINANCIAL INFORMATION

Item 1 Financial Statements

Condensed Consolidated Balance Sheets
as of September 30, 2000 and December 31, 1999............................................. 3

Condensed Consolidated Statements of Operations
for the Three and Nine Month Periods ended September 30, 2000 and 1999..................... 4

Condensed Consolidated Statements of Cash Flows
for the Nine Months ended September 30, 2000 and 1999...................................... 5

Notes to Condensed Consolidated Financial Statements....................................... 6

Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................................. 14

Item 3 Quantitative and Qualitative Disclosures About Market Risk................................. 22

PART II OTHER INFORMATION

Item 1 Legal Proceedings.......................................................................... 22

Item 2 Changes in Securities...................................................................... 24

Item 3 Defaults Upon Senior Securities............................................................ 25

Item 4 Submission of Matters to a Vote of Security Holders........................................ 25

Item 5 Other Information.......................................................................... 25

Item 6 Exhibits and Reports on Form 8-K........................................................... 25

SIGNATURES.............................................................................................. 26

EXHIBIT INDEX........................................................................................... 27

ITEM 1. FINANCIAL STATEMENTS

PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT SHARE DATA)

September 30, December 31,
2000 1999
------------- ------------
(Unaudited)

ASSETS
CURRENT ASSETS
Cash and equivalents......................................................................... $ 19,546 $ 15,366
Marketable securities, available for sale.................................................... 11,625 86,615
Accounts receivable, net..................................................................... 65,731 67,652
Notes receivable - sale of revenue base...................................................... 6,552 -
Prepaid expenses and other................................................................... 11,879 13,299
--------- ---------
Total current assets..................................................................... 115,333 182,932

PROPERTY AND EQUIPMENT, NET................................................................... 111,631 118,725

OTHER ASSETS
Strategic alliance contract, net............................................................. - 8,036
Investments in and notes receivable from associated companies, at cost....................... 45,447 14,620
Intangibles, net............................................................................. 365,689 435,978
Deferred income taxes, net................................................................... 3,490 -
Other assets................................................................................. 12,385 10,190
--------- ---------
$ 653,975 $ 770,481
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................................................................. $ 25,830 $ 33,512
Deferred revenue............................................................................. 1,288 1,586
Accrued taxes................................................................................ 33,847 31,607
Accrued liabilities.......................................................................... 48,348 57,686
Deferred gain - sale of revenue base......................................................... 6,439 -
Deferred income taxes, net................................................................... - 15,426
Current maturities of long-term debt and capital lease obligations........................... 1,425 2,671
Accrued restructuring, merger costs and other special charges................................ 765 5,698
--------- ---------
Total current liabilities................................................................ 117,942 148,186
--------- ---------

LONG-TERM LIABILITIES
Convertible subordinated notes............................................................... 172,500 172,500
Long-term debt and capital lease obligations................................................. 1,888 4,454
Other accrued liabilities.................................................................... 2,308 7,419
Deferred income taxes, net................................................................... - 15,702
--------- ---------
Total long-term liabilities.............................................................. 176,696 200,075
--------- ---------

COMMITMENTS AND CONTINGENCIES (Note 10)

SHAREHOLDERS' EQUITY
Common stock, $0.01 par value; 150,000,000 shares authorized, 49,148,896 and
48,074,566 shares issued in 2000 and 1999 and 47,931,896 and 46,977,566 shares
outstanding in 2000 and 1999, respectively.................................................. 491 481
Unrealized gain on marketable securities..................................................... 5,751 50,774
Additional paid-in capital................................................................... 575,616 570,054
Treasury stock, at cost...................................................................... (9,559) (9,133)
Note receivable, shareholder................................................................. (1,047) (1,047)
Cumulative translation adjustment............................................................ (1,599) 527
Accumulated deficit.......................................................................... (210,316) (189,436)
--------- ---------
Total shareholders' equity............................................................... 359,337 422,220
--------- ---------
$ 653,975 $ 770,481
========= =========

Accompanying notes are integral to these condensed consolidated financial
statements.

PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
(Unaudited) (Unaudited)

REVENUE....................................................... $105,360 $116,248 $332,530 $ 343,502
TELECOMMUNICATIONS COSTS...................................... 27,716 33,175 87,455 97,835
-------- -------- -------- ---------
GROSS PROFIT.................................................. 77,644 83,073 245,075 245,667
DIRECT OPERATING COSTS........................................ 17,189 18,847 51,401 52,060
-------- -------- -------- ---------
CONTRIBUTION MARGIN........................................... 60,455 64,226 193,674 193,607
-------- -------- -------- ---------
OTHER OPERATING EXPENSES
Selling and marketing.................................... 22,740 28,521 71,085 83,528
General and administrative............................... 19,227 25,892 60,281 74,383
Research and development................................. 3,252 3,583 10,331 8,925
Depreciation............................................. 9,145 18,517 31,451 51,001
Amortization............................................. 25,792 25,490 77,226 73,169
Restructuring, merger costs and other special charges.... (641) 8,228 (641) 8,228
Gain on legal settlement................................. - - (3,730) -
-------- -------- -------- ---------
Total other operating expenses...................... 79,515 110,231 246,003 299,234
-------- -------- -------- ---------

OPERATING LOSS................................................ (19,060) (46,005) (52,329) (105,627)
-------- -------- -------- ---------

OTHER INCOME (EXPENSE)
Interest, net............................................ (2,551) (6,751) (7,954) (19,065)
Gain on sale of marketable securities.................... 6,423 - 59,482 -
Other, net............................................... 41 (342) (278) 13,137
-------- -------- -------- ---------
Total other income (expense)........................ 3,913 (7,093) 51,250 (5,928)
-------- -------- -------- ---------

LOSS BEFORE INCOME TAXES...................................... (15,147) (53,098) (1,079) (111,555)
INCOME TAX EXPENSE/(BENEFIT).................................. 1,093 (11,689) 19,801 (20,547)
-------- -------- -------- ---------

NET LOSS...................................................... $(16,240) $(41,409) $(20,880) $ (91,008)
======== ======== ======== =========

BASIC NET LOSS PER SHARE...................................... $ (0.34) $ (0.89) $ (.44) $ (1.97)
======== ======== ======== =========
DILUTED NET LOSS PER SHARE.................................... $ (0.34) $ (0.89) $ (.44) $ (1.97)
======== ======== ======== =========

WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC.................................................... 47,962 46,546 47,816 46,238
======== ======== ======== =========
DILUTED.................................................. 47,962 46,546 47,816 46,238
======== ======== ======== =========

Accompanying notes are integral to these condensed consolidated financial
statements.

PTEK HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS)

2000 1999
-------- --------
(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss................................................................................. $(20,880) $(91,008)
-------- --------
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization............................................................ 108,677 124,170
Gain on sale of marketable securities.................................................... (59,482) -
Gain on legal settlement................................................................. (3,730) -
Deferred income taxes.................................................................... 17,205 (22,064)
Restructuring, merger costs and other special charges.................................... (641) 8,228
Payments for restructuring, merger costs and other special charges....................... (4,292) (4,781)
Proceeds from legal settlement........................................................... 12,000 -
Income taxes paid........................................................................ (15,748) -
Changes in assets and liabilities:
Accounts receivable, net................................................................ (7,952) (5,343)
Prepaid expenses and other.............................................................. (748) (5,473)
Accounts payable and accrued expenses................................................... (24,315) 7,621
-------- --------

Total adjustments........................................................................ 20,974 102,358
-------- --------

Net cash provided by operating activities............................................... 94 11,350
-------- --------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures..................................................................... (25,078) (32,555)
Proceeds from disposal of property and equipment......................................... 1,937 -
Redemption of marketable securities...................................................... 63,126 20,614
Payments made related to acquisitions.................................................... (495) (25,901)
Investments.............................................................................. (31,517) (8,089)
Other.................................................................................... (898) 7,446
-------- --------

Net cash provided by (used in) investing activities...................................... 7,075 (38,485)
-------- --------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (payments under) borrowing arrangements.................................... (5,102) 17,536
Exercise of stock options................................................................ 3,499 1,001
Purchase of treasury stock, at cost...................................................... (426) -
-------- --------

Net cash (used in) provided by financing activities...................................... (2,029) 18,537
-------- --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH................................................... (960) (77)
-------- --------

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS........................................... 4,180 (8,675)
CASH AND EQUIVALENTS, beginning of period................................................. 15,366 19,226
-------- --------
CASH AND EQUIVALENTS, end of period....................................................... $ 19,546 $ 10,551
======== ========

Income taxes paid......................................................................... $ 15,748 $ 524
======== ========
Interest paid............................................................................. $ 9,918 $ 19,454
======== ========

Accompanying notes are integral to these condensed consolidated financial
statements.

PTEK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements
have been prepared by management of PTEK Holdings, Inc. and its subsidiaries
(collectively, the "Company" or "PTEK") in accordance with rules and regulations
of the Securities and Exchange Commission ("SEC"). Accordingly, certain
information and footnote disclosures usually found in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. In the opinion of management of the Company, all
adjustments (consisting only of normal recurring adjustments, except as
disclosed herein) considered necessary for a fair presentation of the condensed
consolidated financial statements have been included. Preparing financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses. Examples include
provisions for bad debts, carrying values and useful lives assigned to goodwill
and other long-lived assets and accruals for restructuring costs and employee
benefits. Actual results could differ from those estimates. These interim
condensed consolidated financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1999.

2. ACCOUNTING CHANGES

Restatement

In February 2000, PTEK announced that as a result of discussions with the
Securities and Exchange Commission, PTEK was required to change its accounting
for certain costs incurred as part of its restructuring, merger costs and other
special charges. These changes primarily affect certain asset impairment charges
and contractual obligation charges taken as part of the restructuring charges
related to Voice-Tel Enterprises, Inc. ("Voice-Tel") and VoiceCom Systems, Inc.
("VoiceCom Systems"). These changes are primarily to change the timing of when
costs are recognized in determining earnings and to reclassify certain
restructuring, merger costs and other special charges to selling, general and
administrative costs and depreciation costs. Accordingly, the Company has
restated its 1997 and 1998 annual financial statements and related disclosures
and its unaudited interim financial statements for 1999.

3. NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," in June 1998,
SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of the FASB Statement No. 133," in June 1999 and
SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an amendment of FASB Statement No. 133," in June 2000. SFAS No.
133 establishes accounting and reporting standards for derivatives and hedging.
It requires that all derivatives be recognized as either assets or liabilities
at fair value and establishes specific criteria for the use of hedge accounting.
SFAS No. 137 defers the effective date of SFAS No. 133 by one year to fiscal
years beginning after June 15, 2000. SFAS No. 138 amends the accounting and
reporting standards of SFAS No. 133 for certain derivative instruments and
certain hedging activities. The Company's required adoption date is January 1,
2001. Upon adoption of the three statements, the Company expects no material
impact to its results of operations or financial position.

4. NET INCOME (LOSS) PER SHARE

Net loss per share is computed in accordance with SFAS No. 128, "Earnings per
Share." Basic and diluted net loss per share are the same in the three and nine
month periods ended September 30, 2000 and 1999 because both of the Company's
potentially dilutive securities, convertible subordinated notes and stock
options, are antidilutive in such periods.

5. COMPREHENSIVE INCOME

In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income."
Comprehensive income represents the change in equity of a business during a
period, except for investments by owners and distributions to owners. Foreign
currency translation adjustments and unrealized gain on available-for-sale
marketable securities represent the Company's components of other comprehensive
income in 2000. For the three month periods ended September 30, 2000 and 1999,
total comprehensive loss was approximately $(16.1) million and $(31.7) million,
respectively. For the nine month periods ended September 30, 2000 and 1999,
total comprehensive loss was approximately $(8.5) million and $(93.2) million,
respectively.

6. MARKETABLE SECURITIES, AVAILABLE FOR SALE

Marketable securities, available for sale at September 30, 2000 and December 31,
1999, are principally common stock investments carried at fair value and based
on quoted market prices, and money market mutual funds carried at fair value.
Common stock investments carried at fair value are primarily minority equity
interests in WebMD Corporation, S1 Corporation and WEBEX Communications, Inc.
WebMD Corporation is a leading end-to-end Internet healthcare company connecting
physicians and consumers to the entire healthcare industry. S1 Corporation is a
leading global provider of innovative Internet-based financial services
solutions. WebEx Communications, Inc., which completed an initial public
offering of 3,500,000 shares of common stock on July 28, 2000, provides real-
time, interactive multimedia communications services for websites. These
services allow end-users to conduct meetings and share software applications,
documents, presentations and other content on the Internet using a standard web
browser.

The cost, gross unrealized gains, fair value, proceeds from sale and realized
gains and losses are as follows for the three and nine months ended September
30, 2000 (in thousands):

Gross
Gross Proceeds Realized
Unrealized Fair From Gains/
Three Months Ended September 30, 2000 Cost Gains Value Sale (Losses)
---------------------------------------------------------------------------

WebMD Corporation $ 323 $5,806 $ 6,129 $ 5,639 $ 5,366
S1 Corporation 438 620 1,058 1,505 1,258
WEBEX Communications, Inc. 1,500 2,925 4,425 - -
Other 13 - 13 354 (201)
---------------------------------------------------------------------------
$2,274 $9,351 $11,625 $ 7,498 $ 6,423
---------------------------------------------------------------------------

Nine Months Ended September 30, 2000
WebMD Corporation $ 323 $5,806 $ 6,129 $37,679 $37,012
S1 Corporation 438 620 1,058 25,093 23,290
WEBEX Communications, Inc. 1,500 2,925 4,425 - -
Other 13 - 13 354 (820)
---------------------------------------------------------------------------
$2,274 $9,351 $11,625 $63,126 $59,482
---------------------------------------------------------------------------

During the three months ended September 30, 2000, the Company sold 340,000
shares of its investment in WebMD Corporation and 50,000 shares of its
investment in S1 Corporation, with aggregate proceeds less commissions of
approximately $7.1 million. At September 30, 2000, the Company held 401,889
shares of WebMD Corporation, 88,597 shares of S1 Corporation and 120,000 shares
of WEBEX Communications, Inc. The deferred tax liability on unrealized gains
related to these investments is approximately $3.7 million at September 30,
2000.

7. ACQUISITIONS

Intellivoice Communications, Inc. Acquisition

In August 1999, the Company acquired all remaining ownership interests it did
not already own in Intellivoice Communications, Inc. ("Intellivoice"), a company
engaged in developing Internet-enabled communications products. The Company
issued approximately 573,000 shares of its common stock and paid cash
consideration and acquisition related costs of approximately $1,365,000 in
connection with this acquisition. This transaction has been accounted for as a
purchase. Excess purchase price over fair value of net assets acquired of
approximately $10.5 million has been recorded as developed technology and is
being amortized on a straight-line basis over three years. The developed
technology relates to work associated with Web-based communications services.

Xpedite France, S.A. Acquisition

During the second quarter of 1999, the Company purchased all remaining ownership
interests it did not already own in an affiliated electronic document
distribution company located in France for approximately $19 million in cash and
liabilities assumed. The Company held an approximate 18% ownership interest in
the affiliate prior to this transaction which has been

accounted for as a purchase. Excess purchase price over fair value of net assets
acquired of approximately $18 million has been recorded as goodwill and is being
amortized on a straight-line basis over seven years.

The following unaudited pro forma consolidated results of operations for the
three and nine month periods ended September 30, 1999 assumes the acquisitions
made by the Company in 1999 which were accounted for as purchases occurred on
January 1, 1999. Pro forma adjustments consist of amortization of intangible
assets acquired and lost interest income reflecting cash paid in the
acquisitions (amounts in thousands).

Three Months Ended Nine Months Ended
September 30, 1999 September 30, 1999

Revenues $116,439 $355,988
Net loss $(41,956) $(95,064)
Basic net loss per share $ (0.91) $ (2.05)
Diluted net loss per share $ (0.91) $ (2.05)

8. RESTRUCTURING, MERGER COSTS AND OTHER SPECIAL CHARGES

Decentralization of Company

In the third quarter of 1999, the Company recorded a charge of approximately
$8.2 million to restructure the administrative overhead of its corporate
headquarters, the sales force of the former Emerging Enterprise Solutions
("EES") group and certain operations of EES and the former Corporate Enterprise
Solutions ("CES") groups. The $8.2 million charge was comprised of $7.3 million
of severance and exit costs, $0.7 million of lease termination costs and $0.2
million of facility exit costs. Severance benefits provided for the termination
of 203 employees, primarily related to corporate administrative functions and
direct sales force and operations of under-performing operating segments in the
former EES and CES groups. 114 employees were severed from the Voicecom
operating segment, 61 employees were severed from the Xpedite operating segment
and 28 employees were severed from the Corporate headquarters. As of December
31, 1999, all 203 employees were terminated. Annual savings of approximately
$13.1 million are anticipated from these terminations. Lease termination and
clean-up costs were provided for the exit of one operating site in the Retail
Calling Card Services operating segment.

The balance at December 31, 1999 for severance and exit costs represents the
remaining reserve for future cash severance and exit payments to former
corporate executive management and various management in the former CES group
that were terminated in 1999. These remaining cash payments were disbursed
during the nine months ended September 30, 2000. In the nine month period ended
September 30, 2000, cash severance payments made were $3.2 million. During the
three months ended September 30, 2000, the Company recognized as income $0.6
million of accrued severance and exit payments upon completion of the severance
program associated with the decentralization of the Company. This amount
represents actual exit costs that were below planned exit costs, relating to the
decentralization plan for the European and Asia/Pacific regions of the Company's
Xpedite operating segment.

Lease termination and clean-up costs of $82,000 were paid in the first quarter
of 2000 for the exit of one operating site in the Retail Calling Card Services
operating segment. No further payments are expected by management.

At September 30, 2000, the decentralization plan of the Company and all related
costs associated with this plan have been completed.

Reorganization of Company into EES and CES Business Segments

In the fourth quarter of 1998, the Company recorded a charge of $11.4 million to
reorganize the Company into two business segments that focus on specific groups
of customers. These segments were named Emerging Enterprise Solutions and
Corporate Enterprise Solutions. EES focused on small office/home office and
multi-level marketing organizations, and CES focused on large corporate
accounts. This charge was comprised of $4.9 million of severance costs, $4.7
million of asset impairment charges, $0.4 million of contractual obligation
costs and $1.4 million of other costs, primarily to exit facilities and certain
activities.

As part of this reorganization, the Company identified 59 employees for
termination. These employees included administrative personnel from the
Company's Cleveland headquarters for the previous Voice-Tel and VoiceCom Systems
entities, personnel from customer service centers from eight locations and
executive management from the acquired companies that were not part of previous
restructuring plans. As of December 31, 1998, all 59 employees were terminated.
The balance at December 31, 1999 and September 30, 2000 represent the remaining
severance reserve for former executive management. In the nine month period
ended September 30, 2000, cash severance payments made to eight former
executives was $0.9 million. The company expects to pay the remaining severance
reserve balance of $0.8 million to one former executive over the next sixteen
months.

Accrued costs for restructuring, merger costs and other special charges at
December 31, 1999 and September 30, 2000 are as follows (in thousands):

Reorganization of Company into EES and CES Accrued Costs at Reversal of Accrued Costs at
Business Segments December 31, 1999 Costs Incurred Accrued Costs September 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------

Severance and exit costs $1,730 $ 965 $ - $765
---------------------------------------------------------------------------------
Accrued restructuring, merger costs and other
special charges $1,730 $ 965 $ - $765
---------------------------------------------------------------------------------

Accrued Costs at Reversal of Accrued Costs at
Decentralization of Company December 31, 1999 Costs Incurred Accrued Costs September 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------

Severance and exit costs $3,886 $3,245 $(641) $ -
Other 82 82 - -
---------------------------------------------------------------------------------
Accrued restructuring, merger costs and other
special charges $3,968 $3,327 $(641) $ -
---------------------------------------------------------------------------------

Accrued Costs at Reversal of Accrued Costs at
Consolidated December 31, 1999 Costs Incurred Accrued Costs September 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------

Severance and exit costs $5,616 $4,210 $(641) $765
Other 82 82 - -
----------------------------------------------------------------------------------
Accrued restructuring, merger costs and other
special charges $5,698 $4,292 $(641) $765
----------------------------------------------------------------------------------

9. CREDIT FACILITY

On September 29, 2000 the Company entered into a credit agreement (the
"Agreement") for a one-year revolving credit facility with ABN AMRO Bank N.V.
(the "Bank" or "Agent"). The Agreement provides for borrowings of up to $20
million, and is subject to certain covenants that are usual and customary for
credit agreements of this nature. The commitment to provide revolving credit
loans under the Agreement terminates 364 days from September 29, 2000, unless
the Agreement is extended. Amounts outstanding under the Agreement on the
expiration date may, at the option of the Company, either be paid in full or
converted to a one-year term loan payable in four equal quarterly installments.
Proceeds drawn under the Agreement may be used for capital expenditures, working
capital, acquisitions, investments, refinancing of existing indebtedness, and
other general corporate purposes. The annual interest rate applicable to
borrowings under the Agreement is, at the Company's option, (i) the Agent's Base
Rate plus 1.25 percent or (ii) the Euro Rate (LIBOR) plus 3.50 percent. Amounts
committed but not drawn under the Agreement are subject to a commitment fee
equal to 0.50 percent per annum. At September 30, 2000 no amounts were
outstanding under the Agreement.

10. COMMITMENTS AND CONTINGENCIES

LITIGATION

The Company has several litigation matters pending, as described below, which it
is pursuing or defending vigorously. Due to the inherent uncertainties of the
litigation process and the judicial system, the Company is unable to predict the
outcome of such litigation matters. If the outcome of one or more of such
matters is adverse to the Company, it could have a material adverse effect on
the Company's business, financial condition and results of operations.

The Company and certain of its officers and directors have been named as
defendants in multiple shareholder class action lawsuits filed in the United
States District Court for the Northern District of Georgia. Plaintiffs seek to
represent a class of individuals (including a subclass of former Voice-Tel
franchisees and a subclass of former Xpedite Systems, Inc. ("Xpedite")
shareholders) who purchased or otherwise acquired the Company's common stock
from as early as February 11, 1997 through June 10, 1998. Plaintiffs allege the
Company admitted it had experienced difficulty in achieving its anticipated
revenue and earnings from voice messaging services due to difficulties in
consolidating and integrating its sales function. Plaintiffs allege, among other
things, violation of Sections 10(b), 14(a) and 20(a) of the Securities Exchange
Act of 1934 and Sections 11, 12 and 15 of the Securities Act of 1933. We filed a
motion to dismiss this complaint on April 14, 1999. On December 14, 1999, the
court issued an order that dismissed the claims under Sections 10(b) and 20 of
the Exchange Act without prejudice, and dismissed the

claims under Section 12(a)(1) of the Securities Act with prejudice. The effect
of this order was to dismiss from this lawsuit all open-market purchases by the
plaintiffs. The plaintiffs filed an amended complaint on February 29, 2000. The
defendants filed a motion to dismiss on April 14, 2000, which is pending.

A lawsuit was filed on November 4, 1998 against the Company and certain of its
officers and directors in the Southern District of New York. Plaintiffs are
shareholders of Xpedite who acquired common stock of the Company as a result of
the merger between the Company and Xpedite in February 1998. Plaintiffs'
allegations are based on the representations and warranties made by the Company
in the prospectus and the registration statement related to the merger, the
merger agreement and other documents incorporated by reference, regarding the
Company's acquisitions of Voice-Tel and VoiceCom Systems, the Company's roll-out
of Orchestrate(R), the Company's relationship with customers Amway Corporation
and DigiTEC, 2000, Inc., and the Company's 800-based calling card service.
Plaintiffs allege causes of action against the Company for breach of contract,
against all defendants for negligent misrepresentation, violations of Sections
11 and 12(a)(2) of the Securities Act of 1933 and against the individual
defendants for violation of Section 15 of the Securities Act. Plaintiffs seek
undisclosed damages together with pre- and post-judgment interest, recission or
recissory damages as to violation of Section 12(a)(2) of the Securities Act,
punitive damages, costs and attorneys' fees. The defendants' motion to transfer
venue to Georgia has been granted. The defendants' motion to dismiss has been
granted in part and denied in part. The defendants filed an answer on March 30,
2000.

On February 23, 1998, Rudolf R. Nobis and Constance Nobis filed a complaint in
the Superior Court of Union County, New Jersey against 15 named defendants
including Xpedite and certain of its alleged current and former officers,
directors, agents and representatives. The plaintiffs allege that the 15 named
defendants and certain unidentified "John Doe defendants" engaged in wrongful
activities in connection with the management of the plaintiffs' investments with
Equitable Life Assurance Society of the United States and/or Equico Securities,
Inc. (collectively "Equitable"). More specifically, the complaint asserts
wrongdoing in connection with the plaintiffs' investment in securities of
Xpedite and in unrelated investments involving insurance-related products. The
defendants include Equitable and certain of its current or former
representatives. The allegations in the complaint against Xpedite are limited to
plaintiffs' investment in Xpedite. The plaintiffs have alleged that two of the
named defendants, allegedly acting as officers, directors, agents or
representatives of Xpedite, induced the plaintiffs to make certain investments
in Xpedite but that the plaintiffs failed to receive the benefits that they were
promised. Plaintiffs allege that Xpedite knew or should have known of alleged
wrongdoing on the part of other defendants. Plaintiffs seek an accounting of the
corporate stock in Xpedite, compensatory damages of approximately $4.85 million,
plus $200,000 in "lost investments," interest and/or dividends that have accrued
and have not been paid, punitive damages in an unspecified amount, and for
certain equitable relief, including a request for Xpedite to issue 139,430
shares of common stock in the plaintiffs' names, attorneys' fees and costs and
such other and further relief as the court deems just and equitable. This case
has been dismissed without prejudice and compelled to NASD arbitration, which
has commenced. In August 2000, the plaintiffs filed a statement of claim with
the NASD against 12 named respondents, including Xpedite (the "Nobis
Respondents"). The claimants allege that the 12 named respondents engaged in
wrongful activities in connection with the management of the claimants'
investments with Equitable. More specifically, the statement of claim asserts
wrongdoing in connection with the claimants' investment in securities of Xpedite
and in unrelated investments involving insurance-related products. The
allegations in the statement of claim against Xpedite are limited to claimants'
investment in Xpedite. Claimants seek an accounting of the corporate stock in
Xpedite, compensatory damages of not less than $415,000, a fair conversion rate
on stock options, loans on the investments, plus interest and all dividends,
attorneys' fees and costs.

counterclaim, claiming that the plaintiff owes the Company the principal amount
of the $100,000 loan plus interest as of January 1, 2001, plus costs and
attorneys' fees, and that the plaintiff defrauded the Company and owes the
Company approximately $400,000 in fraudulently attained pay and benefits,
including the $100,000 loan.

On September 3, 1999, Elizabeth Tendler filed a complaint in the Superior Court
of New Jersey Law Division, Union County, against 17 named defendants including
the company and Xpedite, and various alleged current and former officers,
directors, agents and representatives of Xpedite. Plaintiff alleges that the
defendants engaged in wrongful activities in connection with the management of
the plaintiff's investments, including investments in Xpedite. The allegations
against Xpedite and the Company are limited to plaintiff's investment in
Xpedite. Plaintiff's claims against Xpedite and the Company include breach of
contract, breach of fiduciary duty, unjust enrichment, conversion, fraud,
interference with economic advantage, liability for ultra vires acts, violation
of the New Jersey Consumer Fraud Act and violation of New Jersey RICO. Plaintiff
seeks an accounting of the corporate stock of Xpedite, compensatory damages of
approximately $1.3 million, accrued interest and/or dividends, a constructive
trust on the proceeds of the sale of any Xpedite or PTEK stock, shares of
Xpedite and/or PTEK to satisfy defendants' obligations to plaintiff, attorneys'
fees and costs, punitive and exemplary damages in an unspecified amount, and
treble damages. On February 25, 2000, Xpedite filed its answer, as well as cross
claims and third party claims. This case has been dismissed without prejudice
and compelled to NASD arbitration, which has commenced. In August 2000, a
statement of claim was also filed with the NASD against all but one of the Nobis
Respondents making virtually the same allegations on behalf of claimant
Elizabeth Tendler. Claimant seeks an accounting of the corporate stock in
Xpedite, compensatory damages of not less than $265,000, a fair conversion rate
on stock options, loans on other investments, interest and/or unpaid dividends,
attorneys fees and costs.

On or about May 19, 2000, the Company was served with a Complaint filed by
Robert Cowan in the Circuit Court of Jackson County, Missouri, alleging claims
for breach of contract, fraudulent misrepresentation, negligent
misrepresentation, breach of duty of good faith and fair dealings, unjust
enrichment, and violation of Georgia and Missouri blue sky laws. Plaintiff's
claims arise out of the Company's acquisition of American Teleconferencing
Services, Ltd. ("ATS") in April 1998. Plaintiff was a shareholder of ATS who
received shares of PTEK stock in the transaction. The Company removed the case
to the United States District Court for the Western District of Missouri, and
filed a Motion to Compel Arbitration, or Alternatively to Transfer Venue, or
Alternatively to Dismiss the Complaint. Plaintiff has filed a Motion to Remand
the case back to state court. All motions are pending.

On June 9, 2000, the Company and Premiere Communications, Inc. filed a lawsuit
in the United States District Court for the Middle District of Florida, seeking
unspecified damages and equitable, including injunctive, relief against Z-Tel
Technologies, Inc., Z-Tel Communications, Inc. (collectively, "Z-Tel"), David
Gregory Smith, James Kitchen and Eduard Mayer for patent infringement, breach of
contract, unfair competition, conversion, misappropriation of corporate
opportunities, conspiracy to misappropriate corporate opportunities, tortious
interference with contractual relations, tortious interference with actual and
prospective business relations, and misappropriation of trade secrets. On June
29, 2000, Z-Tel filed an answer and counterclaims against the Company and Boland
T. Jones ("Jones") seeking unspecified damages for tortious interference with
actual and prospective business relations, trade defamation, and compelled self-
defamation. Jones and the Company filed a timely motion to dismiss Z-Tel's
counterclaims, which is pending before the court. On November 14, 2000, the
parties to the lawsuit agreed to resolve in full all claims asserted by each
party against the other. In connection with the settlement, Z-Tel agreed to
issue a warrant to PTEK to purchase 175,000 shares of Z-Tel's common stock at an
exercise price of $12.00, which price is subject to certain adjustments.

On November 3, 2000, Xpedite Systems, Inc., a wholly-owned subsidiary of the
Company, was served with a lawsuit styled BGL Development, Inc. d/b/a The
Bristol Group v. Xpedite Systems, Inc., Case No. 00-CIV-8395, United States
District Court for the Southern District of New York. Plaintiff alleges that it
had a contract with Xpedite whereby Xpedite would pay certain commissions for
new customers that plaintiff brought to Xpedite. Plaintiff claims back
commissions are due and that they have not been paid in breach of the contract.
Plaintiff claims damages of not less that $185,000.

The Company is also involved in various other legal proceedings which the
Company does not believe will have a material adverse effect upon the Company's
business, financial condition or results of operations, although no assurance
can be given as to the ultimate outcome of any such proceedings.

11. SEGMENT REPORTING

The Company's reportable segments are strategic business segments that align the
Company into six decentralized areas of focus driven by product offering,
investment strategy and functional cost control. The Company realigned into this
decentralized organization in the third quarter of 1999 from the previous market
segment focus of the EES and CES business segments. The new business segments
are called Voicecom (formerly of both EES and CES), Xpedite(formerly of CES),
Premiere Conferencing (formerly of CES), Retail Calling Card Services (formerly
of EES, and which segment's revenue base was sold effective August 1, 2000),
PTEKVentures and Corporate. Voicecom focuses on local and 800-based voice
messaging services, Internet enabled communications with its Orchestrate(R)
product, interactive voice response services, and wholesale communications
platform outsourcing solutions. Its customer base ranges from small office/home
office to multi-level marketing organizations to Fortune 1000 corporate
accounts. Xpedite offers a full range of electronic- and fax-based document
distribution and data messaging

services through a dedicated IP network, and through its messageREACH(SM)
division offers outsourced Internet based e-mail services. Xpedite's customers
are primarily Fortune 1000 corporate accounts and governments. Premiere
Conferencing is a leading provider of conference call and group communications
services, primarily to Fortune 1000 customers. Retail Calling Card Services is a
business segment that the Company has exited through the sale of its revenue
base effective August 1, 2000. It consists primarily of the Premiere WorldLink
calling card product, which was primarily marketed through direct response
advertising and co-branding relationships to single retail users. Discontinued
operations treatment of this business segment was not applied as the Company
will continue using the legacy platform for its profitable wholesale line of
business and its corporate calling card bundled within its 800-based messaging
offerings within the Voicecom operating segment. PTEKVentures focuses on
investments in companies in the Internet infrastructure and communications
areas. Corporate focuses on being a holding company, leaving the day to day
operations of running the business at the operating business segments. EBITDA
before gain on legal settlement and restructuring, merger and other special
charges is management's primary measure of segment profit and loss.

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

Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
---------------------------------------------------------------------

EBITDA
Xpedite $ 11.5 $ 14.8 $ 42.8 $ 46.5
Voicecom 2.4 2.3 11.5 9.3
Premiere Conferencing 4.5 2.6 10.1 6.7
Retail Calling Card Services 0.3 (2.6) 1.6 (4.9)
Corporate (3.2) (10.9) (12.4) (30.9)
PTEKVentures (0.3) - (1.6) -
---------------------------------------------------------------------
$ 15.2 $ 6.2 $ 52.0 $ 26.7
=====================================================================

September 30, December 31,
2000 1999
-------------------------------------

Identifiable assets
Xpedite $103.4 $101.4
Voicecom 71.3 69.5
Premiere Conferencing 35.6 30.0
Retail Calling Card Services - 8.0
PTEKVentures 62.1 100.2
Corporate 381.6 461.4
-------------------------------------
$654.0 $770.5
=====================================

(1) Intangible assets associated with acquisitions such as goodwill, customer
lists developed technology and assembled workforce are retained as identifiable
assets in the Corporate segment.

A reconciliation of operating loss and EBITDA to income (loss) before income
taxes is as follows (in millions):

Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
---------------------------------------------------------------------------------

EBITDA $ 15.2 $ 6.2 $ 52.0 $ 26.7
Less depreciation (9.1) (18.5) (31.4) (51.0)
Less amortization (25.8) (25.5) (77.2) (73.1)
Less gain on legal settlement/special charges 0.6 (8.2) 4.3 (8.2)
---------------------------------------------------------------------------------
Operating loss (19.1) (46.0) (52.3) (105.6)
---------------------------------------------------------------------------------
Less interest expense, net (2.4) (6.8) (8.0) (19.1)
Plus gain on sale of marketable equity securities 6.4 - 59.5 -
Plus other income (expense), net - (0.3) (0.3) 13.1
---------------------------------------------------------------------------------
Income (loss) before income taxes $(15.1) $(53.1) $ (1.1) $(111.6)
=================================================================================

12. SALE OF RETAIL CALLING CARD REVENUE BASE

Effective August 1, 2000, the Company sold its retail calling card operating
segment's revenue base to Telecare, Inc. The sale was valued at approximately
$6.5 million and has been financed by the Company in the form of two promissory
notes with recourse to Telecare, Inc. The first note is in the amount of
$4,162,000 and has a 180-day term. The second note is in the amount of
$2,390,000 and has a 360-day term. The purpose of the two notes is to serve as a
bridge loan while Telecare, Inc. obtains third party financing for the purchase
of the revenue base. Accordingly, the Company has recorded a note receivable and
deferred the gain on sale. The Company will record the gain on sale upon payment
of the outstanding notes receivable. The results of operations of this revenue
base are not material to the Company and are not considered a separate line of
business under the definition of discontinued operations accounting guidance.
Accordingly, the results of operations of this revenue base ceased to be
included in the consolidated results of operations of the Company effective
August 1, 2000 without reclassification of prior periods as discontinued
operations in the financial statements.

Effective August 1, 2000, the Company entered into a management services
agreement for a six-month period with Telecare, Inc. This agreement ensures an
effective transition of this revenue base by both the Company and Telecare, Inc.
Under the terms of this agreement, the Company will provide telecommunications
transport services, operational support and administrative support for the
revenue base. The telecommunications transport services are provided on a
wholesale basis similar to other customers in the Voicecom operating segment.
Accordingly, the Company will recognize these services as revenue in the
Voicecom operating segment.

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

OVERVIEW

PTEK Holdings, Inc., a Georgia corporation, and its subsidiaries (collectively,
the "Company") began operations in 1991 and the Company completed its initial
public offering in March 1996. The Company provides an array of innovative
solutions that are designed to simplify everyday communications for businesses
and individuals. The Company's services include voice and electronic messaging,
electronic document distribution, conferencing and Internet-based communications
services. Through a series of acquisitions from September 1996 through September
1999, the Company has assembled a suite of communications services, an
international private data network and points-of-presence in regions covering
North America, Asia/Pacific and Europe. The Company has also invested in
Internet companies that have developed their own innovative service offerings
that will enable these companies to become industry leaders.

The Company's reportable segments align the Company into six areas of focus that
are driven by product offering, investment strategy and corporate governance.
These six business segments are called Voicecom, Xpedite, Premiere Conferencing,
Retail Calling Card Services, PTEKVentures and Corporate. Voicecom focuses on
local and 800-based voice messaging services, Internet-enabled communications
with its Orchestrate(R) product, interactive voice response services and
wholesale communications platform outsourcing solutions. Its customer base
ranges from small office/home office to multi-level marketing organizations to
Fortune 1000 corporate accounts. Xpedite offers a full range of electronic- and
fax-based document distribution and data messaging services through a dedicated
IP network, and through its messageREACH(SM) division offers outsourced Internet
based e-mail services. Xpedite's customers are primarily Fortune 1000 corporate
accounts and governments. Premiere Conferencing is a leading provider of
conference call and group communications services, primarily to Fortune 1000
customers. Retail Calling Card Services is a business segment that the Company
has exited through the sale of its revenue base effective August 1, 2000. It
consists primarily of the Premiere WorldLink calling card product, which was
primarily marketed through direct response advertising and co-branding
relationships to single retail users. Discontinued operations accounting
treatment of this business segment was not applied, as the Company will continue
pursuing the wholesale and corporate account distribution channels of this
product, both of which operate with positive EBITDA, as defined by the Company.
PTEKVentures focuses on investments in companies in the Internet infrastructure
and communications areas. Corporate focuses on being a holding company, leaving
the day to day operations of running the business at the operating business
segments. EBITDA before settlement gains and restructuring, merger and other
special charges is management's primary measure of segment profit and loss.

The Company has pursued its goal of becoming a provider of a suite of
telecommunications and Internet-enabled communications services both
domestically and internationally through various acquisitions from 1996 through
1999. Through these acquisitions, the Company has been able to assemble a
variety of product and service offerings, as described above. In 1996, the
Company acquired TeletT Communications, LLC ("TeleT"), which became the
foundation for the Company's Orchestrate(R) product offering. In 1999 the
Company acquired Intellivoice, a company that was previously a consultant in
developing the next generation Orchestrate(R) product offering, Orchestrate(R)
2000. The Orchestrate(R) product is offered under the Voicecom business segment.
In 1997, the Company acquired the franchise network of Voice-Tel, which provided
local access voice mail and voice messaging. The Company also acquired VoiceCom
Systems in 1997, which provided 800-based corporate voice-mail and calling card
services. Both the Voice-Tel and VoiceCom Systems acquisitions, as well as the
Orchestrate(R) product offering, provide the basis of the Voicecom operating
segment. In 1998, the Company acquired Xpedite, a provider of domestic and
international fax services. Also in 1998, the Company acquired the international
affiliates of Xpedite and other complementary international fax service
providers. These acquisitions, along with the Australian operations of Voice-
Tel, have formed the basis for the Xpedite operating segment. The Company
acquired ATS in 1998, which, along with the conferencing business from the
VoiceCom Systems acquisition, forms the basis of the Premiere Conferencing
operating segment. During 1998, 1999 and the first nine months of 2000, the
Company invested in Internet-based companies that it believes will be leaders in
their market niches in the expanding Internet economy. In 1999, the Company
formed the PTEKVentures segment with dedicated resources to develop and grow
this segment.

The Company's revenues are based on usage in the Xpedite, Premiere Conferencing
and Retail Calling Card Services business segments and a mix of both usage and
monthly fixed fees in the Voicecom business segment.

Telecommunications costs consist primarily of the cost of metered and fixed
telecommunications related costs incurred in providing the Company's services.

Direct operating costs consist primarily of salaries and wages, travel,
consulting fees and facility costs associated with maintaining and operating the
Company's various revenue generating platforms and telecommunications networks,
regulatory fees and non-telecommunications costs directly associated with
providing services.

Direct sales and marketing costs consist primarily of salaries and wages, travel
and entertainment, advertising, commissions and facility costs associated with
the functions of selling or marketing the Company's services.

Research and development costs consist primarily of salaries and wages, travel,
consulting fees and facilities costs associated with developing product
enhancements and new product development.

General and administrative costs consist primarily of salaries and wages
associated with billing, customer service, order processing, executive
management and administrative functions that support the Company's operations.
Bad debt expense associated with customer accounts is also included in this
caption.

Depreciation and amortization includes depreciation of computer and
telecommunications equipment, furniture and fixtures, office equipment,
leasehold improvements and amortization of intangible assets. The Company
provides for depreciation using the straight-line method of depreciation over
the estimated useful lives of the assets, with the exception of leasehold
improvements which are depreciated on a straight-line basis over the shorter of
the term of the lease or the useful life of the assets. Intangible assets being
amortized include goodwill, customer lists, developed technology and assembled
work force.

EBITDA before gain on legal settlement and restructuring, merger and other
special charges is defined as net income before taxes, other income (expense),
depreciation, amortization, legal settlement gains and restructuring, merger
costs and other special charges.

EBITDA before gain on legal settlement and restructuring, merger and other
special charges is considered a key management performance indicator of
financial condition because it excludes the effects of non-cash goodwill and
intangible amortization attributable to acquisitions primarily acquired using
the Company's common stock, the effects of prior years' cash investing and
financing activities and the effects of one time cash or non-cash gains and
losses associated with cash flow before payments for interest and taxes. EBITDA
provides each segment's management team with a consistent measurement tool for
evaluating the operating profit of the business before investing activities and
taxes. EBITDA before gain on legal settlement and restructuring, merger and
other special charges may not be comparable to similarly titled measures
presented by other companies and could be misleading unless all companies and
analysts calculate them in the same manner.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("GAAP") requires management 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. The
following discussion and analysis provides information which management believes
is relevant to an assessment and understanding of the Company's consolidated
results of operations and financial condition. This discussion should be read in
conjunction with the condensed consolidated financial statements and notes
thereto.

RESULTS OF OPERATIONS

The following table presents certain financial information about the Company's
operating segments for the periods presented (amounts in millions):

Revenues
Xpedite $ 56.1 $ 61.7 $177.7 $180.4
Voicecom 29.3 31.5 90.2 94.4
Premiere Conferencing 18.2 13.6 50.9 39.1
Retail Calling Card Services 1.7 9.4 13.7 29.6
------------------------------------------------------------------
$105.3 $116.2 $332.5 $343.5
==================================================================
EBITDA
Xpedite $ 11.5 $ 14.8 $ 42.8 $ 46.5
Voicecom 2.4 2.3 11.5 9.3
Premiere Conferencing 4.5 2.6 10.1 6.7
Retail Calling Card Services 0.3 (2.6) 1.6 (4.9)
Corporate (3.2) (10.9) (12.4) (30.9)
PTEKVentures (0.3) - (1.6) -
------------------------------------------------------------------
$ 15.2 $ 6.2 $ 52.0 $ 26.7
===================================================================

ANALYSIS

The Company's financial statements reflect the results of operations of Xpedite
France, S.A. and Intellivoice from the date of their respective acquisitions.
These acquisitions have been accounted for under the purchase method of
accounting.

Consolidated revenues decreased 9.4% to $105.3 million in the three months
ended September 30, 2000, as compared with the same period in 1999 and decreased
3.2% to $332.5 million in the nine months ended September 30, 2000 as compared
with $343.5 million in the same period in 1999. On a segment basis, the change
in revenue was caused by the following:

. Xpedite experienced a 9.1% decrease to $56.1 million in the three months
ended September 30, 2000 and a 1.5% decrease to $177.7 million in the nine
months ended September 30, 2000, compared with the same periods in 1999,
respectively. The decrease for the three month period is primarily
attributable to the continued strength of the U.S. dollar relative to other
global currencies, revenue declines in Xpedite's real-time product offering
in the Asia/Pacific region, as well as continued pricing pressure in the
market for certain of Xpedite's legacy fax services. The reduction in the
Asia/Pacific region is directly related to the deregulation of
telecommunications services in that region. The decrease for the nine month
period is attributable to the continued strength of the U.S. dollar relative
to other global currencies and reductions in both Xpedite's real-time and
legacy document distribution product offerings, offset somewhat by revenues
relating to Xpedite's new service offerings and the acquisition of Xpedite's
affiliate Xpedite France S.A. in May of 1999. The results of operations for
the nine months ended September 30, 1999 for this subsidiary, which was
accounted for under the purchase method of accounting, contained five months.

. Voicecom experienced a 7.0% decrease to $29.3 million in the three months
ended September 30, 2000 and a 4.5% decrease to $90.2 million in the nine
months ended September 30, 2000, compared with the same periods in 1999,
respectively. These decreases are attributable to a change in revenue channel
focus of its voice-messaging product lines in the second quarter of 2000
toward corporate organizations, wholesale arrangements with competitive local
exchange carriers and multi-level marketing organizations. This focus is a
shift away from less profitable small office and home office retail accounts.
Due to this change in sales channel focus, revenue has declined in the retail
accounts at a greater rate than the acquisition of customers in the new sales
channels which require a longer sales cycle. Also contributing to this
decline is a weakening in sales of voice messaging products in the non-
financial multi-level marketing sales channel.

. Premiere Conferencing experienced a 33.8% increase to $18.2 million in the
three months ended September 30, 2000 and a 30.2% increase to $50.9 million
in the nine months ended September 30, 2000, compared with the same periods
in 1999, respectively. This growth has been indicative of the quarter over
quarter growth trend that this segment has experienced over the last twelve
months which is driven primarily from its unattended conferencing product
offering.

. Retail Calling Card Services experienced a 81.9% decrease to $1.7 million in
the three months ended September 30, 2000 and a 53.7% decrease to $13.7
million in the nine months ended September 30, 2000, compared with the same
periods in 1999, respectively. These declines are attributable to
management's decision not to actively acquire new customers in the operating
segment during the third quarter of 1999, as well as the sale of the
operating segment's revenue base to Telecare, Inc. effective August 1, 2000.
See footnote 12 for a further discussion of this sale.

Consolidated gross profit margins were 73.7% and 71.5% for the three months
ended September 30, 2000 and 1999, respectively and 73.7% and 71.5% for the nine
months ended September 30, 2000 and 1999, respectively. Consolidated gross
profit margins benefited in 2000 from the discontinuance of the retail calling
card operating segment in the third quarter 1999. This operating segment has
inherently lower gross margins than the other operating segments and as it
continues to be a smaller percentage of the Company's operating revenues, gross
margins have benefited. Offsetting these gains in gross margin have been
declines in the Voicecom operating segment's voice messaging product which
utilizes a local number fixed cost telecommunications network. In general, the
Company has experienced favorable trends in per unit telecommunications costs in
each of its operating segments by aggressively negotiating lower
telecommunications costs with various providers. The Company also has
experienced favorable telecommunications costs by benefiting from the general
industry trend of decreased costs from increased capacity among the various long
distance and local exchange carriers.

Consolidated direct costs of operations increased to 16.3% of revenues in the
three months ended September 30, 2000, as compared with 16.2% for the same
period of 1999 (despite a decrease of $1.7 million) and increased to 15.5% of
revenues in the nine months ended September 30, 2000, as compared with 15.2% for
the same period of 1999 (despite a decrease of $0.7 million).

Consolidated selling and marketing costs decreased to 21.6% of revenues in the
three months ended September 30, 2000, from 24.5% of revenues in the same period
in 1999 (a decrease of $5.8 million) and decreased to 21.4% of revenues in the
nine months ended September 30, 2000, from 24.3% of revenues in the same period
in 1999 (a decrease of $12.4 million). This decrease is driven by reduced direct
sales force costs in the Voicecom operating segment relating to headcount
reductions implemented as

part of the Company's third quarter 1999 restructuring efforts. In addition,
marketing costs were lower in 2000 versus 1999 due to marketing costs related to
the commercial roll out of the first version of Orchestrate in the second
quarter of 1999 that are not present in the first nine months of 2000.

Research and development costs were 3.1% of revenues for the three months ended
September 30, 2000, compared with 3.1% of revenues for the same period in 1999
and increased to 3.1% of revenues in the nine months ended September 30, 2000,
from 2.6% of revenues in the same period in 1999 (an increase of $1.4 million).
The increase in these costs as a percentage of revenue is primarily from
increased development efforts associated with the Voicecom operating segment's
Orchestrate(R) 2000 development project.

General and administrative costs decreased to 18.2% of revenues for the three
months ended September 30, 2000, compared with 22.3% of revenues for the same
period in 1999 (a decrease of $6.7 million) and were 18.1% of revenues for the
nine months ended September 30, 2000, compared with 21.7% of revenues in the
same period in 1999 (a decrease of $14.1 million) The overall decrease in
general and administrative costs is related to reduced corporate overhead
stemming from the Company's third quarter 1999 restructuring initiative.

Depreciation was 8.7% of revenues for the three months ended September 30, 2000,
compared with 15.9% of revenues for the same period in 1999 and was 9.5% of
revenues for the nine months ended September 30, 2000, compared with 14.8% of
revenues for the same period in 1999. The decrease in these costs as a
percentage of revenues is attributable to decreases in depreciation expense
associated with the assets in the Company's enhanced calling card platform,
local voice messaging network and legacy fax delivery network. Portions of these
assets' depreciable lives were decreased in the fourth quarter of 1998 to
fifteen months from five to seven years and were fully depreciated by the end of
1999. The shortening of these assets' lives resulted from management's decision
to replace these assets by the end of 1999 with more recent versions of
technology either for Year 2000 or service delivery reasons. Management had
taken these assets out of operation by the end of 1999 according to plan.

Amortization was 24.5% of revenues for the three months ended September 30,
2000, compared with 21.9% for the same period in 1999 and 23.2% of revenues for
the nine months ended September 30, 2000, compared with 21.3% of revenues for
the same period in 1999. The increase in these costs as a percentage of revenues
is attributable to goodwill, customer lists and developed technology intangibles
from the acquisition of Xpedite France, S.A. and Intellivoice in the second
quarter and third quarter 1999, respectively. The lives assigned to these
intangibles ranged from three to seven years.

The gain on legal settlement of $3.7 million for the nine months ended September
30, 2000 is attributable to the Company's favorable settlement of a contractual
dispute with MCI Worldcom. As part of the settlement, the Company received $12
million in cash for terminating the strategic alliance contract with MCI
Worldcom. Accordingly, the Company expensed the net book value of this contract
of approximately $7 million against the initial gain of $12 million during the
second quarter of 2000. In addition, the Company has expensed approximately $1.3
million in legal costs associated with this settlement which were incurred in
the second quarter of 2000.

In the three months ended September 30, 2000, the Company recognized as income
amounts totaling $0.6 million relating to a previous restructuring charge
recorded in the third quarter of 1999. This charge represented costs associated
with an initiative to decentralize the Company's operations. At September 30,
2000, the decentralization plan and all associated costs have been completed.

Consolidated EBITDA was $15.2 million or 14.4% of revenues for the three months
ended September 30, 2000, compared with $6.2 million or 5.3% of revenues for the
same period in 1999 and $52.0 million or 15.6% of revenues for the nine months
ended September 30, 2000, compared with $26.7 million or 7.8% of revenues for
the same period in 1999. On a segment basis the change in EBITDA was
attributable to the following:

. Xpedite's EBITDA was $11.5 million or 20.5% of segment revenues for the three
months ended September 30, 2000, compared with $14.8 million or 24.0% of
segment revenues for the same period in 1999 and $42.8 million or 24.1% of
segment revenues for the nine months ended September 30, 2000, compared with
$46.5 million or 25.8% of segment revenues for the same period in 1999. These
decreases in EBITDA are primarily a result of the continued strength of the
U.S. dollar relative to other global currencies, increased pricing pressure
in the market for certain of Xpedite's legacy fax services, and increased
investment in sales and marketing efforts associated with the launch of
messageREACH(SM).

. Voicecom's EBITDA was $2.4 million or 8.2% of segment revenues for the three
months ended September 30, 2000, compared with $2.3 million or 7.3% of
segment revenues for the same period in 1999 and $11.5 million or 12.7% of
segment revenues for the nine months ended September 30, 2000, compared with
$9.3 million or 9.9% of segment revenues for the same period in 1999. The
improvement in EBITDA for the three and nine month comparative periods is
primarily attributable to one time advertising costs in the second quarter of
1999 attributable to the commercial launch of the first version of
Orchestrate(R). Additional gains in EBITDA have also been experienced from
reduced costs in the direct sales force from the restructuring in

the third quarter of 1999 and improved telecommunications costs. Offsetting
some of these gains are increased costs in developing and supporting
Orchestrate(R) 2000 which will supersede previous versions of this product.

. Premiere Conferencing's EBITDA was $4.5 million or 24.7% of segment revenues
for the three months ended September 30, 2000, compared with $2.6 million or
19.1% of segment revenues for the same period in 1999 and $10.1 million or
19.8% of segment revenues for the nine months ended September 30, 2000,
compared with $6.7 million or 17.1% of segment revenues for the same period
in 1999. This increase is primarily attributable to growth in unattended
conferencing products and improved telecommunications costs.

. Retail Calling Card Services' EBITDA was $0.3 million or 17.6% of segment
revenues for the three months ended September 30, 2000, compared with $(2.6)
million or (27.7)% of segment revenues for the same period in 1999 and $1.6
million or 11.7% of segment revenues for the nine months ended September 30,
2000, compared with $(4.9) million or (16.6)% of segment revenues for the
same period in 1999. The improvements in EBITDA are primarily attributable to
reduced personnel costs through attrition and the absence of direct
advertising costs to acquire new customers. Management discontinued actively
acquiring customers in the latter part of the third quarter of 1999.
Effective August 1, 2000, the Company sold the revenue base of this operating
segment to Telecare, Inc. Accordingly, the results of operations of this
segment for the three months ended September 30, 2000 include one month of
results, and have ceased to be included in the consolidated results of
operations effective August 1, 2000. See footnote 12 for a further discussion
of this sale.

. PTEKVentures' EBITDA was $(0.3) and $(1.6) million for the three and nine
months ended September 30, 2000. Costs associated with this segment are
personnel costs, professional and legal costs and travel costs associated
with acquiring new investments or exploring strategic initiatives.

. Corporate EBITDA was $(3.2) million for the three months ended September 30,
2000, compared to $(10.9) million for the same period in 1999 and $(12.4)
million for the nine months ended September 30, 2000, compared to $(30.9)
million for the same period in 1999. Excluding amortized benefit costs
associated with restricted stock grants to certain executives in the second
quarter of 1999, EBITDA was $(2.9) million for the three months ended
September 30, 2000, compared to $(7.5) million for the same period in 1999
and $(11.5) million for the nine months ended September 30, 2000, compared to
$(18.6) million for the same period in 1999. The improvement for the three
and nine month comparative periods is primarily attributable to reduced
administrative overhead costs associated with the decentralization strategy
implemented in the third quarter of 1999. This strategy consisted of reducing
all non-strategic overhead costs at Corporate and to push down administrative
duties to each operating segment where such costs could be managed more
efficiently.

Net interest expense decreased to $2.6 million for the three months ended
September 30, 2000, as compared with $6.8 million for the same period in 1999
and decreased to $8.0 million for the nine months ended September 30, 2000, as
compared with $19.1 million for the same period in 1999. Net interest expense
decreased in 2000 due to the absence of borrowings relating to the Company's
former credit facility. Such borrowings were repaid in full in the fourth
quarter of 1999 from the proceeds of a partial sale of the Company's holdings in
WebMD Corporation common stock. Average borrowings on the Company's former
credit facility during the first nine months of 1999 were approximately $129.5
million. Interest expense, net in the first nine months of 2000 is primarily
comprised of interest on the Company's $172.5 million face value of convertible
subordinated notes.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations was $0.1 million in the nine month period ended
September 30, 2000, as compared with net cash provided of $11.4 million for the
same period in 1999. Excluding restructuring, merger costs and other special
charges, net cash provided by operations in the nine month period ended
September 30, 2000 was $4.4 million as compared with cash provided of $16.1
million for the same period in 1999. Operating cash flow declined in the first
nine months of 2000 primarily as a result of increased use of cash for operating
assets and liabilities driven primarily by a decrease in the number of days
outstanding in payables from December 31, 1999 and an increase in the days sales
outstanding in accounts receivable. Also contributing to the decrease in
operating cash flows was the payment of approximately $15.7 million in income
taxes associated primarily with the gain on the sale of WebMD Corporation stock
owned by the Company in the fourth quarter of 1999 and first six months of 2000
and gain on sale of S1 Corporation stock owned by the Company in the first six
months of 2000. The sale of these investments utilized substantially all of the
Company's domestic net operating loss carryforwards, causing the Company to be
subject to income taxes for the fiscal year ended December 31, 1999 and the nine
months ended September 30, 2000. These taxes were paid in the first nine months
of 2000. The Company anticipates future tax liabilities on subsequent gains from
the sale of its marketable securities. The Company also received $12 million in
cash for the settlement of the lawsuit against MCI WorldCom.

During the nine months ended September 30, 2000, the Company's allowance for
doubtful accounts has increased by $7.4 million to $18.8 million. This increase
is attributable primarily to one customer base for which the Company assumed the
billing function from a wholesale partner at the beginning of the current fiscal
year. Over the course of the year, the Company has

experienced a deterioration in the quality of the accounts receivable relating
to this customer base. Accordingly, management discontinued revenue recognition
for these customers immediately when it was determined that collection of the
account was not certain. Because the Company currently does not have the
capacity to terminate services, monthly billing of these customers continues,
however instead of recognizing revenue for these customers, management has
offset the billing receivable with an increase to the allowance for doubtful
accounts. Management is currently putting into place modifications to internal
systems and obtaining assistance from third parties in order to collect from
these customers, efficiently terminate service upon non-payment and efficiently
write-off customer balances deemed uncollectible. When these modifications are
in place write-offs and subsequent collections will lower the allowance for
doubtful accounts. Additionally, management has increased its allowance for
doubtful accounts by expensing $3.5 million during the nine months ended
September 30, 2000. This is unrelated to the above mentioned customers and was
in response to the accounts receivable portfolio outside of the partner customer
bases in which formula driven allowance calculations called for increased
allowances due to the age of the receivables. This increase in the age of the
receivables is primarily caused by an overall slowing of the billing cycle and
collections cycle due to the efforts that have been spent on rectifying the
above mentioned wholesale partner collections issues.

Investing activities provided cash of approximately $7.1 million in the nine
month period ended September 30, 2000 compared to cash used of $38.5 million in
the same period of 1999. The principal source of cash from investing activities
in the nine month period ended September 30, 2000, was the sale of WebMD
Corporation and S1 Corporation stock owned by the Company. The proceeds of $63.1
million were used primarily to invest in Internet based companies in the
PTEKVentures portfolio, pay income taxes relating to sales of WebMD Corporation
and S1 Corporation stock, to pay interest due on the Company's convertible
subordinated notes and to fund capital expenditures. See note 6- "Marketable
Securities Available For Sale" for a further discussion of this investment
activity. Capital expenditures in the first nine months of 2000 were primarily
to upgrade the Voicecom segment's local based voice messaging network, increase
capacity on Premiere Conferencing's conference calling network, to develop the
Orchestrate(R) 2000 platform, to improve Xpedite's fax delivery platform and to
develop Xpedite's MessageREACH(SM) Internet-based product offering. Proceeds
from the disposal of property and equipment of $1.9 million related to the sale
of switching equipment associated with the retail calling card segment. Proceeds
were approximately equal to net book value. Investments in the first nine months
of 2000 of approximately $31.5 million relate to activity at PTEKVentures. These
cash outlays were primarily additional investments in companies that existed in
the PTEKVentures investment portfolio at December 31, 1999 and investments in
new Internet based companies. Cash from investing activities in the first nine
months of 1999 was primarily the sale of municipal bond obligations and mutual
funds. These redemptions were used in part to provide capital for improvements
to Xpedite's fax delivery platform and Voicecom's local based voice messaging
network.

Cash provided by financing activities in the nine month period ended September
30, 2000, was primarily from proceeds from employee stock option exercises. Cash
used in financing activities in the nine month period ended September 30, 2000
is primarily debt repayments on capital lease and note obligations associated
with the Voice-Tel acquisition and debt assumed from the Xpedite France, S.A.
acquisition. In addition the Company repurchased approximately 120,000 shares of
its common stock for approximately $426,000 under its share repurchase program
announced on June 6, 2000, under which the board of directors of the Company
authorized share repurchases of up to 10 percent of the Company's outstanding
shares. Significant cash inflows for financing activities in the nine month
period ended September 30, 1999 included a net increase in borrowings under the
Company's revolving credit facility of approximately $17.5 million. This
increase was primarily used to acquire Xpedite France, S.A. This credit facility
was paid in full in the fourth quarter of 1999 with proceeds from the partial
sale of the Company's investment in WebMD Corporation.

At September 30, 2000, the Company's principal commitments involve minimum
purchase requirements under supply agreements with telecommunications providers,
severance payments to former executive management under the Company's various
restructuring plans, commitments under its strategic alliances with
Healtheon/WebMD and various capital lease obligations and semi-annual interest
on the Company's convertible subordinated debt. The Company is in compliance
with all such agreements at this date.

on borrowings under this margin loan arrangement are based on the broker call
rate. At September 30, 2000, the Company had no borrowings outstanding on the
margin loan arrangement.

Management believes that cash and marketable securities and cash flows from
operations should be sufficient to fund the Company's non-investing operating
cash flow needs in the short term. At September 30, 2000, approximately $12.0
million of cash and equivalents resided outside of the United States compared to
$10.3 million at December 31, 1999. The Company routinely repatriates cash in
excess of operating needs in certain countries where the cost to repatriate does
not exceed the economic benefits. Intercompany loans with foreign subsidiaries
generally are considered by management to be permanently invested for the
foreseeable future. Therefore, all foreign exchange gains and losses are
recorded in the cumulative translation adjustment account on the balance sheet.
Based on potential cash positions of the parent company and potential conditions
in the capital markets, management could require repayment of these loans
despite the long-term intention to hold them as permanent investments. Foreign
exchange gains or losses on intercompany loans deemed temporary in nature are
recorded in the determination of net income. Management regularly reviews the
Company's capital structure and evaluates potential alternatives in light of
current conditions in the capital markets. Depending upon conditions in these
markets, the cash flows from the operating segments and other factors, the
Company may engage in other capital transactions to fund the investing needs of
PTEKVentures and capital expenditures in the various operating segments. These
capital transactions include but are not limited to debt or equity issuances or
credit facilities with banking institutions.

RESTRUCTURING, MERGER COSTS AND OTHER SPECIAL CHARGES

Decentralization of Company

In the third quarter of 1999, the Company recorded a charge of approximately
$8.2 million to restructure the administrative overhead of the corporate
headquarters, the sales force of the former Emerging Enterprise Solutions
("EES") group and certain operations of EES and the former Corporate Enterprise
Solutions ("CES") groups. The $8.2 million charge was comprised of $7.3 million
of severance and exit costs, $0.7 million of lease termination costs and $0.2
million of facility exit costs. Severance benefits have been provided for the
termination of 203 employees, primarily related to corporate administrative
functions and direct sales force and operations of under-performing operating
segments in the former EES and CES groups. 114 employees were severed from the
Voicecom operating segment, 61 employees were severed from the Xpedite operating
segment and 28 employees were severed from the Corporate headquarters. As of
December 31, 1999 all 203 employees were terminated. Anticipated annual savings
of approximately $13.1 million are expected from these terminations. Lease
termination and clean-up costs were provided for the exit of one operating site
in the Retail Calling Card Services operating segment.

The balance at December 31, 1999, for severance and exit costs represents the
remaining severance reserve for future cash severance and exit payments to
former corporate executive management and various management in the former CES
group that were terminated in 1999. These remaining cash payments were disbursed
over the nine months ended September 30, 2000. In the nine month period ended
September 30, 2000, cash severance payments made were $3.2 million. During the
three months ended September 30, 2000, the Company recognized as income $0.6
million of accrued severance and exit payments upon completion of the severance
program associated with the decentralization of the Company. This amount
represents actual exit costs that are below planned exit costs related to the
decentralization plan in the Company's European and Asia/Pacific regions of its
Xpedite operating segment.

At September 30, 2000, the decentralization plan of the Company and all related
costs associated with this plan have been completed.

Reorganization of Company into EES and CES Business Segments

In the fourth quarter of 1998, PTEK recorded a charge of $11.4 million to
reorganize the Company into two business segments that focus on specific groups
of customers. These segments were named Emerging Enterprise Solutions and
Corporate Enterprise Solutions. EES focused on small office/home office and
multi-level marketing organizations, and CES focused on large corporate
accounts. This charge was comprised of $4.9 million of severance, $4.7 million
of asset impairments, $0.4 million of contractual obligation costs and $1.4
million of other costs, primarily to exit facilities and certain activities.

As part of this reorganization, PTEK identified 59 employees to terminate.
These employees included administrative personnel from the Company's Cleveland
headquarters for the previous Voice-Tel and VoiceCom Systems entities, personnel
from customer service centers from eight locations and executive management from
the acquired companies that were not part of previous restructuring plans. As of
December 31, 1998, all 59 employees were terminated. The balance at December 31,
1999 and September 30, 2000 represent the remaining severance reserve for former
executive management. In the nine month period ended

September 30, 2000, cash severance payments made to eight former executives was
$0.9 million. The Company expects to pay the remaining $0.8 million balance of
severance to one former executive over the next sixteen months.

NEW ACCOUNTING PRONOUNCEMENTS

FORWARD-LOOKING STATEMENTS

When used in this Form 10-Q and elsewhere by management or PTEK 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. These include, but are
not limited to, forward-looking statements about our business strategy and means
to implement the strategy, our objectives, the amount of future capital
expenditures, the likelihood of our success in developing and introducing new
products and services and expanding our business, and the timing of the
introduction of new and modified products and services. 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 which 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:

. Factors described from time to time in the Company's press releases,
reports and other filings made with the Securities and Exchange Commission,
including but not limited to our report on Form 10-K;

. Competitive pressures among communications services providers, including
pricing pressures, may increase significantly;

. Our ability to respond to rapid technological change, the development of
alternatives to our products and services and risk of obsolescence of its
products, services and technology;

. Market acceptance of new products and services, including Orchestrate(R);

. Strategic investments in early stage companies, which are subject to
significant risks, may not be successful and returns on such strategic
investments, if any, may not match historical levels;

. The value of our business may fluctuate because the value of some of our
strategic equity investments fluctuates;

. Our ability to obtain future financing sufficient to fund operations and
expansion;

. Our ability to manage our growth;

. Costs or difficulties related to the integration of businesses and
technologies, if any, acquired or that may be acquired by us may be greater
than expected;

. Expected cost savings from past or future mergers and acquisitions may not
be fully realized or realized within the expected time frame;

. Revenues following past or future mergers and acquisitions may be lower
than expected;

. Operating costs or customer loss and business disruption following past or
future mergers and acquisitions may be greater than expected;

. The success of our strategic relationships, including the amount of
business generated and the viability of the strategic partners, may not meet
expectations;

. Possible adverse results of pending or future litigation or adverse
results of current or future infringement claims;

. Risks associated with interruption in our services due to the failure of
the platforms and network infrastructure utilized in providing our services;

. Risks associated with expansion and operation of our international
operations;

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

. Legislative or regulatory changes may adversely affect the business in
which we are engaged; and

. Changes in the securities markets may negatively impact us.

The Company cautions that these factors are not exclusive. Consequently, all of
the forward-looking statements made in this Form 10-Q and in documents
incorporated in this Form 10-Q are qualified by these cautionary statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Form 10-Q. The Company takes
on no obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date of this Form 10-Q, or the date of the statement, if a different
date.

All statements made herein regarding the Company's state of readiness with
respect to the Year 2000 issue constitute "Year 2000 readiness disclosures" made
pursuant to the Year 2000 Information and Readiness Disclosure Act, Public Law
No. 105-271.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to market risk from changes in interest rates and foreign
currency exchange rates. The Company manages its exposure to these market risks
through its regular operating and financing activities. Derivative instruments
are not currently used and, if utilized, are employed as risk management tools
and not for trading purposes.

At September 30, 2000, no derivative financial instruments were outstanding to
hedge interest rate risk. A hypothetical immediate 10% increase in interest
rates would decrease the fair value of the Company's fixed rate convertible
subordinated notes outstanding at September 30, 2000, by approximately $8.8
million.

Approximately 28.0% of the Company's revenues and 21.1% of its operating costs
and expenses were transacted in foreign currencies for the nine month period
ended September 30, 2000. As a result, fluctuations in exchange rates impact the
amount of the Company's reported sales and operating income when translated into
U.S. dollars. A hypothetical positive or negative change of 10% in foreign
currency exchange rates would positively or negatively change revenue for the
nine month period ended September 30, 2000 by approximately $9.3 million and
operating costs and expenses for the nine month period ended September 30, 2000
by approximately $8.1 million. The Company has not used derivatives to manage
foreign currency exchange translation risk and no foreign currency exchange
derivatives were outstanding at September 30, 2000.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

services due to difficulties in consolidating and integrating its sales
function. Plaintiffs allege, among other things, violation of Sections 10(b),
14(a) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12 and
15 of the Securities Act of 1933. We filed a motion to dismiss this complaint on
April 14, 1999. On December 14, 1999, the court issued an order that dismissed
the claims under Sections 10(b) and 20 of the Exchange Act without prejudice,
and dismissed the claims under Section 12(a)(1) of the Securities Act with
prejudice. The effect of this order was to dismiss from this lawsuit all open-
market purchases by the plaintiffs. The plaintiffs filed an amended complaint on
February 29, 2000. The defendants filed a motion to dismiss on April 14, 2000,
which is pending.

A lawsuit was filed on November 4, 1998 against the Company and certain of its
officers and directors in the Southern District of New York. Plaintiffs are
shareholders of Xpedite who acquired common stock of the Company as a result of
the merger between the Company and Xpedite in February 1998. Plaintiffs'
allegations are based on the representations and warranties made by the Company
in the prospectus and the registration statement related to the merger, the
merger agreement and other documents incorporated by reference, regarding the
Company's acquisitions of Voice-Tel and VoiceCom, the Company's roll-out of
Orchestrate(R), the Company's relationship with customers Amway Corporation and
DigiTEC, 2000, Inc., and the Company's 800-based calling card service.
Plaintiffs allege causes of action against the Company for breach of contract,
against all defendants for negligent misrepresentation, violations of Sections
11 and 12(a)(2) of the Securities Act of 1933 and against the individual
defendants for violation of Section 15 of the Securities Act. Plaintiffs seek
undisclosed damages together with pre- and post-judgment interest, recission or
recissory damages as to violation of Section 12(a)(2) of the Securities Act,
punitive damages, costs and attorneys' fees. The defendants' motion to transfer
venue to Georgia has been granted. The defendants' motion to dismiss has been
granted in part and denied in part. The defendants filed an answer on March 30,
2000.

A lawsuit was filed on November 1, 1999 by Donald H. Turner, a former officer of
the Company, against the Company, Boland T. Jones and Jeffrey A. Allred in the
Superior Court of Fulton County, Georgia. Against the Company the plaintiff
alleges breach of contract and promissory estoppel relating to the termination
of his employment, and against all defendants the plaintiff alleges fraudulent
inducement relating to his hiring by the Company. The plaintiff seeks
compensatory damages of $875,000, forgiveness of a $100,000 loan, interest,
attorneys' fees and punitive damages in an unspecific amount. The defendants
filed an answer and counterclaim, claiming that the plaintiff owes the Company
the principal amount of the $100,000 loan plus interest as of January 1, 2001,
plus costs and attorneys' fees, and that the plaintiff defrauded the Company and
owes the Company approximately $400,000 in fraudulently attained pay and
benefits, including the $100,000 loan.

On September 3, 1999, Elizabeth Tendler filed a complaint in the Superior Court
of New Jersey Law Division: Union County, against 17 named defendants including
the company and Xpedite, and various alleged current and former officers,
directors, agents and representatives of Xpedite. Plaintiff alleges that the
defendants engaged in wrongful activities in connection with the management of
the plaintiff's investments, including investments in Xpedite. The allegations
against Xpedite and the Company are limited to plaintiff's investment in
Xpedite. Plaintiff's claims against Xpedite and the Company include breach of
contract, breach of fiduciary duty, unjust enrichment, conversion, fraud,
interference with economic advantage, liability for ultra vires acts, violation
of the New Jersey Consumer Fraud Act and violation of New Jersey RICO. Plaintiff
seeks an accounting of the corporate stock of Xpedite, compensatory damages of
approximately $1.3 million, accrued interest and/or dividends, a constructive
trust on the proceeds of the sale of any Xpedite or PTEK stock, shares of
Xpedite and/or PTEK to satisfy defendants' obligations to plaintiff, attorneys'
fees and costs, punitive and exemplary damages in an unspecified amount, and
treble damages. On February 25, 2000, Xpedite filed its answer, as well as cross
claims and third party claims. This case has been dismissed without prejudice
and compelled to NASD arbitration, which has commenced. In August 2000, a
statement of claim was also filed with the NASD against all but one of the Nobis
Respondents making virtually the same allegations on behalf of claimant
Elizabeth Tendler. Claimant seeks an accounting of the corporate stock in
Xpedite, compensatory damages of not less than $265,000, a fair conversion rate
on stock options, loans on other investments, interest and/or unpaid dividends,
attorneys fees and costs.

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit Number Exhibit Description

10.1 Credit Agreement, dated September 29, 2000, by and among
Xpedite Systems, Inc., Ptek Holdings, Inc., the Banks Party
Hereto and ABN AMRO Bank N.V.

10.2 Asset Sale Agreement, dated August 25, 2000, by and between
Telecare, Inc. and Premiere Communications, Inc.

27.1 Financial Data Schedule for the Three and Nine Month Periods
Ended September 30, 2000

(b) Reports on Form 8-K:

None.

SIGNATURES

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

November 13, 2000 PTEK HOLDINGS, INC.
Date
/s/ PATRICK G. JONES
----------------------------------------
Patrick G. Jones
Executive Vice President and Chief
Financial Officer
(principal Financial and Accounting
Officer and duly authorized signatory of
the Registrant) and Chief Legal Officer

EXHIBIT INDEX

Exhibit Number Exhibit Description

10.1 Credit Agreement dated September 29, 2000 by and among Xpedite
Systems, Inc., Ptek Holdings, Inc. and ABN AMRO Bank N.V.

10.2 Asset Sale Agreement, dated August 25, 2000, by and between
Telecare, Inc. and Premiere Communications, Inc.

27.1 Financial Data Schedule for the Three and Nine Month Periods
Ended September 30, 2000