Terremark Worldwide Reports Third Quarter Fiscal Year 2011 Results

Terremark Worldwide, Inc. (NASDAQ:TMRK), a leading global provider of managed IT infrastructure services, today reported its results for the quarter ended December 31, 2010. Terremark delivered strong growth with total revenues of $94.3 million and EBITDA, as adjusted, of $28.5 million for the quarter, representing year-over-year increases of 27% and 44%, respectively.

Q3 FY11 Financial Highlights

• Total revenues for the quarter ended December 31, 2010 were $94.3 million, representing a 27% year-over-year increase.
• EBITDA, as adjusted, for the quarter ended December 31, 2010 was $28.5 million, representing a 44% year-over-year increase. EBITDA, as adjusted, is defined as income (loss) from operations less depreciation, amortization, certain legal and professional costs, litigation and employment settlements, integration expenses, and share-based payments, including share-settled liabilities. EBITDA, as adjusted, should be considered in addition to, but not in lieu of, income (loss) from operations reported under U.S. Generally Accepted Accounting Principles (GAAP).
• Income from operations was $20.1 million for the nine months ended December 31, 2010.
• Cross connects billed to customers increased to 10,086 as of December 31, 2010 from 8,883 a year earlier, representing a 14% year-over-year increase.
• Total colocation space utilization increased to 38.7% as of December 31, 2010 from 36.6% as of September 30, 2010. Utilization of built-out colocation space increased to 66.1% as of December 31, 2010, an increase from 62.5% as of September 30, 2010.

Q3 FY11 Business Highlights

• Verizon Communications Inc. (NYSE, NASDAQ: VZ) and Terremark Worldwide Inc. announced a definitive agreement under which Verizon will acquire Terremark for $19.00 per share in cash, or a total equity value of $1.4 billion. Verizon plans to operate the new unit as a wholly owned subsidiary retaining the Terremark name and with Terremark’s current management team continuing to manage the company.
• In December, Terremark was positioned by Gartner, Inc. in the leaders quadrant in the Magic Quadrant for Cloud Infrastructure as a Service and Web Hosting, 2010 report¹. Gartner’s evaluation is based on completeness of vision and the vendor’s ability to execute.
• Terremark increased the annualized cloud computing run rate to $37.5 million during the third quarter, a 25% increase from the previous quarter. The company continues to add large enterprises and federal government agencies to the customer base leveraging its ability to combine secure cloud computing solutions with industry-leading colocation and managed services into seamless hybrid environments that meet the needs of today’s complex IT systems.
• Terremark had another quarter of strong bookings with $30.9 million of new annual contract value booked in the quarter ended December 31, 2010.
• During the quarter ended December 31, 2010, Terremark added 46 new customers, for a total of 1,422 customers at the end of the period.

Business Outlook

• For the fourth quarter of fiscal 2011, the Company expects revenues to range from $93.8 million to $96.8 million and EBITDA, as adjusted, to range from $29.3 million to $31.3 million.
• For the full 2011 fiscal year, the company increased guidance for revenues to range from $352.0 million to $355.0 million and EBITDA, as adjusted, to range from $100.0 million to $102.0 million.
• For the full 2012 fiscal year, the Company expects revenues between $445.0 million and $455.0 million and EBITDA, as adjusted, to range from $145.0 million to $150.0 million.

The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the Company’s targets, not predictions of actual performance.

Conference Call Information

• Terremark will not host an investor conference call.
• Slides related to today's announcement will be available at http://www.terremark.com, under the Investor Relations link.

Additional information regarding the Company’s financial performance as of and for the three and nine months ended December 31, 2010 and 2009, and the financial performance as of and for the three months ended September 30, 2010 can be found on the attached balance sheet and statement of operations and in the Company’s Quarterly Report on Form 10-Q.

¹ "Magic Quadrant for Cloud Infrastructure as a Service and Web, 2010”, Lydia Leong & Ted Chamberlin, December 22, 2010

About Terremark Worldwide, Inc.

Terremark Worldwide (NASDAQ:TMRK) is a leading global provider of IT infrastructure services delivered on the industry’s most robust and advanced technology platform. Leveraging data centers in the United States, Europe and Latin America with access to massive and diverse network connectivity, Terremark delivers government and enterprise customers a comprehensive suite of managed solutions including managed hosting, colocation, disaster recovery, security, data storage and cloud computing services. Terremark’s Enterprise Cloud computing architecture delivers the agility, scale and economic benefits of cloud computing to mission-critical enterprise and Web 2.0 applications and its DigitalOps® service platform combines end-to-end systems management workflow with a comprehensive customer portal. More information about Terremark Worldwide can be found at http://www.terremark.com.

Statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Terremark's actual results may differ materially from those set forth in the forward-looking statements due to a number of risks, including uncertainties inherent in government contracting, its ability to cross-sell across an acquired customer base, ability to increase revenue yields within facilities, ability to refinance existing debt, uncertainties and other factors, as discussed in Terremark's filings with the SEC. These factors include, without limitation, Terremark's ability to obtain funding for its business plans, uncertainty in the demand for Terremark's services or products, Terremark's ability to manage its growth, and the successful integration of operations of acquired companies. Terremark does not assume any obligation to update these forward-looking statements.

Non-GAAP Financial Measures

Terremark continues to provide all information required in accordance with U.S. Generally Accepted Accounting Principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Terremark uses non-GAAP financial measures, such as EBITDA, as adjusted. In presenting these non-GAAP financial measures, Terremark excludes certain items that it believes are not good indicators of the Company's current or future operating performance. These items are depreciation, amortization, certain legal and professional costs, litigation and employment settlements, integration expenses, and share-based payments, including share-settled liabilities. Bookings represent contracted revenue to be deployed in current or future periods. Bookings are calculated based on the annualized value of monthly recurring revenues plus project-type revenue.

Terremark intends to calculate the various non-GAAP financial measures in future periods on a basis consistent with its calculation of those measures for the three and nine months ended December 31, 2010 and 2009 and the three months ended September 30, 2010, presented within this press release.