##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    March 31, 2007o

TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission file number 0-22520
      Terremark Worldwide,
    Inc.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

84-0873124(State or Other Jurisdiction
    of
    Incorporation or Organization)

(IRS Employer
    Identification No.)   2601 S. Bayshore
    Drive, Miami, Florida 33133 (Address
    of Principal Executive Offices, Including Zip
    Code)
  Registrants telephone number, including area code:
 (305) 856-3200
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, par value $0.001
    per share

NASDAQ Stock Market
    LLC(Title of Class)

(Name of Exchange on Which
    Registered)   Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large Accelerated Filer
    o      Accelerated
    Filer þ      
    Non-Accelerated Filer o
  Rule 12b-2 o þ
  The aggregate market value of the registrants common
    stock held by non-affiliates of the registrant on June 13,
    2007 was approximately $268,028,937, based on the closing market
    price of the registrants common stock as reported on the
    Nasdaq Global Market. For purposes of the foregoing computation,
    all executive officers, directors and five percent beneficial
    owners of the registrant are deemed to be affiliates. Such
    determination should not be deemed to be an admission that such
    executive officers, directors or five percent beneficial owners
    are, in fact, affiliates of the registrant.
  The number of shares outstanding of the registrants
    common stock, par value $0.001 per share, as of May 31,
    2007 was 58,355,968.
  DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 



TABLE OF
    CONTENTS
  PagePart I


2Item 1.


Business


2Item 1A.


Risk
    Factors


14Item 1B.


Unresolved Staff
    Comments


22Item 2.


Properties


23Item 3.


Legal
    Proceedings


23Item 4.


Submission of
    Matters to a Vote of Security Holders


24Part II


24Item 5.


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


24Item 6.


Selected Financial
    Data


27Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


29Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


44Item 8.


Financial
    Statements and Supplementary Data


45Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


46Item 9A.


Controls and
    Procedures


46Item 9B.


Other
    Information


47Part III


47Item 10.


Directors,
    Executive Officers and Corporate Governance


47Item 11.


Executive
    Compensation


47Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


48Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


48Item 14.


Principal
    Accountant Fees and Services


49Part IV


50Item 15.


Exhibits and
    Financial Statement Schedules


50Signatures


55Ex-21.1 Subsidiaries of the CompanyEx-23.1 Consent of PricewaterhouseCoopers LLPEx-23.2 Consent of KPMG LLPEx-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32.1 Section 906 Certification of CEOEx-32.2 Section 906 Certification of CFO   1




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PART I  ITEM 1.  BUSINESS.
  The words Terremark, we,
    our, ours, and us refer to
    Terremark Worldwide, Inc. All statements in this discussion that
    are not historical are forward-looking statements within the
    meaning of Section 21E of the Securities Exchange Act of
    1934, as amended, including statements regarding
    Terremarks expectations, beliefs,
    hopes, intentions,
    strategies or the like. Such statements are based on
    managements current expectations and are subject to a
    number of factors and uncertainties that could cause actual
    results to differ materially from those described in the
    forward-looking statements. Terremark cautions investors that
    actual results or business condition may differ materially from
    those projected or suggested in such forward-looking statements
    as a result of various factors, including, but not limited to,
    the risk factors discussed in this Annual Report on
    Form 10-K.
    Terremark expressly disclaims any obligation or undertaking to
    release publicly any updates or revisions to any forward-looking
    statements contained herein to reflect any change in
    Terremarks expectations with regard thereto or any change
    in events, conditions, or circumstances on which any such
    statements are based.
  Recent
    Events
    
    On January 5, 2007, we secured financing of
    $27.25 million from Credit Suisse to partially fund
    previously announced expansion plans. The financing consisted of
    the issuance of (i) $10.0 million in aggregate
    principal amount of our Senior Subordinated Secured Notes due
    June 30, 2009 (the Series A Notes) to Credit
    Suisse, Cayman Islands Branch, (ii) $4.0 million in
    aggregate principal amount of our 0.5% Senior Subordinated
    Convertible Notes due June 30, 2009 to Credit Suisse,
    International (the Series B Notes) issued
    pursuant to an Indenture between us and The Bank of New York
    Trust Company, N.A., as trustee (the Indenture)
    and (iii) a capital lease facility commitment letter with
    Credit Suisse for lease financing in the amount of up to
    $13.25 million (the Lease Financing Commitment)
    for certain specified properties. The proceeds from this
    financing were sufficient to allow us to obtain the use of two
    properties, in Silicon Valley and Washington D.C. areas, and
    begin signing customer contracts for these new facilities. In
    addition, a portion of the proceeds will be used to build-out
    the remaining 10,000 square feet at our current Silicon
    Valley facility.
    On February 14, 2007, we drew down $4.4 million on the
    $13.25 million Lease Financing Commitment to acquire land
    in Washington D.C. and begin the build-out of a new facility.
    On March 28, 2007, we completed an underwritten public
    offering of 11,000,000 shares of our common stock. In April
    2007, we sold and issued an additional 608,500 shares pursuant
    to the underwriters exercise of their over-allotment
    option. After deducting underwriting discounts and commissions
    and estimated offering expenses, we received net proceeds of
    approximately $87.2 million.
    On May 2, 2007, we completed a private exchange offer with
    a limited number of holders for $57.2 million aggregate
    principal amount of its outstanding 9% Senior Convertible
    Notes due 2009 (the Outstanding Notes) in exchange
    for an equal aggregate principal amount of the Companys
    newly issued 6.625% Senior Convertible Notes due 2013 (the
    New Notes). After completion of the private exchange
    offer, $29.1 million aggregate principal amount of the
    Outstanding Notes would remain outstanding. We also announced
    our intention to complete a public exchange offer to the
    remaining holders of its Outstanding Notes to exchange any and
    all of their Outstanding Notes for an equal aggregate principal
    amount of New Notes.
    On May 14, 2007, we began trading on the NASDAQ Global
    market under the symbol TMRK.
    On May 29, 2007, we acquired privately-held Data Return,
    LLC (Data Return), a leading provider of
    enterprise-class technology hosting solutions, from Saratoga
    Partners, for an aggregate purchase price of 2




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$85.0 million, subject to adjustment, which is comprised of
    $70.0 million in cash and $15.0 million of our common
    stock. The acquisition of Data Returns technology,
    customers and team of employees complements our existing team
    and service delivery platforms, and, we believe, better
    positions us to capture the robust market demand we expect for
    virtualized IT solutions. The addition of Data Returns
    innovative virtualized hosting and service delivery platforms
    are a strategic fit with our network rich colocation and managed
    service business and should allow us to realize significant
    synergies. Some of the strategic value points are:  
    Accelerates growth of the managed hosting business in the
    U.S. market by adding significant enterprise-class hosting
    capabilities to our existing service offerings
    In Gartners most recent North American Web Hosting
    Industry report, Data Return was positioned in the Leaders
    Quadrant
    Complements our successful acquisition of Dedigate, N.V., in 2005
    Over 280 dedicated team members focused on delivering enterprise
    class hosting services
    Utility computing platform Infinistructure is highly scalable
    and can be easily deployed in new locations
    Proprietary service delivery platform
    digitalOps®
    can be leveraged across all of Terremarks managed services
    Robust utility computing and disaster recovery capabilities
    Highly knowledgeable and experienced solution oriented sales
    force with a national footprint  
    On June 12, 2007, we announced that we had secured
    commitment letters from Credit Suisse and Tennenbaum Capital
    Partners for a total of $250.0 million. The first term loan
    is a $150.0 million commitment from Credit Suisse secured
    by a first priority lien on substantially all of our assets and
    the second term loan is a $100.0 million commitment from
    Tennenbaum Capital Partners secured by a second priority lien on
    substantially all of our assets. The financing is subject to
    customary conditions, including the completion of definitive
    documentation for the facilities.  Our
    Business
      
    space to house equipment and network facilities in immediate
    proximity to Internet and communications networks;
    the platform to exchange telecommunications and Internet traffic
    and access to network-based services; and
    related professional and managed services such as our network
    operations center, outsourced storage, dedicated hosting and
    remote monitoring.   3




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(305) 856-3200.
  Industry
        Value
    Proposition
    
    State-of-the-art facilities.  Our facilities
    are constructed in order to meet high standards of security and
    provide 24x7 monitoring,
    on-site
    technical support and service level agreements that guarantee
    100% uptime for power and cooling capabilities. Additionally,
    our Miami facility is designed to withstand a category 5
    hurricane and houses equipment only above the first floor in
    order to prevent flood damage. 4




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
    Carrier-neutrality.  Carriers and other
    customers are willing to locate their equipment within our
    facility and use our professional managed services because we
    neither discriminate against nor give preference to any
    individual or group of customers.
    Connectivity.  Our customers can access any of
    the more than 90 network providers present at our facilities.
    Zero-Mile
    Access.Because our facilities provide
    carrier-grade colocation space directly adjacent to the point at
    which the traffic is exchanged, there is effectively
    zero distance between the peering point and
    customers equipment, which reduces costs and points of
    failure and increases efficiency.
    Outsourcing of Services.  Because of our
    teams expertise, our customers find it more cost effective
    to contract us to design, deploy, operate, monitor and manage
    their equipment and networks at our facilities than to hire
    dedicated staff to perform those functions.
    Lower Costs, Increased Efficiency and Quality of
    Service.  The combination of these attributes
    helps our customers reduce their total costs by eliminating
    local loop charges to connect their facility to the peering
    point, backhaul charges to and from connecting points, and the
    cost of redundancy to mitigate risks associated with increased
    points of failure along these routes.  Our
    Strategy
    Deepen our relationships with existing
    customers.
  Penetrate new sectors.
  Establish insertion points for network-based
    services.
  Maintain and establish a presence in strategic
    locations.
 5




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Customers
    Content andGovernment and Federal Information

Carriers and Network

ServiceTechnology Service Providers

Providers

Providers

EnterprisesBlackbird Technologies

AT&T

Google

Bacardi USACity of Coral Gables, Florida

Global Crossing

Internap

CitrixMiami-Dade County, Florida

Latin America

NTT/Verio

Corporación Andina deFomentoSRA International

Nautilus*

VeriSign

Florida International UniversityUnited States Southern Command

Level 3 Communications



IntradoSprint Communications



Jackson Memorial HospitalT-Systems**



Steiner LeisureCBS Digital MediaFacebookShutterflyIDT     *
    
    A business unit of Telecom Italia.**
    
    A business unit of Deutsche Telecom.    Products
    and Services
    Colocation
    Services:
    Exchange
    Point Service:
   6




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
    Ethernet Exchange Service    
    Optical Exchange Service    
    Muxing and De-muxing Services    
    International Gateway Services    Managed
    and Professional Services:
    
    Network Operations Center Outsourcing  24-hour
  
    Managed Router Service    
    Managed Storage Service   7




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
    Managed Optical Extension Service    
    Advanced Network Monitoring Services    
    Professional Outsourced Services    
    Installation Services    
    Remote Hands and Smart Hands Service    
    Dedicated Managed Hosting  e-commerce
  
    Secure Information Services    Sales and
    Marketing
    Government and Federal Information Technology Service
    Providers.
 8




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Commercial.
    Marketing.
  Competition
      Internet data centers operated by established U.S., Brazilian
    and Spanish communications carriers such as AT&T, Embratel
    and Telefonica.
  U.S. Internet Exchanges such as MAE West and carrier
    operated IXs. 24-hour
  Vertically integrated web site hosting companies, colocation
    companies and Internet service providers such as Navisite and
    Savvis.
 9




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Neutral colocation and Internet exchange services companies
    such as Switch and Data and Equinix.
  Employees
        Name

Age

Principal PositionManuel D. Medina


54


Chairman of the Board, President
    and
    Chief Executive OfficerJoseph R. Wright, Jr


69


Vice Chairman of the BoardGuillermo Amore


68


DirectorTimothy Elwes


71


DirectorAntonio S. Fernandez


67


DirectorArthur L. Money


67


DirectorMarvin S. Rosen


65


DirectorMiguel J. Rosenfeld


57


DirectorRodolfo A. Ruiz


58


DirectorJamie Dos Santos


46


Chief Marketing OfficerJohn Neville


48


Senior Vice
    President  SalesJose A. Segrera


36


Chief Financial OfficerMarvin Wheeler


53


Chief Operations OfficerAdam T. Smith


35


Chief Legal Officer   Manuel D. Medina
  Joseph R. Wright, Jr.
 10




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Guillermo Amore
  Timothy Elwes
  Antonio S. Fernandez
  Arthur L. Money
  Marvin S. Rosen
  Miguel J. Rosenfeld
 11




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Rodolfo A. Ruiz
  Jamie Dos Santos
  John Neville
  Jose A. Segrera
  Marvin Wheeler
  Adam T. Smith
 12




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Where You
    Can Find Additional Information
  1-800-SEC-0330 http://www.sec.gov. http://www.terremark.com Form 10-K.
 13




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ITEM 1A.
    RISK
    FACTORS.    We
    have a history of losses, expect future losses and may not
    achieve or sustain profitability.
    We may
    not be able to compete successfully against current and future
    competitors.
      We
    anticipate that an increasing portion of our revenues will be
    from contracts with agencies of the United States government,
    and uncertainties in government contracts could adversely affect
    our business.
   14




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Acquisitions
    may result in disruptions to our business or distractions of our
    management due to difficulties in integrating acquired personnel
    and operations, and these integrations may not proceed as
    planned.
    
    difficulty integrating acquired technologies, products,
    services, operations and personnel with the existing businesses;
    difficulty maintaining relationships with important third
    parties, including those relating to marketing alliances and
    providing preferred partner status and favorable pricing;
    diversion of managements attention in connection with both
    negotiating the acquisitions and integrating the businesses;
    strain on managerial and operational resources as management
    tries to oversee larger operations;
    inability to retain and motivate management and other key
    personnel of the acquired businesses;
    exposure to unforeseen liabilities of acquired companies;
    potential costly and time-consuming litigation, including
    stockholder lawsuits;
    potential issuance of securities to equity holders of the
    Company being acquired with rights that are superior to the
    rights of holders of our common stock, or which may have a
    dilutive effect on our common stockholders;
    the need to incur additional debt or use cash; and
    the requirement to record potentially significant additional
    future operating costs for the amortization of intangible assets.     15




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We
    derive a significant portion of our revenues from a few clients;
    accordingly, a reduction in our clients demand for our
    services or the loss of clients could impair our financial
    performance.
    A
    failure to meet customer specifications or expectations could
    result in lost revenues, increased expenses, negative publicity,
    claims for damages and harm to our reputation and cause demand
    for our services to decline.
    
    delayed or lost revenue;
    requirements to provide additional services to a customer at
    reduced charges or no charge;
    negative publicity about us, which could adversely affect our
    ability to attract or retain customers; and
    claims by customers for substantial damages against us,
    regardless of our responsibility for the failure, which may not
    be covered by insurance policies and which may not be limited by
    contractual terms of our engagement.  Our
    ability to successfully market our services could be
    substantially impaired if we are unable to deploy new
    infrastructure systems and applications or if new infrastructure
    systems and applications deployed by us prove to be unreliable,
    defective or incompatible.
    Any
    interruptions in, or degradation of, our private transit
    Internet connections could result in the loss of customers or
    hinder our ability to attract new customers.
   16




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Our
    network infrastructure could fail, which would impair our
    ability to provide guaranteed levels of service and could result
    in significant operating losses.
    
    require us to spend substantial amounts of money to replace
    equipment or facilities;
    entitle customers to claim service credits or seek damages for
    losses under our service level guarantees;
    cause customers to seek alternate providers; or
    impede our ability to attract new customers, retain current
    customers or enter into additional strategic relationships.  Our
    dependence on third parties increases the risk that we will not
    be able to meet our customers needs for software, systems
    and services on a timely or cost-effective basis, which could
    result in the loss of customers.
    We
    could be subject to increased operating costs, as well as
    claims, litigation or other potential liability, in connection
    with risks associated with Internet security and the security of
    our systems.
  e-commerce
    We may
    be subject to legal claims in connection with the information
    disseminated through our network, which could divert
    managements attention and require us to expend significant
    financial resources.
   17




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e-mails
  We may
    become subject to burdensome government regulation and legal
    uncertainties that could substantially harm our business or
    expose us to unanticipated liabilities.
    Difficulties
    presented by international economic, political, legal,
    accounting and business conditions could harm our business in
    international markets.
    
    unexpected changes in regulatory, tax and political environments;
    longer payment cycles and problems collecting accounts
    receivable;
    fluctuations in currency exchange rates;
    our ability to secure and maintain the necessary physical and
    telecommunications infrastructure;
    challenges in staffing and managing foreign operations; and
    laws and regulations on content distributed over the Internet
    that are more restrictive than those currently in place in the
    United States.    We
    have significant debt service obligations which will require the
    use of a substantial portion of our available
    cash.
   18




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
    general economic and capital markets conditions, and in
    particular the non-investment grade debt market;
    conditions in the Internet infrastructure market;
    credit availability from banks or other lenders;
    investor confidence in the telecommunications industry generally
    and our company specifically; and
    the success of our facilities    Our
    mortgage loan with Citigroup, Senior Secured Notes, Senior
    Convertible Notes, Series A Notes and Series B Notes
    contain numerous restrictive covenants.
    
    incur more debt;
    pay dividends, redeem or repurchase our stock or make other
    distributions;
    make acquisitions or investments;
    enter into transactions with affiliates;
    merge or consolidate with others;
    dispose of assets or use asset sale proceeds;
    create liens on our assets; and
    extend credit.   19




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Our
    substantial leverage and indebtedness could adversely affect our
    financial condition, limit our growth and prevent us from
    fulfilling our debt obligations.
    
    limit our ability to obtain additional financing to fund our
    growth strategy, working capital, capital expenditures, debt
    service requirements or other purposes;
    limit our ability to use operating cash flow in other areas of
    our business because we must dedicate a substantial portion of
    these funds to make principal payments and fund debt service
    requirements;
    cause us to be unable to satisfy our obligations under our
    existing or new debt agreements;
    make us more vulnerable to adverse general economic and industry
    conditions;
    limit our ability to compete with others who are not as highly
    leveraged as we are; and
    limit our flexibility in planning for, or reacting to, changes
    in our business, industry and market conditions.  and/or
  If our
    financial condition deteriorates, we may be delisted by the
    NASDAQ and our stockholders could find it difficult to sell our
    common stock.
    
    our financial condition and operating results appear to be
    unsatisfactory;
    we have sustained losses that are so substantial in relation to
    our overall operations or our existing financial condition has
    become so impaired that it appears questionable whether we will
    be able to continue operations
    and/or meet
    our obligations as they mature.    Our
    business could be harmed by prolonged electrical power outages
    or shortages, or increased costs of energy.
   20




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We are
    dependent on key personnel and the loss of these key personnel
    could have a material adverse effect on our
    success.
    We may encounter difficulties implementing our expansion
    plan.
    
    identify and obtain the use of locations in which we believe
    there is sufficient demand for our services;
    generate sufficient cash flow from operations or through
    additional debt or equity financings to support these expansion
    plans;
    hire, train and retain sufficient additional financial reporting
    management, operational and technical employees; and
    install and implement new financial and other systems,
    procedures and controls to support this expansion plan with
    minimal delays.    Risk
    Factors Related to Our Common Stock
  Our
    stock price may be volatile, and you could lose all or part of
    your investment.
    
    actual or anticipated variations in our quarterly and annual
    results of operations;
    changes in market valuations of companies in our industry;
    changes in expectations of future financial performance or
    changes in estimates of securities analysts;
    fluctuations in stock market prices and volumes;
    future issuances of common stock or other securities;
    the addition or departure of key personnel; and
    announcements by us or our competitors of acquisitions,
    investments or strategic alliances. 21




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We
    expect that the price of our common stock will be significantly
    affected by the availability of shares for sale in the
    market.
    
    6,900,000 shares of our common stock reserved for issuance
    upon conversion of our Senior Convertible Notes;
    492,000 shares of our common stock reserved for issuance
    upon conversion of our Series B Notes;
    1,078,000 shares of our common stock reserved for issuance
    upon conversion of our Series I convertible preferred stock;
    2,437,239 shares of our common stock issuable upon exercise
    of options;
    532,800 shares of our nonvested stock; and
    2,545,766 shares of our common stock issuable upon exercise
    of warrants.    Our
    common shares are thinly traded and, therefore, relatively
    illiquid.
    Existing
    stockholders interest in us may be diluted by additional
    issuances of equity securities.
    We do
    not expect to pay dividends on our common stock, and investors
    will be able to receive cash in respect of the shares of common
    stock only upon the sale of the shares.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.   22




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ITEM 2.
    PROPERTIES.    Lease Expires(reflecting

Areaall Options)

(Square


AnnualDescription

Location

(M/Yr)

Feet)


RentNAP of the Americas Facility

Miami, Florida

Owned


750,000


N/APrincipal executive offices

Miami, Florida

March 2008


17,900


$604,000(1)Hewlett Packard data center

Sao Paulo, Brazil

October 2021


5,300


$51,000Colocation Facility

Santa Clara,

September 2020


40,000


$1,600,000(2)CaliforniaData Center

Herndon, Virginia

February 2015


18,600


$204,000 - $264,000(1)(3)NAP of the Americas- Madrid

Madrid, Spain

December 2015


10,550


$1,714,000(4)Data Center

London, England

October 2007


255
(5)

$132,000Data Center

Frankfurt, Germany

March 2009


540
(5)

$130,000Data Center

Gent, Belgium

October 2007


323


$80,100February 2008


226


$98,000July 2009


505


$82,800Data Center

Amsterdam, The

December 2008


387


$185,000Netherlands

January 2008


1,473


$291,100December 2009


199


$72,800November 2008


18


$115,200Data Center

Hong Kong, China

July 2008


1,155


$144,000Data Center

Singapore

July 2008


260


$82,000     (1)
    
    We are also responsible for our share of common area maintenance
    expenses and real estate taxes.(2)
    
    We are also responsible for real estate taxes and property and
    casualty insurance expenses aggregating approximately $46,000
    annually.(3)
    
    Annual rent gradually increases with each year of the term and
    equals $264,000 during the year in which the lease expires.(4)
    
    Annual rent is exclusive of value added taxes. The lessor is
    Global Switch Property Madrid, S.I.(5)
    
    We have an option to lease an additional 500 square feet at
    the same base rent.  ITEM 3.
    LEGAL
    PROCEEDINGS.  Rule 10b-5
 23




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES.  Common
    Stock and Preferred Stock Information
    Form 10-K
    
    100,000,000 shares of common stock, par value $0.001 per
    share; and
    10,000,000 shares of preferred stock, par value $0.001 per
    share, which are issuable in series on terms to be determined by
    our board of directors, of which 600 shares are designated
    as series I convertible preferred stock.    
    58,355,968 shares of our common stock were outstanding;
    323 shares of our series I convertible preferred stock
    were outstanding. Each share of series I convertible
    preferred stock may be converted into 3,333 shares of our
    common stock.      PricesFiscal Year 2007 Quarter Ended

High


LowJune 30, 2006

$
8.68


$
3.26September 30, 2006


6.10



3.60December 31, 2006


7.20



4.76March 31, 2007


9.15



6.41   24




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PricesFiscal Year 2006 Quarter Ended

High


LowJune 30, 2005

$
8.00


$
5.60September 30, 2005


7.56



3.97December 31, 2005


5.04



2.60March 31, 2006


8.60



4.35   Performance
    Graph
    
  3/02




3/03




3/04




3/05




3/06




3/07Terremark Worldwide,
    Inc.



100.00




80.00




160.00




144.44




188.89




179.11Russell 2000



100.00




73.04




119.66




126.13




158.73




168.11Goldman Sachs
    Internet



100.00




122.94




201.78




216.45




265.61




277.78     Dividend
    Policy
   25




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##### Table of Contents



Recent
    Sales of Unregistered Securities
      non-United
  Equity
    Compensation Plan Information
    Number of Securities


Weighted Averageto be Issued Upon


Exercise Price of


Number of SecuritiesExercise of Outstanding


Outstanding Options,


Available for FutureOptions, Nonvested Stock,


Nonvested Stock,


Issuance Under EquityPlan Category

Warrants and Rights


Warrants and Rights


Compensation PlansEquity compensation plans approved
    by security holders


5,403,015


$
8.79



29,000Equity compensation plans not
    approved by security holders


142,500


$




  26




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA.    Twelve Months Ended March 31,2007


2006


2005


2004


2003(Dollars in thousands except per share data)Results of
    Operations:Revenues(1)

$
100,948


$
62,529


$
46,818


$
17,034


$
11,033Real estate services










1,330



1,179



3,661Total revenues


100,948



62,529



48,148



18,213



14,694Cost of revenues


56,902



38,824



36,310



16,413



11,235Construction contract expenses










809



918



2,968Other expenses


58,999



60,854



20,888



23,373



41,718Total expenses


115,901



99,678



58,007



40,704



55,921Net loss


(14,953
)


(37,149
)


(9,859
)


(22,491
)


(41,227
)Non-cash preferred dividend


(676
)


(727
)


(915
)


(1,158
)


(160
)Net loss attributable to common
    stockholders

$
(15,629
)

$
(37,876
)

$
(10,774
)

$
(23,649
)

$
(41,387
)Net loss per common
    share  basic

$
(0.35
)

$
(0.88
)

$
(0.31
)

$
(0.78
)

$
(1.76
)Net loss per common
    share  diluted

$
(0.36
)

$
(0.88
)

$
(0.40
)

$
(0.78
)

$
(1.76
)   As of March 31,2007


2006


2005


2004


2003(Dollars in thousands)Financial
    condition:(2)Property and equipment, net

$
137,937


$
129,893


$
123,406


$
53,898


$
54,483Total assets


309,646



204,716



208,906



77,433



69,602Long term obligations(3)(4)


184,510



163,967



149,734



78,525



74,524Stockholders equity (deficit)


89,499



13,836



40,176



(22,720
)


(46,461
)     (1)
    
    Amount includes contract termination fees for the years ended
    March 31, 2004 and 2003 of $422 and $1,095, respectively.(2)
    
    See Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources.(3)
    
    Long term obligations include mortgage payable less current
    portion, convertible debt, estimated fair value of derivatives
    embedded within convertible debt, deferred rent, deferred
    revenue, unearned interest under capital lease obligations,
    capital lease obligations less current portion and notes payable
    less current portion.(4)
    
    Long term obligations as of March 31, 2005, 2004 and 2003
    include approximately $600 in redeemable convertible preferred
    stock plus accrued dividends. 27




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##### Table of Contents



Three Months EndedMarch 31,


December 31,


September 30,


June 30,2007


2006


2006


2006(Dollars in thousands except per share data)Revenues

$
30,692


$
24,669


$
24,184


$
21,403Cost of revenues


17,470



12,973



14,774



11,612Other expenses


17,484



22,472



18,853



263Total expenses


34,954



35,445



33,627



11,875Net income (loss)


(4,262
)


(10,776
)


(9,443
)


9,528Non-cash preferred dividend


(189
)


(162
)


(162
)


(164
)Earnings allocation to
    participating stockholders














(1,458
)Net income (loss) attributable to
    common stockholders

$
(4,451
)

$
(10,938
)

$
(9,605
)

$
7,906Net income (loss) per common
    share  basic

$
(0.10
)

$
(0.25
)

$
(0.22
)

$
0.18Net income (loss) per common
    share  diluted

$
(0.10
)

$
(0.25
)

$
(0.22
)

$
(0.05
)   March 31,


December 31,


September 30,


June 30,2006


2005


2005


2005(Dollars in thousands except per share data)Revenues

$
19,015


$
18,882


$
13,961


$
10,671Cost of revenues


11,572



11,522



8,718



7,012Other expenses


29,285



15,202



2,577



13,791Total expenses


40,857



26,724



11,295



20,803Net income (loss)


(21,842
)


(7,842
)


2,666



(10,132
)Non-cash preferred dividend


(170
)


(185
)


(185
)


(188
)Earnings allocation to
    participating stockholders










(397
)


Net income (loss) attributable to
    common stockholders

$
(22,012
)

$
(8,027
)

$
2,084


$
(10,320
)Net income (loss) per common
    share  basic

$
(0.50
)

$
(0.18
)

$
0.05


$
(0.25
)Net income (loss) per common
    share  diluted

$
(0.50
)

$
(0.18
)

$
(0.09
)

$
(0.25
)  28




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.  This report contains forward-looking statements
    within the meaning of the Private Securities Litigation Reform
    Act of 1995 based on our current expectations, assumptions, and
    estimates about us and our industry. These forward-looking
    statements involve risks and uncertainties. Words such as
    believe, anticipate,
    estimate, expect, intend,
    plan, will, may,  and other
    similar expressions identify forward-looking statements. In
    addition, any statements that refer to expectations, projections
    or other characterizations of future events or circumstances are
    forward-looking statements. All statements other than statements
    of historical facts, including, among others, statements
    regarding our future financial position, business strategy,
    projected levels of growth, projected costs and projected
    financing needs, are forward-looking statements. Our actual
    results could differ materially from those anticipated in such
    forward-looking statements as a result of several important
    factors including, without limitation, a history of losses,
    competitive factors, uncertainties inherent in government
    contracting, concentration of business with a small number of
    clients, the ability to service debt, substantial leverage,
    material weaknesses in our internal controls and our disclosure
    controls, energy costs, the interest rate environment, one-time
    events and other factors more fully described in Risk
    Factors and elsewhere in this report. The forward-looking
    statements made in this report relate only to events as of the
    date on which the statements are made. Because forward-looking
    statements are inherently subject to risks and uncertainties,
    some of which cannot be predicted or quantified, you should not
    rely upon forward-looking statements as predictions of future
    events. Except as required by applicable law, including the
    securities laws of the United States, and the rules and
    regulations of the Securities and Exchange Commission, we do not
    plan and assume no obligation to publicly update or revise any
    forward-looking statements contained herein after the date of
    this report, whether as a result of any new information, future
    events or otherwise.
  Critical
    Accounting Policies and Estimates
      
    revenue recognition, profit recognition and allowance for bad
    debt;
    derivatives;
    accounting for income taxes;
    impairment of long-lived assets;
    share-based compensation; and
    goodwill.  Revenue
    Recognition, Profit Recognition and Allowance for Bad
    Debts
   29




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##### Table of Contents



No. 00-21,
        Derivatives
       30




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##### Table of Contents



Accounting
    for Income Taxes
    No. 05-8, (EITF 05-8) EITF 05-8
      Impairment
    of Long-Lived Assets
   31




---



##### Table of Contents



Share-Based
    Compensation
      Goodwill
     32




---



##### Table of Contents



Recent
    Accounting Pronouncements
    Results
    of Operations
  Results
    of Operations for the Year Ended March 31, 2007 as Compared
    to the Year Ended March 31, 2006.
  Revenue.
  For the YearEndedMarch 31,2007


2006U.S. Operations


84
%


88
%Outside U.S.


16
%


12
%100
%


100
%     For the Year Ended March 31,2007





2006Colocation

$
41,865,161



42
%

$
28,126,193



45
%Managed and professional services


43,742,937



43
%


25,951,843



42
%Exchange point services


9,031,100



9
%


6,308,708



10
%Equipment resales


6,258,268



6
%


2,136,349



3
%Other


50,715



0
%


6,189



0
%$
100,948,181



100
%

$
62,529,282



100
%     
    colocation services, such as licensing of space and provision of
    power;
    exchange point services, such as peering and cross connects;
    procurement and installation of equipment; and
    managed and professional services, such as network management,
    managed web hosting, outsourced network operating center
    services, network monitoring, procurement of connectivity,
    managed router services, secure information services, technical
    support and consulting.       33




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##### Table of Contents



Cost of Revenues.
    General and Administrative Expenses.
  Sales and Marketing Expenses.
  Depreciation and Amortization
    Expenses.
  Change in Fair Value of Derivatives Embedded within
    Convertible Debt.
 34




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##### Table of Contents



Interest Expense.
  Interest Income.
  Results
    of Operations for the Year Ended March 31, 2006 as Compared
    to the Year Ended March 31, 2005.
  Revenue.
  For the YearEndedMarch 31,2006


2005U.S. Operations


88
%


99
%Outside U.S.


12
%


1
%100
%


100
%Data center operations


100
%


97
%Construction contract and fee
    revenue


0
%


3
%100
%


100
%  35




---



##### Table of Contents



For the Year Ended March 31,2006





2005Colocation

$
28,126,193



45
%

$
21,402,860



61
%Managed and professional services


28,088,192



45
%


9,017,282



26
%Exchange point services


6,308,708



10
%


4,564,283



13
%Other


6,189



0
%


918



0
%$
62,529,282



100
%

$
34,985,343



100
%Technology infrastructure buildouts










11,832,745$
62,529,282






$
46,818,088     
    colocation services, such as licensing of space and provisioning
    of power;
    exchange point services, such as peering and cross
    connects; and
    managed and professional services, such as network management,
    managed web hosting, outsourced network operating center (NOC)
    services, network monitoring, procurement and installation of
    equipment and procurement of connectivity, managed router
    services, secure information services, technical support and
    consulting.            Construction Contracts and Fees.
 36




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##### Table of Contents



Cost of Revenues.
        Construction Contract Expenses.
  General and Administrative Expenses.
  Sales and Marketing Expenses.
 37




---



##### Table of Contents



Depreciation and Amortization
    Expenses.
  Impairment of Long-lived Assets.
  Change in Fair Value of Derivatives Embedded within
    Convertible Debt.
    Gain on Debt Restructuring and
    Conversion.
  Interest Expense.
  Interest Income.
  Net Loss.
  For the Year Ended March 31,2006


2005Data center operations

$
(37,149,174
)

$
(9,490,543
)Real estate services






(368,809
)$
(37,149,174
)

$
(9,859,352
)    38




---



##### Table of Contents



Liquidity
    and Capital Resources
    Sources
    and Uses of Cash
        Liquidity
     39




---



##### Table of Contents



Indebtedness
    Mortgage
    Payable
    Senior
    Secured Notes
     40




---



##### Table of Contents



Series A and
    Series B Notes
  Senior
    Convertible Notes
        6.625% Senior Convertible
    Notes
  Series A
    and Series B Notes
   41




---



##### Table of Contents



Capital
    Lease Facility
       42




---



##### Table of Contents



6.625% Senior
    Convertible Notes
      Debt
    Covenants
        Guarantees
    and Commitments
    
    TECOTA files for bankruptcy or a petition in bankruptcy is filed
    against TECOTA with TECOTAs or Terremarks consent;
    Terremark pays a cash dividend or makes any other cash
    distribution on its capital stock (except with respect to its
    outstanding preferred stock); 43




---



##### Table of Contents




    Terremark makes any repayments of its outstanding debt other
    than the scheduled payments provided in the terms of the debt;
    Terremark pledges the collateral it has pledged to the lenders
    or pledges any of its existing cash balances as of
    December 31, 2004 as collateral for another loan; or
    Terremark repurchases any of its common stock.    
    Any fraud, misappropriation or misapplication of funds;
    any transfers of the collateral held by the lenders in violation
    of the Citigroup credit agreement;
    failure to maintain TECOTA as a single purpose
    entity;
    TECOTA obtaining additional financing in violation of the terms
    of the Citigroup credit agreement;
    intentional physical waste of TECOTAs assets that have
    been pledged to the lenders;
    breach of any representation, warranty or covenant provided by
    or applicable to TECOTA and Terremark which relates to
    environmental liability;
    improper application and use of security deposits received by
    TECOTA from tenants;
    forfeiture of the collateral pledged to the lenders as a result
    of criminal activity by TECOTA;
    attachment of liens on the collateral in violation of the terms
    of the Citigroup credit agreement;
    TECOTAs contesting or interfering with any foreclosure
    action or other action commenced by lenders to protect their
    rights under the Citigroup credit agreement (except to the
    extent TECOTA is successful in these efforts);
    any costs incurred by the lenders to enforce their rights under
    the Citigroup credit agreement; or
    Failure to pay assessments made against or to adequately insure
    the assets pledged to the lenders.      Capital Lease


Operating


Convertible


Mortgage


NotesObligations


Leases


Debt


Payable


Payable


Total2008

$
1,385,199


$
5,092,208


$
7,762,500


$
5,606,564


$
4,808,365


$
24,654,8362009


969,621



4,114,604



7,762,500



50,555,719



37,335,539



100,737,9832010


635,404



4,034,828



94,201,476







19,788,004



118,659,7122011


360,970



3,750,440















4,111,4102012


156,083



3,772,840















3,928,923Thereafter






27,451,466















27,451,466$
3,507,277


$
48,216,386


$
109,726,476


$
56,162,283


$
61,931,908


$
279,544,330   ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   44




---



##### Table of Contents



Estimated Fair Value ofPrice Per Share of Common Stock

Embedded Derivatives$6.00

$
10,331,017$8.00

$
16,617,424$10.00

$
23,250,740                 ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.  Form 10-K
 45




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE.  Form 10-Q Form 8-K
  ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d- Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial
    Reporting
  To the
    Shareholders of Terremark Worldwide, Inc.:
  Rules 13a-15(f) 15d-15(f)
       46




---



##### Table of Contents



page F-1.
  Changes
    in Internal Control Over Financial Reporting
    Limitations
    on Effectiveness
    ITEM 9B.
    OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.  Form 10-K
      ITEM 11.
    EXECUTIVE
    COMPENSATION.   47




---



##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.  Form 10-K
  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.               48




---



##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.   49




---



##### Table of Contents



PART IV ITEM 15.  EXHIBITS AND
    FINANCIAL STATEMENTS SCHEDULES.    Financial Statements
  
    Report of Independent Registered Certified Public Accounting
    Firm on the Financial Statements  KPMG LLP.
    Report of Independent Registered Certified Public Accounting
    Firm on Internal Control Over Financial Reporting 
    KPMG LLP.
    Report of Independent Registered Certified Public Accounting
    Firm on the Financial Statements 
    PricewaterhouseCoopers LLP.
    Consolidated Balance Sheets as of March 31, 2007 and 2006.
    Consolidated Statements of Operations for the Years Ended
    March 31, 2007, 2006 and 2005.
    Consolidated Statement of Changes in Stockholders Equity
    for the Three Year Period Ended March 31, 2007.
    Consolidated Statements of Cash Flows for the Years Ended
    March 31, 2007, 2006 and 2005.
    Notes to Consolidated Financial Statements.  Financial Statement Schedules
    Exhibits
  ExhibitNumber

Exhibit Description1
.1

Form of Underwriting Agreement
    related to the Companys offering of common stock on
    March 14, 2005 (previously filed as an exhibit to the
    Companys registration statement filed on February 3,
    2005).1
.2

Underwriting Agreement, dated
    March 22, 2007, by and among Terremark Worldwide, Inc. and
    Credit Suisse Securities (USA) LLC, as representative of the
    several underwriters named in Schedule A thereto
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on March 23, 2007).3
.1

Certificate of Merger of Terremark
    Holdings, Inc. with and into AmTec, Inc. (previously filed as an
    exhibit to the Companys Registration Statement on
    Form S-3
    filed on May 15, 2000).3
.2

Restated Certificate of
    Incorporation of the Company (previously filed as an exhibit to
    the Companys Registration Statement on
    Form S-3
    filed on May 15, 2000).3
.3

Certificate of Amendment to
    Certificate of Incorporation of the Company (previously filed as
    an exhibit to the Companys Registration Statement on
    Form S-1
    filed on December 21, 2004).3
.4

Restated Bylaws of the Company
    (previously filed as an exhibit to the Companys Quarterly
    Report on
    Form 10-Q
    filed on November 14, 2002).3
.5

Certificate of Designations of
    Preferences of Series H Convertible Preferred Stock of the
    Company (previously filed as exhibit 3.5 to the
    Companys Annual Report on
    Form 10-K
    filed on July 16, 2001).3
.6

Certificate of Designations of
    Preferences of Series I Convertible Preferred Stock of the
    Company (previously filed as an exhibit to the Companys
    Registration Statement on
    Form S-3/A
    filed on March 17, 2004).3
.8

Certificate of Amendment to
    Certificate of Incorporation of the Company (previously filed as
    an exhibit to the Companys current report on
    Form 8-K
    filed on May 18, 2005). 50




---



##### Table of Contents



ExhibitNumber

Exhibit Description4
.1

Specimen Stock Certificate
    (previously filed as exhibit to the Companys current
    report on
    Form 8-K
    filed on May 18, 2005).4
.4

Form of Warrant for the Purchase
    of Common Stock (previously filed as exhibit 4.1 to the
    Companys Current Report on
    Form 8-K
    filed on April 15, 2003).4
.5

Indenture dated June 14, 2004
    including form of 9% Senior Convertible Note due 2009
    (previously filed as an exhibit to the Companys Quarterly
    Report on
    Form 10-Q
    filed on August 9, 2004).10
.1

1995 Stock Option Plan (previously
    filed as part of the Companys Transition Report on
    Form 10-KSB
    for the transition period from October 1, 1994 to
    March 31, 1995).+10
.2

1996 Stock Option Plan (previously
    filed as part of the Companys Transition Report on
    Form 10-KSB
    for the transition period from October 1, 1994 to
    March 31, 1995).+10
.3

Form of Indemnification Agreement
    for directors and officers of the Company (previously filed as
    an exhibit to the Companys Registration Statement on
    Form S-3,
    as amended, filed on March 11, 2003).+#10
.4

Employment Agreement with Manuel
    Medina (previously filed as exhibit 10.6 to the
    Companys Annual Report on
    Form 10-K
    filed on July 16, 2001).+#10
.5

Amendment to Employment Agreement
    with Manuel Medina (previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    filed on November 14, 2001).+#10
.7

Net Premises Lease by and between
    Rainbow Property Management, LLC and Coloconnection, Inc.
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on April 15, 2003).10
.13

Non-qualified Stock Option
    Agreement with Brian K. Goodkind to purchase 127,821 shares
    of the Companys common stock (previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on August 14, 2003).+#10
.14

Non-qualified Stock Option
    Agreement with Brian K. Goodkind to purchase 140,680 shares
    of the Companys common stock (previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on August 14, 2003).+#10
.15

First Amendment to the
    Non-qualified Stock Option Agreement with Brian K. Goodkind to
    purchase 200,000 shares of the Companys common stock
    (previously filed as an exhibit to the Companys Quarterly
    Report on
    Form 10-Q
    filed on August 14, 2003).+#10
.16

First Amendment to the
    Non-qualified Stock Option Agreement with Brian K. Goodkind to
    purchase 115,000 shares of the Companys common stock
    (previously filed as an exhibit to the Companys Quarterly
    Report on
    Form 10-Q
    filed on August 14, 2003).+#10
.17

Amended and restated 2000 Stock
    Option Plan (previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-8
    filed on August 19, 2004).+10
.18

2000 Directors Stock
    Option Plan (previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-8
    filed on August 19, 2002).+10
.19

Agreement between Fundacão De
    Amparo A Pesquisa Do Estado De Sao Paulo  FAPESP and
    Terremark Latin America (Brazil) Ltda. (previously filed as an
    exhibit to the Companys Registration Statement on
    Form S-3/A
    filed on December 22, 2003).10
.20

Employment Agreement with Jose A.
    Segrera dated September 8, 2001 (previously filed as an
    exhibit to the Companys Annual Report on
    Form 10-K
    filed June 30, 2003).+#10
.23

Employment Agreement with Jamie
    Dos Santos dated November 1, 2002 (previously filed as an
    exhibit to the Companys Annual Report on
    Form 10-K
    filed June 14, 2004).+#10
.24

Employment Agreement with Marvin
    Wheeler dated November 1, 2002 (previously filed as an
    exhibit to the Companys Annual Report on
    Form 10-K
    filed June 14, 2004).+# 51




---



##### Table of Contents



ExhibitNumber

Exhibit Description10
.26

Loan Agreement dated as of
    December 31, 2004 (the Loan Agreement), by and
    among Technology Center of the Americas, LLC, as Borrower,
    Citigroup Global Markets Realty Corp., as Agent and each Lender
    signatory thereto (previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on January 6, 2005).10
.27

Form of Warrant Certificate of
    Terremark Worldwide, Inc. issued to Citigroup Global Markets
    Realty Corp. (previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on January 6, 2005).10
.28

Purchase Agreement dated as of
    December 31, 2004, among Terremark Worldwide, Inc., as
    Issuer, the guarantors named therein, FMP Agency Services, LLC,
    as agent, and each of the purchasers named therein (previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 6, 2005).10
.29

Security Agreement dated as of
    December 31, 2004, by Terremark Worldwide, Inc., as Issuer,
    the guarantors named therein and FMP Agency Services, LLC, as
    Agent (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on January 6, 2005).10
.30

Registration Rights Agreement
    dated as of December 31, 2004 among Terremark Worldwide,
    Inc. and Falcon Mezzanine Partners, LP, Stichting Pensioenfonds
    ABP and Stichting Pensioenfonds Voor De Gezondheid, Geestelijke
    En Maatschappelijke Belangen (the Purchasers)
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on January 6, 2005).10
.31

Form of Warrant Certificate of
    Terremark Worldwide, Inc. issued to the Purchasers (previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 6, 2005).10
.32

Form of Note of Terremark
    Worldwide, Inc. issued to the Purchasers (previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on January 6, 2005).10
.33

Guaranty of Nonrecourse
    Obligations executed by the Company in favor of Citigroup Global
    Markets Realty Corp., as agent, for the benefit of the lenders
    to the Loan Agreement (previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    filed on February 3, 2005).10
.34

Employment Agreement with John
    Neville dated April 18, 2005 (previously filed as an
    exhibit to the Companys Annual Report on
    Form 10-K
    filed June 29, 2005).+#10
.35

Dedigate Stock Purchase Agreement
    (previously filed as an exhibit to the Companys Quarter
    Report on
    Form 10-Q
    filed August 9, 2005).10
.36

Dedigate Registration Rights
    Agreement (previously filed as an exhibit to the Companys
    Quarter Report on
    Form 10-Q
    filed August 9, 2005).10
.37

2005 Executive Incentive
    Compensation Plan (previously filed as an exhibit to the
    Companys Definitive Proxy Statement relating to the
    Companys 2005 Annual Meeting of Stockholders).+10
.38

Amended and Restated Employment
    Letter Agreement between Terremark Worldwide, Inc. and Arthur J.
    Money (previously filed as an exhibit to the Companys
    Annual Report on Form 10-K filed on June 19, 2006).+#10
.39

Consulting Agreement, dated as of
    November 8, 2006, by and between Terremark Management
    Services, Inc. and Guillermo Amore (previously filed as an
    exhibit to the Companys Quarter Report on
    Form 10-Q
    filed on November 9, 2006).+#10
.40

First Amendment to Loan Agreement,
    dated as of October 31, 2006, by and among Technology
    Center of the Americas, LLC and Citigroup Global Markets Realty
    Corp. (previously filed as an exhibit to the Companys
    Quarterly Report on
    Form 10-Q
    filed on November 9, 2006).10
.41

Employment Agreement, dated
    November 8, 2006, by and between Terremark Worldwide, Inc.
    and Adam T. Smith (previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    filed on November 9, 2006).+# 52




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.42

Purchase Agreement dated as of
    January 5, 2007, by and among Terremark Worldwide, Inc., as
    issuer, the guarantors named therein, the agent named therein,
    and each of the purchasers named therein (previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on January 11, 2007).10
.43

Security Agreement dated as of
    January 5, 2007, by and among Terremark Worldwide, Inc., as
    issuer, the guarantors named therein and the agents named
    therein (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on January 11, 2007).10
.44

Registration Rights Agreement
    dated as of January 5, 2007 by and among Terremark
    Worldwide, Inc. and Credit Suisse International (previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 11, 2007).10
.45

Indenture dated as of
    January 5, 2007 by Terremark Worldwide, Inc. and Bank of
    New York Trust Company, N.A., as trustee (previously filed
    as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 11, 2007).10
.46

Amendment, Waiver and Consent
    dated January 5, 2007 to the Purchase Agreement dated as of
    December 31, 2004, by and among Terremark Worldwide, Inc.,
    as Issuer, the guarantors named therein, FMP Agency Services,
    LLC, as agent, and each of the purchasers named therein
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on January 11, 2007).10
.47

Subordination and Intercreditor
    Agreement dated as of January 5, 2007, by and among
    Terremark Worldwide, Inc., the subsidiary guarantors names
    therein, FMP Agency Services, LLC, as the senior creditors named
    therein, and Credit Suisse, Cayman Islands Branch, as
    subordinated agent to the subordinated creditors named therein
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on January 11, 2007).10
.48

Subordination and Intercreditor
    Agreement dated as of January 5, 2007, by and among TWW,
    the subsidiary guarantors names therein, FMP Agency Services,
    LLC, as the senior agent to the creditors named therein, and
    Credit Suisse, International, as subordinated agent and the
    subordinated agent named therein (previously filed as an exhibit
    to the Companys Current Report on
    Form 8-K
    filed on January 11, 2007).10
.49

Capital Lease Facility Commitment
    Letter by and between TWW and Credit Suisse Securities (USA) LLC
    and Credit Suisse, Cayman Islands Branch dated January 5,
    2007 (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on January 11, 2007).10
.50

Form of Note of Terremark
    Worldwide, Inc. issued to the Credit Suisse, Cayman Islands
    Branch (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on January 11, 2007).10
.51

Form of Note of Terremark
    Worldwide, Inc. issued to Credit Suisse, International
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on January 11, 2007).10
.52

Participation Agreement, dated as
    of February 15, 2007, by and among Culpeper Lessor
    2007-1 LLC,
    as Lessor, NAP of the Capital Region, LLC, as Lessee and
    Terremark Worldwide, Inc., as Guarantor (previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on February 20, 2007).10
.53

Lease Agreement, dated as of
    February 15, 2007, by and between Culpeper Lessor
    2007-1 LLC
    and NAP of the Capital Region, LLC (previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on February 20, 2007).10
.54

Guaranty, dated as of
    February 15, 2007 by Terremark Worldwide, Inc. in favor of
    Culpeper Lessor
    2007-1 LLC
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on February 20, 2007).10
.55

Lease Supplement, Memorandum of
    Lease Agreement and Remedies, dated as of February 15,
    2007, by and among Culpeper Lessor 2007-I LLC, as Lessor, NAP of
    the Capital Region, LLC, as Lessee and James W. DeBoer, as
    Trustee (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on February 20, 2007). 53




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.56

Appendix I to Participation
    Agreement, Lease Agreement and Other Operative
    Documents  Definitions and Interpretation (previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 20, 2007).10
.57

Indenture dated as of May 2,
    2007 by Terremark Worldwide, Inc. and Bank of New York
    Trust Company, N.A., as trustee (previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on May 4, 2007).10
.58

Interest Purchase Agreement, dated
    May 11, 2007, by and among the Company and the Sellers
    (previously filed as an exhibit to the Companys Current
    Report on
    Form 8-K
    filed on May 16, 2007).10
.59

Registration Rights Agreement,
    dated May 11, 2007, by and among the Company and the
    Sellers (previously filed as an exhibit to the Companys
    Current Report on
    Form 8-K
    filed on May 16, 2007).21
.1

Subsidiaries of the Company*23
.1

Consent of PricewaterhouseCoopers
    LLP*23
.2

Consent of KPMG LLP*31
.1

Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a)*31
.2

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a)*32
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*32
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*     *
    
    Filed herewith+
    
    Compensation Plan or Arrangement#
    
    Management Contract 54




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##### Table of Contents



SIGNATURES     TERREMARK WORLDWIDE, INC.
  By:
    /s/  MANUEL
    D. MEDINA  Chairman of the Board, President and
    Chief Executive Officer
    (Principal Executive Officer)
    By:
    /s/  JOSE
    A. SEGRERA  Executive Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)
      Signature

Title

Date/s/  MANUEL
    D. MEDINAManuel
    D. Medina

Chairman of the Board, President
    and Chief Executive Officer
    (Principal Executive Officer)

June 15, 2007/s/  GUILLERMO
    AMOREGuillermo
    Amore

Director

June 15, 2007/s/  TIMOTHY
    ELWESTimothy
    Elwes

Director

June 15, 2007/s/  ANTONIO
    S. FERNANDEZAntonio
    S. Fernandez

Director

June 15, 2007/s/  HON.
    ARTHUR L.
    MONEYHon.
    Arthur L. Money

Director

June 15, 2007/s/  MARVIN
    S. ROSENMarvin
    S. Rosen

Director

June 15, 2007/s/  MIGUEL
    J. ROSENFELDMiguel
    J. Rosenfeld

Director

June 15, 2007/s/  RODOLFO
    A. RUIZRodolfo
    A. Ruiz

Director

June 15, 2007/s/  JOSEPH
    R. WRIGHT,
    JR.Joseph
    R. Wright, Jr.

Director

June 15, 2007/s/  JOSE
    A. SEGRERAJose
    A. Segrera

Executive Vice President
    and Chief Financial Officer
    (Principal Financial and Accounting Officer)

June 15, 2007  55




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##### Table of Contents



EXHIBIT
    SCHEDULE
  ExhibitNumber

Description21
.1

Subsidiaries of the Company*23
.1

Consent of PricewaterhouseCoopers
    LLP*23
.2

Consent of KPMG LLP*31
.1

Certification of Chief Executive
    Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002*31
.2

Certification of Chief Financial
    Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002*32
.1

Certification of Chief Executive
    Officer, pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002*32
.2

Certification of Chief Financial
    Officer, pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002*     *
    
    Filed herewith. 56




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                KPMG
    LLP
     F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              KPMG
    LLP
     F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING
    FIRM
      /s/
    PricewaterhouseCoopers
    LLP
  Form 10-K
 F-3




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  March 31,2007


2006ASSETSCurrent assets:Cash and cash equivalents

$
105,090,779


$
20,401,934Restricted cash


832,178



474,073Accounts receivable, net


23,586,471



10,445,114Current portion of capital lease
    receivable


2,616,175



2,507,029Prepaid expenses and other current
    assets


5,085,263



2,558,942Total current assets


137,210,866



36,387,092Restricted cash


1,602,963



3,814,842Property and equipment, net


137,936,954



129,893,318Debt issuance costs, net


5,898,355



6,963,232Other assets


5,439,708



3,202,329Capital lease receivable, net of
    current portion


1,885,646



4,004,449Intangibles, net


2,900,000



3,680,000Goodwill


16,771,189



16,771,189Total assets

$
309,645,681


$
204,716,451LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Current portion of debt and capital
    lease obligations

$
2,221,677


$
1,890,108Accounts payable and other current
    liabilities


29,752,638



21,469,317Interest payable


3,663,248



3,553,954Total current liabilities


35,637,563



26,913,379Mortgage payable, less current
    portion


45,531,211



45,795,552Convertible debt


69,914,065



59,102,452Derivatives embedded with
    convertible debt, at estimated fair value


16,796,865



24,960,750Notes payable


42,279,711



25,893,474Deferred rent and other liabilities


3,507,173



3,267,481Capital lease obligations, less
    current portion


1,738,314



852,311Deferred revenue


4,742,258



4,094,735Total liabilities


220,147,160



190,880,134Commitments and contingencies






Stockholders equity:Series I convertible preferred
    stock: $.001 par value, 323 and 339 shares issued and
    outstanding (liquidation value of approximately
    $8.3 million and $8.6 million)


1



1Common stock: $.001 par value,
    100,000,000 shares authorized; 55,813,129 and
    44,490,352 shares issued


55,813



44,490Common stock warrants


12,596,638



13,251,660Common stock options






582,004Additional paid-in capital


377,138,006



291,607,528Accumulated deficit


(300,197,561
)


(283,823,243
)Accumulated other comprehensive
    income (loss)


89,991



(317,756
)Treasury stock:  and
    865,202 shares






(7,220,637
)Note receivable


(184,367
)


(287,730
)Total stockholders
    equity


89,498,521



13,836,317Total liabilities and
    stockholders equity

$
309,645,681


$
204,716,451   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-4




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Year Ended March 31,2007


2006


2005RevenuesOperating revenues

$
100,948,181


$
62,529,282


$
34,985,343Technology infrastructure
    build-out revenues










11,832,745Construction contracts and fees










1,329,526Total revenues


100,948,181



62,529,282



48,147,614ExpensesCost of revenues, excluding
    depreciation


56,902,374



38,823,880



26,377,861Technology infrastructure build-out










9,711,022Construction contract expenses,
    excluding depreciation










809,372General and administrative


17,613,604



15,624,516



13,243,073Sales and marketing


11,440,703



8,548,049



5,402,886Depreciation and amortization


11,010,862



8,678,168



5,697,071Gain on sale of asset






(499,388
)


Impairment of long-lived assets
    and goodwill










813,073Operating expenses


96,967,543



71,175,225



62,054,358Income (loss) from operations


3,980,638



(8,645,943
)


(13,906,744
)Other income (expenses)Change in fair value of
    derivatives embedded within convertible debt


8,276,712



(4,761,000
)


15,283,500Gain on debt restructuring and
    extinguishment, net










3,420,956Interest expense


(28,214,563
)


(25,048,519
)


(15,493,610
)Interest income


1,256,295



1,742,609



666,286Other, net


(34,267
)


(436,321
)


170,260Total other income (expenses)


(18,715,823
)


(28,503,231
)


4,047,392Loss before income taxes


(14,735,185
)


(37,149,174
)


(9,859,352
)Income taxes


216,981







Net loss


(14,952,166
)


(37,149,174
)


(9,859,352
)Preferred dividend


(676,150
)


(726,889
)


(915,250
)Net loss attributable to common
    stockholders

$
(15,628,316
)

$
(37,876,063
)

$
(10,774,602
)Net loss per common share:Basic

$
(0.35
)

$
(0.88
)

$
(0.31
)Diluted

$
(0.36
)

$
(0.88
)

$
(0.40
)Weighted average common shares
    outstanding  basic


44,151,259



42,973,114



35,147,503Weighted average common shares
    outstanding  diluted


44,267,041



42,973,114



40,610,003   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-5




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
  AccumulatedPreferred


Preferred


Common Stock Par


Common


Common


Additional





OtherStock


Stock


Value $.001


Stock


Stock


Paid-In


Accumulated


Comprehensive


Treasury


NotesSeries G


Series I


Issued Shares


Amount


Warrants


Options


Capital


Deficit


Income (loss)


Stock


Receivable


TotalBalance at March 31,
    2004

$
1


$
1



31,122,748


$
31,123


$
3,642,006


$
1,545,375


$
213,876,605


$
(236,814,717
)

$



$



$
(5,000,000
)

$
(22,719,606
)Sale of common stock










6,301,778



6,302











42,587,192



















42,593,494Conversion of debt










5,524,927



5,525











28,030,500



















28,036,025Conversion of preferred stock


(1
)






281,089



281











1,448



















1,728Exercise of stock options










33,667



33











122,720



















122,753Warrants issued


















10,365,483



























10,365,483Exercise of warrants










35,162



35



(261,640
)






263,603



















1,998Warrants expired


















(146,145
)






146,145



















Preferred stock issuance costs


























(587,858
)


















(587,858
)Dividends on preferred stock


























(795,249
)


















(795,249
)Issuance of common stock in lieu of
    cash-preferred stock dividend










61,685



62











361,997



















362,059Stock tendered in payment of loan
    and retired










(773,735
)


(774
)










(4,951,133
)














5,000,000



48,093Net assets acquired from NAP Madrid






































(7,220,637
)






(7,220,637
)Forfeiture of stock options






















(7,115
)


7,115



















Other comprehensive loss














































Foreign currency translation
    adjustment


































(172,882
)










(172,882
)Net loss






























(9,859,352
)














(9,859,352
)Total comprehensive loss






























(9,859,352
)


(172,882
)










(10,032,234
)Balance at March 31,
    2005






1



42,587,321



42,587



13,599,704



1,538,260



279,063,085



(246,674,069
)


(172,882
)


(7,220,637
)






40,176,049Conversion of preferred stock










146,655



147











(147
)


















Exercise of stock options










113,456



113











185,869



















185,982Warrants issued for services


















45,226



























45,226Accrued dividends on preferred stock


























(726,889
)


















(726,889
)Exercise of warrants










15,000



15



(41,070
)






94,555



















53,500Forfeiture of stock options






















(956,256
)


956,256



















Warrants expired


















(352,200
)






352,200



















Stock-based compensation


























755,644



















755,644Issuance of common stock in lieu of
    cash-preferred stock dividend










27,920



28











173,355



















173,383Common stock issued in acquisition










1,600,000



1,600











10,753,600



















10,755,200Loans issued to employees, net of
    repayments










































(287,730
)


(287,730
)Other comprehensive loss














































Foreign currency translation
    adjustment


































(144,874
)










(144,874
)Net loss






























(37,149,174
)














(37,149,174
)Total comprehensive loss






























(37,149,174
)


(144,874
)










(37,294,048
)   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-6




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
  AccumulatedPreferred


Preferred


Common Stock Par


Common


Common


Additional





OtherStock


Stock


Value $.001


Stock


Stock


Paid-In


Accumulated


Comprehensive


Treasury


NotesSeries G


Series I


Issued Shares


Amount


Warrants


Options


Capital


Deficit


Income (loss)


Stock


Receivable


TotalBalance at March 31,
    2006






1



44,490,352



44,490



13,251,660



582,004



291,607,528



(283,823,243
)


(317,756
)


(7,220,637
)


(287,730
)


13,836,317Conversion of preferred stock










53,637



54











2,225



















2,279Exercise of stock options










57,655



58











292,732



















292,790Warrants issued in exchange for
    services


















92,988



























92,988Accrued dividends on preferred stock


























(676,029
)


















(676,029
)Expiration of warrants


















(748,010
)






748,010



















Stock tendered in payment of
    services










211,485



211











1,313,868



















1,314,079Amortization of nonvested stock


























298,150



















298,150Compensation expense


























193,357



















193,357Sale of treasury stock






























(1,422,152
)






7,220,637







5,798,485Issuance of common stock










11,000,000



11,000











82,776,161



















82,787,161Repayments of loans issued to
    employees










































128,320



128,320Adoption of SFAS No. 123R






















(582,004
)


582,004



















Other comprehensive loss:














































Foreign currency translation
    adjustment


































407,747







(24,957
)


382,790Net loss






























(14,952,166
)














(14,952,166
)Total comprehensive loss






























(14,952,166
)


407,747







(24,957
)


(14,569,376
)Balance at March 31,
    2007

$



$
1



55,813,129


$
55,813


$
12,596,638


$



$
377,138,006


$
(300,197,561
)

$
89,991


$



$
(184,367
)

$
89,498,521   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-7




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Year Ended March 31,2007


2006


2005Cash flows from operating
    activities:Net loss

$
(14,952,166
)

$
(37,149,174
)

$
(9,859,352
)Adjustments to reconcile net loss
    to net cash used in operating activitiesDepreciation and amortization of
    long-lived assets


11,010,862



8,678,168



5,697,071Change in estimated fair value of
    embedded derivatives


(8,276,712
)


4,761,000



(15,283,500
)Accretion on convertible debt and
    mortgage payable


8,327,261



6,769,030



3,303,168Amortization of beneficial
    conversion feature on issuance of convertible debentures










904,761Amortization of debt issue costs


2,042,999



1,814,480



1,402,010Provision for doubtful accounts


1,068,478



249,425



317,603Interest payment in kind on notes
    payable


1,625,440



823,039



Impairment of long-lived assets










813,073Share-based compensation


766,957



975,644



Gain on debt restructuring and
    extinguishment










(3,626,956
)Loss on disposal of property and
    equipment






174,747



Gain on sale of asset






(499,388
)


Other, net






(317,549
)


(44,425
)Warrants issued for services


92,988



45,226



202,550(Increase) decrease in:Accounts receivable


(14,099,965
)


(5,835,215
)


(1,129,348
)Capital lease receivable, net of
    unearned interest


1,866,867



1,365,713



(6,736,537
)Restricted cash


(13,341
)


1,754,981



(1,355,975
)Prepaid and other assets


(2,467,328
)


(2,879,615
)


(984,947
)Increase (decrease) in:Accounts payable and accrued
    expenses


5,929,436



1,624,057



(1,857,528
)Interest payable


230,932



1,152,406



1,001,428Deferred revenue


3,983,935



3,800,060



(691,798
)Construction payables










(820,146
)Deferred rent and other liabilities


408,351



770,295



4,387,360Net cash used in operating
    activities


(2,455,006
)


(11,922,670
)


(24,361,488
)Cash flows from investing
    activities:Restricted cash


2,199,945



1,782,956



(4,000,000
)Purchase of property and equipment


(18,463,769
)


(8,483,784
)


(10,508,261
)Acquisition of a majority interest
    in NAP Madrid










(2,537,627
)Acquisition of TECOTA, net of cash
    acquired










(73,936,374
)Proceeds from sale of assets






762,046



Acquisition of interest rate cap
    agreement










(100,000
)Acquisition of Dedigate, net of
    cash acquired






203,308



Issuance of notes receivable






(344,530
)


Repayments of notes receivable


103,363



56,800



50,000Net cash used in investing
    activities


(16,160,461
)


(6,023,204
)


(91,032,262
)Cash flows from financing
    activities:Increase in restricted cash










(1,681,401
)Proceeds from mortgage loan and
    warrants










49,000,000Issuance of senior secured notes
    and warrants










30,000,000Payment on loans and mortgage
    payable


(744,630
)


(4,938,566
)


(36,667,782
)Issuance of convertible debt


4,000,000







86,257,312Payments on convertible debt










(10,131,800
)Sale of treasury stock


5,798,485







Debt issuance costs


(966,412
)


(4,111
)


(6,007,370
)Proceeds from issuance of common
    stock


82,787,161







42,593,594Proceeds from sale of preferred
    stock










2,131,800Redemption of preferred stock


(646,693
)






Preferred stock issuance costs










(587,860
)Payments of preferred stock
    dividends


(673,533
)


(383,834
)


(433,253
)Issuance of senior subordinated
    secured notes


10,000,000







Proceeds from capital lease facility


4,403,573Other borrowings










850,262Payments under capital lease
    obligations


(946,429
)


(566,307
)


(433,712
)Proceeds from exercise of stock
    options and warrants


292,790



239,482



124,760Proceeds from exercise of preferred
    stock conversions










1,730Net cash provided by (used in)
    financing activities


103,304,312



(5,653,336
)


155,016,280Net increase(decrease) in cash


84,688,845



(23,599,210
)


39,622,530Cash and cash equivalents at
    beginning of period


20,401,934



44,001,144



4,378,614Cash and cash equivalents at end of
    period

$
105,090,779


$
20,401,934


$
44,001,144   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-8




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Business
    and Organization    2.
    Summary
    of Significant Accounting Policies    Reclassifications
    Use of
    estimates
    Revenue
    recognition, profit recognition and allowance for bad
    debts
    No. 00-21,
 F-9




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Derivatives
          Significant
    concentrations
   F-10




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share-based
    compensation
          For The Year Ended March 31,2006


2005Net loss attributable to common
    stockholders as reported

$
(37,876,063
)

$
(10,774,602
)Employee related share-based
    compensation expense included in net loss


975,644



Incremental share-based
    compensation if the fair value method had been adopted


(3,691,670
)


(2,112,914
)Pro forma net loss attributable to
    common stockholders

$
(40,592,089
)

$
(12,887,516
)Basic loss per common
    share  as reported

$
(0.88
)

$
(0.31
)Basic loss per common
    share  pro forma

$
(0.94
)

$
(0.37
)Diluted loss per common
    share  as reported

$
(0.88
)

$
(0.40
)Diluted loss per common
    share  pro forma

$
(0.94
)

$
(0.45
)   Stock
    warrants
   F-11




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Earnings
    per share
      Other
    comprehensive loss
      Cash
    and cash equivalents
    Restricted
    cash
   F-12




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property
    and equipment
    Goodwill
    and Impairment of long-lived assets and long-lived assets to be
    disposed of
        Rent
    expense
    Fair
    value of financial instruments
   F-13




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      March 31, 2007


March 31, 2006Book Value


Fair Value


Book Value


Fair ValueMortgage payable, including
    current portion

$
46,322,515


$
48,177,123


$
46,540,181


$
40,021,636Notes payable


42,279,711



50,551,949



25,893,474



22,756,178Convertible debt


69,914,065



86,771,627



59,102,452



73,059,204     Income
    taxes
    Beneficial
    conversion feature
    Recent
    Accounting Pronouncements
   F-14




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 06-3 No. 06-3). No. 06-3 No. 06-3 No. 06-3
        No. 06-7,
 F-15




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (EITF 06-7). 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock, (EITF 00-19). EITF 00-19 EITF 06-7, EITF 06-7 EITF 06-7. EITF 06-7
  No. EITF 00-19-2
    3.
    Acquisitions  five-day
 F-16




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash and cash equivalents

$
1,587,384Accounts receivable


977,150Other current assets


130,931Property and equipment


831,170Intangible assets, including
    goodwill


10,971,319Other assets


39,907Accounts payable and accrued
    expenses


(1,285,553
)Other liabilities


(1,113,345
)Net assets acquired

$
12,138,963     Gross Carrying


Amortization


AccumulatedAmount


Period


AmortizationIntangibles no longer amortized:Goodwill

$
6,771,319






$
Amortizable intangibles:Customer base


1,800,000



10 years



120,000Technology acquired


2,400,000



4 years



400,000     March 31,2006


2005Proforma revenues

$
65,143,150


$
54,111,614Proforma net loss

$
(36,995,700
)

$
(9,576,352
)Proforma net loss per common share:Basic

$
(0.85
)

$
(0.29
)Diluted

$
(0.85
)

$
(0.38
)   4.
    Restricted
    Cash  March 31,2007


2006Restricted cash consists of:Capital improvements reserve

$
3,253


$
2,217,044Security deposits under operating
    leases


1,599,710



1,597,798Escrow deposits under mortgage
    loan agreement


832,178



474,0732,435,141



4,288,915Less: current portion


(832,178
)


(474,073
)$
1,602,963


$
3,814,842  F-17




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Accounts
    Receivable  March 31,2007


2006Accounts receivable consists of:Accounts receivable

$
23,437,459


$
12,644,773Unearned revenue


(684,783
)


(2,486,090
)Unbilled revenue


2,034,303



487,827Allowance for doubtful accounts


(1,200,508
)


(201,396
)$
23,586,471


$
10,445,114     6.
    Prepaid
    Expenses and Other Assets  March 31,2007


2006Prepaid expenses and other assets
    consists of:Prepaid expenses

$
1,311,820


$
1,376,401Deferred installation costs


4,327,300



1,991,005Deposits


2,536,490



868,399Interest and other receivables


499,788



474,661Other assets


1,849,573



1,050,80510,524,971



5,761,271Less: current portion


(5,085,263
)


(2,558,942
)$
5,439,708


$
3,202,329   7.
    Property
    and Equipment  March 31,2007


2006Property and equipment consists of:Land

$
14,575,176


$
10,139,683Building


55,335,724



55,335,724Building and leasehold improvements


54,125,101



48,627,733Machinery and equipment


38,296,663



33,992,475Office equipment, furniture and
    fixtures


12,125,967



8,129,071174,458,631



156,224,686Less accumulated depreciation and
    amortization


(36,521,677
)


(26,331,368
)$
137,936,954


$
129,893,318  F-18




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Intangibles  March 31,2007


2006Intangibles consist of:Customer base

$
1,800,000


$
1,800,000Technology


2,400,000



2,400,0004,200,000



4,200,000Accumulated amortization


(1,300,000
)


(520,000
)$
2,900,000


$
3,680,000     Customer Base


Technology2008

$
180,000


$
600,0002009


180,000



600,0002010


180,000



200,0002011


180,000



Thereafter


780,000



$
1,500,000


$
1,400,000   9.
    Accounts
    Payable and Other Current Liabilities  March 31,2007


2006Accounts payable and other current
    liabilities consists of:Accounts payable

$
11,721,406


$
12,205,715Accrued expenses


12,994,896



7,120,310Current portion of deferred revenue


2,766,984



1,699,924Customer prepayments


2,269,352



443,368$
29,752,638


$
21,469,317   10.
    Mortgage
    Payable     F-19




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11.
    Convertible
    Debt  March 31,2007


2006Convertible debt consists of:Senior Convertible Notes, face
    value of $86.25 million, due June 15, 2009, and
    convertible into shares of the Companys common stock at
    $12.50 per share. Interest at 9% is payable semi-annually, on
    December 15 and June 15 (Effective interest rate of 23.4%)

$
65,510,191


$
59,102,452Senior Subordinated Convertible
    Notes, face value of $4.0 million, due June 30, 2009,
    and convertible into shares of the Companys common stock
    at $8.14 per share. Interest at 0.5% is payable semi-annually,
    on December 1 and July 1 (Effective interest rate of 0.74%)


4,403,874



$
69,914,065


$
59,102,452          F-20




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            F-21




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        12.
    Derivatives     F-22




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Notes
    Payable    March 31,2007


2006Senior Secured Notes, face value
    of $30.0 million, due March 2009

$
28,488,987


$
25,893,474Series A Notes, face value of
    $10.0 million, due June 30, 2009


10,106,281



Capital Lease Facility, due
    June 30, 2009


3,684,443



$
42,279,711


$
25,893,474       2007-1
       F-23




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            
    incur more debt;
    pay dividends, redeem or repurchase its stock or make other
    distributions;
    make acquisitions or investments;
    enter into transactions with affiliates;
    merge or consolidate with others;
    dispose of assets or use asset sale proceeds;
    create liens on our assets; and
    extend credit. F-24




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Convertible Debt


Mortgage Payable


Notes Payable


Total2008

$



$
791,305


$



$
791,3052009






46,594,006



32,320,703



78,914,7092010


90,254,721







14,805,961



105,060,68290,254,721



47,385,311



47,126,664



184,766,696Less: Unamortized premiums and
    discounts


(20,340,656
)


(1,062,795
)


(4,846,953
)


(26,250,404
)$
69,914,065


$
46,322,516


$
42,279,711


$
158,516,292   14.
    Changes
    in Stockholders Equity  Series I
    convertible preferred stock
    Common
    stock
  Issuance
    of Common Stock
         F-25




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Conversion
    of debt to equity
        Conversion
    of preferred stock
          Exercise
    of employee stock options
        Grant of
    nonvested stock
    Exercise
    of warrants
         F-26




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    tendered in payment of loan
    Preferred
    stock dividend
        Stock
    tendered in payment of services
        Grant
    of employee stock options
        Loans
    issued to employees
   F-27




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    warrants
    EstimatedNo. of Shares


Exercise




Fair Value atIssuance Date

Able to Purchase


Price


Expiration Date

IssuanceApril 2006


12,500


$
4.80


April 2011

$
92,988April 2005


7,200



6.90


April 2011


25,056December 2004


2,003,378



6.80-8.80


December 2011


8,782,933June 2004


181,579



9.50


June 2007


1,380,000April 2004


5,000



7.00


April 2009


32,450March 2004


248,841



9.00


March 2009


1,672,248February 2004


8,210



9.00


February 2009


8,652January 2004


36,808



7.10-9.00


January 2009


33,750December 2003


10,000



6.20


July 2008


114,400October 2003


5,000



7.30


October 2008


33,700June 2001


1,300



17.20


June 2011


22,490January 2003


950



4.80


June 2011


3,971November 2000


25,000



27.60


November 2008


394,0002,545,766








$
12,596,638         Sale
    of Treasury Shares
   F-28




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    Loss Per
    Share    March 31,2007


2006


2005Net loss attributable to common
    stockholders

$
(15,628,316
)

$
(37,876,063
)

$
(10,774,602
)Adjustments:Interest expense, including
    amortization of discount and debt issue costs


(28,701
)






9,739,395Change in fair value of
    derivatives embedded within convertible debt


(112,827
)






(15,283,500
)Numerator for diluted loss per
    share:

$
(15,769,844
)

$
(37,876,063
)

$
(16,318,707
)     March 31,2007


2006


2005Basic:Weighted average common shares
    outstanding  basic


44,151,259



42,973,114



35,147,503Diluted:Weighted average common shares
    outstanding


44,151,259



42,973,114



35,147,5039% Senior Convertible Notes










5,462,500Series B Notes


115,782







Weighted average common shares
    outstanding  diluted


44,267,041



42,973,114



40,610,003     March 31,2007


2006


20059% Senior Convertible Notes


6,900,000



6,900,000



Common stock warrants


2,545,766



2,679,636



2,712,436Common stock options


2,437,249



2,257,700



1,744,419Early conversion incentive


1,540,772



2,677,471



Nonvested stock


532,800



15,000



Series I convertible
    preferred stock


1,084,477



1,130,000



1,276,667Series H redeemable preferred
    stock


12,324



29,400



29,400   16.
    Share-Based
    Compensation   F-29




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Option
    Awards
    WeightedWeighted


AverageAverage


Remaining


AggregateShares


Exercise Price


Contractual Term


Intrinsic ValueOutstanding at April 1, 2006


2,292,453


$
11.21Granted


350,500



5.57Exercised


50,338



5.11Forfeited


155,366



22.51Outstanding at March 31, 2007


2,437,249


$
9.81



6.39


$
(4,260,915
)Exercisable at March 31, 2007


2,086,582


$
10.52



5.84


$
(5,132,435
)    F-30




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverage


Weighted





WeightedRemaining


Average





AverageOutstanding


Contractual Life


Exercise Price


Options


Exercise PriceRange of Exercise Prices

Options


(Years)


(Outstanding)


Exercisable


(Exercisable)$ 2.50- 5.00


324,600



7.11


$
3.91



324,600


$
3.91$ 5.01-10.00


1,667,391



5.07



6.15



1,316,724



4.98$10.00-20.00


114,621



3.26



14.91



114,621



14.91$20.01-30.00


14,260



3.59



24.65



14,260



24.65$30.01-50.00


316,377



3.19



32.59



316,377



32.592,437,249



6.39


$
9.81



2,086,582


$
10.52   Fair-Value
    Assumptions
    
    the Companys expected stock price volatility over the term
    of the awards;
    actual and projected employee stock option exercise behaviors,
    which is referred to as expected term;
    risk-free interest rate and
    expected dividends      2007

2006

2005Risk Free Rate

4.54%

3.63% - 4.83%

2.87% - 4.33%Volatility

118%

112% - 121%

126% - 137%Expected Term

6 years

5 years

5 yearsExpected Dividends

0%

0%

0%    F-31




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      For The Year Ended March 31,2006


2005Net loss attributable to common
    stockholders as reported

$
(37,876,063
)

$
(10,774,602
)Employee related share-based
    compensation expense included in net loss


975,644



Incremental share-based
    compensation if the fair value method had been adopted


(3,691,670
)


(2,112,914
)Pro forma net loss attributable to
    common stockholders

$
(40,592,089
)

$
(12,887,516
)Basic loss per common
    share  as reported

$
(0.88
)

$
(0.31
)Basic loss per common
    share  pro forma

$
(0.94
)

$
(0.37
)Diluted loss per common
    share  as reported

$
(0.88
)

$
(0.40
)Diluted loss per common
    share  pro forma

$
(0.94
)

$
(0.45
)   Nonvested
    Awards
    Weighted AverageGrant DateShares


Fair ValueOutstanding at April 1, 2006





$
Granted


455,300



5.55Vested






Forfeited






Outstanding at March 31, 2007


455,300


$
5.55  F-32




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    Commitments
    and Contingencies  Leasing
    activities
              As Lessee


As LessorCapital


Operating


Sales-Type


OperatingLeases


Leases


Leases


Leases2008

$
1,385,199


$
5,092,208


$
2,627,062


$
3,466,5162009


969,621



4,114,604



1,772,411



3,141,7122010


635,404



4,034,828



82,121



2,659,1632011


360,970



3,750,440







2,738,9382012


156,083



3,772,840







14,427,707Thereafter






27,451,466







Total minimum lease payments

$
3,507,277


$
48,216,386


$
4,481,594


$
26,434,036Amount representing interest and
    maintenance


(680,618
)






(442,361
)Net minimum lease payments

$
2,826,659






$
4,039,233   Litigation
   F-33




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Rule 10b-5
    18.
    Related
    Party Transactions      For the Year Ended March 31,2007


2006


2005Rent paid to partnership where the
    Company had a 0.8% interest

$



$



$
5,818,784Services purchased from related
    party


497,948



1,270,504



957,483Services provided to related party


87,321



23,698



Property management fees charged
    to partnership where the Company had a 0.8% interest










144,826Interest income on notes
    receivable  related party










50,278Interest income from shareholder


25,800



29,728



28,944Interest paid to shareholder










670,649Services from directors


712,503



442,500



410,000Other assets

$
422,467


$
452,444


$
477,846Note receivable 
    related party


191,525



287,730



    F-34




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    19.
    Revenues  For the Year Ended March 31,2007


2006


2005Revenues consist of:Colocation

$
41,865,161


$
28,126,193


$
21,402,860Managed and professional services


43,742,937



25,951,843



9,017,282Exchange point services


9,031,100



6,308,708



4,564,283Equipment resales


6,258,268



2,136,349



Other


50,715



6,189



918$
100,948,181


$
62,529,282


$
34,985,343Technology infrastructure buildouts










11,832,745Construction contracts and fees










1,329,526Total revenues

$
100,948,181


$
62,529,282


$
48,147,614     20.
    Income
    Taxes      For the Year Ended March 31,2007


2006


2005United States

$
(14,219,056
)

$
(34,201,581
)

$
(8,367,640
)International


(516,129
)


(2,947,593
)


(1,491,712
)$
(14,735,185
)

$
(37,149,174
)

$
(9,859,352
)  F-35




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31,2007


2006Deferred tax assets:Net operating loss carryforwards

$
66,747,512


$
61,229,430Net operating loss carryforwards
    retained from discontinued operations


17,280,709



17,280,709Capitalized
    start-up
    costs


80,947



310,195Embedded derivatives


6,188,256



9,485,085Allowances and other


7,949,409



7,386,909Total deferred tax assets


98,246,833



95,692,328Valuation allowance


(81,868,281
)


(75,896,123
)Deferred tax liabilities:Intangibles


(700,934
)


(1,251,200
)Convertible debt


(7,804,425
)


(10,318,847
)Depreciation


(8,048,789
)


(8,305,610
)Other


(47,561
)


(47,561
)Total deferred tax liability


(16,601,709
)


(19,923,218
)Net deferred tax liability

$
(223,157
)

$
(127,013
)          F-36




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        For the Year Ended March 31,2007


2006


2005Statutory tax rate


(34.0
)%


(34.0
)%


(34.0
)%State income taxes, net of federal
    income tax benefit


(4.0
)


(4.0
)


(3.5
)Foreign income tax


(0.9
)






Permanent differences


0.5



0.3



3.7Increase in valuation allowance


39.9



37.7



33.8Effective tax rate


1.5
%



%



%   21.
    Information
    About the Companys Operating Segments   F-37




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Data center


Real estateFor the year ended March 31,

operations


services


Total2007Revenue

$
100,948,181


$



$
100,948,181Income from operations


3,980,638







3,980,638Net loss


(14,952,166
)






(14,952,166
)2006Revenue

$
62,529,282


$



$
62,529,282Loss from operations


(8,645,943
)






(8,645,943
)Net loss


(37,149,174
)






(37,149,174
)2005Revenue

$
46,818,088


$
1,329,526


$
48,147,614Loss from operations


(13,506,734
)


(400,010
)


(13,906,744
)Net loss


(9,490,543
)


(368,809
)


(9,859,352
)AssetsMarch 31, 2007

$
309,645,681


$



$
309,645,681March 31, 2006

$
204,716,451


$



$
204,716,451     For the Year Ended March 31,2007


2006


2005Total segment income (loss) from
    operations

$
3,980,638


$
(8,645,943
)

$
(13,906,744
)Change in fair value of derivatives


8,276,712



(4,761,000
)


15,283,500Debt restructuring










3,420,956Interest expense


(28,214,563
)


(25,048,519
)


(15,493,610
)Interest income


1,256,295



1,742,609



666,286Other, net


(34,267
)


(436,321
)


170,260Loss before income taxes

$
(14,735,185
)

$
(37,149,174
)

$
(9,859,352
)  F-38




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31,2007


2006


2005Total revenues:United States

$
85,167


$
54,837


$
47,589International


15,781



7,692



559$
100,948


$
62,529


$
48,148Cost of revenues:United States

$
47,175


$
32,893


$
35,970International


9,727



5,931



928$
56,902


$
38,824


$
36,898Income (loss) from operations:United States

$
4,831


$
(5,854
)

$
(12,323
)International


(850
)


(2,792
)


(1,584
)$
3,981


$
(8,646
)

$
(13,907
)     March 31,2007


2006United States

$
152,623


$
145,978International


4,985



4,366$
157,608


$
150,344  F-39




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  22.
    Supplemental
    Cash Flow Information  For the Year Ended March 31,2007


2006


2005Supplemental disclosures of cash
    flow information:Cash paid for interest

$
16,407,077


$
14,489,566


$
6,399,840Non-cash operating, investing and
    financing activities:Warrants issued


92,988



45,226



1,380,000Assets acquired under capital
    leases


1,897,465



889,012



Warrants exercised and converted
    to equity










261,640Conversion of debt and related
    accrued interest to equity










262,500Conversion of convertible debt and
    related accrued interest to equity










27,773,524Settlement of note receivable
    through extinguishment of convertible debt










418,200Stock tendered in payment of
    services


1,038,579







Establishment of Series B
    derivative asset


342,534







Net assets acquired in exchange
    for common stock






10,755,200



Cancellation and expiration of
    stock options and warrants


748,010



1,308,456



146,145Settlement of notes
    receivable  related party by tendering Terremark Stock










4,951,904Non-cash preferred dividend


676,029



173,355



481,947Conversion of preferred stock to
    equity


2,279



804,000



1,925,000   23.
    Subsequent
    Events     F-40




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     F-41