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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-K

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

  For the fiscal year ended December 31, 2000

                                      OR

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

  For the transition period from       to      .

                       Commission file number: 000-29391

                               ----------------

                              VIA NET.WORKS, INC.
            (Exact name of registrant as specified in its charter)

               Delaware                                84-1412512
     (State or other jurisdiction)        (I.R.S. Employer Identification No.)

                       2100 Sunset Hills Road, Suite 110
                            Reston, Virginia 20190
                   (Address of principal executive offices)

      Registrant's telephone number, including area code: (703) 464-0300

       Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:
                    Common stock par value $.001 per share

                               ----------------

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

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

  As of March 1, 2001, the aggregate market value of the 53,774,468 shares of
common stock held by non-affiliates of the registrant was $282,315,957.00,
based on the closing sale price ($5.25) of the registrant's common stock as
reported on the Nasdaq National Market on such date. (For this computation,
the registrant has excluded the market value of all outstanding shares of its
common stock reported as beneficially owned by executive officers and
directors of the registrant and certain other stockholders; such exclusion
shall not be deemed to constitute an admission that any such person is an
"affiliate" of the registrant.) As of March 1, 2000, there were outstanding
54,074,899 shares of the registrant's common stock and 6,770,001 shares of the
registrant's non-voting common stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

  Portions of the registrant's proxy statement for the annual shareholders
meeting to be held on May 23, 2001 are incorporated by reference into Part III
of this annual report.

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                              VIA NET.WORKS, INC.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
 <C>      <S>                                                             <C>
 PART I .................................................................   3
 Item 1.  Business......................................................    3
          Risk Factors..................................................   15
 Item 2.  Properties....................................................   21
 Item 3.  Legal Proceedings.............................................   21
 Item 4.  Submission of Matters to a Vote of Security Holders...........   21

 PART II.................................................................  21
 Item 5.  Market for Registrant's Common Stock and Related Stockholder
          Matters.......................................................   21
 Item 6.  Selected Financial Data.......................................   22
 Item 7.  Management's Discussion and Analysis of Results of Operations
          and Financial Condition.......................................   24
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk....   33
 Item 8.  Financial Statements and Supplementary Data...................   34
 Item 9.  Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure......................................   34

 PART III................................................................  35
 Item 10. Directors and Executive Officers of the Registrant............   36
 Item 11. Executive Compensation........................................   40
 Item 12. Security Ownership of Certain Beneficial Owners and
          Management....................................................   40
 Item 13. Certain Relationships and Related Transactions................   40

 PART IV.................................................................  41
 Item 14. Exhibits, Financial Statements, Schedules and Reports on Form
          8-K...........................................................   41

 SIGNATURES..............................................................  43
 Index to Financial Statements and Financial Statement Schedules......... F-1
 Exhibit Index........................................................... E-1
</TABLE>

                                       2
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                                    PART I

Item 1. Business

  Some of the information contained in this Form 10-K, including the following
discussion and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" set forth in Part II, Item 7 of this Form 10-K,
contains forward-looking statements. Forward-looking statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "could," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these terms or
similar words. Forward-looking statements in this Form 10-K include statements
regarding our ongoing strategy implementation that appear below under the
heading "The VIA NET.WORKS Strategy," statements regarding our plans to expand
our network that appear below under the heading "Our Network," and statements
regarding our plans to expand our sales capabilities that appear under the
heading "Sales and Marketing." These statements are only predictions. Actual
events or results may differ materially. Information regarding the risks,
uncertainties and other factors that could cause actual results to differ from
the results in these forward-looking statements are discussed under "Risk
Factors" beginning on page 15 of this Form 10-K. You are urged to carefully
consider these factors, as well as other information contained in this Form
10-K and in our other periodic reports and documents filed with the Securities
and Exchange Commission.

  Unless the context otherwise requires, as used in this Form 10-K, the terms
"VIA," "our," or "we" refer to VIA NET.WORKS, Inc. and its subsidiaries.

  VIA NET.WORKS is a leading international provider of single source Internet
solutions for businesses. We operate in Europe, Latin America and the United
States. By targeting businesses in Europe and Latin America, we are positioned
to capitalize on some of the most rapidly growing areas of the Internet
market. Our European and Latin American markets have a relatively low number
of total Internet users, and businesses in each region have a relatively low
number of Internet services available to them. By choosing to serve these
market segments, we have the opportunity to sell our services to a large
number of businesses that have identifiable Internet needs but little or no
Internet experience. Once we have developed relationships with these
customers, we can upgrade them from entry-level Internet access services to
more sophisticated and higher margin solutions such as managed application
hosting and virtual private networking. In our U.S. market, we focus
exclusively on web-related services such as shared and dedicated web hosting,
and domain name registration, and Internet security services such as managed
firewalls and virtual private networks, or VPNs. Our U.S. operation allows us
to meet the U.S. web-hosting and security needs of our large international
customer base.

  Since our founding in late 1997, we have rapidly established our
international presence by acquiring, integrating and growing business-focused
Internet services providers in 14 countries. As of December 31, 2000, we had
103,300 customers in Europe, of which 59% were businesses, 34,200 customers in
Latin America, of which 35% were businesses, and 7,700 customers in the U.S.,
all of which were businesses. As of December 31, 2000, we also hosted 52,900
web sites and had registered 354,700 domain names.

  We are a customer-focused sales, marketing and service organization. We
leverage our local marketing, sales and customer care efforts with the
benefits of our global scale by providing our local operations international
network capacity, marketing support, capital and management resources. We
believe that our local focus combined with our global capabilities will allow
us to increase both our market share and revenue.

The VIA NET.WORKS Strategy

  The rapidly growing demand for Internet access and other value-added
Internet services, coupled with low barriers to entry into the marketplace,
has resulted in a highly fragmented Internet services industry. There are
approximately 12,000 Internet services providers in our markets, of which over
one third operate in Europe and Latin America. We believe small and mid-sized
businesses in our targeted European and Latin American markets are under-
served by both large and small Internet services providers. Large Internet
services providers in Europe and Latin America which generally focus on
Internet access products and rely on indirect sales, telemarketing

                                       3
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and remote customer call centers to serve their customers, typically lack the
local presence needed to provide customized, hands-on solutions to small and
mid-sized business customers. Small, local Internet services providers in
these markets typically cannot provide dedicated, high-capacity Internet
access, round-the-clock support and a complete range of competitively priced
service offerings.

  Businesses initially used the Internet by establishing web sites to improve
internal and external corporate communications. Internet access provides a
company with a basic gateway to the Internet, allowing it to use e-mail,
access information, and communicate and conduct transactions with employees,
customers and suppliers. Over the past several years, web sites have also
provided companies with an identity and interactive presence on the Internet,
allowing them to post company information and automate business processes such
as sales, order entry and customer service. Increasingly, businesses worldwide
are using the Internet for critical applications, such as purchasing and
project management, customer service, and on-line sales and marketing. The
Internet presents a compelling opportunity for businesses by enabling them to
reduce operating costs, increase productivity, access valuable information and
reach new markets.

  While recognizing the benefit of having a presence on the Internet,
businesses often do not have the resources to implement and maintain rapidly
changing technologies, create and update content and communicate with
employees, customers and suppliers electronically. Our customers also seek to
avoid overhead costs required to maintain necessary systems not directly
related to their business offerings. Outsourcing arrangements provide a simple
and cost-effective solution to these challenges. Businesses have increasingly
begun to outsource certain IT functions such as network security, virtual
private networking, collaborative and customer relationship applications, as
well as sophisticated enterprise-wide applications including intranets,
network management systems and enterprise resource planning systems.

  Our goal is to become the premier provider of international Internet
solutions for businesses in Europe and Latin America. We intend to reach our
goal by:

  Leveraging the agility and responsiveness of our local, customer-focused
operations to deliver world-class service and technical support. In our
experience, businesses generally seek a provider with locally based personnel
with whom they can establish a long-term relationship. We have operations in
14 countries, with personnel who are available to respond to technical issues
and who can assist in developing and implementing effective Internet
solutions. Our local management teams retain the responsibility for managing
day-to-day operations by meeting the demands of business customers in their
markets. We maintain sales, technical and customer care teams locally so that
customer service remains rapid and responsive.

  Harnessing the reliability and quality of our own international network to
meet business customers' needs. Our high capacity pan-European and trans-
Atlantic networks, coupled with the VIA global network operations center,
enable our operations to compete on a global scale and to provide customers
with sophisticated international Internet solutions.

  Delivering single-source Internet solutions to our customers. We deliver
starter solutions that provide all the essential elements for businesses to
quickly and effectively establish and strengthen their Internet presence. We
deliver tailored solutions for customers requiring more sophisticated,
business-critical Internet capabilities. In both cases, we can offer a single-
source solution to increase customer satisfaction, reduce customer churn and
better leverage our network infrastructure and sales and marketing resources.

  Providing Internet solutions that give businesses more productive, cost
effective ways to communicate information. Businesses continue to increase
their use of the Internet as a business tool. We deliver solutions that allow
our customers to integrate web-based products and services into their existing
business processes, increasing productivity and reducing cost.

  Building the VIA NET.WORKS brand one customer at a time. We establish long
lasting relationships with our customers by focusing on customer service and
products that meet the customers' needs. We are converting all our acquired
companies and brands to the VIA NET.WORKS name to simplify communications to
customers and solidify our brand.

                                       4
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  Delivering quality customer service supported by continued investment in
billing, back-office and customer care systems. Our customers will benefit
from our continuing investment in billing, back-office and customer care
systems through high quality and responsive customer service. We intend to
provide all our customers round-the-clock technical support and customer
service for mission-critical applications.

  Continuing investment in network infrastructure and product development. We
have made significant investments in our network and operating infrastructure.
We will continue to upgrade and expand our network capacity in each of the 14
countries in which we operate based upon customer demand. We are increasing
the web hosting, security, data storage and processing capacities of our local
operating companies and in select VIA data centers to take advantage of cost
efficiencies. These infrastructure improvements will increase our capacity to
expand the services we offer and acquire additional customers.

Our Network

  Our pan-European and trans-Atlantic network provides our European operations
with high capacity and resilient transport, as well as redundant Internet
Protocol peering and transit arrangements. Our network is connected to the
Internet by multiple peering arrangements at major commercial Internet
exchanges and through transit agreements from multiple major carriers. Using
these diverse connections, our network dynamically routes traffic over the
network of the provider best able to deliver the data in the most efficient
manner. Direct connections to multiple major carriers and Internet exchanges
assure reliable service levels, protecting against traffic congestion and
network outages. We have designed a redundant network to avoid any single
point of failure. Our U.S. and Latin American operations are currently
connected to the Internet by multiple leased, high-speed links. We are in the
process of connecting our U.S. operations to our network and expect to expand
our network and network operations center infrastructure to Latin America as
capacity becomes commercially available.

  The local networks of our European operations are connected to our
international network via redundant traditional local area and wide area
networks or high-capacity fiber, and co-location of routers. Where co-location
is not an option, our local operations access our international network
through high-speed data communications facilities. Our European network
operations center, which is located in Duisburg, Germany, is staffed 24 hours
a day, 7 days a week, by Internet systems engineers who are responsible for
monitoring the performance of our network equipment. From this center, we are
able to efficiently identify and correct network problems either remotely or
by local dispatch.

  The backbone of our network is made up of two STM-1 fiber optic cable rings,
each providing 155 Mbps of redundant capacity. The first ring provides trans-
Atlantic capacity and connects our New York City and London network nodes. We
have a 25-year Indefeasible Right of Use, or IRU, from Global Crossing, an
owner of fiber optic cable systems, that expires June 2024. Our agreement with
Global Crossing also provides us with the right to acquire additional network
capacity. The second ring provides pan-European capacity with network nodes in
up to seven European cities. We currently have network nodes in London,
Dusseldorf, Amsterdam, Paris, and Geneva. We have a 20-year IRU from a
European subsidiary of Dynegy, Inc. that expires in July 2019.

  We maintain a network in the United States to facilitate access by our
European customers to the large number of web sites hosted in the United
States. We are located at major public peering locations in Washington, D.C.,
Chicago, Palo Alto and New York. Our U.S. network nodes are interconnected
through diverse DS-3, or 45 Mbps capacity, data communications facilities
provided by local telephone companies, inter-exchange carriers and specialized
carriers.

  VIA's network connects to Tier 1 Internet transit providers and major public
peering locations in London, Frankfurt, Amsterdam, Washington, D.C. and Palo
Alto, where we have co-located routers. A substantial number of our operating
companies have established peering relationships with other local or regional
Internet services providers. In peering relationships, Internet services
providers agree to carry each others' traffic on their networks

                                       5
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to improve performance and reduce congestion and costs. We are in the process
of establishing additional peering relationships with international Internet
services providers. Peering relationships can take the form of either public
peering or private peering. Public peering takes place at a physical location,
usually a network access point, designed for the exchange of Internet traffic
between private Internet services providers. Private peering involves an
agreement between two Internet service providers allowing traffic to pass
between each other's networks at private connection points without having to
traverse the public Internet and public peering points.

Products and Services

  We currently offer a comprehensive portfolio of single source Internet
solutions for business on both an integrated and stand-alone basis These
solutions are constructed and delivered to give businesses more productive,
cost effective ways to communicate information. As businesses increase the use
of the Internet as a business tool and integrate web-based products and
services into their business processes, our solution portfolio fulfills every
business' need to enhance the bottom line and to reduce risk.

  Our solutions are packaged to address the needs of businesses that have
immediate needs for a web presence or for specific Internet capabilities. Our
solutions are also packaged to address more sophisticated Internet
requirements. We do not currently offer all of our services in each of our
markets. The specific products offered in each of our operations are
determined by the needs of the market, competition and local regulations.

  Starter Solutions. For businesses new to the Internet, our starter solutions
provide a simple way to establish an online presence quickly and easily. These
solutions consist of pre-packaged Internet tools that can be purchased
individually or in a bundled solution.

    Internet access and email. We provide access through dial-up, dedicated
  line and other technologies, including broadband cable, integrated services
  digital network, or ISDN, and digital subscriber line, or DSL. The access
  services we offer vary from market to market depending on availability and
  local regulation. Each access service can be packaged with email services
  to enhance the communication capabilities of our customers. We encourage
  our dedicated access customers to include our managed firewall services to
  protect against external attack. We also offer businesses global roaming,
  which is the ability to easily and inexpensively access their e-mail and
  the Internet while avoiding expensive long distance or international
  telephone charges.

    Web-site hosting. Web-site hosting offers business customers a presence
  on the Internet providing them with marketing and customer service
  opportunities, as well as opportunities to increase productivity and
  eliminate costs from their business processes. Our web hosting services are
  complemented by web authoring, web-site development and web-site management
  services. We offer our customers web hosting services through Internet data
  centers located in our local operations. As of December 31, 2000, we hosted
  approximately 52,900 web-sites.

    Domain registration. We deliver domain registration services for all
  general Top Level Domains, such as .com, .net and .org, as well as
  worldwide country-level Top Level Domains, such as .br, .mx and .fr. As of
  December 31, 2000 we registered approximately 354,700 domains.

  Tailored Solutions. For customers ready to take advantage of more
sophisticated Internet capabilities, our tailored solutions combine the basic
starter Internet services with advanced Internet solutions. These customized
solutions provide a comprehensive array of Internet services, that we
integrate, manage and update for our customers on an ongoing basis.

    Connectivity services. We customize Internet connectivity services for
  each customer to meet their specific requirements. This may include on-site
  installation, hardware and software configuration and integration with the
  customer's network. Our tailored connectivity solutions can address
  multiple-site, multiple-use and mobile user business applications.


                                       6
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    Hosting services. Our advanced hosting services combine basic web hosting
  with more sophisticated applications such as intranets, extranets,
  exchanges, and business productivity capabilities. These services allow our
  business customers to outsource the management of their internal databases
  and other business applications. We also deliver high-end hosting
  technologies to improve the performance and resilience of business
  applications, including mirroring, caching, and clustering services.

    Security services. As customers make Internet services a part of their
  external and internal business processes, particularly to transmit or
  electronically share confidential or proprietary business information,
  maintaining data security becomes critical. Our security solutions provide
  customers with the ability to:

    . prevent unauthorized users from accessing their internal network,

    . authenticate users seeking access to proprietary or confidential
      information,

    . increase security for company data transmitted through the Internet,
      and

    . filter viruses, unsolicited bulk-email, and other selected items from
      business communications.

    We provide extensive network security solutions to businesses of all
  sizes, delivering managed and unmanaged firewall and VPN capabilities.
  Internet-based VPNs can significantly reduce the cost of existing wide area
  networks by the secure and encrypted transmission of private traffic
  through the public Internet. Our security experts can design, provision,
  and manage these security solutions for customers, eliminating or reducing
  the costs of internal network and technical security staff.

    Professional services. Many of our customers do not have the internal
  resources or personnel to design or maintain Internet functions. As
  businesses rely more on the Internet for important business applications,
  they are increasing their outsourcing of information technology
  applications. To meet this need, we offer onsite, professional services to
  customers. Our local operations offer a broad range of professional
  services to their customers, including network and system design, web
  design, web-site development and maintenance, VPN and Internet security
  design and implementation, and other Internet-related services.

Organization

  We have locally managed operations in 14 countries in Europe and the
Americas. In order to best serve the market-specific needs of our target
customer base, each of our operations is staffed with local management, sales,
technical and customer care personnel. Our local managers retain the authority
to manage the day-to-day operations of their businesses and meet the Internet
business needs of customers in their local markets. We serve our customers in
their own language, their own currency and with management and staff who
understand the regulations and business practices in the markets in which they
operate. We believe that by maintaining this type of presence within each of
our markets, we are in the best position to understand, and provide solutions
for, the Internet needs of our customers.

  The following table summarizes our operations in Europe, Latin America and
the United States by geographic operating segment, country operating company
and revenue contribution. This table is pro forma as if all acquisitions and
dispositions occurred on January 1, 2000. As of December 31, 2000, we owned
100% of all our operations except for Net4You, of which we owned 58%, M&CNet,
of which we owned 60%, VIA NET.WORKS Ireland, of which we owned 77% and VIA
NET.WORKS Spain, of which we owned 88%. In December 2000, we sold our equity
interest in Ecce Terram, a small operation in Germany.

  VIA operates in 14 countries organized into four geographic operating
regions:

  . Central and Western Europe

  . United Kingdom, Ireland and Southern Europe

  . South America

  . North America

                                       7
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                                VIA Operations

<TABLE>
<CAPTION>
                                                                           Percentages of
                                                                           Total Pro Forma
                                                                               Revenue
                                                                            for the Year
   Country of                                                                   Ended
    Operation                      Operating Company                      December 31, 2000
   ----------                      -----------------                      -----------------
<S>               <C>                                                     <C>               <C>
Central and Western Europe:
  Austria         Net4You.............................................             1%
  France          Artinternet.........................................             1
                  DNS.................................................             7
                  MNET................................................             1
  Germany         VIA NET.WORKS Deutschland (formerly GTN)............             7
                  Highspeed-Server Eisnet.............................             1
                  INS.................................................             2
                  ISAR................................................             3
  The Netherlands bART................................................             3
                  IAE.................................................             3
  Switzerland     M&CNet..............................................             2
                  VIA NET.WORKS (Schweiz) (formerly Smartcomp)........             2
United Kingdom, Ireland and Southern Europe:
  United Kingdom  VIA NET.WORKS UK
                  (formerly i-way, U-Net, WWS and Netlink)............            37
  Ireland         VIA NET.WORKS Ireland (formerly MediaNet)...........             1
  Italy           VIA NET.WORKS Italia (formerly Meridian Microtech)..            <1
  Portugal        VIA NET.WORKS Portugal..............................             2
  Spain           VIA NET.WORKS Spain.................................             2
South America:
  Argentina       VIA NET.WORKS Argentina.............................             2
                  ServiceNet..........................................            <1
  Brazil          VIA NET.WORKS Brasil (formerly Dialdata)...............          3
North America:
  Mexico          VIA NET.WORKS Mexico (formerly InfoAcces)..............         15
  United States   IMC Online..........................................             4
</TABLE>

  We have agreements with the minority stockholders of our majority-owned
operating companies that give us the right, after a specified period of time,
to purchase their shares in those operating companies based on predetermined
price formulas which consider revenue growth, operating results and cash
flows. In some cases, the minority stockholders have the right to purchase our
shares in those operating companies if we do not exercise our purchase right
by a specified date.

  Regional operating, marketing and financial personnel, hired in the regions
they serve, support our local operations. In all regions, a Vice President is
responsible for monitoring the results of, coordinating efforts among, and
assisting in the management of our local operations. Regional marketing
personnel create marketing and advertising programs to promote cross-market
brand recognition and assist our operating managers with local product,
marketing and sales efforts. European financial personnel assist our local
operations with financial reporting, budget preparation and the implementation
of proper financial policies, procedures and controls. We will recruit similar
regional financial positions to support our other regions when the size of
those regions warrants this staffing level.

  We maintain a small headquarters staff, located in Reston, Virginia, to
perform and coordinate company-wide activities. We intend to keep our
headquarters staff small, performing as many functions as possible within the
regions and local operations.

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<PAGE>

Sales and Marketing

  We sell our business solutions through local sales efforts, supported by
local advertising and promotion programs. Our local direct sales and marketing
force is our primary sales tool, but we also maintain significant distribution
capabilities through reseller and referral channels. We will continue to
expand both our direct and indirect sales capabilities, as well as develop new
product and strategic relationships to support those efforts.

  Direct sales. Each of our local operating companies has a direct sales
force. Depending on the market, the local sales force may include large client
field sales, small to medium sized businesses field sales, and telemarketing
representatives. Typically, telemarketing representatives, both inbound and
outbound, handle sales of basic services, where consulting, customization or
training is not required. Field sales representatives handle sales of more
sophisticated services. Our field representatives are technically proficient
Internet specialists who understand the business environment of their
customers and who can tailor Internet solutions to meet customer and market
specific needs.

  Our local operations maintain customer and prospect data that is used to
identify likely users of existing and new services. They also maintain
competitive data that is used to identify areas of opportunity for new
products and services. Depending on the accepted practices and regulations in
their markets, our operating companies may use techniques such as email,
direct mail or fax, outbound telemarketing, seminars and trade shows to target
large potential customer groups that they believe would benefit from our
single source Internet solutions for business.

  Indirect sales. In many of our markets, indirect sales channels represent a
significant source of revenue and revenue growth. Our operations have various
indirect sales channels within their markets. These include reseller and
distributor relationships with systems integrators, value-added resellers,
marketers of other subscription-based products and others who have established
relationships with our target customers and sales forces capable of selling
Internet services. Our operations also maintain relationships with referral
partners, such as web designers and advertising agencies, whose core
businesses typically do not include providing Internet services, but who
represent a valuable source of leads.

Competition

  Though Internet usage remains lower in Europe and Latin America than in the
more mature United States market, high growth rates and large potential market
sizes continue to attract many new entrants. Though the number of competitors
in our markets has increased, many of these competitors focus on a single
Internet product and cannot provide single source Internet solutions for
businesses. Though our specific competitors vary from market to market, they
generally are international, regional and local Internet services providers,
long distance and local exchange telecommunications companies, cable
television companies or on-line services providers.

  Internet services providers. According to IDC, there are approximately
12,000 Internet services providers, including hosting and other value added
service providers, in the United States, Europe and Latin America, with more
than one third of those in the latter two markets. Depending on the market,
our primary competitors may be small, local services providers with limited
ranges of service and geographic reach, or large international or regional
services providers with broad services offerings, large network capacities and
wide geographic presence. The small, local providers often focus on consumer
dial-up Internet access and frequently do not have the services or expertise
to assist small and mid-sized businesses in establishing a presence on the
Internet or creating an Internet platform to support their business processes.
The large international and regional providers also often focus on consumer
dial-up Internet access. Large Internet services providers having a range of
services required to meet the needs of small and mid-sized businesses may not
have the local personnel and market expertise to effectively implement
solutions for this customer base. By combining local market expertise and
service with an

                                       9
<PAGE>

international network and a wide range of services targeted towards small and
mid-sized business customers, we are able to compete effectively with both
large and small Internet services providers.

  Telecommunications companies. Many of the major international
telecommunications companies offer Internet services in our markets, either
directly or through subsidiaries or alliances. In several of our markets,
former telecommunications monopolies have been deregulated and privatized, and
have also become providers of Internet services. Both incumbent and new
telecommunications companies are beginning to use high-speed wireline and
wireless technology to bypass overcrowded, existing networks and are offering
Internet and corporate data services as well. Generally, these companies focus
on consumer dial-up Internet access and large corporate accounts, customer
bases that generate high volume data traffic to carry on their networks. We
believe that our focus on providing tailored solutions to meet the Internet
needs of our business customers will allow us to compete effectively with
telecommunications company competitors. We also believe that our local market
expertise and service, global infrastructure and focus upon the needs of
businesses will enable us to compete effectively for these customers.

  Cable television companies. Cable operators in some of our markets have
either introduced or announced that they intend to offer Internet access
services, both by upgrading their networks and using new, cable modem
technology. Their existing customers are primarily residential and their
physical networks are largely limited to residential areas. We therefore
expect these companies to present relatively little competition for small and
mid-sized business customers in our markets.

  On-line service providers. We compete with large on-line and portal services
providers in Europe and Latin America. These on-line services providers
generally have business models that rely on consumer dial-up access and
advertising revenue. We therefore expect these companies to present relatively
little competition for small and mid-sized business customers in our markets.

Intellectual Property and Proprietary Rights

  We rely on trademark and copyright law, laws restricting unfair trade
practices, laws relating to trade secret protection and confidentiality and/or
license agreements with our employees, customers, partners and others to
protect our intellectual property rights. The applicability and enforceability
of legal principles concerning intellectual property rights in an Internet
context remain uncertain as the courts and legislatures in each country
continue to address the issues. Substantially all of the countries in which we
operate are signatories to international treaties relating to the protection
of intellectual property. Nonetheless, in many of these countries, the courts
have not had the opportunity to address the legal issues within the Internet
context to the same degree as United States courts. It is therefore uncertain
whether the intellectual property of our non-U.S. operations will be subject
to a lesser or different degree of protection than generally afforded in the
United States.

  In Europe and in our markets in the Americas, we pursue the registration of
trademarks for marks that we believe are particularly unique and that will be
used in our business over a long period of time. Conversely, we have not
pursued registration of trademarks of our local operations where we have
decided to transition entirely to the VIA NET.WORKS mark over a short period
of time. We have applied for registration of the VIA Net Works Argentina mark
in Argentina. We have also applied for registration of the VIA NET.WORKS mark
and variations of that mark in Mexico. In the United States, we have applied
for registration of the mark consisting of our logo and the name "VIA
NET.WORKS" and variations of this mark. In Portugal we have applied for
registration of some marks because registration is required as a condition to
obtaining the right to use specified domain names. We hold trademarks and
registrations for other marks in some other countries as well.

  Except as noted above, to date we have not pursued the registration of the
trademark VIA NET.WORKS, or variations of this mark. Consequently, a
competitor with senior rights in a mark similar to ours may be able to argue
successfully that we should be barred from continuing to use our mark, or our
competitors may adopt product or service names similar to ours, thereby
impeding our ability to build brand identity and possibly

                                      10
<PAGE>

leading to customer confusion. Defending trademark infringement litigation and
policing unauthorized use of our marks is also difficult and expensive. For
more information regarding difficulties we may have in protecting our brand
names, please see "Risk Factors" later in Item 1 of this Form 10-K.

  We actively seek to protect our marks against similar and confusing marks of
third parties by:

  . using our local law firms and management teams to identify applications
    to register trademarks

  . filing oppositions to third parties' applications for trademarks and

  . if necessary, bringing lawsuits against infringers

Regulatory Matters

  No uniform body of law specific to the regulation of Internet services or
Internet services providers exists in Europe or the Americas. However, many
local laws, which are not specific to Internet services and uses of the
Internet, apply to the provision of our services generally. The enforcement of
these laws may fall within the powers and duties of a number of regulatory
bodies. As a new and important medium for communication and business
transactions, the Internet is undergoing considerable legal and regulatory
scrutiny worldwide. New laws and regulations regarding the Internet have been
proposed or are currently being considered in many countries in which we
operate, covering issues such as user privacy and information security, wire
tapping, obscenity and child protection, defamation, taxation, and
intellectual property rights. At the same time, the application of existing
laws to communications and the transaction of business through the Internet
are being clarified and refined. We cannot predict what impact future
judicial, legislative or regulatory changes will have on the industry in
general or our operating results specifically, or whether local regulatory
bodies will question our compliance with applicable regulations.

  For example, due to the global nature of the Internet, it is possible that,
although the equipment and software used to provide our services is based in
Europe and the Americas and the transmission of content through the Internet
by us and our users would originate primarily in these regions, the
governments of countries in other regions might attempt to regulate the
content contained in or transmitted using our services or prosecute us for
violations of their laws. As content produced by our users or us is available
over the Internet in countries all around the world, these countries may also
claim that we are required to qualify to do business in their jurisdictions.
Any application of existing laws and regulations from jurisdictions in which
we currently do not conduct business, or the application of existing laws and
regulations to the Internet and other online services, could have a material
adverse effect on our business, results of operations and financial condition.

  Further, future regulatory developments might impede the growth of the
Internet, impose taxes or other costly technical requirements, create
uncertainty in the market or in some other manner have a material adverse
effect on our business, financial conditions or results of operations.

  The regulatory framework in each of the three major markets in which we
provide services is described further below.

 European Union

  Overview. All of our European operations, except our Swiss operations, are
located in member countries of the European Union. Within the European Union,
the European Commission, in co-ordination with the Council of Ministers and
the European Parliament, can enact legislation by way of "decisions" or
"regulations" that are enforceable directly in each of the member states. More
commonly, it adopts "directives" that require member states to enact laws
within their own countries by implementing the principles and rules
established in the directive. Although the directives' legal mandates are
binding on member states, member states have discretion as to the method of
implementation. As a result, the European regulatory environment is
characterized by differing and sometimes conflicting rules and regulations at
the local level regarding licensing, electronic commerce, data protection and
other areas. The European Union and its member states are, however, working on
reaching greater harmonization of these rules across the member states.

                                      11
<PAGE>

  Data Protection.  In October 1995, the European Union adopted the "directive
on the protection of individuals with regard to the processing of personal
data and the free movement of such data." This directive imposes restrictions
on the collection, use and processing of personal data. Under the directive,
European Union citizens are guaranteed rights, including the right to access
their personal data, the right to know the origin of the data, the right to
have incorrect data corrected, the right to recourse in the event of unlawful
processing and the right to withhold permission to use their data for direct
marketing. Member states of the European Union were required to implement the
directive into national laws by October 24, 1998, but some, including France,
Germany and Ireland, have yet to do so. In these countries, however, there are
existing laws that deal with the protection of personal information in varying
degrees.

  The data protection directive could, among other things, affect companies
like us that collect information from individuals in European Union member
states. In particular, companies with facilities located in member states or
that have equipment in member states for the purpose of processing data will
not be allowed to send personal information to countries outside of the
European Union that do not maintain adequate standards of privacy and data
protection. The directive does not define what standards of privacy are
"adequate." In past years, the United States government and the European
Commission have engaged in discussions as to whether the U.S. self-regulatory
approach provides adequate protection. Based on negotiations concluded in
2000, the European Commission recently determined that the self-regulatory
arrangement established by the U.S. Department of Commerce known as the "safe-
harbor principles" provides "adequate protection", but only for data
transferred to those companies that voluntarily agree to adhere to those
principles. The Commission has made similar adequacy decisions regarding
transfers to Switzerland.

  U.S. companies have been able to register for this safe harbor since
November 2000. VIA has not yet adopted the safe harbor principles. Therefore,
our local operations within European Union member states can not, except in
some limited circumstances, transfer personal data collected from customers,
employees and other persons to the United States, including to our Reston,
Virginia headquarters, without the explicit consent of the person concerned.
The European Union has made a political commitment not to enforce data
protection laws against United States companies receiving personal data from
the European Union, until July 1, 2001. This commitment does not apply to
transferors of data within the European Union. Although the purpose of the
directive is to harmonize the various national laws on data protection in the
European Union, the requirements with respect to the collection and processing
of data, the rights of users and the obligations imposed on companies
collecting data vary substantially from country to country and may continue to
do so in the future once the directive has been implemented by all member
states. Therefore, despite the agreement reached between the European Union
and the United States, until specific implementing legislation is enacted in
the member states in which we operate, it is unclear how our operations and
our corporate headquarters will be affected by restrictions that might be
established in each member state with respect to the use of personal
information about our customers, employees and other persons from which we
collect data in the ordinary course of business and our ability to share that
information with others such as suppliers and advertisers.

  The data protection directive was supplemented by a further and sector
specific "Telecommunications Data Protection Directive." This directive sets
out the rules governing the protection of confidentiality of electronic
communications and requires national authorities to set up a framework of
rules governing lawful interception of such communications. All member states
were required to implement this directive into national law by October 24,
2000. Most member states have taken action to implement this directive. For
example, in the United Kingdom, the Government passed the Regulation of
Investigatory Powers Act, which is described in more detail below. There are
similar legislative schemes or proposed schemes in Germany, France and other
member states.

  Content Regulation and Liability.  On June 8, 2000, the European Parliament
and Council adopted the electronic commerce directive. Member states are
required to implement the directive by January 17, 2002. The directive
provides that an Internet services provider will not be liable for information
it hosts unless the provider has actual knowledge that the information or
activity is illegal, or is aware of facts or circumstances

                                      12
<PAGE>

from which the illegal information or activity is apparent, so long as the
Internet services provider acts promptly to remove or disable access to the
information upon becoming aware that it is illegal. In addition, an Internet
services provider providing access to communication networks or transmitting
over communication networks information that is provided by its customers will
not be liable for that information provided that the Internet services
provider does not initiate the transmission, select the recipient of the
transmission or modify the transmitted information. According to the
directive, subject to certain conditions, Internet service providers will also
not be held liable for the automatic, intermediate and temporary storage of
that information, also known as caching, performed for the sole purpose of
making the transmission of the information to other service recipients more
efficient. Because this area of law is still developing, there is uncertainty
in some of our operating companies about the potential liability of providers
for content carried on their networks.


  Access to content. Germany has enacted legislation that would require
Internet services providers to establish technical means to permit German
authorities to intercept data traffic of identified customers. The application
of the legislation to Internet services providers has been subject to
significant opposition from Internet services providers and industry groups
because of the cost that service providers would incur to comply with the law.
This opposition has led to a delay in the implementation of regulations
regarding the practical and technical execution and implementation of
statutory interception requirements. The regulations are currently being
discussed between the Federal Ministry of Commerce and various data protection
organizations and agencies. The next hearing will be in April 2001.

  In the United Kingdom, the Regulation of Investigatory Powers Act, or RIPA,
came into force in October 2000. RIPA extends existing interception law to
encompass all communications service providers (including Internet service
providers). The law permits the British Secretary of State to require a
communication service provider to maintain a reasonable intercept capability.
Industry representatives continue to consult with the British government on
implementation and the question of who will bear the costs of implementing and
maintaining the equipment needed for such interception capability is being
debated. The British government has set aside (Pounds)20 million for the next
three years to provide a "fair contribution" to those costs. It is currently
not clear which or how many service providers will be required to maintain
this capability and what level of financial assistance will be available for
ongoing maintenance costs.

  Licensing Requirements. In the United Kingdom, the Telecommunications Act
1984 provides that it is a criminal offense to run a telecommunications system
without a license. Licenses take two forms--Class and Individual licenses.
Internet services providers are permitted to provide services within the
United Kingdom and acquire international capacity from other carriers under
Telecommunications Services Class Licenses and are generally not required to
hold individual licenses under the Telecommunications Act. However, we own and
operate our own network facilities in the United Kingdom connecting our trans-
Atlantic backbone to connection points in the city of London. Accordingly, we
have acquired an individual public telecommunications operator license issued
under the Telecommunications Act 1984 which permits us to carry international
traffic across international network facilities that we own. In connection
with this license, we were placed on Annex 2 of the Interconnection Directive
by the United Kingdom regulator, OFTEL, which permits us to negotiate for
direct interconnection with British Telecom and other licensed network
operators in the United Kingdom. Our license also imposes conditions on us,
including the obligation to provide, at our cost, the technical means for
authorized government agencies to intercept communications traffic on our
network within the United Kingdom. The requirements imposed on service
providers to enable interception are now also governed by the rules
established under the Regulation of Investigatory Powers Act. If we were to
fail to continue to satisfy in any material respect the conditions on which we
hold our license, we would not be permitted to operate our trans-Atlantic 155
Mbs network within the United Kingdom, which would have a materially adverse
effect on our operations.

                                      13
<PAGE>

 Latin America

  Licensing Requirements. In all Latin American markets in which we currently
operate, the provision of Internet access and value-added services, with the
exception of Internet telephony, is completely deregulated, and, other than in
Brazil, where no licenses are required, companies may satisfy all the
licensing requirements necessary to become an authorized provider of Internet
access and value-added services by obtaining a value-added services license.
All of our Latin American local providers possess licenses where required.

  In each of the countries in Latin America in which we are operating, there
are restrictions against the provision of basic, public telephony services
over the Internet by companies other than the licensed basic services
providers. It remains unclear whether the provision of private corporate
network Internet telephony services is subject to license requirements. We do
not presently intend to offer either public or private Internet telephony
services in these countries until the respective regulatory authorities
explicitly permit Internet services providers to market such services without
a telephony license.

  In Mexico, the Federal Telecommunications Law prohibits Internet services
providers from building and operating a public telecommunications network or
national satellite connection without first obtaining a concession. Under the
concession scheme, non-Mexican ownership of the concession holder may not
exceed 49%. As a result, in Mexico we will not be able to own our own network
facilities without partnering with a Mexican company or person. Our Mexican
operating company, VIA NET.WORKS S.A. de C.V., leases all the network
facilities it requires from local public telecommunications network operators.

  Legislative activity. As in Europe, Latin American countries in which we
operate are considering specific legislation with respect to the Internet,
covering issues such as user privacy, obscenity, libel, child protection,
taxation, advertising, intellectual property rights, and information security.

  Our Brazilian operation, VIA NET.WORKS Brasil, is located in the state of
Sao Paulo, which levies a 25% sales tax on communication services. Neither the
courts nor the tax authorities in Brazil have definitively addressed the
question of whether providing access to the Internet is a communication
service. VIA NET.WORKS Brasil does not assess this tax against its customers
and does not pay it to the state tax authority. If Internet access providers
are ultimately required to pay the tax, our operating results in Brazil would
be significantly and negatively impacted.

 United States

  Content Regulation and Liability. In the United States, certain legislation
has been adopted to address specific areas of liability of Internet services
providers. In 1998, Congress enacted the Digital Millennium Copyright Act, or
DMCA, which limits the liability of online service providers, such as us, who
store, display or transmit information that may infringe the rights of authors
in copyrighted materials, provided that certain requirements are met. The law
provides service providers with a defense against claims of copyright
violations if the provider follows the proscribed procedures when a claim of
copyright infringement is made against materials posted on the providers' web
site or one under its control. We have posted the required notice of
compliance on our United States web sites and have established internal
procedures to ensure compliance with the law to take full advantage of the
defense against liability made available under the law and otherwise minimize
our exposure to liability. Few courts have had the opportunity to interpret
this law and therefore it is unclear to what extent the DMCA will provide
protection from infringement claims.

  Data Protection and Privacy. The United States, unlike the European Union,
has not enacted comprehensive legislation protecting the transfer and
processing of personal information of individuals. Congress has taken a
piecemeal approach by adopting sector-specific legislation, for example, in
the protection of personal medical and health information and banking and
financial information. With respect to other personal information, United
States governmental authorities have generally encouraged industry self-
regulation, although the public's rising focus on data privacy in the United
States has led Congress and government regulatory

                                      14
<PAGE>

agencies to indicate their intent to pursue legislative action to regulate the
collection of personal information over the Internet. Numerous states'
legislatures currently are considering bills relating to the rights of
consumers to the privacy of their personal information. The enactment of any
such laws could increase the cost of providing the type of services we offer
in the United States and impede the growth of such services and others that we
may seek to offer in the future. However, because we currently generate only a
small percentage of our revenues from activities in the United States, we do
not anticipate the enactment of any privacy legislation or other legislation
enacted in the United States would have a material adverse effect on our
operations.

Restrictions on the Import and Export of Encrypted Material or Encryption
Software

  None of the countries in which we do business other than France imposes any
material import restrictions on cryptography. In France, the import of
cryptography devices is subject to prior declaration requirements by the
importer and, depending on the strength of the encryption, prior authorization
by the French government. Among the countries in which we do business, Brazil
and Mexico do not currently restrict the export of cryptography devices.
However, all of the other countries in which we operate do maintain export
controls to some degree on encryption software and devices. The United States,
Argentina, Switzerland and the European Union member countries restrict the
export of technology that could be used for both commercial and military
purposes. These restrictions extend to encryption hardware and software,
including World Wide Web browsers, e-mail applications and e-commerce servers.

  Our operating companies generally offer customers, among other services,
encryption services, providing the customer with the ability to transmit
company data over the Internet in a secure fashion. However, in most cases,
our operating companies do not design, develop, manufacture, or distribute
their own encryption software, but instead, rely upon third-party vendors and
manufacturers. We are not aware that our operating companies have experienced
any difficulty in obtaining from commercial vendors security software or
devices containing the level of encryption technology required by our
customers.

  Many of the most widely used cryptography devices are developed by companies
based in the United States. To the extent that U.S. export laws would impede
or prevent the use by our customers of any U.S. vendor's software, we believe
that we would be able to substitute other available encryption software, of
other than U.S. origin, for our customers' requirements and therefore would
not experience any material adverse impact as a result.

Employees

  At March 1, 2001, we employed 1,211 people on a full-time equivalent basis.
61 employees were located in our headquarters and regional offices and 1,150
were located in our local operations. Of our total employees, 395 were
involved in sales and marketing, 228 were employed in customer care, 328 were
involved in technical and engineering and the remaining 260 were devoted to
finance, legal, strategic planning and other administrative functions.
Relations with our employees are good. Some of our operating companies are
parties to collective bargaining agreements.

  Since year end 2000, our employee base has decreased as we realized
economies of scale from the integration of our operations in one market. We
will continue to realize efficiencies as we integrate operations in additional
markets, but we expect that increases in sales, marketing and customer care
staffing to support our growth will result in a net increase in our employee
base by the end of 2001.

Risk Factors

  You should be aware that there are various risks associated with us and our
business, including the ones discussed below. You should carefully consider
these risk factors, as well as the other information contained in this Form
10-K, in evaluating us and our business.


                                      15
<PAGE>

Risks Related to our Business

 Our combined operating history is limited and may not be indicative of our
 future performance.

  Although a number of the operating companies we have acquired have been in
operation for some time, VIA, as a combined operation, has a limited history
of operations. Our limited history makes it more difficult to recognize
operational or financial trends and indicators that might otherwise allow us
to predict future financial performance with a higher degree of comfort.

 Because we have grown rapidly and we expect our growth to continue, we may
 have difficulty managing our growth effectively, which could adversely affect
 the quality of our services and the results of our operations.

  We have grown rapidly through acquisitions and focusing on our core market
of small and medium-size businesses. From June 1998 through December 2000, we
acquired 26 companies and increased the total number of our employees from
five to over 1,200. We expect to continue our growth by focusing sales efforts
on value-added services to our core market and continuing to develop our base
of larger corporate customers. To manage our expected growth effectively, we
must

  . implement additional management information systems

  . develop additional operating, administrative, financial and accounting
    systems and controls

  . hire and train additional personnel

  . expand the reach of our network

  If we are unable to meet these demands, the quality of our services may
suffer, causing us to lose customers and revenues.

  Our efforts to reduce our lower margin residential and wholesale customer
base may reduce our revenues in the short or intermediate term faster than we
can generate higher margin business and value-added services revenues.

  We have focused our sales and product development efforts on selling higher
margin products and pursuing greater market share of the business market for
Internet and Internet-related services. In doing so, we have allowed our
legacy residential and wholesale customer base to run off and, in certain
markets, have pursued or considered the sale of such customer accounts. We may
not be able to acquire business customer revenues as quickly as our
residential customer or wholesale revenues diminish, which could adversely
affect our operating results.

 If we fail to integrate operating and information systems, networks and
management of our acquired companies successfully, we may suffer operating
inefficiencies and reduced operating cash flow.

  We may not be able to integrate our acquired companies to the extent that we
have assumed because we currently operate in 14 different countries with
different governmental regulations, languages, customs, currencies and
availability of telecommunication capacity to carry data. Any material failure
to integrate systems, networks or management of these operations may have a
significant negative impact on the assumptions we make or have made with
respect to cost reductions, sales and marketing opportunities as well as our
ability to adequately serve and bill our customers. In addition, we have
committed and will continue to commit substantial management, operating,
financial and other resources to integrate our operating companies and
implement our business model, which will continue to reduce our operating cash
flow.

 Our integration efforts may lead to the loss of key staff and a distraction
 from revenue-generating opportunities, which may lead to lower than expected
 operating results.

  We have acquired multiple operations in the United Kingdom, France, Germany,
The Netherlands and Switzerland. In each of these countries, we have begun
efforts to integrate legally, financially and operationally

                                      16
<PAGE>

the separate companies acquired in that country into a single operation. These
efforts may create operational and personnel disruptions that may lead to the
loss of key personnel or require that we increase salaries or fringe benefits
to retain staff. In addition, integration activities require significant
attention from key management and staff at these operations, which may
distract management and staff from revenue-generating opportunities and
negatively affect our results.

 Financial information on which we have relied to make acquisitions may not
 have been accurate, which may result in our acquiring undisclosed liabilities
 or experiencing lower than expected operating results.

  The companies we have acquired typically have not had audited financial
statements and historically have varying degrees of internal controls and
detailed financial information. As a result, we may have acquired undisclosed
liabilities or experience lower-than-expected revenues or higher-than-expected
costs for those companies that we have acquired recently, which could
adversely affect our future operating results.

 Fluctuations in the exchange rate between the U.S. dollar and the various
 currencies in which we conduct business may affect our operating results.

  We record the revenues and expenses of our local operations in their home
currencies and translate these amounts into U.S. dollars for purposes of
reporting our consolidated results. As a result, fluctuations in foreign
currency exchange rates may adversely affect our revenues, expenses and
results of operations as well as the value of our assets and liabilities.
Fluctuations may adversely affect the comparability of period-to-period
results. For example, the average value of the Euro ((Euro)) during the
quarterly period ended December 31, 2000 decreased by 4.2% in relation to the
U.S. dollar. Since each Euro converted to fewer U.S. dollars, we reported
lower revenue growth than what would be calculated in local currencies. In
addition, we hold foreign currency balances that will create foreign exchange
gains or losses, depending upon the relative values of the foreign currency at
the beginning and end of the reporting period, affecting our net income and
earnings per share. For example, the decrease in the value of the Euro from
the beginning to the end of our 3rd quarter resulted in a $6.7 million foreign
exchange loss and a reduction in earnings per share of $.11; the increase in
value of the Euro from the beginning to the end of the 4th quarter resulted in
a $4.8 million foreign exchange gain and an increase in earnings per share of
$.08. In projecting future operating results, we make certain assumptions
about the fluctuation of the home currencies of our operations. If these
assumptions turn out to be materially inaccurate, our actual operating results
may be materially different from our projections.

 Logistical problems or economic downturns that could result from the
 introduction of the Euro may affect our ability to operate and adversely
 impact our operating results.

  On January 1, 1999, 11 of the 15 European Union member countries adopted the
Euro as their common legal currency, at which time their respective individual
currencies became fixed at a rate of exchange to the Euro, and the Euro became
a currency in its own right. During a January 1, 1999 to January 1, 2002
transition period, we must manage transactions with our customers and our
third-party vendors who conduct business in Euro participating countries in
both the Euro and the individual currencies. If we, our customers or our
vendors, experience systems problems in converting to the Euro, we could be
unable to bill and collect from customers or pay vendors for services, and our
operating results could be materially adversely affected. To date, we have not
experienced any material problems in this conversion effort.

 Our brand names are difficult to protect and may infringe on the intellectual
 property rights of third parties.

  We are aware of other companies using or claiming to have rights to use
trademarks, that are similar to ours and variations of those marks, including
the VIA NET.WORKS mark. We have received several demands from third parties to
cease and desist using one or more of our trademarks. The users of these or
similar marks may be found to have senior rights if they were ever to assert a
claim against us for trademark infringement. If an infringement suit were
instituted against us, even if groundless, it could result in substantial
litigation expenses in defending the suit. If such a suit were to be
successful, we could be forced to cease using the mark and to pay

                                      17
<PAGE>

damages. Moreover, if we are forced to stop using any of our trademarks, we
may have to expend significant resources to establish new brands and our
operating results may be materially impacted.

Risks Related to our Industry

 Regulatory conditions of the countries where our operating companies are
 located are uncertain and may decrease demand for our services, increase our
 cost of doing business or otherwise reduce our business prospects.

  Our operating companies are located in countries with rapidly changing
regulatory and economic conditions that may affect the Internet services
industry. Any new law or regulation pertaining to the Internet or
telecommunications, or the application or interpretation of existing laws,
could decrease demand for our services, increase our costs, or otherwise
reduce our profitability or business prospects. Specific examples of the types
of laws or regulations that could adversely affect us include laws that

  .  impose taxes on transactions made over the Internet

  .  impose telecommunications access fees on Internet services providers

  .  directly or indirectly affect telecommunications costs generally or the
     costs of Internet telecommunications specifically

  .  prohibit the transmission over the Internet of various types of
     information and content

  .  impose requirements on Internet services providers to protect Internet
     users' privacy or to permit government interception of data traffic

  .  increase the likelihood or scope of competition from telecommunications
     or cable companies

  For example, Germany has enacted legislation that would require Internet
services providers to establish technical means to permit German authorities
to intercept data traffic of identified customers. Internet Services providers
have opposed the implementation of this legislation because of the costs they
would incur to comply with the legislation. This opposition has led to a delay
in the implementation of the law. If the law is ultimately applied to Internet
services providers, our German operations could be significantly impacted.
Also, some states of Brazil impose a tax of up to 30% on revenues generated by
communications services. There has been no judicial determination that
Internet access services constitute communications services. If Internet
services providers were ultimately required to pay this tax, our Brazilian
operations would be negatively and significantly impacted.

  These laws could require us to incur costs to comply with them or to incur
new liability. They could also increase our competition or change our
competitive environment so that customer demand for our products and services
is affected.

  In addition to risks we face from new laws or regulations, we face
uncertainties in connection with the application of existing laws to the
Internet. It may take years to determine the manner in which existing laws
governing issues like property ownership, libel, negligence and personal
privacy will be applied to communications and commerce over the Internet.

 Increasing competition for customers in our markets may cause us to reduce
 our prices or increase spending, which may negatively affect our revenues and
 operating results.

  There are competitors in our markets with more significant market presence
and brand recognition and greater financial, technical and personnel resources
than we have. We also face competition from new entrants such as ADSL/DSL and
wireless local loop providers who may have significantly reduced cost
structures in obtaining local access connectivity to the customer. Although
the competitors we face vary depending on the market and the country, these
competitors may include local and regional Internet services providers,
telecommunication companies and cable companies. Some of our competitors,
especially the telecommunications

                                      18
<PAGE>

companies, have large networks in place as well as a significant existing
customer base. As a result of this competition, we currently face and expect
to continue to face significant pressure to reduce our prices, particularly
with respect to Internet access services, and to improve the products and
services we offer.

 If demand for Internet services in our markets does not grow as we expect,
 our ability to grow our revenues will be negatively affected.

  Internet use in our markets is relatively low. If the market for Internet
services fails to develop, or develops more slowly than expected, we may not
be able to increase our revenues at the rate we have projected. Obstacles to
the development of Internet services in our markets include:

  .  low rates of personal computer ownership and usage

  .  lack of developed infrastructure to develop Internet access and
     applications

  .  limited access to Internet services

  In particular, we depend on increasing demand for Internet services by small
to mid-sized businesses in our geographic markets. Demand for Internet
services by these businesses will depend partly on the degree to which these
businesses' customers and suppliers adopt the Internet as a means of doing
business, and partly on the extent to which these businesses adopt Internet
technologies to deal with internal business processes, such as internal
communications. Demand will also partly depend on whether there is a general
economic downturn in these markets, which may result in a cutback of
expenditures of the services we offer. Furthermore, as competitive pressures
drive down customer prices for Internet access in many of our markets, we
depend increasingly in such markets on our ability to sell our customers
higher margin, value added services such as security services, web hosting,
and e-commerce solutions.

 We are in a rapidly evolving industry in which the products and services we
 offer, their methods of delivery and their underlying technologies are
 changing rapidly, and if we do not keep pace with these changes, we may fail
 to retain and attract customers, which would reduce our revenues.

  The Internet services market is characterized by changing customer needs,
frequent new service and product introductions, evolving industry standards
and rapidly changing technology. Our success will depend, in part, on our
ability to recognize and respond to these changes in a timely and cost-
effective manner. If we fail to do so, we will not be able to compete
successfully.

 We rely on telecommunications companies in our markets to provide our
 customers with reliable access to our services, and failures or delays in
 providing access could limit our ability to service our customers and impact
 our revenues and operating results.

  Our customers typically access our services either through their normal
telephone lines or dedicated lines provided by local telecommunications
companies specifically for that use. In some of our markets, we experience
delays in delivery of new telephone or dedicated lines that have prevented our
customers from accessing our services. These delays result in lost revenues.
Additionally, some local telecommunications companies that provide Internet
services provide delivery of telephone or dedicated lines to their Internet
customers on a preferential basis, which may cause us to lose current and
potential customers. We also lease network capacity from telecommunications
companies and rely on the quality and availability of their service. These
companies may experience disruptions of service, which could disrupt our
services to, or limit Internet access for, our customers. We may not be able
to replace or supplement these services on a timely basis or in a cost-
effective manner, which may result in customer dissatisfaction and lost
revenues.


                                      19
<PAGE>

 We depend on the reliability of our network, and a system failure or a breach
 of our security measures could result in a loss of customers and reduced
 revenues.

  We are able to deliver services only to the extent that we can protect our
network systems against damages from telecommunication failures, computer
viruses, natural disasters and unauthorized access. Any system failure,
accident or security breach that causes interruptions in our operations could
impair our ability to provide Internet services to our customers and
negatively impact our revenues and results of operations. To the extent that
any disruption or security breach results in a loss or damage to our
customers' data or applications, or inappropriate disclosure of confidential
information, we may incur liability as a result. In addition, we may incur
additional costs to remedy the damages caused by these disruptions or security
breaches. Although we currently possess errors and omissions insurance,
business interruption insurance, and insurance covering losses resulting from
computer viruses and security breaches, these policies may not provide
effective coverage upon the occurrence of all events.

 If we fail to attract and retain qualified personnel or lose the services of
 our key personnel, our operating results may suffer.

  Our success depends on our key management, engineers, sales and marketing
personnel, technical support representatives and other personnel, many of whom
may be difficult to replace. If we lose key personnel, we may not be able to
find suitable replacements, which may negatively affect our business. In
addition, since the demand for qualified personnel in our industry is very
high, we may have to increase the salaries and fringe benefits we may offer to
our personnel, which may affect our operating results. We do not maintain key
person life insurance on, or restrictive employment agreements with, any of
our executive officers.

 We may be liable for information disseminated over our network.

  We may face liability for information carried on or disseminated through our
network. Some types of laws that may result in our liability for information
disseminated over our network include:

  . laws designed to protect intellectual property, including trademark and
    copyright laws

  . laws relating to publicity and privacy rights and laws prohibiting
    defamation

  . laws restricting the collection, use and processing of personal data and

  . laws prohibiting the sale, dissemination or possession of pornographic
    material

  The laws governing these matters vary from jurisdiction to jurisdiction.

 Our Latin American markets have a history of political and economic
 instability which may disrupt our operations and adversely affect our
 results.

  We derive and expect to continue to derive a material portion of our
revenues from the Latin American markets. Latin America has experienced
periods of political and economic instability. If these conditions were to
reoccur, our business could be adversely affected. Historically, instability
in Latin American countries has been caused by

  . extensive governmental involvement, control or ownership of industries in
    local economies, including telecommunications facilities, financial
    institutions and other commerce infrastructure

  . unexpected changes in regulatory requirements such as imposing licensing
    requirements or levying new taxes

  . slow or negative growth as a result of recessionary trends caused by
    foreign currency devaluations, interest rate hikes and inflation

  . wage and price controls that reduce potential profitability of businesses

                                      20
<PAGE>

  We have made no allowances for the impact of any such potential events in
financial projections we have announced. The occurrence of any such adverse
political or economic conditions may deter growth in Internet usage or create
uncertainty regarding our operating climate, which may adversely impact our
business and operating results.

Item 2. Properties

  Our principal executive offices are located in leased facilities at 12100
Sunset Hills Road, Reston, Virginia. Additionally, we lease space in our
operating markets for regional support facilities, local offices, network
operations centers, data centers and points of presence. We believe that our
present facilities are in good condition and are currently suitable for our
business needs. We anticipate that we will need additional space, particularly
in our operating markets, as we expand, and that we will be able to obtain
suitable space where and as needed.

Item 3. Legal Proceedings

  We are not a party to any material legal proceedings.

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

  During the three months ended December 31, 2000, we did not submit any
matters to a vote of our stockholders.

                                    PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

 Market for our Common Stock

  On February 11, 2000, VIA completed its initial public offering of shares of
common stock, par value $.001 per share. The company's stock is traded on both
the Nasdaq National Market in the United States and the Euronext Amsterdam
exchange under the symbol VNWI. The table below sets forth, for the periods
indicated, the high and low sales prices per share of the common stock as
reported on the Nasdaq National Market:

<TABLE>
<CAPTION>
          2000:                                                    High   Low
          -----                                                   ------ ------
<S>                                                               <C>    <C>
First quarter (from February 11th)............................... $72.50 $25.44
Second quarter................................................... $26.50 $11.00
Third quarter.................................................... $17.69 $ 8.25
Fourth quarter................................................... $ 9.63 $ 3.31
</TABLE>

  As of March 1, 2001, there were approximately 5,240 beneficial owners of the
company's common stock, holding the common stock in street name.

  We have never declared or paid any dividends on our common stock and do not
expect to pay dividends in the foreseeable future

 Recent Sales of Unregistered Securities.

  Between October 1, 2000 and December 31, 2000, VIA sold and issued the
following unregistered securities:


                                      21
<PAGE>

  On October 6, 2000, VIA sold 70,708 shares of common stock to stockholders
of one of VIA's operating companies in connection with the operating company's
acquisition by VIA. The shares were valued at approximately $705,000 and were
issued in reliance on Regulation S under the Securities Act.

  On October 10, 2000, VIA sold 119,685 shares of common stock to stockholders
of one of VIA's operating companies in connection with the operating company's
acquisition by VIA. The shares were valued at approximately $1.1 million and
were issued in reliance on Regulation S under the Securities Act.

  Appropriate legends are affixed to the stock certificates issued in the
aforementioned transactions.

 Use of Initial Public Offering Proceeds

  On February 16, 2000, VIA completed its initial public offering of shares of
common stock, par value $.001 per share. VIA's initial public offering was
made pursuant to a prospectus dated February 11, 2000, which was filed with
the SEC as part of a registration statement, file no. 333-91615, that was
declared effective by the SEC on February 10, 2000.

  The estimated net offering proceeds to VIA after deducting the estimated
expenses and underwriting discounts and commissions was approximately $333.0
million. From the effective date of the initial public offering through
December 31, 2000, VIA has used $78.7 million for acquisitions of other
businesses, including the repayment of debt for 1999 acquisitions and
increases in VIA's investment in various partially owned subsidiaries, $20.3
million for capital expenditures and approximately $13.5 million to fund
operating losses.

Item 6. Selected Financial Data

  The following is a summary of selected consolidated financial data of the
Company from inception, June 13, 1997, to December 31, 2000. This data should
be read together with our audited consolidated financial statements and
accompanying notes, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which are included elsewhere in this
Form 10-K.

                                      22
<PAGE>

  As used in the table below, "EBITDA" represents earnings or loss from
operations before interest, taxes, depreciation, amortization and non-cash
stock compensation charges. Although EBITDA is a measure commonly used in our
industry, it should not be considered an alternative to net earnings, when
determined in accordance with generally accepted accounting principles in the
United States, or GAAP, or as an alternative to cash flows from operating
activities, determined in accordance with GAAP. In addition, the measure of
EBITDA we use may not compare to other, similarly titled measures used by other
companies.

<TABLE>
<CAPTION>
                          Period from Inception
                           (June 13, 1997) to    Year Ended   Year Ended   Year Ended
                              December 31,      December 31, December 31, December 31,
                                  1997              1998         1999         2000
                          --------------------- ------------ ------------ ------------
                                 (Dollars in thousands, except per share data)
<S>                       <C>                   <C>          <C>          <C>
Statement of Operations
 Data:
Revenues:
  Access................         $   --           $  3,212    $   26,785  $    59,096
  Value-added services..             --                136        11,015       40,992
  Other.................             --                --          1,494        2,903
                                 -------          --------    ----------  -----------
    Total revenues......             --              3,348        39,294      102,991
Operating costs and
 expenses:
  Internet services.....             --              1,853        19,211       55,405
  Selling, general and
   administrative.......             336             6,258        35,587       80,733
  Depreciation and
   amortization.........             --              1,304        19,425       46,697
                                 -------          --------    ----------  -----------
    Total operating
     costs and
     expenses...........             336             9,415        74,223      182,835
                                 -------          --------    ----------  -----------
Loss from operations....            (336)           (6,067)      (34,929)     (79,844)
Other operating
 expenses:
  Interest income
   (expense)............              15             1,425         1,197       11,171
  Other income
   (expense)............             --             (1,199)         (189)      (2,395)
  Foreign currency gains
   (losses).............             --                115           824       (4,725)
                                 -------          --------    ----------  -----------
Loss before minority
 interest and income
 taxes..................            (321)           (5,726)      (33,097)     (75,793)
  Income tax benefit....             --                145           (65)        (985)
  Minority interest.....             --                239         2,167        2,531
                                 -------          --------    ----------  -----------
Net loss attributable to
 common stockholders....         $  (321)         $ (5,342)   $  (30,995) $   (74,247)
                                 =======          ========    ==========  ===========
Basic and diluted loss
 per share attributable
 to common
 stockholders...........         $(10.66)         $ (24.29)   $   (28.55) $     (1.40)
                                 =======          ========    ==========  ===========
Shares used in computing
 basic and diluted loss
 per share..............          30,063           219,964     1,085,564   52,892,772
Other Financial Data:
Net cash used in
 operating activities...         $  (233)         $ (3,784)   $  (10,071) $   (15,101)
Net cash used in
 investing activities...              (8)          (14,383)     (122,703)     (96,610)
Net cash provided by
 financing activities...           1,048            52,187       118,482      329,054
EBITDA..................            (336)           (4,763)      (13,807)     (27,545)
Depreciation and
 amortization...........             --              1,304        19,425       46,697
Non-cash stock
 compensation charges...             --                --          1,697        5,602
Capital expenditures....               8               520        16,793       20,260
</TABLE>

                                       23
<PAGE>

<TABLE>
<CAPTION>
                                                   As of December 31,
                                            -----------------------------------
                                             1997    1998      1999      2000
                                            ------  -------  --------  --------
                                                 (Dollars in thousands)
<S>                                         <C>     <C>      <C>       <C>
Balance Sheet Data:
Cash and cash equivalents.................. $  807  $34,711  $ 20,067  $237,839
Goodwill...................................    --    29,848   115,194   181,082
Other assets...............................     14    8,466    64,322    65,962
                                            ------  -------  --------  --------
Total assets...............................    821   73,025   199,583   484,883
Short-term notes and current portion of
 long-term debt............................    --    11,182     7,808     3,265
Long-term debt and capital lease
 obligations, net of current portion.......    --       565     5,846     1,894
Other liabilities..........................     94    6,487    30,076    51,386
Minority interest in consolidated
 subsidiaries..............................    --     7,597     4,422       597
Mandatorily redeemable convertible
 preferred stock...........................  1,018   53,075   180,933       --
Total stockholders' equity (deficit).......   (291)  (5,881)  (29,502)  427,741
                                            ------  -------  --------  --------
Total liabilities, minority interest,
 mandatorily redeemable convertible
 preferred stock and stockholders equity
 (deficit)................................. $  821  $73,025  $199,583  $484,883
                                            ======  =======  ========  ========
</TABLE>

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

  The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes included in Part II, Item
8 of this Form 10-K. This discussion contains forward-looking statements based
on current expectations, which involve risks and uncertainties. Actual results
and the timing of certain events could differ materially from the forward-
looking statements as a result of a number of factors including those referred
to in "Risk Factors" in Item 1 of this Form 10-K.

Overview

  We are a leading international provider of Internet access and services
focused on small and mid-sized businesses in Europe, Latin America and the
United States. We have built our business through the acquisition, integration
and growth of 26 Internet services providers in 14 countries, all of which
have been acquired since June 1998. We currently operate in Argentina,
Austria, Brazil, France, Germany, Ireland, Italy, Mexico, the Netherlands,
Portugal, Spain, Switzerland, the United Kingdom and the United States.

                                      24
<PAGE>

  Our financial statements for the period from inception through December 31,
1997 include only corporate expenses. We were a development stage company
during this period and had no revenue-producing operations. Our consolidated
financial statements as of and for the years ended December 31, 1998, 1999 and
2000 include the results of the wholly or majority-owned operating companies
that we owned for all or a portion of the respective periods. We manage our
business by geographic regions, and we evaluate performance based on revenues
and EBITDA. The following table presents information about our four market
segments and our corporate activities, individually and on a consolidated
basis.

<TABLE>
<CAPTION>
                                               Year Ended December 31,
                                           ----------------------------------
                                           1997    1998      1999      2000
                                           -----  -------  --------  --------
                                                   (In thousands)
<S>                                        <C>    <C>      <C>       <C>
Central and Western Europe:
  Total revenue........................... $ --   $ 1,494  $ 11,994  $ 33,101
  EBITDA..................................   --      (166)   (3,103)   (4,079)
  Total assets............................   --    15,354    25,077    63,459
United Kingdom, Ireland and Southern
 Europe:
  Total revenue........................... $ --   $ 1,202  $ 19,477  $ 45,432
  EBITDA..................................   --       121      (811)     (701)
  Total assets............................   --    20,464    72,291    54,995
South America:
  Total revenue........................... $ --   $   652  $  5,376  $  6,450
  EBITDA..................................   --      (329)   (1,316)   (5,571)
  Total assets............................   --    15,474    13,016     6,461
North America:
  Total revenue........................... $ --   $   --   $  2,447  $ 18,008
  EBITDA..................................   --       --       (513)     (861)
  Total assets............................   --       --     36,767    84,987
Corporate:
  Total revenue........................... $ --   $   --   $    --   $    --
  EBITDA..................................   --    (4,389)   (8,064)  (16,333)
  Total assets............................   --    21,733    52,432   274,981
Consolidated:
  Total revenue........................... $ --   $ 3,348  $ 39,294  $102,991
  EBITDA..................................  (336)  (4,763)  (13,807)  (27,545)
  Total assets............................   821   73,025   199,583   484,883
</TABLE>

  As used in the above table and in the table under "Quarterly Results of
Operations" in this section, "EBITDA" represents earnings or loss from
operations before interest, taxes, depreciation, amortization and non-cash
stock compensation charges. Although EBITDA is a measure commonly used in our
industry, it should not be considered an alternative to net earnings, when
determined in accordance with generally accepted accounting principles in the
United States, or GAAP, or as an alternative to cash flows from operating
activities, determined in accordance with GAAP. In addition, the measure of
EBITDA we use may not compare to other, similarly titled measures used by
other companies.

Recent Business Acquisitions and Dispositions

  On October 6, 2000, VIA acquired a 100% interest in Highspeed-Server Eisnet
GmbH in Forchheim, Germany (Highspeed). Highspeed specializes in delivering
high quality web-hosting and server housing to commercial customers in Germany
and was acquired for approximately $5 million in cash and stock.

  On October 10, 2000 VIA acquired a 100% interest in Symphonie S.A. (trading
as MNet) in Montpellier, France for approximately $3 million in cash and
stock. MNet is a full service business focused Internet solutions company.

                                      25
<PAGE>

  On November 7, 2000, VIA made a further investment in and acquired the
remaining minority interest in VIA NET.WORKS Deutschland GmbH (formerly GTN
Gesellschaft fur Telekommunikations und Netzwerkdienste mbH) for a total of
approximately $3 million in cash. VIA acquired a controlling interest in VIA
NET.WORKS Deutschland GmbH in October 1998.

  In December 2000, VIA NET.WORKS Deutschland GmbH sold its 100% interest in
Ecce Terram Internet Services GmbH in Oldenburg, Germany. Ecce Terram is a
small operation who's customer base and revenue stream no longer fit with
VIA's operating strategy. The transaction resulted in no net gain or loss in
the consolidated statements of VIA.

Revenues

  Our operating companies generally had business wholesale and residential
customers at the time we acquired them. After acquisition, our strategy is to
grow the customer base and revenues primarily by marketing value-added
services directly to the small and mid-sized businesses in our markets. We do
not market to the wholesale and residential customer bases and therefore
expect these customers and this revenue to run off. We expect that our number
of business customers will grow more rapidly than our number of consumer
customers, and that revenue from the sale of value-added services will
increase more rapidly than revenue from the sale of Internet access.
Therefore, our current customer and revenue mix is not expected to be
indicative of the future.

  Revenue from Internet access services, both dial-up and dedicated, derives
primarily from subscriptions purchased by businesses and consumers. These
subscriptions, most often for three, six or 12-month service periods, are
often paid for in advance or by direct charge to a credit or debit account.
Larger business customers are usually billed monthly. Additionally, in some
countries we receive revenue in the form of payments from the
telecommunications companies that our customers use to access our services.
These providers charge by the minute for both local and long distance calls,
and pay us a portion of the fees they generate from our customers' Internet
use. All of our access revenues are recognized as they are earned over the
period the services are provided.

  Business access revenue from one large wholesale contract decreased
significantly in the fourth quarter of 2000 and is expected not to recur in
2001, after the customer experienced declining usage due to changing tariff
structures in its markets and was ultimately sold. Declining revenue from this
and other low margin wholesale and residential customers fits with VIA's
strategy of focusing on higher margin revenue streams.

  Revenue from Internet value-added services comes from web hosting,
applications hosting and related maintenance, domain name registration,
Internet security services, sales of hardware and third-party software,
network installation, training and consulting and other services. Services
such as web and applications hosting and domain name registration are sold on
a subscription basis and are paid for in advance or by monthly direct charges
to credit or debit accounts. These revenues are recognized over the period in
which the services are provided. Revenue from hardware and third-party
software sales, installation, training and consulting, and other services is
on a contract basis. We bill our customers when the product is shipped or when
services are rendered. Revenue from installation, training and consulting is
recognized over the contract term as the related services are provided.
Revenue from hardware and third-party software sales is recognized upon
delivery or installation of the products, depending on the terms of the
arrangement, and when the fee is fixed or determinable and collectibility is
considered probable.

  Internet access charges and fees for value-added services vary among our
operating companies, depending on competition, economic and regulatory
environments and other market factors. In some markets, we have reduced
prices, especially for access services, as a result of competitive pressure.
We expect that this pressure will continue in our markets as the demand for,
and supply of, Internet services continue to grow.

Expenses

  Our Internet services operating costs are the costs we incur to carry
customer traffic to and over the Internet. We lease lines that connect our
points of presence, or PoPs, either to our own network or to other network

                                      26
<PAGE>

providers. We pay other network providers for transit, which allows us to
transmit our customers' information to or from the Internet over their
networks. We also pay other recurring telecommunications costs and personnel
costs, including the cost of the local telephone lines our customers use to
reach our PoPs and access our services, and costs related to customer support
and care. We expect that our Internet services operating costs will increase
as we increase capacity to meet customer demand. We anticipate that these
costs will decline as a percentage of revenue, however, as we increase the
percentage of higher margin value added services in our revenue mix, expand
our owned network facilities and as competition drives the overall price of
network capacity downward.

  Our largest selling, general and administrative expenses are compensation
costs and the costs associated with marketing our products and services.
Compensation costs include salaries and related benefits, commissions and
bonuses. In many of our markets, we are required to make significant mandatory
payments for government-sponsored social welfare programs, and we have little
control over these costs. Our marketing expenses include the costs of direct
mail and other mass marketing programs, advertising, customer communications,
trade show participation, web site management and other promotional costs.
Other selling, general and administrative expenses include the costs of
travel, rent, utilities, insurance and professional fees. We expect that our
selling, general and administrative expenses will increase to support our
growth, but remain fairly constant as a percent of revenue.

  The largest component of our depreciation and amortization expense is the
amortization of the goodwill arising from our acquisitions. Goodwill, which we
amortize over five years, is created when the price at which we acquire a
company exceeds the value of its tangible and intangible assets. We also
recognize depreciation expense primarily related to telecommunications
equipment, computers and network infrastructure. We depreciate these assets
over their useful lives, generally ranging from three to five years. Our
network infrastructure is depreciated over 20 or 25 years, depending on the
contract term. We expect depreciation expense to increase as we expand our
network supporting infrastructures.

  When applicable, we also recognize interest income and expense, interest in
an unconsolidated subsidiary and minority interest. We earn interest income
primarily by investing our available cash in short-term treasury securities
funds. To date, this interest income has been partially offset by interest
expense, largely arising from purchase and lease financing in our operating
subsidiaries. Interest in an unconsolidated subsidiary recognizes the value of
our minority investment in i-way. In August 1999 we acquired all the remaining
shares of i-way and began consolidating the results of that subsidiary. For
subsidiaries where we own less than 100% of the equity, minority interest
eliminates a portion of operating results equal to the percentage of equity we
do not own.

  We have recorded deferred stock compensation totaling $13.2 million in
connection with the grant of stock options to employees, through December 31,
2000. This amount represents the difference between the deemed fair market
value of our common stock on the dates these options were granted and the
exercise price of the options. The amount is included as a component of
stockholders' equity (deficit) and is being amortized over the vesting period
of the individual options, generally four years. For the years ended December
31, 1999 and 2000, we recorded $1.7 million and $5.6 million, respectively, in
non-cash, deferred stock compensation charges, leaving $5.9 million to be
recognized over the remaining vesting periods. The remaining compensation
charges will be recognized primarily in 2001 and 2002. Deferred compensation
is reduced by the forfeiture of non-vested stock options upon employee
termination.

RESULTS OF OPERATIONS

Year ended December 31, 2000 compared with the year ended December 31, 1999

  Revenue. Revenue for the year ended December 31, 2000 increased 162% to
$103.0 million as compared to $39.3 million for the year ended December 31,
1999. This revenue was generated by the 26 consolidated

                                      27
<PAGE>

subsidiaries that we owned for all or a portion of 2000, as compared to the 17
consolidated subsidiaries that we owned for a portion of 1999. Of our 2000
revenue, 57% came from the sale of Internet access, 50% from business access
and 7% from residential access. Although business access revenue increased by
$30.7 million and residential access revenue increased by $1.7 million from
the previous year, both categories decreased on a percentage of revenue basis.
Business access revenue and residential access revenue declined to 50% and 7%
of total revenue in 2000, respectively from 52% and 16% of total revenue in
1999, respectively. VIA obtained the wholesale portion of its business access
customer base and its residential customer base as a part of original
acquisitions. The Company does not market to these customers and expects these
revenues to continue to decline. Additionally, during 2000, the Company
eliminated one low margin, wholesale contract, which resulted in a run-off of
business access revenue in the fourth quarter of the year. This run-off will
continue into the first quarter of 2001. Remaining 2000 revenue came from
value added services, including web hosting, web design, domain name
registration, data networking, managed bandwidth and bundled service
offerings. Revenue from value added services increased to 43% of total revenue
in 2000 from 32% in 1999. We expect value added services revenue to continue
to increase in 2001, as we focus on these higher margin revenue streams.

  Internet services operating costs. Our Internet services operating costs
were $55.4 million for the year ended December 31, 2000. We had $19.2 million
of Internet services operating costs for the year ended December 31, 1999. We
incurred these costs primarily to lease lines, purchase transit for the local
networks and compensate customer care personnel. Additionally, we incurred
operating costs associated with our international network, which we
established in June 1999. The 189% increase in costs from 1999 to 2000 is due
to the costs incurred by the 9 consolidated operations acquired during 2000
and costs incurred by the 12 consolidated operations that we owned for all of
2000, but that we owned for a portion of 1999.

  Selling, general and administrative. We incurred selling, general and
administrative expenses of $80.7 million for the year ended December 31, 2000,
a 127% increase over the $35.6 million we incurred for the year ended December
31, 1999. This increase was due to the costs incurred by the 9 consolidated
operations we acquired during 2000, and costs incurred by the 12 consolidated
operations that we owned for all of 2000 but that we owned for a portion of
1999, as well as costs incurred to support our organic growth. During 2000,
$58.8 million, or 73%, of the expenses were incurred by our 26 subsidiaries
and $21.9 million, or 27%, of the costs were incurred by our corporate
organization. The expenses incurred by our corporate organization increased by
131% between 1999 and 2000, largely due to the costs associated with employing
a larger number of corporate and regional personnel and identifying and
acquiring an increasing number of operating companies.

  Depreciation and amortization. Our depreciation and amortization expense was
$46.7 million for the year ended December 31, 2000, up from $19.4 million for
the year ended December 31, 1999. This increase was primarily due to the
amortization of goodwill arising from 9 consolidated operations acquired in
2000 and amortization related to the 12 consolidated operations that we owned
for all of 2000, but that we owned for a portion of 1999. The acquisition of
these operations and the implementation of our international network also
increased our depreciation expense for telecommunications equipment, computers
and other fixed assets. For the 2000 period, $36.7 million, or 79%, of our
depreciation and amortization expense was related to the amortization of
acquisition goodwill and $10.0 million, or 21% was related to the depreciation
of fixed assets. For the 1999 period, $15.1 million, or 78%, of our
depreciation and amortization expense was related to the amortization of
acquisition goodwill and $4.3 million, or 22% was related to the depreciation
of fixed assets.

  Interest income and expense. For the year ended December 31, 2000, we earned
$11.9 million in interest income, a 350% increase over the $2.6 million we
earned for the year ended December 31, 1999. Interest income in 2000 was
generated from investing funds received from our initial public offering in
February 2000, until those funds were used for acquisitions, operating
expenses or capital expenditures. Net proceeds from the public offering were
$333.0 million. The interest income in 1999 was generated from investing funds
from the sale of preferred shares until those funds were used for
acquisitions, operating expenses or capital expenditures. We raised $127.9
million in April 1999. For the 2000 period, we also incurred $714,000 of
interest expense, as compared to $1.4 million of interest expense incurred in
1999. Interest expense relates to the debt agreements

                                      28
<PAGE>

arising from the notes payable to the former owners of businesses acquired and
lease financing of equipment in our operating subsidiaries.

  Other income and expense. For the year ended December 31, 2000, we had $2.4
million in other expense as compared to $177,000 in other expense for the same
period in 1999. The expense in 2000 is primarily due to the impairment of an
investment security acquired in 1999 in conjunction with the acquisition of
VIA NET.WORKS Mexico. The expense in 1999 represents the loss related to our
minority investment in i-way. In August 1999, we purchased all of the
remaining equity in i-way.

  Foreign currency gains and losses. We recognized a $4.7 million foreign
currency loss for the year ended December 31, 2000, as compared to a $824,000
foreign currency gain for the year ended December 31, 1999. The loss in 2000
is primarily due to the impact of the fluctuation in the value of the Euro on
our Euro denominated cash accounts. We established these Euro denominated cash
accounts in connection with our initial public offering in February 2000, in
which we sold shares of our common stock for both US dollars and Euros. The
remainder of the loss was contributed by fluctuations in the five other non-
Euro-linked currencies in which we hold assets.

Year ended December 31, 1999 compared with the year ended December 31, 1998

  Revenue. Revenue for the year ended December 31, 1999 increased 1,074% to
$39.3 million as compared to $3.3 million for the year ended December 31,
1998. This revenue was generated by the 17 consolidated subsidiaries that we
owned for all or a portion of 1999, as compared to the four consolidated
subsidiaries that we owned for a portion of 1998. Of the 1999 revenue, 68%
came from the sale of Internet access and 32% came from the sale of value-
added and other services. Of our value-added and other services revenue, 80%
came from web site services including web hosting, web design and domain name
registration.

  Internet services operating costs. Our Internet services operating costs
were $19.2 million for the year ended December 31, 1999. We incurred these
costs primarily to lease lines, purchase transit for the local networks and
compensate customer care personnel maintained by the 17 consolidated
subsidiaries that we owned for all or a portion of the period. Additionally,
we incurred operating costs associated with our international network, which
we established in June 1999. We had $1.9 million of Internet services
operating costs for the year ended December 31, 1998.

  Selling, general and administrative. We incurred selling, general and
administrative expenses of $35.6 million for the year ended December 31, 1999,
a 469% increase over the $6.3 million we incurred for the year ended December
31, 1998. This increase was primarily due to the addition of costs incurred by
the 13 consolidated subsidiaries that we owned for all or a portion of the
1999 period, but that we did not own for the 1998 period. During 1999, $26.1
million, or 73%, of the expenses were incurred by our 17 subsidiaries and $9.5
million, or 27%, of the costs were incurred by our corporate organization. The
expenses incurred by our corporate organization increased by 116% between 1998
and 1999, largely due to the costs associated with employing a larger number
of corporate and regional personnel and identifying and acquiring an
increasing number of operating companies.

  Depreciation and amortization. Our depreciation and amortization expense was
$19.4 million for the year ended December 31, 1999, up from $1.3 million for
the year ended December 31, 1998. This increase was primarily due to the
amortization of goodwill arising from the acquisitions of the 13 consolidated
subsidiaries completed between January 1, 1999 and December 31, 1999. The
acquisition of these subsidiaries and the implementation of our international
network also increased our depreciation expense for telecommunications
equipment, computers and other fixed assets. For the 1999 period, $15.1
million, or 78%, of our depreciation and amortization expense was related to
the amortization of acquisition goodwill and $4.3 million, or 22% was related
to the depreciation of fixed assets. For 1998, $936,000, or 72%, of our
depreciation and amortization expense was related to the amortization of
acquisition goodwill and $368,000, or 28% was related to the depreciation of
fixed assets.

                                      29
<PAGE>

  Interest income and expense. For the year ended December 31, 1999, we earned
$2.6 million in interest income, a 82% increase over the $1.5 million we
earned for the year ended December 31, 1998. Interest income in both periods
was generated primarily from investing funds generated by the sale of
preferred shares until those funds were used for acquisitions, operating
expenses or capital expenditures. We raised $127.9 million in April 1999,
$51.6 million in May 1998 and $1.5 million between August 1997 and April 1998
from these sales. For the 1999 period, we also incurred $1.5 million in
interest expense, primarily for purchase and lease financing of equipment in
our operating subsidiaries. We incurred no interest expense for 1998.

  Other income and expense. For the year ended December 31, 1999, we
recognized a $177,000 loss related to our minority investment in i-way. This
compared to a $1.2 million loss recognized for the year ended December 31,
1998 related to the same minority investment. This improvement was due to i-
way's significantly increased revenue and operating results, largely related
to a single contract under which it provides managed bandwidth for another
Internet services provider. In August 1999, we purchased all of the remaining
equity in i-way.

  Foreign currency gains. We recognized a $824,000 foreign currency gain for
the year ended December 31, 1999, as compared to a $115,000 foreign currency
gain for the year ended December 31, 1998. In conjunction with some of our
acquisitions, we incurred debts to the acquired companies or their selling
stockholders denominated in foreign currencies. During this period, the U.S.
dollar strengthened relative to these currencies and the related reduction in
the U.S. dollar value of these debts created a gain. Approximately $150,000 of
this gain was generated by fluctuations in the British Pound and another
$150,000 was generated by fluctuations in the Brazilian Real. The remainder
was contributed by fluctuations in the eleven other currencies in which we
transact business.

                                      30
<PAGE>

Quarterly Results of Operations

  The information below has been compiled from our unaudited financial
statements. In the opinion of our management, our unaudited financial
statements have been prepared on the same basis as our audited financial
statements which appear elsewhere on this Form 10-K, and include all
adjustments, consisting only of normal recurring adjustments, that we consider
necessary to fairly present this information. The results of operations for
any quarter are not necessarily indicative of the results of operations for
any future period.

<TABLE>
<CAPTION>
                                               For the three months ended
                         -----------------------------------------------------------------------------
                                     June     Sept.
                         March 31,    30,      30,    Dec. 31,   March    June 30,   Sept.    Dec. 31,
                           1999      1999     1999      1999    31, 2000    2000    30, 2000    2000
                         ---------  -------  -------  --------  --------  --------  --------  --------
                                             (in thousands of U.S. Dollars)
<S>                      <C>        <C>      <C>      <C>       <C>       <C>       <C>       <C>
Revenue:
  Access................ $  3,601   $ 5,143  $ 7,509  $ 10,532  $ 12,566  $ 15,767  $ 16,498  $ 14,265
  Value-added services..      873     1,325    3,263     5,554     6,592     9,502    11,441    13,457
  Other.................       35       120      492       847       861       733       567       742
                         --------   -------  -------  --------  --------  --------  --------  --------
    Total revenue.......    4,509     6,588   11,264    16,933    20,019    26,002    28,506    28,464
                         --------   -------  -------  --------  --------  --------  --------  --------
Operating costs and
 expenses...............    8,065    13,130   20,778    32,250    37,257    44,258    47,821    53,498
                         --------   -------  -------  --------  --------  --------  --------  --------
Loss from operations.... $ (3,556)  $(6,542) $(9,514) $(15,317) $(17,238) $(18,256) $(19,315) $(25,034)
Net loss................ $ (1,970)  $(4,933) $(9,053) $(15,039) $(16,615) $(15,739) $(22,571) $(19,310)
Basic and diluted loss
 per share.............. $  (4.17)  $ (9.05) $ (6.64) $  (7.67) $  (0.54) $  (0.26) $  (0.38) $  (0.32)
EBITDA.................. $ (1,686)  $(3,150) $(3,658) $ (5,313) $ (6,194) $ (6,459) $ (6,160) $ (8,731)
</TABLE>

Provision for Income Taxes

  While we have incurred consolidated operating losses from inception through
December 31, 2000, we have recorded a provision for income taxes of
approximately $985,000 as a result of taxable income in certain foreign
jurisdictions for the year ended December 31, 2000. We have provided a
valuation allowance for our net deferred tax assets of $24.1 million.
Valuation allowances are used to reduce the net deferred tax assets to the
amounts considered more likely than not to be realized. Changes in estimates
of future taxable income can materially change the amount of such valuation
allowances.

  At December 31, 2000 and 1999, VIA had U.S. net operating loss carryforwards
of approximately $16.0 million and $9.7 million, respectively, which may be
used to reduce future taxable income. These U.S. net operating losses begin to
expire in 2018. At December 31, 2000 and 1999, VIA had net operating loss
carryforwards generated from its foreign subsidiaries of approximately of
$41.3 million and $17.2 million, respectively, of which $13.2 million expires
between 2001 and 2010 and $28.1 million has an indefinite carryforward period.

Liquidity and Capital Resources

  Since inception, we have financed our operations primarily through the sale
of equity securities. We raised approximately $181.0 million, in the
aggregate, through three private preferred stock offerings between August 1997
and April 1999. Through our initial public offering of common stock in
February 2000, we raised approximately $333.0 million, net of underwriting
discounts and commissions. At December 31, 2000, we had cash and cash
equivalents of $237.8 million.

  Cash used in operating activities was $15.1 million for the year ended
December 31, 2000 and $10.1 million for the year ended December 31, 1999. In
each period, cash was used primarily to fund operating losses.

                                      31
<PAGE>

  Cash used in investing activities was $96.6 million for the year ended
December 31, 2000 and $122.7 million for the same period in 1999. In each
period, cash was primarily used for acquisitions, including nine acquisitions
in 2000 and twelve acquisitions in 1999. Additionally, we used cash to
increase our investment in various partially owned subsidiaries in both
periods.

  Cash provided by financing activities was $329.1 million for the year ended
December 31, 2000 and $118.5 million for the same period in 1999. In each
period, cash was primarily generated by the sale of equity securities, the
initial public offering of our common stock in 2000 and the private placement
of our Series C Preferred Stock in 1999. Immediately subsequent to our initial
public offering, we paid $10.4 million and issued 316,994 shares of our common
stock to repay notes we had issued to the sellers of U-Net, VIA NET.WORKS
Portugal, formerly known as Esoterica, VIA NET.WORKS Spain, also known as
Interbook, and DNS, and to acquire the remaining minority interest in
Dialdata.

  In conjunction with our acquisition of VIA NET.WORKS Mexico in October 1999,
we agreed to pay additional purchase price consideration of up to $30.0
million based on that company's revenue growth between the time of acquisition
and December 31, 2000. As of December 31, 1999, we had restricted cash of
$15.0 million to secure the payment of the additional purchase price. Based on
the formula, we paid an aggregate of $30 million as additional purchase price
during 2000.

  We continue to pursue an aggressive internal growth strategy and will
continue to pursue strategic acquisitions on an opportunistic basis. Except
for the potential need to fund a specific larger acquisition, should such an
opportunity arise, we do not anticipate the need to obtain additional funding
before we become self-sustaining.

  As a result of our acquisitions, we will continue to amortize substantial
amounts of goodwill and other intangible assets. As we grow, we expect that
the amount of goodwill and other intangibles we will amortize in connection
with our investments will represent an increasingly smaller portion of our
expenses. Therefore, we expect to continue to incur net losses until that
point in time when the goodwill and other intangibles we amortize represents a
sufficiently small amount of our expenses that it is exceeded by our net
income before amortization.

  On a periodic basis, management reviews the carrying value of the Company's
investment in its operations to determine if an event has occurred, with
respect to any operation, that could result in an impairment of long-term
assets, primarily goodwill. In its review, management considers market and
competitive factors, operating and financial trends and the business outlook
for each operation. As of December 31, 2000, management concluded that no
event had occurred in any of its operations that would result in an impairment
of long-term assets. Future changes in operating results or business outlook
could result in a change in management's conclusions with respect to the
recoverability of its long-term assets.

  The foregoing statements regarding our liquidity and need for additional
capital resources, as well as our expectations of future amortization of
goodwill and other intangibles, are forward-looking statements based on
current expectations, which involve certain risks and uncertainties. Actual
results and the timing of certain events could differ materially from these
forward-looking statements depending upon the nature, size and timing of
future acquisitions, if any, and future amounts of net income before
amortization, which we cannot predict, as well as other factors referred to in
the "Risk Factors" section on this Form 10-K.

Foreign Currency Exchange Risks

  We conduct business in 15 different currencies, including the Euro and the
U.S. dollar. With the exception of the Argentine Peso, the value of these
currencies fluctuates in relation to the U.S. dollar. At the end of each
reporting period, the revenues and expenses of our operating companies are
translated into U.S. dollars using the average exchange rate for that period,
and their assets and liabilities are translated into U.S. dollars using the
exchange rate in effect at the end of that period. Fluctuations in these
exchange rates impact our financial condition, revenues and results of
operations, as reported in U.S. dollars.


                                      32
<PAGE>

  Exchange rates can vary significantly. During the year ended December 31,
2000, we experienced similar exchange rate fluctuations in all eight of the
Euro-linked currencies in which we transact business. The Euro-linked
currencies varied by approximately 21% in relation to the U.S. dollar during
2000, and at December 31, 2000 were approximately 7% below where they were at
the beginning of the year. We realized foreign currency losses of $4.1 million
for year, due to the impact of the fluctuation in the value of the Euro on our
Euro denominated cash accounts. Future changes in the value of the Euro could
have a material impact on our financial position and results of operations. We
also experienced fluctuations in other exchange rates but they did not have a
material impact on our results.

  Our local operations transact business in their local currencies. They do
not have significant assets, liabilities or other accounts denominated in
currencies other than their local currency, and therefore are not subject to
exchange rate risk with respect to their normal operations. On a consolidated
basis, we are subject to exchange rate risks because we translate our local
operations' financial data into U.S. dollars

Conversion to the Euro

  On January 1, 1999, 11 of the 15 European Union member countries adopted the
Euro as their common legal currency, at which time their respective individual
currencies became fixed at a rate of exchange to the Euro, and the Euro became
a currency in its own right. Presently, the following 11 currencies are
subject to the Euro conversion: the Austrian Schilling, the Belgian Franc, the
Dutch Guilder, the Finnish Markka, the French Franc, the German Mark, the
Irish Punt, the Italian Lire, the Luxembourg Franc, the Portuguese Escudo and
the Spanish Peseta.

  During a January 1, 1999 through January 1, 2002 transition period, the Euro
will exist in electronic form only and the participating countries' individual
currencies will continue in tangible form as legal tender in fixed
denominations of the Euro. During the transition period, we must manage
transactions with our customers and our third-party vendors in both the Euro
and the participating countries' respective individual currencies. We have
purchased and specified our business support systems, including accounting and
billing, to accommodate Euro transactions and dual currency operations during
the transition period. In addition, we generally require all vendors supplying
third-party software to us to warrant that their software will be Euro
compliant. Because our acquired European companies generally have short
operating histories, most of their systems were acquired and implemented after
the Euro was already contemplated. Consequently, any expenditure related to
Euro compliance has largely been, and will be, in the normal course of
business.

  We conduct business transactions with customers, network suppliers, banks
and other businesses, and we will be exposed to Euro conversion problems in
these third-party systems. During the transition period, to the extent we are
supplying local service, we can continue billings and collections in the
individual currencies to avoid Euro conversion problems. However, to the
extent we have cross-border transactions in European Union countries, we will
be exposed to Euro-related risks. The establishment of the European Monetary
Union may have a significant effect on the economies of the participant
countries. While we believe that the introduction of the Euro will eliminate
exchange rate risks in respect of the currencies of those member states that
have adopted the Euro, there can be no assurance as to the relative strength
of the Euro against other currencies. Since a substantial portion of our net
sales will be denominated in the Euro or currencies of European Union
countries, we will be exposed to that risk.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

  The following discussion relates to our exposure to market risk, related to
changes in interest rates and changes in foreign exchange rates. This
discussion contains forward-looking statements that are subject to risks and
uncertainties. Actual results could differ materially due to a number of
factors, as set forth in the "Risk Factors" section in Item 1 of this Form 10-
K.

                                      33
<PAGE>

  VIA has exposure to financial market risks, including changes in interest
rates and foreign exchange rates. At December 31, 2000, VIA's financial
instruments consisted of short-term investments and fixed rate debt related to
acquisitions and network purchases. Our investments are generally fixed rate
short-term investment grade and government securities denominated in U.S.
dollars. At December 31, 2000 all of our investments are due to mature within
twelve months and the carrying value of such investments approximates fair
value. The majority of our debt obligations have fixed rates of interest.

  As mentioned previously in the "Foreign Currency Exchange Risks" section,
VIA has Euro denominated cash accounts which expose the company to foreign
currency exchange rate risk. As of December 31, 2000, a 10 percent increase or
decrease in the level of the Euro exchange rate against the U.S. dollar with
all other variables held constant would result in a realized gain or loss of
$5.4 million. Additionally, VIA is exposed to foreign exchange rate risk
related to its obligations denominated in foreign currencies. These
obligations are a result of acquiring operating companies in various European
and Latin American countries. VIA is also subject to risk from changes in
foreign exchange rates for its international operations which use a foreign
currency as their functional currency and are translated into U.S. dollars.
These risks cannot be reduced through hedging arrangements.

Item 8. Financial Statements and Supplementary Data

  VIA's consolidated financial statements and notes thereto are identified in
Part IV, Item 14a on this Form 10-K, are included in this Form 10-K where
indicated below, and are incorporated herein by reference:

<TABLE>
<S>                                                                       <C>
Index to Financial Statements............................................  F-1
Report of Independent Accountants........................................  F-2
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 1999 and 2000.............  F-3
Consolidated Statements of Operations for the years ended December 31,
 1998, 1999 and 2000.....................................................  F-4
Consolidated Statement of Stockholders' Equity (Deficit) for the years
 ended December 31, 1998, 1999 and 2000..................................  F-5
Consolidated Statements of Cash Flows for the years ended December 31,
 1998 1999, and 2000.....................................................  F-6
Notes to Consolidated Financial Statements...............................  F-7
Financial Statement Schedule:
  II--Valuation and Qualifying Accounts for the years ended December 31,
   1998, 1999 and 2000................................................... F-23
</TABLE>

  All other schedules are omitted because they are not required, are not
applicable or the information is included in the consolidated financial
statements or notes thereto.

  Selected quarterly financial data appears in Part II Item 7 under the
heading "Quarterly Results of Operations" and is incorporated herein by
reference.

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

  None.

                                      34
<PAGE>

                                   PART III

Item 10. Directors and Executive Officers of the Registrant

  The following table shows information about each of our directors and
executive officers as of the date of this Form 10-K.

<TABLE>
<CAPTION>
     Name                Age                             Position
     ----                ---                             --------
<S>                      <C> <C>
David M. D'Ottavio......  51 Chief Executive Officer and Chairman of the Board of Directors
Michael J. Simmons......  47 President
Catherine A. Graham.....  40 Vice President, Chief Financial Officer and Treasurer
Matt S. Nydell..........  41 Vice President, General Counsel and Secretary
Timothy J. Galante......  39 Vice President, Marketing
Peter T. Shephard.......  55 Vice President, United Kingdom, Ireland & Southern Europe Region
Erwin Wilem Vink........  54 Vice President, Central & Western Europe Region
Antonio A.V. Tavares....  51 Vice President, South American Region
Luis Almeida Dingler....  37 Vice President, North American Region
Gabriel A. Battista.....  56 Director
Edward D. Breen.........  45 Director
Stephen J. Eley.........  41 Director
William J. Elsner.......  49 Director
Adam Goldman............  40 Director
William A. Johnston.....  49 Director
Mark J. Masiello........  33 Director
John G. Puente..........  70 Director
Erik M. Torgerson.......  35 Director
</TABLE>

  Each of our directors and executive officers can be reached c/o VIA
NET.WORKS, Inc., 12100 Sunset Hills Road, Suite 110, Reston, Virginia 20190.

Executive Officers

  David M. D'Ottavio has served as VIA's Chief Executive Officer and a
Director since April 1998 and as VIA's Chairman of the board of directors
since November 1999. From April 1998 to June 1999, he also served as
President. From January 1995 to August 1997, Mr. D'Ottavio served as Senior
Managing Director of United Philips Communications, B.V., now United Pan-
Europe Communications N.V., or UPC, responsible for all acquisition, business
development, finance, marketing and administration functions and launched
UPC's telephony, Internet services provider and high-speed data services. From
1991 to 1994, Mr. D'Ottavio was Chief Operating Officer for United
International Holdings, Inc., now UnitedGlobalCom, Inc., and was responsible
for cable, MMDS and telephone operations in 14 countries. Previously, Mr.
D'Ottavio served as Regional Vice President for Comcast Cable Communications
and held various management positions with Westinghouse Electric Corporation.
Mr. D'Ottavio currently serves on the board of directors of Votera
Corporation. Mr. D'Ottavio received his B.B.A. in Economics from Kent State
University.

  Michael J. Simmons has served as VIA's President since June 1999. From
September 1998 to June 1999 he was Vice President, European Region. Mr.
Simmons was employed by United Pan-Europe Communications, serving as Managing
Director--Portugal, from July 1995 to December 1997, and as Vice President--
Marketing for A2000, the UPC and MEDIA ONE joint venture in Amsterdam from
December 1997 to September 1998. In that role, he was responsible for
telephony and cable modem Internet products in both the residential and
business markets, as well as all sales, customer service and call center
operations. From September 1987 to December 1994, Mr. Simmons was employed by
Comcast Cable Communications, serving first as General Manager of Comcast's
Ft. Wayne, Indiana system and then as Area Vice President in New Jersey.
Previously, he

                                      35
<PAGE>

held marketing, sales and operating positions with Insight Communications
Company, Inc. and Westinghouse Broadcasting and Cable. Mr. Simmons received
his B.A. in History and Communications from St. Mary's University of
Minnesota.

  Catherine A. Graham joined VIA in July 1998 as Vice President, Chief
Financial Officer and Treasurer. From January 1996 to July 1998, she was Vice
President, Finance and Investor Relations Officer for Yurie Systems, Inc., a
publicly traded telecommunications equipment manufacturer subsequently
purchased by Lucent Technologies, Inc. Ms. Graham was responsible for Yurie's
financial and risk management infrastructure, managing Yurie's initial public
offering and handling communications with the investment community. From
August 1994 to December 1995, she was with Smith Barney, Inc. as a consultant
in the Corporate and Institutional Services Group. From August 1991 to April
1994, she was Chief Financial Officer, Treasurer and Senior Investor Relations
Officer for DavCo Restaurants, Inc., the largest franchisee of Wendy's
International. Ms. Graham received a B.A. in Economics from the University of
Maryland and an M.B.A. from Loyola College.

  Matt S. Nydell joined VIA in August 1998 as Vice President, General Counsel
and Secretary. From November 1996 to August 1998, he was Director, Ventures
and Alliances for MCI Communications Corporation, where he oversaw MCI's
interest in Concert Communications Company, an international
telecommunications joint venture with British Telecommunications. From June
1994 to November 1996, he was Senior Counsel in MCI's legal group responsible
for supporting MCI's Mass Markets' advanced technologies and its information
technology groups. Prior to joining MCI, Mr. Nydell was an attorney with the
Washington office of Donovan Leisure Newton and Irvine, focusing on
telecommunications and multimedia issues, and general corporate and commercial
matters. Mr. Nydell received a J.D./M.A., foreign affairs, from the University
of Virginia, and a B.A., with honors, in Philosophy from Bucknell University.

  Timothy J. Galante joined VIA in April 2000 as Vice President, Marketing.
From February 1998 to March 2000, he was Director of Marketing for MCI
WorldCom International Services, responsible for product strategy,
development, and management of wholesale voice and IP solutions. From August
1996 to January 1998 he was General Manager of MCI Puerto Rico, overseeing the
company's residential and commercial operations. From July 1988 to July 1996
he held various sales and marketing positions with MCI Communications
Corporation. Prior to joining MCI, Mr. Galante was an officer in the United
States Air Force. He holds a M.B.A. from the Stern School of Business at New
York University, a M.A. in Information Technology from The George Washington
University, and a B.A. in Mathematics and Government from Cornell University.

  Peter T. Shepard joined VIA in January 2000 as Managing Director, UK &
Ireland and became Vice President, UK, Ireland & Southern Europe in June 2000.
From September 1998 to December 1999, Mr. Shephard was Managing Director of
FAME Computers, a UK software house. Prior to that, from September 1997, he
was Managing Director of Global One, UK & Ireland. From January 1995 until
August 1997, Mr. Shephard was with AT&T (UK) where he was Managing Director,
Solutions and Value Added Services, before becoming Vice President, Vertical
Markets & Electronic Commerce.

  Erwin Wilem Vink joined VIA in August 2000 as Vice President for the Central
and Western Europe Region. From September 1998 to August 2000, Mr. Vink was
Managing Director of Tachyon Europe, in which capacity he established the
European operation of Tachyon Inc., delivering two-way high performance
Internet access, intranets and extranets via satellite. From 1995 to 1998 he
was Managing Director of EUnet, a leading European ISP operating in 40
countries. He was instrumental in setting up RIPE-NCC, one of the three
regional Internet registries, as an independent organisation and continues to
serve as a board member of the organisation. Prior to serving EUnet, he served
as Vice President for European Operations at X/Open and, before that, he was
Director of Marketing for the Continental European Division at Atlantic
Computers, PLC. He has also held the position of head of the Department for
International Activities for Data Centralen, a Danish systems integrator. Mr
Vink has holds an MBA in International Business Management.

  Antonio A.V. Tavares joined VIA in December 1998 when we acquired Dialdata
S.A. Internet Systems. Since February 2001, Mr. Tavares has served as Vice
President, South American Region. From May 1999 until

                                      36
<PAGE>

February 2001, he served as Vice President, Latin American Region. From 1993
until May 1999, he was President of Dialdata, a corporate Internet services
provider in Brazil, since he founded it in 1993. Mr. Tavares was General
Manager of Habasit, a Swiss manufacturer of industrial products, operating in
Brazil, from April 1986 to May 1994. Since November 1996, he has served as
President of ABRANET, the Brazilian Internet service providers association,
responsible for leading the development of the Brazilian Internet industry. He
also is the IT Director of FIESP, the Sao Paulo State Industry Association,
and Director of Camara Portuguesa de Comercio do Brasil. Mr. Tavares is also a
member of the National Advise of Telecommunications, a private council made up
of several private telecommunication associations in Brazil. Mr. Tavares has
completed the general course of Commerce at Escola Comercial Oliveira Martins
in Portugal and also of Sales & Marketing at Fundacao Getulio Vargas in
Brazil.

  Luis Almeida Dingler joined VIA in October 1999 when we acquired InfoAcces
where he was CEO of that company's Network division. Since February 2001, he
has served as Vice President North America Region and from October 1999 to
February 2002, he was Managing Director of VIA NET.WORKS Mexico. From May 1996
to May 1999, Mr. Almeida was Executive Vice President at Grupo Carso
(Consoricio Red Uno-Telmex) and from June 1989 to May 1996 he was Executive
Vice President at Banco Nacional de Comercio Exterior, S.N.C. (Eximbank). Mr.
Almeida holds a B.S. Degree in Economics from the Autonomous Technological
Institute of Mexico.

Directors

  Gabriel A. Battista has served as a Director of VIA since June 1999. He is
Chairman and Chief Executive Officer of Talk.com, Inc., where he has served
since January 1999. From October 1996 to December 1998, he served as Chief
Executive Officer of Network Solutions, Inc. From May 1994 to October 1996, he
was Chief Executive Officer of Cable & Wireless, Inc., North America. Mr.
Battista has also served as Chief Operating Officer of National Telephone
Services Corporation and President of U.S. Sprint's Eastern Group and has held
various positions with GTE Telenet and the General Electric Company. Mr.
Battista is a member of the board of directors of 2nd Century Communications,
Inc., Capitol College, Systems & Computer Technology Corporation and Online
Technologies Group, Inc. He is also a registered Professional Engineer in the
State of Pennsylvania. Mr. Battista received a B.S.E.E. from Villanova
University, an M.S.E.E. from Drexel University and an M.B.A. from Temple
University.

  Edward D. Breen has served as a Director of VIA since November 1999. Mr.
Breen became Executive Vice President of Motorola, Inc. and President of
Motorola's Network sector in January 2001, after having served as Executive
Vice President and President of Motorola's Broadband Communications Sector
following the merger of General Instrument Corporation with Motorola in
January 2000. From December 1997 to January 2000, Mr. Breen served as Chairman
of the Board, President and Chief Executive Officer of General Instrument
Corporation after having served as its Acting Chief Executive Officer and
President from October 1997 to December 1997. Mr. Breen was President of
General Instrument's predecessor company's Broadband Networks Group from
February 1996 to October 1997 and Vice President of General Instrument's
predecessor company from November 1996 until October 1997. From October 1994
to January 1996 Mr. Breen was Executive Vice President, Terrestrial Systems of
General Instrument's predecessor company. Mr. Breen is also a member of the
board of directors of CommScope, Inc.

  Stephen J. Eley has served as a Director of VIA since April 1999. Since
January 1990, he has been a general partner of each of BCI Growth III, IV & V,
private equity funds focused on providing growth capital to private and public
companies. Prior to joining BCI, Mr. Eley was employed by AMEV
Holdings/Venture Management in New York from 1986 to 1989 and by Peat Marwick
Mitchell & Co. from 1983 to 1986. Mr. Eley received his B.S. in accounting in
1982 from the University of Rhode Island.

  William J. Elsner has served as a Director of VIA since September 1997.
Since December 1999, he has been a Managing Member of Telecom Management III
L.L.C., the general partner of Telecom Partners III L.P. and since October
1997, he has been a Managing Member of Telecom Management II, L.L.C., the
general partner

                                      37
<PAGE>

of Telecom Partners II, L.P. Telecom Partners III, L.P. and Telecom Partners
II, L.P. are venture capital funds focused on early stage telecommunications
services companies. From November 1995 until November 1997, Mr. Elsner was a
private investor. From July 1991 until November 1995, Mr. Elsner was the Chief
Executive Officer of United International Holdings, Inc., now UnitedGlobalCom,
Inc., an international cable television operator he co-founded. Mr. Elsner is
currently a member of the board of directors of OneSecure, Inc., CityNet
Telecommunications, Inc., Exenet Technologies, Inc. and VeloCom Inc. Mr.
Elsner received a B.S. in Accounting from Regis University and an M.B.A. from
the University of Denver.

  Adam Goldman has served as a Director of VIA since September 1999. Since
April 1993, Mr. Goldman has been a general partner of Centennial Holdings IV
and V and is a managing principal of Centennial Holdings VI. He serves as a
senior vice president of Centennial Holdings, Inc., which he joined in 1992.
From 1989 through 1991, Mr. Goldman was an associate of Booz, Allen and
Hamilton in the strategy practice. Mr. Goldman is a member of the board of
directors of 24/7 Media, Fantasma, HRZ Ellacoya and Highground. Previously, he
served on the boards of ATG Group, Prime Video and Spectrum Resources of the
Midwest and was Chairman of the board of directors of Centennial
Telecommunications. Mr. Goldman is the Chairman of the board of directors and
former President of the Venture Capital Association of Colorado. Mr. Goldman
received a Bachelor of Arts in economics from Northwestern University and a
Masters of Management from the J.L. Kellogg School of Management at
Northwestern University.

  William A. Johnston has served as a Director of VIA since May 1998 and
served as Chairman of VIA's board of directors from December 1998 through
November 1999. Since 1997, he has served as managing director of Hancock
Venture Partners and HarbourVest Partners, LLC. Mr. Johnston joined Hancock
Venture Partners as a Vice President in 1983 after working in the corporate
finance department of John Hancock from 1981. Prior to 1981, he was Assistant
Vice President for State Street Bank in Boston. Mr. Johnston received a B.S.
from Colgate University and an M.B.A. from Syracuse University School of
Management. He serves on the advisory council of the Centennial Funds and the
advisory committee of Highland Capital Partners. Additionally, Mr. Johnston is
a member of the board of directors of the following US companies: Benchmark
Media, Inc., Epoch Networks, Inc., Formus Communications, Inc., Pangea, Ltd.,
and Venture eCommerce, Inc.

  Mark J. Masiello has served as a Director of VIA since September 1999. Mr.
Masiello is a Managing Director of Providence Equity Partners Inc., and he is
a member of the general partner of Providence's private equity funds. Mr.
Masiello has been with Providence since 1989 and he currently serves as a
director of MPower Communications Inc., Global Metro Networks, Ltd., Managed
Storage International and Surebridge, Inc. Mr. Masiello received a B.A. from
Brown University.

  John G. Puente has served as a Director of VIA since April 1998. From 1987
through 1997, he held various positions at Orion Network Systems, Inc., as
Chairman, Chief Executive Officer and member of the board of directors. He was
a founder, and Chairman, of SouthernNet, Inc., and was instrumental in the
founding of the National Telecommunications Network, a consortium of long
distance fiber optic companies for which he served as the first Chairman. Mr.
Puente was also a founder of DCC, Inc., which was merged with Microwave
Associates in 1978 to form M/A-Com, subsequently acquired by Hughes Aircraft,
now known as Hughes Network Systems, Inc. Mr. Puente is a member of the board
of directors of Primus Telecommunications Group, Incorporated and Micros
Systems, Inc. He is also Chairman of the board of directors of Internet Cargo
Services, Inc., Capitol College, and Virtualcom. Mr. Puente received a
B.S.E.E. from Polytechnic University and an M.S.E.E. from Stevens Institute of
Technology.

  Erik M. Torgerson has served as a Director of VIA since May 1999. He is a
general partner of Norwest Equity Partners. Prior to joining Norwest Equity
Partners in 1993, Mr. Torgerson was employed by Arthur Andersen & Co. in the
financial consulting and audit practice. Mr. Torgerson currently serves on the
board of directors at Norigen Communications, Inc., butlerNetworks A/S,
SkyberNet Communications, riodata NV, and Peoplenet Communications. He is a
C.P.A. and received his B.S. degree from the University of Minnesota and his
M.B.A. from the University of Iowa.


                                      38
<PAGE>

  Some of our directors became directors as a result of board designation
rights we granted to some of our stockholders prior to our initial public
offering. Specifically:

  (1) Mr. Johnston was the director designee of HarbourVest International
      Private Equity Partners III-Direct Fund L.P.

  (2) Mr. Eley was the director designee of BCI Growth V, LLC

  (3) Mr. Elsner was the director designee of Telecom Partners II, L.P.

  (4) Mr. Goldman was the director designee of Centennial Fund VI, L.P.

  (5) Mr. Masiello was the director designee of Providence Equity Partners,
      L.P.

  (6) Mr. Torgerson was the director designee of Norwest Equity Partners, LLC

  The Board designation rights under which these directors were designated
terminated upon the closing of our initial public offering.

  There are no family relationships among any of our directors or executive
officers.

Board of Directors

  Our board of directors is authorized to have 10 members and directors are
divided into three classes. Currently, Stephen Eley, Mark Masiello and William
Johnston serve as Class I directors, and their terms will expire at our 2001
annual stockholders meeting. William Elsner, Adam Goldman and Eric Torgerson
serve as Class II directors, and their terms will expire at our 2002 annual
stockholder meeting. David D'Ottavio, Gabriel Battista, Edward Breen and John
Puente serve as Class III directors, and their terms will expire at our 2003
annual stockholders meeting. At each annual meeting, the successors to the
directors whose terms expire will be elected to serve three-year terms. Our
directors may be removed without cause only upon the vote of holders of two-
thirds of our outstanding common stock, or for cause upon the vote of holders
of a majority of our outstanding common stock.

Committees of the Board of Directors

  Our board of directors has established an audit committee, a compensation
committee, a finance committee and a nominating committee.

  Among other functions, the audit committee

  . recommends our independent auditors for approval by our Board of
    Directors

  . monitors the independence and performance of our independent auditors

  . reviews the scope, results and costs of the audit with our independent
    auditors

  . monitors the integrity of our financial statements

  . reviews our compliance with legal and regulatory requirements

  . oversees our internal control practices

  The members of the audit committee are Mr. Torgerson, who is Chairman, and
Messrs. Puente and Eley.

  The compensation committee is responsible for administering our 1998 Stock
Option and Restricted Stock Plan and our Key Employee Equity Plan and
reviewing and approving our compensation policies for our executive officers.
The members of the compensation committee are Mr. Puente, who is Chairman, and
Messrs. Battista and Goldman.

  The finance committee is responsible for reviewing and making
recommendations on proposed debt and equity financings and for reviewing and
approving acquisitions and investments by VIA up to specified limits. The
members of the finance committee are Mr. Elsner, who is Chairman, and Messrs.
Goldman, Johnston and Masiello.

                                      39
<PAGE>

  The nominating committee is responsible for identifying, evaluating and
recommending individuals for membership on our board of directors and its
committees. The members of the nominating committee are Mr. Battista, who is
Chairman, and Messrs. D'Ottavio, Eley and Breen.

  None of the members of the audit committee or the compensation committee
performs the same function for any other entity whose executive officers serve
on our board of directors.

Limitation of Liability and Indemnification Matters

  We have adopted provisions in our amended and restated certificate of
incorporation, which provide that our directors shall not be liable for
monetary damages to us or our stockholders for any breach of fiduciary duties
to the fullest extent permitted by Delaware law. This limitation of liability
does not affect the availability of equitable remedies such as injunctive
relief or rescission.

  In addition, our certificate of incorporation and by-laws require us to
indemnify our directors and officers to the fullest extent permitted by
Delaware law. On or about April 4, 2000, we entered into indemnification
agreements with our directors and officers. Since then, we have entered into
agreements with new officers as they have been appointed. These
indemnification agreements with our directors and officers, which may, in some
cases, be broader than the specific indemnification provisions of applicable
law. The indemnification agreements may require us, among other things, to
indemnify our directors and officers against liabilities that arise because of
their status or service as directors or officers, to reimburse or advance the
expenses they may incur as a result of threatened claims or proceedings
brought against them, and to cover them under our directors' and officers'
liability insurance policies to the maximum extent that insurance coverage is
maintained.

  At present, we are not aware of any pending or threatened material
litigation or proceeding involving any director or officer where
indemnification will be required or permitted. We believe that these
provisions in our certificate of incorporation, bylaws and indemnification
agreements are necessary to attract and retain qualified persons as directors
and officers.

Section 16(a) Beneficial Ownership Reporting Compliance

  Information regarding Section 16(a) reporting compliance is incorporated
into this annual report on Form 10-K by reference to the information under the
caption "Reporting Compliance" in VIA's proxy statement for the 2001 Annual
Meeting of Stockholders, to be held on May 23, 2001.

Item 11. Executive Compensation

  Information regarding executive compensation is incorporated into this
annual report on Form 10-K by reference to the information under the captions
"Information about our Nominees and Directors" and "Executive Compensation" in
VIA's proxy statement for the 2001 Annual Meeting of Stockholders, to be held
on May 23, 2001.

Item 12. Security Ownership of Certain Beneficial Owners and Management

  Information regarding the ownership of our stock by certain beneficial
owners and management is incorporated into this annual report on Form 10-K by
reference to the information under the caption "Ownership of Securities" in
VIA's proxy statement for the 2001 Annual Meeting of Stockholders, to be held
on May 23, 2001

Item 13. Certain Relationships and Related Transactions

  Information regarding certain relationships and related transactions is
incorporated into this annual report on Form 10-K by reference to the
information under the caption "Related Transactions" in VIA's proxy statement
for the 2001 Annual Meeting of Stockholders, to be held on May 23, 2001.

                                      40
<PAGE>

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

  a. Documents filed as a part of this report.

  1. FINANCIAL STATEMENTS

  See Index to Financial Statements on page F-1, which is incorporated herein
by reference.

  2. FINANCIAL STATEMENT SCHEDULES

  See Index to Financial Statement Schedules on page F-1, which is incorporated
herein by reference.

  3. EXHIBITS

  See Index to Exhibits on page E-1, which is incorporated herein by reference.

  b. Reports on Form 8-K.

  VIA filed no reports on Form 8-K during the three months ended December 31,
2000.

                                       41
<PAGE>

                                   SIGNATURE

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, VIA NET.WORKS, Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized

                                          VIA NET.WORKS, Inc.

                                                   /s/ David M. D'Ottavio
                                          By: _________________________________
                                                     David M. D'Ottavio
                                              Office Chief Executive Officer,
                                                  Chairman of the Board of
                                                         Directors



Date: March 23, 2001

                                      42
<PAGE>

                                   SIGNATURES

Date: March 23, 2001

  Pursuant to the requirement of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of VIA
NET.WORKS, Inc. and in the capacities indicated as of March 23, 2001.

<TABLE>
<S>                                    <C>
      /s/ David M. D'Ottavio           Chief Executive Officer,
______________________________________  Chairman of the Board of
          David M. D'Ottavio            Directors (Principal
                                        Executive Officer)

      /s/ Michael J. Simmons           President
______________________________________
          Michael J. Simmons

     /s/ Catherine A. Graham           Vice President, Chief
______________________________________  Financial Officer and
         Catherine A. Graham            Treasurer (Principal
                                        Financial and Accounting
                                        Officer)

     /s/ William A. Johnston           Director
______________________________________
         William A. Johnston

       /s/ Gabriel Battista            Director
______________________________________
           Gabriel Battista

                                       Director
______________________________________
           Edward D. Breen

       /s/ Stephen J. Eley             Director
______________________________________
           Stephen J. Eley

      /s/ William J. Elsner            Director
______________________________________
          William J. Elsner

         /s/ Adam Goldman              Director
______________________________________
             Adam Goldman

       /s/ Mark J. Masiello            Director
______________________________________
           Mark J. Masiello

        /s/ John G. Puente             Director
______________________________________
            John G. Puente

      /s/ Erik M. Torgerson            Director
______________________________________
          Erik M. Torgerson
</TABLE>

                                       43
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                       <C>
Index to Financial Statements............................................  F-1

Report of Independent Accountants........................................  F-2

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 1999 and 2000.............  F-3

Consolidated Statements of Operations for the years ended December 31,
 1998, 1999 and 2000.....................................................  F-4

Consolidated Statements of Stockholders' Equity (Deficit) for the years
 ended December 31, 1998, 1999 and 2000..................................  F-5

Consolidated Statements of Cash Flows for the years ended December 31,
 1998, 1999 and 2000.....................................................  F-6

Notes to the Consolidated Financial Statements...........................  F-7

Financial Statement Schedule:

  II--Valuation and Qualifying Accounts for the years ended December 31,
   1998, 1999 and 2000................................................... F-23
</TABLE>

  All other schedules are omitted because they are not required, are not
applicable or the information is included in the consolidated financial
statements or notes thereto.

                                      F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of VIA NET.WORKS, Inc.

  In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of VIA NET.WORKS, Inc. and its subsidiaries at December 31, 1999 and
2000, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements. These financial statements and financial statement
schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

McLean, Virginia
February 27, 2001

                                      F-2
<PAGE>

                              VIA NET.WORKS, INC.

                          CONSOLIDATED BALANCE SHEETS
                (in thousands of U.S Dollars, except share data)

<TABLE>
<CAPTION>
                                                               December 31,
                                                            -------------------
                                                              1999      2000
                                                            --------  ---------
<S>                                                         <C>       <C>
ASSETS
Current assets:
 Cash and cash equivalents................................  $ 20,067  $ 237,839
 Restricted cash..........................................    15,000        --
 Trade and other accounts receivable, net of allowance of
  $1,296, and $3,623 respectively.........................     9,197     20,305
 Other current assets.....................................     3,074      5,228
                                                            --------  ---------
 Total current assets.....................................    47,338    263,372
Property and equipment, net...............................    28,909     39,227
Goodwill and other acquired intangible assets, net........   115,194    181,082
Other noncurrent assets...................................     8,142      1,202
                                                            --------  ---------
 Total assets.............................................  $199,583  $ 484,883
                                                            ========  =========
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
 STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
 Accounts payable.........................................  $ 12,735  $  21,866
 VAT and other taxes payable..............................     1,904      2,332
 Short-term notes and current portion of long-term debt...     7,808      3,265
 Deferred revenue.........................................     9,777     14,360
 Other current liabilities and accrued expenses...........     5,660     12,828
                                                            --------  ---------
 Total current liabilities................................    37,884     54,651
Long-term debt, less current portion......................     5,846      1,894
                                                            --------  ---------
 Total liabilities........................................    43,730     56,545
Commitments and contingencies
Minority interest in consolidated subsidiaries............     4,422        597
Mandatorily redeemable convertible preferred stock:
 Series A convertible preferred stock $.001 par value;
  1,500,000 shares authorized; 1,488,657 shares issued and
  outstanding (liquidation preference of $1,489 at
  December 31, 1999)......................................     1,489        --
 Series B-1 voting convertible preferred stock, $.001 par
  value; 17,200,000 shares authorized; 15,795,335 shares
  issued and outstanding (liquidation preference of
  $47,386 at December 31, 1999)...........................    47,386        --
 Series B-2 non-voting convertible preferred stock, $.001
  par value; 2,700,000 shares authorized; 1,400,000 shares
  issued and outstanding (liquidation preference of $4,200
  at December 31, 1999)...................................     4,200        --
 Series C-1 voting convertible preferred stock, $.001 par
  value; 21,400,000 shares authorized; 15,939,657 issued
  and outstanding (liquidation preference of $95,638 at
  December 31, 1999)......................................    95,638        --
 Series C-2 non-voting convertible preferred stock, $.001
  par value; 6,000,000 shares authorized; 5,370,001 issued
  and outstanding (liquidation preference of $32,220 at
  December 31, 1999)......................................    32,220        --
                                                            --------  ---------
                                                             180,933        --
Stockholders' equity (deficit):
 Common stock, $.001 par value; 57,000,000 and 125,000,000
  shares authorized; 1,962,671 and 54,061,998 shares
  issued and outstanding; respectively....................         2         54
 Non-voting common stock, $.001 par value; 7,500,000
  shares authorized; 0 and 6,770,001 shares issued and
  outstanding; respectively...............................       --           7
 Additional paid-in capital...............................    26,023    558,196
 Accumulated deficit......................................   (36,658)  (110,905)
 Deferred compensation....................................   (12,788)    (6,409)
 Accumulated other comprehensive loss.....................    (6,081)   (13,202)
                                                            --------  ---------
 Total stockholders' equity (deficit).....................   (29,502)   427,741
                                                            --------  ---------
 Total liabilities, mandatorily redeemable convertible
  preferred stock and stockholders' equity (deficit)......  $199,583  $ 484,883
                                                            ========  =========
</TABLE>

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

                                      F-3
<PAGE>

                              VIA NET.WORKS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
        (in thousands of U.S. Dollars, except share and per share data)

<TABLE>
<CAPTION>
                                               For the years ended December
                                                            31,
                                               -------------------------------
                                                 1998      1999        2000
                                               --------  ---------  ----------
<S>                                            <C>       <C>        <C>
Revenue......................................  $  3,348  $  39,294  $  102,991
                                               --------  ---------  ----------
Operating costs and expenses:
  Internet services..........................     1,853     19,211      55,405
  Selling, general and administrative........     6,258     35,587      80,733
  Depreciation and amortization..............     1,304     19,425      46,697
                                               --------  ---------  ----------
    Total operating costs and expenses.......     9,415     74,223     182,835
                                               --------  ---------  ----------
Loss from operations.........................    (6,067)   (34,929)    (79,844)
                                               --------  ---------  ----------
Interest income..............................     1,454      2,640      11,885
Interest expense.............................       (29)    (1,455)       (714)
Other income (expense).......................    (1,199)      (177)     (2,395)
Foreign currency gains (losses)..............       115        824      (4,725)
                                               --------  ---------  ----------
Loss before minority interest and income
 taxes.......................................    (5,726)   (33,097)    (75,793)
Income tax benefit (expense).................       145        (65)       (985)
Minority interest in loss of consolidated
 subsidiaries................................       239      2,167       2,531
                                               --------  ---------  ----------
Net loss attributable to common
 stockholders................................  $ (5,342) $ (30,995) $  (74,247)
                                               ========  =========  ==========
Basic and diluted loss per share attributable
 to common stockholders......................  $ (24.29) $  (28.55) $    (1.40)
                                               ========  =========  ==========
Shares used in computing basic and diluted
 loss per share..............................   219,964  1,085,564  52,892,772
                                               ========  =========  ==========
</TABLE>


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

                                      F-4
<PAGE>

                              VIA NET.WORKS, INC.

           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
        (in thousands of U.S. Dollars, except share and per share data)

<TABLE>
<CAPTION>
                                                                                  Accumulated      Total
                             Common Stock    Additional                              Other     Stockholders'
                          ------------------  Paid-in   Accumulated   Deferred   Comprehensive    Equity
                            Shares   Amounts  Capital     Deficit   Compensation     Loss        (Deficit)
                          ---------- ------- ---------- ----------- ------------ ------------- -------------
<S>                       <C>        <C>     <C>        <C>         <C>          <C>           <C>
Balance, January 1,
 1998...................      60,100   --     $     30   $    (321)   $    --      $    --       $   (291)
Comprehensive loss:
 Net loss...............         --    --          --       (5,342)        --           --         (5,342)
 Foreign currency
  translation
  adjustment............         --    --          --          --          --          (434)         (434)
                                                                                                 --------
Total comprehensive
 loss...................         --    --          --          --          --           --         (5,776)
Issuance of common
 stock..................     212,942   --          186         --          --           --            186
                          ----------   ---    --------   ---------    --------     --------      --------
Balance, December 31,
 1998...................     273,042   --          216      (5,663)        --          (434)       (5,881)
                          ----------   ---    --------   ---------    --------     --------      --------
Comprehensive loss:
 Net loss...............         --    --          --      (30,995)        --           --        (30,995)
 Foreign currency
  translation
  adjustment............         --    --          --          --          --        (5,647)       (5,647)
                                                                                                 --------
Total comprehensive
 loss...................         --    --          --          --          --           --        (36,642)
Grant of employee stock
 options below fair
 market value...........         --    --       14,485         --      (14,485)         --            --
Amortization of deferred
 compensation...........         --    --          --          --        1,697          --          1,697
Issuance of common
 stock..................   1,689,629     2      11,322         --          --           --         11,324
                          ----------   ---    --------   ---------    --------     --------      --------
Balance at December 31,
 1999...................   1,962,671     2      26,023     (36,658)    (12,788)     (6,081)       (29,502)
                          ----------   ---    --------   ---------    --------     --------      --------
Comprehensive loss:
 Net loss...............         --    --          --      (74,247)        --           --        (74,247)
 Foreign currency
  translation
  adjustment............         --    --          --          --          --        (7,121)       (7,121)
                                                                                                 --------
Total comprehensive
 loss...................         --    --          --          --          --           --        (81,368)
Grant of employee stock
 options below fair
 market value...........         --    --          588         --         (588)         --            --
Amortization of deferred
 compensation...........         --    --          --          --        5,602          --          5,602
Stock option
 forfeitures............         --    --       (1,365)        --        1,365          --            --
Conversion of preferred
 shares to common shares
 at initial public
 offering...............  39,993,650    40     180,893         --          --           --        180,933
Issuance of common
 stock..................  18,875,678    19     352,057         --          --           --        352,076
                          ----------   ---    --------   ---------    --------     --------      --------
Balance at December 31,
 2000...................  60,831,999   $61    $558,196   $(110,905)   $ (6,409)    $(13,202)     $427,741
                          ==========   ===    ========   =========    ========     ========      ========
</TABLE>

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

                                      F-5
<PAGE>

                              VIA NET.WORKS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
        (in thousands of U.S. Dollars, except share and per share data)

<TABLE>
<CAPTION>
                                                For the years Ended December
                                                            31,
                                                ------------------------------
                                                  1998      1999       2000
                                                --------  ---------  ---------
<S>                                             <C>       <C>        <C>
Cash flows from operating activities:
 Net loss.....................................  $ (5,342) $ (30,995) $ (74,247)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
 Depreciation and amortization................     1,304     19,425     46,697
 Deferred taxes...............................      (145)       --         --
 Employee stock compensation..................       --       1,697      5,602
 Provision for doubtful accounts receivable...        26        640      2,436
 Loss on investment...........................       --         --       2,563
 Unrealized foreign currency transaction
  (gains) losses..............................      (126)      (824)       541
 Minority interest in loss of consolidated
  subsidiaries................................      (239)    (2,167)    (2,531)
 Loss in unconsolidated affiliate.............     1,199        177        --
 Changes in assets and liabilities, net of
  acquisitions:
 Accounts receivable..........................      (164)    (1,712)   (10,111)
 Other current assets.........................      (679)    (1,505)    (1,772)
 Accounts payable.............................       106      4,202      6,867
 Other current liabilities and accrued
  expenses....................................       233     (1,681)     6,226
 Deferred revenue.............................        43      2,188      3,120
 Other noncurrent assets......................       --         484      (492)
                                                --------  ---------  ---------
  Net cash used in operating activities.......    (3,784)   (10,071)   (15,101)
                                                --------  ---------  ---------
Cash flows from investing activities:
 Acquisitions, net of cash acquired...........   (11,005)   (91,454)   (78,694)
 Restricted cash..............................       --     (15,000)       --
 Purchases of property and equipment..........      (520)    (9,534)   (20,260)
 Purchases of indefeasible rights of use......       --      (7,259)       --
 Purchase of equity investment................    (2,781)       --         --
 Other assets.................................       (77)       544      2,344
                                                --------  ---------  ---------
  Net cash used in investing activities.......   (14,383)  (122,703)   (96,610)
                                                --------  ---------  ---------
Cash flows from financing activities:
 Repayment of debt............................       (56)    (9,823)    (3,287)
 Proceeds from issuance of common stock.......       186      1,426    332,341
 Proceeds from borrowings.....................       --         503        --
 Proceeds from issuance of mandatorily
  redeemable convertible preferred stock......    52,057    127,858        --
 Deferred equity offering costs...............       --      (1,482)       --
                                                --------  ---------  ---------
  Net cash provided by financing activities...    52,187    118,482    329,054
Effect of currency exchange rate changes on
 cash.........................................      (116)      (352)       429
                                                --------  ---------  ---------
Net increase (decrease) in cash and cash
 equivalents..................................    33,904    (14,644)   217,772
Cash and cash equivalents, beginning of
 period.......................................       807     34,711     20,067
                                                --------  ---------  ---------
Cash and cash equivalents, end of period......  $ 34,711  $  20,067  $ 237,839
                                                ========  =========  =========
Supplemental disclosure:
 Cash paid for interest.......................  $    --   $     783  $     424
                                                ========  =========  =========
 Income taxes paid............................  $    --   $      30  $     137
                                                ========  =========  =========
Noncash investing and financing transactions:
 Common stock issued to satisfy debt..........  $    --   $   2,747  $   5,183
                                                ========  =========  =========
 Common stock issued in connection with
  acquisitions................................  $    --   $   7,149  $   4,847
                                                ========  =========  =========
 Acquisition of indefeasible rights of use
  financed through long-term debt.............  $    --   $   4,241  $     --
                                                ========  =========  =========
</TABLE>

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

                                      F-6
<PAGE>

                              VIA NET.WORKS, INC.

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
        (in thousands of U.S. Dollars, except share and per share data)

1. Organization and Summary of Significant Accounting Policies

 Organization and Nature of Operations

  VIA NET.WORKS, Inc. (the "Company" or "VIA") was founded on June 13, 1997
for the purpose of acquiring existing Internet services providers around the
world. The focus of the Company is to be a leading, international provider of
single source Internet solutions, including web hosting, e-commerce, Internet
security and other services, primarily to the small and mid-sized business
market. In 1999, the Company amended its Certificate of Incorporation to
change the Company's name from V-I-A Internet, Inc. to VIA NET.WORKS, Inc.

 Risks and Uncertainties

  The Company has a limited operating history and its operations are subject
to certain risks and uncertainties, including those associated with: the
ability to meet obligations; continuing losses, negative cash flow and
fluctuations in operating results; funding expansion; acquisitions and
strategic alliances, including their integration; managing rapid growth and
expansion; international business activities; suppliers; financing arrangement
terms that may restrict operations; regulatory issues; competition in the
Internet services industry; technology trends and evolving industry standards;
and delivering reliable service.

 Use of Estimates

  The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses, together with amounts disclosed in the related notes to the
consolidated financial statements. Actual results could differ from the
recorded estimates.

 Principles of Consolidation

  The accompanying consolidated financial statements include the accounts of
the Company and its majority-owned and controlled subsidiaries, as described
in Note 3. All significant inter-company accounts and transactions have been
eliminated in consolidation. Investments in 20% to 50% owned affiliates over
which the Company has the ability to exercise significant influence are
accounted for under the equity method. Under the equity method of accounting,
an investee's results of operations are not reflected within the Company's
consolidated accounts; however, the Company's share of the earnings or losses
of the investee is reflected in the caption "other income (expense)" in the
consolidated statements of operations. In applying the equity method to
investments in voting preferred stock, the Company recognizes losses based on
its share of ownership interest of the preferred stock once common equity of
the investee has been fully depleted.

 Reclassifications

  Certain prior year information has been reclassified to conform to the
current year presentation.

 Revenue Recognition

  Revenue from Internet access and value-added Internet services is recognized
over the period in which the services are provided. Internet access revenue
includes payments from customers, as well as payments from telecommunications
providers that customers use to access the Company's service. The Company
records deferred revenue for amounts billed and/or collected in advance.
Revenue from network installation and training and consulting services is
recognized over the contract term as the related services are provided.
Installation and service activation fees are deferred and recognized over the
life of the customer relationship. Revenue from

                                      F-7
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

hardware and third-party software sales is recognized upon delivery or
installation of the respective products, depending on the terms of the
arrangement, and when the fee is fixed or determinable and collectibility is
considered probable.

 Cash and Cash Equivalents

  The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents. Restricted cash reflects
amounts held in escrow in connection with various acquisition agreements.

 Concentration of Credit Risk

  Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents, and
accounts receivable. The Company's cash and investment policies limit
investments to short-term, investment grade instruments. Concentration of
credit risk, with respect to accounts receivable, is limited due to the large
number and geographic dispersion of customers comprising the Company's
customer base.

 Property and Equipment

  Property and equipment are recorded at cost less accumulated depreciation,
which is provided on the straight-line method over the estimated useful lives
of the assets, generally three to five years. The Company has purchased
software to facilitate its global information processing, financial reporting
and access needs. These costs and related software implementation costs are
being capitalized, in accordance with SOP 98-1, Accounting for the Cost of
Internal Use Software and amortized over the estimated useful life, generally
three years. The cost of network infrastructure purchased under indefeasible
right of use agreements (IRU) is being amortized over the lesser of the
estimated useful life or term of the agreement, generally 20 to 25 years. Cost
includes major expenditures for improvements and replacements, which extend
useful lives or increase capacity of the assets. Expenditures for maintenance
and repairs are expensed as incurred. The carrying value of property, plant
and equipment is assessed annually and/or when factors indicating a possible
impairment are present. If an impairment is present, the assets are reported
at the lower of carrying value or fair value as determined, in accordance with
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the
Impairment of Long-Lived Assets and Assets to be Disposed of.

 Goodwill and Other Acquired Intangible Assets

  The Company has recorded goodwill and other acquired intangible assets
related to its acquisitions. Goodwill and other intangible assets are
amortized using the straight-line method over a five-year period. The Company
periodically reviews goodwill and other intangible assets to assess
recoverability based upon events and circumstances at each operation.
Impairments of goodwill and other intangibles assets are determined in
accordance with SFAS No. 121.

 Other Assets

  Other assets principally comprise deferred equity offering costs, other
costs incurred in connection with pending acquisitions, non-compete agreements
and other receivables related to the acquisition of businesses. Offering costs
as of December 31, 1999 were subsequently charged against additional paid-in
capital upon completion of the Company's initial public offering in February
2000. Costs incurred in connection with

                                      F-8
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

successful acquisitions are included in the total purchase price. Costs
related to unsuccessful acquisition efforts are charged to income in the
current period. The non-compete agreements are being amortized over the
contractual life of two years.

 Advertising Costs

  Costs related to advertising and promotion of services are charged to
operating expense as incurred. Advertising expense was $975, $2,021 and $4,803
for the years ended December 31, 1998, 1999 and 2000, respectively.

 Income Taxes

  The Company accounts for income taxes under the asset and liability method,
which requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying
amounts and tax bases of assets and liabilities. The Company provides a
valuation allowance on net deferred tax assets when it is more likely than not
that such assets will not be realized. In conjunction with business
acquisitions, the Company records acquired deferred tax assets and
liabilities. Future reversals of the valuation allowance on acquired deferred
tax assets will first be applied against goodwill and other intangibles before
recognition of a benefit in the consolidated statements of operations.

 Stock-Based Compensation

  SFAS No. 123, Accounting for Stock-Based Compensation, encourages, but does
not require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for stock-
based compensation using the intrinsic value method prescribed in Accounting
Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the estimated fair value
of the Company's stock at the date of the grant over the amount an employee
must pay to acquire the stock. The Company has adopted the "disclosure only"
alternative described in SFAS No. 123, which requires pro forma disclosures of
net income and earnings per share as if the fair value method of accounting
has been applied.

 Foreign Currency

  The functional currency for the Company's international subsidiaries is the
applicable local currency. Accordingly, net assets are translated at year-end
exchange rates while revenue and expenses are translated at the average
exchange rates. Adjustments resulting from these translations are accumulated
and reported as a component of accumulated other comprehensive loss in
stockholders' equity (deficit). Transaction gains or losses, including gains
or losses on foreign currency denominated inter-company balances, are recorded
in the consolidated statements of operations.

 Fair Value of Financial Instruments

  Carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable,
accrued expenses and other liabilities approximate fair value due to their
short maturities. Based upon borrowing rates currently available to the
Company for loans with similar terms, the carrying value of debt and capital
lease obligations approximate their fair value.


                                      F-9
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

 Loss Per Share

  Basic loss per share is computed using the weighted-average number of shares
of common stock outstanding during the year. Diluted loss per share is
computed using the weighted-average number of shares of common stock, adjusted
for the dilutive effect of common stock, equivalent shares of common stock
options and warrants and contingently issuable shares of common stock. Common
stock equivalent shares are calculated using the treasury stock method. Due to
losses by the Company the following securities that were outstanding for each
of the periods presented have been excluded from the computation of diluted
loss per share, as their effect would be antidilutive:

<TABLE>
<CAPTION>
                                                                     Convertible
                                                    Stock             Preferred
                                                   Options  Warrants    Stock
                                                  --------- -------- -----------
   <S>                                            <C>       <C>      <C>
   December 31, 1998............................. 1,365,000 100,000  18,683,992
   December 31, 1999............................. 5,387,500 100,000  39,993,650
   December 31, 2000............................. 7,988,654 100,000         --
</TABLE>

  There is no difference between basic and diluted loss per share for each of
the periods presented.

 Comprehensive Loss

  Comprehensive loss consists of net loss and foreign currency translation
adjustments as presented in the consolidated statements of stockholders'
equity (deficit).

 Segment Reporting

  The Company discloses its segments using the ""management" approach. The
management approach designates the internal organization that is used by
management for allocating resources and assessing performance as the source of
the Company's reportable segments.

 Recent Pronouncements

  In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. Upon initial
application of SFAS No. 133, as amended by SFAS No. 138, all derivatives are
required to be recognized in the statement of financial position as either
assets or liabilities and measured at fair value. In addition, all hedging
relationships must be reassessed and documented pursuant to the provisions of
SFAS No. 133. Subsequent to the issuance of SFAS No. 133, the Financial
Accounting Standards Board issued SFAS No. 137 which defers the effective date
of SFAS No. 133 to fiscal years beginning after June 15, 2000, the first
quarter of VIA's fiscal 2001. The adoption of SFAS No. 133 has no effect on
VIA's results of operations or financial position.

2. Investment in Affiliate

  In June 1998, the Company acquired a 36% interest in i-way Limited (i-way)
an Internet services provider located in the United Kingdom.

  In June 1999, the Company negotiated the purchase of the remaining 64%
equity interest in i-way for total consideration of $13,104, comprised of
$10,473 in cash and 317,421 shares of the Company's common stock, valued at
$8.25 per share. The transaction was consummated on August 5, 1999. On the
date of acquisition the

                                     F-10
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

fair value of net assets acquired was $208. Goodwill of $14,174 was recognized
on the acquisition. Accordingly, the revenues and expenses of i-way subsequent
to August 5, 1999 have been included in the Company's consolidated financial
statements.

3. Acquisitions of Certain Businesses

  Beginning in 1998, the Company has made a series of acquisitions of Internet
services providers located in Europe, Latin America and the U.S., offering
services that include Internet access, web hosting, e-commerce, Internet
security and other services, primarily to small and mid-sized businesses.

  Each of the acquisitions has been accounted for using the purchase method of
accounting and, accordingly, the net assets and results of operations of the
acquired companies have been included in the Company's consolidated financial
statements since the acquisition dates. The purchase price of the acquisitions
was allocated to assets acquired, including intangible assets, and liabilities
assumed, based on their respective fair values at the acquisition dates.
Identifiable intangible assets as of the date of acquisition primarily consist
of a customer base, employee workforce and the trade name. Because the
Company's operating strategy following an acquisition will result in changing
the existing target market from residential subscribers to small and mid-sized
businesses and focus on the VIA NET.WORKS brand name, the value allocated to
the acquired customer bases and trade names has not been significant.
Likewise, due to the short operating history of most of these acquired
businesses, there is uncertainty as to employee retention. As a result, a
significant portion of the purchase price has been allocated to goodwill.

 Acquisitions

  Since 1998, the Company completed 26 acquisitions for cash and notes
payable:

<TABLE>
<CAPTION>
                   Number of Businesses Aggregate Purchase  Assets  Liabilities
                         Acquired             Price        Acquired   Assumed
                   -------------------- ------------------ -------- -----------
     <S>           <C>                  <C>                <C>      <C>
     1998.........           4               $ 39,217      $ 6,456    $ 7,148
     1999.........          13               $ 92,327      $15,867    $18,321
     2000.........           9               $ 75,715      $ 8,454    $ 6,356
                           ---               --------      -------    -------
     Total........          26               $207,259      $30,777    $31,825
</TABLE>


                                     F-11
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  In 2000, the following companies were acquired:

<TABLE>
<CAPTION>
                                                         Aggregate Ownership
                           Acquiree      Acquisition     Purchase  Interest   Assets  Liabilities
      Company Name         Location          Date          Price   Acquired  Acquired   Assumed
      ------------        ----------- ------------------ --------- --------- -------- -----------
<S>                       <C>         <C>                <C>       <C>       <C>      <C>
Net4You EDV
 Dienstleistungs und
 Handelges.m.b.H
 (Net4You)..............  Austria     January 4, 2000     $ 2,948     58%     $1,070    $  876
DNS Telecom SAS (DNS)...  France      January 7, 2000      11,878    100%      1,771     1,314
I.S.A.R. Netzwerke
 Dienstleistungs GmbH
 (ISAR).................  Germany     February 16, 2000     8,589    100%        811       550
Internet Access
 Eindhoven BV (IAE).....  Netherlands April 3, 2000         7,489    100%      1,310       543
SmartComp AG
 (SmartComp)............  Switzerland July 26, 2000         3,965    100%        798       353
Interactive Multimedia
 Corporation (IMC
 Online)................  USA         August 31, 2000      29,264    100%      1,040     1,386
Meridian Microtech s.r.l
 (Microtech)............  Italy       September 15, 2000    3,530    100%        417       370
Hishspeed-Server Eisnet
 GmbH (Highspeed).......  Germany     October 6, 2000       4,966    100%        716       657
Symphonie S.A. (MNet)...  France      October 10, 2000      3,086    100%        521       307
                                                          -------             ------    ------
                                      Totals              $75,715             $8,454    $6,356
                                                          =======             ======    ======
</TABLE>

  In connection with the acquisitions of Net4You and DNS, we are obligated to
pay amounts to the current or former owners in 2001. These amounts are carried
as short-term debt and are disclosed further in Note 6.

  In connection with the purchase of ISAR, we are obligated to pay an
additional contingent earn-out payment. The payment amount will be determined
based on revenue and EBITDA generated during the year ended December 31, 2000
and is payable in 2001. Additionally, cash payments may be paid to Smartcomp
in 2001 in accordance with the purchase agreement related to that acquisition.

  The acquisitions of IMC Online, Microtech, Highspeed and MNet included
consideration in the form of common stock. A portion of the common stock was
issued on the respective closing dates and the remaining portions were issued
and put into escrow as security against any claims that might be asserted by
VIA against the sellers of these companies. The escrowed shares will be
distributed to the former owners of the companies in August 2001, April 2002,
April 2002 and October 2002, respectively, assuming that no claims are made by
VIA under the original purchase agreement.

  We have agreements with the minority stockholders of our majority-owned
operating companies that give us the right, after a specified period of time,
to purchase their shares in those operating companies based on predetermined
price formulas which consider revenue growth, operating results and cash
flows. In some cases, the minority stockholders have the right to purchase our
shares in those operating companies if we do not exercise our purchase right
by a specified date. In 1999, we exercised our right to purchase additional
shares in VIA NET.WORKS Argentina by paying $2,594 in cash and common stock.
In 2000, we exercised our right to purchase additional shares in VIA NET.WORKS
Deutschland (formerly GTN), VIA NET.WORKS Brasil S.A. (formerly Dialdata), and
Artinternet. We also paid additional consideration in the amount of $30,000 to
VIA NET.WORKS Mexico (formerly InfoAcces). Additionally in 2000, we increased
our equity interest in VIA

                                     F-12
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

NET.WORKS Ireland (formerly Medianet) in connection with the separation from
that company of its former managing director and a minority shareholder,
through the purchase of his shares in the company. In December 2000, VIA
NET.WORKS Deutschland sold its 100% interest in Ecce Terram to that company's
former owners. Because cash payment was not received until January 2001, and
the sale could have been cancelled if payment was not received, the sale was
accounted for as a January 2001 transaction.

  The following presents the unaudited pro forma results of operations of the
Company for the years ended December 31, 1999 and 2000 as if the 2000
acquisitions had been consummated on January 1, 1999. The unaudited pro forma
results of operations include certain pro forma adjustments, including the
amortization of goodwill and other intangible assets relating to the
acquisitions.

<TABLE>
<CAPTION>
                                                              December 31,
                                                            ------------------
                                                              1999      2000
                                                            --------  --------
                                                               (unaudited)
   <S>                                                      <C>       <C>
   Revenue................................................. $ 58,978  $110,945
   Net loss................................................  (45,035)  (81,165)
   Basic and diluted loss per share........................ $ (41.49) $  (1.53)
</TABLE>

  The unaudited pro forma results of operations are prepared for comparative
purposes only and do not necessarily reflect the results that would have
occurred had the 2000 acquisitions occurred at January 1, 1999 or the results
that may occur in the future.

4. Property and Equipment

  Property and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                               December 31,
                                                             ------------------
                                                               1999      2000
                                                             --------  --------
   <S>                                                       <C>       <C>
   Hardware and other equipment............................. $ 23,255  $ 21,999
   Network and data center assets...........................   12,484    26,691
   Software.................................................    1,752     7,595
   Furniture and fixtures...................................    2,113     2,999
                                                             --------  --------
                                                               39,604    59,284
   Accumulated depreciation and amortization................  (10,695)  (20,057)
                                                             --------  --------
   Property and equipment, net.............................. $ 28,909  $ 39,227
                                                             ========  ========
</TABLE>

  Total depreciation expense was $368, $4,331 and $9,975 in 1998, 1999 and
2000, respectively. As of December 31, 2000, the Company held $23,769 of
machinery and equipment, and capitalized network infrastructure under capital
lease/IRU arrangements. The related accumulated amortization was $6,135. As of
December 31, 2000, the Company held $7,595 of capitalized software with
related accumulated amortization expense of $2,138.


                                     F-13
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

5. Goodwill and Other Acquired Intangible Assets

  Goodwill and other intangible assets acquired through business acquisitions
consisted of the following:

<TABLE>
<CAPTION>
                                                               December 31,
                                                             ------------------
                                                               1999      2000
                                                             --------  --------
   <S>                                                       <C>       <C>
   Goodwill................................................. $126,731  $220,378
   Customer base............................................    2,123     8,360
   Employee workforce.......................................    1,213     3,760
   Accumulated amortization.................................  (14,873)  (51,416)
                                                             --------  --------
   Total.................................................... $115,194  $181,082
                                                             ========  ========
</TABLE>

  Total amortization expense was $936, $15,094, and $36,722 in 1998, 1999 and
2000, respectively. The value assigned to goodwill, customer base and employee
workforce is being amortized over estimated useful lives of five years.

6. Short-term Notes and Long-term Debt

  Short-term notes and long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                              December 31,
                                                             ----------------
                                                              1999     2000
                                                             -------  -------
   <S>                                                       <C>      <C>
   Acquisition debt......................................... $ 8,076  $ 1,495
   Debt related to IRU Agreements, 12%, due quarterly to
    2002....................................................   3,899    2,476
   Capital lease obligations at interest rates ranging from
    7.8% to 8.0%, due monthly to 2004.......................     858      866
   Notes payable, due monthly through 2002..................     821      322
                                                             -------  -------
                                                              13,654    5,159
   Less current portion.....................................  (7,808)  (3,265)
                                                             -------  -------
   Long-term portion........................................ $ 5,846  $ 1,894
                                                             =======  =======
</TABLE>

  The acquisition obligations outstanding at December 31, 1999 related to
businesses acquired in 1999. All of these amounts were paid in full subsequent
to the initial public offering of the Company's common stock in February 2000,
except for one note, which is payable to a former manager of one acquired
business. The note amount was relieved in January 2001 when the acquired
business was sold back to the original owner. The remaining acquisition
obligations outstanding at December 31, 2000 include payments due to the
current or former owners of two of the Company's acquired businesses.

  The scheduled maturities of long-term debt outstanding at December 31, 2000
are summarized as follows:

<TABLE>
   <S>                                                                    <C>
   2001..................................................................  3,265
   2002..................................................................  1,531
   2003..................................................................    343
   2004..................................................................     20
   2005 and thereafter...................................................    --
                                                                          ------
                                                                          $5,159
                                                                          ======
</TABLE>

                                     F-14
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)


7. Mandatorily Redeemable Convertible Preferred Stock

  The Company's mandatorily redeemable convertible preferred stock as of
December 31, 1999 is summarized below:

<TABLE>
<CAPTION>
                                                           Price per
                                                             share     Shares
                                                           --------- ----------
   <S>                                                     <C>       <C>
   Series A, voting.......................................    $ 1     1,488,657
   Series B-1, voting.....................................    $ 3    15,795,335
   Series B-2, non-voting.................................    $ 3     1,400,000
   Series C-1, voting.....................................    $ 6    15,939,657
   Series C-2, non-voting.................................    $ 6     5,370,001
                                                                     ----------
                                                                     39,993,650
                                                                     ==========
</TABLE>

  All preferred shares were converted into equivalent shares of common stock
concurrent with the initial public offering of the Company's common stock in
February 2000.

8. Stock Compensation and Retirement Plans

 Key Employee Equity Plan

  During 1998, the Company adopted the V-I-A Internet Inc. Key Employee Equity
Plan (the "KEEP Plan"), an incentive plan to attract and retain qualified
officers, key employees, directors and other persons at VIA and our operating
companies. The KEEP Plan provides for the granting of stock options to key
employees of the Company. Rights are granted with an exercise price as
determined by the Company's Board of Directors. The stock purchase rights vest
immediately and expire two months from the date of the grant unless terminated
earlier. As of December 31, 1999 and 2000, the Company has reserved 800,000
common shares for issuance under the KEEP Plan.

 Stock Option Plan

  In 2000, the Company adopted the Amended and Restated 1998 Stock Option and
Restricted Stock Plan (the "Option Plan"). The Option Plan allows the Company
to issue employees either incentive or non-qualified options, which vest over
such periods as may be determined by the Board of Directors, generally two to
four years. The options expire no later than ten years and one month after
grant date. The Option Plan allows for grants, which would allow the grantees
to exercise their options prior to vesting in exchange for restricted common
stock or restricted stock units, however, no such grants have been made.
Options granted prior to our initial public offering of the company's common
stock in February 2000 have an exercise price equal to the estimated value of
the common stock at the date of grant as determined by the Company's Board of
Directors. Options granted after the date of our initial public offering have
an exercise price equal to the closing price for our stock on the Nasdaq
National Market on the last trading day immediately prior to the date of
grant. As of December 31, 1999 and 2000 the Company has reserved 9,200,000
common shares for issuance under the Option Plan.

 Warrants for Common Stock

  In April 1998, the Company issued warrants to purchase 100,000 shares of
common stock at an exercise price of $2.40, to a non-employee member of the
Board of Directors. These warrants vested immediately and expire five years
from the grant date. As of December 31, 2000 no warrants have been exercised.

                                     F-15
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)


 Fair Value of Stock Options and Warrants

  For disclosure purposes under SFAS No. 123, the fair value of each stock
option and warrant granted is estimated on the date of grant using the Black
Scholes option-pricing model with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                      1998                      1999                  2000
                         ------------------------------ --------------------- ---------------------
                         KEEP Plan Option Plan Warrants KEEP Plan Option Plan KEEP Plan Option Plan
                         --------- ----------- -------- --------- ----------- --------- -----------
<S>                      <C>       <C>         <C>      <C>       <C>         <C>       <C>
Expected life in
 months.................      2       48-60       60         2       12-48         2       48-84
Risk-free interest
 rate...................    4.5%          5%       5%      4.4%        4.9%      5.5%          6%
Volatility..............      0%          0%       0%        0%      0%-50%       90%         90%
Dividend yield..........      0%          0%       0%        0%          0%        0%          0%
</TABLE>

  For all options granted subsequent to the initial filing of the Company's
public offering in November 1999 through December 31, 1999, a volatility
factor of 50% was used. For options granted in the fiscal year 2000, a
volatility factor of 90% was used.

  Utilizing these assumptions, the weighted-average fair value of the stock
options and warrants granted was as follows:

<TABLE>
<CAPTION>
                                                              1998  1999   2000
                                                              ----- ----- ------
   <S>                                                        <C>   <C>   <C>
   KEEP Plan................................................. $0.02 $0.15 $ 3.22
   Option Plan............................................... $0.36 $4.54 $12.17
   Warrants.................................................. $0.53   --     --
</TABLE>

  Under the above model, the total value of stock options and warrants granted
was approximately $440, $20,172 and $47,057 in 1998, 1999 and 2000
respectively, which would be amortized on a pro forma basis over the option-
vesting period. Had the Company determined compensation cost for these plans
in accordance with SFAS No. 123, the Company's pro forma results would have
been as follows:

<TABLE>
<CAPTION>
                                      For the Years Ended December 31,
                            ---------------------------------------------------------
                                  1998               1999                2000
                            -----------------  ------------------  ------------------
                               As       Pro       As       Pro        As       Pro
                            Reported   Forma   Reported   Forma    Reported   Forma
                            --------  -------  --------  --------  --------  --------
   <S>                      <C>       <C>      <C>       <C>       <C>       <C>
   Net loss................ $(5,342)  $(5,403) $(30,995) $(31,827) $(74,247) $(85,061)
   Net loss per share...... $(24.29)  $(24.56) $ (28.55) $ (29.32) $  (1.40) $  (1.61)
</TABLE>


                                     F-16
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  Following is a summary of the Company's stock purchase right, stock option
and warrant activity through December 31, 2000:

<TABLE>
<CAPTION>
                            Number of Shares of Common
                                       Stock                           Weighted-
                            -----------------------------               Average
                              KEEP     Option                Price     Exercise
                              Plan      Plan     Warrants  Per Share     Price
                            --------  ---------  -------- ------------ ---------
   <S>                      <C>       <C>        <C>      <C>          <C>
   Balance at December 31,
    1997...................      --         --       --            --      --
   Granted.................  365,000  1,080,000  100,000  $1.00-$ 2.40  $ 2.13
   Exercised...............      --         --       --            --      --
   Forfeited...............  (25,000)   (50,000)     --   $       2.40  $ 2.40
                            --------  ---------  -------
   Balance at December 31,
    1998...................  340,000  1,030,000  100,000  $1.00-$ 2.40  $ 2.11
                            --------  ---------  -------
   Granted.................  332,000  4,380,500      --   $4.00-$ 9.75  $ 7.50
   Exercised............... (495,158)       --       --   $2.40-$ 9.75  $ 3.16
   Forfeited............... (116,842)   (54,002)     --   $2.40-$ 9.75  $ 5.36
                            --------  ---------  -------
   Balance at December 31,
    1999...................   60,000  5,356,498  100,000  $1.00-$ 9.75  $ 6.16
                            --------  ---------  -------
   Granted.................   37,500  4,006,150      --   $6.13-$21.63  $15.12
   Exercised...............  (90,325)  (384,279)     --   $2.40-$ 9.00  $ 4.96
   Forfeited...............   (7,175)  (989,715)     --   $2.40-$19.00  $ 9.94
                            --------  ---------  -------
   Balance at December 31,
    2000...................      --   7,988,654  100,000  $1.00-$21.63  $10.49
                            ========  =========  =======
   Exercisable, December
    31, 1998...............  340,000     47,037  100,000  $1.00-$ 8.25  $ 2.58
                            ========  =========  =======
   Exercisable, December
    31, 1999...............   60,000    670,442  100,000  $1.00-$ 9.00  $ 4.48
                            ========  =========  =======
   Exercisable, December
    31, 2000...............      --   2,086,639  100,000  $1.00-$18.69  $ 6.38
                            ========  =========  =======
</TABLE>

  All stock purchase rights and options granted during 1998 were granted with
exercise prices equal to the fair market value as determined by the Board of
Directors. During 1999 and 2000, prior to the initial public offering, the
Company determined that the fair value of the underlying common stock exceeded
the exercise price of certain stock purchase rights and stock option grants by
$14,485 and $588, respectively. Such amounts will be amortized over the
vesting period. The Company recognized an expense of $1,697 and $5,602 in 1999
and 2000, respectively.


                                     F-17
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  The following table summarizes information about the outstanding and
exercisable options and warrants at December 31, 2000:
<TABLE>
<CAPTION>
                                                       Outstanding
                                          --------------------------------------
                                                    Weighted-Average
                                                       Remaining
                                                    Contractual Life Exercisable
   Exercise Price                          Number       (months)       Number
   --------------                         --------- ---------------- -----------
   <S>                                    <C>       <C>              <C>
   $1.00.................................   300,000       87.5          193,749
   $2.40.................................   381,360       76.4          326,037
   $4.00................................. 1,041,575      100.4          430,863
   $6.13.................................   378,500      119.2              --
   $8.25.................................   390,958      102.8          172,841
   $9.00................................. 2,372,200      109.1          885,618
   $9.75.................................   567,061      107.0          163,990
   $10.56................................    50,000      116.5              --
   $12.94................................   196,250      116.1              --
   $14.88................................   251,000      116.0              --
   $16.00................................   183,000      108.6              --
   $18.69................................   705,250      113.9           13,541
   $19.00................................ 1,268,500      111.2              --
   $21.63................................     3,000      116.1              --
                                          ---------                   ---------
                                          8,088,654      106.8        2,186,639
                                          =========                   =========
</TABLE>

  In January 2001, the Company granted 35,000 stock options, at an exercise
price of $6.13 per share. In February 2001, the Company granted 258,000 stock
options at an exercise price of $6.06.

9. Income Taxes

  The differences between the U.S. federal statutory tax rate and the
Company's effective tax rate are as follows:

<TABLE>
<CAPTION>
                                                               For the Years
                                                               Ended December
                                                                    31,
                                                               ----------------
                                                               1998  1999  2000
                                                               ----  ----  ----
   <S>                                                         <C>   <C>   <C>
   Statutory U.S. federal income tax rate.....................  34%   34%   34%
   Minority interest..........................................   1     3     1
   Goodwill amortization......................................  (5)  (11)  (16)
   State income taxes, net....................................   1     1     1
   Change in valuation allowance.............................. (19)  (34)  (17)
   Loss in unconsolidated subsidiary..........................  (7)  --    --
   International subsidiaries................................. --      8    (2)
   Other......................................................  (2)   (1)  --
                                                               ---   ---   ---
   Effective income tax rate..................................   3%    0%    1%
                                                               ===   ===   ===
</TABLE>


                                     F-18
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  The (benefit from) provision for income taxes is summarized below:

<TABLE>
<CAPTION>
                                                                For the Years
                                                               Ended December
                                                                     31,
                                                               ----------------
                                                               1998   1999 2000
                                                               -----  ---- ----
   <S>                                                         <C>    <C>  <C>
   Current income taxes:
     International............................................ $ --   $65  $946
     Federal..................................................   --   --    --
     State....................................................   --   --     27
                                                               -----  ---  ----
                                                                 --    65   973
   Deferred income taxes:
     International............................................  (145) --     12
     Federal..................................................   --   --    --
     State....................................................   --   --    --
                                                               -----  ---  ----
   Total deferred income taxes................................  (145) --     12
                                                               -----  ---  ----
   Total (benefit from) provision for income taxes............ $(145) $65  $985
                                                               =====  ===  ====
</TABLE>

  The components of loss before income taxes and minority interest are as
follows:

<TABLE>
<CAPTION>
                                                       For the Years Ended
                                                          December 31,
                                                    ---------------------------
                                                     1998      1999      2000
                                                    -------  --------  --------
   <S>                                              <C>      <C>       <C>
   U.S operations.................................. $(4,107) $ (8,215) $(17,693)
   Non-U.S. operations.............................  (1,619)  (24,882)  (58,100)
                                                    -------  --------  --------
                                                    $(5,726) $(33,097) $(75,793)
                                                    =======  ========  ========
</TABLE>

  Deferred tax assets and liabilities were comprised of the following:

<TABLE>
<CAPTION>
                                                   1998      1999      2000
                                                  -------  --------  --------
   <S>                                            <C>      <C>       <C>
   Deferred tax assets:
     Federal net operating loss carryforward..... $   539  $  3,695  $  6,088
     Start-up costs..............................     523       962       294
     IMC cash to accrual adjustment..............     --        --        335
     Deferred compensation.......................     --        770     2,435
     Other.......................................     --        403     3,298
     International subsidiaries net operating
      loss carryforward..........................     145     5,979    15,506
                                                  -------  --------  --------
   Gross deferred tax assets.....................   1,207    11,809    27,956
                                                  -------  --------  --------
   Deferred tax liabilities:
     Unrealized foreign currency gain............     (48)     (412)     (341)
     Foreign acquired intangible assets..........     --        --     (3,467)
     Depreciation and amortization...............     --        (70)      (60)
                                                  -------  --------  --------
   Gross deferred tax liabilities................     (48)     (482)   (3,868)
                                                  -------  --------  --------
   Net deferred tax assets.......................   1,159    11,327    24,088
   Valuation allowance...........................  (1,159)  (11,327)  (24,100)
                                                  -------  --------  --------
   Net deferred tax asset (liability)............ $   --   $    --   $    (12)
                                                  =======  ========  ========
</TABLE>


                                      F-19
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  The net deferred tax assets have been reduced by a valuation allowance since
management has determined that currently it is more likely than not that such
benefits will not be realized. The change in the valuation allowance was an
increase of $12,733 in 2000, which is primarily related to additional
operating losses in the U.S. and foreign jurisdictions and amounts
attributable to the purchased intangible assets other than goodwill for the
foreign subsidiaries. The company establishes valuation allowances in
accordance with the provisions of SFAS No. 109. The Company continually
reviews the adequacy of these valuation allowances.

  At December 31, 1998, 1999 and 2000, the Company had a U.S. net operating
loss carryforwards of approximately $1,427, $9,731 and $16,022, respectively,
which may be used to offset future taxable income. These carryforwards begin
to expire in 2018. Further, the Internal Revenue Code places certain
limitations on the annual amount of net operating loss carryforwards which can
be utilized if certain changes in the Company's ownership occur.

  At December 31, 1998, 1999 and 2000, the Company had net operating losses
from its foreign subsidiaries of approximately $406, $17,235 and $41,330,
respectively, of which $13,184 expires between 2001 and 2010 and $28,146 has
an indefinite carryforward period. It is expected that all earnings generated
from foreign subsidiaries will be permanently reinvested in those
subsidiaries.

10. Commitments and Contingencies

 Operating and Capital Lease Commitments

  The Company leases office space and equipment under non-cancelable operating
leases expiring on various dates through 2010. In addition, the Company is
required to make quarterly payments for certain operations and maintenance
services over the life of the IRU arrangements ranging from 20-25 years. Rent
expense for the years ended December 31, 1998, 1999 and 2000, $178, $1,726 and
$3,723, respectively.

  The Company also leases telecommunications and other equipment under capital
leases.

  Future minimum lease payments under non-cancelable operating leases and
capital leases at December 31, 2000 are as follows:

<TABLE>
<CAPTION>
   Year Ending December 31,                                    Operating Capital
   ------------------------                                    --------- -------
   <S>                                                         <C>       <C>
   2001.......................................................  $ 5,126   $575
   2002.......................................................    5,840    276
   2003.......................................................    4,799     58
   2004.......................................................    3,224     22
   2005.......................................................    2,717    --
   Thereafter.................................................    2,930    --
                                                                -------   ----
                                                                $24,636    931
                                                                =======
   Less amount representing interest..........................             (65)
                                                                          ----
   Present value of future minimum lease payments.............            $866
                                                                          ====
</TABLE>

 Contingencies

  From time to time, the Company is subject to claims arising in the ordinary
course of business. In the opinion of management, no such matter, individually
or in the aggregate, exists which is expected to have a material effect on the
results of operations, cash flows or financial position of the Company.

                                     F-20
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)


11. Segment Reporting

  The Company offers a variety of Internet access, web hosting, e-commerce,
Internet security and related services to businesses and consumers in Europe,
Latin America and the United States. As of December 31, 2000, the Company
served primary markets in 14 countries, with operations organized into four
geographic operating segments--North America, South America, the United
Kingdom (UK) and Southern Europe and Central and Western Europe. These
segments generate Internet-related revenues from leased lines, dial-up
Internet access, web hosting and design, consulting services, and sale of
third-party hardware and software. Corporate expenses which are not allocated
to one of the operating segments are shown to reconcile to the total
consolidated figures.

  Beginning in the quarter ended September 30, 2000, VIA modified its
definition of total segment assets and beginning in the quarter ended December
31, 2000, VIA reorganized its management reporting structure to create four
reportable segments rather than two. Prior amounts have been revised to
conform to the current presentation.

  Each of these geographic operating segments is considered a reportable
segment, and the accounting policies of the operating segments are the same as
those described in Note 1. The Company evaluates the performance of its
segments based on revenue and earnings before interest, taxes, depreciation
and amortization and non-cash compensation charges ("EBITDA"). The table below
presents information about the reported revenue, EBITDA and assets of the
Company's segments for the years ended December 31, 1998, 1999 and 2000.

<TABLE>
<CAPTION>
                                                      UK, Ireland
                                                          and     Central and
                                     North    South    Southern     Western
                         Corporate  America  America    Europe      Europe     Total
                         ---------  -------  -------  ----------- ----------- --------
<S>                      <C>        <C>      <C>      <C>         <C>         <C>
The year ended December
 31, 1998:
  Revenue............... $    --    $   --   $   651    $ 1,203     $ 1,494   $  3,348
  EBITDA................   (4,389)      --      (329)       121        (166)    (4,763)
  Assets................   21,733       --    15,474     20,464      15,354     73,025
The year ended December
 31, 1999:
  Revenue............... $    --    $ 2,447  $ 5,376    $19,477     $11,994   $ 39,294
  EBITDA................   (8,064)     (513)  (1,316)      (811)     (3,103)   (13,807)
  Assets................   52,432    36,767   13,016     72,291      25,077    199,583
The year ended December
 31, 2000:
  Revenue............... $    --    $18,008  $ 6,450    $45,432     $33,101   $102,991
  EBITDA................  (16,333)     (861)  (5,571)      (701)     (4,079)   (27,545)
  Assets................  274,981    84,987    6,461     54,995      63,459    484,883
</TABLE>


                                     F-21
<PAGE>

                              VIA NET.WORKS, INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
        (in thousands of U.S. Dollars, except share and per share data)

  Adjustments to reconcile total EBITDA to loss before income taxes and
minority interest are as follows:

<TABLE>
<CAPTION>
                                  For the           For the           For the
                                Year Ended        Year Ended        Year Ended
                             December 31, 1998 December 31, 1999 December 31, 2000
                             ----------------- ----------------- -----------------
   <S>                       <C>               <C>               <C>
   EBITDA..................       $(4,763)         $(13,807)         $(27,545)
   Non-cash compensation...           --             (1,697)           (5,602)
   Depreciation and
    amortization...........        (1,304)          (19,425)          (46,697)
                                  -------          --------          --------
   Loss from operations....        (6,067)          (34,929)          (79,844)
   Interest income
    (expense), net.........         1,425             1,185            11,171
   Other income (expense)..        (1,084)              647            (7,120)
                                  -------          --------          --------
   Loss before income taxes
    and minority interest..       $(5,726)         $(33,097)         $(75,793)
                                  =======          ========          ========
</TABLE>

  The three largest revenue producing countries for 1998 and 1999, the United
Kingdom, Germany and Argentina, generated revenues in the amounts of $1,203,
$1,494 and $651; and $16,923, $8,253, and $3,136, respectively. For 2000, the
three largest revenue producing countries, the United Kingdom, Germany and
Mexico, generated revenues in the amounts of $40,158, $14,330, and $16,643,
respectively. Revenue from our U.S. operating company, for the period in 2000
for which it was owned, was $1,365.

                                     F-22
<PAGE>

                                  SCHEDULE II

                              VIA NET.WORKS, INC.

                       VALUATION AND QUALIFYING ACCOUNTS
                         (in thousands in U.S. dollars)

<TABLE>
<CAPTION>
                                                    Charged
                            Balance at Balances of  to costs                 Balance at
                            beginning    acquired     and                      end of
   Description              of period  subsidiaries expenses Deductions(/1/)   period
   -----------              ---------- ------------ -------- --------------- ----------
   <S>                      <C>        <C>          <C>      <C>             <C>
   Year ended December 31,
    1998:
   Allowance for doubtful
    accounts...............   $    0       $200      $   17       $   0        $  217
                              ======       ====      ======       =====        ======
   Year ended December 31,
    1999:
   Allowance for doubtful
    accounts...............   $  217       $822      $  640       $(383)       $1,296
                              ======       ====      ======       =====        ======
   Year ended December 31,
    2000:
   Allowance for doubtful
    accounts...............   $1,296       $113      $2,561       $(347)       $3,623
                              ======       ====      ======       =====        ======
</TABLE>
--------
(/1/)Amounts represent the write off of uncollectible accounts receivable
balances.

                                      F-23
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
 -------
 <C>      <S>
   3.1    Amended and Restated Certificate of Incorporation of VIA NET.WORKS,
          Inc. (1)

   3.2    Amended and Restated Bylaws of the VIA NET.WORKS, Inc. (2)

  10.1*   Amended and Restated 1998 Stock Option and Restricted Stock Plan (2)

  10.2*   Form of 1998 Stock Option and Restricted Stock Plan Incentive Stock
          Option Agreement for executive employee (4)

  10.3*   Form of 1998 Stock Option and Restricted Stock Plan Incentive Stock
          Option Agreement for non-executive employee (4)

  10.4*   Key Employee Equity Plan, as amended (5)

  10.5*   Amendment No. 2 to Key Employee Equity Plan (2)

  10.6    Form of Purchase Agreement by and between VIA and its preferred
          stockholders (3)

  10.7**  Indefeasible Right of Use Agreement in Inland Capacity (United
          Kingdom), dated as of June 21, 1999, by and between GT U.K. Ltd. and
          VIA NET.WORKS Europe Holding B.V. (5)

  10.8**  Indefeasible Right of Use Agreement in Inland Capacity (United
          States), dated as of June 21, 1999, by and between GT Landing Corp.
          and VIA NET.WORKS Europe Holding B.V. (5)

  10.9**  Capacity Purchase Agreement, dated as of June 21, 1999, by and
          between Atlantic Crossing Ltd. And VIA NET.WORKS Europe Holding B.V.
          (5)

  10.10** Customer Agreement for an IRU Capacity, dated as of July 21, 1999, by
          and between iaxis Limited and VIA NET.WORKS, Europe Holding B.V. (5)

  10.11** Software License and Support Agreement by and between Portal
          Software, Inc. and VIA Net Works, UK Limited, dated as of October 29,
          1999 (5)

  10.12   Distribution and Revenue Sharing Agreement, dated as of June 30,
          1999, by and between Trellix Corporation and VIA NET.WORKS, Inc. (5)

  10.13   Amended and Restated Stockholders Agreement by and among VIA
          NET.WORKS, Inc. and the additional parties named therein, dated as of
          April 20, 1999 (5)

  10.14   Registration Rights Agreement by and among VIA NET.WORKS, Inc. and
          the stockholders named therein (4)

  10.15   Transit Service Agreement, dated as of August 1, 1999, between Verio
          Inc. and VIA NET.WORKS, Inc. (5)

  10.16*  Employee Letter Agreement between VIA and Antonio Tavares (4)

  10.17*  Employee Confidentiality Agreement between VIA and Antonio Tavares
          (4)

  10.18*  Retention Agreement by and between Dialdata and Antonio Tavares (4)

  10.19*  Termination Agreement by and between Dialdata and Antonio Tavares (4)

  10.20*  Form of Indemnification Agreement by and between VIA and its officers
          and directors (2)

  21.1    List of Subsidiaries
  23.1    Consent of PricewaterhouseCoopers LLP
</TABLE>
--------
(1) Incorporated by reference to VIA's annual report on Form 10-K for the
    period ended December 31, 1999.
(2) Incorporated by reference to VIA's registration statement on Form S-1,
    File No. 333-91615, as filed with the SEC on January 19, 2000.

                                      E-1
<PAGE>

(3) Incorporated by reference to VIA's registration statement on Form S-1,
    File No. 333-91615, as filed with the SEC on February 8, 2000.
(4) Incorporated by reference to VIA's registration statement on Form S-1,
    File No. 333-91615, as filed with the SEC on January 3, 2000.
(5) Incorporated by reference to VIA's registration statement on Form S-1,
    File No. 333-91615, as filed with the SEC on November 24, 1999.
*  Management or compensatory contract or plan.
** Confidential treatment has been granted for portions of this exhibit.

                                      E-2