SAVVIS Reports Fourth-Quarter and Full-Year 2004 Results

SAVVIS Reports Fourth-Quarter and Full-Year 2004 Results

    Business Editors/High-Tech Editors

    ST. LOUIS--(BUSINESS WIRE)--Feb. 22, 2005--SAVVIS Communications Corporation (NASDAQ:SVVS)

-- Achieved record gross margin of $55.4 million on revenue of $166.3 million in Q4

-- Achieved Adjusted EBITDA of $18.4 million in Q4

-- Achieved positive operating cash flow of $8.3 million in Q4

-- For full year reported results, gross margin of $178.9 million on revenue of $616.8 million
    SAVVIS Communications Corporation (NASDAQ:SVVS), a leading global IT utility, announced today that revenue for the fourth quarter of 2004 totaled $166.3 million, up 140% from $69.4 million in the fourth quarter of 2003. Results for the 2004 quarter included revenue attributable to the Cable & Wireless America ("CWA") operations acquired in March 2004. Compared to the third quarter of 2004, revenue decreased 2%, in line with company guidance, largely due to the previously-reported price deterioration in the wholesale carrier market.
    SAVVIS' gross margin for the fourth quarter grew 120%, to $55.4 million from $25.2 million in the fourth quarter of 2003. Sequentially, gross margin grew 12% from $49.6 million in the third quarter of 2004, largely driven by continued reductions in network and operational costs as a result of planned synergies from the acquisition of the CWA operations in March. As a percentage of revenue, gross margin was 33% in the current quarter, versus 29% in the third quarter and 36% in the fourth quarter of 2003.
    SAVVIS' consolidated net loss for the current quarter was $21.7 million, versus $15.8 million for the same quarter last year and an improvement of $11.2 million from $32.9 million consolidated net loss in the third quarter of 2004. The fourth-quarter 2004 loss included $1.9 million of acquisition and integration expenses specifically related to the integration of CWA operations, compared to $3.7 million in the third quarter. Adjusted EBITDA(1) of $18.4 million was up from $2.5 million a year earlier and $5.1 million in the prior quarter.
    Operating cash flow was $8.3 million in the fourth quarter, up $4.3 million from a year earlier and $20.0 million from the prior quarter. Fourth quarter 2004 operating cash flow included cash payments of $5.6 million for acquisition and integration costs, compared to payments of $10.1 million in the third quarter. Results for the fourth quarter included strong working capital performance. Cash capital expenditures in the quarter were $7.2 million, slightly lower than planned. SAVVIS generated positive cash flow for the fourth quarter of $2.0 million, an improvement of $2.1 million from negative cash flow of $0.1 million a year ago, and an improvement of $23.9 million from the third quarter of 2004.
    For the full year 2004, revenue totaled $616.8 million, compared to $252.9 million in 2003. Gross margin doubled, to $178.9 million in 2004 from $89.3 million in 2003. SAVVIS' consolidated net loss for the full year 2004 was $148.8 million, compared to $94.0 million a year earlier. The loss in 2004 included $27.7 million of acquisition and integration expenses specifically related to the integration of CWA operations. Adjusted EBITDA of $14.4 million was a $15.6 million improvement from negative Adjusted EBITDA of $1.2 million in 2003.
    Rob McCormick, SAVVIS' chairman and chief executive officer, said, "The fourth quarter was an impressive finish to a great year at SAVVIS, as we achieved improved operating cash flow of $8.3 million in the quarter, up 107% from a year ago, and Adjusted EBITDA of $18.4 million, up from $2.5 million a year ago. The important strides we've made in our financial performance are largely due to our rapid, successful integration of the CWA operations we acquired in March.
    "The acquisition, which doubled the size of our company; the subsequent integration, which brought together our facilities, services, and people into a seamless SAVVIS team; and the introduction of our virtualized utility solutions, which lead the industry for performance, innovation, and cost-effectiveness, were our defining achievements of 2004," Mr. McCormick continued. "We look forward to building on our successes in 2005, as we introduce our unique IT services model to clients who are eager for solutions to the cost and complexity of conventional IT infrastructures. We're committed to expanding our presence in core markets to achieve long-term, profitable growth that creates value for all of our stakeholders."

Fourth Quarter Results

Three months ended: Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003 ----------- ----------- ----------- (US$ millions) Revenue Managed IP VPN $ 24.8 $ 22.6 $ 16.9 Hosting(1) 66.9 63.6 9.5 Other Network Services(1) 34.1 38.4 5.3 Digital Content Management 11.7 14.1 6.0 ----------- ----------- ----------- Total Diversified Revenue 137.5 138.7 37.7 Reuters and Telerate 28.8 30.7 31.7 ----------- ----------- ----------- Total Revenue $ 166.3 $ 169.4 $ 69.4 =========== =========== =========== Gross Margin $ 55.4 $ 49.6 $ 25.2 Sales, Gen. & Admin. Expenses $ 37.0 $ 44.5 $ 22.7 Adjusted EBITDA $ 18.4 $ 5.1 $ 2.5 Net Loss $ (21.7) $ (32.9) $ (15.8)

(1) Some revenue previously reported as Hosting revenue in the third quarter of 2004 has been re-classified as Other Network Services revenue. The re-classified revenue derives from providing unmanaged connectivity to hosting clients. The re-classification is designed to distinguish between value-added hosting services provided to customers and more commodity-like connectivity bandwidth.
    Total revenue for the fourth quarter increased 140% year-over-year, driven primarily by revenue associated with the CWA assets acquired in March 2004. Sequentially, revenue declined 2% from the third quarter, primarily reflecting pricing pressure in the wholesale services market. Growth in Managed IP VPN revenue, up 10% sequentially, and in Hosting revenue, up 5% sequentially, offset much of the decline in the wholesale market, reflected in Other Network Services. Digital Content Management revenue was $11.7 million in the quarter, down $2.4 million from the third quarter, primarily due to a decrease in usage from a single customer.
    Diversified Revenue, defined as revenue from all customers except Reuters and Telerate, represented 83% of total revenue in the fourth quarter, up from 82% in the third quarter 2004 and from 54% in the fourth quarter of 2003.
    Gross margin, defined as total revenue less data communications and operations expenses, was $55.4 million in the current quarter, compared to $25.2 million in the fourth quarter of 2003 and $49.6 million in the third quarter of 2004. As a percentage of revenues, gross margin was 33% in the current quarter, versus 36% in the fourth quarter of 2003 and up from 29% in the third quarter of 2004. Sequential-quarter growth in gross margin was driven largely by the realization of savings from the CWA integration and by ongoing improvements in operating efficiency.
    Sales, general, and administrative expenses ("SG&A") for the quarter were $37.0 million as compared to $22.7 million for the same period last year and $44.5 million in the third quarter of 2004. As a percentage of revenue, SG&A was 22% in the current quarter, down from 33% of revenue in the same quarter of 2003 and 26% in the third quarter of 2004. The improvement in SG&A from the third quarter reflected planned savings realized from the CWA integration and ongoing efficiency initiatives.
    Chief Financial Officer Jeff Von Deylen said, "We're pleased with the financial results SAVVIS achieved in the fourth quarter, with revenue in line with expectations and strong Adjusted EBITDA and operating cash flow, which exceeded capital expenditures. Last year was clearly a transformational period for our company, as we more than doubled the size of our business with the acquisition of the CWA assets. Our strong Adjusted EBITDA reflects the substantial improvement in operating efficiency we've achieved throughout the year as a result of the integration of the businesses. Fourth-quarter Adjusted EBITDA included approximately $4.9 million of one-time benefits from cost savings and contractual savings realized from previous quarter recorded estimates. After eliminating the effect of those non-recurring items, reported Adjusted EBITDA would be approximately $13.5 million for the quarter."

Full Year Results

Twelve months ended: December 31, December 31, 2004 2003 ------------ ------------ (US$ millions) Revenue Managed IP VPN $ 87.1 $ 57.7 Hosting(1) 223.9 28.5 Other Network Services(1) 137.0 19.1 Digital Content Management 46.8 10.4 ------------ ------------ Total Diversified Revenue 494.8 115.7 Reuters and Telerate 122.0 137.2 ------------ ------------ Total Revenue $ 616.8 $ 252.9 ============ ============ Gross Margin $ 178.9 $ 89.3 Sales, Gen. & Admin. Expenses $ 164.5 $ 90.5 Adjusted EBITDA $ 14.4 $ (1.2) Net Loss $ (148.8) $ (94.0)

(1) Some revenue previously reported as Hosting revenue in the first three quarters of 2004 has been re-classified as Other Network Services revenue. The re-classified revenue derives from providing unmanaged connectivity to hosting clients. The re-classification is designed to distinguish between value-added hosting services provided to customers and more commodity-like connectivity bandwidth.
    For the full year 2004, revenue totaled $616.8 million, up 144% from $252.9 million in 2003. Gross margin was $178.9 million, an increase of 100% from $89.3 million in 2003. Both revenue and gross margin in 2004 were significantly affected by acquisition of the CWA operations in March 2004. The gross margin for 2004 was 29% of total revenue, compared to 35% in 2003. Gross margin percentage improved from 25% in the second quarter of 2004, which was the first quarter to reflect a full three months' results including the CWA operations, to 33% in the fourth quarter, reflecting efficiency improvements achieved through the integration of operations.
    Net loss for 2004 was $148.8 million, compared to $94.0 million in 2003. Adjusted EBITDA for 2004 was $14.4 million, compared to negative $1.2 million in 2003. Both net loss and Adjusted EBITDA showed consistent quarterly improvement in 2004, reflecting the financial impact of the integration of CWA operations.
    Diversified revenue for 2004 comprised 80% of total revenue, up from 46% in 2003. The changing business mix is also reflected in higher Hosting revenue, 36% of 2004 revenue, compared to 11% of 2003 revenue.

    Balance Sheet and Cash Flow

    Net cash provided by operating activities in the fourth quarter 2004 was $8.3 million, compared to $4.0 million a year ago and net cash used of $11.7 million in the third quarter of 2004. Operating cash flow included cash payments of $5.6 million of acquisition and integration-related costs to realize synergies in the fourth quarter 2004, and $10.1 million in the third quarter 2004. The balance sheet and cash position remain in line with management expectations, with $55.4 million in cash at December 31, 2004, and Days Sales Outstanding ("DSO") below 30 days.
    In the fourth quarter, as previously announced, SAVVIS' Series B Preferred stock converted into 65.5 million common shares. As of December 31, 2004, SAVVIS had 180.3 million common shares outstanding and Series A Preferred stock convertible into 366.9 million shares of common stock. Including the Series A Preferred stock and warrants and options outstanding on an as-converted basis, SAVVIS had 576.9 million common shares on a fully-diluted basis as of December 31, 2004.

    Financial Outlook

    Based on current information, SAVVIS management expects that 2005 financial results will include:

--	Double-digit year-over-year growth in Hosting and Managed IP VPN revenue;
--	Lower revenue from Reuters and Telerate, contributing 13-15% of total annual revenue;
--	Total revenue in a range of $630-660 million;
--	Adjusted EBITDA in a range of $50-60 million
--	Cash capital expenditures in a range of $35-45 million
--	Cash debt service payments of approximately $15-16 million
--	Cash payments for integration-related costs of $6-10 million

    Operational Highlights

    -- Industry analyst group Gartner, Inc. listed SAVVIS in the
    "Leader" quadrant in the Gartner North American Web Hosting
    Magic Quadrant, published October 5, 2004. According to
    Gartner, vendors listed in the Leader quadrant are performing
    well today, have a clear vision of market direction, and are
    actively building competencies to sustain their leadership
    position in the market.

    -- Rapid commercial adoption of virtualized utility services
    platform, including more than 650 virtual firewalls, more than
    300 virtual servers, and more than 60 terabytes of virtualized
    storage.

    -- New customers signed include enterprises such as APCO
    Worldwide, Bitfone Corp, and Novell Inc.

    -- SAVVIS expanded relationships with existing customers
    including the General Services Administration, ITG Inc., and
    Layered Technologies.

    (1)Adjusted EBITDA

    "Adjusted EBITDA" is results from operations before depreciation, amortization, accretion, non-cash equity-based compensation, loss on sale of data center, restructuring charges, and integration costs. We have included information concerning Adjusted EBITDA because our management believes that, in our industry, such information is a relevant measurement of a company's financial performance and liquidity. The calculation of Adjusted EBITDA is not specified by accounting principles generally accepted in the United States of America. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Please see the table under Selected Condensed Consolidated Financial Information for a reconciliation of Adjusted EBITDA.

    Investor Conference Call

    SAVVIS will webcast an investor conference call today, February 22, 2005, at 9:00 am EST. Both the webcast and supporting presentation will be available at www.savvis.net, under "Presentations" on the Investor Relations page. The conference call will also be available via telephone, at +1 610-769-3888 or 888-405-4399 (US and Canada only), under the password "SAVVIS NEWS." A replay of the call will be available from about noon today, on the website for one year and via telephone, at +1 402-220-9698 or 800-239-4590 (US and Canada only) for ten business days.

    Forward-Looking Statements

    This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from SAVVIS' expectations. Certain factors that could adversely affect actual results are set forth as risk factors described in SAVVIS' SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission on February 24, 2004, and all subsequent filings. Those risk factors include, but are not limited to, variability in pricing for SAVVIS' products, highly competitive markets, rapid evolution of technology, and changes in regulatory environments. The forward-looking statements contained in this document speak only as of the date of publication, February 22, 2005, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

    About SAVVIS

    SAVVIS Communications (NASDAQ:SVVS) is a leading global IT utility services provider that delivers secure, reliable, and scalable hosting, network, and application services. SAVVIS' strategic approach combines the use of virtualization technology, a utility services model, and automated software management and provisioning systems. SAVVIS solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT infrastructure. With an IT services platform that extends to 47 countries, SAVVIS is one of the worlds' largest providers of IP computing services. For more information about SAVVIS, visit http://www.savvis.net.

SAVVIS Communications Corporation Condensed Consolidated Statements of Operations (unaudited)

(dollars in thousands, except share and per share amounts)

For the Three Months For the Year Ended Ended December 31, December 31, ------------------------- ------------------------- 2004 2003 2004 2003 ------------ ----------- ------------ -----------

TOTAL REVENUES (1) $ 166,308 $ 69,398 $ 616,823 $ 252,871

Data communications and operations expenses (2) 110,861 44,149 437,963 163,606 ------------ ----------- ------------ -----------

GROSS MARGIN 55,447 25,249 178,860 89,265 Gross margin percentage of revenue 33% 36% 29% 35%

Sales, general, and administrative expenses 37,045 22,748 164,483 90,498 Integration costs 1,889 - 27,675 - Depreciation, amortization, and accretion 20,495 10,918 72,065 55,346 Restructuring charges - - - 7,903 Loss on sale of data center - - - 8,106 Non-cash equity-based compensation 149 6,005 11,086 13,989 ------------ ----------- ------------ ----------- TOTAL OTHER OPERATING EXPENSES 59,578 39,671 275,309 175,842 ------------ ----------- ------------ -----------

LOSS FROM OPERATIONS (4,131) (14,422) (96,449) (86,577)

NON-OPERATING EXPENSE: Net interest expense and other (17,542) (1,329) (52,349) (7,456) ------------ ----------- ------------ -----------

NET LOSS (21,673) (15,751) (148,798) (94,033)

Accreted and deemed dividend on Series A Preferred Stock (9,707) (8,688) (37,247) (33,323) ------------ ----------- ------------ -----------

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (31,380) $ (24,439) $ (186,045) $ (127,356) ============ =========== ============ ===========

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (3) 130,981,477 96,119,938 113,711,188 94,738,124

BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.24) $ (0.25) $ (1.64) $ (1.34) ============ =========== ============ ===========

(1) Includes $18,363 and $77,974 from affiliates for the three and twelve months ended December 31, 2004, respectively, and $19,636 and $82,748 from affiliates for the three and twelve months ended December 31, 2003, respectively.

(2) Exclusive of depreciation, amortization, and accretion shown separately below.

(3) As the effects of including the incremental shares associated with options, warrants, and convertible Series A Preferred Stock are antidilutive, they are not included in the diluted weighted average common shares outstanding.

SAVVIS Communications Corporation Condensed Consolidated Balance Sheets

(dollars in thousands)

December 31, ----------------------- 2004 2003 ----------- ----------- (unaudited) ASSETS

CURRENT ASSETS: Cash and cash equivalents $ 55,369 $ 28,173 Trade accounts receivable, net 48,050 11,305 Prepaid expenses and other current assets 15,004 5,149 ----------- ----------- TOTAL CURRENT ASSETS 118,423 44,627 ----------- -----------

Property and equipment, net 264,542 59,357 Restricted cash - 7,843 Intangibles, net and other non-current assets 23,285 12,796 ----------- -----------

TOTAL ASSETS $ 406,250 $ 124,623 =========== ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES: Payables and other accrued expenses $ 50,350 $ 26,771 Current portion of capital lease obligations 505 315 Other accrued liabilities 66,150 22,629 ----------- ----------- TOTAL CURRENT LIABILITIES 117,005 49,715 ----------- -----------

Capital lease obligations, net of current portion 113,529 56,587 Long-term debt 171,051 - Other accrued liabilities 68,606 19,248 ----------- ----------- TOTAL LIABILITIES 470,191 125,550 ----------- -----------

STOCKHOLDERS' DEFICIT: Series A Preferred stock 272,137 243,334 Series B Preferred stock - - Common stock 1,804 965 Additional paid-in capital 384,847 330,890 Accumulated deficit (721,263) (572,465) Deferred compensation (515) (1,438) Treasury stock, at cost (16) (16) Accumulated other comprehensive loss: Cumulative foreign currency translation adjustment (935) (2,197) ----------- ----------- TOTAL STOCKHOLDERS' DEFICIT (63,941) (927) ----------- -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 406,250 $ 124,623 =========== ===========

SAVVIS Communications Corporation Condensed Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

For the Three Months For the Year Ended Ended December 31, December 31, --------------------- --------------------- 2004 2003 2004 2003 ---------- ---------- ---------- ---------- OPERATING ACTIVITIES: Net loss $ (21,673) $ (15,751) $(148,798) $ (94,033) Reconciliation of net loss to net cash used in operating activities: Accrued interest 15,411 1,608 50,899 6,996 Depreciation, amortization, and accretion 20,495 10,918 72,065 55,346 Restructuring charges - - - 7,903 Loss on sale of data center - - - 8,106 Non-cash equity-based compensation 149 6,005 11,086 13,989 Net changes in operating assets and liabilities: Trade accounts receivable 1,323 (337) (8,309) 3,812 Prepaid expenses and other current assets 3,125 (419) 8,239 (1,339) Other non-current assets 726 (507) 3,093 1,675 Accounts payable (2,043) 1,464 (3,437) (4,245) Other accrued liabilities (9,251) 1,015 (11,595) 1,505 ---------- ---------- ---------- ---------- Net cash provided by / (used in) operating activities 8,262 3,996 (26,757) (285) ---------- ---------- ---------- ----------

INVESTING ACTIVITIES: Capital expenditures (7,224) (4,114) (31,308) (18,824) Acquisition, net of cash received 659 - (116,477) - Proceeds from sale of acquired assets 718 - 3,338 - Proceeds from sale of data center - - - 35,000 Purchase of WAM!NET assets (1,014) - (1,690) (3,118) ---------- ---------- ---------- ---------- Net cash provided by / (used in) investing activities (6,861) (4,114) (146,137) 13,058 ---------- ---------- ---------- ----------

FINANCING ACTIVITIES: Payments under capital lease obligations (268) (462) (10,052) (15,769) Issuance of subordinated debt and associated warrants - - 200,000 - Deferred subordinated debt issuance costs - - (625) - Net changes in restricted cash - - 7,973 (1,459) Other 284 560 2,171 1,429 ---------- ---------- ---------- ---------- Net cash provided by / (used in) financing activities 16 98 199,467 (15,799) ---------- ---------- ---------- ----------

Effect of exchange rate changes on cash and cash equivalents 554 (65) 623 (960) ---------- ---------- ---------- ----------

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 1,971 (85) 27,196 (3,986)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 53,398 28,258 28,173 32,159 ---------- ---------- ---------- ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 55,369 $ 28,173 $ 55,369 $ 28,173 ========== ========== ========== ==========

SAVVIS Communications Corporation Selected Condensed Consolidated Financial Information

(dollars in thousands, except share amounts)

For the Three Months Ended --------------------------------------------------- PRO FORMA (1) REPORTED ------------ -------------------------------------- March 31, June 30, September 30, December 31, 2004 2004 2004 2004 ------------ ------------ ------------ ------------ Revenues by customer: Diversified revenues Managed IP VPN $ 19,516 $ 20,803 $ 22,582 $ 24,785 Hosting 65,915 65,054 63,639 66,902 Other Network Services 41,105 43,879 38,424 34,143 Digital Content Management 12,364 12,415 14,081 11,708

------------ ------------ ------------ ------------ Subtotal $ 138,900 $ 142,151 $ 138,726 $ 137,538

Reuters and Telerate 31,742 30,840 30,663 28,770

------------ ------------ ------------ ------------ Total revenues $ 170,642 $ 172,991 $ 169,389 $ 166,308 ------------ ------------ ------------ ------------

EBITDA reconciliation: Loss from operations $ (45,998) $ (46,667) $ (19,344) $ (4,131)

Integration costs 4,906 17,165 3,715 1,889 Depreciation, amortization, and accretion 19,614 19,069 20,525 20,495 Non-cash equity based compensation 6,838 3,943 156 149

------------ ------------ ------------ ------------ Adjusted EBITDA (2) $ (14,640) $ (6,490) $ 5,052 $ 18,402 ------------ ------------ ------------ ------------

Diluted common shares: Common shares outstanding 109,137,532 109,635,714 114,314,377 180,329,963 Series B Preferred Stock on an as converted basis 65,528,860 65,528,860 65,528,860 - ------------ ------------ ------------ ------------ Total common shares outstanding on an as converted basis 174,666,392 175,164,574 179,843,237 180,329,963 ------------ ------------ ------------ ------------ Series A Preferred Stock on an as converted basis 336,967,562 346,654,779 356,621,121 366,871,247 Warrants and options outstanding (treasury method) 33,673,004 30,997,620 34,019,115 29,723,925 Diluted common shares on an as ------------ ------------ ------------ ------------ converted basis 545,306,958 552,816,973 570,483,473 576,925,135 ------------ ------------ ------------ ------------

For the Year Ended ---------------------- PRO FORMA REPORTED (1) ---------------------- December 31, 2004 2004 ---------- ---------- Revenues by customer: Diversified revenues Managed IP VPN $ 87,686 $ 87,122 Hosting 261,510 223,917 Other Network Services 157,551 137,006 Digital Content Management 50,568 46,763

---------- ---------- Subtotal $ 557,315 $ 494,808

Reuters and Telerate 122,015 122,015

---------- ---------- Total revenues $ 679,330 $ 616,823 ---------- ----------

EBITDA reconciliation: Loss from operations $(116,140) $ (96,449)

Integration costs 27,675 27,675 Depreciation, amortization, and accretion 79,703 72,065 Non-cash equity based compensation 11,086 11,086

---------- ---------- Adjusted EBITDA (2) $ 2,324 $ 14,377 ---------- ----------

(1) Summarizes the combined results of operations of SAVVIS Communications Corporation and Cable & Wireless America, on a pro forma basis, as though the companies had been combined as of the beginning of the three month period presented. This pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition taken place at the beginning of the three month period presented.

(2) "Adjusted EBITDA" is results from operations before integration costs, depreciation, amortization, accretion, and non-cash equity-based compensation. We have included information concerning adjusted EBITDA because our management believes that in our industry such information is a relevant measurement of a company's financial performance and liquidity. The calculation of adjusted EBITDA is not specified by accounting principles generally accepted in the United States of America. Our calculation of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

SAVVIS Communications Corporation Selected Condensed Consolidated Financial Information

(dollars in thousands, except share amounts)

For the For the Three Months Ended Year Ended --------------------------------------- --------- March 31, June 30, Sept. 30, Dec. 31, Dec. 31, 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- Revenues by customer: Diversified revenues Managed IP VPN $ 11,668 $ 13,487 $ 15,604 $ 16,920 $ 57,679 Hosting 2,907 6,818 9,281 9,528 28,534 Other Network Services 4,395 4,585 4,796 5,276 19,052 Digital Content Management - - 4,420 6,014 10,434

--------- --------- --------- --------- --------- Subtotal $ 18,970 $ 24,890 $ 34,101 $ 37,738 $115,699

Reuters and Telerate 36,231 35,460 33,821 31,660 137,172

--------- --------- --------- --------- --------- Total revenues $ 55,201 $ 60,350 $ 67,922 $ 69,398 $252,871 --------- --------- --------- --------- ---------

EBITDA reconciliation: Loss from operations $(22,472) $(27,978) $(21,705) $(14,422) $(86,577)

Depreciation, amortization, and accretion 15,747 15,400 13,281 10,918 55,346 Restructuring charges - 7,903 - - 7,903 Loss on sale of data center - - 8,106 - 8,106 Non-cash equity based compensation 2,657 2,667 2,660 6,005 13,989

--------- --------- --------- --------- --------- Adjusted EBITDA (1) $ (4,068) $ (2,008) $ 2,342 $ 2,501 $ (1,233) --------- --------- --------- --------- ---------

(1) "Adjusted EBITDA" is results from operations before loss on sale of data center, restructuring charges, depreciation, amortization, accretion, and non-cash equity-based compensation. We have included information concerning adjusted EBITDA because our management believes that in our industry such information is a relevant measurement of a company's financial performance and liquidity. The calculation of adjusted EBITDA is not specified by accounting principles generally accepted in the United States of America. Our calculation of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

--30--TG/ph*

CONTACT: SAVVIS Communications Corporation Investors: Elizabeth Corse, 703-667-6984 elizabeth.corse@savvis.net or Media: Carter Cromley, 703-667-6110 carter.cromley@savvis.net

KEYWORD: MISSOURI UNITED KINGDOM INTERNATIONAL EUROPE INDUSTRY KEYWORD: HARDWARE ADVERTISING/MARKETING BANKING TELECOMMUNICATIONS SOFTWARE EARNINGS CONFERENCE CALLS SOURCE: SAVVIS Communications Corporation

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