-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RN1mb9W3M6djR6PFw4CUuzkc/ZZG8cA19qDXfw5M1UH7BhtO4Ka64dFRCqGevzcI xk5cSiT2BB9/cas4oCZHUA== 0001005477-01-500031.txt : 20010427 0001005477-01-500031.hdr.sgml : 20010427 ACCESSION NUMBER: 0001005477-01-500031 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010426 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WORLDCOM INC/GA// CENTRAL INDEX KEY: 0000723527 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 581521612 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 001-10415 FILM NUMBER: 1611883 BUSINESS ADDRESS: STREET 1: 500 CLINTON CENTER DRIVE CITY: CLINTON STATE: MS ZIP: 39056 BUSINESS PHONE: 6014605600 FORMER COMPANY: FORMER CONFORMED NAME: MCI WORLDCOM INC DATE OF NAME CHANGE: 19980914 FORMER COMPANY: FORMER CONFORMED NAME: WORLDCOM INC /GA/ DATE OF NAME CHANGE: 19970127 FORMER COMPANY: FORMER CONFORMED NAME: LDDS COMMUNICATIONS INC /GA/ DATE OF NAME CHANGE: 19930916 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WORLDCOM INC/GA// CENTRAL INDEX KEY: 0000723527 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 581521612 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 500 CLINTON CENTER DRIVE CITY: CLINTON STATE: MS ZIP: 39056 BUSINESS PHONE: 6014605600 FORMER COMPANY: FORMER CONFORMED NAME: MCI WORLDCOM INC DATE OF NAME CHANGE: 19980914 FORMER COMPANY: FORMER CONFORMED NAME: WORLDCOM INC /GA/ DATE OF NAME CHANGE: 19970127 FORMER COMPANY: FORMER CONFORMED NAME: LDDS COMMUNICATIONS INC /GA/ DATE OF NAME CHANGE: 19930916 425 1 d425.txt RULE 425 Document is copied. Filed by WorldCom, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: WorldCom, Inc. Commission File No. 0-11258 April 26, 2001 PROXY STATEMENT Investors and security holders are urged to read the Company's Registration Statement on Form S-4 relating to the tracking stocks, including the prospectus and proxy statement, when they become available. When these and other documents relating to the tracking stock transaction are filed with the SEC, they may be obtained without charge from the SEC's website at http://www.sec.gov. Holders of the Company's stock may also obtain each of these documents (when they become available) for free by directing their request to WorldCom, Inc., c/o Investor Relations Department, 500 Clinton Center Drive, Clinton, Mississippi 39056. This earnings release, and such proxy statement/prospectus does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of tracking stock in any state in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state. No offering of tracking stock will be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. WORLDCOM GROUP FIRST QUARTER 2001 REVENUES UP 12 PERCENT, ACHIEVING GROWTH TARGETS AND DELIVERING SOLID RESULTS WORLDCOM, INC. REPORTS FIRST QUARTER CASH EPS OF 35 CENTS CLINTON, Miss., - April 26, 2001 - WorldCom, Inc. (NASDAQ:WCOM), the leading global digital and data communications provider, today announced financial results for the quarter ended March 31, 2001. In the first quarter, WorldCom recognized after-tax charges of $76 million for domestic severance packages and other costs associated with previously announced workforce reductions. Of these charges, $47 million and $29 million were attributable to the WorldCom group and the MCI group, respectively. In addition, the Company incurred $94 million of expenses resulting from the impact of foreign currency exchange on WORLDCOM FIRST QUARTER 2001 RESULTS, Page 2 Embratel, WorldCom's Brazilian communications company. The discussion in this release excludes these items. WORLDCOM GROUP RESULTS WorldCom group, which includes the Company's high-growth data, Internet and international operations, as well as commercial voice services, reported revenues of $6.1 billion, a 12 percent increase from the same period in 2000. This strong result was driven by 22 percent year-over-year revenue growth in data and Internet services and 19 percent revenue growth in international services. Data and Internet services accounted for $2.8 billion or 45 percent of WorldCom group's revenues, up from 42 percent of revenues in the first quarter of 2000. Revenue growth in these fast-growing services continues to lead the industry and accounts for 76 percent of WorldCom group's incremental revenue growth since the year-ago quarter. International services now represent 26 percent of WorldCom group's revenues, up 150 basis points from the year ago period. Business voice revenues declined 5 percent from the year-ago period and now represent 28 percent of WorldCom group's revenues. WorldCom group EBITDA (earnings before interest, taxes, depreciation and amortization) was unchanged from the year-ago period at $2.2 billion, but increased $116 million from the fourth quarter of 2000. WorldCom group EBITDA margin was 35 percent and includes the continued impact of previously announced spending on growth initiatives, such as managed web hosting and Internet-based private virtual networks, and increased employee retention and benefit spending. WorldCom group reported cash earnings (earnings before goodwill amortization) of $865 million or 30 cents per share. WorldCom group net income, after goodwill amortization, was $638 million or 22 cents per share in the quarter. MCI GROUP RESULTS MCI group, the Company's consumer, small business, wholesale long distance, wireless messaging and dial-up Internet access businesses, reported revenues of $3.6 billion, versus $4.2 billion in the same period last year. Contrary to industry trends, MCI group consumer subscription long distance and local services reported revenue growth. This growth was offset by reduced revenues from transaction brands and calling card services that are experiencing substitution from wireless services; and alternate channels, wholesale and resale services that are being de-emphasized as the MCI group shifts its focus from revenue growth to cash generation. MCI group EBITDA was $506 million. The MCI group reported cash earnings of $158 million or 5 cents per share. MCI group net income was $91 million or 3 cents per share. WORLDCOM FIRST QUARTER 2001 RESULTS, Page 3 CONSOLIDATED WORLDCOM, INC. RESULTS First quarter 2001 consolidated revenues were $9.7 billion, up from $9.6 billion in the same period of 2000. Consolidated EBITDA was $2.9 billion, representing an EBITDA margin of 30 percent. First quarter 2001 cash earnings were $1.0 billion, or 35 cents per share. Consolidated net income, after goodwill amortization, was $729 million or 25 cents per share in the quarter. MANAGEMENT'S COMMENTS "This quarter was an excellent start to what will be a pivotal year for WorldCom. These results show that WorldCom is on track to deliver strong growth and solid performance throughout the year," said Bernard J. Ebbers, president and CEO of WorldCom, Inc. "On the WorldCom group side we achieved our growth targets, adding $237 million in revenues since the fourth quarter -- the largest sequential increase we've delivered in a year." "And on the MCI group side we made excellent progress adjusting our businesses to maximize and maintain profitability and cash flow as far into the future as possible." "In a very difficult environment, WorldCom's employees have accomplished a great deal preparing the Company for the realignment. While we still have more to do, I would like to thank all our employees for their efforts." "We've made excellent progress on the creation of our tracking stocks and expect to mail documents to shareholders on May 2nd and hold a shareholder meeting on June 7th to vote on the tracking stocks and other matters. Assuming a favorable vote, we will distribute the tracking shares shortly thereafter." MANAGEMENT'S OUTLOOK The following outlook contains forward-looking statements that are based on WorldCom management's best judgment at this time. Actual results could differ materially and are subject to various risks and uncertainties, many of which, such as economic factors, market demand and competitive pressures, are beyond the Company's control. WORLDCOM FIRST QUARTER 2001 RESULTS, Page 4 The Company continues to expect full-year 2001 WorldCom group revenue growth of between 12 and 15 percent and expects WorldCom group cash earnings of between $1.25 and $1.35 per share for the year. Because of the Company's intention to manage the MCI group for cash profitability and its intention to de-emphasize unprofitable business segments, we expect declining, but stabilizing sequential revenues in the MCI group. The Company expects MCI group cash earnings of between $0.25 and $0.30 per share in 2001. In addition, the Company fully expects the MCI group to generate sufficient cash flow in 2001 to service its anticipated dividends and allocated debt. FORWARD-LOOKING STATEMENTS This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to the effects of vigorous competition; the impact of technological change on our business, new entrants and alternative technologies, and dependence on availability of transmission facilities; uncertainties associated with the success of acquisitions; risks of international business; regulatory risks in the United States and internationally; contingent liabilities; risks associated with Euro conversion efforts; uncertainties regarding the collectibility of receivables; risks associated with debt service requirements and interest rate fluctuations; and our financial leverage. More detailed information about those factors is contained in WorldCom's filings with the Securities and Exchange Commission. ABOUT WORLDCOM WorldCom (NASDAQ: WCOM) is a preeminent global communications company for the digital generation, operating in more than 65 countries with 2000 revenues of approximately $40 billion. WorldCom provides the innovative technologies and services that are the foundation for business in the 21st century. For more information go to http://www.worldcom.com. WorldCom will conduct a conference call to discuss its financial results today, Thursday, April 26 at 7:30 AM (Central Time). The call will be available to all investors on the Internet at http://www.worldcom.com/investor. ### WORLDCOM GROUP COMBINED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data) Note to readers: Our reported results for 2001 have been impacted by events, including costs associated with domestic severance packages and other costs related to our previously announced workforce reductions, and the adverse impact resulting from fluctuations in foreign currency exchange rates. The table below reflects normalized information for WorldCom group's 2001 operating results for comparative purposes.
For the Three Months Ended March 31, -------------------------- 2001 2000 ----------- ----------- Revenues: Voice $ 1,726 $ 1,824 Data 2,045 1,724 International 1,605 1,346 Internet 722 535 ------- ------- Total revenues 6,098 5,429 ------- ------- Operating expenses: Line costs: Attributed costs 2,375 2,068 Intergroup allocated expenses 24 20 Selling, general and administrative: Attributed costs 1,543 1,183 Depreciation and amortization: Attributed costs 1,212 922 Intergroup allocated expenses (183) (154) ------- ------- Total 4,971 4,039 ------- ------- Operating income 1,127 1,390 Other income (expense): Interest expense (171) (91) Miscellaneous 98 111 ------- ------- Income before income taxes, minority interests and cumulative effect of accounting change 1,054 1,410 Provision for income taxes 411 587 ------- ------- Income before minority interests and cumulative effect of accounting change 643 823 Minority interests 11 (82) ------- ------- Income before cumulative effect of accounting change 654 741 Cumulative effect of accounting change (net of income tax of $43 in 2000) -- (75) ------- ------- Net income before distributions on subsidiary trust and other mandatorily redeemable preferred securities and preferred dividend requirements 654 666 Distributions on subsidiary trust and other mandatorily redeemable preferred securities 16 16 Preferred dividend requirements -- 1 ------- ------- Net income $ 638 $ 649 ======= ======= Diluted earnings per common share: Net income before cumulative effect of accounting change $ 0.22 $ 0.25 ======= ======= Cumulative effect of accounting change $ -- $ (0.03) ======= ======= Net income $ 0.22 $ 0.22 ======= ======= Diluted weighted average common shares outstanding 2,899 2,921 ======= =======
WORLDCOM GROUP COMBINED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data)
For the Three Months Ended March 31, -------------------------- 2001 2000 ----------- ----------- Revenues: Voice $ 1,726 $ 1,824 Data 2,045 1,724 International 1,605 1,346 Internet 722 535 ------- ------- Total revenues 6,098 5,429 ------- ------- Operating expenses: Line costs: Attributed costs 2,375 2,068 Intergroup allocated expenses 24 20 Selling, general and administrative: Attributed costs 1,620 1,183 Depreciation and amortization: Attributed costs 1,212 922 Intergroup allocated expenses (183) (154) ------- ------- Total 5,048 4,039 ------- ------- Operating income 1,050 1,390 Other income (expense): Interest expense (171) (91) Miscellaneous 4 111 ------- ------- Income before income taxes, minority interests and cumulative effect of accounting change 883 1,410 Provision for income taxes 346 587 ------- ------- Income before minority interests and cumulative effect of accounting change 537 823 Minority interests 11 (82) ------- ------- Income before cumulative effect of accounting change 548 741 Cumulative effect of accounting change (net of income tax of $43 in 2000) -- (75) ------- ------- Net income before distributions on subsidiary trust and other mandatorily redeemable preferred securities and preferred dividend requirements 548 666 Distributions on subsidiary trust and other mandatorily redeemable preferred securities 16 16 Preferred dividend requirements -- 1 ------- ------- Net income $ 532 $ 649 ======= ======= Diluted earnings per common share: Net income before cumulative effect of accounting change $ 0.18 $ 0.25 ======= ======= Cumulative effect of accounting change $ -- $ (0.03) ======= ======= Net income $ 0.18 $ 0.22 ======= ======= Diluted weighted average common shares outstanding 2,899 2,921 ======= =======
WORLDCOM GROUP CONDENSED COMBINED BALANCE SHEETS (Unaudited. In Millions)
March 31, 2001 December 31, 2000 -------------- ----------------- ASSETS Current assets: Cash and cash equivalents $ 649 $ 720 Accounts receivable, net 4,935 4,980 Receivable from MCI group, net 1,812 1,625 Other current assets 1,875 1,743 ------------ ------------ Total current assets 9,271 9,068 ------------ ------------ Property and equipment, net 36,393 35,177 Goodwill and other intangibles, net 36,639 36,685 Other assets 4,554 4,963 ------------ ------------ $ 86,857 $ 85,893 ============ ============ LIABILITIES AND ALLOCATED NET WORTH Current liabilities: Short-term debt and current maturities of long-term debt $ 8,886 $ 7,200 Accounts payable and accrued line costs 3,386 3,584 Other current liabilities 3,129 3,429 ------------ ------------ Total current liabilities 15,401 14,213 ------------ ------------ Long-term debt 11,682 11,696 Other liabilities 3,570 3,648 Minority interests 2,349 2,592 Mandatorily redeemable preferred securities 798 798 Allocated net worth 53,057 52,946 ------------ ------------ $ 86,857 $ 85,893 ============ ============
WORLDCOM GROUP COMBINED STATEMENTS OF CASH FLOWS (Unaudited. In Millions)
For the Three Months Ended March 31, --------------------------- 2001 2000 ---------- ---------- Cash flows from operating activities: Net income before distributions on subsidiary trust and other mandatorily redeemable preferred securities and preferred dividend requirements $ 548 $ 666 Adjustments to reconcile net income before distributions on subsidiary trust and other mandatorily redeemable preferred securities and preferred dividend requirements to net cash provided by operating activities: Cumulative effect of accounting change -- 75 Minority interests (11) 82 Depreciation and amortization 1,029 768 Provision for losses on accounts receivable 217 171 Provision for deferred income taxes 186 582 Change in working capital items (706) (885) Other (27) (97) --------- --------- Net cash provided by operating activities 1,236 1,362 --------- --------- Cash flows from investing activities: Capital expenditures (2,140) (2,254) Capital expenditures, Embratel and undersea cables (152) (179) Acquisitions and related costs (142) (7) Increase in intangible assets (101) (45) Proceeds from disposition of marketable securities and other long-term assets 195 186 Increase in other assets (307) (327) Decrease in other liabilities (79) (412) --------- --------- Net cash used in investing activities (2,726) (3,038) --------- --------- Cash flows from financing activities: Principal borrowings on debt, net 1,399 1,162 Attributed stock activity of WorldCom, Inc. 71 268 Distributions on subsidiary trust mandatorily redeemable preferred securities and dividends paid on preferred stock (16) (17) Redemption of Series C preferred stock -- (190) Advances (to) from MCI group, net (15) 161 Other -- (17) --------- --------- Net cash provided by financing activities 1,439 1,367 Effect of exchange rate changes on cash (20) 5 --------- --------- Net decrease in cash and cash equivalents (71) (304) Cash and cash equivalents at beginning of period 720 806 --------- --------- Cash and cash equivalents at end of period $ 649 $ 502 ========= =========
MCI GROUP COMBINED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data) Note to readers: Our reported results for 2001 have been impacted by events, including costs associated with domestic severance packages and other costs related to our previously announced workforce reductions, and the adverse impact resulting from fluctuations in foreign currency exchange rates. The table below reflects normalized information for MCI group's 2001 operating results for comparative purposes.
For the Three Months Ended March 31, -------------------------- 2001 2000 ---------- ---------- Revenues: Wholesale and consumer $ 2,502 $ 2,890 Alternative channels and small business 695 876 Dial-up Internet 425 417 ---------- ---------- Total revenues 3,622 4,183 ---------- ---------- Operating expenses: Line costs: Attributed costs 1,733 1,665 Intergroup allocated expenses 93 86 Selling, general and administrative: Attributed costs 1,200 1,125 Other intergroup allocated expenses 90 68 Depreciation and amortization: Attributed costs 251 225 Intergroup allocated expenses (24) (20) ---------- ---------- Total 3,343 3,149 ---------- ---------- Operating income 279 1,034 Other income (expense): Interest expense (126) (127) ---------- ---------- Income before income taxes and cumulative effect of accounting change 153 907 Provision for income taxes 62 360 ---------- ---------- Income before cumulative effect of accounting change 91 547 Cumulative effect of accounting change (net of income tax of $7 in 2000) -- (10) ---------- ---------- Net income $ 91 $ 537 ========== ========== Diluted earnings per common share: Net income before cumulative effect of accounting change $ 0.03 $ 0.19 ========== ========== Cumulative effect of accounting change $ -- $ -- ========== ========== Net income $ 0.03 $ 0.18 ========== ========== Diluted weighted average common shares outstanding 2,899 2,921 ========== ==========
MCI GROUP COMBINED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data)
For the Three Months Ended March 31, -------------------------- 2001 2000 ---------- ---------- Revenues: Wholesale and consumer $ 2,502 $ 2,890 Alternative channels and small business 695 876 Dial-up Internet 425 417 ---------- ---------- Total revenues 3,622 4,183 ---------- ---------- Operating expenses: Line costs: Attributed costs 1,733 1,665 Intergroup allocated expenses 93 86 Selling, general and administrative: Attributed costs 1,248 1,125 Other intergroup allocated expenses 90 68 Depreciation and amortization: Attributed costs 251 225 Intergroup allocated expenses (24) (20) ---------- ---------- Total 3,391 3,149 ---------- ---------- Operating income 231 1,034 Other income (expense): Interest expense (126) (127) ---------- ---------- Income before income taxes and cumulative effect of accounting change 105 907 Provision for income taxes 43 360 ---------- ---------- Income before cumulative effect of accounting change 62 547 Cumulative effect of accounting change (net of income tax of $7 in 2000) -- (10) ---------- ---------- Net income $ 62 $ 537 ========== ========== Diluted earnings per common share: Net income before cumulative effect of accounting change $ 0.02 $ 0.19 ========== ========== Cumulative effect of accounting change $ -- $ -- ========== ========== Net income $ 0.02 $ 0.18 ========== ========== Diluted weighted average common shares outstanding 2,899 2,921 ========== ==========
MCI GROUP CONDENSED COMBINED BALANCE SHEETS (Unaudited. In Millions)
March 31, 2001 December 31, 2000 -------------- ----------------- ASSETS Current assets: Cash and cash equivalents $ 20 $ 41 Accounts receivable, net 1,772 1,835 Other current assets 365 436 ------- ------- Total current assets 2,157 2,312 ------- ------- Property and equipment, net 2,221 2,246 Goodwill and other intangibles, net 9,904 9,909 Other assets 253 168 ------- ------- $14,535 $14,635 ======= ======= LIABILITIES AND ALLOCATED NET WORTH Current liabilities: Payable to WorldCom group, net $ 1,812 $ 1,625 Accounts payable and accrued line costs 2,094 2,438 Other current liabilities 1,066 1,022 ------- ------- Total current liabilities 4,972 5,085 ------- ------- Long-term debt 6,000 6,000 Other liabilities 1,023 1,087 Allocated net worth 2,540 2,463 ------- ------- $14,535 $14,635 ======= =======
MCI GROUP COMBINED STATEMENTS OF CASH FLOWS (Unaudited. In Millions)
For the Three Months Ended March 31, --------------------------- 2001 2000 ---------- ---------- Cash flows from operating activities: Net income $ 62 $ 537 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting change -- 10 Depreciation and amortization 227 205 Provision for losses on accounts receivable 157 98 Provision for deferred income taxes 6 44 Change in working capital items (92) (462) -------- -------- Net cash provided by operating activities 360 432 -------- -------- Cash flows from investing activities: Capital expenditures (95) (86) Increase in intangible assets (118) (65) Proceeds from disposition of marketable securities and other long-term assets -- 2 Increase in other assets (95) (59) Decrease in other liabilities (88) (34) -------- -------- Net cash used in investing activities (396) (242) -------- -------- Cash flows from financing activities: Advances from (to) WorldCom group, net 15 (161) -------- -------- Net cash provided by (used in) financing activities 15 (161) -------- -------- Net increase (decrease) in cash and cash equivalents (21) 29 Cash and cash equivalents at beginning of period 41 70 -------- -------- Cash and cash equivalents at end of period $ 20 $ 99 ======== ========
WORLDCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data) Note to readers: Our reported results for 2001 have been impacted by events, including costs associated with domestic severance packages and other costs related to our previously announced workforce reductions, and the adverse impact resulting from fluctuations in foreign currency exchange rates. The table below reflects normalized information for our 2001 operating results for comparative purposes.
For the Three Months Ended March 31, -------------------------- 2001 2000 --------- ----------- Revenues: Voice $ 1,726 $ 1,824 Data 2,045 1,724 International 1,605 1,346 Internet 722 535 ------- ------- Commercial services 6,098 5,429 Wholesale and consumer 2,502 2,890 Alternative channels and small business 695 876 Dial-up Internet 425 417 ------- ------- Total revenues 9,720 9,612 ------- ------- Operating expenses: Line costs 4,108 3,733 Selling, general and administrative 2,743 2,308 Depreciation and amortization 1,463 1,147 ------- ------- Total 8,314 7,188 ------- ------- Operating income 1,406 2,424 Other income (expense): Interest expense (297) (218) Miscellaneous 98 111 ------- ------- Income before income taxes, minority interests and cumulative effect of accounting change 1,207 2,317 Provision for income taxes 473 947 ------- ------- Income before minority interests and cumulative effect of accounting change 734 1,370 Minority interests 11 (82) ------- ------- Income before cumulative effect of accounting change 745 1,288 Cumulative effect of accounting change (net of income tax of $50 in 2000) -- (85) ------- ------- Net income 745 1,203 Distributions on subsidiary trust and other mandatorily redeemable preferred securities 16 16 Preferred dividend requirement -- 1 ------- ------- Net income applicable to common shareholders $ 729 $ 1,186 ======= ======= Diluted earnings per common share: Net income applicable to common shareholders before cumulative effect of accounting change $ 0.25 $ 0.44 ======= ======= Cumulative effect of accounting change $ -- $ (0.03) ======= ======= Net income applicable to common shareholders $ 0.25 $ 0.41 ======= ======= Diluted weighted average common shares outstanding 2,899 2,921 ======= =======
WORLDCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited. In Millions, Except Per Share Data)
For the Three Months Ended March 31, -------------------------- 2001 2000 ---------- ----------- Revenues: Voice $ 1,726 $ 1,824 Data 2,045 1,724 International 1,605 1,346 Internet 722 535 ------- ------- Commercial services 6,098 5,429 Wholesale and consumer 2,502 2,890 Alternative channels and small business 695 876 Dial-up Internet 425 417 ------- ------- Total revenues 9,720 9,612 ------- ------- Operating expenses: Line costs 4,108 3,733 Selling, general and administrative 2,868 2,308 Depreciation and amortization 1,463 1,147 ------- ------- Total 8,439 7,188 ------- ------- Operating income 1,281 2,424 Other income (expense): Interest expense (297) (218) Miscellaneous 4 111 ------- ------- Income before income taxes, minority interests and cumulative effect of accounting change 988 2,317 Provision for income taxes 389 947 ------- ------- Income before minority interests and cumulative effect of accounting change 599 1,370 Minority interests 11 (82) ------- ------- Income before cumulative effect of accounting change 610 1,288 Cumulative effect of accounting change (net of income tax of $50 in 2000) -- (85) ------- ------- Net income 610 1,203 Distributions on subsidiary trust and other mandatorily redeemable preferred securities 16 16 Preferred dividend requirement -- 1 ------- ------- Net income applicable to common shareholders $ 594 $ 1,186 ======= ======= Diluted earnings per common share: Net income applicable to common shareholders before cumulative effect of accounting change $ 0.20 $ 0.44 ======= ======= Cumulative effect of accounting change $ -- $ (0.03) ======= ======= Net income applicable to common shareholders $ 0.20 $ 0.41 ======= ======= Diluted weighted average common shares outstanding 2,899 2,921 ======= =======
WORLDCOM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited. In Millions)
March 31, 2001 December 31, 2000 -------------- ----------------- ASSETS Current assets: Cash and cash equivalents $ 669 $ 761 Accounts receivable, net 6,707 6,815 Other current assets 2,240 2,179 ----------- ----------- Total current assets 9,616 9,755 ----------- ----------- Property and equipment, net 38,614 37,423 Goodwill and other intangibles, net 46,543 46,594 Other assets 4,807 5,131 ----------- ----------- $ 99,580 $ 98,903 =========== =========== LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Short-term debt and current maturities of long-term debt $ 8,886 $ 7,200 Accounts payable and accrued line costs 5,480 6,022 Other current liabilities 4,195 4,451 ----------- ----------- Total current liabilities 18,561 17,673 ----------- ----------- Long-term debt 17,682 17,696 Other liabilities 4,593 4,735 Minority interests 2,349 2,592 Mandatorily redeemable preferred securities 798 798 Total shareholders' investment 55,597 55,409 ----------- ----------- $ 99,580 $ 98,903 =========== ===========
WORLDCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited. In Millions)
For the Three Months Ended March 31, --------------------------- 2001 2000 ---------- ----------- Cash flows from operating activities: Net income $ 610 $ 1,203 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting change -- 85 Minority interests (11) 82 Depreciation and amortization 1,463 1,147 Provision for losses on accounts receivable 374 269 Provision for deferred income taxes 192 626 Change in working capital items (1,005) (1,521) Other (27) (97) ---------- ----------- Net cash provided by operating activities 1,596 1,794 ---------- ----------- Cash flows from investing activities: Capital expenditures (2,235) (2,340) Capital expenditures, Embratel and undersea cables (152) (179) Acquisitions and related costs (142) (7) Increase in intangible assets (219) (110) Proceeds from disposition of marketable securities and other long-term assets 195 188 Increase in other assets (402) (386) Decrease in other liabilities (167) (446) ---------- ----------- Net cash used in investing activities (3,122) (3,280) ---------- ----------- Cash flows from financing activities: Principal borrowings on debt, net 1,399 1,162 Common stock issuance 71 268 Distributions on subsidiary trust mandatorily redeemable preferred securities and dividends paid on preferred stock (16) (17) Redemption of Series C preferred stock -- (190) Other -- (17) ---------- ----------- Net cash provided by financing activities 1,454 1,206 Effect of exchange rate changes on cash (20) 5 ---------- ----------- Net decrease in cash and cash equivalents (92) (275) Cash and cash equivalents at beginning of period 761 876 ---------- ----------- Cash and cash equivalents at end of period $ 669 $ 601 ========== ===========
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