MCI reported a cumulative net reduction of $74.4 billion to previously reported pre-tax income for 2000 and 2001 in what it described as “the largest and most complex financial restatement ever undertaken.” The restatement process included revalidation and correction of accounting records, review of the accounting for all major acquisitions dating back to 1993, reassessing the propriety and appropriateness of the application of accounting principles, and a re-audit of the financial statements. The largest category of restatement adjustments is impairment charges resulting from write-offs of goodwill and write-downs in the carrying value of other intangible assets and property, plant and equipment in 2000 and 2001. The impairment charges for 2000 and 2001 total $59.8 billion. MCI also filed its annual report for 2002. As restated, consolidated revenues were $32.2 billion in 2002, $37.7 billion in 2001, and $39.3 billion in 2000. Work continues on its 2003 financial statements.
MCI said the filing is one of the last remaining milestones on its path to emerge from Chapter 11 protection, which is expected to occur in April. The restated financials do not have an impact on the company’s current liquidity position. http://www.mci.com
