WorldCom filed its proposed Plan of Reorganization with the U.S. Bankruptcy Court, relocated its headquarters from Clinton, Mississippi to Ashburn, Virginia and changed its brand name back to MCI. The existing wholesale business will be sub-branded as UUNET. The company’s senior noteholder groups have agreed upon the economic terms of the proposed restructuring, which would eliminate approximately $36 billion in debt, leaving only about $3.5 billion-$4.5 billion in debt, net of cash. A global multi-media advertising campaign is being launched to position the company as a leader in the move toward convergence of local, long-distance and data services. Separately, MCI announced the appointment of Robert T. Blakely as its Executive Vice President and CFO. Blakely recently completed a four-year appointment as a member of the Financial Accounting Standards Advisory Council, which advises the Financial Accounting Standards Board on issues relating to accounting rulemaking, financial reporting and disclosure.
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- In a company-wide webcast, company CEO, Michael D. Capellas, said MCI has successfully completed a 100-day financial plan and is now focused on a three-year plan to gain the leadership position in the convergence of voice and data. The company reached profitability in January. Sales in Q1 2003 were 30% over Q4 2002 and over $1 billion in contracts were signed in Q1. The company has $3 billion in cash. He also noted that 25% of the company’s voice traffic will ride over IP this year.
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In March, WorldCom announced nearly $80 billion in balance sheet write-offs covering existing goodwill and the carrying value of its other intangible assets, property and equipment.
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On 25-June-2002, WorldCom announced that it would restate its financial results for 2001 and the first quarter of 2002 as result of an internal audit of the company’s capital expenditure accounting. The “accounting irregularities�? initially were estimated at $3.6 billion and have since risen to about $11 billion. Following congressional hearings into the accounting fraud, WorldCom submitted a Chapter 11 filing in a bankruptcy court in New York on 21-July-2002.
MCI Network Statistics
- Owns and operates global data and Internet networks in North America, Europe, Asia, Latin America, Australia and Africa with more than 4,500 PoPs and more than 3.2 million dial modems. Internet access services are available in over 2,800 cities across six continents
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A North American OC-192/OC-48 network with over 1 Terabit of aggregate backbone capacity, carrying data traffic at up to 10 Gbps in the U.S. and 2.5 Gbps in Europe.
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Over 98,000 wholly-owned and operated network route miles, including terrestrial and undersea cables
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ATM service available in 21 countries, Frame Relay in 72 countries