CLINTON, Miss. - November 1, 2000
- WorldCom, Inc. (NASDAQ: WCOM) today announced performance
expectations for the fourth quarter of 2000 and full-year 2001 based on
results to date. The Company issued new financial guidance due to
continuing competitive pressures in the telecommunications industry,
increased spending to support the Company's growth initiatives and
other economic factors. Today WorldCom, Inc. also announced a plan to
separate its businesses into two publicly traded tracking stocks:
WorldCom, which will reflect the performance of the Company's core
high-growth data, Internet, hosting and international businesses, and
MCI, which will reflect the performance of its high cash flow consumer,
small business, wholesale long-distance voice and dial-up internet
access operations.
REVENUE GUIDANCE
Consolidated WorldCom, Inc. fourth quarter year-over-year revenue
growth is expected to be in the 7 to 9 percent range. The Company
currently expects fourth quarter revenue growth of approximately 12 to
14 percent for the WorldCom businesses and essentially flat for the MCI
businesses. Consolidated WorldCom, Inc. revenue growth is expected to
be in the 7 to 9 percent range for full year 2001. Full year 2001
revenue growth is expected to be between 12 and 15 percent for WorldCom
and flat to negative 2 percent for MCI. WorldCom is expecting a
compound annualized revenue growth rate of 14 to 16 percent through the
2005 time frame. Intense pricing pressures, unfavorable foreign
exchange rates and the shift of consumer voice to wireless technologies
are negatively affecting revenue growth.
Current Revenue Growth Guidance: New Reporting Format
| 4Q00 | 2001 | |
| Data | 23 to 26% | 20 to 23% |
| International | 25 to 30% | 20 to 25% |
| Internet-dedicated and other | 40 to 50% | 40 to 50% |
| Voice | (5) to (7%) | (6) to (8%) |
| WorldCom | 12 to 14% | 12 to 15% |
| MCI | (1) to 0% | (2) to 0% |
| WorldCom, Inc. | 7 to 9% | 7 to 9% |
EARNINGS GUIDANCE
WorldCom, Inc. currently expects fourth quarter consolidated cash
earnings (earnings before goodwill amortization) per share to be
between $0.34 and $0.37 per share, with WorldCom between $0.27 and
$0.30 and MCI in the area of $0.07 on a pro forma basis
for the tracking stock transaction. The Company expects full-year
2001 consolidated cash earnings per share (including impact of
Intermedia/Digex transaction) to be between $1.55 and $1.65 per share,
with WorldCom earnings of between $1.25 and $1.35 and MCI between $0.25
and $0.30 on a pro forma basis for the tracking stock transaction.
WorldCom, Inc. cash earnings expectations for the fourth quarter of
2000 and full-year 2001 are being affected by increased spending on
generation d growth initiatives, such as web hosting and Internet based
virtual private networks, lower revenue growth expectations, and
increased employee spending.
| WorldCom, Inc. Cash EPS Guidance | 4Q00 | FY2001 |
| Midpoint of previous "Street" estimate | $0.58 | $2.60 |
| Intermedia/Digex impact | (0.20) | |
| ________________________ | ____ | ____ |
| 0.58 | $2.40 | |
| WorldCom | ||
| Investment for growth | (0.10) | (0.35) |
| FX effect | (0.02) | (0.05) |
| Global & Major accounts pricing | (0.04) | (0.10) |
| ________ | ________ | |
| (0.16) | (0.50) | |
| MCI | ||
| Consumer & Wholesale pricing | (0.06) | (0.22) |
| Dial-up Internet traffic mix | (0.02) | (0.08) |
| ________ | ________ | |
| (0.08) | (0.30) | |
| Midpoint of WorldCom, Inc. guidance | $0.34 - 0.35 | $1.60 |
WorldCom, Inc is scheduled to hold a meeting today from 9:00 a.m. to
12:30 p.m. EST to announce its plan to create the two publicly traded
tracking stocks. The Company does not intend to provide any additional
communication regarding performance for the quarter until the meeting
and does not undertake any obligation to update forward- looking
statements.
At the meeting, management will discuss strategic initiatives as
well as answer questions from the investment community. Interested
investors and media are encouraged to attend via a live web conference
at http://www.wcom.com/investor/. A rebroadcast will be available on
the WorldCom website following the completion of the meeting on
Wednesday, November 1, 2000.
FORWARD LOOKING STATEMENTS
The foregoing are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements concerning future
operating performance, share of new and existing markets, and revenue
and earnings
growth rates. Such forward-looking statements, which are not a
guarantee of performance, are subject to a number of uncertainties and
other factors, that could cause actual results to differ materially
from such statements, including vigorous competition; the ability to
establish a significant market presence in new geographic service
markets, and the success and market acceptance of new products and
services. For a more detailed description of the factors that could
cause such a difference, please see WorldCom, Inc.'s filings with
the Securities and Exchange Commission. The Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
We urge investors and security holders to read WorldCom, Inc.'s
Registration Statement on Form S-4, including the prospectus and proxy
statement, when they become available, because they will contain
important information. When these and other documents relating to the
transaction are filed with the U.S. Securities and Exchange Commission,
they may be obtained without charge from the SEC's website at
http://www.sec.gov. Holders of WorldCom, Inc. stock may also obtain
each of these documents (when they become available) for free by
directing your request to WorldCom, Inc., c/o Investor Relations
Department, 500 Clinton Center Drive, Clinton, Mississippi 39056. This
communication shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of securities in any
state in which the offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
state. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act.
WorldCom, Inc. and certain other persons referred to below may be
deemed to be participants in the solicitation of proxies of
shareholders to adopt the proposals which will be set forth in the
proxy statement contained in WorldCom, Inc.'s Registration
Statement on Form S-4. The participants in this solicitation may
include the directors and executive officers of WorldCom, Inc., who may
have an interest in the transaction including as a result of holding
shares of common stock and/or options to acquire the same. A detailed
list of the names and interests of WorldCom, Inc.'s directors and
executive officers is contained in the Company's proxy statement
for its 2000 annual meeting, which may be obtained without charge at
the SEC's Internet Website at http://www.sec.gov.
ABOUT WORLDCOM
WorldCom (NASDAQ: WCOM) is a preeminent global communications
company for the digital generation, operating in more than 65
countries. Global revenues in 1999 were $36 billion, with $15 billion
from high-growth data, Internet and international services. WorldCom
provides the innovative technologies and services that are the
foundation for business in the 21st century. For more information go to
http://www.wcom.com
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