Core Revenue up 35 Percent on 37 Percent Volume Growth
Operating Income up 234 Percent
JACKSON, MS (July 31, 1997) -- WorldCom, Inc.
(WorldCom) today reported second quarter revenues of $1.77 billion, a
65 percent increase over second quarter 1996 revenues of $1.07 billion.
The year-over-year increase is due to both the merger with MFS
Communications Company, Inc. (MFS) on December 31, 1996 as well as
strong internal growth across all Communications Services. On a
reported basis, long distance traffic for the second quarter increased
57 percent over the previous year. On a pro forma basis, Communications
Services revenues increased 35 percent on 37 percent volume growth.
Net income before preferred dividends for the second quarter 1997 --
taking into account the increased amortization of goodwill of $84
million related to the merger with MFS -- was $79 million, or $0.08 per
common share, compared with net income of $100 million, or $0.25 per
common share for second quarter 1996, before non-recurring charges in
the prior period.
For the six months ended June 30, 1997, WorldCom reported revenues
of $3.45 billion, up 64 percent from revenues of $2.11 billion for the
first six months of 1996 and net income before preferred dividends of
$128 million compared with $190 million for the first half of 1996
before non-recurring charges. Fully diluted earnings per common share
are $0.13 as compared with $0.46 before non-recurring charges for the
same period in 1996.
Bernard J. Ebbers, president and chief executive officer of WorldCom
stated, "I am particularly pleased with our second quarter and six
month year-to-date performance. The strength in our traditional
domestic switched and private line business underscores the importance
of providing a complete range of services to our customers. Our
particularly impressive gains in international and Internet services
highlight the changing mix in our revenue base and are cause for
optimism going forward, given our significant investment in these
sectors."
COMMUNICATIONS SERVICES - PRO FORMA COMPARISON
WorldCom's second
quarter highlights include the following year-over-year internal
growth:
| SECOND QUARTER | YEAR - TO- DATE | |
| ($ MILLIONS) |
| Revenues | Actual | Pro Forma | Actual | Pro Forma | ||
| 1997 | 1996 | Change | 1997 | 1996 | Change | |
| ||||||
| Domestic Switched | $996.8 | $794.1 | 22% | $1,918.7 | $1,568.2 | 22% |
| Domestic Private Line | 371.7 | 276.2 | 35% | 724.4 | 539.5 | 34% |
| International | 197.0 | 107.7 | 83% | 360.8 | 194.6 | 85% |
| Internet | 125.8 | 54.0 | 133% | 237.0 | 93.0 | 155% |
| ||||||
| Core Revenues | $1,661.3 | $1,231.0 | 35% | $3,240.9 | $2,395.3 | 35% |
| ||||||
| Other | 108.8 | 102.4 | 6% | 206.4 | 182.9 | 13% |
| Total Revenues | $1,770.1 | $1,334.4 | 33% | $3,447.3 | $2,578.2 | 34% |
|
Domestic switched Domestic private line International revenues Internet revenues for OTHER REVENUES Other revenues for the OPERATING RESULTS Operating Income for PRO FORMA COMPARATIVES In order to compare year-over-year internal growth, the following | ||
| SECOND QUARTER | YEAR - TO- DATE | |
|
($ in millions except EPS and % of Revenue) |
| Actual | Pro | Forma | Actual | Pro | Forma | |
| 1997 | 1996 | Change | 1997 | 1996 | Change | |
| ||||||
| Revenues | $1,770.1 | $1,334.4 | 33% | $3,447.3 | $2,578.2 | 34% |
| ||||||
| EBITDA | $ 467.0 | $274.7 | 70% | $ 860.4 | $ 535.9 | 61% |
| % of Revenue | 26.4% | 20.6% | 25.0% | 20.8% | ||
| ||||||
| Operating Income | $ 239.2 | $ 71.7 | 234% | $ 409.7 | $ 126.0 | 225% |
| % of Revenue | 13.5% | 5.4% | 11.9% | 4.9% | ||
| ||||||
| Earnings Per Share | ||||||
| (EPS) | $ 0.08 | $ (0.09) | ------------- | $ 0.13 | $ (0.19) | ------------ |
| ||||||
| Cash Earnings / Share | $ 0.26 | $ 0.09 | ------------ | $ 0.46 | $0.14 | ----------- |
1) Adding back MFS purchase accounting amortization ($0.09) | ||||||
|
As a percent of OUTLOOK Commenting on the Except for the WorldCom is a global
ADDITIONAL FINANCIAL INFORMATION
| |
WORLDCOM, INC. AND SUBSIDIARIES For the three months ended |
| SECOND QUARTER | YEAR - TO- DATE | |
|
($ in millions except EPS and % of Revenue) |
| 1997 | 1996 | 1996 | ||||
| Actual | % | Actual | % | Pro Forma | % | |
| ||||||
| Minutes | 8,927,214 | 5,697,837 | 6,497,003 | |||
| ||||||
| Revenues | $1,770,084 | 100.0% | $1,073,538 | 100.0% | $1,334,435 | 100.0% |
| ||||||
| Operating expenses: | ||||||
| Line costs | 922,444 | 52.1% | 584,632 | 54.5% | 726,223 | 54.4% |
| Selling, general and administrative | 380,657 | 21.5% | 198,828 | 18.5% | 333,513 | 25.0% |
| Provision to reduce carrying value of certain assets | ----------- | ----------- | 402,000 | 37.4% | 402,000 | 30.1% |
| Total | 1,530,874 | 86.5% | 1,257,287 | 117.1% | 1,664,712 | 124.8% |
| ||||||
| Operating Income(loss) | 239,210 | 13.5% | (183,749) | -17.7% | (330,227) | -24.8% |
| Other Income (expense) | ||||||
| Interest expense | (77,705) | -4.4% | (55,898) | -5.2% | (83,205) | -6.2% |
| Miscellaneous | 2,260 | 0.1% | 1,988 | 0.2% | 6,376 | 0.5% |
| ||||||
| Income (loss) before income taxes and extraordinary items | 163,765 | 9.3% | (237,659) | -22.1% | (407,106) | -30.5% |
| Provision for Income Taxes | 85,158 | 4.8% | 5,509 | 0.5% | 5,559 | 0.4% |
| ||||||
| Net Income (loss) before extraordinary items | 78,607 | 4.4% | (243,168) | -22.7% | (412,665) | -30.9% |
| Extraordinary Items | ||||||
| (net of income taxes of $15,621 in 1996) | ----------- | ----------- | (24,434) | -2.3% | (24,434) | -1.8% |
| Prefered dividend requirement | 6,611 | 0.4% | 355 | 0.0% | 7,815 | 0.6% |
| ||||||
| Net Income (loss) applicable to common shareholders | $71,996 | 4.1% | (267,957) | -25.0% | (444,914) | -33.3% |
| ||||||
| Earnings per common share: | ||||||
| Net income (loss) applicable to common shareholders before extraordinary items: | ||||||
| Primary | $0.08 | $(0.62) | $(0.49) | |||
| ||||||
| Fully diluted | $0.08 | $(0.62) | $(0.49) | |||
| ||||||
| Extraordinary items | ---------------------- | $(0.06) | $(0.03) | |||
| ||||||
| Net income (loss) applicable to common shareholders: | ||||||
| Primary | $0.08 | $(0.69) | $(0.52) | |||
| ||||||
| Fully Diluted | $0.08 | $(0.69) | $(0.52) | |||
| ||||||
| Net income (loss) applicable to common shareholders before non-cash charges and extraordinary items: | ||||||
| Primary | $0.08 | $0.25 | $(0.09) | |||
| ||||||
| Fully Diluted | $0.08 | $0.25 | $(0.09) | |||
|
WORLDCOM, INC. AND SUBSIDIARIES For the six months ended |
| 1997 | 1996 | 1996 | ||||
| Actual | % | Actual | % | Pro Forma | % | |
| ||||||
| Minutes | 17,445,578 | 11,309,246 | 12,807,242 | |||
| ||||||
| Revenues | $3,447,323 | 100.0% | $2,107,598 | 100.0% | $2,578,195 | 100.0% |
| ||||||
| Operating expenses: | ||||||
| Line costs | 1,833,913 | 53.2% | 1,147,463 | 54.5% | 1,398,839 | 54.3% |
| Selling, general and administrative | 753,004 | 21.8% | 390,429 | 18.5% | 643,459 | 25.0% |
| Provision to reduce carrying value of certain assets | ------------ | ---------- | 402,000 | 19.1% | 402,000 | 15.6% |
| ||||||
| Total | 3,037,593 | 88.1% | 2,095,490 | 99.4% | 2,854,216 | 110.7% |
| ||||||
| Operating Income(loss) | 409,730 | 11.9% | 12,108 | 0.6% | (276,021) | -10.7% |
| Other Income (expense) | ||||||
| Interest expense | (153,160) | -4.4% | (112,946) | -5.4% | (164,208) | -6.4% |
| Miscellaneous | 10,661 | 0.3% | 4,149 | 0.2% | 13,588 | 0.5% |
| ||||||
| Income (loss) before income taxes and extraordinary items | 267,231 | 7.8% | (96,689) | -4.6% | (46,641) | -16.5% |
| Provision for Income Taxes | 138,960 | 4.0% | 60,172 | 2.9% | 60,322 | 2.3% |
| ||||||
| Net Income (loss) before extraordinary items | 128,271 | 3.7% | (156,861) | -7.4% | (486,963) | -18.9% |
| Extraordinary Items | ||||||
| (net of income taxes of $15,621 in 1996) | ---------------- | ------------ | (24,434) | -1.2% | (24,434) | -0.9% |
| Prefered dividend requirement | 13,221 | 0.4% | 860 | 0.0% | 15,392 | 0.6% |
| ||||||
| Net Income (loss) applicable to common shareholders | $115,050 | 3.3% | (182,155) | -8.6% | (526,789) | -20.4% |
|
| Earnings per common share: | |||
| Net income (loss) applicable to common shareholders before extraordinary items: | |||
| Primary | $0.13 | $(0.41) | $(0.58) |
| |||
| Fully diluted | $0.13 | $(0.41) | $(0.58) |
| |||
| Extraordinary items | ---------------------- | $(0.06) | $(0.03) |
| |||
| Net income (loss) applicable to common shareholders: |
