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News Bureau
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Media
Relations 800-644-NEWS
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Investors |
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Scott
Hamilton 601-460-5111
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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 |
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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 |
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Consumer & Wholesale
pricing |
(0.06) |
(0.22) |
Dial-up Internet traffic mix |
(0.02) |
(0.08) |
|
________ |
________ |
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(0.08) |
(0.30) |
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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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