North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: Fwd: WorldCom Investor News: WorldCom Announces Intention toRestate 2001 and First Quarter 2002 Financial Statements
Hey, dumb question. Does WCOM own Cox? Or is that AT&T? Just curious. Jane blitz wrote: > > From their own press report: > > >WorldCom Announces Intention to Restate 2001 and First Quarter 2002 > >Financial Statements > > > >CLINTON, Miss., June 25, 2002 - WorldCom, Inc. (Nasdaq: WCOM, MCIT) today > >announced it intends to restate its financial statements for 2001 and the > >first quarter of 2002. As a result of an internal audit of the company's > >capital expenditure accounting, it was determined that certain transfers > >from line cost expenses to capital accounts during this period were not > >made in accordance with generally accepted accounting principles (GAAP). > >The amount of these transfers was $3.055 billion for 2001 and $797 million > >for first quarter 2002. Without these transfers, the company's reported > >EBITDA would be reduced to $6.339 billion for 2001 and $1.368 billion for > >first quarter 2002, and the company would have reported a net loss for > >2001 and for the first quarter of 2002. > > > >The company promptly notified its recently engaged external auditors, KPMG > >LLP, and has asked KPMG to undertake a comprehensive audit of the > >company's financial statements for 2001 and 2002. The company also > >notified Andersen LLP, which had audited the company's financial > >statements for 2001 and reviewed such statements for first quarter 2002, > >promptly upon discovering these transfers. On June 24, 2002, Andersen > >advised WorldCom that in light of the inappropriate transfers of line > >costs, Andersen's audit report on the company's financial statements for > >2001 and Andersen's review of the company's financial statements for the > >first quarter of 2002 could not be relied upon. > > > >The company will issue unaudited financial statements for 2001 and for the > >first quarter of 2002 as soon as practicable. When an audit is completed, > >the company will provide new audited financial statements for all required > >periods. Also, WorldCom is reviewing its financial guidance. > > > >The company has terminated Scott Sullivan as chief financial officer and > >secretary. The company has accepted the resignation of David Myers as > >senior vice president and controller. > > > >WorldCom has notified the Securities and Exchange Commission (SEC) of > >these events. The Audit Committee of the Board of Directors has retained > >William R. McLucas, of the law firm of Wilmer, Cutler & Pickering, former > >Chief of the Enforcement Division of the SEC, to conduct an independent > >investigation of the matter. This evening, WorldCom also notified its lead > >bank lenders of these events. > > > >The expected restatement of operating results for 2001 and 2002 is not > >expected to have an impact on the Company's cash position and will not > >affect WorldCom's customers or services. WorldCom has no debt maturing > >during the next two quarters. > > > >"Our senior management team is shocked by these discoveries," said John > >Sidgmore, appointed WorldCom CEO on April 29, 2002. "We are committed to > >operating WorldCom in accordance with the highest ethical standards." > > > >"I want to assure our customers and employees that the company remains > >viable and committed to a long-term future. Our services are in no way > >affected by this matter, and our dedication to meeting customer needs > >remains unwavering," added Sidgmore. "I have made a commitment to driving > >fundamental change at WorldCom, and this matter will not deter the new > >management team from fulfilling our plans." > > > >Actions to Improve Liquidity and Operational Performance > > > >As Sidgmore previously announced, WorldCom will continue its efforts to > >restructure the company to better position itself for future growth. These > >efforts include: > > > >Cutting capital expenditures significantly in 2002. We intend 2003 capital > >expenditures will be $2.1 billion on an annual basis. > > > >Downsizing our workforce by 17,000, beginning this Friday, which is > >expected to save $900 million on an annual basis. This downsizing is > >primarily composed of discontinued operations, operations & technology > >functions, attrition and contractor terminations. > > > >Selling a series of non-core businesses, including exiting the wireless > >resale business, which alone will save $700 million annually. The company > >is also exploring the sale of other wireless assets and certain South > >American assets. These sales will reduce losses associated with these > >operations and allow the company to focus on its core businesses. > > > >Paying Series D, E and F preferred stock dividends in common stock rather > >than cash, deferring dividends on MCI QUIPS, and discontinuing the MCI > >tracker dividend, saving approximately $375 million annually. > > > >Continuing discussions with our bank lenders. > > > >Creating a new position of Chief Service and Quality Officer to keep an > >eye focused on our customer services during this restructuring. > > > >"We intend to create $2 billion a year in cash savings in addition to any > >cash generated from our business operations," said Sidgmore. "By focusing > >on these steps, I am convinced WorldCom will emerge a stronger, more > >competitive player." > > > >About WorldCom, Inc. > >WorldCom, Inc. (NASDAQ: WCOM, MCIT) is a pre-eminent global communications > >provider for the digital generation, operating in more than 65 countries. > >With one of the most expansive, wholly-owned IP networks in the world, > >WorldCom provides innovative data and Internet services for businesses to > >communicate in today's market. In April 2002, WorldCom launched The > >Neighborhood built by MCI - the industry's first truly any-distance, > >all-inclusive local and long-distance offering to consumers for one fixed > >monthly price. Effective as of the close of regular trading on July 12, > >2002, WorldCom will eliminate its tracking stock structure and have one > >class of common stock with the NASDAQ ticker symbol WCOM. For more > >information, go to http://www.worldcom.com. > > > >Forward-Looking Statements > >This document includes certain "forward-looking statements" within the > >meaning of the Private Securities Litigation Reform Act of 1995. These > >statements are based on management's current expectations and are subject > >to uncertainty and changes in circumstances. Actual results may differ > >materially from these expectations due to economic uncertainty; the > >effects of vigorous competition; the impact of technological change on our > >business, alternative technologies, and dependence on availability of > >transmission facilities; risks of international business; regulatory risks > >in the United States and internationally; contingent liabilities; > >uncertainties regarding the collectibility of receivables; risks > >associated with debt service requirements and; our financial leverage; > >uncertainties associated with the success of acquisitions; and the ongoing > >war on terrorism. More detailed information about those factors is > >contained in WorldCom's filings with the Securities and Exchange Commi! > >ssion. begin:vcard n:Pawlukiewicz;Jane tel;cell:703 517-2591 tel;fax:703 289-5814 tel;work:703 289-5307 x-mozilla-html:FALSE org:Booz Allen Hamilton;Visit us on the Internet: <a href="http://boozallen.com">BoozOnline</a> adr:;;;;;; version:2.1 email;internet:[email protected] title:Senior Consultant fn:Jane Pawlukiewicz end:vcard
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