<PAGE>
FILED PURSUANT TO RULE NO. 424(b)(2)
REGISTRATION No. 33-49387
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 9, 1994)
LOGO
MCI COMMUNICATIONS CORPORATION
$300,000,000 6 1/4% SENIOR NOTES DUE MARCH 23, 1999
$450,000,000 7 3/4% SENIOR DEBENTURES DUE MARCH 23, 2025
----------------
Interest on the 6 1/4% Senior Notes due March 23, 1999 (the "6 1/4% Notes")
and on the 7 3/4% Senior Debentures due March 23, 2025 (the "7 3/4%
Debentures" and, together with the 6 1/4% Notes, the "Offered Securities") is
payable semiannually on March 23 and September 23 of each year, commencing
September 23, 1994. The 6 1/4% Notes will mature on March 23, 1999 and are not
subject to redemption by MCI Communications Corporation (the "Company") prior
to maturity. The 7 3/4% Debentures will mature on March 23, 2025 and will be
subject to redemption by the Company on and after March 23, 2004 at the
redemption prices set forth under "Description of Offered Securities--
Redemption".
Each series of Offered Securities will be represented by Offered Securities
in book-entry form (each, a "Book-Entry Security") registered in the name of
the nominee of The Depository Trust Company (the "Depositary"). Beneficial
interests in each Book-Entry Security will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary (with
respect to beneficial interests of participants) or by participants or persons
that hold interests through participants (with respect to beneficial interests
of beneficial owners). Owners of beneficial interests in the Book-Entry
Securities will be entitled to physical delivery of Offered Securities of the
same series in certificated form equal in principal amount to their respective
beneficial interests only under the limited circumstances described under
"Description of Offered Securities--Book-Entry System". Settlement for each
series of Offered Securities will be made in immediately available funds. The
Offered Securities will trade in the Depositary's Same-Day Funds Settlement
System until maturity or earlier redemption, as the case may be, and secondary
market trading activity in the Offered Securities will therefore settle in
immediately available funds, in each case, until the Offered Securities are
issued in certificated form. All payments of principal, premium, if any,
and/or interest will be made by the Company in immediately available funds
unless and until the Offered Securities are issued in certificated form. See
"Description of Offered Securities--Same-Day Settlement and Payment".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-
FENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per 6 1/4% Note........................ 99.657% .6% 99.057%
- --------------------------------------------------------------------------------
Total for 6 1/4% Notes................. $298,971,000 $1,800,000 $297,171,000
- --------------------------------------------------------------------------------
Per 7 3/4% Debenture................... 99.188% .875% 98.313%
- --------------------------------------------------------------------------------
Total for 7 3/4% Debentures............ $446,346,000 $3,937,500 $442,408,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from March 23, 1994.
(2) The Company has agreed to indemnify the Underwriters against or make
contributions relating to certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
(3) Before deduction of expenses payable by the Company.
----------------
The Offered Securities are offered by the Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, and subject to approval
of certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Book-Entry Securities will be made in New York, New York on or
about March 23, 1994.
----------------
MERRILL LYNCH & CO.
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
----------------
The date of this Prospectus Supplement is March 9, 1994.
<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 9, 1994)
LOGO
MCI COMMUNICATIONS CORPORATION
$300,000,000 6 1/4% SENIOR NOTES DUE MARCH 23, 1999
$450,000,000 7 3/4% SENIOR DEBENTURES DUE MARCH 23, 2025
----------------
Interest on the 6 1/4% Senior Notes due March 23, 1999 (the "6 1/4% Notes")
and on the 7 3/4% Senior Debentures due March 23, 2025 (the "7 3/4%
Debentures" and, together with the 6 1/4% Notes, the "Offered Securities") is
payable semiannually on March 23 and September 23 of each year, commencing
September 23, 1994. The 6 1/4% Notes will mature on March 23, 1999 and are not
subject to redemption by MCI Communications Corporation (the "Company") prior
to maturity. The 7 3/4% Debentures will mature on March 23, 2025 and will be
subject to redemption by the Company on and after March 23, 2004 at the
redemption prices set forth under "Description of Offered Securities--
Redemption".
Each series of Offered Securities will be represented by Offered Securities
in book-entry form (each, a "Book-Entry Security") registered in the name of
the nominee of The Depository Trust Company (the "Depositary"). Beneficial
interests in each Book-Entry Security will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary (with
respect to beneficial interests of participants) or by participants or persons
that hold interests through participants (with respect to beneficial interests
of beneficial owners). Owners of beneficial interests in the Book-Entry
Securities will be entitled to physical delivery of Offered Securities of the
same series in certificated form equal in principal amount to their respective
beneficial interests only under the limited circumstances described under
"Description of Offered Securities--Book-Entry System". Settlement for each
series of Offered Securities will be made in immediately available funds. The
Offered Securities will trade in the Depositary's Same-Day Funds Settlement
System until maturity or earlier redemption, as the case may be, and secondary
market trading activity in the Offered Securities will therefore settle in
immediately available funds, in each case, until the Offered Securities are
issued in certificated form. All payments of principal, premium, if any,
and/or interest will be made by the Company in immediately available funds
unless and until the Offered Securities are issued in certificated form. See
"Description of Offered Securities--Same-Day Settlement and Payment".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-
FENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per 6 1/4% Note........................ 99.657% .6% 99.057%
- --------------------------------------------------------------------------------
Total for 6 1/4% Notes................. $298,971,000 $1,800,000 $297,171,000
- --------------------------------------------------------------------------------
Per 7 3/4% Debenture................... 99.188% .875% 98.313%
- --------------------------------------------------------------------------------
Total for 7 3/4% Debentures............ $446,346,000 $3,937,500 $442,408,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from March 23, 1994.
(2) The Company has agreed to indemnify the Underwriters against or make
contributions relating to certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
(3) Before deduction of expenses payable by the Company.
----------------
The Offered Securities are offered by the Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, and subject to approval
of certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Book-Entry Securities will be made in New York, New York on or
about March 23, 1994.
----------------
MERRILL LYNCH & CO.
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
----------------
The date of this Prospectus Supplement is March 9, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
USE OF PROCEEDS
The net proceeds to be received by MCI Communications Corporation (the
"Company") from the sale of the Offered Securities offered hereby will be added
to the general corporate funds of the Company and will be used for the
repayment of short-term borrowings under the Company's Commercial Paper Program
and for general corporate purposes. Concurrently with the offering of the
Offered Securities, the Company is offering through a separate prospectus
supplement $200,000,000 principal amount of Senior Floating Rate Notes due
March 16, 1999, the net proceeds of which will be used for the repayment of
short-term borrowings under the Company's Commercial Paper Program. As of
February 28, 1994, the Company had outstanding $532.6 million under its
Commercial Paper Program at a weighted average interest rate of 3.51% and a
weighted average maturity of 13.9 days.
RECENT DEVELOPMENTS
In August 1993, the Company and British Telecommunications plc ("BT") entered
into a definitive agreement providing for a total investment by BT in the
Company of $4.3 billion in exchange for a new class of common stock giving BT a
20% voting interest in the Company. In June 1993, BT purchased $830 million of
newly issued shares of convertible preferred stock of the Company which will be
exchanged for shares of the new class of common stock upon the receipt of the
remaining $3.5 billion from BT. In addition, as part of the BT transaction, MCI
purchased in January 1994 substantially all of the assets of the U.S.
operations of BT's data services subsidiary. Further, the Company and BT have
agreed to form a joint venture, in which the Company will own a 24.9% equity
interest, to provide global enhanced and value-added telecommunications
services. The Company expects to invest approximately $250 million in the joint
venture over the next five years. The receipt of the $3.5 billion from BT and
the formation of the joint venture are subject to stockholder and various
regulatory approvals, which approvals have not yet been obtained.
In January 1994, the Company announced components of its long-term strategic
plan. Initiatives relating to the plan include (i) networkMCI, which involves
the expansion of the Company's network to create and deliver a wide variety of
new branded services; and (ii) the creation of MCI Metro, a new subsidiary of
the Company, which will construct fiber rings and local switching
infrastructure in major United States markets to make local access facilities
available to long-distance communications carriers at a lower cost than is now
generally available and over time, subject to regulatory constraints, will
compete in the local exchange telecommunications services market. The total
investment in MCI Metro will be approximately $2 billion over the next several
years, a portion of which is expected to be provided by alliances with other
companies.
In February 1994, the Company entered into a letter agreement with Nextel
Communications, Inc. ("Nextel") and Comcast Corporation under which the parties
have agreed, subject to the terms and conditions thereof, to use their
reasonable best efforts to enter into definitive documentation providing for,
among other things, the investment by the Company of approximately $1.3 billion
in Nextel over the next three years to purchase approximately a 17% equity
interest. In addition, the letter agreement contemplates that the Company will
provide to Nextel marketing and other services to support Nextel's efforts to
offer wireless telecommunications services and products. Additionally, the
letter agreement contemplates that, subject to the terms and conditions
thereof, the Company will (i) utilize Nextel as its principal wireless
telecommunications service provider in the U.S. and (ii) seek to present to
Nextel all business opportunities in the wireless
S-2
<PAGE>
telecommunications area that the Company might otherwise consider acting upon
itself. The consummation of the transactions contemplated by the letter
agreement are subject to the approval of Nextel's stockholders and various
other conditions, including the execution of definitive documentation and the
receipt of regulatory approvals which have not yet been obtained.
In addition, in January 1994, the Company announced, as part of its long-
term international strategy, its intention to form a joint venture with Grupo
Financiero Banamex-Accival to provide competitive domestic and international
long-distance telecommunications services in Mexico. The Company will own a
45% equity interest in the joint venture and will invest up to $450 million in
the joint venture over the next several years. The formation of the joint
venture is dependent on the award of licenses in 1994 that will allow the
joint venture to provide the services. Such licenses have yet to be awarded to
the joint venture.
DESCRIPTION OF OFFERED SECURITIES
GENERAL
The 6 1/4% Senior Notes due March 23, 1999 (the "6 1/4% Notes") and the 7
3/4% Senior Debentures due March 23, 2025 (the "7 3/4% Debentures" and,
together with the 6 1/4% Notes, the "Offered Securities") each constitute a
separate series of Senior Securities (which are more fully described in the
accompanying Prospectus) to be issued under an Indenture between the Company
and Citibank, N.A., as trustee ("Citibank"), dated as of October 15, 1989, as
amended by the Trust Indenture Reform Act of 1990 (the "Indenture"). The
Indenture does not limit the aggregate principal amount of Senior Securities
which may be issued thereunder. The following summaries of certain provisions
of the Indenture do not purport to be complete and are subject to and
qualified in their entirety by reference to all of the provisions of the
Indenture, including the definitions therein of certain terms.
All Senior Securities, including the 6 1/4% Notes and the 7 3/4% Debentures,
issued and to be issued will be unsecured and will rank pari passu (equally
and ratably) with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding.
The Indenture does not limit the amount of unsecured indebtedness of the
Company or any subsidiary. Nothing in the Indenture or in the terms of either
series of Offered Securities will limit the payment of dividends by the
Company or the Company's acquisition of any of its equity securities. Nothing
in the Indenture affords holders of the Offered Securities protection in the
event of a highly leveraged transaction, reorganization, restructuring, merger
or similar transaction involving the Company. However, the Indenture does
contain certain restrictive covenants with respect to the business of the
Company and its subsidiaries, and liens on and the sale or lease of the
Company's assets which may make more difficult or discourage any such
transaction. The consummation of any highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company could cause a material decline in the credit quality of the
outstanding Offered Securities. See "Description of Senior Securities--
Covenants" in the accompanying Prospectus.
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the holders
of Offered Securities, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization or otherwise will be subject to the
prior claims of the subsidiary's creditors, except to the extent that claims
of the Company itself as a creditor of the subsidiary may be recognized. Also,
certain subsidiaries of the Company have guaranteed certain indebtedness of
the Company, not including the Offered Securities.
The 6 1/4% Notes and the 7 3/4% Debentures each will bear interest from
March 23, 1994, payable semiannually on March 23 and September 23 of each
year, commencing September 23, 1994 (each, an "Interest Payment Date"), to the
persons in whose names the applicable Offered Securities are registered in the
security register as of the close of business on the preceding March 8 or
September 8, as the case may be (each, a "Regular Record Date"). Interest on
each series of Offered Securities will be computed on the basis of a 360-day
year of twelve 30-day months.
S-3
<PAGE>
Interest payable on any Interest Payment Date and at maturity or earlier
redemption shall be the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including March 23, 1994, if no interest has
been paid or duly provided for with respect to such Offered Security) to but
excluding such Interest Payment Date or the date of maturity or earlier
redemption, as the case may be. If any Interest Payment Date or the date of
maturity or earlier redemption of an Offered Security falls on a day that is
not a Business Day, the payment shall be made on the next Business Day with the
same force and effect as if it were made on the date such payment was due and
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or date of maturity or earlier redemption, as the
case may be. "Business Day" means any day, other than a Saturday or Sunday, on
which banks in The City of New York are not required or authorized by law or by
executive order to close.
The principal, premium, if any, and interest payable in respect of each
Offered Security at maturity or on the date fixed for earlier redemption will
be paid against presentation of such Offered Security at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.
Interest on an Offered Security payable on an Interest Payment Date or at
maturity will be paid to the holders of record of such Offered Security (or one
or more predecessor Offered Securities) on the Regular Record Date immediately
preceding such Interest Payment Date or date of maturity, as the case may be.
For further information with respect to interest payable upon any redemption of
the 7 3/4% Debentures, see "Description of Offered Securities--Redemption".
The Offered Securities will be issued only in fully registered, book-entry
form without coupons, in denominations of $1,000 and integral multiples in
excess thereof, except under the limited circumstances described under
"Description of Offered Securities--Book-Entry System."
REDEMPTION
The 6 1/4% Notes are not subject to redemption by the Company prior to
maturity.
The 7 3/4% Debentures are not subject to redemption by the Company prior to
March 23, 2004. On and after March 23, 2004, the 7 3/4% Debentures will be
subject to redemption at the option of the Company, as a whole at any time or
in part from time to time, on not less than 30 days nor more than 60 days prior
written notice given as provided in the Indenture, at the redemption price
equal to the percentage of the principal amount set forth below if redeemed
during the twelve-month period beginning on March 23 of the year indicated:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2004 103.469%
2005 103.122
2006 102.775
2007 102.428
2008 102.081
2009 101.735
2010 101.388
2011 101.041
2012 100.694
2013 100.347
</TABLE>
and, beginning on March 23, 2014, at a redemption price of 100% of the
principal amount thereof, plus, in each case, accrued interest to the date
fixed for redemption; provided, however, that
S-4
<PAGE>
interest installments due on an Interest Payment Date which is on or prior to
the date fixed for redemption will be payable to the holders of record of such
7 3/4% Debentures (or one or more predecessor 7 3/4% Debentures) as of the
close of business on the relevant Regular Record Date for such interest
installment. If less than all of the 7 3/4% Debentures are redeemed, the
particular 7 3/4% Debentures to be redeemed will be selected for redemption by
such method as Citibank deems fair and appropriate.
There is no provision for a sinking fund for either the 6 1/4% Notes or the 7
3/4% Debentures.
CONCERNING THE TRUSTEE
Citibank is an affiliate of Citicorp Securities, Inc. and participates with a
group of banks in a Revolving Credit Agreement with the Company. See also "The
Securities -- The Trustees under the Indentures" in the accompanying
Prospectus. Pursuant to the Trust Indenture Act of 1939, as amended, should a
default occur with respect to the Offered Securities when Citibank has a
conflicting interest as defined under such Act, then Citibank would be required
to resign as trustee under the Indenture within 90 days of such default, unless
such default were cured, duly waived or otherwise eliminated.
BOOK-ENTRY SYSTEM
Each series of Offered Securities will be issued in the form of fully-
registered book-entry Offered Securities which will be deposited with, or on
behalf of, The Depository Trust Company (the "Depositary") and registered in
the name of the Depositary's nominee (each, a "Book-Entry Security"). Except as
set forth below, a Book-Entry Security may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor.
The Depositary has advised the Company and the Underwriters that it is a
limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic book-
entry changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own the Depositary. Access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by the Depositary only
through participants.
Upon the issuance by the Company of the Book-Entry Securities, the Depositary
will credit, on its book-entry registration and transfer system, the respective
principal amounts of the applicable series of Offered Securities represented by
such Book-Entry Securities to the accounts of participants. The accounts to be
credited shall be designated by the applicable Underwriter. Ownership of
beneficial interests in a Book-Entry Security will be limited to participants
or persons that may hold interests through participants. Beneficial interests
in a Book-Entry Security will be shown on, and the transfer thereof will be
effected only through, records maintained by the Depositary (with respect to
beneficial interests of participants) or by participants or persons that may
hold interests through participants (with respect to beneficial interests of
beneficial owners). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in certificated form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Book-Entry Security.
S-5
<PAGE>
For a Book-Entry Security, so long as the Depositary or its nominee is the
registered owner of a Book-Entry Security, the Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Offered
Securities represented by such Book-Entry Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Book-
Entry Security will not be entitled to have Offered Securities represented by
such Book-Entry Security registered in their names, will not receive or be
entitled to receive physical delivery of such Offered Securities in
certificated form and will not be considered the owners or holders thereof
under the Indenture.
Principal, premium, if any, and interest payments in respect of the Offered
Securities which are represented by the Book-Entry Securities will be made by
the Company to the Depositary or its nominee, as the case may be, as the
registered owner of the related Book-Entry Securities. Neither the Company nor
Citibank will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Book-Entry Securities, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. The
Company expects that the Depositary, upon receipt of any payment of principal,
premium, if any, or interest in respect of any series of Book-Entry
Securities, will credit immediately the accounts of the related participants
with payment in amounts proportionate to their respective holdings in
principal amount of beneficial interests in such Book-Entry Securities as
shown on the records of the Depositary. The Company also expects that payments
by participants to owners of beneficial interests in the Book-Entry Securities
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name", and will be the responsibility of such
participants. Payments to the Depositary in respect of the Offered Securities
which are represented by Book-Entry Securities shall be the responsibility of
the Company or Citibank, disbursement of such payments to direct participants
shall be the responsibility of the Depositary and disbursement of such
payments to beneficial owners shall be the responsibility of direct and
indirect participants.
Redemption notices shall be sent to the Depositary's nominee, Cede & Co. If
less than all of either series of Offered Securities are being redeemed, the
Depositary's practice is to determine by lot the amount of the interest of
each direct participant in such series to be redeemed.
Conveyance of notices and other communications by the Depositary to direct
participants, by direct participants to indirect participants and by direct
and indirect participants to beneficial owners are governed by arrangements
among them, subject to statutory or regulatory requirements as may be in
effect from time to time.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue Offered Securities in certificated form in
exchange for each Book-Entry Security. In addition, the Company may at any
time determine not to have Offered Securities represented by the Book-Entry
Securities. In any such instance, owners of beneficial interests in such Book-
Entry Securities will be entitled to physical delivery of Offered Securities
of the same series in certificated form equal in principal amount to such
beneficial interest and to have such Offered Securities registered in its
name. Offered Securities so issued in certificated form will be issued in
denominations of $1,000 or any larger amount that is an integral multiple
thereof and will be issued in registered form only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for each series of Offered Securities will be made by the
Underwriters in immediately available funds. All payments of principal,
premium, if any, and interest in respect of the Offered Securities will be
made by the Company in immediately available funds unless and until
S-6
<PAGE>
the Offered Securities are issued in certificated form, in which event such
payments will be made by the Company in next-day funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the Offered
Securities will trade in the Depositary's Same-Day Funds Settlement System
until maturity or earlier redemption, as the case may be, and secondary market
trading activity in the Offered Securities will therefore be required by the
Depositary to settle in immediately available funds, in each case, until the
Offered Securities are issued in certificated form. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the Offered Securities.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
Basic Provisions and the Terms Agreement dated March 9, 1994 (collectively, the
"Underwriting Agreement"), the Company has agreed to sell to each of the
Underwriters named below (collectively, the "Underwriters"), and each of the
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Citicorp Securities, Inc., Goldman, Sachs & Co. and Lehman Brothers Inc. are
acting as representatives (the "Representatives"), has severally agreed to
purchase from the Company, the principal amount of 6 1/4% Notes and 7 3/4%
Debentures set forth below opposite its name. In the Underwriting Agreement,
the several Underwriters have agreed, subject to the terms and conditions set
forth therein, to purchase all the Offered Securities offered hereby if any of
the Offered Securities are purchased. In the event of a default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased, additional underwriters may be added or the Underwriting Agreement
may be terminated.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT OF 7 3/4%
UNDERWRITER OF 6 1/4% NOTES DEBENTURES
----------- ---------------- ----------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .......................... $ 70,500,000 $105,750,000
Citicorp Securities, Inc. ................... 70,500,000 105,750,000
Goldman, Sachs & Co. ........................ 70,500,000 105,750,000
Lehman Brothers Inc. ........................ 70,500,000 105,750,000
J.P. Morgan Securities Inc. ................. 18,000,000 27,000,000
------------ ------------
Total................................... $300,000,000 $450,000,000
============ ============
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Offered Securities to the public at the respective public offering
prices set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of .35% of the
principal amount of the 6 1/4% Notes or .5% of the principal amount of the 7
3/4% Debentures. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount of the Offered
Securities to certain other dealers. After the initial public offering, the
public offering prices, concessions and discounts may be changed by the
Underwriters.
The Company has agreed to indemnify the Underwriters against or make
contributions relating to certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
S-7
<PAGE>
PROSPECTUS
$950,000,000
MCI COMMUNICATIONS CORPORATION
SENIOR/SUBORDINATED/CONVERTIBLE DEBT SECURITIES
------------
MCI Communications Corporation (the "Company" or "MCI") from time to time may
offer up to $950,000,000 aggregate principal amount (or its equivalent in any
other currency or composite currency) of its senior unsecured debt securities
(the "Senior Securities"), subordinated unsecured debt securities (the
"Subordinated Securities") and/or subordinated unsecured debt securities (the
"Convertible Subordinated Securities") convertible into the common stock, par
value $.10 per share, of the Company (the "Common Stock"), in separate series
in amounts, at prices and on terms to be determined at the time of sale (the
Senior Securities, the Subordinated Securities and the Convertible Subordinated
Securities being herein referred to collectively as the "Securities"). The
Company may sell Securities to one or more underwriters for public offering and
sale by them or may sell Securities to investors directly or through agents.
See "Plan of Distribution."
The terms of the Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations (which may be in United
States dollars, in any other currency or in a composite currency), maturity,
interest rate (which may be fixed or variable) and time of payment of interest,
if any, terms for conversion, if any, terms for redemption, if any, at the
option of the Company or repayment, if any, at the option of the holder, terms
for sinking fund payments and other variable terms of the Securities, if any,
the initial public offering price, the names of, and the principal amounts to
be purchased by, dealers, if any, the compensation of such dealers and the
other terms in connection with the offering and sale of the Securities in
respect of which this Prospectus is being delivered, are set forth in one or
more accompanying Prospectus Supplements (each, a "Prospectus Supplement").
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------
The date of this Prospectus is March 9, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act can be inspected and copied at the public reference facilities
maintained by the Commission at its principal offices at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
MCI's Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30,
1993 and September 30, 1993, Current Reports on Form 8-K dated January 19,
1993, March 3, 1993, March 12, 1993, June 2, 1993, June 11, 1993 (as amended
June 14, 1993) and March 9, 1994, and Notice of Special Meeting and Proxy
Statement dated February 4, 1994, previously filed by MCI with the Commission,
are incorporated by reference in this Prospectus and shall be deemed to be a
part hereof.
Each document filed by MCI with the Commission pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of any offering made by this Prospectus
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing such document.
MCI undertakes to provide without charge to each person to whom a Prospectus
is delivered, upon the written or oral request of any such person, a copy of
any and all of the documents incorporated herein by reference other than
exhibits to such documents. Request for such copies should be directed to the
Secretary, MCI Communications Corporation, 1801 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 (telephone: (202) 872-1600).
THE COMPANY
MCI Communications Corporation, a Delaware corporation organized in 1968, has
its principal executive offices at 1801 Pennsylvania Avenue, N.W., Washington,
D.C. 20006 (202) 872-1600. Unless the context otherwise requires, the "Company"
or "MCI" means MCI Communications Corporation and its subsidiaries. MCI
provides a wide spectrum of domestic and international voice and data
communications services to its customers. It is the second largest nationwide
carrier of long distance telephone services.
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)(a)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
4.12 3.63 3.37 2.22 3.30
</TABLE>
(a) For purposes of this ratio, earnings are calculated by adding fixed
charges (excluding capitalized interest) to income before income taxes and
extraordinary item. Fixed charges consist of interest on indebtedness
(including amortization of debt discount and premium) and the portion of rental
expense representative of an interest factor.
2
<PAGE>
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
added to its general corporate funds and will be used for general corporate
purposes. Until so utilized, the net proceeds will be invested in income
producing securities.
THE SECURITIES
EXPLANATORY STATEMENT
(APPLICABLE TO SENIOR SECURITIES, SUBORDINATED SECURITIES AND CONVERTIBLE
SUBORDINATED SECURITIES)
The Senior Securities are to be issued under an Indenture dated as of
October 15, 1989, as amended by the Trust Indenture Reform Act of 1990 (the
"Senior Indenture"), between the Company and Citibank, N.A., as trustee
("Citibank"), the Subordinated Securities are to be issued under an Indenture
dated as of October 15, 1989, as amended by the Trust Indenture Reform Act of
1990 (the "Subordinated Indenture"), between the Company and Bankers Trust
Company, as trustee ("Bankers Trust"), and the Convertible Subordinated
Securities are to be issued under an Indenture dated as of October 15, 1989,
as amended by the Trust Indenture Reform Act of 1990 (the "Convertible
Indenture"), between the Company and Bankers Trust, as trustee. The forms of
the Senior Indenture, the Subordinated Indenture and the Convertible Indenture
(being sometimes referred to herein collectively as the "Indentures" and,
individually, as an "Indenture") are filed as exhibits to the Registration
Statement relating to the Securities (the "Registration Statement").
The Indentures do not limit the aggregate principal amount of the Securities
which may be issued thereunder and provide that the Securities may be issued
in one or more series up to the aggregate principal amount which may be
authorized from time to time by the Company. The Company may, from time to
time, without the consent of the holders of the Securities, provide for the
issuance of Securities under the Indentures in addition to the $950,000,000
principal amount of Securities available for issuance as of the date of this
Prospectus.
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the holders
of the Securities, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization or otherwise will be subject to the
prior claims of the subsidiary's creditors, except to the extent that claims
of the Company itself as a creditor of the subsidiary may be recognized. Also,
certain subsidiaries of the Company have guaranteed certain indebtedness of
the Company, not including the Securities.
The Indentures do not limit the amount of unsecured indebtedness of the
Company or any subsidiary, the payment of dividends by the Company or its
acquisition of any of its equity securities. Nothing in the Indentures or in
the terms of the Securities will prohibit the issuance of securities
representing subordinated indebtedness that is senior or junior to the
Subordinated Securities or the Convertible Subordinated Securities. Nothing in
the Indentures affords holders of Securities protection in the event of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving the Company. However, the Senior Indenture does contain
certain restrictive covenants with respect to the business of the Company and
its subsidiaries, and liens on and the sale or lease of the Company's assets
which may make more difficult or discourage any such transaction. The
consummation of any highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company could cause
a material decline in the credit quality of the outstanding Securities. See
"Description of Senior Securities--Covenants."
The particular terms of each series of Securities, as well as any
modifications or additions to the general terms of the Senior Securities, the
Subordinated Securities or the Convertible Subordinated Securities, as
described herein, which may be applicable in the case of a particular series
of
3
<PAGE>
Securities, are described in a Prospectus Supplement relating to such series of
Securities which will be filed with the Commission. Accordingly, for a
description of the terms of a particular series of Securities, reference must
be made to both the Prospectus Supplement relating thereto and to the
description of Senior Securities, Subordinated Securities or Convertible
Subordinated Securities, as appropriate, set forth in this Prospectus.
BEARER SECURITIES
The Company also may offer from time to time Securities in bearer form
("Bearer Securities") outside the United States at varying prices and terms.
Such offerings of Bearer Securities may be separate from, or simultaneous with,
offerings of registered Securities in the United States. The Bearer Securities
are not offered by this Prospectus and may not be purchased by U.S. persons
other than foreign branches of certain U.S. financial institutions. For
purposes of this Prospectus, "U.S. person" means a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust which is subject to United States
income taxation regardless of its source of income.
CERTAIN DEFINITIONS
"Contingent Obligation" means, with respect to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item,
level of income or financial condition of the primary obligor or (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the Company in good faith.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Discount Security" means any Security that is issued with "original issue
discount" within the meaning of Section 1273(a) of the Internal Revenue Code of
1986 and the regulations thereunder and any other Security designated by the
Company as issued with original issue discount for United States federal income
tax purposes.
"Indebtedness" means, with respect to any Person, (a) all obligations of such
Person for borrowed money (including, without limitation, reimbursement and all
other obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured); (b) all obligations evidenced by notes,
bonds, debentures or similar instruments; (c) all obligations to pay for the
deferred purchase price of property or services except trade accounts payable
and accrued liabilities arising in the ordinary course of business; (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller under such agreement in the event
of default are limited to repossession or sale of such property); (e) all
obligations under leases which
4
<PAGE>
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases; and (f) all indebtedness secured by any
Lien on any property or asset owned or held by that Person regardless of
whether the Indebtedness secured thereby shall have been assumed by that Person
or is non-recourse to the credit of that Person.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or segregated deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever including, without limitation,
those created by, arising under or evidenced by any conditional sale or other
title retention agreement or the filing of any financing statement naming the
owner of the asset to which such Lien shall relate as debtor (other than in
connection with a transaction in which such asset shall have been leased by the
named debtor) under the Uniform Commercial Code or comparable law of any
jurisdiction.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Stated Maturity," when used with respect to any Security or any installment
of principal (including any sinking fund payment) thereof or premium thereon or
interest thereon, means the date specified in such Security or Coupon, if any,
representing such installment of interest, as the date on which the principal
of such Security or such installment of principal, premium or interest is due
and payable.
"Subsidiary," in connection with the covenants set forth below under
"Description of Senior Securities--Covenants," means, with respect to any
Person, (i) a corporation of which shares of stock having ordinary voting power
(other than stock having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person and (ii) any partnership of which such Person or any Subsidiary
is a general partner or any partnership more than 50% of the equity interests
of which are owned, directly or indirectly, by such Person or by one or more
other Subsidiaries, or by such Person and one or more other Subsidiaries.
"Total Consolidated Assets" means all assets of the Company and its
Subsidiaries which may properly be classified as assets in accordance with
generally accepted accounting principles, after eliminating all intercompany
items.
EVENTS OF DEFAULT; RIGHTS UPON DEFAULT
An "Event of Default" is defined in the Indentures to mean failure to pay
interest when due for 30 days; failure to pay principal or premium, if any,
when due; failure to make any sinking fund installment when due; failure on
MCI's part to observe any of its other covenants under the Indentures (other
than certain covenants solely for the benefit of holders of a different series
of Securities) for a period of 90 days after notice (from the appropriate
Trustee or holders of at least 25% in aggregate principal amount of the
outstanding Securities of a series); and certain events of bankruptcy or
reorganization of MCI. In addition, an "Event of Default" under the Senior
Indenture occurs with respect to a series of Senior Securities when an event of
default in respect of any Indebtedness or Contingent Obligation under which the
Company or any of its subsidiaries has at the date of such event of default
outstanding at least $25,000,000, or the equivalent in another currency or
currencies, aggregate principal amount of indebtedness for borrowed money,
shall happen and be continuing and such Indebtedness or Contingent Obligation
shall, as a result thereof, have been accelerated so that the same shall be or
become due and payable prior to the date on
5
<PAGE>
which the same would otherwise have become due and payable, and such
acceleration shall not be rescinded or annulled within 30 days after notice of
such acceleration shall have been given to the Company by the Trustee under the
Senior Indenture (if such event be known to it), or to the Company and the
Trustee under the Senior Indenture by the holders of at least 25% in aggregate
principal amount of the Outstanding Securities of such series; provided,
however, that if such event of default in respect of any Indebtedness or
Contingent Obligation shall be remedied or cured by the Company or waived by
the holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation, then, unless the Securities of such series shall have
been accelerated as provided in this provision, the Event of Default under this
provision by reason of such provision shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee under the Senior Indenture or any holders of the Securities
of such series.
If an Event of Default with respect to Securities of any series at the time
outstanding occurs and is continuing, either the appropriate Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series, by notice as provided in the appropriate Indenture,
may declare the principal amount (or, if the Securities of that series are
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of and all accrued but unpaid interest on all the
Securities of that series to be due and payable immediately. At any time after
a declaration of acceleration with respect to Securities of any series has been
made, but before a judgment or decree for payment of money has been obtained by
the appropriate Trustee, the holders of a majority in aggregate principal
amount of the outstanding Securities of that series may, under certain
circumstances, rescind and annul such acceleration.
The Indentures provide that the appropriate Trustee shall, within 90 days
after the occurrence of a default, give to the holders of Securities notice of
all uncured defaults known to it; provided that, except in the case of default
in the payment of the principal of, premium, if any, or interest on any of the
Securities or in the payment of any sinking fund installment, the appropriate
Trustee shall be protected in withholding such notice if in good faith it
determines that the withholding of such notice is in the interest of the
holders of Securities.
MCI is required, pursuant to the terms of the Indentures and applicable law,
to furnish each Trustee within 120 days after the close of each fiscal year a
written statement of certain of MCI's officers to the effect that they have
reviewed MCI's activities and its performance under the Senior Indenture, the
Subordinated Indenture or the Convertible Indenture, as the case may be, and
that, to the best of their knowledge, MCI has fulfilled all its obligations
under such Indenture (or, if it has not, specifying the nature and status of
such default).
In case an Event of Default shall occur (which shall not have been cured or
waived), the appropriate Trustee will be required to exercise its rights and
powers under the appropriate Indenture and use in such exercise the degree of
care and skill of a prudent man under the circumstances in the conduct of his
own affairs. Subject to such provisions, such Trustee will be under no
obligation to exercise any of its rights or powers under such Indenture at the
request of any of the holders of Securities, unless they shall have offered to
the Trustee reasonable security or indemnity. Except as specifically provided
in the Indentures, nothing therein relieves a Trustee thereunder from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct.
MODIFICATION OF THE INDENTURES
Modifications and amendments of each of the Indentures may be made by the
Company and the appropriate Trustee with the consent of the holders of a
majority in principal amount of the outstanding Securities of each series
affected by such modification or amendment; provided,
6
<PAGE>
however, that no such modification or amendment may, without the consent of the
holder of each outstanding Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment or principal of or interest on
or sinking fund payment on any Security, (b) reduce the principal amount of, or
premium or interest on any Security, or (c) reduce the percentage in principal
amount of outstanding Securities of any series, the consent of whose holders is
required for modification or amendment of an Indenture. In addition, no
modification or amendment of the Convertible Indenture may, without the consent
of the holder of each Convertible Subordinated Security affected thereby,
adversely affect the terms of conversion of the Convertible Subordinated
Securities and no modification or amendment of the Subordinated Indenture or
the Convertible Indenture may, without the written consent of each holder of
Senior Indebtedness (as defined in each such Indenture as set forth below),
modify, directly or indirectly, the subordination provisions therein or the
definition of Senior Indebtedness in any manner that might alter or impair the
subordination of the Subordinated Securities (and any Coupons appertaining
thereto) or the Convertible Subordinated Securities.
No modification or amendment of the Senior Indenture or the Subordinated
Indenture may, without the consent of the holder of each outstanding Security
affected thereby, (a) change the Stated Maturity of or reduce the amount of any
payment to be made with respect to a Coupon, (b) change any obligation of the
Company to pay additional interest contemplated by the Indentures, (c) reduce
the amount of principal of a Discount Security payable upon acceleration of the
maturity thereof, (d) change the currency in which any Security or any premium
or interest thereon is denominated or payable, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Security after the Stated Maturity or date of redemption, (f) reduce the
percentage in principal amount of outstanding Securities of any series, the
consent of whose holders is required for waiver of compliance with certain
provisions of any such Indentures or for waiver of certain defaults, (g) limit
any obligation of the Company to maintain a paying agency outside the United
States for payment on Bearer Securities, (h) limit the obligation of the
Company to redeem certain Bearer Securities or Coupons the beneficial owners of
which are required by United States law to disclose their nationality,
residence or identity, or (i) modify any of the provisions set forth in this
paragraph or in the preceding paragraph and regarding the waiver of past
defaults except to increase any such percentage.
The holders of not less than a majority in principal amount of the
outstanding Securities of each series may, on behalf of all holders of
Securities of that series and any Coupons appertaining thereto, waive any past
default under the appropriate Indenture with respect to Securities of that
series, except a default (a) in the payment of principal of, any premium on or
any interest on any Security of such series or in the payment of a related
Coupon or (b) in respect of a covenant or provision of such Indenture which
cannot be modified or amended without the consent of the holder of each
outstanding Security of such series affected.
The Indentures will provide that in determining whether the holders of the
requisite principal amount of the outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
(i) the principal amount of any Discount Security deemed to be outstanding will
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon acceleration of the maturity thereof, and (ii)
the principal amount of a Security denominated in other than U.S. dollars will
be the U.S. dollar equivalent, determined on the date of original issuance of
such Security, of the principal amount of such Security.
A meeting may be called at any time by the appropriate Trustee, or upon the
request of the Company or the holders of at least 10% in principal amount of
the outstanding Securities of a series, in any such case upon notice given in
accordance with the appropriate Indenture. Except as limited by the proviso in
the fourth preceding paragraph and by the third preceding paragraph, any
7
<PAGE>
resolution presented at a meeting may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Securities of that
series; provided, however, that, except as limited by the proviso in the fourth
preceding paragraph and by the third preceding paragraph, any resolution with
respect to any demand, consent, waiver or other action that may be made, given
or taken by the holders of a specified percentage, which is more or less than a
majority, in principal amount of outstanding Securities of a series may be
adopted at a meeting by the affirmative vote of the holders of at least such
specified percentage in principal amount of the outstanding Securities of that
series.
LIMITATIONS ON CONSOLIDATION, MERGER AND SALE OF ASSETS
MCI may not consolidate with or merge into any other corporation, or convey,
transfer or lease its properties and assets substantially as an entirety to,
any Person, unless (a) the successor entity is a corporation organized and
existing under the laws of the United States of America or any political
subdivision or State thereof and expressly assumes MCI's obligations on all the
Securities and Coupons relating thereto and under the Indentures; and (b) after
giving effect to such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, would
occur and be continuing.
THE TRUSTEES UNDER THE INDENTURES
Citibank participates with a group of banks in a Revolving Credit Agreement
with the Company. As of December 31, 1993, Citibank had no loans outstanding to
MCI under this facility. Citibank also serves as issuing and paying agent under
MCI's Commercial Paper Program. In addition, MCI maintains depository accounts
with Citibank.
Bankers Trust has entered into various interest rate swap agreements with MCI
involving an aggregate principal amount of approximately $10 million as of
December 31, 1993 and has been a dealer in connection with certain short-term
investments made by MCI.
Both Citibank and Bankers Trust are customers of MCI. In addition, Citicorp,
the parent of Citibank, is among MCI's largest customers by revenue.
8
<PAGE>
DESCRIPTION OF SENIOR SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT ON PAGE 3 OF THIS PROSPECTUS
The Senior Securities are to be issued under the Senior Indenture. The
following description of the Senior Indenture and summaries of certain
provisions thereof do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the Senior
Indenture, including the definitions therein of certain terms. Wherever
particular sections of, or terms defined in, the Senior Indenture are referred
to, such sections or defined terms are incorporated herein by reference.
GENERAL
The Senior Indenture provides that there may be more than one trustee under
the Senior Indenture, each with respect to one or more different series of
Senior Securities. In the event that there is more than one trustee under the
Senior Indenture, the powers and trust obligations of each trustee as described
herein shall extend only to the one or more series of Senior Securities for
which it is trustee. The effect of the provisions contemplating that at a
particular time there might be more than one trustee acting is that, in that
event, those Senior Securities (whether of one or more than one series) for
which each trustee is acting would be treated as if issued under a separate
indenture.
The Senior Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and premium, if any, and interest, if any, for each series of
Senior Securities will be payable, and the Senior Securities will be
exchangeable and transfers thereof will be registrable, at the office of
Citibank at 111 Wall Street, Fifth Floor, New York, New York 10043, provided
that, unless other arrangements are made, payments of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
Security Register.
COVENANTS
Maintenance of Telecommunications Business. MCI shall maintain the business
of providing telecommunications services as a principal business of the Company
and its Subsidiaries.
Limitation on Liens. From and after the date of the first issuance of
Securities under the Senior Indenture, MCI may not, nor may it permit any of
its Subsidiaries to, directly or indirectly, make, create, incur or assume any
Lien upon or with respect to any part of its property or assets, whether owned
as of such date or thereafter acquired, unless the Senior Securities then
outstanding shall be equally and ratably secured with any other obligation or
indebtedness so secured, except for any of the following: (a) any Lien existing
on the date of the first issuance of Securities under the Senior Indenture
securing Indebtedness outstanding on such date; (b) Liens for taxes,
assessments or other governmental charges which are not delinquent or remain
payable without material penalty, or the validity of which is contested in good
faith by appropriate proceedings (to the extent that it would be appropriate to
contest the levy or imposition of such tax as an alternative to payment) upon
stay of execution or the enforcement thereof and for which adequate reserves or
other appropriate provision has been made in accordance with generally accepted
accounting principles; (c) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not material or, if material, are not delinquent
or remain payable without penalty or which are being contested in good faith
and by appropriate proceedings; (d) pledges or deposits in connection with
workmen's
9
<PAGE>
compensation, unemployment insurance and other social security legislation; (e)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (f) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount, and do not materially detract from
the overall value to the Company and its Subsidiaries of all property and assets
of the Company and its Subsidiaries subject to such Liens or interfere with the
ordinary conduct of the business of the Company and its Subsidiaries; (g) Liens
on assets which shall be acquired by MCI either directly or through the
acquisition of the owner of such assets after the date of the first issuance of
Securities under the Senior Indenture, if such Liens shall have existed at the
time the assets or the owner of such assets were acquired and shall not have
been created in anticipation thereof by or with the agreement of MCI; (h) Liens
on assets acquired or constructed by MCI or a Subsidiary to secure the purchase
price of such assets (or to secure indebtedness for money borrowed or incurred
prior to or within 12 months after the acquisition or construction of any such
assets to be subject to such Lien for the purpose of such acquisition or
construction), and any conditional sales agreement or other title retention
agreement with respect to any assets acquired after the date of the first
issuance of Securities under the Senior Indenture; provided, however, that the
aggregate principal amount of the Indebtedness secured by all such Liens on any
particular asset shall not exceed the then fair market value of such asset,
including the improvements thereon, and provided further, that any such Lien
does not extend to other assets owned prior to such acquisition or construction
or to assets thereafter acquired or constructed; (i) Liens on any assets (in
addition to Liens otherwise permitted by this paragraph), securing Indebtedness
in an aggregate principal amount at any time outstanding not exceeding 5% of
Total Consolidated Assets as at the end of the immediately preceding fiscal
quarter, minus the then outstanding aggregate principal amount of lease
obligations incurred, created or assumed in accordance with the sale-lease backs
permitted under clause (c) (i) of the next succeeding paragraph; (j) Liens on
securities arising from repurchase or reverse repurchase agreements; (k)
refundings, replacements or extensions of any permitted Liens not exceeding the
principal amount of Indebtedness so refunded or extended at the time of such
refunding or extension and covering the same property theretofore securing the
same; and (l) other Liens (i) consisting of attachments or involuntary Liens or
(ii) not pertaining to the telecommunication system of the Company and its
Subsidiaries; provided, that the obligations secured by such Liens shall not
exceed $20 million in any individual case or $100 million in the aggregate at
any time.
Limitation on Sales and Leases of Assets. From and after the date of the
first issuance of Securities under the Senior Indenture, MCI may not, nor may
it permit any of its Subsidiaries to, directly or indirectly, sell, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) all or a material part of the assets, business or property of MCI
and its Subsidiaries taken as a whole, whether owned as of such date or
thereafter acquired, or enter into any agreement to do any of the foregoing,
except any of the following: (a) dispositions by MCI or any Subsidiary of
obsolete or worn-out property or real property no longer used or useful in its
business; (b) sales to local exchange carriers, with or without recourse, of
customer receivables in the ordinary course of business; (c) the sale and
leaseback by the Company or any of its Subsidiaries of any asset, after the
date of the first issuance of Securities under the Senior Indenture (i) under
arrangements providing for lease obligations in an aggregate principal amount
at any time outstanding not exceeding 5% of Total Consolidated Assets as at the
end of the immediately preceding fiscal quarter, minus the aggregate principal
amount of Indebtedness secured by Liens under clause (i) in the immediately
preceding paragraph, (ii) if the commitment by or on behalf of the purchaser
with respect to such sale and leaseback is obtained not later than 180 days
after the later of (A) the completion of the acquisition, substantial repair or
alteration, construction, development or substantial improvement of such asset
or (B) the placing in operation of such asset or of such asset
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as so substantially repaired or altered, constructed, developed or
substantially improved, or (iii) if MCI shall apply or cause to be applied, in
the case of a sale or transfer for cash, an amount equal to the net proceeds
thereof (but not in excess of the net book value of such property at the date
of such sale or transfer) and, in the case of a sale or transfer otherwise than
for cash, an amount equal to the fair value (as determined by the Board of
Directors of MCI) of the property so leased, to the retirement, within 180 days
after the effective date of such sale and leaseback transaction, of Senior
Securities or other unsubordinated Indebtedness of MCI or a Subsidiary; (d) the
leasing by a Subsidiary organized after the date of the Senior Indenture for
the principal purpose of engaging in financing transactions (including leasing
transactions) related to telecommunications equipment to third parties of
equipment not comprising part of the communications system of the Company and
its Subsidiaries; (e) dispositions of assets acquired, either directly or
through the acquisition of the owner of such assets, after the date of the
first issuance of Securities under the Senior Indenture, provided, that (i) in
the case of any individual acquisition the assets disposed of shall not
comprise more than 33% of the total assets acquired, and (ii) each such
disposition shall be for fair and adequate consideration; (f) sales of accounts
receivable without recourse; and (g) dispositions by any Subsidiary of all or a
material part of its assets, business or property to the Company or any other
Subsidiary, if immediately after giving effect thereto no Event of Default
under the Senior Indenture would exist.
DESCRIPTION OF SUBORDINATED SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT
ON PAGE 3 OF THIS PROSPECTUS
The Subordinated Securities are to be issued under the Subordinated Indenture.
The following description of the Subordinated Indenture and summaries of certain
provisions thereof do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the Subordinated
Indenture, including the definitions therein of certain terms. Wherever
particular sections of, or terms defined in, the Subordinated Indenture are
referred to, such sections or defined terms are incorporated herein by
reference.
GENERAL
The Subordinated Indenture provides that there may be more than one trustee
under the Subordinated Indenture, each with respect to one or more different
series of Subordinated Securities. In the event that there is more than one
trustee under the Subordinated Indenture, the powers and trust obligations of
each trustee as described herein shall extend only to the one or more series of
Subordinated Securities for which it is trustee. The effect of the provisions
contemplating that at a particular time there might be more than one trustee
acting is that, in that event, those Subordinated Securities (whether of one or
more than one series) for which each trustee is acting would be treated as if
issued under a separate indenture.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of, premium, if any, and interest, if any, for each series of
Subordinated Securities will be payable, and the Subordinated Securities will
be exchangeable and transfers thereof will be registrable, at the office of
Bankers Trust at Four Albany Street, New York, New York 10015, provided that,
unless other arrangements are made, payments of interest may be made by check
mailed to the address of the person entitled thereto as it appears in the
Security Register.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Subordinated Securities will be subordinated in right of payment, as set forth
in the Subordinated Indenture, to the prior
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payment in full of all Senior Indebtedness of MCI, whether outstanding on the
date of the Subordinated Indenture or thereafter incurred. Senior Indebtedness
is defined in the Subordinated Indenture as any liability or obligation of MCI
(whether incurred directly by MCI, by assumption or otherwise) (i) for money
borrowed (except as indicated below), or (ii) arising under a lease of
property, equipment or other assets which, pursuant to generally accepted
accounting principles then in effect, is classified upon the balance sheet of
MCI or any subsidiary of MCI as a liability of MCI or such subsidiary, or (iii)
arising under an express written guaranty by MCI of the liability or obligation
of another (including any subsidiary of MCI) of the type described in clauses
(i) or (ii) above, or (iv) arising under an express written guaranty by MCI of
the liability or obligation of another (including any subsidiary of MCI), where
the liability or obligation of MCI is, by the express terms of the guaranty,
superior in right to the payment of the Subordinated Securities, or (v)
created, incurred or assumed by MCI in connection with the acquisition of any
other business, where, but only if, the liability or obligation of MCI is, by
the express terms of the agreement or instrument creating or evidencing such
liability or obligation of MCI, superior in right of payment to the
Subordinated Securities, unless, in each such case, it is provided in the
agreement or instrument creating or evidencing such liability or obligation of
MCI or pursuant to which such liability or obligation is outstanding, that such
liability or obligation is not superior in right of payment to the Subordinated
Securities. MCI's 10% Subordinated Debentures due April 1, 2011 and any
Convertible Subordinated Securities issued under the Convertible Indenture do
not constitute Senior Indebtedness with respect to the Subordinated Securities
and will rank on a parity with the Subordinated Securities in right of payment.
By reason of the subordination described above, in the event of insolvency,
creditors of MCI who are not holders of Senior Indebtedness or of the
Subordinated Securities may recover less, ratably, than holders of Senior
Indebtedness, and may recover more, ratably, than the holders of the
Subordinated Securities.
As of December 31, 1993, the aggregate amount of Senior Indebtedness (as so
defined) was approximately $2,581 million. Any amounts thereafter borrowed
under MCI's revolving credit agreements or issued under the Senior Indenture
would also constitute Senior Indebtedness. See also "The Securities--
Explanatory Statement".
DESCRIPTION OF CONVERTIBLE SUBORDINATED SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT
ON PAGE 3 OF THIS PROSPECTUS
The Convertible Subordinated Securities are to be issued under the
Convertible Indenture. The following description of the Convertible Indenture
and summaries of certain provisions thereof do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all
provisions of the Convertible Indenture, including the definitions therein of
certain terms. Wherever particular sections of, or terms defined in, the
Convertible Indenture are referred to, such sections or defined terms are
incorporated herein by reference.
GENERAL
The Convertible Indenture provides that there may be more than one trustee
under the Convertible Indenture, each with respect to one or more different
series of Convertible Subordinated Securities. In the event that there is more
than one trustee under the Convertible Indenture, the powers and trust
obligations of each trustee as described herein shall extend only to the one or
more series of Convertible Subordinated Securities for which it is trustee. The
effect of
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the provisions contemplating that at a particular time there might be more than
one trustee acting is that, in that event, those Convertible Subordinated
Securities (whether of one or more than one series) for which each trustee is
acting would be treated as if issued under a separate indenture.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of, premium, if any, and interest, if any, for each series of
Convertible Subordinated Securities will be payable, and the Convertible
Subordinated Securities will be exchangeable, transfers thereof will be
registrable and may be presented for conversion, at the office of Bankers Trust
at Four Albany Street, New York, New York 10015, provided that, unless other
arrangements are made, payments of interest may be made by check mailed to the
address of the person entitled thereto as it appears in the Security Register.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Convertible Subordinated Securities will be subordinated in right of payment,
as set forth in the Convertible Indenture, to the prior payment in full of all
Senior Indebtedness of MCI, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred. Senior Indebtedness is defined in the
Convertible Indenture as any liability or obligation of MCI (whether incurred
directly by MCI, by assumption or otherwise) (i) for money borrowed (except as
indicated below), or (ii) arising under a lease of property, equipment or other
assets which, pursuant to generally accepted accounting principles then in
effect, is classified upon the balance sheet of MCI or any subsidiary of MCI as
a liability of MCI or such subsidiary, or (iii) arising under an express
written guaranty by MCI of the liability or obligation of another (including
any subsidiary of MCI) of the type described in clauses (i) or (ii) above, or
(iv) arising under an express written guaranty by MCI of the liability or
obligation of another (including any subsidiary of MCI), where the liability or
obligation of MCI is, by the express terms of the guaranty, superior in right
to the payment of the Convertible Subordinated Securities, or (v) created,
incurred or assumed by MCI in connection with the acquisition of any other
business, where, but only if, the liability or obligation of MCI is, by the
express terms of the agreement or instrument creating or evidencing such
liability or obligation of MCI, superior in right of payment to the Convertible
Subordinated Securities, unless, in each such case, it is provided in the
agreement or instrument creating or evidencing such liability or obligation of
MCI or pursuant to which such liability or obligation is outstanding, that such
liability or obligation is not superior in right of payment to any Convertible
Subordinated Securities. Any Subordinated Securities issued under the
Subordinated Indenture do not constitute Senior Indebtedness with respect to
the Convertible Subordinated Securities and will rank on a parity with the
Convertible Subordinated Securities in right of payment.
By reason of the subordination described above, in the event of insolvency,
creditors of MCI who are not holders of Senior Indebtedness or of the
Convertible Subordinated Securities may recover less, ratably, than holders of
Senior Indebtedness, and may recover more, ratably, than the holders of the
Convertible Subordinated Securities.
As of December 31, 1993, the aggregate amount of Senior Indebtedness (as so
defined) was approximately $2,581 million. Any amounts thereafter borrowed
under MCI's revolving credit agreements or issued under the Senior Indenture
would also constitute Senior Indebtedness. See "The Securities--Explanatory
Statement".
CONVERSION
If any Convertible Subordinated Security is to be issued, certain terms and
provisions with respect thereto will be set forth in a Convertible Subordinated
Security Prospectus Supplement (a
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"Convertible Prospectus Supplement"). To the extent that the description set
forth herein is inconsistent with such terms and provisions, such terms and
provisions shall govern with respect to any Convertible Subordinated Security.
Except as set forth in the applicable Convertible Prospectus Supplement, the
holders of Convertible Subordinated Securities will be entitled at any time on
or prior to the close of business on the date set forth in the applicable
Convertible Prospectus Supplement, subject to prior redemption, to convert such
Convertible Subordinated Securities or portions thereof (which are $1,000 or
integral multiples thereof) into Common Stock of the Company at the conversion
price set forth on the cover page of such Convertible Prospectus Supplement. No
adjustment will be made on conversion of any Debenture for interest accrued
thereon or for dividends on any Common Stock issued. If any Convertible
Subordinated Security is converted between a record date for the payment of
interest and the next succeeding interest payment date, such Convertible
Subordinated Security must be accompanied by funds equal to the interest
payable to the registered holder on such interest payment date on the principal
amount so converted. The Company is not required to issue fractional interests
in Common Stock upon conversion of Convertible Subordinated Securities and, in
lieu thereof, will pay a cash adjustment based upon the market price of the
Common Stock on the last business day prior to the date of conversion. In the
case of Convertible Subordinated Securities called for redemption, conversion
rights will expire at the close of business on the redemption date.
Also except as set forth in the applicable Convertible Prospectus Supplement,
the conversion price is subject to adjustment as set forth in the Convertible
Indenture in certain events, including the issuance of dividends on the
Company's Common Stock payable in its Common Stock; subdivisions, combinations
and certain reclassifications of the Common Stock; certain consolidations,
mergers and sales of the property of the Company; the issuance to all holders of
Common Stock of certain rights or warrants entitling them to subscribe for
Common Stock at less than the then current market price (as defined) of the
Common Stock; and the distribution to all holders of Common Stock of evidences
of indebtedness or of securities of the Company or of assets (other than cash
dividends or cash distributions payable out of consolidated net earnings or
retained earnings). No adjustment in the conversion price will be required
unless such adjustment would require a change of at least 1% in the price then
in effect; provided however, that any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment. Except as stated above, the conversion price will not be
adjusted for the issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock, or carrying the right to purchase any of the
foregoing, in exchange for cash, property or services. The Convertible Indenture
will provide that in case of the reclassification or change in the outstanding
shares of Common Stock, or the consolidation or merger of the Company with or
into another corporation which is effected in such a way that holders of Common
Stock are entitled to receive stock, securities or property (including cash)
with respect to or in exchange for Common Stock, or the sale or conveyance of
its property as an entirety or substantially as an entirety to another
corporation, a supplemental indenture shall be executed providing that the
holder of a Convertible Subordinated Security shall have the right to convert
such Convertible Subordinated Security into the kind and amount of shares, of
stock or other securities or property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock which would have been issuable upon
conversion of such Convertible Subordinated Security immediately prior thereto.
Except as set forth in the applicable Convertible Prospectus Supplement, any
Convertible Subordinated Securities called for redemption, unless surrendered
for conversion on or before the close of business on the redemption date, are
subject to being purchased from the holder of such Convertible Subordinated
Securities at the redemption price by one or more broker-dealers or
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other purchasers who may agree with the Company to purchase such Convertible
Subordinated Securities and convert them into Common Stock of the Company.
In the event of a taxable distribution to holders of Common Stock which
results in an adjustment of the conversion price, the holders of the
Convertible Subordinated Securities may, in certain circumstances, be deemed to
have received a distribution subject to Federal income tax as a dividend. See
the Prospectus Supplement or Supplements relating to such Securities.
DESCRIPTION OF CAPITAL STOCK
MCI has authority to issue 800 million shares of Common Stock and 20 million
shares of Preferred Stock, par value $.10 per share ("Preferred Stock"). At
December 31, 1993, there were 541 million shares of Common Stock outstanding
(net of treasury shares), 65.2 million shares of Common Stock contingently
issuable upon the exercise of options and approximately 14,000 shares of
Preferred Stock outstanding. The Preferred Stock is convertible into
approximately 27.4 million shares of a new class of common stock of MCI, which,
upon the occurrence of certain events, is convertible into an equal number of
shares of Common Stock. The board of directors of MCI has authority (without
action by its stockholders) to issue the authorized and unissued Preferred
Stock in one or more series and, within certain limitations, to determine the
voting rights, preferences as to dividends and in liquidation, conversion and
other rights of each such series.
DIVIDEND RIGHTS. Dividends may be paid on the Common Stock out of funds
legally available therefor when, as and if declared by MCI's board of
directors. In May 1993, the board of directors authorized a two-for-one stock
split in the form of a 100% stock dividend. Since May 1990, the board of
directors has declared semi-annual cash dividends (adjusted for the effect of
the two-for-one stock split) of $.025 per share of Common Stock.
VOTING RIGHTS. On all propositions except the election of directors, each
stockholder may cast one vote for each share of Common Stock entitled to vote
except as described below.
The board of directors of MCI is divided into three classes, each class as
nearly equal in number to the other classes as the then total number of
directors permits. On the date of this Prospectus, the board of directors
consists of one class of three directors and two classes of four directors
each. The members of each class of directors are elected for three-year terms
by the holders of Common Stock. In voting upon the election of directors,
voting is cumulative. Each stockholder has the right to cast as many votes in
the aggregate as equals the number of votes to which that stockholder is
entitled on other matters multiplied by the number of directors to be elected.
Each stockholder may cast the whole number of votes for one candidate or may
distribute votes among the candidates, as he or she chooses. The voting
restrictions upon substantial stockholders described below also apply to the
number of votes which may be cast in voting for directors.
MCI's Certificate of Incorporation requires the written request of the
holders of not less than two-thirds of the outstanding shares to call a special
meeting of stockholders and the affirmative vote of not less than four-fifths
of the outstanding shares (a) to make, alter or repeal by-laws by stockholder
action; or (b) to effect any changes in the provisions of the Certificate of
Incorporation relating to (i) cumulative voting; (ii) the making, altering or
repealing of by-laws by stockholder action, and (iii) the calling of special
meetings by stockholders. In addition, MCI's by-laws require that notice of any
proposed nominations for election of directors (other than by the board itself)
be given to MCI not less than 60 days prior to the anniversary of the last
meeting at which directors were elected.
MCI's Certificate of Incorporation also provides that (a) certain business
combinations and other significant transactions involving MCI and any
beneficial owner of more than 15% of the
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outstanding voting shares of MCI must be approved by at least 80% of all votes
entitled to be cast thereon, including a majority of all votes entitled to be
cast in respect of shares not held by any such beneficial owner, unless
approved by MCI's board of directors in the manner provided in the Certificate
of Incorporation; and (b) if and so long as a beneficial owner of more than 10%
of MCI's outstanding voting shares does not consummate a tender offer for any
and all outstanding Common Stock conforming to certain requirements as to price
and other terms, the holder(s) of voting shares of MCI beneficially owned by
such beneficial owner in excess of 10% of the outstanding shares of any class
or series of MCI capital stock shall only be entitled to one hundredth (1/100)
of one vote for each share in excess of 10% of such class or series and that
under such circumstances such holder(s) may not cast more than 15% of all votes
entitled to be cast on any matter by all holders of shares of any class or
series of stock. Certain of the voting rights described in this paragraph may
change in the event certain proposed amendments to MCI's Certificate of
Incorporation are approved at a special meeting of stockholders to be held
March 11, 1994. For further information about these amendments, see MCI's
Notice of Special Meeting and Proxy Statement dated February 4, 1994
incorporated herein by reference.
LIQUIDATION RIGHTS AND OTHER PROVISIONS. After distribution in full of the
preferential amount to be distributed to the holders of any outstanding
Preferred Stock upon any voluntary or involuntary liquidation, dissolution or
winding-up of MCI, the holders of Common Stock are entitled to receive pro
rata, on a share-for-shares basis, the remaining assets of MCI available for
distribution.
The Common Stock is not redeemable and has no preemptive or conversion
rights, and there are no sinking fund provisions therefor. All outstanding
shares of Common Stock are, and the shares of Common Stock issuable upon
conversion of the Convertible Subordinated Securities will be, when issued
pursuant to the terms of the Convertible Indenture, fully paid and not liable
for further calls or assessments.
For a full description of the existing provisions of the Capital Stock,
reference is made to the complete Certificate of Incorporation and by-laws of
MCI which have been filed with the Commission as exhibits to the Registration
Statement of which this Prospectus is a part. The foregoing brief description
of the Capital Stock is qualified in its entirety by such reference.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain United States federal income
tax consequences of the ownership and disposition of the Securities. The
discussion only addresses the tax consequences to persons who hold the
Securities as capital assets and does not deal with special classes of holders,
such as dealers in securities, financial institutions, insurance companies,
tax-exempt organizations or persons holding Securities as a hedge against
currency risks. In addition, the discussion does not address the tax
consequences of the ownership and disposition of any specific series of
Securities, which consequences may be affected by the particular terms of such
series of Securities, and may require additional discussion in a prospectus
supplement relating to such series of Securities. In particular, the discussion
does not address the tax consequences of Securities that are denominated in, or
indexed to, currencies other than the United States dollar or Securities that
are convertible into Common Stock of the Company. In all cases, persons
considering the purchase of Securities should consult their own tax advisors
concerning the application of United States federal income tax laws to their
particular situations as well as any consequences arising under the laws of any
other taxing jurisdiction.
UNITED STATES HOLDERS
A United States Holder is a holder that is a citizen or resident of the
United States, a corporation or partnership created or organized in or under
the laws of the United States or any political
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subdivision thereof or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source. As used herein,
the term "Non-United States Holder" means a holder that is not a United States
Holder.
Payments of Interest. Interest on a Security (other than interest included in
the stated redemption price at maturity of a Discount Security, described
below) will be taxable to a United States Holder as ordinary interest income at
the time it is accrued or is paid in accordance with the United States Holder's
method of accounting for tax purposes.
Original Issue Discount Securities. The following summary is a general
discussion of the United States federal income tax consequences to United
States Holders of Securities issued at an original issue discount ("Discount
Securities"). Final Treasury regulations dealing with original issue discount
have been issued. The regulations are generally effective for debt instruments
issued on or after April 4, 1994. However, taxpayers are generally permitted to
rely on the final regulations for debt instruments issued after December 21,
1992.
For United States federal income tax purposes, the excess of the stated
redemption price at maturity of a Discount Security over its issue price
(defined as the first price at which a substantial amount of the issue of
Discount Securities is sold for money) will be original issue discount if such
excess equals or exceeds 1/4 of 1 percent of the stated redemption price at
maturity of such Discount Security multiplied by the number of complete years
to its maturity. The stated redemption price at maturity of a Discount Security
includes its principal amount and all payments provided by the Discount
Security other than payments of "qualified stated interest". The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property (other than debt instruments of the
Company) at least annually at a single fixed rate or at current values of (i)
one or more qualified floating rates, (ii) a single fixed rate and one or more
qualified floating rates, (iii) a single objective rate, or (iv) a single fixed
rate and a single objective rate that is a qualified inverse floating rate. A
"qualified floating rate" is any floating rate where variations in such rate
can reasonably be expected to measure contemporaneous variations in the cost of
newly borrowed funds in the currency in which the debt instrument is
denominated, as well as certain multiples of a qualified floating rate. An
"objective rate" is a rate that is not itself a qualified floating rate but
which is determined using a single fixed formula and which is based on one or
more qualified floating rates, on one or more rates where each rate would be a
qualified floating rate for a debt instrument denominated in a currency other
than the currency in which the debt instrument is denominated, on the yield or
changes in the price of actively traded personal property, or on a combination
of such rates. A "qualified inverse floating rate" is an objective rate that is
equal to a fixed rate minus a qualified floating rate, where variations in the
rate can reasonably be expected to inversely reflect contemporaneous variations
in the cost of newly borrowed funds. A Security which has an issue price not
less than its principal amount may, nonetheless, be considered to have original
issue discount. If interest is included in the stated redemption price at
maturity, it will be accounted for under the original issue discount rules,
rather than the holder's method of accounting.
United States Holders of Discount Securities will have to include original
issue discount in income before the receipt of cash attributable to such
income. The amount of original issue discount includible in income by the
initial holder of a Discount Security and, subject to an adjustment, by any
subsequent holder is the sum of the daily portions of original issue discount
with respect to the Discount Security for each day during the taxable year or
portion of the taxable year on which such holder holds the Discount Security.
The daily portion is determined by allocating to each day of the relevant
"accrual period" a pro rata portion of an amount equal to the excess of (i) the
product of (a) the "adjusted issue price" of the Discount Security at the
beginning of that accrual period, and (b) the "yield to maturity" of the
Discount Security (determined on the basis of compounding at the close of each
accrual period and properly adjusted for the length of the accrual period),
over
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(ii) the sum of the qualified stated interest payments, if any, allocable to
such accrual period. For these purposes, an "accrual period" is an interval of
time with respect to which the accrual of original issue discount is measured.
Accrual periods may be of any length and may vary in length over the term of
the debt instrument, provided that each accrual period is no longer than one
year and each scheduled payment of principal or interest occurs either on the
final day of an accrual period or on the first day of an accrual period. The
"adjusted issue price" of the Discount Security at the beginning of any
accrual period is the issue price of such Discount Security plus the accrued
original issue discount for each prior accrual period, reduced by any payments
made on the Discount Security other than payments of qualified stated
interest. Under these rules, United States Holders may have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods. The computation of original issue discount on a Discount
Security that is subject to repayment at the option of the Holder or
redemption at the option of the Company may be affected by rules presuming the
option to be exercised, with the result that the original issue discount may
be accrued as income over a shorter period.
United States Holders may, subject to certain limitations and exceptions,
elect to include in income all interest (including stated interest,
acquisition discount, original issue discount, de minimis original issue
discount, market discount, de minimis market discount, and unstated interest,
as adjusted by any amortizable bond premium or acquisition premium) that
accrues on a debt instrument acquired on or after April 4, 1994 by using the
constant yield method applicable to original issue discount.
Acquisition Premium. If a United States Holder purchases a Discount Security
at an acquisition premium, i.e., at a price in excess of the adjusted issue
price (but less than or equal to its stated redemption price at maturity), the
amount includible in income in each taxable year as original issue discount is
reduced by an amount equal to the original issue discount (as otherwise
determined) multiplied by a fraction, the numerator of which is such excess
and the denominator of which is the original issue discount for the period to
maturity after the Holder's purchase. If a United States Holder purchases a
Discount Security at a price in excess of its stated redemption price at
maturity, such excess may be deductible as amortizable bond premium (discussed
below).
Short-Term Obligations. In general, an individual or other cash method
United States Holder of any Discount Security that matures one year or less
from the date of its issuance (a "Short-Term Obligation") is not required to
accrue original issue discount for United States federal income tax purposes
unless it elects to do so. United States Holders who report income for federal
income tax purposes under the accrual method and certain other United States
Holders, including banks and dealers in securities, are required to accrue the
original issue discount on such Discount Securities on a straight-line basis,
unless an election is made to accrue the original issue discount under the
constant yield method based on daily compounding. In the case of a United
States Holder not required and not electing to include the original issue
discount in income currently, any gain realized on the sale or maturity of a
Short-Term Obligation will be ordinary income to the extent of the original
issue discount accrued on a straight-line basis through the date of sale or
maturity. United States Holders who are not required and do not elect to
accrue the original issue discount on a Short-Term Obligation will be required
to defer deductions for interest on borrowings allocable to such a Short-Term
Obligation in an amount not exceeding the accrued discount until such accrued
discount is included in income.
Amortizable Bond Premium. If a United States Holder of a Security purchases
it at a cost which is in excess of its stated redemption price at maturity,
the excess cost may be deductible by the purchaser as "amortizable bond
premium" on a constant yield basis over the remaining term of the Security.
The deduction is available only if an election is made by the purchaser or is
in effect. The election applies to all debt instruments held or subsequently
acquired by the electing
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<PAGE>
purchaser. Amortizable bond premium must be treated as an offset to interest
income on the Security acquired, rather than as a separate deduction. An
electing purchaser's tax basis in a Security is reduced by the amount of bond
premium amortized with respect to the Security.
Market Discount. If a United States Holder of a Security (including, in some
instances, an initial holder) purchases it at a "market discount" and
thereafter realizes gain upon a disposition or a retirement of the Security,
the lesser of such gain or the portion of the market discount that accrues on a
straight-line basis (or, if the holder so elects, on a constant interest rate
basis) while the Security was held by such holder will be treated as ordinary
interest income at the time of such disposition or retirement. In addition, a
holder may be required to include in gross income, as ordinary interest income,
accrued market discount to the extent of partial principal payments received
with respect to the Security. In such case, the amount of accrued market
discount to be recognized at the time of the disposition or retirement of the
Security will be reduced accordingly.
"Market discount" is the amount by which (i) the revised issue price of a
Discount Security (i.e., the issue price increased by the sum of daily portions
of original issue discount for each prior accrual period), or (ii) the
principal amount (or the issue price, in the case of an initial holder) of a
Security not issued at a discount, exceeds the holder's basis in such Security
immediately after acquisition. The market discount will be deemed to be zero,
however, if it is less than 1/4 of 1 percent of the revised issue price of a
Discount Security, or of the principal amount of a Security not issued at a
discount, multiplied by the number of complete years from acquisition to
maturity. If a holder makes a gift of a Security or disposes of a Security in
certain nonrecognition transactions, accrued market discount, if any, will be
recognized as if such holder had sold such Security for a price equal to its
fair market value. The market discount rules also provide that a holder who
acquires a Security at a market discount may be required to defer a portion of
any interest expense that may otherwise be deductible on any indebtedness
incurred or continued to purchase or carry such Security until the holder
disposes of the Security in a taxable transaction.
A holder of a Security acquired at a market discount may elect to include
market discount in gross income as the discount accrues, either on a straight-
line basis or on a constant interest rate basis. This current inclusion
election, once made, applies to all market discount debt instruments acquired
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the Internal Revenue
Service. If a holder of a Security makes such an election, the foregoing rules
with respect to the recognition of ordinary interest income on sales and other
dispositions of, and on the receipt of partial principal payments on, the
Securities and with respect to the deferral of interest deductions on
indebtedness incurred or continued to purchase or carry such Securities would
not apply.
Purchase, Sale and Retirement. A United States Holder's tax basis for
determining gain or loss on a sale or other disposition of a Security will
generally be the United States Holder's cost increased by any original issue
discount included in income (and market discount, if any, if the United States
Holder elects to include the accrued market discount in income on an annual
basis) and decreased by the amount of any payments, other than qualified stated
interest payments, received and the amount of bond premium amortized with
respect to such Security. Gain or loss on the sale or redemption of a Security
will generally be long-term capital gain or loss if the Security has been held
for more than one year (except to the extent that gain represents accrued
interest or market discount not previously included in the United States
Holder's income).
Information Reporting. The amount of interest paid on the Securities and the
amount of original issue discount accrued on Discount Securities held of record
by United States persons (other than corporations and other exempt United
States Holders) will be reported to the Internal Revenue Service. The amount of
original issue discount required to be reported to the Internal Revenue Service
may not be equal to the amount of original issue discount required to be
reported as taxable income by a United States Holder of such Discount
Securities who is not an original purchaser.
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<PAGE>
NON-UNITED STATES HOLDERS
Under present United States federal income tax law, and subject to the
discussion of backup withholding below, payments on the Securities by the
Company or any of its Paying Agents to any non-United States Holder will not be
subject to United States federal withholding tax, provided that (a) such Holder
does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote, (b) such
Holder is not a controlled foreign corporation that is related to the Company
through stock ownership, (c) such Holder is not a bank with respect to which
the holding of the Security is treated as the extension of credit in the
ordinary course of its trade or business, (d) the payment is not treated as
contingent interest, excluded from the definition of portfolio interest, and
(e) either (1) the beneficial owner of the Security certifies to the Company or
its agent, under penalties of perjury, that it is a non-United States Holder
and provides its name and address, and U.S. taxpayer identification number, if
any, or (2) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "financial institution") and that holds the Securities
certifies to the Company or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor with a
copy thereof. The certificate may be made on a United States Internal Revenue
Service Form W-8 or substantially similar form. A certificate described in this
paragraph is effective only with respect to interest payments and payments
representing accrued original issue discount made to the certifying non-United
States Holder after the issuance of the certificate in the calendar year of its
issuance and the two immediately succeeding calendar years.
If a non-United States Holder is engaged in a trade or business in the United
States and interest and original issue discount on the Security are effectively
connected with the conduct of such trade or business, the non-United States
Holder, although exempt from the withholding tax discussed above, may be
subject to United States income tax on such interest and original issue
discount in the same manner as if it were a United States Holder. In addition,
if such a Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, as adjusted for certain items; for this purpose, interest and
original issue discount on a Security will be included in earnings and profits
if the interest and original issue discount are effectively connected with the
conduct of the United States trade or business of the Holder.
Any gain or income realized by a non-United States Holder upon retirement or
disposition of a Security (not including in such gain or income amounts
representing stated interest or accrued original issue discount, the U.S. tax
treatment of which is described above) will not be subject to United States
federal income tax if (i) such gain or income is not effectively connected with
a trade or business in the United States of the Holder of such Security and
(ii) in the case of an individual Holder, the Holder is not present in the
United States for a period or periods aggregating 183 days in the taxable year
of the retirement or disposition.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A 31% "backup" withholding tax and information reporting requirements apply
to certain payments of interest and original issue discount on an obligation,
and to proceeds of the sale of an obligation before maturity, to certain non-
corporate United States Holders. The Company, and/or any paying and/or
collection agent, including a broker, as the case may be, will be required to
withhold from any payment that is subject to backup withholding a tax equal to
31% of such payment unless the Holder furnishes its taxpayer identification
number (i.e., social security number in the case of an individual) in the
manner prescribed in applicable Treasury Regulations, certifies that such
number is correct, certifies (with respect to payments of interest and original
issue
20
<PAGE>
discount) as to no loss of exemption from backup withholding, and meets certain
other conditions. Backup withholding, however, in any event, generally does not
apply to payments to certain "exempt recipients" such as corporations. Its
applicability to non-United States Holders is discussed more fully below.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any paying agency
thereof (in its capacity as such) to a Holder of a Security with respect to
which the Holder has provided to the Company (and/or any paying and/or
collection agent, including a broker) required certification of its non-United
States status under penalties of perjury or has otherwise established an
exemption (provided that neither the Company nor such paying agency has actual
knowledge that the Holder is a United States Holder or the conditions of any
other exemption are not in fact satisfied). Such certificate may be made on a
United States Internal Revenue Service Form W-8 or substantially similar form.
If such payment is made to the beneficial owner of a Security by the non-United
States office of a foreign custodian, foreign nominee or other foreign agent of
such beneficial owner, or if the non-United States office of a foreign "broker"
(as defined in applicable Treasury Regulations) pays the proceeds of the sale
of a Security to the seller thereof, such nominee, custodian, agent or broker
is not required to backup withhold or file an information report with respect
to such payment (provided that such nominee, custodian, agent or broker derives
less than 50% of its gross income for certain specified periods from the
conduct of a trade or business in the United States and is not a controlled
foreign corporation for United States tax purposes). Payments made to the
beneficial owner by the non-United States office of other custodians, nominees
or agents, or the payment by the foreign office of other brokers, will not be
subject to backup withholding, but will be subject to information reporting
unless the custodian, nominee, agent or broker has documentary evidence in its
records that the beneficial owner or seller is not or was not, as the case may
be, a United States Holder and certain conditions are met or the beneficial
owner or seller otherwise establishes an exemption. Payments made to the
beneficial owner by the United States office of a custodian, nominee or agent,
or a broker are subject to both backup withholding and information reporting
unless the beneficial owner or seller certifies its non-United States status
under penalties of perjury or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules from a payment to a
Holder would be allowed as a refund or a credit against such Holder's United
States federal income tax, provided that the required information is furnished
to the United States Internal Revenue Service.
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
thereby.
In connection with the sale of the Securities, dealers may receive
compensation from the Company or from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions. The
dealers which participate in the distribution of Securities may be deemed to be
underwriters under the Securities Act of 1933 (the "Act") and any discounts or
commissions received by them and any profit on the resale of Securities by them
may be deemed to be underwriting discounts and commissions under the Act. Any
such dealer will be identified and any such compensation will be described in
the appropriate Prospectus Supplement.
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<PAGE>
Under agreements which may be entered into by the Company, underwriters,
agents and dealers which participate in the distribution of Securities may be
entitled to indemnification or contribution by the Company against certain
liabilities, including liabilities under the Act.
If so indicated in the appropriate Prospectus Supplement, the Company will
authorize underwriters, dealers or other persons acting as the Company's agents
to solicit offers by certain institutions to purchase Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the conditions that (1) the purchase
of the Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject, and (2) if the
Securities are also being sold to dealers acting as principals for their own
account, such dealers shall have purchased such Securities not sold by them for
delayed delivery. The underwriters, dealers and such other persons acting as
the Company's agents will not have any responsibility in respect of the
validity or performance of such contracts.
LEGAL OPINIONS
The legality of each issue of the Securities will be passed upon for the
Company by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York, New
York, and for the agents or underwriters by Brown & Wood, New York, New York.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1992 and to the Current Report on Form 8-K dated March 9,
1994 have been so incorporated in reliance on the reports of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNEC-
TION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OF-
FER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SO-
LICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SO-
LICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds.................................................... S-2
Recent Developments ............................................... S-2
Description of Offered Securities.................................. S-3
Underwriting....................................................... S-7
PROSPECTUS
Available Information.............................................. 2
Incorporation of Certain Documents by Reference.................... 2
The Company........................................................ 2
Ratio of Earnings to Fixed Charges................................. 2
Use of Proceeds.................................................... 3
The Securities..................................................... 3
Description of Senior Securities................................... 9
Description of Subordinated Securities............................. 11
Description of Convertible Subordinated Securities................. 12
Federal Income Tax Consequences.................................... 16
Plan of Distribution............................................... 21
Legal Opinions..................................................... 22
Experts............................................................ 22
</TABLE>
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[LOGO OF MCI COMMUNICATIONS CORPORATION]
MCI COMMUNICATIONS CORPORATION
$300,000,000 6 1/4% SENIOR NOTES DUE MARCH 23, 1999
$450,000,000 7 3/4% SENIOR DEBENTURES DUE MARCH 23, 2025
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MARCH 9, 1994
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