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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
February 2, 1998 (January 29, 1998)
Date of report (Date of earliest event reported)
MCI Communications Corporation
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(Exact name of registrant as specified in its charter)
Delaware 52-0886267
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1801 Pennsylvania Avenue, N.W.
Washington DC 20006
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 202-872-1600
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Item 5. Other Events.
MCI Communications Corporation ("MCI") announced today that it has revised its
1997 Earnings Release, dated January 29, 1998 (the "1997 Earnings Release"), as
a result of discussions with the staff of the Securities and Exchange Commission
("SEC") regarding the accounting treatment of certain charges reported in the
1997 Earnings Release. The 1997 Earnings Release was previously filed with the
SEC on February 2, 1998 pursuant to a Current Report on Form 8-K (the "Form
8-K"). The press release and the financial information filed with this Amendment
to the Form 8-K as Exhibits 99(a) and 99(b), respectively, supersede the
reported financial results of operations set forth in Exhibit 99(a) and all of
Exhibit 99(b) to the Form 8-K. MCI will file its Annual Report on Form 10-K for
the year ended December 31, 1997 by April 15, 1998.
Item 7. Financial Statements and Exhibits
(c) The following exhibits are filed with this report:
Exhibit No. Description
- ----------- -----------------------
99(a) Press Release of MCI Communications Corporation dated April 10,
1998.
99(b) Financial information.
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Forward-looking Statements May Prove Inaccurate
MCI has made certain forward-looking statements in this Amendment to
Current Report on Form 8-K ("Form 8-K/A") that are subject to risks and
uncertainties. Forward-looking statements include information concerning the
possible future results of operations of the company, its long-distance
telecommunication services business, its investments in ventures and developing
markets ("VDM") businesses, the possible future results of operations of the
company and those of MCI WorldCom, Inc. ("MCI WorldCom") after the proposed
merger with WorldCom, Inc. ("WorldCom") and statements of information preceded
by, followed by or that include the words believes , expects , anticipates , or
similar expressions. For those statements, the company claims the protection of
the safe-harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. The reader is cautioned that important
factors such as the following, in addition to those contained elsewhere in this
Form 8-K/A, could affect the future results of the company, its long-distance
telecommunication services and VDM businesses and those of MCI WorldCom after
the proposed merger with WorldCom and could cause those results to differ
materially from those expressed in the forward-looking statements: material
adverse changes in the economic conditions in the markets served by the company
and MCI WorldCom; a significant delay in the expected closing of the proposed
merger with WorldCom; future regulatory actions and conditions in the company's
and MCI WorldCom's operating areas, including the ability of the company to
implement its local strategy and obtain local facilities at competitive rates;
the ability to pass on additional charges imposed by the Federal Communications
Commission; competition from others in the United States ("U.S.") and
international long-distance markets, including the entry of the Regional Bell
Operating Companies and other companies into the long-distance markets in the
U.S.; the cost of the company's year 2000 compliance efforts; and the effect of
future technological changes on its business.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCI COMMUNICATIONS CORPORATION
/s/ David M. Case
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David M. Case
Vice President and Controller
Date: April 10, 1998
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EXHIBIT INDEX
Exhibit No. Description
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99(a) Press Release of MCI Communications Corporation dated
April 10, 1998.
99(b) Financial information.
Exhibit 99(a)
MCI REVISES REPORTING OF CERTAIN FOURTH QUARTER 1997 CHARGES
WASHINGTON, D.C.--April 10, 1998--MCI said today that it has revised the
reporting of certain of its previously announced fourth quarter 1997 charges
following its discussions with the Securities and Exchange Commission.
Approximately $147 million, after applicable income taxes, of MCI's fourth
quarter 1997 charges will be removed from the previously announced results.
These charges principally relate to the write down of planned equipment
disposals accounted for in accordance with the company's interpretation of
Statement of Financial Accounting Standards No. 121. The company expects that
nearly 90 percent of the charges will be recorded in the first half of 1998 and
will not impact revenue or cash flow.
The company reported revised 1997 fourth quarter results of a net loss of
$244 million or $0.35 diluted loss per share compared to a net loss of $391
million or $0.56 diluted loss per share as announced on January 29, 1998. In
addition, the company reported revised 1997 net income of $149 million or $0.21
diluted earnings per share compared to $2 million net income or $0.00 diluted
earnings per share previously announced.
MCI expects to announce its first quarter results on April 30, 1998.
<TABLE>
<CAPTION>
Exhibit 99(b)
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
(NASDAQ: MCIC)
FOURTH QUARTER 1997
AS REPORTED
(In millions, except per share amounts)
(unaudited)
4TH QTR 4TH QTR % 3RD QTR %
1997 1996 CHANGE 1997 CHANGE
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
REVENUE 5,108 4,753 7.5 4,819 6.0
------ ------ ------ ------ ------
OPERATING EXPENSES
Cost of Services 2,866 2,433 17.8 3,018 (5.0)
Sales, operations and general 1,912 1,310 46.0 1,444 32.4
Depreciation 607 441 37.6 543 11.8
------ ------ ------ ------ ------
TOTAL OPERATING EXPENSES 5,385 4,184 28.7 5,005 7.6
------ ------ ------ ------ ------
INCOME (LOSS) FROM OPERATIONS (277) 569 (148.7) (186) (48.9)
Interest (expense) (61) (43) (41.9) (58) (5.2)
Interest income 4 7 (42.9) 4 0.0
Equity in income (losses) of
affiliated companies (37) (28) (32.1) (46) 19.6
Other income (expense), net (14) (4) (250.0) 6 N/M
------ ------ ------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES
AND TRUST DISTRIBUTIONS (385) 501 (176.8) (280) (37.5)
Income tax provision/(benefit) (156) 183 (185.2) (113) (38.1)
Distributions on Trust
preferred securities 15 15 0.0 15 0.0
------ ------ ------ ------ ------
NET INCOME (LOSS) (244) 303 (180.5) (182) (34.1)
====== ====== ====== ====== ======
EARNINGS (LOSS) PER COMMON SHARE (0.35) 0.44 (179.5) (0.26) (34.6)
DILUTED EARNINGS (LOSS) PER COMMON SHARE (0.35) 0.44 (179.5) (0.26) (34.6)
Weighted average number of shares 703 685 2.6 695 1.2
Weighted average number of shares
- assuming dilution 703 694 1.3 695 1.2
NM - not meaningful
</TABLE>
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<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
(NASDAQ: MCIC)
YEAR ENDED DECEMBER 31, 1997
AS REPORTED
(In millions, except per share amounts)
(unaudited)
%
1997 1996 CHANGE
------ ------ ------
<S> <C> <C> <C>
REVENUE 19,653 18,494 6.3
------ ------ ------
OPERATING EXPENSES
Cost of services 10,956 9,489 15.5
Sales, operations and general 5,940 5,028 18.1
Depreciation 2,082 1,664 25.1
------ ------ ------
TOTAL OPERATING EXPENSES 18,978 16,181 17.3
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INCOME FROM OPERATIONS 675 2,313 (70.8)
Interest (expense) (235) (196) (19.9)
Interest income 18 34 (47.1)
Equity in income (losses) of
affiliated companies (144) (156) 7.7
Other income (expense), net (15) (5) (200.0)
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INCOME BEFORE INCOME TAXES
AND TRUST DISTRIBUTIONS 299 1,990 (85.0)
Income tax provision 90 753 (88.0)
Distributions on Trust
preferred securities 60 35 71.4
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NET INCOME 149 1,202 (87.6)
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EARNINGS PER COMMON SHARE 0.22 1.75 (87.4)
DILUTED EARNINGS PER COMMON SHARE 0.21 1.73 (87.9)
Weighted average number of shares 693 687 0.9
Weighted average number of shares
- assuming dilution 707 695 1.7
</TABLE>
