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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 8, 1995
WORLDCOM, INC.
(F/K/A LDDS COMMUNICATIONS, INC.)
(Exact Name of Registrant as Specified in its Charter)
Georgia 0-11258 58-1521612
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification Number)
Incorporation)
515 East Amite Street
Jackson, Mississippi 39201-2702
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (601) 360-8600
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ITEM 5. OTHER EVENTS
The following table sets forth the ratio of earnings to combined fixed charges
and preferred stock dividends for each of the five years ended December 31,
1994 and for the six months ended June 30, 1994 and 1995, which ratios are
based on the historical consolidated financial statements of WorldCom, Inc.
(the "Company" or "WorldCom"). The table also sets forth the pro forma
combined data for the year ended December 31, 1994, which data gives effect to
the acquisition of Williams Telecommunications Group, Inc. ("WilTel") on
January 5, 1995 for approximately $2.5 billion in cash (the "WilTel
Acquisition") and the financing thereof as if it occurred on January 1, 1994.
The WilTel Acquisition was accounted for as a purchase transaction. The pro
forma combined data are presented for comparative purposes only and are not
intended to be indicative of actual results had the transactions occurred as of
the date indicated above nor do they purport to be indicative of results which
may be attained in the future.
<TABLE>
<CAPTION>
Pro Forma
Historical Combined Historical
------------------------------------------------- --------------- ----------------
Year Ended December 31, Year Ended December 31, Six Months Ended June 30,
1990 1991 1992 1993 1994 1994 1994 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of
Earnings to
Combined Fixed
Charges and
Preferred Stock
Dividends 2.45:1 2.53:1 1.40:1 4.14:1 0.13:1 0.45:1 3.43:1 2.14:1
Deficiency of
Earnings to
Combined Fixed
Charges and
Preferred Stock
Dividends (in
thousands) N/A N/A N/A N/A $(78,008) $(153,203) N/A N/A
</TABLE>
For the purpose of computing the ratio of earnings to combined fixed charges
and preferred stock dividends, earnings consist of income (loss) from
continuing operations and fixed charges and preferred stock dividends, and
fixed charges consist of interest (including capitalized interest, but
excluding amortization amounts previously capitalized) on all indebtedness,
amortization of debt discount and expense and that portion of rental expense
which the Company believes to be representative of interest.
NOTES TO COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(1) As a result of the mergers with IDB Communications Group, Inc. (the
"IDB Merger") and Advanced Telecommunications Corporation (the "ATC
Merger"), the Company initiated plans to reorganize and restructure
its management and operational organization and facilities to
eliminate duplicate personnel, physical facilities and service
capacity, to abandon certain products and marketing activities, and to
further take advantage of the synergy available to the combined
entities. Also, during the fourth quarter of 1993, plans were
approved to reduce IDB Communications Group, Inc.'s cost structure and
to improve productivity. Accordingly, in 1994, 1993 and 1992, the
Company charged to operations the estimated costs of such
reorganization and restructuring activities, including employee
severance, physical facility abandonment and duplicate service
capacity. These costs totaled $43.7 million in 1994, $5.9 million in
1993 and $79.8 million in 1992.
2
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Also, during 1994 and 1992, the Company incurred direct merger costs
of $15.0 million and $7.3 million, respectively, related to the IDB
Merger (in 1994) and the ATC Merger (in 1992). These costs include
professional fees, proxy solicitation costs, travel and related
expenses and certain other direct costs attributable to these mergers.
(2) In connection with certain debt refinancing, the Company recognized in
1993 and 1992 extraordinary items of approximately $7.9 million and
$5.8 million, respectively, net of income taxes, consisting of
unamortized debt discount, unamortized issuance cost and prepayment
fees.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 12.1 Statement regarding computation of ratio of earnings
to combined fixed charges and preferred stock
dividends.
3
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SIGNATURE
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.
Dated: September 8, 1995
WORLDCOM, INC.
By: /s/ Scott D. Sullivan
Scott D. Sullivan
Chief Financial Officer
4
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
Exhibit 12.1 Statement regarding computation of ratio of earnings to combined fixed charges and preferred
stock dividends.
</TABLE>
<PAGE> 1
Exhibit 12.1
WorldCom, Inc.
Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
(In thousands of dollars, except ratio)
<TABLE>
<CAPTION>
Six Months Ended
Year Ended December 31, Pro Forma June 30,
------------------------------------------- Fiscal Year ----------------
1990 1991 1992 1993 1994 1994 1994 1995
-------------------------------------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pretax income (loss) from
continuing operations $ 61,645 65,646 20,401 198,237 (76,108) (151,303) 100,859 175,925
Fixed charges, net of
capitalized interest 38,109 38,116 38,720 58,999 87,455 276,506 41,429 154,183
-------------------------------------------- ---------- ----------------
Earnings $ 99,754 103,762 59,121 257,236 11,347 125,203 142,288 330,108
============================================ ========== ================
Fixed charges:
Interest expense $ 32,635 31,595 30,311 35,557 47,303 222,568 21,520 126,866
Interest capitalized 2,647 2,900 3,504 3,100 1,900 1,900 - 242
Amortization of financing
costs 984 1,018 1,464 1,792 2,086 9,586 1,037 5,574
Interest factor of rent
expense 4,490 5,503 4,833 9,967 10,300 16,586 4,982 7,868
Preferred dividend
requirements 0 0 2,112 11,683 27,766 27,766 13,890 13,875
-------------------------------------------- ---------- ----------------
Fixed charges $ 40,756 41,016 42,224 62,099 89,355 278,406 41,429 154,425
============================================ ========== ================
Deficiency of earnings to
fixed charges $ - - - - (78,008) (153,203) - -
============================================= ========== ================
Ratio of earnings to combined
fixed charges and preferred
stock dividends 2.45:1 2.53:1 1.40:1 4.14:1 0.13:1 0.45:1 3.43:1 2.14:1
============================================ ========== ================
</TABLE>
See notes to computation of ratio of earnings to combined fixed charges and
preferred stock dividends.
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NOTES TO COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(1) On January 5, 1995, the Company completed the acquisition of
Williams Telecommunications Group, Inc. for approximately
$2.5 billion in cash (the "WilTel Acquisition"). The WilTel
Acquisition is being accounted for as a purchase.
(2) As a result of the mergers with IDB Communications Group, Inc.
(the "IDB Merger") and Advanced Telecommunications Corporation
(the "ATC Merger"), the Company initiated plans to reorganize
and restructure its management and operational organization
and facilities to eliminate duplicate personnel, physical
facilities and service capacity, to abandon certain products
and marketing activities, and to further take advantage of the
synergy available to the combined entities. Also, during the
fourth quarter of 1993, plans were approved to reduce IDB
Communications Group, Inc.'s cost structure and to improve
productivity. Accordingly, in 1994, 1993 and 1992, the Company
charged to operations the estimated costs of such
reorganization and restructuring activities, including employee
severance, physical facility abandonment and duplicate service
capacity. These costs totaled $43.7 million in 1994, $5.9
million in 1993 and $79.8 million in 1992.
Also, during 1994 and 1992, the Company incurred direct merger
costs of $15.0 million and $7.3 million, respectively, related
to the IDB Merger (in 1994) and the ATC Merger (in 1992).
These costs include professional fees, proxy solicitation
costs, travel and related expenses and certain other direct
costs attributable to these mergers.
(3) In connection with certain debt refinancing, the Company
recognized in 1993 and 1992 extraordinary items of
approximately $7.9 million and $5.8 million, respectively, net
of income taxes, consisting of unamortized debt discount,
unamortized issuance cost and prepayment fees.
