SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 6
to
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 7
TO
SCHEDULE 13D
---------------
OZEMAIL LIMITED
(ACN # 066 387 157)
(NAME OF SUBJECT COMPANY)
UUNET HOLDINGS AUSTRALIA PTY LIMITED
UUNET TECHNOLOGIES, INC.
MCI WORLDCOM, INC.
(BIDDER)
---------------
ORDINARY SHARES AND
AMERICAN DEPOSITARY SHARES, EACH REPRESENTING 10 ORDINARY SHARES
(TITLE OF CLASS OF SECURITIES)
---------------
[NONE] (ORDINARY SHARES)
[692674104] (AMERICAN DEPOSITARY SHARES)
(CUSIP NUMBER OF CLASS OF SECURITIES)
---------------
CHARLES T. CANNADA
SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT
MCI WORLDCOM INC.
515 EAST AMITE STREET
JACKSON, MISSISSIPPI 39201
(601) 360-8600
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
---------------
WITH COPIES TO:
R. RANDALL WANG, ESQ. MARTINA W. KNEE, ESQ.
BRYAN CAVE LLP UUNET TECHNOLOGIES, INC.
ONE METROPOLITAN SQUARE 3060 WILLIAMS DRIVE
SUITE 3600 FAIRFAX, VIRGINIA 22031
ST. LOUIS, MISSOURI 63102 (703) 206-5600
(314) 259-2000
Page 1 of 8 pages
Exhibit Index is located on page 7.
================================================================================
<PAGE>
Amendment No. 6 to 14D-1
CUSIP NO. 692674104 Page 2 of 8 Pages
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
UUNET HOLDINGS AUSTRALIA PTY LIMITED (00-00000000)
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC & BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) OR 2(f)
NOT APPLICABLE [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
NEW SOUTH WALES, AUSTRALIA
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,863,174
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
NOT APPLICABLE [_]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
14.9%
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Amendment No. 6 to 14D-1
CUSIP NO. 692674104 Page 3 of 8 Pages
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
UUNET TECHNOLOGIES, INC. 54-1543611
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC & BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) OR 2(f)
NOT APPLICABLE [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,863,174
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
NOT APPLICABLE [_]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
14.9%
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Amendment No. 6 to 14D-1
CUSIP NO. 692674104 Page 4 of 8 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MCI WORLDCOM, INC. 58-1521612
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC & BK
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) OR 2(f)
NOT APPLICABLE [_]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
GEORGIA
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,863,174
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES*
NOT APPLICABLE [_]
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
14.9%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Amendment No. 6 to 14D-1
CUSIP NO. 692674104 Page 5 of 8 Pages
This Statement amends and supplements the combined Tender Offer
Statement on Schedule 14D-1 and Amendment No. 1 to Schedule 13D filed with the
Securities and Exchange Commission on January 7, 1999, which was amended on
January 20, 1999, January 27, 1999, February 2, 1999, February 3, 1999 and
February 9, 1999 (the "Schedule 14D-1"), and relates to the offer by UUNET
Holdings Australia Pty Limited, a company incorporated in New South Wales,
Australia ("Purchaser") and a wholly owned subsidiary of UUNET Technologies,
Inc., a Delaware corporation ("Intermediate"), which is, in turn, a wholly-owned
subsidiary of MCI WORLDCOM, Inc., a Georgia corporation ("Parent"), to purchase
all outstanding: (a) ordinary shares (the "Shares") of OzEmail Limited, a
corporation incorporated under the laws of the State of New South Wales,
Australia (the "Company"), and (b) American Depositary Shares ("ADSs"), each
representing 10 Ordinary Shares (the Shares and the ADSs collectively, the
"Securities"), of the Company, at a price of US$2.20 per Share and US$22.00 per
ADS, net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated January 8, 1999 (Sydney time (January 7, 1999, New York time)), a copy of
which was attached and filed with the Schedule 14D-1 as Exhibit (a)(1) thereto
and (i) in the case of Shares, in the related Acceptance and Transfer Form, a
copy of which was attached and filed with the Schedule 14D-1 as Exhibit (a)(2)
thereto and (ii) in the case of ADSs, in the related Letter of Transmittal, a
copy of which was attached and filed with the Schedule 14D-1 as Exhibit (a)(3)
thereto (which Offer to Purchase, Acceptance and Transfer Form and Letter of
Transmittal, as amended from time to time, together constitute the "Offer").
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Schedule 14D-1.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
See Below.
ITEM 10. ADDITIONAL INFORMATION.
Item 9 and Item 10(f) are hereby amended and supplemented by the
following:
"On February 11, 1999 (Jackson, MS time) MCI WorldCom issued two
press releases announcing (1) its earnings for the 1998 fiscal year and (2) a
series of agreements with Electronic Data Systems Corp. ("EDS") relating to the
outsourcing of certain services and EDS agreeing to acquire MCI Systemhouse, an
IT services provider, for $1.65 billion in cash. Such press releases are filed
as exhibits (a)(17) and (a)(18) and incorporated herein by reference.
Section 8 of the Offer to Purchase ("Certain Information Concerning
Purchaser, Intermediate, And MCI WorldCom") is hereby amended and supplemented
by the addition of the following paragraph immediately after the last paragraph
of the subsection entitled "MCI WorldCom":
"On February 11, 1999 (Jackson, MS time) MCI WorldCom issued two press
releases announcing (1) its earnings for the 1998 fiscal year and (2) a series
of agreements with Electronic Data Systems Corp. ("EDS") relating to the
outsourcing of certain services and EDS agreeing to acquire MCI Systemhouse, an
IT services provider, for $1.65 billion in cash. Such press releases are filed
as exhibits (a)(17) and (a)(18) and incorporated herein by reference."
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by the addition of the
following paragraph thereto:
"(a)(17) News Release dated February 11, 1999 (Jackson, MS time),
issued by Parent."
"(a)(18) News Release dated February 11, 1999 (Jackson, MS time),
issued by Parent."
The undersigned hereby agree to jointly file a statement on Schedule
14D-1 and Schedule 13D, together with any amendments thereto, with the SEC
pursuant to the requirements of Rule 14d-1 and Rule 13d-1 under the Securities
Exchange Act of 1934, as amended.
<PAGE>
Amendment No. 6 to 14D-1
CUSIP NO. 692674104 Page 6 of 8 Pages
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: February 11, 1999
UUNET Holdings Australia Pty Limited
By: *
Name: Charles T. Cannada
Title: Director
UUNET Technologies, Inc.
By: *
Name: Mark F. Spagnolo
Title: President and Chief Executive
Officer
MCI WORLDCOM, Inc.
By: *
Name: Scott D. Sullivan
Title: Chief Financial Officer and
Secretary
*By: /s/ Charles T. Cannada
---------------------------------------
Name: Charles T. Cannada
Title: Authorized Representative and Attorney-
in-Fact under Powers of Attorney filed
with the original Schedule 14D-1
<PAGE>
EXHIBIT INDEX
*(a)(1) Offer to Purchase, dated January 8, 1999 (Sydney, Australia
time) (January 7, 1999, New York time).
*(a)(2) Acceptance and Transfer Form
*(a)(3) Letter of Transmittal.
*(a)(4) Notice of Guaranteed Delivery.
*(a)(5) Letter from Merrill Lynch to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees holding OzEmail
ADSs.
*(a)(6) Letter to ADS Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees holding OzEmail
ADSs.
*(a)(7) Form of Summary Advertisement as published in the Wall Street
Journal on January 7, 1999 (New York City time).
*(a)(8) News Release dated January 7, 1999 (Jackson, MS time), issued
by Parent.
(a)(9) News Release dated December 13, 1998 (Jackson, MS time) and
December 14, 1998 (Sydney, Australia time), issued by Parent
(incorporated by reference to Schedule 1 to the Subscription
Agreement, which appears as Exhibit 99.1 to Schedule 13D dated
December 21, 1998 filed by MCI WorldCom, UUNET Technologies,
Inc. and UUNET Holdings Australia Pty Limited with respect to
OzEmail).
(a)(10) News Release dated December 14, 1998 (Sydney, Australia time),
issued by the Company (incorporated by reference to Schedule 2
to the Subscription Agreement, which appears as Exhibit 99.1
to Schedule 13D dated December 21, 1998 filed by MCI WorldCom,
UUNET Technologies, Inc. and UUNET Holdings Australia Pty
Limited with respect to OzEmail).
*(a)(11) News Release dated January 20, 1999 (Jackson, MS time), issued
by Parent.
*(a)(12) Letter from Parent to Shareholders/ADS holders dated 27
January, 1999 (Sydney, Australia time).
*(a)(13) Notice pursuant to Section 663(3) of the Corporation Law in
the form filed by Purchaser with the Australian Stock Exchange
on February 1, 1999.
*(a)(14) News Release dated February 8, 1999 (Jackson, MS time), issued
by Parent.
*(a)(15) Letter from Parent to Shareholders/ADS holders dated 9
February, 1999 (Sydney, Australia time).
*(a)(16) Notice of Variation pursuant to Section 657 of the Corporation
Law in the form filed by Purchaser with the Australian Stock
Exchange on 9 February, 1999 (Sydney, Australia time).
(a)(17) News Release dated February 11, 1999 (Jackson, MS time),
issued by Parent.
(a)(18) News Release dated February 11, 1999 (Jackson, MS time),
issued by Parent.
(b)(1) Amended and Restated Facility A Revolving Credit Agreement
among MCI WorldCom (borrower), NationsBank, N.A. (Arranging
Agent and Administrative Agent), NationsBanc Montgomery
Securities LLC (Lead Arranger), Bank of America NT & SA,
Barclays Bank PLC, The Chase Manhattan Bank, Citibank, N.A.,
Morgan Guaranty Trust Company of New York, and Royal Bank of
Canada (Co-Syndication Agents) and the lenders named therein
dated as of August 6, 1998 (incorporated herein by reference
to Exhibit 10.1 to MCI WorldCom's Current Report on Form 8-K
dated August 6, 1998 (filed August 7, 1998) (File No.
0-11258)).
(b)(2) 364-day Revolving Credit and Term Loan Agreement among MCI
WorldCom (borrower), NationsBank, N.A. (Arranging Agent and
Administrative Agent), NationsBanc Montgomery Securities LLC
(Lead Arranger), Bank of America NT & SA, Barclays Bank PLC,
The Chase Manhattan Bank, Citibank, N.A., Morgan Guaranty
Trust Company of New York, and Royal Bank of Canada
(Co-Syndication Agents) and the lenders named therein dated
August 6, 1998 (incorporated herein by reference to Exhibit
10.3 to MCI WorldCom's Current Report on Form 8-K dated August
6, 1998 (filed August 7, 1998) (File No.
0-11258)).
(c) Subscription Agreement, dated December 11, 1998, by and
between the Purchaser and the Company (incorporated by
reference to Exhibit 99.1 to Schedule 13D dated December 21,
1998 filed by MCI WorldCom, UUNET Technologies, Inc. and UUNET
UUNET Holdings Australia Pty Limited with respect to
OzEmail).
(d) [Not applicable.]
(e) [Not applicable.]
(f) [Not applicable.]
*(g)(1) Powers of Attorney (contained on the signature pages to the
original Schedule 14D-1, dated and filed on January 7, 1999).
* Previously filed
Exhibit (a)(17)
MCI WORLDCOM FOURTH QUARTER RESULTS/PAGE 2
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
Contacts:
News Media: Frank Walter Investors: Gary Brandt
(601) 360-8750 (601) 360-8544
800-644-NEWS
MCI WORLDCOM REPORTS FOURTH QUARTER 1998 RESULTS
Quarterly Revenue Tops $8 Billion
EPS of $0.23 for Quarter and $0.81 for Year
MCI Systemhouse Sold to EDS for $1.65 Billion
JACKSON, MS (February 11, 1999) - MCI WORLDCOM, Inc. (NASDAQ:WCOM) today
reported fourth quarter revenues, excluding Embratel, of $8.0 billion which was
quadruple the fourth quarter 1997 revenues of $2.0 billion. Robust internal
growth combined with the substantial impact of both the MCI merger and the
CNS/ANS transactions included for the fourth quarter 1998, drove the
year-over-year increase in reported revenue. Including Embratel, total fourth
quarter revenues were $9.0 billion.
On a pro forma and comparative basis, assuming the acquisitions of CNS, ANS and
MCI occurred as of the beginning of the year for both periods -- which is
indicative of internal growth -- communications services revenues, which
comprises voice, data, international and Internet, increased 17 percent from
$6.5 billion to $7.6 billion. Traffic, on a pro forma basis, increased 13
percent year-over-year.
"We have intensified our focus on what we do best -- provide core communications
services. Including today's announcement with EDS, over the past year we have
shed virtually all of our non-communications services businesses," said Bernard
J. Ebbers, president and chief executive officer of MCI WorldCom.
"Strong revenue gains across all communications services combined with the first
phases of network and SG&A synergies drove the stronger than anticipated
earnings performance. We accelerated our capital spending in the fourth quarter
<PAGE>
particularly in international and next generation network deployment which
should not only sustain future revenue growth but also drive significant cost
reductions across all communications services," added Ebbers.
Reported net income for the fourth quarter 1998, excluding Embratel, was $428
million, or $0.23 per common share, compared with reported net income of $95
million, or $0.10 per common share, in the fourth quarter of 1997. Reported net
income for the full year 1998, excluding the merger related charges, was $1.07
billion or $0.81 per common share. After merger related and R&D charges from
previous quarters, the net loss for the full year 1998 was $2.7 billion.
FOURTH QUARTER AND FULL YEAR PRO FORMA REVENUES
For internal growth comparison purposes, the following pro forma illustration
includes CNS, ANS and MCI from the beginning of the earliest period presented.
These tables do not include Embratel or the sold InternetMCI division. The
impact of discontinued or sold businesses including SHL have been indicated in
prior year figures to reflect revenue growth on a comparative basis. These
amounts appear in the "Recasted Revenues" line, which now are virtually the same
as the Communications Services line.
<TABLE>
<CAPTION>
FOURTH QUARTER FULL YEAR
($ MILLIONS)
Pro Forma Revenues 1998 1997 Change 1998 1997 Change
<S> <C> <C> <C> <C> <C> <C>
---- ---- ------ ---- ---- ------
Voice $4,997 $4,641 8% $19,480 $17,932 9%
Data 1,616 1,255 29% 5,827 4,550 28%
Internet 658 408 61% 2,246 1,325 69%
International 328 211 55% 1,130 726 56%
----- ------ --- ----- ------- ---
Communications Services $7,599 $6,515 17% $28,683 $24,533 17%
IT Services and Other 410 513 (20%) 1,733 1,999 (13%)
------ ------ ----- ------- ------- ----
Total Revenues $8,009 $7,028 14% $30,416 $26,532 15%
------ ------ ----- ------- ------- ----
Business Sold:
MFS Network Technologies - (71) - (64) (262) -
SHL and Other (405) (433) - (1,620) (1,537) -
Operator Services - - - - (69) -
Broadcast Operations - - - - (40) -
------ ------ ----- ------- ------- ----
Recasted Revenues $7,604 $6,524 17% $28,732 $24,624 17%
------ ------ ----- ------- ------- ----
</TABLE>
COMMUNICATIONS SERVICES
MCI WorldCom reported pro forma fourth quarter communications services revenues,
excluding Embratel, of $7.6 billion and year-to-date communications services
revenues of $28.7 billion, in both cases, an increase of 17 percent, as compared
with the same periods in 1997.
Voice revenues, representing 62 percent of total revenues grew eight percent to
$5.0 billion, for the fourth quarter. On a full year basis, voice revenue was
<PAGE>
$19.5 billion, up nine percent as compared with $17.9 billion for the comparable
period in 1997.
Growth in voice traffic is particularly evident in the business markets where
MCI WorldCom's ability to provide competitive prices and services over a high
quality network is driving strong growth from commercial sales. On the consumer
side, the company continues to market a range of integrated services, promote
transaction brands and leverage partner marketing programs to improve customer
retention.
Local voice revenues grew over 80 percent for the full year 1998 as compared
with 1997 and represents two percent of voice revenues.
Data revenues increased 29 percent to $1.6 billion for the fourth quarter 1998.
Full year data revenues of $5.8 billion were up 28 percent as compared with
1997. Virtual data services, including frame relay and ATM services, combined
with continued strength in private line sales are driving overall revenue
growth.
Rapidly growing demand for higher bandwidth services is driving local data
revenue growth of over 40 percent for the full year 1998 as compared with 1997.
This growth, correlating to the jump in local building connections and a 65
percent increase in voice grade equivalents, is an early indication of the
impact that electronic commerce and other advanced data applications are having
on data communications services revenues.
Internet revenues increased 61 percent and 69 percent to $658 million and $2.2
billion for the fourth quarter and full year ended December 31, 1998,
respectively. Revenues from MCI's former Internet business have been excluded in
all periods because of the divestiture.
UUNET continues to be an industry leader in network deployment and revenue
growth, and has begun to leverage the systems integration expertise provided by
MCI WorldCom Advanced Networks (CNS/ANS) for large corporate intranet
applications. These organizations will all take advantage of the strong UUNET
global identity in 1999.
International revenues were up 55 percent to $328 million for the fourth quarter
and up 56 percent to $1.1 billion for the full year ended December 31, 1998 as
compared with the same periods in 1997, respectively.
Significant percentage gains in international revenues are being achieved in
continental Europe in response to our rapidly expanding networks and sales
effort. The pan-European networks and national networks in the U.K., France,
Germany and Belgium are driving a much higher proportion of enhanced data sales,
internationally. This revenue mix shift is contributing to the improving
margins, in spite of the competitive pricing environment.
<PAGE>
INFORMATION TECHNOLOGY AND OTHER
IT Services, which consists primarily of the operations of MCI Systemhouse,
includes equipment deployment, consulting and systems integration and
outsourcing services. These revenues decreased 20 percent and 13 percent to $410
million and $1.7 billion for the 3 months and full year ended December 31, 1998
respectively, over comparable periods in 1997. Excluding the impact of Canadian
exchange rates and the businesses previously exited by MCI Systemhouse (SHL),
revenues were essentially flat year-over-year and up a strong 12 percent
sequentially from third quarter 1998.
Earlier today, MCI WorldCom and EDS Corporation announced the signing of
definitive agreements to sell MCI Systemhouse (SHL) to EDS for $1.65 billion. In
addition, both companies agreed to significant outsourcing contracts which will
capitalize on the individual strengths of each company. The definitive
agreements for these outsourcing contracts will be finalized in the second
quarter of 1999.
GLOBAL INVESTMENTS
Embratel
On July 29, 1998, MCI WorldCom acquired a 52 percent voting interest and 19
percent economic interest in Embratel Participacoes S.A. (Embratel), Brazil's
only facilities-based national communications provider. At closing $900 million
of the purchase price was paid in U.S. dollars with the remaining purchase price
(approximately 60%) to be paid in installments of local currency prior to July
29, 2000. Embratel results have been consolidated with MCI WorldCom from the
date of the MCI merger closing on September 14, 1998. On a standalone basis,
<PAGE>
Embratel pro forma financials are as follows:
<TABLE>
<CAPTION>
THIRD QUARTER FOURTH QUARTER
3 months ended 3 months ended
September 30, 1998 % December 31 , 1998 %
<S> <C> <C> <C> <C>
------------------ --- ------------------ ---
($ in millions)
Revenues $932 100% $1,008 100%
EBITDA 245 26% 262 26%
Operating Income 80 9% 112 11%
Net Income Before Minority Interest 56 6% 96 10%
Minority Interest 51 5% 82 9%
----- ---- ------ ----
Net Income to MCI WorldCom $ 5 1% $ 14 1%
----- ---- ------ ----
</TABLE>
Avantel
Avantel, MCI WorldCom's Mexican joint venture company, has close to 10 percent
of the addressable long distance market. The company continues to expand its
base in the business market, winning a number of key new corporate and
government contracts and growing its share of higher-margin services such as
data and Internet services. Avantel continues to work closely with Mexican
regulatory bodies to reduce interconnection charges and discriminatory practices
that are hindering true competition in the Mexican telecommunications market.
For the fourth quarter, equity losses in Avantel were approximately $21 million.
OUTLOOK
Commenting on the company's outlook, Ebbers added: "With the merger integration
efforts successfully underway and our heightened focus on our core
communications services, we are confident in our ability to deliver on our
financial targets in 1999 and beyond.
"Our capital investments in new markets, combined with technology advances which
will continue to drive down our network costs as a percent of revenues, give us
confidence in our ability to grow revenues profitably. We are attacking new and
fast-growing markets such as the $100 billion U.S. local market, the $500
billion international market and the over $50 billion rapidly expanding data and
Internet market. In this golden age of communications, MCI WorldCom, with just
four percent of the global market, is well positioned in the fastest growing
segments of the business," said Ebbers.
FORWARD LOOKING STATEMENT
Except for the historical information contained herein, this news release may be
deemed to include forward-looking statements that involve risk and uncertainty,
including financial, regulatory environment and trend projections. Although the
company believes that its expectations are based on reasonable assumptions, it
can give no assurance that its expectations will be achieved. The important
factors that could cause actual results to differ materially from those in the
forward-looking statements herein (the "Cautionary Statements") include, without
limitation, the company's degree of financial leverage, risks associated with
debt service requirements and interest rate fluctuations, risks associated with
acquisitions and the integration thereof, risks of international business,
<PAGE>
dependence on availability of transmission facilities, regulation risks
including the impact of the Telecom Act, contingent liabilities, and the impact
of competitive services and pricing, as well as other risks referenced from time
to time in the company's filings with the SEC. All subsequent written and oral
forward-looking statements attributable to the company or persons acting on its
behalf are expressly qualified in their entirety by the Cautionary Statements.
The company does not undertake any obligation to release publicly any revisions
to such forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
MCI WorldCom is a global leader in communications services with 1998 revenues of
more than $30 billion and established operations in over 65 countries
encompassing the Americas, Europe and the Asia-Pacific regions. MCI WorldCom is
a premier provider of facilities-based and fully integrated local, long
distance, international and Internet services. MCI WorldCom's global networks,
including its state-of-the-art pan-European network and transoceanic cable
systems, provide end-to-end high-capacity connectivity to more than 40,000
buildings worldwide. MCI WorldCom is traded on NASDAQ under WCOM. For more
information on MCI WorldCom, visit the World Wide Web at www.wcom.com.
<PAGE>
MCI WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months ended December 31, 1997 and 1998
(Unaudited. In Millions, Except Per Share Data)
<TABLE>
<CAPTION>
Pro Forma Reported Reported
(excluding (excluding (including
Reported Embratel) Embratel) Embratel)
4Q 1997 4Q 1997 4Q 1998 4Q 1998
<S> <C> <C> <C> <C>
---------- -------------- ------------ ------------
Revenues:
Voice $ 1,090 $ 4,641 $ 4,997 $ 4,997
Data 458 1,255 1,616 1,616
International 211 211 328 1,336
Internet 182 408 658 658
Communications services 1,941 6,515 7,599 8,607
Information technology
and other 78 513 410 410
Total 2,019 7,028 8,009 9,017
Operating expenses:
Line costs 981 3,628 3,750 4,276
Selling, general and
administrative 425 2,419 2,188 2,408
Depreciation and
amortization 258 934 950 1,100
Total 1,664 6,981 6,888 7,784
Operating income 355 47 1,121 1,233
Other income (expense):
Interest expense (106) (289) (286) (286)
Miscellaneous 8 (38) 1 6
Income (loss) before
income taxes and
minority interests 257 (280) 836 953
Provision for income taxes 155 11 393 414
Net income (loss) before
minority intrerests 102 (291) 443 539
Minority interests (82)
- - -
<PAGE>
Net income (loss) 102 (291) 443 457
Preferred dividends and
distributions on Trust
securities 7 22 15 15
Net income (loss) applicable
to common shareholders $95 [313) $ 428 $ 442
Earnings (loss) per
common share -
Net income (loss) applicable
to common shareholders:
Basic $ .10 [0.18) $ 0.23 $ 0.24
Diluted $0.10 $ [0.18) $ 0.23 $ 0.23
Shares utilized in
calculation:
Basic 980 1,723 1,831 1,831
Diluted 1,044 1,723 1,894 1,894
</TABLE>
<TABLE>
<CAPTION>
MCI WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1997 and 1998
(Unaudited. In Millions, Except Per Share Data)
Reported, Before Charges Reported,
After Charges
(excluding (including (including
Reported Embratel) Embratel) Embratel)
Year 1997 Year 1998 Year 1998 Year 1998
---------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Voice $ 4,062 $ 9,243 $ 9,243 $ 9,243
Data 1,618 3,384 3,384 3,384
International 726 1,130 2,312 2,312
Internet 566 2,165 2,165 2,165
Communications services 6,972 15,922 17,104 17,104
Information technology
and other 412 574 574 574
Total 7,384 16,496 17,678 17,678
Operating expenses:
Line costs 3,764 7,763 8,380 8,416
Selling, general and
administrative 1,626 4,032 4,291 4,312
Depreciation and
amortization 976 2,017 2,200 2,200
In process research and
development and other
charges - - - 3,725
Total 6,366 13,812 14,871 18,653
Operating income (loss) 1,018 2,684 2,807 (975)
Other income (expense):
Interest expense (395) (634) (637) (637)
Miscellaneous 40 28 41 41
<PAGE>
Income (loss) before income
taxes, extraordinary items
and minority interests 663 2,078 2,211 (1,571)
Provision for income taxes 416 977 1,002 876
Net income (loss) before
extraordinary items and
minority 247 1,101 1,209 (2,447)
interests
Extraordinary items, net of
taxes of $0 in 1997 and
$78 in 1998 (3) - - (129)
Net income (loss) before
minority interests 244 1,101 1,209 (2,576)
Minority interests - - (93) (93)
Net income (loss) 244 1,101 1,116 (2,669)
Preferred dividends and
distributions on Trust
securities 26 31 31 31
Net income (loss) applicable
to common shareholders $ 218 $ 1,070 $ 1,085 [2,700)
Earnings (loss) per common
share - Net income (loss)
applicable to common
shareholders before
extraordinary items:
Basic $ 0.23 $ 0.84 $ 0.85 [2.02)
Diluted $ 0.22 $ 0.81 $ 0.83 [2.02)
Extraordinary item $ - $ - $ - [0.10)
Net income (loss) applicable
to common shareholders:
Basic $ 0.23 $ 0.84 $ 0.85 [2.12)
Diluted $ 0.22 $ 0.81 $ 0.83 [2.12)
Shares utilized in
calculation:
Basic 966 1,274 1,274 1,274
Diluted 997 1,330 1,330 1,274
</TABLE>
MCI WORLDCOM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
BEFORE CHARGES
(Unaudited. In Millions, Except Per Share Data)
<TABLE>
<CAPTION>
Pro Forma (Excluding Embratel)
---------------------------------------------------------------------------
For the Quarter Ended
---------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31, Year 1998
1998 1998 1998 1998
<S> <C> <C> <C> <C> <C>
---------- ------------- ------------- ------------- -----------
Revenues:
Voice $ 4,754 $ 4,822 $ 4,907 $ 4,997 $ 19,480
Data 1,304 1,387 1,520 1,616 5,827
International 230 270 302 328 1,130
Internet 474 525 589 658 2,246
Communication
services 6,762 7,004 7,318 7,599 28,683
<PAGE>
Information
technology
and other 490 477 356 410 1,733
Total 7,252 7,481 7,674 8,009 30,416
Operating expenses:
Line costs 3,607 3,598 3,625 3,750 14,580
Selling, general and
administrative 2,011 2,078 2,114 2,188 8,391
EBITDA 1,634 1,805 1,935 2,071 7,445
Depreciation and
amortization 1,029 979 944 950 3,902
Operating income 605 826 991 1,121 3,543
Other income (expense):
Interest expense (276) (284) (289) (286) (1,135)
Miscellaneous 32 38 4 1 75
Income before
income taxes 361 580 706 836 2,483
Income tax expense 170 272 332 393 1,167
Net income 191 308 374 443 1,316
Preferred dividends and
distributions on Trust 22 21 15 15 73
securities
Net income applicable
to common
shareholders $ 169 $ 287 $ 359 $ 428 $ 1,243
Earnings per
common share:
Basic $ 0.10 $ 0.16 $ 0.20 $ 0.23 $ 0.69
Diluted $ 0.10 $ 0.16 $ 0.19 $ 0.23 $ 0.67
Shares outstanding:
Basic 1,744 1,782 1,822 1,831 1,795
Diluted 1,829 1,858 1,880 1,894 1,865
</TABLE>
<TABLE>
<CAPTION>
MCI WORLDCOM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
BEFORE CHARGES
(Unaudited. In Millions, Except Per Share Data)
Pro Forma (Excluding Embratel)
---------------------------------------------------------------------
For the Quarter Ended
---------------------------------------------------------------------
March 31, June 30, Sept. 30 Dec. 31, Year
1997 1997 1997 1997 1997
<S> <C> <C> <C> <C> <C>
--------- --------- --------- ------------ -----------
Revenues:
Voice $ 4,402 $ 4,427 $ 4,462 $ 4,641 $ 17,932
Data 1,039 1,109 1,147 1,255 4,550
International 144 176 195 211 726
Internet 271 303 343 408 1,325
Communications services 5,856 6,015 6,147 6,515 24,533
Information
technology
and other 518 491 477 513 1,999
Total 6,374 6,506 6,624 7,028 26,532
Operating expenses:
Line costs 3,174 3,267 3,781 3,628 13,850
<PAGE>
Selling, general
and administrative 1,755 1,721 1,927 2,419 7,822
EBITDA 1,445 1,518 916 981 4,860
Depreciation and
amortization 749 788 859 934 3,330
Operating income 696 730 57 47 1,530
Other income (expense):
Interest expense (270) (276) (282) (289) (1,117)
Miscellaneous (20) (16) (23) (38) (97)
Income (loss) before
income taxes 406 438 (248) (280) 316
Income tax expense 242 267 17 11 537
Net income (loss) 164 171 (265) (291) (221)
Preferred dividends and
distributions on Trust
securities 22 21 22 22 87
Net income (loss)
applicable to common $ 142 $ 150 [287) [313) [308)
shareholders
Earnings (loss) per
common share:
Basic $ 0.09 $ 0.09 [0.17) [0.18) [0.18)
Diluted $ 0.08 $ 0.09 [0.17) [0.18) [0.18)
Shares outstanding:
Basic 1,668 1,688 1,707 1,723 1,697
Diluted 1,754 1,773 1,707 1,723 1,697
</TABLE>
<TABLE>
<CAPTION>
MCI WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited. In Millions)
Reported Reported
(excluding (excluding
Embratel) Embratel) Reported
December 31, September 30, December 31,
1998 1998 1997
------------ ------------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 999 $ 311 $ 155
Accounts receivable, net 4,810 4,896 1,241
Other current assets 3,031 1,649 478
Total current assets 8,840 6,856 1,874
Property and equipment, net 19,259 17,862 6,714
Goodwill and other
intangibles, net 45,468 45,371 13,882
Other assets 6,626 6,588 1,126
$ 80,193 $ 6,677 $ 23,596
<PAGE>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Short-term debt and current
maturities of
long-term debt $ 4,628 $ 4,125 $ 11
Other current liabilities 9,886 8,565 2,063
Total current liabilities 14,514 12,690 2,074
Long-term liabilities, less current portion:
Long-term debt 14,345 14,259 7,413
Note payable - Embratel 1,315 1,342 -
Other liabilities 4,226 3,377 308
Total long-term
liabilities 19,886 18,978 7,721
Mandatorily redeemable
preferred securities 798 750 -
Total shareholders'
investment $ 44,995 44,259 13,801
$ 80,193 $76,677 $23,596
</TABLE>
Exhibit (a)(18)
HEADLINE: EDS and MCI WorldCom Align to Capitalize on Global Electronic
Business, Communications and Data Services Markets Companies Agree to
Significant Outsourcing Agreements; EDS Purchases MCI Systemhouse for $1.65
Billion
DATELINE: PLANO, Texas and JACKSON, Miss., Feb. 11
BODY:
In one of the largest agreements of its kind, EDS and MCI WorldCom today
announced a framework that positions the companies to seize opportunities in the
converging global communications and computing markets. Each company and its
customers will be better positioned to capitalize on the rapid growth in
electronic business and global communications services.
There are four key elements of the agreement:
-- In a 10-year agreement, MCI WorldCom will outsource major portions of
its information technology services to EDS. EDS will assume
responsibility for significant applications development and
maintenance services and virtually all of MCI WorldCom's
infrastructure services. When finalized, this will represent the
largest IT outsourcing agreement in the telecommunications industry to
date, with revenues to EDS expected to range from $5-$7 billion over
the life of the contract.
-- EDS will outsource the bulk of its global network to MCI WorldCom,
with MCI WorldCom handling end-to-end management of voice and data
communications services on a preferred basis for EDS and its
customers. This agreement is expected to approximate $6-$8.5 billion
in revenues to MCI WorldCom over the next 10 years.
-- EDS will acquire MCI Systemhouse for $1.65 billion in cash. The
acquisition of Systemhouse, an IT services provider that delivered
$1.7 billion in revenue in 1998, will enhance EDS' applications
consulting and systems integration capabilities and rank the company
among the largest information technology services providers in Canada.
EDS believes it will achieve substantial synergies by integrating
Systemhouse into its existing infrastructure.
-- MCI WorldCom and EDS will capitalize on the fast-growing market for
global communications and data services, including electronic business
applications. The companies intend to develop networking solutions to
business and government entities worldwide utilizing the global
capabilities of both companies. The expanded services will complement
MCI WorldCom's existing array of network services now offered to large
corporate and government users.
"Aligning with MCI WorldCom and its global telecommunications capabilities
will enhance EDS' ability to serve our customers as they move into the digital
world of electronic business," said Dick Brown, EDS chairman and CEO. "This
relationship assures that both EDS and those we serve are positioned to
capitalize on the cresting wave of global data and voice network services.
"We are also enthusiastic about working with the people who will be joining
EDS from MCI WorldCom and Systemhouse," Brown continued. "To us, today's
announcement offers the best of all worlds -- new business, new capabilities,
new customers, new markets, and new highly skilled and talented professionals."
More than 12,000 employees primarily located in the U.S. and Canada are
expected to transition into employment with EDS from MCI WorldCom and from
Systemhouse. Approximately 1,000 EDS network employees from offices around the
world will be offered employment with MCI WorldCom.
"This agreement is a classic win-win," said John Sidgmore, MCI WorldCom
vice chairman. "It allows both companies to grow their core businesses while
creating synergies as each expands its global offerings. EDS offers MCI WorldCom
<PAGE>
proven IT and integration expertise, which will be key to our ability to
maintain our technology leadership position as we continue to aggressively
deploy facilities and expand globally."
The MCI WorldCom IT outsourcing agreement names EDS as the company's
preferred supplier of IT services. EDS will have responsibility for business
process management for selected billing functions, defined applications
development and maintenance, mainframe operations, desktop and help desk
services and LAN support.
The network agreement provides for MCI WorldCom to outsource EDS' network
and establishes MCI WorldCom as EDS' preferred supplier of communications and
network integration services. MCI WorldCom will have responsibility for voice,
data and video transport, and other network services for EDS and many of the
company's network customers.
According to Brown, "network capabilities are increasingly important to
companies that want to emerge as the business leaders of the 21st century. Our
customers in all industries and in every geography are placing growing emphasis
on advanced network capabilities and the development of electronic business
applications. We intend to be there for them -- and our relationship with MCI
WorldCom will play a major role in seeing that happen."
The marketing relationship with EDS strengthens MCI WorldCom's existing
wide area network outsourcing, design, implementation and management services.
MCI WorldCom currently manages hundreds of networks for leading multinational
companies and organizations worldwide such as the United States Postal Service,
Nasdaq Stock Market, Inc. and the Independent System Operator and the Power
Exchange.
"This partnership brings together the leading players in communications and
information technology, greatly enhancing our marketing muscle and allowing us
access to new markets," noted Sidgmore.
About MCI WorldCom
MCI WorldCom is a global communications company with revenue of more than
$30 billion and established operations in over 65 countries encompassing the
Americas, Europe and the Asia-Pacific regions. MCI WorldCom is a premier
provider of facilities-based and fully integrated local, long distance,
international and Internet services. MCI WorldCom's global networks, including
its state-of-the-art pan-European network and transoceanic cable systems,
provide end-to-end high-capacity connectivity to more than 40,000 buildings
worldwide. For more information on MCI WorldCom, visit the World Wide Web at
http://www.mciworldcom.com.
About Systemhouse
MCI Systemhouse, the Network
Enterprise Company(SM), is a global information technology services company. MCI
Systemhouse is one of the industry's only single-source providers of convergence
products and services to enable businesses' total networking, communications,
and consulting and outsourcing needs. The company has 120 offices and
approximately 9,000 professionals worldwide. With a comprehensive suite of
network enabled IT solutions and services for the new millennium, MCI
Systemhouse serves major corporate, mid-sized and public sector clients
throughout North and South America, Europe and Asia.
About EDS
EDS has been a leader in the global information services industry for more
than 35 years. The company delivers systems and technology expertise, management
consulting, business process management and electronic business leadership. EDS,
which reported revenues of $16.9 billion in 1998, offers solutions to improve
the performance of more than 9,000 business and government clients in about 50
countries. The company's stock is traded on the New York Stock Exchange (NYSE:
EDS) and the London Stock Exchange. Visit EDS via the Internet at
http://www.eds.com.
SOURCE MCI WorldCom
Thursday, February 11, 1999. Reporters wishing to participate should call
1-888-469-1756 or 312-470-7212 by 8:20 AM EST. The pass code for the call is
"global." Replay of the conference call will be available after 10:30 AM EST by
calling 1-800-839-4171.
CONTACT: Media: Jamie DePeau of MCI Worldcom, 202-887-3224 or 800-644-NEWS;
or Virginia Brooks of EDS, or 972-605-6779, or virginia.brooksfeds.com; or
Investors: Gary Brandt of MCI WorldCom, 601-360-8544
