MCI Provides 2004 Financial Guidance
(PR Newswire 01/22 16:19:49)
Company on Track for February 2004 Emergence From Chapter 11
ASHBURN, Va., Jan. 22 /PRNewswire-FirstCall/ -- MCI (WCOEQ, MCWEQ) today
provided financial guidance for full-year 2004. MCI expects to generate
revenue between $21 billion and $22 billion, a decline of approximately 10 to
12 percent versus expected 2003 results, primarily reflecting overall industry
conditions and continued declining trends in the consumer market. Operating
income is expected to be between $1.1 billion and $1.3 billion, which includes
depreciation and amortization of $1.7 billion and restructuring charges of
approximately $100 million, resulting in an increase of $300 million to $400
million versus expected 2003 results. Net operating cash flow is expected to
exceed $1 billion, after capital expenditures of 6 to 8 percent of revenues,
but including proceeds from the sale of certain non-core assets.
The Company remains focused on delivering an innovative set of products
and services which take advantage of advancements in converged voice and data
networks, as well as an aggressive cost reduction program, which includes a
reduction of sales, general and administrative (SG&A) expense by 15 to 20
percent versus expected 2003 results. The Company expects to achieve this
reduction through increased on-net utilization, selective outsourcing,
attrition and workforce reductions as necessary. MCI remains on track to
emerge from U.S. Chapter 11 protection in February 2004.
"Last year we made tremendous strides in improving MCI's financial health
and returning to a path toward market leadership," said Bob Blakely, MCI
executive vice president and chief financial officer. "While current market
conditions remain difficult, we believe our solid enterprise performance, our
industry-leading IP strengths and ability to serve businesses globally
position us well to succeed over the long-term."
Business Segments
Following are highlights related to each of the company's three business
segments:
Business Markets revenue, which includes sales to U.S. domestic enterprise
customers, is expected to decline 6 to 8 percent versus 2003. Continued
competitive pricing pressure, especially in Small and Medium-sized Business
and traditional long-distance services, is expected to be partially offset by
gains in new product offerings, such as multi-protocol label switching (MPLS)
and other Internet-protocol (IP)-based services, as well as a broad range of
Managed Services offerings. The Company expects better than overall revenue
trends in its Enterprise and Government Markets segments.
International revenue, which includes sales to Europe, Middle East and
Africa (EMEA), Asia-Pacific and Latin America commercial customers, is
expected to decline at similar levels to Business Markets. Continued
competitive pricing pressure is expected to be partially offset by stable
volumes in EMEA and new entries into emerging countries. MCI continues to
operate the largest facilities-based network with the highest total points-of-
presence of any international carrier.
Mass Markets revenue, or sales to domestic U.S. consumers, is expected to
decline 20 to 25 percent versus 2003. This reflects continued long-distance
industry revenue declines primarily due to wireless substitution, intensified
competitive conditions and the impact of national Do Not Call legislation.
Mass Markets will continue to focus on the U.S. local services markets and
plans to launch a consumer voice-over IP initiative in 2004.
2004 Capital Expenditures
MCI has invested $38 billion in its network over the past six years,
placing it in a position of strength to benefit from the industry's move
toward IP. Today, MCI's IP network can connect customers to more places, more
directly, than any other IP network in the world. Continuing to invest for
the future, the Company expects 2004 capital expenditures to be 6 to 8 percent
of revenue. MCI is expanding its MPLS footprint that supports the convergence
of voice and data, as well as investing in network security products and
advanced application features.
About WorldCom, Inc.
WorldCom, Inc. (WCOEQ, MCWEQ), which, together with its subsidiaries,
currently conducts business under the MCI brand name, is a leading global
communications provider, delivering innovative, cost-effective, advanced
communications connectivity to businesses, governments and consumers. With
the industry's most expansive global IP backbone, based on the number of
company-owned points-of-presence (POPs), and wholly-owned data networks,
WorldCom develops the converged communications products and services that are
the foundation for commerce and communications in today's market. For more
information, go to mci.com.
Forward-Looking Statements
This press release includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. While management has prepared the
guidance contained in this press release in good faith and believes the
assumptions to be reasonable, it is important to note that the Company can
provide no assurance that such assumptions will be realized. Important
assumptions used in preparing the guidance include: a generally stable
economic environment with low inflation, and no significant change in the
regulatory and competitive conditions under which the Company currently
operates. Furthermore, no additional material restructuring costs are
forecast for 2004. Actual results could vary materially if any of these
assumptions turn out to be incorrect or other unexpected events occur. A
variety of risk factors could affect the Company's projected financial
results, including: developments related to the Company's bankruptcy
proceedings and matters arising out of pending class-action and other lawsuits
and ongoing internal and government investigations relating to the previously
announced restatement of its financial results. Other factors that may cause
actual results to differ materially from management's expectations include
economic uncertainty; the effects of vigorous competition, including price
compression; the impact of technological change on our business, alternative
technologies, and dependence on availability of transmission facilities; risks
of international business; regulatory risks in the United States and
internationally; contingent liabilities; uncertainties regarding the
collectibility of receivables; risks associated with debt service requirements
and our financial leverage; uncertainties associated with the success of
acquisitions; and the ongoing war on terrorism. More detailed information
about those factors is contained in the Company's filings with the Securities
and Exchange Commission. We will continue to file documents with the
Securities and Exchange Commission under the WorldCom, Inc. name until the
effective date of the Plan of Reorganization.
Basis of Presentation
The Company cautions readers not to place undue reliance upon the
information with respect to 2003 results contained in this press release. The
un-audited information for 2003 in this press release is subject to further
review and potential adjustments upon the audit of the Company's consolidated
financial statements for the fiscal year ended December 31, 2003, and
accordingly this un-audited information may not be indicative of the Company's
actual operating results. There can be no assurance that the un-audited 2003
information in this press release is complete and accurate and the Company
undertakes no obligation to update or revise this press release.
SOURCE MCI
-0- 01/22/2004
/CONTACT: Media: Brad Burns or Claire Hassett, +1-800-644-NEWS, or
Investors: Gregory Petitt, +1-877-624-9266, all of MCI/
/Web site: mci.com
(WCOEQ MCWEQ) |
