WorldCom, Inc. is comprised of two groups, each with its own separately traded tracking stock: the WorldCom group, consisting of WorldCom’s data, Internet, international and commercial voice businesses, and MCI group which released earnings results separately today, consisting of WorldCom’s consumer, small business, wholesale long distance, wireless messaging and dial-up Internet access businesses.

WorldCom group’s continuing focus on balancing revenue growth with improving cash results enabled the group to achieve 12 percent revenue growth from the same period last year, while improving free cash flow by $1.9 billion from the year-ago quarter. The improved cash performance is due, approximately equally, to increased cash generated from operations, reduced working capital and judicious capital expenditures.

WorldCom group reported revenues of $5.5 billion, a 12 percent increase from the same period in 2000. As a result of the Company’s acquisition of a controlling interest in Digex, Incorporated, the WorldCom group recorded $29 million in revenue, net of intercompany eliminations, during the quarter. This revenue added approximately six-tenths of one percent to WorldCom group’s year-over-year growth rate.

Results were driven by 22 percent year-over-year revenue growth in data and Internet services. Data and Internet services accounted for approximately $3.1 billion or 56 percent of WorldCom group’s revenues, up from 52 percent of revenues in the third quarter of 2000.

International services revenues increased 19 percent from the year-ago period to $761 million. In local currency, year-over-year international services growth was 27 percent. WorldCom group international services represent those services that originate outside the United States. International revenues represented 14 percent of WorldCom group’s revenues during the quarter, up from 13 percent of revenues in the year-ago period.

Business voice revenues declined 6 percent from the year-ago period, representing 30 percent of WorldCom group’s revenues compared to 35 percent in the third quarter of 2000. Business long distance voice revenues declined at a slower pace this quarter than in previous periods, but were offset by wireless voice resale revenues which were down sequentially.

WorldCom group EBITDA (earnings before interest, taxes, depreciation and amortization) was $2.1 billion, a $60 million sequential increase and a $35 million increase from the same period last year. WorldCom group EBITDA margin was 38.1 percent for the third quarter of 2001, an improvement of 30 basis points from the second quarter.

The group reported cash earnings (earnings before goodwill amortization) of $701 million or 24 cents per share. WorldCom group net income, after goodwill amortization, was $460 million or 16 cents per share in the quarter.

During the third quarter, WorldCom completed a number of financial transactions, including the repayment of $1.5 billion in debt that matured in August, $1 billion in previously announced debt redemptions, $1.1 billion in open market debt repurchases and $200 million in preferred stock redemptions, while paying down credit facilities by $259 million.

WorldCom delivered excellent growth this quarter, while substantially improving the free cash flow of our businesses, said Bernard J. Ebbers, president and CEO of WorldCom, Inc. Our data, Internet and international businesses continue to perform well in spite of the very difficult economic environment. We still expect our growth businesses to gain market share profitably during this period of global economic uncertainty.

SOURCE: COMPANY PRESS RELEASE