WorldCom, Inc.

Balance Sheets
December 31st
ASSETS Originally Reported ASSETS Revised
Current assets: 2000 2001 Current assets 2001 2002
Cash and cash equivalents $761 $1,416 Cash and cash equivalents 1,290 2,820
Accounts receivable, net of allowance for
bad debts of $1,532 in 2000 and $1,086 in
2001
6,815 5,308
Accounts receivable, net of allowance
for doubtful accounts of $1,817 in
2002 and $2,023 in 2001
4,202 5,611
Deferred tax asset 172 251 Prepaid expenses 306 445
Other current assets 2,007 2,230 Other current assets 2,438 773
Assets held for sale 130
Total current assets 9,755 9,205 Total current assets 8,366 9,649
Property, plant and equipment, net 37,423 38,809 Property, plant and equipment, net 21,486 14,190
Investments 398 170
Goodwill and other intangible assets 46,594 50,537 Intangible assets, net 2,284 1,514
Deferred taxes 270 279
Other assets 5,131 5,363 Other assets 902 734
$98,903 $103,914 $33,706 $26,536
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
LIABILITIES AND
SHAREHOLDERS DEFICIT
Current liabilities: Liabilities not subject to compromise
Short-term debt and current maturities of
long-term debt
$7,200 $172 Current liabilities
Accrued interest 446 618 Current portion of long-term debt 1,309 885
Accounts payable and accrued line costs 6,022 4,844 Accrued interest 538 35
Accounts payable 3,081 1,080
Other current liabilities 4,005 3,576 Accrued access costs 3,914 2,068
Other current liabilities 4,474 3,354
Liabilities of assets held for sale 74
Total current liabilities 17,673 9,210 Total current liabilities 13,390 7,422
Long-term liabilities, less current portion:
Long-term debt 17,696 30,038
Long-term debt, excluding current
portion
29,310 1,046
Deferred tax liability 3,611 4,066 Other liabilities 511 468
Other liabilities 1,124 576 Liabilities subject to compromise 37,154
Total long-term liabilities 22,431 34,680
Minority interests not subject to
compromise
Minority interests 2,592 101
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely
company guaranteed debentures
752
Mandatorily redeemable preferred
stock issued by subsidiaries
665
Company obligated mandatorily redeemable
and other preferred securities
798 1,993 Other minority interests 1,581 837
Minority interests subject to
compromise
Shareholders' investment:
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely
company guaranteed debentures
750
2000 and none in 2001; issued and
outstanding: 2,887,960,378 shares in 2000
and none in 2001
29 --
Mandatorily redeemable preferred
stock issued by subsidiaries
660
WorldCom group common stock, par value
$.01 per share; authorized: none in 2000 and
4,850,000,000
PreferredstockSeriesD,E,andF
Junior Convertible Preferred Stock
($500 aggregate liquidation preference
including $7 of accrued and unpaid
dividends)
438
shares in 2001; issued and outstanding :
none in 2000 and 2,967,436,680 shares in
2001
-- 30
Preferred stock subject to
compromiseSeriesD,E,andF
Junior Convertible Preferred Stock
($494 aggregate liquidation preference
including $1 of accrued and unpaid
dividends)
494
MCI group common stock, par value $.01 per
share; authorized: none in 2000
WorldCom group common stock, par
value $.01 per share; authorized:
4,850,000,000 in 2002 and 2001;
issued and outstanding: 2,975,109,694
in 2002 and 2,967,436,680 in 2001
30 30
and 150,000,000 shares in 2001; issued and
outstanding: none in 2000 and 118,595,711
in 2001
-- 1
MCI group common stock, par value
$.01 per share; authorized:
150,000,000 in 2002 and 2001; issued
and outstanding: 118,877,925 in 2002
and 118,595,711 in 2001
1 1
Additional paid-in capital 52,877 54,297 Additional paid-in capital 56,330 56,384
Retained earnings 3,160 4,400 Accumulated deficit (68,975 (78,167
Unrealized holding gain (loss) on marketable
equity securities
345 -51
Treasury stock, at cost: 6,765,316
shares of WorldCom group common
stock in 2002 and 2001; 270,611
shares of MCI group common stock in
2002 and 2001
(185 (185
Cumulative foreign currency translation
adjustment
-817 -562 Accumulated other comprehensive loss (142 (358
Treasury stock, at cost, 6,765,316 shares of
WorldCom, Inc. in 2000, 6,765,316 shares of
-185 -185
Total shareholders' investment 55,409 57,930 Totalshareholdersdeficit -12,941 -22,295
$98,903 $103,914 $33,706 $26,536
WorldCom, Inc.
Operating Statements
For the Years Ending December 31st
Originally Reported Revised as of April 15, 2004
2000 2001 2000 2001 2002
Revenues $39,090 $35,179 Revenues
$39,344 $37,668 $32,202
Operating expenses: Operating expenses:
Line costs 15,462 14,739 Access costs
16,903 16,015 14,651
Selling, general and administrative 10,597 11,046
Selling, general and
administrative
10,337 10,660 9,179
Costs of services and
products
5,092 5,377 4,339
Depreciation and amortization 4,878 5,880
Depreciation and
amortization
8,485 4,851 3,291
Other charges -- --
Unclassified (income)
expense
426 -383 -35
Property, plant and
equipment
impairment charges
14,057 5,729 4,599
Goodwill and
intangibles
impairment charges
33,123 6,863 400
Total Expenses 30,937 31,665 Total expenses
88,423 49,112 36,424
Operating income 8,153 3,514 Operating loss
-$49,079 -$11,444 -$4,222
Other income (expense):
Other income (expense), net:
Interest expense -970 -1,533
Interest expense
(contractual interest of
$2,360 in 2002)
1,300 2,099 1,372
Miscellaneous 385 412
Miscellaneous
(expense) income
(includes a $2,250
SEC fine in 2002)
459 -921 -2,794
Income before income taxes, minority inte
Reorganization items,
net
(802
of accounting change 7,568 2,393
Loss from continuing
operations before income
taxes, minority interests and
cumulative effect of a
change in accounting
principle
-$49,920 -$14,474 -$9,190
Provision for income taxes 3,025 927
Income tax expense (benefit)
-1,915 -503 54
Income before minority interests and cumu 4,543 1,466
-193
Minority interests -305 35
Minority interests, net of tax
358 -702 -193
Income before cumulative effect of accounting change 4,238 1,501
-193
Cumulative effect of accounting change (net of income tax of $50 in 2000) -85 --
Loss from continuing
operations before cumulative
effect of a change in
accounting principle
-48,363 -14,275 -9,051
-------- --------
Net loss from discontinued
operations -449 -1,323 -90
Loss before cumulative
effect of a change in
accounting principle
-48,812 -15,598 (9,141
Cumulative effect of a
change in accounting
principle
-97 1 -32
Net income $4,153 $1,501 Net loss
-$48,909 -$15,597 -$9,173
Distributions on preferred
securities (contractual
distributions of $35 in 2002)
19 19
Net loss attributable to
common shareholders
-$48,909 -$15,616 -$9,192
WorldCom, Inc.
Statement of Cash Flows
For the Years Ending December 31st
Originall
y
Reported
Revised
as of
April 15,
2004
Cash flows from operating activities: 2000 2001
OPERATING ACTIVITIES
2000 2001 2002
Net income $4,153 $1,501
Net loss
-48,909 -15,597 -9,173
Adjustments to reconcile net loss to net cash
provided by operating activities:
Adjustments to reconcile net loss to net cash
provided by operating activities:

Loss on impairment of investments
105 640 25
Cumulative effect of accounting change 85 --
Cumulative effect of a change in accounting
principle
97 -1 32
Minority interests 305 -35
Minority interests, net of tax
358 -702 -193
Depreciation and amortization 4,878 5,880
Depreciation and amortization
8,485 4,851 3,291
Provision for deferred income taxes 1,649 1,104
Loss on impairment of long-lived assets,
goodwill and intangibles
47,180 12,841 4,999
Realized gain on investments
-636 -188 (24
Loss on sale of property, plant and equipment
130 79 123
Bad debt provision
1,451 1,837 1,517
Deferred tax provision
-2,169 -408 171
Bad debt write-off of employee loan
332
Non-cash reorganization charges
688
Other
67 112 73
Change in assets and liabilities, net of effect
of business combinations:
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable, net -1,126 281
Accounts receivable
-2,063 -509 -2,883
Other current assets -797 164
Other current assets
-830 457 1,462
Non current assets 4 350
Accounts payable and other current liabilities -1,050 -1,154
Accounts payable and accrued access costs
668 -1,179 -325
All other operating activities -431 253
Other liabilities
353 320 1,144
Other
-64 -58 -59
Net cash provided by operating activities 7,666 7,994
Net cash provided by operating activities
4,227 2,845 1,200
Cash flows from investing activities: INVESTING ACTIVITIES
Capital expenditures -11,484 -7,886
Additions to property, plant and equipment
-11,668 -6,465 -1,660
Acquisitions and related costs -14 -206
Proceeds from sale of property, plant and
equipment
26 48 48
Increase in intangible assets -938 -694
Proceeds from sale of investments
699 561 57
Decrease in other liabilities -839 -480
Purchase of investments
-220 -95
All other investing activities -1,110 -424
Proceeds from disposition of assets
53
Cash paid for acquisitions, net of cash
received
-171
Net cash used in investing activities -14,385 -9,690
Net cash used in investing activities
-11,163 -6,122 -1,502
Cash flows from financing activities: FINANCING ACTIVITIES
Principal borrowings (repayments) on debt,
net 6,377 3,031
Principal borrowings on debt
7,771 11,830 2,851
Principal repayments on debt
-1,439 -7,366 -715
Common stock issuance 585 124
Proceeds from exercise of stock options
569 109 15
Distributions on mandatorily redeemable and
other preferred securities
Dividends paid on common and preferred
stock (2 -86 -159
and dividends paid on other equity securities -65 -154
Redemption of preferred stock
-190 -200
Redemptions of preferred stock -190 -200
Debt issuance costs
(27 (70 (50
All other financing activities -84 -272
Net cash provided by (used in) financing
activities 6,623 2,529
Net cash provided by financing activities
6,682 4,217 1,942
Effect of exchange rate changes on cash -19 38
Effect of exchange rate changes on cash
-19 -32 -110
Net increase (decrease) in cash and cash
equivalents -115 871
Net change in cash and cash equivalents
-273 908 1,530
Cash and cash equivalents at beginning of
period 876 761
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 655 382 1,290
Deconsolidation of Embratel -- -216
Cash and cash equivalents at end of period $761 $1,416
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $382 $1,290 $2,820
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid (refunds received) for taxes, net of
refunds 422 144 (471
Cash paid for interest, net of amounts
capitalized 1,233 1,831 1,306
Cash paid for reorganization items 114
Non cash items
Conversion of Digex preferred stock to
common stock 28
Minimum pension liability adjustment 9 38
Unrealized holding loss on investments 345 697 22
Reclassification of pre-petition liabilities to
liabilities subject to compromise 2,890