WorldCom gets sums wrong - by $74bn
By Tim Richardson
Posted: 15/03/2004 at 11:51 GMT

The true scale of WorldCom's financial woes has been revealed after the telecoms outfit announced a whopping $74.4bn restatement of income. Back in 2000/01 - while WorldCom was reporting that it was making a profit - the company was actually making a loss.

Described as the "largest and most complex financial restatement ever undertaken", WorldCom has completed yet another task on its way to emerging from Chapter 11 bankruptcy protection.

It's expected to exit Chapter 11 next month.

According to the new figures, WorldCom generated a loss of $48.9 billion in 2000 against revenues of $39.3 billion.

In 2001 the company lost $15.6bn against revenues of $37.7bn. In 2002, losses were $9.2 billion against revenues of $32.2bn.

Said MCI CFO Bob Blakely: "This filing culminates the largest and most complex financial restatement ever undertaken. While these restatement adjustments are substantial they do not have any impact on our current substantial liquidity position."

WorldCom said the restatement process - including the revalidation and correction of accounting records and a review of the accounting for all major acquisitions dating back to 1993 - has "no impact on the company's current operations or liquidity".

This month, disgraced former boss Bernie Ebbers was charged with federal criminal offences after his former boardroom colleague turned supergrass.

Ebbers is charged with fraud and conspiracy related to the collapse of WorldCom in July 2002. Ex-CFO Scott Sullivan pleaded guilty to similar charges and is co-operating with investigators.

Elsewhere, telecoms outfit Global Crossing announced last week that it made a profit of $25bn in Q4 2003 - the largest ever in US corporate history. However, the sum has been described as "meaningless" by one analyst, who explained that the profit was a result of accounting rules, following Global Crossing's exit from Chapter 11 bankruptcy.

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