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The following is an excerpt from a 10-Q SEC Filing, filed by WORLDCOM INC /GA/ on 11/14/1997.
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MCI INC - 10-Q - 19971114 - PART_II

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 2. Changes in Securities and Use of Proceeds.

On August 19, 1997, in connection with its acquisition of the outstanding shares of McCourt Fiber Network, Inc., which was the holder of the shares of Metropolitan Fiber Systems - McCourt, Inc. not already owned by the Company, the Company issued to shareholders of McCourt Fiber Network, Inc. 846,154 shares of WorldCom Common Stock which total included 812,308 shares issued to David C. McCourt, a member of the WorldCom Board of Directors. In connection with this transaction, the Company relied on an exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act") and Regulation D promulgated thereunder.

On July 1, 1997, in connection with its acquisition of the remaining shares of Gridnet, Inc. that it did not already own, the Company issued 466,000 shares of WorldCom Common Stock to certain minority shareholders of Gridnet, Inc. In connection with this transaction, the Company relied on an exemption from registration contained in
Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

Page 20

Item 3. Defaults upon Senior Securities.

None

Item 4. Submission of Matters to a Vote of Security Holders.

None

Item 5. Other Information.

None

Item 6. Exhibits and Reports on Form 8-K.

A. Exhibits

See Exhibit Index

B. Reports on Form 8-K

(i) Current Report on Form 8-K dated August 5, 1997 (filed August 5, 1997) reporting under Item 5, Other Events, information related to the Company's announcement of the amendment of the Exchange Offers and Consent Solicitations for certain MFS Communications Company, Inc. Notes.

(ii) Current Report on Form 8-K dated August 8, 1997 (filed August 11, 1997) reporting under Item 5, Other Events, information relating to the Company's announcement of the initial acceptance in Exchange Offers and Consent Solicitations for certain MFS Communications Company, Inc. Notes.

(iii) Current Report on Form 8-K dated August 22, 1997 (filed August 25,1997) reporting under Item 5, Other Events, information related to the successful completion of Exchange Offers and Consent Solicitations for certain MFS Communications Company, Inc. Notes.

(iv) Current Report on Form 8-K dated August 28, 1997 (filed September 10, 1997) reporting under Item 9, Sales of Securities Pursuant to Regulation S, information related to the Company's issuance of a total of 988,781 shares of WorldCom common stock pursuant to the acquisition agreement among NLnet Holding B.V., a Netherlands corporation ("NLnet"), the shareholders of NLnet and the holders of options to purchase shares in NLnet, and UUNET Technologies Inc., a wholly owned subsidiary of the Company and WorldCom, in exchange for all of the common stock and options of NLnet, valued at approximately $33.1 million.

(v) Current Report on Form 8-K dated September 7, 1997 (filed September 16, 1997) reporting under Item 5, Other Events, information related to the Company's announcement that it had entered into an Agreement and Plan of Merger to acquire CompuServe Corporation, a Delaware corporation ("CompuServe") from H&R Block, Inc., a Missouri corporation; and the Company's announcement that on September 7, 1997, the Company also entered into a Purchase and Sale Agreement (the "Agreement") with America Online, Inc. ("AOL") and ANS Communications, Inc., a Delaware corporation and a wholly owned subsidiary of AOL ("ANS").

Page 21

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by Scott D. Sullivan, thereunto duly authorized to sign on behalf of the registrant and as the principal financial officer thereof.

WORLDCOM, INC.

                                           By: /s/ Scott D. Sullivan
                                              ----------------------------
                                                   Scott D. Sullivan
                                               Chief Financial Officer



Dated: November 14, 1997

Page 22

EXHIBIT INDEX

Exhibit No.             Description
-----------             -----------
    1.1       Form of Underwriting Agreement Standard Provisions for Debt
              Securities, with form of Terms Agreement (incorporated
              herein by reference to Exhibit 1.1 to the Company's Current
              Report on Form 8-K dated March 26, 1997(File No. 0-11258))

    1.2       Terms Agreement dated March 26, 1997, by and among WorldCom,
              Inc. and Salomon Brothers Inc, Goldman, Sachs & Co., Credit
              Suisse First Boston and NationsBanc Capital Markets, Inc.
              (incorporated herein by reference to Exhibit 1.2 to the
              Company's Current Report on Form 8-K dated March 26,
              1997(File No. 0-11258))

    2.1       Agreement and Plan of Merger, dated as of September 7, 1997,
              by and among H&R Block, Inc., H&R Block Group, Inc.,
              CompuServe Corporation, WorldCom, Inc., and Walnut
              Acquisition Company, L.L.C. (incorporated herein by
              reference to Exhibit 2.1 to the Company's Current Report on
              Form 8-K dated September 7, 1997(File No. 0-11258))*

    2.2       Stockholders Agreement, dated as of September 7, 1997, by
              and among H&R Block, Inc., a Missouri corporation, H&R Block
              Group, Inc., a Delaware corporation, and WorldCom, Inc., a
              Georgia corporation. (incorporated herein by reference to
              Exhibit 2.2 to the Company's Current Report on Form 8-K
              dated September 7, 1997(File No. 0-11258))

    2.3       Standstill Agreement dated as of September 7, 1997, by and
              among H&R Block, Inc., a Missouri corporation, H&R Block
              Group, Inc., a Delaware corporation, and WorldCom, Inc., a
              Georgia corporation (incorporated herein by reference to
              Exhibit 2.3 to the Company's Current Report on Form 8-K
              dated September 7, 1997(File No. 0-11258))

    2.4       Purchase and Sale Agreement by and among America Online,
              Inc., ANS Communications, Inc. and WorldCom, Inc., dated as
              of September 7, 1997 (incorporated herein by reference to
              Exhibit 2.4 to the Company's Current Report on Form 8-K
              dated September 7, 1997(File No. 0-11258))*

    2.5       Agreement and Plan of Merger dated as of October 1, 1997 by
              and among WorldCom, Inc., BV Acquisition, Inc. and Brooks
              Fiber Properties, Inc. ("BFP") (incorporated by reference to
              Exhibit 2.1 to BFP's Current Report on Form 8-K dated
              October 1, 1997 (filed October 6, 1997) (File No. 0-
              28036))*

    2.6       Agreement and Plan of Merger dated as of November 9, 1997
              among WorldCom, Inc., TC Investments Corp. and MCI
              Communications Corporation (incorporated by reference to
              Exhibit 2.1 to the Company's Current Report on Form 8-K
              dated November 9, 1997 (filed November 12, 1997))*

    2.7       Agreement dated as of November 9, 1997 among British
              Telecommunications plc, WorldCom, Inc. and MCI
              Communications Corporation (incorporated by reference to
              Exhibit 99.1 to the Company's Current Report on Form 8-K
              dated November 9, 1997 (filed November 12, 1997))*

Page 23

EXHIBIT INDEX

Exhibit No.             Description
-----------             -----------
    3.1       Second Amended and Restated Articles of Incorporation of
              WorldCom, Inc. (including preferred stock designations) as
              of December 31, 1996 (incorporated herein by reference to
              Exhibit 3.1 to the Company's Current Report on Form 8-K
              dated December 31, 1996 (File No. 0-11258))

    3.2       Restated Bylaws of WorldCom, Inc. (incorporated by reference
              to Exhibit 4.2 to the Company's Annual Report on Form 10-K
              for the year ended December 31, 1996 (File No. 0-11258))

    4.1       Form of 7.55% Senior Note due 2004 (incorporated herein by
              reference to Exhibit 4.1 to the Company's Current Report on
              Form 8-K dated March 26, 1997(File No. 0-11258))

    4.2       Form of 7.75% Senior Note due 2007 (incorporated herein by
              reference to Exhibit 4.2 to the Company's Current Report on
              Form 8-K dated March 26, 1997(File No. 0-11258))

    4.3       Form of 7.75% Senior Note due 2027 (incorporated herein by
              reference to Exhibit 4.3 to the Company's Current Report on
              Form 8-K dated March 26, 1997 (File No. 0-11258))

    4.4       Senior Indenture dated March 1, 1997 by and between
              WorldCom, Inc. and Mellon Bank, N.A., as trustee
              (incorporated herein by reference to Exhibit 4.6 to the
              Company's Form 10-Q for the period ended March 31, 1997
              (File No. 0-11258))

    4.5       First Supplemental Indenture of WorldCom to Mellon Bank,
              N.A. relating to 9-3/8% Notes Due 2004 and 8-7/8% Senior
              Notes Due 2006 (including form of 9-3/8% Senior Note Due
              2004 attached as Exhibit A thereto and form of 8-7/8% Senior
              Note Due 2006 attached as Exhibit B thereto) (incorporated
              herein by reference to Exhibit 4.9 to Amendment No. 2 to the
              Company's Registration Statement on Form S-4 (Registration
              No. 333-27345))

    10.1      Memorandum between the Company and James Q. Crowe dated June
              26, 1997 (incorporated herein by reference to Exhibit 10.1
              to the Company's Quarterly Report on Form 10-Q for the
              period ended June 30, 1997 (File No. 0-11258))

    10.2      Facility A Revolving Credit Agreement among WorldCom, Inc.,
              NationsBank of Texas, N.A. (Managing Agent and
              Administrative Agent), Bank of America NT & SA, Bank of
              Montreal, The Bank of New York, The Bank of Nova Scotia,
              Bank of Tokyo-Mitsubishi Trust Company, Barclays Bank PLC,
              Canadian Imperial Bank of Commerce, The Chase Manhattan
              Bank, Citibank, N.A., Credit Lyonnais New York Branch, First
              Union National Bank, Fleet National Bank, The Industrial
              Bank of Japan, Limited, Atlanta Agency, Morgan Guaranty
              Trust Company of New York, Royal Bank of Canada, and Toronto
              Dominion (Texas), Inc. (Agents) and the Lenders named
              therein (Facility A Lenders), dated as of July 3, 1997.
              (Incorporated herein by reference to Exhibit 10.1 to the
              Company's Current Report on Form 8-K dated June 30, 1997
              (File No. 0-11258))

    10.3      Facility B Revolving Credit Agreement among WorldCom, Inc.,
              NationsBank of Texas, N.A. (Managing Agent and
              Administrative Agent), Bank of America NT & SA, Bank of
              Montreal, The Bank of New York, The Bank of Nova Scotia,
              Bank of Tokyo-Mitsubishi Trust Company, Barclays Bank

Page 24

EXHIBIT INDEX

Exhibit No.             Description
-----------             -----------

              PLC, Canadian Imperial Bank of Commerce, The Chase Manhattan
              Bank, Citibank, N.A., Credit Lyonnais New York Branch, First
              Union National Bank, Fleet National Bank, The Industrial
              Bank of Japan, Limited, Atlanta Agency, Morgan Guaranty
              Trust Company of New York, Royal Bank of Canada, and Toronto
              Dominion (Texas), Inc. (Agents) and the Lenders named
              therein (Facility B Lenders), dated as of July 3, 1997.
              (Incorporated herein by reference to Exhibit 10.2 to the
              Company's Current Report on Form 8-K dated June 30, 1997
              (File No. 0-11258))

    10.4      WorldCom, Inc. Performance Bonus Plan (incorporated herein
              by reference to Exhibit A to the Company's Proxy Statement
              dated April 21, 1997 (File No. 0-11258))

    11.1      Statement Regarding Computation of Per Share Earnings

    27.1      Financial Data Schedule

*The Registrant hereby agrees to furnish supplementally a copy of any omitted schedules to this Agreement to the Securities and Exchange Commission upon its request.

Page 25

Exhibit 11.1

WORLDCOM, INC. AND SUBSIDIARIES

STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)

                                                                    For the Three Months Ended         For the Nine Months Ended
                                                                   -----------------------------     -----------------------------
                                                                   September 30,    September 30,    September 30,    September 30,
                                                                       1997             1996            1997              1996
                                                                   ------------     ------------     ------------     ------------
Primary:
  Weighted average shares outstanding                                   903,356          402,881          895,688          393,869
  Common stock equivalents                                               28,537            7,724           27,045               --
  Common stock equivalents issuable upon conversion of:
    Series A preferred stock                                             32,703                            32,703               --
    5% convertible notes                                                     --            4,584               --               --
                                                                   ------------     ------------     ------------     ------------
                                                                        964,596          415,189          955,436          393,869
                                                                   ============     ============     ============     ============
Net income (loss) applicable to common shareholders
  before extraordinary items                                       $    105,839     $    109,255     $    220,889     $    (48,466)
Extraordinary items                                                          --               --               --          (24,434)
Add back:
  Series A preferred dividend                                             6,364               --           19,092               --
  Interest paid on 5% convertible notes
    conversions, net of taxes                                                --            1,489               --               --
                                                                   ------------     ------------     ------------     ------------
Net income (loss) applicable to common shareholders                $    112,203     $    110,744     $    239,981     $    (72,900)
                                                                   ============     ============     ============     ============

Primary earnings (loss) per share:
  Applicable to common shareholders before extraordinary items     $       0.12     $       0.27     $       0.25     $      (0.12)
                                                                   ============     ============     ============     ============
  Extraordinary items                                              $         --     $         --     $         --     $      (0.06)
                                                                   ============     ============     ============     ============
  Applicable to common shareholders                                $       0.12     $       0.27     $       0.25     $      (0.18)
                                                                   ============     ============     ============     ============

Fully diluted:
  Weighted average shares outstanding                                   903,356          402,881          895,688          393,869
  Common stock equivalents                                               30,041            7,730           29,109               --
  Common stock issuable upon conversion of:
    Series A preferred stock                                             32,703               --           32,703               --
    Series B preferred stock                                              1,227               --            1,230               --
    5% convertible notes                                                     --            4,584               --               --
                                                                   ------------     ------------     ------------     ------------
                                                                        967,327          415,195          958,730          393,869
                                                                   ============     ============     ============     ============

Net income (loss) applicable to common shareholders
  before extraordinary items                                       $    105,839     $    109,255     $    220,889     $    (48,466)
Extraordinary items                                                          --               --               --          (24,434)
Add back:
  Series A preferred dividend                                             6,364               --           19,092               --
  Series B preferred dividend                                               242               --              735               --
  Interest on 5% convertible notes, net of taxes                             --            1,489
                                                                   ------------     ------------     ------------     ------------
Net income (loss) applicable to common shareholders                $    112,445     $    110,744     $    240,716     $    (72,900)
                                                                   ============     ============     ============     ============

Fully diluted earnings (loss) per share:
  Applicable to common shareholders before extraordinary items     $       0.12     $       0.27     $       0.25     $      (0.12)
                                                                   ============     ============     ============     ============
  Extraordinary items                                              $         --     $         --     $         --     $      (0.06)
                                                                   ============     ============     ============     ============
  Applicable to common shareholders                                $       0.12     $       0.27     $       0.25     $      (0.18)
                                                                   ============     ============     ============     ============


ARTICLE 5
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WORLDCOM, INC.'S FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
MULTIPLIER: 1,000


PERIOD TYPE 9 MOS
FISCAL YEAR END DEC 31 1997
PERIOD START JAN 01 1997
PERIOD END SEP 30 1997
CASH 59,190
SECURITIES 6,866
RECEIVABLES 1,303,688
ALLOWANCES 128,583
INVENTORY 0
CURRENT ASSETS 1,625,380
PP&E 6,081,730
DEPRECIATION 662,909
TOTAL ASSETS 20,813,368
CURRENT LIABILITIES 1,870,285
BONDS 5,348,638
PREFERRED MANDATORY 0
PREFERRED 125
COMMON 9,072
OTHER SE 13,356,803
TOTAL LIABILITY AND EQUITY 20,813,368
SALES 0
TOTAL REVENUES 5,348,522
CGS 2,805,807
TOTAL COSTS 4,628,875
OTHER EXPENSES 16,794
LOSS PROVISION 76,246
INTEREST EXPENSE 234,949
INCOME PRETAX 501,492
INCOME TAX 260,776
INCOME CONTINUING 240,716
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME 220,889
EPS PRIMARY 0.25
EPS DILUTED 0.25
BROKERAGE PARTNERS