UNITED STATES OF AMERICA
June 26, 2002
On March 14, 2002, the Commission authorized a Formal Order of Private Investigation in this matter. Pursuant to Section 21(a)(1) of the Securities Exchange Act of 1934 ("Exchange Act"), the Commission, in its discretion, deems it necessary, in order to determine whether WorldCom, Inc. ("WorldCom"), has violated, is violating, or is about to violate any provision of the Exchange Act, to require WorldCom to file a statement in writing, under oath, describing certain facts and circumstances concerning the matter under investigation.
Accordingly, it hereby ORDERED that WorldCom file a statement in writing, under oath, describing in detail the facts and circumstances underlying the events described in and that led to WorldCom's announcement on June 25, 2002 (1) that WorldCom intended to restate its financial statements for 2001 and the first quarter of 2002; (2) that WorldCom had determined that certain transfers from line cost expenses to capital accounts during this period were not made in accordance with generally accepted accounting principles ("GAAP"); (3) that the amount of these transfers was $3.055 billion for 2001 and $797 million for first quarter 2002; and (4) that without these transfers, the company's reported Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") would be reduced to $6.339 billion for 2001 and $1.368 billion for first quarter 2002, and the company would have reported a net loss for 2001 and for the first quarter of 2002.
IT IS FURTHER ORDERED that the sworn statement and an electronic copy of it be delivered to the Director of the Division of Enforcement before 8:00 a.m. on July 1, 2002, for publication.
By the Commission.