MCI Announces First Quarter 2005 Results

MCI, Inc. (www.mci.com) today reported its results for the first quarter ended March 31, 2005.

Revenues for the first quarter were $4.8 billion, down 4 percent sequentially and 12 percent year-over-year. Operating expenses fell sharply compared to the year-earlier quarter when the Company incurred significant expenses related to its reorganization, which became effective April 20, 2004.

Operating income before depreciation and amortization was $443 million for the quarter. Operating income before depreciation and amortization for last year's first quarter would have been $251 million which includes the effect of approximately $157 million of severance and restatement expenses.

Operating income was $115 million for the quarter compared to an operating loss of $270 million in the comparable 2004 period. Income from continuing operations before taxes was $28 million in the first quarter versus a loss of $362 million in the first quarter of 2004.

The Company reported a net loss of $2 million or 1 cent per basic and diluted share in the first quarter of 2005. MCI recorded a loss of $388 million or $1.19 per basic and diluted share in the year earlier quarter. MCI had approximately 325 million shares outstanding at the end of first quarter 2005.

"We achieved solid performance in the first quarter," said Michael D. Capellas, MCI president and chief executive officer.

MCI's operations are organized into three distinct business units defined by their respective customer bases: Enterprise Markets, US Sales & Service and International & Wholesale Markets.

The segment's operating loss was reduced to $51 million in the first quarter of 2005 from an operating loss of $185 million in the year earlier quarter. First quarter results benefited from unusual items as they did in the fourth quarter of 2004.