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THE WORLDCOM SCANDAL

WorldCom at a Glance

June 27, 2002|From Reuters

Key events in the history of WorldCom Inc.:

1983: Businessmen Bernard J. Ebbers, Murray Waldron and William Rector plan to create a long-distance company called LDDS, for long-distance discount service.

1995: LDDS acquires voice and data transmission company Williams Telecommunications Group Inc. for $2.5 billion in cash and changes its name to WorldCom.

1998: WorldCom completes mergers with MCI Communications Corp. ($40 billion, the largest ever at that time), Brooks Fiber Properties Inc. ($1.2 billion) and CompuServe Corp. ($1.3 billion).

1999: WorldCom and Sprint Corp. agree to merge.

2000: U.S. and European regulators block the proposed merger with Sprint.

2001: WorldCom merges with Intermedia Communications Inc., a provider of data and Internet services to businesses.

March 11, 2002: WorldCom receives a request for information from the Securities and Exchange Commission relating to accounting practices and loans to officers.

April 3: WorldCom says it is cutting 3,700 jobs in the U.S., or 4% of its work force.

April 22: Standard & Poor's cuts WorldCom's long-term and short-term credit ratings.

April 23: Moody's Investors Service cuts WorldCom's long-term ratings. Fitch cuts the company's ratings, saying it expects WorldCom's revenue to deteriorate during 2002, with prospects for recovery in 2003 uncertain.

April 30: WorldCom CEO Bernard J. Ebbers resigns amid slumping share prices and an SEC probe of the firm's support of his personal loans.

May 9: Moody's cuts WorldCom's long-term debt ratings to "junk" status.

May 10: Standard & Poor's cuts WorldCom's credit rating to "junk" status.

May 13: Standard & Poor's removes WorldCom from its S&P 500 index.

May 15: WorldCom says it will draw down a $2.65-billion bank credit line as it negotiates for a new $5-billion funding pact with its lenders.

May 21: WorldCom says it will scrap dividend payments and eliminate its two tracking stocks, one that reflects its main Internet and data business and a second that reflects its residential long-distance telephone business.

May 23: WorldCom secures $1.5 billion in new funding to replace a $2-billion credit line.

June 5: WorldCom says it will exit the wireless resale business and will cut jobs to reduce expenses and pare massive debts.

June 25: WorldCom fires its chief financial officer after uncovering improper accounting of $3.9 billion in expenses that covered up a net loss for 2001 and the first quarter of 2002. The company also says it will cut 17,000 jobs.

June 26: Nasdaq halts trading in WorldCom Group and the MCI Group tracking stock. President Bush calls for a full investigation of the scandal.

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