17. Based on company records and an interview with WorldCom's Vice President of Investor Relations ("VP-IR"), I am aware of the following. a. At all times relevant to this Complaint, numerous analysts of major Wall Street investment firms followed WorldCom's performance and published estimates regarding its expected earnings. b. These analysts considered, among other things, WorldCom's EBITDA ("Earnings Before Interest, Taxes, Depreciation, and Amortization"), earnings per share, net income, and capital expenditures, to gauge WorldCom's performance and predict WorldCom's expected earnings.
18, I have spoken with the VP-IA, other employees of WorldCom's Internal Audit department, WorldCom's Director of Property Accounting (the "DPA"), and the VP-LCAP, who have informed me of the following, in substance and in part, a, Beginning at least in or about July 2000, WorldCom's expenses as a percentage of its total revenue began to increase, resulting in a decline in the rate of growth of WorldCom's earnings, This decline created a substantial risk that, unless symmetry series clear graphics case for apple iphone 7 and 8 - easy breezy WorldCom's performance improved, its earnings would fail to meet analysts' expectations, Thereafter, SCOTT D, SULLIVAN, the defendant, and others known and unknown, devised a scheme to hide WorldCom's increasing expenses by causing substantial portions of WorldCom's line costs to be transferred from WorldCom's income statement into its capital expenditure accounts, This transfer allowed WorldCom to defer recognizing a substantial portion of its current operating expenses, thereby allowing WorldCom to report higher earnings..
b. To implement this scheme, SULLIVAN instructed DAVID F. MYERS, the defendant, to direct employees of WorldCom's general accounting department to make various journal entries necessary to transfer certain line costs from WorldCom's income statement to capital expenditure accounts on WorldCom's balance sheet. c. In furtherance of this plan, MYERS instructed certain subordinates, including the Director of General Accounting (the "DGA"), the Director of Management Reporting (the "DMR"), and the Director of Legal Entity Accounting (the "DLEA") to make journal entries transferring certain line costs from expense accounts in WorldCom's general ledger to certain general ledger accounts for capital expenditures. As a result of these transfers, billions of dollars of WorldCom's current expenses were transferred from expenses on its Income Statement to assets on its Balance Sheet. Contrary to WorldCom's usual practices and prevailing accounting industry norms, no documentary support existed for any of these entries, which reclassified certain line costs as capital expenditures.
d, Beginning at the end of the first quarter of 2001 and continuing through the first quarter of 2002, the DGA, the DMR and the DLEA executed the instructions of MYERS by making certain journal entries in the general ledger to transfer, in total, approximately $3.8 billion from line cost expense accounts to capital expenditure accounts, MYERS' symmetry series clear graphics case for apple iphone 7 and 8 - easy breezy instructions were generally communicated, and the journal entries affecting the transfers were generally made, after WorldCom's field offices' books were closed for each quarter..
f. In or about July 2001, the DLEA called the DPA and again instructed him to adjust the PP&E Roll-Forward by increasing certain capital accounts for "prepaid capacity." The DLEA again advised the DPA that these entries had been ordered by SULLIVAN and MYERS. Correspondingly, the DMR made journal entries in WorldCom's general ledger that effectively transferred approximately $560 million from certain line cost expense accounts to certain PP&E capital expenditure accounts. g. In or about October 2001, the DLEA called the DPA and again instructed him to adjust the PP&E Roll-Forward by increasing certain capital accounts for "prepaid capacity." The DLEA again advised the DPA that these entries had been ordered by SULLIVAN and MYERS. Correspondingly, a subordinate of the DMR made journal entries in WorldCom's general ledger that effectively transferred approximately $743 million from certain line cost expense accounts to certain PP&E capital expenditure accounts.