Elliott Associates Intends Not to Vote for MCI / Verizon Merger as Currently Structured Investment Firm Urges MCI to Consider Any Subsequent Offers NEW YORK, Feb. 23 /PRNewswire/ -- Elliott Associates, L.P. (together with funds under common management) is a substantial shareholder of MCI Inc. (NASDAQ:MCIP) and today sent the following letter to the Board of Directors of MCI Inc.: February 23, 2005 Board of Directors MCI Inc. 22001 Loudoun County Parkway Ashburn, VA 20147 Re: Proposed Sale of MCI Inc. Ladies and Gentlemen: Elliott Associates, L.P. and funds under common management ("Elliott") are the beneficial owners of approximately 2.72 million common shares of MCI Inc. (the "Company"). We are writing with regard to the Agreement and Plan of Merger (the "Proposed Merger") between the Company and Verizon Communications Inc. ("Verizon"). Our purpose in writing is to express our displeasure with the economics of the Proposed Merger and to urge you to seriously consider any offer put forth in the future (a "Subsequent Bid") by Qwest Communications International, Inc ("Qwest") or other interested parties. We appreciate the significant efforts that management and the Board of Directors of MCI (the "Board") have made over the last many months to reshape the Company, its cost structure and its business. As a function of having been one of the largest and most active creditors of the predecessor company during its reorganization, Elliott is keenly aware of the significant obstacles that the current management and Board overcame to enable the Company to be in the position in which it finds itself today. That said, we feel that the Board erred in its decision with respect to the Proposed Merger. Fortunately, based on February 17, 2005 8-K filed by Qwest, it appears likely that Qwest will put forth a Subsequent Bid, and thus the Board will be in a position in the near future to take the further steps required to maximize the long-term value of the Company to its shareholders. The offer to acquire the Company made by Qwest (the "Initial Bid") outlined in its February 16, 2005 8-K translates into a price of $23.82 per MCI share,(1) or roughly 17% higher than the value of the deal currently contemplated with Verizon.(2) Further, the initial reaction of Qwest's common stock to the mere possibility of a deal with MCI illustrates the potential for substantially greater value to be realized by MCI shareholders (we note that the recent, more muted reaction of Qwest stock to the possibility of a Subsequent Bid is potentially the result of the seeming lack of interest of the Board with regard to the Qwest overtures). Clearly, any bid to purchase the Company (both in the case of Verizon and Qwest) may have certain not- immediately quantifiable aspects that would require consideration. However, to accept a bid from Verizon that is 19% lower than the Qwest bid is difficult to understand. To have failed to explore an alternative form of the Initial Bid, in light of the substantial and continuing interest Qwest has shown in owning MCI, seems unjustifiable. In addition, our analysis suggests that a Qwest/MCI combination is likely to require less divestitures and less time to complete than the Proposed Merger. While Verizon is a larger and more stable company than Qwest, such must be weighed against the fact that, through a transaction with Qwest, current MCI shareholders would participate much more meaningfully in the value created by having the MCI assets under a new corporate umbrella. By its very nature, investing in equity securities entails risks; by investing in MCI, its current shareholder base has demonstrated a willingness to incur a calculated, though substantial, risk with the view that the potential rewards outweigh such risk. Further, the very traits of Verizon that lend it the stability that seems to have driven in some substantial part the Board's current reasoning -- its size, its meaningful exposure to the wireless market, etc., -- create a dynamic in which Verizon, quite frankly, would not be a meaningfully different company subsequent to the Proposed Merger than it is today. If current MCI shareholders wanted to participate in Verizon's fortunes, they could have simply purchased Verizon stock, and may still do so today. In addition to the superiority of the Initial Bid based on today's security prices, a Qwest/MCI transaction has the potential to transform both entities and realize synergies in a value-creating manner not afforded by a Verizon transaction. It is our understanding that the Board was concerned with certain contingent liabilities of Qwest. Again, we agree that the Board must weigh these issues. However, our understanding of the timing of the events leading up to the Proposed Merger causes us to wonder if the Board gave itself a sufficient opportunity to conduct such an analysis. We note that just yesterday, the Suspension and Debarment Official of the General Services Administration issued a favorable letter to Qwest in which it stated that "[b]ased upon all information contained in the administrative record, I have concluded that the protection of the Federal government's interest does not presently require that I initiate administrative action against Qwest." Given the magnitude of the superiority of the Initial Bid based on current trading values, the Board should have taken the necessary steps to properly investigate these matters in a complete and thoughtful manner, a process that likely could not have been accomplished in such a short time frame. Further, if press reports are correct that Qwest had floated the potential for a $6.3 billion all-cash bid, such indicates that Qwest might have been amenable to structuring a transaction in a form that would largely mitigate any concerns the Board may have had with the prospects of a combined Qwest/MCI. In addition to the concern expressed by several of MCI's largest shareholders, we would point out that a significant number of the Company's shares have traded subsequent to the announcement of the Proposed Merger at a price higher than that implied by the current Verizon bid. We view this as a clear signal that such holders are anticipating an offer from Qwest, and would be amenable to such a transaction. Given the information currently available to us, we believe that the Initial Offer was superior to the Proposed Merger. Thus, should Qwest present MCI with a Subsequent Offer, we trust that the Board, consistent with its fiduciary duty to maximize shareholder value (particularly given the enhanced scrutiny that applies in the change of control context under Delaware law), would give such a proposal its due and serious consideration. In the event that the Board insists on proceeding with the Proposed Merger notwithstanding the more value accretive transactions available to the Board, the Board should note that Elliott intends not to vote for the proposed merger with Verizon as currently structured. Further, Elliott reserves all rights with regard to the past and future conduct of the Board in connection with the potential combinations with Qwest and Verizon. Should you have any questions, please contact Scott Tagliarino at 212-506-2999. Very truly yours, Elliott Associates, L.P. About Elliott Associates, L.P. Elliott Associates, L.P. and its sister fund, Elliott International, L.P. have more than $4.2 billion of capital under management as of January 1, 2005. Founded in 1977, Elliott Associates is one of the oldest hedge funds under continuous management. The Elliott funds' investors include large institutions, high-net-worth individuals and families, and employees of the firm. (1) This calculation is based on the February 22, 2005 closing price of Qwest stock of $3.94; 3.735 shares of Qwest per share of MCI; $7.50 of cash per MCI shares; and four quarterly dividends of $0.40 per share. We also note that the Initial Bid was 19% higher than the currently contemplated Verizon transaction on February 14, 2005, the day the Proposed Merger was announced (using the relevant closing prices as of February 11, 2005). All numbers are exclusive of the $200 million break-up fee. (2) The Proposed Merger contemplates that MCI shareholders will receive 0.4062 shares of Verizon stock and a total of $6.00 of cash per MCI share. Based on the February 22, 2005 closing price of Verizon, this translates to an offer price of $20.37. DATASOURCE: Elliott Associates, L.P. CONTACT: Scott Tagliarino, +1-212-506-2999, +1-917-922-2364 cell, for Elliott Associates, L.P.

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