UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended December 31, 1996

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _____ to _______

                         Commission File Number: 0-6457

                         MCI COMMUNICATIONS CORPORATION

          (Exact name of registrant as specified in its charter)

     Delaware                                  52-0886267
(State of incorporation)            (I.R.S. Employer Identification No.)

     1801 Pennsylvania Avenue, N.W., Washington, D.C.         20006
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:  (202) 872-1600

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $.10 par value per share
                                (Title of class)

       8.00% Cumulative Quarterly Income Preferred Securities, Series A*
                                (Title of class)
--------------------------
* Issued by MCI Capital I, a Delaware  statutory  business trust. The payment of
trust  distributions  and payments on  liquidation  or redemption are guaranteed
under   certain   circumstances   by   MCI   Communications   Corporation.   MCI
Communications  Corporation is the owner of 100% of the common securities issued
by MCI Capital I.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ]

The aggregate market value of the voting stock of registrant, which includes the
Common   Stock  and  Class  A  Common   Stock,   held  by   non-affiliates   was
$24,377,901,691 at February 14, 1997, based upon the closing price of the Common
Stock on that date.

As of February 14, 1997, registrant had outstanding 547,737,100 shares of Common
Stock and 135,998,932 shares of Class A Common Stock.

Documents Incorporated by Reference:

Portions of the Annual Report to  Stockholders  for the year ended  December 31,
1996 - Part II Portions of the Proxy  Statement  For the 1997 Annual  Meeting of
Stockholders -
Part I and Part III





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PAGE 2


Forward-looking Statements May Prove Inaccurate


          MCI has made certain forward-looking  statements in this Annual Report
on Form  10-K  that are  subject  to risks  and  uncertainties.  Forward-looking
statements  include  information  concerning  the  possible  future  results  of
operations  of  the  company,  its  long-distance   telecommunication   services
business, its investments in ventures and developing markets ("VDM") businesses,
the possible  future  results of operations of the company and Concert after the
Merger and  statements of information  preceded by,  followed by or that include
the words "believes",  "expects",  "anticipates",  or similar  expressions.  For
those  statements,   the  company  claims  the  protection  of  safe-harbor  for
forward-looking statements contained in the Private Securities Litigation Reform
Act of  1995.  The  reader  is  cautioned  that  important  factors  such as the
following,  in addition to those  contained  elsewhere in this Annual  Report on
Form 10-K,  could affect the future  results of the company,  its long  distance
telecommunication  services and VDM businesses and the company and Concert after
the  Merger  and could  cause  those  results  to differ  materially  from those
expressed in the  forward-looking  statements:  material  adverse changes in the
economic  conditions  in the  markets  served  by the  company  and  Concert;  a
significant  delay in the  expected  closing of the  Merger;  future  regulatory
actions and  conditions in MCI's and Concert's  operating  areas,  including the
ability of the company to obtain local  facilities  at  competitive  rates;  and
competition  from others in the U.S. and  international  long-distance  markets,
including  the entry of the RBOC's and other  companies  into the  long-distance
markets in the U.S.

          Capitalized  terms not otherwise defined above shall have the meanings
ascribed to them in this Annual Report on Form 10-K.



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                                     PART I

Item 1. Business

GENERAL
-------

      MCI* is one of the world's leading providers of communication services. It
is the second largest carrier of long-distance telecommunication services in the
United  States  ("U.S.")  and  the  third  largest   carrier  of   international
long-distance telecommunication services in the world.

      MCI  provides  a  broad  range  of   communication   services,   including
long-distance   telecommunication   services,   local  and  wireless   services,
Internet/intranet  services and information technology and outsourcing services.
The  provision  of  long-distance   telecommunication  services  is  MCI's  core
business.  Long-distance  telecommunication services comprise a wide spectrum of
domestic and  international  voice and data  services,  including  long-distance
telephone services, data communication services,  teleconferencing  services and
electronic  messaging  services.  During each of the last three years, more than
90% of MCI's operating  revenues and operating income were derived from its core
business.

      The communication  services industry continues to change both domestically
and internationally.  The enactment of the  Telecommunications  Act of 1996 (the
"Telecommunications  Act") and the recent  agreement of member  countries of the
World Trade Organization to open their telecommunication  markets to competition
reflect and further this change. The  Telecommunications Act is expected to have
a significant impact on MCI's business by opening the U.S. local service markets
to competition and allowing the incumbent local exchange  carriers  ("ILECs") to
compete in the  long-distance  market.  These  developments  should increase the
momentum  of  change  and  provide  significant  opportunities  and risks to the
participants in these markets.




----------------------
*MCI  conducts  its  business  primarily  through its  subsidiaries.  Unless the
context  otherwise  requires,   "MCI"  or  "company"  means  MCI  Communications
Corporation,   a  Delaware  corporation   organized  in  August  1968,  and  its
subsidiaries on a consolidated  basis.  MCI is a registered  service mark of MCI
Communications  Corporation.  MCI has its  principal  executive  offices at 1801
Pennsylvania  Avenue,  N.W.,  Washington,  D.C.  20006  (telephone  number (202)
872-1600).




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      The changes in the communication services industry reflect, and are driven
by,  providers of  telecommunication  services that are  entering,  or trying to
enter,  new  markets,  both  domestically  and  internationally,  and are facing
competition from new entrants in their present markets.  This convergence of the
international,  domestic  long-distance  and  local  telecommunication  services
markets into one global market is being  facilitated by evolving  technology and
by the regulatory  developments  described above and is partially in response to
the desire of customers to have most or all of their communication  requirements
fulfilled  by one  supplier.  As a  result  and  because  of  this  convergence,
companies,  including MCI, which previously  offered  services  primarily in one
part of the  communication  services  market,  are offering,  either directly or
through alliances with others,  new services to complement their primary service
offerings. These companies are also aligning with entities that provide services
that  complement  their own, such as MCI's  announcement  in November 1996 of an
agreement    providing   for   the   merger   (the    "Merger")   with   British
Telecommunications  plc ("BT") and the pending mergers of several  Regional Bell
Operating Companies  ("RBOCs").  See "The Merger" below for a further discussion
of the Merger.


      MCI's  continuing  investments  in ventures  and  developing  markets will
enable it to expand its  offering of a variety of  wireless,  Internet/intranet,
information  technology  outsourcing  and multimedia  services that,  along with
local services,  complement its long-distance  telecommunication services. These
services,  combined  with the  continued  growth  and  strength  of  MCI's  core
business, should enable MCI to participate in all communication service markets.
See "VENTURES AND DEVELOPING MARKETS BUSINESS" and "CORE BUSINESS" below.

      MCI anticipates that continued  substantial  capital  expenditures will be
required to compete effectively in the long-distance and local telecommunication
service  markets.  Competition  from the RBOCs and any others that seek to enter
the  long-distance   telecommunication  services  market,  some  of  which  have
significant  financial and other resources,  will be intense. Due to the rapidly
changing nature of these markets,  the timing of the  consummation of the Merger
and the other  factors  summarized  above,  MCI cannot  predict the level of its
future  success,  but  the  company  believes  that  it  can  and  will  compete
effectively in providing its services.









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The Merger
----------

      On November 3, 1996, MCI announced an agreement to merge with BT to create
the first truly global  communications  company.  The  combined  company will be
named Concert plc  ("Concert") and will operate under the BT and MCI brand names
in the United Kingdom and the U.S., respectively. Concert** will deliver premier
integrated  services to customers  worldwide and take advantage of opportunities
of a global communications market.

      Consummation of the Merger is subject to certain conditions, including the
approval of the Merger by the stockholders of MCI and BT and receipt of required
regulatory approvals.  See MCI's Proxy Statement for its 1997 Annual Meeting for
a full description of the Merger and the risks and benefits of the Merger, which
description is incorporated herein by reference.

     MCI believes the Merger will increase its financial  strength and enable it
to expand into new  markets,  offer new  services  and compete  earlier and more
effectively  in the local  services  market than it had  anticipated.  The local
services market,  currently dominated by the RBOCs, is in the process of opening
to competition as a result of the Telecommunications Act. The Telecommunications
Act will  facilitate  MCI's and  others'  entry into the local  services  market
although  it will  permit the RBOCs to enter the long  distance  market  outside
their  regions  immediately  and  within  their  regions  eventually.  See "CORE
BUSINESS - COMPETITION" and "CORE BUSINESS - TELECOMMUNICATIONS ACT" below for a
further discussion of the  Telecommunications  Act and its anticipated impact on
competition.

      As of December 31, 1996, MCI had approximately 55,000 full-time employees.



---------------
** Concert  is a mark of  Concert  Communications  Company,  a business  venture
between MCI and BT, and is used under license.




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PAGE 6



CORE BUSINESS
-------------

      Services
      --------

      MCI  provides a wide range of  long-distance  telecommunication  services,
including:  basic long-distance  telephone service; voice and data services over
software-defined  virtual  private  networks;  private  line  services;  collect
calling,  operator  assistance  and calling  card  services,  including  prepaid
calling cards; toll free or 800 services;  900 services;  switched and dedicated
Internet access services;  and Internet  backbone  services.  The company offers
these services individually and in combinations. Through combined offerings, MCI
provides  customers with benefits such as single billing,  unified  services for
multi-location companies and customized calling plans.

      MCI markets domestic and  international  long-distance  telecommunication,
domestic data  telecommunication  and electronic messaging services to business,
government and residential customers primarily through the sales organization of
its   long-distance   telecommunication   subsidiary,   MCI   Telecommunications
Corporation  ("MCIT").   International  data  telecommunication  and  electronic
messaging services are marketed through MCI International,  Inc., a wholly-owned
subsidiary  of MCI.  To a lesser  extent,  MCI also  markets  its voice and data
communication  services  domestically and internationally  through  arrangements
with third parties.

      System
      ------

      Domestic  long-distance  services  are provided  primarily  over MCI's own
optical fiber and terrestrial digital microwave  communication systems and, to a
lesser extent,  over transmission  facilities leased from other common carriers,
utilizing  MCI's  digital  switches.  International  communication  services are
provided by submarine  cable  systems in which MCI holds  investment  positions,
satellites and facilities of other domestic and foreign carriers.

      MCI continues to expand and upgrade its digital transmission and switching
facilities  and  capabilities  to meet the  requirements  of its  customers  for
additional and enhanced domestic and international  services,  to add redundancy
to its network and to enhance network intelligence. Network intelligence enables
MCI to utilize its transmission  resources more effectively and provide enhanced
services. This requires substantial capital expenditures.


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PAGE 7


Total  capital  expenditures  were  approximately  $3.3 billion in 1996 and $2.9
billion  in both 1995 and 1994.  Approximately  $637  million  of MCI's  capital
expenditures  in 1996 were for its  ventures  and  developing  markets  business
units.  See "VENTURES AND DEVELOPING  MARKETS  BUSINESS - LOCAL SERVICES" below.
MCI anticipates  that its core business and its ventures and developing  markets
business units will require total capital  expenditures  of  approximately  $3.9
billion in 1997.

      Local Access
      ------------

      MCI  provides  customers  that  utilize  large  volumes  of  long-distance
telecommunication services with direct access to its long-distance network. Most
customers  access  MCI's  services  through  local  interconnection   facilities
provided by the ILECs,  the largest of which are  subsidiaries of the RBOCs, and
competitive local exchange carriers  ("CLECs").  To a much lesser extent,  local
access is provided by MCImetro,  Inc. ("MCImetro"),  an MCI subsidiary providing
local  telephone  and  competitive  access  services.  The costs of these  local
interconnection  facilities  are a  significant  component  of  MCI's  operating
expenses.

      MCI believes that the  anticipated  increase in  competition  in the local
services  market  due  to the  Telecommunications  Act  will  lower  access  and
interconnection  costs.   MCImetro***  expects  that  the  requirements  of  the
Telecommunications  Act that allow it to  purchase  both  services  and  network
elements  from  ILECs  will  enable  it to offer a wider  variety  of  services,
increase its revenues and utilize the most  economical  local  service  delivery
methods.  However,  the extent to which MCI and MCImetro will benefit  cannot be
quantified and will be partially dependent upon the prices at which services and
network  elements  become and are  available.  In  addition,  MCI  believes  the
temporary  stay  granted by the United  States  Court of Appeals  for the Eighth
Circuit  (the  "Eighth  Circuit")  of  certain  key  provisions  of the  Federal
Communications  Commission ("FCC")  Interconnection  Order (the "Interconnection
Order") implementing the Telecommunications Act may hinder its ability to obtain
ILEC  services  and  facilities  on an economic  basis and could delay  national
competition in the local services market. See "TELECOMMUNICATIONS ACT" below for
a discussion of the Telecommunications Act and the FCC Interconnection Order and
"VENTURES AND DEVELOPING MARKETS BUSINESS - LOCAL SERVICES" below for discussion
of the benefits MCImetro and MCI anticipate from the Telecommunications Act.


-----------------------
***  MCImetro is a service mark of MCI.



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      Competition
      -----------

      MCI's   primary  and  most   vigorous   competitor  in  the  domestic  and
international  long-distance  telecommunication  services market continues to be
AT&T Corp. ("AT&T"),  which is substantially larger than MCI. In general,  MCI's
long-distance telecommunication services are priced lower than AT&T's comparable
services.  Although  price is a factor in  customer  choice,  innovation  in and
quality of services,  diversity of services,  the ability to offer a combination
of services,  marketing strategy,  customer service and other non-price elements
are also important competitive factors.

      The  Telecommunications  Act now allows the RBOCs to provide long-distance
telecommunication  services  internationally  and  domestically  in  territories
outside of their respective  local service  regions.  The RBOCs may also provide
long-distance  telecommunication  services that are  incidental to certain other
services  (e.g.,  wireless  and video  services)  in their  local  regions.  The
authority  to  provide  long-distance   telecommunication  services  originating
outside of an RBOC's  local  service  region does not include the  authority  to
provide services,  such as private line services, 800 services or any equivalent
service,  that  terminate in its local service region and allow the called party
to choose the interLATA (see  definition of LATA below)  carrier.  The RBOCs are
prohibited  from  providing  a full  range  of  long-distance  telecommunication
services in their local service regions until certain  important  conditions are
met (see  "TELECOMMUNICATIONS ACT" below). The RBOCs own extensive facilities in
their local service regions and have  long-standing  customer  relationships and
very substantial  capital and other financial  resources.  MCI believes that the
RBOCs will eventually  become  substantial  competitors of MCI for long-distance
telecommunication services, especially in their local regions.

      In addition to AT&T and the RBOCs,  MCI competes  with Sprint  Corporation
("Sprint"),  other facilities-based  domestic  telecommunication common carriers
and numerous  resellers of long-distance  telecommunication  services.  MCI also
competes with the ILECs that provide  long-distance  telecommunication  services
within local access transport areas ("LATA").




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      Regulation
      ----------

      The  Telecommunications  Act  preserves the FCC's  extensive  authority to
regulate  interstate  services and local access facilities and services provided
by common  carriers,  including the right to review the interstate rates charged
by common carriers,  as well as the authority to implement policies that promote
competition  for all  telecommunication  services.  The  Telecommunications  Act
broadened the scope of authority of the FCC by granting the FCC, in consultation
with the Attorney  General of the United  States (the  "Attorney  General")  the
authority   to   determine   when   the   RBOCs   may   provide    long-distance
telecommunication  services  in their  local  regions.  The FCC was  also  given
authority  to  preempt  state and local  action  that is  inconsistent  with the
Telecommunications  Act.  See  "TELECOMMUNICATIONS  ACT"  below for a summary of
portions of the Telecommunications Act.

      In addition,  the Telecommunications Act authorized the FCC to discontinue
regulation in situations where it could find, based on evidence, that regulation
is unnecessary to further the interest of consumers and competition.  In October
1996, the FCC applied this new  authorization  and concluded  that  non-dominant
common carriers, including MCI, should no longer be required to file tariffs for
their domestic service offerings. It mandated that such carriers cease tariffing
all their  domestic  service  offerings  by September  23, 1997.  MCI and others
appealed this FCC action,  and on February 13, 1997,  the United States Court of
Appeals for the District of Columbia Circuit stayed the FCC's ruling pending the
appeal.  The issues to be decided are: (1) whether the FCC has the  authority to
mandate detariffing (or whether it only has the authority to permit carriers, at
their election,  not to tariff); and (2) assuming that the FCC has the authority
to require detariffing, whether the record is sufficient to support that action.
MCI expects a decision in early 1998.

      Under the  Telecommunications  Act, the states  retain their  authority to
regulate rates for intrastate  services and advance universal  telecommunication
service,  to protect the public safety and welfare,  to ensure continued quality
of telecommunication services and to safeguard the rights of consumers,  subject
to FCC  authority  to  preempt  state  and  local  action  that  violates  or is
inconsistent  with the  Telecommunications  Act.  MCI is  subject  to  extensive
regulation by state regulatory  commissions to the extent it provides intrastate
long-distance telecommunication services and local services.




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      Rates of international  communication carriers for traffic from the United
States to foreign  countries  are  regulated by the FCC.  Revenues  from traffic
between the foreign  country and the U.S.  (with the exception of leased channel
services) are generally collected by the originating carrier and shared with the
terminating  carrier through  agreements that are subject to the approval of the
FCC and the appropriate  overseas agency. In addition to regulation of rates and
agreements, the FCC has jurisdiction over international communication facilities
located in the U.S. The provision of long-distance telecommunication services to
a foreign  country  is subject to the  approval  of the FCC and the  appropriate
foreign governmental agencies.


      Telecommunications Act
      ----------------------

      The Telecommunications  Act, among other things, allows the RBOCs to offer
long-distance  telecommunication  services  outside  of their  respective  local
service  regions.  In order for an RBOC to offer such services in a state within
its local service  region,  the FCC must  determine,  on a state by state basis,
that:  (i) the  RBOC  has  entered  into  one or more  approved  interconnection
agreements  in the  applicable  state;  (ii) the RBOC is  actually  offering  to
competitors all items on the competitive checklist (the "Competitive Checklist")
set forth in the  Telecommunications  Act; (iii) there is a competitor  offering
services to residential and business  customers in the applicable state over its
own  facilities;  and  (iv)  the  grant  of  authority  to the  RBOC to  provide
long-distance  telecommunication  services  in the  applicable  state  is in the
public interest.  Alternatively,  if no competitor has demanded interconnection,
an RBOC may apply for in-region entry based on the  availability of a "Statement
of Generally Available Terms" as provided for in the Telecommunications Act.

      The Competitive Checklist includes  requirements that:(i)  interconnection
be at any  technically  feasible  point and of equal quality as that provided to
the  RBOC or to  other  carriers;  (ii)  access  to the  RBOC's  facilities  and
equipment,  and their features,  functions and  capabilities,  be provided on an
unbundled,  non-discriminatory  basis; (iii) any  telecommunication  service the
RBOC  provides  at retail to  subscribers  who are not  carriers  be  offered to
carriers for resale, at wholesale rates; (iv) access to poles,  ducts,  conduits
and   rights-of-way   owned  or   controlled  by  the  RBOC  be  provided  on  a
non-discriminatory basis; (v) local loop transmission from the central office to
the  customer's  premises be provided  unbundled  from local  switching or other
services;  (vi) local  transport  be provided  from the trunk side of a wireline
switch  unbundled from  switching or other  services;  (vii) local  switching be
provided unbundled from transport, local loop


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transmission   or   other   services;   (viii)   access   be   provided   on   a
non-discriminatory basis to 911 and Enhanced 911 services,  directory assistance
services and  operator  call  completion  services;  (ix) white pages  directory
listings for  customers of the other  carrier's  telephone  exchange  service be
provided;  (x) access to telephone numbers for assignment to the other carrier's
telephone exchange service customers be provided on a  non-discriminatory  basis
until telecommunications  numbering administration guidelines are established by
the FCC and  thereafter be provided in  accordance  with such  guidelines;  (xi)
access to data bases and  associated  signaling  necessary  for call routing and
completion  be provided on a  non-discriminatory  basis;  (xii)  interim  number
portability be provided  through remote call  forwarding,  direct inward dialing
trunks or other  comparable  arrangements  until the FCC supersedes such interim
arrangements  by issuing its number  portability  rules;  (xiii)  access to such
services or  information  as are  necessary to allow the  requesting  carrier to
implement local dialing parity be provided on a  non-discriminatory  basis;  and
(xiv)  reciprocal  compensation  arrangements be implemented for the origination
and  termination  of  telecommunications  so as to provide the  recovery by each
carrier of costs based on a reasonable  approximation of the additional costs of
terminating calls.

      In determining  whether to grant an RBOC authority to offer  long-distance
telecommunication  services in a state in its local service region, the FCC must
consult with the Attorney  General and give  substantial  weight to the Attorney
General's  recommendations.  The FCC must also consult with the applicable state
regulatory   authority.   MCI  will   vigorously   seek  to   ensure   that  the
Telecommunications Act requirement of meaningful facilities-based competition in
the local  services  market is fully  enforced  before  any RBOC is  allowed  to
provide long-distance telecommunication services in a state in its local service
region.  Currently,  no RBOC  applications  to provide  in-region  long-distance
telecommunication  services  are  pending  before  the  FCC,  the  one  previous
application having been withdrawn.  Several of the RBOCs have indicated publicly
their intent to file such applications in the second quarter of 1997.

      Upon the  grant of  authority  to  provide  long-distance  service  in its
region, an RBOC is required to provide immediately intraLATA toll dialing parity
throughout the applicable state. In general,  states cannot require such dialing
parity until the date that the RBOC is granted in-region  interLATA authority or
February 8, 1999, whichever is earlier. Importantly, the following categories of
states may mandate such dialing parity  sooner:  (i) the ten single LATA states,
and (ii) the 15 states (of which two are single LATA states) that issued dialing
parity orders by December 19, 1995.



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PAGE 12


      The  Telecommunications Act also provides that until the date that an RBOC
is authorized to provide long-distance telecommunication services within a state
in the RBOC's local services region or February 8, 1999, whichever is earlier, a
carrier,  such as MCI, serving more than 5% of the U.S.'s  pre-subscribed access
lines, may not market within a state resold telephone  exchange service obtained
from the RBOC jointly with interLATA services offered by that carrier.  However,
this restriction  would not preclude MCI from marketing local services  provided
by MCImetro or another  non-RBOC local service  provider over its own facilities
with MCI's long-distance  telecommunication services. The Telecommunications Act
also  provides  that an RBOC is restricted  from  marketing  its local  services
within any of the states in its region  jointly  with an  affiliate's  interLATA
services until the RBOC is authorized to offer interLATA services in such state.

      Pursuant   to  the   Telecommunications   Act,   the  FCC   released   the
Interconnection   Order  on  August  8,  1996.  The  Interconnection  Order  (i)
established  national rules regarding the duty of the ILECs to negotiate in good
faith;  (ii)  established  rules and  methods  by which the ILECs  must  provide
interconnection  between the  networks of the ILECs and other  telecommunication
common  carriers;  (iii)  established  rules and methods by which the ILECs must
provide to other telecommunication  common carriers access to the ILECs' network
elements on an unbundled basis;  (iv) contained a pricing  methodology which the
various   state   commissions   could  use  to  establish  the  rates  at  which
interconnection  and  network  elements  will  be  sold by the  ILECs  to  other
telecommunication  common carriers; and (v) contained a range for discounts from
the ILECs' retail  prices for their  telecommunication  facilities  and services
which the ILECs should offer new  entrants.  Most state  regulatory  commissions
have set interim prices for  interconnection  that are consistent  with the rate
levels and discount levels set forth in the Interconnection Order. While several
states have set  permanent  rates,  most states are  scheduled to set  permanent
rates in  proceedings  that are  expected to conclude  later this year.  MCI has
completed arbitration of the interconnection terms and conditions in most states
and is in the process of filing  interconnection  agreements  with state  public
utility commissions for approval.





<PAGE>


PAGE 13


VENTURES AND DEVELOPING MARKETS BUSINESS
----------------------------------------

      MCI  has  diversified  the   communication   services  it  offers  through
investments in ventures and developing markets businesses.  This diversification
enables MCI to meet more of the  communications  needs of its  customers  and to
take advantage of developing opportunities in the communication services market.
In 1996  and  1995,  MCI had  revenues  of  $1,953  million  and  $365  million,
respectively,  from the ventures and developing markets businesses. MCI invested
$1,939 million in 1996 and anticipates  investing,  an estimated $200 million in
1997, in addition to capital  expenditures,  in existing ventures and developing
markets businesses. The 1996 amount included the purchase of a high-power direct
satellite ("DBS") services license for $682 million and an additional investment
of $350 million  pursuant to the investment  agreement with The News Corporation
Limited.  See Item 6.  Management's  Discussion  and Analysis and  "VENTURES AND
DEVELOPING MARKETS BUSINESS - MULTIMEDIA SERVICES" below.

      Local Services
      --------------

      MCImetro was created to enter the local  services  market and compete with
the ILECs and CLECs in that market.  In 1996 and 1995,  MCImetro had revenues of
$178 million and $108  million,  respectively,  substantially  all of which were
from sales of  services  to MCI.  Also in 1996 and 1995,  MCImetro  had  capital
expenditures of approximately $390 million and $265 million, respectively.

      MCImetro  provides  businesses and governments with high quality dedicated
access  to  the  MCI  network  or  to  the   networks  of  other   long-distance
telecommunications  providers.  The  access  services  are  provided  either  on
MCImetro's  own local city networks or through  arrangements  with the ILECs and
CLECs for special  access and switched  access  services.  As of March 24, 1997,
MCImetro  had been  granted  authority  to offer a full range of local  switched
services in 30 states and had  applications  pending for such  services in eight
other states.  MCImetro has 67 local city networks and 27 Class 5 local switches
installed.  MCImetro  currently  offers local  exchange  services  such as local
telephone service,  business lines, private branch exchange (PBX) trunks, access
services and enhanced services in 21 major U.S. cities and intends to offer such
local  exchange  services in over 30 major U.S.  cities by the end of 1997. To a
lesser extent, MCImetro resells local services to customers in several states in
the U.S.




<PAGE>


PAGE 14


      If or when MCImetro  will be able to offer a full range of local  services
in  competition  with  the  ILECs  in  all  states  is  unknown.   Although  the
Telecommunications  Act  establishes a timetable for an ILEC to sell  separately
its local  services and provide them to other  carriers on a  non-discriminatory
basis prior to receiving authority to provide long-distance service in its local
service region, MCI does not know if the timetable will be met. This uncertainty
is increased due to the stay of the Interconnection  Order. See "CORE BUSINESS -
TELECOMMUNICATIONS  ACT" above.  The pace at which all local  services  are sold
separately,  the prices at which  MCImetro can purchase  such  services from the
ILEC and the amount of capital  available  to MCImetro to expand its  facilities
will affect the types of services  MCImetro can offer and its ability to compete
with the ILECs in providing local telecommunications services.

      The ILECs have very substantial capital and other resources, long standing
customer   relationships   and  extensive   existing   facilities   and  network
rights-of-way and will be MCImetro's  primary  competitors in the local services
market.  In  addition,   it  is  anticipated  that  a  number  of  long-distance
telecommunication,  wireless and cable  service  providers  will enter the local
services  market  in  competition   with  MCImetro.   Some  of  these  potential
competitors have substantial  financial and other resources.  MCImetro will also
compete in the local services market with a number of CLECs, a few of which have
existing local networks and significant financial resources.

      To the extent MCImetro and others provide intrastate local services,  they
are also  subject to  regulation  by state  regulatory  commissions,  which have
extensive  authority to regulate the provision of local services.  MCImetro will
be required to file  tariffs as a  competitive  local  exchange  carrier.  Those
filing requirements may be less restrictive than those imposed on the ILECs.


      Wireless Services
      -----------------

      Through the acquisition in September 1995 of Nationwide  Cellular Service,
Inc.  ("Nationwide"),  a reseller of cellular  phone  services and a retailer of
cellular phone equipment,  and as a result of the execution of resale agreements
with facilities-based  cellular phone service providers,  MCI has the capability
to offer cellular phone services  obtained from  facilities  based  providers to
approximately 55% of the U.S. population.




<PAGE>


PAGE 15


      MCI markets  these  services to both  business and  residential  customers
through the former  Nationwide's  sales organization and stores and MCIT's sales
organization. Revenues for the years ended December 31, 1996 and 1995 from these
services were $347 million and $93 million, respectively.  Revenues are expected
to  increase  in 1997 as MCI  increases  the number of cities in which it offers
cellular  phone and paging  services and combines  these service  offerings with
MCI's core business service  offerings to meet its customers' needs. At December
31, 1996, MCI had approximately 429,000 cellular phone service subscribers.

      In  addition,  MCI has signed an  agreement  with  NextWave  Telecom  Inc.
("NextWave")  to  purchase  at least 10 billion  Personal  Communication  System
("PCS")  minutes  over 10 years.  The  agreement  will permit MCI to utilize the
features of its intelligent network with NextWave's planned national system. PCS
technology is a digital,  wireless technology that enables new and more advanced
wireless   services,   such  as  greater  security,   short  messaging  service,
single-number  service,  integrated voice and paging and enhanced  wireless data
communications.  PCS  technology  may  provide  MCI with an  alternate  means of
providing local communication services.

      NextWave  was  granted,  or was the winning  bidder  for, 95 PCS  spectrum
licenses in the recent C, D, E, and F block PCS  spectrum  auctions  held by the
FCC. If NextWave  obtains the necessary  financing to build, and does build, its
PCS  network,  MCI will be able to offer PCS  service  to more than 163  million
individuals  in  the  95  markets  where   NextWave  has  PCS  licenses.   MCI's
arrangements  with  NextWave  will  enable MCI to provide PCS  services  without
building or owning  wireless  facilities.  MCI will market PCS service under the
MCI brand name and integrate it with MCI's other communication services. MCI may
also obtain and resell PCS services from other carriers.

      MCI's  primary  competitors  in the  wireless  market  are  AT&T  Wireless
Services,  Airtouch Communications,  Inc., Ameritech Corporation,  Bell Atlantic
NYNEX  Mobile,  Southwestern  Bell and  Sprint,  all of which  provide  wireless
services over their own  facilities.  As MCI is not a facilities  based wireless
operator,  its ability to be competitive will depend on the terms and conditions
under which it obtains  services and its ability to renew on satisfactory  terms
its resale  agreements.  Competition  is  expected to  intensify  as the winning
bidders in the PCS spectrum auctions begin to offer competing services.

      As  a  reseller,  MCI  is  not  subject  to  any  tariffing  or  licensing
requirements by the FCC or state regulatory agencies.




<PAGE>


PAGE 16


      Information Technology Services
      -------------------------------

      MCI's  information   technology  ("IT")  services   primarily  consist  of
outsourcing,  IT consulting,  systems  integration,  private network management,
technology  deployment and  applications  and systems  development.  IT services
generally  involve the use of technology,  know-how and methodologies to gather,
collate,  analyze,  record,   characterize,   categorize,   process,   generate,
distribute and/or store information for end-users or others.

      In addition to IT services,  MCI offers call center services which include
technical  help  desk  services,  customer  services,   telesales,  call  center
consulting and  implementation,  call center network integration  services,  and
software/database  application development.  IT and call center service revenues
for the years ended  December  31,  1996 and 1995 were  $1,401  million and $135
million,  respectively. The majority of these revenues were from SHL Systemhouse
Inc. ("MCI Systemhouse") businesses acquired by MCI in November 1995.

      MCI  Systemhouse****  is  one  of  the  world's  largest  providers  of IT
outsourcing services to commercial and government  enterprises.  The acquisition
of MCI Systemhouse  provides MCI with the ability to address the growing demands
of its business customers for IT outsourcing services, which include the design,
development and  implementation  of IT systems with an emphasis on client/server
technologies;  the management,  operation and maintenance of client IT functions
as part of outsourcing  arrangements;  and the delivery and  installation  of IT
hardware and software.

      MCI serves its IT clients by (i)  working  with a client to analyze its IT
needs and, based on this analysis,  designing,  developing and  implementing  an
integrated  client/server  IT system;  (ii)  providing  systems  operations  and
management  services  for  a  broad  range  of  computing  platforms,  including
mainframe, mid-range computers, personal computer and network environments, such
as local-area  networks and wide-area  networks;  and (iii) assessing a client's
computing  platform and network  requirements and then configuring,  delivering,
installing  and testing the needed  hardware and software  products to meet such
requirements. MCI also offers service for IT products and training and education
of client IT users.



----------------------
**** MCI Systemhouse is a service mark of MCI.



<PAGE>


PAGE 17


     Competitors  in the  IT  business  include  Andersen  Consulting,  Computer
Sciences Corporation, Electronic Data Systems Corporation and Integrated Systems
Solutions Corp., a wholly-owned  subsidiary of International  Business  Machines
Corporation,  all of which have substantial  financial and other resources.  MCI
derives a material  amount of its IT revenues  from a small number of customers.
In addition,  MCI faces  competition  in the IT industry not only for contracts,
but also for  personnel.  There is a shortage  of skilled  employees  and a high
turnover rate among  skilled  employees in the  client/server  portion of the IT
business.  On the other hand,  MCI is not  dependent  on any single  employee or
group in providing these services.




      International Services
      ----------------------

      MCI continues to develop  global  alliances to expand the use and reach of
its services and to meet the global needs of its customers.

      Concert  Communications  Company  ("Concert  JV"),  is a business  venture
between  MCI and BT in  which  MCI  owns a 24.9%  equity  interest.  Concert  JV
provides  global enhanced and value-added  telecommunication  services,  such as
packet data, virtual network, frame relay and managed bandwidth services. MCI is
the  exclusive  distributor  of Concert JV services in North,  Central and South
America, and BT is the exclusive  distributor of Concert JV services in the rest
of the world.  Since July 1994, MCI has invested  approximately  $170 million in
Concert  JV.  For the years  ended  December  31,  1996 and 1995,  Concert  JV's
distributors had approximately $570 million and $300 million,  respectively,  in
revenue from the sale of Concert JV's products.

      AT&T and Sprint have each formed global  alliances  that will compete with
Concert JV. AT&T's WorldPartners is an association of member companies formed in
1993 to provide a family of  telecommunication  services  (private  line,  frame
relay and virtual network services) to multinational  customers.  Members of the
association include AT&T, KDD of Japan, Singapore Telecom, Telstra of Australia,
Telecom New Zealand, Hong Kong Telecom,  Unitel of Canada, Korea Telecom and the
members  of  Unisource  (which  include  Telefonica  de  Espana,  SA,  Royal PTT
Netherlands  NV, Telia AB and  Schweizerische  PTT - Betriebe).  Sprint,  France
Telecom  ("FT") and  Deutsche  Telekom  ("DT") have formed  Global One, a global
partnership which offers an array of international telecommunication services to
multinational  business  customers.  As part of the transaction,  FT and DT each
acquired 10% of Sprint's common stock.


<PAGE>


PAGE 18


      AVANTEL  S.A. de C.V.  ("AVANTEL")  is a business  venture  between  Grupo
Financiero Banamex-Accival,  Mexico's largest financial group, and MCI, in which
MCI owns a 44.5% equity  interest.  AVANTEL  built  Mexico's  first  all-digital
fiber-optic  network.  In 1996,  AVANTEL  became  the first  company  to provide
alternative  long-distance  telecommunication  service in Mexico in  competition
with Telefonos de Mexico  ("TelMex").  As of December 31, 1996, MCI had invested
$495 million in AVANTEL.  AVANTEL is a supplier of Concert JV services in Mexico
and is a sub-distributor  to MCI of Concert JV services in Mexico.  TelMex,  the
monopoly telecommunications provider, is AVANTEL's primary competitor.  TelMex's
financial and other resources are substantially  greater than AVANTEL's,  and it
has an extensive existing customer base.

      In 1992, MCI entered into a strategic  alliance with Stentor,  an alliance
of major Canadian telephone companies, to develop a fully integrated intelligent
network linking the U.S. and Canada. In 1995,  Stentor entered into an agreement
with MCI to become the exclusive  distributor  of Concert JV services in Canada.
The  Stentor  alliance  and  the  AVANTEL  joint  venture  will  facilitate  the
development of a fully  integrated,  seamless North American  network capable of
providing  services with  identical  features to customers  throughout the U.S.,
Canada and Mexico.

      In addition,  MCI owns  minority  equity  interests  in  telecommunication
service  providers in New Zealand and Belize and is exploring  opportunities  in
Central and South America and other areas of the world.



      Multimedia Services
      -------------------

      In August 1995,  MCI invested $1 billion in The News  Corporation  Limited
("News Corp.").  In addition,  MCI received a five year option to invest in News
Corp.  from time to time up to an additional $1 billion in the aggregate.  Under
certain  circumstances,  News Corp. has the right from time to time to cause MCI
to exercise this option and make additional  investments up to $1 billion in the
aggregate. At the request of News Corp., MCI invested an additional $350 million
in News Corp. in May of 1996.


      MCI and News Corp. are currently discussing the formation of a venture, of
which MCI would  own less  than a 20%  interest,  to  provide  DBS  services  to
consumers  in the U.S.  DBS service is a  point-to-multipoint  service that uses
high-powered KU band satellites which are placed in a geosynchronous  orbit. DBS
service is capable of delivering a wide range of services, such as


<PAGE>


PAGE 19


subscription  television,  pay-per-view services,  such as movies,  concerts and
sporting  events,  and digitized  content,  such as magazines.  As part of these
ongoing  discussions,  MCI is renegotiating  its investment  agreement with News
Corp. which may result in the purchase by MCI of mandatory  redeemable preferred
securities  of News Corp.  and the  termination  of MCI's  remaining  investment
obligation and News Corp.'s rights relating thereto.

      The  proposed  venture  with News Corp.  would  provide  DBS  services  by
utilizing  satellites  which will operate under a license  awarded by the FCC to
MCI in an auction in December 1996 for $682.5  million.  The license  grants MCI
the right to use 28 of 32 channels in the satellite  slot located at 110 degrees
west  longitude,  which  provides  coverage to all fifty  states in the U.S. and
Puerto Rico. MCI has entered into an agreement to purchase two  satellites,  one
of which is  scheduled  for launch in late 1997.  MCI  anticipates  the proposed
venture  will  provide  DBS  services  by late 1997,  assuming  the first of its
satellites is  successfully  launched  according to plan. The joint venture will
pay  MCI a fee to  utilize  the  capacity  represented  by the  license  under a
right-to-use for a limited term.

     In  February  1997,  News Corp.  announced  that it would  purchase  50% of
EchoStar  Communications  Corp.  ("EchoStar") for $1 billion.  It is anticipated
that the proposed MCI/News Corp. DBS venture would own the interest in EchoStar.
The acquisition,  if completed,  would result in the proposed venture having the
right to use  additional  DBS channels.  The  acquisition is subject to EchoStar
shareholder and various regulatory approvals.

      Competition  in the DBS  service  market  will arise  from three  sources:
existing and future DBS service providers;  medium-power satellite video service
providers;  and cable  companies  that  operate  land  based  facilities.  These
competitors have substantial  financial  resources,  existing customer bases and
experienced marketing organizations. In addition, it is anticipated that certain
long-distance telecommunication service providers and the RBOCs may seek to form
alliances with DBS service or other multimedia  service providers and compete in
this market.

      Except for routine FCC licensing of earth station  (uplink)  facilities to
be used in conjunction  with the satellites  and the satellite  license  itself,
including  certain  restrictions  on use of the  spectrum,  neither  MCI nor the
proposed venture with News Corp. will be subject to extensive  regulation by the
FCC.  At the state  level,  the  venture  will be  subject  to  standard  zoning
requirements  for the placement of uplink  facilities.  Zoning  restrictions  by
localities  on the placement of receive  dishes is largely  preempted by federal
law.




<PAGE>


PAGE 20


Item 2.  Properties.
-------------------

      MCI leases,  under  long-term  leases,  portions of railroad,  utility and
other  rights-of-way  for its  fiber-optic  transmission  system.  MCI  also has
numerous tower sites, generally in rural areas, to serve as repeater stations in
its  domestic  microwave  transmission  system.  Most of these sites are leased,
although MCI does own many of those which are at an  intersection of two or more
routes of MCI's  transmission  system.  Generally,  MCI owns the buildings  that
serve as switch facilities for the transmission  system. In metropolitan  areas,
MCI leases  facilities to serve as operations  facilities  for its  transmission
systems.

      MCI also leases,  under long-term  leases,  office space to serve as sales
office and/or  administrative  facilities.  Some of these facilities are located
jointly  with  operations  facilities.  In addition,  MCI owns its  headquarters
building in Washington, D.C. and two buildings in a suburb of Washington,  D.C.,
as well as  administrative  facilities in Cary,  North  Carolina;  Cedar Rapids,
Iowa; Colorado Springs, Colorado; Piscataway, New Jersey; and Richardson, Texas.

      MCImetro operates a fiber optic  transmission  network consisting of owned
fibers  located in conduits,  which are either  owned or leased under  long-term
leases,  and dark (not  currently  used) fibers leased under  long-term  leases.
MCImetro  supplements its network with  transmission  capacity leased from other
carriers under long-term leases.  MCImetro leases,  under long-term leases,  the
buildings  that house its Class 5 switches and other network and  administrative
office  space.  MCImetro  also  sub-leases  administrative  and sales office and
operation facility space from MCI.




                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]




<PAGE>


PAGE 21


Item 3.  Legal Proceedings.
---------------------------

      Information  regarding  contingencies and legal proceedings is included in
Note 15 of the  Notes to  Consolidated  Financial  Statements  on page 26 of the
company's  Annual Report to  Stockholders  for the year ended December 31, 1996,
which is  incorporated  herein by  reference  to Exhibit 13 to the  registrant's
Current Report on Form 8-K, dated February 10, 1997.

      With respect to the actions  relating to AT&T patents  identified  in Note
15, on March 6, 1997 a Stipulation and Order  dismissing the actions in the U.S.
with prejudice was entered in the United States  District Court for the District
of Columbia  and a Consent  Judgement  dismissing  the matter with  prejudice in
Canada was entered on February 28, 1997.


Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

      None.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]




<PAGE>


PAGE 22


Item 10.  Executive Officers of the Registrant.*
-----------------------------------------------

      The executive  officers of MCI,  including its  subsidiaries,  are elected
annually and serve at the pleasure of the  respective  board of directors.  They
are:

       Name            Age*         Position**

Bert C. Roberts, Jr.   54        Chairman of the Board,
                                 Director

Gerald H. Taylor       55        Chief Executive Officer, Director

Timothy F. Price       43        President and
                                 Chief Operating Officer

Seth D. Blumenfeld     56        President,
                                 MCI International, Inc.

John W. Gerdelman      44        Executive Vice President,
                                 MCI Telecommunications Corporation

Douglas L. Maine       48        Executive Vice President and
                                 Chief Financial Officer

Scott B. Ross          45        Director, SHL Systemhouse Inc.,
                                 Director, President and Chief
                                 Operating Officer, MCI Systemhouse
                                 Corp.

Michael J. Rowny       46        Executive Vice President

Michael H. Salsbury    47        Executive Vice President and
                                 General Counsel

David M. Case          41        Vice President and Controller


--------------------
 *  As of March 1, 1997.
**  Unless otherwise indicated, the position is with MCI
    Communications Corporation.





<PAGE>


PAGE 23



      Mr.  Roberts has been Chairman of the Board of MCI since June 1992. He was
Chief  Executive  Officer of MCI from  December  1991 to November  1996.  He was
President and Chief Operating  Officer of MCI from October 1985 to June 1992 and
President of MCI  Telecommunications  Corporation ("MCIT") from May 1983 to June
1992.  Mr.  Roberts  has been a  director  of MCI since  1985;  a  non-executive
director of British  Telecommunications plc ("BT"), a global  telecommunications
provider  which has an  approximate  20% equity  interest in MCI,  since October
1994; and a non-executive  director of The News  Corporation  Limited,  a global
multi-media company located in Australia, since November 1995.

      Mr. Taylor has been Chief Executive Officer of MCI since November 1996. He
has been Vice  Chairman  of MCIT  since July 1995.  He was  President  and Chief
Operating Officer of MCI from July 1994 to November 1996 and President and Chief
Operating Officer of MCIT from April 1994 to July 1995. He was an Executive Vice
President and Group  Executive of MCIT from September 1993 to April 1994. He was
an Executive Vice  President of MCIT,  serving as President,  Consumer  Markets,
from  November  1990 to September  1993.  Mr.  Taylor has been a director of MCI
since September 1994 and a non-executive director of BT since November 1996.

      Mr.  Price has been  President  and Chief  Operating  Officer of MCI since
November 1996. He has been President and Chief  Operating  Officer of MCIT since
July 1995.  He was an  Executive  Vice  President  and Group  President of MCIT,
serving as Group President,  Communication  Services, from December 1994 to July
1995. He was an Executive Vice President of MCIT, serving as President, Business
Markets, from June 1993 to December 1994. He was a Senior Vice President of MCIT
from November 1990 to June 1993, serving as President,  Business Services,  from
July 1992 to June 1993 and as Senior  Vice  President,  Consumer  Markets,  from
November 1990 to July 1992.

     Mr. Blumenfeld was President of MCI  International,  Inc., from August 1983
to July 1993. He was Executive Vice  President and Group  Executive of MCIT from
July 1993 to September  1994 and has been President of MCI  International,  Inc.
since September 1994.



<PAGE>


PAGE 24


      Mr.  Gerdelman has been an Executive  Vice  President of MCIT,  serving as
President,  networkMCI  Services,  since  October  1994.  He was a  Senior  Vice
President  of MCIT from  August 1992 to October  1994.  From July 1991 to August
1992, he was President and Chief  Executive  Officer of MCI Services  Marketing,
Inc.,  a company  that  provided  telemarketing  services to, and in which a 51%
equity  interest was held by, MCIT.  Since July 1994,  Mr.  Gerdelman has been a
director of General Communication,  Inc. ("GCI"), a telecommunications  provider
in Alaska,  of which MCIT owns  approximately  22% of the outstanding  shares of
Class A Common Stock and approximately 31% of the outstanding  shares of Class B
Common Stock.

     Mr. Maine has been an Executive Vice President of MCI since April 1994. Mr.
Maine has been Chief  Financial  Officer of MCI since  February  1992.  He was a
Senior Vice President of MCI from  September  1988 to April 1994.  From November
1990 to  February  1992,  he was a Senior  Vice  President  of MCIT,  serving as
President of the Southern Division.

      Mr. Ross has been President and Chief Operating Officer of MCI Systemhouse
Corp. since September 1995. He was Executive Vice President of MCIT,  serving as
President,  Finance and Business Operations,  from August 1995 to March 1996 and
as President, Business Markets, from December 1994 to August 1995. He was Senior
Vice President of MCIT from September 1993 to December 1994 and a Vice President
of MCIT for more that 5 years prior thereto.

      Mr. Rowny has been an Executive Vice President of MCI since April 1995 and
an Executive Vice  President of MCIT since June 1994,  serving as Executive Vice
President,  Ventures  and  Alliances.  He was  President of MJR  Enterprises,  a
consulting company,  from April 1994 to June 1994;  Executive Vice President and
Chief  Financial  Officer and a director of ICF Kaiser  International,  Inc., an
environmental and engineering  services company,  from April 1992 to April 1994;
and Chairman and Chief Executive Officer of Ransohoff Company, a manufacturer of
environmental and industrial equipment, from November 1989 to April 1992.

      Mr.  Salsbury has been Executive Vice President and General Counsel of MCI
since November 1995. He was a partner in the law firm of Jenner & Block for more
than five years prior thereto.

      Mr. Case has been Vice  President and  Controller  of MCI since  September
1995 and a Vice  President of MCIT since October 1993.  For more than five years
prior thereto, he served MCIT in various management capacities.





<PAGE>


PAGE 25


                          PART II

Item 5.  Market for Registrant's Common Equity and Related
-----------------------------------------------------------------
Stockholder Matters.
-------------------

      MCI Common Stock is traded on the NASDAQ National Market. The tables below
set forth the high and low bid prices of the Common  Stock as  reported  for the
periods indicated.

                                                     1996

                                               HIGH      LOW
                                            --------   ---------

                    1st Quarter              $31 1/8   $25 5/8
                    2nd Quarter               30 3/8    24 7/8
                    3rd Quarter               28 1/8    22 3/8
                    4th Quarter               33 7/8    23 7/8

                                                    1995

                                              HIGH        LOW
                                            --------   ---------

                    1st Quarter             $21 1/4    $17 3/8
                    2nd Quarter              23 1/8     19 7/64
                    3rd Quarter              27 1/8     20 7/8
                    4th Quarter              27 1/2     23 3/4


      MCI paid cash  dividends  of $.025  per share of Common  Stock in July and
December of 1995 and 1996 and an equivalent cash dividend on the shares of Class
A Common Stock.

      At February 14, 1997,  there were 47,472 holders of record of MCI's Common
Stock and 1 holder of record of MCI's Class A Common Stock.




<PAGE>


PAGE 26


Recent Sales of Unregistered Securities
---------------------------------------

On June 30, 1995,  as part of the merger  consideration  contemplated  under the
Agreement and Plan of Merger among Darome Teleconferencing,  Inc., MCI and MCIT,
MCI issued 793,297 shares of MCI Common Stock, par value $.10 per share, with an
aggregate value of approximately  $16,000,000 or approximately $20.17 per share,
to the shareholders of Darome  Teleconferencing,  Inc. MCI claims exemption from
registration of the shares under  Regulation D of the Securities Act of 1933, as
amended.

Items 6 through 8.
-----------------

     The  information  required by these items is included in pages 2 through 28
of the company's  Annual Report to Stockholders  for the year ended December 31,
1996. The referenced pages of the company's  Annual Report to Stockholders  have
been  filed as  Exhibit  13 to the  company's  Current  Report on Form 8-K filed
February 10, 1997. Such information is incorporated herein by reference.


Item 9.  Change in and Disagreements with Accountants on
--------------------------------------------------------
 Accounting and Financial Disclosure.
------------------------------------

       None.





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<PAGE>


PAGE 27



                                    PART III

Item 10.  Directors and Executive Officers.
------------------------------------------

      Information with respect to executive officers of MCI is set forth in Part
I of this Annual Report on Form 10-K.

      Information  with respect to directors  of MCI is  incorporated  herein by
reference  to the  information  under  the  captions  "Information  Relating  to
Directors and Executive Officers of MCI" and "Section 16(a) Beneficial Ownership
Compliance" in MCI's Proxy Statement for its 1997 Annual Meeting of Stockholders
(the "1997 Proxy Statement").


Item 11.  Executive Compensation.
--------------------------------

      Information with respect to executive  compensation is incorporated herein
by reference to the information under the captions "Interests of Certain Persons
in the Merger",  including  the  sub-captions  thereunder,  "Board of Directors'
Committees,  Meetings and Fees", "Remuneration of Executive Officers",  "Pension
Plans" and "MCI Executive  Compensation Policies and Objectives",  including the
sub-captions thereunder, in the 1997 Proxy Statement.


Item 12.  Security Ownership of Certain Beneficial Owners and
-------------------------------------------------------------
Management.
----------

      Information with respect to security  ownership is incorporated  herein by
reference  to the  information  under  the  captions  "Information  Relating  to
Directors and Executive Officers of MCI", including the sub-captions thereunder,
"Interests  of  Certain  Persons  in the  Merger",  including  the  sub-captions
thereunder, and "Security Ownership of Management and Certain Beneficial Owners"
in the 1997 Proxy Statement.


Item 13.  Certain Relationships and Related Transactions.
--------------------------------------------------------

      Information with respect to certain relationships and related transactions
is  incorporated  herein by  reference  to the  information  under  the  caption
"Certain Relationships and Related Transactions" in the 1997 Proxy Statement.


<PAGE>


PAGE 28



                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on
-----------------------------------------------------------------
Form 8-K.
--------

(a)    Documents filed as a part of this report.

       (1)  Financial Statements.

           Report of Independent Accountants

           Income Statements for the years
             ended December 31, 1996, 1995
             and 1994

           Balance Sheets at December 31, 1996
             and 1995

           Statements of Cash Flows for the
             years ended December 31, 1996,
             1995 and 1994

           Statements of Stockholders' Equity
             for the years ended December 31,
             1996, 1995 and 1994

           Notes to Consolidated Financial Statements

      The Financial Statements and Notes thereto are incorporated
herein by reference to pages 11 through 28 of the company's Annual
Report to Stockholders for the year ended December 31, 1996.  See
Part II.

       (2)  Financial Statement Schedule.

     The following  additional financial data should be read in conjunction with
the Financial  Statements  and Notes thereto  which are  incorporated  herein by
reference  to  Exhibit  13 to the  company's  Current  Report  on Form 8-K filed
February 10, 1997.  Schedules not included with this  additional  financial data
have been omitted  because they are not required or  applicable  or the required
information is shown in the Financial Statements or Notes thereto.

          Report of Independent Accountants on
            Financial Statement Schedule

          Valuation and Qualifying Accounts (Schedule II)


<PAGE>


PAGE 29




      The Report of Independent  Accountants on the Financial Statement Schedule
is  incorporated  herein by reference to Exhibit 99(c) to the company's  Current
Report on Form 8-K filed February 10, 1997.

      The  Financial  Statement  Schedule is submitted as Exhibit  99(a) to this
Annual Report on Form 10-K.

       (3)  Exhibits.

        Executive  compensation plans and arrangements required to be filed, and
which have been filed, with the Commission pursuant to Item 14(c) of this Annual
Report on Form 10-K are listed in this  Annual  Report on Form 10-K as  Exhibits
10(a)-(u).




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<PAGE>


PAGE 30


Exhibit No.                          Description
-----------                          -----------

         2                 Agreement   and   Plan  of   Merger   among   British
                           Telecommunications     plc,    MCI     Communications
                           Corporation and Tadworth Corporation,  dated November
                           3, 1996.  (Incorporated  by reference to Exhibit 2 to
                           Registrant's Current Report on Form 8-K, filed
                           November 5, 1996.)

         3 (a)             Restated Certificate of Incorporation of MCI
                           Communications Corporation filed on March 28, 1995.
                           (Incorporated by reference to Exhibit 3(a) to
                           registrant's Annual Report on Form 10-K for the
                           fiscal year ended December 31, 1994.)

           (b)             By-laws of registrant, as amended. (Incorporated by
                           reference to Exhibit 3(ii) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-57155.)

         4 (a)             Indenture, dated as of October 15, 1989, between
                           registrant and Bankers Trust Company.  (Incorporated
                           by reference to Exhibit 4(c) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (b)             Indenture dated as of October 15, 1989 between
                           registrant and Bankers Trust Company.  (Incorporated
                           by reference to Exhibit 4(d) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (c)             Indenture dated as of October 15, 1989 between
                           registrant and Citibank, N.A. (Incorporated by
                           reference to Exhibit 4(e) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (d)             Indenture  dated  as of  February  17,  1995  between
                           registrant  and  Citibank,   N.A.   (Incorporated  by
                           reference  to  Exhibit 4 (d) to  registrant's  Annual
                           Report  on  Form  10-K  for  the  fiscal  year  ended
                           December 31, 1994.)

           (e)             Supplement No. 1 to the Indenture, dated as of
                           February 17, 1995, between MCI and Citibank, N.A.

           (f)             Form of Senior Fixed Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(a) to


<PAGE>


PAGE 31


                           Registrant's   Current  Report  on  Form  8-K,  filed
                           October 7, 1996.)

           (g)             Form of Senior Floating Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(b) to
                           Registrant's Current Report on Form 8-K, filed
                           October 7, 1996.)

           (h)             Form of Subordinated Fixed Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(g) to
                           registrant's Registration Statement on Form S-3,
                           Reg. No. 33-31600.)

           (i)             Form of Subordinated Floating Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(i) to
                           registrant's Registration Statement on Form S-3,
                           Reg. No. 33-31600.)

           (j)             Form of  7-1/2%  Senior  Note due  August  20,  2004.
                           (Incorporated   by   reference   to   Exhibit   4  of
                           registrant's  Quarterly  Report  on Form 10-Q for the
                           Quarter Ended June 30, 1992.)

           (k)             Form of 7-1/8%  Senior  Note due  January  20,  2000.
                           (Incorporated   by   reference  to  Exhibit  1(b)  of
                           registrant's Current Report on Form 8-K filed January
                           19, 1993.)

           (l)             Form of 8-1/4% Senior Debenture due January 20, 2023.
                           (Incorporated   by   reference  to  Exhibit  1(c)  of
                           registrant's Current Report on Form 8-K filed January
                           19, 1993.)

           (m)             Form of 7-3/4%  Senior  Debenture due March 15, 2024.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed March
                           12, 1993.)

           (n)             Form of  6-1/4%  Senior  Note  due  March  23,  1999.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed March
                           15, 1994.)

           (o)             Form of 7-3/4%  Senior  Debenture due March 23, 2025.
                           (Incorporated   by   reference  to  Exhibit  4(b)  of
                           registrant's  Current  Report on Form 8-K filed March
                           15, 1994.)




<PAGE>


PAGE 32


           (p)             Form  of  7-1/8%   Debenture   due  June  15,   2027.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed  June
                           21, 1996.)

           (q)             Form of  6.95%  Senior  Note  due  August  15,  2006.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current Report on Form 8-K filed August
                           8, 1996.)

           (r)             Form of Senior Floating Rate Note due March 16,
                           1999.  (Incorporated by reference to Exhibit 4(c) of
                           registrant's Current Report on Form 8-K filed March
                           15, 1994.)

           (s)             Rights  Agreement,  dated as of  September  30, 1994,
                           between  the   registrant   and  Mellon  Bank,   N.A.
                           (Incorporated   by   reference  to  Exhibit  4(a)  to
                           registrant's Current Report on Form 8-K filed October
                           4, 1994.)

           (t)             Amendment No. 1, dated as of November 3, 1996, to
                           Rights Agreement, dated as of September 30, 1994,
                           between the registrant and Mellon Bank, N.A.
                           (Incorporated by reference to Exhibit 2 to
                           registrant's Form 8-A/A filed November 20, 1996.)

           (u)             Junior Subordinated Indenture between registrant and
                           Wilmington Trust Company, as Debenture Trustee.
                           (Incorporated by reference to Exhibit 4.01 of
                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

           (v)             Form of Amended and Restated Trust Agreement among
                           registrant, as Depositor, Wilmington Trust Company,
                           as Property Trustee and Delaware Trustee, and the
                           Administrative Trustees named therein.
                           (Incorporated by reference to Exhibit 4.10 of
                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

           (w)             Form of Guarantee Agreement between registrant, as
                           Guarantor, and Wilmington Trust Company, as Trustee.
                           (Incorporated by reference to Exhibit 4.12 of
                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

           (x)             Form of Supplemental Indenture between registrant
                           and Wilmington Trust Company, as Debenture Trustee.
                           (Incorporated by reference to Exhibit 4.13 of


<PAGE>


PAGE 33


                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

        10 (a)             1979 Stock Option Plan of registrant, as amended and
                           restated. (Incorporated by reference to Exhibit
                           10(a) to registrant's Annual Report on Form 10-K for
                           the fiscal year ended December 31, 1988.)

           (b)             Supplemental  Retirement  Plan for  Employees  of MCI
                           Communications   Corporation  and  Subsidiaries,   as
                           amended.  (Incorporated by reference to Exhibit 10(b)
                           to  registrant's  Annual  Report on Form 10-K for the
                           fiscal year ended December 31, 1993.)

           (c)             Description of Executive Life Insurance Plan for MCI
                           Communications Corporation and Subsidiaries.
                           (Incorporated by reference to "Remuneration of
                           Officers" in registrant's Proxy Statement for its
                           1992 Annual Meeting of Stockholders.)

           (d)             MCI Communications Corporation Executive Incentive
                           Compensation Plan.  (Incorporated by reference to
                           Exhibit 10(e) to registrant's Annual Report on Form
                           10-K for the fiscal year ended December 31, 1995.)

           (e)             Amendment No. 1 to MCI Communications Corporation
                           Executive Incentive Compensation Plan.

           (f)             Form        of        Director        Indemnification
                           Agreement.(Incorporated by reference to Appendix B to
                           registrant's  Proxy  Statement  for its  1987  Annual
                           Meeting of Stockholders.)

           (g)             1988 Directors' Stock Option Plan of registrant.
                           (Incorporated by reference to Exhibit D to
                           registrant's Proxy Statement for its 1989 Annual
                            Meeting of Stockholders.)

           (h)             Amendment No. 1 to the 1988 Directors' Stock Option
                           Plan of registrant. (Incorporated by reference to
                           Appendix D to registrant's Proxy Statement for its
                           1996 Annual Meeting of Stockholders.)

           (i)             Amendment No. 2 to 1988 Directors' Stock Option Plan
                           of registrant.

           (j)             Amendment No. 3 to 1988 Directors' Stock Option Plan
                           of registrant.



<PAGE>


PAGE 34


           (k)             Stock Option Plan of registrant.  (Incorporated by
                           reference to Exhibit C to registrant's Proxy
                           Statement   for   its   1989   Annual    Meeting   of
                           Stockholders.)

           (l)             Amendment No. 1 to the Stock Option Plan of
                           registrant.

           (m)             Amendment No. 2 to the Stock Option Plan of
                           registrant. (Incorporated by reference to Appendix
                           B to registrant's Proxy Statement for its 1996
                           Annual Meeting of Stockholders.)

           (n)             Amendment No. 3 to the Stock Option Plan of
                           registrant.

           (o)             Amendment No. 4 to the Stock Option Plan of
                           registrant.

           (p)             Amendment No. 5 to the Stock Option Plan of
                           registrant.

           (q)             Board of Directors Deferred Compensation Plan of
                           Registrant.  (Incorporated by reference to Exhibit
                           10(i) to registrant's Annual Report on Form 10-K for
                           the fiscal year ended December 31, 1994.)

           (r)             The Senior Executive Incentive Compensation Plan of
                           registrant.  (Incorporated by reference to Appendix
                           A to registrant's Proxy Statement for its 1996
                           Annual Meeting of Stockholders.)

           (s)             Amendment No. 1 to the Senior Executive Incentive
                           Compensation Plan of registrant.

           (t)             Executive Severance Policy.  (Incorporated by
                           reference to Exhibit 10(a) to Registrant's Quarterly
                           Report on Form 10-Q for the quarter ended September
                           30, 1996.)

           (u)             Form of employment agreement, effective as of
                           November 2, 1996, between MCI and certain executive
                           officers of MCI.


           (v)             Amended and Restated Investment Agreement dated as
                           of January 31, 1994 between MCI Communications
                           Corporation and British Telecommunications plc.
                           (Incorporated by reference to Appendix I of
                           registrant's Notice of Special Meeting of


<PAGE>


PAGE 35


                           Stockholders  and Proxy  Statement  dated February 4,
                           1994.)

           (w)             Modified Joint Venture Agreement dated as of July 1,
                           1994 between MCI Communications Corporation and
                           British Telecommunications plc and MCI Ventures
                           Corporation and Moorgate (Twelve) Limited and
                           Concert Communications Company.  (Incorporated by
                           reference to Exhibit 10(l) to registrant's Annual
                           Report on Form 10-K for the fiscal year ended
                           December 31, 1994.)

           (x)             Warrant  Purchase  Agreement  by and between The News
                           Corporation    Limited    and   MCI    Communications
                           Corporation dated as of August 2, 1995. (Incorporated
                           by reference to Exhibit 10(p) to registrant's  Annual
                           Report  on  Form  10-K  for  the  fiscal  year  ended
                           December 31, 1995.)

           (y)             Preferred Stock Purchase Agreement by and among MCI,
                           News Triangle Finance, Inc. and News T Investments,
                           Inc. dated as of August 2, 1995.  (Incorporated by
                           reference to Exhibit 10(q) to registrant's Annual
                           Report on Form 10-K for the fiscal year ended
                           December 31, 1995.)

           (z)             $2,000,000,000 Revolving Credit Agreement, dated as
                           of September 26, 1996, among the registrant, Bank of
                           America National Trust and Savings Association, as
                           agent, and the several financial institutions
                           parties thereto.  (Incorporated by reference to
                           Exhibit 10 of registrant's Current Report on Form
                           8-K filed October 4, 1996).

        11                 Computation of Earnings per Common Share.
                           (Incorporated by reference to Exhibit 11 to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

        12                 Computation of Ratio of Earnings to Fixed Charges.
                           (Incorporated by reference to Exhibit 12 to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

        13                 Specified  portions  (pages  1  through  29)  of  the
                           registrant's  Annual Report to  Stockholders  for the
                           year  ended  December  31,  1996.   (Incorporated  by
                           reference  to  Exhibit  13  to  registrant's  Current
                           Report on Form 8-K filed February 10, 1997.)



<PAGE>


PAGE 36


        21                 Significant Subsidiaries of MCI Communications
                           Corporation.

        23                 Consent of Independent Accountants.  (Incorporated
                           by reference to Exhibit 23 to registrant's Current
                           Report on Form 8-K filed February 10, 1997.)

        27                 Financial Data Schedule.  (Incorporated by reference
                           to Exhibit 27 to registrant's Current Report on Form
                           8-K filed February 10, 1997.)

        99 (a)             Valuation and Qualifying Accounts (Schedule II).
                           (Incorporated by reference to Exhibit 99(a) to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

           (b)             Capitalization Schedule.  (Incorporated by reference
                           to Exhibit 99(b) to registrant's Current Report on
                           Form 8-K filed February 10, 1997.)

           (c)             Accountant's Report on Financial Statement Schedule.
                           (Incorporated by reference to Exhibit 99(c) to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

(b)    Reports on Form 8-K.

           (i)             Current Report on Form 8-K filed on October 4, 1996
                           reporting on Items 5 and 7.

           (ii)            Current Report on Form 8-K filed on October 7, 1996
                           reporting on Item 7.

           (iii)           Current  Report on Form 8-K filed on November 5, 1996
                           reporting on Items 5 and 7.

(c)    Exhibits.

        See Item 14(a)(3) of this Annual Report on Form 10-K.

(d)    Financial Statement Schedules.

        See Items 14(a)(2) and 14(a)(3) of this Annual Report on Form 10-K.








<PAGE>


PAGE 37



                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                             MCI COMMUNICATIONS CORPORATION

                                  /s/ Bert C. Roberts, Jr.
Dated:  March 28, 1997       By: --------------------------
                                      Bert C. Roberts, Jr.
                                    Chairman

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this report has been signed below by the following  persons on March 28, 1997 on
behalf of the registrant and in the capacities indicated.

Signature                            Title


/s/ Gerald H. Taylor
----------------------------         Chief Executive Officer,
Gerald H. Taylor                     Director

/s/ Douglas L. Maine
-----------------------------        Principal Financial Officer
Douglas L. Maine

/s/ David M. Case
-----------------------------        Principal Accounting Officer
David M. Case

/s/ Bert C. Roberts, Jr.
-----------------------------        Director
Bert C. Roberts, Jr.

/s/ Clifford L. Alexander, Jr.
-----------------------------        Director
Clifford L. Alexander, Jr.



------------------------------       Director
Judith Areen



<PAGE>


PAGE 38



/s/ Michael H. Bader
-----------------------------        Director
Michael H. Bader



-----------------------------        Director
Sir Peter L. Bonfield


/s/ Richard M. Jones
-----------------------------        Director
Richard M. Jones


/s/ Gordon S. Macklin
-----------------------------        Director
Gordon S. Macklin


/s/ Sir Colin Marshall
-----------------------------        Director
Sir Colin Marshall



-----------------------------        Director
K. Rupert Murdoch


/s/ John Keith Oates
-----------------------------        Director
John Keith Oates


/s/ Richard B. Sayford
-----------------------------        Director
Richard B. Sayford



-----------------------------        Director
Judith Whittaker


/s/ John R. Worthington
-----------------------------        Director
John R. Worthington


<PAGE>


PAGE 1


                                  Exhibit Index
                                 ---------------

Exhibit No.                          Description
-----------                          -----------

         2                 Agreement   and   Plan  of   Merger   among   British
                           Telecommunications     plc,    MCI     Communications
                           Corporation and Tadworth Corporation,  dated November
                           3, 1996.  (Incorporated  by reference to Exhibit 2 to
                           Registrant's Current Report on Form 8-K, filed
                           November 5, 1996.)

         3 (a)             Restated Certificate of Incorporation of MCI
                           Communications Corporation filed on March 28, 1995.
                           (Incorporated by reference to Exhibit 3(a) to
                           registrant's Annual Report on Form 10-K for the
                           fiscal year ended December 31, 1994.)

           (b)             By-laws of registrant, as amended. (Incorporated by
                           reference to Exhibit 3(ii) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-57155.)

         4 (a)             Indenture, dated as of October 15, 1989, between
                           registrant and Bankers Trust Company.  (Incorporated
                           by reference to Exhibit 4(c) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (b)             Indenture dated as of October 15, 1989 between
                           registrant and Bankers Trust Company.  (Incorporated
                           by reference to Exhibit 4(d) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (c)             Indenture dated as of October 15, 1989 between
                           registrant and Citibank, N.A. (Incorporated by
                           reference to Exhibit 4(e) to registrant's
                           Registration Statement on Form S-3, Reg. No.
                           33-31600.)

           (d)             Indenture  dated  as of  February  17,  1995  between
                           registrant  and  Citibank,   N.A.   (Incorporated  by
                           reference  to  Exhibit 4 (d) to  registrant's  Annual
                           Report  on  Form  10-K  for  the  fiscal  year  ended
                           December 31, 1994.)

           (e)             Supplement No. 1 to the Indenture, dated as of
                           February 17, 1995, between MCI and Citibank, N.A.


<PAGE>


PAGE 2


           (f)             Form of Senior Fixed Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(a) to
                           Registrant's Current Report on Form 8-K, filed
                           October 7, 1996.)

           (g)             Form of Senior Floating Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(b) to
                           Registrant's Current Report on Form 8-K, filed
                           October 7, 1996.)

           (h)             Form of Subordinated Fixed Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(g) to
                           registrant's Registration Statement on Form S-3,
                           Reg. No. 33-31600.)

           (i)             Form of Subordinated Floating Rate Medium-Term Note.
                           (Incorporated by reference to Exhibit 4(i) to
                           registrant's Registration Statement on Form S-3,
                           Reg. No. 33-31600.)

           (j)             Form of  7-1/2%  Senior  Note due  August  20,  2004.
                           (Incorporated   by   reference   to   Exhibit   4  of
                           registrant's  Quarterly  Report  on Form 10-Q for the
                           Quarter Ended June 30, 1992.)

           (k)             Form of 7-1/8%  Senior  Note due  January  20,  2000.
                           (Incorporated   by   reference  to  Exhibit  1(b)  of
                           registrant's Current Report on Form 8-K filed January
                           19, 1993.)

           (l)             Form of 8-1/4% Senior Debenture due January 20, 2023.
                           (Incorporated   by   reference  to  Exhibit  1(c)  of
                           registrant's Current Report on Form 8-K filed January
                           19, 1993.)

           (m)             Form of 7-3/4%  Senior  Debenture due March 15, 2024.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed March
                           12, 1993.)

           (n)             Form of  6-1/4%  Senior  Note  due  March  23,  1999.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed March
                           15, 1994.)

           (o)             Form of 7-3/4%  Senior  Debenture due March 23, 2025.
                           (Incorporated   by   reference  to  Exhibit  4(b)  of
                           registrant's  Current  Report on Form 8-K filed March
                           15, 1994.)



<PAGE>


PAGE 3


           (p)             Form  of  7-1/8%   Debenture   due  June  15,   2027.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current  Report on Form 8-K filed  June
                           21, 1996.)

           (q)             Form of  6.95%  Senior  Note  due  August  15,  2006.
                           (Incorporated   by   reference  to  Exhibit  4(a)  of
                           registrant's  Current Report on Form 8-K filed August
                           8, 1996.)

           (r)             Form of Senior Floating Rate Note due March 16,
                           1999.  (Incorporated by reference to Exhibit 4(c) of
                           registrant's Current Report on Form 8-K filed March
                           15, 1994.)

           (s)             Rights  Agreement,  dated as of  September  30, 1994,
                           between  the   registrant   and  Mellon  Bank,   N.A.
                           (Incorporated   by   reference  to  Exhibit  4(a)  to
                           registrant's Current Report on Form 8-K filed October
                           4, 1994.)

           (t)             Amendment No. 1, dated as of November 3, 1996, to
                           Rights Agreement, dated as of September 30, 1994,
                           between the registrant and Mellon Bank, N.A.
                           (Incorporated by reference to Exhibit 2 to
                           registrant's Form 8-A/A filed November 20, 1996.)

           (u)             Junior Subordinated Indenture between registrant and
                           Wilmington Trust Company, as Debenture Trustee.
                           (Incorporated by reference to Exhibit 4.01 of
                           registrant's Registration Statement on Form S-3,
                          Registration No. 333-02593.)

           (v)             Form of Amended and Restated Trust Agreement among
                           registrant, as Depositor, Wilmington Trust Company,
                           as Property Trustee and Delaware Trustee, and the
                           Administrative Trustees named therein.
                           (Incorporated by reference to Exhibit 4.10 of
                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

           (w)             Form of Guarantee Agreement between registrant, as
                           Guarantor, and Wilmington Trust Company, as Trustee.
                           (Incorporated by reference to Exhibit 4.12 of
                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

           (x)             Form of Supplemental Indenture between registrant
                           and Wilmington Trust Company, as Debenture Trustee.
                           (Incorporated by reference to Exhibit 4.13 of


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PAGE 4


                           registrant's Registration Statement on Form S-3,
                           Registration No. 333-02593.)

        10 (a)             1979 Stock Option Plan of registrant, as amended and
                           restated. (Incorporated by reference to Exhibit
                           10(a) to registrant's Annual Report on Form 10-K for
                           the fiscal year ended December 31, 1988.)

           (b)             Supplemental  Retirement  Plan for  Employees  of MCI
                           Communications   Corporation  and  Subsidiaries,   as
                           amended.  (Incorporated by reference to Exhibit 10(b)
                           to  registrant's  Annual  Report on Form 10-K for the
                           fiscal year ended December 31, 1993.)

           (c)             Description of Executive Life Insurance Plan for MCI
                           Communications Corporation and Subsidiaries.
                           (Incorporated by reference to "Remuneration of
                           Officers" in registrant's Proxy Statement for its
                           1992 Annual Meeting of Stockholders.)

           (d)             MCI Communications Corporation Executive Incentive
                           Compensation Plan.  (Incorporated by reference to
                           Exhibit 10(e) to registrant's Annual Report on Form
                           10-K for the fiscal year ended December 31, 1995.)

           (e)             Amendment No. 1 to MCI Communications Corporation
                           Executive Incentive Compensation Plan.

           (f)             Form        of        Director        Indemnification
                           Agreement.(Incorporated by reference to Appendix B to
                           registrant's  Proxy  Statement  for its  1987  Annual
                           Meeting of Stockholders.)

           (g)             1988 Directors' Stock Option Plan of registrant.
                           (Incorporated by reference to Exhibit D to
                           registrant's Proxy Statement for its 1989 Annual
                            Meeting of Stockholders.)

           (h)             Amendment No. 1 to the 1988 Directors' Stock Option
                           Plan of registrant. (Incorporated by reference to
                           Appendix D to registrant's Proxy Statement for its
                           1996 Annual Meeting of Stockholders.)

           (i)             Amendment No. 2 to 1988 Directors' Stock Option Plan
                           of registrant.

           (j)             Amendment No. 3 to 1988 Directors' Stock Option Plan
                           of registrant.



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PAGE 5


           (k)             Stock Option Plan of registrant.  (Incorporated by
                           reference to Exhibit C to registrant's Proxy
                           Statement   for   its   1989   Annual    Meeting   of
                           Stockholders.)

           (l)             Amendment No. 1 to the Stock Option Plan of
                           registrant.

           (m)             Amendment No. 2 to the Stock Option Plan of
                           registrant. (Incorporated by reference to Appendix
                           B to registrant's Proxy Statement for its 1996
                           Annual Meeting of Stockholders.)

           (n)             Amendment No. 3 to the Stock Option Plan of
                           registrant.

           (o)             Amendment No. 4 to the Stock Option Plan of
                           registrant.

           (p)             Amendment No. 5 to the Stock Option Plan of
                           registrant.

           (q)             Board of Directors Deferred Compensation Plan of
                           Registrant.  (Incorporated by reference to Exhibit
                           10(i) to registrant's Annual Report on Form 10-K for
                           the fiscal year ended December 31, 1994.)

           (r)             The Senior Executive Incentive Compensation Plan of
                           registrant.  (Incorporated by reference to Appendix
                           A to registrant's Proxy Statement for its 1996
                           Annual Meeting of Stockholders.)

           (s)             Amendment No. 1 to the Senior Executive Incentive
                           Compensation Plan of registrant.

           (t)             Executive Severance Policy.  (Incorporated by
                           reference to Exhibit 10(a) to Registrant's Quarterly
                           Report on Form 10-Q for the quarter ended September
                           30, 1996.)

           (u)             Form of employment agreement, effective as of
                           November 2, 1996, between MCI and certain executive
                           officers of MCI.

           (v)             Amended and Restated Investment Agreement dated as
                           of January 31, 1994 between MCI Communications
                           Corporation and British Telecommunications plc.
                           (Incorporated by reference to Appendix I of
                           registrant's Notice of Special Meeting of


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PAGE 6


                           Stockholders  and Proxy  Statement  dated February 4,
                           1994.)

           (w)             Modified Joint Venture Agreement dated as of July 1,
                           1994 between MCI Communications Corporation and
                           British Telecommunications plc and MCI Ventures
                           Corporation and Moorgate (Twelve) Limited and
                           Concert Communications Company.  (Incorporated by
                           reference to Exhibit 10(l) to registrant's Annual
                           Report on Form 10-K for the fiscal year ended
                           December 31, 1994.)

           (x)             Warrant  Purchase  Agreement  by and between The News
                           Corporation    Limited    and   MCI    Communications
                           Corporation dated as of August 2, 1995. (Incorporated
                           by reference to Exhibit 10(p) to registrant's  Annual
                           Report  on  Form  10-K  for  the  fiscal  year  ended
                           December 31, 1995.)

           (y)             Preferred Stock Purchase Agreement by and among MCI,
                           News Triangle Finance, Inc. and News T Investments,
                           Inc. dated as of August 2, 1995.  (Incorporated by
                           reference to Exhibit 10(q) to registrant's Annual
                           Report on Form 10-K for the fiscal year ended
                           December 31, 1995.)

           (z)             $2,000,000,000 Revolving Credit Agreement, dated as
                           of September 26, 1996, among the registrant, Bank of
                           America National Trust and Savings Association, as
                           agent, and the several financial institutions
                           parties thereto.  (Incorporated by reference to
                           Exhibit 10 of registrant's Current Report on Form
                           8-K filed October 4, 1996).

        11                 Computation of Earnings per Common Share.
                           (Incorporated by reference to Exhibit 11 to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

        12                 Computation of Ratio of Earnings to Fixed Charges.
                           (Incorporated by reference to Exhibit 12 to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

        13                 Specified  portions  (pages  1  through  29)  of  the
                           registrant's  Annual Report to  Stockholders  for the
                           year  ended  December  31,  1996.   (Incorporated  by
                           reference  to  Exhibit  13  to  registrant's  Current
                           Report on Form 8-K filed February 10, 1997.)



<PAGE>


PAGE 7

        21                 Significant Subsidiaries of MCI Communications
                           Corporation.

        23                 Consent of Independent Accountants.  (Incorporated
                           by reference to Exhibit 23 to registrant's Current
                           Report on Form 8-K filed February 10, 1997.)

        27                 Financial Data Schedule.  (Incorporated by reference
                           to Exhibit 27 to registrant's Current Report on Form
                           8-K filed February 10, 1997.)

        99 (a)             Valuation and Qualifying Accounts (Schedule II).
                           (Incorporated by reference to Exhibit 99(a) to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)

           (b)             Capitalization Schedule.  (Incorporated by reference
                           to Exhibit 99(b) to registrant's Current Report on
                           Form 8-K filed February 10, 1997.)

           (c)             Accountant's Report on Financial Statement Schedule.
                           (Incorporated by reference to Exhibit 99(c) to
                           registrant's Current Report on Form 8-K filed
                           February 10, 1997.)