January 31, 2002 -- The leader of Williams (NYSE: WMB) said that the company remains fully committed to maintaining its current investment-grade credit rating and called the market's response to its earnings pre-release on Tuesday an overreaction not supported by facts.

"All relevant facts surrounding Williams' 2001 spin-off of Williams' former communications unit, including all items related to contingent financial obligations, have been properly accounted for and disclosed in SEC filings," said Steve Malcolm, president and chief executive officer. "These issues also have been discussed since their inception with investors, banks, rating agencies and any individual who asked any question about any publicly filed document. Other than our internal assessment of whether we will ever have to perform on our Williams Communications contingent obligations, there are no issues, accounting or otherwise, that prompted the delay of releasing final 2001 earnings on Tuesday.

"We are scheduled to meet with rating agencies again on Thursday to further refine the balance-sheet strengthening plan that we disclosed in December," he said. "As we have said, we are committed to earnings growth, asset sales, capital-spending reductions, expense reductions or utilizing any other element within our extensive financial capabilities to maintain or further strengthen our already strong balance sheet. These measures give us the capability, if required, to satisfy our contingent obligations of up to $2.2 billion related to Williams Communications.

"As recently as December, all three of the major rating agencies reaffirmed our solid credit status, including issues related to Williams Communications. No new issues have surfaced since then," he said. "We expect to be able to announce on Friday a re-affirmation of our credit ratings. We have been an investment-grade company since 1987," he said. "We are constructively addressing the issues related to our former communications business in a manner that we expect will not impact current earnings growth or our ability to achieve all of the recurring earnings growth targets we have established.

"On Tuesday, this very high-performing energy business reported a record $2.7 billion in recurring segment profit generated by assets and people who find, process, manage the price risk of, and deliver a significant portion of the energy that our nation demands. This demand is not diminishing. It is growing. It is disappointing that the market largely ignored the terrific year we posted in 2001 and the reaffirmation of our 2002 earnings target."

Malcolm said in addition to the record earnings that are expected for 2001, Williams currently has $38 billion in assets and significant liquidity, including $1.2 billion cash on hand, $1.1 billion of commercial paper availability fully backed by banks and $700 million of available multi-year revolving-credit facilities.

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