February 26, 2002 -- Williams Communications (NYSE: WCG), a provider of broadband services for bandwidth-centric customers, announced it is continuing discussions with its bank group to develop a restructuring plan as part of ongoing efforts to strengthen its balance sheet.

"Williams Communications continues to have a productive dialogue with its banks. We firmly believe that this dialogue will enable us to meet the current challenges of the telecommunications marketplace and, ultimately, to thrive," said Howard Janzen, chairman and CEO for Williams Communications. "As previously stated, we believe the company has sufficient cash -- over $1 billion as of December 31, 2001 -- to fund our business plan through 2003. In addition, we are current on all of our obligations."

The company, along with its bank group, is pursuing a comprehensive resolution to restructure its balance sheet. Currently, discussions are being expanded to include multiple restructuring options. In addition, the company has authorized its legal and financial advisers to discuss restructuring options with the holders of certain of its notes. The company expanded the options being considered after it concluded on February 22, 2002, that certain institutions other than the banks are not likely to participate in the restructuring process on terms that are beneficial to all stakeholders of the company.

As part of evaluating the expanded options, the company is considering the potential benefits of a negotiated Chapter 11 reorganization process, which would support uninterrupted continuation of the business and minimize any impact to customer and vendor relationships. The company may decide to pursue that alternative if it believes it will allow for a more orderly process that maximizes enterprise value. The expanded options now being considered could potentially result in substantial shareholder dilution. As part of any restructuring the company undertakes, it plans to reduce its current controllable cost structure by approximately 25 percent, which will include workforce reductions.

Continuing world-class service to customers and business growth are central to all restructuring options being discussed. Williams Communications recently announced new contracts with Verizon, Yahoo! and KDDI America, further strengthening its customer base of substantial industry players. The company also recently announced it had delivered on 99 percent of its Customer Firm Order Commitments as of the end of 2001, and on 97 percent of Customer Requested Due Dates. Both statistics significantly exceed standard industry intervals. As of the fourth quarter of 2001, the company had achieved 16 consecutive quarters of sequential network services revenue growth.

"We remain committed to providing best-in-class network services to our customers as we continue to work toward de-leveraging our balance sheet," said Janzen. "Our customers have come to depend on our services because of our unyielding attention to their needs. We look forward to continuing our long- standing tradition of customer satisfaction and high standards of performance."

-End-