POINT RICHMOND, Calif. (February 14, 2000) - Western Water Company (NASDAQ: WWTR) announced today its results for the third quarter ended December 31, 1999.

The Company reported a net loss applicable to common stockholders for the quarter ended December 31, 1999 of $1,524,000, or $0.19 per share, compared to a net loss applicable to common stockholders of $1,551,000, or $0.19 per share, for the quarter ended December 31, 1998. Revenues for the quarter, primarily from water sales, were $1,581,000, compared to $759,000 for the preceding fiscal year.

The net loss applicable to common stockholders for the nine months ended December 31, 1999 of $2,127,000, or $0.27 per share, compared to a net loss applicable to common stockholders of $3,873,000, or $0.47 per share, for the nine months ended December 31, 1998. Revenues for the nine months ended December 31, 1999 were $2,429,000, compared to $1,250,000 for the preceding fiscal year. The results for the nine months ended December 31, 1999 also included an extraordinary gain of $3.5 million resulting from the repurchase of $5 million of the Company’s outstanding debentures. The repurchase of the debentures will reduce the Company’s annual interest expense by $450,000.

The loss for the quarter ended December 31, 1999 included $370,000 of non-recurring charges resulting from an asset impairment charge and consolidation costs related to the closing of its existing San Diego office. The consolidation of the Company’s corporate headquarters into its Point Richmond, California office, which is expected to be completed during the quarter ending June 30, 2000, will result in the net reduction of two administrative personnel and the early termination of (or other provision for) its office and equipment leases in San Diego. The Company believes that the increase in future earnings and cash flow from the consolidation will approximate $230,000 per year.

The Company also announced that $4,624,000 of cash and investments on its balance sheet as of December 31, 1999 have been classified as "restricted", based upon provisions of its Strategic Relationship Agreement ("SRA") with Sociedad General de Aguas de Barcelona, S.A. ("Agbar"), holder of the Company’s Series D Preferred Stock. Under the terms of the SRA, the Company can only use the $10 million proceeds it received from the issuance of the Series D Preferred Stock for specified water projects approved by Agbar and dividends on the Series D Preferred Stock. As of December 31, 1999, $4,624,000 of that amount has not yet been expended for those purposes. Prior to the quarter ended December 31, 1999, management of the Company had a reasonable expectation that Agbar would waive or modify the restrictions under the SRA. During the quarter ended December 31, 1999, management initiated discussions with Agbar seeking such a waiver or modification of these restrictions. Pending a resolution of this issue, management has decided to classify the remaining proceeds of the Series D Preferred Stock as restricted. If the restrictions are not waived or modified or other arrangements are not successful to raise additional working capital, the Company believes it will not be able to meet all of its financial obligations in the coming year.

In view of its cash situation, the Company is considering restructuring its preferred stock and/or debentures to reduce its fixed charges and has retained Houlihan Lokey Howard & Zukin Capital to assist in this effort.

Commenting on the results, Michael Patrick George, Chairman, President and CEO of Western Water Company, said: "Although we are not satisfied with our financial performance nor with the pace of our business development, this quarter’s results demonstrate real progress toward our objective of building a viable, sustainable water sales business. For example, measured against the third quarter and the nine months of our previous fiscal year, we have doubled our water sales revenue. While we face significant near-term financial challenges associated with our need to modify our capital structure, we have begun to demonstrate that we can sell water profitably."

Western Water is engaged in the identification, development, transportation, sale and lease of water rights and water to municipalities and other end users in the western United States and owns water rights and real estate in California and Colorado.

Statements contained in this release which are not historical facts are forward looking statements that involve risks and uncertainties that could cause actual results or future events to differ from those contained herein. Factors that could cause actual results or events to differ include the company’s ability to purchase water rights and obtain financing and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.