POINT RICHMOND, Calif., Feb 19, 2002 (BUSINESS WIRE) -- Western Water Company (OTCBB:WWTR) announced its results for the second fiscal quarter ended December 31, 2001.

The Company reported a net loss applicable to common stockholders for the quarter ended December 31, 2001 of $632,000, or $(0.08) per common share. That result compared to a net income applicable to common stockholders of $2,091,000, or $0.26 per common share basic and $0.22 per share-diluted, for the quarter ended December 31, 2000. The results for the quarter ended December 31, 2000 include a gain on sale of assets of $465,000 and the gain of $1,935,000 from the repurchase of preferred stock at less than the carrying value of the shares on the Company's books. Revenues for the quarter, entirely from water sales, were $338,000, compared to $712,000 for the comparable quarter of the preceding fiscal year. The revenues during the comparable quarter of the preceding fiscal year included non-recurring sales in the amount of $344,000.

Despite the continuing losses from operations, the Company has largely maintained a cash position comparable to the year ago period through the sales of non-strategic assets.

Commenting on the results, Michael Patrick George, Chairman, President and CEO of Western Water Company, said: "The Company's ability to generate revenue from water sales continues to be limited due both to regulatory obstacles to water transfers and the high charges imposed on access to public conveyance facilities. Also, the spike in energy prices in California during 2001 substantially increased the cost of moving water from areas of conservation and/or surplus to areas experiencing shortages. As a result, the Company deferred some water sales in hopes of achieving lower energy charges. Although wholesale energy costs have declined dramatically, lower energy charges are only beginning to be reflected in power costs passed through by public agencies. The Company continues to be actively engaged in a wide variety of activities aimed at streamlining the water transfer process."

Mr. George also commented on an important development in the prospects for settlement of long-standing water rights disputes that could impact the Company's water assets in Northern California: "We have long supported the ongoing water rights settlement negotiation known as the Sacramento Valley Water Management Agreement. Though we have serious concerns related to aspects of the Statement of Policy and Principles proposed as a framework for the next phase of the settlement process, we are committed to the process and we remain hopeful that the final agreement will fully respect senior water rights in the Sacramento Valley. We are working constructively with like-minded water rights holders toward that objective."

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 that 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 and sell water rights and obtain financing and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.