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American Water Reports Third Quarter 2012 Results, Demonstrating Strong Year-Over-Year Growth

Market-Based Operations

American Water’s Market-Based Operations’ revenues and O&M expenses during the third quarter of 2012 both remained flat as compared to the comparable quarter in 2011.

During the quarter, American Water announced that its homeowner services business, American Water Resources, Inc., has been selected by the New York City Water Board as the official service line protection provider to homeowners. American Water Resources’ Water and Sewer Line Protection Programs will be available beginning in the first quarter of 2013 to an estimated 600,000 homeowners throughout the city’s five boroughs, making it the largest municipal partnered water and sewer line protection contract in the U.S.

Quarterly Dividend

On Sept. 3, 2012, the company made cash dividend payments of $0.25 per share to all shareholders of record as July 6, 2012. On Sept. 20, 2012, in recognition of the company’s performance, American Water’s Board of Directors declared a quarterly cash dividend of $0.25 per common share, payable on Dec. 3, 2012, to all shareholders of record as of Nov. 16, 2012.

Earnings Guidance

The company reaffirmed its 2012 earnings to be in the range of $2.12 to $2.22 per share for continuing operations, assuming normal weather patterns for the balance of the year. The company has included in this range $0.13 to $0.16 per share driven by the increased water sales experienced through the end of the third quarter.

The company’s earnings forecasts are subject to numerous risks, including those described under “Forward-Looking Statements” below and under “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011.

Non-GAAP Financial Measures

This press release includes a presentation of O&M efficiency ratio, which excludes from its calculation estimated purchased water revenues and purchased water expenses. This item is derived from American Water’s consolidated financial information but is not presented in its financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). The item constitutes a “non-GAAP financial measure” under Securities and Exchange Commission (SEC) rules. This non-GAAP financial measure supplements the company’s GAAP disclosures and should not be considered an alternative to the GAAP measure.

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