American Water Declares Quarterly Dividend

American Water Works Company, Inc. (NYSE: AWK) announced today that its Board of Directors declared a quarterly cash dividend payment of $0.25 per share. In addition, the Board approved accelerating the payment date to Dec. 28, 2012, to take advantage of the existing 2012 tax rates. The regular quarterly cash dividend, which has historically been paid in March, is now payable on Dec. 28, 2012 to all shareholders of record as of Dec. 20, 2012.

“As always, we are pleased to consistently declare a quarterly dividend,” said Jeff Sterba, president and CEO of American Water. “We were also pleased that the Board made the decision to accelerate the payment due to the uncertainty over the tax rates that will be in effect in 2013. American Water has supported the extension of both the dividend tax rate and the capital gains tax rate because we know that it will have a real impact on our investors. This accelerated payment reflects our commitment to do what is under our control for the benefit of our stockholders.”

American Water offers a dividend reinvestment and direct stock purchase plan called American Water Stock Direct, which enables stockholders to reinvest cash dividends and purchase additional American Water common shares without any brokerage commissions or service charges. Stockholders and other persons may obtain a copy of the Plan prospectus and an enrollment form by contacting American Stock Transfer & Trust Company (“AST”) at [phone], visiting AST’s website at www.amstock.com, contacting American Water’s Investor Relations at 877-310-7174 or by visiting the Investor Relations page at www.amwater.com.

American Water is a supporter of Defend My Dividend, a national grassroots advocacy campaign with the mission of retaining the current dividend tax rate. Without action by Congress, the tax rates on dividends and capital gains are set to increase on Jan. 1, 2013. More information is available on the Investor Relations page at www.amwater.com, or by visiting www.defendmydividend.org.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities. The offer is being made solely through the Plan prospectus.

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