Pennsylvania American Water Closes Two Water System Acquisitions At Year’s End

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it closed a pair of water systems acquisitions in northeast Pennsylvania in the final days of 2012. The combined purchase price of the newly acquired systems is approximately $1.2 million.

In Monroe County, Pennsylvania American Water acquired the water system assets serving the Fernwood Resort, which consists of approximately 570 timeshare units and six commercial customers, including a hotel complex, convenience store and restaurants built around Fernwood’s golf course. The resort is located in Middle Smithfield Township and is in close proximity to Pennsylvania American Water’s Saw Creek water and wastewater operations.

The company also purchased the All Seasons Water Company in Delaware Township, Pike County, which provides water service to approximately 100 residents.

“These two transactions brought our acquisition total to six in 2012, marking another successful year of expanding our customer footprint through regionalization while achieving greater economies of scale,” said Pennsylvania American Water President Kathy L. Pape.

Pape said the company is making significant capital investments to improve water service and reliability for the newly acquired systems. For example, the company plans to install new treatment systems for the Fernwood operation to address existing water quality issues, as well as replace nearly 1,000 feet of water main. Pennsylvania American Water will also install new water meters using radio frequency technology for customers of both systems.

Pennsylvania American Water is the largest water utility in the commonwealth, providing high-quality and reliable water and/or wastewater services to approximately 2.2 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 7,000 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 15 million people in more than 30 states and parts of Canada. More information can be found by visiting www.amwater.com.

This release contains forward looking statements, including, among others, our plan to continue our long-term strategy of capital investment in our systems. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, changes in regulations or regulatory treatment and availability and the cost of capital. We undertake no obligation to publicly update or revise any forward-looking statement.

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