American Water Files Registration Statement for Equity Units

The company intends to apply to list its equity units on the NewYork Stock Exchange. American Water will offer $500 million of equityunits and plans to use a portion of the net proceeds from the offeringto repay recent commercial paper borrowings and to use the balance ofthe net proceeds for general corporate purposes.

Goldman, Sachs & Co., Citi, and Merrill Lynch & Co. will act asjoint book-running managers of the proposed offering.

A registration statement relating to these securities has beenfiled with the SEC but has not yet become effective. These securitiesmay not be sold, nor may offers to buy be accepted, prior to the timethe registration statement becomes effective.

This press release shall not constitute an offer to sell, or thesolicitation of an offer to buy, nor shall there be any sale of thesesecurities in any state or jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration orqualification under the securities laws of any such state orjurisdiction.

Copies of the American Water prospectus, when available, may beobtained from Goldman, Sachs & Co., 85 Broad Street, New York, NY10004, Attention: Prospectus Department (Tel: 212-902-1171); Citi,Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220(Tel: 718-765-6732; Fax: 718-765-6734); or Merrill Lynch & Co., 4World Financial Center, New York, NY 10080, Attention: ProspectusDepartment (Tel: 866-500-5408).

With headquarters in Voorhees, N.J., American Water employsapproximately 6,900 dedicated professionals who provide drinkingwater, wastewater and other related services to approximately 16.2million people in 32 states and Ontario, Canada.