American Water to Purchase Shorelands Water Company

American Water (NYSE: AWK), the nation’s largest publicly traded water and wastewater utility company, announced today that it has signed an agreement to acquire the Shorelands Water Company, a privately owned water utility that provides water services to more than 11,000 customer accounts in Monmouth County, N.J. Financial and other terms of the sale were not disclosed. The agreement is subject to the review and approval of the New Jersey Board of Public Utilities.

“This important acquisition provides a direct link with our water system serving the community of Union Beach, enhancing supply to the northeastern sections of Monmouth County that we serve. The strength of the Shorelands system will help New Jersey American Water achieve a goal of increased reliability for customers without the need for additional projects that were being evaluated,” said Bill Varley, president of New Jersey American Water.

Shorelands was first established in 1926 as a supplier to the summer residents of West Keansburg. Under the guidance of the current owners since 1957, it grew to provide service to residents in the Bayshore communities of Hazlet, Holmdel, Union Beach, Keyport and Aberdeen. Shorelands delivers approximately two billion gallons of water to its customers annually.

When completed, the acquisition will continue the expansion of New Jersey American Water’s operations. Earlier this year, American Water completed the acquisition of Environmental Disposal Corporation (which provides service in the Bernards and Bedminster area), and New Jersey American Water acquired the former Roxiticus Water Company (in Mendham Township) and began providing water and wastewater service to Elk Township.

New Jersey American Water, a subsidiary of American Water, is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.7 million people. American Water is the largest and most geographically diverse publicly traded U.S. water and wastewater utility company. Marking its 130th anniversary this year, the company employs 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found by visiting www.amwater.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, the completion of the proposed acquisition; the ability to satisfy closing and other conditions related to the proposed transaction, including obtaining regulatory approvals; anticipated capital investments; and the ability to achieve certain benefits relating to the transaction and the operations to be acquired. These statements are based on the current expectations of management of American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including with respect to (1) obtaining the regulatory and other approvals required for the acquisition; (2) satisfying other conditions to the closing of the acquisition; (3) the occurrence of the benefits expected or predicted to occur as a result of the acquisition; (4) unexpected costs, liabilities or delays associated with the acquisition or the integration of the acquired business; (5) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect American Water; and (6) other economic, business and other factors. Forward-looking statements are not guarantees or assurances of future performance or results, and American Water and its affiliates do not undertake any duty to update any forward-looking statement.

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