Board of Directors to increase dividend by eight percent

Significant rate awards received in five states

Company’s largest subsidiary Aqua

Pennsylvania maintains A+ S&P rating

BRYN MAWR, Pa.–(EMWNews)–Second graph, first sentence should read …payable December 1, 2008 to

shareholders of record on November 17, 2008 (sted payable December 1,

2008 to shareholders of record on November 12, 2008)

The corrected release reads:

AQUA AMERICA REPORTS SECOND QUARTER EARNINGS

Board of Directors to increase dividend by eight percent

Significant rate awards received in five states

Company’s largest subsidiary Aqua

Pennsylvania maintains A+ S&P rating

Aqua America, Inc. (NYSE:WTR) today reported revenues for the quarter

ended June 30, 2008 of $150.8 million compared to $150.6 million in the

second quarter of 2007. Net income in the second quarter was $22.6

million versus $23.7 million in the same period of 2007. Corresponding

diluted earnings per share for the quarter were $0.17, compared to $0.18

in the same quarter 2007 on less than one percent more shares

outstanding.

At its regularly scheduled meeting on August 5, 2008, the company’s

Board of Directors voted to increase the quarterly common stock cash

dividend payable December 1, 2008 to shareholders of record on November

17, 2008 by 8 percent to $0.135 per share, an annualized rate of $0.54

per share. This is the tenth consecutive year in which Aqua America has

increased its dividend above its stated five percent target and the

eighteenth dividend increase in 17 years. The Board also declared the

regular $0.125 per share quarterly common stock cash dividend to be paid

on September 1, 2008 to shareholders of record on August 18, 2008. Aqua

has paid a consecutive dividend for more than 60 years.

Aqua America Chairman and CEO Nicholas DeBenedictis said, “So

far, 2008 has been a year focused on efforts to improve our revenue and

net income growth through rate case activity as the company looks to

limit regulatory lag associated with the infrastructure investments and

operating expense growth we have incurred over the last few years. I am

pleased that despite the current economic environment, our largest

subsidiary, Aqua Pennsylvania, has maintained its A+ Standard & Poor’s

rating, which helps the company keep its borrowing costs down resulting

in a benefit to our customers’ rates. I am

also pleased that our Board has expressed its continued confidence in

our long-term growth business model by once again authorizing a dividend

increase above our stated five percent target.”

Revenue for the quarter was flat due to decreased consumption resulting

from unfavorable weather and economic conditions and the disposition of

customers in Fort Wayne, Indiana and Henrico, Virginia in prior

quarters. These losses were offset by gains in surcharges, rate awards,

and year-over-year customer growth. The unfavorable weather included wet

weather in the Midwest and Mid-Atlantic regions and mandatory drought

restrictions in North Carolina.

Rate relief continues to be a major focus of management for 2008 under

the company’s program to address regulatory

lag, which has affected results over recent quarters. Since May, the

company received awards on several rate cases in Pennsylvania, New

Jersey, Ohio, Virginia and Maine, and expects rulings on five other

cases over the next several months. To date in 2008, the company has

received rate awards that are intended to provide $49 million in

additional annualized revenue, including rate awards totaling

approximately $39 million in Pennsylvania and New Jersey. The company

currently has rate requests in progress seeking approximately $34

million in annualized revenues which are expected to positively impact

2009. This includes two recently filed major rate cases in Florida and

North Carolina requesting approximately $21 million in annualized

revenues.

During the quarter, operating and maintenance expenses increased 2.9

percent from the same period in 2007. In addition to some inflationary

impact, expenses were influenced by continuing increases in fuel, bad

debt expense associated with current economic conditions, and increased

operating expense to support growth year over year. However this was

offset by a decrease in expenses associated with disposed systems. The

company has successfully reduced fuel usage, consuming 21,000 gallons

less fuel in the first half of 2008 than in the first half of 2007 by

reducing the number of miles driven and improving miles per gallon. “We

continue to look for ways to improve fleet efficiency,”

said Aqua America Chairman and CEO Nicholas DeBenedictis. “Management

remains committed to improving operating efficiency while continuing to

provide outstanding service to its customers, even in a time of

increasing costs.”

To date in 2008, the company has invested $111 million in infrastructure

improvements and plans to invest approximately $280 million in water and

wastewater infrastructure improvements for the full year compared to

$238 million in 2007. Most of the increase from our prior 2008 planned

capital investment of approximately $260 million is associated with

accelerated pipe rehabilitation and replacement work in Pennsylvania.

Even with the record capital investment, the company does not foresee

any significant additional equity financing needs to support its capital

program because of increasing internally-generated cash and the benefits

of the Economic Stimulus Act, which allows the company to take bonus tax

depreciation in 2008.

In July, Standard and Poor’s affirmed the A+

corporate credit rating on the company’s

largest subsidiary, Aqua Pennsylvania. The strong rating reflects the

consolidated credit quality of Aqua America, which helps Aqua

Pennsylvania borrow money at lower rates. Management continues to strive

to lower its cost of borrowing and now has an imbedded cost of fixed

rate, long-term debt of 5.58 percent vs. 5.67 percent at the end of the

second quarter of 2007.

Aqua America remains committed to expanding its operations through its

growth-through-acquisition program and recently announced three growth

ventures. Aqua purchased a company providing wastewater service to

12,000 residents in South Haven, Indiana and entered into a bulk water

supply agreement with the Borough of Sharpsville (population 7,300) in

Mercer County, Pennsylvania. Aqua also announced a partnership with

Mopac, a division of Smithfield Beef Group that will allow it to grow

its operations and improve efficiencies in the grease removal business

in Pennsylvania.

Aqua America’s conference call with financial

analysts will take place on Wednesday, August 6, 2008 at 11:00 a.m.

Eastern Time. The call will be web cast live so that interested parties

may listen over the Internet by logging on to www.aquaamerica.com.

The conference call will be archived in the investor relations section

of the company’s Web site for 90 days

following the call. Additionally, the call will be recorded and made

available for replay at 3:00 p.m. on August 6, 2008 for 10 business days

following the call. To access the audio replay in the U.S., dial

888.203.1112 (pass code 463117). For international callers, dial

719.457.0820 (pass code 463117).

Aqua America, Inc. is a publicly traded water and wastewater utility

holding company with operating subsidiaries serving approximately three

million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas,

New Jersey, New York, Indiana, Florida, Virginia, Maine, Missouri and

South Carolina. Aqua America is listed on the New York and Philadelphia

Stock Exchanges under the ticker symbol WTR.

This release contains forward looking statements within the meaning of

the Private Securities Litigation Reform Act of 1995, including, among

others, projected revenue and net income growth, the company’s

and Board of Directors’ continued confidence

in the company’s long-term growth business

model, the effects of current economic conditions, our plans for capital

investment, the effects of our capital investments, management’s

focus on rate relief and the anticipated revenue from completed and

planned rate cases, the filing of additional rate requests to recover

capital expenditures, the timing of the expected impact of rate

increases, efforts to improve fleet efficiency, management’s

commitment to improving operating efficiency and customer service,

anticipated needs for new equity, the effects of internally generated

cash, our financial condition and continuation of our business strategy.

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; housing and

customer growth trends; unfavorable weather conditions; the success of

certain cost containment initiatives; the extent to which rate increase

requests are granted and the timing of rate awards; changes in

regulations or regulatory treatment; availability and the cost of

capital; the success of growth initiatives; and other factors discussed

in our Annual Report on Form 10-K which is on file with the SEC. We

undertake no obligation to publicly update or revise any forward-looking

statement.

WTRF

The following table shows selected operating data for the quarters and

six months ended June 30, 2008 and 2007 (in thousands, except per share

data) for Aqua America, Inc. and subsidiaries.

		(Unaudited)						(Unaudited)
		Quarter Ended						Six Months Ended
		June 30,						June 30,
		2008			2007			2008			2007
Operating revenues		$	150,751		$	150,624		$	290,034		$	287,925
Net income		$	22,552		$	23,727		$	36,873		$	40,585
Basic net income per common share		$	0.17		$	0.18		$	0.28		$	0.31
Diluted net income per common share		$	0.17		$	0.18		$	0.28		$	0.30
Average common shares outstanding:
Basic			133,683			132,652			133,549			132,504
Diluted			134,060			133,520			133,998			133,404

Aqua America, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
		Quarter Ended June 30,								Six Months Ended June 30,
			2008				2007				2008				2007
Operating revenues		$	150,751			$	150,624			$	290,034			$	287,925
Cost & expenses:
Operations and maintenance			65,146				63,334				129,450				123,629
Depreciation			20,619				20,456				42,100				40,592
Amortization			1,012				1,233				2,185				2,442
Taxes other than income taxes			10,845				10,831				22,954				22,747
Total			97,622				95,854				196,689				189,410
Operating income			53,129				54,770				93,345				98,515
Other expense (income):
Interest expense, net			17,063				16,441				34,193				32,990
Allowance for funds used during construction			(1,100	)			(742	)			(2,056	)			(1,463	)
Gain on sale of other assets			(553	)			(319	)			(553	)			(388	)
Income before income taxes			37,719				39,390				61,761				67,376
Provision for income taxes			15,167				15,663				24,888				26,791
Net income		$	22,552			$	23,727			$	36,873			$	40,585
Net income		$	22,552			$	23,727			$	36,873			$	40,585
Other comprehensive income, net of tax:
Unrealized holding gain on certain investments			189				213				189				218
Comprehensive income		$	22,741			$	23,940			$	37,062			$	40,803
Net income per common share:
Basic		$	0.17			$	0.18			$	0.28			$	0.31
Diluted		$	0.17			$	0.18			$	0.28			Aqua America, Inc. Brian Dingerdissen Director, Investor Relations 610-645-1191 [email protected] or Gretchen Toner Senior Communications Specialist 610-645-1175 [email protected] Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89 Get Unlimited Organic Website Traffic to your Website  TheNFG.com now offers Organic Lead Generation & Traffic Solutions