Exhibit 12.1

AMERICAN WATER CAPITAL CORP.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

     12 Months ended December 31,               
     2002    2003    2004    2005    2006    9 mos ended
September 30,
2007		   

Proforma 12

mos ended
December 31,
2006

   

Proforma 9

mos ended
September 30,
2007

Income (loss) from continuing operations before income taxes

    $ —      $ —      $ —      $ —      $ —      $ —      $ —      $ —  

Fixed Charges:

                        

Interest, dividend on Mandatory redeemable preferred shares and amortization of debt discount and expenses and premium on all indebtedness

      70,734      85,212      66,093      103,733      134,390      92,095      210,131      160,846
                                                       

Total fixed charges

      70,734      85,212      66,093      103,733      134,390      92,095      210,131      160,846
                                                       

Income from continuing operations plus fixed charges

      70,734      85,212      66,093      103,733      134,390      92,095      210,131      160,846
                                                       

Total fixed charges

      70,734      85,212      66,093      103,733      134,390      92,095      210,131      160,846

Total fixed charges and preferred dividends

      70,734      85,212      66,093      103,733      134,390      92,095      210,131      160,846
                                                       

Ratio of earnings to combined fixed charges and preferred dividends

      1.00      1.00      1.00      1.00      1.00      1.00      1.00      1.00

For purposes of calculating the ratio of earnings to fixed charges, earnings consists of income (loss) from continuing operations before income taxes including the effect of allowance for funds used during construction, plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs, interest on mandatory redeemable preferred stock, and a portion of rent expense that management believes is representative of the interest component of rental expense. Fixed charges have not been reduced for the effect of AFUDC.

 

AMERICAN WATER WORKS COMPANY, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

     12 Months ended     9 mos ended
September 30,
2007		    

Proforma 12
mos ended
December 31,
2006

    

Proforma 9
mos ended
September 30,
2007

  
     2002     2003     2004    2005     2006        

Income (loss) from continuing operations before income taxes

    $ (149,522 )   $ 102,411     $ 125,428    $ (224,151 )   $ (108,938 )   $ (33,608 )   $ (23,248 )   $ (21,308 )
                                                               

Fixed Charges:

                  

Interest, dividend on Mandatory redeemable preferred shares and amortization of debt discount and expenses and premium on all indebtedness

     26,734       284,860       319,731      349,851       371,247       215,502       285,567       203,202  

Interest factor in rentals

      400       6,623       10,526      11,554       12,045       6,273       12,045       6,273  

Interest costs from discontinued operations

      —         (22 )     67      21       (322 )     (56 )     —         —    
                                                               

Total fixed charges

      27,134       291,461       330,324      361,426       382,970       221,719       297,612       209,475  
                                                               

Income from continuing operations plus fixed charges

      (122,388 )     393,872       455,752      137,275       274,032       188,111       274,364       188,167  
                                                               

Preferred dividend requirements

      —         225       225      225       225       169       225       169  

Ratio of pre-tax income to net income

      0.94       2.43       2.12      0.81       0.70       1.66       0.37       1.66  

Preferred dividend factor (1)

      —         547       478      183       157       280       83       280  

Total fixed charges

      27,134       291,461       330,324      361,426       382,970       221,719       297,612       209,475  
                                                               

Total fixed charges and preferred dividends

      27,134       292,008       330,801      361,609       383,128       221,999       297,694       209,755  
                                                               

Ratio of earnings to combined fixed charges and preferred dividends (2)

      —         1.35       1.38      —         —         —         —         —    

For purposes of calculating the ratio of earnings to combined fixed charges and preferred dividends, earnings consists of income (loss) from continuing operations before income taxes including the effect of allowance for funds used during construction, referred to as AFUDC, plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs, interest on mandatory redeemable preferred stock, and a portion of rent expense that management believes is representative of the interest component of rental expense. Fixed charges have not been reduced for the effect of AFUDC.

 

(1) Represents the amount of pre-tax earnings required to cover the dividends associated with preferred stock without mandatory redemption requirements.
(2) For the years ended December 31, 2002, 2005 and 2006 earnings was insufficient to cover fixed charges and there was a deficiency of $149.5 million, $224.3 million and $109.1 million, respectively. On a pro forma basis after giving effect to the Transactions earnings would have been insufficient to cover fixed charges and there would have been a deficiency of $23.3 million and $21.6 million for the year ended December 31, 2006 and the nine months ended September 30, 2007, respectively.