-----BEGIN PRIVACY-ENHANCED MESSAGE-----
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<SEC-DOCUMENT>0001125282-06-003565.txt : 20060620
<SEC-HEADER>0001125282-06-003565.hdr.sgml : 20060620
<ACCEPTANCE-DATETIME>20060620163805
ACCESSION NUMBER:		0001125282-06-003565
CONFORMED SUBMISSION TYPE:	11-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20051231
FILED AS OF DATE:		20060620
DATE AS OF CHANGE:		20060620

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AQUA AMERICA INC
		CENTRAL INDEX KEY:			0000078128
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				231702594
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		11-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06659
		FILM NUMBER:		06915572

	BUSINESS ADDRESS:	
		STREET 1:		762 LANCASTER AVE
		CITY:			BRYN MAWR
		STATE:			PA
		ZIP:			19010
		BUSINESS PHONE:		2155278000

	MAIL ADDRESS:	
		STREET 1:		762 LANCASTER AVE
		CITY:			BRYN MAWR
		STATE:			PA
		ZIP:			19010

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILADELPHIA SUBURBAN CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>11-K
<SEQUENCE>1
<FILENAME>p413751-1_11k.txt
<DESCRIPTION>FORM 11-K
<TEXT>
<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 11-K

               [X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                   For the fiscal year ended December 31, 2005

                                       OR

             [_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                          Commission file number 1-6659

                           A. Full title of the Plan:

                               AQUA AMERICA, INC.
                                EMPLOYEES 401(k)
                             SAVINGS PLAN AND TRUST

          B. Name of issuer of the securities held pursuant to the Plan
               and the address of its principal executive office:

                               AQUA AMERICA, INC.
                             762 W. LANCASTER AVENUE
                               BRYN MAWR, PA 19010

<PAGE>

                               AQUA AMERICA, INC.
                     EMPLOYEES 401(K) SAVINGS PLAN AND TRUST

The following audited financial statements are included with this report:

Financial Statements and Supplementary Schedule as of December 31, 2005 and
2004

Exhibit
- -------
23.1      Consent of Beard Miller Company LLP
99.1      Financial Statements and Supplemental Schedules as of
          December 31, 2005 and 2004

<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Aqua
America, Inc. has duly caused this annual report to be signed by the undersigned
thereunto duly authorized.

                               AQUA AMERICA, INC.
                     EMPLOYEES 401(K) SAVINGS PLAN AND TRUST

Plan Sponsor:                                                              Date


/s/ Roy H. Stahl                                                         6/20/06
- --------------------------------------
Roy H. Stahl
Executive Vice President and General Counsel
Aqua America, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>2
<FILENAME>p413751-1ex23_1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>

                                  EXHIBIT 23.1

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in the Registration Statement
on Form S-8 (No. 333-81085) of Aqua America, Inc. of our report dated May 19,
2006 relating to the financial statements of the Aqua America, Inc. Employees
401(k) Savings Plan and Trust included in this annual report on Form 11-K for
the year ended December 31, 2005.


                                        /s/ BEARD MILLER COMPANY LLP

Beard Miller Company LLP
Reading, Pennsylvania
June 14, 2006
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>p413751-1ex99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>

                                                                    Exhibit 99.1


                               AQUA AMERICA, INC.
                     EMPLOYEES 401(K) SAVINGS PLAN AND TRUST

                                Financial Report

                                December 31, 2005

         (With Report of Independent Registered Public Accounting Firm)

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

TABLE OF CONTENTS
DECEMBER 31, 2005 AND 2004

                                                                            PAGE
                                                                            ----
FINANCIAL STATEMENTS:
   Report of Independent Registered Public Accounting Firm                    1
   Statements of Net Assets Available for Benefits                            2
   Statements of Changes in Net Assets Available for Benefits                 3
   Notes to Financial Statements                                              4
SUPPLEMENTARY SCHEDULE:
   Schedule of Assets (Held at End of Year)                                  10

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Administrators
Aqua America, Inc. Employees 401(k) Savings Plan and Trust

     We have audited the accompanying statements of net assets available for
benefits of the Aqua America, Inc. Employees 401(k) Savings Plan and Trust as of
December 31, 2005 and 2004, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plan's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Aqua
America, Inc. Employees 401(k) Savings Plan and Trust as of December 31, 2005
and 2004, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.

     Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplementary schedule of
assets (held at end of year) as of December 31, 2005 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplementary schedule is the
responsibility of the Plan's management. The supplementary schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

                                        /s/ Beard Miller Company LLP
Beard Miller Company LLP
Reading, Pennsylvania
May 19, 2006


                                        1

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004

                                             2005          2004
                                         -----------   -----------
                ASSETS
Investments, at fair value               $49,918,590   $39,210,796
Employer contributions receivable              1,321             0
Participants' contributions receivable        25,449             0
                                         -----------   -----------
   NET ASSETS AVAILABLE FOR BENEFITS     $49,945,360   $39,210,796
                                         ===========   ===========

See notes to financial statements.


                                        2

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                              2005          2004
                                                          -----------   -----------
<S>                                                       <C>           <C>
INVESTMENT INCOME
   Interest and dividends                                 $ 1,190,181   $   935,680
   Net appreciation in fair value of investments            9,043,507     2,845,350
                                                          -----------   -----------
      TOTAL INVESTMENT INCOME                              10,233,688     3,781,030
                                                          -----------   -----------
CONTRIBUTIONS
   Employer                                                   288,074       300,618
   Participants                                             1,602,161     1,548,000
                                                          -----------   -----------
      TOTAL CONTRIBUTIONS                                   1,890,235     1,848,618
                                                          -----------   -----------
BENEFITS PAID TO PARTICIPANTS                              (1,386,999)   (2,094,200)
                                                          -----------   -----------
ADMINISTRATIVE EXPENSES                                        (2,360)       (2,857)
                                                          -----------   -----------
      NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS    10,734,564     3,532,591
NET ASSETS AVAILABLE FOR BENEFITS - BEGINNING OF YEAR      39,210,796    35,678,205
                                                          -----------   -----------
NET ASSETS AVAILABLE FOR BENEFITS - END OF YEAR           $49,945,360   $39,210,796
                                                          ===========   ===========
</TABLE>

See notes to financial statements.


                                        3

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 1 - DESCRIPTION OF PLAN

               The following description of the Aqua America, Inc. Employees 401
          (k) Savings Plan and Trust (the "Plan") is provided for general
          information purposes only. Participants should refer to the Plan
          document for more complete information.

               GENERAL

                    The Plan is a defined contribution plan covering
                    substantially all non-bargaining unit employees with hire
                    dates prior to April 1, 2003 of Aqua Illinois Inc., Aqua
                    Ohio, Inc., Aqua New Jersey, Inc., Aqua Maine, Inc., Aqua
                    North Carolina, Inc. (formerly Hydraulics, Ltd.), employees
                    of certain divisions of Aqua Pennsylvania, Inc. and some
                    employees of other subsidiaries of Aqua America, Inc. (the
                    "Company"). Employees became eligible to participate on
                    January 1 of the year following the date on which his or her
                    employment commenced. The Plan is subject to the provisions
                    of the Employee Retirement Income Security Act of 1974, as
                    amended (ERISA). Employees covered under collective
                    bargaining agreements are permitted to participate in the
                    Plan if the collective bargaining agreement provides for
                    participation.

               CONTRIBUTIONS

                    Participants may elect to contribute from 1% to 25% of their
                    pretax compensation pursuant to a salary deferral election,
                    up to a maximum of $14,000 in 2005 and $13,000 in 2004,
                    which are partially matched by the employer. Participants
                    may also contribute from 1% to 10% of their after-tax
                    compensation, which is not matched by the Company.
                    Additionally, participants who are age 50 or who will attain
                    age 50 prior to the plan year may make an additional
                    deferral contribution ("Catch-Up"), provided the participant
                    made the maximum amount of deferral contributions permitted
                    under the Plan. The maximum amount of allowable catch-up
                    contribution for 2005 and 2004 is $4,000 and $3,000,
                    respectively. They may also make transfers or suspend their
                    contributions at any time, and may contribute amounts
                    representing distributions from other qualified defined
                    benefit or contribution plans ("Rollover"). In any Plan
                    year, a participant's aggregate contributions to the Plan
                    (salary deferral amounts plus after-tax voluntary
                    contributions) may not exceed 35% of such participant's
                    compensation for the applicable Plan year.

                    The Plan provides for the Company to contribute an amount
                    equal to 40% of the pretax employee contribution up to
                    $1,040 for each participant. The Company's contributions
                    consist of common stock in Aqua America, Inc.

               PARTICIPANTS' ACCOUNTS

                    Each participant's account is credited with the
                    participant's contribution and allocations of the Company's
                    contribution and Plan earnings. Allocations are based on
                    participant contributions or account balances, as defined by
                    the Plan document.


                                       4

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 1 - DESCRIPTION OF PLAN (CONTINUED)

               VESTING

                    Each participant will always be 100% vested in all employee
                    and Company contributions.

               COMMON STOCK FUND

                    Matching contributions may be made in cash or invested in
                    Aqua America, Inc. common stock. Participants have an
                    opportunity to elect that any dividends with respect to Aqua
                    America, Inc. common stock held be paid in cash rather than
                    being allocated to their account to be invested in
                    additional shares of Aqua America, Inc. common stock.

               INVESTMENT OPTIONS

                    Participants can direct, at the time they enroll in the
                    Plan, that their salary deferral and voluntary contributions
                    be invested entirely in one of the funds offered by the Plan
                    or divided among the funds. The Plan currently offers
                    fourteen registered investment companies and one
                    common/collective trust fund. Subject to compliance with
                    applicable state and federal securities laws, the Plan also
                    permits participants to acquire an interest in Aqua America,
                    Inc. common stock. Participants may change their investment
                    instructions and reinvest their contributions in a different
                    fund or funds at any time.

               PAYMENT OF BENEFITS

                    Upon retirement, disability, or death, distributions will be
                    paid as soon as administratively possible in a lump sum or
                    as an annuity. Prior to March 28, 2005, upon termination of
                    service other than by retirement, disability, or death, a
                    participant will receive a lump sum payment if the total of
                    their employer matching and profit sharing contribution
                    accounts does not exceed $5,000. If the account balances
                    exceed $5,000, the assets will generally be held in a trust
                    until the participant's normal or early retirement date.
                    Effective March 28, 2005, the $5,000 threshold was decreased
                    to $1,000.

                    Withdrawals will be made in cash or shares of Aqua America,
                    Inc. stock, to the extent permitted by law. Under certain
                    circumstances, a participant may withdraw all or a portion
                    of the employee contributions while still employed.

               LOANS DUE FROM PARTICIPANTS

                    Participants may borrow funds from their account balance
                    equal to the lesser of $50,000 or 50% of their vested
                    account balance for a period not to exceed five years unless
                    the loan is used to purchase the participant's principal
                    residence. Repayment is made through payroll deductions. All
                    new loans are issued at an interest rate of prime plus 1%.

               PLAN AMENDMENT OR TERMINATION

                    Although the Company does not intend to terminate the Plan,
                    it may do so at its discretion, subject to the provisions of
                    ERISA. All interests of the participants would be
                    distributed to them as determined in accordance with
                    applicable provisions of the Internal Revenue Code.


                                       5

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES

               A summary of the significant accounting policies consistently
          applied in the preparation of the accompanying financial statements
          follows:

               BASIS OF ACCOUNTING

                    The accompanying financial statements have been prepared
                    using the accrual basis.

               USE OF ESTIMATES

                    The preparation of the financial statements in conformity
                    with accounting principles generally accepted in the United
                    States of America requires the Plan's management to use
                    estimates and assumptions that affect the accompanying
                    financial statements and disclosures. Actual results could
                    differ from these estimates.

               ADMINISTRATION

                    The Plan is administered by a committee (the "Committee")
                    consisting of three or more individuals selected by and who
                    may be removed at any time by the Board of Directors of Aqua
                    America, Inc. The Committee members may be employees of Aqua
                    America, Inc. and may be participants in the Plan. The
                    Committee members receive no compensation from the Plan for
                    their services in such capacity. The Committee has extensive
                    administrative powers in connection with the Plan, including
                    authority to interpret the provisions of the Plan, to adopt
                    rules for its administration and to make other decisions
                    with respect to the Plan.

                    The plan trustee invests funds as directed by the
                    participants. The principal duties of the trustees are to
                    receive all contributions paid to the Plan and to make
                    investments and pay benefits.

                    Substantially all of the administrative expenses of the Plan
                    are paid by the Company.

               INVESTMENT VALUATION

                    The Plan's investments are stated at fair value. Investments
                    in registered investment companies are valued at quoted
                    market prices which represents the net asset value of shares
                    held by the Plan at year end. Common/collective trust funds
                    are valued at unit value, which represents the fair value of
                    the underlying assets. Therefore, the value of
                    common/collective trust funds are deemed to be at estimated
                    fair value. Aqua America, Inc. stock is valued at its quoted
                    market price. Loans to participants are valued at cost,
                    which approximates fair value.

                    Investments of the Plan are exposed to various risks, such
                    as interest rate, market, and credit. Due to the level of
                    risk associated with certain investments and the level of
                    uncertainty related to changes in the value of investments,
                    it is at least reasonably possible that changes in risks in
                    the near term would materially affect investment assets
                    reported in the statement of net assets available for
                    benefits and the statements of changes in net assets
                    available for benefits.


                                       6

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

               INVESTMENT VALUATION (CONTINUED)

                    Dividend income is recorded on the ex-dividend date and
                    interest income is recorded when earned. Realized gains and
                    losses on the sale of the Aqua America, Inc. stock are based
                    on average cost of the securities sold. Purchases and sales
                    are recorded on a trade date basis.

               PAYMENTS OF BENEFITS

                    Benefits are recorded when paid.

NOTE 3 - INVESTMENTS

               The following table presents the fair value of investments:

                INVESTMENTS                       2005           2004
- -------------------------------------------   ------------   -----------
Investments at fair value, by reference to
   quoted market prices:
   Registered investment companies:
      American Century Balanced Fund          $ 3,341,577 *  $ 3,046,178 *
      American Century Select Fund              7,735,990 *    7,599,820 *
      Other registered investment companies     6,466,164      5,635,712
                                              -----------    -----------
      TOTAL REGISTERED INVESTMENT COMPANIES    17,543,731     16,281,710
   Stock:
      Aqua America, Inc. Common Stock          27,234,479 *   18,658,772 *
                                              -----------    -----------
      TOTAL INVESTMENTS AT FAIR VALUE, BY
         REFERENCE TO QUOTED MARKET PRICES     44,778,210     34,940,482
                                              -----------    -----------
Investments at estimated fair value:
      Common/Collective Funds
         American Century Stable Asset Fund     4,003,220 *    3,266,620 *
                                              -----------    -----------
      TOTAL INVESTMENTS AT ESTIMATED FAIR
         VALUE                                  4,003,220      3,266,620
                                              -----------    -----------
Investments at cost, which approximates
   fair value:
      Loans due from participants               1,137,160      1,003,694
                                              -----------    -----------
      TOTAL INVESTMENTS AT COST, WHICH
         APPROXIMATES FAIR VALUE                1,137,160      1,003,694
                                              -----------    -----------
      TOTAL INVESTMENTS                       $49,918,590    $39,210,796
                                              ===========    ===========

*    Investment represented 5% or more of the Plan's net assets available for
     benefits in the respective plan year.


                                        7

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 3 - INVESTMENTS (CONTINUED)

          In August 2005, Aqua America's Board of Directors declared a 4-for-3
     common stock split effected in the form of a 33-1/3% stock distribution for
     shareholders of record on November 17, 2005. The new shares were
     distributed in December 2005.

          The Plan's investments (including gains and losses on investments
     bought and sold, as well as held during the year) appreciated (depreciated)
     in value during the years ended December 31, 2005 and 2004 as follows:

                                      2005         2004
                                  -----------   ----------
Common stock                       $9,058,200   $1,863,366
Registered investment companies       (14,693)     981,984
                                  -----------   ----------
      TOTAL                       $ 9,043,507   $2,845,350
                                  ===========   ==========

NOTE 4 - NONPARTICIPANT-DIRECTED INVESTMENTS

          Information about the net assets available for benefits as of December
     31, 2005 and 2004 and the significant components of the changes in net
     assets relating to the nonparticipant-directed investments for the years
     ended December 31, 2005 and 2004 is as follows:

                                            2005         2004
                                        -----------   -----------
Net assets:
   Aqua America common stock            $20,969,549   $14,126,809
   Employer contribution receivable           1,321             0
                                        -----------   -----------
                                        $20,970,870   $14,126,809
                                        ===========   ===========
Changes in net assets:
   Contributions                        $   288,074   $   300,618
   Interest and dividends                   305,425       284,252
   Net appreciation                       6,766,030     1,414,390
   Benefits paid to participants           (515,468)     (667,264)
                                        -----------   -----------
      TOTAL                             $ 6,844,061   $ 1,331,996
                                        ===========   ===========


                                        8

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004

NOTE 5 - RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS

          Certain Plan investments are shares of registered investment companies
     managed by J.P. Morgan Retirement Plan Services. J.P. Morgan Retirement
     Plan Services is the trustee as defined by the Plan and, therefore, these
     transactions qualify as party-in-interest transactions.

          Employer matching contributions are invested in common stock of the
     Plan Sponsor. Participants may also elect to invest in Plan Sponsor common
     stock. These transactions qualify as related party and party-in-interest
     transactions. Total purchases at market value related to the stock for 2005
     and 2004 were $1,111,973 and $921,450, respectively. Total sales at market
     value related to the stock for 2005 and 2004 were $1,488,324 and $888,719,
     respectively.

NOTE 6 - TAX STATUS

          The Internal Revenue Service issued its latest determination letter
     dated October 8, 2003, which stated that the Plan and related trust, as
     amended, qualified under applicable provisions of the Internal Revenue Code
     (IRC) and, therefore, are exempt from federal income taxes. The Plan has
     been amended since receiving the determination letter. The Plan
     administrator and the Plan's counsel believe that the Plan is designed and
     is currently being operated in compliance with applicable requirements of
     the IRC. Therefore, no provision for income taxes has been included in the
     Plan's financial statements.

NOTE 7 - PLAN AMENDMENT

          Effective July 1, 2005, the Plan was amended to allow certain
     employees of Hydraulics, Ltd. to terminate their participation in the Plan
     and to become participants in the Aqua America, Inc. 401(k) and Profit
     Sharing Plan. The amendment also allows the participants to transfer their
     account balances in the Plan to the Aqua America, Inc. 401(k) and Profit
     Sharing Plan. The transfer of assets has not taken place as of December 31,
     2005 and will take place as soon as the third party administrators can
     provide for the transfer.


                                        9

<PAGE>

AQUA AMERICA, INC. EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
- --------------------------------------------------------------------------------

SCHEDULE OF ASSETS (HELD AT END OF YEAR)
FORM 5500 - SCHEDULE H - LINE 4I
EIN: 23-1702594
PN: 003
DECEMBER 31, 2005

<TABLE>
<CAPTION>
                                                                                                            CURRENT
(A)                IDENTITY OF ISSUE (B)                  DESCRIPTION OF INVESTMENT (C)       COST (D)     VALUE (E)
- ---   --------------------------------------------   -------------------------------------   ----------   -----------
<S>   <C>                                            <C>                                     <C>          <C>
 *    American Century Balanced Fund                 Registered Investment Company               N/A      $ 3,341,577
 *    American Century Diversified Bond Fund         Registered Investment Company               N/A          452,854
 *    American Century Equity Index Fund             Registered Investment Company               N/A        1,138,409
 *    American Century International Growth Fund     Registered Investment Company                            475,814
 *    American Century Retirement Portfolio          Registered Investment Company               N/A            7,629
 *    American Century Retirement Portfolio - 2015   Registered Investment Company               N/A            9,843
 *    American Century Retirement Portfolio - 2025   Registered Investment Company               N/A           61,876
 *    American Century Retirement Portfolio - 2035   Registered Investment Company               N/A            8,779
 *    American Century Retirement Portfolio - 2045   Registered Investment Company               N/A            9,078
 *    American Century Select Fund                   Registered Investment Company               N/A        7,735,990
 *    American Century Strategic Allocation
          Moderate Fund                              Registered Investment Company               N/A          253,546
 *    American Century Value Fund                    Registered Investment Company               N/A        2,013,481
 *    American Century Vista Fund                    Registered Investment Company               N/A        1,587,578
 *    JP Morgan U.S. Small Company                   Registered Investment Company               N/A          447,277
 *    American Century Stable Asset Fund             Common/Collective Fund                      N/A        4,003,220
 *    Aqua America, Inc.                             Common Stock                            $8,173,638    27,234,479
      Participant loans                              Participant Loans (interest rate 4.0%
                                                     to 9.5%)                                         0     1,137,160
                                                                                                          -----------
                                                                                                          $49,918,590
                                                                                                          ===========
</TABLE>

*    Represents a party-in-interest to the Plan.

N/A  Historical cost has not been presented as investment is participant
     directed


                                       10
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
