PHILADELPHIA SUBURBAN CORP, S-3, 2000-08-03

PHILADELPHIA SUBURBAN CORP
S-3, 2000-08-03
WATER SUPPLY

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<PAGE>
As filed with the Securities and Exchange Commission on August 3, 2000.
Registration No. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

REGISTRATION STATEMENT
ON FORM S-3
Under
THE SECURITIES ACT OF 1933

PHILADELPHIA SUBURBAN CORPORATION
(Exact name of registrant as specified in its charter)

Pennsylvania 23-1702594
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

762 W. Lancaster Avenue
Bryn Mawr, PA 19010-3489
(610) 527-8000
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
-----------------------
ROY H. STAHL
Philadelphia Suburban Corporation
Executive Vice President and General Counsel
762 W. Lancaster Avenue
Bryn Mawr, PA 19010-3489
(610) 527-8000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

Copies to:

Stephen A. Jannetta David P. Falck
Morgan, Lewis & Bockius LLP Winthrop, Stimson, Putnam & Roberts
1701 Market Street One Battery Park Plaza
Philadelphia, PA 19103-2921 New York, NY 10004
(215) 963-5000 (212) 858-1000

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------------------------------------------------------------------------

Title of Shares Amount Proposed Maximum Proposed Maximum Amount of Registration
To Be Registered To Be Registered (1) Offering Price Per Share (2) Aggregate Offering Price Fee
(2)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.50 par value 1,150,000 $ 22.10 $ 25,415,000 $ 6,709.56
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes 150,000 shares subject to an over-allotment option granted to the
underwriters.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with paragraph (c) of Rule 457 on the basis of the average of
the high and low sale prices for the Common Stock on August 1, 2000, as
reported on the New York Stock Exchange.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell or accept offers to buy these securities before the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.

SUBJECT TO COMPLETION, DATED AUGUST 3, 2000

1,000,000 Shares

Philadelphia Suburban Corporation

Common Stock

---------------

We are selling 1,000,000 shares of our common stock. Our common stock
is listed on the New York Stock Exchange and the Philadelphia Stock Exchange
under the symbol "PSC." The last reported sale price of our common stock on the
New York Stock Exchange on August 1, 2000 was $22.1875 per share.

-------------

Per Share Total
--------- -----
<S> <C>
Public offering price...................................................... $ $
Underwriting discount ..................................................... $ $
Proceeds, before expenses, to Philadelphia Suburban Corporation............ $ $
</TABLE>

The underwriters named in this prospectus may purchase up to an
additional 150,000 shares of common stock from us under certain circumstances.
The underwriters expect to deliver the shares to purchasers on or about , 2000.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

---------------

A.G. Edwards & Sons, Inc.

PaineWebber Incorporated

Janney Montgomery Scott LLC

Prospectus dated , 2000

<PAGE>

[INSIDE FRONT COVER]

[TERRITORY MAP - A graphic depicting the northeast quarter of the United States,
with the five states in which we have operations shown in a different shade than
the other states. The locations of our service territories in these five states
are represented by dots on the map and our corporate headquarters and primary
service territory is represented by a star. There are circles around the dots
closest to Chicago, Cleveland/Youngstown, and Philadelphia, where most of our
operations are concentrated. There is an arrow pointing from the star to an
enlarged map of the area around the City of Philadelphia showing the location of
Philadelphia Suburban Water Company's service territory. In the lower right hand
quarter of the page is a table setting forth the number of our customers in each
of the five states as of March 31, 2000, as set forth below. In the middle of
the page is a legend explaining that the star indicates the location of our
corporate headquarters and the Philadelphia Suburban Water Company service
territory and that the dots represent the Consumers Water Company service
territories. At the bottom of the page is a legend explaining that the shaded
area in the enlarged map around the City of Philadelphia indicates the
Philadelphia Suburban Water Company service territory.]

Customers by State as of 3/31/00
-------------------------------------------------
Pennsylvania 368,072
-------------------------------------------------
Ohio 78,703
-------------------------------------------------
Illinois 62,463
-------------------------------------------------
New Jersey 33,817
-------------------------------------------------
Maine 16,828
-------------------------------------------------
Total 559,883
-------------------------------------------------

<PAGE>

TABLE OF CONTENTS
Page
----

Prospectus Summary .............................................. 1
Forward-Looking Statements ...................................... 5
The Water and Wastewater Utility Industries ..................... 5
Philadelphia Suburban Corporation ............................... 6
Capital Requirements and Funding ................................ 11
Where You Can Find More Information ............................. 12
Use of Proceeds ................................................. 13
Price Range of Common Stock and Dividends ....................... 13
Description of Capital Stock .................................... 15
Underwriting .................................................... 17
Legal Matters ................................................... 19
Experts ......................................................... 19

-------------------

You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. Our
website is located at www.suburbanwater.com. Information on this website,
however, is not part of this prospectus. We are not, and the underwriters are
not, making an offer to sell these securities in any state where the offer or
sale is not permitted. You should not assume that the information provided in
this prospectus or incorporated by reference in this prospectus is accurate as
of any date other than the date on the front of this prospectus or the date of
those documents. Our business, financial condition, results of operations and
prospects may have changed since those dates.

<PAGE>

PROSPECTUS SUMMARY

This summary highlights material information contained elsewhere in
this prospectus. Before making an investment decision, you should read this
entire prospectus as well as the documents incorporated by reference. Unless
otherwise indicated, the information in this prospectus assumes that the
underwriters' over-allotment option is not exercised. Unless the context
otherwise requires, references in this prospectus to "we," "us" and "our" refer
to Philadelphia Suburban Corporation and its direct and indirect subsidiaries.
In addition, references to Philadelphia Suburban Water refer to our subsidiary,
Philadelphia Suburban Water Company, and its subsidiaries, and references to
Consumers Water refer to our subsidiary, Consumers Water Company, and its
subsidiaries.

Philadelphia Suburban Corporation

Our business ......................... A holding company for regulated utilities
providing water or wastewater services.
Among the largest investor-owned water
utilities in the U.S. based on the number
of customers.

Our service territory ................ Parts of Pennsylvania, Ohio, Illinois,
New Jersey and Maine.

Population of our service territory .. Approximately 2.0 million.

Philadelphia Suburban Water .......... One of our subsidiaries and a regulated
public utility providing water or
wastewater services to about 1.1 million
residents in the suburban areas west and
north of the City of Philadelphia.

Consumers Water ...................... One of our subsidiaries and a holding
company for several regulated public
utilities providing water or wastewater
services to about 850,000 residents in
various communities in Pennsylvania,
Ohio, Illinois, New Jersey and Maine.

Customers as of March 31, 2000 ....... Approximately 560,000 (including
approximately 8,800 customers associated
with operating and maintenance
contracts).

<PAGE>
Our address and telephone number ............ Philadelphia Suburban Corporation
762 W. Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3489
610-527-8000

The Offering

Common stock offered (1) .................... 1,000,000 shares.

Common stock to be outstanding after
this offering (2) ........................... 41,927,257 shares.

Current indicated annual dividend rate ...... $.72 per share. Effective with the
$.19375 per share dividend payable
December 1, 2000 to holders of
record on November 15, 2000, the
indicated annual dividend rate
will be $.775 per share.

Cash dividends paid since ................... 1944

Listing ..................................... New York Stock Exchange and
Philadelphia Stock Exchange
(Symbol: PSC).

Use of proceeds ............................. The net proceeds of this offering
will be used to reduce
Philadelphia Suburban Water's
short-term debt. See "Use of
Proceeds."

________________________
(1) Purchasers of offered shares will also receive preferred stock purchase
rights. See "Description of Capital Stock - Common Stock - Shareholder
Rights Plan."
(2) The outstanding share information is based upon the shares of common
stock outstanding as of March 31, 2000. This information excludes options
to purchase 1,595,737 shares of common stock outstanding as of March 31,
2000 under our stock option plans. In addition, on August 1, 2000, our
board of directors approved a 25% common stock dividend payable on
December 1, 2000 to holders of record on November 15, 2000. The share and
per share data contained in this prospectus have not been restated to give
effect to this stock dividend.

2
<PAGE>
Summary Consolidated Financial Data
(in thousands, except per share and operating data)

The following table sets forth certain summary consolidated financial data
derived from our audited consolidated financial statements for the years ended
December 31, 1999, 1998 and 1997 and from our unaudited interim consolidated
financial statements for the three months ended March 31, 2000 and 1999. The
unaudited interim financial statements include, in the opinion of our
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of our financial position and results of
operations for the interim periods presented. Interim results are not
necessarily indicative of the results that may be expected for any other interim
period or for a full year.

On March 10, 1999, we completed a merger with Consumers Water. The merger
has been accounted for as a pooling-of-interests. Accordingly, our historical
consolidated financial statements and notes thereto included in the documents
that we incorporate by reference in this prospectus, and from which certain of
the financial data presented below has been derived, were restated to include
the accounts and results of Consumers Water as if the merger had been completed
as of the beginning of the earliest period presented. You should read this
summary consolidated financial data together with our historical consolidated
financial statements and the notes thereto in the documents that we incorporate
by reference in this prospectus.

<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
------------------------ ---------------------------------------------
2000 1999 1999 1998 1997
---- ---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Operating revenues ..................... $ 64,510 $ 58,597 $ 257,326 $ 250,771 $ 235,852
Operating income ....................... 25,079 18,658 (1) 101,045 (1) 99,238 89,959
Income from continuing
operations, exclusive of certain
non-recurring items (4) ........... 10,246 8,912 (2) 44,871 (2) 40,917 (3) 35,015
Net income (loss) available to
common stock:
Continuing operations (4) ............ $ 10,246 $ 316 (5) $ 36,275 (5) $ 44,820 (6) $ 35,015
Discontinued operations .............. -- -- -- -- (2,737)
--------- ------- ----------- ----------- ---------
Total ............................ $ 10,246 $ 316 (5) $ 36,275 (5) $ 44,820 (6) $ 32,278
========= ======= =========== =========== =========

Per Common Share Data: (7)
Diluted income per share:
Income from continuing
operations, exclusive of certain
non-recurring items ............... $ 0.25 $ 0.22 (2) $ 1.09 (2) $ 1.00 (3) $ 0.90
Income from continuing
operations ........................ 0.25 0.01 (5) 0.88 (5) 1.10 (6) 0.90
Net income ........................... 0.25 0.01 (5) 0.88 (5) 1.10 (6) 0.83
Cash dividends paid
per common share (8) ................. 0.18 0.17 0.70 0.67 0.62
Book value per share of
common stock ......................... 8.92 8.44 8.89 8.53 7.70

Average common shares
outstanding (diluted) .................. 41,256 41,285 41,305 40,854 39,018
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
March 31, December 31,
---------------------------- -------------------------------------------
2000 1999 1999 1998 1997
------------- -------------- ------------- ------------- -------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Total assets ..................... $1,290,106 $1,157,276 $1,280,805 $ 1,156,733 $ 1,083,162
Property, plant & equipment, net.. 1,146,822 1,026,324 1,135,364 1,016,194 952,626
Capitalization:
Long-term debt, including
current portion ............. $ 442,210 $ 389,434 $ 425,946 $ 377,355 $ 407,526
Preferred stock with mandatory
redemption, including current
portion ..................... - - - - 4,214
Stockholders' equity ........... 369,238 348,448 368,901 353,088 306,816
------------- -------------- ------------- ------------- -------------
Total capitalization ............. $ 811,448 $ 737,882 $ 794,847 $ 730,443 $ 718,556
============= ============== ============= ============= =============

Operating Data:
Number of metered customers ...... 551,096 527,857 548,937 525,959 519,160

March 31, 2000
-------------------------------------------------------
Actual As Adjusted (9)
-------------------------- --------------------------
Amount Percent Amount Percent
------ ------- ------ -------
(unaudited) (unaudited)
Capitalization:
Long-term debt (10) ............ $ 442,210 54.5% $ 471,570 54.7%
Preferred stock ................ 1,760 0.2% 1,760 0.2%
Common stockholders' equity .... 367,478 45.3% 388,494 45.1%
------------- ----------- -------------- ----------
Total capitalization (10) ............ $ 811,448 100.0% $ 861,824 100.0%
============= =========== ============== ==========

Short-term debt:
Revolving credit debt of Philadelphia
Suburban Water ............. $ 50,000 $ 28,984
Loans payable to banks under
short-term lines of credit . 52,741 24,229
------------- --------------
Total short-term debt ................ $ 102,741 $ 53,213
============= ==============
</TABLE>

-------------------------------------------
(1) Includes a charge for restructuring costs in connection with the Consumers
Water merger of $3,787.
(2) Non-recurring items represent a charge of $6,334 ($6,134 after-tax or $0.15
per share) for the Consumers Water merger transaction costs and a charge
for related restructuring costs of $3,787 ($2,462 after-tax or $0.06 per
share).
(3) Non-recurring item represents a gain of $6,680 ($3,903 after-tax or $0.10
per share) on the sale of Consumers Water's New Hampshire operations
pursuant to the state's condemnation statute.
(4) After provision for dividends on our preferred stock.
(5) Results include the net charges described in footnote (2) above.
(6) Results include the net gain described in footnote (3) above.
(7) The share and per share data contained in this table have not been
restated to give effect to the 25% common stock dividend payable on
December 1, 2000.
(8) Represents our historical dividends paid per common share. At our August
1, 2000 board meeting, our board of directors approved an increase in our
quarterly cash dividend from $0.18 per share to $.19375 per share effective
with our December 1, 2000 payment.
(9) Adjusted to reflect:
(i) the estimated net proceeds from the sale of 1,000,000 shares of
common stock to be issued in this offering and the application of
these net proceeds to repay the short-term debt of Philadelphia
Suburban Water; and
(ii)the private placements in April 2000 of $11,000 of First Mortgage
Bonds of Philadelphia Suburban Water and in June 2000 of $18,360
of First Mortgage Bonds of one of Consumers Water's Pennsylvania
operating subsidiaries and the application of the net proceeds
from these placements to repay portions of our short-term lines of
credit. See "Use of Proceeds."
(10) Includes current portion of long-term debt of $12,978.

4
<PAGE>

FORWARD-LOOKING STATEMENTS

Certain statements in this prospectus, or incorporated by reference in
this prospectus, are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 made based upon, among other things, our current assumptions,
expectations and beliefs concerning future developments and their potential
effect on us. These forward-looking statements involve risks, uncertainties and
other factors, many of which are outside our control, that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. In some cases you can identify forward-looking
statements where statements are preceded by, followed by or include the words
"believes," "expects," "anticipates," "plans" or similar expressions.
Forward-looking statements in this prospectus, or incorporated by reference in
this prospectus, include, but are not limited to, statements regarding:

o projected capital expenditures and related funding requirements;

o developments and trends in the water and wastewater utility
industries;

o opportunities for future acquisitions;

o the development of new services and technologies by us or our
competitors;

o the availability of qualified personnel;

o general economic conditions; and

o merger-related costs and synergies.

Because forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to differ materially
from those expressed or implied by these forward-looking statements, including
but not limited to:

o changes in general economic, business and financial market
conditions;

o changes in government regulations, including environmental
regulations;

o abnormal weather conditions;

o changes in capital requirements;

o our ability to integrate businesses, technologies or services
which we may acquire;

o our ability to manage the expansion of our business;

o the extent to which we are able to develop and market new and
improved services;

o the effect of the loss of major customers;

o our ability to retain the services of key personnel and to hire
qualified personnel as we expand;

o unanticipated capital requirements; and

o cost overruns relating to improvements or the expansion of our
operations.

Given these uncertainties, you should not place undue reliance on these
forward-looking statements. You should read this prospectus and the documents
that we incorporate by reference in this prospectus completely and with the
understanding that our actual future results may be materially different from
what we expect. These forward-looking statements represent our estimates and
assumptions only as of the date of this prospectus. Except for our ongoing
obligations to disclose material information under the federal securities laws,
we are not obligated to update these forward-looking statements, even though our
situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.

THE WATER AND WASTEWATER UTILITY INDUSTRIES

With more than 50,000 community water systems in the U.S. (85% of which
serve less than 3,300 customers), the water industry is the most fragmented of

5
<PAGE>

the major utility industries (telephone, natural gas, electric and water). The
nation's water systems range in size from large municipally-owned systems, like
the New York City water system that serves about 9 million people, to small
systems, where a few customers share a common well. In the states where we
operate, we believe there are over 6,400 public water systems of widely varying
size.

The water industry is the most capital intensive of the utilities, with
more capital invested per dollar of revenue than any other utility. Customers
and regulators expect companies in the water industry, both municipally-owned
and investor-owned, to provide reliable water service at affordable prices while
meeting stringent federal and state water quality standards. Continued capital
investment is necessary to (1) repair and replace aging water distribution
infrastructure, (2) expand existing systems in response to community growth and
development, and (3) invest in new treatment plants and technology to meet water
quality standards. In its First Report to Congress in January 1997, the U.S.
Environmental Protection Agency estimated that the nation's water systems must
invest a minimum of $138.4 billion through 2015 to meet the requirements of the
Safe Drinking Water Act of 1974, as amended. Advancing technology and the
increasingly stringent drinking water regulations have transformed the drinking
water industry into one that now demands a level of technological expertise that
was previously not required. The costs associated with meeting more stringent
water quality standards, coupled with the costs of replacing aging
infrastructure, have caused many small, and some large, water utilities to sell
their systems to larger, better capitalized water utilities that can afford the
costs of making the necessary investments in their systems and have the
requisite economies of scale.

Although not as fragmented as the water industry, the wastewater
industry in the U.S. also presents opportunities for consolidation. According to
the U.S. Environmental Protection Agency's most recent survey of publicly-owned
wastewater treatment facilities in 1996, there are approximately 16,000 such
facilities in the nation serving approximately 72% of the U.S. population. The
vast majority of wastewater facilities are government-owned rather than
privately-owned. That survey also indicates that there are about 2,900 such
facilities in operation or planned in the five states where we operate. The U.S.
Environmental Protection Agency estimates that about $140 billion will need to
be invested in wastewater systems over the next 20 years to meet environmental
standards.

PHILADELPHIA SUBURBAN CORPORATION

General

We are a holding company for regulated utilities providing water or
wastewater services to approximately 2 million people in Pennsylvania, Ohio,
Illinois, New Jersey and Maine. Our two primary subsidiaries are Philadelphia
Suburban Water, a regulated public utility that provides water or wastewater
services to about 1.1 million residents in the suburban areas west and north of
the City of Philadelphia, and Consumers Water, a holding company for several
regulated public utility companies that provide water or wastewater services to
about 850,000 residents in various communities in Pennsylvania, Ohio, Illinois,
New Jersey and Maine. We are among the largest investor-owned water utilities in
the U.S. based on the number of customers. In addition, we provide water service
to approximately 25,000 people through operating and maintenance contracts with
municipal authorities and other parties close to our operating companies'
service territories. Subsidiaries of Philadelphia Suburban Water and Consumers
Water provide primarily residential wastewater services to approximately 28,000
people in Pennsylvania, Illinois and New Jersey. For the three months ended
March 31, 2000, the operating revenues associated with wastewater services were
approximately 2% of our consolidated operating revenues. Our ratio of customers
to employees as of March 31, 2000 is 595 to 1, which is one of the best ratios,
from an efficiency perspective, in the water utility industry.

Our customer base is primarily residential, with these customers
representing approximately two-thirds of our total water revenues. Substantially
all of our customers are metered, which allows us to measure and bill our
customers' water consumption. Water consumption per customer is affected by
local weather conditions during the year, especially during the late spring and
early summer. In general, during these seasons, an extended period of dry
weather increases water consumption, while above average rainfall decreases
water consumption. Also, an increase in the average temperature generally causes
an increase in water consumption. As was the case in Pennsylvania and New Jersey
in the summer of 1999, abnormally dry weather in our service areas can sometimes
result in the governmental authorities declaring drought warnings and water use
restrictions in the affected areas. If these types of actions are taken, water
consumption and water revenues may be reduced. While parts of Pennsylvania,
particularly those dependent on groundwater, experienced water shortages during
the 1999 drought, our water supplies remained adequate. When the drought
restrictions were lifted, water revenues returned to normal levels.

6
<PAGE>

The merger with Consumers Water in 1999, with its operations in western
Pennsylvania, Ohio, Illinois, New Jersey and Maine, has allowed us to diversify
our exposure to regional weather conditions. In 1999, above average water
consumption during the summer in Ohio and Illinois offset the effect of the
drought declarations and water use restrictions in Pennsylvania and New Jersey.
More importantly, Consumers Water has over 25 locations within those five states
from which we can pursue our growth strategy. Including acquisitions,
Philadelphia Suburban Water's customer base increased at an annual compound rate
of 3.9% during the three-year period of 1997 through 1999. Including
acquisitions, Consumers Water's consolidated customer growth rate during this
period was 1.5%.

Our largest shareholder is Vivendi S.A. and certain of its
subsidiaries. Vivendi S.A. is a company headquartered in Paris with worldwide
interests in various businesses, including the water industry primarily through
its subsidiary, Vivendi Water S.A. Vivendi S.A. and these subsidiaries owned
approximately 18% of our outstanding common stock on March 31, 2000. A recent
letter from Vivendi Water S.A. to our chairman, reaffirmed Vivendi S.A.'s
intention to hold our shares for investment, which is consistent with the
disclosure set forth in Vivendi S.A.'s Amendment No. 19 to its Schedule 13D,
filed with the SEC in April 2000. Although Vivendi S.A. indicated in this filing
that it would review its investment position in us periodically, including
possibly selling its shares, it also indicated in this filing that it may seek
to acquire (either directly or through a subsidiary) additional shares of our
common stock from time to time that would result in Vivendi S.A and its
subsidiaries holding up to 19.99% of our shares. For more information with
respect to Vivendi S.A.'s ownership of our common stock, we refer you to
Amendment No. 19 to Vivendi S.A.'s Schedule 13D. At its August 1, 2000 meeting,
our board of directors, on the recommendation of our corporate governance
committee: acknowledged the resignation of Michel Avenas, President of Vivendi
North America, from our board; increased the size of the board from 11 to 12
directors; expanded the class of directors with terms expiring at our 2001
annual meeting (the class of directors that Mr. Avenas was in) from 3 to 4; and
appointed Mr. Richard Heckmann, Chairman of Vivendi Water S.A., and Mr. Andrew
Seidel, President and Chief Operating Officer of Vivendi Water S.A. to our board
in the class of directors with terms expiring at our 2001 annual meeting.

We have had various discussions with representatives of Vivendi S.A.'s
subsidiaries, Vivendi Water S.A. and United States Filter Corporation, exploring
possible joint activities or alliances in such areas as water treatment devices,
bottled water, contract operations of water and wastewater systems and joint
materials purchasing. Although we intend to continue these discussions and
explore any other potential areas of cooperation, we currently have no formal
agreements with Vivendi S.A., United States Filter Corporation or any of their
affiliates in any of these areas and there can be no assurance that any
agreements in these areas or other areas will be ultimately reached.

Recent Financial Results (First Quarter 2000 Compared to First Quarter 1999)

Operating revenues in the first quarter of 2000 increased by $5,913,000
or 10.1% primarily due to revenues from the distribution system improvement
charge in Pennsylvania, increased water sales and additional water revenues
associated with acquisitions. Increased revenues from acquisitions came
primarily from the Bensalem water system acquired in December 1999. The
distribution system improvement charge, which is discussed in more detail below
under "-- Rates and Regulation," provided $1,735,000 of additional revenues over
the prior year. The improvement in water sales was due to an increase in
customer consumption.

Costs and expenses in the first quarter of 2000 decreased by $508,000
or 1.3% primarily due to a restructuring charge of $3,787,000 recorded in the
first quarter of 1999 for severance and costs associated with the closing of the
Consumers Water corporate office, offset in part by increased operations and
maintenance expenses and depreciation. Operations and maintenance expenses in
the first quarter of 2000 increased by $2,203,000 or 9.7% due to higher
maintenance expenses and additional operating costs associated with the Bensalem
acquisition and increased wage and administrative expenses. Offsetting these
increases, in part, was a reduction in general corporate expenses related to the
closing of Consumers Water's corporate office following the merger. Depreciation
increased by $832,000 or 11.2% due to capital expenditures made to expand and
improve water utility facilities, and as a result of acquisitions of water
systems.

7
<PAGE>

Net income available to common stock for the first quarter of 2000
increased as a result of the change in operating revenues and expenses described
above and the following factors. In the first quarter of 1999, we recorded a
charge of $6,334,000 for transaction costs associated with the Consumers Water
merger consummated in March 1999. The charge represents the fees for investment
bankers, attorneys, accountants and other administrative charges. Interest
expense for the first quarter of 2000 increased $1,764,000 primarily due to
increased borrowings to finance capital projects and acquisitions. In the first
quarter of 2000, we recorded gains on the sale of marketable securities of
$1,061,000. We did not sell any marketable securities in 1999.

Accordingly, earnings per share for the first quarter of 2000 were
$0.25 versus $0.01 for the first quarter of 1999. Earnings per share (without
the merger related restructuring and transaction costs incurred in the first
quarter of 1999 described above) were $0.25 for the first quarter of 2000 versus
$0.22 for the first quarter of 1999.

Acquisition Strategy

We are actively exploring opportunities to expand our utility
operations through acquisitions or otherwise. As of March 31, 2000, we had
completed 54 acquisitions or other growth ventures during the past five years.
Exclusive of the Consumers Water merger in March 1999, these transactions have
added 60,200 customers to our customer base during this five-year period. The
largest of these transactions was the acquisition of the water utility assets of
Bensalem Township in December 1999, which added 14,945 customers.

Because of the fragmented nature of the water and wastewater utility
industries, we believe that there are many potential water system acquisition
candidates throughout the U.S. We believe the factors driving consolidation of
these water systems are:

o the benefits of economies of scale, including the development of
technological expertise that would not be feasible in a smaller
organization;

o increasingly stringent environmental regulations; and

o the need for major capital investment.

We believe that acquisitions will continue to be an important source of
growth for us. We intend to continue to pursue acquisitions of municipally-owned
and investor-owned water systems of all sizes that provide services in areas
adjacent to our existing service territories or in new service areas. We engage
in continuing activities with respect to potential acquisitions, including
calling on prospective sellers, performing analyses and investigations of
acquisition candidates, making preliminary acquisition proposals and negotiating
the terms of potential acquisitions.

We believe that any municipally-owned water and wastewater systems that
we would acquire would be purchased with cash, while any investor-owned water
and wastewater systems that we would acquire would be purchased with cash,
shares of our common stock, shares of our preferred stock or a combination of
each. We expect to generate the cash needed for acquisitions initially with the
proceeds from the issuance of short-term debt, with subsequent repayment from
earnings, the proceeds from the issuance of long-term debt and the proceeds from
equity sold through our dividend reinvestment plan and our equity offerings. We
have filed a registration statement with the SEC to issue up to an additional
2,000,000 shares of common stock and up to an additional 500,000 shares of
preferred stock in connection with the acquisition of other water and wastewater
systems. If we issue any of these shares in connection with an acquisition,
subject to the requirements of Rule 145 under the Securities Act of 1933 and any
contractual restrictions, these shares may be immediately resold following the
completion of any acquisition.

We are not currently a party to any definitive agreement or binding
letter of intent with respect to a material acquisition. We cannot assure you
that in the future we will be able to continue to identify and acquire any
business or water or wastewater system on acceptable terms or that such
acquisitions will be accretive to earnings.

8
<PAGE>

Employee Relations

As of March 31, 2000, we employed a total of 941 full-time employees.
Our subsidiaries are parties to agreements with labor unions covering 484
employees. These agreements are due to expire between October 2001 and August
2004. We consider our employee relations to be good.

Rates and Regulation

Our water and wastewater utility operations are subject to regulation
by their respective state regulatory commissions, which have broad
administrative power and authority to set rates and charges, determine franchise
areas and conditions of service and authorize the issuance of securities. The
regulatory commissions also establish uniform systems of accounts and approve
the terms of contracts with both affiliates and customers. In addition, the
regulatory commissions have the authority to approve acquisitions of other
utility systems, loans and the purchase or sale of property. The profitability
of our utility operations is influenced to a great extent by the timeliness and
adequacy of rate allowances in the various states in which we operate.
Accordingly, we maintain a rate case management capability to ensure that the
rates of the utility operations reflect, to the extent practicable, current
costs of operations, capital, taxes, energy, materials and compliance with
environmental regulations. Rates for some divisions of our Ohio water utility
can be fixed by negotiated agreements with the municipalities that are served by
those divisions, in lieu of regulatory approval from the Public Utility
Commission of Ohio. Currently, two of our four regulated divisions in Ohio are
operating under these negotiated agreements.

In 1996, the Pennsylvania Public Utility Commission approved the
distribution system improvement charge. The distribution system improvement
charge is a mechanism that allows Pennsylvania water utilities to add a
surcharge to their water bills without the need for a fully-litigated rate
proceeding. This surcharge is designed to recover, on a current basis, the
additional depreciation and capital costs associated with certain non-revenue
producing, non-expense reducing capital expenditures related to replacing and
rehabilitating distribution systems. Prior to the distribution system
improvement charge, water utilities absorbed all of the depreciation and capital
costs of these projects between base rate increases without the benefit of
additional revenues. The gap between the time that a capital project is
completed and the recovery of its costs in base rates is known as regulatory
lag. Regulatory lag often acted as a disincentive to water utilities in
rehabilitating their distribution systems. The distribution system improvement
charge is intended to eliminate or reduce regulatory lag. The Pennsylvania
distribution system improvement charge is adjusted quarterly based on additional
qualified capital expenditures made in the previous quarter. The Pennsylvania
distribution system improvement charge is capped at 5% of base rates. Once a
utility's distribution system improvement charge reaches this level, further
rate increases would require a formal rate proceeding with the Pennsylvania
Public Utility Commission, which would address all costs and expenses of the
company. The distribution system improvement charge is reset to zero when new
base rates that reflect the costs of those additions become effective. The
Pennsylvania Public Utility Commission also limits use of the distribution
system improvement charge to periods when a company's return on equity is less
than a benchmark it establishes each quarter.

We are currently working to establish distribution system improvement
charge mechanisms in the other states in which we operate. In May 1999, the
Illinois legislature passed a bill to establish a distribution system
improvement charge mechanism in Illinois. The Illinois Commerce Commission is
analyzing the mechanism currently and considering approval of a distribution
system improvement charge for use by Illinois water utilities, beginning in
2001. The New Jersey Board of Public Utilities has established a task force to
review the merits of a distribution system improvement charge mechanism in New
Jersey.

On April 27, 2000, the Pennsylvania Public Utility Commission approved
a rate settlement reached between our Pennsylvania utility subsidiaries and the
parties actively litigating our joint rate application filed in October 1999.
The settlement was designed to increase annual revenue by $17,000,000 or 9.4%
above the level in effect at the time of the filing. The rates in effect at the
time of the filing included $7,347,000 in distribution system improvement
charges ranging from 0.33% to 5%. Consequently, the settlement resulted in a
total base rate increase of $24,347,000 or 13.5% above the rates in effect
before the distribution system improvement charges were applied. As a part of
the settlement, the distribution system improvement charges were reset to zero
and we agreed not to file a base rate increase request prior to April 29, 2001,
absent extraordinary circumstances. In this rate case, the Pennsylvania Public
Utility Commission recognized all four of our Pennsylvania operating water
utilities as one entity for rate-making purposes. Accordingly, in 2000, we plan
to merge these four utilities into one company.

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<PAGE>

In March 2000, an operating division of Consumers Water's Illinois
operating subsidiary was awarded an aggregate annual revenue increase of
approximately $400,000. In April 2000, a rate increase was negotiated by an
operating division of Consumers Water's subsidiary in Ohio with the local
governmental authority resulting in an aggregate annual revenue increase of
$140,000 in each of the following three years. In addition, in 2000, rate
applications were filed by seven operating divisions of Consumers Water's
subsidiaries in Illinois, Maine and New Jersey. The total additional annual
revenue requested is $6,662,000 and decisions are anticipated by late 2000 or in
the first quarter of 2001.

Environmental Regulation

The primary federal and state laws affecting the provision of water and
wastewater services are the Clean Water Act, the Safe Drinking Water Act and the
regulations issued under these laws by the U.S. Environmental Protection Agency
and state environmental regulatory agencies, as well as federal and state laws
affecting dam safety. These laws and regulations establish criteria and
standards for drinking water and for discharges into the waters of the U.S. The
states have the right to establish criteria and standards that are more strict
than those established by the U.S. Environmental Protection Agency. In some of
the states where our subsidiaries operate they have done so. Other federal and
state environmental laws and regulations in addition to the Clean Water Act, the
Safe Drinking Water Act and the dam safety regulations affect the operations of
our subsidiaries.

The Safe Drinking Water Act establishes criteria and procedures for the
U.S. Environmental Protection Agency to develop minimum national quality
standards for drinking water. Regulations issued pursuant to the Safe Drinking
Water Act set standards on the amount of certain inorganic and organic chemical
contaminants, microbials and radionuclides allowable in drinking water. Current
requirements under the Safe Drinking Water Act are not expected to have a
material effect on our operations or financial condition. We may, in the future,
have to change our method of treating drinking water at certain sources of
supply if additional regulations become effective.

The Clean Water Act regulates the discharge of liquid effluents from
drinking water and wastewater treatment facilities into lakes, rivers, streams
and subsurface or sanitary sewers. The Resource Conservation and Recovery Act
regulates the handling and disposal of residuals and solids from drinking water
and wastewater treatment facilities.

Our subsidiaries own sixteen major dams that are subject to the
requirements of federal and state regulations related to dam safety. All major
dams undergo an engineering inspection annually. We believe that all sixteen
dams are structurally sound and well-maintained.

In addition to the capital expenditures and costs currently
anticipated, changes in environmental regulations, enforcement policies and
practices or related matters may result in additional capital expenditures and
costs. Capital expenditures and costs incurred as a result of efforts to meet
water quality standards and environmental requirements generally have been
recognized by state public utility commissions as appropriate plant additions in
establishing rates.

Rights to Conduct our Business

In general, we believe that we have valid rights, free from unduly
burdensome restrictions, to enable us to carry on our business as presently
conducted in the territories we now serve. The rights to provide water or
wastewater service to a particular franchised service territory are generally
non-exclusive, although the applicable regulatory commissions usually allow only
one utility to provide service to a given area. In some instances, another water
utility, usually government-owned, already provides service to a separate area
within the same political subdivision served by one of our subsidiaries. In the
states where our subsidiaries operate, it is possible that portions of our
subsidiaries' operations could be acquired by municipal governments by one or
more of the following methods:

o eminent domain;

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<PAGE>

o the right of purchase given or reserved by a municipality or
political subdivision when the original franchise was granted; and

o the right of purchase given or reserved under the law of the state
in which the subsidiary was incorporated or from which it received
its permit.

The price paid by a municipal government for an acquisition is usually
determined in accordance with applicable law governing the taking of lands and
other property under eminent domain. In other instances, the price may be
negotiated, fixed by appraisers selected by the parties or computed in
accordance with a formula prescribed in the law of the state or in the
particular franchise or charter. Generally, our strategy is to acquire
additional water and wastewater systems, maintain our existing systems, and
actively oppose efforts by municipal governments to acquire any of our
operations, particularly for less than the fair market value of our operations
or where the municipal government seeks to acquire more than it is entitled to
under the applicable law or agreement.

There are two matters in Ohio that involve the attempted acquisition or
condemnation of certain assets of Consumers Ohio Water Company, a subsidiary of
Consumers Water.

In Ashtabula County, Consumers Ohio Water Company provides water
service to several municipalities and to areas of the county that are located
outside of these municipalities. Ashtabula County is seeking to purchase certain
assets of Consumers Ohio Water Company that are located outside of these
municipalities. The parties are currently litigating the question of whether
Ashtabula County's right to purchase includes all of the assets located outside
of these municipalities or only those assets that are not essential for
providing service to these municipalities. The county claims that it is entitled
to purchase all the assets and will allow Consumers Ohio Water Company to use
certain pipelines needed to convey water to the municipalities. Consumers Ohio
Water Company's position is that the county may only purchase assets not
involved in providing service to the municipalities. It is not certain that the
county will proceed with an acquisition if all the assets cannot be purchased.
If the county does proceed to acquire all or some of these assets, we believe
that Consumers Ohio Water Company will be entitled to fair value for these
assets, which, in any event, will exceed the book value for these assets.

The City of Geneva, a municipality in Ashtabula County, Ohio, has
passed an ordinance seeking to condemn the assets of Consumers Ohio Water
Company that are located in Geneva. The issue is being submitted to a referendum
in the fall of 2000, whereby voters will determine whether the city should
proceed with this action. If the city does proceed to condemn these assets, we
believe that Consumers Ohio Water Company will be entitled to fair value for
these assets, which, in any event, will exceed the book value for these assets.

The total number of customers included in the Ashtabula and Geneva
systems discussed above represent only 1.4% of our total customer base.

CAPITAL REQUIREMENTS AND FUNDING

2000 Capital Program

During the first quarter of 2000, we had $19,691,000 of capital
expenditures, repaid $520,000 of long-term debt and repaid $1,620,000 of
customer advances for construction. Our planned 2000 capital program, exclusive
of the costs of new mains financed by advances and contributions in aid of
construction, is estimated to be approximately $110.6 million, of which
approximately $34.3 million is for distribution system improvement charge
qualified projects. We expect to continue to finance our 2000 capital program,
along with approximately $12.2 million of sinking fund obligations and debt
maturities, through internally-generated funds, our revolving credit facilities,
proceeds from this offering, the issuance of new long-term debt and proceeds
from our dividend reinvestment plan.

11
<PAGE>

2001 Capital Program

Our planned 2001 capital program, exclusive of the costs of new mains
financed by advances and contributions in aid of construction, is estimated to
be approximately $110.5 million, of which $45.8 million is for distribution
system improvement charge qualified projects. Philadelphia Suburban Water and
Consumers Water's Pennsylvania subsidiaries have increased their capital
spending for infrastructure rehabilitation in response to the availability of
the distribution system improvement charge. Should the distribution system
improvement charge in Pennsylvania be discontinued (which is not anticipated),
for any reason, Philadelphia Suburban Water and the Consumers Water subsidiaries
in Pennsylvania would likely reduce their capital programs significantly. Our
2001 capital program, along with approximately $3.8 million of sinking fund
obligations and debt maturities is expected to be financed through
internally-generated funds, the revolving credit facilities, the issuance of new
long-term debt and proceeds from our dividend reinvestment plan.

Water Main Replacement

In our water utility systems, we maintain approximately 6,800 miles of
water mains to transmit and distribute water to our customers. On average, the
water mains are 47 years old and are made of cast iron (64%), ductile iron (26%)
and other materials (10%). We maintain a program to replace or rehabilitate
these mains through a cost-effective infrastructure rehabilitation program.

Anticipated Construction

Future utility construction in the period 2002 through 2004, including
recurring programs, such as the ongoing replacement of water meters, the
rehabilitation of water mains and additional transmission mains and expanded and
new treatment facilities to meet customer demands is estimated to require
aggregate expenditures of approximately $360 million. This $360 million is
exclusive of the costs of new mains financed by advances and contributions in
aid of construction. We anticipate that less than one-half of these expenditures
will require external financing, including the issuance of long-term debt, the
issuance of common stock through our dividend reinvestment plan and possible
future public equity offerings. We expect to refinance approximately $87.6
million of debt maturities during this period, as they become due, with new
issues of long-term debt. The estimates discussed above do not include any
amounts for possible future acquisitions of water systems or the financing
necessary to support such acquisitions.

The ability to finance our future construction programs, as well as our
acquisition activities, depends on our ability to attract the necessary external
financing and maintain or increase internally-generated funds. Rate orders
permitting compensatory rates of return on invested capital and timely rate
adjustments will be required by our operating subsidiaries to achieve an
adequate level of earnings to enable them to secure the capital they will need
and to maintain satisfactory debt coverage ratios.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. You may also obtain our SEC filings from the SEC's
website at http://www.sec.gov/.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. Statements made in this prospectus as to the
contents of any contract, agreement or other documents are not necessarily
complete, and, in each instance, we refer you to a copy of such document filed
as an exhibit to the registration statement, of which this prospectus is a part,
or otherwise filed with the SEC. The information incorporated by reference is
considered to be part of this prospectus. When we file information with the SEC
in the future, that information will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until all of the shares of common
stock that we have registered are sold:

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<PAGE>

o Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999 including portions of our definitive Proxy Statement for
the 2000 Annual Meeting of Shareholders incorporated therein by
reference;

o Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2000;

o Our Current Report on Form 8-K filed on April 27, 2000 reporting
under Item 5 the settlement of our Pennsylvania rate case;

o Our Current Report on Form 8-K filed on July 27, 2000 reporting
under Item 5 our earnings for the quarter ended June 30, 2000;

o The description of our common stock contained in our registration
under Section 12 of the Securities Exchange Act of 1934, including
any amendment or report updating such description; and

o The description of our shareholder rights plan contained in our
Form 8-A Registration Statement filed on March 17, 1998.

You may request a copy of these filings, at no cost, by writing or
telephoning us at:

Philadelphia Suburban Corporation
Attention: Patricia M. Mycek, Secretary
762 W. Lancaster Avenue
Bryn Mawr, PA 19010-3489
Telephone: 610-527-8000

USE OF PROCEEDS

Based on current market conditions, we anticipate that the net proceeds
from the sale of the shares will be approximately $21.0 million ($24.2 million
if the underwriters' over-allotment option is exercised in full). We expect to
make a capital contribution of these proceeds to Philadelphia Suburban Water. We
expect that Philadelphia Suburban Water will use these proceeds to reduce
outstanding debt under its revolving credit agreement incurred for capital
expenditures and for acquisitions of water systems. As of March 31, 2000, the
principal amount outstanding under Philadelphia Suburban Water's revolving
credit agreement was $50 million. Interest on outstanding balances under this
revolving credit agreement is based, at Philadelphia Suburban Water's option, on
the prime rate, an adjusted federal funds rate, an adjusted London Interbank
Offered Rate corresponding to the interest period selected, an adjusted
Euro-Rate corresponding to the interest period selected or at rates offered by
the banks. As of March 31, 2000, the weighted average interest rate on the
principal amount outstanding under this revolving credit agreement was 6.32%.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The following table shows the high and low sale prices for our common
stock as reported on the New York Stock Exchange composite transactions
reporting system and the cash dividends paid per share for the periods
indicated. Our common stock is listed on the New York and Philadelphia Stock
Exchanges and is traded under the symbol "PSC".

<PAGE>

<TABLE>
<CAPTION>
Quarterly
Cash
Dividends
High Low Paid
------------- ------------ ------------
<S> <C> <C> <C>
1998
First Quarter................................. $ 25.75 $ 19.56 $ 0.1625
Second Quarter................................ 22.56 18.88 0.1625
Third Quarter................................. 28.19 20.50 0.1700
Fourth Quarter................................ 30.06 23.00 0.1700

1999
First Quarter................................. $ 29.75 $ 19.75 $ 0.17
Second Quarter................................ 25.75 21.31 0.17
Third Quarter................................. 25.31 21.13 0.18
Fourth Quarter................................ 24.19 20.19 0.18

2000
First Quarter................................. $ 22.00 $ 16.50 $ 0.18
Second Quarter................................ 24.94 18.13 0.18
Third Quarter (through August 1, 2000)........ 22.69 20.00 -

</TABLE>

At our August 1, 2000 board meeting, our board of directors approved
our regular quarterly dividend of $0.18 per share, payable on September 1, 2000
to shareholders of record on August 15, 2000. In addition, our board of
directors approved a 25% common stock dividend payable on December 1, 2000 to
shareholders of record on November 15, 2000 and a 7.64% increase in our
quarterly cash dividend from $0.18 per share to $0.19375 per share with this
increase to be effective for our December 1, 2000 cash dividend payment payable
on December 1, 2000 to shareholders of record on November 15, 2000. On an
annualized basis, this represents an increase in the annual dividend rate from
$0.72 per share to $0.775 per share effective with the December 1, 2000
dividend. The increase in the December 1, 2000 dividend is the 10th increase in
our dividend that the board has approved in the past 9 years.

We or our predecessor companies have paid dividends each year since
1944. We presently intend to pay quarterly cash dividends in the future on March
1, June 1, September 1 and December 1, subject to our earnings and financial
condition, regulatory requirements and such other factors as our board of
directors may deem relevant. See "Description of Capital Stock - Common Stock --
Dividend Rights and Limitations" for a description of certain limitations on our
ability to pay cash dividends.

On August 1, 2000 the last reported sale price of our common stock on
the New York Stock Exchange was $22.1875 per share. As of March 31, 2000, there
were approximately 20,353 holders of record of our common stock.

We offer the holders of record of less than 30,000 shares of our common
stock the opportunity to reinvest part or all of the dividend payments on their
shares of common stock through purchases of original issue common stock without
payment of any brokerage commission or service charge through our dividend
reinvestment and direct stock purchase plan. The purchase price for original
issue shares of common stock purchased through the reinvestment of dividends is
95% of the average of the high and low prices of common stock as reported on the
New York Stock Exchange composite transactions reporting system for each of the
five trading days immediately preceding the dividend payment date. This plan
also permits shareholders and investors to invest up to $30,000 annually in our

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<PAGE>

common stock in the open market through our transfer agent. At March 31, 2000,
holders of 18.3% of the shares of our common stock outstanding participated in
the dividend reinvestment portion of this plan.

DESCRIPTION OF CAPITAL STOCK

The following description of our common stock sets forth material terms
and provisions of our common stock. You should read our current amended and
restated articles of incorporation for more detailed terms of our common stock.

As of March 31, 2000, our authorized capital stock was 101,770,819
shares. Those shares consisted of:

o 100,000,000 shares of our common stock, par value $0.50 per share,
of which 40,927,257 shares were outstanding; and

o 1,770,819 shares of preferred stock, par value $1.00 per share, of
which 17,600 shares of Series B Preferred Stock were issued and
outstanding.

Common Stock

Voting Rights

Holders of our common stock are entitled to one vote for each share
held by them at all meetings of the shareholders and are not entitled to
cumulate their votes for the election of directors.

Dividend Rights and Limitations

Holders of common stock may receive dividends when declared by our
board of directors. Because we are a holding company, the funds we use to pay
any dividends on our common stock are derived predominantly from the dividends
that we receive from our subsidiaries, Philadelphia Suburban Water and Consumers
Water, and the dividends they receive from their subsidiaries. Therefore, our
ability to pay dividends to holders of our common stock depends upon our
subsidiaries' earnings, financial condition and ability to pay dividends. We own
100% of the outstanding common stock of Philadelphia Suburban Water and
Consumers Water. Consumers Water owns 100% of the voting stock of four water
companies and at least 96% of the voting stock of three water companies. Most of
our subsidiaries are subject to regulation by state utility commissions and the
amounts of their earnings and dividends are affected by the manner in which they
are regulated. In addition, they are subject to restrictions on the payment of
dividends contained in their various debt agreements. Under our most restrictive
debt agreements, the amount available for payment of dividends to us as of March
31, 2000 was approximately $149 million of Philadelphia Suburban Water's
retained earnings and $60 million of Consumers Water's retained earnings.
Payment of dividends on our common stock is also subject to the preferential
rights of the holders of preferred stock to receive full cumulative dividends,
both past and current.

Liquidation Rights

In the event that we liquidate, dissolve or wind-up, the holders of our
common stock are entitled to share ratably in all of the assets that remain
after we pay our liabilities. This right is subject, however, to the prior
distribution rights of any outstanding preferred stock.

Shareholder Rights Plan

Holders of our common stock own, and the holders of the shares of
common stock issued in this offering will receive, one right to purchase Series
A Junior Participating Preferred Stock for each outstanding share of common
stock. These rights are issued pursuant to a shareholders rights plan. Upon the
occurrence of certain events, each right would entitle the holder to purchase
from us one one-thousandth of a share of Series A Junior Participating Preferred
Stock at an exercise price of $90 per one-thousandth of a share, subject to
adjustment. The rights are exercisable in certain circumstances if a person or
group acquires 20% or more of our common stock or if the holder of 20% or more
of our common stock engages in certain transactions with us. In that case, each
right would be exercisable by each holder, other than the acquiring person, to
purchase shares of our common stock at a substantial discount from the market
price. In addition, if, after the date that a person has become the holder of
20% or more of our common stock, any person or group merges with us or engages
in certain other transactions with us, each right entitles the holder, other

15
<PAGE>

than the acquirer, to purchase common stock of the surviving corporation at a
substantial discount from the market price. These rights are subject to
redemption by us in certain circumstances. These rights have no voting or
dividend rights and, until exercisable, cannot trade separately from our common
stock and have no dilutive effect on our earnings. This plan expires on March 1,
2008.

Preferred Stock

Our board of directors has the authority to divide the preferred stock
into one or more series and to fix and determine relative rights and preferences
of the shares of each series.

Series B Preferred Stock

As of March 31, 2000, the only series of preferred stock outstanding
was our Series B Preferred Stock, of which there were 17,600 shares outstanding.
Holders of our Series B Preferred Stock are entitled to receive cumulative
quarterly dividends equal to $1.5125 per share or at a rate equal to 6.05% per
year. In the event that we liquidate, dissolve or wind-up, holders of Series B
Preferred Stock are entitled to receive $100 per share plus an amount equal to
any accrued but unpaid cumulative dividends together with any interest that has
accrued on those dividends. Our Series B Preferred Stock ranks senior to our
Series A Junior Participating Preferred Stock, if issued, and our common stock
with respect to the right to receive dividends and the right to the distribution
of our assets upon liquidation.

The Series B Preferred Stock is not convertible into any other class or
series of our capital stock. We have the right to redeem, in whole or in part,
up to 6,440 shares of Series B Preferred Stock each year beginning on December
1, 2001 at a price equal to $100 per share plus any accrued and unpaid dividends
together with any interest that has accrued on those dividends through the date
of redemption. The Series B Preferred Stock is not subject to or entitled to the
benefit of a sinking fund.

So long as any shares of our Series B Preferred Stock are outstanding,
we may not adopt any amendment to our articles of incorporation that would
adversely affect, in any material respect, the rights or preferences of the
Series B Preferred Stock without the affirmative vote of the holders of a
majority of the Series B Preferred Stock.

State Law Anti-Takeover Provisions

Pennsylvania State Law Provisions

We are subject to various anti-takeover provisions of the Pennsylvania
Business Corporation Law of 1988, as amended. Generally, these provisions are
triggered if any person or group acquires, or discloses an intent to acquire,
20% or more of a corporation's voting power, unless the acquisition is under a
registered firm commitment underwriting or, in certain cases, approved by the
board of directors. These provisions:

o provide the other shareholders of the corporation with certain
rights against the acquiring group or person;

o prohibit the corporation from engaging in a broad range of
business combinations with the acquiring group or person; and

o restrict the voting and other rights of the acquiring person or
group.

In addition, as permitted by Pennsylvania law, an amendment to our
articles of incorporation or other corporate action that is approved by
shareholders may provide mandatory special treatment for specified groups of
nonconsenting shareholders of the same class. For example, an amendment to our
articles of incorporation or other corporate action may provide that shares of
common stock held by designated shareholders of record must be cashed out at a
price determined by the corporation, subject to applicable dissenters' rights.

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<PAGE>

Articles of Incorporation and Bylaw Provisions

Certain provisions of our articles of incorporation and bylaws may have
the effect of discouraging unilateral tender offers or other attempts to take
over and acquire our business. These provisions might discourage some
potentially interested purchaser from attempting a unilateral takeover bid for
us on terms which some shareholders might favor. Our articles of incorporation
require that certain fundamental transactions must be approved by the holders of
75% of the outstanding shares of our capital stock entitled to vote on the
matter unless at least 50% of the members of the board of directors has approved
the transaction, in which case the required shareholder approval will be the
minimum approval required by applicable law. The fundamental transactions that
are subject to this provision are those transactions that require approval by
shareholders under applicable law or the articles of incorporation. These
transactions include certain amendments of our articles of incorporation or
bylaws, certain sales or other dispositions of our assets, certain issuances of
our capital stock, or certain transactions involving our merger, consolidation,
division, reorganization, dissolution, liquidation or winding up. Our articles
of incorporation and bylaws provide that:

o a special meeting of shareholders may only be called by the chairman, the
president, the board of directors or shareholders entitled to cast a
majority of the votes which all shareholders are entitled to cast at the
particular meeting;

o nominations for election of directors may be made by any shareholder
entitled to vote for election of directors if the name of the nominee and
certain information relating to the nominee is filed with our corporate
secretary not less than 14 days nor more than 50 days before any meeting of
shareholders to elect directors; and

o certain advance notice procedures must be met for shareholder proposals to
be made at annual meetings of shareholders. These advance notice procedures
generally require a notice to be delivered not less than 90 days nor more
than 120 days before the anniversary date of the immediately preceding
annual meeting of shareholders.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is BankBoston,
N.A.

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement
between us and the representatives on behalf of the underwriters, the
underwriters have agreed severally to purchase from us the following number of
shares of common stock at the public offering price less the underwriting
discount set forth on the cover page of this prospectus.

Number of
Underwriters Shares
------------ ------

A.G. Edwards & Sons, Inc........................
PaineWebber Incorporated........................
Janney Montgomery Scott LLC..................... ---------

Total........................................... 1,000,000
=========

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
certain conditions precedent, and that the underwriters are obligated to take
and pay for all of the shares of common stock offered hereby (other than those
covered by the over-allotment option described below) if any are taken.

The representatives of the underwriters have advised us that they
propose to offer the shares of common stock to the public at the public offering
price set forth on the cover page of this prospectus and to certain dealers at
such price less a concession not in excess of $__ per share. The underwriters
may allow, and such dealers may re-allow, a concession not in excess of $0.__
per share to certain other dealers. After the offering, the public offering
price and other selling terms may be changed by the underwriters.

17
<PAGE>

We have granted to the underwriters an option, exercisable for 30 days
after the date of this prospectus, to purchase up to 150,000 additional shares
of common stock at the public offering price, less the underwriting discount set
forth on the cover page of this prospectus, solely to cover over-allotments. To
the extent that the underwriters exercise this option, the underwriters will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares as the number set forth next to such
underwriter's name in the preceding table bears to the total number of shares in
such table, and we will be obligated, pursuant to the option, to sell such
shares to the underwriters.

We and Vivendi S.A., together with certain of its affiliates, our
largest shareholder, have agreed not to sell or otherwise dispose of, and
Vivendi S.A. has agreed to cause each of its controlled affiliates to not sell
or otherwise dispose of, any shares of our common stock for a period of 90 days
after the date of this prospectus without the prior written consent of A.G.
Edwards & Sons, Inc. A.G. Edwards & Sons, Inc. may, in its sole discretion,
allow us or Vivendi S.A. to dispose of common stock or other securities prior to
the expiration of such 90-day period. Except as discussed above, there are,
however, no agreements between A.G. Edwards & Sons, Inc. and us or Vivendi S.A.
that would allow us or Vivendi S.A. to do so as of the date of this prospectus.
There are some exceptions to our restrictions to sell common stock, including
the issuance of our common stock in connection with our employee benefit plans,
our shareholder rights plan and our dividend reinvestment and direct stock
purchase plan and up to 600,000 shares of our common stock that may be issued as
consideration for acquisitions of businesses pursuant to our shelf registration
statement discussed earlier.

The following table summarizes the underwriting discount that we will
pay to the underwriters in this offering. These amounts assume both no exercise
and full exercise of the underwriters' option to purchase additional shares of
common stock.
No Full
Exercise Exercise
Per Share................................. $ $
---------- ----------
Total..................................... $ $
---------- ----------

We expect to incur expenses of approximately $150,000 in connection
with this offering. We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act.

Until the distribution of the common stock is completed, rules of the
SEC may limit the ability of the underwriters and certain selling group members
to bid for and purchase the common stock. As an exception to these rules, the
underwriters are permitted to engage in certain transactions that stabilize,
maintain or otherwise affect the price of the common stock.

In connection with the offering, the underwriters may make short sales
of our shares of common stock and may purchase our shares on the open market to
cover positions created by short sales. Short sales involve the sale by the
underwriters of a greater number of shares than they are required to purchase in
the offering. "Covered" short sales are made in an amount not greater than the
over-allotment option described above. The underwriters may close out any
covered short position by either exercising the over-allotment option or
purchasing shares in the open market. In determining the source of shares to
close out the covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. "Naked" short sales are sales in excess of the
over-allotment option. The underwriters must close out any naked short position
by purchasing shares in the open market. A naked short position is more likely
to be created if the underwriters are concerned that there may be downward
pressure on the price of the shares in the open market after pricing that could
adversely affect investors who purchase in the offering.

The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase common stock in the open
market to reduce the selling group members' short position or to stabilize the
price of the common stock, it may reclaim the amount of the selling concession
from the selling group members who sold those shares of common stock as part of
this offering.

18
<PAGE>

In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases or such purchases could
prevent or retard a decline in the price of the security. The imposition of a
penalty bid might also have an effect on the price of a security to the extent
that it were to discourage resales of the security.

Neither we nor the representatives make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor the representatives make any representation that the underwriters will
engage in these transactions or that these transactions, once commenced, will
not be discontinued without notice.

The representatives of the underwriters are three of the six placement
agents under Philadelphia Suburban Water's medium term note program. In
addition, the representatives of the underwriters have engaged in transactions
with and performed various financial advisory, investment banking, brokerage and
other services for us and our subsidiaries in the past and may do so from time
to time in the future.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be
passed upon for us by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania,
and for the underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New
York.

EXPERTS

The consolidated financial statements of Philadelphia Suburban
Corporation and subsidiaries as of December 31, 1999 and 1998, and for each of
the years in the three-year period ended December 31, 1999, have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants, also
incorporated by reference herein and in the registration statement, and upon
authority of said firm as experts in accounting and auditing.

19
<PAGE>

================================================================================

1,000,000 Shares

PHILADELPHIA SUBURBAN
CORPORATION

Common Stock

PROSPECTUS

A.G. Edwards & Sons, Inc.

PaineWebber Incorporated

Janney Montgomery Scott LLC

, 2000

================================================================================

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby:

Securities and Exchange Commission Registration Fee............... $ 6,710
Printing ......................................................... 28,000
Accounting Services............................................... 35,000
Legal Services.................................................... 50,000
NYSE Listing Fees................................................. 4,025
PHSE Listing Fees................................................. 1,250
Transfer Agent Fees............................................... 2,500
Miscellaneous..................................................... 22,515
--------
Total..................................................... $150,000

Item 15. Indemnification of Directors and Officers

Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), provide that a business corporation may indemnify directors
and officers against liabilities they may incur as such provided that the
particular person acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, with respect to any criminal proceeding, had no reasonable cause to believe
his or her conduct was unlawful. In general, the power to indemnify under these
sections does not exist in the case of actions against a director or officer by
or in the right of the corporation if the person otherwise entitled to
indemnification shall have been adjudged to be liable to the corporation unless
it is judicially determined that, despite the adjudication of liability but in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnification for specified expenses. The corporation is required
to indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.

Section 1713 of the BCL permits the shareholders to adopt a bylaw provision
relieving a director (but not an officer) of personal liability for monetary
damages except where (i) the director has breached the applicable standard of
care, and (ii) such conduct constitutes self-dealing, willful misconduct or
recklessness. The statute provides that a director may not be relieved of
liability for the payment of taxes pursuant to any federal, state or local law
or responsibility under a criminal statute. Section 4.01 of the Registrant's
bylaws limits the liability of any director of the Registrant to the fullest
extent permitted by Section 1713 of the BCL.

Section 1746 of the BCL grants a corporation broad authority to indemnify its
directors, officers and other agents for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness. Article VII of the Registrant's
bylaws provides indemnification of directors, officers and other agents of the
Registrant broader than the indemnification permitted by Section 1741 of the BCL
and pursuant to the authority of Section 1746 of the BCL.

Article VII of the bylaws provides, except as expressly prohibited by law, an
unconditional right to indemnification for expenses and any liability paid or
incurred by any director or officer of the Registrant, or any other person
designated by the board of directors as an indemnified representative, in
connection with any actual or threatened claim, action, suit or proceeding
(including derivative suits) in which he or she may be involved by reason of
being or having been a director, officer, employee or agent of the Registrant
or, at the request of the Registrant, of another corporation, partnership, joint
venture, trust, employee benefit plan or other entity. The bylaws specifically
authorize indemnification against both judgments and amounts paid in settlement
of derivative suits, unlike Section 1742 of the BCL which authorized
indemnification only of expenses incurred in defending a derivative action.
Article VII of the bylaws also allows indemnification for punitive damages and
liabilities incurred under the federal securities laws.

II-1
<PAGE>

Unlike the provisions of BCL Sections 1741 and 1742, Article VII does not
require the Registrant to determine the availability of indemnification by the
procedures or the standard of conduct specified in Sections 1741 and 1742 of the
BCL. A person who has incurred an indemnifiable expense or liability has a right
to be indemnified independent of any procedures or determinations that would
otherwise be required, and that right is enforceable against the Registrant as
long as indemnification is not prohibited by law. To the extent indemnification
is permitted only for a portion of a liability, the bylaw provisions require the
Registrant to indemnify such portion. If the indemnification provided for in
Article VII is unavailable for any reason in respect of any liability or portion
thereof, the bylaws require the Registrant to make a contribution toward the
liability. Indemnification rights under the bylaws do not depend upon the
approval of any future board of directors.

Section 7.04 of the Registrant's bylaws also authorizes the Registrant to
further effect or secure its indemnification obligations by entering into
indemnification agreements, maintaining insurance, creating a trust fund,
granting a security interest in its assets or property, establishing a letter of
credit, or using any other means that may be available from time to time.

The Registrant maintains, on behalf of its directors and officers, insurance
protection against certain liabilities arising out of the discharge of their
duties, as well as insurance covering the Registrant for indemnification
payments made to its directors and officers for certain liabilities. The
premiums for such insurance are paid by the Registrant.

Item 16. Exhibits

The exhibits filed as part of this registration statement are as follows:

Exhibit
Number Description
------ -----------
1.1 Form of Underwriting Agreement**
4.1 Amended and Restated Articles of Incorporation (1)
4.2 Current Bylaws of Registrant*
4.3 Amendment to Amended and Restated Articles of Incorporation,
to increase the number of authorized shares (2)
4.4 Amendment to Amended and Restated Articles of Incorporation,
designating the Series B Preferred Stock (2)
4.5 Amendment to Amended and Restated Articles of
Incorporation, designating the Series A Junior Participating
Preferred Stock (3)
4.6 Amendment to Amended and Restated Articles of Incorporation,
to increase the number of authorized shares (4)
4.7 Amendment to Amended and Restated Articles of Incorporation (5)
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities when issued*
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto)*
23.2 Consent of KPMG LLP*
24.1 Powers of Attorney (included on the signature page)*

---------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference from the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992,
(Exhibit No. 3.1).
(2) Incorporated by reference from the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996,
(Exhibit Nos. 3.3, and 3.4).
(3) Incorporated by reference from the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997,
(Exhibit No. 3.6).
(4) Incorporated by reference from the Registrant's Registration
Statement on Form S-4 filed on September 11, 1998 (Annex E to
the Amended and Restated Agreement and Plan of Merger Dated as
of August 5, 1998 By and Among Philadelphia Suburban
Corporation, Consumers Acquisition Company and Consumers Water
Company).
(5) Incorporated by reference from the Registrant's definitive
Proxy Statement filed on March 31, 2000 dated April 10, 2000
(Annex A).

II-2
<PAGE>

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(2) That for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(3) For the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bryn Mawr, Commonwealth of Pennsylvania, on this
3rd day of August, 2000.

PHILADELPHIA SUBURBAN CORPORATION

By: /s/ Nicholas DeBenedictis
-----------------------------------
Nicholas DeBenedictis
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

Each person in so signing also makes, constitutes and appoints
Roy H. Stahl and David P. Smeltzer and each of them acting alone, his true and
lawful attorney-in-fact, with full power of substitution, to execute and cause
to be filed with the Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933, as amended, any and all amendments
and post-effective amendments to this Registration Statement, and including any
Registration Statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act, with exhibits thereto
and other documents in connection therewith, and hereby ratifies and confirms
all that said attorney-in-fact or his substitute or substitutes may do or cause
to be done by virtue hereof.

Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Nicholas DeBenedictis Director, Chairman and Chief August 3, 2000
----------------------------- Executive Officer (Principal
Nicholas DeBenedictis Executive Officer)

/s/ David P. Smeltzer Senior Vice President -- Finance August 3, 2000
----------------------------- and Treasurer (Principal Financial
David P. Smeltzer and Accounting Officer)

/s/ Mary C. Carroll Director August 3, 2000
-----------------------------
Mary C. Carroll

/s/ G. Fred DiBona, Jr. Director August 3, 2000
-----------------------------
G. Fred DiBona, Jr.

/s/ Richard H. Glanton, Esq. Director August 3, 2000
-----------------------------
Richard H. Glanton, Esq.

/s/ Richard J. Heckmann Director August 3, 2000
-----------------------------
Richard J. Heckmann
</TABLE>

II-4
<PAGE>

<S> <C> <C>
/s/ Alan R. Hirsig Director August 3, 2000
-----------------------------
Alan R. Hirsig

/s/ John F. McCaughan Director August 3, 2000
----------------------------
John F. McCaughan

/s/ John E. Menario Director August 3, 2000
-----------------------------
John E. Menario

/s/ John E. Palmer, Jr. Director August 3, 2000
-----------------------------
John E. Palmer, Jr.

/s/ Andrew D. Seidel Director August 3, 2000
-----------------------------
Andrew D. Seidel

----------------------------- Director , 2000
Richard L. Smoot

/s/ Robert O. Viets Director August 3, 2000
-----------------------------
Robert O. Viets
</TABLE>

II-5
<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description
------ -----------------------------
1.1 Form of Underwriting Agreement**

4.1 Amended and Restated Articles of Incorporation (1)

4.2 Current Bylaws of Registrant*

4.3 Amendment to Amended and Restated Articles of Incorporation,
to increase the number of authorized shares (2)

4.4 Amendment to Amended and Restated Articles of Incorporation
designating the Series B Preferred Stock (2)

4.5 Amendment to Amended and Restated Articles of Incorporation,
designating the Series A Junior Participating
Preferred Stock (3)

4.6 Amendment to Amended and Restated Articles of Incorporation to
increase the number of authorized shares (4)

4.7 Amendment to Amended and Restated Articles of Incorporation (5)

5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities when issued*

23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto)*

23.2 Consent of KPMG LLP*

24.1 Powers of Attorney (included on the signature page)*

---------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference from the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992, (Exhibit No. 3.1).
(2) Incorporated by reference from the Registrant's Annual Report on
Form 10-K for the Year Ended December 31, 1996, (Exhibit Nos. 3.3
and 3.4).
(3) Incorporated by reference from the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1997 (Exhibit 3.6).
(4) Incorporated by reference from the Registrant's
Registration Statement on Form S-4 filed on September
11, 1998 (Annex E to the Amended and Restated
Agreement and Plan of Merger Dated as of August 5,
1998 By and Among Philadelphia Suburban Corporation,
Consumers Acquisition Company and Consumers Water
Company).
(5) Incorporated by reference from the Registrant's definitive
Proxy Statement filed on March 31, 2000 dated April
10, 2000 (Annex A).