United Water and KKR Sign Unique Utility Partnership with City of Bayonne, NJ

  United Water and KKR Sign Unique Utility Partnership with City of Bayonne,
  NJ

     Innovative Solution to Meet Growing Water and Wastewater Challenges

Business Wire

HARRINGTON PARK, N.J. -- December 20, 2012

Using a new model to address water infrastructure needs, United Water and KKR
announced today the initiation of a partnership for water and wastewater
system operations in the City of Bayonne, NJ. Operations will begin tomorrow
December 21. The agreement was approved by the Bayonne Municipal Utilities
Authority (BMUA) and by numerous state agencies.

The innovative model is a joint venture between United Water and KKR to
acquire a 40-year water and wastewater concession from the BMUA. Under the
agreement, the joint venture has made an initial payment to the BMUA of $150
million, which will be used to eliminate the BMUA’s existing debt and improve
its finances. The joint venture has further committed to funding another $157
million into the system over the life of the contract. KKR, which made the
investment through its infrastructure fund, will fund 90% of the joint venture
with United Water.

The BMUA will maintain ownership of the water and wastewater system and will
provide oversight of the partnership and its adherence to high quality
standards and customer service performance. In addition, the BMUA will
maintain control of rates charged to users, which will be guided by a formula
in the agreement. United Water will operate the system for the 40-year term
under an operations and maintenance agreement with the joint venture.

“What is unique about this model is that it is a blend of United Water’s
operations expertise and KKR’s long-term vision, which brings credibility to
address America’s water challenges. Our commitment to funding improvements in
the water and wastewater system is critical to keeping rates stable and under
BMUA’s control,” said Bertrand Camus, CEO of United Water. “KKR has a long
history of making infrastructure investments and a proven commitment to
improving the operational and environmental performance of the companies in
its portfolio, making it an ideal partner for this investment.”

This investment in Bayonne’s infrastructure will lead to improved service
reliability and water quality while maintaining rate stability. The funds will
be used to upgrade water systems and to help ease pressure on municipal
balance sheets, freeing the city to invest in other services. The initial
capital investment will provide for the addition of highly accurate wireless
water metering and other monitoring systems, such as GIS, SCADA and CMMS,
which help reduce water loss from leakage, prioritize pipe replacement and
improve operational efficiency.

“The partnership among Bayonne, KKR and United Water is a responsible and
innovative transaction that will pay off over $130 million in Bayonne’s debt,
thereby cutting our municipal debt burden in half,” said Steve Gallo,
Executive Director of the BMUA. “The partnership will invest in our aging
infrastructure, and provide resources that the BMUA could not otherwise
deliver. Simply put, this transaction will result in a more efficient and
reliable water and sewer system for today and future generations.”

Raj Agrawal, Head of North American Infrastructure at KKR, said: “We are
thrilled to help bring this innovative solution to the city of Bayonne. The
operational and environmental stewardship of United Water, combined with our
commitment to maintain continuous investment into the system, creates a
sustainable model that will produce tangible benefits for the city and its
residents for a very long time.”

Partnership Recognized by Clinton Global Initiative, American Water
Intelligence

This innovative model was recognized as a featured innovation the 2012 Clinton
Global Initiative Annual Meeting in New York City this fall for its commitment
to providing cities with an opportunity to address their long term water and
wastewater infrastructure needs.

United Water and KKR’s partnership with Bayonne was also recognized as
Partnership Performance of the Year at the 2012 American Water Summit.
Attendees at the Summit, an annual meeting of municipal and industry leaders,
voted to recognize the partnership for this innovative partnership approach
that offers cities a new way to meet the challenge of improving water and
wastewater systems.

“Maintaining clean, sustainable water supplies is the single most important
contributor to public health and it is essential to creating vibrant local
economies. With ever increasing pressure on scarce water resources and
dwindling public funds, the private sector has a more important role than ever
to provide a lasting solution to America’s water challenge. We hope to expand
this innovative model and partner with other communities across the nation
seeking a viable solution to the increasing challenge of maintaining water and
wastewater infrastructure,” said Camus.

About United Water

United Water is one of the nation’s leading environmental companies, providing
water and wastewater services to approximately 5.7 million people in the
United States. In addition to owning and operating 20 water utilities, the
company operates 100 municipal and industrial water and wastewater systems
through innovative public-private partnerships and contract agreements.
Founded in 1869, United Water is a subsidiary of SUEZ ENVIRONNEMENT. For
additional information, please visit United Water’s website at
www.unitedwater.com.

About SUEZ ENVIRONNEMENT

Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris: SEV,
Brussels: SEVB) and its subsidiaries deal with the challenge of protecting
resources by providing innovative solutions to industries and to millions of
people. SUEZ ENVIRONNEMENT supplies drinking water to 91 million people,
provides wastewater treatment services for 63 million people and collects the
waste produced by close to 57 million people. SUEZ ENVIRONNEMENT has 80,410
employees and, with its presence on a global scale, is a world leader
exclusively dedicated to environmental services. For additional information,
please visit SUEZ ENVIRONNEMENT’s website at www.suez-environnement.com.

About KKR

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading
global investment firm with $66.3 billion in assets under management as of
September 30, 2012. With offices around the world, KKR manages assets through
a variety of investment funds and accounts covering multiple asset classes.
KKR seeks to create value by bringing operational expertise to its portfolio
companies and through active oversight and monitoring of its investments. KKR
complements its investment expertise and strengthens interactions with
investors through its client relationships, capital markets and global
stakeholder relations platform. KKR & Co. L.P. is publicly traded on the New
York Stock Exchange (NYSE: KKR), and references to KKR in this release include
its subsidiaries, their managed investment funds and accounts, and/or their
affiliated investment vehicles, as appropriate. For additional information,
please visit KKR’s website at www.kkr.com.

Contact:

United Water
Rich Henning, 201-767-9300
Rich.Henning@unitedwater.com
or
Steve Goudsmith, 201-225-6809
Steven.Goudsmith@unitedwater.com
or
KKR
Kristi Huller, 212-230-9722
Kristi.Huller@kkr.com