American Water Works Announces Creation of Commercial Paper Program.

Business Editors

VOORHEES, N.J.--(BUSINESS WIRE)--Oct. 31, 2000

American Water Works Company, Inc., (NYSE:AWK) announced today that on October 30, 2000 the Company's financing subsidiary, American Water Capital Corp. (AWCC), issued almost $250 million from a $600 million commercial paper program.

This was the first commercial paper issued by AWCC and the only commercial paper program of an investor-owned water utility available in the marketplace.

AWCC was formed in June 2000 to serve as the primary funding vehicle for American Water Works Company and its utility subsidiaries. Through AWCC, American Water Works replaced multiple lines of credit formerly held by its utility subsidiaries with a $600 million bank facility, creating cash management efficiencies and a lowering the cost of obtaining capital.

Establishing a commercial paper program gives the Company a range of financing vehicles to meet its future short-term capital needs.

"We are extremely pleased by the market response to our initial issue of commercial paper," said Ellen Wolf, the Company's Chief Financial Officer. "It demonstrates market support for this segment of our short-term financing plans."

The Company's securities, sold by both Merrill Lynch and Chase Securities, produced interest expense savings when compared with interest expenses that would have been incurred by borrowing from the existing bank facility.

American Water Works Company, Inc. is the largest and most geographically diverse investor-owned water utility enterprise based in the United States. The Company provides water, wastewater and other water resource management services to more than 10 million people in 23 states.

This release may contain certain forward looking statements, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.

These factors include, among others, the following: the success of pending applications for rate increases, inability to obtain, or to meet conditions imposed for, regulatory approval of pending acquisitions; general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; availability, terms and development of capital; business abilities and judgement of personnel; changes in, or the failure to comply with governmental regulations, particularly those affecting the environment and water quality; and other factors described in the filings of the Company with the SEC.

The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.