American Water Works Company Reports Second Quarter, Six Months Results.

VOORHEES, N.J.--(BUSINESS WIRE)--July 24, 1997--American Water Works Company Inc. (NYSE:AWK) announced Thursday that net income to common stock for the second quarter of 1997 totaled $30.6 million, a 20 percent increase over the $25.5 million reported for the second quarter of 1996.

Earnings per common share for the quarter were 39 cents, an 11 percent increase over last year's 35 cents per share. This per share income was the highest ever achieved by the company in a second quarter. Revenues for the quarter were $237.9 million, a 4 percent increase over the previous year's $228.6 million.

American Water Works Company President and Chief Executive Officer George W. Johnstone said the increase in net income to common stock for the period was largely attributable to continuing cost containment efforts and rate decisions reflecting the capital costs of major treatment plant additions.

Johnstone also noted that the average number of shares of common stock outstanding in the second quarter of 1997 was 5,494,000 greater than in the second quarter of 1996. This was principally the result of the May, 1996 common stock offering which funded the equity portion of the cost of a major acquisition in Pennsylvania earlier that year.

The company's Pennsylvania subsidiary has filed a request with the Pennsylvania Public Utility Commission for additional revenues to cover this and other new investments in essential utility plant. A decision is expected later this year.

For the six months ended June 30, net income to common stock was $47.7 million, a 15 percent increase over the previous year's $41.5 million. Earnings per common share were 60 cents, a 2 percent increase over the previous year's 59 cents.

The average number of shares outstanding for the first half was 7,907,000 greater than the previous year, due to the offering. Revenues for the six months were $451.3 million, a 6 percent increase over the previous year's $426.8 million.

American Water Works Company Inc., is the largest investor-owned water utility business in the United States, serving some 7 million people in more than 800 communities in 21 states.

For the three, six and 12 month periods ended June 30, American Water Works Company Inc. reported unaudited consolidated revenues and income as follows: -0-

                 Three Months        Six Months       Twelve Months
                    Ended              Ended              Ended
                ------------         ----------       -------------
                  June 30,            June 30,            June 30,
                1997    1996        1997    1996        1997    1996

(In thousands,
except per
share amounts)
------------------------------------------------------------------------
Operating
 revenues    $237,915  $228,621  $451,272  $426,810  $919,108  $848,124
------------------------------------------------------------------------
Net income     31,640    26,505    49,670    43,536   107,808    94,625

Dividends on
 preferred
 stocks           996       996     1,992     1,992     3,984     3,984
------------------------------------------------------------------------

Net income
 to common
 stock       $ 30,644  $ 25,509  $ 47,678  $ 41,544  $103,824  $ 90,641
------------------------------------------------------------------------

Average shares
 of common stock
 outstanding
 (in
 thousands)    79,100    73,606    78,894    70,987   78,549     69,107

Earnings per
 common share on
 average shares
 outstanding     $.39      $.35      $.60      $.59    $1.32      $1.31
------------------------------------------------------------------------

CONTACT: American Water Works Co. Inc., Voorhees

George W. Johnstone, president/CEO, 609/346-8200