American Water Works increases dividend 18.5 percent.

VOORHEES, N.J.--(BUSINESS WIRE)--Jan. 5, 1995--The Board of Directors of American Water Works Company Inc. Thursday increased the quarterly dividend rate on its common stock 18.5 percent to 32 cents per share from the 1994 quarterly rate of 27 cents per share.

The increase is the 20th consecutive annual increase of the common stock dividend.

The dividend is payable Feb. 15, 1995 to shareholders of record on Jan. 27, 1995.

George W. Johnstone, president and chief executive officer of the company, said, "The Board has taken this action to express its confidence in the company's growth potential and to further position American to take advantage of the growth opportunities coming from the consolidation of the water utility industry.

"The financial demands of stricter water quality regulations and the need to replace aging infrastructure are the forces driving the consolidation of the water business. The higher dividend enhances the attractiveness of American stock to typical utility investors and continues American's commitment to provide annual dividend increases greater than other water utilities.

"This increase does not change American's commitment to fund on-going capital improvements with retained earnings and our current stock purchase programs."

The Board also declared the regular quarterly dividends of 31-1/4 cents per share on the cumulative preferred stock, 5 percent series and the 5 percent cumulative preference stock, as well as 53-1/8 cents per share on the cumulative preferred stock, 8.5 percent series (unlisted), all payable March 1, 1995 to shareholders of record on Feb. 10, 1995.

American Water Works Co. is the largest investor-owned water utility in the United States serving a population in excess of six million people in more than 700 communities in 21 states.

CONTACT: American Water Works Company Inc., Vorhees

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