American Water Works shareholders approve increase in authorized stock.

VOORHEES, N.J.--(BUSINESS WIRE)--May 2, 1996--At the 1996 annual meeting Thursday of American Water Works Company Inc. (NYSE:AWK), shareholders approved a resolution increasing the number of authorized shares of common stock from 100 million to 300 million.

In its proxy statement the company said that following shareholder approval, the board of directors intends to declare a two-for-one stock split (in the form of a 100 percent stock dividend) later in the year, with an anticipated record date of July 15, 1996.

That date would follow the completion of American Water Work's previously announced public offering of 4.2 million shares of common stock, the net proceeds of which will be invested in the company's Pennsylvania-American Water Co. to reduce debt incurred for a major acquisition. On Feb. 16, Pennsylvania-American completed the $400 million acquisition of the water business of Pennsylvania Gas and Water Co. in Northeastern Pennsylvania.

President and Chief Executive Officer George W. Johnstone, reviewing the company's previously announced 1995 and first quarter, 1996 results, praised the company's "dedicated, motivated" management team.

"These results are a tribute to our leaders who have their eyes firmly fixed on our long-term strategies for growth and service to the customer," Johnstone said. "They are committed to the philosophy that underlies our every activity: providing a safe, reliable product at an affordable price creates value for both our customers and our stockholders."

Shareholders also ratified the appointment of Price Waterhouse LLP as independent accountants and elected 11 members to the board of directors. At the board's organizational meeting following the annual meeting, Marilyn Ware Lewis was elected chairman of the board, and Nelson G. Harris, vice chairman. Lewis is a consultant and financial advisor; and Harris is chairman of the executive committee of Tasty Baking Co.

In addition to Johnstone, Lewis and Harris, board members elected were: -0-

    --  William O. Albertini, executive vice president and chief
        financial officer, Bell Atlantic Corp.;
    --  William R. Cobb, retired president of American Water Works
        Company's Connecticut, New Jersey and New York subsidiaries;
    --  Elizabeth H. Gemmill, Esquire, vice president and secretary,
        Tasty Baking Co.;
    --  Henry G. Hager, Esquire, president of the Insurance Federation
        of Pennsylvania Inc., and a partner of Stradley, Ronon,
        Stevens & Young, attorneys;
    --  Nancy W. Wainwright, retired vice president, United Propane,
        Inc.;
    --  Paul W. Ware, chairman, Penn Fuel Gas Inc.;
    --  Ross A. Webber, professor of management, The Wharton School,
        University of Pennsylvania; and,
    --  Horace Wilkins Jr., president-Missouri, Southwestern Bell
        Telephone Co.-0-

American Water Works Co. is the largest investor-owned and most geographically diverse water utility business in the U.S. The company, through its 22 regulated subsidiaries, serves more than 800 communities with a population of approximately 7 million in 21 states.

CONTACT: American Water Works Company Inc., Voorhees

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