Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 177

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 177
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 the                                                                                                            
 receipt of American Water common stock pursuant to the merger, except for any gain or loss recognized with respect to cash received in lieu of a fractional share of American Water common stock, as described below; |

| • |     | the aggregate tax basis in the shares of American Water common stock received by a U.S. holder pursuant to the                                                                                                             
 merger (including fractional shares deemed received as described below) will be equal to such U.S. holder’s aggregate tax basis in its Essential common stock surrendered in exchange for the American Water common stock; |

| • |     | a U.S. holder’s holding period for the American Water common stock received in the merger (including                                                
 fractional shares deemed received as described below) will include the holding period for the Essential common stock surrendered in the merger; and |

| • |     | a U.S. holder that receives cash in lieu of a fractional share of American Water common stock will generally be                                                                                                                                         
 treated as having received such fractional share pursuant to the merger and then as having received such cash as consideration for the sale of such share. Gain or loss will generally be recognized based on the difference between the amount of cash 
 received in lieu of the fractional share and such U.S. holder’s adjusted basis in the fractional share. Such gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the        
 merger, the U.S. holder’s holding period for the relevant shares is greater than one year. For U.S. holders of Essential common stock that are non-corporate holders, long-term capital gain generally will                                             
 be subject to tax at a U.S. federal income tax rate that is lower than the rate for ordinary income or for short-term capital gains. The deductibility of capital losses is subject to limitations.                                                     |

If a U.S. holder of Essential common stock acquired different blocks of Essential common stock at different times or at different prices, such U.S. holder’s holding period and basis will be determined separately with respect to each block of Essential common stock. Any such U.S. holder should consult its tax advisor regarding the holding periods of the particular shares of American Water common stock received in the merger. If the merger does not so qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes and is therefore taxable for U.S. federal income tax purposes, then a U.S. holder of Essential common stock that exchanges