Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 106

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 106
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 Water common stock to be issued in the merger; |

| • |     | recent and historical market prices, volatility, and trading information for American Water common stock and 
 Essential common stock;                                                                                      |

| • |     | the expectation that the use of all-stock consideration will help support                                                                                                                                                                   
 a reasonable leverage ratio for the combined company, with an estimated debt-to-consolidated capitalization ratio (as calculated for purposes of American Water’s revolving credit facility) of 0.537 to 1.000 by the second year following 
 completion of the merger, allowing the combined company to pursue additional value enhancing opportunities as appropriate;                                                                                                                  |

67

| • |     | the requirement that the share issuance proposal would be subject to the approval of American Water shareholders,                                                     
 and that American Water shareholders would have the opportunity to evaluate the merger and vote on the share issuance proposal at the American Water special meeting; |

| • |     | the obligations imposed on Essential under the merger agreement to use its reasonable best efforts to obtain the                                                           
 required regulatory approvals, as more fully described in “The Merger Agreement—Efforts Related to Consents and Approvals of Governmental Entities” beginning on page 137; |

| • |     | the likelihood and anticipated timing of completing the merger in light of the nature and scope of the conditions 
 to completion;                                                                                                    |

| • |     | the belief that, although the completion of the merger is subject to the required regulatory approvals, the                                                                                                                                             
 parties will be able to obtain all required regulatory approvals without a burdensome effect on their respective businesses, and if a burdensome effect is imposed in connection with obtaining the required regulatory approvals, American Water would 
 have the right not to complete the merger;                                                                                                                                                                                                              |

| • |     | the belief that the end date (as it may be extended) under the merger agreement, after which American Water or                                                                                                                                        
 Essential, subject to certain exceptions, may terminate the merger agreement if the closing of the merger has not occurred, provides the parties with sufficient time to obtain all required regulatory approvals and satisfy the other conditions to 
 closing;                                                                                                                                                                                                                                              |

| • |     | the possibility that Essential may be required to pay American Water a termination fee of $370 million under                                                                                                                    
 certain circumstances following a termination of the merger agreement, including if the merger agreement is terminated due to the Essential board changing its recommendation that Essential shareholders vote “FOR” the merger 
 agreement proposal, as described in “The Merger Agreement—Effect of Termination