Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 71

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 71
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 exposing the combined company to the risk of increased interest rates on variable rate borrowings. |

In addition, the amount of cash required to service the indebtedness levels will be greater than the amount of cash flows required to service the indebtedness of American Water or Essential individually prior to completion of the merger, thereby reducing the combined company’s ability to use cash flow to fund operations, capital expenditures, and future business opportunities. The level of indebtedness of the combined company could also reduce common stock dividend payments, share repurchases, and other activities and may create competitive disadvantages relative to other companies with lower debt levels. The combined company may be required to seek or obtain additional financing for working capital, capital expenditures, acquisitions, or other general corporate purposes. The combined company’s ability to arrange additional financing or refinancing will depend on, among other factors, its financial condition and performance, as well as prevailing market conditions and other factors beyond its control. There can be no assurance that the combined company will be able to obtain additional financing or arrange refinancing on terms acceptable to it or at all, and any such failure could materially adversely affect its results of operations, financial condition, and cash flows. For more information on the financial impact of the merger on the combined company’s indebtedness, see “ Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 146. The merger may not be accretive to the combined company’s earnings and may adversely affect the combined company’s earnings per share, which may negatively affect the market price of the combined company’s common stock. American Water and Essential currently anticipate that the merger will be accretive to the combined company’s earnings per share in 2028, the first full year following the completion of the merger. This expectation is based on preliminary estimates that are subject to change. The combined company could also encounter additional transaction and integration-related costs, may fail to realize all of the benefits anticipated in the merger, or be subject to other factors that affect American Water’s and Essential’s preliminary estimates. Any of these factors 44

could cause a decrease in the combined company’s earnings per share or decrease or delay the expected accretive effect of the merger and contribute to a decrease in the market price of the combined company’s common stock. If the merger is completed, the combined company may be required to record goodwill or may acquire other assets measured and recorded at fair value, and, thereafter, the combined company may be required to record impairments to the goodwill or changes to the fair value of the other assets