Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 216

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 216
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 Under ASC 805, all assets
acquired and liabilities assumed are recorded at their acquisition date fair value and, accordingly, the total purchase price will be allocated to the tangible and intangible assets acquired and liabilities assumed based on their respective fair
values using the fair value concepts defined in ASC 820. Any difference between the purchase price for Essential and the fair value of the identifiable net assets acquired will be recorded as goodwill.

The determination of the fair values of the assets acquired and liabilities assumed of Essential (and the related determination of estimated useful lives of
depreciable and amortizable tangible and identifiable intangible assets) requires significant judgment and have been measured based on various preliminary estimates using assumptions that American Water’s management believes are reasonable and
based on currently available information as of the date of this joint proxy statement/prospectus. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing this unaudited pro forma condensed
combined financial information. Information regarding or underlying these adjustments may change and is subject to risks and uncertainties such that differences between these preliminary estimates and the final purchase accounting may occur.
Therefore, actual results and the final purchase accounting could be materially different from the preliminary estimates used to prepare the accompanying unaudited pro forma condensed combined financial information.

Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of the SEC’s Regulation S-X and should
be read in conjunction with the accompanying notes. The accounting policies followed in preparing the unaudited pro forma condensed combined financial information are those used by American Water as set forth in the historical financial statements
of American Water referenced above and incorporated by reference into this joint proxy statement/prospectus. The preparation of the unaudited pro forma condensed combined financial information did not require making adjustments to conform
Essential’s historical financial information to American Water’s significant accounting policies based on American Water’s initial review and understanding of Essential’s summary of significant accounting policies. A more
comprehensive comparison and assessment of the significant accounting policies of American Water and Essential will occur following completion of the merger, which may result in the identification of differences that could be material. American
Water has included certain presentation adjustments for consistency in the financial statement presentation. See Notes 2 and 3 for more information.

The
unaudited pro forma condensed combined financial information appearing below does not consider any potential effects of changes in market conditions on revenues or expense efficiencies, among other factors. In addition, as explained in more