Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 72

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 72
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 indebtedness of the combined 
 company;                                                                                                          |

| • |     | increasing the combined company’s vulnerability to general economic and industry conditions, including its 
 ability to access the capital markets for debt and equity;                                                 |

| • |     | limiting the combined company’s ability to adjust to changing market or industry conditions and placing it                                                                                                    
 at a competitive disadvantage with respect to significant business opportunities, including, without limitation, with respect to acquisitions, compared to its competitors who are less highly leveraged; and |

| • |     | 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 145. 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