Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 66

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 66
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 provisions or otherwise amend the terms of such agreements, the counterparties may exercise their rights and remedies under the agreements,
potentially terminating the agreements or seeking monetary damages. Even if American Water and Essential are able to negotiate waivers or amend the terms of such agreements, the counterparties may require a fee for such waivers or amendments or
renegotiate the agreements on terms less favorable to American Water, Essential, or the combined company. Any of the foregoing or similar developments may have an adverse impact on the combined company’s business, results of operations,
financial condition, and cash flows.

If the merger does not qualify as a “reorganization” under Section 368(a) of the Code, the U.S. holders of Essential common stock may be required to pay additional U.S. federal income taxes.

American Water and Essential intend for the
merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes. Nevertheless, it is not a condition to American Water’s obligation or Essential’s obligation
to complete the transactions that the merger qualify as a “reorganization.”

American Water and Essential have not sought and will not seek
any ruling from the IRS regarding any matters relating to the merger and the other transactions contemplated by the merger agreement, and, as a result, there can be no assurance that the IRS would not assert, or that a court would not sustain, a
position contrary to any of the conclusions herein. If the IRS or a court determines that the merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. holder (as defined in “The Merger—U.S. Federal

40

Income Tax Considerations”) of Essential common stock generally would recognize taxable gain or loss upon the exchange of Essential common stock for American Water common stock pursuant to the merger. U.S. holders of Essential common stock should consult their tax advisors as to the U.S. federal income tax consequences of the merger, including the income tax consequences arising from such U.S. holders’ particular circumstances, and as to any estate, gift, state, local, or non-U.S.tax consequences arising out of the merger. See “ The Merger—U.S. Federal Income Tax Considerations” beginning on page 114 for a more complete discussion of the U.S. federal income tax consequences of the merger. Risks Related to the Combined Company After Completion of the Merger If completed, the merger may not