Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 132

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 132
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 not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which American Water was compared. Discounted Cash Flow Analysis BofA Securities performed a discounted cash flow analysis of American Water to calculate a range of implied present values per share of American Water common stock utilizing estimates of the standalone, unlevered, after-taxfree cash flows American Water was expected to generate over the period from June 30, 2025 through December 31, 2030 based on the American Water forecasts. BofA Securities calculated a terminal value for American Water by applying a net income exit multiple range of 24.00x to 28.00x, based on BofA Securities’ professional judgment and experience, to an estimate of the terminal year recurring net income of American Water. The unlevered free cash flows and the terminal values were discounted to June 30, 2025, utilizing mid-yeardiscounting convention, and using discount rates ranging from 6.63% to 7.63%, which were based on an estimate of American Water’s weighted average cost of capital derived using the capital asset pricing model. 86

BofA Securities then calculated an implied equity value per share reference range for American Water by deducting from this range of present values American Water’s net debt as of June 30, 2025, as reflected in American Water’s Quarterly Report on Form 10-Qfor the fiscal quarter ended June 30, 2025, as filed with the SEC on July 30, 2025, and dividing the result by the number of fully-diluted shares of American Water common stock outstanding as of October 20, 2025, as provided by the management of American Water. This analysis indicated the following approximate implied equity value reference range per share for American Water (rounded to the nearest $0.05), as compared to the closing price per share of American Water common stock as of October 22, 2025:

| Implied Equity Value Reference 
 Range                          
 Per Share                      |     | October 22, 2025 Closing Price Per   
 Share of American Water Common Stock |        |
|:-------------------------------|:----|:-------------------------------------|-------:|
| $137.95 – $176.40              |     | $                                    | 143.73 |

Other Factors BofA Securities also noted certain additional factors that were not considered part of