Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 130

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 130
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x to 25.75x, based on BofA Securities’ professional judgment and experience, to an estimate of the terminal year recurring net income of Essential’s water utility segment, and (ii) a net income exit multiple range of 19.75x to 24.25x, based on BofA Securities’ professional judgment and experience, to an estimate of the terminal year recurring net income of Essential’s natural gas local distribution segment. The unlevered free cash flows, the terminal values, and the estimated benefits from Essential’s NOLs were discounted to June 30, 2025, utilizing mid-yeardiscounting convention, and using discount rates ranging from 6.25% to 7.25%, which were based on an estimate of Essential’s weighted average cost of capital derived using the capital asset pricing model. BofA Securities then calculated an implied equity value per share reference range for Essential by deducting from this range of implied enterprise values an estimate of the net debt of Essential as of June 30, 2025, as reflected in Essential’s Quarterly Report on Form 10-Qfor the fiscal quarter ended June 30, 2025, as filed with the SEC on August 4, 2025, and dividing the results by a number of fully-diluted shares of Essential common stock outstanding as of October 20, 2025, as provided by the management of Essential. This analysis indicated the following approximate implied equity value reference range per share of Essential common stock (rounded to the nearest $0.05), as compared to the Implied Exchange Ratio Value, and the closing price per share of Essential common stock as of October 22, 2025:

| Implied Equity Value Reference Range 
 Per Share                            |     | Implied Exchange Ratio 
 Value                  |       |     | October 22, 2025 Closing Price Per 
 Share of Essential Common Stock    |       |
|:-------------------------------------|:----|:-----------------------|------:|:----|:-----------------------------------|------:|
| $42.15 – $55.85                      |     | $                      | 43.84 |     | $                                  | 41.69 |

85

Other Factors BofA Securities also noted certain additional factors that were not considered part of BofA Securities’ financial analyses with respect to its opinion but were referenced solely for informational purposes, including, among other things, the following: 52-WeekTrading Range. BofA Securities reviewed