Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 146

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 146
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24.5x to American Water’s estimated terminal year net income and by adding estimated terminal year net debt of American Water to derive the implied TEV for American Water. In determining the estimated terminal values, estimated terminal net income of American Water was assumed to reflect a normalized earnings level consistent with the average return on equity earned over the projection period applied to the calendar year December 31, 2030 rate base and equity component of the business. 94

For purposes of selecting the reference range to apply to American Water’s estimated terminal year net income, Moelis noted (i) that the selected reference range was informed by the current and recent historical P/E trading multiples for American Water and (ii) American Water’s larger scale, balance sheet strength, stronger financial performance and ability to earn at or above authorized returns in key jurisdictions relative to the other Selected Publicly Traded Water Utility Companies. Based on the foregoing analysis and its professional judgement and experience, Moelis selected a reference range of 21.5x to 24.5x for American Water’s terminal net income multiples. Moelis then applied such multiple range to American Water’s estimated terminal year net income based on the American Water Financial Projections. The implied range of equity values for American Water and the implied range of share prices for the American Water common stock derived from the DCF analysis for American Water are presented below, and the implied range of share prices was compared to the closing share price for American Water common stock of $142.58 as of October 23, 2025.

| American Water |     | Implied Equity  
 Value           
 ($ in millions) |                  |     | Implied Share Price 
 ($ per share)       |                  |
|:---------------|:----|:----------------|:-----------------|:----|:--------------------|:-----------------|
| DCF Analysis   |     | $               | 24,675 - $30,767 |     | $                   | 126.12 - $157.26 |

DCF-BasedExchange Ratios and Ownership Percentage Analysis Based on the implied range of share prices for Essential common stock and American Water common stock presented in the respective DCF analyses above, Moelis calculated a range of implied exchange ratios, which are presented below. Based on the implied range of equity values for Essential and American Water presented in the respective DCF analyses above, Moelis also calculated a range of implied pro forma ownership percentages of the pre-mergerholders of Essential common stock in the combined company after giving