Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 144

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 144
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 as of June 30, 2025 of the (i) estimated unlevered free cash flows of each respective segment of Essential for the second half of the calendar year ending December 31, 2025 through the end of the calendar year ending December 31, 2030 (in each case, discounted using a mid-yeardiscounting convention) and (ii) estimated terminal values of each respective segment of Essential derived by applying a range of selected terminal P/E multiples of (a) 16.5x to 93

23.5x for the Water Segment, (b) 18.0x to 21.5x for the Gas Segment and (c) 17.2x to 22.6x for the Parent Segment, to the terminal net income of each respective segment of Essential and by adding estimated terminal year net debt of each respective segment of Essential to derive the cumulative implied TEV of Essential. In determining the estimated terminal values, estimated terminal net income of the Water Segment and Gas Segment of Essential 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. For purposes of selecting the reference range to apply to the Water Segment’s estimated terminal year net income, Moelis noted (i) that the selected reference range was informed by the current P/E trading multiples for the Selected Publicly Traded Water Utility Companies (as defined below) and (ii) the higher quality of American Water’s business relative to the Water Segment of Essential. For purposes of selecting the reference range to apply to the Gas Segment’s estimated terminal year net income, Moelis noted (i) that the selected reference range was informed by the current P/E trading multiples for the Selected Publicly Traded Gas Utility Companies and (ii) that Northwest Natural Holding Company was considered, but not utilized, to inform the foregoing selected P/E multiple range due to its materially lower quality regulatory, growth and financial characteristics compared to the other Selected Publicly Traded Gas Utility Companies (as defined below). For purposes of selecting the reference range to apply to the Parent Segment’s estimated terminal year net income, Moelis calculated the blended P/E terminal multiples informed by the net income contributions of the Water Segment and the Gas Segment based on their respective contributions to the earnings of Essential. Based on the foregoing analysis and its professional judgement and experience, Moelis selected a (i) reference