Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 145

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 145
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) reference range of 18.0x to 21.5x for the Gas Segment’s terminal net income multiples and (iii) reference range of 17.2x to 22.6x for the Parent Segment’s terminal net income multiples. Moelis then applied such multiple ranges to each segment’s estimated terminal year net income based on the Essential Financial Projections. The implied range of equity values for Essential and the implied range of share prices for the Essential common stock derived from the DCF analysis for Essential are presented below, and the implied range of share prices was compared to the closing share price for Essential common stock of $41.30 as of October 23, 2025.

| Essential    |     | Implied Equity  
 Value           
 ($ in millions) |                 |     | Implied Share Price 
 ($ per share)       |                |
|:-------------|:----|:----------------|:----------------|:----|:--------------------|:---------------|
| DCF Analysis |     | $               | 9,731 - $14,835 |     | $                   | 34.29 - $52.21 |

American Water Moelis calculated American Water’s unlevered free cash flows as EBITDA (i) less taxes, (ii) plus cost of removal accrual, (iii) plus deferred income taxes, (iv) less capital expenditures, (v) less acquisitions, (vi) less removal costs, (vii) less pension and non-pensionbenefit contributions and (viii) less change in working capital & other. Stock-based compensation expense was treated as a cash expense and was not added back when calculating the unlevered free cash flows. Moelis utilized a range of discount rates of 5.25% to 6.25% based on an estimated range of American Water’s WACC. The estimated WACC range reflected a derived cost of equity range using CAPM. Moelis used the foregoing range of discount rates to calculate estimated present values as of June 30, 2025 of the (i) estimated unlevered free cash flows of American Water 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 American Water derived by applying a range of selected terminal P/E multiples of 21.5x to