Hayward Consulting L.L.C.

Abstract

FinMod -- A valuation model for water utilities - enables water utility participants (e.g., utilities, commercial bankers, other lenders, regulators, other investors) to estimate a utility's value and future revenue requirements (for rate case purposes). A valuation study could be used for:

1. Financial acquisitions or divestitures
2. Damages (e.g., condemnation, lost profit, etc.)
3. Business planning
4. Strategic planning
5. Gift, estate, donation
6. Property taxes
7. "Buy/sell" agreements
8. Corporate dissolution (i.e., liquidation)
9. Antitrust
10. Marital dissolution
11. Dissenting stockholder action
12. Going private
13. Employee Stock Ownership Plan (ESOP)

Benefits and Value

1. Analyzes the value of a utility using 12 valuation approaches.
   
   - Uses well recognized valuation methods and approaches, and in particular, those approaches appropriate for a regulated utility.
   
   
2. Analyzes several economic benefit streams so that any anomalies in the utility's value are readily apparent.
   
   
3. Produces an exhibit showing key profitability, leverage, liquidity, and operating performance measures for each year during the forecast period.
   
   
4. Compares a utility's financial and operating performance to comparable utilities.
   
   
5. Compares the subject utility's rates to comparable utilities.
   
   
6. Identifies how the utility's expected performance compares to the National Regulatory Research Institute's (NRRI) financial distress benchmarks. This is useful for regulators in making policy decisions.
   
   
7. Captures the key regulatory policy issues in a state.
   
   
8. Clearly identifies over 95 key base case financial, regulatory, legal, tax, and operating assumptions.
   
   
9. Since a valuation study is not complete without a report, FinMod's exhibits can be used in preparing a formal valuation report meeting the requirements of the National Association of Certified Valuation Analysts (NACVA).
   
   
10. Uses the National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts for accounting purposes.
    
    
11. Allows for using multiple types of financing.
    
    
12. Data for the model is based on a unique "client questionnaire." Entering the data for the model is simple.
    
    
13. The model identifies year-to-year changes in a utility's value. This allows the user to isolate the reasons for the changes.
    
    
14. The output reports meet the requirements of suppliers of capital (e.g., bankers).
    
    
15. The user can specify the level and detail of analysis it wants and bypass various valuation methods.
    
    
16. The model can be linked to a rate design model for rate case purposes or used on a stand-alone basis.

To see a sample exhibit click here.

Version: 2.00.1
Date Published: May 2005
Operating System: Windows XP
Software: Excel 2003

For purchase information please contact:

Mr. Mike Horner
NAWC
Phone: 202-833-8383
Email: mike@nawc.com
Web: http://www.nawc.com

For more information contact:

Hayward Consulting L.L.C.
David L. Hayward, President
1047 Hygeia Ave., Leucadia, CA 92024
Phone: (760) 436-7888
E-mail: DavidLHayward@cs.com