Evercore Investment Banking Pitch Book
Preliminary Financial Analysis
Valuation Methodologies
■ In analyzing the Proposed Transaction, Evercore utilized the following methodologies for its preliminary valuation of McMoRan:
Methodology
Net Asset Valuation
("NAV") Analysis
Peer Group Trading
Analysis
Precedent Transactions
Analysis
Discounted Cash Flow
Analysis
EVERCORE PARTNERS
Description
Valuation based on the present value of the future after-tax cash
flows expected to be generated from MMR's proved and non-
proved reserves and resources
Valuation based on public trading metrics of E&P companies with
similar assets
Valuation based on metrics of transaction value to cash flow,
proved reserves, and current production for M&A transactions
involving acquisitions of similar assets and premiums paid in
corporate transactions with all cash consideration in 2012 YTD
Valuation based on the net present valuation of MMR's current
projections of future after-tax free cash flows assuming selected
discount rates and terminal value multiples
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Confidential
Assumptions
▪ Cash flows based on the Reserve Report and the
Company's resource estimates for its Ultra-Deep
prospect portfolio
Proved reserves based on the Reserve Report
Financial projections based on I/B/E/S estimates
• Reviewed trading multiples for selected GOM and
onshore Gulf Coast companies
• Reviewed resource trading multiples for Cobalt
International Energy, Inc. ("Cobalt")
Proved reserves based on the Reserve Report
Reviewed selected transactions that included assets in
the Gulf of Mexico shelf and onshore Gulf Coast since
2009 with transaction value greater than $20 million
Valuation date as of October 1, 2012
Terminal value based on a 5.0x EBITDA exit multiple
and an assumed 0.5% growth in perpetuity
* 35.0% federal tax
• Tax depreciation based on a full-step up in tax basis
and 7-MACRS
MCMORARView entire presentation