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Exterran Details 2Q Financials Ahead of Pure-Play Spinoff

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   |    Monday,July 13,2015

Exterran Holdings, Inc. reported certain preliminary second quarter 2015 financial results for the businesses to be spun-off.

As announced in November 2014, Exterran Holdings intends to separate its international contract operations, international aftermarket services and global fabrication businesses into a standalone, publicly traded company named Exterran Corporation. Upon completion of the spin-off, Exterran Holdings, which will continue to own and operate its contract operations and aftermarket services businesses in the United States, will be renamed Archrock, Inc.

Exterran Corporation’s full financial results for the second quarter 2015 are not yet available and are subject to finalization by management and review by Exterran Corporation’s independent auditors. Set forth below are certain preliminary estimates of the results of operations that Exterran Holdings expects Exterran Corporation to report for the second quarter 2015. Exterran Corporation’s actual results may differ materially from these preliminary estimates due to the completion of its financial closing procedures, final adjustments and other developments that may arise before the financial results for the second quarter are finalized.

Exterran Holdings expects the following range of financial results for Exterran Corporation for the three months ended June 30, 2015 ($ in millions except percentages):

In addition, Exterran Holdings expects Exterran Corporation to spend approximately $205 million to $235 million in capital expenditures during 2015, including 1) approximately $130 million to $150 million on contract operations growth capital expenditures and (2) approximately $25 million to $35 million for maintenance capital expenditures primarily on equipment related to its contract operations business.

Exterran Holdings’ parent level (excluding Exterran Partners) debt outstanding was approximately $707 million as of June 30, 2015. Exterran Corporation’s capital structure is expected to include (1) a new $750 million revolving credit facility that has been executed and will become available upon the completion of Exterran Corporation’s separation from Exterran Holdings and the satisfaction of certain other conditions and (2) subject to market conditions, the issuance of new senior notes due 2022. The revolving credit facility includes, among other covenants, financial covenants requiring Exterran Corporation to maintain (after the separation) an Interest Coverage Ratio of not less than 2.25:1.00, a Total Leverage Ratio of not greater than 4.50:1.00, and a Senior Secured Leverage Ratio of not greater than 2.75:1.00, as they are defined in the credit agreement. Exterran Holdings anticipates that Exterran Corporation will transfer the net proceeds of its debt arrangements, including amounts Exterran Corporation borrows under its credit facility and the net proceeds Exterran Corporation receives following the issuance of the senior notes, to allow Exterran Holdings to repay its indebtedness.

Subsequent to June 30, 2015 and prior to the completion of the spin-off, Exterran Holdings expects to incur additional borrowings under Exterran Holdings’ existing credit facility between $45 million and $55 million to finance expenses related to the completion of the spin-off and related debt financings, which would increase the amount that Exterran Corporation borrows under its new revolving credit facility and transfers to Exterran Holdings to allow Exterran Holdings to repay its indebtedness.

At July 2, 2015, Exterran Holdings was due approximately $100 million of principal payments from the previously announced sales of nationalized Venezuelan assets, which amounts will be due to Exterran Corporation following the spin-off.