Exterran Holdings, Inc. (EXH) announced today 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):

International contract operations $113-118
Aftermarket services $32-35
Product sales (including sales to Archrock1) $325-335
Total $470-488
Gross margin percentage:
International contract operations 60-62%
Aftermarket services 27-29%
Product sales2 12.5-13.5%
Selling, general & administrative expenses $55-58
Product sales bookings Approximately $145
Product sales backlog (at June 30, 2015) Approximately $600

(1) Includes sales of newly-fabricated compression equipment to Exterran Partners, L.P. (to be renamed Archrock Partners, L.P. upon completion of the spin-off) of approximately $50 million.

(2) Includes non-cash expense for inventory reserves currently estimated to be $3.7 million.

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.

Subsidiaries of Exterran Holdings to Pursue Debt Offering in Connection with Spin-Off

Exterran Holdings, Inc. (EXH) (“Exterran Holdings”) announced today that, in preparation for the previously announced separation of its international services and global fabrication businesses into a standalone, publicly traded company named Exterran Corporation (“SpinCo”), Exterran Energy Solutions, L.P., a wholly owned subsidiary of Exterran Holdings (“EESLP”), and EES Finance Corp., a wholly owned subsidiary of EESLP (“Finance Corp.” and, together with EESLP, the “Issuers”), intend to offer, subject to market conditions, $400 million aggregate principal amount of senior unsecured notes due 2022 (the “notes”). The Issuers will be subsidiaries of SpinCo after the completion of the separation.

The Issuers intend to transfer to Exterran Holdings the net proceeds from the sale of the notes, together with borrowings under EESLP’s new credit agreement (which has been executed and, subject to certain conditions, will become available upon the completion of the separation), to allow Exterran Holdings to repay certain of its existing indebtedness. The consummation of the notes offering will not be conditioned on Exterran Holdings’ completion of the separation; however, the Issuers will be required to redeem the notes if the separation does not occur within three months of the consummation of the notes offering.

The notes will be offered and sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States to non-U.S. persons in compliance with Regulation S of the Securities Act.

The notes have not been registered under the Securities Act, or the securities laws of any other jurisdiction. Unless they are registered, the notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction.

This press release does not constitute an offer to sell or a solicitation of an offer to purchase the notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Exterran Holdings

Exterran Holdings, Inc. is a global market leader in full-service natural gas compression and a premier provider of operations, maintenance, service and equipment for oil and gas production, processing and transportation applications. Exterran Holdings serves customers across the energy spectrum – from producers to transporters to processors to storage owners. Headquartered in Houston, Texas, Exterran has approximately 10,000 employees and operates in approximately 30 countries. Exterran Holdings owns an equity interest, including all of the general partner interest, in Exterran Partners, L.P. (EXLP), a master limited partnership, the leading provider of natural gas contract compression services to customers throughout the United States. For more information, visit www.exterran.com.

About Exterran Corporation

Exterran Corporation will be a market leader in compression, production and processing products and services, serving customers throughout the world engaged in all aspects of the oil and natural gas industry. Its global product lines will include natural gas compression, process & treating and production equipment and water treatment solutions. Outside the United States, Exterran Corporation will be a leading provider of full-service natural gas contract compression and a supplier of new, used, OEM and aftermarket parts and services. Exterran Corporation will be headquartered in Houston, Texas, and will operate in approximately 30 countries with approximately 7,000 employees.

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