Good morning. Welcome to the Exterran Holdings Incorporated and Exterran Partners LP Fourth Quarter 2012 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions] Earlier today, Exterran Holdings and Exterran Partners released their financial results for the fourth quarter and full year ended December 31, 2012. If you have not received a copy, you can find the information on the company's website at exterran.com. During this call, the companies will discuss some non-GAAP measures in reviewing their performance such as EBITDA as adjusted, EBITDA as further adjusted, gross margin and distributable cash flow. You will find definitions and a reconciliation of these measures to GAAP measures in the summary pages of the earnings release and on the company's website at exterran.com. During today's call, Exterran Holdings may be referred to as Exterran or EXH, and Exterran Partners as either Exterran Partners or EXLP. Because of EXLP's financial results and position are consolidated into Exterran, the discussion of Exterran will include Exterran Partners unless otherwise noted. Also, the term international will be used to refer to Exterran's operations outside the U.S. and Canada and the combination of U.S. and Canada will be referred to as North America. I want to remind listeners that the news release issued this morning by Exterran Holdings and Exterran Partners, the company's prepared remarks on this conference call and the related question-and-answer session include forward-looking statements. These forward-looking statements include projections and expectations of the company's performance and represent the company's current beliefs. Various factors could cause results to differ materially from those projected in the forward-looking statements. Information concerning the risk factors, challenges and uncertainties that could cause actual results to differ materially from those in the forward-looking statements can be found in the company's press release, as well as the Exterran Holdings' annual report on Form 10-K for the year ended December 31, 2011, Exterran Partners' annual report on Form 10-K for the year ended December 31, 2011, and those set forth from time to time in Exterran Holdings' and Exterran Partners' filings with the Securities and Exchange Commission, which are currently available on exterran.com. Except as required by law, the companies expressly disclaim any intention or obligation to revise or update any forward-looking statements. Your host for this morning's call is Brad Childers, President and CEO. I would now like to turn the call over to him. Mr. Childers, you may begin your conference.

Thank you. Good morning, everyone. With me today is Bill Austin, CFO of Exterran Holdings; and David Miller, CFO of Exterran Partners. A year ago, we said our goal at Exterran was to make changes that will drive significant improvement in 2012 and over the long term. Driven by the implementation of key initiatives, we believe that we've made good progress in 2012. Let me highlight a few of our accomplishments for the year. Exterran Holdings and Exterran Partners each recorded improved operating profitability on a year-over-year basis. We did this by focusing on cost initiatives and margin improvement. We increased working horsepower in both our U.S. and international contract operations businesses and we grew our fabrication revenue, profit and backlog. And we significantly reduced covenant leverage at the Exterran Holdings level by both reducing debt and increasing EBITDA. For the year, we set a leverage target. We beat it, we reset the target and we beat it again. We accomplished these goals while continuing our focus on excellent customer service and providing a safe working environment for our employees. Our equipment run times exceeded our service targets across the globe and our overall safety performance beats our TRIR targets. While I'm pleased to say I remain ambitious about our opportunities to continue to improve and grow our business, 2012 is a year our employees should be proud of. In today's call, we'll provide a review of both Exterran Holdings and Exterran Partners. On the Exterran Holdings part of today's call, I'll review our operating performance, business development trends and highlight our priorities for 2013. For the fourth quarter at Exterran Holdings, EBITDA as adjusted was 20% better than the year-ago period as we achieved our highest EBITDA level in over 3 years. Net income from continuing operations before charges…

Thanks, Brad. And as Brad said, this year, we implemented a number of initiatives and have had some good results. But moving forward, we are rolling out more initiatives that we believe will result in sustainable improvements in our core operations as we continue to maintain a sharp focus on results and profitability, but at the same time, actively manage our capital. Now I'll provide a summary of the results for Exterran Holdings and provide some guidance for the first quarter. In the fourth quarter, we generated EBITDA as adjusted of $141 million. That's up 11% compared to the third quarter of 2012 and up 20% over prior year levels. We also reported positive earnings per share from continuing operations before charges of some $0.09 per share in the fourth quarter. That's up from $0.02 per share in the third quarter, and a loss last year of $0.16 per share. But moving quickly to our segment results, in North America, our contract operations revenue was $155 million in the fourth quarter. Now that's somewhat above our guidance range, but this was driven by increased working horsepower of some 51,000 horsepower in the quarter. Gross margin came in at 55% as compared to 50% in the third quarter and 49% in the fourth quarter of 2011. Profitability in the fourth quarter was positively impacted by lower maintenance expense and call-out activity due to holidays and vacations and ongoing performance improvement initiatives. Now looking forward at the first quarter, we expect increased North America contract operations revenues in the $157 million to $158 million range. This is driven by the deployment of new build horsepower in our January 2013 price increase. Gross margins are expected to be in the low 50s -- 50% range due to higher maintenance levels and overall field…

Thanks, Bill. Exterran Partners had another solid quarter. We generated EBITDA as further adjusted, of $48.9 million in the fourth quarter, as compared to $46.2 million in the third quarter. Distributable cash flow was $34.2 million in the fourth quarter, up from $29.5 million in the third quarter. Distributable cash flow coverage in the fourth quarter was 1.47x. Net income for per limited partner unit was $0.31 in the quarter, compared to $0.21 in the third quarter of 2012 and $0.10 in the year-ago period. In the fourth quarter, Exterran Partners operating horsepower increased by 50,000 to approximately 1.99 million operating horsepower, driven by organic growth in liquid-rich plays. Revenue grew to $102.3 million in the fourth quarter, as compared to $99.3 million in the third quarter largely due to this horsepower growth. As Brad said earlier, Exterran Holdings is making cost cap contributions to Exterran Partners under the omnibus agreement. Our goal is to reduce and eventually eliminate the need for these payments through our performance improvement initiatives. Our distributable cash flow coverage increased from 1.22x in 2011 to 1.29x in 2012. Excluding the benefit of the cost cap payments, our distributable cash flow coverage increased from 0.78x in 2011 to 1.02x in 2012, which demonstrates progress towards this objective. Late last month, Exterran Partners announced its distribution equal to $2.05 on an annualized basis. Our current quarterly distribution is $0.005 higher than the third quarter 2012 distribution, and $0.02 higher than the fourth quarter 2011 distribution. Gross margin excluding the benefit of cost cap payments was 56% in the fourth quarter, as compared to 51% in the third quarter, and 49% in Q4 '11. Cost of sales per average operating horsepower was $22.93 in the fourth quarter, down 9% from the third quarter 2012 and down 8% from…

Great. Thanks, Bill, thanks, David. Operator, that concludes our prepared commentary for the quarter. We'd like to turn the call over to open it up for questions.

[Operator Instructions] Our first question comes from Jim Rollyson from Raymond James. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Nice work on the quarter and certainly the progress you guys have made in the past year, I look forward to more of that. Brad, on the new capacity additions, I think this is probably more respective with Partners, you added about 50,000 horsepower. Last year, you mentioned the first half of this year is going to be a little more modest growth. Can you talk about how you think about longer term plans, just in terms of, obviously the whole history of Exterran, you guys had a lot of capacity that's been around for a while, you've been kind of improving that, I suppose, with adding new capacity to fit the market and what have you. How do you think about that going forward over the next several years in terms of adding and then just maybe what end of the market, in terms of horsepower size, are you focusing on with the new capacity adds?

Sure, so look, on the capacity, I think the best indication of our optimism for the opportunities we see in the market longer-term is our new fleet build program. So we're looking at adding about 170,000 horsepower to the fleet and that's an expression of what we think we see in the marketplace for opportunities. So overall, we remain optimistic that we're going to see good growth in the market ahead as we continue to build out the shale plays and invest in some of the liquid-prone plays. So that's I think, the best expression on that front. As far as the mix, we're building on both ends of the spectrum. So we have a good chunk of our investment going into large horsepower that's suitable for gathering applications, but we're also building small horsepower units that are in high demand right now in some of the gas-lift driven oil production plays. So we're building from 200 horsepower all the way up to 1,700 horsepower units and a few spots in between. James M. Rollyson - Raymond James & Associates, Inc., Research Division: That's very helpful and you've mentioned the second price increase in the last 12 months in January. Can you give us a little sense of magnitude of the price increase and is this just on new units going to work or is this kind of across the board?

The price increase was applied to our active units that were out of primary term in their contract. So roughly 1/2 of the operating horsepower received a price increase or will receive a price increase as they come out of term. And just think of low single digits for the magnitude of the price increase overall in 2013. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Which is, if I recall correctly, somewhat similar to last year?

It was. Look, our plan is to allow our customers to plan their years and their budgets, so we try to be consistent in our approach and communication with them. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Great. And last question from me, just on the cost side of things, you made pretty solid improvements last year, said you're going to continue to focus on that. Any guidance or thoughts of magnitude of how much you can improve that side of the line this year?

Without getting into specific numbers, because we're working hard to deliver it, I think that as you saw in 2012, you should expect just a steady improvement throughout the course of 2013 that's comparable in magnitude to what we accomplished in 2012. That's really what we're targeting right now.

Our next question comes from Blake Hutchinson from Howard Weil.

Just starting on the international business, with the annual kind of revenue run rate and kind of execution or backlog phase of still about $50 million here, what's the delineation between kind putting idle horsepower back to work versus kind of greenfield projects as we go through the year?

Brad, I think he's talking about the $50 million in annualized contract ops...

Right. As we think about incremental revenue opportunities for '13, are we leaning more towards greenfield than what we saw in '12, where we had an opportunity to put a lot of idle assets back to work or is that just kind of be opportunistic for the year here?

Yes. So look, in that backlog number is a good mix of both contract extensions where we're going to keep horsepower working, that's not greenfield, but a good percentage of it is also growth horsepower. So the magnitude, we're just checking the number right now, but the magnitude, we think it's about 50,000 of horsepower that is going to be growth for international in 2013.

Okay, great. And then just helping us kind of -- I know it might be difficult to do, but just kind of diagnosing some of these one-time issues where there's contract cancellations or the opportunity for a sale to the customer. Is there anything that's notable as you look out this year or would you expect less risk to kind of quarterly fortunes from activity like that?

Yes, what we saw in 2012 was a little more disruptive than we expect normally and we see don't see the same level of stops and returns in international for that large horsepower that we experienced in 2012. So looking out, we expect it to be a steadier build.

Just to add to that, I refer to it -- I don't think it's going to be quite as noisy as it was in 2012.

Okay, great. And then just finally, anything that we should read into kind of the margin mix in fab, with big drawdowns in production and processing and install. Is the install margin performance different than you might have anticipated or just kind of chalk it up to the lumpiness of the quarter?

It's both. Some of it's the lumpiness of the quarter, but as we see some of the build in our international portfolio, and on the installed, that definitely carries a lower margin percentage that work attracts, something in that 10% to the low-teens range. And as we build and restore some of that backlog in international and I'm thinking also of Belleli, it will be dilutive to our gross margin percentage, but an improvement to our profitability overall.

Our next question comes from Joe Gibney from Capital One.

Brad, a couple of questions around fabrication. I know you referenced record level of revs in '13. Certainly, your run rate you're indicating in the first quarter, is indicative of that. Just trying to calibrate a little bit on expectations then on -- I know it is, lumpy but where are we on fab bookings growth year-over-year against that backdrop of this elevated burn rate and pull-through on revs? It looks lumpy international and you're coming off from pretty elevated North America bookings levels this past year, I'm just trying to get a sense of where are you on book-to-bill, I guess the record level of revenue pull-through that you're expecting this year?

Clearly, when you have a standout quarter on the revenue generation side and on the pull-through, it can create a challenge in the lumpiness, looks like the downside of it in the following quarter and you're seeing a bit of that now. We had such a robust quarter in Q4 in pulling through revenue and slightly less on bookings side that you're seeing that book-to-bill that appears to have slowed down in the quarter. I would really attribute that to lumpiness. It's hard to make a lot of that change on a quarter-over-quarter basis and what we expect is to have a backlog level and a build from this point forward that is positive. But we like the backlog number we have right now. We think we generated good sales activity and we expect, based on our opportunity set, to continue to both replenish on the book-to-bill and build from here forward in 2013.

And then just 2 quick ones. Just curious, dry gas versus liquids directed, kind of, fleet mix as it stands today and maybe what you think it will be towards the end of '13. And then Bill, I was just curious if you could remind us what the remaining PDVSA cash payments are as it stands today.

That's 2 questions, I'll go first. We do track and we watch pretty carefully, what our trending is in moving the business from the dry gas plays into more of the shale and liquids-rich plays. But the mix right now, we would estimate that we are still in that 60% to 65% range of exposure to conventional plays and that, that number is coming down and will continue to come down incrementally. And in previous periods, you may note we articulated, we thought we were more in the 65% to 70% range for dry gas plays.

As far as Venezuela, let me start out with the total amount that we expect to receive is well in excess of -- or is in excess of $550 million. We got about $300 million remaining to be received. And that's -- I mean, at about $20 million a quarter, for I think, it's about the next 15 quarters.

Our next question comes from Sunil Sibal from Citigroup.

Most of my questions have been answered. A couple of things, I just wanted to [indiscernible] on. When you look at your new build fleet program, I think you're guiding to about 170 HP versus 200-plus that you did last year and I was curious whether that is kind of related to what you're seeing in the rich gas plays especially with the pricing on the natural gas liquids being a little bit weak versus last year at this point of time?

I think the short answer, Sunil, is yes. The growth that we're seeing in the compression market is not being bolstered by a robust gas price and where the attractiveness is, remains in the development of the plays that are more liquids rich. And in some of the dry gas plays, the shale plays also can be price competitive even in the current gas price environment. So we're seeing some growth there. But the short answer to your question is absolutely.

And then when you look at your fleet composition at EXLP, how much of that is using the gas lifting application currently?

For EXH, the number overall, it's about -- as much as 15% of our fleet is in gas lift and exposed to oil production.

That's helpful, and then lastly, in terms of your fleet retirement, where do you think you are in terms of that and what should we expect going forward in that regard?

Well I think what you're asking about is in the past, we've had some significant reductions to our idle fleets through our coal process and we're going to manage this fleet going forward with discipline. We want to make sure we're adding horsepower, which we're doing, that's going to modernize, standardize and drive the cost out in our fleet, as well as have a good market for years to come. So that's the fleet that we're building and as we do that, some of the older units will continue to drop out. I don't have an expectation and we can't really guide what the future looks like on those expected moves, other than we're going to, with a disciplined approach, ensure that we're taking out those units that are no longer marketable or price competitive going forward. So we will be managing the fleet with great discipline. It's hard to talk about exactly what that could look like going forward.

Our next question comes from Sharon Lui from Wells Fargo.

A quick question in terms of the cost cap. Do you think, I guess, with your cost initiatives, that you'll be in a position to eliminate the cost caps when they terminate by the end of this year?

Hard to answer that specifically. The way we want to make sure we're thinking about it is that our goal is to drive sufficient improvement so that we render the cost caps not needed and no longer necessary. It doesn't mean that, that we'll necessarily be there. And looking forward, as we engage in further drop-down activity, we want to be mindful of the relationship in respect to the omnibus agreement between EXH and EXLP. So it's hard to guide further than that we really want to render them out of play, is our approach to guiding that part of the discussion.

I think directionally, we're showing that we are making those kinds of improvements.

Okay, I guess, in terms of just looking at the coverage without the cost cap, is there a specific target that you guys are aiming at?

I don't know that we have a specific target, but we should be somewhere between 1.10 and 1.20 in any case. We have not spelled that out, but that's a good guide post, at least at this juncture.

Okay, great. And I guess, in terms of the gross margin percentage, you did indicate that you anticipate to moderate a bit in the first quarter from I guess, the 55% to the low-50% range. Just trying to, I guess, understand how much of the improvement in Q4 was related to your cost-reduction initiatives and how much was it related to, I guess, the timing of some of the maintenance expenditures?

Well, we don't break that out. Obviously, some proportion of both. But what we focus on and normally, in the first quarter, we do have a little bit of a drop-off in that percentage as we catch up to some maintenance and we don't have as much in terms of vacation, so we'll have some more call-out activity. What we would direct people to look at is quarter-over-quarter, year-over-year, we think we're going to make progress. And if you look at our first quarter of last year, we'll make significant progress over the first quarter of last year and then hopefully build on that throughout the year. So if you look at the results that we achieved this year, in terms of the increase in margin percentage, we had about a 4% margin percentage increase year-over-year. And looking within the quarters, we made progress in most of those quarters. We expect to make more progress in most of those quarters next year, too.

Our next question comes from Daniel Burke from Johnson Rice. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: In terms of organic growth in NACO being a little slower through the first half of '12, I assume that's really, with a reference point, as the substantial additions you made in Q4. Just kind of curious if you can maybe elaborate on why you'd see that slow down? And maybe 1 factor as well, I think you said you added 170,000 or will add 170,000 horsepower in '13. What were the adds in '12?

Sure, Dan. So on the growth side of the equation, what we're seeing in the market right now is we had 145,000 for 2012 compared to 170,000 for 2013 and that suggests that what we see still is a relatively robust market going forward. However, in contrast, and you're right, the step back for 2013 is that we saw fourth quarter activity was particularly robust on the start cycle and we also saw a slowdown in the stop activity in a few of the plays that we don't expect to remain at those lower levels of stops as we see the migration away from the dry conventional into some more of the shale plays and liquids-prone plays. And so it's that combination that makes us pause the particularly robust nature of Q4, driven by both the start activity, as well as the slowdown in some of that stop activity. We think that some of the producers will slow down on some of the growth and some of the stops at the front half of this year. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: Brad, when you say slow down on some of the stops, you mean that stop activity will pick back up a little bit here in the first half of '13? Am I understanding that right?

Yes, that's exactly right. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: One question, almost a formality here, but the Venezuela payment, did it flow through discontinued ops this quarter?

It's a split. 16.8 did go through there and the 4.6, I think we did as a line item. I'm sorry, equity in earnings, they came in the equity account. [indiscernible] because one came in owned and one is part of a joint venture, they come in 2 different [indiscernible]. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: And so there was a roughly offsetting discontinued operations charge encountered in Q4 then?

We took a little bit more in Canada. That's what you're seeing in the [indiscernible]. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: And then maybe just the last one. Maybe I missed it, Bill, but did you give an effective tax rate number for '13?

I did. Effective tax rate looks like it's about 38% for the year.

Next question comes from Gary Farber from CL King. Gary Farber - CL King & Associates, Inc., Research Division: Just on your EBITDA margins, you've had a nice trend up since fiscal '11, but still below the peak. I was just wondering how you think about the progression once you get out of this year towards where you were a few years ago, just trying to reach that level.

Well, I'll say is we project to make continued progress on -- but we haven't given you targets in terms of we'll get back to the peak. I think if you look at the run rates we're exiting this year versus last year, we'll make more progress this year on that EBITDA percentage. Gary Farber - CL King & Associates, Inc., Research Division: And will it be a function of weighting towards your revenue growth or just other things on the process side that you alluded to?

Well, as we said, we're going to have better or increased revenues in our fabrication this year versus last year. So you'll see some revenue, but hopefully, what you'll see is more EBITDA and that will give you the percentage increase. So we expect a percentage increase or we expect to make some progress on our EBITDA percentage in 2013.

Your next question comes from Marc Silverberg from Barclays.

Just a few final EXLP questions if I may. You've added more than 80,000 horsepower at the MLP level in the back half of '12 organically. So I guess, given that stepped-up level of organic spending opportunity, does this change at all the potential size or timing of near-term drop-downs into the partnership?

Well, number one, we don't really talk about the timing of drop-downs, as you know, and the best indication for the way we are approaching the drop-downs is just to look at our past track record. But I also don't think that this changes -- this level of organic growth changes the way we are thinking about our approach in our drop-downs.

Okay, great. And then next, just trying to get a better understanding of the underlying movement in the net 50 -- 50,000 horsepower adds that you had at Partners. Could you give a breakout of the starts and stops, similar to the one you've given at Holdings. And also if you can, specific basins where you're seeing that, if they've changed any from previous comments?

Do you have a breakout of the -- we haven't broken it out similarly, but the magnitude is, really, they sit on top of each other. So proportionately, it's going to look very similar. So I think you can just use the same ratios for the breakout between what we see on the growth side versus what we saw in the stop activity for Partners as we had for Holdings. As far as where we're seeing the growth, it's not going to be surprising, it's across a few of the growth plays right now that you're hearing a lot about. A lot of growth out of the Eagle Ford, we got growth out of the Permian, Mississippi Lime, Avalon, Niobrara, are the top growth plays. It's not a limited list, but that's a good list of where we're seeing some of our growth.

And then for EXLP growth spending, I think you've previously mentioned about $100 million you're expecting for '12. Looks like that came in a bit higher, about 20%. Just curious, is any portion of the 50,000 horsepower adds accelerated timing shifts from '13 into '12 or was that just an outright increase in spending opportunity?

A little bit was pull-forward, but mostly, it was just increase in spending opportunity.

And then just last quick one regarding the pricing increase, could you comment a bit on customer acceptance you're seeing in the market so far?

Yes, sure. Customer acceptance has been good. I think that there's been an understanding of where we've been on pricing with our customers and the program has been effective, without any significant pushback from our customers.

We have no further questions at this time. I will now turn the call back to Brad Childers for closing remarks.

Everyone, we thank you for following both Exterran Holdings and Exterran Partners. Thanks for participating in the call this quarter and we'll talk to you again following our first quarter results. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.