Good morning. Welcome to the Exterran Holdings, Inc. and Exterran Partners, L.P. Third Quarter 2013 Earnings Conference Call. At this time, I'd like to inform you this conference is being recorded. [Operator Instructions] Turning to today's call, Exterran Holdings may be referred to as Exterran, or EXH, and Exterran Partners, as either Exterran Partners or EXLP. Because 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 in the Exterran Holdings' Annual Report on Form 10-K for the year ended December 31, 2012, and Exterran Partners' Annual Report on Form 10-K for the year ended December 31, 2012, 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 at exterran.com. Except as required by law, the companies expressly disclaim any intention or obligation to revise or update any forward-looking statements. And your host for this morning's call is Brad Childers, President and CEO. And I would now like to turn the call over to Mr. Childers. You may begin.

Thank you, operator. Good morning, everyone. With me today is Bill Austin, CFO of Exterran Holdings; and David Miller, CFO of Exterran Partners. As we usually do, we're going to provide a review of both Exterran Holdings and Exterran Partners in the call before we open it up for questions. I'm going to provide a review of the financial results, operating highlights and our priorities moving ahead and Bill will provide a detailed summary of Exterran Holdings' financial performance, while David will provide a detailed summary of Exterran Partners' financial performance. At Exterran Holdings, we achieved significant milestones in improving our performance in the third quarter. We generated our second highest level of EBITDA in 4 years. At about $156 million, it's 23% higher than the year-ago period. We achieved solid operating performance in cash flows and we reduced debt by $84 million at the Exterran Holdings level. In our fabrication business, overall bookings levels in 2013 have declined compared to prior year levels as we discussed in our last call. But we believe that our backlog has generally stabilized and that we will see improved booking levels going forward. There are several positive indicators that we see behind us. First, our third quarter bookings were higher than second quarter levels. Second, we've seen an increase in quote and bid activity late in the third quarter and at the front of this current fourth quarter. And we continue to have attractive opportunities in international. In our North America contract operations business, our market remains challenging, particularly in dry gas conventional plays due to relatively low natural gas prices. Reduced activity levels in these conventional plays continues to offset the increasing activity we're experiencing in oil and liquids-rich plays, which resulted in a slight reduction in our operating horsepower in the…

Thanks, Brad. With Brad's overview, I'll provide a brief summary of the results for Holdings. We'll discuss some of the segment results and then as Brad said, I'll give you some guidance for the fourth quarter. Quickly, we did generate EBITDA as adjusted of $156 million for the third quarter as compared to the $177 million in the second quarter and $126 million in the prior year period. I'll remind you that customer exercises of purchase options on a North American and international contract operations increased EBITDA as adjusted by that $18 million in the second quarter of 2013. We also reported diluted net income from continuing operations attributed to Exterran stockholders of some $0.34 per share in the third quarter. That's up from $0.31 per share in the second quarter and $0.02 per share in the prior year period. Now moving on to the segment results. Our North American contract operations revenue came in at $153 million in the third quarter. Gross margin was 53% in the quarter as compared to 57% in the second quarter of 2013, but 50% in the prior year period. Again, I'll remind you that a customer exercise of purchase options in the -- on 2 processing plants during the second quarter of 2013 increased our revenue by $6.5 million and increased our gross margin by -- percentage by some 2%. In addition, second quarter results includes revenue of some $2.3 million from the operations of those plants. Now in the fourth quarter, we expect revenues, again, to be in the mid-$150 million level, but gross margin percentages to be somewhat up into the 54% to 55% range. Maintenance capital came in at $21 million in North America during the third quarter as compared to $18 million in the second quarter of 2013 and…

Thanks, Bill. In the third quarter of 2013, Exterran Partners had a good overall performance. Our financial results, however, declined as compared to the second quarter 2013 period, which benefited from a customer's exercise of purchase options on 2 natural gas processing plants. In addition, we performed more service activities in the third quarter than in the second quarter of 2013, and we believe we will return to lower service levels in the fourth quarter of 2013. As a reminder, the sale of the 2 natural gas processing plants increased our revenue by $6.5 million with no incremental costs. EBITDA, as further adjusted, by $13.3 million and our distributable cash flow by $6.5 million in the second quarter. In addition, the operations of these plants generated revenue of $2.3 million in the second quarter of 2013 that did not reoccur in the third quarter. For the quarter, Exterran Partners generated EBITDA, as further adjusted, of $55.7 million as compared to $71.1 million in the second quarter of 2013 and $46.2 million in the prior year period. Distributable cash flow was $33.3 million in the third quarter of 2013 as compared to $44.7 million in the second quarter of 2013 and $29.5 million in the third quarter of 2012. Maintenance capital expenditures in the third quarter were $12.7 million, which is expected to be the highest level for the year and compares to $9.6 million in the second quarter and $10.3 million in the prior year period. Distributable cash flow coverage in the third quarter was 1.17x. Excluding the benefit of the cost cap payment, our distributable cash flow coverage decreased to 0.91x in the third quarter of 2013 from 1.46x in the second quarter and 0.98x in the prior year period. Net income per limited partner unit was $0.16 in…

[Operator Instructions] And our first question is from Mike Urban from Deutsche Bank.

This is actually Jason Bandel calling in for Mike who is traveling today. Are there any demobilization costs left in the U.S. contract business for Q4, given that you're guiding toward improving margins from these levels? And what's kind of the main driver behind that improvement?

Yes, Jason, this is Bill. Yes, there's a little bit left. We've -- as opposed to what we had said, it's come more in smaller increments quarter-by-quarter. So there's still a -- some left for the fourth quarter. But to be perfectly honest, I got tired of talking about it and we just execute on it, and we'll have a little bit in the fourth quarter and our margins will go up despite that.

Understood, that's helpful. Now in terms of the pace of customers' stop activity in conventional fields, is that slowing down? Because I know you said you have a decline of 74,000 horsepower in Q2 and now 62,000 horsepower here. Did that trend continue? What kind of helped that to stabilize at what point?

Sure, this is Brad. I'll take that one, Jason. Look, It was certainly higher in Q3 and year-to-date, both compared to prior year periods. And so that caught us -- it's at a higher level, candidly, than we expected. We are seeing it taper off a little bit, but it's been too short of a test period to get carried away with that. But that is part of the reason why we expect that we are going to be able to see more growth in the liquids-rich and shale plays that will not be as hardly hit by offsets coming out of the conventional dry gas plays in Q4.

Okay. And then the last one for me here. You touched on it a little bit in your prepared remarks. And I know we saw it recently in a presentation in the addendum section. You were highlighting the value of the units. And a lot of the investors we talk to believe your GP interest in MLP isn't getting any value. So how do you go about unlocking that value? And are you considering adopting a model kind of similar to -- like a Williams, as an example?

Well, I can't comment on the Williams example or direction forward. That would be not something we'd be willing to make any comments around as you would expect. And right now, our main focus is to ensure that we're driving operational improvements and improvement in the cash flow that can be seen in all of our businesses, with a focus on what that cash flow value will mean to the GP. So I think that's the focus that we have on the business right now.

Let me add one thing, Jason. You are starting to see quarter-by-quarter higher GP revenues, and we will be talking more and more about that, so you'll see higher GP revenues in the fourth quarter versus the third quarter, just like you've seen in the third quarter versus the second quarter. So we are starting to build some view and some look at those kind of annualized revenues.

Our next question is from Blake Hutchinson from Howard Weil.

Guys, I was intrigued by the comment Brad that, at this point, all of your horsepower is available for a potential drop-down or nearby all of your horsepower. Is that meant to imply that if you so -- were to choose that you could kind of clean up the relationship here in one transaction? Or would you caution against that and say the pace would kind of be more similar to what we've seen historically?

Sure. The comment was made because, in the past, the contract conversion process has been a gating item in the timing of our drop-downs. And what we're telling you now is that, that is no longer a gating item for future drop-down transactions. And so the timing of the transactions will be dictated by our own internal strategy and market timing. And that, that item is removed. It's not to speak at all to the timing of the drop-downs or the structure of what any future drop-downs would look like. It's just that, in the past, we've tracked that and reported it out and we wish to kind of close down that process because it's all generally available for drop-down now.

But you wouldn't caution us to say that a transaction that might involve everything at this point would be too daunting to take on necessarily?

I just really don't want to comment on what a future transaction should look like or what the timing of it could look like, Blake.

Sure, that's fair. And let me just switch over then to the fabrication margin. Certainly, a highlight for the quarter, and this may be for Brad or Bill. Can you just take us to -- kind of explain the moving parts between 3Q, which is obviously, a superlative quarter probably beyond the range of which you would have even anticipated. Is that just more kind of the base U.S. processing business driving that? Is that kind of late major project installation and just a really good quarter overall? And then we transition 4Q into kind of more international mix that weighs that down? Can we just get kind of a little more kind of at least qualitative explanation between the 2 Qs and the mix issues?

Blake, this is Bill. Let me try. That's a long question with lots of parts. I tried to say in the remarks that we had a great quarter for our processing and treating, and that includes our production equipment. So we did have some good numbers there. As you look at the mix for the fourth quarter, we'll probably have a little different mix in terms of some of the install projects that will complete versus what we've had in this quarter. So all in all, a great quarter. We did close out some contracts, but I tried to guide to something that's more in line with the product mix that we see coming in the fourth quarter.

Next question is from Sharon Lui from Wells Fargo.

I guess in terms of your guidance for CapEx at the MLP level, if you could just talk about, I guess, the reductions. Is that deferment of spending into 2014?

Yes, I think so. We lowered our guidance for growth from $125 million to $150 million, down to $100 million and $125 million for the year. And it's just sort of a timing issue where some of those stuff is moving into Q -- 2014.

Okay. And the same thing for the maintenance CapEx spending?

Yes, that was only a $5 million reduction or so. And we had a little bit lower than we expected maintenance activity in the first part of the year. And we think we'll have a pretty normalized maintenance activity in Q4 and so comes out to $40 million to $45 million versus $45 million to $50 million.

Okay. And I guess, with regards to future drop-downs, is the intention to just drop down operating horsepower to the MLP?

In past transactions, we have dropped down a mix of horsepower. And we have also dropped down in other transactions where it was all operating horsepower. And I think that for future drop-downs, and we can only look to the past, and the discussion with -- between Exterran Holdings and Exterran Partners as to what assets are required to be dropped down for that operating horsepower and for that business to be valued at a reasonable price based upon a going enterprise -- going concern valuation. And so we'll look at a mix between whether it needs to be all operating or whether it -- there's sufficient idle capacity that's already at EXLP to support it. And that's the way the analysis has worked in past transactions also.

Okay. And I guess just the last question for me. In terms of conversions that you did during the quarter, can you maybe just talk about, I guess, what contributed to the success? Because I think only 84% was converted. Was it just one big contract that was tied to these horsepower?

No, there are a few factors we look at. And we have been working on to come to the position we're in today. One is the conversion exercise itself. Second is the assessment of the contract, which may or may not require conversion for some of the contracts depending upon how structured. As well as, finally, an assessment of how much non-qualifying income could be borne in a drop-down if we were to proceed with a contract that did not necessarily, although it's not clear, did not necessarily or clearly generate qualifying income. And it's the combination of those 3 factors that pushed us over the hurdle for the position we are expressing today.

Our next question is from James Bardowski from Sidoti. James A. Bardowski - Sidoti & Company, LLC: Just had a brief question, a couple of others were already answered. But regarding the fabrication segment, I know you mentioned that you witnessed some project delays on the quarter and expect to be pushed out. How severe are any of the delays on this front?

From a gross margin impact perspective, we don't expect the delays to be severe. These are project completions. So in some cases, a substantial amount of the percentage of completion for the equipment side has flown through. And what remains are some installation revenues to be realized on closure of those contracts. So I would not expect it to have a significant impact on future gross margin period. James A. Bardowski - Sidoti & Company, LLC: Okay. Okay, excellent. And I guess also one more brief question. Regarding the minority interest on the income statement, what specifically caused the decrease sequentially from the last quarter?

James, you're asking a tough accounting question. But I think, and somebody's going to correct me here, but remember in the second quarter, we had the sale of those plants in the partnership and that increased the income in the partnership in the minority interest increase to us, and we didn't have that this quarter. And then looking around, I think that's -- I could put a number to it, maybe, in a follow-up call, but that's generally what happened.

Last question is from Peter Van Roden from Spitefire Capital.

I just have a quick question on how you guys think about growth capital versus the existing fleet. And so if you do the math, utilization kind of ticked down quarter-over-quarter, but you're still spending money on the gross side. How do you think about trying to get older units back to work versus spending money on newer units?

Sure, 2 dynamics that are really the driver of that. One, where we're adding horsepower with new CapEx, it tends to be in categories of equipment that are very highly utilized in our fleet already. That is, without the addition, we would not have the right equipment to work via horsepower category or via application. The second factor that we see is that there's a geographic shift in the infrastructure and usage of our equipment today, where the declines that we are contending with come out of dry gas plays that demand both different equipment and are geographically differently situated and with different customers than we see in the growth areas. And so these 2 dynamics are really the driver behind why we are continuing to see good growth in our business in the growth plays but are facing contraction in the dry gas plays. So that's the way to think about that net impact that we see in the business.

Okay. And as you guys think about price, price was down a little bit this quarter. Relating that from trying -- what was -- is that just stuff that was on the contract for a while coming off? Or what was going on there?

Yes, Peter, this is Bill. I think some of the price issue, again, goes back to some of those onetime effects in the second quarter. But I -- let me make sure. But I'm 90% sure that there was a onetime effect in the second quarter, which lower -- because those plants were so lower, the -- what you see is the price per horsepower.

Yes. And just can you guys walk me through, so the natural gas processing plants or the processing plants, they're running through both Partners and Holdings?

Well, the 2 that we sold were owned by Partners. And that's -- runs through Partners, and it comes to us through the minority interest. But when we report some of the horsepower stats, we report them on a consolidated basis. Now the other plant, which is the Reinecke plant, got removed and you don't see that in -- and that was owned by Holdings. You don't see that anymore, period. So.

[Operator Instructions] Our next question is from Majid Khan from Tourbillon Capital.

There's a lot of movement on the international side, both in terms of price and cost, not just a mix thing. I was just -- for the horsepower, I was just wondering if you could maybe comment on that a little bit.

Help me, again, Majid, this is Bill, with that question.

It seems like both price per horsepower in international operations and costs were up substantially. I think like 12% year-over-year on price and 6% on the cost per horsepower?

Yes. And the year-over-year, I think some of it -- and I have to break it down, some of it, you do have some inflation that comes certainly through our Argentina operations. And that -- while we're getting the same kinds of margins there because you've got inflation both on the revenue and the costs, you see some of that. But to be perfectly honest, I'll have to take a harder look to see if I can break it down any better than that.

Got it, got it. And I guess, again, when I look back on what you guys have done over the last couple of years, your operating performance has been great. The fabrication backlog recently, per your comments, is improving. The leverage ratios are looking pretty good. Your maintenance CapEx looks to be stable. You're collecting cash from Venezuela. The SG&A support for EXLP is closer to being gone. And it looks like the contracts at EXH for drop-downs look to be clearer and you're in the high splits. I guess I think you know where I'm going with this. I'm wondering if you...

Well, you're doing -- Majid, you're doing a great sales talk for us. We love it.

Well, one of the perils of doing well is that people expect more. So I'm wondering, could you -- I mean, given you're the only publicly traded GP that doesn't pay a dividend, how are you guys thinking about the path to eventually paying a dividend in the future?

Well, I'll go first and Bill will top me up. But look, we're evaluating all of the opportunities that we have to create value for our investors. And the past practice, we've had plenty of opportunities and competing demands to utilize the cash flow that the business was generating by investing in the business. And we're going to continue to evaluate all of the opportunities we have, including investing in the business and investing in other businesses and any other competing uses for that cash that would maximize the value available to our stockholders. And I think that's about as much as we can really say about how we think about that cash going forward. Bill, anything you want to add to that?

Majid, we're just happy you asked the question. We've got financial flexibility to -- and -- but Brad's right. That's about all we can say at this juncture.

And at this time, we have no further questions.

Okay, great. Everyone, we appreciate your interest in Exterran Holdings and Exterran Partners. And we look forward to talking to you on our fourth quarter conference call. Thanks very much.