Good morning. Welcome to Exterran Holdings Incorporated and Exterran Partners L.P. Third Quarter 2014 Earnings Conference Call. At this time, I'd like to inform you, this conference is being recorded. [Operator Instructions] Earlier today, Exterran Holdings and Exterran Partners released their financial results for the third quarter of 2014. If you have not received a copy, you can find the information on the company's website at www.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 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 releases issued this morning by Exterran Holdings and Exterran Partners, the companies' 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 releases as well as in the Exterran Holdings annual report on Form 10-K for the year ended December 31, 2013, and Exterran Partners annual report on Form 10-K for the year ended December 31, 2013, 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 www.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.

Great. Thank you, operator, and good morning, everyone. With me today is Jon Biro, CFO of Exterran Holdings; and David Miller, CFO of Exterran Partners. As we usually do, we'll provide a review of both Exterran Holdings and Exterran Partners before we open up the call for questions. I'm pleased with the recent addition of John to the Exterran management team. John brings extensive experience as a public company financial executive, and he's well positioned to help lead our efforts to drive performance improvements, growth and shareholder value. As we begin today, let me first share some thoughts about our view of the impact of recent developments in the macro market and concerns over oil price levels. From an overall market perspective, we remain optimistic about the long-term outlook for our businesses, supported by the expectation for increasing oil and natural gas production levels over the coming years. A potential headwind, however, has been posed by the recent decline in oil prices, which could have a moderating impact on industry activity levels. Although this heightened uncertainty, we have not yet seen an impact to our business. Looking at our business today, business development opportunity and activity levels remain high. We've not seen changes in customer spending or order levels, and recent conversations with customers have similarly indicated no change in planned activities, though many are still early in the planning process for 2015. All of that said, we believe that the market has put us on notice to be closely attentive to activity levels as we know changes in our industry can occur rapidly. And to that end, we will be staying close to our customers, and we will be proactive in managing production, component orders and costs in the event of a change in customer or market activity. Now…

Thanks, Brad. First, let me say I'm pleased to join Exterran. I look forward to working with Brad, David and the rest of the Exterran team as we continue the companies' strong financial discipline and focus on delivering value to our investors. I will now provide a summary of the results and guidance for Exterran Holdings. Exterran Holdings generated EBITDA as adjusted of $171 million for the third quarter compared to $161 million in the second quarter. We also reported diluted net income from continuing operations attributed to Exterran common shareholders, excluding items of $0.25 per share in the third quarter. That compared with a net loss of $0.07 per share in the second quarter. While the $0.25 per share is a miss despite our strong operating performance, we had currency losses during the third quarter, which were included in other income and expense on our income statement. The impact of these losses was about a $0.05 per share reduction to our EPS excluding items and included currency losses related to repatriating cash from Argentina. These losses were partially offset by a lower tax rate in the quarter. Turning to segment results. Our North American contract operations revenue came in at $191 million in the third quarter, up 5% compared to $182 million in the second quarter due to organic growth, our second MidCon acquisition that closed in August 2014, and a full quarter contribution from the first MidCon acquisition that closed in April 2014. We achieved organic growth of 56,000 operating horsepower in the quarter, an increase of 1.6% over June 30, 2014, operating horsepower levels. In addition, the August MidCon acquisition added an incremental 110,000 operating horsepower. Gross margin was 57% in the quarter. For the fourth quarter in North America contract operations, we expect revenue to increase…

Thanks, John. Exterran Partners had another solid quarter in Q3. Third quarter ending operating horsepower increased sequentially by 157,000 to approximately 2.95 million as a result of the August 2014 MidCon acquisition and significant organic horsepower growth of 47,000. Turning to financial results. Exterran Partners EBITDA as adjusted was up 10% to $75.1 million as compared to $68.6 million in the second quarter of 2014. This increase was driven by the August 2014 MidCon acquisition, a full quarter contribution from the April 2014 MidCon acquisition and organic growth. Distributable cash flow was $45.7 million in the third quarter of 2014, up 8%, compared to $42.4 million in the second quarter of 2014. Maintenance capital expenditures were $13.4 million in the third quarter as compared to $11.9 million in the second quarter. Distributable cash flow coverage in the third quarter was 1.31x as compared to 1.26x in the second quarter. Excluding the benefit of the cost cap payments, our distributable cash flow coverage was a solid 1.24x in the third quarter of 2014. Cost cap reimbursements from EXH to EXLP were $2.7 million related to the SG&A cost cap and 0 related to the operating cost cap in the third quarter of 2014 compared to $1.4 million of total cost cap reimbursements in Q2 2014. With a solid level of distributable cash flow coverage, we remain on track to eliminate the need for cost cap reimbursements by the end of 2014. Revenue for the third quarter was $153.2 million as compared to $145.7 million in the second quarter. Gross margin improved to 60% in the third quarter from 59% in the second quarter. Cost of sales per average operating horsepower was $21.50 in the third quarter, down 3% compared to the second quarter of 2014 and down 7% from prior year…

[Operator Instructions] The first question is from Mike Urban with Deutsche Bank.

In the North American compression business, solid margin there, I guess, roughly flat, maybe down just a bit versus Q2. Were there any disruptions there? Any cause? The only reason I ask of it was a very good performance. One, you did have more contribution from the higher-margin MidCon assets. And one of the things you talked about previously was seeing more of the benefits from some of the previous initiatives service delivery model and some of the other efficiency efforts that you're working on becoming more evident in the second half. So one, wondering again if there any offsets? Are there any delays? Unexpected costs? And 2, should we expect to see that margin impact a little bit more going forward?

Sure, Mike. It's Brad. Overall, the operation is performing really well. So the financial performance that is -- what we're doing on a cost basis is very solid in the core operation in the business. We did see a little bit of noise with this level of start activity, our make-ready expense in the quarter and our freight expense in the quarter, some of which is not reimbursed, a good chunk of which is -- was also a little bit higher in the quarter and that's dilutive to gross margin percentage when it comes out. So when you look at the underlying cost in the business performing very well -- but we did see a little more noise in the quarter from the make-ready and freight. To the broader question, we're continuing to work and squeeze really hard to build more efficiency into our operations. What I've tried to communicate consistently is that this is now really hard work. We are down into the field at multiple levels to drive the next improvement, and we're going to continue to squeeze. I do think we have more opportunity ahead. It's incremental. I have tried to emphasize that each quarter.

That's great. And then as you look at the overall structure of the business, as you just noted in the underlying operating performance coming along pretty nicely, so maybe a little bit more opportunity to be -- look a little bit perspectively, specifically. You talked a bit about in the past about the potential to be able to drop at least some of the aftermarket business in the MLP. I wonder if you just had any updated views on that. And then also the thoughts on the fabrication business longer-term. You've done a great job in restructuring that and getting the profitability up there. It would seem like that maybe an opportune time to do something potentially monetize that business?

Sure so 2 questions. I think, Mike, in that, one is on the dropdown strategy. I will say we do remain fully committed to getting that business into EXLP over time. So no change in the ultimate strategy to get that business drop down. As you know, we don't talk about timing of particular drop downs. And then second on the fabrication business, let me just say that fabrication business has been a contributor to our overall business strategy to date. It is a contributor in allowing us to both control our destiny on the new build side, control our costs. And it is contributing nicely to our EBITDA today. And so we've seen that as an important component to our overall operation.

And then finally, just one quick last one. Was the -- with the express project that you announced, was that -- that was to be announced right at the end of the third quarter. Was that in the backlog for Q3?

It is in the backlog for Q3.

The next question is from Jim Rollyson with Raymond James. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Brad, I know you don't give drop-down timing guidance, but would it be logical to assume for partners, given that you had 2 big external M&A acquisitions closed plus the big organic growth that it's -- you're probably not likely to do something in this calendar year? Is that a logical assumption?

Boy -- look, Jim, I just can't really address the question. Whether I say we're not doing, or doing or give any information for it or not, it's not a road we're going to go down. I do think that what we said in the past, the best guidance is to look at our track record and start to extrapolate that. It's been an effective strategy for us. Unless we have other things going on, which is you pointed out, we did with a couple of M&A transactions. But that's the most guidance we can give. James M. Rollyson - Raymond James & Associates, Inc., Research Division: That's okay. I tried. On the -- this year, you had a very strong organic build rate, pretty strong demand it sounds like out there. Can you maybe give us a little bit of color on what you're seeing? As we head into '15, do you see customer demand to continue to build organically? And when you think about the balance sheet, how high are you willing to go? It's like -- in other words, should we see -- expect to see maybe similar organic growth next year versus what we've seen this year?

Well, sure. When we look at the business for '15 compared to business for '14, we have not seen any let up in the pace of activity, order activity, from our customers at all. Now the current market is one everybody is sorting through. And I tried to address it in my call that we really do have a caution as to the future impact. Now our business is a lifetime business. We typically see some impact on new activity on a delayed basis. Overall in contract compressions, something like 6, maybe even 9 months. So there's a lot of uncertainty as to where our customers are going to focus on in 2015. But the communications from our customers to date in conversations, the order activity we've seen, the opportunities that we've seen shows that we have, right now, a similar level of market activity in 2015 as we've seen in 2014. James M. Rollyson - Raymond James & Associates, Inc., Research Division: That's very helpful. And last one just on partner's point of view. As the cost caps go away this year, you guys have obviously built up coverage to the pretty comfortable level planning for that. Any thoughts on the longer-term horizon? Maybe where you think of our target for coverage for partners?

Yes, with -- I'll give my view, and David can top me up, if he needs to. But overall, to be really comfortable in a stable business subject to growth expectations in market, uncertainty as well as what we're managing internally, right around 1.1 or a little higher would be a comfortable place ultimately to get to somewhere in that 1.1 to 1.2 range. David?

[Operator Instructions] The next question is from Blake Hutchinson with Howard Weil.

Brad, I just wanted to touch on some of your opening commentary. I thought it's interesting as you laid out kind of the organic and even nonorganic build for the year, that although we typically associate with you very gassy type business profile, that the reality is a lot of it is touched to places like the Eagle Ford and Permian, and much more oily than you've been historically. If we look at kind of your average operating horsepower, can you help us understand what might be still tied to the kind of old dry gas environment or even unconventional gas versus what realistically your oil exposure maybe at this point?

Yes, I can. And as you asked the question, it's not totally clear to me whether we're looking for the sensitivity to oil or to gas, but let me just tell you what I can about overall horsepower position. We think we have about 50% of the horsepower to date deployed on more rich liquids prone associated gas and/or gas lift type applications that are very tied to liquids production, and about half tied to dry gas production. And within that dry gas production, however, there's a fair amount that's also on shale plays that are very economic at lower gas price levels or much more stable in offshore. So it's about 50-50, but even with the 50% of dry gas exposure, a reasonable amount of it may be as much as 20% or so is still very stable horsepower on very cost-effective shale gas plays.

That's exactly what I was looking for. I'm glad you're able to gather that through my poorly-worded question. And then the extension of that, if we think about the profile of the business where you are in -- at the wellhead versus the gathering line, does your more liquids-prone exposure actually argue -- that it's more for greater stability and utilization, is it closer to or deeper into the gathering system today than perhaps dry wellhead gas equipment was, generations ago were it's very sensitive to gas movement?

Yes, your thesis is right on an overall basis, but I am not going to be able to quantify that one, Blake. But you're right in positing that the move to a more shale play activity, which we've certainly seen, has moved us further from dry gas wellhead applications, which made -- which in today's market I would view as more volatile. So your thesis is right, it has moved. And I do believe that we have a more stable profile in our overall horsepower position to date than we had previously.

The next question is from Daniel Burke with Johnson Rice. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: I wanted to ask one on international contract ops. Over the last 6-or-so quarters, it seems like we've seen the average operating horsepower there to continue to drift lower. We've seen revenue per horsepower coming up as an offset. I was wondering if you could, first of all, comment on what that trend is telling us. And then secondly, you mentioned, Brad, the revenue backlog on a forward basis around $60 million. Can you update us on -- any comments on the extent to which you think that backlog might be subsumed by some drift in the existing base lower?

Yes, Daniel totally fair question. The business in Latin America tends to be very lumpy, and what I think you've seen is we had some fairly significant horsepower stops, particularly out of Brazil in '12. And then it was stable. And then we've seen -- we have one project, actually, we had 2 projects that we had -- we terminated this year earlier than expected. It wasn't an early termination on the contract, but it did terminate earlier than expected, and so that's provided some of that downward momentum in horsepower. And what we expect looking forward right now is candidly, a pretty good market in booking but fairly normal activity, which could include some pluses and some minuses and some drift as you described in the overall horsepower level. Until we see an uptick, which we expect in the back half of '15 as some of these large projects get started up in the second half of 2015. What I really like about the business is that it's a stable cash flow generating machine even if the horsepower has drifted a little bit, you've seen that. But we have a nice backlog of large installations that we're going to start up in 2015, and we have yet more projects that we're competing for very aggressively that we expect to land this year or early next year to continue to build that business back up. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: That's helpful. And then another one, again, just jumping around here. On aftermarket, it doesn't capture a lot of scrutiny, but I thought I heard you all reference lower maintenance activity in North America. I didn't hear a reason or a thought on what would drive that trend.

Yes, sometimes the market just gives us that. And in this quarter, what we saw and we did not expect to either candidly was incremental lower activity on the maintenance side out of North America. Some of it we know is associated with the displacement of our activity as we are both selling and growing a contract compression. Some of the same resources are pulled between those 2 businesses, so we think there's a touch of it there. But overall, what we'd say is that some of our customers were less active in the quarter than we expected. I wouldn't make much more of it beyond that. Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: Okay. So not a signal of what would happen going forward. One last one for me just on the -- on guidance. The share count -- 1.8 million shares to be added during Q4. What was the share count as of the end of September?

Hey, Daniel, we may not have that handy. If it's okay, can we follow up on that after the call? Daniel J. Burke - Johnson Rice & Company, L.L.C., Research Division: Yes, not a problem.

The next question is from Majid Khan with Tourbillon Capital.

I have a quick question for you, but let me bother Brad for a little bit. Brad, I think we all appreciate how conservatively you run the business, but clearly, some of your comments this morning have got people very worried about the future potential of the business. So I was just wondering, would you mind quantifying what your exposure to oil is through gas lift? And my understanding is that a lot of the gas production in the U.S. is going -- more production growth in the U.S. is very linked to LNG demand in the future, which works around $70 on brand. So it doesn't sound like we're going to see a lull on that, so given that, like how concerned are you about oil activity levels and offset by growing gas production in the shale plays?

Okay, interesting. Majid, I don't think there's an overly conservative approach. I do think that we have, from both the analyst community and from the producers right now who watch both oil price, gas price and the future impacts. We have noticed that 2015 has a lot more uncertainty in it than we've had to deal with recently, and we just want to be heads up in how we talk about that. But if I step back and think about your question, I'll tell you that the data's easy on one point, we have about 16% of our units on a horsepower basis on gas lift right now. But we have more of our units on the gathering side compressing associated gas that's driven by a lot of oil activity, and we're seeing that in the marketplace today. It feels very detached from it, disassociated from natural gas price to the extent it's producing liquids rich or associated gas applications. So there's that part of it that I answered your question very directly. But stepping back, I can give you a broader perspective and maybe some context around the way we're thinking about the business today. On the first side, we think the secular trends for our business are excellent on an intermediate and longer-term basis. We totally see and agree that the demand for natural gas is going to continue to increase over time as we look at both export in the form of LNG as well as pipeline to Mexico. We see increasing use for PowerGen, we see increasing growth in transportation and we're very bullish on what that's going to mean on an intermediate and longer-term basis. So that part of the business absolutely solid on. Secondly, on the strategic side, we think we're doing a lot to the business, to improve its core operations profitability withstand any market as well as to grow in the markets that we expect to see ahead. But from a cyclical basis, we could have a very challenging oil price and potentially, even a lower gas price in a short-term basis to deal with. And we just want to be real clear about that. What we've also being clear about on the call, on a close here is that, to date, we have not seen a change in activity levels or in customer sentiment around that. But we also know we're a lifetime business, and wanted to make sure that people understood that.

Got it. Just 2 quick follow-ups. My conversations with your customers sort of indicate, one, that in the event oil or associated gas activity slows down, gas prices might actually move up, which is probably not so bad for dry or wet gas production. Along with that, it seems like a lot of the liquid-rich plays, the cost curves are such that people aren't really worried about cutting production at these prices. Certainly, the growth will slow down, but they don't expect activity levels to slow down much especially, given the high decline rates in those wells. So I was just wondering if you've had those conversations with your customers at that level, and given your exposures to some of the shale plays, will there be some offsetting kind of -- I guess, offsetting business fundamentals as if oil prices move down, let's say, even further from here.

Yes, look -- fair enough, there's a part of this that's really good speculation by the marketplace. I think other people are probably in a better position to do that than me. What we look at is what is the appropriate response to what the market may offer, including feedback from our customers. And the feedback has been pretty consistent that at $80 a barrel level, people did not expect a lot of change where a lot of the production comes out of a breakeven that's closer to $60. But at $70, people are going to start to get concerned at the expression that we've seen, and if they're going to their planning exercise. And dealing with the same uncertainty in this marketplace that felt like fair information for us to think about.

Fair enough. Just one last question for you, Brad, before I have one for John. But obviously, your stock is way off the highs. And I understand you have your own opinion on where to go to realize the value on some of the parts basis. Judging by your comments on fabrication, I was wondering -- I looked at your CapEx guidance and it seems like organic CapEx or maintenance CapEx might be slowing in the coming years. How are you feeling about increasing the dividend going forward, buying back stock? You've sort of expressed your opinion on the fabrication piece, but I'm just wondering what are you thinking about closing the gap between the sum of the parts value that is expressed in your long-term excitement about the business versus where the stock is trading in the market?

Yes, fair point. Look, on the dividend itself, the amount will be set by the Board of Directors, taking into consideration where we are in the marketplace, free cash flow and competing uses for capital going forward. And so that's the approach we have on the dividend. It's one that we will revisit when those factors are warranted. For the overall business right now, I'll point out we are consuming a bit of capital, and we've seen some investment opportunities that we want to take advantage of. And so we've seen this in the cycle pausing today's cautionary point on oil price and maybe gas going forward. We've seen good opportunities for growth in the market place we want to take advantage of. So that's the way I think about the cash flow and the free cash flow right now. As far as the overall value in the company, I'll just remind -- reiterate, that we are fully determined to get the full value of our operations into our stock price over time. We have various methods that we can look at doing it, but it's not something that is a part of our quarterly discussion right now or anything that we want to say anything about.

Fair enough. Just a quick question for -- I was just wondering not having had the benefit, I think, for the market to talk to you, why do you find this opportunity exciting at Exterran? Why did you come over?

Good industry, good people, see the opportunity. I think this is a place where we can create value for our investors, so I'm looking forward to contributing and working with the team here.

And we have no further questions at this time. I'd like to turn the call back to Brad Childers for closing remarks.

Okay. Everybody, thanks very much for your interest in Exterran Holdings and Exterran Partners. We look forward to talking to you again next quarter. Thanks.

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