Good morning ladies and gentlemen and thank you for standing by, and welcome to the USA Compression Partners Third Quarter Earnings Conference Call. During today's presentation all parties will be in a listen only mode, and following the presentation the conference will be open for questions, (Operator Instructions). This conference is being recorded today November 7th 2013. I would now like to turn the call over to Greg Holloway, please go ahead, sir.

Well good morning everyone and thanks for joining us. This morning we released our financial results for the quarter ended September 30, 2013. You can find our earnings release in the Investor Relation section of our website at www.usacpartners.com. During this call, management will discuss certain non-GAAP measures. You will find definitions and a reconciliation of these measures to GAAP measures in the summary pages of the earnings release and on our website. As a reminder our conference call will include certain forward looking statements, these statements include projections and expectations of our performance and represent USA Compression's current beliefs. Actual results may differ materially. Please review the statements of risk included in this morning's release and in our latest filings with the SEC. Please note that the information provided on this call speaks only for management's views as of today November 7 and may no longer be accurate at the time of a replay. I'll now turn the call over to Eric Long, President and Chief Executive Officer of USA Compression.

Thank you, Greg and good morning to everyone. Looks like we have a good turnout today. Also with me on the call is Jody Tusa, Vice President and Chief Financial Officer as well as our treasurer and Matt Liuzzi, our Senior VP of Strategic Development. Pleased to report that this morning we record levels of revenue, adjusted EBITDA and adjusted DCF for the third quarter of 2013. Year over year our revenue increased 24%, adjusted EBITDA increased 19% and adjusted distributable cash flow increased 30%. We're pleased that we successfully completed the acquisition of a $182 million of compression assets owned by S&R Compression on August 30th of 2013 and we’ve hired the skilled employees operating this compression fleet. As we discussed at the time of the announcement these assets are primarily used in crude oil production, gas lift operations. As we have become more familiar with these assets and the gas lift market over the last four months since the June 30 effective date, we have continued to be excited about the opportunity we're seeing in this market and are very-very pleased with the performance of the acquired assets thus far. To reiterate what we said back in August this transaction is immediately accretive to distributable cash flow. Due in part to the performance of the S&R assets we have increased our cash distributions from $0.44 per unit in the second quarter of 2013 to $0.46 in the third quarter of 2013. The fourth quarter of 2013 will represent the first full quarter of operations for the S&R assets and the USA results. We believe we will continue to see significant growth in our revenues and adjusted EBITDA as a result of the capital expenditures invested in new compression units in 2013, committed for the first half of 2014…

Thank you Eric and good morning everyone. As Eric mentioned USA Compression reported record revenue, adjusted EBITDA and adjusted DCF for the third quarter of 2013, and we continue to generate improvement in our gross operating margins. Revenue in the third quarter of 2013 increased 24% compared to the third quarter of 2012, primarily driven by an increase in USA’s contract operations revenues, as a result of adding revenue generating horsepower and the addition of the revenue generated by the S&R Compression assets for the month of September. Contract operations revenue in the third quarter of 2013 increased 25% to $37.9 million as compared to $30.4 million in the third quarter of 2012. The year-over-year increase in our contract operations revenue was driven almost exclusively by the growth in our revenue generating horsepower including fleet growth due to the S&R transaction. Average revenue generating horsepower increased 17% to 919,000 in the third quarter of 2013 as compared to 789,000 for the same period of the prior year, again primarily due to growth in our core midstream, compression business along with the acquisition of the S&R Compression assets. Average revenue for revenue generating horsepower per month increased 6% to $14.13 for the third quarter of 2013 as compared to $13.33 for the third quarter of 2012 Adjusted EBITDA increased 19% to $20.2 million in the third quarter of 2013 as compared to $16.9 million for the third quarter of 2012. Adjusted distributable cash flow in the third quarter of 2013 was $13.7 million as compared to $10.5 million for the same period last year, an increase of 30%. Gross operating margin increased 25% to $26.4 million as compared to $21.2 million a year ago. The gross operating margin percentage increased from 68.5% in the third quarter of 2012 to 68.9% in…

(Operator Instructions). And our first question does come from the line of TJ Schultz with RBC Capital Markets.

Maybe just on the S&R business if you can talk about your comfort levels still there with kind of your term profile that you had mentioned before or I think it was maybe four or nine times multiple at June 30, kind of trending into this 7 to 8 range just as you look at the assets if you are still comfortable with those expectation?

TJ you’ve got Eric here and I am going to -- obviously Jody and Matt chime in. The business is actually performing better than what we had modeled and pro formed it, so we're obviously going to be very, very comfortable pulling in the acquisition multiple significant, consistent with what we articulated before.

Yes, just to supplement that TJ we are in fact seeing very strong growth out of the business. And as Eric mentioned looking at the deploying horse power in advance of our initial modeling. So high level of comfort in terms of their business trends.

And Eric you mentioned kind of growing through new business with existing customers both in existing geographies and new geographies and also looking to kind of increase your customer base. Just if you could provide maybe a little bit more color on where the best leverage is near term? Or where you think are the best options for growth?

We continue to be consistent with the peer group see growth in the oily plays; we have expanded significantly into West Texas with new customer mix. We have moved significantly into what we're calling station services which are complete turnkey full blown compressor station with dehydration, separation manned operations in the Mid-Continent region and we’re deploying similar or have the similar opportunities in other geographic regions that we operate the Northeast as an example. We're seeing strong growth in the Marcellus, we’re continuing to see significant growth in the Utica, we’re seeing growth in the Eagle Ford, we’re seeing very significant growth in the S&R backyard over in the Western Oklahoma, Texas Panhandle area. Some of the dry gas basin surprisingly we’re seeing some tick up in demand as well. The Fayetteville Shale in Arkansas we’ve seen some tick up in demand and we’re actually gaining some market share in some classic dry basin areas Barnett Shale is an example. I think that’s driven predominantly from our commitment to excellence and the high quality level of service that we’re delivering in the marketplace, so strong in all areas very, very strong in the oily areas and actually pockets of strength and growth in the dry gas areas as well.

And our next question does come from line of Sharon Lui with Wells Fargo.

Good morning. Just maybe if you could comment on the integration process with S&R and what type of milestones we should look out for going forward?

So the integration in terms of the scope it was really pretty straight forward because we had essentially an operating unit for those compression assets as Eric mentioned we hired the -- all the individuals that were running the business and operationally we moved those assets under an individual who has been a senior operator with our company for some time. So the -- in terms of the operations of the business, it’s continued to perform as they did prior to the acquisition and we’re just now wrapping up some of the back office types of activities along with the abilities and payables and those sorts of things to get those operations on to our systems. So milestones really would be finishing that in the fourth quarter. We have a lot of upfront communication with the employee base so they understood how important their growth profile is to our business and Eric maybe want to add some commentary but he didn’t -- our Chief Operating Officer Bill Manias personally visited the key locations to explain how everything would operate and integrate including all the human resource types of benefit plans and compensation which actually are lined up quite nicely to our structure.

Yes, let me toss in a couple of comments, we have 100% retention with the employee complement if you think about this was a straight forward asset purchase with service personnel, pickup trucks, parts stools, et cetera. The contracts of the S&R format were under rental agreements rather than service contracts so we’re going through a conversion process which is going swimmingly well. The largest customer or S&R was Apache. We very quickly got that contract converted. Roughly 40% of the S&R revenue stream is associated with some existing USA customers. So we can fold those folks underneath existing USA master service agreements and quickly move from the rental contract into the service agreement template. The other thing that we’re experiencing is actually some significant pull through opportunity with some of the new customers that we acquired through the S&R organization, we’re looking at moving some of our larger midstream type of horsepower and then with some of the existing USA customers where we didn’t have those service offering historically in the past, we’re now picking up some opportunities where prior to this point in time these customers may have turned to competitors of USA. So the employee complement is strong, the integration effort is extremely far along and we’re heading to ground running and offering now complementary service and seeing the pull through and the cross selling beginning.

So it sounds like S&R is performing better than expectations. Maybe you can just touch on why I guess you think you may fall at the low end of guidance. Is it maybe just a deferment of either contracts or equipment into 2014? How should we think about that?

When I look at our utilization rates remain strong we have had some timing or some slippage with some of our midstream assets in some of the dryer gas areas but I would say it’s not that there is a degradation of business it’s more of a timing question associated with just a couple of pockets. Jody?

Yes, Eric, that’s exactly right it’s a share just to show the strength that we see going into 2014 we put purchase orders for new compression units that we didn’t anticipate in Q4 that actually is what took our leverage up a little bit at the end of the year. But we as Eric mentioned are looking at 40,000 over the balance of the year between midstream assets and S&R and looking at 2014 with all-in horsepower additions at about 200,000 horsepower. So again expecting a very strong power demand 2014 and even look at front end loading some of those deliveries. So, as Eric mentioned there were just some contracts that we getting anticipate that we would have signed up for new compression units in Q4. But we are seeing some of those move into the first quarter of 2014. But in terms of demand and placing these units again, the fundaments are very strong with the demand signals from our customers. So we have significant amount of growth CapEx that we expect to deploy in the first half of next year.

And our next question comes from the line of Matt Niblack with HITE.

Hi, two questions. One is could you just comment on the pricing environment you are currently seeing in the market, distinguishing between both the core business and the S&R business. And, then secondly, given the success of the S&R integration of the S&R business how soon, if ever, would you expect to be back in the acquisition market?

If a pricing environment remains committed -- it's relatively stable right now, USA compression has never been the price setter so to speak, we have a public peer who's significantly larger than us and tends to have a dominant toehold in position. They’ve indicated that they’ve actually had a couple of rate increases that have been pushed through. And I think it’s fair to say that maybe we become beneficiary and kind of draft behind those guys. So, I guess I would categorize the environment that we’re living in right now is Goldilocks. Things are not too hot or not too cold, they’re kind of just right as it pertains to the pricing environment. The demand for our services is extremely high. So, as everybody on the call knows, we’re basically building or rebuilding the infrastructure, midstream infrastructure in new areas or areas that are not capable of moving those significant volumes of dry and rich gas to marketplace are being developed with all the new shale activity. So, we see continued demand for 2014 on into 2015 for the product and services that we’re offering in the marketplace with stable pricing and probably looking at inflationary CPI type of environment. And again, just kind of -- we don’t expect things to get too hot or too cold in this kind of business is normal. As it pertains to the acquisition question, we have grown the company since 1998 up until the S&R acquisition organically. When we’re looking at a couple of hundred thousand horsepower of additions that are kind of front ended loaded or front end loaded into 2014 obviously we see a lot of opportunity for organic growth and very attractive multiples for us. That said, the S&R opportunity came along was infrastructure oriented expense of opportunity for us, all brand new equipment. So it’s not old equipment, it’s not gas oriented toward dry gas applications, it's an infrastructure opportunity consistent with what USA has focused on in the past. So, to the extent that another opportunity of equivalent quality of assets, equivalent age of assets or something that strategically came along I think we'd be frankly after the first of the year we’re ready to capitalize upon something if it was dropped in our lap, not something that we’re activity pursuing today.

(Operator Instructions). And at this time, I’m not showing any further questions. So I would like to turn the call over to Eric Long for any closing comments.

We appreciate everybody’s continued interest in USA Compression, it's been a good quarter for us and we’re excited about what the fourth quarter of 2013 holds in store and more importantly we’re really excited about how we’re positioned for growth in our asset base and hopefully growth and distributions stored in the 2014. So, everybody have a great day and appreciate your continued interest in USA Compression.

Thank you. Ladies and gentlemen, that will conclude the conference call for today. There will be a replay available of this conference and that information is available in the news release. Again, we do thank you for your participation. You may now disconnect your lines at this time.