Greg Holloway - Vice President, General Counsel and Secretary Eric Long - President and CEO Jody Tusa - Vice President and CFO

Jim Rollyson - Raymond James Jeremy Tonet - J.P. Morgan Marc Silverberg - Barclays Sharon Lui - Wells Fargo Matt Niblack - HITE

Good morning. Welcome to the USA Compression Partners LP’s First Quarter 2013 Earnings Conference Call. During today’s call, USA Compression Partners LP may be referred to as USA Compression or USAC at this time. I would like to inform you that this conference is being recorded. And now I would like to turn the call over to Greg Holloway, Vice President and General Counsel and Secretary. Thank you.

Well, thanks, Stephanie. Last time when we begin the call, I had mentioned that we had a replay that was available and it was only available for seven days. I really misspoke a bit, that replay is telephone replay, the webcast is up for quite a bit longer. So, Stephanie, would you confirm that, I’ve gotten it correct this time.

That’s correct. And the replay will be available at moment it is, sorry, pardon me one second, it’s for eight day.

Yeah. That’s the telephone replay. Thanks Stephanie.

Okay.

Well, good morning, everyone and welcome to our call. This morning as you we released our financial results for the quarter ended March 31, 2013. Copies of our earnings release may be obtained on our website at www.usapartners.com. During this call, USA Compression will discuss certain non-GAAP measures in reviewing our performance such as adjusted EBITDA, gross operating margins, and distributable cash flow. You will find definitions and the reconciliation of these measures to GAAP measures, in the summary pages of the earnings release and on our website. I want to remind listeners that the news release issued this morning by USAC, our officers 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 our performance and represents USA Compression’s current beliefs, various factors could cause results to differ materially from those projected in the forward-looking statements. Information concerning the risks, challenges and uncertainties that could cause actual results to differ materially from those in the forward-looking statements can be found in our press release, as well as is in our other filings with the SEC, all of which are available on our website at www.usacpartners.com. Except is required by law USA Compression expressly disclaims any intention or obligation to revise or update any forward-looking statements. Your host for this mornings call is Eric Long, President and Chief Executive Officer of USA Compression. I will now turn the call over to Eric.

Thank you, Greg, and good morning, everyone. With me today along with Greg Holloway, our Vice President, General Counsel and Secretary is Jody Tusa, the Vice President and Chief Financial Officer of USA Compression. On today’s call, I will review our performance for the quarter of 2013 and provide commentary on our growth opportunities for the remainder of 2013. Starting with our performance we reported record levels of revenue and adjusted EBITDA for the first quarter of 2013. Revenue for the first quarter of 2013 was $32.6 million, compared to $27.1 million for the first quarter of 2012, an increase of over 20%. Adjusted EBITDA for the first quarter of 2013 was $17.4 million, a 22% increase compared to the $14.3 million for the first quarter of 2012. We believe we will continue to see significant growth in our revenues and adjusted EBITDA as a result of the additional capital expenditures invested in new compression units in 2012, the first quarter 2013 and expected to be invested in remainder of 2013. We had 23,521 horsepower new compression units to our fleet in the first quarter of 2013 and ended the quarter with approximately 943,000 total fleet horsepower, making USA Compression one of the largest independent providers of compression services in the U.S. based on total fleet horsepower. In addition, our horsepower utilization rates remained strong throughout the quarter at above 90%. We continue to see strong demand for our contract compression services throughout the shale in unconventional plays in which we operate that is especially in the Marcellus, and Eagle Ford shale’s and the Mississippi Lime in Granite Wash areas. Based on continued strong demand for our customers, we have ordered approximately 90,000 horsepower of new compression units, which are scheduled for delivery predominately over the first half of this year, including the 23,521 horsepower that we acquired in the first quarter of 2013. We have customer contracts for all of the new compression units ordered and scheduled for delivery, primarily in the first quarter of 2013, comprised of 35,880 horsepower and 51% of the new units ordered and scheduled for delivery primarily in the second quarter of 2013, comprised of 50,915 horsepower. We expect to order a total of 100,000 horsepower of new compression units, which supports our full year 2013 guidance range. But we will continue to evaluate our customer demand to determine whether to adjust the size of our compression unit purchases for this year. Our revenue generating horsepower increased from 794,324 at the end of 2012 to 807,988 at the end of the first quarter of 2013, due to the additional horsepower we placed into service in the Marcellus, Fayetteville, Woodford and Eagle Ford shale plays, as well as the Mississippi Lime in Granite Wash areas. We expect continued growth in 2013 to occur primarily in the liquid rich portions of shale and unconventional plays. I would like to take a few minutes to once again outline the five components of our business strategy which we believe are central to our success. One, we will capitalize on the increasing need for natural gas compression in conventional and unconventional plays. With a particular emphasis on the continued shifting of natural gas production to domestic shale plays, as well as on the declining production pressures of ageing basins. Number two, we will continue our focus on organic growth opportunities by increasing our business with existing customers, obtaining new customers in our existing areas of operation and extending our operations into new geographic areas. Number three, we will continue to partner with existing new customers, who have significant compression needs, particularly those who have major acreage positions, acreage dedications or regional franchises in active and growing areas. Number four, while our principal growth strategy is to continue to grow organically, we may from time to time pursue accretive acquisition opportunities of complementary assets or businesses. And number five, we intend to maintain our financial flexibility to take advantage of growth opportunities. We look forward to communicating with you in the future on the execution of our business strategy and our plans. I will now turn the call over to Jody, who will take you through a review of our financial performance.

Thank you, Eric. As Eric mentioned USA Compression recorded record revenue and adjusted EBITDA levels for the first quarter 2013, and we continue to generate improvement in our gross operating margins. Revenue for the first quarter of 2013 was $32.6 million, as compared to $27.1 million for the same period in the prior year, an increase of 20.2%. This decrease was primarily driven by an increase in USA Compression’s contract operations revenues as a result of adding revenue generating horsepower to our fleet. Contract operations revenues in the first quarter 2013 were $31.9 million, as compared to the first quarter of 2012, which was $26.6 million, an increase of 20.1%. The increase in our contract operations revenue from first quarter 2012 to first quarter 2013 of 20% was driven almost exclusively by the growth in our revenue generating horsepower. Revenue generating horsepower was 807,988 for the first quarter of 2013, as compared to 827,720 for the same period forecasted in our final IPO prospectus. While we had slightly lower revenue generating horsepower, we generated $13.59 average revenue per horsepower per month, which is higher than what we had expected. Average revenue generating horsepower was 801,574 for the first quarter of 2013, as compared to 680,063 for the same period of the prior year, an increase of approximately 18%. Adjusted EBITDA for the first quarter of 2013 was $17.4 million, as compared to $14.3 million for the same period last year, an increase of 23.4%. Gross operating margin for the first quarter of 2013 was $23.2 million, as compared to $18.1 million for that same period of the prior year, an increase of 22.5%. The gross operating margin percentage increased from 66.7% in the first quarter of 2012 to 68% in the first quarter of 2013 or 69.1%, excluding retail services and related operating expenses for the first quarter of 2013. These increases primarily resulted from the operating leverage we achieved by adding large horsepower compression units to our revenue generating horsepower portion of our fleet. Maintenance CapEx and cash interest expense were $3.1 million and $2.6 million, respectively, for the first quarter of 2013, while expansion in CapEx was $20.3 million for this period, and which use primarily to purchase new compression units. Maintenance CapEx and cash interest expense were $2.6 million and $3.2 million respectively for the first quarter of 2012, while expansion CapEx was $48.8 million and was used primarily also to purchase new compression units. Distributable cash flow for the first quarter of 2013 was $11.6 million, as compared to $8.4 million for the same period last year, an increase of 37.6%. On April 23, 2013, we announced a cash distribution of $34.08 per unit on our common and subordinated units. This prorated amount corresponds to 72 days of a quarterly cash distribution rate of $43.5 per unit, which exceeds the minimum quarterly distribution of $42.5 per unit. This first quarter distribution corresponds to an annualized distribution rate of $1.74 per unit. Our first distribution is prorated to cover the portion of the quarter after January 18, 2013, the closing date of our initial public offering, through March 31, 2013. The prorated distribution will be paid on May 15th to unitholders of record as of the close of business on May 3, 2013. USA Compression Holdings, LLC, the owner of 62.2% of our outstanding common and subordinated units, has elected to reinvest under our Distribution Reinvestment Plan all of the distribution it receives on its units. Distributable cash flow coverage for the first quarter of 2013 is 0.9 times and cash coverage for the actual distributions to be paid as a result of USA Compression Holdings reinvesting under our Distribution Reinvestment Plan is 2.4 times. Our balance under our revolving credit facility as of March 31, 2013 was $335.6 million and was $502.3 million on December 31, 2012. Our credit facility balance at March 31, 2013, resulted in leverage ratio of 5.1 times on a trailing 12 monthly basis in compliance with our leverage ratio covered within the credit facility. Based on our full year projections for 2013, we expect our leverage ratio to be reduced to 4.6 times to 4.9 times by the end of 2013 due to the increase in adjusted EBITDA anticipated as a result of the expansion capital expenditures invested in 2012, the first quarter of 2013, and that we expect to invest during the remainder of 2013. We believe that we have attractive organic growth opportunities particularly in the liquids-rich portion of shale and conventional plays. We are providing a guidance range for the remainder of 2013. Our current revenue guidance range for the full year 2013 is $140.5 million to $145.4 million, net income guidance range of $15.9 million to $19.9 million, and adjusted EBITDA guidance range of $78.1 million to $82.1 million, and we expect to generate distributable cash flow of $52 million to $56 million for 2013. Finally, we expect to file our Form 10-Q with the Securities and Exchange Commission on or before May 15, 2013. With that, we’ll open the call to questions. Stephanie, I’ll turn the call back over to you.

Thank you. (Operator Instructions) Your first question is from Jim Rollyson from Raymond James. Please go ahead sir. Your line is open. Jim Rollyson - Raymond James: Good morning, guys.

Good morning, Jim.

Hey Jim. Jim Rollyson - Raymond James: Eric or Jody, whomever, just on the guidance real quick since you’ve brought in kind of a lower bottom end of the range and the top end is still where your original guidance was? Can you maybe give us a little color on what introduced the bottom, a little bit lower side of that range, is it kind of equipment timing or is it customer contract timing or just maybe some color?

Sure Jim. It’s more customer contract timing and so we captured in our guidance range the initial expectation that was in the prospectus. So if you noted, we did take advantage of signing up some five-year contracts at attractive rate, attractive rates with some customers, but the start dates were moved out a little bit from our original anticipation. So we have some timing like that going on with expected actual start dates, but again continue to sign up contracts with good term and attractive pricing. So we’re just trying to be a bit cautious in terms of recognizing that while the underlying fundamentals remain strong. If we continue to see a little bit of some of the start dates getting pushed out on the selective basis. That’s really the primary driver was for the lower end of the range. Jim Rollyson - Raymond James: Got you. And on the, revenue per unit picked up a little bit this quarter, can you maybe talk about just how the mix of units and what your customers are demanding coming in throughout the year look and how that would shape up for your, do you expect revenue per unit to trend up or kind of remain static or just maybe some thoughts there?

Yeah, Jim. This is Eric. And we’re seeing a couple of trends here. First, demand for our largest horsepower range remains extremely strong. We have seen some improvement in pricing with our intermediate and large horsepower as well. And interestingly, we are seeing a lot of demand for oily-oriented infrastructure gas look type of equipment. So, I think we are seeing pretty strong demand trends, both small, intermediate and particularly with our large horsepower units and actually we are seeing some improvement to some degree in the pricing across the range. Jim Rollyson - Raymond James: And as a follow-up, I presume that part of the sequential increase in cost per horsepower was mix related. But maybe you could talk about, your margins came down just a little bit, up year-over-year but down a little bit from the last three quarters. Maybe trends going on with margins and how you see those just going through the year’?

Yeah. Jim, in my commentary one of the things I was attempting to point out is, we had a pretty large retail component in the first quarter. It was approximately $700,000 with low margin on that that worked. So, if you factor that out, we actually had a sequential increase in our gross margins. So we don’t see a trend other than continued improvement in the gross operating margins for 98% of our revenue base, which is in the contract operations revenue. So, on the cost trends, they continue to stay at, what we projected in terms of just general inflationary types of increases. Nothing that really moves significantly, so we do also get a little bit of shift in the mix from one quarter to the next. But again, factoring out that retail component, we actual had a sequential increase in the operating margins and with what we are seeing in terms of pricing trends for our services and the addition of the continued addition of large compression units, we would expect to see solid margins throughout the year. Jim Rollyson - Raymond James: Thanks for the clarification and color, guys. I appreciate it.

Good. Thank you.

Thank you. The next question comes from Jeremy Tonet from J.P. Morgan. Please go ahead. Jeremy Tonet - J.P. Morgan: Good morning.

Good morning, Jeremy.

Hey, Jeremy. Jeremy Tonet - J.P. Morgan: Congrats on the solid quarter. I was just curious, as far as the units to be delivered in 2Q, it’s 51% contracted now. I was wondering when you think that might hit 100%, or would some of those be contracted in the third quarter? How do you see that unfolding?

Much like we do in the first quarter. Jeremy, we would expect to see nearly all of that new compression unit purchases contracted at the time that we are taking delivery. So most of the 51,000 horsepowers is being delivered in the second quarter but some of that is scheduled for delivery in July and early August. So again we would expect that customer contracts would be signed up at roughly the point in time that we are taking possession of the equipment, again pretty much what we did for the first quarter. Jeremy Tonet - J.P. Morgan: Okay. Great. And then touching on, I think it was the fourth tenet of the five that you outlined as far as the potential for acquisitions out there. I’m just wondering if you could provide any updated thoughts on how the M&A market looks out there. Has anything changed in your mind over the past few months?

As we did indicate before, we will look at opportunistic accretive opportunities. We have nothing definitively pulled together at this stage but we continue to opportunistically review a couple of opportunities. Jeremy Tonet - J.P. Morgan: Okay. That’s great. Thank you very much.

Thank you.

Thank you. The next question comes from Marc Silverberg from Barclays. Please go ahead. Marc Silverberg - Barclays: Hi. Good morning, everyone.

Good morning, Marc.

Good morning, Marc. Marc Silverberg - Barclays: I guess just a quick question, you sort of alluded to the fact of potentially upsizing the order book as the year progresses here and you have hit on some strong demand point here. Just trying to, if you can, elaborate a bit on the opportunities you are seeing to potentially upsize above the 100,000 horsepower that you have originally targeted?

Yeah. Marc, we have may recall that, we added 200,000 horsepower of new compression units in 2012. So we continue to see strong demand for our services. And we don’t anticipate adding new horsepower equipment from 2013 at that level But could we slightly upsize the 100,000 horse power that is a possibility, the customer demand certainly does remain strong. We’re being very mindful of the leverage levels that were running particular through the first couple of quarters this year. And so we’re trying to have a judicious balance between moving to de-levering by the end of the year. And so that will influence in part our timing of how much, if any, we would upsize the new compression equipment order and how quickly that translates into revenue and EBITDA. Marc Silverberg - Barclays: Got it. Okay. Thank you. Next question would be around pricing. Just want to make sure I’m understanding correctly and if you hit on this, I apologize. But obviously, as you put these larger horsepower units in place, they have a bit of a dilutive effect on revenue per horsepower but obviously offsetting that would be better margins. But net-net, we saw increase in pricing. So is it correct to allude or assume the fact that pricing was a bit stronger than was actually on the face of the numbers, just because you did have some offsetting reductions from the nature of the large horsepower units?

Couple of things there, Marc, so we do continue to see improvements in the spot pricing for the contracts that we’re signing up in the early portion of this year. So we have run at higher rates than we originally have projected. The other thing to consider is that for the very largest horsepower component of our fleet. These 3600 types of units that are 1800 horsepower, without getting into the specifics that average revenue for horsepower per month is actually north of the composite revenue for horsepower per month for our fleet. So you have both those components of work. Marc Silverberg - Barclays: Okay. Perfect. And then, lastly, with regards to the monthly contracts, I think it was Eric in the past who had alluded to potentially terming out some of those contracts if you do see the pricing environment firm up a bit, which certainly sounds like you have been experiencing. So I just wanted to hear your latest thoughts around potentially turning out those month-to-months?

One of those things, Marc, that our sales and our operations team are continually looking forward. We always look at our machines running fully loaded, partially loaded lightly loaded, what are the market rates and the monthly service fee. So it’s is one of those -- this is an ongoing project. It’s actively on our radar screen. In overtime, we continue to move or trying to turn it up some of the existing month-to-month contracts. Marc Silverberg - Barclays: Okay. Perfect. That was it for me. Thanks so much.

Thank you, Marc.

Thank you, Marc.

Thank you. The next question comes from Sharon Lui from Wells Fargo. Please go ahead. Your line is open. Sharon Lui - Wells Fargo: Hi. Good morning.

Good morning, Sharon.

Good morning, Sharon. Sharon Lui - Wells Fargo: Since one of your competitors did implement the price increase in the first quarter. I guess, have the impacts been, I guess, an improvement in the spot pricing that you’ve realized? And is there an opportunity for you to, I guess, do the same across your fleet?

One of the reasons, we have let some of our units when it come off a primary term, rolling to month-to-month was some of the pricing trends that we saw. So we will be selective and judicious in working with our customer mix to potentially move to look for some pricing improvement as well. Sharon Lui - Wells Fargo: Okay. I guess, have you been able to quantify how meaningful is the increase you would be able to implement?

Yeah. We would probably will be a little bit careful with that, Sharon, in terms of the forward projections. If you look at the composite rate for the fleet for the first quarter, we were about roughly, call it, $0.25 per horsepower per month above our initial projections. And so it isn’t moving the composite for the fleet as of yet in a very significant way because we still have a lot of units that are out there that are under contracts that were signed couple two to three years ago. So we would expect to have opportunities to continue to have at least some level of slight improvement, perhaps a little bit more meaningful in the composite pricing for the fleet as these contracts as Eric mentioned come back in and get removed at improved rates. We are trying to be fairly judicious in how much we project out in the overall revenue stream for this year form these spot price improvements. Sharon Lui - Wells Fargo: Okay. And then, I guess, in terms of the absolute growth CapEx spending for 2013, is your guidance still around $94 million?

It is. That’s correct. Sharon Lui - Wells Fargo: Okay. And do you anticipate the same type of levels for next year or a pickup in spending?

Again, based on the early commentary that are -- earlier the commentary that I made, we did acquire, as you well know, Sharon, couple of 100,000 horsepower last year. It’s a little bit early to reach out to see where we made set levels for 2014. Most of the research reports that are out there are tracking us at -- continuing at about 100,000 horsepower for years. So we will make that evaluation as we get into the early third quarter period and haven’t made any commitments for new compression equipment yet in 2014. But with that said, again we still see strong demand and so if there is an opportunity to have a higher growth rate above that 100,000 horsepower case and we will certainly evaluate that and consider that in our commitments. Sharon Lui - Wells Fargo: Okay. And I guess with the pickup in natural gas prices, have you seen any change in I guess inquiries from producers in conventional areas?

Sharon, that’s a really good question. And we see, it almost varies company-to-company. We are seeing some pickup in the dry gas areas. Folks who say six months ago were looking at the potential for downsizing some of their fleet needs and horsepower needs, have actually come back and we’ve seen some pickup in a number of rigs running in these areas and so we’ve seen a stabilization to a pick up. So, I would say when you look at dry gas areas, it tends to be company specific. We are seeing extremely strong demand in the liquids rich areas, both on the processing side as well as on the casing head gas side in the high BTU condensate type wells. So, I would say in general because of the pickup and the commodity price, we have seen a pick up in demand signals. Sharon Lui - Wells Fargo: Okay. Great. Thank you so much.

Thank you, Sharon.

(Operator Instructions) The next question comes from Matt Niblack from HITE. Please go ahead. Your line is open. Matt Niblack - HITE: So regarding the Q2 delivery, it sounded like from your earlier comments that you were basically on track for getting those contracted. So is it safe to say that sort of the 50% contract rates for this time relative to the -- relative to the quarter is typical, based on your past history?

Yeah, Matt. That is correct. So it moves in a progression as you are indicating and so that is quite typical based on where we are at this juncture. So, yeah, early may in the quarter, there is a quite a bit of the quarter left to get those signed. Again, some of those units were getting delivered in the July and early August timeframe. So there is kind of run rate for contracting new compression equipment is quite typical. Matt Niblack - HITE: Great. And then clarifying the range of guidance again in response to an earlier question. So it sounds like these are largely in-year contract timing-related issues, as you describe. So is it also safe to say that you still feel comfortable being able to hit your sort of original plan in terms of 2013 exit rate of contract volume?

Yeah. That certainly is possible and while we have that captured in the guidance range, so we will see how the quarters continue to unfold. But we have the compression units that we anticipated in our plan this year, nearly all on order. So again, about 90,000 horsepower that compression equipment is being delivered primarily in the first half of the year. So there is not going to be an issue with having the equipment to get better at work. Again, we are seeing a normal pattern in terms of getting the contracts signed up, have had seen some timing issues early in the year here. But certainly a potential to still hit the full year in exit rates that we initially projected. Matt Niblack - HITE: Great. And then last question, any sign that there is increasing competition or that you are losing contracts you were expected to win, particularly it seems like Exterran is performing quite well recently. Any commentary on that competitive landscape?

Obviously, we live in a competitive world. We see different competitors in different geographic regions. I know that Exterran has some alliance relationships with some folks who were very active in certain geographic areas. Honestly, we have not lost contracts to competitors that we expected to win. So it’s a pretty big marketplace out there and at this juncture, it seems like there is more than enough to go around for all of us in the industry. Matt Niblack - HITE: Great. Thank you.

Thank you, sir.

There are no more questions. And now I would like to turn the call back over to Mr. Greg Holloway.

Thanks, Stephanie and thanks everybody for participating in our first quarter call. Hope, everybody has a great rest of the week. Thank you.

Thank you. Ladies and gentlemen, that concludes your conference call for today. You may now disconnect. Thank you for joining and enjoy the rest of your day.