Ladies and gentlemen, welcome to the Clearwater Paper Fourth Quarter And Full Year 2012 Results Conference Call and webcast. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. (Operator Instructions). As a reminder this conference call is being recorded. I would like to turn the conference over to Mr. John Hertz, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Thank you Saied. Good afternoon and welcome to Clearwater Paper’s fourth quarter 2012 conference call. Our press release this afternoon includes details regarding our fourth quarter and full year results and you’ll find a presentation of supplemental information posted on the Investor Relations area of our website at clearwaterpaper.com. Additionally, we provide certain non-GAAP information in this afternoon’s discussion. A reconciliation of the non-GAAP information to comparable GAAP information is included in the Press Release and supplemental material provided on our website. I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include those expressed or implied by risks and uncertainties described from time-to-time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2011 and our quarterly filings on Form 10-Q. Any forward-looking statements are made only as of this date, and we undertake no obligation to update any forward-looking statements. With that I will report on our full year and fourth quarter results. 2012 was a year of significant accomplishments and cost structure improvements for Clearwater Paper. On the financial side of things we are reporting net sales of $1.9 billion and diluted earnings per share of $2.72 per share, which is a 64% increase over 2011 EPS of $1.66 per share. Adjusted EBITDA came in at a record $228 million or 12% of net sales and we generated $199 million in cash flow from operating activities or 11% of net sales. On the operational accomplishment side…

Thanks John. Before I get into the segments, I would like to take this opportunity to congratulate Tom Colgrove and Dan Johansen on their new roles as President of the Consumer Products and Pulp and Paperboard Divisions respectively. Tom has successfully run our Pulp and Paperboard Division for the last four years and prior to that spent more than 25 years with Kimberly Clark and Proctor & Gamble. Dan joined the company 40 years ago and he spent the majority of his career in our former Wood Products Division and in our Pulp and Paperboard division in both sales and operating roles. I would also like welcome Beth Ford and Kevin Hunt, who joined our Board of Directors last month. Beth has spent 25 years in various leadership positions in multiple industries, including flavor and fragrances, consumer package goods, publishing, and oil and gas and is currently Executive Vice President, Chief Supply Chain and Operations Officer at Land O’Lakes. Kevin bring more than 25 years of private label consumer experience to the Clearwater Paperboard and is the former Chief Executive Officer, President and Director of Ralcorp Holdings, which manufactures, distributes and markets private-brand food products. With the promotions of Tom and Dan and addition of our new Board members, I am confident that Clearwater Paper has the leadership in place to achieve our strategic goal and generate additional value for shareholders. Regarding our company goals, I wanted to give you an update on our business strategy on long term vision. December of 2012 marks the four year anniversary from our spinoff from Potlatch. We thought that this would be a good time to review these items. In January, we finalized a strategy development and are now in the process of communicating a five point plan all employees across the company.…

(Operator Instructions). And our first question comes from Graham Meagher from TD Securities.

First, just wanted to note that we do appreciate the improved disclosure that you’ve provided this quarter. First question, Linda, can you just discuss the sort of competitive behavior you’re seeing from both the branded and private label producers as you’re selling the output from Shelby into your retailers.

Yes, I would say the market remains very stable. We are actively engaged with our customers as we’re looking to begin selling out Shelby. We’re in great detailed dialogue with them now and I would say it’s a pretty normal operating environment from our perspective and our focus right now is on really getting that TAD bath tissue product to the shelves of our retailers as quickly as we can.

And then maybe just on the paperboard market, you gave a little of color on January, February. Do you expect pricing to comeback a little bit as we move into Q1, Q2?

I would say that we did see some softness in Q1. I guess we’re encouraged by the strong backlogs we’re seeing in January and February and I think it might be too early to know exactly what’s going to happen with pricing, but definitely encouraged that we’ll begin to see those stronger backlogs.

Thank you. Our next question comes from Steve Chercover from D.A. Davidson.

I guess Linda kind of answered it; you did accumulate 14,000 tons of inventory in the paperboards that you’ve said for this new customer?

What we’re going to do is move that into a consignment sales relationship with them. So it will be our inventory that we’ll own for a while.

And Steve, it’s John. The way I think about it is, we shipped that product and because it is now going to be on a consignment relationship with that customer, that shipment doesn’t get to be recognized as sale. So it’s going to stay in our inventory until they actually pull it into their manufacturing line.

And presumably, that has some benefit to them since you own it. Does that mean that the middle net somehow creeps up a bit, because you’re providing them with kind of working capital service?

There is definitely going to be a small incremental working capital cost to us, but we think that’s more than offset with this more strategic relationship we’ll develop with this particular customer. Clearly already a strategic relationship has been developed with this customer, that’s we’re even moving into this type of relationship. But it will ultimately help us as well because it does allow us to build a stronger and more consistent shipping volume with this customer, which will get us more flexibility as we progress through year to be able to react to what’s going on in the marketplace.

And I apologize, I was having some technical issue so I might have missed it, I mean is that an onshore customer?

Yes.

Okay, great. And also with respect to Shelby, it sounds like you had a great startup. Were there any startup expenses that we should incorporate within our estimates that presumably go away?

Steve, this is John. I think we said we actually incurred about $3 million of startup costs, but $1.8 million of that was capitalized, so the net $1.2 million you could say goes away in the first quarter. I would remind you that right now we’re on household towels and we’ve got a convert over to bathroom tissue and so that would be the first time we'll have done that. Of course, on that machine and there could be some start up related costs associated with that, but we do not anticipate that moving the needle, it would be, probably not material.

And how are the machine controls working? I guess neither of you were there for the startup of Las Vegas, but is anyone there who could shed some perspective as to how it compares?

I would say that we couldn’t be more pleased with our startup of Shelby. I have to just say, I’m very proud of the team and what they’ve accomplished. It started up incredibly well on anybody’s standards. And we do have Tom Colgrove, who has a tremendous amount of experience bringing up tissue machines in his former life as well. And I think what we’re most proud of is this facility started up on time, under budget and quite frankly what we didn’t say is this really on quality. Our consumer testing has been going very well. We are definitely on target with regard to quality with the bath-tissue, with regard to both strong and soft, and now it is really up to the sales team to remain thoroughly engaged with our customers as they are and getting that product to the retailer shelf as quickly as we can.

And just how quickly, does that have to be tested at retail?

We have been going through that already with a large number of our customers, because we have been able to get some product off of the Las Vegas facility. So we are well into the selling process at this point and feel pretty good about how excited the customers are to get this product.

Thank you. And our next question comes from Ian Zaffino from Oppenheimer.

Just a quick question, the 3.5% retail price increase; that was some mix, right? I’m just trying to get what the apples-to-apples pricing would be, ignoring mix?

It was definitely mix related and we said we sold a little bit more, different retail mix more to facial, and that would have caused that change.

Okay, so basically sort of flat pricing with a 3.5% benefit from mix?

Yes, exactly. There has not been any big market changes in pricing that we have experienced. So yes, that would be a mix related in individual customer relationships.

(Operator Instructions). Our next question comes from James Armstrong from Vertical Research.

My first question is more of a clarification. When you gave your $300 million EBITDA target, what year was that for again?

James, that’s 2011 cost structure to achieve in 2014.

Okay, to achieve in 2014, I just wanted to make sure. Okay then, on Shelby, if it was at a 100% today, do you think that you could place all the tons with a minimal impact to the market and what’s your ramp up curve going to look like to get to 100%. For instance will you be at 50% to 60% in the first quarter, 70% in the second, how does that look?

Maybe I'll take the first question first, which was I think more about tissue capacity and if we were fully ramped up and maybe I'll change the context a little bit because we will be ramping up through the course of the year. We do have a slide in our investor deck that I think is quite telling. It shows, I think the first part of the chart is 2011 tissue demand versus capacity and it shows that the two are matched up pretty nicely at 97%. And then given what has been announced from a capacity increased perspective in the marketplace as well as what we've seen historically with regard to tissue growth, primarily driven by population, shows at the end of ‘13 that ratio is very consistent at 97% and we don't have any reason to believe that wouldn’t continue to be the case. So, the additional capacity announcements I think are fine and the market will absorb that. With regard to how the Shelby ramp, we gave you some indication as to how that flows off with the 55,000 tons, but specifically we have to go through the selling process that is going to be individually driven by each of our customers and what their needs are and what their plans are to get this to the shelf, and I would say today our closest indication would be that while we're going to have to build some inventory and make sure we can meet the normal and customary good customer service that we provide our retailers, most of that volume will be in the third and fourth quarter. We'll see some of it in the first and second quarter but it would definitely take a larger ramp in the back half of the year.

And that's a shipment volume comment. From a production volume we do see that growing linearly through the year.

Yes, but production side that helps a lot. And then lastly, how much of the $100 million authorization has been used to date?

Well, I'll answer it this way. We were in the quiet period when we finished our authorization, and we won't be out of the quiet period until a couple of days after this call.

Perfect, so nothing really has been used as of yet.

Sure.

I’m showing no one else in the queue at this time. I would like to hand the conference back over to Ms. Linda Massman for closing remarks.

And I would just like to thank everybody for joining us on the call and we look forward to catching up with you soon. Thank you.