Good day, ladies and gentlemen, and welcome to Clearwater Paper First Quarter 2013 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) And as a reminder today’s conference call is being recorded. And today’s speakers for the call, Ms. Linda Massman, President and Chief Executive Officer and Mr. John Hertz, Senior Vice President and Chief Financial Officer. At this time, I would like to hand the conference over to Mr. John Hertz. Sir, you may begin.

Thank you, Saeed. Good afternoon and welcome to Clearwater Paper’s first quarter 2013 conference call. Our press release this afternoon includes details regarding our first quarter results and you’ll find a presentation of supplemental information posted on 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 provided or 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, 2012 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. Now turning to our first quarter financial performance, and let me start with a little housekeeping. For a number of items that we do not believe are representative of our core operations impacting the first quarter and as a result we are providing both GAAP results and those that are adjusted to exclude certain charges and benefits. Those include, one, a $17 million charge associated with the January debt refinancing. Two, a $10 million tax benefit associated with the conversion of alternative fuel mixture gallon, also known as Black Liquor 1 back to cellulosic biofuels also known as…

Thank you, John. First off, thanks for joining our call today and for your continued support to Clearwater Paper. Unfortunately as you heard from John, our first quarter was the mixed bag and I am disappointed about the performance we delivered to you. With that said the fundamentals of the business do remain solid. We’ve assessed what went wrong in our way to fixing it. We did anticipate there will be complexity associated with rebalancing our converting and paper making network in light of the new production coming from Shelby, which is truly a complex process to undertake predicatively and operationally, but we did not receive all the issues. We made some difficult decisions within the tissue business to meet customer demand and service levels that the expense of near term possibility to ensure that we had the overall demand we need in Q3 and Q4 when Shelby ramps up. At the end of the second quarter, many of those events are (inaudible). We have taken active steps to stop or at least minimize the activities that are driving the margin compression that we saw in Q1. Examples of this would include getting our mix of inventory back to healthy operational levels, reducing purchases of external paper, minimizing paper machine changeovers wherever we can, and prioritizing customer service related decisions. However there were likely be a hangover into the second quarter as it relates to transpiration cost, TAD converting line run rates, and pulp cost. As we look at our end markets for tissue and paper board and the factors that drive those markets, we see solid trends. For the first quarter 2013, the US tissue market grew 3.3% year-over-year to a $128 million equivalent cases; and within that private label tissue grew 5.1% to $33 million equivalent cases on…

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

Just a couple of questions. I guess first one on the consumer tissue side, you know retail tons at 77,000 this quarter, that’s up quite a bit from last quarter. How much of that was Shelby and how much of that was just improved demand from the conventional side?

Graham, how are you? This is John. There were very low shipments of actual Shelby TAD in the quarter. So it was, I would say, 99% conventional tissue.

Okay, great. And then may be just one for Linda. Just think about the sales process for Shelby and 13,000 tons produced by this point, but how was the sales process going with your existing and new customers?

Yeah. I would say the sales process we feel very confident about how we’re progressing. Our sales team is obviously working very hard in a marketplace to ensure our customers are ready to go with the new products and of course they are also continuing to bring on new customers. So I’d say we’re feeling very confident right now.

Got you. And then may be just last one sort of on that line, in the bridge on page six, where you have talked about SG&A cost being up in the Consumer Products segment noting higher selling in TAD bath tissue marketing cost. Is that sort of a one-time thing to get yourself into customers or is that promotional activity, how should we think about that number?

Graham, I think I would say it's probably a bit of both. Clearly we have a pretty aggressive build up taking place right now, which would clearly increase our cost, but those costs still remain as we continue to take care of our customers and are looking for new business. So it is actually a little bit of both.

Okay, great. Thanks very much.

Thanks, Graham.

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

Thanks. Good afternoon, everyone. First of all, I think you normally give us your pulp purchases and average price; did I miss that in this quarter?

You mean our -- we have before previously given the sale of pulp and average sales price, because it’s actually diminished number and it's our intention to use it all up, internally we start doing that.

Okay, got you. And I guess we’re trying to sort that, I guess this is three for you John to see philosophically where you stand, we didn't do a great job and sort of putting your guidance from the last conference call, but do you have a rule of thumb on where you might think that it's prudent to issue a prerelease if there is going to be such a substantial miss to EPS?

No, (inaudible) I mean we don't actually give guidance. And if we move through the quarter and we looked at the range of where the different analyst estimates were towards the end of the quarter, we were at the low end of that range and then finally through the closing of the books, we ended that being lower than that. So at that point, our focus was on making sure we understood what happened and so there was a big discussion with you that we had completely understand situation to be able to explain how we are going forward. And so we don't give guidance, the any pre-announcement within that being somewhat of an operational release and so that I don't think we’d be in a position of saying here is what we now think a range of EBITDA would be.

I appreciate this slide 10 showing us how you get from the $38 million Q1 run rate towards the $75 million. Can we may be go through these puts and takes and just see which one of them will be impacting Q2, I mean Arkansas is not there in Q2, cost saving programs and how quickly could those materialize kind of phase of in 2 million in ton?

Yeah I mean the cost saving programs what big hitters there are kind of full run rate of the Granger acquisition that we said would be kind of $4 million to $5 million for the year will have more of an impact in the second quarter than in the first quarter, and then Thomaston which you know will start to incur more costs before we execute the benefits of that so we won't really see the full benefits of that until we get in probably the first quarter of next year. Then it’s a bunch of kind of onezy, twozy capital projects largely in paperboard side of the business that we see $100,000 per quarter here, $200,000 per quarter there.

I think the Arkansas outage is the only one that's fully resolved into the second quarter, the rest I think are going to play out over the course of the year. It will be a part of the transition cost as we said about two-thirds will be resolved in the second quarter, but some will carry over into third quarter or the second quarter.

So does that mean $6 million reduction in transition cost in Q2.

Yes, that will [reduce] that.

And similarly $13 million to $15 million in TAD tissue that's gone, right, that's a one time [rift] in Q1.

Well, no that's incremental EBITDA to come once we ramp the TAD bathroom tissue, that's more Q3 to Q4.

Got it, that's not just from buying third party tissue.

No, that's all baked into this transition costs.

(Operator Instructions) Our next question comes from Ian Zaffino from Oppenheimer.

As far as the switch from the TAD to the conventional, when were you made aware of that and how does it work as far as the lead time you’re given to make that conversion.

Ian we talk to customers all the time, so we have continual dialogue and I think maybe the best way to address that question is at the end of 2012 we knew you are facing challenges in Q1 which is why we guided to being down one to three points. I would say early in the first quarter it became apparent that the challenges we anticipated were greater in longer duration than we had anticipated, and I will tell you that we began immediately working on getting us back on track. But the complexity and rebalancing the network as our new customers came online, coupled with the low inventories and bath tissue just were more challenging than I think could have been anticipated at the end of the year in 2012.

Okay and then on the $75 million of EBITDA run rate guidance or goal or however you call it, what quarter are we looking at that. Is that an end of 2014 mid-2014 how do you think about that.

We are saying we are coming into 2014 at that run rate so Q1.

That would be great. So I guess if we are looking at 2014, it will be somewhat higher than $300 million for 2014.

No I think what we've said is 2014 will be at least $300 million.

Well, I guess you really said $75 million per quarter entering 2014, which would mean that you are getting certainly at $75 million per quarter. This gets you to 300 million, I would imagine you are getting maybe some other benefit from some other area, whether it's pricing, whether it's cost savings or something to push through over that 300 million.

Well, I guess we will take that where it comes.

Our next question comes from James Armstrong from Vertical Research.

The first one is could you talk about the parent roll price increased May first. Could you remind us the order of magnitude of that increase?

Yeah, James, we haven't stated what the magnitude of that increase is, but what I can tell you is that it was on tissue and the machine-glazed parent roll business. We announced it mid-March. We expected to be effective May 1, kind of based on the function of two different things, both a rising pulp market and rather strong demand in the tissue market, and I think the reason is kind of hard to go through the exact increases. Our parent roll business cover is such a broad spectrum of end users from kind of highly specialized, wanting to kind of a more commodity towel business. So that price increase is really varied across those different grades.

Fair enough, completely understand. And then switching gears a bit, corporate expense was up sequentially quarter-over-quarter but much of that seemed a one time expense. As we go out through the rest of the year, should corporate expense roughly be the same as what we saw in 2012?

Yeah, I mean I think that kind of call it $11 million to $12 million run rate is what you should expect, it was up in Q1 because of the mark-to-market equity comp. And so if you feel that out, we are actually down versus the fourth quarter. In fourth quarter we happen to have some one-time retirement cost, so I think it all kind of comes back around that $11 million to $12 million run rate.

Perfect. And then lastly, could you remind me the maintenance schedule for the remainder of the year, do you have any maintenance in the third and fourth quarter?

Yeah, third quarter, Idaho will be down for major maintenance and we have said that’s going to be 11 million to 13 million.

11 to 13, perfect. Thank you very much.

Thank you. Our next question comes from Lawrence Stavitski from Sidoti & Company. Lawrence Stavitski - Sidoti & Company: Hi, good afternoon. Can you guys just I guess I don't know if I missed this or I guess can you just elaborate on the increased cost as a result of the lower inventories for the conventional grades? I guess can you just elaborate on what you guys were, what you guys missed there I guess and going forward what you guys project?

Well, let’s try this way and see if this answers your question, because what we said was about $89 million of cost, transition cost associated with kind of the rebalancing of the network as we bring Shelby up and kind of some of the inventory and those costs were additional transportation costs in product around the country and customer demand, increased changeovers and some manufacturing inefficiencies as we had to changeover of in to try to meet customer demand as well as an upside purchase paper, which is a less lower margin weight around the business. And I’d say those are probably the biggest items. Does that answer your question? Lawrence Stavitski - Sidoti & Company: Okay, yeah, that is very helpful. I guess the next question would be in terms of a retail and non-retail shipments; do you have any outlook for those would be? And I guess just maybe elaborate on what happen this quarter in terms of the retail and non-retail shipments?

Yeah, so the retail shipments were definitely very, very robust. And then with regards to the non-retail the tons were down and that was by design to reallocate tons in order to rebuild some of our inventory. Lawrence Stavitski - Sidoti & Company: Okay.

And we said looking forward that more essentially a little bit flat but down in retail asset by up to non-retail. Lawrence Stavitski - Sidoti & Company: Okay, great. Thank you. That is helpful. And then I guess going back to the gentleman’s question on the price increases, I know you guys it’s difficult to project them, but would you not rule out any additional price increases, if you see the input cost is increasing accordingly or should the May 1st would that be all for the year?

Well, I would say that is all we have line of sight to today, but obviously the progress of the year, if market conditions change, we will without a doubt take a look at what is the best course of action is for the company. Lawrence Stavitski - Sidoti & Company: Okay, got you. And then just lastly the share buyback is about 80% complete in terms of the accelerated buyback and what is taking place, is that so there is the 20% left for the balance of 13?

I know that’s just – that’s for the half that we did accelerate buyback program on, there is also another $50 million of open market transaction. Lawrence Stavitski - Sidoti & Company: Okay. So there is 20% left in the accelerated buyback and that 50% outside of that.

Correct. Lawrence Stavitski - Sidoti & Company: Okay, got you. Thank you.

I would like to hand the conference back over to Ms. Linda Massman at this time.

Great, thank you everybody for attending the call. We appreciate your support of Clearwater Paper and we look forward to talking to you shortly at our two conferences.

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect and have a wonderful day.