Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Quad/Graphics Fourth Quarter 2012 Conference Call. [Operator Instructions] I would now like to turn the conference call over to Kelly Vanderboom, Vice President and Treasurer for Quad/Graphics. Kelly, please go ahead.

Thank you, operator, and good morning, everyone. With me today are Joel Quadracci, our Chairman, President and Chief Executive Officer; John Fowler, our Executive Vice President and Chief Financial Officer; and Dave Honan, Vice President, Corporate Controller and Chief Accounting Officer. Joel will lead off today with a high-level review of the quarter and provide an update on our key strategic goals. John will follow with a more detailed review of our financial results, which will then be followed by Q&A. I would like to remind everyone that this call is being webcast, and forward-looking statements are subject to Safe Harbor provisions as outlined in our quarterly news release and in today's slide presentation. The slide presentation can be accessed through a link on the Investor Relations section of the Quad/Graphics website at www.qg.com. There are also detailed instructions on how to access the slide presentation in our fourth quarter earnings press release issued last evening. A replay of the call will also be posted on the Investor Relations section of the Quad website after the live call concludes. I will now turn the call over to Joel.

Thanks, Kelly. Good morning, everyone, and thank you for joining our call today. I am pleased to report that our fourth quarter and full year 2012 performance was in line with our expectations, and I'm especially pleased with our continued track record of solid and consistent free cash flow generation. We ended the year with an annual recurring free cash flow of $375 million, which surpassed our upwardly revised guidance of $340 million. Our ability to maximize recurring free cash flow positioned us well in 2012 to make progress on our priorities to maintain balance sheet strength and flexibility, maintain strong credit metrics, invest in value-driven industry consolidation opportunities and return capital to shareholders. During the fourth quarter, we were able to return cash to our shareholders through a special $2 year end dividend and also increased the 2013 quarterly cash dividend by 20% to $0.30 per share. In addition, we paid down $120 million of debt and our leverage ratio, even after our special year end dividend, was 2.39x and remains within our targeted range of 2.0x to 2.5x. On January 16, 2013, we completed our acquisition of Vertis and welcomed approximately 3,900 new employees to our family. The combination of Quad/Graphics and Vertis is a natural and strategic fit, and key benefits from the acquisition include: an enhanced position in the production of retail inserts, direct marketing and in-store marketing solutions, an enhanced range of products and services, extended expertise in more vertical markets, an extended geographic footprint that increases our manufacturing flexibility and distribution efficiencies. In 2012, Vertis generated approximately $1.1 billion in annual revenue, which has been included on a pro forma basis in our 2012 revenue summary on Slide 4. Retail inserts is now our largest product line at 25% of our total revenue on…

Thanks, Joel, and welcome, everyone. Slide 6 is a snapshot of our fourth quarter 2012 financial results as compared to our fourth quarter in 2011. Net sales were $1.1 billion as compared to $1.2 billion. Cost of sales at $872 million was lower as compared to $921 million. SG&A expense of $87 million was lower by $22 million as compared to $109 million. Depreciation and amortization was $86 million as compared to $89 million. Interest expense was $20 million as compared to $24 million, primarily due to our focus on debt reduction. Our adjusted EBITDA was $174 million as compared to $187 million and our adjusted EBITDA margin of 15.3% was essentially even with last year's margin of 15.4%. We have once again included an adjusted EBITDA bridge in our slide deck to better explain the impacts to adjusted EBITDA in the quarter. There are 3 major positive impacts for the quarter: First, a reduction in selling, general and administrative expense of $17 million. This reduction was due to our focused effort to create sustainable cost reductions over and above the Worldcolor integration synergies. Second, our incremental synergies from the acquisition of Worldcolor were $7 million; and third, a $4 million reduction to our bad debt provision as compared to a higher-than-normal bad debt provision in the fourth quarter of 2011. This positive impacts were offset by volume declines and pricing pressures on print and byproduct revenue that impacted adjusted EBITDA by $36 million during the quarter and $5 million that was attributable to the book business, which reflects both volume and productivity issues. As Joel mentioned, we are proud of our consistent, recurring free cash flow and the work we are doing to maintain a strong and flexible balance sheet. Our recurring free cash flow was $375 million for…

[Operator Instructions] Your first question comes from the line of Haran Posner with RBC.

Starting with your guidance. I was wondering if you can give us a sense for just sort of what the economic backdrop is for some of your assumptions.

Well, I think as we kind of look forward here -- you've probably gotten to know us as being a little bit conservative on our outlook of the economy these days because I think that there's obviously a lot of things playing out. We've seen some modest signs of life here. I think if you look at what's been published out there publicly on first quarter ad pages, we've seen some growth; it's somewhere around 5 percentage points. And we've seen stability in our catalog product line. So I think that's all good stuff, but I think we also want to rely on making sure that it's more than just a short-term trend and a longer one. I think what we like to do is remain cautious about the economy. But I will tell you what I'm really bullish about is our ability to manage whether the economy continues to be a slow one or capture the upside if it does in fact recover. Certainly, we're seeing the market take off today. There's all sorts of positive things. But I will say, we also look at like our average employees getting hit with the payroll tax or getting hit with gas cost. And so the average people out there yet are still feeling headwinds. And I want to make sure that hopefully with that bit of good news in the economy with housing and the market start to translate into good news in the consumer. A lot of this stuff is going to be based on the consumer confidence that is out there. And so I'd say that we're, I think, cautious but seeing signs of optimism in what the economy's doing.

And Joel, just to follow up. You said upwards in ad pages, you saw growth. Is that for what period again?

And this is out there. I mean, I think the industry reports on it, and I'm talking from an industry standpoint. A lot of them saw towards the back end of the year about 5% increase in ad pages. I mean, overall, for the year, ad pages were down about, for '12, were down about 8% but kind of started correcting towards the end. I will tell you that in our mix of customers, our rate was about half that because I think that sort of speaks to the quality of the publishers we have in our mix. But in the first quarter, what we've heard from clients and this is publicly out there is they're seeing somewhere around a 5% increase in ad pages for the first quarter. I will say that after April, their visibility drops off very quickly, as the -- I think the advertisers are still waiting to see how trends happen and things happen much later in the day in terms of decisions than they've had before.

Okay, that's great color. Maybe shifting to the Vertis integration. Just to clarify, did you say $50 million, $5-0 million in synergies in 2013 and '14?

Yes. We said -- well I said, in excess -- I mean, we're still kind of early on into it. But that would be our estimate, would be that.

And John, how should we think about modeling that? Is it fair to kind of think about it as kind of a linear ramp? Or is it going to be more early weighted?

I think lineal is a reasonable way. I mean, some things you're going to get more quickly in the procurement and SG&A, some of the plant integration will come more slowly as we integrate the plants and move work around.

Okay. And then when I go look back at your integration of Worldcolor, at least initially there was a period where you sort of experienced, what you described at the time, as frictional costs, as sort of you migrated the production. And I was just wondering if that is something that you would expect this time around, and if so, to what degree?

When you move work, you're always going to have these "frictional costs". I think we, frankly, probably created more confusion around that than we created value. So when we shared the in excess of $50 million and how it's going to flow out, that's taken into consideration.

And I think in the Worldcolor case, I mean, it was such a significant acquisition with so many pieces of business moving from one place to the other, with more complication in those product lines that are actually in the retail product lines. If you remember, retail is really a product of press. So most of the time, it doesn't encompass all of the finishing operations where a lot of the complexity are. So we don't anticipate experiencing as much of a frictional sort of experience as we did. But that being said, every integration has cost to it but we're not going to be talking much about those.

Your next question comes from the line of Jamie Clement with Sidoti. James Clement - Sidoti & Company, LLC: Joel, I know you all put out a press release in response to your trip to Washington about postal reform. If in fact, USPS does do away with Saturday delivery, does that -- is there a group of your customers for whom that does impact in a meaningful way? And if you just care to kind of go into your postal thoughts just a little bit more for us and see how -- where Quad fits into the mix there?

So you want me to go postal. Well, let me -- first of all, the 5-day delivery thing is -- this is not a new... James Clement - Sidoti & Company, LLC: And if I -- John, is that the 10th time you've said that over the last 2 weeks, just out of curiosity?

No, no, no. So the 5-day delivery thing is not a new concept out there. This has been in the works and talked about for quite a long time. Some of our customers get more affected from a production standpoint, like weekly magazines because they all want to be in the same spot. So if the spot has to move, they're all competing for that. So it's like the timing contract we talked about, our production platform, all that was anticipated in terms of ultimately going to 5-day. I think that the Postmaster General says he's going to do it earlier. I tend to think that, that was a little bit of positioning and it may still happen earlier. But it's to get Congress's attention. You remember, last year there was a bill to fix all these problems, or most of them, that failed in the House. And what was different this time on the Hill is I went up to testify in front of the Senate Committee on Homeland Security where the post office goes through, a couple of members of the House actually came up to that hearing to testify first, and they were all openly supporting getting this fixed, which is not very normal. So that's a good sign. I think everyone kind of understands the issues here. And there's a lot of people who think that this is on the backs of the taxpayers, the reality is that the post office is funded by postage and the goal is for it to be self-sustaining. The problem is, it has twice the infrastructure it needs for the volume it has, and they've been aggressively and successfully pulling significant costs out, but Congress wants them to run like a business that's still shackled to them. And so part…

Yes. Again, I don't think people want to see less service. I mean, as a customer, to my vendors, the last thing I want to see is less service. But if things have to be done, the industry, I think, has been, for the most part, generally supportive with the idea of pulling cost out. The volumes on Saturdays tend to be lower. And even if they pull Saturday away, we're really pushing for them to keep the production going on those facilities because we still have to deliver mail. And so I -- it's going to affect people different ways. But generally speaking, they want to get there before the weekend and retailers want to get the stuff to you before the weekend when you're going to go spend, and Saturday is the day when hopefully you've already gotten the message.

Your next question comes from the line of Dan Leben with Robert W. Baird. Patrick C. Wang - Robert W. Baird & Co. Incorporated, Research Division: This is actually Patrick Wang for Dan Leben this morning. First off, appreciate the color on the 2013 guidance on EBITDA, breaking out the $45 million as attributable to a stand-alone Vertis. Do you have a similar guidance for -- in terms of revenue, what would have -- what would Vertis have been as a stand-alone in 2013?

We would expect that Vertis, on a stand-alone basis would have been approximately $1 billion. Patrick C. Wang - Robert W. Baird & Co. Incorporated, Research Division: Okay. So very -- pretty similar to 2012?

They're at $1.1 billion. I mean, they did have downward momentum that was caused by the financial challenges and exasperated when they went into the bankruptcy to facilitate the sale process, so a little steeper. Patrick C. Wang - Robert W. Baird & Co. Incorporated, Research Division: And then just really quick on the 2013 recurring free cash flow guidance, I know that during the acquisition of Vertis, you guys mentioned that it was $97 million of the portion of current assets in excess of working capital. Is that included in that $360 million guidance figure?

Yes, we would expect that a vast majority of that would come back into 2013. Probably the order of magnitude of $85 million to $90 million of it would be restored during '13. Patrick C. Wang - Robert W. Baird & Co. Incorporated, Research Division: Okay, wonderful. And then from an integration challenges standpoint, you guys mentioned earlier on the call that with the product mix, you're not facing the same level of complexities as the Worldcolor acquisition. But is there any other areas where you anticipate challenges, whether it's with customer overlap and retention?

No. I think that -- I started seeing the customers right after we closed the deal, literally that day. And you're always going to have some risk of clients moving or not but I think we maintained a pretty good track record of keeping them on board. And I think that they have a very loyal client base because Vertis, the employees of Vertis, I have to tell you, my hat is off to them. Because as I've made my way around both to the clients and the customers, they've really performed well for them. And so I think it's just a matter of their customers getting to know us. And by the way, there were a lot of areas where there wasn't an overlap. Again, they brought some segments to us that we didn't really play well in or played much in, which would be things like grocery, the things I mentioned before. But I think the financial stability we bring is going to be key to these clients. And I know that as much as they like Vertis, they were getting nervous, and so I think we've been able to alleviate a lot of that. Okay. Well, I want to thank everyone for joining us. But first of all, I want to thank all the Vertis employees. I have been just absolutely amazed by what I've seen and what I've heard and really thank everybody involved in this process to pull these 2 great companies together. And so with that, we'll see you all next quarter. Take care.

This concludes today's conference call. You may now disconnect.