If you would like further information regarding the various risks and uncertainties associated with our business, please refer to our various SEC filings which are posted on our website versopaper.com under the Investor Relations tab. Mike?

Mike Jackson

Good morning, everyone and also Dave a hearty welcome to Verso. Just before the question-and-answer period, I will make some further comments about the CEO transition and the fact that the company has chosen the right successor.

If you would go to slide 3, as many on the call know, the first quarter is a seasonally challenging quarter for volume. Such was the case this year. In fact, this was compounded this year due to the larger than expected drop in advertising spend, which impacted both the magazine and direct mail business.

As we look at year-over-year comparisons, the first quarter of 2011 was unusually strong, and coupled with the impact of our three machines being shut down in the fourth quarter of 2011; it really makes for a distorted year-over-year basis for comparisons.

From an industry perspective, if you adjust for 20,000 tones of coated mechanical imports from Korea, which are really competing in the freesheet market, but get classified as mechanical due to the BCTMP content, then both coated mechanical and coated freesheet demand were down 7.5% in the first quarter.

This drop-off was a bit disappointing, but given the fact that GDP was a very lukewarm 2.2% growth, we expect to see a stronger economy going forward. I will speak of that in a moment, when I give my forward-looking comments.

Our inventories of coated groundwood remained at levels similar to both the fourth quarter of 2011, as well as the first quarter of 2011. Our coated freesheet inventories did grow, but overall our inventories are at planned levels and in good shape.

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