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Owens Corning (NYSE:OC)

Q2 2009 Earnings Call Transcript

August 5, 2009 11:00 am ET

Executives

Scott Deitz – VP, IR and Corporate Communications

Mike Thaman – Chairman and CEO

Duncan Palmer – SVP and CFO

Analysts

Dennis McGill – Zelman & Associates

Ken Zener – Macquarie Capital

Ray Huang – JPMorgan

John Baugh – Stifel Nicolaus

Keith Hughes – SunTrust

Garik Shmois – Longbow Research

Jim Barrett – CL King & Associates

Mary Gilbert – Imperial Capital

Jason Hope [ph] – Voyant Advisors [ph]

Operator

Good day, ladies and gentlemen, and welcome to the second quarter 2009 Owens Corning earnings conference call. My name is Lacy, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to your host for today's call, Mr. Scott Deitz, Investor Relations. Please proceed.

Scott Deitz

Thank you, Lacy. Good morning, everyone. Thank you for taking the time to join us for today's conference call and review of our business results for the second quarter of 2009. Joining us today are Mike Thaman, Owens Corning's Chairman and Chief Executive Officer and Duncan Palmer, Chief Financial Officer.

Following our presentation this morning, we will open this one-hour call to your questions. Please limit yourselves to one question and one follow-up so. Earlier this morning, we issued a news release and filed a 10-Q that detailed our results for the second quarter of this year.

For the purposes of our discussion today, we prepared presentation slides that summarize our performance and our results for the second quarter of this year. We will refer to the slides during the call. You can access the slides at owenscorning.com. There you'll find a link on our home page and a link on the Investor Section of that website. This call and the supporting slides will be recorded and available on our website for future reference.

Before we begin, we offer a couple of reminders. First, today's presentation will include forward-looking statements based on our current forecasts and estimates for future events. Second, these statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. Please refer to the cautionary statements and the risk factors identified in our SEC filings for a more detailed explanation of the inherent limitations of such forward-looking statements.

We ask that you understand that this presentation and today's prepared remarks contain non-GAAP financial measures. Also, note that GAAP to non-GAAP reconciliations are found within the financial tables of our earnings release. For those of you following along with our presentation, we will begin on slide four.

Now, opening remarks from our Chairman and CEO Mike Thaman, followed by CFO, Duncan Palmer, and then our Q&A session. Mike?

Mike Thaman

Thanks, Scott. Good morning, everyone. Thank you for joining us today to discuss results for the second quarter of 2009. I'm pleased to report that Owens Corning delivered an outstanding second quarter on the continued strength of our roofing business and the execution of our cost reduction programs.

We produced a 58% year-over-year increase in adjusted earnings per share, a great result considering the weakness of the global economy. During our first quarter call, we said that we would generate $150 million of free cash flow in 2009. Based on our performance during the first half of the year, we now believe that $200 million in free cash flow is achievable in 2009, which means that we expect to generate at least $377 million in free cash flow during the second half of this year, an excellent result.

We are also on track to surpass our cost reduction of $160 million and are on track to reduce capital spending by $140 million. All told, we will reduce cost and cut capital spending by a combined total of $300 million in 2009.

In review of the second quarter, the rapid downturn in the global economy and the prolonged weakness in the U.S. construction market continue to challenge our market opportunity. Revenue totaled $1.2 billion compared with $1.6 billion in the second quarter of 2008.

We delivered adjusted earnings per share of $0.49 in the second quarter, an increase of 58% from our $0.31 performance in the second quarter of 2008. We also strengthened our balance sheet during the quarter. We reduced debt and maintained significant liquidity.

During the quarter, we executed a bond offering. I'm pleased with the outcome. We issued $350 million of 10-year bonds that further strengthened our liquidity and in particularly – in particular, our maturity profile. Duncan will provide more insights to this and also our second quarter results in his remarks.

At the beginning of the year, we framed our outlook and expectations for the year. We said that we would continue our progress in creating an injury-free workplace. During the first six months of this year, our safety performance has improved another 15% to overall performance in 2008. Our goal continues to be to establish an injury-free workplace.

We said that weakness in the composite segment will persist through the first half; it has. Our recovery plan for the business is on track. I'll outline our progress in a moment. We said that roofing momentum would carry into 2009; it most certainly has. In the U.S. market with weak demand for asphalt shingles, revenue was up compared with second quarter of 2008. We achieved record roofing earnings. EBIT margins in the roofing business reached 34% during the second quarter of this year. Our roofing EBIT is a particularly strong driver of cash flow due to our advantageous tax position in the U.S.

We said that the insulation business would face a difficult market in 2009 and it has. And we expect that that will continue throughout the year. We are currently operating this business at about 50% of capacity. We said that we would be profitable in our composites and our building materials segments in 2009. Clearly, our outstanding roofing performance has all but assured the attainment of this goal for our building materials segment.

For our composite segment, we did show optimism about achieving this goal in our last call. It now appears that the cumulative impact of first half volume weakness and the cost absorption impact of our aggressive capacity curtailments will make this goal unattainable. In summary, the Owens Corning portfolio is exceeding our expectations in 2009.

Now, let's review each of our segments with a look to what we see ahead. First, our building materials segment. It was another terrific quarter for our roofing business. Sales were up 14% and EBIT up $145 million compared with the second quarter of 2008. In the quarter, our roofing business produced $182 million of EBIT.

We have sustained the gains in this business and we are performing at exceptional levels. During the past 12 months, this business has generated EBIT margins of 21%. Underpinning this performance are enduring enhancements to our competitive position, including cost productivity, marketing mix, and shingle design and materials technology.

While demand has been weak in 2009 versus historical norms, our national scope and our strong share position have allowed us to benefit from regional market strength in the Southeastern Texas and most recently, the Denver area.

Our insulation business was unprofitable for the third consecutive quarter. While U.S. housing starts and prices have recently begun to show some signs of a bottom, our business continues to suffer from very poor market conditions. This is particularly true for the residential construction market in the U.S. and now, Canada.

While other markets for insulation such as the North American commercial and industrial, as well as Latin America and China markets are also weak, our overall financial performance in these markets has been stable. We will continue to take a disciplined approach to capacity and cost management in our insulation business. The business is positioned to return to profitability quickly when the market recovers.

Now, on to our composite segment. For the second consecutive quarter, composites lost money on the EBIT line. The business continues to be pressured by the global economic slowdown. Sales were down 41% compared with the second quarter of 2008. Inventory in the supply chain continues to be elevated. We do believe that customer inventories have begun to come down and we have brought our inventories down even faster than we had previously expected.

In April, we discussed our plan to drive improvement in the composite segment. First, we said that we needed to get our production below demand and to begin to reduce our inventories. Last quarter on the call we told you that we had achieved this milestone. Second, we said that through aggressive management of cost, capital expenditure, and working capital we would generate positive cash flow sometime in the second quarter. I’m pleased to report that this was achieved.

Third, we said that based on expectations for demand growth and stable prices, we will return to profitability sometime in the third quarter of 2009. On the positive side, demand has continued to improve sequentially since December. We have also been very successful at establishing and sustaining unprecedented levels of inventory reduction, as well as unprecedented levels of manufacturing curtailments. However, our production levels have put more pressure on our P&L than originally envisioned and it potentially delayed our return to profitability to outside the third quarter.

Fourth, we said we will restore inventory balances to target levels by year-end. Our strong efforts on manufacturing curtailment and inventory liquidity will allow us to achieve this goal.

Finally, we expect to enter 2010 positioned to restore production and utilization to more acceptable levels and get back on track to restore operating margins to our double-digit goal. We remain committed to this important milestone. We are confident in the composite segment. We continue to invest in this global business to serve our customers in every region of the world.

In summary, Owens Corning had a great quarter. Our strong cash performance of $140 million of free cash flow for the quarter is evidence that we are performing across the organization. We've set aggressive financial goals for the balance of the year and we are leading our operations to position Owens Corning for continued success in 2009 and into 2010.

Now, here is Duncan to provide a detailed look at our quarterly performance and our financial position. Then we'll turn to your questions. Duncan?

Duncan Palmer

Thanks Mike. Let’s start on slide 5 where we detail key financial figures for the second quarter of 2009. You will find more detailed financial information in the table of today's news release and the Form 10-Q that was filed earlier.

Today, we reported second quarter of 2009 consolidated net sales of $1.2 billion, a 23% decrease compared to 2008. The quarter was highlighted by strong roofing sales that were up 14% compared with the second quarter of 2008, continuing the momentum begun in the second quarter of last year.

As a reminder, when we look at period-over-over comparability, our primary measure is adjusted earnings before interest and tax, adjusted EBIT. In a moment, I will review our reconciliation of items to get to adjusted EBIT. These items totaled $20 million in the second quarter of 2009 compared to $13 million during the same period in 2008. And for the first half, these items totaled $70 million in 2009 compared to $48 million in 2008.

Given the market environment, we are extremely proud that we have grown our second quarter adjusted EBIT from $87 million in 2008 to $108 million in 2009. Adjusted earnings for the second quarter of 2009 was $62 million or $0.49 per diluted share as compared to second quarter of 2008 adjusted earnings of $40 million or $0.31 per diluted share.

Results for the quarter continue to demonstrate the strength of our business portfolio and our ability to execute in the midst of the weak global economic environment and the continued decline in the U.S. housing market.

Marketing and administrative expenses decreased by $37 million in the second quarter and by $55 million in the first six months compared to 2008. As part of this reduction, our cost actions have decreased our operating costs by about $40 million so far in 2009 and we are ahead in achieving our overall cost reduction goal of $160 million for the year, which includes both operating and manufacturing costs.

Depreciation and amortization totaled $74 million in the second quarter. We currently estimate our depreciation and amortization will be approximately $320 million in 2009. This is less than our prior guidance of $340 million due to the impact of actions we have taken to curtail production and to reduce capital expenditure.

Our first half capital expenditures totaled $95 million compared with $147 million in 2008. We expect that they will be about $225 million for the full year 2009 compared with $366 million in 2008 excluding purchases of precious metals. In addition, we have taken actions to reduce working capital, which resulted in $69 million of cash generation for the second quarter, a significant improvement over the $103 million of cash used related to working capital in the second quarter of 2008. Free cash flow generation for the quarter was $149 million. As a result, net debt was reduced to $2.16 billion at the end of the quarter.

Moving to slide 6, you can see the detail associated with the reconciliation of our second quarter adjusted EBIT of $108 million to reported EBIT of $88 million. We provide this analysis as a measure of our current operating results. We are responding to the current environment to reset our cost structure across the company.

Beginning in 2009, we have taken various cost reduction actions including significant capacity curtailments, extending planned downtimes, reducing headcount, and delaying and cancelling capital projects. These actions will contribute to cost reductions of at least $160 million in 2009, of which we expect at least half will be permanent reductions where the cost will not return when we restart fiber production capacity.

Given the results of our actions, we are ahead of our expectations in achieving these savings. We incurred charges of $11 million in the second quarter related to achieving these savings and expect to incur an additional $8 million of charges during the second half of 2009.

The integration of the composite acquisition continues to deliver synergies well ahead of our original plans. In 2009, we expect to deliver a total of $75 million from synergies, up from the $50 million we realized in 2008. We incurred $8 million of integration costs in the second quarter associated with achieving these ongoing savings.

As you have seen in prior quarters, we adjusted for the non-cash amortization of costs associated with the Employee emergence equity program, a total of $6 million. These shares, which have a three-year investing schedule and will be amortized in the P&L until October 2009, were awarded to employees at the time of our emergence from Chapter 11 in 2006. In the second quarter of 2009, we had gains on sales of assets and other items that resulted in $5 million gain.

Now, if you move to slide 7, you will see an illustration of adjusted EBIT performance comparing second quarter of 2009 with the same period in 2008 based on business contribution. This illustrates how our portfolio performance has improved year-over-year. Adjusted EBIT increased $21 million from the second quarter of 2008 to second quarter of 2009.

Our roofing business delivered record results in the quarter and sustained the momentum that began in the second quarter of 2008. This improvement was offset by both the insulation and composite businesses, which faced weaker demand in their respective markets.

With that as background, turn to slide 8 and we will begin a more detailed review of our segments, starting with building materials. In the second quarter, building materials had net sales of $865 million, a 9% decrease over second quarter of 2008. Despite these low sales, building materials delivered a significant improvement in EBIT of $143 million compared to EBIT of $39 million in 2008.

The following two slides discuss these results in more detail by highlighting the key businesses within the building materials segment, the roofing business, and the insulation business. First, slide 9 provides an overview of our roofing business. In the second quarter, this business achieved a new level of performance despite low sales volumes. Roofing net sales for the quarter improved 14% from second quarter of 2008. Selling prices rose during the first three quarters of 2008 to recover material costs, particularly asphalt.

Since the fourth quarter of 2008, prices have remained relatively stable and unit margins have improved. The business achieved a $182 million of EBIT in the second quarter of 2009. This represents a tremendous improvement from last year.

We have significant actions since 2007 to improve the profitability of our business. We have achieved improvements in our production processes including energy efficiencies and reduction in the raw material cost of our shingle formulation. We have also reduced overall manufacturing fixed costs. In addition, we have launched new product lines, improved our mix, and grown our accessories business. These programs had a significant impact on 2008. In 2009, these programs will deliver $100 million of improvement compared to 2007.

In addition, the roofing industry is attractive. We have seen stable selling prices since the fourth quarter of 2008 and we have demonstrated that our business can deliver operating margins well above 10%. We believe that this business will continue to see strong operating margins for the rest of 2009 and beyond.

Next, on to slide 10, our insulation business. Our insulation business continues to feel the impact of the weak North American housing market. Second quarter net sales in this business were down 31% when compared to second quarter of 2008. This decline was primarily due to a reduction in volume as prices have remained stable since the second half of 2008. The decline in insulation net sales was less severe than the decline in U.S. housing starts due in large part to our diversified portfolio of markets and geographies although we have experienced in many of these markets in the second quarter of 2009.

EBIT for this business was a loss of $28 million due to the impact of lower demand on our sales and underutilization of our production capacity. In response to the prolonged weakness in demand, we have taken actions to reduce active production capacity and to align our cost structure with market demand. As a result, about half of our fiberglass insulation capacity is now curtailed.

The improved cost structure resulting from these actions, as well as the business resilient portfolio have contributed to insulation increasing EBIT from the second quarter of 2009 over the first quarter of 2009 on lower housing starts. Even with these actions, this business will struggle to achieve profitability until demand improves. This is a great business in a well-structured industry.

Owens Corning's pink fiberglass insulation is a powerful and enduring brand. We are the clear market leader, well positioned to return to historical levels of performance when demand improves as we know it will.

Next, slide 11 provides an overview of our composite segment. Composites net sales decreased 41% in the second quarter of 2009 as compared to the same period in 2008. Approximately two-thirds of this decrease was the result of lower sales volumes caused by the global economic slowdown that began in the fourth quarter of 2008.

The remainder of the decrease was due to the May 2008 divestiture of two plants in Europe and an unfavorable currency variance from translating sales denominated in foreign currencies into U.S. dollars.

Second quarter EBIT for the business was negative $9 million compared to a positive $71 million for the same period in 2008. Substantially all of this decrease was the result of lower sales volumes including the impact of underutilization of our production capacity. This impact more than offset the operating cost that we have taken out of the business through our cost reduction programs, as well as the synergies that we have achieved through the integration of the 2007 acquisition.

In our first quarter call, we noted that we began to see a favorable trend in reinforcements demand after experiencing volumes down by as much as 45% in December 2008. This favorable trend in demand for reinforcements has continued throughout the second quarter. We expect a gradual increase in demand to persist throughout 2009, but industry demand could be down by as much as 20% in 2009 compared to 2008.

We have curtailed about 50% of our global reinforcements production capacity and as a result, we had a significant decrease in inventory during the second quarter of 2009. Also during the first quarter call, we said we would return our business to cash generation in the second quarter, which we have achieved. By year-end, we expect to have reached our inventory goals in this business, which will allow us to bring – to being to bring back operations back in line for 2010.

Next, we have a few additional items to cover before turning to our Q&A. Now to slide 12. We have further strengthened our balance sheet. In the second quarter, we took advantage of improving credit markets to issue $350 million of 9% senior notes maturing in 2019 and used the proceeds to reduce amounts outstanding under our senior revolving credit facility. This issuance significantly improved liquidity and the debt maturity profile of the company.

In addition, as part of this bond offering, our credit ratings were reaffirmed with both S&P and Moody's. We have no material debt maturities coming due until the fourth quarter of 2011. We have $889 million available in our senior revolving credit facility as of the end of the quarter. In addition, we have $110 million of cash on hand. We expect that the cash we have on hand coupled with future cash flows from operations and other available sources of funds will provide ample liquidity to allow us to meet our cash requirements and capital investment plans.

Now, on slide 13. We have continued to focus on actions to maximize free cash flow in 2009 and in the 2009, we generated $149 million of free cash flow. We will reduce cost by $160 million in our business during the year and expect to reduce capital expenditures by $140 million from 2008 levels. We expect that cash taxes in 2009 will less than 2008 and overall cash taxes paid were $34 million.

These measures, along with the company's extremely robust performance for the quarter, have improve our confidence in the outlook for free cash flow. We believe that we will achieve free cash flow of at least $200 million in 2009, which will reduce our net debt at the end of the year to less than $1.8 billion.

With that, Scott, back to you for Q&A.

Scott Deitz

Thank you, Duncan. Thank you, Mike. Lacy, we are now ready to begin the Q&A session.

Question-and-Answer Session

Operator

Thank you. (Operator instructions). And our first question will come from the line of Dennis McGill with Zelman & Associates. Please proceed.

Dennis McGill – Zelman & Associates

Good morning, guys.

Mike Thaman

Good morning, Dennis.

Dennis McGill – Zelman & Associates

Just quickly on the last slide, the cost reduction of $160 million for the year, can you break that down roughly by segment and kind of how you think that will associate to the three major segments?

Mike Thaman

Dennis, this is Mike. We've broken it down a bit in terms of what we think it will be in the operating expenses side versus the manufacturing side. Up to now, we have not given guidance and how it is spread across the individual segments. I think suffice it to say that on the operating expense side of the business, we've been focused on really getting our operating expenses driven down across the entire business, both the building materials side, the composite side, as well as corporate. I think you can see that coming through the numbers.

On the manufacturing side, we have obviously continued to be very aggressive in insulation although we have been aggressive now for about three years running. So the rate of change of costs in the insulation business has probably slowed down a bit. In terms of the amount of cost we can take out, we've been much more aggressive on the composite side, which is where we saw the biggest reversal in the last six months and I think there is an outside contribution in terms of cost reduction coming from composites.

And then on the roofing side, volumes have been pretty weak. So there has been some curtailment activity and cost reductions on roofing although I wouldn't think that you'd see a huge contribution to the overall cost reduction program coming from roofing manufacturing costs.

Dennis McGill – Zelman & Associates

Okay. And then on the roofing segment, as you mentioned there, volumes, I'd imagine, down more in 2Q than 1Q. Pricing, as you mentioned, has been kind of stable recently. So can you help us kind of bridge the big jump in sequential profitability from 1Q to 2Q, I guess between raw materials and cost actions and anything else that might be going into that?

Mike Thaman

Sure. I think your assessment, which is that we probably saw volumes a little bit weaker in Q2 ’09 is a true statement versus Q2 ’08. If you look back to the second quarter of last year, volumes were a little bit stronger because we did have some storm activity particularly in the Southeast last year that was starting to come through our books.

If you look at the second quarter of ’09 versus the first quarter of ’09, though volumes did build in the second quarter, volumes were relatively good sequentially in the first quarter due to the hurricane Ike at the end of last year and some activity we had at year-end. We did build though going into the second quarter, probably related to seasonality, and then also a little bit of a storm activity near the end of the quarter, particularly in the Denver area, which I talked about in my comments.

So volume growth has certainly contributed sequentially to the improvement from the first quarter to the second quarter. We did start to see asphalt costs going up in the second quarter. Although that didn’t really come through our books, I think we are starting to see that more in our cost structure late second and we'll see that coming into the third quarter. So we had some benefit from continued price stability and a relatively tame asphalt environment combined with some volume build from the first quarter to the second.

Operator

And our next question will come from the line of Ken Zener with Macquarie Capital. Please proceed.

Ken Zener – Macquarie Capital

Good morning.

Mike Thaman

Good morning, Ken.

Ken Zener – Macquarie Capital

In composites, we can talk about any impact there has been from price changes and/or tax rebates coming out of China over the last three months?

Mike Thaman

Like – let me talk quickly about what we are seeing in terms of pricing and then I'll throw it to Duncan if you have anything on tax rebates. I wouldn’t have anything in that area. So I will go over to him to see if there is anything we would comment there, but on the pricing side, I think what we were saying composites is prices have been relatively stable.

So despite a very aggressive slowdown in the marketplace, in the last up cycle, prices never really got elevated. So a lot of our improvement in composites performance for the 2004, '05, '06, '07, '08 time frame was really related to operating leverage we were getting in our business, productivity, cost reductions associated with synergies. It really was not a price-lead improvement in the performance of the business. So we would say versus historical standards, even last year when the results in composites were quite strong, pricing was pretty low versus historical standards of previous cycles.

So it's given us some confidence that coming into this downturn, there wasn’t going to be a big price event that was much more of a volume effect for us and that's certainly what we are seeing coming through our number. Duncan, I don’t know if you'd comment anything on the tax side.

Duncan Palmer

I think the question relates to the Chinese tax rebate side. I think he is right. I think historically – context of the question, historically the – some of our Chinese competition have received some rebates I think in past years. They lost some of those rebates during last year. We’ve seen no change in that tax situation of – certainly in the second or first quarter.

Ken Zener – Macquarie Capital

Okay and I saw something with that. And then also on composites, can you talk about just the spread of regional profit though I know you guys see – I know Europe is obviously a big piece, but relative to the margins that we are seeing on the – in the segment basis, I mean is that fairly even across Europe, Asia, the U.S. or how does the profit or the product mix that you guys sell impact profitability? Thank you.

Mike Thaman

Thanks, Ken. I think we've talked in the past about – we have a very strong global footprint and a very strong global market share position in that capacity. I think our – pretty much the undisputed global leader in this industry. We have historically had stronger potions in North America and Western Europe, particularly with the position we've established with the combination of our business along with VentureTech.

Today, I think the North America and/or the Americas and Western Europe are probably a bit weaker than other parts of the world. So our operating leverage there has been actually a little bit more negative because of our very strong position there. We are continuing to see probably a better position and a more stable position in Brazil, in India, and in China. We have very, very good positions in Brazil and India, we are doing quite well there.

In China, the market position is pretty good. Our position in the market – we are not as strong and clear in the Chinese market as we are in other parts of the world. That's something that we've talked about on past calls of wanting to improve with the investment of some capacity in China. That investment in China is really more driven by trying to improve our manufacturing cost position and ourselves positioned to be able to service our local customers there more cost effectively.

So I think once we get an investment in place in China that will give us a little bit better positive operating leverage in the business than we have today. But right now, we don’t have a lot of leverage in China, which is probably the one bright spot in composites.

Ken Zener – Macquarie Capital

Thank you.

Mike Thaman

Thanks, Ken.

Operator

And our next question will come from the line of Michael Rehaut with JPMorgan. Please proceed.

Ray Huang – JPMorgan

Hi, guys. This is actually Ray Huang on for Mike.

Mike Thaman

Hi.

Ray Huang – JPMorgan

First question on roofing. Margins are obviously very strong. On the press release you guys talked about how the price increase accounted for essentially all of the EBIT improvement in the quarter. So given those price increases are going – you are going to be anniversarying here in the back half, what does that imply for margins in the second half of the year? Is that 20% range that we're talking about or do you think that it's going to kind come out even more?

And then secondly, in terms of a normalized margin for the segment – I mean historically you guys have talked about 8% to 9% range, but given all the productivity achievements you've gotten over the last year, where do you guys see that normalized margin now over the next couple of years?

Mike Thaman

Thanks for the question. I think your observation that the business performed at very, very high levels also in the second half of last year and then the fact that we are getting into tougher comps as we move into the second half of this year is correct. That said, I mean obviously what we are comparing is exceptional performance to what began to be exceptional performance last year.

So we certainly anticipate that our roofing business will carry very strong momentum out of the second quarter into the third quarter and that it will run through the finish line at year-end here and have really an outstanding and exceptional year. If you go back to the investor presentation, which we had shared with investors and we've talked about in the call on the past, we did make a call and it was all the way back kind of in the ’07 time frame when the business was operating at very low single-digits that we thought we can improve the business to around 10% operating margins. We had said we thought it would be a good goal to get to double-digit operating margins.

At the time we did that, that was an internal analysis based on things we knew we were going to do to rationalize our asset base, to change our production footprint, to improve our cost position, our headcount position, but also improve our position in the marketplace and our market mix. Those actions that we envisioned at that time, which were the source of the improvement are largely in place and have been executed and are certainly contributing to the performance that we see in the numbers at – in the second quarter.

The great unknown of course in that time in 2007 was what would be the impact of a big change in the industry dynamic associated with GAF's acquisition of Elk. We had always felt that the overall level of profitability of our business was below potential and that there was an opportunity for these businesses and in particular, our business, to perform at a much higher level.

I think what we've seen as the roofing industry has moved into what is really a very good industry structure is that the business has been able to perform well above the goals that we set. As we sit here right now, we don’t see what would cause roofing margins to kind of trace back to kind of that high-single digit or double-digit rate, although we could be wrong about that obviously. But we don’t see any dynamic of pressure in the market today that causes us to worry about rapidly falling operating margins or operating margins returning back to what we've seen in historical level.

At the same time, operating margins in the second quarter here of 34% relative to the history obviously outsized and we don’t necessarily want to go on the hook to say we know how to keep these levels of operating margins to sustain.

I think if we could keep margins through the year somewhere near that four-quarter rolling forecast of – four quarters of 21%, which we’ve seen over the last four quarters, that's a good benchmark for us in the near term in terms of looking at how the business is operated over what's been a very good year, which is the third and fourth quarter last year, the first and second quarter of this year.

So I think that's probably somewhere in the kind of in the split of difference between the previous guidance we've given, the current operating margins, and I think our four-quarter actual is somewhere in that middle and I think we would look at that kind of operating margin and say that's a good near-term goal for us.

Ray Huang – JPMorgan

Okay, that's helpful. Just a follow-up question. Given the insulation and your capacity down there, 50% there right now, what level of housing starts do you think you need in order to kind of turn back to profitability, kind of like a breakeven level?

Mike Thaman

We did comment, in particular in today's call, about the residential construction market as compared to some of the other markets that we report out through insulation, which is our commercial and industrial markets as well as we report of Latin America and the Americas business through there, and also our China business in building materials in Asia.

We are really seeing the pronounced weakness, specifically in residential and it's been in the U.S. residential market and then also in Canada. So the challenge in our insulation segment, while broad spread in terms of market demand, the profitability challenge really is much more focused on the residential business than any other place. So you are correct in asking about how will housing starts which will help residential come back and then tick up and underpin the performance of the insulation business.

The last time we were profitable in the business for a full year was 2008. 2008 overall single and multifamily starts in the U.S. were around 900,000. Starts in Canada, I don’t have that number exactly in front of me, but I think they are around a couple of hundred thousand in Canada. Canada is probably a fair amount weaker than that. But if you go back to an environment with the U.S. at kind of 900,000, probably Canada around 200,000, we’ve demonstrated a profitability at that level in the past. I think that would probably be that best indicator we have of when we will get back to profitability in the future.

Ray Huang – JPMorgan

Okay, great. Thank you, guys.

Mike Thaman

Thanks.

Operator

And our next question will come from the line of John Baugh with Stifel Nicolaus. Please proceed.

John Baugh – Stifel Nicolaus

Thank you, good morning. Just drilling down on this roofing again, what is the current input of raw material picture and if you can relate that sequentially in the first quarter year-over-year and then relate that if we assume pricing is going to stay stable, relate that to your expectations for the remainder of the year and how that affects this EBIT margin?

Mike Thaman

Happy to that. Let me roll back maybe to the summer of last year, I mean it's hard to imagine that it’s only a year ago that oil prices were peaking around the $140 a barrel and we were – in the environment that we were in the last summer, that was really the period of time where I think as a roofing manufacturer, we felt we were really staring down the barrel of a very, very difficult market dynamic for us, which was prices had not been strong in the industry through 2007 and the early part of 2008 and we were facing dramatic run-ups in our raw material costs with asphalt being a key derivative of crude oil.

There was a fair amount of pricing activity through the second and third quarter of last year to recover the run-up in asphalt cost. The real run-up in asphalt cost lags for us because you have to look at when oil and then when the asphalt comes out of the refinery and then we will bring it into our operations and then when it goes from our operations into our shingles and then we sell them into the market. So we saw very elevated levels of asphalt costs coming through our business, all the way really through the end of last year.

We started to get a little bit of relief in the earlier part of this year, partly related to oil prices falling in the latter half of last year, as well as the seasonality, typically our asphalt is a little bit expensive in the winter than it is in the summer and then I think predictably we've begun to see asphalt costs begin to creep up through the second quarter and that will start coming through our results here late in the second quarter and what we produce, but we’ll start to see those increased asphalt costs not coming through our results in the third quarter and probably trail into the fourth quarter, depending on how long the winter – the summer driving season and the summer paving season and the other things that drive seasonality would be.

So it's kind of a longwinded way of saying that oil is not way up of the elevator levels we saw last summer, which is one of the reasons why we've seen margins widen out based on a stable pricing environment, but that we are seeing asphalt coming to the business at higher levels than what we saw in the earlier part of this year and we are trying to respond to that and deal with that in a responsible way.

John Baugh – Stifel Nicolaus

So Mike, to follow up on that, you said your goal was 10% a couple of years ago and you've done that internally. And we are at 34%, so we got a 24% improvement. How of that if you had to guess is the structural improvement versus kind of back in the balance with pricing in asphalt? In other words, is this 20% to 25% EBIT margin an appropriate target, assuming asphalt and pricing are normalized whatever that is?

Mike Thaman

Yes. I mean, given how much operating margins have really moved in the last call it 16 quarters, I mean if you – both on the downside and the upside, we were performing at relative – near that high-single digit level in kind of 2005. Then we saw some degradation of results in '06 and then we saw really kind of collapse in results in ’07, which is when we set the internal goal of getting back to the double-digit operating margins and now, we've seen them to be very volatile, back on the upside.

It’s pretty hard for us today to set a long-term operating margin goal for the business, except to say we know we created the line of sights to the double-digit operating margin goal and we feel that's all kind of good-to-go executed things that our team has gone and got it done.

We also know that the dynamic that's been helping get to the operating margins over the last four quarters of 21% is the real change in the structure of the industry. It is – it's really a four-player market in a lot of ways, structured as attractive if not more attractive than what we've seen historically in insulation and historically in insulation, we've seen operating margins through time at the 15% 20% level.

So we are not shocked by these levels of operating margins. We would just be cautious, it's hard for us to forecast long-term where our operating margin is going to go because they've been so volatile, but in the near term we certainly see that the momentum can continue. I guess what I would say for foreseeable future, we don’t see the dynamic that should cause these operating margins to get a lot more difficult, materializing the market right now. So we feel pretty good about the business at least through the run-out at the end of the year.

John Baugh – Stifel Nicolaus

Great. Thanks for that color.

Mike Thaman

Thanks.

Operator

And our next question will come from the line of Keith Hughes with SunTrust. Please proceed.

Keith Hughes – SunTrust

Thank you. I have two questions, both on roofing of course. Number one, I've seen in past years you've had an advantage with the asphalt piece of the roofing business, getting some extra margin due to your market share in terms of the processing of that asphalt. Number one, was that applied in the quarter? And number two, what kind of magnitude were volumes down in roofing in the second quarter?

Mike Thaman

Okay, let me talk a little bit about asphalt and maybe I'll let Duncan talk a little bit about volumes for roofing for the quarter. On the asphalt side, we've always seen our ability to process asphalt as much more kind of an asset utilization and an asset turn play that really being an important and material contributor to the overall results of the business. So we operate asphalt facilities at almost all of our roofing plants.

As you crank up the throughput of those asphalt facilities, you get leverage and you get productivity. Through time what we've seen is the industry has begun to kind of consolidate or reduce the number of asphalt facilities that are out there and as a result, you can put yourself in a position where you can process asphalt, not just for your own facility, but also for some of the – some of our competitors' roofing plants.

It's a pretty transparent price market. So if you don't stay price competitive there, our customers on the asphalt side have options and they can move the business. So that's not a place where typically we look to be driving lot of margin or widening of margins. It's just much more important that we get productivity of our asphalt and try to utilize our assets to get productivity really for us and for our external customers.

On the volume side, I'll let Duncan kind of a little – give some color on where we see roofing volumes year-to-date and where we see them going maybe in the second half.

Duncan Palmer

Thanks, Mike. Yes, as Mike mentioned earlier on, we did see some improvement in shingle volumes in the second quarter versus the first quarter. And actually, if you look back at the first quarter, on a relative basis, that was a reasonably strong quarter because we had seen some carry-on volume from late last year, particularly related to hurricane Ike, which had caused a lot of damage in the Texas area and actually up through the Midwest.

So it was an improvement in volume in the second quarter. On a more historical perspective, the kind of volumes that we are seeing in shingles this year versus some – versus historical levels, is quite weak. We actually disclosed on previous investor presentations long-term trend data on shingles and you'll certainly see some – a pretty substantial decline since the kind of the peak of the housing cycle in terms of demand reductions from 2005, 2006, through 2007 and 2008. And despite the fact that we saw some strength in some storm-related volume in the last part of last year, this year we foresee to be a relatively weak demand there for shingles as a whole.

So while we did see some improvement in the second quarter, seasonally we would expect the third quarter to sort of also be a – one of the more active quarters during a typical year and depending on where storm demand comes out both hailstorm-related and also hurricane-related could be higher or lower. And then typically, we would expect the full quarter to be a relatively weak volume in terms of overall shingle demand, again with some uncertainty driven by exactly what kind of late storm activity, particularly hurricanes we might see.

So that would kind of give you some flavor of how the year is shaping up from a shingle point of view.

Keith Hughes – SunTrust

Yes. With – your comments are not surprising. As always, a little surprised at your comments on margins, given that we are not going to have much of a volume environment. You talked about cost saving initiatives and things like that. If you had to point to one thing internally you've done in roofing that has helped show the good results in the second quarter, what would that be?

Mike Thaman

This is Mike. I think it's really important we talk for a second about the dynamic of the roofing business as compared to say composites or insulation. In our roofing business, we really do process some very expensive raw materials and the primary driver of our cost position is our raw material position, not capacity utilization or asset utilization as it would be in composites or an insulation.

So when we look at composites and when we look at insulation, the decision to turn off melters and curtail capacity comes with really significant consequence to both our P&L and our balance sheet on how we manage those decisions. With roofing, the decision to synchronize production to demand is a fairly straightforward decision. So we have the ability to run our lines, to turn them off, or shift activities, to turn them off for a week at a time or a day at a time, unlike our hot assets like our glass assets.

So internally, when we look at managing volumes, managing margin rates, managing pricing, and then managing capacity and inventory levels is a very different equation for us than it would on the composites or insulation side. We came into the year, I think, with fairly modest expectations of overall market demand, we calibrated that. Therefore, based on our position in the market to what our expectations would be in terms of what we would need to produce in order to meet market demand and we are really producing against that plan.

And to date, that has not had a significant absorption consequence to us on the cost side and by keeping inventories in balance and really supporting the value of our inventory and supporting the value of our customers' inventory through a stable pricing environment, we've been able to widen our margins and improve the performance of the business.

Keith Hughes – SunTrust

Okay, thank you.

Operator

And our next question will come from the line of Garik Shmois with Longbow Research. Please proceed.

Garik Shmois – Longbow Research

Hi, thank you. First question is in composites. You just talked about what you are seeing in your backlog towards the end of last year when demands rose significantly, you said. And then in some of your products, demand was down 30% to 60% or so. Can you just talk about how that worked as you move through the second quarter or maybe where you stand right now?

Mike Thaman

Yes, sure. It's a pretty short cycle business. So it's kind of a tough business to manage off of the backlog. We tend to manage it off of trends, which is why the massive reversal in trend in the fourth quarter of last year was so difficult for us to deal with because the business had been trending very, very stable and then all of a sudden, it backed up on itself really from early – late August through early September maybe in Europe to by early November kind of backed up around the world.

So we saw it kind of in two steps, but it was a slow – slow kind of decline in Europe that then really accelerated and then a very rapid and sudden decline in the rest of the world that didn’t start till the last couple of months of the fourth quarter.

We've been working at trend obviously very carefully because that’s a key performance indicator for us. I think in Duncan's comments and then in comments we both said that we have demand improving sequentially. We did say that the market was down 45% in the fourth quarter of last year versus where the trend had been and that we are now forecasting that for the full year this year the overall market will be down as much as 20% versus prior year.

So we'll get into a positive comp in the fourth quarter, but to be down 20% for the year, we obviously need to trend up each month and each quarter to kind of carve our way back to something that gives more representative of what we think end-use demand is, but still well below where we were to the first nine months of 2008.

So we would expect we'll exist the year with far more momentum than we entered the year. We would expect that fourth quarter volumes will show strengthening on trend line from third, which is a strengthening from second, which have shown strengthening from first, but we would still expect to exit this year well below the trend that was established in the first three quarters of 2008.

Garik Shmois – Longbow Research

Okay. Thanks for that. And just a quick follow-up question on your free cash flow guidance. Just want to clarify, was it really just the impact of roofing outperforming in the second quarter leading you to update your free cash flow guidance or you are seeing something in the second half that's giving you more confidence in outperformance?

Duncan Palmer

Thanks. It’s Duncan, I'll respond to that. The – I think in terms of our overall free cash flow if you recall, we had guided in the last quarter that we saw that $150 million was achievable and this time we are indicating that we say $200 million is being achievable. I think there are a two or three factors that really go into that.

One is obviously both our confidence in most of the level of roofing performance we see, which has also had made a – has been very positive for us, but in terms of how we see the (inaudible) remainder of the year, but also as you look at our businesses and particularly, our composites business, we have taken very substantial action to make sure that we are producing below a level of sales to make sure our inventories are coming down and in particularly in composites we’ve seen considerable success in doing that in the second quarter to return that business to overall cash flow positive during the quarter.

We would – will see that continuing throughout the third quarter and into the fourth quarter so that we generate really substantial amounts of cash flow. We would also see from a – typically from a cash flow cycle point of view, our third and fourth quarters being a lot more positive than our first two. So all of those items together really indicate to us that our free cash flow of course for the year – is what we've seen increasing and also one in which our confidence has also increased. So both of those items are very positive drivers for us.

Garik Shmois – Longbow Research

Would you say that they are fairly equally weighted as far as the $50 million increase?

Duncan Palmer

I'm not sure we've done a sort of analysis on sort of that level of sort of precision, but I would say that both – those are significant contributors to our free cash flow for the year and as we look out for the second two quarters and as we indicated on the call, we see the second two quarters should generate at least $377 million of free cash flow. Both – the roofing business and a reduction of inventory across our businesses will both be very large contributors to our free cash flow for the remainder of the year.

Garik Shmois – Longbow Research

Great. Thank you very much.

Operator

And our next question will come from the line of Jim Barrett with CL King & Associates. Please proceed.

Jim Barrett – CL King & Associates

Good morning, everyone.

Mike Thaman

Good morning, Jim.

Jim Barrett – CL King & Associates

Duncan, to follow up on the prior question, given the fact your free cash flow – fact is your expectations are increasing this year, what was the reasoning or how important was it to raise the $350 million in senior notes in June and does that suggest anything about your view for your markets in 2010, 2011 for your cash flow generation in that period?

Duncan Palmer

Thank you for that question. Yes, I think as we looked at our refinancing position for our $1 billion senior revolving credit facility and also our term note which are due in the fourth quarter of 2011 and we looked at our – both our forecast for our business, more particularly what's going on in the credit markets, we saw substantial improvements in credit markets in the U.S. during the early part of the second quarter and going into the late part of the second quarter.

Due to this general uncertainty in outlook in credit markets over the future, we thought it was both prudent in terms of our refinancing, but also a good opportunity for us in terms of where the pricing on our own ability to issue new debt have got to, that was a prudent thing for us to do to issue some bonds, both in terms of extending out our maturity profile out to 2019 and also in terms of brining cash into the company enabled us to pay down some of our revolving credit facility.

So I think it was – it was much less driven by our point of view on our internal cash flow, which as I said, has got more confidence and has a stronger outlook, but much more driven by this uncertainty in overall credit markets and making sure that we had – we will be responsive to markets and take advantage of the improvements that we've seen.

Jim Barrett – CL King & Associates

Okay, that's helpful. And Mike, given what appears to be at least some uptick in asphalt cost at the end of Q2, would you envision – can that industry, the roofing shingle industry sustain further price increases, do you have further pricing flexibility if that asphalt goes up modestly or moderately from here?

Mike Thaman

Jim, really good question. I think foremost in our thought process right now, as we think about pricing at roofing is, obviously our business is operating at very high levels and we are very pleased with the performance of our business. We want to make sure that we are doing things that are supporting the marketplace and supporting our customers.

I don't know that – we would say a tremendous priority for us right now is that we need to get prices up necessarily because we are seeing a lot of inflation, but it is a priority for us that we continue to defend the value of our inventories and the value of our customers’ inventories because this is an inventory intensive business, and our distributors really – our distributors and our distribution channels, it’s very, very important to them that we don’t put them in a position of deflationary marketplace where the inventories that they own are getting devalued every single day in the market.

So when we talk to our customers, when we think about the marketplace, the pricing discipline we are trying to exhibit is to give our customers some stability through the year and some stability to the value of their inventories so that everybody has the opportunity to make a reasonable margin on their inventory.

Jim Barrett – CL King & Associates

Okay. That’s helpful. Thank you very much.

Mike Thaman

Thank you.

Operator

And our next question will come from the line of Mary Gilbert with Imperial Capital.

Mary Gilbert – Imperial Capital

Thank you very much. I just wanted to follow up on a couple of things, when we are looking at Composites, by the end of the fourth quarter where would be the run rate growth that we will be seeing? For example, for the year it will be down 20% year over year, but what will be the actual run rate in the fourth quarter do you think, I mean kind of what you are seeing?

Duncan Palmer

Mary, we obviously don’t want to give volume forecast on a quarter by quarter basis. But I can kind of walk you through the dynamics of the market and kind of help you think about that. If you assume that our prior trends in the first three quarters of last year was, call it a 100; and then in the fourth quarter last year, we saw a drop by around 45%, so we were more like 55 or 60; and we are saying for the full year this year – we think the market in total will be down 80%.

Then we will be 20% off of that four quarter sum, which I guess I am doing the math in my mind. But it is kind of – if you assume on an index basis, last year it was 355, and we’re somewhere going to be 20% off of that, then that same index of a 100 plus, a 100 plus, a 100 plus 355, it is going to produce a result this year that’s 20% less. It’s going to materialize very differently, though. Obviously in the first quarter, we are going to be coming off of that 55 in the fourth, second quarter a little better, third quarter a little better, and then into the fourth I think probably a smooth growth rate that kind of gets those numbers to add up is probably as good a guess as we have.

Mary Gilbert – Imperial Capital

Okay. All right.

Duncan Palmer

I hope that made some sense?

Mary Gilbert – Imperial Capital

I’ll follow up later. And then just going back to the Roof again, I just wanted to confirm on the profit margins there. It sounds to me like the 10% reflects the initiatives that you’ve conducted and now the additional – I don’t know if I’ve got this right – the additional 24% reflects the tolerance for pricing in the market because of the fact that it’s a concentrated market in terms of the players that are in it. Is that fair to say? It’s less competitive – sorry go ahead.

Duncan Palmer

Yes, I think that’s fair to say. I wouldn’t – I guess in this call I want to make sure we don’t hinge too much off of the second quarter margins specifically because it’s also a seasonal business. There is more roofing activity in the summer than the winter. Obviously there are big parts of the country where it snows in the winter and you can’t get up on roofs.

So there is reason they are kind of weather related and seasonal related reasons why our second and third quarter volumes in Roofing are typically quite a bit better than our fourth and first quarter volumes. So when you get into a good dynamic at the operating margin level we would still expect to see operating margins be appreciably stronger in the second and third quarter than they are in the fourth and the first just based on volumes.

So I hope no one on the call is trying to extrapolate off of the second quarter operating margin to get an outlook. We talked on the call about the four quarter rolling – the LTM operating margins of 21%. The last four quarters they’ve all been pretty good periods for our Roofing business.

So that’s a pretty strong benchmark to take the last four quarters, look at that operating margin and challenge ourselves to try to sustain at that level. I would say most of the difference between the double-digit operating margin call we made a couple of year ago which – (inaudible) at that time, we thought it was a pretty bold call. We’re operating at 4%. The business was kind of really struggling along and we said, look, we can get it to 10%.

I think we had good solid well thought-out execution plans in the business to go get that done that we’ve gotten done. And then most of the upside that you would see from there to the dynamic we are seeing today out of LTM operating margins at 21% would be driven by a better industry dynamic and more discipline, certainly on our part on managing a weak volume to strong operating margins if we think it is the appropriate way to manage the business in this environment.

Mary Gilbert – Imperial Capital

Great, thank you.

Scott Deitz

Lacy, I think we have time for one more brief question, and I offer an apology to those who haven’t had a chance to ask their question, but certainly give us a call this afternoon offline. So one more question and then we will go to a wrap.

Operator

Our final question will come from the line of Jason Hope [ph] with Voyant Advisors [ph]. Please proceed.

Jason Hope – Voyant Advisors

Thanks for taking my question. I was just wondering if I could get some clarification on what caused the decline in your expectations for depreciation, amortization. I would think that would be kind of stable considering there is no major acquisitions of any kind from what you saw a quarter ago when you said it was going to be a little higher.

Duncan Palmer

Thanks, Jason. This is Duncan. Yes, what we said I think on the last call is we thought it would be about $340 million for the year. In this call we said it would be about $320 million for the year. What’s really driving that is the actions we’ve been taking in terms of curtailing our production capacity and also reducing our capital expenditure and delaying and deferring, and in some cases cancelling projects.

So as we had looked forward and looked at the depreciation we would have against our active asset base and against the new capital that’s coming into the business and then we took further actions during the quarter and foresee further actions on the schedule of prongs [ph] that are going to be active during the year. The depreciation associated with those prongs. We now foresee it being less than we had foreseen at the end of the first quarter. So it’s really being driven by the actions we are taking both on the capital side and also on the active capacity side, particularly in the Composites business.

Jason Hope – Voyant Advisors

Okay. And then one other quick question. I saw a new disclosure in your 10-Q on the mark to market of some of your debt positions. Was there any gain recognized marking to market your debt in the quarter?

Duncan Palmer

We are not marking to market our debt and there are no gains associated with marking to market our debt. If you have some follow up question on that you can let us know, that will be great. But there is no marking to market of our debt or gains thereof in going through our EBIT in the quarter.

Jason Hope – Voyant Advisors

Okay. I will just call you later. Thanks.

Operator

Ladies and gentlemen, this concludes the question-and-answer period for today. I would now like to turn the call back over to Mr. Scott Deitz for any closing remarks.

Scott Deitz

Thank you, Lacy. I’ll turn it over to Mike the call.

Mike Thaman

Well, first of all, I’d just like to thank everyone for your interest in our company. It’s always exacting for our team and I think energizing for our people to know that we’ve got an investor group out there that is interested and engaged on the performance of our company as the folks who joined us for this call. So I do appreciate your ongoing interest. I think if I was going to write a headline for the quarter, it’s easy to one who write a headline that’s says our roofing business had a terrific quarter, but in fact I think the right headline for the quarter is that OC – Owens Corning had an outstanding quarter.

On this call, you heard us talk about cash flow in a fair amount of detail. You heard us give guidance for the remainder of the year with cash flow in a fair amount of detail. The reason being because that’s really where we have the entire company right now focused on in terms of execution. We know we’ve got to get our cost structure right. We have to get our balance sheets right.

We need to make sure that we get our businesses position to have a lot of positive operating leverage when our markets recover as we assure that we know that they will. I think the team is doing a wonderful job of doing that. The fact that we have been able to advance our agenda in roofing at warp [ph] speed, and get the business with a kind of operating performance that we now see has certainly been additive to our story and our financial performance.

And it has really put us in a position that we can ask businesses like composites and insulation to go that much faster in making sure that they make the right cash decisions that will benefit our shareholders for the long term, even if in the near term in those businesses, it is having consequence to our profitability and our ability to produce positive earnings results. We do know that in the long term the steps that we are taking are going to position those businesses to have the cost structure and the capacity position to give them the positive operating leverage when the markets pick back up.

We talk about them in every call, we are very proud of our safety performance that continues to be a very important objective for our company. And we continue to ask our inventors to look at that as an important measure of this management team’s ability to execute and to take care of our people and keep our people engaged in the business of Owens Corning. We’ve got a strong agenda for the remainder of the year.

I think you will see us working it all the way through the finish line this year, making sure that we get done – everything we can get done in ’09 related to our inventory positions, our capital spending positions, and our cost positions to get all of our portfolio in a strengthened position and ready to perform as our markets begin to pick up.

Thanks for your interest and we look forward to talking to you again at the end of third quarter. Have a great day.

Scott Deitz

Lacy, thanks to everyone for joining, and that wraps up the call. Thank you.

Operator

Thank you. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day, everyone.

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Source: Owens Corning Q2 2009 Earnings Call Transcript
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