Good day ladies and gentlemen. And welcome to the Third Quarter 2009 Owens Corning Earning Conference Call. My name is Michael and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Scott Deitz, Vice President, Investor Relations. You may proceed.

Good morning and thank you Michael. Good morning everyone. Thank you for taking the time to join us for today's conference call in review of our business results for the third 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. Earlier this morning, we issued a news release and filed a 10-Q that detailed our results for the third quarter. For the purposes of our discussion today, we have prepared presentation slides that summarize our performance and our results for the third quarter of this year. We will refer to the slides during this call. You can access the slides at owenscorning.com. You will find a link on our homepage and a link on the Investors section of our 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 of 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 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 slide presentation today, 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?

Thanks, Scott. Good morning everyone. Thank you for joining us today to discuss results for the third quarter of 2009. I am pleased to report that Owens Corning again demonstrated strong progress. We delivered adjusted earnings growth driven by another great quarter Roofing and the return to profitability of our Composites' segment. Through the first nine months of 2009, Owens Corning generated $275 million of adjusted EBIT, an improvement versus 2008 in a more difficult market. The diversity of our business portfolio served us well strong results in Roofing more than offset weak results in our other businesses. We continue our focus in generating cash and maintaining a strong balance sheet. During the third quarter of this year, we generated $332 million in free cash flow compared with $8 million during the same quarter last year. At our Investor Day, on October, 1st we upgraded our free cash flow guidance to $250 million for the year. We now believe that free cash flow for full year 2009 could be as much as $300 million based on our strong third quarter performance. In review of the third quarter, net sales totaled $1.3 billion compared with 1.6 billion in the third quarter of 2008. Revenue was once again impacted by the prolonged weakness in the U.S. housing starts and a year-over-year weakness in the global economy. We delivered third quarter 2009 adjusted earnings per share of $0.61 compared with $0.57 in the third quarter of 2008. In prior quarterly calls, I have measured our performance against our objectives for the year; I'll do the same today. We said that we would continue our progress in creating an injury-free workplace. Our commitment to safety remains unconditional. During the first nine months of this year, our safety performance improved 8% compared with our performance…

Thanks Mike. Let's start on slide five and our key financial figures for the third quarter of 2009. You will find more detailed financial information in the tables of today's new release and the Form 10-Q that was filed earlier. Today, we reported third quarter 2009 consolidated net sales of $1.3 billion, a 17% decrease compared to 2008. Despite the decrease in net sales, we experienced increased year-over-year earnings in the quarter led by the excellent results in our Roofing business. In addition to our earning's performance, we also dramatically improved our free cash flow generation. We delivered $332 million of free cash flow during the third quarter 2009 as compared to $8 million for the same period in 2008. In a moment, I will review our reconciliation of items to get to adjusted EBIT. As a reminder, when we look at period-over-period comparability, our primary measure is adjusted earnings before interest and tax, adjusted EBIT. These items totaled $15 million in the third quarter of 2009 compared to $13 million during the same period in 2008. And for the first three quarters, these items totaled $85 million in 2009 compared to $61 million in 2008. Given the market environment, we are extremely proud that we have grown our third quarter adjusted EBIT from $126 million in 2008 to $135 million in 2009. Adjusted earnings for the third quarter 2009 was $78 million or $0.61 per diluted share as compared to third quarter 2008 adjusted earnings of $73 million or $0.57 per diluted share. Results for the quarter continued to demonstrate the strength of our business portfolio and our ability to execute in the midst of the weak global economic environment and U.S. housing market. Marketing and administrative expenses decreased by $16 million in the third quarter and by $71…

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

(Operator Instructions). And you first question comes form line of Ken Zener of Macquarie. You may proceed.

Good morning.

Good morning Ken.

Insulation has delivered a significant margin quarter-to-quarter, when sales rose about 340 million versus 280 averaging in the first half. Is that gain that we saw margins largely tied to better absorption?

Ken, when you look at the that insulation performance in the third quarter, I think one of the things we talked about in the prepared remarks was we have seen the business improve sequentially. I think you're seeing two things going on there. One is we've traditionally thought about this business as being a very new residential construction business. But in fact today, new residential construction only represents about 33% or 35% I guess, on slide 10, 35% of the overall business. So while we did see seasonality that was giving us positive leverage in the business and helping third quarter results, we're also seeing that the other pieces of the business, the commercial and the industrial side of the business, our extruded polystyrene foam products, Latin America, Asia Pacific, the other pieces we report up through Insulation have started to form a bit of a bedrock of performance that underpins our residential performance. So I think we saw continued stable performance out of the non-new construction piece and then we saw positive leverage for the new construction piece, which is why you're seeing what looks like pretty good positive operating leverage in the quarter.

Okay. And then if I'm looking at Composites, given that it's obviously, you posted positive numbers not just during the quarter but margins, but for the whole quarter. Has the strength you've seen since your Analyst Day led you guys to change kind of I think the growth that you talked about at your Analyst Day for 2010 of 8 to 10% in Composites?

No, it really hasn't. At our Analyst Day, we did a fairly detailed analysis of the overall reinforcements market and I think any of the investors who were listening who haven't gone out to our investor website to see those presentations, I think they are valuable and some pretty high quality work. We are pretty proud of that. What we show on that day was we expected that overall 2009 demand will be down as much as 20% versus 2008. And that's a 2008 that included a pretty weak fourth quarter. So if you take it on kind of a fourth quarter to '08 to third quarter of '09 basis, we've probably seen more than a 20% decline during that four quarter period. We did expect a recovery going into 2010. We don't expect that we're going to recover all the way back to 2008 levels for a couple of years here. So I would say, we're still comfortable believing that next year's maybe high single digits maybe in a good case, maybe all the way to double digit in terms of demand growth. But the recovery we've seen in the last three or four months has not changed our mid-term outlook for how quickly the market will go back to 2008 demand levels.

Thank you very much.

Thanks Ken.

Your next question comes from the line of Michael Rehaut of J.P. Morgan. You may proceed.

Hi thanks. Good morning everyone.

Good morning Michael.

First question, just to go back to Composite' for a second and then I have a question on Roofing, you mentioned I think in the prepared remarks or in the press release that you continue to produce at a level below demand. And so you're able still to get back to a slight profit despite being suboptimal production even relative to today's depressed demand. So the question, can you give us a sense of what margin would look like if you were to increase production to a level equal to today's demand? Number one. And number two, given an outlook for some level of the growth in 2010, how far along to that double-digit longer term goal do you expect to get to progress along as we look through next year?

Okay. Well, I think that as you recognized in your question and as we recognized in our prepared remarks, we were pleased to get the business back to a positive operating margin in third quarter. I know I went a little bit weak in the knees on the second quarter call, saying I wasn't totally sure we will get to that goal. At the time, I think the business was fully committed and believe they would get there and in fact we did get there. So that was pleasing to be able to report good news today on that front. We are still producing quite a bit below demand levels. So while demand has begun to come back versus what we were in 2008 we are still well below 2008 levels. I think the overall number of 20% for the year is probably a reasonably good approximation for where we are today in that journey of demand recovery. We are still producing though in capacity utilization levels that are probably in the 50 to 60% levels, so we still have a lot of equipment turned off and a lot of our operations turned off. We turned on a bit of capacity in the third quarter. I think we'll turn on some more here in the fourth quarter getting ready for 2009. And I would expect probably by the early second quarter of 2010, we'll find ourselves in a position where our production is about equaling demand. If you think about that in margin terms, in the third quarter of last year or really three quarters year-to-date, which is what we show you slide 11, we had delivered double-digit operating margins on a year-to-date basis last year as of the end of the third quarter. So we demonstrated at 2008 demand levels the ability to get to double-digit margins. We're demonstrating at today's demand levels the ability to go positive. So I think when we move back to maybe a production level that's somewhere between where we are today and where we were in 2008 and a demand level that's somewhere between where we are today and where we were in 2008, I think it's a reasonable assumption to believe that we'll do better than where we currently are, which is approximately breakeven but that we probably wouldn't be able to get all the way back to the double-digit number till we saw additional recovery in volumes.

Okay. Now I appreciate that Mike. I know, kind of giving an exact number or a rough estimate even and can be challenging. So the second question on Roofing and asphalt. Obviously, continued great margin performance there and as I look to the fourth quarter, just from a seasonal prospective. I would expect the margins to fall off as volume falls off. But aside from that, what I'm trying to get a sense of is the raw materials and the input size of the equation, with oil going from a lower $50 up to 75-$80. How does that change in terms of asphalt and some of the other input prices that may or may not effect or impact margin as we look out into 2010?

Right, you're absolutely right in terms of what will happen with seasonal demand as we head into the fourth quarter. The Roofing market is much stronger in the second and third quarters than it tends to be in the fourth quarter and the first quarter. We also know that our customers tend to buy, a bit ahead of demand so that we start to see some volumes build in the first quarter as people get prepared for Roofing season. But that as they get prepared for winter, volumes do drop off quite a bit more aggressively in the fourth quarter. So we're not expecting as we head into the fourth quarter that we'll see much volume strength in the business. We positioned our operations and our inventories consistent with that view. We have as we said in today's prepared remarks continue to see relatively stable pricing. I think with the recent run up in oil prices, on a regional basis that it had some impact on asphalt prices but generally asphalt prices also fall as you go into the winter. So we have a little bit of the headwind from oil prices going up. But we do have some tailwind from the fact that we're coming out of paving season or we're coming out of the summer. When there tends to be more demand for asphalt. So I don't think we feel that big inflation in asphalt is a theme today for our Roofing business. I think we feel like we can manage our input costs pretty effectively. And that with reasonable stability and pricing that the key impact on margins would be volumes. And that we would feel that impact through the first half, through the last quarter of this year and maybe through the first quarter of next year and with good fortune, enter the second half or the middle of next year with again very strong operating margins. So that's really the scenario, we're planning for.

So, thanks for the Mike and just to finish up on this and I'll get back into queue. To the extent that we were to see a revenue number and a volume number in 4Q '09 more similar to the level we saw in 1Q '09, everything else equal. I assume it'd be fair to also look towards a low 20% type of margin. I believe it 21.7 in 1Q '09 is that again, I know you want to get into quarter, segment-by-segment, margin forecasting but is that reasonable approach, everything else equal or...

I'm going to agree with you two ways. One is I don't want to get into segment-by-segment, quarter-by-quarter margin forecasting. So I'll give you thumbs up on that one. I do think that directionally, the belief that as volume slows down, we would see some compression of margins even in an environment where asphalt pricing is not all that volatile and Roofing prices is relatively stable. I think you got that directionally right. The magnitude of the margin compression we would feel from that I think something that we are not really going to give guidance on.

Okay. Thank you.

Thanks Michael.

Your next question comes from the line Ivy Zelman of Zelman & Associates. You may proceed. Ivy Zelman - Zelman & Associates: Thank you. Good morning guys. Congratulations on a strong quarter. A lot of the questions I had on raw materials and have been answered I think. Maybe you can talk a little bit about the Insulation business. As you pointed out, Mike with respect to the mix, you obviously are getting the benefit from the some of the other market strengths in the international arena. I know one market in particular I'm interested just understanding what might the dynamics be in Australia. I understand that market sold out and actually maybe I'm not correct on that but there has been some positive benefits to your company as you guys are one of the largest producers to service that market. Can you help us understand, what's going on there and is there a potential proxy for other markets and hope?

Well it's a great insight Ivy and you're right about Australia. What we've seen in Australia is a very effective stimulus package that was put in place by the Australian government where their decision in terms of how to stimulate the economy, they just pretty definitively put a stake in the ground and said, one of the things we going to do is not only made the homes in Australia more energy efficient; we're actually going to insulate the homes in Australia. So they went directly to a solution, they challenged the marketplace to respond. We have a relationship in Australia with a manufacturer in Australia, New Zealand, with a manufacturer there who is a licensee. And so we've been working very hard to support them in order to help them meet Australian market demand. The result of that has been, we have been shipping product really from all of our global insulation operations to Australia. That helped us in the quarter. We think that will help us also a bit in the fourth quarter. Obviously, we don't think it's an enduring positive impact on margins because kind of once this stimulus period passes in Australia and the houses get insulated, demand levels will fall back to normal. As a bridging, it has helped us keep some of our assets hot. It's probably given us more absorption than it has margin. As you can imagine, by the time you pack insulation in a container and you ship it halfway around the world and try to do that at competitive market prices, the big opportunity for us is to keep some of our assets operating and for us to make some manufacturing margin on the product. And that helped a bit in the third quarter. We expect that would also help a bit in the fourth quarter. But I wouldn't say materially, it's kind of bending the curve or changing the trajectory of operating margins in insulation. Ivy Zelman - Zelman & Associates: That's very helpful Mike. With respect to Insulation and then more broadly speaking, you've been always good at helping us understand what are your inputs that you're using for I guess forecasting. And currently, I guess what are your expectations for housing starts and remodel... repair/model spending if you are using a forecast to help plan your business and your strategy going forward? And then secondly, because you do service the non-residential market including industrial, commercial, maybe you can helps us with what you're seeing more specifically with maybe some differences within the end markets that you're serving where there might be strength and areas that you're either surprised by the strength or weakness has been most notable and a little bit more detail within those segments, within those sectors that you're servicing please.

Okay. Well let me start with new construction. I think most of the economists and analysts who are looking at the new construction market do believe that 2010 will be a better year than 2009. I think in general, that makes sense to us. If look at when the finical crisis hit and the kind of fall off we saw in second half of last year, housing starts dropped nearly 100,000 units a month for about six months running from June of last year to the end of last year. So we knew coming into this year, we were in an environment where we had just gone through a very decline and that continued really into the first quarter this year before it felt like starts may be stabilized in the summer of this year, but certainly have not recovered strongly. So if you kind of do a greater than less than analysis, we have a hard time seeing how the first half of next year could be a lot worse than what we saw for the first half of this year. And so we would expect that on a lag basis, we're going to have a very weak first half but not one that's getting worse and that potentially by the second half of next year, we would actually start to see a little bit a improvement in the market. So I think most of the economists that we follow probably have housing starts in the 700,000 plus level which will be about 100,000 better than where they are right now. I think likely, if that scenario happens, it will be because we do see some pretty good pickup kind of through this summer and into the second half of next year, which is not likely to have a…

Well, thanks Ivy. I mean, we've tried to put a fair amount of information out there for our investors to talk about some of the changes we've seen in the Roofing market and certainly over the last couple of decades, if you go back 20 years, what you've seen is a fairly significant consolidation among all the manufacturers. Today, there are really four big national manufacturers that have a footprint that can service the market nationally. We feel we are well positioned among those manufacturers from a cost perspective and from an asset and a footprint perspective and also from a brand perspective. So we like our position in the market and we really think it's a very, very good market. Generally, Roofing prices have tried to be stable. I think that tended to be the best market environment for our customers. Our Roofing distributor would typically carry a fairly large product line and a fair amount of inventory in their warehouse and a lot of price volatility, can have a lot of negative financial impact to distributor who is carrying inventory. So there is a desire as we talk to our customers to see the market trade with fairly stable prices. What we saw last year was, the run up in oil prices was real catalyst that drove us to try to recover, what we were seeing in terms of significant inflation in the market place in the form of prices increases. We were able to do that. We were able to successfully maintain our position in the market as well as recover the inflation that we saw due to oil price run ups. And we were able to sustains our margin performance in the first half of '08 and then when we saw oil come off of it's peak and we saw as asphalt prices decline, we've been able to maintain a stable price environment for the our products which has a lot of margins right now. We've been very reluctant to project into the future that we know that these are kind of golden days for Roofing will sustain forever. But at the same time, the dynamics that got us into the position that we're in today which is margins that have widened out, fairly stable pricing and a good cost environment based on our manufacturing footprint and our performance. At least for now, we see good momentum in the business that would allow us to believe in the near-term will continue to sustain that good operating margin performance. Ivy Zelman - Zelman & Associates: Great. Thank you.

Okay. Thanks Ivy.

(Operator Instructions). Your next question from the line of Keith Hughes of SunTrust. You may proceed.

Thank you. You referred to inventories earlier in the call. I guess drilling into that a little bit more, particularly in Roofing and Insulation, where does your inventory stand versus prior year and how do you feel about the channel at this point? And in the Insulation market, is your inventory different when we look at the different end user markets whether it's renovation, residential construction and commercial?

Thanks Keith. This is Duncan. When we talked about as you can see in the third quarter, we had -- a big contributor to our free cash flow was reduction over in working capital which was about $200 million in the quarter. And a significant contributor to that was reductions in inventory. We talked I think about Composites'. We continue to produce less than demand and we are able to reduce inventory significantly there. As we look at the seasonality of our businesses, we would say that Roofing I think was a contributor to lower inventory in the third quarter. That's typical for the kind of way we schedule our production through the year as we compare that I think to how we saw last year. I think that will be fairly much in line in what we would have seen in terms of inventory levels versus last year. Insulation, which you asked about, I mean that's fairly balanced in terms of our overall inventory. We don't... inventory is not something which we want to keep a whole lot of in Insulation; it tends to be a relatively short cycle and little inventory in the channel. So that's probably balanced, probably similar to what we would have seen last year. So I think it's something which we are managing, particularly in the businesses where we are producing less than we sell such as Composites and something which we'll continue to match going forward and something which has been a great contributor to us in terms of cash flow this year.

You have got an interesting program with Home Depot going on right now around insulation. Is that product similar to what we've seen in the new construction market? Is that new different smaller sizes that would make it different production runs?

Keith, this is Mike. The products that we sell to retail distribution channels versus the products that we were selling to new construction are slightly different. Typically, though, they are made on the same lines and we have the hot end of the asset and the fabrication into the asset. We tend to have a very similar configuration where we melt the glass, fiberize the glass and make the wall. And then down at the fabrication end of the line, we have multiple packaging stations and flexible packaging equipment that allows us to take that product form and to cut it and to package it into different product forms for our different end use market. So in terms of balancing production or establishing production plans, as we see shifts in production or shifts in demand between different channels, we are able to manage that pretty flexibly in our production environment.

Okay, thank you.

Thanks Keith.

Your next question comes from the line of Garik Shmois of Longbow Research. You may proceed.

Hi, thank you. Could you talk about pricing dynamics in the Composites business? The press release indicated that you continue to see pressure there. Can you just talk about what you saw in the third quarter maybe relative to the second quarter and your expectations going forward?

Okay. Thanks Garik. A lot of what we are seeing about Composites now is similar to some of things that we actually said about Insulation a couple of years ago in terms of looking at pricing on a sequential basis and then also looking at pricing on a comparable basis to prior year. So you kind of have to understand the story of Composites pricing through '08. In the first part of '08, pricing was relatively stable and then as the market began to peak really in the summer of 08, we actually started to get some pricing power and saw our prices improve in the third quarter and fourth quarter of last year. So as a manufacturer, we did have some ability to gain some price with our customers in the latter half of '08. We entered '09, therefore, with a little bit higher prices than we had entered '08. But we also saw with the tremendous global slowdown and the big reversal in demand that we saw in the last 45 days of last year that there was tremendous pressure on the market associated with big inventories and the lack of demand opportunity. And we did see sequentially some price weakness in the first quarter and the second quarter that caused our prices to decline through the first half of the year, although on a comparable basis versus prior year, our overall pricing level at the end of the first half was about flat with where we had been through the first half of '08. Now we are getting into tougher comps. So in the second half of '09, we are going to be comparing what we think is going to be a fairly stable price environment sequentially to a price environment last year that was pretty favorable. So we think for a couple quarters here, we'll probably show negative comps on pricing. That might persist into the early part of next year. But we think sequentially, we'll probably have our most difficult price environment behind us and that the market has moved to a state of equilibrium where pricing today feels a bit more stable than maybe what we saw through the 180 days of this year. So you have to kind of work your way through the movie of what's going in the market. But we do believe that from the first quarter of last year to maybe the end of the first half or the end of the third quarter 2009 that the market has moved to more of a state of equilibrium and that we would expect sequentially to see pretty stable pricing from here.

Okay. Great, thank you for that. And can you just talk about raw material costs in the Composites business? We understand that low fixed cost absorption and low utilization rates is leading to challenging performance here in the first three quarters of the year in that business. But can you talk about what you have seen on the raw material side, expectations going forward there?

Yeah, I mean I think we have seen a fairly tame inflationary environment. Probably, the most volatile raw material input that we have has been energy, and we are a big energy user. And in the U.S., it's a combination of gas and electricity and then in that case even a lot of the gas. I mean a lot of electricity is manufactured in natural gas electricity markets. So we tend to be kind of a natural gas derivative in our energy cost in North America. Around the world, gas prices are a bit more pegged and we also use some alternative sources of energy in some of the developing countries where there is not good stable gas supply. The outlook for energy has continued to be that in the spot market at least through this year, energy has been pretty cheap. But the expectation is that natural gas will go back to being more expensive in the out years. Generally, for our planning purposes; we tend to use the forward curve. So our sense would be going into next year that we would see a fairly stable cost environment for energy and that wouldn't be a big theme in terms of how we are looking at margins for next year.

Okay. Great, thank you.

Thank you.

Your next question comes from the line of Jim Barrett of CL King & Associates. You may proceed. Jim Barrett - CL King & Associates: Good morning everyone.

Good morning Jim. Jim Barrett - CL King & Associates: Mike, I have a question for you on Roofing. Are your roof shingle prices and margins fairly consistent across the U.S., or are there significant differences by region?

Well, it's a good thing for you to point out, Jim, which we often like to report out, which is we do talk about the business as being a national market. But in fact, the business operates as a set of very regional markets and in large capacity not just in terms of competitive envelope and where our capacity is located, but also our raw material costs are often very much correlated or dictated by where in the country we are manufacturing shingles. So it is kind of a factor cost business. That said, I think today we would say what we are seeing is it's a high performing business in almost all geographies. So we have a very nice position with our footprint. We tend to have a local plant in most of the major markets and we have invested in that footprint and in that network of plants so that we have the flexibility to service local demand. So our factor costs, our freight costs have been pretty low. As we talked about in terms of pricing and margins, we are in a good margin profile today and so as result, we like the business in almost every place we compete. Jim Barrett - CL King & Associates: And then the one follow up. Do you view it as a competitive advantage that you can forward by asphalt? Can you stockpile that less expensively during the winter time and at least some of your competitors? How should we look at that?

Yeah, certainly, the fact that we are vertical integrated in asphalt we believe is a strength of our business. I mean if you think about our business, we are both integrated in glass and asphalt. And so from a technology point of view and understanding asphalt technology, understanding glass technology as well as a purchasing point of view, we think we have good information and good data to make smart decisions about how and when to buy our glass and our asphalt. In terms of our ability to time the market, in effect, we do have storage and so as a result, we can take kind of physical hedging position with asphalt by either having our tanks be relatively full or relatively empty. But that's measured in days or maybe a couple of months of capacity. It's not measured in our ability to really shift winter costs to the summer or summer costs to the winner. It's more our ability to maybe shift a little bit of costs from quarters in terms of when we buy. The more important strategic issue for us is when to make shingles, because if you do have some low-cost asphalt, the shareholder value strategy is to make low-cost shingles. And if you think asphalt prices are going down, then the smart strategy is to run your operations at a fairly low level of weighting lower cost asphalt and not to lay in extensive inventories. We tend therefore at this time of the year, when we are coming off of the summer where we think asphalt prices are a bit higher to try to run our inventories fairly lean and then as we get into the winter build inventories are bit as we have the opportunity to buy some low-cost asphalt, try to sell those through in the first half of the year and then for the remainder of the year balance production to demand. Jim Barrett - CL King & Associates: Okay, that's helpful. Thanks.

Thank you Jim.

Your next question comes from the line of John Baugh of Stifel Nicolaus. You may proceed.

Yeah, two quick questions on Roofing, you had made the comment earlier that you expect that to be up in 2010. Was that strictly a volume comment I would love your color on what pricing and Roofing may or may not do?

Yeah, John. The comment that we made in terms of where we think Roofing will go in 2010 was entirely related to demand. We look at the business in three demand segments there is the new constructions piece, there is the classic re-roof piece which is my rough guess to be 20 years old and that either starts to leak or starts to look bad, all my neighbors start to replace their roofs. So I decide to go ahead and do a re-roofing job and then there is this the storm awaited demand. And again if you go back to our Investor presentation at earlier this month, we laid out our outlook for Roofing demand and we broke it into those three categories. We think because of what happened to home prices and home equity and the credit markets. That there was a lot of pressure of re-roofing demand and as we have seen that in our overall demand numbers. We know there is a lot of pressure on new construction demand. And then this has not been a particularly strong year for bad weather and or for severe weather. And so most of the severe weather demand we saw this year would carryover from 2008. And some of strong in 2008, so when we just roll all those variables forward, we would expect to see re-roof demand a bit stronger, new construction demand a bit stronger. And we wouldn't expect to see severe weather demand, much weaker in aggregate. As it relates to margins. I think Duncan said it in his prepared comments, we said that a bunch of times at Investor Day, our goal is to sustain the momentum that we see in our operating margins. We definitely understand that delivering double-digit operating margins in the business is a good goal. We had actually laid out how to get the double-digit operating margins well before the business had approach to anything resembling double-digit when we are kind of low single or mid-single digits. We feel very comfortable with the operational improvements and our ability to sustain margins in double digits. Any guidance beyond that we'd like to just put a few more quarters behind as to this level performance before we start estimating what we think long-term operating margins will be?

So much driving that margin and you probably stay away from as much as if we assume oil is going be a higher next year versus this year and then asphalt follows for getting the seasonality that's in between now and then, just looking at the year versus year. Should we think there could be some inflation in pricing assuming the industry is diligent about raising prices with rising import or would that be just bunch of a gas?

Well, I would want to speculate on what's going to happen in industry pricing. I have to look at recent history, clearly last year, when we saw very volatile asphalt prices and significant asphalt inflation that was a catalyst that did allow us to get our prices up in the market and did allow us to recover that cost from the market place. I don't see anything changed in the dynamic of the industry then I wouldn't feel some amount of confidence in our ability to recover inflation we saw that kind of catalyst again.

Great, thank you.

Michael, I think we will take one more question and then we will go to our close.

Your next question comes from the line Andrew Fimon of Meridian. You may proceed.

Thanks, you guys are doing a great job and I think that the it's clearly evidenced that you are managing the company better and one of the things in terms of the page to me is that you are spending less but your safety performance has improved. That to me that shows me that this is much as you guys are not just benefiting from better prices in the market place, you are benefiting from one of the company. My question is, whether you can tell me if there is a general, typical seasonal pattern to general corporate expense and whether that, typical seasonal pattern is what we will see this year or whether it's going to be different this year? Obviously I'm trying to estimate what that number might be for the full year?

Thanks Andy. First of all thanks for your supportive comments. I mean obviously, it's been a while since we've seen anything that resembles what we believe is a normal market in almost any of our businesses. So we have private ourselves, I'm trying to be fast and nimble and respond to the market. And I particularly appreciate your kind words regarding our safety performance. We do talk about safety at the beginning of every meeting in our company. It's exceedingly important to our employees and its something that our Investor's call we've kind of kept that tradition up and set as one of the first things we are going to talk about with investors. We do believe it's a measure of two important things. One is the company's ability to care for its employees and the second is the company's ability to execute. So when we look at our safety performance, we see two things. One is are we doing a good job of getting out of bed every morning and making sure that we're creating a safer work environment for our employees that expresses to our employees how important they are to us. And then secondly, can we execute that every single day. So our track record of safety performance is very important to us as a measuring stick in terms of our execution. With regard to corporate expenses, I'll give a high level comment and then I don't know if Duncan can maybe put a little bit more color behind this. But we see a little bit of seasonality in our corporate expenses, primarily related to some of our accruals. So some of our accruals just for external reporting reasons and internal measurement reasons we tend to accrue through the cycle of the year based on when we…

Yeah, I think, that's right Mike. I mean also when we look at the things that kind of go through the other lines, I mean one of the things probably to note year-on-year that we've disclosed was probably just noting as you compare. Last year is what we actually filed with this year. We used measure our inventory on a LIFO basis; we now measure it on a FIFO basis. So we used to this LIFO charge or benefit that would go through kind of the corporate line. And in 2009, that no longer is happening. So when we compare year-over-year, we're kind of cleaning that up if our comparisons exclude LIFO. So if you look at last year's numbers, you would have seen LIFO in them. That's typically as we went through that line item. And the other thing, of course, as we adjust out our numbers every quarter, things like the $5 million expense in the third quarter was going to the post-emergence equity. That goes away in October 2009, so that kind of item will disappear as we tail down in terms of synergy costs. That will also... the integration costs associated with the acquisitions will disappear. And so some of those other items will also get cleaned up going forward. There won't be as many of those. So I think as we look forward, some of the volatility maybe in the line item as well as general corporate expenses is probably worth noting that it is cleaning up and being a bit easier to understand and being a bit more transparent.

Thank you.

Thanks Andy.

I would now like to turn the call over to Mr. Scott Deitz for closing remarks.

Thank you, Michael, and certainly thank everyone for joining us today. I will offer a reminder that our fourth quarter and full year 2009 results are scheduled to be announced on Wednesday, February 17, 2010. With that I'll turn it over to Mike for a close.

Well, thanks Scott. And thank you everyone for joining our call and your interest in our company and for many of you who are investors, your support of our company. We were pleased with the quarter. In large part, we achieved the objectives that we set out for ourselves earlier in the year and believe that we are on track for 2009. I think of note, if you look at the fact that on an adjusted EBIT basis, we are ahead of last year through the first nine months. We would consider that to be a pretty good accomplishment given how challenging our markets have been really across the board. I think probably the highlight for the quarter for us was the cash flow generation. We had a pretty difficult cash position in the first half of the year. We used a lot of cash in the first quarter. We knew that we needed to get very focused on cash. We asked our team around the world to understand cash flow better and to make sure that we could drive against some aggressive goals. We started the year with a goal of 200 million of free cash flow. We increased that a month ago to 250. And now with 332 million of free cash flow in the quarter, we feel comfortable saying that we believe cash flow for the full year could be as much as $300 million, which really not only is a demonstration of what we believe is good execution, but also puts us in a wonderful position in terms of net debt at year end to continue to work on the refinancings and the credit ratings which we think are very important to our long term. Composites going positive in the quarter is a good checkmark for…

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