Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Owens Corning Earnings Conference Call. My name is Jineada, and I will be your operator for today. [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. Thierry Denis, Director of Investor Relations. Please proceed.

Thank you, Jineada. 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 third quarter 2011. Joining us today are Mike Thaman, Owens Corning's Chairman and Chief Executive Officer; and Duncan Palmer, Chief Financial Officer. [Operator Instructions] Earlier this morning, we issued a news release and filed a 10-Q that detailed our results for the quarter. For the purposes of our discussion today, we've prepared presentation slides that summarize our performance and results for the third quarter 2011. We will refer to these slides during the call. You can access these slides at owenscorning.com. We have 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. Please reference Slide 2. 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 a more detailed explanation of the inherent limitations of such forward-looking statements. This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of GAAP to non-GAAP are found within the financial tables of our earning release. For those of you following along with our slide presentation, we will begin on Slide 4. And now, opening remarks from our Chairman and CEO, Mike Thaman, who will be followed by our CFO, Duncan Palmer. Mike will then provide comments on our outlook prior to the Q&A session. Mike?

Thank you, Thierry, and good morning, everyone. We appreciate you joining us today to discuss our third quarter 2011 results. I'm pleased to report that Owens Corning delivered record earnings performance in the third quarter. Owens Corning continues to benefit from strong execution and a resilient portfolio of market-leading businesses. We are on track to deliver another year of significant earnings growth. Net sales for the quarter totaled $1.5 billion, a 22% increase over the third quarter of 2010. Third quarter EBIT of $177 million was nearly double that of the same period last year. Third quarter adjusted net earnings performance of $124 million represents a historic high for our company. And all 3 of our businesses increased both revenue and EBIT during the quarter, contributing to both top and bottom line growth. Before Duncan provides a more detailed review of our quarterly results, I will comment on how we were performing relative to the expectations we have previously shared with you. We will start with our guidance. We began the year expecting full year EBIT of $475 million. As you may recall, we knew that we had a back-end loaded year when we gave this guidance. We are very pleased to see the momentum that has built across Owens Corning over the last 2 quarters. Last quarter, we raised this guidance to $500 million based on our view that the volume outlook across our businesses at that time. Our current estimate for the year is EBIT in the range of $450 million to $490 million, consistent with our original guidance. There are 2 market-based reasons for this provided outlook: First, we now expect some of the storm-related demand in Roofing to carry over into 2012. Last quarter, we reported that storm-related volume was approaching the highest level we have…

Thanks, Mike, and good morning, everyone. Before I review key financial data for the third quarter 2011, I would like to start with summarizing our strong financial position. Our performance for the quarter and our results year-to-date have been excellent with record results in the third quarter, which represent year-over-year growth in both sales and EBIT in each of our 3 businesses. We are on track to deliver a second straight year of growth and adjusted EPS approaching 40%. Since 2007, our portfolio has performed well in the face of historic market weakness, and we have first sustained and then grown earnings while strengthening our balance sheet, investing in growth in our businesses and repurchasing 10% of our outstanding shares. We have an advantaged tax position that has enabled us to save over $200 million in cash taxes over the past 3 years. It is against this backdrop of achievement that I describe our third quarter financial results. Let's start on Slide 5, which summarizes our key financial data for the third quarter. You will find more detailed financial information in the tables of today's news release and the Form 10-Q. Today, we reported third quarter 2011 consolidated net sales of $1.5 billion, a 22% increase over the same period in 2010 with sales growth across all of our businesses. Our Roofing business grew 59%, our Insulation business grew 16% and our Composites business grew 4% compared with the same period a year ago. In recent years, we have excluded items that were unrepresentative of our ongoing operations to arrive at adjusted EBIT, our primary measure to look at period-over-period comparisons. We believe that this measure is helpful to investors for comparing our results from period-to-period. In 2011, we have not had any adjusting items to our reported earnings before…

Thank you, Duncan. As I've said at the outset of today's call, we are pleased to have delivered outstanding earnings performance in the third quarter. Our teams have been working all year to produce these results, and our achievements are the product of focused execution by the people of Owens Corning throughout the world. As we look to the future, we believe that Owens Corning possesses an enviable market position that enables us to capture growth opportunities and win with our customers. Our strong balance sheet provides strategic flexibility, and we have the ability to deploy capital to support growth for global expansions and technology investment. We possess a resilient portfolio of market-leading businesses to deliver earnings even in volatile markets and stand to benefit from substantial leverage when there's an improvement in the global economy, particularly in the U.S. residential construction market. We expect 2011 to be another year of significant earnings growth. We are positioned for continued earnings growth in 2012, as we make further meaningful progress towards the achievement of our 2013 goals for EBITDA and free cash flow performance. With that, I will now turn it back to Thierry who will lead us into the Q&A session. Thierry?

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

[Operator Instructions] Your first question comes from the line of Michael Rehaut with JPMorgan. Michael Rehaut - JP Morgan Chase & Co, Research Division: First question, I was hoping to get a little bit more granular on the Composites business and appreciate the detail so far. In particular, if you could kind of update how things are going in Europe and also in China. Europe, I think you kind of talked broadly about composite demand slipping in July, August but then rebounding. Does that apply to Europe as well? And also, if you could kind of give us an update on last quarter's comments regarding China wind demand.

Sure. [Audio Gap] prepared script about what we're seeing in Composites in the quarter, let me maybe build on some of those comments. Let's start with the Americas. We have a very strong market position in the Americas, and we've seen really good performance out of our business in that region. So generally, I would say, we've been very pleased with the performance of the Americas region from a demand point of view and also our business there. Through the quarter, we did see demand weakness that began in July, continued into August and then some recovery in September. I think in Duncan's comments, he said that was probably most pronounced in Europe. I think you have 2 things going on here: One is, obviously, August is typically weak in Europe because of the timing of vacations and holidays in Europe. And then secondly, I think, the general concerns or pessimism about industrial production were probably more prevalent in Europe through the late summer months than they were in the U.S. So we saw what felt like more inventory correction and more demand correction in Europe than in other regions. I want to stress, though, that by the end of the quarter as we got into September, we were seeing, at least our shipment volumes, back at June or late second quarter kind of levels. So we went through a soft patch. We got back at the end of the quarter and now into October at shipment levels that we think [Audio Gap] versus where we were versus the second quarter. Now we had expected to see growth, so that's not as good as we had thought we would see coming into the year. But it's certainly a lot better than maybe some of the concerns that we have been…

Sure. Let me talk a little bit about Roofing, I think, across the sweep of the full year. Obviously, we entered the year with lower margins than our overall guidance, so we had expected that we would come into the year with our operating margins kind of down in the teens. And that overall, we thought we could get to 20% operating margins for the year. We're 21% year-to-date and 24% in the quarter. So obviously, we've had a productive year in terms of getting some price recovery and improving our margins back to our target rate. I think we had 3 big price increases in the early part of the year, one in April, one in May and then one in the early part of July. Clearly based on our margin performance, we had good success with those price increases in terms of both covering the asphalt cost inflation we saw and also getting some margin rehabilitation. We have seen asphalt costs continue to sustain themselves at fairly high levels, which is a little bit uncharacteristic this time of year with both crude oil having traded off some of its peaks, as well as heading into winter. This is a time of year we typically see asphalt prices start to come off. We haven't seen a lot of that, so asphalt prices have been persistently high. But we haven't seen asphalt going up, so we haven't needed additional pricing to sustain our margin performance. There was a price increase that we had announced for the September time frame. That price increase was not critical to our outlook in terms of margin performance. And really, it was very important to us in the event that we saw some late fall storm activity. Very often, if we have hurricanes in the fall, we will both see a demand spike and also a spike in oil prices because very often those late fall storm activities tear up the Gulf or have an impact on the oil infrastructure, which also then impacts our input costs. So given that we haven't seen hurricane activity in the fall, we haven't seen an increase in asphalt prices that would have necessitated the achievement of that price increase. So at this point, we feel comfortable with the pricing environment. We feel comfortable with our outlook for the remainder of the year.

Your next question comes from the line of Josh Levin with Citigroup.

So you gave a guidance range for EBIT, and as you think about your guidance range, what are the key sensitivities? What would be the biggest drivers in terms of pushing you to the high end or the low end of that range?

Yes, I mean, great question. Obviously, the biggest driver for us between now and the end of the year is going to be how much of the Roofing volume we see in 2011 and how much of it carries over into 2012, so it's really a timing issue for us. But Roofing is so profitable. It's such a great business that any volume we don't see this year would have a more significant impact on our reported EBIT. And then obviously, if we didn't see it this year, it would probably cause us to be a bit more optimistic about next year. So we see that as a timing issue, but one that could have a significant impact on reported earnings for the time period of the fourth quarter. Obviously, we talked a bit about Composites volumes between now and year end and also Insulation volumes between now and year end. I don't think the Insulation story is particularly material to our reported results, more material to our guidance. We had set a goal out there that we would like to see the business make money in the second half. We, obviously, in our prepared comments, have made it clear we believe we're going to be quite close to that goal. But at this point, it's just too close to call in terms of where volumes will come in between now and year end. But obviously, great progress versus last year where we lost $40 million in the second half. It's a great conversation to be having that we're within eyesight of how we get that business to break even here in the second half. Composites, I would say, we feel it's fairly stable. I guess, I don't really see a big upside or a big downside. Obviously, we could see a little bit of a pickup in growth if we've underestimated how much of this is in inventory adjustment by our customers. You could potentially see customers needing to come back and restock. The flip side is that could go on a bit further, but I think we're pretty middle of the road in terms of where we believe Composites will finish out the year. So I would say it's primarily driven between now and year end by how much of the Roofing volumes we'll see this year versus next.

Okay. And then I wanted to ask you to maybe elaborate on your thoughts on share buybacks. I mean given where the stock price is right now, when you think about the trade-off between share repurchases or reinvesting the cash in the business, I mean, do you really think there are better uses of your cash than buying back shares given where the share price is right now?

Yes, I mean, let's talk about our actions on this. And I think our actions speak for kind of our outlook to the share price. Since we emerged in 2006, we began buybacks in 2008. As Duncan said in his comments, we bought back almost 10% of the stock over that 4-year period at an average price of about $26.80. So our average buyback over the period has been right around where our stock is now. Obviously, quite a bit above where our stock bottomed in the middle of October -- or I guess early October. In the quarter, we bought back 2.8 million shares at about $30. I'll be perfectly candid, we had come off of pricing of our stock in the mid- to high-30s all through the second quarter, hadn't changed our near term or long-term outlook materially and really felt like when we saw the stock come down to $30 that we were seeing a pretty major buying opportunity in our stock. And so we were very aggressive in the third quarter and moved all the way to 4 million shares of buyback here this year. We have about 3.7 million shares remaining under our authorization. We said that we would expect to get that done between now and the end of next year. And I think you should continue to expect to see that the timing of our buyback activity would be related to the timing of our cash flows, our confidence in our outlook for our markets in the economy and also the overall share price.

Your next question comes from the line of Ken Zener with KeyBanc.

It sounds really like Roofing was the predominant factor versus Composite for your EBIT revision. Could you just -- I mean, is that clear in terms of the response to the earlier question, which means Composite really didn't change that much relative to your EBIT as of last quarter?

Yes, Ken, the last question that was asked was more what would drive the number up or down inside the range. So I think within the range of what we see for the balance of the year, it's probably more driven by Roofing. If you go back and reflect on the comments that I made in my prepared remarks and I think Duncan also had some comments here, the movement in the range was really driven by 2 factors: One was our expectation now that there is a base amount of this Roofing-related storm demand volume that will appear in 2012. So we have taken some demand out of our market forecast for 2011, moved it into 2012 and therefore reduced our expectations for the year, and that has brought the range down. And then how accurate we are in that estimate will cause us to land inside the range. And the second thing is we did moderate our growth expectations for Composites, which caused us to bring the range down. So we had said, coming into the year, we thought Composites could potentially be a double-digit growth story this year. In the second quarter, we still thought it was a high single-digit growth story. We now believe it's going to be kind of a mid-single-digit growth story. So as we backed off of what is still good growth numbers for Composites, that's caused us to bring the range down because that business has really wonderful operating leverage.

Okay. And I guess related to the comments around focusing on Composites, you said 4Q was kind of entering the end rate 2Q when -- and second quarter you had roughly $529 million in sales versus $496 million, so it sounds like the revenue is closer to the second quarter. And I think the broader question, concern people have in Composites is if we're going to see that type of downturn that we did in '09 with your slowing view of demand seemingly more on the inventory side right now versus the -- well, exacerbated by thinner inventories, it sounds like, can you talk about utilization? It sounds like it's better in America versus Europe, A. B, what it means regarding your experience because I know Russia is smaller than the Mexico plant. And what that means for pricing vis-à-vis your expansion and competitors as you move into what is not necessarily going to be a clear 2012 demand environment. You can choose which one or all.

Yes, I was going to ask, which question in there you'd like me to start with. Let me just start with your comments on the fourth quarter. I would caution you to make sure that you obviously understand the seasonality of our markets and the seasonality of our business. We would look at late second quarter and late third, early fourth as being 2 pretty peak periods for Composites. So the fact that late second kind of that May, June, early July time frame and then late third or early fourth, September, October, those are 2 times of the year where you don't have holidays, weather production breaks and other things that can influence volumes. So we think those are pretty comparable. As we get into the fourth quarter as you get it late in the year, you do see some seasonality based on some of the markets that we serve as well as our customers' needs to manage their year-end inventories, et cetera. So I just want to caution as you try to roll forward from the comments we made. As we look at our outlook, this is an industrial production-driven business. While there has been some cautiousness about the global economy, I think most forecasts would still have positive industrial production growth for the developed world and continued strong industrial production growth in the developing world, not just China, but also India where we have a very, very strong market position with our Composites business there. So we would look at next year and expect that we should see continued demand growth based on growth in industrial production. This gives us an opportunity to continue to bring some of the low-cost assets online that we've been building, as well as load some of the low-cost assets that we…

Your next question comes from the line of Joshua Pollard with Goldman Sachs.

I'd like to understand what causes consumers to push out storm-related shingle purchases from this year to next. And ultimately, if you could dig in a little deeper on what's happening on your standard level of demand for shingles. I think because of the storms, it's a little harder to look at your revenues and operating profits and see what's going on, on the core of the business. Could you give some clarity there?

Sure. Let me start with the second part of your question, and then I'll come back to kind of the dynamics of how storm demands in our market get satisfied. But we had come into the year with the reroof and repair market, which is kind of the bread and butter of this market. We've always talked about roofing as really being a need, not a want. And even in difficult new construction and difficult existing home residential markets, Roofing has been a fairly resilient market segment for us and our customers. Although we have seen and we published data on this that our estimates of the repair market and the reroof market is probably at least 10% below what we think is a reasonable long-term average for that market, so it has been depressed. We had expected small amounts of growth in recovery in that market this year. I think that's probably our best estimate at current, is that market is still recovering some. And we would expect that market -- its recovery to really be timed to roofs beginning to age more and more, which creates more and more need to reroof, roofs that were repaired and actually do need be reroofed and ultimately, house prices stabilizing and creating confidence in the investment in the home that would cause the homeowner want to go do a reroof job. And then obviously, any particular uptick that we saw in existing home sales or new construction activity would also spur that market. As it relates to the storm demand, if you think about the dynamic of how a market responds to storms, you can see upticks in a market where the monthly rate of activity in the market could double or triple when a storm comes through. That market, therefore,…

Got it. And my second question is, is could you outline what you think will be the key drivers of EBIT growth as you get into 2012, recognizing that you had a pretty strong first half in Composites for this year. It seems like the storm-related demand, while some of it is being pushed out to '12, is still supporting some pretty high levels of growth in the second half of this year. I'm trying to understand as you guys look and are trying to approach those 2013 goals you set out, what will be the key drivers whether it be on the top line or the margin side across your business in 2012?

Well, obviously, we haven't given 2012 guidance beyond expressing on today's call that we did think we were positioned to grow earnings again next year. I think if you look across the portfolio, probably the emerging story right now is the turnaround in Insulation. We're now believing that we'll see up to as much as $40 million of EBIT improvement in the second half of this year if we can get the business to break even versus prior year. So that's a significant improvement in the EBIT performance of that business, and we believe we'll have a profitable quarter in the fourth quarter, which would be our first profitable quarter in about 3 years. So we're seeing a lot of good positive developments in Insulation, which can become a part of an earnings growth engine for the company going into next year. We're probably reasonably optimistic that the Roofing business will enter next year in a fairly stable frame. This year, we started with a little bit weaker margins. Hopefully, with decent volumes through the fourth quarter and some storm volume in the first half of next year, we would maybe see a little bit stronger margin performance heading into the first part of next year, so that we could still post some great numbers next year even if the market were down a bit. And then Composites, we would still expect growth. So we do think we'll see demand growth, and we think demand growth positions us well to get into another operating leverage story and be in a position to grow that business again next year. Obviously, the timing of how that falls through the year and when we see that volume growth is going to be something that we're going to have to work on as we put our operating plans together for next year. So we can look at each one of our businesses and feel fairly comfortable that now with an emerging turnaround story in Insulation, that we still have a fair amount of more levers to pull in order to keep Owens Corning growing.

Your next question comes from the line of Dennis McGill with Zelman & Associates. Dennis McGill - Zelman & Associates, Research Division: Mike, I was hoping, just from a big-picture perspective on the Composites side, you could maybe lay out a counterargument to an uncertainty we hear a lot from investors, which is realizing Composites went from, call it, a $200 million profit in '08 to losing money in '09. If we were to get some sort of catalyst from Europe that would cause concern around the globe on the manufacturing side, can you outlie such a delta in profitability wouldn't happen again, what's different within the business or your manufacturing footprint that would limit the type of decline we saw in that period?

Well, let me start by talking maybe more broadly about the materials markets generally and how we think Composites plays in the overall market for materials. I think you've heard some of the other people who make materials whether it's aluminum, steel and others, the analysts that cover those. Generally, my reading of their reports and my reading of their analyst reports suggest that at least in the recent quarter, in the recent couple quarters, volumes have continued to be reasonably good in the materials markets. So what we're seeing in our Composites report is quite similar to what we've seen with some of the other materials companies that report. I think the big difference in our Composites report has been you have seen some margin compression and price compression for some of the other materials providers that we haven't seen in our business. Our pricing has been stable, and we've been able to capture some price in the market. I think that's a function of our market position, and it's also a function of the nature of the business. We provide fiberglass reinforcements to manufacturers who then process our product into end-use products. And there are some reasonable barriers to entry. There are some switching costs and the product doesn't trade as a pure commodity. If you look back in the '08, '09 time frame, we lost some price during that period of time, but not a dramatic amount of price. And pricing, generally, in Composites is more stable on the downside, and admittedly, more stable on the upside. We also don't go on kind of the big price upswings that you see in some of the other materials markets. So we're seeing the volume profile of some of the other materials companies that are reporting, but we're probably seeing a better margin profile and better pricing outlook than some of them because of our low-cost position and because of our strong market position and the nature of our market. I think it's maybe a little bit dangerous to speculate what is -- what's an overall kind of "fall off the cliff" environment for the world to look like. And I think that's what investors and analysts -- you have to make your own judgments about that. I would only say that given the strength of our businesses and the resilience of our portfolio, we've been able to navigate an awful lot of difficult challenges in this company and continue to post great results. Dennis McGill - Zelman & Associates, Research Division: Well, I guess, just to follow on that, though, from a manufacturing side or a productivity side, is the business structured any differently today than it was then that if something does come that's more dramatic that you could respond differently or the leverage would be different?

Yes, I mean, we have some lower-cost assets that are currently running, so the capital program that we've had in place in Composites over the past -- course of the last 4 years, I do think has positioned us with a lower-cost fleet of assets. I would also say that if you look at that time frame, we were just coming out of the Vetrotex integration, and we're really starting to get our legs underneath us as running the Owens Corning and Vetrotex assets as one Owens Corning Composites business. I think we've made great strides in our technology group and our manufacturing support group in terms of now finding best practices across that fleet of assets and having them learn from one another. We think there's more to be done there, but it's an opportunity for us. I would caution, though, on the other side, it does continue to be a high-fixed cost business. So your ability to shed cost in a downturn is one of the reasons why you have great operating leverage on the way up and it's also a challenge for us on the way down. So there are some real positives relative to the last time we went through this. But obviously, the nature of the business is going to make it a high fixed cost business, which would give it negative operating leverage if we saw a significant drop in demand. Dennis McGill - Zelman & Associates, Research Division: Okay. And just quickly on Insulation, the comments around fourth quarter imply that if you are profitable, it's mainly modest profits. Is it right to assume that the delta is entirely volume driven? Are there any other assumptions that are uncertain, any price that's baked in or market share gains that are baked in that we should be aware of?

No. I think our market execution has been very, very good. I mean our commercial teams are working awfully hard to make sure that every piece of volume out there that prefers Owens Corning that we're servicing that well. We're manufacturing well in that business with the EcoTouch conversion now fully implemented. We're loving that technology. Not only do our customers think we're making a great product, but every day we're learning more and more about that technology and the process technology and how to make that both a wonderful product and also a low-cost technology. For us, between now and the end of the year, it's really about volume. And the market has been basically flat versus last year. We work on a 90-day lag, so some of the maybe a little bit more positive housing data we've seen in the last couple weeks with housing starts in September and existing home sales today, that wouldn't impact our business this year. That would really be a next year theme if we start to see an improvement in housing. So it's going to be what the volumes we see in the market are and how that impacts our reported results. Again, I would emphasize, it's a great conversation to be having. Last year in the second half of the year, we lost $40 million. This year, we're now talking about which side of breakeven we're going to be on. I mean I think that represents tremendous progress from the business and great operating leverage second to third quarter and we'd expect to see great operating leverage again third to fourth.

Your next question comes from the line of Garik Shmois with Longbow Research.

Just have a question on Roofing. You mentioned the seasonal inventory correction that's occurring right now. Last year, in second half of the year, you also had an inventory correction and needed to get back on price a little bit. I'm just wondering if you could comment on your expectations for pricing here in this winter as it relates to what you saw last year. And if you could comment on inventories as they stand right now compared to last year as well.

Yes, I mean, great question. I think our reported results today demonstrate how profoundly different the market we're in today than we were last year. Last year, you had the first-time homebuyer tax credit that had spurred some new construction volumes in kind of the March, April time frame. Economic reports and unemployment data were suggesting we were getting ready to go into a recovery. And Roofing prices were going up, which caused distributors to be highly incentivized to want to buy inventories in advance of projected demand. When that demand didn't materialize, we saw much more broadly an inventory correction that was not seasonal based, but was actually an overbuy in the second quarter that needed to be unwound in the third quarter. And that's why we had such a difficult third quarter last year. Our comps, we didn't talk much about our comps in the call because we beat our third quarter of last year by so much that it's just 2 totally different stories. This year, we do know that most Roofing distributors see more vibrant activity when it's not snowing and it's not winter, so they're more happy to carry inventories in the second quarter and third quarter than they necessarily would be in the fourth quarter. That's the natural seasonal inventory that we talked about today. So the demand signal, which has been storm-related with a good underlying volume of the roof and repair, albeit at slow levels, that underlying volume has supported the market this year all the way through the third. We do know that some of the distributors and our customers are taking down their inventory positions just in anticipation of winters coming. So we think it's a natural seasonal effect. We don't think we have a big inventory overbuild out there that was built against demand that's not going to materialize.

Okay. Just a question on Insulation on the incremental margins. You had good incremental margins from 2Q to 3Q. It seems like that's generally in line with your long-run guidance. But given that we're at such low demand levels right now, could there be some potential upside to that 50% incremental margin target that you've thrown out there before longer term?

It's Duncan. I'll take that. Back on our Investor Day, I think, last year, we had talked about that over the period from '10 to '13, we could see on average about 50% operating leverage kind of in that business. And that was based on the fact that, as you say, demand is at quite low levels. And so as we do turn back on facilities as we see some demand come back, we will get some incremental leverage both from turning on facilities. We're also getting incremental leverage from the fact that we've been managing costs very assiduously in this business over a long time now. And thirdly, obviously, there's some contribution also from price. I think what we're seeing in the second to third quarter this year is some of the operating leverage is borne out in terms of what we see over second to the third quarter. We'd probably continue to see some pretty good operating leverage we think into the fourth. That's being driven by -- we have seen some decent-sized increases in revenue quarter-over-quarter, second to third quarter and that, I think, gives us the opportunity to post some decent operating leverage. And if we do start to see some demand pick up over future quarters and leading back into '13, then we'll probably post some pretty good operating leverage. I think what is probably the biggest uncertainty in operating leverage is also -- is always a function of where prices will go and how fast they will go and at what level. So if there is any upside, it will probably be in the price. But generally speaking, I think we're sort of comfortable at sort of the range we laid out for our overall operating leverage of that business over a prolonged period of time, it's still in the order of magnitude of 50%.

Your last question comes from the line of Stephen Kim with Barclays Capital.

Guys, we had been hearing a little bit about your ability to increase share in the Roofing business. And I was curious if you could talk a little bit about the dynamics you're seeing competitively there. We understand there's maybe been some motion on the part of some of your competitors in the big-box retail channel and I wanted to see if you were seeing any of that, and overall, if you think you've gained share in the past quarter or 2.

Yes, Stephen, we don't have good reliable share numbers that we share externally. So I think generally, we -- if there's sources of information that are talking about market share in Owens Corning, it's likely not us because that's not a generally an indicator that we report on. We love our position with our customers. We're, obviously, a very, very important relationship with Lowe's on the Roofing side of the business and do a lot of business with them. We've been working very hard with them to make sure that they have a very competitive offering and are successful in the market. Obviously, in the retail channel, we think that, that's been a good story for us and for them this year. On the distribution side, which is much more to the heavy contractor and to the reroof side of the business, that's a combination of both big national distributors as well as local distributors, so you have to be able to execute on the ground kind of branch-by-branch, market-by-market. I think we've done a very, very good job of listening to our customers and being able to respond to their needs, some of whom are in a storm market and are seeing a lot of demand and some of whom are not in a storm market and need support in helping them with sell-through and helping them build their brand position and our brand position in the market. So we've had kind of a full agenda of commercial execution for our Roofing team, and I think they're doing on awfully nice job in the market.

Okay. Just as an FYI. I'm actually on a waiting list to get my roof done, so I definitely understand what you're saying about demand getting pushed out a little bit. I wanted to ask you also a question about transfer pricing. How do you set the transfer pricing for your glass mat in the Roofing business, is that something that's done once a year? Is it benchmark to something that sort of moves from quarter-to-quarter? Could you just give us a sense for how you guys set that price?

Well, as a company, we believe very strongly in returning capital as a measure of business performance. So we would look at any of the businesses that have internal transfers, and we would try to associate market-based pricing and margin with assets so that we get realistic reads of what is a return on capital. That's a key performance indicator that we would talk to all of our general managers about. In Roofing, the asphalt assets tend to be integral to the roofing plant. So the cost of the asset and the cost of the asphalt and the processing costs gets caught up in our cost of goods. But we have a pretty good understanding of where asphalt prices are externally because we also sell merchant asphalt in the market, both processed and unprocessed. So we have pretty good read on that. Composites does hold the glass assets that provide the mat and the glass to our Roofing business. We are merchant in that business also, so we sell both glass and mat into the external roofing market into some of the very good customers of Owens Corning that, in fact, are competitors of our Roofing business in shingle manufacturing. So we have a pretty good understanding, we believe, of where those merchant prices are also. So our goal would be in our internal management reporting to very accurately reflect where we think return on capital is because that's a key measure we hold our managers accountable for.

Well, good. Thank you, all, for joining us today. And with that, I'll turn it to Mike Thaman with a few closing comments.

Well, thank you, Thierry. First of all, thank you all for your interest in our company and for your participation on our call. Obviously, it's a fun day as a leader of a company to be able to report that you're delivering record results. So I hope we have many days in the future that we can open our earnings call by talking about this being the all-time record performance in our company's history, but it was certainly a phone call I look forward to in representing the employees of Owens Corning to deliver that news to our market. We think we are well positioned to deliver another outstanding year of financial performance at Owens Corning. If you listen to our prepared remarks, also our comments, we have great confidence in our 3 businesses. We think each of them are making great progress in their markets to become more and more competitive. And would expect that, that will produce a second consecutive year of earnings per share growth of about 40%. So given the volatility and uncertainty that we see in our markets, we think having a portfolio that has the kind of competitive positions that we have is a real asset and has given as resilience in earnings performance and obviously has given us the ability to post some great results. We're very proud of the amount of earnings improvement we showed in 2010. We think we will do that again here in 2011. We continue to march towards the 2013 goals that we laid out at our Investor Day last year. We said today on the call that based on what we're seeing in terms of slow improvement in housing, but some of the nice underlying foundations of housing may be starting to round into a little bit better form, as well as at least projections of slow but sustained global growth that we're well-positioned for our businesses to head into 2012, produce another year of earnings growth and continue to make progress against those 2013 goals that we laid out. Obviously, we continue to work on the businesses. Know that there's lots of good things that we can continue to do. I think the people of Owens Corning are actively engaged in trying to make this the best possible company and to give me the pleasure of coming on at a future quarterly call and reporting another new record earnings quarter. Thank you for your interest. We look forward to talking to you on our fourth quarter call in February.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.