Good morning, and welcome to the Third Quarter 2013 Owens Corning Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Thierry Denis, Director of Investor Relations. Please go ahead.

Thank you, Andrew, and good morning, everyone. We appreciate you taking the time to join us for today's conference call to review our business results for the third quarter of 2013. Joining us today are Mike Thaman, Owens Corning's Chairman and CEO; and Michael McMurray, Chief Financial Officer. Following our presentation this morning, we will open this one-hour call to your questions. [Operator Instructions] Earlier this morning, we issued a press release and filed a Form 10-Q that detailed our financial results for the third quarter. For the purposes of our discussion today, we prepared presentation slides that summarize our performance and results for the quarter. We will refer to these slides during this call. You can access the earnings press release, Form 10-Q and slides on the Investors section of our website. The transcript and recording of this call and supporting slides will be available on owenscorning.com for future reference. Please review Slide 2 before we begin where we offer a couple of reminders. First, today's presentation and remarks includes forward-looking statements based on our current forecasts and estimates of future performance. Actual results may differ materially from those projected in such statements. Additional information about the risks, uncertainties and factors that could cause these material differences can be found in today's press release, as well as in our 2012 Form 10-K and third quarter 2013 Form 10-Q. This presentation and today's remarks contain non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most comparable GAAP measures may be found within the financial tables of our earnings release on www.owenscorning.com. Adjusted EBIT is our primary measure of period-over-period comparisons and we believe it is a meaningful measure for investors to compare our results from period to period. Consistent with our historical practice, we have excluded non-recurring items and items that we believe are not representative of our ongoing operations when calculating adjusted EBIT. We adjust our effective tax rate to remove the effect of quarter-to-quarter fluctuations, which has the potential to be significant in arriving at adjusted earnings and adjusted earnings per share. In the third quarter, we have utilized an effective tax rate of 30%, and Michael will explain our updated guidance in his prepared remarks. For those of you following along with our slide presentation, we will now move to Slide 4. And now, our Chairman and CEO, Mike Thaman, will make some opening remarks, followed by remarks from our CFO, Michael McMurray. Mike Thaman will then provide some closing comments 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 results. Owens Corning delivered improved year-on-year performance in each of our businesses, generating positive momentum for the remainder of the year. Our Roofing business sustained strong margin performance. The Insulation business delivered its best quarter in 6 years, and is profitable year-to-date. And Composites improved EBIT by $10 million compared to last year. The company delivered $119 million in adjusted EBIT, an increase of $38 million from the third quarter of last year. Consolidated revenue for the third quarter was $1.32 billion compared to $1.28 billion in the same period of 2012, and adjusted earnings were $63 million, an increase of $23 million from the same period last year. Based on our year-to-date performance, we have maintained our outlook of at least $100 million of adjusted EBIT growth in 2013. At the start of the year, we discussed a number of expectations for improved performance across our businesses. Let me review them now, starting with safety. As is the case each quarter, we said that we would continue to make progress towards our goal of creating an injury-free workplace. We've had a 6% improvement of recordable injuries year-to-date versus the comparable period last year. We remain focused on an injury-free workplace and are committed to achieving a 12th consecutive year of safety improvement in 2013. In Roofing, we said that we would improve margins and see better pricing. In the quarter, we delivered 20% margins, a 2-point increase year-over-year, sustaining the margin improvement that we reported in the first half of the year. In the Insulation business, we said that continued improvement in the U.S. housing market would translate to a return to profitability for the business in 2013. In the third…

Thanks, Mike, and good morning, everyone. As Mike mentioned earlier, our year-to-date results support our outlook of at least $100 million of adjusted EBIT growth in 2013. Before I discuss our quarterly results in more detail, today, we reported on an important transaction in our Composites business that was executed this quarter. We reached an agreement to close and sell our composites glass reinforcement facility in Hangzhou, China, in exchange for proceeds of approximately $70 million from the local government. The facility will be closed in late 2003 -- (sic) [2013] and the land will return to the Hangzhou authorities during the first half of 2014. The closure will result in capacity reduction of about 40,000 tons for Owens Corning. To replace this capacity, we will leverage our previously announced supply lines with Jinniu. This represents a creative and capital-efficient solution that enables us to maintain our market position in this growing region, lowers our cost position and reduces our capital footprint. We received $17 million in the third quarter, and expect the remaining cash proceeds to be received over the next 2 to 3 quarters. The sale will result in a gain of approximately $30 million to $40 million, when the transaction closes in 2014, which we will adjust out of our results. Now let's start on Slide 5, which summarizes our key financial data for the quarter. You will find more detailed financial information in the tables of today's press release and the Form 10-Q. Today, we reported third quarter 2013 consolidated net sales of $1.3 billion, up 3% compared with the same period in 2012. In our Roofing business, net sales were flat compared with the same period in 2012, as slightly higher selling prices offset the impact of slightly weaker volumes in the quarter. Net sales…

Thank you, Michael. As I noted in the outset of today's call, all 3 of our businesses improved performance over 2012, and we're positioned to finish the year strong. Our year has not been without challenges. We've had some unexpected market headwinds, notably a declining roofing market and an overall weaker global economy. In addition, we've had some execution challenges, specifically in the third quarter composites manufacturing performance. However, we are very pleased with our overall progress in 2013. The continued execution of our management actions, including price realization in insulation, margin management in roofing and cost reductions in our production network and price realization in composites, will provide a significant step forward in the financial performance of our company for 2013 and into 2014. With that, I'd like to turn the call over to Thierry who will lead us in the question-and-answer session.

Thank you, Mike. Andrew, we're now ready to begin the Q&A session.

[Operator Instructions] The first question comes from George Staphos of Bank of America Merrill Lynch.

Two questions here. First, can you recall when the last time you saw such a divergent trend in your market share in roofing was and what caused it? What gives you confidence that it's the regional factors and not some relative difference in pricing and promotion? And the second question I had, what was the incremental impact of the investment that you made on product quality, manufacturing, network, et cetera, within insulation and will that all reverse next year?

Thanks, George. Let me start by talking about Roofing. I would tell you, I guess, I've been with the company now 21 years, so I've been around the analysis of our results for a long time. This was really the first quarter that we dug into kind of state-by-state shipment data and state-by-state market share data at the level we did because we saw some trends in the quarter that did surprise us in terms of the size of the volume swings that we saw in some parts of the country. So at least, in my history, I would say this is probably the biggest change in the overall geographic mix of the market. Now I think this is a bit of an outgrowth of the change we've seen in the overall market over the course of the last 4 or 5 years where we are seeing more inventory put into the market early in the year and then we're seeing distribution customers primarily manage that inventory through the summer, so that end use market dynamics are now starting of having an impact on kind of regional demand and regional shipment characteristics. So I wouldn't say that -- our theory is not that we saw the end use market shift as dramatically as maybe we saw it in our books, but that because of inventory effects, we saw the order pattern of our customers shift. And certainly, on the coast, up and in the Northeast where there's probably still a lot of Sandy rebuilding and then the new construction markets kind of down into Southeastern Florida and then along the West Coast, which is a little bit more new construction-driven generally for asphalt shingles, those are markets that are a little bit below national average for our share. And then,…

[indiscernible] Kim of Barclays

I just wanted to follow up on the previous question. With respect to the Roofing business, if we could take the revenue, you were talking about the fact that the regional analysis this quarter was something that you hadn't really undertaken as extensively before but that it was basically indicating that you had held share. I guess, I'm curious is if over the next 6 months or so, you kind of learn differently that perhaps you see some evidence that you had lost some share. I was wondering, what are you prepared to do in terms of your pricing? Is your general sense that you're prepared to rein in pricing in order to recover some share or hold share? Or if you could just sort of comment about your overall views for how you balance share or perceived share with your pricing strategy, that would be helpful.

Well, thanks, Stephen. A great question because I think that a little bit how we talk about the business here in the quarter is instructive in how we think about the business also in terms of pricing, which is, for reporting purposes, we obviously report the business as though it's 1 big national market. We report pricing and margins as though it operates as 1 big national market. And in fact, you do see some pretty significant variations region by region and even in local markets, not just in terms of market share among the industry participants, but also price levels in individual markets and also margin performance in markets. So it is possible, as you said, that if we saw share trends that we didn't like and we thought that the root cause of those share trends was pricing competitiveness that we in fact might need to respond, I think the way we would think about that is it wouldn't be a national response and that the market doesn't really operate as a national market but it's possible that you could find some geographies where we felt, to defend our position in the marketplace, we needed to either adjust the pricing on 1 or more of our products, and I think that's the other real benefit of our product line, which is really our showcase product is our duration shingle, which is a Croydon engineered shingle that's preferred by reroof contractors. It has real benefits to the reroof contractor in terms of how it's installed, it has real benefits to the homeowner in terms of the aesthetics and also in terms of warranty. So we have real value built into that product and I wouldn't necessarily feel like if we had a region or a market where price competitiveness…

Great. Yes, that would be great. Appreciate that. Second question relates to your Insulation business. Actually, the builders that we speak with have been talking about and reacting to the fact that demand sort of slowed over the summer and there's a concurrent call right now with a builder who indicated, I guess, that October volume trends were slower than September, and this is, I think, in general, something that we're hearing more and more about. In general, the idea that margins at the homebuilder side are starting to -- you're starting to see a crest forming in 2014. And in that environment, I was curious -- or against that backdrop, I was curious if you could comment on whether you think you're seeing any growing resistance or slackening in your ability to achieve positive pricing trajectories in Insulation or if you believe that, that is not really something that you're perceiving in the marketplace?

Sure. I mean let me first start by talking a little bit about what we think the overall market for housing is. I mean, certainly, we read all the reports that you guys produce and that others produce and it does seem like the market has gone through a little bit of a flat spot here. It's not that it's gone into decline but that rate of growth, we maybe saw through first 5 or 6 months of the year has slowed down a bit. Our internal analysis of that would suggest that, that makes a fair amount of sense, given that we saw a pretty rapid and sudden rise in mortgage rates. That kind of the rate of change of mortgage rates in a very short period of time would cause a little bit of a shock effect in the market where some buyers were maybe eager to come in the market, would take a pause, and really evaluate their financial situation and their decision about buying a house. That said, when we look at the fundamentals of the market, home prices have continued to go up, mortgage rates on a historical basis are still very, very low. Housing starts have been extremely low for a 5- or 6-year period of time. All the demographics are showing an increasing rate of household formation and rents are going up in most major markets. So when you have that kind of stew of activity in the marketplace, it certainly says to us this is a pause in kind of an exorable rise of housing activity, which is what's really important to us. I think in that environment, with increased housing activity, as a manufacturer, our facilities are getting more loaded. We're still not at margin rates that are acceptable to us,…

The next question comes from Michael Rehaut of JPMorgan. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: My first question has to do with -- both my questions have to do with Composites actually. You mentioned that you're encouraged by the pricing actions in the third quarter and -- but at the same time, there was a little bit of weakness, I believe, you said in North America, in addition to global IP. So I was just hoping to get a little bit more granularity, if possible, in terms of the pricing trends that you saw during the quarter, and particularly in North America, but perhaps you could take us across Europe and Asia as well to the extent possible. Just trying to get a sense of the direction of pricing and if that should be a tailwind along with the resolution of some of the manufacturing issues that you saw in the third quarter?

Sure. I'm happy to talk about that. Let me first talk about your North American question because it maybe that my prepared remarks were kind of inartfully written. But the objective of our comments regarding the North American market, in particular the North American roofing market, was really a volume comment. So we thought coming into the year, obviously, we thought that the roofing market in total would be flat. We're now calling that market kind of down mid-single-digits. That's an important market to Owens Corning as a roofing manufacturer. It's also a very important market to our Composites business, particularly North America, where we're really the leading supplier of glass and mat to that market. So we've had to adjust our expectations for volume related to that vertical in North America, which is a really good vertical for us on the Composites side. That's not a price comment. So from a pricing point of view, that has not impacted our outlook on pricing nor has it affected our near-term pricing. We reported today on the call that we had sequential price improvements from the first quarter to the second, and then again from the second quarter to the third. I would say that, that's pretty much in every region of the world. Now when we talk about materiality, we didn't, I don't think, telegraph today that we're yet getting material levels of price that are going to bridge that gap back from where we are today at probably 5% EBIT margins back to where we were just 1.5 years ago, both 2011 and 2010, the business produced EBIT margins of around 10%. But we do think that a couple quarters of sequential pricing is a really important leading indicator, and the fact that we're getting that in almost every…

Sure. Happy to talk about that. And I, first of all, I really appreciate you asking that question because to the extent there's any confusion about that, this gives me an opportunity to clear it up. The facility we built and commissioned 3 or 4 years ago is in Yuhang, which is actually quite close to Hangzhou. So the confusion there is real. But that facility, which is a greenfield site, is operating exceedingly well today. We think that's probably one of the low-cost facilities anywhere in the world. We have found a good market for the production of that facility, which does include some improvement in the wind market in China, but is very much now diversified across all the performance markets of China, and we've been very, very happy with the performance of that plant, that it's fully loaded and performing at very high levels relative to any other plants in the world. The Hangzhou facility was a facility that was owned by Vetrotex at the time of the acquisition. It's really a legacy composites facility in China, so it's been around for a while. The reason why the municipality approached us is it's really now moved kind of into the city proper. So I think, at the time it was built, it was way out in a rural area, and as the city of Hangzhou has grown, it's now kind of engulfed our facility. And as a part of the economic development plan for the town, it's -- I say town, it's city, I mean, these are all cities that are much bigger than some of the cities we have here in the U.S. They came to us and said they would like to revert the land back to them. It was a subscale, relatively high-cost facility.…

The next question comes from Mike Wood of Macquarie.

In Insulation, excluding the acquisition, it looks like, overall, you had relatively flattish volume growth. Can you give us a sense of the sales volume trends by your major categories such as your North American housing, C&I and Canadian businesses? And ultimately, was there, in hindsight, a pre-buy hangover ahead of that June price increase that you felt in that North American housing-related businesses?

Yes, Mike, it's a great question because, in fact, when I went through the operating leverage reconciliation, you can look at the quarter and either you look at the insulation top line and say, gee, growth was pretty good but they didn't get the leverage. Or when you adjust out Thermafiber, I think you can look at the quarter and say, gee, for the quarter and year-to-date, leverage is pretty good, but the top line growth maybe isn't as aggressive as what we would've expected. And you hit the nail right on the head, which is when you go by segment, the commercial and industrial markets are obviously growing quite a bit more slowly than U.S. residential construction. The 2 markets that had been a helper for us over the course of the last 2 or 3 years, which was Canada and Asia where we had seen decent growth, we're not really seeing growth now outside of the U.S. Canada had some stimulus in housing starts and some incentives and other things that have caused starts year-over-year to decline. Our business in Asia is still doing very well but some of the credit tightening and other things has definitely affected rate of volume growth. So kind of our non-U.S. geographies haven't really contributed this year. Our commercial and industrial business has contributed to growth but is not contributing at the rate of U.S. residential. And so U.S. res, which would also include re-insulation, some of the products we sell at retail in lumberyard is not just pure new construction, we are seeing that kind of 20% growth that you'd expect to see based on where housing starts are. So when we take the pieces of the business apart in management reporting, we feel very good about where we see growth in the U.S. res market, we feel good about what we're seeing in terms of operating leverage, we feel good about what we see in terms of sequential pricing, we feel great about being profitable year-to-date. We feel really good about the best quarter in 6 years and we really think we're starting to see an Insulation business that will become a big theme in the financial performance of our company and certainly in the outlook to our stock price.

Got it. And then, in terms of, broadly speaking, the pre-buy that you've seen in both roofing and insulation, how are you thinking about managing differently going forward when you have an upcoming price increase in insulation, winter discounting in roofing?

Yes, I think they're different businesses but I think pre-buying is a fact of life when you're in a business that has inventory positions and customers who take inventory positions and also when a lot of your management focus is on trying to manage and execute price increases well. You don't want to do that at the expense of your customers, you want to do that in a way that your customers have the ability to make margin and improve their performance as a result. Insulation and roofing work very differently though, which is insulation is a very bulky product, difficult to store. So what we've seen historically is a pre-buy in insulation of 1 week or 2 weeks tends to be a fair amount of pre-buy and we would potentially expect to see some pre-buy. We have a November price increase in the Insulation -- in our Insulation business, here coming up in the fourth quarter, which we put in place to make sure that our contractors have good price visibility on how to price business in new construction for next year. We would expect that we would see some purchases in the quarter that would wash out in the quarter and then maybe some purchases in the quarter that would carry inventory positions into next year in insulation but I wouldn't say that, that's going to be a material theme. Roofing is very different because you can store the product outside. So storage cost of roofing, I mean, it's designed to be out in the weather. So we've seen a much different dynamic there and we think that dynamic will continue and that probably what manages that dynamic on our behalf and our customers' behalf is the price swings are less dramatic. And we do hear from our distribution customers this year that there's been some margin compression out their door. And we certainly believe, as many of them do, that the overhang of very low-cost inventories being put into the market earlier in the year are making it harder and harder for our distribution customers to manage pricing through the year. So creating these really big overhangs in the market in the first quarter hasn't been helping the manufacturer like Owens Corning. We don't think it's helping our customers either and so the sanity of what we saw last year of trying to give a little bit smaller discounts, put more reasonable inventory positions into the business early in the year and then manage pricing through the first half of the year to allow them to earn some margin on the product they buy from us is probably the right way for that industry -- for us to operate with our customers.

That question will come from Ken Zener of KeyBanc Capital Markets.

I wonder if you guys could expand on Insulation. You obviously give very good disclosure in your Q where you talked about Insulation EBIT being up $15 million and $48 million year-to-date, which seems to overlay pretty close to the $15 million and $50 million benefit you guys got from pricing in Insulation. Mike, you talked about Canada, commercial markets, Asia. But to the extent all the EBIT expansion was on price with the volume gains offset by kind of inflation mix or SG&A, as you guys highlighted, did you guys expect to get volume gains at this point of the cycle? Because my impression was that price was more of a later cycle EBIT catalyst but it appears to be the sole catalyst.

Yes, thanks, Ken. Let me talk for a second about price and then maybe talk about kind of how we see the evolution of leverage in the Insulation business and kind of where we are, what inning we're in, in that evolution. One of the things that's a little bit -- is not misleading in our disclosure because it's accurate, but it can be a little bit misleading in terms of how you would want to do the analysis is we reported through the first half of the year that last year through the first half, we've seen insulation prices were about flat. We reported some price gains in the second and third quarter as we finished out the year. In fact, through the first half of last year, we've seen a little bit of price weakness early in the year that we had recovered in the second quarter. So we had kind of flattish overall price in the first half. So our comps this year, when we look on year-on-year comparisons of price, we show that we had gotten a lot of price versus the first half of last year but in fact, sequentially, most of that price we picked up first in the third quarter last year was a price increase then, then we picked up some more price sequentially with our price increase in the first quarter of this year. Now we picked up price again sequentially with our price increase through the summer, which has given us some gains here in the third quarter. And again, with the November price increase, with some success in that increase, we probably expect to pick up price sequentially as we head into the beginning part of next year. So we're not going to necessarily show smooth price progression, we're…

Appreciate that. Roofing, the comments you just made a few questions ago raised the idea. Can you talk about inventory since you did such a regional analysis, how you think it is if there was pre-buying, if there was too much as we move into year-end when seasonally, there's some sequential price historically, all else being equal, seasonal weakness in pricing, can you talk about inventory levels? And then, you seemed to comment on some distributors trying to move their inventory, putting a little pressure on price related to -- for whatever reason, could you expand on that and clarify the inventory as you see it?

Yes, we comment on that, I would tell you, we're not the authorities on this and we don't have great visibility to it. So we tend to kind of do a math balance equation. We look at industry shipments, we look at our estimate of how big we think the overall end-use market was, and if we think introduced shipments are in balance or out of balance with the overall end-use market, then inventory was either created or depleted. I think, this year, our overall sense nationally, and I'll talk about it nationally, where we say the market is going to be down mid-single-digits is if manufacturer shipments were down mid-single-digits, that would probably pretty much mirror distributor and retail and lumberyard shipments into the market. So the end-use markets was probably down about mid-single-digits. The distributors bought about that same amount. And as a result, the year-end inventories would be about in balance with where they were last year. So on a regional basis, there's probably some markets that are ahead of that position, there's some markets that are behind that position, but kind of our current guidance assumes that if the market is down mid-single-digits, that, that basically is both end-use estimate, as well as shipment estimate and that those 2 numbers are about in balance. As we look into next year, that puts storm demand at a pretty low level relative to history. It puts new construction demand in a position where we would expect it to continue to grow with new construction. And it actually puts reroof demand for this year having declined a bit versus 2012, and so we would expect now that some of these storms in the center of the country are a little bit further in history that maybe we'd start to see some recovery there. so our initial thoughts for next year is it's reasonable to expect that both the new construction and the reroof market would increase next year and that in fact, storms are probably at least comping flat to maybe some improvement. So if we can get through the fourth quarter here with good margins, if we can have the right inventory position with our customers, the thing that would really make us feel good about roofing is actually having great margins in a growing market, which may be the environment we find ourselves in next year.

This concludes our question-and-answer session. I would like to turn the conference back over to Thierry Denis for any closing remarks.

Okay. Very good. Thank you, Andrew, and thank you all for your participation to the call today. Our next quarterly earnings call is scheduled for February 12 of next year, when we will report on full-year 2013 results. And in the meantime, I'd like to take this opportunity to remind you that we will be holding an Investor Day in our Toledo, Ohio headquarter location on November 8, and I look forward to seeing many of you here. And now, I'll turn it back over to Mike for a few closing remarks.

Thanks, Thierry, and thanks, everyone, for your interest in our company and for your very good questions. Obviously, we're pleased with a lot of things that are going on in the business. If you look at our guidance originally for the year, our guidance was $100 million of EBIT improvement with upside being determined by the rate of recovery of the U.S. construction market and its impact on our margins. I think today, in our guidance, we backed off a little bit on some of the upside statements and said, look, we think we'll get the $100 million of EBIT improvement or more but we're 10 months through the year. So I think it's a little easier for us to see that maybe the roofing market isn't going to give us the tailwind we're looking for, and in fact, it may be a bit of a headwind in aggregate. U.S. new construction has been great. It's not quite galloping ahead at this moment but we continue to be very confident in it. So it maybe could've given us a little bit more of a push than it's given us but we've been very happy with that -- how that's played out. And obviously, global industrial production has been kind of downgraded through the year and that's been one of the themes that's hurt our composites demand profile. So some of the things that could've helped us produce some significant upside to that number, which were market-based, didn't come to pass. But some of the execution things that we needed to do in order to get to that guidance, we feel very good about our performance. So margin management in our Roofing business has been very good year-to-date, price management and production management in our Insulation business has been very good…

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.