Good day everyone, and welcome to the Owens Corning Q4 and Full Year 2014 Earnings Conference Call. All participants are in a listen-only mode.[Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please also note that today’s event is being recorded. At this time I would like to turn the conference call over to Mr. Thierry Denis, Vice President of Investor Relations. Sir you may begin.

Thank you Jamie, and 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 fourth quarter and full-year 2014. 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. Please limit yourself to one question and one follow up. Earlier this morning, we issued a news release and filed a 10-K that detailed our financial results for the fourth quarter and full-year. For the purposes of our discussion today, we’ve prepared presentation slides that summarize our performance and results for the fourth quarter and full-year 2014. We will refer to these slides during this call. You can access the earnings press release, Form 10-K and the presentation slides at our website, owenscorning.com. Refer to the Investor’s link on the bottom right-side of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference to Slide 2 before we begin, where we offer a couple of reminders. First, today’s remarks will include forward-looking statements based on our current forecasts and estimates of future events. These statements are subject to risks, uncertainties and other factors that could cause our actual results to differ materially and we undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for a more detailed explanation of the inherent risks and uncertainties affecting such forward-looking statements. Second, this presentation in today’s prepared remarks contains non-GAAP financial measures. Reconciliations of a non-GAAP to GAAP measures may be found within the financial tables of our earnings release on 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 effects of quarter-to-quarter fluctuations, which have the potential to be significant in arriving at adjusted earnings and adjusted earnings per share. In the fourth quarter, we have utilized an effective tax rate of 30%, in line with our full-year effective tax rate on adjusted earnings for 2014. 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 would be followed by CFO Michael McMurray, Mike will then provide comments on our outlook prior to the Q&A session. Mike?

Thank you, Thierry, good morning everyone. We appreciate you joining us today to discuss our fourth quarter and full-year 2014 results. Owens Corning consolidated revenue for 2014 was $5.03 billion, flat with last year. Full-year adjusted EBIT was $412 million compared to $416 million in 2013. Full-year adjusted earnings were $208 million compared to $221 million in the prior year. Fourth quarter revenue was $1.26 billion compared to $1.28 billion one year ago. Adjusted EBIT for the quarter was $107 million, up from $96 million in 2013. And adjusted earnings for the quarter were $55 million, up from $52 million in the prior year period. I’m pleased that we’ve been able to grow EBIT in the fourth quarter and the second half, despite a negative comp in roofing for both periods. For the second half Owens Corning grew EBIT BY $24 million, overcoming a $60 million year-on-year EBIT shortfall in roofing. While full-year results were effectively flat at the revenue and EBIT levels, I believe that we made significant progress in 2014. We’re a better company when all three businesses are making meaningful contributions to our financial results. While roofing took a significant step back last year, it still contributed materially to income and cash flow. Both insulation and composite showed strong year-on-year improvement, and also contributed materially to our financial results. Based on the strength exhibited across our portfolio, we’re pleased that our board elected to increase our dividend pay by 6% to $0.17 per share. Now, as they do every quarter, I’ll review of performances related to the expectations we set for the year. And as indicated each year, we said that we would continue to make progress toward our goal of creating an injury-free workplace. The company continues to operate at a very high level of safety…

Thank you Mike and good morning everyone. As Mike mentioned earlier, Owens Corning is a better company when all three businesses are making meaningful contributions to financial results. While roofing took a significant step back, it contributed materially to earnings and cash flow. Both insulation and composites showed strong year-on-year improvement. Now let’s start on slide 5 which summarizes our key financial data for the year and the fourth quarter. You’ll find more detailed financial information in the tables of today’s news release and the Form 10-K. Today we reported 2014 revenues of approximately 5.3 billion substantially flat with 2013. Sales of our insulation business grew by 6% primarily on higher selling prices and stronger volumes. Sales in our composites business were up 5% primarily due to stronger volumes, higher selling prices and favorable customer mix, partially offset by foreign currency translation in the fourth quarter. In our roofing business sales were down 11% resulting from lower volumes and lower selling prices. In a moment I’ll review our reconciliation, a guidance to get to adjusted EBIT. Our primary measure is to look at period-to-period comparison. Adjusted EBIT for 2014 was 412 million compared to 416 million in 2013. Adjusted earnings for 2014 were 208 million or $76 per diluted share compared to 221 million or $1.86 per diluted share in 2013. Fourth quarter 2014 adjusted EBIT was 107 million compared to the 96 million in the fourth quarter of 2013. Adjusted earnings for the fourth quarter of 2014 were 55 million or $0.47 per diluted share compared to adjusted earnings of 52 million or $0.44 per diluted share in the fourth quarter of 2013. Our effective tax rate on adjusted earnings was 30% which was at the top end of our previous guidance of 28% to 30%. Depreciation, amortization expense…

Thank you, Michael. As I noted at the outset of today’s call, Owens Corning is a better company with all three businesses are making meaningful contributions to our financial results. Both insulation and composites showed strong year-on-year improvement in 2014, and contributed materially to our performance. Roofing also contributed materially to both income and cash flow. I’m pleased that our board of directors elected to increase our quarterly dividend payout by 6% to $0.17 per share. We intend to provide full year EBIT outlook once we have better visibility to the roofing market demand and competitive dynamics in that business, that should be later in the year. With that I’ll turn the call over to Thierry to lead us in the question and answer session. Theirry?

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

[Operator Instructions] And our first question comes from Garik Shmois from Longbow Research. Please go ahead with your question.

Thank you. Just wondering if you could provide a little bit more colour on your comments around the leverage in the insulation business for 2015, and your comments that the leverage is expected to be slightly below the 50% run rate that we’ve seen so far in the recovery. Is this mainly related to the one-off costs you’ve seen in the first quarter that’s going to weigh down the leverage in the business. Or is there something else that we should be thinking about?

Garik, thanks for your question. Both my guidance, and Michael’s guidance that we continue to believe that 50% through the recovery is good guidance. We've been trending a little bit above that, our cumulative operating leverage over the last few years is a bit above 50. We’ve said we believe for 2015 that we’ll be slightly below that 50, but we’ll continue to be at 50 through the recovery. I think you’ve pretty much nailed it, last year in the first quarter we did have some cost benefits related to better utilization of our assets that gave us a little bit better cost absorption and some other things. And if you look at our sequentials last year in the first quarter, we had a significant pickup from first quarter of ‘13 to first quarter of ’14, that’s actually given us a challenge in the first quarter comp. It’s really nothing to do with the fundamentals of the cash, the cash cost performance of the business, or the revenue side of the business, or volume side of the business it’s really timing cost benefit. I would report that we had a fairly sizeable insulation price increase scheduled for early January. I think that’s absolutely critical to our year end insulation and achieving those objectives, is that we get off to a good start in terms of pricing. And at this point, 45 days into the quarter, we feel pretty good about the market dynamic in terms of both volumes in insulation through the first quarter as well as what we're seeing in pricing developing early in the quarter.

Okay thank you. And then my follow-up question is on composites. You indicated that you anticipate 50 million or so of EBIT improvement for 2015, that’s coming through in pricing. Could you provide a outlook on how much of that pricing have you already have secured through your annual contract, and how much of that is still depended on your ability to get pricing as the year progresses?

Yeah thanks Garik, its Michael I’ll take that question. So the one thing I’d like to point out is that, in 2014 I think the composites business, you had a really good year, made a lot of progress in a number of fronts, including getting price and also the assets rammed really well for the year. As you know about half of our volumes are subject to annual negotiations, those annual negotiations typically take place late in the first quarter, late in the fourth quarter and early in the first. I think we've made pretty good progress so far, we're pleased with the progress. And we’d say that it’s probably broadly inline with the progress that we had made last year at this time.

Our next question comes from George Staphos from Bank of America. Please go ahead with your question.

Thanks for taking my question, and thanks for the details guys, good luck on your coming quarter. I guess the question I had is on roofing and recognizing that a lot of the water still has to flow under the bridge before you can provide more guidance, if we look back at historical precedence where you have both a likely shipment decline, but also a pretty sizeable deflationary benefit that’ll come to you, that’ll accrue to you later in the year. What have been past case studies in terms of promotional and pricing, and for that matter, volume dynamic and then I had a follow-on.

Okay this is Mike, thanks for the question. Probably the closest proxy we would have to the kind of environment we see in 2015, would have been what we saw in 2009 where we saw a big run up at oil prices followed by a very rapid decline. So it’s a bit different than the kind of environment we see today because it was a run-up followed by decline as opposed to, we’ve been in persistently higher oil prices now for three or four years followed by this decline. In that cycle we did take price up as we saw the oil price inflation in the first half of the year. And then as oil prices peaked and we started to see deflation, the manufacturer with Owens Corning, we kept prices relatively stable in the second half of ‘09 and margins widened out. I think if you look at distribution economics that makes a lot of sense. It’s difficult to the distributor, if you’re distributing a commodity that’s deflating, to make money because your inventories are constantly revaluing on the way down. So our sense would be as we get into the selling season, as we get into the second quarter which is when we think we’ll actually begin to see some of this deflation. We're not going to see much of it here in the first quarter, that as a manufacturer, the opportunity for us is going to be to try to help our customers with the price environment that allows them to make some money on the inventories that they have, and allows us to take some of this deflation and repair some of the margin issues that we encountered last year with the price cutting. Now it’s a very different theory of the year than what we talked about 90 days ago. 90 days ago we came into the year thinking that we wanted to have a fairly quiet incentive season in the first quarter, and then we wanted to see we couldn’t get price going into the second quarter. We expected in that type of environment we might actually do reasonably high first quarter volumes in advance of expectations of increasing prices. I think the environment we're in today, as we're expecting not only quiet pricing environment in the first quarter, but a pretty quiet volume environment. And I think Michael talked about that, today our customers have a bit of a wait and see approach to buying shingles, and that makes a lot of sense because there’s not a lot of downside to them waiting to see. But our view would be, the best thing that can happen for us would be stable pricing coming into the second quarter which allows us to try to capture some of the [indiscernible] 33:33 deflation and get it to margin.

Mike thanks for the details and then a related follow-on two part, quickly though. Do you typically see customers de-stock at all? And so if you’re of the view that the cost of something is going to be coming down overall because the major commodity is declining, that’s for the manufacturing cost, do you wait and see? And if so how long and if the answer’s no that’d be great. And then if we just look at the percentage margin that you’re guide to mid single-digit in the first quarter since pricing is stable should we assume most of that is just lost operating, or that’s driving the lower margin? And thanks again.

Yeah let me address both parts of your question. Well we definitely believe we're seeing and we’ll see a de-stocking behavior. It’s not de-stocking in the classic sense in that I don’t think the channel is driving inventory down. I think its de-stocking relative to last year, where at this time of year we saw pretty much channel inventories beginning to explode with some of the incentives that caused the industry to ship about 35% of all the shingles in the first quarter when probably outdoor sales in the marketplace due to weather, are certainly less than 25% of the year. So we would have seen a fairly significant inventory build the last year, our sense is that we would expect inventory to be relatively flat that we would ship about what the market’s selling. And then purchase of the ramp up without the door as we start to see spring come and people want to re-roof their house. That is causing some of the margin pressure that we talked about here in the first quarter. As you might imagine as we saw oil prices coming down in the fourth quarter, we tried very hard to drive our inventories down and reduce our purchases of asphalt in the fourth quarter to get our tanks empty. As you could imagine in the first quarter, since we're not yet seeing the asphalt price translate through into our purchases. We're being very cautious about producing new shingles because our sense is those shingles could be high cost relative to the shingles we might produce 60 days from now. So we're cautious in our production which I think is good news. So it’s a little bit of a complex story in that, we're really saying a good news, we don’t think we’ll sell very much in the first quarter. We're not going to make very much in the first quarter and all of that could result in an environment where we have opportunity at the end of the quarter on a year-to-go basis a lot of product left to ship, on a year-to-go basis a lot of product yet to produce. The products that we ship up with stable prices, the product that we produce hopefully have much better economics than we currently have. And that will be a way to get the business back on track and hopefully put up some decent comps relevant to 2014.

Thanks for all the details.

Our next question comes from Stephen Kim from Barclays Capital. Please go ahead with your question.

Thanks very much guys. I just want to revisit the insulation operating leverage question again. You would mention that, that you’re running a little lower, did you mention that was tough comp in the year ago 1Q, but if I recall the insulation business also has an Australian component if I’m not mistaken. I was just curious is FX an issue at all in your guidance here for some of the lower incremental in that business, or is it really just all about the year-over-year comp in insulation, thanks.

Well let me clarify your comments regarding our insulation business outside of the U.S. we have a reasonably sizeable building materials business, which is primarily insulation in China which goes quite well with the Chinese currency has been relatively stable versus the dollar. We also have a fairly sizeable inflation operation in Canada. We report our segmentation of the business as North America and in fact the market operates, somewhat is the North American market from production point of view. I think most of our sales and our competitors operate our production networks. As a North American network the markets are a bit separated because, little bit different products, little bit different building codes, different sales organizations, different customer base. We do nicely in Canada, it’s a good market for us. We would have some translation loss on bringing Canadian profitability back to the U.S. Our goal in the year would be to try to offset some of that, with maybe a little bit of better pricing environment in Canada. Typically we see on the margin U.S. production coming into Canada and obviously the economics of taking U.S. production into Canada have gotten quite a bit less attractive here in January of 2015 than they were in January 2014. We actually have little bit long capacity in Canada. So we tend to be able to service the Canadian market with our Canadian production and even have a bit of swing capacity that comes into the U.S. So our view would be that there should be a little bit of upward pressure on cost for our competitors as they service the Canadian market, and maybe we get a little bit of cost benefit of bringing some Canadian products into the U.S.

Okay sorry I misspoke about the Canada - sorry about that, thanks for the colour on that. The next question I had regarding is with respect to roofing. First of all just a housekeeping item. You mentioned 50 million estimated in benefit. I just want to make sure if that was an annualized figure or if that was, going to be just the back half impact. And then I thought you also said something about asphalt prices hadn’t dropped yet and your tanks were still relatively empty. Well I just wanted to make sure I heard that correctly, was that a comment for today, or year-end, or did I just miss-hear that? Thanks.

Yeah, so Michael made the comment in his prepared remarks that we were expecting to see $50 million or more of asphalt cost deflation in 2015 based on a set of assumptions. So let me walk through that set of assumptions. That is a 2015 benefit in the way we characterize this, the assumption is that it takes two to four months, and it depends on geography refiner slate, crude slate, all the variables that go into the economics of the petrochemical industry. But we see about a two to four month lag from the time oil prices move to what we see in terms of the purchase price of roofer’s asphalt or roofer’s flux. And roofer’s asphalt and roofer’s flux tend to be a bit more premium product than what you’d see on some of the paving markets. So if you’re seeing paving prices you get a good read through and what maybe having with roofer’s flux but its not, its not the same product. So the real shift in crude, where we saw the most dramatic drop was probably from the middle of November to the middle of December. If you fast forward that two to four months, that you puts you kind of from mid to late January, to mid to late March. So what we think we're in the window now, we're across most of our facilities between now and the end of the quarter. We’d expect to see asphalt prices that are priced off of lower crude input cost that materialize for the refiners in the fourth quarter. We then said it typically takes two to three months from the time we bring asphalt into our tanks before we put that into production, we obviously keep a safety stock of asphalt because you don’t want to run out of input materials in your operations, we're trying to manage to our minimums today. You then have a product line with a number of skews in it, so you have to sort it through your inventory in terms of what you ship. So it does take us two or three months to really work those economic through our supply chain. So we’d expect to see low cost asphalt into our shingles and shipped some time in the second quarter, that would produce $50 million or more of deflation in 2015, provided that asphalt comes down on that curve and then it comes down to its historical relationship to crude oil, which is pretty much a parity type relationship once we get in the equilibrium.

Our next question comes from Adam Rudiger from Wells Fargo Securities.

Hi thank you. Can you tell us where you ended the year in prices both for insulation and roofing on a year-over-year basis? I’m just trying to take into perspective the shingle, particularly for shingles going to be down more than 10%, just want to know what the getting price was relative to a year ago so we can kind of try and kind of figure out what we think Q1 roofing revenues will be down?

Insulation prices are obviously higher at year-end 2014 than they were at the beginning of the year. We did not have as much price increase in the first part of 2014, but we did have good price realization through the summer. And we came out of the year with better pricing coming into January. So we will come positively on price in January of 2015 in insulation, but due the price we're carrying over out of 2014 as well as what I said in my prior comments to previous question, good realization on the January 1st price increase. On the roofing side of the business, prices are definitely below where they were this time last year. If you recall our narrative from last year, we hung in there pretty tough in the first quarter and then had to adjust our pricing in the second quarter to the market reality. So in fact our prices declined through 2014, but we're really stable from late second quarter through the end of the year. In the first quarter you would see some channel mix and some other things that would affect our net average price, we had a major price by geography and by channel. As we look at price by geography and by channel we expect pricing in the quarter be relatively stable versus where we finished the fourth quarter.

And then the scenario you talked about earlier about not producing enough, not selling a lot right now but potentially having a lot more to produce and sell later in the year and the impact on margins I think could be pretty interesting. And that only work though if others are doing the same thing, do you have any sense when you chatter out there and what your competitors are doing from a manufacturing perspective, are they doing the same thing or are there others that are producing a bit more now.

Yeah, I’m not really in a position to comment on what our competitor is doing, I think that the basic math, if you’re a roofing manufacturer, input materials drive your cost and trying to time your production to make sure that you’re producing product at the time of the year when your input materials are most advantageous. I would say that, that’s I think a generally accepted conventional wisdom across the industry, so I don’t think any of our competitors would have economics that would look different than ours or any of our competitors have a philosophy different than ours, but I don’t know in fact what they’re doing.

Our next question comes from Mike Wood from Macquarie Securities Group. Please go ahead with your question.

Hi this is actually Ryan Hunter on for Mike, first question about composites pricing, how much of that was just carry over?

So again, so as I said earlier in my prepared remarks, six consecutive quarters of pricing improvement. So we're really pleased with that, so clearly, there’ll be some carryover that comes into the New Year. We haven’t specifically quantified that. And then as I said earlier, we're pleased with the progress that we've made thus far in our annual negotiations.

And then in terms of your insulation sales up 1% year-over-year, was there a hangover from pre-buy with this. And on your positive pricing comments, do this pertain to the fall increase or also from successful January price action?

I’m not sure I caught all of the question, our outlook for insulation really through the first half of the year was driven off of the amount of price we carried over into the year, which is really from the summer increase as well as our expectations that we’ll have decent price utilization of the first quarter price increase, which was really at Jan 1, increase through to first quarter and then into the second quarter. So it’s those two pricing actions that are really affecting us, the Jan 1, price increase was announced in the fourth quarter. So you may be thinking that there were two price increases out there, but there was a fourth quarter price increase it was effectively basically at year end.

Okay great that clears it up, thank you.

Our next question comes from James Armstrong from Vertical Research Partners, please go ahead with your question.

Good morning, thanks for taking my question. In relation to your insulation business and the progression of inventories given your housing starts estimates, are you likely to keep inventories lower into the back half of this year, versus what you did last year?

That’s something that we obviously spent a lot of time of time on in terms of our forecasting, is trying to determine the timing of the inventory - the timing of insulation demand and then determining the production strategy that will give us the optimal economics. I think we’ve talked in prior calls about the nature of glass melting assets that leverages very important in those assets. And so if you get a melter running, you want to keep it up and running and you want to run around the clock. So typically, because we see better second half demand than first half, it almost is conventional wisdom coming into the year that we’re going to build inventories in the first half in order to keep our assets running and shift capacity effectively through inventory from the first half of the year, the second half of the year, and then out ship our capacity in the second half. So that’s a fairly normal cycle, expectations of growth the following year start to play into that, because you need a certain amount of inventory each year. And so that inventory’s going to have to grow as we have a bigger business so that we can continue to meet demand in the second half of the following year. I think we will work in inventories down a bit in the second half of last year, mostly related to, volumes were just a little bit on the low end, most of our estimates as we went through the year, and so we started adjusting inventories in the back half. We’ve said that the current estimates for housing starts are kind of between a 1.1 million and a 1.2 million. I think consensus is 1 million 160, we’re kind of setting our production plans at the low end of that range and then giving ourselves some flexibility to be able to step up production in the second half to meet that. But even with that, we would build some inventory in the first half of the year in order to meet second half demand.

Okay that helps. And then on composites, how are you doing on getting to your goal of 75% of your facilities being low cost?

That is a great question, we’ve done a lot of work over the last four or five years on the composites portfolio both from a structuring point of view, where we spend a fair amount of cash, but also putting it in place new low cost assets. And the business is essentially at a pivot point, as we sit here today, we’re in striking distance of the 75% low delivered cost goal. If you take the closures that we announced in the third quarter, so one in Japan and one in Canada, it actually puts us above that goal. So we’ve made really good progress. We’re pleased with what we’ve got accomplished. And kind of see ourselves at a pivot point as we move forward.

And maybe I’ll add a little bit of additional colour on top of Michael’s remark. I think you also are starting to see a bit of that benefit coming through on the capital side. And then I think you’ll start to see that benefit coming through our mid cash restructuring side. So we’ve had a fairly sizable capital investment and cash restructuring cost in composites over the last five years in order to achieve that position. Our guidance for this year on capital was around $350 million in capital, but includes a $50 million investment for a new non-wovens facility. In fact, if you exclude that growth investment, our overall underlying capital spending is below depreciation in our outlook for 2015. It’s been a bit off time since you’ve been able to see us get to those kind of levels of capital spending, and I think that combined with much - cash restructuring cost gives us, not only a better outlook for composites cost position, but certainly composites cash flow position.

Our next question comes from Keith Hughes from SunTrust, please go ahead with your question.

Due to some of your comments on distributor channel inventories on others and this push forward of demand, is the industry facing a situation if there was strong storms or strong spring demand, there’ll be shortages in the market?

That’s a great question Keith, and I would tell you that I’ve been around this industry for a long time. That’s not an unusual condition for there to be shortages when storms hit in the spring, it’s just hasn’t been the reality of the market for the last three or four years, because there have been these big incentives in the first quarter to push a lot of inventory out there. So I don’t know that you’d see nationwide shortages, but given cautious inventory positions on the part of the distributors that we would see some big spring storm activity, I think you’d some regions of the country with storm activity there would be short inventory. And then depending on how the manufacturers played it, you might find that the manufacturers take longer to respond with production to meet the needs of that market than they have historically. One of the advantages we believe Owens Corning’s has is, we kind of have a regional capability where we can make products that are combinable on the roof in multiple facilities. And we call that the Regional Shingle Program, and that sounds like something that’s fairly simple to do, which is making black shingle in two different facilities that looks alike on the roof, but it’s actually quite complicated, and we have very good technology to allow to achieve that. So we would believe that if we were to see some shortages and a lot of demand, that it would not be just an issue us turning up one facility that’s maybe closest to where there’s shortage, but we would be able to use our regional model to turn up production and maybe a couple of other facilities and have them come in and help and assist the facility that services that trait area. So we look at that a lot, that’s a lot of our planning. I would say we are not driving inventories down to bare bones, because of that reality you could be more aggressive than we’re being because of the idea that we want to be able to support our customers and certainly support people who are affected by storm damage. But we’re going to be on the low end of what is a normal safe zone, and I think you could - some shortages that we saw [indiscernible].

Second question, composites business I believe in the fourth quarter from some type of settlement. Can you discuss what that is and how much it helped the quarter?

Yeah sure Keith, its Michael, it was a legal settlement in Japan, about $4 million.

Our next question comes from Philip Ng from Jefferies, please go ahead with your question

Hey good morning guys. Free cash flow for this year from a conversion standpoint was a little lighter than we would have thought. I would imagine part of that is some of the excess inventory in the channel in your system. Do you expect working capital to be a source of cash, and how should we think about free cash flow conversion over the cycle?

Well let me take a high level comment about free cash flow and then I’ll let Michael talk a bit about working capital. One of the headwinds on free cash flow, because we tend to measure against adjusted earnings, is a lot of the restructuring costs that we’ve had in composites in fact were cash. So the cash flow statement doesn’t lie, if you have those costs and you adjust them out of EBIT and use that as the denominator, you’re going to show a little bit weaker cash conversion. I think that’s mostly behind us, so we’re pretty optimistic with our tax position, that if we can get to levels of cash restructuring and adjustments, that really would start to come out of the numbers, which we do think is for the most part behind us. But at least EBIT conversion to cash flow will become better, and then I made some comments about CapEx which then leaves you working capitals. So I made comments about tax, so we’ve got decent tax position, EBIT translating through free cash flow. And then where we are in working capital, I’ll let Michael take that.

Yeah thanks Mike. Working capital for 2014 was kind of broadly inline with the previous year. As we look forward to 2015, well I won’t give you specific guidance, it would be my expectation that on a finished goods perspective, we make some decent progress in two of our businesses, composites and insulation. And then we’re going to be pretty aggressive with our suppliers as well this year and I’d be disappointed that on the favourable side we didn’t make some progress as well

Okay, that’s helpful on the corporate expense side regarding a step up in 2015, what’s driving that? Is that mostly pension expense, I would have figured it’d be flat to down perhaps due to some of the streamlining you guys are doing at the management level?

No, no so good question and maybe it wasn’t clear in my prepared remarks. If you go back a year ago, we guided to about $120 million to $130 million of expense, that’s what we’re guiding this year as well. The biggest difference kind of year-on-year was in sense of compensation - that we’re hopeful, and then incentive compensation comes back to a more normal level this year.

And related to the BMG group elimination simplification of the organisation, we in fact do have really a decent cost realization out of that, we’d be about $8 million to $10 million cost as a result of that move. Most of that cost is - you reported up through the insulation business and the roofing business. So you wouldn’t see that in the corporate number, it does give us a little bit of earnings relief in roofing and insulation opportunity to invest in some growth program.

Hey Jamie this is Thierry, I think we have time for one last round of questions.

And our next question comes from Dennis McGill from Zelman & Associates, please go ahead with your question.

Hi, thank you. Mike, just on the asphalt assumptions that you’ve two laid out, what does it imply that the cost would be down in the fourth quarter year-over-year? And then just based on the historical relationship, is there anything you can think of that would prevent that relationship from holding?

Yeah, let me take the second part of your question first and then I’ll come back to the percent change. Typically, the time if asphalt is going to not trade in sympathy with crude oil, that typically is in the summer. And it has to do with paving and whether the refiners are incentivized to make more paving asphalts and how much government money is going to in the infrastructure and paving. Because we expect the bulk of the movement in asphalt prices to start to come at about the same time where paving demand would start to ramp up. We do think the refiners may have some options in terms of where they want to go with the bottom of the barrel, or the heavier end of the barrel. And we may not trade all the way back to the historical relationship of roofers asphalt to crude oil. So that’s, I think, something we’re watching, I don’t think that affect could ever be so large that we wouldn’t expect to see barely significant deflation over the course of the next two or three months. But it could mute the amount of inflation that we see in terms of coming all the way down. I think if you look at fourth quarter versus fourth quarter, let’s say third quarter versus third quarter that might be a little bit cleaner in comparison. I think if you took average crude oil price in the third quarter of 2014, you took the forward curve for crude oil in the third quarter of 2015, the ratio of those two numbers would be about our expectation of the percent decline we’d expect to see in asphalt.

Okay that’s helpful. And then I’d just like to say on the composites business going on internationally as far as this uncertainty and slowdown in some of the regions. Can you maybe just walk through which is in demand-wise across Europe, and maybe China specifically?

Yeah so I’d say our businesses outside of U.S. are broadly inline with expectation. Europe’s fine, obviously we have the facility in Russia, which is relatively small which is in a great environment. But we actually think that we can actually turn that into an opportunity, given its pretty low cost. And China so far is fine.

And ladies and gentlemen, at this time we’ve reached the end of the allotted time for the Q&A session, I’d like to turn the conference call back over to management for any closing remarks.

Thanks Jamie, well thank you everyone for joining us to the call today, and with that I’d like to hand it over to Mike for some final comments.

Well thanks Thierry, first of all we always appreciate your interest in our company, and thank you for all those good questions. Obviously we tried, in this call, to be very helpful in giving you an understanding of some of the opportunities and also challenges we’ve faced going into 2015. When we look at the year and look at the keys to success for 2015, I think a lot of the prerequisites for a successful 2015 in insulation and composites are in place. We feel like we have stable demand, expectations of housing growth in the United States, good pricing environment with decent comp share in the first quarter, relative to the first quarter last year, relative to where we were to the middle of last year, predictable volumes that are giving us very good manufacturing performance. And we’d expect to see the kind of momentum we’ve had in insulation over the last couple of years, continue through into 2015, we’d expect to see the kind of momentum we saw in 2014 and composites carry through. I think Michael talked about the offset that we’d expect to see that momentum due to foreign exchange, obviously that’s a bit of a headwind. It’s a translation issue for us, though it’s not a strategic issue. We tend to make product in the geographies where we ship it and sell it, so our cost position and our asset base is well positioned to serve the markets where we’re competing. The other side of the coin, in terms of getting off to a great start in roofing, is a bit more unconventional. We’re seeing a great start in roofing this year, would sound and look like weak volumes and stable pricing leaving us the opportunity on a year-to-go basis that coming out of the…

Ladies and gentlemen, that does conclude today’s conference call. We do thank you for attending. You may now disconnect your telephone lines.