Good day and welcome to the Owens Corning Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Thierry Denis, Vice President of Investor Relations. Please go ahead.

Thank you, Allison, and 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 2015. 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-Q that detailed our financial results for the third quarter. For the purposes of our discussion today, we’ve prepared presentation slides that summarize our performance and results for the third quarter of 2015, and we will refer to these slides during this call. You can access the earnings press release from 10-Q and a 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 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. 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 and today’s prepared remarks contain non-GAAP financial measures. Reconciliations of 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 effect of quarter-to-quarter fluctuations, which have 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 33% on adjusted earnings, the midpoint of the 2015 range published this morning. 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, and good morning, everyone. We appreciate you joining us today to discuss our third quarter results. As noted in the press release we had a very strong quarter, representing a record EBIT performance for the company. All three businesses made substantial contributions to this performance. The Composites business continued to momentum we have seen throughoutthe year driven by stronger volumes, improved pricing and good manufacturing performance. Our Roofing business saw volume growth in the quarter with improved margins benefiting from the continued asphalt deflation we have discussed throughout the year. The Insulation business grew at double-digit rates reflecting the improved housing activity in the second half of the year. This marks the 17th consecutive quarter of EBIT improvement for our Insulation business. All three businesses performed at double-digit margin levels in the quarter as a result of positive macro trends and solid commercial and operational execution. The company delivered consolidated revenue in the quarter of $1.46 billion, a 6% increase from $1.38 billion for the same period a year ago. We earned $198 million in adjusted EBIT for the quarter, up from $132 million last year. Adjusted earnings were $113 million, up from $73 million one year ago. We are also pleased to note that we have delivered year-to-date cash flow from operating activities of $384 million, up from $62 million one year ago. At the outset of the year we discussed a number of expectations for sustained or improved performance across our businesses in 2015. Let me review them now beginning with safety. As is the case each year, we said that we will continue to make progress towards our goal of creating an injury free workplace. We continue to perform at a high level of safety. Through the third quarter the number of recordable injuries…

Thank you, Mike, and good morning, everyone. As Mike mentioned earlier, we had a very strong quarter and were very pleased with our results. All three businesses delivered double-digit EBIT margins in the quarter resulting in a 14% adjusted operating margin for the company. As I have said on previous calls, Owens Corning is a better company when all three businesses are making meaningful contributions to our financial results. Now 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 table of today's new release and the Form 10-Q. Today we reported third quarter 2015 consolidated net sales of $1.46 billion, up 6% as compared to sales reported for the same period in 2014. Net sales in our Insulation business increased 11% primarily on increased sales volumes. In our Composites business, higher sales volumes, favorable product mix and higher selling prices were offset by roughly $50 million of foreign currency translation. In our Roofing business, net sales were up 6% primarily on higher sales volumes. Adjusted EBIT for the third quarter of 2015 was $198 million, up $66 million compared to the same period one year ago. This represents record EBIT performance for the company. Adjusted earnings for the third quarter of 2015 were $113 million, or $0.96 per diluted share compared to $73 million or $0.62 per diluted share in 2014. Depreciation and amortization expense for the quarter was $73 million, down $2 million as compared to the third quarter of 2014. Our capital expenditures for the quarter were $89 million. Cash from operations improved by $125 million for the quarter and $322 million for the year-to-date compared to the same period one year ago. For the year, we expect to see strong free cash…

Thank you, Michael. As I noted at the outset of today's call, Owens Corning had a very strong quarter representing an all-time best EBIT performance. Our Insulation business grew EBIT to the 17th consecutive quarter. Our Composites business delivered at 9th consecutive quarter of EBIT growth and our Roofing business improved margins to 21% and is now tracking ahead of 2014 on a year-to-date basis. Given our performance this year analysis for the remainder of 2015, we are confident we should deliver EBIT at or above the high-end of our previous guidance of $460 million to $500 million. And now, I'd like to turn the call over to Thierry, who will lead us in the question-and-answer session. Thierry?

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

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Stephen Kim from Barclays. Please go ahead.

Thanks very much, guys, and good results in the quarter.

Thank you.

I wanted to first start off with your Insulation business. You have talked about incremental there 40% for the year longer term. I think you talked about 50% better, it was about 25% in the quarter and we know the pricing was disappointing. I guess I'm wondering how much of the difference between the current incremental that we are seeing and your forecast in incremental is to solely to an improved outlook for pricing?

Thanks, Stephen. As we talked about our operating leverage guidance, we said through the recovery, which is now in multiple years we expected that we would have about 50% operating leverage. And in fact, based on our comments today where we said we think this year will come in around 40%, we are still at about that 50% level cumulatively over the last three or four years through the recovery. So, we're still tracking pretty well; to the overall guidance we gave there on 50% incremental. You are correct that in the third quarter our incremental were a bit weaker. I think there is some comparison issues and other things that caused the third quarter to look a little bit worse than the full year. But fundamentally, I would say there is nothing in the quarter that causes me to believe that the underlying momentum around incrementals is different in this quarter than it has been in the other. I think we are going to average about 40% through the year. Your second question around pricing, I think that that's a key observation for us. We came into the year thinking that we would maybe do a little bit better than our current guidance at 40%. I think the gap or the disappointment is primarily on the pricing side. We would have expected at this point, the recovery, the prices, and insulation, should be accelerating from what we saw in '13 and '14 and in fact we are experiencing a bit of a deceleration in price performance. We think that's specific to 2015. So, we had kind of a context or some fact and circumstances associated with this year that have made the price environment a little bit more challenging. The nature of the price announcements and the price increases…

Great, yes, thanks. Yes, certainly in insulation, some of the pricing announcements remained over the year which mean in the beginning of the year probably accounts for some of that. I wanted to switch to roofing. And I know you are going to get a bunch of questions about the volume and the margin. I wanted to ask you specifically about the pricing. I think you -- I think Michael talked about Asphalt prices being down roughly 30% year-over-year in that segment. And we know this is obviously some mingling of your Asphalt prices in your -- together with your shingle prices and the number that you reported to us. I was wondering if you could give us some, help us see through some of that and give us a sense for, if pricing stays flat sequentially how much would you expect, I'm talking shingles here. If shingle pricing stays flat sequentially, how much do you think year-over-year shingle prices will be up or down in 4Q and if you could help us understand what that shingle specific price performance was year-over-year in 3Q?

Yes. I think we have some pretty good disclosure on this in our 10Q. So, we tried hard to enhance that and make sure that our investors have the ability to kind of track pricing. I think this year we talked pricing primarily sequentially and we said in the second quarter, then in the third quarter that prices were relatively stable on a sequential basis. I think we've given indications based on our outlook for the fourth quarter. We did not call prices down for the fourth quarter. So, we do believe that for the second half of the year, prices will be largely stable or flat sequent to where they were, exiting the first half of the year. They are in fact tracking below last year. That was true in the first half of the year. If you remember, last year we had to do some price corrections in the middle part of the year, coming through in the second and third quarter. We are still comping against those number but we are comping pricing today below those numbers. I think our characterization of pricing being stable would suggest that while we're meeting competitive situations and we're seeing competitive situations in the market every single day, we are not seeing widespread discounting which characterize 2014. So, whereas in 2014, we would say there was national market-wide price movements. I think today it's much more on a regional or local basis. It so much channel specific, even at times new construction versus repair remodel specific. So, we're seeing a very different and I would say positive market environment today around pricing and that it's still very competitive but we are seeing prices relatively stable. That said, our overall price level in the third quarter and expectation for the price level in the fourth quarter is that those price levels will be below last year. We've also said we expect full-year Asphalt cost deflation to be $60 million, that's related to our Shingle business. So, Michael broke out and gave I think a little bit more guidance today on that commercial and industrial end market, which is our roof, which is our Asphalt business too, other roofing manufacturers and into the commercial roofing business. That's independent of our guidance around deflation. So, the 50 million of deflation is specific to Asphalt shingle business, given that we're saying we think the overall market will be flat, our volumes would be slightly up because of our share position last year and that we think Asphalt cost deflation would be $60 million. I think the influence of that in an overall flat EBIT year is that most of that has been given back in price in total relative to 2014.

And our next question comes from Michael Rehaut from JP Morgan. Please go ahead.

Thanks. Good morning everyone and nice quarter.

Good morning, Mike.

The first question I had was on Composites. I think, definitely better than expected results than we were looking for and I think also perhaps as implied by guidance last quarter where there were a number of items I think that you highlighted. And I think this is more for the second half overall, not for 3Q specifically but you cited rebuild expenses and cost associated with the startup of the U.S. facility implementation cost with an expanding supply line for the Chinese-based manufacture as well as lower level of higher margin specialty glass sales. And those were the three items that you kind of talked about. Clearly, it looks like there are some things that are on the positive side that are perhaps giving greater than expected tailwinds, but I just wanted to get back to those three drivers that you mentioned last quarter and ask if all of those items are in effect still in your guidance for the year or if some of them are differed or if there is other elements that have kind of played into the picture, as you now look at the second half overall?

Okay. Hey, thanks Michael, its Michael. Why not I give you a bit of color on the quarter itself and then I can specifically take on the question you had specifically around rebuild cost and startup cost and how we shaped that for the year. But you are right. So, we delivered very strong results in the quarter, 61 million versus 32 million year-on-year. You heard me in my prepared remarks talk about exceptional operational execution and exceptional commercial execution, really kind of hitting the ball out of the park on all fronts. We probably guided last quarter a little bit conservatively and as I back up to the beginning of the year where I sit today. Maybe we guided the year a little bit conservatively but I'd rather be a little bit conservative may been aggressive. We've really seen three big bright spots in 2015 and let me take you through those. So, the first one would be Europe. So, our European business went through a pretty extensive restructuring over the last three or four years. And the European business has executed very well this year, again both commercially and operationally. And I'd say that their results are probably about a year ahead where we thought they'd be when we started the year. So, again, really strong performance in Europe, driving some of the up-slide that we've seen in the year. Secondly, the other area I'd highlight is manufacturing. So, manufacturing this year has been a significant tailwind. And again, they are probably about a year ahead of where we thought we'd be as we sit here today versus at the start of the year. So, very smooth operations, good cost take out, and execution of rebuild which I'll come to in a minute. And then the third bright…

That's very helpful, Mike, thank you for that. And I guess just second question maybe on the below the operating line you made adjustments for full year guidance in terms of lowering corporate as well as raising the tax rate. I guess, obviously you're not at the point yet to talk about 2016 guidance per se but just wanted to get a sense of thinking about things from an ongoing basis, if there were certain items that on the corporate expense were differed in that you might see that moved into '16. So, kind of an ongoing corporate expense. How to think about that. And if there are any items again that were shifted forward or the changes there. And then also on the tax rate, with the move up by two points, was that due to any type of geographic mix and is that something that on an ongoing basis should be now the more of the go forward type of rate?

Thank you, Mike. Yes, I think I can help you. Just as a reminder, let's take corporate expense line item first. So, just as a reminder at the start of the year we had guided you a 120 million to 130 million. On the last quarterly call, we lowered that guidance to the low end and then on today's call I have given you guidance of a 110 million. You will recall that last year, corporate expense came in significantly below our first part of the year guidance, primarily, as a result of lower performance based compensation but also as a result of a very good spend control. As we went and since started this year, we kept the range on corporate cost and had been very disciplined throughout the year. So, we're clearly seeing some benefit there. And at some point we will have to all right take the reins off a bit. And then the other thing that happened in the third quarter which won't be repeatable is we had about a $7 million insurance settlement. So, was a claim related to prior to the company's0 bankruptcy, that we were successful in collecting on and clearly that won't be repeatable. And then in regards to tax, yes, the change in rate is predominately driven by the geographic mix of earnings and then we've also had a couple of prior period adjustments, two minors ones which were in the third quarter but the big driver is actually the geographic mix that is driving higher. I'm probably not going to give you guidance for 2016 but clearly we'll lay that out in much more detail at our Investor Day mid-November. The one thing I want you to stay focused on though, is we have $2.2 billion tax N.O.L and cash tax this year remains unchanged at roughly 10% to 12%.

Our next question comes from Ken Zener from KeyBanc. Please go ahead.

Good morning gentlemen.

Good morning, Ken.

So, in roofing, Mike, you talked about your expectations that from a volume perspective you might up a little bit versus the market because the market share last year. If I look at the sales, you talked about down kind of sequentially 40% volume is the number you kind of threw out there. Obviously, with less volume, there is going to be some fixed cost absorption. Given that pricing was stable sequentially, Asphalt's kind of flattened out a bit. Would you assume that the margin degradation sequentially is going to be largely associated with those fixed cost overhead components or is there actually kind of a change in your variable cost or a hypothetical gross margin there?

Yes. Thanks for the question because I appreciate the opportunity to clarify that. We think variable margins which is the way we really, that's the key management data that we manage the business to internally. We would expect variable margins to be relatively flat, really from the second to the third and now from the third to the fourth. So, the Asphalt cost deflation that we saw come through in the second quarter continue through the third and will continue into the fourth. Given that the fairly stable variable -- margin performance over the last couple of four months and we would expect through the reminder of the year. We were explicit today about saying that we think EBIT margins could decline by as much as 10 points in the fourth quarter for the very specific reason you are bringing up. And it's really on the fixed cost absorption or fixed cost as percent of sales basis. The downtick in volumes in the fourth quarter will be more pronounced than what we've seen in the last three years, primarily because third quarter volumes were better than what we've seen in the last three years, producing a bigger down take, producing a bigger sequential decline in EBIT margins. But our variable margins are intact and really in good shape.

Good. Thanks for that clarification. And then, Mike, to you. I wonder if you can clarify, it seems -- I know you guys never look at the stock price but it seem to me you made a comment about perhaps being some -- you're not making any outlook comments on FY '16 but it's certainly I kind of heard some cautiousness around composites. It seemed, I mean, and I started to notice the stock moved downside. I just wonder if you said something that you didn't mean to say in terms of these tailwinds that you had in composites might because they did better than you expected. It might be headwinds next year, I think that where I kind of heard that. Was that what you meant to say I know you guys will give more clarity at the annuals day, but if you would expand on that, I would appreciate that. Thank you.

Yes. Let me talk to that, Ken. And obviously, specific to the stock prices. We're not working at the stock prices, we're in the [indiscernible]. I don’t know.

I know.

I don’t know. I'm not talking to that. I will talk about our outlook for composites, which is very bullish. Year ago, we improved EBIT in the business by about $50 million. We were around a $100 million in 2013, we stepped up to a $150 million in 2014. We've given guidance today that we expect EBIT improvement in the composites business of $80 million in 2015, which would put us well above $200 million; a double digit operating margins. I think one of the open question has been, as we've updated guidance through the year, what's going better in composites, I would say that the market is going about as we expected. I'd say pricing is going about as we expected and then our operating performance and our agenda around cost improvement and our agenda around performance improvement in the business is about a year ahead of schedule. And I think that's maybe what Michael was saying in his comments, which is some of the things we are seeing this year which are good guise and helping performance, absolutely are repeatable and absolutely are sustainable. But they are actually some of the performance we expected to see in 2016, now appearing in our 2015 books, just because we've gotten a better on the operation side, a little bit faster than we expected. So, if there is any confusion at all, I want to be very clear, we expect operating improvement in Composites in 2016. We expect volume improvement in Composites in 2016, we expect price improvement in Composites in 2016. We expect operating margin improvement in Composites in 2016. We see green lights in that business. It's operating well today but it's in our view not anywhere yet nearing its potential performance. We see upside in that business pretty much across all aspects of the business.

And our next question comes from Dennis McGill from Zelman & Associates. Please go ahead.

Hi, Mike. Just to push a little bit on that Composites. I think you said margin being up next year, which sounds pretty optimistic. And just want to make sure as you dial back maybe to the revenue side. I think where maybe clients and probably analysis well are a little uncertain. It's just how you get comfortable with some of the industrial slowdown globally. That it is a headwind that's to come on the revenue side. And that's ultimately, seemingly been the trigger to weaker than expected margin performance. So, maybe just detail what you've seen recently from a either a geographic and our end channel perspective, just to maybe put some confidence behind what you've said from that outlook?

Yes, I mean, let me make a few comments on this and maybe Michael will want to add some additional specifics. But we're not seeing the slowdown that I think is often reported typically in the ANOS reports associated with our business. We've seen decent growth in most of the geographies around the world, where we think the overall market has probably been declining, which is a couple of the developing countries like Russia or Brazil. We're basic in those countries. So, we have manufacturing operations and generally those were import markets. So, devaluations of the currency have actually benefitted us, because it's made imports more expensive, it's made our manufacturing cost more competitive. So, some of the places where there was volatility in currencies is actually played a little bit to our advantage because we're in those countries and manufacturing in those countries. I think it's probably without question that China is slowing down some. I think slowing down is different than declining. So, if we see volume growth in China, that's a couple of points weaker or three points weaker, then maybe what we've seen over the last couple of years, that's a very different scenario for our business, than actually somehow seen that volumes will decline in China. I have not seen and maybe I'm reviewing different economic reports than the folks on the call. But we haven’t seen a lot of people calling for China to go into actual negative growth. We're just seeing commentary that China will likely continue to slow down typically in the industrial side. Given the amount of progress we've made industry wide, on capacity utilization and capacity. I think the Composite industry is in a position to absorb a slowdown in growth in composites, without creating much turmoil in the marketplace.…

Okay. Is it possible if you were to look at the 6% volume in the whole segment, just a segment that by North America, Europe and Asia-Pacific, just to speak to what you're talking to, which is pretty broad base strength?

We published a slide in our investor doc that shows where our revenue is by geography. So, obviously we are over weighted towards North America, we are kind of market weighted towards Europe and we are a little bit under weighted to China. But China has been the fastest growing market. So, for us to be showing kind of broad based growth across the business; we had growth in the third quarter. We didn't have a ton of volume growth in the second. We had very good volume growth in the first. So, kind of a year-to-date basis our volume growth a bit below what we showed in the third but we would see volume growth pretty much in all regions of the world. So, it's been broad-based performance in the business. And as Michael said, are particularly very happy with the rate of improvement we've seen in Europe. It has exceeded our expectations for the year.

And our next question comes from Keith Hughes from SunTrust. Please go ahead.

To build on the last question within composites. If you look at it from an end user market perspective, are there oil and gas I assume is negative, but beyond that is there any ones that are really driving what was a perfectly solid volume performance in the --.

Keith, it’s Michael. We have a slide in our investor deck that we kind of show or segment the end market. So, you heard Mike talk about oil and gas being the one market that's weak. That's probably the one that I'd highlight. It's been weak, otherwise, whether it's transportation, consumer, winter construction, we've seen pretty positive trends throughout the year. In particular, I'd probably call out transportation has been really good automotive build this year in particular in North America.

And second question on that part of that business and that goes to the distributors of our margin items. As we approach the year end how are they thinking about inventories during the winter months and '16 in general? What have you heard from them?

As far as I know, distribution isn't a huge part of our business. I think it's actually relatively small. But things in general are pretty balanced, as you know the industry as a whole is operating at 90% utilization within China, they're operating at about 90% utilization, where actually certain product lines in geographies that are experiencing tightness. I don't think there is any inventory backup anywhere that I am aware of.

And our next question comes from Garik Shmois from Longbow Research. Please go ahead.

Hi, thank you. Question on roofing. You had $15 million in production benefits in the third quarter. I was wondering if you can maybe expand on because specifically what that entailed. Did you tend to overproduce demand in the quarter to take advantage of over Asphalt costs? And how is that say from an inventory perspective at the plant level, when looking out to force you into next year?

Thanks, Garik, this is Mike. We did have a benefit in the third quarter relative to the third quarter of last year. And I think that goes to some additional disclosure that Michael made in his prepared remarks regarding the timing of shipments in roofing and how that impacts our economics. If you look at last year we had an obviously big first quarter. We produced through kind of the midpoint or late in the second quarter at pretty high levels and then began to realize that the shipments in the first quarter had created an inventory build that actually was going to blow back in us in the third quarter. And that's I think in our analysis what we've seen is this [indiscernible] or buy activity in the first quarter hasn't had so much of an impact on the second quarter. Historically, it's actually had an impact on the third quarter. So, last year as we ended the third quarter, we took production way down and to give us some runway to be able to get to our year-end working capital targets, we needed a fair amount of time to reduce production and had to take production down really across the network for the second half of 2014. This year, we didn't have that big first quarter, we didn't produce big in the first quarter. I would say we've been producing pretty ratably two shipments and as a result we had good production economics in the second where we weren't yet slowing down. We had good production economics in the third quarter where we produced about two, our shipments. So, we didn't have inventory build, a little bit actually inventory reduction in the third quarter. Now, we're positioned to produce at the fourth quarter at about what we believe our shipment levels will be to get to our year-end inventory target. So, it's really a timing issue. Last year in the second quarter, we probably benefited from producing when we didn't have as much shipments and then that came back on us in the third. This year we pretty much produced shipments every single quarter. So we're comping against a little bit weaker second quarter -- third quarter number last year which was a benefit. And then we'll comp against, I guess, a comparable fourth quarter number which is why we'll see margin weakness in the fourth.

Okay. Shifting at the insulation. You put up double digit volumes in the business, I guess in line with your previous outlook, expected to continue in the fourth quarter. What are the main end markets that it's contributing to that type of volume growth? Is it they coming out of the second quarter you talked about pent up them there because of weather acceleration in U.S. housing. Is that really the material contributor to volume or is there something else?

Yes. I mean, it's really residential new constructions. If you look at the current housing start forecast I think for this year it's an 1130, as the consensus somewhere in that range. That's about a 13% improvement in residential new constructions versus last year, where I think we finished at right around a million. That's actually been a little bit back-end loaded. So, if you look at how the million 130 would play out through the year. If you recall in the first quarter, the housing start numbers we’re kind of printing around a million. And then really since April-May timeframe, we've been more consistently kind of at the million two range. So, we're really seeing new construction at above that 13% growth rate in the second half of the year just based on the timing of the start. We had some headwinds. Obviously, we are dealing with FX which excluding revenue, which is reading top-line. We have a good side of business in Canada. We do very well there and obviously the Canadian dollar getting a lot weaker has been hurting top-line. We also have some resin based foam business, particularly polystyrene related. It was deflation in polystyrene. We've seen a little bit weaker price environment, although margins have been fine in that business. Because of weaker polystyrene, we have not had a robust pricing environment there. So, as a result, we have a little bit of topline headwind around from those businesses, but we've been overcoming that with growth in residential new constructions in U.S. primarily.

And our next question comes from George Staphos from Bank of America Merrill Lynch. Please go ahead.

Hi, it's actually Alex Lin sitting in for George. Thanks for taking the question. Just starting up with roofing, can you just talk about where the incremental 10 million of Asphalt benefit came from and then kind of related, can you provide any color on how we should frame the potential benefit for 2016, assuming no changes from today?

Yes, Alex. I assume, when you talk about the 10 million in incremental benefit, you're talking about third quarter versus second. And fundamentally, that timing issue where we had said coming into the year that we expected about $15 million deflation and we expected to see most of that in the second half. We updated that guidance on our second quarter call and so that actually we had seen a little bit better volumes in the second quarter. And as a result, we had shipped some shingles. We had expected that would be second half in the second quarter and as a result had pulled some of our deflation outlook into the second quarter and had got some of that benefit in the second, but we didn't have a full quarter benefit in the second. We didn't really get to a full quarter of benefit associated with deflation, until the third. So, I think you're just seeing the impact of three full months of lower Asphalt cost coming through our numbers. We would expect that to come through our numbers in the fourth quarter or be in a more volume. So, we'll have less benefit in the fourth quarter because we'll ship fewer shingles but the overall cost per shingle benefit would be pretty similar to what we saw probably starting in the mid second quarter and then through the third into the fourth. You asked a question about next year. Obviously, we do have some ability as we go into next year to have Asphalt come positively for us through the first kind of quarter and a half of next year. Since we didn't see a lot of benefit through the first quarter and a half, we would expect to carry these Asphalt cost through into next year and hopefully I'll be able to take some of that benefit through to the bottom-line in terms of continued margin improvement. And then we've seen some additional weakness and that in oil prices for a period of time, where oil kind of dipped down into the 40's. Oil has kind of picked up again. And if you look at the future, I am not sure that there is a huge spread today between the oil that's probably in our numbers for the second half of 2015 versus the outlook for all oil prices would be in 2016 but if anything is biased towards the benefit side. So, if you look at our futures, that those came to pass we would probably see some additional benefit in 2016 as those oil prices came through relative to what we pay for Asphalt in 2015.

Got it. I appreciate the color. And then just second question on capital allocation, is there any way to comment on the outlook for CapEx in 2016? I understand, it may be a little early in the planning process. So, if not maybe you can just detail what are some of the key areas in opportunities requiring some investment for next year? Thanks a lot.

Thanks. We've said that kind of reinvestment in the business, we feel like we ought to be able to invest in our business at about a 100% in depreciation and in some years 90% of depreciation. And to keep our assets well maintained safe and get incremental capacity expansions and productivity associated with capital projects and the continuous process type manufacturing environment capital projects tend to bring with them benefits around throughputs and benefits around productivity. So, it's all pretty integrated. We don't have kind of separate maintenance budgets and productivity budgets. Our maintenance budgets tend to be productivity budgets and vice versa. I think that's pretty reasonable going to the next year. So, as you look at the footprint of our business, we come through a pretty strong capital spending cycle here in composites. We have some rebuilds that we we'll do next year and then I think we start to get into a little bit of a benefit beyond 2016. Related to rebuilds we'll detail that a little bit more at our investor day coming up here in November. We have announced obviously a couple of big capital projects. We should be largely complete with capital spending associated with Gastonia, by the end of this year which is a non-woven facility. We'll be in the bulk of the capital spending for our Joplin, Missouri mineral fiber facility next year. So, that will be something that we come in above depreciation. We have a couple of capacity expansion projects that look interesting to us. But I would say that we've been at in kind of the high 300's the last two or three years, which has been both the maintenance and productivity capital as well as the expansion projects. And we haven't announced anything that would cause you to believe we're going to be above that level.

Alison, its Thierry. I think we have time for one more round of questions.

Certainly. The next question will come from Mike Wood from Macquarie Securities Group. Please go ahead.

Hi, thanks. And I love the Pink Panther music before the call started, by the way.

Thanks, Mike.

You answered a lot of the short term questions I had. So, I was just wondering if we could switch to some longer term thoughts. I am curious what your view is. This year you had the Asphalt deflation you called up. The price decline more than offset that Asphalt deflation. Curious, what you're thinking as longer term on price cost in the roofing industry sort of what it would take to turn that positive, going forward?

I think in the near term, the most constructive way for us to see some margin expansion in the roofing business would be for us to have additional Asphalt cost deflation and be able to capture that Asphalt cost deflation in our P&L. I think what we've been able to demonstrate this year in our business is we've been able to do that and I think that's also been an environment that's been constructive for our customers. I mean, if you understand distribution related businesses typically deflating cost hurt the value of your inventories and compress margins. I mean the roofing distribution market today is very competitive. So, additional deflation of roofing prices would if anything in our view likely put down more pressure on our customers prices which would not be good for their businesses. So, a stable price environment for the manufacturers where we can get to our margin goal and support stable pricing to our customers, seems to be a winning formula. Now, obviously, the best equation generally in distribution related businesses is rising prices, because that revalues our inventories and allows them to expand margins. We saw some progress this year in the April-May timeframe associated with the May price increase, where we did get some positive price utilization. I think that was good for us and I think that was good for our customers. I think that's a bit of a challenging thing to guide to or to expect in the deflationary environment. So, our goal would be to try to manage into next year with flat prices sequentially and a little bit more deflation. And since we won't be comping off of a high priced year like we were in the first half of 2014, our price comparisons would be a little bit better next year and as a result maybe our margins would expand out a bit more.

Great. As a follow-up, around this time last year you commented on your expectations for the winter discount do you have thoughts as whether or not you are going to attempt to lead a low or no winter discount this year?

Our view on winter discounting, which I don't think has changed much over the last three or four years, is that it's not constructive for Owens Corning. We don't necessarily believe it's constructive for our customers as it got bigger and more widespread. I think it created price confusion in the marketplace at the distribution level. It created piles of low cost inventories that had to be worked off through the year. And we certainly heard feedback from our customers that that was a difficult environment for them. Also, the history of winter discounting, that used to be a good idea when the market was much more northern and winter based. If you look where the United States has houses today and population, the market is not quite as seasonal. So, the need for manufacturers to find a way to keep their plants busy in the winter has kind of gone away over the last decade and it all used to be. The Asphalt prices were a lot more seasonal. Asphalt prices were very high in the summer and they used to be very cheap in the winter with Koppers and with the changes in refinery economics we don't see that either. So, it's a bit of a time-worn idea in our view that you should try to somehow produce a bunch of shingles in the winter and ship them out and have them in the marketplace as the inventory piles. Our economics don't support it and I don't think our customers' economics benefit from it. So, our view would be we'd like to see a repeat of our strategy in 2015, which is we would go into next year and sell our customers the product they need in the first quarter of the year and then track their business through the year. I will say again what I've said in every call, though, it's a competitive market. And to the extend we see competitive pricing that doesn't allow us to achieve our margin goals, we're going to go where we need to go on competitive pricing to maintain and we defend our market share.

Ladies and gentlemen, this will conclude our Question-and-Answer Session. I will now turn the conference back over to Mr. Thierry Denis.

Very good. Thank you, everyone, for joining us for today's call. And with that, I'll turn it back over to Mike Thaman for a few closing remarks.

Thank you, Thierry. As I noted the outset of today's call, Owens Corning had a very strong quarter. Not only we did, we deliver all time best EBIT performance which is something that we're really proud of. But we also had very good cash performance and that's a performance that we'll continue through the remainder of this year and I think into the coming years. We’ve made great progress in getting the profitability and returning capital of all three of our businesses, in some cases to exceptional levels and in some cases to acceptable levels, but in all cases great progress. I think Michael noted we've been really pleased with the pace of progress in our Composites business. That business has continued to perform at high levels, above our expectations, and continue to move its agenda forward at a very quick rate. The highlights of the quarter for us were insulation putting up 17th consecutive quarter of EBIT growth, composites with a ninth consecutive quarter and roofing on a year-to-date basis is now ahead of last year. It was a bit daunting earlier in the year, when at the end of the first quarter we were 60 million behind last year. We made a good dent in catching that up in the second quarter. We've now caught fully up in the third quarter and have given guidance on today's call that we expect Roofing to be at or above last year's performance on an EBIT basis and probably a tick ahead of last year's performance on a margin basis. And given that outlook and given our performance year-to-date, we've upgraded our overall corporate guidance a bit. We were previously in a $460 million to $500 million range. We said today we now expect it will be at or above the…

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