This call and the supporting slides will be recorded and available on our website for future reference. Please reference Slide 2 before we begin, where we offer a couple of reminders. First, today's presentation will include forward-looking statements based on our current forecasts and estimates of future events. Second, these statements are subject to risks, uncertainties and other factors that could cause our actual results to differ materially.Please refer to the cautionary statements and the risk factors identified in our SEC filings for a more detailed explanation of the inherent limitations of such forward-looking statements. This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of GAAP to non-GAAP are found within the financial tables of our earnings release. Consistent with our historical practice, we have excluded items that we believe are unrepresentative of our ongoing operations to arrive at adjusted EBIT, our primary measure to look at period-over-period comparisons. We typically exclude significant nonrecurring items such as the impact of the restructuring actions discussed in our most recent earnings call. We believe that adjusted EBIT is helpful to investors for comparing our results from period to period. 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 second quarter, we have utilized an effective tax rate of 25%, in line with our anticipated annual effective tax rate on adjusted earnings for 2012. 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 Duncan Palmer. Mike will then provide comments on our outlook prior to the Q&A session. Mike? Michael H. Thaman Thanks, Thierry and good morning, everyone. We appreciate you joining us today to discuss our second quarter 2012 results. Owens Corning revenue was $1.4 billion in the second quarter, down 4% compared with the same period last year. Adjusted EBIT was $117 million, down from $135 million 1 year ago while. While we did demonstrate financial progress in the quarter, it was not sufficient to support our prior guidance. As we disclosed earlier today in our press release, we now anticipate full year adjusted EBIT in the range of $360 million to $420 million. Substantially all of this reduction and the associated range is a result of our current outlook for our Roofing business, which Duncan and I will discuss in our prepared comments.
As I do each quarter, let me review our performance against the commitments and outlook I've previously provided. We said we would continue to make progress towards our goal creating an injury-free work place. As of June 30, our year-to-date rate of injuries has increased 13% over our full year 2011 performance. As you know, we've achieved 10 consecutive years of safety improvements, reducing the number of injuries in our company by more than 90% during this period. Given this performance, the bar for continued improvement is extremely high. We know that we are up to the challenge and remain committed to the pursuit of our goal of 0 injuries.We said that we expected another great year for our Roofing business in 2012, reflecting some carryover of 2011's strong demand, improvement in the reroof market and modest improvement in new construction. Coming into the year, we had expected carryover storm demand and an improving U.S. housing market would allow us to get off to a fast start and deliver another year of 20% margins. While the business continues to operate at a high level of profitability, we now believe that the combination of first quarter competitive intensity, persistently high asphalt cost and the volume weakness that we've begun to see in the last 6 to 8 weeks will not allow us to sustain the margins that we've grown accustomed to over the last 3 years. We set our Insulation business with significantly narrow losses in 2012. Insulation significantly narrowed its losses in the quarter to $15 million from $35 million 1-year ago on improved sales volume and excellent operating leverage. Through the first half of the year, the business reduced losses to $50 million down from $85 million in 2011. We expect to further improve the financial performance of our Insulation business in the second half of the year and to significantly narrow losses in 2012 as a result of higher volumes, continued cost leverage and announced price increases. We said we would transform our composites operation into a global network of low delivery cost assets with a commitment to achieving significant progress against this goal this year. The restructuring of our European assets is on track, with all European consolidations and closures announced and on schedule. In addition, we are on track with the start up of new capacity in Mexico and Russia. Finally, we showed good progress against our inventory reduction goals in the quarter, which will accelerate in the third quarter. As a result, we are moving to a cost position that will produce stronger financial performance in the second half of 2012 particularly in the fourth quarter. On the basis of this progress, the business remains positioned to achieve double-digit margins in 2013. We said that we would grow adjusted EBIT this year. As we announced this morning, we have revised our EBIT growth expectations for the year to a range of $360 million to $420 million due to the recent weakness in the roofing market and the impact on margins from higher asphalt cost. Finally, we said 2012 would be a year of strong cash generation. We remain on course for strong cash flow this year. We continue to expect high levels of free cash conversion over the next 5 years, up to 100% of adjusted earnings on average. Based on our cash outlook and continued confidence in achieving our midterm earnings goals, we repurchased 2.6 million shares of common stock in the second quarter of 2012. Read the rest of this transcript for free on seekingalpha.com