Question-and-Answer Session
Operator
Thank you. (Operator instructions). And our first question will come from the line of Dennis McGill with Zelman & Associates. Please proceed.
Dennis McGill – Zelman & Associates
Good morning, guys.
Mike Thaman
Good morning, Dennis.
Dennis McGill – Zelman & Associates
Just quickly on the last slide, the cost reduction of $160 million for the year, can you break that down roughly by segment and kind of how you think that will associate to the three major segments?
Mike Thaman
Dennis, this is Mike. We've broken it down a bit in terms of what we think it will be in the operating expenses side versus the manufacturing side. Up to now, we have not given guidance and how it is spread across the individual segments. I think suffice it to say that on the operating expense side of the business, we've been focused on really getting our operating expenses driven down across the entire business, both the building materials side, the composite side, as well as corporate. I think you can see that coming through the numbers.
On the manufacturing side, we have obviously continued to be very aggressive in insulation although we have been aggressive now for about three years running. So the rate of change of costs in the insulation business has probably slowed down a bit. In terms of the amount of cost we can take out, we've been much more aggressive on the composite side, which is where we saw the biggest reversal in the last six months and I think there is an outside contribution in terms of cost reduction coming from composites.
And then on the roofing side, volumes have been pretty weak. So there has been some curtailment activity and cost reductions on roofing although I wouldn't think that you'd see a huge contribution to the overall cost reduction program coming from roofing manufacturing costs.
Dennis McGill – Zelman & Associates
Okay. And then on the roofing segment, as you mentioned there, volumes, I'd imagine, down more in 2Q than 1Q. Pricing, as you mentioned, has been kind of stable recently. So can you help us kind of bridge the big jump in sequential profitability from 1Q to 2Q, I guess between raw materials and cost actions and anything else that might be going into that?
Mike Thaman
Sure. I think your assessment, which is that we probably saw volumes a little bit weaker in Q2 ’09 is a true statement versus Q2 ’08. If you look back to the second quarter of last year, volumes were a little bit stronger because we did have some storm activity particularly in the Southeast last year that was starting to come through our books.
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