**FORM          10-K**

|   | þ | **ANNUAL                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                    SECURITIES** **EXCHANGE ACT OF                    1934** |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

**OR**

|   |  ̈ | **TRANSITION                      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                      SECURITIES** **EXCHANGE ACT OF                      1934** |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**001-33192**

*www.bmhc.com*

**Building          Materials Holding Corporation**

| **Delaware**                                                   |   | **91-1834269**                                                          |
|----------------------------------------------------------------|--------|-------------------------------------------------------------------------|
| (State                    of                    incorporation) |   | (IRS                    Employer                    Identification No.) |

**Four          Embarcadero Center, Suite 3200, San Francisco, CA 94111**

**(415)          627-9100**

|                                                                 |   | Name                    of each                    exchange |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------|
| Title                    of                    each Class       |   | on                    which                    registered   |
|                                                            |   |                                                        |
| **Common                    Stock, $0.001 par value per share** |   | **New                    York Stock Exchange**              |

**None          **

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**Documents          Incorporated by Reference**

| (1) | Portions                    of                    the Proxy Statement to be delivered to shareholders in connection                    with the                    Annual Meeting of Shareholders on May 6, 2008, are incorporated                    by                    reference in Part III of this Form                    10-K. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**FORM          10-K**

|                            |                            |                                                                                                                                                     | Page   |
|---------------------------------|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **PART                    I**   |                            |                                                                                                                                                     |        |
|                            | Item                    1.      | Business                                                                                                                                                 |   | 3 |
|                            | Item                    1A.     | Risk                    Factors                                                                                                                          |   | 12 |
|                            | Item                    1B.     | Unresolved                    Staff Comments                                                                                                             |   | 16 |
|                            | Item                    2.      | Properties                                                                                                                                               |   | 17 |
|                            | Item                    3.      | Legal                    Proceedings                                                                                                                     |   | 18 |
|                            | Item                    4.      | Submission                    of Matters to a Vote of Security                    Holders                                                                |   | 19 |
|                            |                            |                                                                                                                                                     |   |   |
| **PART                    II**  |                            |                                                                                                                                                     |   |
|                            | Item                    5.      | Market                    for Registrant’s Common Equity, Related Stockholder                    Matters and Issuer Purchases of Equity Securities |   | 20 |
|                            | Item                    6.      | Selected                    Financial Data                                                                                                               |   | 22 |
|                            | Item                    7.      | Management’s                    Discussion and Analysis of Financial Condition                    and Results of Operations                        |   | 23 |
|                            | Item                    7A.     | Quantitative                    and Qualitative Disclosures About Market                    Risk                                                         |   | 49 |
|                            | Item                    8.      | Financial                    Statements and Supplementary                    Data                                                                        |   | 50 |
|                            | Item                    9.      | Changes                    in and Disagreements With Accountants on Accounting                    and Financial Disclosure                               |   | 93 |
|                            | Item                    9A.     | Controls                    and Procedures                                                                                                               |   | 93 |
|                            | Item                    9A. (T) | Controls                    and Procedures                                                                                                               |   | 93 |
|                            | Item                    9B.     | Other                    Information                                                                                                                     |   | 94 |
|                            |                            |                                                                                                                                                     |   |   |
| **PART                    III** |                            |                                                                                                                                                     |   |
|                            | Item                    10.     | Directors,                    Executive Officers and Corporate                    Governance                                                             |   | 95 |
|                            | Item                    11.     | Executive                    Compensation                                                                                                                |   | 100 |
|                            | Item                    12.     | Security                    Ownership of Certain Beneficial Owners and                    Management and Related Stockholder Matters                     |   | 101 |
|                            | Item                    13.     | Certain                    Relationships and Related Transactions, and                    Director Independence                                          |   | 102 |
|                            | Item                    14.     | Principal                    Accounting Fees and Services                                                                                                |   | 103 |
|                            |                            |                                                                                                                                                     |   |  |
| **PART                    IV**  |                            |                                                                                                                                                     |   |
|                            | Item                    15.     | Exhibits,                    Financial Statement Schedules                                                                                               |   | 104 |
|                            |                            |                                                                                                                                                     |   |   |
|                            |                            | Signatures                                                                                                                                               |   | 111 |

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**Introduction          - Risk Factors and Forward-Looking Statements**

*There          are a          number of business risks and uncertainties that affect our operations and          therefore could cause future results to differ from past financial performance          or expected results and ultimately affect the trading price of our common          shares. Information regarding these risks and uncertainties is contained          in Item          1A of this Form 10-K under the caption Risk Factors.*

*Certain          statements in this Form 10-K including those related to expectations about          homebuilding activity in our markets, demographic trends supporting homebuilding          and anticipated sales and operating income are forward-looking statements          within          the meaning of the Private Securities Litigation Reform Act of 1995. Statements          that are not historical or current facts, including statements about our          expectations, anticipated financial results and future business prospects          are          forward-looking statements. While these statements represent our current          judgment on what the future may hold and we believe these judgments are          reasonable, these statements involve risks and uncertainties that are important          factors that could cause our actual results to differ materially from those          in          forward-looking statements. These factors include, but are not limited          to, the          risks and uncertainties cited in Item 1A of this Form 10-K under the caption          Risk Factors. Undue reliance should not be placed on such forward-looking          statements, as such statements speak only as of the date of the filing          of our          2007 Annual Report on Form 10-K. We undertake no obligation to update          forward-looking statements.*

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**PART          I**

**ITEM          1. Business**

*General          *

**BMC West**
** SelectBuild,**

*Industry          Overview*

**BMC West**

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**SelectBuild**

*Acquisition          and Expansion Strategy*

**SelectBuild **

| ***2007***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | ***2006***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | ***2005***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · door                  and                  molding installation services in Las Vegas, Nevada· remaining                  49%                  interest in our existing truss manufacturer business in Fort Pierce,                  Florida · remaining                  33%                  interest in our existing framing business in Delaware, Maryland                  and                  Virginia · remaining                  27%                  interest in our existing plumbing business in Phoenix and Tucson,                  Arizona                  · concrete                  services in Fresno, California |   | · distribution                  services in Southern California· remaining                  49%                  interest in our existing concrete business in Arizona· window                  installation services in Phoenix, Arizona · framing                  services in Southern California· concrete                  services in Northern Arizona· wall                  panel                  and truss manufacturer in Palm Springs, California· remaining                  20%                  interest in our existing concrete block masonry and concrete business                  in                  Florida· framing                  services in Palm Springs, California and Reno, Nevada |   | · framing                  services in San Diego, California· concrete                  and                  plumbing services in Las Vegas, Nevada and Southern                  California· additional                  20% interest in our existing concrete block masonry and concrete                  business                  in Florida · 51%                  interest                  in concrete services in Arizona· 73%                  interest                  in plumbing services in Phoenix and Tucson, Arizona· stucco                  services in Las Vegas, Nevada· 51%                  interest                  in framing services in Chicago,                  Illinois |

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**BMC          West**

| ***2007***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | ***2006***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | ***2005***                                                                                                                                                                                          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · building                  materials distribution in Terrell, Texas· future                  expansion and consolidation site for building materials distribution                  and                  truss manufacturing in Helena, Montana· future                  site                  for building materials distribution in Houston, Texas· building                  materials distribution in Burlington, Washington· building                  materials distribution in San Antonio, Texas· expansion                  in                  progress for millwork facility in Coppell, Texas |   | · expansion                  and                  consolidation of millwork facility in Englewood, Colorado · truss                  manufacturer in El Paso, Texas· future                  site                  for building materials distribution, truss and millwork facilities                  in                  Caldwell, Idaho· building                  materials distribution and truss manufacturer in Eastern                  Idaho· expansion                  of                  building materials distribution and truss manufacturing in Hurst,                  Texas· building                  materials distribution and millwork facility in Houston,                  Texas |   | · truss                  manufacturer in McCall, Idaho· truss                  manufacturer in Missoula, Montana· millwork                  facility in Austin, Texas |

|                                     | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |
|------------------------------------------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
| Building                    products     | **44%**  |   | 40%      |   | 45%      |   | 56%      |   | 64%      |
| Construction                    services | **56%**  |   | 60%      |   | 55%      |   | 44%      |   | 36%      |

*Competitive          Strengths*

**Strategically          located in growing and diverse markets.**

**Full          offering of manufactured products and other services.**

**Superior          quality turnkey construction services.**

----

**Significant          economies of scale**

**Variable          cost structure.**

**Experienced          management team.**

**Focus          on          service.**
* *

*Our          Customers*

**BMC          West**
**SelectBuild**

*Competition*

----

**BMC          West**
**SelectBuild**

*Sales          and Marketing*

**BMC          West**

**SelectBuild          **

*Cyclicality          and Seasonality*

*Business          Segments*

|                                                     |   | **2007** |          | **2006** |   | **2005**     |   |
|----------------------------------------------------------|--------|----------|---------------|----------|--------|--------------|--------|
| **BMC                  West**                            |   |     |          |     |   |         |   |
|    Building                  products     |   | **$**    | **987,871**   |     | $      | 1,237,349    |   | $ | 1,256,346 |   |
|    Construction                  services |   |     | **189,840**   |     |   | 234,104      |   |   | 228,176 |   |
|                                                     |   | **$**    | **1,177,711** |     | $      | 1,471,453    |   | $ | 1,484,522 |   |
|                                                     |   |     |          |     |   |         |   |   |   |   |
| **SelectBuild**                                          |   |     |          |     |   |         |   |   |   |   |
|    Building                  products     |   | **$**    | **13,413**    |     | $      | 39,841       |   | $ | 35,553 |   |
|    Construction                  services |   |     | **1,093,847** |     |   | 1,691,973    |   |   | 1,358,333 |   |
|                                                     |   | **$**    | **1,107,260** |     | $      | 1,731,814    |   | $ | 1,393,886 |   |
|                                                     |   |     |     |     |   |    |   |   |     |   |
| **      ****Total**        |   | **$**    | **2,284,971** |     | $      | 3,203,267    |   | $ | 2,878,408 |   |

----

|                                                         |   | **Sales** |          | **(Loss)****(1)**** ****Income                    from Continuing****Operations****Before****Taxes                    and** |   | **Depreciation** |   |                      |          |                    |   |
|--------------------------------------------------------------|--------|-----------|---------------|----------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|---------------------------|---------------|-------------------------|--------|
|                                                         |   | **Total** |          | **Inter-****Segment**                                                                                                            |   | **Trade**        |   | **Minority****Interests** |          | **and****Amortization** |   | **Capital****(2)****Expenditures** |   | **Assets** |   |
| **Year                    Ended December 31, 2007**          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   |   |   |   |   |
| BMC                    West                                  |   | **$**     | **1,179,097** |                                                                                                                             | **$**  | **(1,386**       | **)**  | **$**                     | **1,177,711** |                    | **$**  | **64,653** |   | **$** | **11,998** |   | **$** | **21,302** |   | **$** | **376,462** |   |
| SelectBuild                                                  |   |      | **1,107,501** |                                                                                                                             |   | **(241**         | **)**  |                      | **1,107,260** |                    |   | **(335,279** | **)** |   | **32,172** |   |   | **8,893** |   |   | **326,507** |   |
| Corporate                                                    |   |      | **—**   |                                                                                                                             |   | **—**      |   |                      | **—**   |                    |   | **(51,697** | **)** |   | **4,471** |   |   | **2,936** |   |   | **171,875** |   |
| Discontinued                       operations |   |      | **—**   |                                                                                                                             |   | **—**      |   |                      | **—**   |                    |   | **—** |   |   | **—** |   |   | **79** |   |   | **—** |   |
|                                                         |   | **$**     | **2,286,598** |                                                                                                                             | **$**  | **(1,627**       | **)**  | **$**                     | **2,284,971** |                    |   | **(322,323** | **)** | **$** | **48,641** |   | **$** | **33,210** |   | **$** | **874,844** |   |
| Interest                    expense                          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   | **33,800** |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |                                                                                                                             |   |             |   |                      |          |                    | **$**  | **(356,123** | **)** |   |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| **Year                    Ended December 31, 2006**          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| BMC                    West                                  |   | $         | 1,473,219     |                                                                                                                             | $      | (1,766           | )      | $                         | 1,471,453     |                    | $      | 119,737 |   | $ | 11,987 |   | $ | 33,107 |   | $ | 479,101 |   |
| SelectBuild                                                  |   |      | 1,744,092     |                                                                                                                             |   | (12,278          | )      |                      | 1,731,814     |                    |   | 148,416 |   |   | 30,002 |   |   | 33,409 |   |   | 722,328 |   |
| Corporate                                                    |   |      | —       |                                                                                                                             |   | —          |   |                      | —       |                    |   | (75,484 | ) |   | 3,104 |   |   | 6,174 |   |   | 118,880 |   |
| Discontinued                       operations |   |      | —       |                                                                                                                             |   | —          |   |                      | —       |                    |   | — |   |   | — |   |   | 28 |   |   | 8,602 |   |
|                                                         |   | $         | 3,217,311     |                                                                                                                             | $      | (14,044          | )      | $                         | 3,203,267     |                    |   | 192,669 |   | $ | 45,093 |   | $ | 72,718 |   | $ | 1,328,911 |   |
| Interest                    expense                          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   | 29,082 |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |                                                                                                                             |   |             |   |                      |          |                    | $      | 163,587 |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| **Year                    Ended December 31, 2005**          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| BMC                    West                                  |   | $         | 1,486,152     |                                                                                                                             | $      | (1,630           | )      | $                         | 1,484,522     |                    | $      | 147,781 |   | $ | 11,010 |   | $ | 17,293 |   | $ | 439,779 |   |
| SelectBuild                                                  |   |      | 1,395,182     |                                                                                                                             |   | (1,296           | )      |                      | 1,393,886     |                    |   | 160,957 |   |   | 13,695 |   |   | 62,611 |   |   | 623,877 |   |
| Corporate                                                    |   |      | —       |                                                                                                                             |   | —          |   |                      | —       |                    |   | (72,631 | ) |   | 2,450 |   |   | — |   |   | 79,029 |   |
| Discontinued                       operations |   |      | —       |                                                                                                                             |   | —          |   |                      | —       |                    |   | — |   |   | — |   |   | 42 |   |   | 7,840 |   |
|                                                         |   | $         | 2,881,334     |                                                                                                                             | $      | (2,926           | )      | $                         | 2,878,408     |                    |   | 236,107 |   | $ | 27,155 |   | $ | 79,946 |   | $ | 1,150,525 |   |
| Interest                    expense                          |   |      |          |                                                                                                                             |   |             |   |                      |          |                    |   | 14,420 |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |                                                                                                                             |   |             |   |                      |          |                    | $      | 221,687 |   |   |   |   |   |   |   |   |   |   |

|   | · | $330.4                  million for the carrying amount of certain customer relationships                  and                  goodwill at SelectBuild and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $6.7                  million                  for the carrying amount of goodwill at BMC                  West. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | · | $2.2                  million                  for the carrying amount of certain customer relationships and goodwill                  at                  SelectBuild. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

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|   | · | $1.3                  million                  for the carrying amount of certain customer relationships and goodwill                  at                  SelectBuild. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

*Operating          Strategy*

*Purchasing*

*Management          Information Systems*

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*Safety        and Risk Management*

*Employees*

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*Executive      Officers*

| Name                                                  | Age    | Position                  and Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Robert                  E.                  Mellor    | 64     | Chairman                  of the Board and Chief Executive OfficerMr.                  Mellor                  became Chairman of the Board of Directors in 2002 and has been                  Chief                  Executive Officer since 1997. He has been a director since 1991.                  He was                  previously Of Counsel with the law firm of Gibson, Dunn & Crutcher LLP                  from 1990 to 1997. He is on the boards of directors of Coeur d’Alene Mines                  Corporation and The Ryland Group. He is also on the board of councilors                  of                  Save-the-Redwoods League. He does not serve on the audit committee                  or                  compensation committee of any of these boards.                                                                                                                                                                         |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| William                  M.                  Smartt   | 65     | Senior                  Vice President and Chief Financial OfficerMr.                  Smartt                  has been a Senior Vice President and Chief Financial Officer since                  April                  2004. Prior to joining the Company, he was an independent consultant                  from                  August 2001 to March 2004. From 1992 to 2001, he was Executive                  Vice                  President, Chief Financial and Administrative Officer of DHL Express,                  a                  leader in international air express services. His previous experience                  as a                  Chief Financial Officer included 10 years with Di Giorgio Corporation,                  a                  Fortune 500 Company, whose product lines included the distribution                  of                  building materials, prefabricated components and framing                  services. |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Stanley                  M.                  Wilson   | 63     | President                  and Chief Operating OfficerMr.                  Wilson                  was appointed President and Chief Operating Officer of Building                  Materials                  Holding Corporation in February 2008. Mr. Wilson was appointed                  President                  and CEO of BMC West in 2004 and was appointed Senior Vice President                  in                  2003. He was appointed Vice President in 2000 and was General Manager                  of                  the Pacific Division of BMC West from 1993 to 2003. Mr. Wilson                  has been                  with the company since its beginning in 1987. His previous experience                  includes 20 years with the building materials distribution business                  of                  Boise Cascade Corporation.                                                                                        |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Michael                  D.                  Mahre    | 48     | Senior                  Vice President and PresidentMr.                  Mahre was                  appointed Senior Vice President of Building Materials Holding Corporation                  in 2003 and President and Chief Executive Officer of SelectBuild                  in 2002.                  He was appointed Vice President of Corporate Development in 2001.                  He                  joined the Company in 1999 as Director of Financial Planning and                  Analysis.                  Mr. Mahre was a principal of The Cambria Group, a private equity                  investment firm, from 1997 to 1998.                                                                                                                                                                                                                                                                                                                      |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Eric                  R.                  Beem        | 38     | Vice                  President and ControllerMr.                  Beem was                  appointed Vice President in January 2006 and Controller in April                  2005. He                  joined the Company as Accounting Manager in 1996. Mr. Beem is a                  Certified                  Public Accountant and his experience includes 3 years with an                  international public accounting firm.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Mark                  R.                  Kailer      | 54     | Vice                  President, Treasurer and Investor RelationsMr.                  Kailer                  has been Vice President and Treasurer since 2003. He joined the                  Company in                  2000 as Assistant Treasurer. He was previously Senior Manager of                  Treasury                  Services at Circle International Group, a publicly-traded global                  logistics                  company based in San Francisco, from 1997 to 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Jeffrey                  F.                  Lucchesi | 54     | Senior                  Vice President, Chief Information OfficerMr.                  Lucchesi                  joined the Company in August 2004 as Senior Vice President and                  Chief                  Information Officer. From 2000 to 2004, he was Senior Vice President                  of                  Worldwide Operations for Corio, Inc., an enterprise application                  service                  provider. Mr. Lucchesi also served from 1994 to 2000 as Vice President                  and                  Chief Information Officer for DHL Express, a leader in international                  air                  express services.                                                                                                                                                                                                                                                                                      |
|                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Paul                  S.                  Street      | 59     | Senior                  Vice President, Chief Administrative Officer, General Counsel and                  Corporate SecretaryMr.                  Street                  joined the Company in 1999 as Senior Vice President, General Counsel                  and                  Corporate Secretary and has been Chief Administrative Officer since                  2001.                  He previously served as our outside General Counsel & Secretary while                  a partner of the law firm of Moffatt, Thomas, Barrett, Rock &                  Fields.                                                                                                                                                                                                                                                                                                                                                                                   |

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**ITEM        1A. Risk Factors **

*Risks        Related to Our Business*

*Our        business is dependent on demand for and supply of single-family homes which        is        influenced by changes in the overall condition of the U.S. economy, including        interest rates, consumer confidence, job formation and other important        factors.*

*There        are risks associated with our business model.*

*An        inability to implement and maintain cost structures that align with revenue        trends may have an adverse impact on our operating results.*

*Compliance        with credit facility covenants is dependent on operating performance and        changes        in interest expense may adversely impact our operating        results.*

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*Changes        in the business models of customers may limit our ability to provide building        products and construction services required by our customers.*

*The        integration of acquired businesses may not result in anticipated cost savings        and revenue synergies being fully realized or may take longer to realize        than        expected.*

| ·   | the                uncertainty that an acquired business will achieve anticipated operating                results; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|
| ·   | significant                expenses to integrate; |
|--------------------|---------------------------------------------------|
| ·   | diversion                of                management attention; |
|--------------------|------------------------------------------------------------------|
| ·   | departure                of                key personnel from the acquired business; |
|--------------------|--------------------------------------------------------------------------------------|
| ·   | effectively                managing entrepreneurial spirit and                decision-making; |
|--------------------|------------------------------------------------------------------------------------------------|
| ·   | integration                of different information systems; |
|--------------------|--------------------------------------------------------------|
| ·   | managing                new                construction service trades; |
|--------------------|-------------------------------------------------------------------------|
| ·   | unanticipated                costs and exposure to unforeseen liabilities;                and |
|--------------------|-----------------------------------------------------------------------------------------------|
| ·   | impairment                of                assets. |
|--------------------|-----------------------------------------------------|

*Losses        of and changes in customers may have an adverse impact on our operating        results.*

*Our        success is dependent upon the availability of and our ability to attract,        train        and retain qualified individuals.*

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*Our        operating results are affected by fluctuations in our costs and the availability        of sourcing channels for commodity wood products, concrete, steel and other        building products.*

*Our        business is subject to intense competition.*

*Weather        conditions, including natural catastrophic events, may cause our operating        results to fluctuate each quarter.*

*The        nature of our business exposes us to construction defect and product liability        claims as well as other legal proceedings.*

*We        may be adversely affected by disruptions in our information        systems.*

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*Actual        and perceived vulnerabilities as a result of terrorist activities and armed        conflict may adversely impact consumer confidence and our        business.*

*Federal,        state and other regulations could impose substantial costs and/or restrictions        on our business.*

*Numerous        other matters of a local and regional scale, including those of a political,        economic, business, competitive or regulatory nature may have an adverse        impact        on our business. *

*Risks        Related to Our Shares*

*Our        share price may fluctuate significantly, which may make it difficult for        shareholders to trade*
*our        shares when desired or at attractive prices.*

*Anti-takeover        defenses in our governing documents and certain provisions under Delaware        law        could*
*prevent        an acquisition of our company or limit the price that investors might be        willing        to pay for our shares.*

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**ITEM          1B. Unresolved Staff Comments**

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**ITEM        2. Properties**

| **BMC                West** |   | **SelectBuild** |   | **Corporate** |
|-----------------------------|--------|-----------------|--------|---------------|
| **Location**                |   | **Properties**  |   | **Location**  |   | **Properties** |   | **Location** |   | **Properties** |
| Arizona                     |   | 1               |   | Arizona       |   | 16  |   | California |   | 1 |
| California                  |   | 6               |   | California    |   | 19  |   | Idaho |   | 1 |
| Colorado                    |   | 14         |   | Florida       |   | 8 |   | Nevada |   | 1 |
| Idaho                       |   | 12         |   | Illinois      |   | 1 |   |   |   |   |
| Montana                     |   | 7               |   | Nevada        |   | 11  |   |   |   |   |
| Nevada                      |   | 3               |   | Virginia      |   | 1 |   |   |   |   |
| Oregon                      |   | 2               |   |          |   |   |   |   |   |   |
| Texas                       |   | 31         |   |          |   |   |   |   |   |   |
| Utah                        |   | 6               |   |          |   |   |   |   |   |   |
| Washington                  |   | 6               |   |          |   |   |   |   |   |   |

----

**ITEM        3. Legal Proceedings**

----

**ITEM        4. Submission of Matters to a Vote of Security        Holders**

----

**PART      II**

| **ITEM                5.** | **Market                for Registrant's Common Equity, Related Stockholder Matters and Issuer                Purchases of Equity                Securities** |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Common        Shares*

|                          |   | **2007**       |   | **2006**      |   |
|-------------------------------|--------|----------------|--------|---------------|--------|
|                          |   |  **High** |   |  **Low** |   | **Cash****Dividends****Declared** |   |  **High** |   |  **Low** |   | **Cash****Dividends****Declared** |   |
|                          |   |           |   |          |   |   |   |   |   |   |   |   |   |
| First                quarter  |   | **$****25**    |   | **$****18**   |   | **$****0.10** |   | $40 |   | $32 |   | $0.10 |   |
| Second                quarter |   | **$****18**    |   | **$****13**   |   | **$****0.10** |   | $38 |   | $25 |   | $0.10 |   |
| Third                quarter  |   | **$****15**    |   | **$****11**   |   | **$****0.10** |   | $28 |   | $21 |   | $0.10 |   |
| Fourth                quarter |   | **$****12**    |   | **$****5**    |   | **$****0.10** |   | $28 |   | $24 |   | $0.10 |   |

*Share        Performance Graph*

| ·   | NYSE                Market                Index |
|--------------------|-------------------------------------------------|
| ·   | Philadelphia                Housing Sector Index and |
|--------------------|------------------------------------------------------|
| ·   | Peer                Group                Index |
|--------------------|------------------------------------------------|

| ·  Avatar                  Holdings Inc.                   | ·  Lennar                  Corp.                       | ·  Simpson                  Manufacturing Co. Inc.      |
|---------------------------------------------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------------------------|
| ·  Beazer                  Homes                  USA Inc. | ·  Masco                  Corp.                        | ·  Standard                  Pacific Corp.              |
| ·  Brookfield                  Homes Corp.                 | ·  Meritage                  Homes Corp.               | ·  Toll                  Brothers                  Inc. |
| ·  Builders                  FirstSource Inc.              | ·  MDC                  Holdings                  Inc. | ·  Universal                  Forest Products, Inc.     |
| ·  D.R.                  Horton                  Inc.      | ·  NVR                  Inc.                           | ·  USG                  Corp.                           |
| ·  KB                  Home                           | ·  Ryland                  Group                  Inc. |                                                                   |

----

----

**ITEM        6. Selected Financial Data** 

**Selected        Financial Data**

|                                                                                                              |   | **Year                Ended December 31**  |          |
|-------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------------|
|                                                                                                              |   | **2007****(1)**                                 |          | **2006**  |   | **2005**  |   | **2004**  |   | **2003**  |   |
| Sales                (2)                                                                                          |   |                                            |          |   |   |   |   |   |   |   |   |
| Building                products                                                                                  |   | **$**                                           | **1,001,284** |   | $ | 1,277,190 |   | $ | 1,291,899 |   | $ | 1,156,000 |   | $ | 892,292 |   |
| Construction                services                                                                              |   |                                            | **1,283,687** |   |   | 1,926,077 |   |   | 1,586,509 |   |   | 904,362 |   |   | 498,052 |   |
| Total                sales                                                                                        |   | **$**                                           | **2,284,971** |   | $ | 3,203,267 |   | $ | 2,878,408 |   | $ | 2,060,362 |   | $ | 1,390,344 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impairment                of                assets                                                                |   | **$**                                           | **337,074**   |   | $ | 2,237 |   | $ | 1,320 |   | $ | 2,274 |   | $ | 829 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)                income                from operations (3)                                                   |   | **$**                                           | **(322,323**  | **)** | $ | 192,669 |   | $ | 236,107 |   | $ | 105,667 |   | $ | 39,020 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss)                income (4)                                                               |   | **$**                                           | **(312,713**  | **)** | $ | 102,074 |   | $ | 129,507 |   | $ | 53,910 |   | $ | 19,929 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss)                income per diluted share                                                 |   | **$**                                           | **(10.86**    | **)** | $ | 3.45 |   | $ | 4.41 |   | $ | 1.94 |   | $ | 0.74 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Annual                cash                dividends declared                                                      |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| per                share                                                                                          |   | **$****0.40**                                   |          | $0.40 |   | $0.24 |   | $0.14 |   | $0.105 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Working                capital                                                                                    |   | **$**                                           | **263,180**   |   | $ | 242,800 |   | $ | 304,459 |   | $ | 270,437 |   | $ | 216,898 |   |
| Total                assets                                                                                       |   | **$**                                           | **874,844**   |   | $ | 1,328,911 |   | $ | 1,150,525 |   | $ | 743,044 |   | $ | 604,199 |   |
| Long-term                debt, net of current portion                                                             |   | **$**                                           | **344,376**   |   | $ | 349,161 |   | $ | 278,169 |   | $ | 206,419 |   | $ | 186,773 |   |
| Shareholders’                equity                                                                         |   | **$**                                           | **253,742**   |   | $ | 572,629 |   | $ | 470,061 |   | $ | 327,678 |   | $ | 271,010 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                flows                provided by operations                                                   |   | **$**                                           | **67,279**    |   | $ | 273,418 |   | $ | 198,294 |   | $ | 33,374 |   | $ | 12,479 |   |
|                                                                                                              |   |                                            |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Single-family                building permits in our markets                per                U.S. Census Bureau |   |                                            | **329,200**   |   |   | 502,311 |   |   | 632,447 |   |   | 606,123 |   |   | 528,838 |   |

| (1) | As                  a result of                  changes in specific markets, the following impairments were recognized                  in                  2007: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $330.4                million                for the carrying amount of goodwill and certain customer relationships                at                SelectBuild and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | $6.7                million                for the carrying amount of goodwill at BMC                West. |
|--------------------|------------------------------------------------------------------------------------------------------------|

|                                                                                                                                               |   | **2007** |       | **2006** |   | **2005** |   | **2004** |    | **2003** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|----------|--------|----------|---------|----------|--------|
| (2)                      Sales                  from                  acquisitions were:                                       |   | **$**    | **82,088** |     | $      | 701,604  |   | $        | 403,919 |     | $      | 221,407 |   | $ | 155,176 |   |
| (3)                        Income (loss)                  from operations of acquisitions                  was: |   | **$**    | **7,595**  |     | $      | 55,454   |   | $        | 31,588  |     | $      | 2,764 |   | $ | (3,628 | ) |

| (4) | Income                  from                  discontinued operations was $14.6 million or $0.50 per share in                  2007.                  Income from discontinued operations was not significant in prior                  years. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **ITEM                7.** | **Management's                Discussion and Analysis of Financial Condition and Results **of                Operations**** |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------|

**Our      Business**

**BMC      West**
**      SelectBuild**

----

**Business        Environment and Executive Overview**

**Single-Family        Housing**

**(000s)**

***Acquisition        and Expansion Strategy***

----

**SelectBuild**

| ***2007***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | ***2006***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | ***2005***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · door                  and                  molding installation services in Las Vegas, Nevada· remaining                  49%                  interest in our existing truss manufacturer business in Fort Pierce,                  Florida · remaining                  33%                  interest in our existing framing business in Delaware, Maryland                  and                  Virginia · remaining                  27%                  interest in our existing plumbing business in Phoenix and Tucson,                  Arizona                  · concrete                  services in Fresno, California |   | · distribution                  services in Southern California· remaining                  49%                  interest in our existing concrete business in Arizona· window                  installation services in Phoenix, Arizona · framing                  services in Southern California· concrete                  services in Northern Arizona· wall                  panel                  and truss manufacturer in Palm Springs, California· remaining                  20%                  interest in our existing concrete block masonry and concrete business                  in                  Florida· framing                  services in Palm Springs, California and Reno, Nevada |   | · framing                  services in San Diego, California· concrete                  and                  plumbing services in Las Vegas, Nevada and Southern                  California· additional                  20% interest in our existing concrete block masonry and concrete                  business                  in Florida · 51%                  interest                  in concrete services in Arizona· 73%                  interest                  in plumbing services in Phoenix and Tucson, Arizona· stucco                  services in Las Vegas, Nevada· 51%                  interest                  in framing services in Chicago,                  Illinois |

**BMC            West**

| ***2007***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | ***2006***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | ***2005***                                                                                                                                                                                                |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · building                    materials distribution in Terrell, Texas· future                    expansion and consolidation site for building materials distribution                    and                    truss manufacturing in Helena, Montana· future                    site                    for building materials distribution in Houston, Texas· building                    materials distribution in Burlington, Washington· building                    materials distribution in San Antonio, Texas· expansion                    in                    progress for millwork facility in Coppell, Texas |   | · expansion                    and                    consolidation of millwork facility in Englewood, Colorado · truss                    manufacturer in El Paso, Texas· future                    site                    for building materials distribution, truss and millwork facilities                    in                    Caldwell, Idaho· building                    materials distribution and truss manufacturer in Eastern                    Idaho· expansion                    of                    building materials distribution and truss manufacturing in Hurst,                    Texas· building                    materials distribution and millwork facility in Houston,                    Texas |   | · truss                    manufacturer in McCall, Idaho· truss                    manufacturer in Missoula, Montana· millwork                    facility in Austin, Texas |

----

***Performance          Measurements***

|  · |   Sales                                               |  · |   Management                  of working                  capital |
|--------------|----------------------------------------------------------------------|--------------|-----------------------------------------------------------------------------|
|  · |   Income                  from                  operations |  · |   Return                  on                  investment          |

**RESULTS          OF OPERATIONS**

***2007          COMPARED TO 2006***

|                                                                                                                                       |   |  **Year                Ended December 31**  |         |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------------|
|                                                                                                                                       |   | **2007**                                         |         | **2006**  |   |
| **Sales**                                                                                                                                  |   |                                                  |         |    |   |    |   |    |   |
| Building                products                                                                                                           |   | **$**                                                 | **1,001**    |   |   | **43.8** | **%** | $ | 1,277 |   |   | 39.9 | % |
| Construction                services                                                                                                       |   |                                                  | **1,284**    |   |   | **56.2** |   |   | 1,926 |   |   | 60.1 |   |
| **Total                sales**                                                                                                             |   |                                                  | **2,285**    |   |   | **100.0** |   |   | 3,203 |   |   | 100.0 |   |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| **Costs                and operating expenses**                                                                                            |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| Cost                of goods                sold                                                                                           |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| Building                products                                                                                                           |   |                                                  | **726**      |   |   | **72.5** |   |   | 930 |   |   | 72.8 |   |
| Construction                services                                                                                                       |   |                                                  | **1,117**    |   |   | **87.0** |   |   | 1,586 |   |   | 82.3 |   |
|    Impairment                of assets                                                                                      |   |                                                  | **337**      |   |   | **14.7** |   |   | 2 |   |   | — |   |
| Selling,                general and administrative expenses                                                                                |   |                                                  | **438**      |   |   | **19.2** |   |   | 496 |   |   | 15.5 |   |
| Other                income,                net                                                                                            |   |                                                  | **(11**      | **)** |   | **(0.5** | **)** |   | (4 | ) |   | (0.1 | ) |
| Total                costs                and operating expenses                                                                           |   |                                                  | **2,607**    |   |   | **114.1** |   |   | 3,010 |   |   | 94.0 |   |
|                                                                                                                                       |   |                                                  |    |   |   |    |   |   |    |   |   |    |   |
| **(Loss)                income from operations**                                                                                           |   |                                                  | **(322**     | **)** |   | **(14.1** | **)** |   | 193 |   |   | 6.0 |   |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
|    Interest                expense                                                                                          |   |                                                  | **34**       |   |   | **1.5** |   |   | 29 |   |   | 0.9 |   |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| **(Loss)                income from continuing operations****   before                income taxes and minority interests** |   |                                                  | **(356**     | **)** |   | **(15.6** | **)** |   | 164 |   |   | 5.1 |   |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
|    Income                tax benefit (expense)                                                                              |   |                                                  | **29**       |   |   | **1.2** |   |   | (56 | ) |   | (1.7 | ) |
|    Minority                interests income, net of income taxes                                                            |   |                                                  | **(1**       | **)** |   | — |   |   | (9 | ) |   | (0.3 | ) |
| **(Loss)                income from continuing operations**                                                                                |   |                                                  | **(328**     | **)** |   | **(14.4** | **)** |   | 99 |   |   | 3.1 |   |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| Income                from                discontinued operations       prior                to sale         |   |                                                  | **4**        |   |   | **0.2** |   |   | 5 |   |   | 0.2 |   |
| Gain                on sale                of discontinued operations                                                                      |   |                                                  | **20**       |   |   | **0.9** |   |   | — |   |   | — |   |
| Income                taxes                                                                                                                |   |                                                  | **(9**       | **)** |   | **(0.4** | **)** |   | (2 | ) |   | (0.1 | ) |
| **Income                from discontinued operations**                                                                                     |   |                                                  | **15**       |   |   | **0.7** |   |   | 3 |   |   | 0.1 |   |
|                                                                                                                                       |   |                                                  |    |   |   |    |   |   |    |   |   |    |   |
| **Net                (loss) income**                                                                                                       |   | **$**                                                 | **(313**     | **)** |   | **(13.7** | **)%** | $ | 102 |   |   | 3.2 | % |
|                                                                                                                                       |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| **Net                (loss) income per share:**                                                                                            |   |                                                  |         |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                                                                                       |   | **$****(11.36**                                       | **)**        |   |   |   | $3.35 |   |   |   |   |
|    Discontinued                operations                                                                                   |   |                                                  | **0.50**     |   |   |   |   |   | 0.10 |   |   |   |   |
|   Diluted                                                                                                                        |   | **$****(10.86**                                       | **)**        |   |   |   | $3.45 |   |   |   |   |

----

***Consolidated        Financial Results***

**Sales        and        (Loss) Income from Operations**

|                                                   |   | **2007**       |      | **2006** |   | **%                Change** |   |
|--------------------------------------------------------|--------|----------------|-----------|----------|--------|-----------------------------|--------|
| **Sales**                                              |   |           |      |     |   |                        |   |
|    Building                products     |   | **$****1,001** |      | $1,277   |   |                        | (22)%  |   |
|    Construction                services |   |           | **1,284** |     |   | 1,926                       |   |   | (33)% |   |
|                                                   |   | **$****2,285** |      | $3,203   |   |                        | (29)%  |   |
|                                                   |   |           |      |     |   |                        |   |   |   |   |
| **(Loss)                income from operations**       |   | **$****(322**  | **)**     | $193     |   |                        | n/m    |   |

*Intangibles        and Goodwill Impairment*

----

| ·   | $30.0                million                for certain customer relationships at                SelectBuild, |
|--------------------|---------------------------------------------------------------------------------------------------------------|
| ·   | $300.2                million for goodwill at SelectBuild, |
|--------------------|------------------------------------------------------------|
| ·   | $6.7                million                for goodwill at BMC West and |
|--------------------|-------------------------------------------------------------------------|
| ·   | $0.2                million                for certain equipment at SelectBuild. |
|--------------------|----------------------------------------------------------------------------------|

| ·   | a                  shift in                  sales mix to building products from construction                  services, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|
| ·   | decreases                  in                  commodity wood product prices and |
|--------------------|----------------------------------------------------------------------------------|
| ·   | the                  relatively fixed portion of these                  expenses. |
|--------------------|-----------------------------------------------------------------------------------|
|    |   |
|--------------|--------|

*Interest          Expense*

*Income        Taxes*

----

*Discontinued        Operations*

***Business        Segments***

|                    |   | **2007**        |        | **2006**                                               |   |
|-------------------------|--------|-----------------|-------------|--------------------------------------------------------|--------|
|                    |   |  **Sales** |        | **(Loss)                Income****from****Operations** |   |  **Sales** |   | **Income                from****Operations** |   |
| BMC                West |   | **$**           | **1,178**   |                                                   | **$**  | **65** |   | $ | 1,471 |   | $ | 120 |   |
| SelectBuild             |   |            | **1,107**   |                                                   |   | **(335** | **)** |   | 1,732 |   |   | 148 |   |
| Corporate               |   |            | **—** |                                                   |   | **(52** | **)** |   | ― |   |   | (75 | ) |
|                    |   | **$**           | **2,285**   |                                                   | **$**  | **(322** | **)** | $ | 3,203 |   | $ | 193 |   |

***BMC        West***

|                                      |   | **2007** |      | **2006** |   | **%                Change** |   |
|-------------------------------------------|--------|----------|-----------|----------|--------|-----------------------------|--------|
| **Sales**                                 |   | **$**    | **1,178** |     | $      | 1,471                       |   |   | (20)% |   |
|                                      |   |     |      |     |   |                        |   |   |   |   |
| **Income                from operations** |   | **$**    | **65**    |     | $      | 120                         |   |   | (46)% |   |

|   | · | the                number of                employees and related expenses, |
|--------|--------|-----------------------------------------------------------------------------|

----

|    |   |
|--------------|--------|

|   | · | incentive                compensation based on operating performance as well                as |
|--------|--------|------------------------------------------------------------------------------------------------|
|   | · | delivery                and                handling. |
|--------|--------|------------------------------------------------------|

***SelectBuild***

|                                             |   | **2007** |      | **2006** |   | **%                Change** |   |
|--------------------------------------------------|--------|----------|-----------|----------|--------|-----------------------------|--------|
| **Sales**                                        |   | **$**    | **1,107** |     | $      | 1,732                       |   |   | (36)% |   |
|                                             |   |     |      |     |   |                        |   |   |   |   |
| **(Loss)                income from operations** |   | **$**    | **(335**  | **)**    | $      | 148                         |   |   | n/m |   |

| ·   | the                number of                employees and related expenses, |
|--------------------|-----------------------------------------------------------------------------|
| ·   | incentive                compensation based on operating performance                and |
|--------------------|-----------------------------------------------------------------------------------------|
| ·   | an                operating                performance payment for a recent                acquisition. |
|--------------------|---------------------------------------------------------------------------------------------------------|

***Corporate***

|                                  |   | **2007** |   | **2006** |   | **%                Change** |
|---------------------------------------|--------|----------|--------|----------|--------|-----------------------------|
| **Operating                expenses** |   | **$52**  |   | $75      |   | (31)%                       |

----

----

***2006      COMPARED TO 2005***

|                                                                                                                                |   |  **Year                Ended December 31**  |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                                                                |   | **2006**                                         |   | **2005**  |   |
| **Sales**                                                                                                                           |   |                                                  |   |    |   |    |   |    |   |
| Building                products                                                                                                    |   | $                                                     | 1,277  |   |   | 39.9 | % | $ | 1,292 |   |   | 44.9 | % |
| Construction                services                                                                                                |   |                                                  | 1,926  |   |   | 60.1 |   |   | 1,586 |   |   | 55.1 |   |
| **Total                sales**                                                                                                      |   |                                                  | 3,203  |   |   | 100.0 |   |   | 2,878 |   |   | 100.0 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Costs                and operating expenses**                                                                                     |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of goods                sold                                                                                    |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Building                products                                                                                                    |   |                                                  | 930    |   |   | 72.8 |   |   | 943 |   |   | 73.0 |   |
| Construction                services                                                                                                |   |                                                  | 1,586  |   |   | 82.3 |   |   | 1,305 |   |   | 82.3 |   |
|    Impairment                of assets                                                                               |   |                                                  | 2      |   |   | — |   |   | 1 |   |   | — |   |
| Selling,                general and administrative expenses                                                                         |   |                                                  | 496    |   |   | 15.5 |   |   | 396 |   |   | 13.8 |   |
| Other                income,                net                                                                                     |   |                                                  | (4     | ) |   | (0.1 | ) |   | (3 | ) |   | (0.1 | ) |
| Total                costs                and operating expenses                                                                    |   |                                                  | 3,010  |   |   | 94.0 |   |   | 2,642 |   |   | 91.8 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Income                from operations**                                                                                           |   |                                                  | 193    |   |   | 6.0 |   |   | 236 |   |   | 8.2 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
|    Interest                expense                                                                                   |   |                                                  | 29     |   |   | 0.9 |   |   | 14 |   |   | 0.5 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Income                from continuing operations before****   income                taxes and minority interests** |   |                                                  | 164    |   |   | 5.1 |   |   | 222 |   |   | 7.7 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
|    Income                taxes                                                                                       |   |                                                  | 56     |   |   | 1.7 |   |   | 78 |   |   | 2.7 |   |
|    Minority                interests income, net of income taxes                                                     |   |                                                  | (9     | ) |   | (0.3 | ) |   | (16 | ) |   | (0.6 | ) |
| **Income                from continuing operations**                                                                                |   |                                                  | 99     |   |   | 3.1 |   |   | 128 |   |   | 4.4 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Income                from                discontinued operations       prior                to sale  |   |                                                  | 5      |   |   | 0.2 |   |   | 3 |   |   | 0.1 |   |
| Income                taxes                                                                                                         |   |                                                  | 2      |   |   | 0.1 |   |   | 1 |   |   | — |   |
| **Income                from discontinued operations**                                                                              |   |                                                  | 3      |   |   | 0.1 |   |   | 2 |   |   | 0.1 |   |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Net                income**                                                                                                       |   | $                                                     | 102    |   |   | 3.2 | % | $ | 130 |   |   | 4.5 | % |
|                                                                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Net                income per share:**                                                                                            |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                                                                              |   | $3.35                                                 |   |   |   |   | $4.34 |   |   |   |   |
|    Discontinued                operations                                                                            |   |                                                  | 0.10   |   |   |   |   |   | 0.07 |   |   |   |   |
|       Diluted                                                                                         |   | $3.45                                                 |   |   |   |   | $4.41 |   |   |   |   |

----

***Consolidated      Financial Results***

**Sales      and      Income from Operations**

|                                                   |   | **2006** |      | **2005** |   | **%                Change** |   |
|--------------------------------------------------------|--------|----------|-----------|----------|--------|-----------------------------|--------|
| **Sales**                                              |   |     |      |     |   |                        |   |
|    Building                products     |   | **$**    | **1,277** |     | $      | 1,292                       |   |   | (1 | )% |
|    Construction                services |   |     | **1,926** |     |   | 1,586                       |   |   | 21 | % |
|                                                   |   | **$**    | **3,203** |     | $      | 2,878                       |   |   | 11 | % |
|                                                   |   |     |      |     |   |                        |   |   |   |   |
| **Income                from operations**              |   | **$**    | **193**   |     | $      | 236                         |   |   | (18 | )% |

----

*Interest        Expense*

*Income        Taxes*

***Business        Segments***

|                    |   | **2006**  |    | **2005**                                     |   |
|-------------------------|--------|-----------|---------|----------------------------------------------|--------|
|                    |   | **Sales** |    | **Income                from****Operations** |   | **Sales** |   | **Income                from****Operations** |   |
| BMC                West |   | $1,471    |    | $120                                         |   | $1,484 |   | $148 |   |
| SelectBuild             |   |      | 1,732   |                                         |   | 148 |   |   | 1,394 |   |   | 161 |   |
| Corporate               |   |      | — |                                         |   | (75 | ) |   | ― |   |   | (73 | ) |
|                    |   | $3,203    |    | $193                                         |   | $2,878 |   | $236 |   |

***BMC      West***

|                                                |   | **2006** |   | **2005** |   | **%                Change** |   |
|-----------------------------------------------------|--------|----------|--------|----------|--------|-----------------------------|--------|
| **Sales**                                           |   | $        | 1,471  |     | $      | 1,484                       |   |   | (1)% |   |
|    Less:                Acquisitions |   |     | (58    | )        |   | —                     |   |   | — |   |
|                                                |   | $        | 1,413  |     | $      | 1,484                       |   |   | (5)% |   |
|                                                |   |     |   |     |   |                        |   |   |   |   |
| **Income                from operations**           |   | $        | 120    |     | $      | 148                         |   |   | (19)% |   |
|    Less:                Acquisitions |   |     | (1     | )        |   | ―                     |   |   | — |   |
|                                                |   | $        | 119    |     | $      | 148                         |   |   | (20)% |   |

----

| ·   | compensation                  expenses for additional personnel to support increased sales                  volume, |
|--------------------|---------------------------------------------------------------------------------------------------------------------|
| ·   | expenses                  from                  acquisitions not present in the prior period                  and |
|--------------------|-------------------------------------------------------------------------------------------------------------------|
| ·   | higher                  delivery and occupancy expenses. |
|--------------------|----------------------------------------------------------|

***SelectBuild***

|                                                |   | **2006** |   | **2005** |   | **%                Change** |   |
|-----------------------------------------------------|--------|----------|--------|----------|--------|-----------------------------|--------|
| **Sales**                                           |   | $        | 1,732  |     | $      | 1,394                       |   |   | 24 |  % |
|    Less:                Acquisitions |   |     | (644   | )        |   | —                     |   |   | — |   |
|                                                |   | $        | 1,088  |     | $      | 1,394                       |   |   | (22 | )% |
|                                                |   |     |   |     |   |                        |   |   |   |   |
| **Income                from operations**           |   | $        | 148    |     | $      | 161                         |   |   | (8 | )% |
|    Less:                Acquisitions |   |     | (54    | )        |   | —                     |   |   | — |   |
|                                                |   | $        | 94     |     | $      | 161                         |   |   | (42 | )% |

| ·   | reduced                operating leverage resulting from a 22% decline in sales from comparable                operations, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|
| ·   | compensation                and integration expenses associated with a regional operating structure                and |
|--------------------|------------------------------------------------------------------------------------------------------------------------|
| ·   | operating                expenses and non-cash amortization associated with recent                acquisitions. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

***Corporate***

|                                  |   | **2006** |   | **2005** |   | **%                Change** |
|---------------------------------------|--------|----------|--------|----------|--------|-----------------------------|
| **Operating                expenses** |   | $75      |   | $73      |   | 3%                          |

----

**LIQUIDITY        AND CAPITAL RESOURCES**

*Operations*

*Capital        Investment and Acquisitions*

----

*Financing*

----

*Revolver*

*Term        Note*

*Other*

*Expansion        of Previous Credit Facility, Covenants and Maturities*

----

| 2008       |   | $      | 4,923   |   |
|------------|--------|--------|---------|--------|
| 2009       |   |   | 4,251   |   |
| 2010       |   |   | 3,971   |   |
| 2011       |   |   | 3,709   |   |
| 2012       |   |   | 3,572   |   |
| Thereafter |   |   | 328,873 |   |
|       |   | $      | 349,299 |   |

*Subsequent        to December 2007*

| ·   | $100                million                or |
|--------------------|-----------------------------------------------|
| ·   | a                borrowing                base calculated on certain accounts receivable minus 50% of outstanding                surety bonds, multiplied by 50%. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Hedging          Activities*

*Equity*

----

----

**OFF-BALANCE        SHEET ARRANGEMENTS**

**DISCLOSURES        OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS**

|                                                                                                                                       |   | **Payments                  Due by Period**               |        |             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|-------------|------------------|--------|
| **Contractual                  Obligations**                                                                                               |   | **Less                  than****1                  Year** |        | **1-3****Years** |   | **3-5****Years** |   | **More                  than****5                  Years** |   | **Total** |   | **Fair                  Value** |   |
| Long-term                  debt                                                                                                            |   | **$**                                                     | **4.7**     |             | **$**  | **8.2** |   | **$** | **7.3** |   | **$** | **328.9** |   | **$** | **349.1** |   | **$** | **348.2** |   |
| Capital                  lease                  obligations                                                                                |   |                                                      | **0.2**     |             |   | **—** |   |   | **—** |   |   | **—** |   |   | **0.2** |   |   | **0.2** |   |
| Interest                  on                  long-term debt and capital                  leases(1)                                        |   |                                                      | **27.0**    |             |   | **53.2** |   |   | **51.1** |   |   | **18.3** |   |   | **149.6** |   |   | **149.6** |   |
| Operating                  leases                                                                                                          |   |                                                      | **28.9**    |             |   | **43.4** |   |   | **19.4** |   |   | **11.6** |   |   | **103.3** |   |   | **103.3** |   |
| Unconditional                  purchase obligations                                                                                        |   |                                                      | **—** |             |   | **—** |   |   | **—** |   |   | **—** |   |   | **—** |   |   | **—** |   |
| Other                  long-term commitments                                                                                               |   |                                                      | **—** |             |   | **—** |   |   | **—** |   |   | **—** |   |   | **—** |   |   | **—** |   |
|                                                                                                                                       |   | **$**                                                     | **60.8**    |             | **$**  | **104.8** |   | **$** | **77.8** |   | **$** | **358.8** |   | **$** | **602.2** |   | **$** | **601.3** |   |
|                                                                                                                                       |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest                  rate                  swap contracts                                                                             |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Notional                  principal amount of interest                  rate                  exchangeagreements                  maturing |   |                                                      |             |             |   |  |   |   |  |   |   |  |   | **$** | **200.0** |   |   | **8.6** |   |
| Variable                  to                  fixed                                                                                        |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Average                  pay                  rate                                                                                         |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   | **5.09** | **%** |   |  |   |
| Average                  receive rate                                                                                                      |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   | **5.32** | **%** |   |   |   |
|                                                                                                                                       |   |                                                      |             |             |   |  |   |   |  |   |   |  |   |   |  |   | **$** | **609.9** |   |

| (1) | Interest                paid                on all years may differ due to future refinancing of debt. Interest                on our                variable rate debt was calculated for all years using the rates effective                as of December 31, 2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

*Inventory      Price Risk*

*Interest      Rate Risk*

----

**CRITICAL      ACCOUNTING ESTIMATES **

*Revenue      Recognition for Construction Services*

*Estimated      Losses on Uncompleted Contracts and Changes in Contract      Estimates*

*Goodwill*

----

*Insurance        Deductible Reserves*

*Warranties*

----

*Share-based        Compensation*

**RECENT        ACCOUNTING PRINCIPLES**

*Business        Combinations*

*Noncontrolling        Interests in Consolidated Financial Statements*
*Business        Combinations*

*The        Fair Value        Option for Financial Assets and Financial Liabilities - Including an Amendment        of FASB Statement No. 115*

----

*Fair        Value        Measurements*

*Accounting        for        Uncertainty in Income Taxes. *

**BUSINESS        RISKS AND FORWARD-LOOKING STATEMENTS**

| ·   | demand                for                and supply of single-family homes which is influenced by changes                in the                overall condition of the U.S. economy, including interest rates,                consumer                confidence, job formation and other important                factors; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | our                business                model; |
|--------------------|---------------------------------------------------|
| ·   | our                ability                to implement and maintain cost structures that align with revenue                trends; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|
| ·   | compliance                with credit facility covenants in an uncertain housing                market; |
|--------------------|---------------------------------------------------------------------------------------------------------|
| ·   | changes                in                the business models of our customers may limit our ability to provide                building products and construction services required by our                customers; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | the                integration of acquired businesses may not result in anticipated                cost                savings and revenue synergies being fully realized or may take longer                to                realize than expected; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | losses                of and                changes in customers; |
|--------------------|-------------------------------------------------------------------|

----

| ·   | availability                of and our ability to attract, train and retain qualified                individuals; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|
| ·   | fluctuations                in our costs and availability of sourcing channels for commodity                wood                products, concrete, steel and other building                materials; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | intense                competition; |
|--------------------|-------------------------------------|
| ·   | weather                conditions including natural catastrophic                events; |
|--------------------|-----------------------------------------------------------------------------------------|
| ·   | exposure                to                construction defect and product liability claims as well as other                legal                proceedings; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | disruptions                in our information systems; |
|--------------------|--------------------------------------------------------|
| ·   | actual                and                perceived vulnerabilities as a result of terrorist activities and                armed                conflict; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | costs                and/or                restrictions associated with federal, state and other regulations;                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|
| ·   | numerous                other matters of a local and regional scale, including those of a                political, economic, business, competitive or regulatory                nature. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | price                for our                shares may fluctuate significantly; and |
|--------------------|-------------------------------------------------------------------------------------|
| ·   | anti-takeover                defenses and certain provisions could prevent an acquisition of our                company or limit share price. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM      7A. Quantitative and Qualitative Disclosures About Market      Risk**

*Inventory      Price Risk*

*Interest      Rate Risk*

----

**ITEM      8. Financial Statements and Supplementary Data** 

**Building      Materials Holding Corporation**

**Consolidated      Statements of Operations**

**(thousands,      except per share data)**

|                                                                                                                                       |   | **Year                Ended December 31** |          |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------------|
|                                                                                                                                       |   | **2007**                                  |          |  **2006** |   |  **2005** |   |
| **Sales**                                                                                                                                  |   |                                      |          |    |   |    |   |
|    Building                products                                                                                         |   | **$**                                     | **1,001,284** |   | $ | 1,277,190 |   | $ | 1,291,899 |   |
|    Construction                services                                                                                     |   |                                      | **1,283,687** |   |   | 1,926,077 |   |   | 1,586,509 |   |
| **      Total                sales**                                                                         |   |                                      | **2,284,971** |   |   | 3,203,267 |   |   | 2,878,408 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
| **Costs                and operating expenses**                                                                                            |   |                                      |          |   |   |   |   |   |   |   |
|    Cost                of goods sold                                                                                        |   |                                      |          |   |   |   |   |   |   |   |
|       Building                products                                                                       |   |                                      | **725,847**   |   |   | 929,800 |   |   | 942,871 |   |
|       Construction                services                                                                   |   |                                      | **1,116,684** |   |   | 1,586,383 |   |   | 1,305,097 |   |
|    Impairment                of assets                                                                                      |   |                                      | **337,074**   |   |   | 2,237 |   |   | 1,320 |   |
|    Selling,                general and administrative expenses                                                              |   |                                      | **438,142**   |   |   | 496,459 |   |   | 396,179 |   |
|    Other                income, net                                                                                         |   |                                      | **(10,453**   | **)** |   | (4,281 | ) |   | (3,166 | ) |
|       Total                costs and operating expenses                                                      |   |                                      | **2,607,294** |   |   | 3,010,598 |   |   | 2,642,301 |   |
|                                                                                                                                       |   |                                      |     |   |   |    |   |   |    |   |
| **(Loss)                income from operations**                                                                                           |   |                                      | **(322,323**  | **)** |   | 192,669 |   |   | 236,107 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
|    Interest                expense                                                                                          |   |                                      | **33,800**    |   |   | 29,082 |   |   | 14,420 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
| **(Loss)                income from continuing operations****   before                income taxes and minority interests** |   |                                      | **(356,123**  | **)** |   | 163,587 |   |   | 221,687 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
|    Income                tax benefit (expense)                                                                              |   |                                      | **29,688**    |   |   | (54,991 | ) |   | (78,665 | ) |
|    Minority                interests income, net of income taxes                                                            |   |                                      | **(853**      | **)** |   | (9,493 | ) |   | (15,514 | ) |
| **(Loss)                income from continuing operations**                                                                                |   |                                      | **(327,288**  | **)** |   | 99,103 |   |   | 127,508 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
|    Income                from discontinued operations       prior                to sale      |   |                                      | **3,554**     |   |   | 4,786 |   |   | 3,249 |   |
|    Gain                on sale of discontinued operations                                                                   |   |                                      | **20,029**    |   |   | — |   |   | — |   |
|    Income                taxes                                                                                              |   |                                      | **(9,008**    | **)** |   | (1,815 | ) |   | (1,250 | ) |
| **Income                from discontinued operations**                                                                                     |   |                                      | **14,575**    |   |   | 2,971 |   |   | 1,999 |   |
|                                                                                                                                       |   |                                      |     |   |   |   |   |   |   |   |
| **Net                (loss) income**                                                                                                       |   | **$**                                     | **(312,713**  | **)** | $ | 102,074 |   | $ | 129,507 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
| **Net                (loss) income per share:**                                                                                            |   |                                      |          |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                     |   | **$****(11.36**                           | **)**         | $3.47 |   | $4.54 |   |
|    Discontinued                operations                                                                                   |   |                                      | **0.50**      |   |   | 0.10 |   |   | 0.07 |   |
|       Basic                                                                                                  |   | **$****(10.86**                           | **)**         | $3.57 |   | $4.61 |   |
|                                                                                                                                       |   |                                      |          |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                     |   | **$****(11.36**                           | **)**         | $3.35 |   | $4.34 |   |
|    Discontinued                operations                                                                                   |   |                                      | **0.50**      |   |   | 0.10 |   |   | 0.07 |   |
|       Diluted                                                                                                |   | **$****(10.86**                           | **)**         | $3.45 |   | $4.41 |   |

----

**Building        Materials Holding Corporation**

**Consolidated        Balance Sheets**

**(thousands)**

|                                                            |   | **December                31** |              |     |   | **December                31** |
|-----------------------------------------------------------------|--------|--------------------------------|-------------------|----------|--------|--------------------------------|
|                                                            |   | **2007**                       |              | **2006** |   |                           |   | **2007** |   | **2006** |
| **Assets**                                                      |   |                           |              |     |   |                           |   | **Liabilities,                Minority Interests and****Shareholders’                Equity** |   |   |   |   |   |   |
| Cash                and cash                equivalents         |   | **$**                          | **60,587 **  |     | $      | 74,272                    |   |   |   |   |   |   |   |   |
| Marketable                securities                            |   |                           | **1,872 **   |     |   | 4,337                     |   | Accounts                payable |   | **$** | **77,024 ** |   | $ | 109,129  |
| Receivables,                net of allowances                   |   |                           |              |     |   |                           |   | Accrued                compensation |   |   | **32,016 ** |   |   | 48,180  |
|    of                $5,561 and $4,487           |   |                           | **209,355 ** |     |   | 276,497                   |   | Insurance                deductible reserves |   |   | **28,488 ** |   |   | 24,931  |
| Inventory                                                       |   |                           | **116,836 ** |     |   | 141,457                   |   | Other                accrued                liabilities |   |   | **29,504 ** |   |   | 103,145  |
| Unbilled                receivables                             |   |                           | **39,917 **  |     |   | 43,527                    |   | Billings                in                excess of costs and estimated |   |   |   |   |   |   |
| Deferred                income taxes                            |   |                           | **11,470 **  |     |   | 8,914                     |   |    earnings |   |   | **23,779 ** |   |   | 27,622  |
| Prepaid                expenses and other                       |   |                           | **18,877 **  |     |   | 11,153                    |   | Current                portion of long-term debt |   |   | **4,923 ** |   |   | 8,143  |
| Assets                of                discontinued operations |   |                           | **— ** |     |   | 6,254                     |   | Liabilities                of                discontinued operations |   |   | **— ** |   |   | 2,461  |
| **   Current                assets**             |   |                           | **458,914 ** |     |   | 566,411                        |   | **   Current                liabilities** |   |   | **195,734 ** |   |   | 323,611  |
|                                                            |   |                           |              |     |   |                           |   |   |   |   |   |   |   |   |
| Property                and                equipment            |   |                           |              |     |   |                           |   | Deferred                income taxes |   |   | **— ** |   |   | 9,138  |
|    Land                                          |   |                           | **62,737 **  |     |   | 61,217                    |   | Insurance                deductible reserves |   |   | **27,898 ** |   |   | 25,841  |
|    Buildings                and improvements     |   |                           | **138,630 ** |     |   | 136,659                   |   | Long-term                debt |   |   | **344,376 ** |   |   | 349,161  |
|    Equipment                                     |   |                           | **192,653 ** |     |   | 186,956                   |   | Other                long-term liabilities |   |   | **44,503 ** |   |   | 41,390  |
|    Construction                in progress       |   |                           | **16,215 **  |     |   | 8,579                     |   |   |   |   |   |   |   |   |
|    Accumulated                depreciation       |   |                           | **(160,096)**     |     |   | (136,020)                      |   | Minority                interests |   |   | **8,591 ** |   |   | 7,141  |
| Marketable                securities                            |   |                           | **40,039 **  |     |   | 53,513                    |   |   |   |   |   |   |   |   |
| Deferred                income taxes                            |   |                           | **11,269 **  |     |   | —                   |   | Commitments                and contingent liabilities |   |   | **— ** |   |   | —  |
| Deferred                loan                costs               |   |                           | **4,358 **   |     |   | 5,481                     |   |   |   |   |   |   |   |   |
| Other                long-term assets                           |   |                           | **30,981 **  |     |   | 26,975                    |   | Shareholders’                equity |   |   |   |   |   |   |
| Other                intangibles, net                           |   |                           | **64,948 **  |     |   | 108,792                   |   |    Common                shares, $0.001 par value: |   |   |   |   |   |   |
| Goodwill                                                        |   |                           | **14,196 **  |     |   | 308,000                   |   | authorized                50                million; issued and |   |   |   |   |   |   |
| Assets                of                discontinued operations |   |                           | **— ** |     |   | 2,348                     |   | outstanding                29.4 and 29.2 million shares |   |   | **29 ** |   |   | 29  |
|                                                            |   | **$**                          | **874,844 ** |     | $      | 1,328,911                 |   | Additional                paid-in capital |   |   | **164,043 ** |   |   | 154,405  |
|                                                            |   |                           |              |     |   |                           |   | Deferred                compensation common shares obligation |   |   | **1,427 ** |   |   | 1,200  |
|                                                            |   |                           |              |     |   |                           |   | Deferred                compensation common shares |   |   | **(1,427)** |   |   | (1,200) |
|                                                            |   |                           |              |     |   |                           |   |    Retained                earnings |   |   | **94,482 ** |   |   | 418,927  |
|                                                            |   |                           |              |     |   |                           |   | Accumulated                other comprehensive (loss), net |   |   | **(4,812)** |   |   | (732) |
|                                                            |   |                           |              |     |   |                           |   | **      Shareholders’                equity** |   |   | **253,742 ** |   |   | 572,629  |
|                                                            |   |                           |              |     |   |                           |   |   |   | **$** | **874,844 ** |   | $ | 1,328,911  |

----

**Building        Materials Holding Corporation**

**Consolidated        Statements of Shareholders’ Equity**

**(thousands)**

|                                                                                                                |   | **Year                Ended December 31** |         |
|---------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------------|
|                                                                                                                |   | **2007**                                  |         | **2006** |   | **2005** |   |
| Common                shares                - beginning balance                                                     |   | **$**                                     | **29**       |   | $ | 29 |   | $ | 28 |   |
|    Shares                issued from Incentive and Performance Plans                                 |   |                                      | —      |   |   | — |   |   | 1 |   |
| **Common                Shares**                                                                                    |   | **$**                                     | **29**       |   | $ | 29 |   | $ | 29 |   |
|                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Additional                paid-in capital - beginning balance                                                       |   | **$**                                     | **154,405**  |   | $ | 141,082 |   | $ | 123,197 |   |
|    Shares                issued from Incentive and Performance Plans                                 |   |                                      |         |   |   |   |   |   |   |   |
|       Options                exercised - Management                                   |   |                                      | **203**      |   |   | 1,292 |   |   | 4,904 |   |
|          Tax                benefit for share options exercised        |   |                                      | **29**       |   |   | 1,457 |   |   | 9,140 |   |
|       Restricted                shares - Management                                   |   |                                      | **2,614**    |   |   | 5,220 |   |   | 2,616 |   |
|          Unearned                compensation                          |   |                                      | **(2,614**   | **)** |   | (5,220 | ) |   | (2,616 | ) |
|          Tax                benefit for dividends on restricted shares |   |                                      | **63**       |   |   | — |   |   | — |   |
|       Shares                issued to Directors                                       |   |                                      | **405**      |   |   | 415 |   |   | 380 |   |
|    Earned                compensation                                                                |   |                                      |         |   |   |   |   |   |   |   |
|       Options                - Management                                             |   |                                      | **5,177**    |   |   | 5,103 |   |   | — |   |
|       Restricted                shares - Management                                   |   |                                      | **3,317**    |   |   | 3,107 |   |   | 1,301 |   |
|          Tax                benefit for vested restricted shares       |   |                                      | **167**      |   |   | — |   |   | — |   |
|    Shares                issued from Employee Stock Purchase Plan                                    |   |                                      | **277**      |   |   | 1,949 |   |   | 1,160 |   |
|    Shares                issued for an acquisition                                                   |   |                                      | —      |   |   | — |   |   | 1,000 |   |
| **Additional                paid-in capital**                                                                       |   | **$**                                     | **164,043**  |   | $ | 154,405 |   | $ | 141,082 |   |
|                                                                                                                |   |                                      |              |   |   |   |   |   |   |   |
| Deferred                compensation common shares obligation - beginning                balance               |   | **$**                                     | **1,200**    |   | $ | 934 |   | $ | 680 |   |
|    Shares                purchased                                                                   |   |                                      | **402**      |   |   | 319 |   |   | 272 |   |
|    Distribution                and forfeitures                                                       |   |                                      | **(175**     | **)** |   | (53 | ) |   | (18 | ) |
| **Deferred                compensation common                shares obligation**** **                     |   | **$**                                     | **1,427**    |   | $ | 1,200 |   | $ | 934 |   |
|                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Deferred                compensation common shares - beginning balance                                              |   | **$**                                     | **(1,200**   | **)** | $ | (934 | ) | $ | (680 | ) |
|    Shares                purchased with deferred compensation                                        |   |                                      | **(364**     | **)** |   | (276 | ) |   | (253 | ) |
|    Shares                purchased with dividends                                                    |   |                                      | **(38**      | **)** |   | (43 | ) |   | (19 | ) |
|    Distributions                and forfeitures                                                      |   |                                      | **175**      |   |   | 53 |   |   | 18 |   |
| **Deferred                compensation common shares**                                                              |   | **$**                                     | **(1,427**   | **)** | $ | (1,200 | ) | $ | (934 | ) |
|                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Retained                earnings - beginning balance                                                                |   | **$**                                     | **418,927**  |   | $ | 328,463 |   | $ | 205,812 |   |
|    Net                (loss) income                                                                  |   |                                      | **(312,713** | **)** |   | 102,074 |   |   | 129,507 |   |
|    Cash                dividends on common shares                                                    |   |                                      | **(11,732**  | **)** |   | (11,610 | ) |   | (6,856 | ) |
| **Retained                earnings**                                                                                |   | **$**                                     | **94,482**   |   | $ | 418,927 |   | $ | 328,463 |   |
|                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Accumulated                other comprehensive (loss) income, net - beginning balance                               |   | **$**                                     | **(732**     | **)** | $ | 487 |   | $ | (1,359 | ) |
|    Interest                rate swap contracts:                                                      |   |                                      |         |   |   |   |   |   |   |   |
|       Unrealized                loss                                                  |   |                                      | **(7,673**   | **)** |   | (880 | ) |   | — |   |
|          Tax                benefit for unrealized loss                |   |                                      | **2,933**    |   |   | 332 |   |   | — |   |
|       Unrealized                gain                                                  |   |                                      | **—**  |   |   | 262 |   |   | 3,412 |   |
|          Taxes                for unrealized gain                      |   |                                      | **—**  |   |   | (101 | ) |   | (1,314 | ) |
|       Realized                gain                                                    |   |                                      | **—**  |   |   | (1,459 | ) |   | — |   |
|          Taxes                for realized gain                        |   |                                      | **—**  |   |   | 562 |   |   | — |   |
|    Marketable                securities:                                                             |   |                                      |         |   |   |   |   |   |   |   |
|       Unrealized                gain (loss)                                           |   |                                      | **1,000**    |   |   | 127 |   |   | (410 | ) |
|          (Taxes)                tax benefit for unrealized gain (loss) |   |                                      | **(340**     | **)** |   | (62 | ) |   | 158 |   |
| **Accumulated                other comprehensive (loss) income, net**                                               |   | **$**                                     | **(4,812**   | **)** | $ | (732 | ) | $ | 487 |   |
|                                                                                                                |   |                                      |    |   |   |    |   |   |    |   |
| **Shareholders’                Equity**                                                                       |   | **$**                                     | **253,742**  |   | $ | 572,629 |   | $ | 470,061 |   |

----

**Building        Materials Holding Corporation**

**Consolidated        Statements of Comprehensive (Loss) Income**

**(thousands)**

|                                                                                              |   | **Year                Ended December 31** |         |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------------|
|                                                                                              |   | **2007**                                  |         |  **2006** |   |  **2005** |   |
| Net                (loss)                income                                                   |   | **$**                                     | **(312,713** | **)** | $ | 102,074 |   | $ | 129,507 |   |
|                                                                                              |   |                                      |         |   |   |   |   |   |   |   |
| Unrealized                (loss) gain on interest rate swap contracts:                            |   |                                      |         |   |   |   |   |   |   |   |
|    Unrealized                loss                                                  |   | **$**                                     | **(7,673**   | **)** | $ | (880 | ) | $ | — |   |
|       Tax                benefit for unrealized loss                |   |                                      | **2,933**    |   |   | 332 |   |   | — |   |
|    Unrealized                gain                                                  |   |                                      | **—**  |   |   | 262 |   |   | 3,412 |   |
|       Taxes                for unrealized gain                      |   |                                      | **—**  |   |   | (101 | ) |   | (1,314 | ) |
|    Realized                gain                                                    |   |                                      | **—**  |   |   | (1,459 | ) |   | — |   |
|       Taxes                for realized gain                        |   |                                      | **—**  |   |   | 562 |   |   | — |   |
|                                                                                              |   | **$**                                     | **(4,740**   | **)** | $ | (1,284 | ) | $ | 2,098 |   |
| Unrealized                gain (loss) on marketable securities:                                   |   |                                      |         |   |   |   |   |   |   |   |
|    Unrealized                gain (loss)                                           |   | **$**                                     | **1,000**    |   | $ | 127 |   | $ | (410 | ) |
|       (Taxes)                tax benefit for unrealized gain (loss) |   |                                      | **(340**     | **)** |   | (62 | ) |   | 158 |   |
|                                                                                              |   | **$**                                     | **660**      |   | $ | 65 |   | $ | (252 | ) |
|                                                                                              |   |                                      |         |   |   |   |   |   |   |   |
| **Comprehensive                (loss) income**                                                    |   | **$**                                     | **(316,793** | **)** | $ | 100,855 |   | $ | 131,353 |   |

----

**Building        Materials Holding Corporation**

**Consolidated        Statements of Cash Flows**

**(thousands)**

|                                                                                                                                                                                                                               |   | **Year                Ended December 31** |         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------------|
| **Operating                Activities**                                                                                                                                                                                            |   | **2007**                                  |         | **2006** |   | **2005** |   |
|    Net                (loss) income                                                                                                                                                                                 |   | **$**                                     | **(312,713** | **)** | $ | 102,074 |   | $ | 129,507 |   |
|    Items                in net (loss) income not using (providing) cash:                                                                                                                                       |   |                                      |         |   |   |   |   |   |   |   |
|       Minority                interests, net                                                                                                                                                         |   |                                      | **853**      |   |   | 9,493 |   |   | 15,514 |   |
|       Depreciation                and amortization                                                                                                                                                   |   |                                      | **48,781**   |   |   | 45,284 |   |   | 27,363 |   |
|       Deferred                loan cost amortization                                                                                                                                                 |   |                                      | **1,123**    |   |   | 1,359 |   |   | 704 |   |
|       Impairment                of assets                                                                                                                                                            |   |                                      | **337,074**  |   |   | 2,237 |   |   | 1,320 |   |
|       Share-based                compensation                                                                                                                                                        |   |                                      | **8,944**    |   |   | 8,917 |   |   | 1,855 |   |
|       Gain                on sale of discontinued operations                                                                                                                                         |   |                                      | **(20,029**  | **)** |   | — |   |   | — |   |
|       (Gain)                loss on sale of assets, net                                                                                                                                              |   |                                      | **(8,789**   | **)** |   | 207 |   |   | (194 | ) |
|       Realized                gain on interest rate swap contracts                                                                                                                                   |   |                                      | **—**  |   |   | (1,459 | ) |   | — |   |
|       Realized                (gain) loss on marketable securities                                                                                                                                   |   |                                      | **(408**     | **)** |   | 206 |   |   | — |   |
|       Deferred                income taxes                                                                                                                                                           |   |                                      | **(19,452**  | **)** |   | (1,125 | ) |   | (3,473 | ) |
|       Accrued                loss for acquisition purchase obligation                                                                                                                                |   |                                      | **5,500**    |   |   | — |   |   | — |   |
|       Tax                benefit for share options                                                                                                                                                   |   |                                      | **—**  |   |   | — |   |   | 9,140 |   |
|       Changes                in assets and liabilities, net of effects of acquisitions and          divestitures                of business units: |   |                                      |         |   |   |   |   |   |   |   |
|                             Receivables, net                                                                                                                           |   |                                      | **68,385**   |   |   | 128,381 |   |   | (19,049 | ) |
|                             Inventory                                                                                                                                  |   |                                      | **24,599**   |   |   | 43,873 |   |   | (3,332 | ) |
|                             Unbilled receivables                                                                                                                       |   |                                      | **3,610**    |   |   | 22,702 |   |   | (8,378 | ) |
|                             Prepaid expenses and other current                assets                                                                                   |   |                                      | **(7,758**   | **)** |   | (3,915 | ) |   | 4,340 |   |
|                             Accounts payable                                                                                                                           |   |                                      | **(22,621**  | **)** |   | (43,483 | ) |   | 1,852 |   |
|                             Accrued compensation                                                                                                                       |   |                                      | **(16,536**  | **)** |   | (18,823 | ) |   | 24,465 |   |
|                             Insurance deductible reserves                                                                                                              |   |                                      | **3,557**    |   |   | 3,059 |   |   | 5,777 |   |
|                             Other accrued liabilities                                                                                                                  |   |                                      | **(13,033**  | **)** |   | 1,483 |   |   | (4,611 | ) |
|                             Billings in excess of costs and estimated                earnings                                                                          |   |                                      | **(3,843**   | **)** |   | (29,734 | ) |   | (1,911 | ) |
|                             Other long-term assets and liabilities                                                                                                     |   |                                      | **(12,560**  | **)** |   | 1,588 |   |   | 18,181 |   |
|       Other,                net                                                                                                                                                                      |   |                                      | **2,595**    |   |   | 1,094 |   |   | (776 | ) |
| **Cash                flows provided by operating activities**                                                                                                                                                                     |   |                                      | **67,279**   |   |   | 273,418 |   |   | 198,294 |   |
|                                                                                                                                                                                                                               |   |                                      |         |   |   |   |   |   |   |   |
| **Investing                Activities**                                                                                                                                                                                            |   |                                      |         |   |   |   |   |   |   |   |
|    Purchases                of property and equipment                                                                                                                                                               |   |                                      | **(32,995**  | **)** |   | (52,873 | ) |   | (46,540 | ) |
|    Acquisitions                and investments in businesses, net of cash acquired                                                                                                                                  |   |                                      | **(80,961**  | **)** |   | (201,754 | ) |   | (203,201 | ) |
|    Proceeds                from dispositions of property and equipment                                                                                                                                              |   |                                      | **16,905**   |   |   | 2,944 |   |   | 1,358 |   |
|    Proceeds                from sale of discontinued operations                                                                                                                                                     |   |                                      | **27,176**   |   |   | — |   |   | — |   |
|    Purchase                of marketable securities                                                                                                                                                                 |   |                                      | **(35,239**  | **)** |   | (54,700 | ) |   | (20,623 | ) |
|    Proceeds                from sales of marketable securities                                                                                                                                                      |   |                                      | **52,650**   |   |   | 29,270 |   |   | 6,546 |   |
|    Other,                net                                                                                                                                                                                        |   |                                      | **(628**     | **)** |   | (3,150 | ) |   | 892 |   |
| **Cash                flows used by investing activities**                                                                                                                                                                         |   |                                      | **(53,092**  | **)** |   | (280,263 | ) |   | (261,568 | ) |
|                                                                                                                                                                                                                               |   |                                      |         |   |   |   |   |   |   |   |
| **Financing                Activities**                                                                                                                                                                                            |   |                                      |         |   |   |   |   |   |   |   |
|    Net                (payments) borrowings under revolver                                                                                                                                                          |   |                                      | **—**  |   |   | (77,500 | ) |   | (3,700 | ) |
|    Borrowings                under term note                                                                                                                                                                        |   |                                      | **—**  |   |   | 350,000 |   |   | 75,000 |   |
|    Principal                payments on term notes                                                                                                                                                                  |   |                                      | **(3,500**   | **)** |   | (197,750 | ) |   | (1,251 | ) |
|    Net                payments on other notes                                                                                                                                                                       |   |                                      | **(4,505**   | **)** |   | (6,109 | ) |   | (7,605 | ) |
|    (Decrease)                increase in book overdrafts                                                                                                                                                            |   |                                      | **(7,609**   | **)** |   | (2,902 | ) |   | 17,404 |   |
|    Proceeds                from share options exercised                                                                                                                                                             |   |                                      | **203**      |   |   | 1,292 |   |   | 4,905 |   |
|    Tax                benefit for share options                                                                                                                                                                     |   |                                      | **259**      |   |   | 1,457 |   |   | — |   |
|    Dividends                paid                                                                                                                                                                                    |   |                                      | **(11,709**  | **)** |   | (10,853 | ) |   | (5,807 | ) |
|    Deferred                financing costs                                                                                                                                                                          |   |                                      | **—**  |   |   | (3,224 | ) |   | (2,236 | ) |
|    Distributions                to minority interests                                                                                                                                                               |   |                                      | **(1,223**   | **)** |   | (5,731 | ) |   | (2,792 | ) |
|    Other,                net                                                                                                                                                                                        |   |                                      | **212**      |   |   | 2,359 |   |   | (62 | ) |
| **Cash                flows (used) provided by financing activities**                                                                                                                                                              |   |                                      | **(27,872**  | **)** |   | 51,039 |   |   | 73,856 |   |
|                                                                                                                                                                                                                               |   |                                      |    |   |   |    |   |   |    |   |
| **(Decrease)                Increase in Cash and Cash Equivalents**                                                                                                                                                                |   |                                      | **(13,685**  | **)** |   | 44,194 |   |   | 10,582 |   |
|                                                                                                                                                                                                                               |   |                                      |         |   |   |   |   |   |   |   |
|    Cash                and cash equivalents, beginning of year                                                                                                                                                      |   |                                      | **74,272**   |   |   | 30,078 |   |   | 19,496 |   |
|    Cash                and cash equivalents, end of year                                                                                                                                                            |   | **$**                                     | **60,587**   |   | $ | 74,272 |   | $ | 30,078 |   |
|                                                                                                                                                                                                                               |   |                                      |         |   |   |   |   |   |   |   |
| **Supplemental                Disclosure of Cash Flow Information**                                                                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
|    Accrued                but unpaid dividends                                                                                                                                                                      |   | **$**                                     | **2,938**    |   | $ | 2,915 |   | $ | 2,158 |   |
|    Cash                paid for interest                                                                                                                                                                            |   | **$**                                     | **32,827**   |   | $ | 28,185 |   | $ | 13,682 |   |
|    Cash                paid for income taxes                                                                                                                                                                        |   | **$**                                     | **7,233**    |   | $ | 69,568 |   | $ | 70,553 |   |

| **Supplemental                Schedule of Investing Activities**                 |   |   |       |    |   |    |   |
|----------------------------------------------------------------------------------|--------|--------|------------|--------------|--------|--------------|--------|
|    Fair                value of assets acquired                   |   | **$**  | **12,999** |         | $      | 265,105      |   | $ | 336,252 |   |
|    Liabilities                assumed                             |   | **$**  | **(3,680** | **)**        | $      | 82,414       |   | $ | 133,362 |   |
|    Cash                paid for acquisitions made this period     |   | **$**  | **16,679** |         | $      | 182,691      |   | $ | 202,890 |   |
|    Cash                paid for acquisitions made in prior period |   | **$**  | **64,282** |         | $      | 19,063       |   | $ | 311 |   |

----

***Notes      to Consolidated Financial Statements***

***1.***
***Summary      of Significant Accounting Policies***

*Nature      of Operations*

*Principles      of Consolidation*

*Use      of Estimates*

*R*
*evenue      Recognition for Construction Services*

*Estimated      Losses on Uncompleted Contracts and Changes in Contract      Estimates*

----

*Goodwill*

*Insurance        Deductible Reserves*

*Warranties*

*Share-based        Compensation*

*Cash            and Cash Equivalents*

*Receivables*

*Inventory            Valuation*

----

*Unbilled        Receivables and Billings in Excess of Costs and Estimated        Earnings*

*Property        and Equipment*

*Long-lived        Assets*

*Revenue        Recognition *

*Shipping        and Handling*

*Reclassifications*

----

*Recent        Accounting Principles*

*Business        Combinations*

*Noncontrolling        Interests in Consolidated Financial Statements*
*Business        Combinations*

*The        Fair Value        Option for Financial Assets and Financial Liabilities - Including an Amendment        of FASB Statement No. 115*

----

*Fair        Value        Measurements*

*Accounting        for        Uncertainty in Income Taxes. *

----

| ***2.  *** | ***Impairment                of Assets*** |
|----------------------|-------------------------------------------|
| ·   | $30.0                million                for certain customer relationships at                SelectBuild, |
|--------------------|---------------------------------------------------------------------------------------------------------------|
| ·   | $300.2                million for goodwill at SelectBuild, |
|--------------------|------------------------------------------------------------|
| ·   | $6.7                million                for goodwill at BMC West and |
|--------------------|-------------------------------------------------------------------------|
| ·   | $0.2                million                for certain equipment at SelectBuild. |
|--------------------|----------------------------------------------------------------------------------|
| ·   | $0.4                million                for the carrying amount of certain customer relationships                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|
| ·   | $1.8                million                for the carrying amount of                goodwill. |
|--------------------|------------------------------------------------------------------------------------------------|

----

| ·   | $0.5                million                for the carrying amount of certain customer relationships in the                second                quarter and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | $0.8                million                for the carrying amount of goodwill in the fourth                quarter. |
|--------------------------|----------------------------------------------------------------------------------------------------------------------|

----

***3.***
***Discontinued        Operations***

|        |   | **December                  31** |        |         |   |
|-------------|--------|----------------------------------|-------------|--------------|--------|
|        |   | **2007**                         |        | **2006**     |   |   |   |
|        |   |                             |        |    |   |    |   |
| Assets      |   | **$**                            | **—** |         | $      | 8,602 |   |   |   |   |
| Liabilities |   | **$**                            | **—** |         | $      | 2,461 |   |  |   |   |

|                                                              |   | **Year                Ended December 31** |       |
|-------------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                              |   | **2007**                                  |       | **2006** |   | **2005** |   |
| Sales                                                             |   |                                      |       |    |   |    |   |
|    Building                Products                |   | **$**                                     | **29,706** |   | $ | 41,903 |   | $ | 33,753 |   |
| Income                from                discontinued operations |   | **$**                                     | **14,575** |   | $ | 2,971 |   | $ | 1,999 |   |

----

***4.***
***Net      (Loss) Income Per Share***

|                                                                                                                                                                |   | **Year                Ended December 31** |         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------------|
|                                                                                                                                                                |   | **2007**                                  |         |  2006 |   | 2005 |   |
| (Loss)                income                from    continuing                operations                                                             |   | **$**                                     | **(327,288** | **)** | $ | 99,103 |   | $ | 127,508 |   |
| Income                from                discontinued    operations                                                                                 |   |                                      | **14,575**   |   |   | 2,971 |   |   | 1,999 |   |
|    Net                (loss) income                                                                                                                  |   | **$**                                     | **(312,713** | **)** | $ | 102,074 |   | $ | 129,507 |   |
|                                                                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
|    Weighted                average       shares                - basic                                                 |   |                                      | **28,807**   |   |   | 28,603 |   |   | 28,101 |   |
|    Effect                of dilutive:                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
|       Share                options                                                                                                    |   |                                      | **—**  |   |   | 830 |   |   | 1,153 |   |
|       Restricted                shares                                                                                                |   |                                      | **—**  |   |   | 156 |   |   | 108 |   |
|    Weighted                average       shares                - assuming       dilution |   |                                      | **28,807**   |   |   | 29,589 |   |   | 29,362 |   |
|                                                                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Net                (loss)                income per share:                                                                                                          |   |                                      |         |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                                              |   | **$****(11.36**                           | **)**        | $3.47 |   | $4.54 |   |
|    Discontinued                operations                                                                                                            |   |                                      | **0.50**     |   |   | 0.10 |   |   | 0.07 |   |
|       Basic                                                                                                                           |   | **$****(10.86**                           | **)**        | $3.57 |   | $4.61 |   |
|                                                                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                                              |   | **$****(11.36**                           | **)**        | $3.35 |   | $4.34 |   |
|    Discontinued                operations                                                                                                            |   |                                      | **0.50**     |   |   | 0.10 |   |   | 0.07 |   |
|       Diluted                                                                                                                         |   | **$****(10.86**                           | **)**        | $3.45 |   | $4.41 |   |
|                                                                                                                                                                |   |                                      |         |   |   |   |   |   |   |   |
| Cash                dividends declared    per                share                                                                                   |   | **$****0.40**                             |         | $0.40 |   | $0.24 |   |

| ·   | options                with                exercise prices greater than the average market value of the common                shares                (options out-of-the-money) and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | unrecognized                compensation expense for restricted shares with after-tax proceeds                greater                than the average market value of the common                shares. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                 |   | **Year                Ended December 31**     |      |
|----------------------------------------------------------------------|--------|-------------------------------------------------------------------|-----------|
|                                                                 |   |  **2007**                                                    |      |  **2006** |   |  **2005** |   |
| Average                market value of    shares |   | **$****14**                                                       |      | $30 |   | $33 |   |
| Share                options:                                        |   |                                                              |      |   |   |   |   |   |   |   |
|    Exercise                price range                |   | **$****15                to $38**                                 |      | $23                to $38 |   | $— |   |
|    Not                dilutive                        |   |                                                              | **1,312** |   |   | 819 |   |   | — |   |
| Restricted                shares:                                    |   |                                                              |      |   |   |   |   |   |   |   |
|    Grant                price range                   |   | **$****34**                                                       |      | $— |   | $42 |   |
|    Not                dilutive                        |   |                                                              | **2**     |   |   | — |   |   | 2 |   |

----

***5.***
***Acquisitions        and Minority Interests***

| ·   | In                March                2007, SelectBuild acquired a concrete services business in Fresno,                California for approximately $0.7 million in cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                December                2006, SelectBuild acquired a distribution services business in Southern                California for $1.6 million in cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                August                2006, SelectBuild acquired a window installation business in Arizona                for                $13.9 million in cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                July 2006,                SelectBuild acquired a framing services business in Southern California                for $78.6 million in cash. Additional consideration of $3.1 million                was                paid in the third quarter of 2007 for operating performance through                June                2007. Additional cash payments may be required based on operating                performance through June 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                June 2006,                BMC West acquired a building materials distribution and truss                manufacturing business in Eastern Idaho for $5.1 million in                cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                April                2006, SelectBuild acquired a concrete services business in Northern                Arizona for $1.5 million in cash. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                April                2006, SelectBuild acquired a wall panel and truss manufacturing business                in Palm Springs, California for $6.7 million in                cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                February                2006, BMC West acquired 3 facilities providing building materials                distribution and millwork services in Houston, Texas for $20.6 million                in                cash. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                January                2006, SelectBuild acquired framing businesses in Palm Springs, California                and Reno, Nevada for $57.1 million in cash. Additional cash payments                may                be required based on operating performance through December                2009. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                January                2008, SelectBuild was required to purchase the remaining 49% interest                in                SelectBuild Illinois (RCI Construction) for $8.4 million in cash                which is                payable in 2008. As there were no additional tangible or intangible                assets, $5.5 million of this put obligation was recognized as an                expense                in Other income, net for 2007. In January 2005, SelectBuild acquired                an                initial 51% interest for $4.9 million in cash. SelectBuild Illinois                provides framing services to production homebuilders in the greater                Chicago area. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | In                    September                    2007, SelectBuild acquired the remaining 49% interest in SelectBuild                    Trim                    for $0.5 million in cash. In January 2007, SelectBuild formed                    this venture                    for an initial 51% interest for $0.5 million in cash. SelectBuild                    Trim                    provides door and molding installation services in Las Vegas,                    Nevada. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                  September                  2007, SelectBuild acquired the remaining 49% interest in A-1 Building                  Components, LLC (A-1 Truss) for $5.0 million in cash. In September                  2004,                  SelectBuild acquired an initial 51% interest for $2.3 million in                  cash. A-1                  Truss manufactures trusses in Fort Pierce, Florida. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                  May 2007,                  SelectBuild acquired the remaining 33% interest in SelectBuild                  Mid-Atlantic (WBC Mid-Atlantic) for no consideration pursuant to                  the                  operating agreement. In October 2003, SelectBuild acquired an initial                  67%                  interest for $5.1 million in cash and $0.2 million of our common                  shares.                  SelectBuild Mid-Atlantic provides framing services to production                  homebuilders in Delaware, Maryland and                  Virginia. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                  April                  2007, SelectBuild acquired the remaining 27% interest in Riggs                  Plumbing                  for $10.5 million in cash. In July 2005, SelectBuild acquired an                  additional 13% interest for $1.4 million in cash and in April 2005,                  acquired an initial 60% interest for $17.8 million in cash. Riggs                  Plumbing                  provides plumbing services to production homebuilders in the Phoenix                  and                  Tucson markets.  |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                  November                  2006, SelectBuild acquired the remaining 49% interest in BBP Companies                  for                  $22.8 million in cash. In July 2005, SelectBuild acquired an initial                  51%                  interest for $9.4 million in cash and $1.0 million of our common                  shares.                  BBP Companies provide concrete services to production homebuilders                  in                  Arizona. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | In                  January                  2006, SelectBuild acquired the remaining 20% interest in SelectBuild                  Florida (WBC Construction, LLC) for $36.0 million in cash. In August                  2005,                  SelectBuild acquired an additional 20% interest for $24.8 million                  in cash                  and in January 2003, acquired an initial 60% interest for $22.9                  million in                  cash and $1.0 million of our common shares. SelectBuild Florida                  provides                  concrete block masonry and concrete services to production homebuilders                  in                  Florida. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   |  **December                31**   |               |      |   |  **December                31**   |   |
|-----------------------------------------------------------|--------|--------------------------------------------------|--------------------|----------------|--------|--------------------------------------------------|--------|
|                                                      |   |  **2007**                                   |               |  **2006** |   |                                        |   |  **2007** |   |  **2006** |   |
| Receivables                                               |   | **$**                                            | **(21**            | **)**          | $      | 44,683                                           |   |   | Accounts                payable |   | **$** | **—** |   | $ | 10,376 |   |
| Inventory                                                 |   |                                             | **—**        |           |   | 19,957                                           |   |   | Accrued                compensation |   |   | **—** |   |   | 1,447 |   |
| Unbilled                receivables                       |   |                                             | **—**        |           |   | 10,101                                           |   |   | Other                accrued                liabilities |   |   | **(60,787** | **)** |   | 50,340 |   |
| Prepaid                expenses and other                 |   |                                             | **18**             |           |   | 263                                              |   |   | Billings                in                excess of costs and |   |   |   |   |   |   |   |
|                                                           |   |                                             |     |           |   |                                        |   |   | estimated                earnings |   |   | **—** |   |   | 23,557 |   |
| **   Current                assets ** |   |                                             | **(3**             | **)**          |   | 75,004                                           |   |   | **Current                liabilities** |   |   | **(60,787** | **)** |   | 85,720 |   |
|                                                      |   |                                             |               |           |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Property                and equipment                     |   |                                             | **216**            |           |   | 19,845                                           |   |   | Deferred                income taxes |   |   | **(917** | **)** |   | 937 |   |
| Other                long-term assets                     |   |                                             | **—**        |           |   | 42                                               |   |   | Other                long-term liabilities |   |   | **—** |   |   | 8,173 |   |
| Other                  intangibles, net                   |   |                                             | **2,287**          |           |   | 68,692                                           |   |   | Minority                interests |   |   | **(3,680** | **)** |   | (10,627 | ) |
| Goodwill                                                  |   |                                             | **13,077**         |           |   | 122,374                                          |   |   |   |   |   |                  |   |   |                   |   |
|                                                      |   | **$**                                            | **15,577**         |           | $      | 285,957                                          |   |   |   |   | **$** | **(65,384** | **)** | $ | 84,203 |   |

----

***6.***
***Marketable        Securities***

|                                                  |   |  **December                31**   |       |
|-------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                  |   |  **2007**                                   |       |  **2006** |   |
| U.S.                government and agencies           |   | **$**                                            | **18,380** |   | $ | 25,661 |   |
| Asset                backed                securities |   |                                             | **9,798**  |   |   | 18,278 |   |
| Corporate                securities                   |   |                                             | **13,733** |   |   | 13,911 |   |
|                                                  |   | **$**                                            | **41,911** |   | $ | 57,850 |   |

|                                              |   |  **December                31**   |        |
|---------------------------------------------------|--------|--------------------------------------------------|-------------|
|                                              |   |  **2007**                                   |        |  **2006** |   |
| Less                than 1                year    |   | **$**                                            | **1,872**   |   | $ | 4,337 |   |
| Due                in 1 to 2                years |   |                                             | **12,683**  |   |   | 16,648 |   |
| Due                in 2 to 5                years |   |                                             | **27,356**  |   |   | 36,865 |   |
| More                than 5                years   |   |                                             | **—** |   |   | — |   |
|                                              |   | **$**                                            | **41,911**  |   | $ | 57,850 |   |

----

***7.***
***Intangible        Assets and Goodwill***

|                                                       |   | **December                  31, 2007** |        |
|------------------------------------------------------------|--------|----------------------------------------|-------------|
|                                                       |   | **Gross** **Carrying****Amount**  |        | **Accumulated                  Amortization**  |   | **Net                  Carrying****Amount** |   |
| Customer                  relationships                    |   | **$**                                  | **92,424**  |   | **$** | **(32,733** | **)** | **$** | **59,691** |   |
| Covenants                  not                  to compete |   |                                   | **11,560**  |   |   | **(6,835** | **)** |   | **4,725** |   |
| Trade                  names                               |   |                                   | **204**     |   |   | **(204** | **)** |   | **—** |   |
| Favorable                  leases                          |   |                                   | **780**     |   |   | **(248** | **)** |   | **532** |   |
|                                                       |   | **$**                                  | **104,968** |   | **$** | **(40,020** | **)** | **$** | **64,948** |   |

|                                                           |   | **December                    31, 2006**                                  |    |
|----------------------------------------------------------------|--------|---------------------------------------------------------------------------|---------|
|                                                           |   | **Gross                    Carrying****Amount                     ** |    | **Accumulated                    Amortization** |   | **Net                    Carrying****Amount** |   |
| Customer                    relationships                      |   | $                                                                         | 122,498 |   | $ | (22,125 | ) | $ | 100,373 |   |
| Covenants                    not                    to compete |   |                                                                      | 13,094  |   |   | (4,802 | ) |   | 8,292 |   |
| Trade                    names                                 |   |                                                                      | 204     |   |   | (159 | ) |   | 45 |   |
| Favorable                    leases                            |   |                                                                      | 146     |   |   | (64 | ) |   | 82 |   |
|                                                           |   | $                                                                         | 135,942 |   | $ | (27,150 | ) | $ | 108,792 |   |

|                                                           |   | **BMC                    West**  |       | **SelectBuild**  |   | **Total**   |   |
|----------------------------------------------------------------|--------|---------------------------------------|------------|-----------------------|--------|-------------|--------|
| **Balance                    at December 31, 2005**            |   | $                                     | 20,202     |                  | $      | 167,268     |   | $ | 187,470 |   |
|    Purchase                    price adjustment |   |                                  | (16        | )                     |   | (1,927      | )      |   | (1,943 | ) |
|    Goodwill                    acquired         |   |                                  | 691        |                  |   | 123,621     |   |   | 124,312 |   |
|    Impairment                                   |   |                                  | —    |                  |   | (1,839      | )      |   | (1,839 | ) |
| **Balance                    at December 31, 2006**            |   | $                                     | 20,877     |                  | $      | 287,123     |   | $ | 308,000 |   |
| Purchase                    price adjustment                   |   |                                  | —    |                  |   | (182        | )      |   | (182 | ) |
| Goodwill                    acquired                           |   |                                  | —    |                  |   | 13,259      |   |   | 13,259 |   |
| Impairment                                                     |   |                                  | (6,681     | )                     |   | (300,200    | )      |   | (306,881 | ) |
| **Balance                    at December 31, 2007**            |   | **$**                                 | **14,196** |                  | **$**  | **—** |   | **$** | **14,196** |   |

|                                                   |   | **BMC                    West**  |      | **SelectBuild**  |   | **Total**   |   |
|--------------------------------------------------------|--------|---------------------------------------|-----------|-----------------------|--------|-------------|--------|
| **Balance                    at December 31, 2005**    |   | $                                     | 7,423     |                  | $      | 18,751      |   | $ | 26,174 |   |
|    Goodwill                    acquired |   |                                  | —   |                  |   | 15,188      |   |   | 15,188 |   |
| **Balance                    at December 31, 2006**    |   | $                                     | 7,423     |                  | $      | 33,939      |   | $ | 41,362 |   |
| Purchase                    price adjustment           |   |                                  | —   |                  |   | (4,656      | )      |   | (4,656 | ) |
| Impairment                    adjustment               |   |                                  | (3,963    | )                     |   | (29,283     | )      |   | (33,246 | ) |
| **Balance                    at December 31, 2007**    |   | **$**                                 | **3,460** |                  | **$**  | **—** |   | **$** | **3,460** |   |

----

***8.***
***Debt***

|                                                   |   |        |        |                                         |   | **Notional****Amount****of**                                                                                                                            |   | **Effective                  Interest Rate** |        |
|---------------------------------------------------|--------|-------------|-------------|----------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|
| **As                    of December 31, 2007**    |   | **Balance** |        | **Stated****Interest                  Rate** |   | **Interest****Rate                  Swaps**                                                                                                             |   | **Average****for****Year**                   |        | **As****of****December                  31** |
| Revolver                                          |   | **$**       | **—** |                                         |   | **LIBOR                  plus****1.50%                  or****Prime                  plus****0.25%                  and****0.25%****commitment****fee** |   | **$**                                        | **—** |   |   | **8.8** | **%** |   | **n/a** |   |
| Term                  note                        |   |        | **345,625** |                                         |   | **LIBOR                  plus****2.50%                  or****Prime                  plus****1.25                  %**                                  |        |                                         | **200,000** |   |   | **7.7** | **%** |   | **7.5** | **%** |
| Other                                             |   |        | **3,674**   |                                         |   | **Various**                                                                                                                                             |   |                                         | **—** |   |   | **—** |   |   | **—** |   |
|                                              |   |        | **349,299** |                                         |   |                                                                                                                                                         |   | **$**                                        | **200,000** |   |   |  |   |   |  |   |
|                                              |   |        |             |                                         |   |                                                                                                                                                         |   |                                         |             |   |   |  |   |   |  |   |
| Less:  Current                  portion |   |        | **4,923**   |                                         |   |                                                                                                                                                         |   |                                         |             |   |   |  |   |   |  |   |
|                                              |   | **$**       | **344,376** |                                         |   |                                                                                                                                                         |   |                                         |             |   |   |  |   |   |  |   |

|                                                                   |   |        |    |                                         |   | **Notional****Amount****of**                                                                                                                                         |   | **Effective                  Interest Rate** |    |
|-------------------------------------------------------------------|--------|-------------|---------|----------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|
| **As                    of                    December 31, 2006** |   | **Balance** |    | **Stated****Interest                  Rate** |   | **Interest****Rate                  Swaps**                                                                                                                          |   | **Average****for****Year**                   |    | **As****of****December                  31** |
| Revolver                                                          |   | $           | — |                                         |   | LIBOR                  plus 1.25%                  or Prime                  plus 0.00%                  and 0.225%                  commitment                  fee |   | $                                            | ― |   |   | 6.5 | % |   | n/a |   |
| Term                  note                                        |   |        | 349,125 |                                         |   | LIBOR                  plus 2.50%                  or Prime                  plus 1.25 %                                                                             |   |                                         | 200,000 |   |   | 6.7 | % |   | 7.0 | % |
| Other                                                             |   |        | 8,179   |                                         |   | Various                                                                                                                                                              |   |                                         | — |   |   | — |   |   | — |   |
|                                                              |   |        | 357,304 |                                         |   |                                                                                                                                                                      |   | $                                            | 200,000 |   |   |  |   |   |  |   |
|                                                              |   |        |         |                                         |   |                                                                                                                                                                      |   |                                         |         |   |   |  |   |   |  |   |
| Less:  Current                  portion                 |   |        | 8,143   |                                         |   |                                                                                                                                                                      |   |                                         |         |   |   |  |   |   |  |   |
|                                                              |   | $           | 349,161 |                                         |   |                                                                                                                                                                      |   |                                         |         |   |   |  |   |   |  |   |

*Revolver*

----

*Term        Note*

*Other*

*Expansion        of  Previous Credit Facility, Covenants and Maturities*

| 2008       |   | $      | 4,923   |   |
|------------|--------|--------|---------|--------|
| 2009       |   |   | 4,251   |   |
| 2010       |   |   | 3,971   |   |
| 2011       |   |   | 3,709   |   |
| 2012       |   |   | 3,572   |   |
| Thereafter |   |   | 328,873 |   |
|       |   | $      | 349,299 |   |

----

*Subsequent        to December 2007*

| ·   | $100                million                or |
|--------------------|-----------------------------------------------|
| ·   | a                borrowing                base calculated on certain accounts receivable minus 50% of outstanding                surety bonds, multiplied by 50%. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Hedging            Activities*

----

***9.***
***Shareholders’        Equity***

*Preferred        Shares*

*Common        Shares*

| Employee                Stock Purchase Plan        |   |   | **4,767**  |   |
|----------------------------------------------------|--------|--------|------------|--------|
| 2004                Incentive and Performance Plan |   |   | **59,998** |   |

*Dividends*

|                            |   | **2007**  |     | **2006**  |   | **2005** |   |
|---------------------------------|--------|----------------|----------|----------------|--------|----------|--------|
| First                  quarter  |   | **$****0.10**  |     | $0.10          |   | $0.04    |   |
| Second                  quarter |   |           | **0.10** |           |   | 0.10     |   |   | 0.05 |   |
| Third                  quarter  |   |           | **0.10** |           |   | 0.10     |   |   | 0.075 |   |
| Fourth                  quarter |   |           | **0.10** |           |   | 0.10     |   |   | 0.075 |   |
|                            |   | **$****0.40**  |     | $0.40          |   | $0.24    |   |

*Repurchase        Program*

----

***10.***
***Employee        Benefit Plans***

*Retirement        Plans*

*Savings        and Retirement Plan*

*Executive        Deferred Compensation*

| ·   | Compensation                deferred and invested in third-party investment options is recorded                in                Other long-term assets and Other long-term liabilities. As the investment                is settled for the value of the underlying investments, changes in                the                fair value of the investments are recognized in Other income and                changes                in the fair value of the liability are recognized in Selling, general                and                administrative expenses. Fair value is based on market quotes. The                fair                value of these investments was $13.5 million at December 31, 2007                and                $10.0 million at December 31, 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Compensation                deferred and invested in our common shares is recorded as a component                of                shareholders’ equity. As the investment is settled for the fixed number of                common shares purchased, changes in fair value are not recognized.                Rather                purchases and distributions of the common shares are recorded at                historical cost. The historical cost of these common shares was $1.4                million or 105,189 common shares at December 31, 2007, $1.2 million                or                106,441 shares at December 31, 2006 and $0.9 million or 105,718 shares                at                December 31, 2005. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Supplemental        Retirement*

| ·   | 65%                of the                contributions are invested in company-owned life insurance polices                for                certain participants. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 35%                of the                contributions are made in our common shares and distributed to the                savings                and retirement plans of certain participants. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Employee        Stock Purchase Plan*

----

*Incentive        and Performance Plans*

*Options*

| ·                  | Grants                of                options under the 2004 Incentive and Performance Plan vest ratably                over 3                to 4 years from the date of grant and expire after 7 years if unexercised.                Under certain circumstances some or all of the options may vest earlier.                Options were awarded with exercise prices equal to the closing share                price                of our common shares on the date of grant. |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·                  | In                February                2000, our Board of Directors adopted the 2000 Stock Incentive Plan,                as                approved by our shareholders in May 2000. Grants of options under                the 2000                Stock Incentive Plan vest ratably through the end of the fourth year                from                the date of grant and expire after 10 years if unexercised. Under                certain                circumstances some or all of the options may vest earlier. Options                were                awarded with exercise prices equal to the closing share price of                our                common shares on the date of grant. No further grants will be made                under                this plan. |
|----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Share-Based        Payment, *

*Impact        of Recognizing Share-Based Payments*

|                                                                            |   | **Year                Ended December 31****2006** |   |
|---------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
| Income                before                income taxes and minority interests |   | $                                                 | 5,103  |   |
| Net                income                                                       |   | $                                                 | 3,383  |   |
|                                                                            |   |                                              |   |   |
| Net                income                per share:                             |   |                                              |   |   |
|    Basic                                                         |   | $0.12                                             |   |
|    Diluted                                                       |   | $0.11                                             |   |

----

*Pro        Forma Information for the Periods Prior to January 1, 2006*

*Accounting        for        Stock-Based Compensation*

|                                                                                                                                                                                                                   |   | **Year                  Ended December 31** |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                                                                                                                                                                                   |   | **2005**                                    |    |
| Net                  income,                  as reported                                                                                                                                                              |   | $                                           | 129,507 |   |
| Add:                  Share-based employee compensation expense determined     under                  APB 25, net of related tax effects                                                           |   |                                        | 555     |   |
| Deduct:                  Share-based employee compensation expense determined                        under fair value method for all awards, net of related tax                  effects |   |                                        | (2,497  | ) |
| Pro                  forma net                  income                                                                                                                                                                 |   | $                                           | 127,565 |   |
|                                                                                                                                                                                                                   |   |                                        |         |   |
| Basic                  net                  income per share:                                                                                                                                                          |   |                                        |         |   |
|    As                  reported                                                                                                                                                                         |   |                                        | $4.61   |   |
|    Pro                  forma                                                                                                                                                                           |   |                                        | $4.54   |   |
|                                                                                                                                                                                                                   |   |                                        |         |   |
| Diluted                  net                  income per share:                                                                                                                                                        |   |                                        |         |   |
| As                  reported                                                                                                                                                                                           |   |                                        | $4.41   |   |
| Pro                  forma                                                                                                                                                                                             |   |                                        | $4.34   |   |

|                                                    |   | **Year                  Ended December 31** |     |
|---------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                    |   | **2007**                               |     | **2006**  |   | **2005** |   |
| Expected                  term                  (years) |   |                                        | **5.2**  |   |   | 5.6 |   |   | 6.8 |   |
| Expected                  volatility                    |   |                                        | **54.5** | **%** |   | 48.6 | % |   | 54.2 | % |
| Expected                  dividend yield                |   |                                        | **2.0**  | **%** |   | 0.7 | % |   | 0.8 | % |
| Risk-free                  interest rate                |   |                                        | **4.5**  | **%** |   | 3.8 | % |   | 4.1 | % |
| Exercise                  price                         |   | **$****18**                                 |     | $38 |   | $23 |   |
| Weighted                  average fair value            |   | **$****8**                                  |     | $18 |   | $12 |   |

----

|                                                                                       |   | **Year                  Ended December 31** |      |
|--------------------------------------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                                                       |   | **2007**                                    |      | **2006** |   | **2005** |   |
|                                                                                       |   | **Shares**                                  |      | **Weighted                  Average Exercise Price** |   | **Weighted                  Average Remaining Contractual Term (years)** |   | **Shares** |   | **Weighted                  Average Exercise Price** |   | **Shares** |   | **Weighted                  Average Exercise Price** |   |
| Outstanding                  at beginning    of                  the period |   |                                        | **2,521** |   | **$****14** |   |   | **5.1** |   |   | 2,300 |   | $10 |   |   | 2,756 |   | $6 |   |
|    Granted                                                                  |   |                                        | **541**   |   | **$****18** |   |   |  |   |   | 409 |   | $38 |   |   | 424 |   | $23 |   |
|    Exercised                                                                |   |                                        | **(33**   | **)** | ** $****6** |   |   |  |   |   | (176 | ) | $7 |   |   | (861 | ) |  $6 |   |
|    Forfeited                                                                |   |                                        | **(51**   | **)** | **$****28** |   |   |  |   |   | (12 | ) | $22 |   |   | (19 | ) | $8 |   |
| Outstanding                  at end of the   period                         |   |                                        | **2,978** |   | **$****15** |   |   | **4.5** |   |   | 2,521 |   | $14 |   |   | 2,300 |   | $10 |   |
|                                                                                       |   |                                        |           |   |   |  |   |   |  |   |   |  |   |   |   |   |  |   |   |  |   |
| Exercisable                  at end    of                  the period       |   |                                        | **2,079** |   |   |  |   |   | **4.0** |   |   | 1,658 |   | $8 |   |   | 1,428 |   | $6 |   |

|                                                           |   | **Year                  Ended December 31** |   |
|----------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                           |   | **2007**                               |   | **2006**  |   | **2005** |   |
| Weighted                  average grant-date fair value        |   | **$****8**                                  |   | $18 |   | $12 |   |
| Intrinsic                  value of options exercised          |   | **$****299**                                |   | $3,832 |   | $23,749 |   |
| Fair                  value of                  options vested |   | **$****4,665**                              |   | $2,955 |   | $1,367 |   |

|                                             |   |   | **Options                    Outstanding** |   |             | **Options                    Exercisable**                               |   |
|--------------------------------------------------|--------|--------|--------------------------------------------|--------|------------------|--------------------------------------------------------------------------|--------|
| **Exercise                    Price Range**      |   |   | **Shares**                                 |   |             | **Weighted** **Average** **Exercise                    Price** |   |   | **Intrinsic                    Value** |   |   | **Weighted** **Average** **Remaining** **Contractual** **Life                    (years)** |   |   | **Shares** |   |   | **Weighted** **Average** **Exercise****Price** |   |   | **Intrinsic                    Value** |   |
| $4                    to                    $6   |   |   | **534**                                    |   | ** $****5** |                                                                     |   |  |   |   | **2.5** |   |   | **534** |   | ** $****5** |   |   |  |   |
| $6                    to                    $7   |   |   | **333**                                    |   | ** $****7** |                                                                     |   |  |   |   | **5.2** |   |   | **333** |   | ** $****7** |   |   |  |   |
| $7                    to                    $8   |   |   | **467**                                    |   | ** $****7** |                                                                     |   |  |   |   | **5.0** |   |   | **467** |   | ** $****7** |   |   |  |   |
| $8                    to                    $9   |   |   | **332**                                    |   | ** $****9** |                                                                     |   |  |   |   | **3.3** |   |   | **332** |   | ** $****9** |   |   |  |   |
| $14                    to                    $19 |   |   | **526**                                    |   | **$****18**      |                                                                     |   |  |   |   | **6.3** |   |   | **5** |   | **$****18** |   |   |  |   |
| $22                    to                    $29 |   |   | **411**                                    |   | **$****23**      |                                                                     |   |  |   |   | **4.1** |   |   | **277** |   | **$****23** |   |   |  |   |
| $37                    to                    $39 |   |   | **375**                                    |   | **$****38**      |                                                                     |   |  |   |   | **5.1** |   |   | **131** |   | **$****38** |   |   |  |   |
|                                             |   |   | **2,978**                                  |   |             |                                                                          |   |   |  |   |   |  |   |   | **2,079** |   |   |  |   |   |  |   |
| In-the-money:                                    |   |   |                                            |   |             |                                                                          |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Outstanding                                      |   |   | **534**                                    |   |             |                                                                          |   | **$****321** |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Exercisable                                      |   |   |                                            |   |             |                                                                          |   |   |  |   |   |  |   |   | **534** |   |   |  |   | **$****321** |   |

----

*Restricted        Shares*

|                                                                                   |   | **Year                  Ended December 31** |
|----------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                   |   | **2007**                                    |   | **2006** |   | **2005** |
|                                                                                   |   | **Shares**                                  |   | **Weighted**** Average**** Grant                  Date**** Fair                  Value** |   | **Shares** |   | **Weighted****Average**** Grant                  Date**** Fair                  Value** |   | **Shares** |   | **Weighted****Average**** Grant                  Date****Fair                  Value** |
| Nonvested                  at                  beginning ofthe                  period |   | **396 **                               |   | **$24** |   | 258  |   | $16 |   | 149  |   | $11 |
| Granted                                                                                |   | **172 **                               |   | **$18** |   | 139  |   | $38 |   | 118  |   | $23 |
| Vested                                                                                 |   | **(142)**                                   |   | **$11** |   | —  |   | $— |   | —  |   | $— |
| Forfeited                                                                              |   | **(16)**                                    |   | **$30** |   | (1) |   | $38 |   | (9) |   | $13 |
| Nonvested                  at                  end of theperiod                        |   | **410 **                               |   | **$26** |   | 396  |   | $24 |   | 258  |   | $16 |

|                                                                 |   | **Year                Ended December 31** |   |
|----------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                 |   | **2007**                                  |   | **2006** |   | **2005** |   |
| Weighted                average grant-date fair value                |   | **$****18**                               |   | $38 |   | $23 |   |
| Fair                value of                shares granted           |   | **$****3,005**                            |   | $5,220 |   | $2,702 |   |
| Fair                value of                restricted shares vested |   | **$****1,556**                            |   |  | $— |   |   | $— |   |

*Shares*

|                                                                                                          |   | **Number                  of Securities to be****Issued                  Upon Exercise of****Outstanding                  Options,****Warrants                  and Rights** |   | **Weighted                  Average**** Exercise                  Price of****Outstanding                  Options,****Warrants                  and Rights** |   | **Number                  of Securities****Remaining                  Available for****Future                  Issuance Under Equity****Compensation                  Plans** |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Equity                  compensation plansapproved                  by                  security holders      |   | **3,389**                                                                                                                                                                    |   | **$13**                                                                                                                                                            |   | **60**                                                                                                                                                                        |
| Equity                  compensation plans not approved                  by                  security holders |   | **     —**                                                                                                                                    |   | **  —**                                                                                                                                            |   | ** —**                                                                                                                                                             |
|       Total                                                                     |   | **3,389**                                                                                                                                                                    |   | **$13**                                                                                                                                                            |   | **60**                                                                                                                                                                        |

----

***11.***
***Income        Taxes***

|                                 |   | **Year                Ended December 31** |       |
|--------------------------------------|--------|-------------------------------------------|------------|
| Current                income taxes  |   | **2007**                                  |       | **2006** |   | **2005** |   |
|    Federal            |   | **$**                                     | **10,801** |   | $ | (52,229 | ) | $ | (71,561 | ) |
|    State              |   |                                      | **(565**   | **)** |   | (3,887 | ) |   | (10,577 | ) |
|                                 |   |                                      | **10,236** |   |   | (56,116 | ) |   | (82,138 | ) |
|                                 |   |                                      |       |   |   |   |   |   |   |   |
| Deferred                income taxes |   |                                      |       |   |   |   |   |   |   |   |
|    Federal            |   |                                      | **17,832** |   |   | 1,043 |   |   | 3,157 |   |
|    State              |   |                                      | **1,620**  |   |   | 82 |   |   | 316 |   |
|                                 |   |                                      | **19,452** |   |   | 1,125 |   |   | 3,473 |   |
|                                 |   |                                      |       |   |   |    |   |   |   |   |
|                                 |   | **$**                                     | **29,688** |   | $ | (54,991 | ) | $ | (78,665 | ) |

----

|                                                                     |   | **Year                Ended December 31** |        |
|--------------------------------------------------------------------------|--------|-------------------------------------------|-------------|
|                                                                     |   | **2007**                                  |        | **2006** |   | **2005** |   |
| Statutory                rate                                            |   |                                      | **35.0**    | **%** |   | 35.0 | % |   | 35.0 | % |
| State                income                taxes, net of federal benefit |   |                                      | **3.3**     |   |   | 1.2 |   |   | 3.5 |   |
| Valuation                allowance - intangibles                         |   |                                      | **(26.5**   | **)** |   | — |   |   | — |   |
| Non-deductible                goodwill                                   |   |                                      | **(3.6**    | **)** |   | — |   |   | — |   |
| Non-deductible                items                                      |   |                                      | **(0.2**    | **)** |   | 0.4 |   |   | 0.2 |   |
| Earnings                of                minority interests             |   |                                      | **—** |   |   | (1.6 | ) |   | (2.3 | ) |
| Domestic                production deduction                             |   |                                      | **0.1**     |   |   | (0.8 | ) |   | (0.8 | ) |
| Other                                                               |   |                                      | **0.2**     |   |   | (0.6 | ) |   | (0.1 | ) |
|                                                                     |   |                                      | **8.3**     | **%** |   | 33.6 | % |   | 35.5 | % |

|                                                                         |   | **December                31** |         |
|------------------------------------------------------------------------------|--------|--------------------------------|--------------|
|                                                                         |   | **2007**                       |         | **2006** |   |
|                                                                         |   |                      |         |    |   |
| Deferred                tax                assets:                           |   |                      |         |    |   |
|    Accounts                receivable                         |   | **$**                          | **1,486**    |   | $ | 756 |   |
|    Inventory                                                  |   |                           | **2,272**    |   |   | 1,594 |   |
|    Goodwill                and other intangibles, net         |   |                           | **101,491**  |   |   | — |   |
|    Accrued                compensation                        |   |                           | **9,332**    |   |   | 11,645 |   |
|    Insurance                deductible reserves               |   |                           | **5,440**    |   |   | 6,184 |   |
|    Share-based                compensation                    |   |                           | **6,280**    |   |   | 3,681 |   |
|    Other                accrued liabilities                   |   |                           | **5,184**    |   |   | 2,502 |   |
|    Interest                rate swap contracts                |   |                           | **3,266**    |   |   | — |   |
|    State                taxes and credits                     |   |                           | **2,939**    |   |   | 2,629 |   |
|    Investment                in minority interests            |   |                           | **379**      |   |   | 2,634 |   |
|    Other                                                      |   |                           | **308**      |   |   | 437 |   |
|                                                                         |   |                           | **138,377**  |   |   | 32,062 |   |
| Less:                Valuation allowance                                     |   |                           | **(97,230**  | **)** |   | (1,507 | ) |
|                                                                         |   |                           | **41,147**   |   |   | 30,555 |   |
|                                                                         |   |                           |         |   |   |   |   |
| Deferred                tax                liabilities:                      |   |                           |         |   |   |   |   |
|    Revenue                recognition                         |   |                           | **3,298**    |   |   | 2,495 |   |
|    Prepaid                expenses and other                  |   |                           | **762**      |   |   | 1,503 |   |
|    Property                and equipment                      |   |                           | **2,792**    |   |   | 360 |   |
|    Depreciation                                               |   |                           | **10,998**   |   |   | 14,088 |   |
|    Goodwill                and other intangibles, net         |   |                           | **—**  |   |   | 12,333 |   |
|    Other                                                      |   |                           | **558**      |   |   | — |   |
|                                                                         |   |                           | **18,408**   |   |   | 30,779 |   |
|                                                                         |   |                           |    |   |   |    |   |
| Net                deferred                tax assets (liabilities)          |   | **$**                          | **22,739**   |   | $ | (224 | ) |
|                                                                         |   |                           |         |   |   |   |   |
| Classified                in                the balance sheet as:            |   |                           |         |   |   |   |   |
|    Deferred                income taxes (current asset)       |   | **$**                          | **11,470**   |   | $ | 8,914 |   |
|    Deferred                income taxes (long-term asset)     |   |                           | **11,269**   |   |   | — |   |
|    Deferred                income taxes (long-term liability) |   |                           | **—**  |   |   | (9,138 | ) |
|                                                                         |   | **$**                          | **22,739**   |   | $ | (224 | ) |

----

----

***12.***
***Financial Instruments***

| ·                   | $7.7                  million                  more than the amount of debt reported on the consolidated balance                  sheet at                  December 31, 2007 and |
|------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·                   | $0.2                  million                  less than the amount of debt reported on the consolidated balance                  sheet at                  December 31, 2006. |
|------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***13.***
***Commitments        and Contingencies***

*Operating        Leases*

*Warranties*

|                                                                        |   | **December                31** |        |
|-----------------------------------------------------------------------------|--------|--------------------------------|-------------|
|                                                                        |   | **2007**                       |        |  **2006** |   |  **2005** |   |
| Balance                at                beginning of the period            |   | **$**                          | **7,155**   |   | $ | 5,404 |   | $ | 258 |   |
|    Provision                for warranties                   |   |                           | **657**     |   |   | 3,009 |   |   | 2,925 |   |
|    Provision                for warranties from acquisitions |   |                           | **—** |   |   | 117 |   |   | 3,345 |   |
|    Warranty                charges                           |   |                           | **(954**    | **)** |   | (1,375 | ) |   | (1,124 | ) |
| Balance                at                end of the period                  |   | **$**                          | **6,858**   |   | $ | 7,155 |   | $ | 5,404 |   |

*Legal          Proceedings*

----

***14.***
***Fair      Values of Assets and Liabilities***

| ·   | Quoted                Prices                in Active Markets for Identical Assets - valuations for assets and                liabilities traded in active exchange markets, such as the New York                Stock                Exchange. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Significant                Other Observable Inputs - valuations for assets and liabilities traded                in                less active dealer or broker markets. For example, an interest rate                swap                contract is valued based on a model whose inputs are observable forward                interest rate curves. Valuations are obtained from third party pricing                services for identical or comparable assets or                liabilities. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Significant                Unobservable Inputs - valuations for assets and liabilities that                are                derived from other valuation methodologies, including discounted                cash flow                models and similar techniques, and are not based on market exchange,                dealer, or broker traded transactions. Valuations incorporate certain                assumptions and projections in determining fair value assigned to                such                assets or liabilities. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   |                                           |       | **Fair                  Value Measurements at Reporting Date Using**                                              |       |
|----------------------------------------------------------------|--------|------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------|------------|
|                                                           |   | **December                  31** **2007** |       | **Quoted                  Prices in****Active                  Markets for****Identical                  Assets** | ** ** | **Significant                  Other****Observable                  Inputs** | ** ** | **Significant****Unobservable                  Inputs** |   |
| Marketable                  securities                         |   | **$**                                          | **41,911** |                                                                                                              | **$**      | **41,911** |   | **$** | **—** |   | **$** | **—** |   |
| Interest                  rate                  swap contracts |   |                                           | **(8,553** | **)**                                                                                                             |       | **—** |   |   | **(8,553** | **)** |   | **—** |   |
|                                                           |   | **$**                                          | **33,358** |                                                                                                              | **$**      | **41,911** |   | **$** | **(8,553** | **)** | **$** | **—** |   |

|                                    |   |                                     |       | **Fair                  Value Measurements Using **                                                                |       |                                                                         |       |
|-----------------------------------------|--------|------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------|------------|
|                                    |   | **December                  31****2007** |       | **Quoted                  Prices****in                  Active****Markets                  for****Identical****Assets** | ** ** | **Significant                  Other****Observable                  Inputs** | ** ** | **Significant****Unobservable****Inputs** | ** ** | **Year                    Ended****December                    31****2007****Gains                  (Losses)** |   |
| Other                  intangibles, net |   | **$**                                    | **64,948** |                                                                                                                    | $          | —                                                                      |       | $ | — |   | $ | 64,948 |   | **$** | **(30,007** | **)** |
| Goodwill                                |   |                                     | **14,196** |                                                                                                                    |       | —                                                                      |       |   | — |   |   | 14,196 |   |   | **(306,881** | **)** |
|                                    |   | **$**                                    | **79,144** |                                                                                                                    | $          | —                                                                      |       | $ | — |   | $ | 79,144 |   | **$** | **(336,888** | **)** |

----

----

***15.***
***Segment      Information***

*BMC      West*

*SelectBuild*

*Corporate*

----

|                                                     |   |   | **Sales**     |   | **(Loss)****(1)****Income****from****Continuing****Operations****Before****Taxes                  and** |                  |   | **Depreciation** |          |   |   |                      |   |   |                    |
|----------------------------------------------------------|--------|--------|---------------|--------|---------------------------------------------------------------------------------------------------------|-----------------------|--------|------------------|---------------|--------|--------|---------------------------|--------|--------|-------------------------|
|                                                     |   |   | **Total**     |   |                                                                                                    | **Inter-****Segment** |   |             | **Trade**     |   |   | **Minority****Interests** |   |   | **and****Amortization** |   |   | **Capital****(2)****Expenditures** |   |   | **Assets** |   |
| **Year              Ended December 31, 2007**            |   |
| BMC                West                                  |   | **$**  | **1,179,097** |   | **$**                                                                                                   | **(1,386**            | **)**  | **$**            | **1,177,711** |   | **$**  | **64,653**                |   | **$**  | **11,998**              |   | **$** | **21,302** |   | **$** | **376,462** |   |
| SelectBuild                                              |   |   | **1,107,501** |   |                                                                                                    | **(241**              | **)**  |             | **1,107,260** |   |   | **(335,279**              | **)**  |   | **32,172**              |   |   | **8,893** |   |   | **326,507** |   |
| Corporate                                                |   |   | **—**   |   |                                                                                                    | **—**           |   |             | **—**   |   |   | **(51,697**               | **)**  |   | **4,471**               |   |   | **2,936** |   |   | **171,875** |   |
| Discontinued                   operations |   |   | **—**   |   |                                                                                                    | **—**           |   |             | **—**   |   |   | **—**               |   |   | **—**             |   |   | **79** |   |   | **—** |   |
|                                                     |   | **$**  | **2,286,598** |   | **$**                                                                                                   | **(1,627**            | **)**  | **$**            | **2,284,971** |   |   | **(322,323**              | **)**  | **$**  | **48,641**              |   | **$** | **33,210** |   | **$** | **874,844** |   |
| Interest                expense                          |   |   |          |   |                                                                                                    |                  |   |             |          |   |   | **33,800**                |   |   |                    |   |   |   |   |   |   |   |
|                                                     |   |   |          |   |                                                                                                    |                  | **$**  | **(356,123**     | **)**         |   |   |                      |   |   |                    |   |   |   |
|                                                     |   |   |          |   |                                                                                                    |                  |   |             |          |   |   |                      |   |   |                    |
| **Year                Ended December 31, 2006**          |   |   |          |   |                                                                                                    |                  |   |             |          |   |   |                      |   |   |                    |
| BMC                West                                  |   | $      | 1,473,219     |   | $                                                                                                       | (1,766                | )      | $                | 1,471,453     |   | $      | 119,737                   |   | $      | 11,987                  |   | $ | 33,107 |   | $ | 479,101 |   |
| SelectBuild                                              |   |   | 1,744,092     |   |                                                                                                    | (12,278               | )      |             | 1,731,814     |   |   | 148,416                   |   |   | 30,002                  |   |   | 33,409 |   |   | 722,328 |   |
| Corporate                                                |   |   | —       |   |                                                                                                    | —               |   |             | —       |   |   | (75,484                   | )      |   | 3,104                   |   |   | 6,174 |   |   | 118,880 |   |
| Discontinued                   operations |   |   | —       |   |                                                                                                    | —               |   |             | —       |   |   | —                   |   |   | —                 |   |   | 28 |   |   | 8,602 |   |
|                                                     |   | $      | 3,217,311     |   | $                                                                                                       | (14,044               | )      | $                | 3,203,267     |   |   | 192,669                   |   | $      | 45,093                  |   | $ | 72,718 |   | $ | 1,328,911 |   |
| Interest                expense                          |   |   |          |   |                                                                                                    |                  |   |             |          |   |   | 29,082                    |   |   |                    |   |   |   |   |   |   |   |
|                                                     |   |   |          |   |                                                                                                    |                  | $      | 163,587          |          |   |   |                      |   |   |                    |   |   |   |
|                                                     |   |   |          |   |                                                                                                    |                  |   |             |          |   |   |                      |   |   |                    |
| **Year                Ended December 31, 2005**          |   |   |          |   |                                                                                                    |                  |   |             |          |   |   |                      |   |   |                    |
| BMC                West                                  |   | $      | 1,486,152     |   | $                                                                                                       | (1,630                | )      | $                | 1,484,522     |   | $      | 147,781                   |   | $      | 11,010                  |   | $ | 17,293 |   | $ | 439,779 |   |
| SelectBuild                                              |   |   | 1,395,182     |   |                                                                                                    | (1,296                | )      |             | 1,393,886     |   |   | 160,957                   |   |   | 13,695                  |   |   | 62,611 |   |   | 623,877 |   |
| Corporate                                                |   |   | —       |   |                                                                                                    | —               |   |             | —       |   |   | (72,631                   | )      |   | 2,450                   |   |   | — |   |   | 79,029 |   |
| Discontinued                   operations |   |   | —       |   |                                                                                                    | —               |   |             | —       |   |   | —                   |   |   | —                 |   |   | 42 |   |   | 7,840 |   |
|                                                     |   | $      | 2,881,334     |   | $                                                                                                       | (2,926                | )      | $                | 2,878,408     |   |   | 236,107                   |   | $      | 27,155                  |   | $ | 79,946 |   | $ | 1,150,525 |   |
| Interest                expense                          |   |   |          |   |                                                                                                    |                  |   |             |          |   |   | 14,420                    |   |   |                    |   |   |   |   |   |   |   |
|                                                     |   |   |          |   |                                                                                                    |                  | $      | 221,687          |          |   |   |                      |   |   |                    |   |   |   |

| ·    | $330.4                million for the carrying amount of certain customer relationships                and                goodwill at SelectBuild and |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·    | $6.7                million                for the carrying amount of goodwill at BMC                West. |
|--------------------------|------------------------------------------------------------------------------------------------------------|
| ·   | $2.2                million                for the carrying amount of certain customer relationships and goodwill                at                SelectBuild. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | $1.3                million                for the carrying amount of certain customer relationships and goodwill                at                SelectBuild. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***16.***
***Quarterly        Results of Operations (unaudited)***

|                                                                       |   | **First**      |        | **Second**    |       | **Third**     |       | **Fourth**      |        |       |
|----------------------------------------------------------------------------|--------|----------------|-------------|---------------|------------|---------------|------------|-----------------|-------------|------------|
| **2007**                                                                   |   |           |        |          |       |          |       |            |        |       |
| Sales                                                                      |   | **$**          | **561,342** | ** **    | **$**      | **686,191**   | ** ** | **$**           | **618,280** | ** ** | **$** | **419,158** |   |   |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| (Loss)                income                from continuing operations     |   | **$**          | **(5,417**  | **)**         | **$**      | **18,601**    | ** ** | **$**           | **1,118**   | ** ** | **$** | **(341,590** | **)(1)** |  |
|    Income                from discontinued operations (2)   |   | **$**          | **451**     | ** **    | **$**      | **816**       | ** ** | **$**           | **3,050**   | ** ** | **$** | **10,258** |   |   |
|                    Net (loss) income                        |   | **$**          | **(4,966**  | **)**         | **$**      | **19,417**    | ** ** | **$**           | **4,168**   | ** ** | **$** | **(331,332** | **)** |   |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
|    Net                (loss) income per share:              |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
|       Continuing                operations   |   | **$****(0.19** | **)**       | **$****0.63** | ** ** | **$****0.04** | ** ** | **$****(11.79** | **)**       |       |
|       Discontinued                operations |   |           | **0.02**    | ** **    | ** ** | **0.03**      | ** ** | ** **      | **0.10**    | ** ** | ** ** | **0.35** |   |   |
|          Diluted              |   | **$****(0.17** | **)**       | **$****0.66** | ** ** | **$****0.14** | ** ** | **$****(11.44** | **)**       |       |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Common                share                prices:                         |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| High                                                                       |   | **$****25**    | ** **  | **$****18**   | ** ** | **$****15**   | ** ** | **$****12**     |        |       |
| Low                                                                        |   | **$****18**    |        | **$****13**   |       | **$****11**   |       | **$****5**      |        |       |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Cash                dividends declared per share                           |   | **$****0.10**  |        | **$****0.10** |       | **$****0.10** |       | **$****0.10**   |        |       |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| **2006**                                                                   |   |           |        |          |       |          |       |            |        |       |   |
| Sales                                                                      |   | $              | 876,993     |          | $          | 911,712       |       | $               | 817,794     |       | $ | 596,768 |   |   |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Income                from                continuing operations            |   | $              | 27,738      |          | $          | 33,482        | (1)        | $               | 34,400      |       | $ | 3,483 |   |   |
|    Income                from discontinued operations (2)   |   | $              | 331         |          | $          | 693           |       | $               | 948         |       | $ | 999 |   |   |
|    Net                income                                |   | $              | 28,069      |          | $          | 34,175        |       | $               | 35,348      |       | $ | 4,482 |   |   |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Net                income                per share:                        |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
|       Continuing                operations   |   | $0.94          |        | $1.13         |       | $1.17         |       | $0.12           |        |       |
|       Discontinued                operations |   |           | 0.01        |          |       | 0.03          |       |            | 0.03        |       |   | 0.03 |   |   |
|          Diluted              |   | $0.95          |        | $1.16         |       | $1.20         |       | $0.15           |        |       |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Common                share                prices:                         |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| High                                                                       |   | $40            |        | $38           |       | $28           |       | $28             |        |       |
| Low                                                                        |   | $32            |        | $25           |       | $21           |       | $24             |        |       |
|                                                                       |   |           |        |          |       |          |       |            |        |       |   |   |   |   |
| Cash                dividends declared per share                           |   | $0.10          |        | $0.10         |       | $0.10         |       | $0.10           |        |       |

| ·   | $330.4                  million for the carrying amount of certain customer relationships                  and                  goodwill at SelectBuild and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | $6.7                  million                  for the carrying amount of goodwill at BMC                  West. |
|--------------------|------------------------------------------------------------------------------------------------------------------|
| ·   | $2.2                  million                  for the carrying amount of certain customer relationships and goodwill                  at                  SelectBuild. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                    discontinued operations from three Western Colorado building                    materials                    distribution businesses sold in September                    2007. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Management’s      Report on Internal Control Over Financial Reporting**

*Internal      Control - Integrated Framework *

| March                10,                2008 | */s/                Robert E. Mellor*                                                                            |   | */s/                William M. Smartt*                                                                                           |
|----------------------------------------------|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|
|                                         | Robert                E.                Mellor*Chairman                of the Board and Chief Executive Officer* |   | William                M.                Smartt*Senior                Vice President and Chief Financial                Officer* |

----

**Report      of Independent Registered Public Accounting Firm**

----

**Report      of Independent Registered Public Accounting Firm**

----

**ITEM      9.** **Changes      in and Disagreements with Accountants on Accounting and      Financial** **Disclosure**

**ITEM      9A.** **Controls      and Procedures** 

*Conclusion      Regarding the Effectiveness of Disclosure Controls and      Procedures*

*Changes      in Internal Controls*

*Management’s      Report on Internal Control Over Financial Reporting*

*Report      of Independent Registered Public Accounting Firm on Internal Control Over      Financial Reporting*

**ITEM      9A (T). Controls and Procedures** 

----

**ITEM        9B.** **Other        Information**

----

**PART      III**

**ITEM      10. Directors, Executive Officers and Corporate      Governance**

*Directors      *

| Name                                                 |   | Age    |   | Position                and Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Robert                E.                Mellor       |   | 64     |   | Mr.                Mellor                became Chairman of the Board of Directors in 2002 and has been Chief                Executive Officer since 1997. He has been a director since 1991.                He was                previously Of Counsel with the law firm of Gibson, Dunn & Crutcher LLP                from 1990 to 1997. He is on the boards of directors of Coeur d’Alene Mines                Corporation and The Ryland Group. He is also on the board of councilors                of                Save-the-Redwoods League. He does not serve on the audit committee                or                compensation committee of any of these boards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Sara                L.                Beckman        |   | 51     |   | Dr.                Beckman                has served as a director since 2002. She is a faculty member of the                Operations and Information Technology Management faculty at the Haas                School of Business at University of California - Berkeley where she                has                been for nearly 20 years. Her teaching and research focus on operations                strategy and innovation management. She also worked in several corporate                positions at Hewlett-Packard Company and as a consultant for Booz,                Allen                and Hamilton. Additionally, she consults with corporate clients on                customer-focused design and innovation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Eric                S.                Belsky         |   | 47     |   | Dr.                Belsky                will not be standing for re-election and will complete his term as                a                director in May 2008. Dr. Belsky has served as a director since 2005.                He                is a specialist in housing finance, economics and policy. He has                nearly 20                years experience conducting research on a wide range of housing and                urban                topics for public and private sector organizations and clients. He                currently is the Executive Director of the Joint Center for Housing                Studies at Harvard University and has been for over 5 years. Since                2004,                he has been a Lecturer in the Harvard Graduate School of Design.                He also                served as Research Director for the Millennial Housing Commission                2001-2002, a bipartisan commission appointed by the United States                Congress. Dr. Belsky also serves as a director of Champion Enterprises,                Inc.                                                                                                                                                                                                                                                                                                                                                       |
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| James                K.                Jennings, Jr. |   | 66     |   | Mr.                Jennings                has served as a director since 2003. Since January 2005, Mr. Jennings                has                served as Executive Vice President and Secretary of both Ashbrook                Simon-Hartley GP, LLC, and Ashbrook Simon-Hartley Operations GP,                LLC, the                general partners of limited partnerships which own the assets of                a                manufacturer of waste water treatment equipment with operations in                the                U.S., U.K. and Chile. Since October 2003, he has been Executive Vice                President, Chief Financial Officer and Director of Atreides Capital,                LLC,                a private equity investment firm that specializes in the acquisition                and                operation of middle market manufacturing and distribution companies.                He                previously served as Executive Vice President, Chief Financial Officer                and                Director of Consolidation Partners, L.L.C., a privately-held merchant                banking organization. Prior to that, he served as Executive Vice                President                and Chief Financial Officer of Loomis, Fargo & Co. and its predecessor                organization, both cash-in-transit service providers, from 1994 to                January                2003. |

----

| Norman                J.                Metcalfe     |   | 65     |   | Mr.                Metcalfe                has served as a director since 2005. For the past 8 years he has                managed                his own investment and real estate business, Norman Metcalfe Consulting,                Inc. He has served as Vice Chairman and Chief Financial Officer of                The                Irvine Company, one of the nation's largest real estate and community                development companies. Mr. Metcalfe also serves on the boards of                The                Ryland Group and The Tejon Ranch Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------------------------------------------------------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| David                M.                Moffett       |   | 56     |   | Mr.                Moffett                has served as a director since 2006. In February 2007, Mr. Moffett                retired                as Vice Chairman and Chief Financial Officer for U.S. Bancorp where                he                served since 1993. He was also previously the chairman of the U.S.                Bancorp                Asset Liability Policy Committee and a member of its Managing Committee                and Credit Policy Committee. Mr. Moffett serves on the boards of                Ebay                Inc., E.W. Scripps, Inc., and MBIA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| R.                Scott                Morrison, Jr. |   | 68     |   | Mr.                Morrison                has served as a director since 2004. For over 5 years he has been                the                owner and President of Morrison Properties, a real estate development                firm. He is formerly a partner and divisional President for Florida                based                Arvida Corporation, a real estate firm. Mr. Morrison is also a development                principal in the Boca Raton Innovation Center now known as the Florida                Atlantic Research Park. Mr. Morrison was also a limited partner in                Memphis                Prince, L.P., d/b/a Audubon Park Place, which owns a 120 unit apartment                building in Memphis, Tennessee, until 2005 when it was sold and he                served                as the President of the general partner, RSM II, Inc, until 2005                when it                was dissolved. The limited partnership filed for protection under                Chapter                11 of the federal bankruptcy laws in late 2003 and the court approved                a                reorganization plan late in 2004. |
|                                                 |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Peter                S.                O’Neill |   | 70     |   | Mr.                O’Neill                has served as a director since 1993. In 1979, he founded O’Neill                Enterprises, LLC., a residential development and homebuilding company.                Since 2003, he has served as chairman of PON, LLC and related companies,                a                residential real estate firm. Mr. O’Neill serves on the Board of Trustees                and as a member of the Governance Committee for The College of Idaho.                He                is a member of the Urban Land Institute and is currently serving                as a                director of IDACORP and Idaho Power                Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

| Richard                G.                Reiten |   | 68     |   | Mr.                Reiten                has served as a director since 2001. He has been a director for Northwest                Natural Gas since 1996 and was Chairman of the Board from 2000 to                2005 and                recently re-appointed the Chairman of the Board in 2006. Mr. Reiten                was                also President and CEO from 1997 to 2002 and President and COO in                1996 of                Northwest Natural Gas. He is a director of U.S. Bancorp, IDACORP                and                National Fuel and Gas. Mr. Reiten is past Chairman of the Board for                the                American Gas Association and serves on the board of the Associated                Electric & Gas Insurance Services Limited. He is also a trustee of the                Board of The Nature Conservancy of Oregon, the Oregon Business Council                and                the Oregon Community Foundation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                            |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Norman                R.                Walker  |   | 64     |   | Mr.                Walker                has served as a director since 2006. Mr. Walker is a retired partner                of                PricewaterhouseCoopers LLP (PwC), a position held for more than 26                years.                He most recently served as a National Risk Management Partner, Audit                and                Business Advisory Services from 1992 to 2003 with PwC and is currently                the                Chief Financial Officer of the Diocese of Bridgeport in Connecticut.                Mr.                Walker’s professional and business activities also include serving as                Chairman of the Ethics Division Technical Standards Committee of                the                American Institute of Certified Public Accountants, President of                PricewaterhouseCoopers LLP Foundation and Chair and President of                the                University of Oregon Foundation Board of Trustees. He is currently                an                Emeritus Trustee of the University of Oregon Foundation, a member                of                National Championship Properties, LLC, a wholly owned subsidiary                of the                University of Oregon Foundation, member of the Business Advisory                Council                of Lundquist College of Business at the University of Oregon, and                a                Trustee of the Bank Street College in New                York. |

*Executive      Officers*

| Name                                                |   | Age    |   | Position                  and Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Robert                  E.                  Mellor  |   | 64     |   | Chairman                  of the Board and Chief Executive OfficerMr.                  Mellor                  became Chairman of the Board of Directors in 2002 and has been                  Chief                  Executive Officer since 1997. He has been a director since 1991.                  He was                  previously Of Counsel with the law firm of Gibson, Dunn & Crutcher LLP                  from 1990 to 1997. He is on the board of directors of Coeur d’Alene Mines                  Corporation and The Ryland Group. He is also on the board of councilors                  of                  Save-the-Redwoods League. He does not serve on the audit committee                  or                  compensation committee of any of these boards.                                                                                                                                                                          |
|                                                |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| William                  M.                  Smartt |   | 65     |   | Senior                  Vice President and Chief Financial OfficerMr.                  Smartt                  has been a Senior Vice President and Chief Financial Officer since                  April                  2004. Prior to joining the Company, he was an independent consultant                  from                  August 2001 to March 2004. From 1992 to 2001, he was Executive                  Vice                  President, Chief Financial and Administrative Officer of DHL Express,                  a                  leader in international air express services. His previous experience                  as a                  Chief Financial Officer included 10 years with Di Giorgio Corporation,                  a                  Fortune 500 Company, whose product lines included the distribution                  of                  building materials, prefabricated components and framing                  services. |

----

| Stanley                M.                Wilson   |   | 63     |   | President                and Chief Operating OfficerMr.                Wilson                was appointed President and Chief Operating Officer of Building Materials                Holding Corporation in February 2008. Mr. Wilson was appointed President                and CEO of BMC West in 2004 and was appointed Senior Vice President                in                2003. He was appointed Vice President in 2000 and was General Manager                of                the Pacific Division of BMC West from 1993 to 2003. Mr. Wilson has                been                with the company since its beginning in 1987. His previous experience                includes 19 years with the building materials distribution business                of                Boise Cascade Corporation. |
|---------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Michael                D.                Mahre    |   | 48     |   | Senior                Vice PresidentMr.                Mahre was                appointed Senior Vice President of Building Materials Holding Corporation                in 2003 and President and Chief Executive Officer of SelectBuild                in 2002.                He was appointed Vice President of Corporate Development in 2001.                He                joined the Company in 1999 as Director of Financial Planning and                Analysis.                Mr. Mahre was a principal of The Cambria Group, a private equity                investment firm, from 1997 to 1998.                                                                                                                                                                                                     |
|                                              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Eric                R.                Beem        |   | 38     |   | Vice                President and ControllerMr.                Beem was                appointed Vice President in January 2006 and Controller in April                2005. He                joined the Company as Accounting Manager in 1996. Mr. Beem is a Certified                Public Accountant and his experience includes 3 years with an                international public accounting firm.                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Mark                R.                Kailer      |   | 54     |   | Vice                President, Treasurer and Investor RelationsMr.                Kailer                has been Vice President and Treasurer since 2003. He joined the Company                in                2000 as Assistant Treasurer. He was previously Senior Manager of                Treasury                Services at Circle International Group, a publicly-traded global                logistics                company based in San Francisco, from 1997 to 2000.                                                                                                                                                                                                                                                                                                                                 |
|                                              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Jeffrey                F.                Lucchesi |   | 54     |   | Senior                Vice President, Chief Information OfficerMr.                Lucchesi                joined the Company in August 2004 as Senior Vice President and Chief                Information Officer. From 2000 to 2004, he was Senior Vice President                of                Worldwide Operations for Corio, Inc., an enterprise application service                provider. Mr. Lucchesi also served from 1994 to 2000 as Vice President                and                Chief Information Officer for DHL Express, a leader in international                air                express services.                                                                                                                                                                                         |

----

| Paul                S.                Street |   | 59 |   | Senior                Vice President, Chief Administrative Officer, General Counsel and                Corporate SecretaryMr.                Street                joined the Company in 1999 as Senior Vice President, General Counsel                and                Corporate Secretary and has been Chief Administrative Officer since                2001.                He previously served as our outside General Counsel & Secretary while                a partner of the law firm of Moffatt, Thomas, Barrett, Rock &                Fields. |
|----------------------------------------------|--------|----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Certain        Relationships and Legal Proceedings*

*Audit        Committee and Financial Expert*

*Section        16(a) Beneficial Ownership Reporting Compliance*

*Code        of Ethics*

----

**ITEM      11. Executive Compensation**

| ·   | Compensation                Discussion and Analysis |
|--------------------|-----------------------------------------------------|

|  ·   | Executive                Compensation Tables |
|--------------------------|----------------------------------------------|

| ·   | Compensation                Committee Report |
|--------------------|----------------------------------------------|

----

| **ITEM              12.** | **Security                Ownership of Certain Beneficial Owners and Management and Related****Stockholder                Matters** |
|---------------------------|-------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM      13. Certain Relationships and Related Transactions, and      Director Independence**

----

**ITEM      14. Principal Accounting Fees and      Services**

----

**PART      IV**

**ITEM      15. Exhibits, Financial Statement Schedules**

| (a)    | The                following                documents are filed as part of this Annual Report on Form                10-K: |
|--------|----------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                       |   |   |   |   |   |
|   | 1.                                                                                                                         | Financial                Statements as filed under Item 8 - Financial Statements and                Supplementary Data: |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Consolidated                Statements of Operations for the years ended December 31, 2007, 2006                and                2005 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Consolidated                Balance Sheets as of December 31, 2007 and 2006 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Consolidated                Statements of Shareholders’ Equity for the years ended December 31, 2007,                2006 and 2005 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Consolidated                Statements of Comprehensive (Loss) Income for the years ended December                31,                2007, 2006 and 2005 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Consolidated                Statements of Cash Flows for the years ended December 31, 2007, 2006                and                2005 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Notes                to Consolidated Financial Statements |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Management’s                Report on Internal Control Over Financial Reporting |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Reports                of Independent Registered Public Accounting Firm |
|   |                                                                                                                       |   |   |   |
|   | 2.                                                                                                                         | Financial                Statement Schedules: |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Schedule                II - Valuation and Qualifying Accounts for the years ended December                31,                2007, 2006 and 2005 |
|   |                                                                                                                       |   |
|   |                                                                                                                       | · Report                of Independent Registered Public Accounting Firm |
|   |                                                                                                                       |   |
|   |                                                                                                                       | Schedules                other than those listed are omitted because they are not applicable                or the                required information is presented in the financial statements and                related                disclosures. |
|   |                                                                                                                       |   |   |   |   |   |
|   | 3.                                                                                                                         | Exhibits: |   |   |   |   |
|   |                                                                                                                       |   |
|   |                                                                                                                       | A                list of the                exhibits required to be filed as part of this report are presented                in the                Exhibit Index. |

----

**Schedule      II**

**Valuation      and Qualifying Accounts**

*(thousands)*

**Deductions      to Accounts Receivable: Allowance for Returns, Discounts and Doubtful      Accounts**

| **Description**                                            |   | **Balance                at Beginning****of                Year** |   | **Additions                Charged to Costs and Expenses** |   | **Additions****Charged**** to                Other**** Accounts** |   | **Deductions****(1)**      |   | **Balance                at****End                of Year** |   |
|------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|----------------------------|--------|-------------------------------------------------------------|--------|
| **Year                Ended December 31, 2007**            |   | **$****4,487**                                                    |   | **$****2,976**                                             |   | **$****―**                                                            |   | **$****1,902**             |   | **$****5,561**                                              |   |
| Year                Ended                December 31, 2006 |   | $3,756                                                            |   | $1,181                                                     |   | $                ―                                                    |   |  $                450 |   | $4,487                                                      |   |
| Year                Ended                December 31, 2005 |   | $4,367                                                            |   | $                  447                           |   | $                ―                                                    |   | $1,058                     |   | $3,756                                                      |   |

|   | (1) | Represents                write-offs of uncollectible receivables, net of                recoveries. |
|--------|-----|------------------------------------------------------------------------------------------------------|

----

**Report      of Independent Registered Public Accounting Firm**

----

**Exhibit      Index Filed with the Annual Report on Form 10-K**

**For      the Year Ended December 31, 2007**

|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **Incorporated                by Reference** |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
| **Exhibit**         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| **Number**          |   | **Exhibit                Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Form**                                     |   | **File                No.** |   | **Exhibit** |   | **Filing                Date** |
| 3.50      |   | Amended                Certificate of Incorporation Filed with the Delaware Secretary of                State on                September 23, 1997                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 8-K12G3                                      |   | 000-23135 |   | 3.(i)                1 |   | September                24,                1997 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 3.50.1              |   | Certificate                of Amendment to Certificate of Incorporation of Building Materials                Holding                Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 10-K                                         |   | 000-23135 |   | 3.50.1 |   | February                27,                2006 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 3.60           |   | Amended                and                Restated By-laws                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 10-Q                                         |   | 000-23135 |   | 3.70 |   | November                14,                2001 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 10.10     |   | Second                Amended and Restated Credit Agreement Dated as of November 10, 2006                among                Building Materials Holding Corporation, BMC West Corporation and                other                Subsidiary Guarantors, Wells Fargo Bank, National Association, as                Administrative Agent, Joint Lead Arranger, Joint Book Manager Swingline                Lender and L/C Issuer, JPMorgan Chase Bank, N.A., as Document Agent,                Suntrust Bank as Joint Lead Arranger and Co-Syndication Agent, BNP                Paribas                as Joint Lead Arranger and Co-Syndication Agent and other Financial                Institutions Party Hereto |   | 8-K                                          |   | 000-23135 |   | 10.10 |   | November                14,                2006 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 10.10.1   |   | First                Amendment to Second Amended and Restated Credit Agreement and Waiver                Dated                as of February 29, 2008 among Building Materials Holding Corporation,                BMC                West Corporation and other Subsidiary Guarantors, Wells Fargo Bank,                National Association, as Administrative Agent, Joint Lead Arranger,                Joint                Book Manager Swingline Lender and L/C Issuer, JPMorgan Chase Bank,                N.A.,                as Documentation Agent and the other Financial Institutions Party                Hereto                                                                                      |   | 8-K                                          |   | 001-33192 |   | 10.10.1 |   | March                3,                2008 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 10.20*         |   | Amended                and                Restated 1993 Employee Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 10-K                                         |   | 000-23135 |   | 10.34 |   | March                28,                1997 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         |   |   |   |   |   |   |
| 10.20.1*       |   | Non-Statutory                Stock Option Agreement Pursuant to the Amended and Restated 1993                Employee                Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 10-K                                         |   | 000-23135 |   | 10.21.1 |   | February                27,                2006 |

----

|           |   |                                                                                                                                                                       |   | **Incorporated                by Reference** |
|----------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
| **Exhibit**    |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| **Number**     |   | **Exhibit                Description**                                                                                                                                     |   | **Form**                                     |   | **File                No.** |   | **Exhibit** |   | **Filing                Date** |
| 10.21*    |   | Building                Materials Holding Corporation 2000 Stock Incentive Plan                                                                                            |   | S-8                                          |   | 333-44260 |   | 4 |   | August                22,                2000 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.21.1*  |   | Non-Statutory                Stock Option Agreement Pursuant to the 2000 Stock Incentive Plan                                                                              |   | 10-K                                         |   | 000-23135 |   | 10.23.1 |   | February                27,                2006 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.22*    |   | Building                Materials Holding Corporation Employee Stock Purchase Plan                                                                                         |   | S-8                                          |   | 333-47122 |   | 4 |   | October                2,                2000 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.23*    |   | Stock                Option                Agreement Pursuant to the 2004 Amended Incentive and Performance                Plan                                            |   | 10-Q                                         |   | 001-33192 |   | 10.25 |   | May                7,                2007 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.23.1*  |   | Stock                Option                Agreement Pursuant to the 2004 Amended Incentive and Performance                Plan                                            |   | 10-K                                         |   | 000-23135 |   | 10.25.1 |   | February                27,                2006 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.23.2*       |   | Restricted                Stock Agreement Pursuant to the 2004 Amended Incentive and Performance                Plan                                                       |   | 10-K                                         |   | 001-33192 |   | 10.25.2 |   | February                21,                2007 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.24*         |   | Cash                Equity                Plan                                                                                                                             |   | 10-K                                         |   | 000-23135 |   | 10.26 |   | February                27,                2006 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.40*    |   | Building                Materials Holding Corporation 2007 Annual Incentive Program for Certain                Employees of BMHC and SelectBuild                           |   | 10-Q                                         |   | 001-33192 |   | 10.40 |   | May                7,                2007 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.41*    |   | Building                Materials Holding Corporation 2007 Annual Incentive Program BMC West                Officers and Key Staff                                         |   | 10-Q                                         |   | 001-33192 |   | 10.41 |   | May                7,                2007 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.46*         |   | Building                Materials Holding Corporation General Terms and Conditions BMC West                Corporation Key Management 2007 Long-Term Cash Incentive Plan   |   | 10-Q                                         |   | 001-33192 |   | 10.46 |   | July                31,                2007 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.47*         |   | Building                Materials Holding Corporation General Terms and Conditions BMHC Officers                and BMHC Key Management 2006 Long-Term Cash Incentive Plan |   | 10-Q                                         |   | 000-23135 |   | 10.45 |   | August                1,                2006 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.48*         |   | Building                Materials Holding Corporation General Terms and Conditions BMHC Officers                and BMHC Key Management 2005 Long-Term Cash Incentive Plan |   | 10-K                                         |   | 000-23135 |   | 10.47 |   | February                27,                2006 |
|           |   |                                                                                                                                                                       |   |                                         |   |   |   |   |   |   |
| 10.50*         |   | Building                Materials Holding Corporation 2005 Deferred Compensation Plan for                Directors as Amended and Restated 2007                            |   |                                         |   |   |   |   |   | Filed                with                this Form |

----

|             |   |                                                                                                                                                                                                                  |   | **Incorporated                by Reference** |
|------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
| **Exhibit**      |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| **Number**       |   | **Exhibit                Description**                                                                                                                                                                                |   | **Form**                                     |   | **File                No.** |   | **Exhibit** |   | **Filing                Date** |
| 10.51*           |   | Building                Materials Holding Corporation 1999 Deferred Compensation Plan for                Directors                                                                                                    |   | 10-K                                         |   | 001-33192 |   | 10.44 |   | February                21,                2007 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.52*           |   | Building                Materials Holding Corporation 2005 Deferred Compensation Plan for                Executives as Amended and Restated 2007                                                                      |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.53*           |   | Building                Materials Holding Corporation 1999 Deferred Compensation Plan for                Executives                                                                                                   |   | 10-K                                         |   | 001-33192 |   | 10.46 |   | February                21,                2007 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.60*           |   | Building                Materials Holding Corporation 2005 Executives Supplemental Retirement                Income Plan as Amended and Restated 2007                                                                 |   | 8-K                                          |   | 001-33192 |   | 10.60 |   | November                21,                2007 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.61*           |   | Building                Materials Holding Corporation 2002 Executives Supplemental Retirement                Income Plan as Amended and Restated December 31, 2002                                                    |   | 10-K                                         |   | 000-23135 |   | 10.60 |   | February                27,                2006 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.70*      |   | Severance                Plan for Certain Executive Officers, Senior Management and Key Employees                of the Company and its Subsidiaries as Amended and Restated Effective                January 1, 2008 |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.80            |   | Amended                Form                of Indemnity Agreement Between Building Materials Holding Corporation                and                its Officers and Directors                                         |   | 10-K                                         |   | 000-23135 |   | 10.7.1 |   | March                26,                2003 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.90*      |   | Amended                and                Restated Employment Agreement by and Between Robert E. Mellor and                Building                Materials Holding Corporation as of December 26, 2007              |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.91*      |   | Employment                Agreement by and Between William M. Smartt and Building Materials                Holding                Corporation as of April 1, 2006                                                     |   | 10-Q                                         |   | 000-23135 |   | 10.91 |   | August                  1,                  2006 |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.91.1*    |   | First                Amendment to Employment Agreement by and Between William M. Smartt                and Building Materials Holding Corporation as of February 19,                2008                         |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 10.92*           |   | Employment                Agreement by and Between Stanley M. Wilson and Building Materials                Holding                Corporation as of February 19, 2008                                                 |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 21.0   |   | Subsidiaries                of Building Materials Holding Corporation                                                                                                                                                 |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 23.1   |   | Consent                of                KPMG LLP                                                                                                                                                                     |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 31.1             |   | CEO                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002                                                                                                             |   |                                         |   |   |   |   |   | Filed                with                this Form |
|             |   |                                                                                                                                                                                                                  |   |                                         |   |   |   |   |   |   |
| 31.2             |   | CFO                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002                                                                                                             |   |                                         |   |   |   |   |   | Filed                with                this Form |

----

|        |   |                                                                                                                                             |   | **Incorporated                by Reference** |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
| **Exhibit** |   |                                                                                                                                             |   |                                         |   |   |   |   |   |   |
| **Number**  |   | **Exhibit                Description**                                                                                                           |   | **Form**                                     |   | **File                No.** |   | **Exhibit** |   | **Filing                Date** |
| 32.1        |   | CEO                and CFO                Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act                of                2002 |   |                                         |   |   |   |   |   | Filed                with                this Form |

| *                Indicates a                management contract or compensatory                plan |
|-----------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                                                       |                                                                                                                                                      |                                                  |
|------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|
|                                                       |                                                                                                                                                      | Building                Materials Holding Corporation |
|                                                  |                                                                                                                                                 |                                             |
| Date:              March              10, 2008   |                                                                                                                                                           | /s/              Robert E. Mellor                     |
|                                                       | Robert              E. MellorChairman                of                the Board and Chief Executive Officer (Principal                Executive Officer) |

| **Signature**                                            |   | **Title**                                                                                                                    |   | **Date**                                     |
|----------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Robert E.                Mellor       |   | Chairman                of                the Board and Chief Executive Officer (Principal Executive                Officer) |   | March                10,                2008 |
| Robert                E.                Mellor           |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                William                M. Smartt      |   | Senior                Vice                President and Chief Financial Officer (Principal Financial                Officer) |   | March                10,                2008 |
| William                M.                Smartt          |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Eric R.                Beem           |   | Vice                President and Controller(Principal                Accounting Officer)                                    |   | March                10,                2008 |
| Eric                R.                Beem               |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Sara L.                Beckman        |   | Director                                                                                                                     |   | March                10,                2008 |
| Sara                L.                Beckman            |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Eric S.                Belsky         |   | Director                                                                                                                     |   | March                10,                2008 |
| Eric                S.                Belsky             |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                James K.                Jennings, Jr. |   | Director                                                                                                                     |   | March                10,                2008 |
| James                K.                Jennings, Jr.     |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Norman J.                Metcalfe     |   | Director                                                                                                                     |   | March                10,                2008 |
| Norman                J.                Metcalfe         |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                David M.                Moffett       |   | Director                                                                                                                     |   | March                10,                2008 |
| David                M.                Moffett           |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                R. Scott                Morrison, Jr. |   | Director                                                                                                                     |   | March                10,                2008 |
| R.                Scott                Morrison, Jr.     |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Peter S.                O’Neill |   | Director                                                                                                                     |   | March                10,                2008 |
| Peter                S.                O’Neill     |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Richard                G. Reiten      |   | Director                                                                                                                     |   | March                10,                2008 |
| Richard                G.                Reiten          |   |                                                                                                                         |   |                                         |
|                                                     |   |                                                                                                                         |   |                                         |
| /s/                Norman R.                Walker       |   | Director                                                                                                                     |   | March                10,                2008 |
| Norman                R.                Walker           |   |                                                                                                                         |   |                                         |

----

| **List                  of Exhibits Filed** |
|---------------------------------------------|
|                                        |   |   |
| **Exhibit**                                 |   |   |
| **Number**                                  |   | **Exhibit                Description** |
|                                        |   |   |
| 10.50*                                      |   | Building                Materials Holding Corporation 2005 Deferred Compensation Plan for                Directors as Amended and Restated 2007 |
|                                        |   |   |
| 10.52*                                      |   | Building                Materials Holding Corporation 2005 Deferred Compensation Plan for                Executives as Amended and Restated 2007 |
|                                        |   |   |
| 10.70*                                      |   | Severance                Plan for Certain Executive Officers, Senior Management and Key Employees                of the Company and its Subsidiaries as Amended and Restated Effective                January 1, 2008 |
|                                        |   |   |
| 10.90*                                      |   | Amended                and                Restated Employment Agreement by and Between Robert E. Mellor and                Building                Materials Holding Corporation as of December 26,                2007 |

| 10.91.1*  |   | First                Amendment to Employment Agreement by and Between William M. Smartt                and Building Materials Holding Corporation as of February 19,                2008 |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                          |
| 10.92*         |   | Employment                Agreement by and Between Stanley M. Wilson and Building Materials                Holding                Corporation as of February 19, 2008                         |
|           |   |                                                                                                                                                                                          |

| 21.0   |   | Subsidiaries                of Building Materials Holding Corporation                                                            |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                             |
| 23.1   |   | Consent                of                KPMG LLP                                                                                |
|   |   |                                                                                                                             |
| 31.1   |   | CEO                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002                        |
|   |   |                                                                                                                             |
| 31.2   |   | CFO                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002                        |
|   |   |                                                                                                                             |
| 32.1   |   | CEO                and CFO                Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |

----