|SECURITIES AND EXCHANGE
COMMISSION WASHINGTON, D.C. 20549
FORM 10-K


(X) Annual report under
Section 13 or 15 (d) of the Securities Exchange Act of 1934. For the fiscal year
period ended December 31, 2002 or( ) Transition report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934. For the Transition period from
________ to _______


Commission file number
0-19335.


BUILDING MATERIALS
HOLDING CORPORATION


Incorporated in the
State of Delaware                             I.R.S. Employer Number 91-1834269


BUILDING MATERIALS
HOLDING CORPORATIONFour Embarcadero Center, Suite 3250, San Francisco, CA 94111Telephone:
(415) 627-9100


Securities registered
pursuant to Section 12(b) of the Act: NoneSecurities registered pursuant to
Section 12(g) of the Act:


Common Stock, $.001 par
value Title of class


Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.


Yes  |X|       No  |_|


Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
_________


Indicate by check mark whether the
registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes  |X|       NO  |_|


The aggregate market value
of the voting stock held by non-affiliates of the registrant, computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of the close of business on June 30, 2002 was
$83,409,530.*
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|* |  | Excludes
7,328,846 shares of Common Stock held by directors, officers and holders of more than 5%
of the Companys shares outstanding at June 30, 2002. Exclusion of shares held by any
person should not be construed to indicate that such person possesses the power, direct
or indirect, to direct or cause the direction of the management or policies of the
Registrant, or that such person is controlled by or under common control with the
Registrant.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Class           | Shares Outstandingas of March 13, 2003
|--------------- | --------------------------------------
|Common Stock    |                                       
|$.001 par value |                                       

|Documents Incorporated
by reference


Listed hereunder are the documents
any portions of which are incorporated by reference and the Parts of this Form 10-K into
which such portions are incorporated:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. |  | The
registrants annual report for the fiscal year ended December 31, 2002, portions of
which are incorporated by reference into Parts II and IV of this Form 10-K, and
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | The
registrants definitive proxy statement dated April 1, 2003, for use in connection with
the annual meeting of shareholders to be held on May 7, 2003, portions of which are
incorporated by reference into Part III of this Form 10-K.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|BUILDING MATERIALS
HOLDING CORPORATION TABLE OF CONTENTS


PART I
|-----------------------------------------------------------------

|Item     |  | Page                                                      
|-------- |  | ----------------------------------------------------------
|1.       |  | Business                                                  
|        
|2.       |  | Properties                                                
|        
|3.       |  | Legal Proceedings                                         
|        
|4.       |  | Submission of Matters to a Vote of Security Holders       
|        
|PART II 
|        
|5.       |  | Market for Registrants Common Stock and Related          
|         |  | Stockholder Matters                                       
|        
|6.       |  | Selected Financial Data                                   
|        
|7        |  | Managements Discussion and Analysis of Financial         
|         |  | Condition and Results of Operations                       
|        
|7A.      |  | Quantitative and Qualitative Disclosures About Market Risk
|        
|8.       |  | Financial Statements and Supplementary Data               
|        
|9.       |  | Changes in and Disagreements With Accountants             
|         |  | on Accounting and Financial Disclosure                    
|        
|PART III
|        
|10.      |  | Directors and Executive Officers of the Registrant        
|        
|11.      |  | Executive Compensation                                    
|        
|12.      |  | Security Ownership of Certain Beneficial Owners and       
|         |  | Management                                                
|        
|13.      |  | Certain Relationships and Related Transactions            
|        
|14.      |  | Controls and Procedures                                   
|        
|PART IV 
|        
|15.      |  | Exhibits, Financial Statement Schedules, and              
|         |  | Reports on Form 8-K                                       

|PART I.


Item 1. Business


Introduction


Certain statements
contained in this Annual Report on Form 10-K constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Given these uncertainties, we caution
prospective investors not to place undue reliance on such forward-looking
statements. We disclaim any obligation to update any such factors or to announce
publicly the results of any revisions to any of the forward-looking statements
contained in the Annual Report on Form 10-K.


Business


Building Materials Holding
Corporation (BMHC) is a NASDAQ-traded holding company headquartered
in San Francisco, California. We specialize in providing construction services
 including engineering, manufacturing, framing construction and
installation  and high-quality building materials to residential builders
and contractors in 12 western states, Florida and North Carolina. Our operating
subsidiaries include BMC Construction, Inc. (BMC Construction) and
BMC West Corporation (BMC West), with more than 135 facilities
organized into 60 business units. BMHCs website address is
www.bmhc.comand it makes its periodic and current reports available,
free of charge, on its website as soon as reasonably practicable after such
material is electronically filed with, or furnished to, the SEC.


In recent years we have
increased our sales of construction services and manufactured components. We
fabricate roof and floor trusses, purchase and pre-assemble doors, millwork and
select and distribute pre-assembled windows based on customer specifications.
Through BMC Construction, we participate in the turnkey framing and shell
construction market. Our diversification into construction services and
manufactured building components reduces our sensitivity to commodity wood
product price volatility and provides higher operating margins on less invested
capital.


BMHC targets professional
builders and contractors engaged in residential construction. We focus on
developing and maintaining strong relationships with national, regional and
local developers, builders, architects, engineers and contractors. Professional
builders and contractors generally are high-volume, repeat customers who require
specialized engineering, manufacturing and installation services, on-time
job-site delivery and volume purchasing and trade credit, which are not
typically offered by large home center retailers. We do not compete directly
against do-it-yourself retailers, such as Home Depot or Lowes, which do
not offer the broad range of services that we provide and generally sell to
retail consumers in small quantities and with limited services. We also sell to
the repair and remodel market, consisting of contractors and consumers involved
in major home improvement projects, and to contractors involved in light
commercial and industrial construction.
3
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In July 2001, we acquired
the remaining 51% interest in Knipp Brothers Industries, LLC and its related
entities (KBI) that provide framing services in Arizona, Southern
California and Nevada. Having purchased a 49% interest in KBI in May of 1999, we
decided to complete the acquisition earlier than originally contemplated to
enhance our capabilities in the framing business, which we believe will continue
to be an important part of our construction services and manufactured building
components business. On July 1, 2002, we further enhanced our framing
capabilities by purchasing a 51% interest in a newly formed partnership, KBI
Norcal, which provides framing services in Northern California, and effective
January 1, 2003, we purchased a 60% interest in WBC, LLC (WBC),
which primarily provides shell construction services for single family and
multi-family developments in Florida.


Our business units offer
services and products tailored to the needs of professional builders and
contractors. Each unit also customizes its service and product mix to meet the
demands of its local market. Our offerings include the following:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | turnkey
framing and shell construction
| |  | - |  | --------------------------------------

| |  |  |  | roof
truss, floor truss and wall panel engineering and manufacturing
| |  | - |  | --------------------------------------------------------------------

| |  |  |  | pre-hanging
of doors and pre-assembly of windows
| |  | - |  | ------------------------------------------------

| |  |  |  | customized
millwork manufacturing and installation
| |  | - |  | --------------------------------------------------

| |  |  |  | professional-grade
building materials and supplies, including:
| |  | - |  | --------------------------------------------------------------

| |  |  |  |  |  | lumber
and panel products
| |  |  |  | - |  | -------------------------

| |  |  |  |  |  | engineered
wood products
| |  |  |  | - |  | ------------------------

| |  |  |  |  |  | roofing
and siding
| |  |  |  | - |  | ------------------

| |  |  |  |  |  | cabinets
| |  |  |  | - |  | --------

| |  |  |  |  |  | hardware,
tools and miscellaneous supplies
| |  |  |  | - |  | ------------------------------------------

| |  |  |  | other
professional services, including:
| |  | - |  | ---------------------------------------

| |  |  |  |  |  | analysis
of project designs and materials specifications to reduce total building costs
| |  |  |  | - |  | ---------------------------------------------------------------------------------------

| |  |  |  |  |  | accurate
estimates of materials costs on which contractors can base bids
| |  |  |  | - |  | ------------------------------------------------------------------------

| |  |  |  |  |  | just-in-time
delivery of home construction packages to job sites
| |  |  |  | - |  | ----------------------------------------------------------------

| |  |  |  |  |  | provision
of trade credit to pre-approved customers
| |  |  |  | - |  | ---------------------------------------------------

| |  |  |  |  |  | evaluation
of industry and product trends
| |  |  |  | - |  | -----------------------------------------

| |  |  |  |  |  | software-based
design and engineering of manufactured components to ensure compliance with local
building codes and suitability to the customers project
| |  |  |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|We believe that our focus
on service is a key factor that distinguishes us from many of our competitors.
We have developed a variety of specialty services in order to help our customers
build high quality and cost-effective projects. We employ experienced,
service-oriented employees who advise builders and contractors at their job
sites and offices or at our facilities. Because of our enhanced product
knowledge and training, our customers often seek out our sales people for design
and product recommendations, instruction and job-site assistance. Our
high-quality service and contractor-focused product offerings allow our
management and sales staff to develop long-term relationships with homebuilders
and contractors and to generate a large volume of repeat and referral business.
4
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Industry Overview


BMHC operates in the
residential construction services and building materials industry in the United
States. Our primary customers are professional builders and contractors, whose
needs and expectations are significantly different from those of retail
customers, who generally buy from mass-market home improvement chains.
Professional builders and contractors tend to develop long-term relationships
with suppliers, and to base purchase decisions on a combination of factors
including:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | dependability and breadth of services
| | - |  | -------------------------------------

| |  |  | quality and availability of products
| | - |  | ------------------------------------

| |  |  | track record of on-time delivery
| | - |  | --------------------------------

| |  |  | availability of trade credit
| | - |  | ----------------------------

| |  |  | competitive pricing
| | - |  | -------------------

| |  |  | flexibility in transaction processing
| | - |  | -------------------------------------

| |  |  | ability to provide integrated service and product packages, such as turnkey framing and
shell construction, as well as millwork manufacturing and installation
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|The composition of the
industry is characterized by large number of small, privately owned enterprises,
including framing and shell construction contractors; local and regional
materials distributors; and single or multi-site lumberyards, truss
manufacturing and millwork operations. While a significant amount of
consolidation has occurred during the past five to ten years  particularly
through the acquisition activities of Stock Building Supply (formerly known as
Carolina Holdings, a unit of U.K.-based Wolseley, plc, NYSE: WOS), Builders
FirstSource (privately held), 84 Lumber (privately held), Lanoga (privately
held) and others  the industry remains fragmented, particularly on the
services side. These businesses are typically family run, relationship-based
operations, with limited access to sophisticated working capital management and
control systems, or large-scale purchasing advantages.


Many large production
homebuilders outsource structural framing and shell construction to contractors
under construction contracts. Framing and shell construction contracting is a
highly fragmented area of the industry, with participants ranging from small
single crew operations to large integrated, multi-crew businesses. The
integrated businesses typically include supply chain activities, such as
materials procurement and truss and component manufacturing, in addition to
installation. Many of these businesses lack the working capital management,
control systems, purchasing expertise and advantages of a large entity, such as
BMHC.


Construction expenditures are
largely a function of new residential, commercial and industrial building demand and
repair and remodeling projects undertaken. The residential construction services and
building materials industry responds to the seasonality and economic cycles associated
with the homebuilding industry. Inclement weather patterns in most of our markets result
in decreased construction activity during the first and fourth quarters, which adversely
affects sales. Residential construction is closely linked to new job formation, household

5
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|formation, interest rates, housing
affordability, availability of mortgage financing, regional demographics and consumer
confidence. Vacancy and absorption rates, interest rates, long-term regional economic
outlooks and the availability of financing all significantly affect commercial
construction. Industrial construction expenditures are linked to the industrial economic
outlook, corporate profitability, interest rates and capacity utilization. In difficult
economic environments, repair and remodeling expenditures generally represent a greater
percentage of housing construction expenditures as new housing starts decline. BMHC
targets primarily the new residential construction sector.


Geographic Markets


We believe that our presence
primarily in the western and southern United States places us in attractive
markets for residential construction services and building materials. Historical
population and migration trends in the markets we serve, as well as their
relative economic strength, have generally supported steady growth of
residential construction.


Operating Strategy


Our strategy is to continue
increasing sales of construction services and manufactured building components
as a percentage of total sales, thereby further reducing our percentage sales of
commodity wood products. We plan to continue expanding the availability of our
company-fabricated and pre-assembled products to every business unit in which
market demand justifies the expansion. We also plan to continue introducing new
construction services and manufactured building components, as exemplified by
BMC Constructions recent investments in KBI Norcal and WBC. Local managers
have introduced specialty installation services for windows, doors, wall panels
and insulation to meet local customers needs. The installation of our
products by our own employees or subcontractors we hire and supervise, allows
professional builders and contractors to reduce their on-site labor costs and
the number of suppliers. We will continue to expand these and other specialty
services where appropriate.


Our business unit managers
have substantial autonomy and responsibility to address customer needs in their
markets. A vendors reputation is often determined locally, where service,
product suitability and knowledgeable customer service are critical. Our
managers are responsible for optimizing business activities in their markets,
including managing sales personnel, configuring and maintaining inventory
levels, identifying potential customers for targeted marketing efforts and
developing service and product options. Our compensation system for managers has
incentive features based on business unit earnings, efficient working capital
management, and the ability to manage a safe work environment. We seek to expand
our sales to new and existing customers by capitalizing on our reputation for
quality, accuracy and dependability.


We focus on improving
efficiency and productivity at all business units while giving special attention
and support to any units that are not performing to company objectives. If
objectives are not met, alternatives include restructuring management,
consolidation or liquidation of the business unit. We try to anticipate changes
in each market by adjusting the mix of services and products.
6
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Acquisition Strategy


We look for acquisitions
that will complement our existing service and product offerings, provide
geographic diversification or enhance our existing capabilities. Acquired
businesses must also have an established customer base of professional builders
and contractors and a quality management team. We evaluate potential
acquisitions based on their expected ability to meet our performance objectives
and improve operating efficiencies by leveraging our existing infrastructure.
Additional criteria include the reputation of the business among builders and
contractors and the quality of the management, accounting systems and sales
organization. We assemble and assign a multi-disciplined team to guide the
successful integration of each newly acquired business.


In 2002 we acquired 51% of
KBI Norcal, which resulted in the formation of three new business units and in
2001 we completed the acquisition of KBI, which added four new business units
(See Note 4 to the consolidated financial statements for the year ended December
31, 2002). In 2001 we also designated four existing locations as business units.
The following table sets forth the number of business units acquired or opened
and consolidated during each of the last two fiscal years.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | Year EndedDec. 31, 2002 | Year EndedDec. 31, 2001
|---------------------------------- | ----------------------- | -----------------------
|Beginning number of business units |                         | 61                     
|Acquisitions and denovo            |                         | 3                      
|Consolidations and closures        |                         | (4                     
|                                   |                         |                        
|Ending balance                     |                         | 60                     
|                                   |                         |                        

|Although we routinely
engage in discussions with potential acquisition candidates, we may not be able
to continue to identify and complete successful acquisitions in the future.


Services and Products


Our principal service and
product mix varies by business unit. Construction services include turnkey
framing and shell construction; design, engineering and manufacture of roof
trusses, floor trusses and wall panels; pre-hung door fabrication; assembly of
manufactured windows into frames; manufacture and installation of custom doors,
windows and millwork; and installation of a variety of other products. Building
material products include dimensional lumber, panel products, engineered wood
products, roofing materials, cabinets, hardware, paint and tools.


The following table sets forth
information regarding the percentage of net sales represented by the specified categories
of services provided and products sold during each of the last two fiscal years. While we
believe the percentages included in the table generally indicate the mix of our



7
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|sales, the specific percentages are
affected year-to-year by changes in the prices of commodity wood products, changes in
unit volumes sold, and changes in the markets we serve.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Category                                                   | 2002 | 2001
|---------------------------------------------------------- | ---- | ----
|Construction Services and Manufactured Building Components |      | 54  
|Commodity Wood Products                                    |      | 31  
|Building Materials and Supplies                            |      | 9   
|Other                                                      |      | 6   
|                                                           |      |     
|                                                           |      | 100 
|                                                           |      |     

|BMC Construction provides
national and regional production homebuilders with integrated construction
services including project estimating, structural engineering, material
procurement and handling, component manufacturing, delivery and on-site
installation of framing, millwork and trim packages. With the exception of WBC,
components and materials are generally sourced through BMC Constructions
own facilities.


BMC West provides regional
and local builders and contractors, as well as national production builders,
with component manufacturing and installation services, and distributes a broad
range of lumber and professional-grade building materials and supplies.


We use computerized systems
to design and engineer roof trusses, floor trusses and wall panels from
customers blueprints. We route the completed designs to a third-party firm
for certification of engineering standards and building code compliance, then
manufacture the components in our own plants and deliver them to job-sites. We
purchase door blanks and manufactured windows for fabrication into frames with
hardware and trim as specified by the customer.


Construction services and
manufactured building components are relatively more attractive than lumber and
building materials distribution because they generally bring higher operating
margins on less invested capital, exhibit less price volatility and are not
available from as many competitors. We believe that our ability to provide
either integrated construction services or stand-alone manufactured and
fabricated components is a competitive advantage when soliciting business from
builders and contractors.


Our customers generally
order services and products on an as-needed basis. Therefore, virtually all
product shipments in a given quarter result from orders received in that
quarter. Order backlog represents only a very small percentage of the product
sales anticipated in a given quarter and is not indicative of actual sales for
any future period.


Sales and Marketing


Each of our business units
customizes its service and product mix to its target market and operates as a profit
center. BMC Construction relies on national and regional relationships with high-volume
production homebuilders to market and sell our products and services. At BMC


8
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|West, we reach new local and
regional customers through field sales representatives, referrals, advertisements in
trade journals and local promotional events.


Customers


Our business focuses on two
major customer categories in the new residential construction market: large,
high-volume production homebuilders with national or multiple-market operations;
and local custom and smaller production homebuilders and new-home contractors. A
smaller third category includes commercial and industrial contractors, repair
and remodel contractors and miscellaneous sales to consumers. No single customer
accounted for more than 4.5% of total sales in 2002.


High-Volume
Production Homebuilders
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2002, sales to these customers accounted for approximately 19% of net sales, compared to
9% of net sales in 2001. This increase year over year is primarily due to a full twelve
months of consolidation of KBI in 2002 as opposed to only six months in 2001. A
significant amount of this business consists of sales of turnkey framing construction
services or complete house packages (which may include framing lumber, panel products,
pre-hung doors and trim packages, roof and floor trusses, pre-assembled windows and
related products).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | While
pricing is an important vendor-selection criterion for these customers, we believe that
other factors such as materials procurement and logistics; component design, engineering
and manufacturing capabilities and expertise; and outsourcing of labor and risk
management are equally important. We believe that our skills in these areas are important
competitive advantages.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Almost
all of BMC Constructions sales are to customers in this category. Its integrated
approach to delivery of services as well as materials and labor management, allows the
customer to focus on other aspects of its business, including land development and new
home sales. BMC Constructions experience, reliability and ongoing working relationship
with production builders enable it to maintain and grow market share. BMC West also sells
lumber, building materials, and trusses to this customer category, primarily in areas
where BMC Construction does not have a presence.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Custom Homebuilders
and New-Home Contractors

| | In
2002, sales to these customers accounted for approximately 66% of net sales, compared to
73% of net sales in 2001. BMC West is primarily responsible for sales to these customers.
A significant amount of this business consists of sales of dimensional lumber and panel
products, pre-hung doors and trim packages, roof and floor trusses, pre-assembled windows
and other building materials and supplies.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-

| | Our
principal channel for reaching these customers is a sales force of approximately 370
field sales representative employees supported by approximately 270 inside salespeople.
Field sales representatives actively solicit business and work with the inside
salespeople and managers to develop bids for customer projects. We provide sales training
for all representatives and sales management training for all sales managers and location
managers. We generally compensate sales representatives through a combination of salary
and commissions based on individual sales volume and gross margin.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
deliver building materials to job sites according to customer specifications and
schedules. Technical personnel involved in purchasing, dispatching, invoicing and credit
functions, support both field sales force and location managers to enhance customer
satisfaction.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other Customers

| | This
customer category consists generally of commercial and industrial contractors involved in
multi-family and light industrial construction projects, residential repair and remodel
contractors and a minimal number of consumers. In 2002, sales to these customers
accounted for approximately 15% of net sales compared to 17% of net sales in 2001.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Credit


Corporate management
establishes overall credit policy, but each business unit is responsible for
overseeing its own accounts. We train our managers and staff to have a thorough
understanding of state lien laws, which provide security for accounts
receivable. Our credit policies, together with daily monitoring of customer
balances, have resulted in average bad debt expense of approximately 0.17% of
net sales during the last five years, with no single year exceeding 0.21%. We
believe that our bad debt expense levels are among the lowest in the industry.
Approximately 95% of our sales in 2002 were to customers to whom we had extended
credit for such sales.


Management
Information Systems


Our financial information,
operational data and other related statistical information are processed and maintained
at our data center in Boise, Idaho. Our financial reporting and relational database
system was designed and customized for us by Oracle Corporation. The flexible nature of
our installed network allows for the accumulation, processing and distribution of
information using industry standard computing resources and programs. Subsidiary
information systems connect to the data center through a high-speed wide area network.
These systems provide real-time pricing, inventory availability and margin analysis. This
allows each sales staff to offer a high level of customer service, while giving
management the ability to access and use timely information to monitor operations. We
believe these systems enable us to enhance profit

10
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|margins, improve inventory turnover,
accelerate analysis of sales trends and better monitor accounts receivable, employee
productivity, customer credit limits and lien protections.


Purchasing


We purchase merchandise
from a large number of manufacturers and suppliers. In 2002, our largest
supplier accounted for approximately 13% of our total purchases. We do not
believe the loss of any single supplier would have a material adverse effect on
our financial position, results of operations or cash flows.


We purchase inventory
primarily on a centralized basis in order to capitalize on economies of scale,
although local business units conduct a limited amount of purchasing in response
to specific customer needs. Most ordering occurs at the business unit level to
ensure that we meet local product needs and maximize inventory turns.


Approximately 31% of our
2002 sales were attributable to commodity wood products. Prices of commodity
wood products are subject to significant volatility and directly affect sales.
Commodity wood product prices were down 0.6% in 2002 over 2001. This is the
lowest prices have been in nine years, and we expect prices to remain at this
level through 2003. Our commodity wood product buyers monitor inventory and
sales levels in each facility on a regular basis. With this supply and demand
information, buyers generally can avoid overstocking commodity wood products. As
a result, we turn our commodity wood product inventory approximately 10 to 12
times per year. Such rapid inventory turnover limits our potential exposure to
inventory loss from commodity price fluctuations. In addition, our real-time
computer network allows our business units to adjust sales prices as purchase
prices of commodity products change.


Competition


We operate in a changing
and highly competitive environment.


For the business of
high-volume production homebuilders, whom we serve primarily through BMC
Construction, we compete with independent framing and shell construction
contractors, building materials distribution companies and some of the
homebuilders themselves. Independent framing and shell construction contractors
range in size from single-crew operations to large well-managed organizations
spanning multiple markets. Distribution companies such as Stock Building Supply,
Builders FirstSource, 84 Lumber, Lanoga and others offer construction services
in select markets. Several of the large production homebuilders continue to
perform framing and other construction services in-house. We believe we compare
favorably to our competitors because of the quality and reliability of our
products and services, supply chain integration, volume, scale, geographic reach
and capital resources.


For the business of custom
homebuilders and new-home contractors, whom we serve primarily through BMC West, we
compete primarily with privately owned, single-site enterprises as well as local,
regional and national building materials chains. Professional builders and contractors

11
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|generally select suppliers based on
the availability of knowledgeable personnel, on-time delivery, reliable inventory levels,
availability of trade credit and competitive pricing. We compete favorably on each of
these bases. Our relatively large size also permits us to attract experienced and
professional sales and service personnel and provides us the resources to offer
Company-wide product and service training programs. By working closely with our customers
and supported by our management information systems, our business units maintain
appropriate inventory and staffing levels and are well positioned to deliver completed
orders on time to individual job sites.


For the business of
commercial and industrial contractors, repair and remodel contractors and
consumers, all of whom we serve through BMC West, we compete primarily with
local lumberyards and hardware stores and, in certain of our markets, with
larger home center chains such as Home Depot and Lowes. We believe we
effectively meet the needs of these customers by providing higher-quality
products, offering access to our knowledgeable staff and developing contractor
referral programs to address the requirements of consumers on larger projects.


Safety and Risk
Management


BMHC set a goal in late
2001 of a 20% reduction in both the frequency and cost of work-related
accidents. In our primary workers compensation program at December 31,
2002, such accidents were down 24% and related costs were down 32% compared to
the prior year. We continue to target improved workplace safety as a key
component of making BMHC the employer of choice in our industry, and to address
the rapid escalation in corporate property-casualty insurance costs in
recent years.


Employees


Our success is highly
dependent on the quality of our personnel at all levels. Because we face
competition in attracting and retaining qualified employees, we maintain
competitive compensation and benefit programs to attract, motivate and retain
top-performers. We also provide extensive product knowledge, customer service,
supervisory and managerial training programs to assure employee and customer
satisfaction.


At December 31, 2002, we
employed approximately 6,900 persons, of which unions represented approximately
284. We have not experienced any strikes or other work interruptions and have
maintained generally favorable relations with our employees. The following table
shows the approximate breakdown by job function of our employees:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                     | 
|---------------------------------------------------- | 
|Officers, corporate and unit management, and         | 
|corporate and unit administration                    | 
|Delivery (truck drivers, load builders, yard)        | 
|Manufacturing (truss, door, window, framing)         | 
|Field sales force (outside/inside sales)             | 
|Retail operations (cashiers/receiving/sales support) | 

|12
|--

|Executive Officers as of December
31, 2002
|------------------------------------------

|Name                 | Age | Position or Office | Date FirstElected asAn Officer
|-------------------- | --- | ------------------ | ------------------------------
|Robert E. Mellor     |     | 59                 |                               
|                     |     |                    |                               
|                    
|Robert L. Becci      |     | 62                 |                               
|                    
|Richard F. Blackwood |     | 65                 |                               
|                     |     |                    |                               
|                    
|Ellis C. Goebel      |     | 61                 |                               
|                     |     |                    |                               
|                    
|Jack D. LaRock       |     | 59                 |                               
|                     |     |                    |                               
|                    
|Michael D. Mahre     |     | 43                 |                               
|                     |     |                    |                               
|                     |     |                    |                               
|                    
|Steven H. Pearson    |     | 55                 |                               
|                     |     |                    |                               
|                    
|William E. Smith (a) |     | 51                 |                               
|                     |     |                    |                               
|                    
|Paul S. Street       |     | 54                 |                               
|                     |     |                    |                               
|                     |     |                    |                               
|                    
|Stanley M. Wilson    |     | 58                 |                               
|                     |     |                    |                               

|(a)     Employment was terminated in
January, 2003


Mr. Mellor became Chairman of the
Board of Directors of BMHC in 2002 and has been President and Chief Executive Officer
since joining the Company in 1997. He was previously Of Counsel with the law firm of
Gibson, Dunn & Crutcher LLP from 1990 to 1997. Mr. Mellor also serves as a director of
Coeur dAlene Mines Corporation, The Ryland Group, Inc. and Monroe Muffler Brake Inc.


Mr. Becci has served as Vice
President since 1990 and as Controller since the Companys inception in 1987.
13
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Mr. Blackwood is Executive Vice
President of BMHC and President of BMC West. He previously served as President of the
Intermountain Division of BMC West and as Executive Vice President of BMHC. Mr. Blackwood
has been a Vice President since the Companys inception in 1987.


Mr. Goebel has been Senior Vice
President - Finance & Treasurer of BMHC since 1997. He served as Vice President and
Treasurer of the Company since its inception in 1987.


Mr. LaRock has been Vice President
since 2001 and is the General Manager for the Colorado/Front Range Region. He
was General Manager of Millwork Operations for the Intermountain Division of BMC
West since 2000. He previously held various management positions within the
Company since 1993.


Mr. Mahre has been Vice
President of Corporate Development since 2001 and Chief Executive Officer of BMC
Construction since 2002. 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 1999, and worked in commercial and
investment banking with Citibank and Citicorp Securities from 1991 to 1997.


Mr. Pearson has been Senior Vice
President - Human Resources of the Company since 2001. From 1987 through 2001 he served
as Vice President - Human Resources.


Mr. Smith served as President of the
SouthCentral Division since November 1997 and was elected Vice President of BMHC in
February 2000. Before joining BMC West, he held the position of President and Chief
Operating Officer of Lone Star Plywood & Door Corp., which was purchased by the Company in
November 1997. Mr. Smiths employment was terminated in January 2003.


Mr. 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 outside General Counsel & Secretary to the Company while a partner
of Moffatt, Thomas, Barrett, Rock & Fields.


Mr. Wilson has been Vice President
of BMHC since 2000 and General Manager of the Pacific Division of BMC West since 1997. He
was manager of the West Coast district of BMC West from 1993 to 1998. Mr. Wilson was
named Senior Vice President of BMHC in February 2003.
14
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 2. Properties


BMHCs headquarters
are in San Francisco, California, with subsidiary administrative offices in
Boise, Idaho and San Francisco, California. We have several types of facilities,
including lumber and building materials distribution centers, millwork
fabrication and distribution centers and warehouses, truss-manufacturing plants,
and various sales offices and showrooms. The facilities listed below do not
include standalone sales offices or showrooms. We believe that all of our
locations are in good condition and are generally adequate for our needs for the
near future. We own or lease all of our material assets, including land and
facilities.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|State and City            | DateAcquired | OwnedAcreage | LeasedAcreage
|------------------------- | ------------ | ------------ | -------------
|ARIZONA                   |              |              |              
|Chandler                  |              | 2001         |              
|Phoenix - KBI             |              | 2001         |              
|Phoenix - Royal           |              | 2000         |              
|Tucson                    |              | 2001         |              
|CALIFORNIA                |             
|Atwater                   |              | 1990         |              
|Bakersfield               |              | 2000         |              
|Corona                    |              | 2001         |              
|Fresno                    |              | 1989         |              
|Marysville                |              | 2002         |              
|Marysville                |              | 2002         |              
|Merced                    |              | 1987         |              
|Modesto                   |              | 1989         |              
|San Francisco             |             
|Headquarters              |              | 1997         |              
|COLORADO                  |             
|Aspen                     |              | 1987         |              
|Boulder                   |              | 1990         |              
|Colorado Springs          |              | 1994         |              
|Colorado Springs Millwork |              | 1999         |              
|Denver Door North         |              | 1990         |              
|Denver Door South         |              | 1997         |              
|Denver                    |              | 1994         |              
|Evergreen                 |              | 1990         |              
|Fort Collins              |              | 1990         |              
|Fort Collins Millwork     |              | 2001         |              
|Fort Lupton               |              | 1994         |              

|15
|--

|State and City           | DateAcquired | OwnedAcreage | LeasedAcreage
|------------------------ | ------------ | ------------ | -------------
|COLORADO (continued)     |              |              |              
|Glenwood Springs         |              | 1990         |              
|Greeley                  |              | 1994         |              
|Pueblo                   |              | 1994         |              
|Steamboat Springs        |              | 1987         |              
|IDAHO                    |             
|Boise                    |              | 1987         |              
|Boise Millwork           |              | 1999         |              
|Boise (office)           |              | 1988         |              
|Idaho Falls              |              | 1987         |              
|Idaho Falls Truss        |              | 1987         |              
|Rexburg                  |              | 1987         |              
|MONTANA                  |             
|Great Falls              |              | 1993         |              
|Helena                   |              | 1998         |              
|Helena Truss             |              | 1998         |              
|Kalispell                |              | 1998         |              
|Kalispell Door           |              | 1999         |              
|Missoula                 |              | 1998         |              
|Missoula Door            |              | 1999         |              
|Missoula Wood Specialty  |              | 1999         |              
|NEVADA                   |             
|Carson Valley            |              | 1998         |              
|Las Vegas                |              | 2001         |              
|Northern Nevada Millwork |              | 1999         |              
|Sparks                   |              | 1997         |              
|NORTH CAROLINA           |             
|Charlotte - Royal        |              | 2000         |              
|OREGON                   |             
|Beaverton                |              | 2000         |              
|Sherwood                 |              | 2000         |              
|TEXAS                    |             
|Abilene                  |              | 1995         |              
|Austin                   |              | 1998         |              
|Austin                   |              | 1995         |              
|Austin MWPC              |              | 2001         |              
|Castleberry              |              | 1995         |              

|16
|--

|State and City       | DateAcquired | OwnedAcreage | LeasedAcreage
|-------------------- | ------------ | ------------ | -------------
|TEXAS (continued)    |              |              |              
|Coppell              |              | 1997         |              
|Dallas - Marvin      |              | 2000         |              
|Dallas - Royal       |              | 1999         |              
|El Paso              |              | 1991         |              
|Frisco               |              | 2000         |              
|Houston              |              | 1997         |              
|Houston              |              | 1998         |              
|Houston              |              | 2002         |              
|Hurst                |              | 1994         |              
|Killeen              |              | 1994         |              
|New Braunfels        |              | 1995         |              
|San Antonio          |              | 1998         |              
|UTAH                 |             
|Heber City           |              | 1997         |              
|Orem                 |              | 1987         |              
|Salt Lake            |              | 1990         |              
|Salt Lake Millwork   |              | 1999         |              
|West Haven           |              | 1996         |              
|WASHINGTON           |             
|Everett              |              | 1994         |              
|Issaquah             |              | 1994         |              
|Kent                 |              | 1994         |              
|Puget Sound Millwork |              | 1998         |              
|Tacoma               |              | 1987         |              
|Spokane              |              | 1990         |              
|Vancouver            |              | 1994         |              

|BMHC and BMC are trade
names. Other brand names or trademarks appearing in this Form 10-K are the
property of their respective holders.


Item 3. Legal
Proceedings


We are involved in
litigation and other legal matters arising in the normal course of business.
Management believes that our recovery or liability, if any, under any of these
matters will not have a material effect on our financial position, liquidity or
results of operations.


Item 4. Submission of
Matters to a Vote of Security Holders


No matters were submitted
to the shareholders for a vote during the fourth quarter of the fiscal year.


17
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II


Item 5. Market for
Registrants Common Stock and Related Shareholder Matters


BMHCs Common Stock
trades on the NASDAQ National Market under the symbol BMHC. The
following table sets forth the range of high and low closing sales prices on the
NASDAQ National Market for the Common Stock for the periods indicated. Such
quotations represent inter-dealer prices without retail markup, markdown or
commission and may not necessarily represent actual transactions.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                 | Common Stock Prices:
|-------------------------------- | --------------------
|Fiscal 2002                      | High                
|Quarter ended March 31, 2002     |                     
|Quarter ended June 30, 2002      |                     
|Quarter ended September 30, 2002 |                     
|Quarter ended December 31, 2002  |                     

|Fiscal 2001                      | High | Low     
|-------------------------------- | ---- | --------
|Quarter ended March 31, 2001     |      | $  9.938
|Quarter ended June 30, 2001      |      | 15.210  
|Quarter ended September 30, 2001 |      | 16.960  
|Quarter ended December 31, 2001  |      | 15.490  

|The Board of Directors
approved implementation of a cash dividend program in November 2002. The first
quarterly dividend of $0.05 per common share was declared for shareholders of
record December 23, 2002 and payable January 15, 2003. The amount of dividend
payments is included in calculations of certain loan covenants in our bank
credit facility. At March 13, 2003, our Common Stock was held by approximately
2,738 shareholders of record or through nominee or street name accounts with
brokers (433 registered holders). The last sales price for our Common Stock, as
reported by NASDAQ on March 13, 2003, was $13.97.


Item 6. Selected
Financial Data


The following table shows
selected consolidated financial data of BMHC for the years indicated. It is
derived from our audited consolidated financial statements and should be read in
conjunction with the disclosures in Item 7, Managements Discussion
and Analysis of Financial Condition and Results of Operations, and the
consolidated financial statements and notes thereto presented on pages 10
through 32 of our 2002 Annual Report. (Amounts are in thousands, except share
data.)
18
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                       | 2002 | 2001            | 2000 | 1999            | 1998
|-------------------------------------- | ---- | --------------- | ---- | --------------- | ----
|Net sales                              |      | $ 1,161,494     |      | $ 1,092,867     |     
|Gross profit                           |      | 329,157         |      | 307,305         |     
|Selling, general and administrative    |     
|expense                                |      | 284,068         |      | 265,661         |     
|Impairment of assets (a)               |      | 6,698           |      | 1,750           |     
|Other income                           |      | (730            | )    | (2,735          | )   
|Income from operations                 |      | 39,121          |      | 42,629          |     
|Equity in earnings of unconsolidated   |     
|companies (b)                          |      |                |      | 4,817           |     
|Interest expense                       |      | 9,812           |      | 13,553          |     
|Income taxes                           |      | 10,871          |      | 13,049          |     
|Income before minority interest,       |     
|extraordinary item and change in       |     
|accounting principle                   |      | 18,438          |      | 20,844          |     
|Minority interest loss                 |      | (227            | )    |                |     
|Extraordinary item, net of tax (c)     |      |                |      |                |     
|Change in accounting principle, net of |     
|tax (d)                                |      | (11,650         | )    |                |     
|Net income                             |      | $        7,015  |      | $      20,844   |     
|                                       |     
|Income per diluted common share before |     
|extraordinary item and change in       |     
|accounting principle                   |      | $          1.41 |      | $          1.60 |     
|                                       |     
|Net income per common share:           |     
|Basic                                  |      | $          0.54 |      | $          1.61 |     
|Diluted                                |      | $          0.53 |      | $          1.60 |     

BALANCE SHEET DATA:

|At Year End                               | 2002 | 2001         | 2000 | 1999         | 1998
|----------------------------------------- | ---- | ------------ | ---- | ------------ | ----
|Working capital                           |      | $    170,492 |      | $    160,904 |     
|Total assets                              |      | 503,074      |      | 485,742      |     
|Long-term debt, net of current maturities |     
|and redeemable preferred stock            |      | 157,375      |      | 167,417      |     
|Shareholders equity                      |      | 251,300      |      | 242,894      |     

|19
|--

| |  | (a) |  | The year
ended December 31, 2002 includes a $6.7 million charge related to the Companys
Dallas/Ft. Worth and Marvin Windows Reporting Units. See Item 7, Managements Discussion
and Analysis of Financial Condition and Results of Operations for more detail.
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (b) |  | The
years ended December 31, 2001 and 1999 include six months and eight months, respectively,
of equity earnings with respect to the Companys 49% investment in KBI. See Notes 4 and 6
to the consolidated financial statement for more detail.
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (c) |  | The
year ended December 31, 1999 includes a loss related to a redemption premium and the
write-off of deferred financing costs associated with the early retirement of notes
payable.
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (d) |  | The
year ended December 31, 2002 includes a loss related to a change in accounting principle.
See Note 2 to the consolidated financial statements for more detail.
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations


Managements
discussion and analysis of financial condition and results of operations is
presented under the caption Financial Review in BMHCs 2002
Annual Report to Shareholders (Annual Report). The information under
this caption is incorporated herein by this reference.


Item 7A. Quantitative
and Qualitative Disclosures About Market Risk


Quantitative and
qualitative disclosures about market risk are presented under the caption
Financial Review in the Annual Report. The information under this
caption is incorporated herein by this reference.


Item 8. Financial
Statements and Supplementary Data


BMHCs consolidated
financial statements and related notes, together with the report of our
independent accountants, are presented on pages 17 through 32 of the Annual
Report and are incorporated herein by this reference.


Item 9. Changes in
and Disagreements With Accountants on Accounting and Financial Disclosure


None.


PART III


Item 10. Directors
and Executive Officers of the Registrant


The nominees for directors
of the Company are presented on pages five and six of the Companys
definitive Proxy Statement (Proxy Statement), which is incorporated
herein by this reference.


The information required by
this Item concerning the Companys executive officers is set forth in Part
I, under the caption Executive Officers, of this report and is
incorporated herein by this reference.

20
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The information required by
this Item concerning compliance with Section 16(a) of the Exchange Act is
presented under the caption Certain Relationships and Other
Transactions of the Proxy Statement and is incorporated herein by this
reference.


Item 11. Executive
Compensation


Information required by
this Item concerning compensation of the Companys executive officers for
the year ended December 31, 2002, is presented under the caption Executive
Compensation and Other Information of the Proxy Statement, and is
incorporated herein by this reference.


Item 12. Security
Ownership of Certain Beneficial Owners and Management


Information required by
this Item concerning the security ownership of certain beneficial owners,
directors and executive officers, as of December 31, 2002, is set forth under
the caption Security Ownership of Certain Beneficial Owners of the
Proxy Statement and is incorporated herein by this reference.


The following table summarizes
equity compensation plan information as of December 31, 2002:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Plan category             | Number of securities to beissued upon exercise ofoutstandingoptions, warrants and rights | Weighted-average exerciseprice of outstandingoptions, warrantsand rights | Number of securitiesremaining available forfuture issuance under equitycompensation plans (1)
|------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------
|Equity compensation plans |                                                                                          |                                                                          |                                                                                              
|approved by security      |                                                                                         
|holders                   |                                                                                          | 1,465,183                                                                |                                                                                              
|Equity compensation plans |                                                                                         
|not approved by           |                                                                                         
|security holders          |                                                                                          | 50,000                                                                   | (3)                                                                                          
|                          |                                                                                          |                                                                          |                                                                                              
|Total                     |                                                                                          | 1,515,183                                                                |                                                                                              
|                          |                                                                                          |                                                                          |                                                                                              

| |  | (1) |  | Excludes
securities reflected in the second column.
| |  | --- |  | ---------------------------------------------------

| |  | (2) |  | This
number includes 34,300 from the 1993 Amended and Restated Non-Employee Stock Option Plan
and 50,750 from the 2000 Stock Incentive Plan. The 2000 Stock Incentive Plan allows for
an increase of 100,000 shares each year not to exceed 1,100,000 for the plan.
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (3) |  | The
exercise price was equal to the fair market value of BMHCs common stock on the date the
options were granted. These options vested in February 2002 and expire 10 years from the
date of grant, or 2007.
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21
|--

|Item 13. Certain
Relationships and Related Transactions


Information required by
this Item concerning certain relationships and related transactions during 2002
is set forth under the caption Certain Relationships and Other
Transactions of the Proxy Statement and is incorporated herein by this
reference.


Item 14. Controls and
Procedures


Within the 90 days prior to
the date of this report, the Company carried out an evaluation, under the
supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Senior Vice President,
Finance and Treasurer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures pursuant to Exchange Act Rule
13a-14.


Disclosure controls are
procedures designed with the objective of ensuring that information we are
required to disclose in our periodic reports filed with the Securities and
Exchange Commission (SEC) is recorded, processed, summarized and
reported timely. Disclosure controls also are designed with the objective to
insuring that such information is communicated to our management, as
appropriate, to allow timely judgments concerning required disclosure. Internal
controls are procedures designed with the objective of providing reasonable
assurance that (i) transactions are properly authorized; (ii) assets are
safeguarded against unauthorized or improper use and (iii) transactions are
properly recorded and reported, in order to permit the preparation of our
financial statements in accordance with generally accepted accounting
principles.


A control system, even if
well conceived and implemented can only provide reasonable assurance rather than
absolute assurance that the goals of the control system are met. There are
inherent limitations in all control systems due to resource constraints and
other factors, such as assumptions regarding the likelihood of future events and
new business conditions, the fact that judgments may, with the benefit of
hindsight, prove to be incorrect, and the fact that breakdowns can occur because
of simple error or mistake, as well as a result of fraudulent activity. As a
result of these limitations, it is not possible to ensure that misstatements due
to error or fraud may occur and not be detected.


The evaluation of our
disclosure controls and internal controls included a review of the design and
objectives and implementation throughout the Company. Our management seeks to
identify errors, control problems or instances of fraud and to confirm that
appropriate corrective action is implemented as appropriate.


In accordance with SEC
requirements, the Chief Executive Officer and the Senior Vice President, Finance
and Treasurer advised the Company that, since the date of their evaluation,
there have been no significant changes in internal controls or other factors
that could significantly affect the internal controls.


Based on their evaluation,
the Chief Executive Officer and Senior Vice President Finance and Treasurer have
concluded that, subject to the above limitations, the Companys disclosure
controls are effective to ensure that material information relating to the
Company and its subsidiaries is communicated to management, and that the
Companys internal controls are effective to provide reasonable assurance
that our financial statements are fairly presented in accordance with generally
accepted accounting principles.
22
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART IV


Item 15. Exhibits,
Financial Statement Schedules and Reports on Form 8-K
|----------------------------------------------------------------------------------

|(a) |  | The
following documents are filed as part of this annual report on Form 10-K:
|--- |  | -----------------------------------------------------------------------------

| |  | 1. |  | Financial
Statements:
| |  | -- |  | ---------------------

| | Incorporated
herein by this reference from pages 17 through 32 of the Annual Report.
| | ------------------------------------------------------------------------------------

| |  | - |  | Consolidated
Statements of Income for the years ended December 31, 2002, 2001 and 2000.
| |  | - |  | ---------------------------------------------------------------------------------------

| |  | - |  | Consolidated
Balance Sheets as of December 31, 2002 and December 31, 2001.
| |  | - |  | --------------------------------------------------------------------------

| |  | - |  | Consolidated
Statements of Shareholders Equity for the years ended December 31, 2002, 2001 and 2000.
| |  | - |  | -----------------------------------------------------------------------------------------------------

| |  | - |  | Consolidated
Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000.
| |  | - |  | -------------------------------------------------------------------------------------------

| |  | - |  | Notes
to Consolidated Financial Statements.
| |  | - |  | -------------------------------------------

| |  | - |  | Report
of Independent Accountants.
| |  | - |  | ----------------------------------

| |  | 2. |  | Financial
Statement Schedules:
| |  | -- |  | ------------------------------

| |  |  | Page
| |  |  | ----

| | Report
of Independent Accountants on Financial Statement
Schedule |  | 24
| | ----------------------------------------------------------------- |  | --

| | I.
Valuation and Qualifying Accounts for the years ended December 31, 2002, 2001 and
2000 |  | 29
| | ----------------------------------------------------------------------------------------- |  | --

|Schedules other than those
listed are omitted because they are not applicable or because the required
information is shown in the financial statements or notes.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3. |  | Exhibits:
| |  | -- |  | ---------

| | A
list of the exhibits required to be filed as part of this report is set forth in the
Index to Exhibits, which immediately precedes such exhibits, and is incorporated herein
by this reference.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  |  |  | Reports
on Form 8-K
|--- |  |  |  | -------------------

| | No
Form 8-Ks were filed during the fourth quarter of the fiscal year.
| | ---------------------------------------------------------------------

|23
|--

|Report of Independent
Accountants onFinancial Statement
Schedule


To the Board of Directors of
Building Materials Holding Corporation:


Our audits of the consolidated
financial statements referred to in our report dated March 6, 2003 appearing in the 2002
Annual Report to Shareholders of Building Materials Holding Corporation (which report and
consolidated financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the financial statement schedule listed in Item
15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.


/s/ PricewaterhouseCoopers LLP


San Francisco, CaliforniaMarch 6,
2003

24
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|SIGNATURES


Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


BUILDING MATERIALS HOLDING
CORPORATION


By  /s/ Robert E. Mellor
            Robert E. Mellor President,
      Chief
Executive Officer and Director


Dated: March 17, 2003


KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below constitutes and
appoints Robert E. Mellor, Ellis C. Goebel, and Robert L. Becci, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments to this Report, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming that all said attorneys-in-fact
and agents, or any of them or their or his substitutes or substituted, may
lawfully do or cause to be done by virtue hereof. This Form 10-K may be executed
in multiple counterparts, each of which shall be an original, but which shall
together constitute but one agreement.


25
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) Principal Executive Officer:
/s/ Robert E. Mellor
Robert E. MellorPresident, Chief ExecutiveOfficer and Director
March 17, 2003
(ii) Principal Financial Officer:
/s/ Ellis C. Goebel
Ellis C. GoebelSenior Vice President - Finance and Treasurer
March 17, 2003

(iii) Principal Accounting Officer:
/s/ Robert L. Becci
Robert L. BecciVice President and ControllerMarch 17, 2003 | (iv) Directors:
/s/ Robert E. Mellor
Robert E. MellorChairman of the Board
of Directors
March 17, 2003
/s/ Alec F. Beck

Alec F. BeckMarch 17, 2003
/s/ Sara L. Beckman
Sara L. BeckmanMarch 17, 2003/s/ H. James BrownH. James BrownMarch 17, 2003/s/ Wilbur J. Fix
Wilbur J. FixMarch 17, 2003
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | /s/ Donald S. Hendrickson

Donald S. HendricksonMarch 17, 2003
/s/ James K. Jennings, Jr.
James K. Jennings, Jr.March 17, 2003
/s/ Guy O. Mabry
Guy O. MabryMarch 17, 2003
/s/ Peter S. ONeill
Peter S. ONeillMarch 17, 2003
/s/ Richard G. Reiten
Richard G. ReitenMarch 17, 2003
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|26
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|CERTIFICATIONS


I, Robert E. Mellor, certify that:


1. I have reviewed this annual
report on Form 10-K of Building Materials Holding Corporation;


2. Based on my knowledge, this
annual report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by
this annual report;


3. Based on my knowledge, the
financial statements, and other financial information included in this annual report,
fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this annual
report;


4. The registrants other
certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:


(a)
designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this annual
report is being prepared;


(b)
evaluated the effectiveness of the registrants disclosure controls and procedures as of
a date within 90 days prior to the filing date of this annual report (the Evaluation
Date); and


(c)
presented in this annual report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;


5. The registrants other certifying
officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons
performing the equivalent functions):


(a)
all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material weaknesses
in internal controls; and


(b)
any fraud, whether or not material, that involves management or other employees who have
a significant role in the registrants internal controls; and


6. The registrants
other certifying officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.


Date: March 17, 2003/s/ Robert E.
MellorRobert E. Mellor,Chairman of the Board, President and Chief
Executive Officer(Principal Executive Officer)

27
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|I, Ellis C. Goebel, certify that:


1. I have reviewed this annual
report on Form 10-K of Building Materials Holding Corporation;


2. Based on my knowledge, this
annual report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by
this annual report;


3. Based on my knowledge, the
financial statements, and other financial information included in this annual report,
fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this annual
report;


4. The registrants other
certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:


(a)
designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this annual
report is being prepared;


(b)
evaluated the effectiveness of the registrants disclosure controls and procedures as of
a date within 90 days prior to the filing date of this annual report (the Evaluation
Date); and


(c)
presented in this annual report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;


5. The registrants other certifying
officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons
performing the equivalent functions):


(a)
all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material weaknesses
in internal controls; and


(b) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and


6. The registrants
other certifying officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.


Date: March 17, 2003


/s/ Ellis C. Goebel
Ellis C. Goebel,Senior Vice President-Finance and Treasurer
(Principal Financial Officer)

28
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|BUILDING MATERIALS
HOLDING CORPORATION


SCHEDULE I VALUATION
AND QUALIFYING ACCOUNTS


FOR THE YEARS ENDED
DECEMBER 31, 2002, 2001 and 2000(amounts in thousands)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Description | Balance atBeginningof Year | AdditionsCharged toCosts andExpenses | AdditionsCharged toOtherAccounts | Deductions | Balance atEnd of Year
|----------- | -------------------------- | ------------------------------------ | -------------------------------- | ---------- | ---------------------
|            |                            |                                      |                                  |            |                      

DEDUCTED FROM ASSET ACCOUNTS:ALLOWANCE
FOR RETURNS, DISCOUNTS AND DOUBTFUL ACCOUNTS

|Year Ended December 31, 2002 |  | $1,966 |  | $2,347 |  | $ |  | $2,291(1) |  | $2,022 | 
|---------------------------- |  | ------ |  | ------ |  | -- |  | --------- |  | ------ | 
|Year Ended December 31, 2001 |  | $2,184 |  | $1,679 |  | $ |  | $1,897(1) |  | $1,966 | 
|Year Ended December 31, 2000 |  | $2,257 |  | $1,582 |  | $ |  | $1,655(1) |  | $2,184 | 

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

|29
|--

|BUILDING MATERIALS
HOLDING CORPORATION


INDEX TO EXHIBITS Filed with the Annual
Report on Form 10-K for the Year Ended December 31,
2002
|-----------------------------------------------------------------------------------------------------------------------------------------

|Footnote |  | ExhibitNumber |  | ExhibitDescription
|-------- |  | ------------- |  | ------------------

|(f) |  | 3.5 |  | Amended Certificate of Incorporation, filed with the office of the Secretary of State of
the State of Delaware on September 23, 1997.
|--- |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------

|(j) |  | 3.6.1 |  | Amended and Restated By-laws of the Registrant.
|--- |  | ----- |  | -----------------------------------------------

|(c) |  | 4.2 |  | Form of Note.
|--- |  | --- |  | -------------

|(f) |  | 4.7 |  | Rights Agreement, dated September 19, 1997, as amended November 5, 1998 by and between
the Registrant and American Stock Transfer and Trust Company.
|--- |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | 10.4* |  | 1990 Bonus Plan of the Company
|--- |  | ----- |  | ------------------------------

|(a) |  | 10.5* |  | Stock Option Plan (Senior Original Shareholders Management Plan), effective January 1,
1991.
|--- |  | ----- |  | --------------------------------------------------------------------------------------------

|(a) |  | 10.6* |  | Stock Option Plan (Field Management Plan), effective January 1, 1991.
|--- |  | ----- |  | ---------------------------------------------------------------------

|(b) |  | 10.7 |  | Form of indemnity agreement between the Company and its officers and directors.
|--- |  | ---- |  | -------------------------------------------------------------------------------

| |  | 10.7.1 |  | Amended
Form of Indemnity Agreement between the Company and its officers and directors.
| |  | ------ |  | ---------------------------------------------------------------------------------------

|(d) |  | 10.13* |  | Supplemental Retirement Plan dated January 1, 1993.
|--- |  | ------ |  | ---------------------------------------------------

|(e) |  | 10.19* |  | Amended and Restated 1992 Non-Qualified Stock Plan.
|--- |  | ------ |  | ---------------------------------------------------

|(e) |  | 10.20* |  | Amended and Restated 1993 Employee Stock Option Plan.
|--- |  | ------ |  | -----------------------------------------------------

|(e) |  | 10.21* |  | Amended and Restated 1993 Non-Employee Director Stock Option Plan.
|--- |  | ------ |  | ------------------------------------------------------------------

|30
|--

|(g) |  | 10.34 |  | Asset Purchase Agreement dated as of October 13, 1999, between BMCW, LLC and Rowland
Manufacturing Corporation dba Royal Door Company, Inc.
|--- |  | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------

|(g) |  | 10.35 |  | Promissory Note between BMCW, LLC Rowland Manufacturing Corporation dba Royal Door
Company, Inc.
|--- |  | ----- |  | ------------------------------------------------------------------------------------------------

|(k) |  | 10.36 |  | Amended and Restated Credit Agreement among Wells Fargo Bank, N.A., as Agent, the
Company, Letter Of Credit Issuing Bank First Union Bank, as Syndication Agent, and Twelve
Other Financial Institutions Party Hereto dated August 30, 2001.
|--- |  | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) |  | 10.37 |  | Amended and Restated Severance Plan for Certain Key Executive Officers, Senior Management
and Key Employees of the Company and its subsidiaries as Adopted by the Board of
Directors of the Company on February 17, 2000.
|--- |  | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) |  | 10.38 |  | Building Materials Holding Corporation 2000 Stock Incentive Plan.
|--- |  | ----- |  | -----------------------------------------------------------------

|(i) |  | 10.39 |  | Building Materials Holding Corporation Employee Stock Purchase Plan.
|--- |  | ----- |  | --------------------------------------------------------------------

| |  | 10.40 |  | Employment Agreement by and between Robert E. Mellor and the Company as of June 1, 2002.
| |  | ----- |  | ----------------------------------------------------------------------------------------

| |  | 10.41 |  | First Amendment to Amended and Restated Credit Agreement among Wells Fargo Bank, N.A., as
Agent, the Company, and twelve other financial institutions dated as of December 11, 2002.
| |  | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 11.0 |  | Statement regarding computation of earnings per share.
| |  | ---- |  | ------------------------------------------------------

| |  | 13.1 |  | Building Materials Holding Corporations 2002 Annual Report. Such report, except to the
extent incorporated herein by reference, is being furnished for the information of the
Securities and Exchange Commission only and is not to be deemed filed as part of this
Annual Report on Form 10-K.
| |  | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 21.1 |  | Subsidiaries of Building Materials Holding Corporation.
| |  | ---- |  | -------------------------------------------------------

| |  | 23.1 |  | Consent of PricewaterhouseCoopers LLP.
| |  | ---- |  | --------------------------------------

| |  | 24.1 |  | Power of Attorney. Reference is made to page 25.
| |  | ---- |  | ------------------------------------------------

|31
|--

---

|(a) |  | Filed
as an Exhibit to the Registration Statement on Form S-1 filed with the Commission on June
6, 1991 (Registration No. 33-41040) (the Registration Statement) and incorporated
herein by reference.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Filed
as an Exhibit to Amendment No. 2 to the Registration Statement, filed with the Commission
on August 2, 1991 and incorporated herein by reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | Filed
as an Exhibit to Amendment No.1 to the Registration Statement on Form S-1, filed with the
Commission on October 20, 1992 (Registration No. 33-52432), and incorporated herein by
reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) |  | Filed
as an Exhibit to Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1994, filed with the Commission on March 30, 1995, and incorporated herein by
reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) |  | Filed
as an Exhibit to Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1996, filed with the Commission on March 28, 1997, and incorporated herein by
reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) |  | Filed
as an Exhibit to BMHCs Report on Form 8-K12G3, filed with the Commission on September
23, 1997 and incorporated herein by reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------

|(g) |  | Filed
as an Exhibit to Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1999, filed with the Commission on March 31, 2000, and incorporated herein by
reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) |  | Filed
as an Exhibit to BMHCs Report on Form S-8, filed with the Commission on August 22, 2000
and incorporated herein by reference.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | Filed
as an Exhibit to BMHCs Report on Form S-8, filed with the Commission on October 2, 2000
and incorporated herein by reference.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------

|(j) |  | Filed
as an Exhibit to Companys Quarterly Report on Form 10-Q for the quarter ended September
30, 2001, filed with the Commission on November 14, 2001, and incorporated herein by
reference.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(k) |  | Filed
as an Exhibit to Companys Annual Report on Form 10-K for the fiscal year ended December
31, 2001, filed with the Commission on March 27, 2002, and incorporated herein by
reference.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Component of executive
compensation.

|32
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