SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
  /X/           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For The Quarterly Period Ended September 27, 1998

                                       OR

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

                         Commission File Number 33-81808

                    BUILDING MATERIALS CORPORATION OF AMERICA
             (Exact name of registrant as specified in its charter)


        Delaware                                               22-3276290
(State of Incorporation)                                  (I. R. S. Employer
                                                           Identification No.)

 1361 Alps Road, Wayne, New Jersey                               07470
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code           (973) 628-3000

                                (Not applicable)
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)


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  / /

As of  November 5, 1998,  1,015,010  shares of the  Registrant's  Class A common
stock  and  15,000  shares  of  the  Registrant's  Class  B  common  stock  were
outstanding.


<PAGE>


                         Part I - FINANCIAL INFORMATION
                          Item 1 - FINANCIAL STATEMENTS


                    BUILDING MATERIALS CORPORATION OF AMERICA

                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



                                        Third Quarter Ended   Nine Months Ended
                                        -------------------- -------------------
                                        Sept. 28,  Sept. 27, Sept. 28, Sept. 27,
                                           1997       1998      1997      1998
                                        ---------  --------- --------- ---------
                                                       (Thousands)

Net sales ............................ $274,356   $313,617  $723,614  $812,273
                                       --------   --------  --------  --------
Costs and expenses:
  Cost of products sold ..............  197,934    220,246   521,291   578,776
  Selling, general and administrative.   50,344     66,483   141,100   172,864
  Goodwill amortization ..............      501        571     1,421     1,573
  Nonrecurring charges (Note 1) ......        -     27,563         -    27,563
                                       --------   --------  --------  --------

    Total costs and expenses..........  248,779    314,863   663,812   780,776
                                       --------   --------  --------  --------

Operating income (loss) ..............   25,577     (1,246)   59,802    31,497
Interest expense .....................  (10,395)   (12,270)  (30,494)  (37,675)
Other income, net.....................    3,504      6,564     8,864    20,917
                                       --------   --------  --------  --------

Income (loss) before income taxes
  and extraordinary item .............   18,686     (6,952)   38,172    14,739
Income tax (provision) benefit .......   (7,287)     2,784   (14,887)   (5,675)
                                       --------   --------  --------  --------
Income (loss) before extraordinary
  item ...............................   11,399     (4,168)   23,285     9,064
Extraordinary item, net of income tax
  benefit of $5,845 ..................        -     (9,336)        -    (9,336)
                                       --------   --------  --------  --------
Net income (loss) .................... $ 11,399   $(13,504) $ 23,285  $   (272)
                                       ========   ========  ========  ========








                 See Notes to Consolidated Financial Statements





                                       1


<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA
                           CONSOLIDATED BALANCE SHEETS
                                                                     Sept. 27,
                                                     December 31,      1998
                                                          1997      (Unaudited)
                                                     ------------   -----------
                                                             (Thousands)
ASSETS
Current Assets:
  Cash and cash equivalents.........................  $  12,921     $  51,114
  Investments in trading securities.................     62,059        32,162
  Investments in available-for-sale securities......    161,290        95,486
  Investments in held-to-maturity securities........        499         6,344
  Other short-term investments......................     19,488        20,587
  Accounts receivable, trade, net...................     13,643        11,698
  Accounts receivable, other........................     50,839        71,471
  Receivable from related parties, net..............      5,151             -
  Loan receivable from related party................      6,152             -
  Inventories.......................................     72,254       103,444
  Other current assets..............................      6,243         7,200
                                                      ---------     ---------
    Total Current Assets............................    410,539       399,506
Property, plant and equipment, net..................    241,946       300,611
Goodwill, net.......................................     70,046        80,431
Deferred income tax benefits........................     35,981        51,050
Receivable from related parties ....................     31,661             -
Other assets........................................     17,113        17,785
                                                      ---------     ---------
Total Assets........................................  $ 807,286     $ 849,383
                                                      =========     =========
LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities:
  Short-term debt...................................  $  26,944     $   2,388
  Current maturities of long-term debt..............      3,801         4,024
  Accounts payable..................................     55,642        74,072
  Payable to related parties, net...................          -         3,780
  Accrued liabilities...............................     26,298        58,817
  Reserve for product warranty claims...............     13,100        21,725
                                                      ---------     ---------
    Total Current Liabilities.......................    125,785       164,806
                                                      ---------     ---------
Long-term debt less current maturities..............    555,446       569,552
                                                      ---------     ---------
Reserve for product warranty claims.................     23,881        30,719
                                                      ---------     ---------
Other liabilities...................................     19,175        22,352
                                                      ---------     ---------
Stockholder's Equity:
  Series A Cumulative Redeemable Convertible
    Preferred Stock, $.01 par value per share;
    100,000 shares authorized; no shares issued               -             -
  Class A Common Stock, $.001 par value per share;
    1,300,000 shares authorized; 1,000,010
    and 1,015,010 shares issued and outstanding,
    respectively ...................................          1             1
  Class B Common Stock, $.001 par value per share;
    100,000 shares authorized; 0 and 15,000 shares
    issued and outstanding, respectively ...........          -             -
  Additional paid-in capital........................     86,910        89,400
  Accumulated deficit...............................    (14,083)      (14,355)
  Accumulated other comprehensive income (loss).....     10,171       (13,092)
                                                      ---------     ---------

    Stockholder's Equity ...........................     82,999        61,954
                                                      ---------     ---------
 Total Liabilities and Stockholder's Equity ........  $ 807,286     $ 849,383
                                                      =========     =========

                 See Notes to Consolidated Financial Statements
                                        2


<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                            Nine Months Ended
                                                          ---------------------
                                                          Sept. 28,   Sept. 27,
                                                            1997        1998
                                                          ---------   --------
                                                                (Thousands)

Cash and cash equivalents, beginning of period........... $124,560    $ 12,921
                                                          --------    --------

Cash provided by (used in) operating activities:
  Net income (loss) .....................................   23,285        (272)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
      Extraordinary item ................................        -       9,336
      Depreciation ......................................   16,796      19,347
      Goodwill amortization..............................    1,421       1,573
      Deferred income taxes..............................   14,736       5,487
      Noncash interest charges...........................   20,125      20,203
  Increase in working capital items......................  (52,316)    (29,301)
  Purchases of trading securities........................  (60,470)   (117,914)
  Proceeds from sales of trading securities..............   46,217      98,987
  Change in net receivable from/payable to related
    parties..............................................  (22,282)     40,592
  Other, net.............................................   (3,364)     21,691
                                                          --------    --------
Net cash provided by (used in) operating activities......  (15,852)     69,729
                                                          --------    --------

Cash provided by (used in) investing activities:
  Capital expenditures...................................  (26,182)    (36,251)
  Acquisitions...........................................  (30,531)    (59,187)
  Purchases of available-for-sale securities............. (103,427)    (54,524)
  Purchases of held-to-maturity securities...............   (4,591)     (6,344)
  Proceeds from sales of available-for-sale securities...  125,445     122,187
  Proceeds from held-to-maturity securities..............   10,558         499
                                                          --------    --------

Net cash used in investing activities....................  (28,728)    (33,620)
                                                          --------    --------

Cash provided by (used in) financing activities:
  Proceeds from sale of accounts receivable..............   15,574      43,620
  Decrease in short-term debt............................        -     (24,556)
  Proceeds from issuance of debt ........................      662     149,361
  Decrease in borrowings under revolving credit facility.        -     (34,000)
  Repayments of long-term debt...........................   (2,610)   (135,443)
  Decrease in loan receivable from related party.........        -       6,152
  Distributions to parent company........................  (46,000)          -
  Payments of asbestos claims............................   (3,062)          -
  Financing fees and expenses............................     (430)     (3,050)
                                                          --------    --------
Net cash provided by (used in) financing activities......  (35,866)      2,084
                                                          --------    --------
Net change in cash and cash equivalents..................  (80,446)     38,193
                                                          --------    --------
Cash and cash equivalents, end of period................. $ 44,114    $ 51,114
                                                          ========    ========





                                       3


<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

         CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - (Continued)


                                                            Nine Months Ended
                                                          --------------------
                                                          Sept. 28,  Sept. 27,
                                                             1997       1998
                                                          ---------  ---------
                                                                (Thousands)

Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest (net of amount capitalized).............     $  8,193   $ 10,894
    Income taxes.....................................          130      1,041

Acquisition of Leatherback Industries business, 
  net of $8 cash acquired:
    Fair market value of assets acquired.............     $ 27,167
    Purchase price of acquisition....................       25,531
                                                          --------
    Liabilities assumed..............................     $  1,636
                                                          ========


Acquisition of Leslie-Locke business:
  Fair market value of assets acquired...............                $ 59,318
  Purchase price of acquisition......................                  43,468
                                                                     --------
  Liabilities assumed................................                $ 15,850
                                                                     ========














                 See Notes to Consolidated Financial Statements











                                        4


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Building Materials Corporation of America (the "Company") is a wholly-owned
subsidiary  of  GAF  Building  Materials  Corporation  ("GAFBMC"),  which  is an
indirect,  wholly-owned  subsidiary of G-I Holdings Inc. ("G-I  Holdings").  G-I
Holdings  is  a  wholly-owned   subsidiary  of  GAF  Corporation   ("GAF").  The
consolidated  financial  statements  of the Company  reflect,  in the opinion of
management,  all adjustments  necessary to present fairly the financial position
of the Company at September  27, 1998,  and the results of  operations  and cash
flows for the periods  ended  September  28, 1997 and  September  27, 1998.  All
adjustments are of a normal recurring nature.  These financial statements should
be read in conjunction  with the annual  financial  statements and notes thereto
included in the  Company's  Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Form 10-K").



Note 1:  Nonrecurring Charges


     The Company recorded pre-tax  nonrecurring  charges in the third quarter of
1998 aggregating $27.6 million, of which $20.0 million related to the settlement
of a national  class action  lawsuit  involving  asphalt  shingles  manufactured
between January 1, 1973 and December 31, 1997.  Under the terms of the September
1998  settlement,  the Company will provide  property  owners whose GAF shingles
were manufactured during this period and which suffer certain damages during the
term of their original warranty period, and who file a qualifying claim, with an
opportunity to receive certain limited benefits beyond those already provided in
their existing warranty. The Company agreed to the settlement,  payments against
which  will be made over a number of years,  to avoid the  expense  required  to
defend such litigation.

         On July 15, 1998, the Company  recorded a  nonrecurring  charge of $7.6
million  related  to a grant to its  President  and Chief  Operating  Officer of
30,000  shares of  restricted  common  stock of the  Company  and  certain  cash
payments  to be  made  over a  specified  period  of time  to  such  officer  in
connection  with the  termination by an affiliate of preferred stock options and
stock appreciation rights held by such officer.


Note 2:  Debt Refinancing -- Extraordinary Item

     On July 17, 1998,  the Company  issued $150 million in aggregate  principal
amount at  maturity  of 7-3/4%  Senior  Notes due 2005.  The  Company has used a
portion  of the net  proceeds  from this  issue to  purchase  (and  subsequently
cancel)  $132.6  million  in  aggregate  principal  amount  at  maturity  of the
Company's 11-3/4% Senior Deferred Coupon Notes due 2004. In connection with this
purchase,  the  Company  recorded  an  after-tax  extraordinary  charge  of $9.3
million.









                                       5

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Note 3: Comprehensive Income



     In June 1997, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting  Comprehensive Income," which
is   effective   for  fiscal   years   beginning   after   December   15,  1997.
Reclassification of financial statements for earlier periods is required. In the
Company's case,  comprehensive income includes net income,  unrealized gains and
losses from investments in available-for-sale  securities, and pension liability
adjustments.

                                       Third Quarter Ended   Nine Months Ended
                                       -------------------- -------------------
                                       Sept. 28, Sept. 27,  Sept. 28, Sept. 27,
                                          1997     1998       1997      1998
                                       --------  --------   -------- ---------
                                                      (Thousands)

Net income (loss) .................... $ 11,399  $(13,504)  $ 23,285 $   (272)
                                       --------  --------   -------- --------
Other comprehensive income, net of tax:
  Unrealized gains (losses) on
    available-for-sale securities:
  Unrealized holding gains (losses)
    arising during the period, net of
    income tax (provision) benefit of
    $(335), $11,596, $(4,100)
    and $10,125 ......................      524   (18,482)     6,414  (16,177)
  Less:  Reclassification adjustment
    for gains (losses) included in net
    income, net of income tax
    (provision) benefit of
    $(663),$ 2,630, $(3,581), and
    $(4,585) .........................    1,037    (4,203)     5,603    7,086
                                       --------  --------   -------- --------
Total other comprehensive income (loss)    (513)  (14,279)       811  (23,263)
                                       --------  --------   -------- --------
Comprehensive income (loss) .......... $ 10,886  $(27,783)  $ 24,096 $(23,535)
                                       ========  ========   ======== ========















                                         6


<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.   Comprehensive Income (Continued)


     Changes  in the  components  of  "Accumulated  other  comprehensive  income
(loss)" for the nine months ended September 27, 1998 are as follows:

                                  Unrealized
                                  Gains (losses) Minimum     Accumulated
                                  on Available-  Pension     Other
                                  for-sale       Liability   Comprehensive
                                  Securities     Adjustment  Income
                                  -------------- ----------  -------------
                                                (Thousands)

Balance, December 31, 1997 ...    $ 11,102       $   (931)   $ 10,171
Change for the period ........     (23,263)             -     (23,263)
                                  --------       --------    --------
Balance, September 27, 1998 ..    $(12,161)      $   (931)   $(13,092)
                                  ========       ========    ========

Note 4:   Inventories:

     Inventories consist of the following:
                                              December 31,   Sept. 27,
                                                  1997         1998
                                              ------------   ---------

                                                     (Thousands)

         Finished goods ..................    $ 38,459       $ 65,401
         Work in process .................      10,180          9,070
         Raw materials and supplies ......      24,670         30,028
                                              --------       --------

         Total ...........................      73,309        104,499
         Less LIFO reserve ...............      (1,055)        (1,055)
                                              --------       --------

         Inventories .....................    $ 72,254       $103,444
                                              ========       ========

Note 5:   Acquisition

     Effective  June 1, 1998,  the Company  purchased  for  approximately  $43.5
million substantially all of the assets of Leslie-Locke Inc. ("Leslie-Locke"), a
wholly-owned  subsidiary of Leslie Building  Products,  Inc., which manufactures
and markets a variety of specialty  building  products and  accessories  for the
professional  and   do-it-yourself   remodeling  and  residential   construction
industries from manufacturing  facilities in Burgaw, North Carolina and Compton,
California.  Leslie-Locke  had 1997  sales of  approximately  $90  million.  The
acquisition  will be accounted for under the purchase method of accounting.  The
results of the  Leslie-Locke  business are included from the date of acquisition
and are  not  material  to the  results  presented  in the  foregoing  financial
statements for the nine months ended September 27, 1998.




                                       7

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 6:   Termination of Interest Rate Swap Agreements

     In June 1998, the Company terminated  interest rate swap agreements related
to its 11-3/4% Senior  Deferred  Coupon Notes due 2004 with an aggregate  ending
notional principal amount of $60.0 million,  resulting in gains of $0.7 million.
The gains have been  deferred  and will be  amortized as a reduction of interest
expense over the remaining original life of the swaps.


Note 7:   Contingencies

Asbestos Litigation Against GAF

     In connection  with its formation,  the Company  contractually  assumed and
agreed to pay the first  $204.4  million  of  liabilities  for  asbestos-related
bodily injury claims  relating to the  inhalation of asbestos  fiber  ("Asbestos
Claims") (whether for indemnity or defense) of its parent,  GAFBMC,  relating to
pending  cases and  previously  settled,  but not paid,  cases as of January 31,
1994,  and no other asbestos  liabilities  of GAFBMC.  As of March 30, 1997, the
Company had paid all of its assumed asbestos-related liabilities.

     GAF has advised the Company that, as of September 27, 1998, it is defending
approximately 105,000 pending alleged Asbestos Claims (having received notice of
approximately  74,400 new Asbestos  Claims during the first nine months of 1998)
and has resolved approximately 283,200 Asbestos Claims (including  approximately
48,700 in the first nine months of 1998).  GAF has  advised the Company  that it
believes that a significant portion of the claims filed in the first nine months
of 1998 were already pending  against other  defendants for some period of time,
with GAF being added as a defendant  upon the lifting in 1997 of the  injunction
relating to the Georgine  class  action  settlement.  During 1997,  GAF resolved
approximately  11,000 Asbestos Claims of which approximately 9,900 were resolved
(including Asbestos Claims disposed of at no cost to GAF) for an average cost of
approximately  $4,070  per  claim.  GAF's  share of the costs  with  respect  to
approximately  1,100  Asbestos  Claims  resolved  during  1997  has not yet been
determined. There can be no assurance that the actual costs of resolving pending
and future Asbestos Claims will approximate GAF's historic average costs.

     GAF has stated that it is committed to effecting a comprehensive resolution
of Asbestos Claims, that it is exploring a number of options,  both judicial and
legislative,  to accomplish such resolution,  but there can be no assurance that
this effort will be successful.

     The Company  believes that it will not sustain any additional  liability in
connection  with  asbestos-related  claims.  While the  Company  cannot  predict
whether any  asbestos-related  claims will be asserted against it or its assets,
or the outcome of any  litigation  relating to such claims,  it believes that it
has  meritorious  defenses to such  claims.  Moreover,  it has been  jointly and
severally indemnified by G-I Holdings and GAFBMC with respect to such claims.





                                         8


<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 7.  Contingencies (Continued)

     For further information  regarding the history of the foregoing  litigation
and  asbestos-related  matters,  see "Item 3. Legal  Proceedings"  and Note 3 to
Consolidated Financial Statements contained in the Company's Form 10-K.


Environmental Litigation

     The  Company,  together  with other  companies,  is a party to a variety of
proceedings  and  lawsuits  involving   environmental  matters   ("Environmental
Claims"),  in which  recovery is sought for the cost of cleanup of  contaminated
sites,  a number of which  Environmental  Claims are in the early stages or have
been dormant for protracted periods. At most sites, the Company anticipates that
liability will be apportioned  among the companies  found to be responsible  for
the presence of hazardous  substances at the site. The Company believes that the
ultimate disposition of such matters will not, individually or in the aggregate,
have a  material  adverse  effect on the  business,  results  of  operations  or
financial position of the Company.

     For  further  information   regarding   environmental   matters  and  other
litigation,  reference is made to "Item 3. Legal  Proceedings"  contained in the
Company's Form 10-K.


Tax Claim Against GAF

     On  September  15, 1997,  GAF  received a notice from the Internal  Revenue
Service (the  "Service") of a deficiency  in the amount of $84.4 million  (after
taking  into  account  the use of net  operating  losses and foreign tax credits
otherwise  available for use in later years) in connection with the formation in
1990 of  Rhone-Poulenc  Surfactants  and  Specialties,  L.P.  (the  "surfactants
partnership"),  a  partnership  in which a  subsidiary  of GAF,  GAF  Fiberglass
Corporation  ("GFC"),  holds an interest.  The claim of the Service for interest
and penalties,  after taking into account the effect on the use of net operating
losses and  foreign  tax  credits,  could  result in GFC  incurring  liabilities
significantly in excess of the deferred tax liability of $131.4 million that GAF
recorded in 1990 in  connection  with this  matter.  GAF has advised the Company
that it believes that GFC will prevail in this matter,  although there can be no
assurance in this regard. The Company believes that the ultimate  disposition of
this matter will not have a material  adverse effect on its business,  financial
position or results of operations. GAF, G-I Holdings and certain subsidiaries of
GAF have agreed to jointly and severally  indemnify the Company  against any tax
liability associated with the surfactants  partnership,  which the Company would
be  severally  liable  for,  together  with GAF and  several  current and former
subsidiaries of GAF, should GFC be unable to satisfy such liability.






                                      9

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 8.  New Accounting Standard

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards  requiring that every derivative  instrument be recorded in
the balance  sheet as either an asset or  liability  measured at its fair value.
SFAS No. 133 requires that changes in the derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related results on the hedged item in the income statement.

     SFAS No. 133 is effective for fiscal years  beginning  after June 15, 1999,
but may be adopted  earlier.  The Company has not yet  determined  the effect of
adoption of SFAS No. 133 and has not determined the timing or method of adoption
of the statement. Adoption of SFAS No. 133 could increase volatility in earnings
and other comprehensive income.


Note 9.  Subsequent Event


     On October 16,  1998,  the  Company  announced  that it has entered  into a
definitive  agreement  to sell its perlite  insulation  manufacturing  assets to
Johns  Manville  Corporation.  The  transaction,  which has received  regulatory
approval,  is  expected  to close  during  the  fourth  quarter.  As part of the
transaction,  Johns  Manville  and  the  Company  will  enter  into a  long-term
agreement to supply the Company with perlite insulation products,  thus enabling
the Company to continue to serve its commercial roofing customers.


























                                        10

<PAGE>

            Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


Results of Operations - Third Quarter 1998 Compared With
                        Third Quarter 1997

     The  Company  recorded  a third  quarter  1998 net  loss of  $13.5  million
compared with net income of $11.4 million in the third quarter of 1997.  The net
loss for the quarter  reflected  the impact of pre-tax  nonrecurring  charges of
$27.6 million and an after-tax  extraordinary charge of $9.3 million.  Excluding
the effect of these charges,  the Company's  results  reflected higher operating
and other income, partially offset by increased interest expense.

     The Company's net sales for the third quarter of 1998 were $313.6  million,
a 14.3%  increase over last year's sales of $274.4  million,  resulting from net
sales  gains  in  residential  roofing  and the  inclusion  of the  Leslie-Locke
business,   acquired  in  June  1998  (see  Note  5  to  Consolidated  Financial
Statements),  offset by lower net sales in the commercial roofing products.  The
increase in residential  net sales  reflected  increased unit volumes and higher
selling prices,  while the decrease in net sales of commercial  roofing products
resulted from both lower unit volumes and selling prices.

              The Company  recorded  pre-tax  nonrecurring  charges in the third
quarter of 1998 aggregating $27.6 million, of which $20.0 million related to the
settlement  of a  national  class  action  lawsuit  involving  asphalt  shingles
manufactured  between January 1, 1973 and December 31, 1997.  Under the terms of
the September 1998  settlement,  the Company will provide  property owners whose
GAF  shingles  were  manufactured  during this period and which  suffer  certain
damages  during  the  term of their  original  warranty  period,  and who file a
qualifying claim, with an opportunity to receive certain limited benefits beyond
those already  provided in their  existing  warranty.  The Company agreed to the
settlement, payments against which will be made over a number of years, to avoid
the expense  required to defend such  litigation.  On July 15, 1998, the Company
recorded  a  nonrecurring  charge  of $7.6  million  related  to a grant  to its
President and Chief  Operating  Officer of 30,000  shares of  restricted  common
stock of the  Company  and  certain  cash  payments  to be made over a specified
period  of time  to such  officer  in  connection  with  the  termination  by an
affiliate of preferred stock options and stock appreciation  rights held by such
officer.

     Operating  income for the third  quarter of 1998,  before the impact of the
nonrecurring  charges of $27.6  million,  was $26.3 million  compared with $25.6
million in the third quarter of 1997. The higher operating  results in 1998 were
due to improved gross margins  together with the performance of the Leslie-Locke
business  since  its  acquisition  in  June  1998.  Partially  offsetting  these
improvements  were higher  distribution  costs,  primarily  due to rail  carrier
service  problems  in  certain  regions  of the  country  requiring  the  use of
higher-cost  transportation  alternatives,  and increased  selling,  general and
administrative expenses related to higher sales and expanded marketing efforts.






                                      11


<PAGE>



     Interest  expense for the third quarter of 1998 increased to $12.3 million,
up from the $10.4  million  recorded in the same  period in 1997,  due to higher
debt levels, partially offset by lower average interest rates resulting from the
refinancing of $132.6 million (principal at maturity) of 11-3/4% Senior Deferred
Coupon Notes due 2004 (the "Deferred  Coupon Notes") (see below).  Other income,
net, for the quarter was $6.6 million  compared with $3.5 million in 1997,  with
the improvement due to higher investment  income,  partially offset by increased
expenses related to the sale of the Company's receivables.

     On July 17, 1998,  the Company  issued $150 million of 7-3/4%  Senior Notes
due 2005 (the "7-3/4%  Notes") and used a portion of the net proceeds  from this
issue  to  purchase  (and  subsequently  cancel)  $132.6  million  in  aggregate
principal  amount at maturity of the Deferred  Coupon Notes.  In connection with
this purchase,  the Company recorded an after-tax  extraordinary  charge of $9.3
million.


Results of Operations - Nine Months 1998 Compared With
                        Nine Months 1997

     For the first nine months of 1998, the Company  recorded a net loss of $0.3
million  compared  with net income of $23.3 million for the first nine months of
1997. The net loss for the first nine months reflected the $27.6 million pre-tax
nonrecurring  charges  and  the  after-tax  $9.3  million  extraordinary  charge
previously  discussed.  Excluding  the effect of these  charges,  the  Company's
results  reflected higher other income,  partially offset by increased  interest
expense and lower operating income.

     Net sales for the first nine  months of 1998 were $812.3  million,  a 12.3%
increase over last year's net sales of $723.6  million,  principally  due to net
sales  gains  in the  residential  product  lines  and  the  acquisition  of the
Leslie-Locke  business in June 1998.  The  increase in net sales of  residential
products resulted from higher unit volumes and selling prices.

     Operating income,  before the impact of the nonrecurring charges, was $59.1
million for the first nine  months of 1998  compared  with $59.8  million in the
first nine months of 1997. The decline in operating  income was  attributable to
higher  distribution  costs due to rail  service  problems  and higher  selling,
general and  administrative  expenses  resulting from broader marketing efforts,
partially offset by an increase in sales volume and lower manufacturing costs.

     Interest expense  increased from $30.5 million for the first nine months of
1997 to $37.7 million in 1998,  primarily  due to higher debt levels,  partially
offset by lower average  interest rates resulting from the refinancing of $132.6
million in aggregate  principal  amount at maturity of the Deferred Coupon Notes
with a portion of the  proceeds  from the  issuance of the 7-3/4%  Notes in July
1998.  Other  income,  net, for the first nine months of 1998 was $20.9  million
compared  with $8.9 million in 1997,  with the  improvement  principally  due to
higher investment income and lower other expenses.






                                      12

<PAGE>



Liquidity and Financial Condition

     Net cash  inflow  during  the first nine  months of 1998 was $36.1  million
before financing  activities,  and included $69.7 million of cash generated from
operations, the reinvestment of $36.3 million for capital programs, acquisitions
of $59.2 million,  including the  acquisition of the  Leslie-Locke  business for
$43.5  million  (see  Note 5 to  Consolidated  Financial  Statements),  and  the
generation   of  $61.8  million  from  net  sales  of   available-for-sale   and
held-to-maturity securities.

     Cash invested in additional  working  capital  totaled $29.3 million during
the first nine  months of 1998,  primarily  reflecting  a seasonal  increase  in
inventories  of $17.8  million  and a $55.8  million  increase  in  receivables,
partially  offset by a $44.7  million  increase in accounts  payable and accrued
liabilities.  Accrued  liabilities,  including the reserve for product  warranty
claims,  increased by $41.1  million to $80.5  million as a result of additional
accrued interest payable,  seasonal increases in accrued  distribution costs and
other plant operating accruals and due to the $8.6 million short-term portion of
the $27.6 million of nonrecurring  charges.  Cash from operating activities also
reflected a $40.6  million  cash inflow from  related  party  transactions  as a
result of  repayments  of advances by GAF, G-I  Holdings and their  subsidiaries
which were made by the Company in 1997,  an $18.9  million  cash outflow for net
purchases  of trading  securities  and $21.7  million of cash  inflow from other
operating  activities,  mainly  reflecting  $19.0  million  of the  nonrecurring
charges.

     Net cash provided by financing  activities  totaled $2.1 million during the
first nine months of 1998,  mainly reflecting the net proceeds of $149.4 million
from the issuance in July 1998 of the 7-3/4% Notes,  $43.6 million proceeds from
the sale of  receivables,  and $6.2 million cash inflow from the  repayment of a
loan by a related  party.  Offsetting  such cash  inflows was $135.4  million of
repayments of long-term  debt,  principally  the repurchase of $132.6 million in
aggregate  principal  amount at maturity of the Deferred  Coupon Notes,  a $34.0
million  paydown  of  borrowings  under  the  Company's  bank  revolving  credit
facility, and a $24.6 million decrease in short-term borrowings.

     As a result of the foregoing factors,  cash and cash equivalents  increased
by  $38.2  million  during  the  first  nine  months  of 1998 to  $51.1  million
(excluding $154.6 million of trading,  available-for-sale  and  held-to-maturity
securities and other short-term investments).

     In June 1998, the Company terminated  interest rate swap agreements related
to its Deferred Coupon Notes with an aggregate ending notional  principal amount
of $60.0  million,  resulting  in gains of $0.7  million.  The  gains  have been
deferred  and will be  amortized  as a reduction  of interest  expense  over the
remaining original life of the swaps.









                                       13

<PAGE>



     On October 16,  1998,  the  Company  announced  that it has entered  into a
definitive  agreement  to sell its perlite  insulation  manufacturing  assets to
Johns  Manville  Corporation.  The  transaction,  which has received  regulatory
approval,  is  expected  to close  during  the  fourth  quarter.  As part of the
transaction,  Johns  Manville  and  the  Company  will  enter  into a  long-term
agreement to supply the Company with perlite insulation products,  thus enabling
the Company to continue to serve its commercial roofing customers.

     See Note 7 to Consolidated  Financial Statements for information  regarding
contingencies.


Year 2000 Compliance

         The Company has  implemented a formal Year 2000 program (the "Year 2000
Program")  (i) to address  its Year 2000  issues  (i.e.  the  inability  by some
information technology (IT) and non-IT equipment, including embedded technology,
to accurately  read and process  certain dates in the Year 2000 and  afterwards)
(the "Year 2000  Issues"),  (ii) to  investigate  the Year 2000  Issues of third
parties  significant  to  the  Company's   business,   and  (iii)  to  establish
contingency plans where appropriate.

         The Company has completed  remediation of substantially all of its core
systems and has remediated most of its personal computers and other IT equipment
that may have Year 2000 Issues.  With respect to non-IT  equipment,  the Company
and its  consultants  are presently  inventorying,  evaluating,  remediating and
testing this equipment. The Company expects to complete its Year 2000 Program by
mid-1999.

         The Company is requesting  information on the Year 2000 Issues of third
parties  significant  to the Company's  business.  The Company will evaluate the
responses  from  these  entities  and  request  more   information,   as  deemed
appropriate.  Based on the information  gathered from its Year 2000 Program, the
Company is developing  contingency plans to minimize the impact of the Year 2000
Issues.  The Company  expects to  substantially  complete  these  activities  by
mid-1999.

         The Company does not believe the costs of its Year 2000 Program will be
material to its  financial  position or results of  operations.  The Company has
incurred  outside  costs  of   approximately   $250,000  to  date.  The  Company
anticipates  that  additional  outside costs should  approximate no more than $1
million in the  aggregate  and that it will  charge  such  costs,  as  incurred,
against results of operations.













                                      14

<PAGE>




         Management  believes it has taken  reasonable  steps in developing  its
Year 2000 Program. Notwithstanding these actions, there can be no assurance that
all of the  Company's  Year 2000 Issues or those of its key  suppliers,  service
providers or customers will be resolved or addressed  satisfactorily  before the
year  2000  commences.  If  the  Company's  key  suppliers,  service  providers,
customers and other third  parties fail to address  their Year 2000 Issues,  and
there are no  alternates  available to the  Company,  then the  Company's  usual
channels  of supply and  distribution  could be  disrupted,  in which  event the
Company could experience a material  adverse impact on its business,  results of
operations or financial condition.


Forward-looking Statements

     This Form 10-Q may contain certain "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally can be
identified by use of statements  that include phrases such as the Company or its
management "believes," "expects,"  "anticipates," "intends," "plans," "foresees"
or other words or phrases of similar import. Similarly, statements that describe
the Company's  objectives,  plans or goals also are forward-looking  statements.
All  such   forward-looking   statements   are  subject  to  certain  risks  and
uncertainties  that could cause actual results to differ  materially  from those
contemplated  by the relevant  forward-looking  statement.  Investors  and other
readers  are  urged to  consider  these  factors  carefully  in  evaluating  the
forward-looking  statements.  The forward-looking statements included herein are
made  only as of the  date of this  Form  10-Q  and the  Company  undertakes  no
obligation  to  publicly  update  such  forward-looking  statements  to  reflect
subsequent events or circumstances.


























                                       15


<PAGE>


                                     PART II

                                OTHER INFORMATION




Item 1.  Legal Proceedings

     On or about April 29, 1996, an action was commenced in the Circuit Court of
Mobile County,  Alabama against GAFBMC on behalf of a purported nationwide class
of purchasers of, or current owners of,  buildings with certain asphalt shingles
manufactured  by GAFBMC.  The action  alleges,  among  other  things,  that such
shingles were defective and seeks unspecified damages on behalf of the purported
class.  On September 25, 1998, the Company agreed to settle this litigation on a
national class-wide basis for asphalt shingles  manufactured  between January 1,
1973 and December 31, 1997. Under the terms of the settlement,  the Company will
provide property owners whose shingles were manufactured  during this period and
which suffer certain damages during the term of their original  warranty period,
and who file a qualifying  claim, with an opportunity to receive certain limited
benefits beyond those already  provided in their existing  warranty.  In October
1998, the three separate actions  commenced in 1997 in the Superior Court of New
Jersey,  Middlesex County, the Superior Court of New Jersey,  Passaic County and
the  Superior  Court of the State of New York,  County of  Nassau,  on behalf of
purported  classes have been stayed pending the outcome of the fairness  hearing
on the settlement agreement in the Mobile County, Alabama action.

     For further information  relating to these legal proceedings,  see "Item 3.
Legal Proceedings -- Other Litigation" contained in the Form 10-K.


Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

     3.1 - Certificate of Incorporation of BMCA

     27    - Financial Data Schedule,  which is submitted  electronically to the
           Securities and Exchange Commission for information only.

(b)  No Reports on Form 8-K were filed during the quarter  ended  September  27,
     1998.














                                       16


<PAGE>


                                   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 CORPORATION OF AMERICA


DATE:  November 5, 1998      BY:  /s/William C. Lang
       ----------------           ------------------

                                  William C. Lang
                                   Senior Vice President and
                                     Chief Financial Officer
                                   (Principal Financial and Accounting Officer)





































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