UNITED STATES

                       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 July 4, 1999

                                       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

See table of additional registrants.

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 August  16,  1999,  1,015,010  shares of Class A Common  Stock,  $.001 par
value,  and 15,000 shares of Class B Common Stock,  $.001 par value, of Building
Materials  Corporation of America were  outstanding.  There is no trading market
for the common stock of Building Materials Corporation of America.

As of August 16,  1999,  each of the  additional  registrants  had the number of
shares  outstanding  which is shown on the table  below.  No shares were held by
non-affiliates.


<PAGE>

<TABLE>

                             ADDITIONAL REGISTRANTS

<CAPTION>

                                                                Registration     Address, including zip
                                  State or other                No./I.R.S.       code and telephone number,
                                  jurisdiction of  No. of       Employer         including area code, of
Exact name of registrant as       incorporation    Shares       Identification   registrant's principal
specified in its charter          or organization  Outstanding  No.              executive offices
---------------------------       ---------------  -----------  ---------------  ----------------------------
<S>                               <C>              <C>          <C>              <C>

Building Materials
  Manufacturing Corporation....   Delaware           10         333-69749-01/    1361 Alps Road
                                                                22-3626208       Wayne, NJ 07470
                                                                                 (973) 628-3000


Building Materials
  Investment Corporation.......   Delaware           10         333-69749-02/    300 Delaware Avenue
                                                                22-3626206       Wilmington, DE  19801
                                                                                 (302) 427-5960

</TABLE>

<PAGE>





                         Part I - FINANCIAL INFORMATION
                          Item 1 - FINANCIAL STATEMENTS


                    BUILDING MATERIALS CORPORATION OF AMERICA

                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



                                         Second Quarter Ended  Six Months Ended
                                         -------------------- -----------------
                                         June 28,    July 4,  June 28,  July 4,
                                           1998       1999      1998     1999
                                         --------   --------  -------- --------
                                                        (Thousands)

Net sales ............................. $286,227   $310,494  $498,656 $573,422
                                        --------   --------  -------- --------
Costs and expenses:
  Cost of products sold ...............  200,496    218,392   358,530  410,474
  Selling, general and administrative..   58,507     62,471   106,381  118,746
  Goodwill amortization ...............      510        508     1,002    1,017
                                        --------   --------  -------- --------

    Total costs and expenses...........  259,513    281,371   465,913  530,237
                                        --------   --------  -------- --------

Operating income ......................   26,714     29,123    32,743   43,185
Interest expense ......................  (12,713)   (12,862)  (25,405) (24,696)
Other income, net......................    4,086      7,067    14,353    6,557
                                        --------   --------  -------- --------

Income before income taxes ............   18,087     23,328    21,691   25,046
Income taxes ..........................   (7,055)    (8,632)   (8,459)  (9,268)
                                        --------   --------  -------- --------
Net income ............................ $ 11,032   $ 14,696  $ 13,232 $ 15,778
                                        ========   ========  ======== ========
























The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

                                       1
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA
                           CONSOLIDATED BALANCE SHEETS
                                                                      July 4,
                                                     December 31,      1999
                                                          1998      (Unaudited)
                                                     ------------   -----------
                                                             (Thousands)
ASSETS
Current Assets:
  Cash and cash equivalents.........................  $  24,987     $  53,041
  Investments in trading securities.................     95,134           855
  Investments in available-for-sale securities......     56,461        63,104
  Investments in held-to-maturity securities........      6,358             -
  Other short-term investments......................     22,671         1,718
  Accounts receivable, trade, net...................     24,249        35,038
  Accounts receivable, other........................     54,795        62,391
  Receivable from related parties, net..............          -        56,568
  Inventories.......................................     93,364       124,731
  Other current assets..............................      4,144         5,114
                                                      ---------     ---------
    Total Current Assets............................    382,163       402,560
Property, plant and equipment, net..................    314,400       325,903
Excess of cost over net assets of businesses
  acquired, net ....................................     72,093        71,201
Deferred income tax benefits........................     60,427        47,685
Other assets........................................     18,410        19,250
                                                      ---------     ---------
Total Assets........................................  $ 847,493     $ 866,599
                                                      =========     =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Short-term debt...................................  $       -     $      48
  Current maturities of long-term debt..............      4,273         4,776
  Accounts payable..................................     71,613        83,495
  Payable to related parties, net...................      5,430             -
  Accrued liabilities...............................     59,893        58,544
  Reserve for product warranty claims...............     20,239        16,100
                                                      ---------     ---------
    Total Current Liabilities.......................    161,448       162,963
                                                      ---------     ---------
Long-term debt less current maturities..............    588,413       590,356
                                                      ---------     ---------
Reserve for product warranty claims.................     28,393        22,622
                                                      ---------     ---------
Other liabilities...................................     24,366        21,143
                                                      ---------     ---------
Stockholders' Equity:
  Series A Cumulative Redeemable Convertible
    Preferred Stock, $.01 par value per share;
    200,000 shares authorized; no shares issued               -             -
  Class A Common Stock, $.001 par value per share;
    1,300,000 shares authorized; 1,015,010 shares
    issued and outstanding .........................          1             1
  Class B Common Stock, $.001 par value per share;
    100,000 shares authorized; 15,000 shares
    issued and outstanding .........................          -             -
  Additional paid-in capital........................     89,400        92,447
  Accumulated deficit...............................    (24,644)       (8,866)
  Accumulated other comprehensive loss .............    (19,884)      (14,067)
                                                      ---------     ---------

    Stockholders' Equity ...........................     44,873        69,515
                                                      ---------     ---------
 Total Liabilities and Stockholders' Equity ........  $ 847,493     $ 866,599
                                                      =========     =========



The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

                                       2
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                           Six Months Ended
                                                          -------------------
                                                          June 28,    July 4,
                                                            1998       1999
                                                          --------   --------
                                                              (Thousands)

Cash and cash equivalents, beginning of period........... $ 12,921   $ 24,987
                                                          --------   --------

Cash provided by (used in) operating activities:
  Net income ............................................   13,232     15,778
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
      Depreciation ......................................   12,378     14,500
      Goodwill amortization..............................    1,002      1,017
      Deferred income taxes..............................    8,358      8,893
      Noncash interest charges...........................   14,920      2,290
  Increase in working capital items......................  (43,931)   (87,625)
  Purchases of trading securities........................  (61,049)  (124,696)
  Proceeds from sales of trading securities..............   77,111    224,452
  Change in net receivable from/payable to related
    parties..............................................   45,987    (61,998)
  Other, net.............................................    2,867    (11,984)
                                                          --------   --------
Net cash provided by (used in) operating activities......   70,875    (19,373)
                                                          --------   --------

Cash provided by (used in) investing activities:
  Capital expenditures...................................  (23,548)   (26,680)
  Acquisition............................................  (43,468)         -
  Purchases of available-for-sale securities.............  (32,808)   (56,469)
  Purchases of held-to-maturity securities...............        -     (1,401)
  Proceeds from sales of available-for-sale securities...   96,604     59,493
  Proceeds from held-to-maturity securities..............      499      7,758
  Proceeds from sales of other short-term investments....        -     21,145
                                                          --------   --------

Net cash provided by (used in) investing activities......   (2,721)     3,846
                                                          --------   --------

Cash provided by (used in) financing activities:
  Proceeds from sale of accounts receivable..............    7,478     43,494
  Increase (decrease) in short-term debt.................  (24,833)        48
  Proceeds from issuance of long-term debt...............        -      3,500
  Decrease in borrowings under revolving credit facility   (34,000)         -
  Repayments of long-term debt...........................   (1,629)    (2,865)
  Decrease in loan receivable from related party.........    6,152          -
  Financing fees and expenses............................     (176)      (596)
                                                          --------   --------
Net cash provided by (used in) financing activities......  (47,008)    43,581
                                                          --------   --------
Net change in cash and cash equivalents..................   21,146     28,054
                                                          --------   --------
Cash and cash equivalents, end of period................. $ 34,067   $ 53,041
                                                          ========   ========

                                       3
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

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


                                                            Six Months Ended
                                                          -------------------
                                                           June 28,   July 4,
                                                             1998      1999
                                                          ---------  --------
                                                               (Thousands)

Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest (net of amount capitalized).............     $ 10,279   $ 22,732
    Income taxes.....................................          800        958

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


































The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

                                       4
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Building  Materials  Corporation of America (the  "Company") is a 97%-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 July 4, 1999, and the results of operations and cash flows for
the  periods  ended June 28,  1998 and July 4, 1999.  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,
1998 (the "Form 10-K").



Note 1: Comprehensive Income

<TABLE>
<CAPTION>


                                                Second Quarter Ended  Six Months Ended
                                                -------------------- -----------------
                                                 June 28,  July 4,   June 28,  July 4,
                                                  1998      1999       1998     1999
                                                --------- --------   --------  -------
                                                              (Thousands)
<S>                                             <C>       <C>        <C>       <C>

Net income .................................... $11,032   $14,696    $13,232   $15,778
                                                -------   -------    -------   -------
Other comprehensive income (loss), net of tax:
  Change in unrealized gains (losses) on
    available-for-sale securities:
  Unrealized holding gains (losses)
    arising during the period, net of
    income tax (provision) benefit of $378,
    $2,986, $(1,471) and $4,656  ..............    (589)    6,983      2,305     7,192
  Less:  Reclassification adjustment
    for gains included in net income, net of
    income taxes of $2,913, $570, $7,215
    and $807...................................   4,559       971     11,289     1,375
                                                -------   -------    -------   -------
Total other comprehensive income (loss)........  (5,148)    6,012     (8,984)    5,817
                                                -------   -------    -------   -------
Comprehensive income........................... $ 5,884   $20,708    $ 4,248   $21,595
                                                =======   =======    =======   =======

</TABLE>












                                       5
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 1.   Comprehensive Income (Continued)


     Changes in the components of "Accumulated other comprehensive loss" for the
six months ended July 4, 1999 are as follows:

                                  Unrealized
                                  Losses on      Minimum     Accumulated
                                  Available-     Pension     Other
                                  for-sale       Liability   Comprehensive
                                  Securities     Adjustment  Loss
                                  -------------- ----------  -------------
                                                (Thousands)

Balance, December 31, 1998 ...    $(16,928)      $ (2,956)   $(19,884)
Change for the period ........       5,817              -       5,817
                                  --------       --------    --------
Balance, July 4, 1999 ........    $(11,111)      $ (2,956)   $(14,067)
                                  ========       ========    ========

Note 2:   Inventories:

     Inventories consist of the following:
                                              December 31,     July 4,
                                                  1998          1999
                                              ------------   ---------
                                                     (Thousands)

         Finished goods ..................    $ 58,266       $ 83,700
         Work in process .................       8,488         10,077
         Raw materials and supplies ......      27,296         31,640
                                              --------       --------

         Total ...........................      94,050        125,417
         Less LIFO reserve ...............        (686)          (686)
                                              --------       --------

         Inventories .....................    $ 93,364       $124,731
                                              ========       ========


Note 3.  Nonrecurring Charges

     In July 1998, the Company  recorded a pre-tax  nonrecurring  charge of $7.6
million related to a grant to its former  President and Chief Executive  Officer
of 30,000 shares of  restricted  common stock of the Company (a portion of which
such officer  transferred to trusts for the benefit of his children) and related
cash payments to be made over a period of time  (substantially  all of which was
earned) in connection  with the  termination by an affiliate of preferred  stock
options and stock appreciation  rights held by such officer. Of the $7.6 million
charge, $2.5 million represented the value as of the date of grant of the 30,000
shares of restricted  common stock,  and $5.1 million  represented the aggregate
amount of the cash  payments  to which such  officer  was  entitled  (subject to
certain future vesting requirements). The shares of restricted stock are subject
to certain rights of the Company to purchase, and of such

                                       6
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.  Nonrecurring Charges (Continued)

officer  and   the  trusts  to  sell to the  Company,  such shares at Book Value
(as defined).

     Effective June 30, 1999,  such officer  terminated his employment  with the
Company. In connection with this termination,  the Company's  obligation to such
officer to pay an  aggregate of $3.0  million  (representing  the balance of the
cash  payments   described  above)  was  cancelled  and  treated  as  a  capital
contribution.  Accordingly,  such  amount has been  reflected  as an increase in
additional  paid-in-capital.  In  addition,  the Company  expects the  agreement
between the Company and such officer and the trusts  relating to the  restricted
common stock will be  terminated  and that the  restricted  common stock will be
cancelled or exchanged in consideration  for equity to be issued to such officer
and the trusts in one or more parents of the Company.


Note 4:   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
then-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 June 26,  1999,  it is  defending
approximately 126,000 pending alleged Asbestos Claims (having received notice of
approximately  30,200 new Asbestos  Claims  during the first six months of 1999)
and has resolved approximately 311,500 Asbestos Claims (including  approximately
18,000 in the first six months of 1999).  GAF's current  estimated  average cost
for Asbestos Claims  resolved in 1998 (including  Asbestos Claims disposed of at
no cost to GAF) is  approximately  $3,600 per claim.  There can be no  assurance
that the actual  costs of  resolving  pending  and future  Asbestos  Claims will
approximate  GAF's  estimated  average costs for the Asbestos Claims resolved in
1998.

     GAF has stated that it is committed to effecting a comprehensive resolution
of Asbestos  Claims and that it is  exploring a number of options 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.
Should   GAF  or  GAFBMC  be  unable  to   satisfy   judgments   against  it  in
asbestos-related  lawsuits,  its judgment  creditors might seek to enforce their
judgments against the assets of GAF or GAFBMC,  including its holdings of common
stock of

                                       7
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4:   Contingencies (Continued)

the  Company,  and such  enforcement  could  result in a change of control  with
respect to the Company.

     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"), held 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 GAF  incurring  liabilities
significantly  in excess of the deferred tax liability of $131.4 million that it
recorded in 1990 in  connection  with this  matter.  GAF has advised the Company
that it believes that it will prevail in this matter,  although  there can be no
assurance in this regard. However, if GAF is unsuccessful in challenging its tax
deficiency  notice,  the ability of GAF to satisfy its tax  obligation  would be
dependent  on the cash flows of the Company and GFC. 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 GAF be unable to
satisfy such liability.



                                       8
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5.  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, 2000,  but
may be adopted earlier. If the Company had adopted SFAS No. 133 as of January 1,
1999, there would have been no significant impact on results of operations.  The
Company has not yet determined the timing,  method or effect on the Consolidated
Balance Sheets of adoption of SFAS No. 133.


Note 6.  Subsequent Event

     Effective July 9, 1999, the Company called for the redemption on August 16,
1999 of the remaining  $29.9  million of the  Company's 11 3/4% Senior  Deferred
Coupon Notes due 2004. The redemption  price is 105.875% of the principal amount
outstanding plus accrued interest up to the redemption date. The call premium in
connection  with  the  extinguishment  of  such  debt  will  be  recorded  as an
extraordinary  item,  net of tax, of  approximately  $1.1 million,  in the third
quarter of 1999.


Note 7.  Guarantor Financial Information

     Effective  January  1,  1999,  Building  Materials  Corporation  of America
("BMCA"  or  "Parent  Company")  transferred  all of its  investment  assets and
intellectual  property  assets  to  Building  Materials  Investment  Corporation
("BMIC"),  a  newly-formed,  wholly-owned  subsidiary.  In connection  with this
transfer,  BMIC agreed to guarantee all of the Company's  obligations  under the
Company's bank credit facility (the "Credit Agreement"), 11 3/4% Senior Deferred
Coupon Notes due 2004 (the "Deferred  Coupon  Notes"),  and the Company's 7 3/4%
Senior Notes due 2005, the 8 5/8% Senior Notes due 2006, the 8% Senior Notes due
2007 (the "2007  Notes")  and the 8% Senior  Notes due 2008  (collectively,  the
"Other Senior Notes").  BMCA also transferred all of its  manufacturing  assets,
other  than  those  located  in  Texas,  to  Building  Materials   Manufacturing
Corporation  ("BMMC"),   another  newly-formed,   wholly-owned  subsidiary.   In
connection  with this  transfer,  BMMC agreed to become a co-obligor on the 2007
Notes and to guarantee the Company's obligations under the Credit Agreement, the
Deferred  Coupon Notes and the Other Senior  Notes.  The  guarantees of BMIC and
BMMC are full, unconditional and joint and several.

     In addition,  in connection  with the above  transactions,  the Company and
BMMC entered into license  agreements,  effective January 1, 1999, for the right
to use intellectual  property,  including  patents,  trademarks,  know-how,  and
franchise  rights owned by BMIC for a license fee stated as a percentage  of net
sales. The license agreements are for a period of one year and can be terminated
with 60 days written notice. Also, effective January 1, 1999, BMMC will sell all
finished goods to the Company at a manufacturing profit.

                                       9
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7.  Guarantor Financial Information - (Continued)

     Presented below is condensed  consolidating  financial information for BMIC
and BMMC, prepared on a basis which retroactively reflects the formation of such
companies,  as  discussed  above,  for all  periods  presented.  This  financial
information  should  be read in  conjunction  with  the  Consolidated  Financial
Statements and other notes related thereto.

<TABLE>

                    Building Materials Corporation of America
                   Condensed Consolidating Statement of Income
                       Second Quarter Ended June 28, 1998
                                   (Thousands)


<CAPTION>


                                                                    Non-
                                        Parent     Guarantor     Guarantor
                                        Company   Subsidiaries  Subsidiaries  Eliminations  Consolidated
                                      ---------  ------------  ------------  ------------  ------------
<S>                                    <C>         <C>           <C>            <C>           <C>
Net sales............................. $ 232,969   $       -     $  53,258      $       -     $ 286,227
Intercompany net sales................       746     145,604        20,061       (166,411)            -
                                       ---------   ---------     ---------      ---------     ---------
Total net sales.......................   233,715     145,604        73,319       (166,411)      286,227
                                       ---------   ---------     ---------      ---------     ---------

Costs and expenses:
  Cost of products sold...............   169,233     137,965        59,709       (166,411)      200,496
  Selling, general and administrative.    39,737       7,639        11,131                       58,507
  Goodwill amortization...............       160                       350                          510
                                       ---------   ---------     ---------      ---------     ---------
Total costs and expenses..............   209,130     145,604        71,190       (166,411)      259,513
                                       ---------   ---------     ---------      ---------     ---------

Operating income......................    24,585           -         2,129              -        26,714

Equity in earnings of subsidiaries....     1,329                                   (1,329)            -
Interest expense, net.................    (7,085)     (2,758)       (2,870)                     (12,713)
Other income (expense), net...........    (1,557)      5,743          (100)                       4,086
                                       ---------   ---------     ---------      ---------     ---------
Income (loss) before income taxes.....    17,272       2,985          (841)        (1,329)       18,087
Income tax (provision) benefit........    (6,240)     (1,134)          319                       (7,055)
                                       ---------   ---------     ---------      ---------     ---------
Net income (loss)..................... $  11,032   $   1,851     $    (522)     $  (1,329)    $  11,032
                                       =========   =========     =========      =========     =========

</TABLE>











                                       10
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                   Condensed Consolidating Statement of Income
                        Second Quarter Ended July 4, 1999
                                   (Thousands)

<CAPTION>



                                                                    Non-
                                        Parent     Guarantor     Guarantor
                                        Company   Subsidiaries  Subsidiaries  Eliminations  Consolidated
                                       ---------  ------------  ------------  ------------  ------------
<S>                                    <C>         <C>           <C>           <C>            <C>
Net sales............................. $ 248,731   $       -     $  61,763     $       -      $ 310,494
Intercompany net sales................     2,791     166,372        18,144      (187,307)             -
                                       ---------   ---------     ---------     ---------      ---------
Total net sales.......................   251,522     166,372        79,907      (187,307)       310,494
                                       ---------   ---------     ---------     ---------      ---------

Costs and expenses:
  Cost of products sold...............   187,265     151,172        67,262      (187,307)       218,392
  Selling, general and administrative.    41,542      10,104        10,825                       62,471
  Goodwill amortization...............       160                       348                          508
  Transition service agreement
    (income) expense..................      (250)        250                                          -
                                       ---------   ---------     ---------     ---------      ---------
Total costs and expenses..............   228,717     161,526        78,435      (187,307)       281,371
                                       ---------   ---------     ---------     ---------      ---------

Operating income......................    22,805       4,846         1,472             -         29,123

Equity in earnings of subsidiaries....    10,367                                 (10,367)             -
Intercompany licensing income
  (expense), net......................    (7,462)      7,462                                          -
Interest expense, net.................    (6,280)     (3,559)       (3,023)                     (12,862)
Other income (expense), net...........    (2,188)      9,255                                      7,067
                                       ---------   ---------     ---------     ---------      ---------
Income (loss) before income taxes.....    17,242      18,004        (1,551)                      23,328
Income tax (provision) benefit........    (2,546)     (6,659)          573       (10,367)        (8,632)
                                       ---------   ---------     ---------     ---------      ---------
Net income (loss)..................... $  14,696   $  11,345     $    (978)    $ (10,367)     $  14,696
                                       =========   =========     =========     =========      =========
</TABLE>












                                       11

<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                   Condensed Consolidating Statement of Income
                         Six Months Ended June 28, 1998
                                   (Thousands)

<CAPTION>



                                                                    Non-
                                        Parent     Guarantor     Guarantor
                                        Company   Subsidiaries  Subsidiaries  Eliminations  Consolidated
                                       ---------  ------------  ------------  ------------  ------------
<S>                                    <C>         <C>           <C>            <C>          <C>
Net sales............................. $ 415,317   $       -     $   83,339     $       -    $   498,656
Intercompany net sales................     1,410     264,146         34,941      (300,497)             -
                                       ---------   ---------     ---------      ---------    -----------
Total net sales.......................   416,727     264,146        118,280      (300,497)       498,656
                                       ---------   ---------     ----------     ---------    -----------

Costs and expenses:
  Cost of products sold...............   313,712     249,621         95,694      (300,497)       358,530
  Selling, general and administrative.    72,545      14,525         19,311                      106,381
  Goodwill amortization...............       320                        682                        1,002
                                       ---------   ---------     ----------     ---------     ----------
Total costs and expenses..............   386,577     264,146        115,687      (300,497)       465,913
                                       ---------   ---------     ----------     ---------     ----------

Operating income......................    30,150           -          2,593             -         32,743

Equity in earnings of subsidiaries....     6,266                                   (6,266)             -
Interest expense, net.................   (15,235)     (5,253)        (4,917)                     (25,405)
Other income (expense), net...........    (3,330)     17,783           (100)                      14,353
                                       ---------   ---------     ----------     ---------    -----------
Income (loss) before income taxes.....    17,851      12,530         (2,424)       (6,266)        21,691
Income tax (provision) benefit........    (4,619)     (4,761)           921                       (8,459)
                                       ---------   ---------     ----------     ---------    -----------
Net income (loss)..................... $  13,232   $   7,769     $   (1,503)    $  (6,266)   $    13,232
                                       =========   =========     ==========     =========    ===========

</TABLE>
















                                       12
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                 Condensed Consolidating Statement of Cash Flows
                         Six Months Ended June 28, 1998
                                   (Thousands)


<CAPTION>


                                                       Parent     Guarantor    Non-Guarantor
                                                       Company   Subsidiaries  Subsidiaries  Consolidated
                                                      ---------  ------------  -------------  ------------
<S>                                                   <C>          <C>          <C>           <C>
Cash and cash equivalents, beginning of period....... $      35    $  12,061    $     825     $  12,921
                                                      ---------    ---------    ---------     ---------
Cash provided by(used in)operating activities:
Net income(loss).....................................     6,966        7,769       (1,503)       13,232
Adjustments to reconcile net income(loss)to net
  cash provided by(used in)operating activities:
    Depreciation.....................................     1,623        7,621        3,134        12,378
    Goodwill amortization............................       320                       682         1,002
    Deferred income taxes............................     8,358                                   8,358
    Noncash interest charges.........................    14,920                                  14,920
(Increase)decrease in working capital items..........   (37,274)      18,506      (25,163)      (43,931)
Purchases of trading securities......................                (61,049)                   (61,049)
Proceeds from sales of trading securities............                 77,111                     77,111
Change in net receivable from/payable to
  related parties....................................    73,047      (58,598)      31,538        45,987
Other, net...........................................    (1,462)       4,412          (83)        2,867
                                                      ---------    ---------    ---------     ---------
Net cash provided by(used in)operating activities....    66,498       (4,228)       8,605        70,875
                                                      ---------    ---------    ---------     ---------
Cash provided by(used in)investing activities:
  Capital expenditures...............................    (2,251)     (12,825)      (8,472)      (23,548)
  Acquisition........................................   (43,468)                                (43,468)
  Purchases of available-for-sale securities.........                (32,808)                   (32,808)
  Proceeds from sales of available-for-sale
   securities........................................                 96,604                     96,604
  Proceeds from held-to-maturity securities..........                    499                        499
                                                      ---------    ---------    ---------     ---------
Net cash provided by(used in)investing activities....   (45,719)      51,470       (8,472)       (2,721)
                                                      ---------    ---------    ---------     ---------

Cash provided by(used in)financing activities:
  Proceeds from sale of accounts receivable...........    7,478                                   7,478
  Decrease in short-term debt........................                (24,833)                   (24,833)
  Decrease in borrowings under revolving credit
     facility........................................   (34,000)                                (34,000)
  Repayments of long-term debt.......................      (266)      (1,323)         (40)       (1,629)
  Decrease in loan receivable from related party.....     6,152                                   6,152
  Financing fees and expenses........................      (176)                                   (176)
                                                      ---------    ---------    ---------     ---------
Net cash used in financing activities................   (20,812)     (26,156)         (40)      (47,008)
                                                      ---------    ---------    ---------     ---------
Net change in cash and cash equivalents..............       (33)      21,086           93        21,146
                                                      ---------    ---------    ---------     ---------
Cash and cash equivalents, end of period............. $       2    $  33,147    $     918     $  34,067
                                                      =========    =========    =========     =========

</TABLE>









                                       13
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                      Condensed Consolidating Balance Sheet
                                December 31, 1998
                                   (Thousands)


<CAPTION>


                                                                      Non-
                                            Parent    Guarantor     Guarantor
                                            Company  Subsidiaries  Subsidiaries Eliminations Consolidated
                                           --------- ------------  ------------ ------------ ------------
<S>                                        <C>         <C>          <C>          <C>           <C>
ASSETS
Current Assets:
  Cash and cash equivalents............... $       3   $  21,746    $   3,238    $       -     $  24,987
  Investments in trading securities.......                95,134                                  95,134
  Investments in available-for-sale
    securities............................                56,461                                  56,461
  Investments in held-to-maturity
    securities............................                 6,358                                   6,358
  Other short-term investments............                22,671                                  22,671
  Accounts receivable, trade..............                             24,249                     24,249
  Accounts receivable, other..............    52,806         323        1,666                     54,795
  Inventories.............................    44,886      18,825       29,653                     93,364
  Other current assets....................       125       2,893        1,126                      4,144
                                           ---------   ---------    ---------    ---------     ---------
    Total Current Assets..................    97,820     224,411       59,932            -       382,163

Investment in subsidiaries................   250,156                              (250,156)            -
Intercompany loans including accrued
  interest................................   140,298                 (140,298)                         -
Due from(to)subsidiaries, net.............   (27,369)     42,972      (15,603)                         -
Property, plant and equipment, net........    34,620     167,587      112,193                    314,400
Excess of cost over net assets of
  businesses acquired, net................    19,380                   52,713                     72,093
Deferred income tax benefits..............    60,427                                              60,427
Other assets..............................    14,844       3,229          337                     18,410
                                           ---------   ---------    ---------    ---------     ---------
Total Assets.............................. $ 590,176   $ 438,199    $  69,274    $(250,156)    $ 847,493
                                           =========   =========    =========    =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current maturities of long-term debt.... $   1,170   $   3,016    $      87    $       -     $   4,273
  Accounts payable........................    22,688      33,248       15,677                     71,613
  Payable to related parties, net.........     1,721       3,495          214                      5,430
  Accrued liabilities.....................    20,257      26,181       13,455                     59,893
  Reserve for product warranty claims.....    19,139                    1,100                     20,239
                                           ---------   ---------    ---------    ---------     ---------
    Total Current Liabilities.............    64,975      65,940       30,533            -       161,448

Long-term debt less current maturities....   433,929     154,265          219                    588,413
Reserve for product warranty claims.......    24,159                    4,234                     28,393
Other liabilities.........................    22,240                    2,126                     24,366
                                           ---------   ---------    ---------    ---------     ---------
Total Liabilities.........................   545,303     220,205       37,112            -       802,620
                                           ---------   ---------    ---------    ---------     ---------

Stockholders' equity, net.................    44,873     217,994       32,162     (250,156)       44,873
                                           ---------   ---------    ---------    ---------     ---------
Total Liabilities and Stockholders' Equity $ 590,176   $ 438,199    $  69,274    $(250,156)    $ 847,493
                                           =========   =========    =========    =========     =========
</TABLE>


                                       14

<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                   Condensed Consolidating Statement of Income
                          Six Months Ended July 4, 1999
                                   (Thousands)


<CAPTION>


                                                                     Non-
                                            Parent    Guarantor   Guarantor
                                            Company  Subsidiaries Subsidiaries Eliminations Consolidated
                                           --------- ------------ ------------ ------------ ------------
<S>                                        <C>         <C>          <C>          <C>          <C>
Net sales................................. $ 459,686   $       -    $ 113,736    $       -    $ 573,422
Intercompany net sales....................     3,792     312,640       34,188     (350,620)           -
                                           ---------   ---------    ---------    -----------  ---------
Total net sales...........................   463,478     312,640      147,924     (350,620)     573,422
                                           ---------   ---------    ---------    -----------  ---------
Costs and expenses:
  Cost of products sold...................   351,476     283,462      126,156     (350,620)     410,474
  Selling, general and administrative.....    77,842      19,572       21,332                   118,746
  Goodwill amortization...................       320                      697                     1,017
  Transition service agreement (income)
    expense...............................      (500)        500                                     -
                                           ---------   ---------    ---------    ----------  ---------
  Total costs and expenses................   429,138     303,534      148,185     (350,620)    530,237
                                           ---------   ---------    ---------    ----------  ---------
Operating income (loss)....................   34,340       9,106         (261)           -      43,185

Equity in earnings of subsidiaries........    13,936                               (13,936)          -
Intercompany licensing income (expense),
  net.....................................   (13,791)     13,791                                     -
Interest expense, net.....................   (13,570)     (5,486)      (5,640)                 (24,696)
Other income (expense), net...............    (4,054)     10,611                                 6,557
                                           ---------   ---------    ---------    ---------   ---------
Income (loss) before income taxes.........    16,861      28,022       (5,901)     (13,936)     25,046
Income tax (provision) benefit............    (1,083)    (10,368)       2,183                   (9,268)
                                           ---------   ---------    ---------    ---------   ---------
Net income (loss)..........................$  15,778   $  17,654    $  (3,718)   $ (13,936)  $  15,778
                                           =========   =========    =========    =========   =========
</TABLE>












                                       15

<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                      Condensed Consolidating Balance Sheet
                                  July 4, 1999
                                   (Thousands)


<CAPTION>


                                                                     Non-
                                            Parent    Guarantor    Guarantor
                                            Company  Subsidiaries  Subsidiaries Eliminations Consolidated
                                           --------- ------------- ------------ ------------ ------------
<S>                                        <C>         <C>          <C>          <C>          <C>
ASSETS
Current Assets:
  Cash and cash equivalents............... $     274   $  46,950    $   5,817    $       -    $  53,041
  Investments in trading securities.......                   855                                    855
  Investments in available-for-sale
    securities............................                63,104                                 63,104
  Other short-term investments............                 1,718                                  1,718
  Accounts receivable, trade..............                             35,038                    35,038
  Accounts receivable, other..............    60,094         613        1,684                    62,391
  Receivable from(payable to) related
    parties, net..........................    62,320      (5,541)        (211)                   56,568
  Inventories.............................    64,182      20,468       40,081                   124,731
  Other current assets....................     2,082       1,810        1,222                     5,114
                                             -------   ---------    ---------    ---------    ---------
    Total Current Assets..................   188,952     129,977       83,631            -      402,560

Investment in subsidiaries................   264,092                              (264,092)           -
Intercompany loans including accrued
  interest................................   150,673                 (150,673)                        -
Due from(to)subsidiaries, net.............   (98,492)    136,251      (37,759)                        -
Property, plant and equipment, net........    33,121     177,134      115,648                   325,903
Excess of cost over net assets of
  businesses acquired, net................    19,060                   52,141                    71,201
Deferred income tax benefits..............    47,685                                             47,685
Other assets..............................    14,469       4,445          336                    19,250
                                           ---------   ---------    ---------    ---------    ---------
Total Assets.............................. $ 619,560   $ 447,807    $  63,324    $(264,092)   $ 866,599
                                           =========   =========    =========    =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Short-term debt......................... $       -   $      48    $       -    $       -    $      48
  Current maturities of long-term debt....     1,204       3,508           64                     4,776
  Accounts payable........................    40,186      28,126       15,183                    83,495
  Accrued liabilities.....................    21,143      25,412       11,989                    58,544
  Reserve for product warranty claims.....    15,000                    1,100                    16,100
                                           ---------   ---------    ---------    ---------    ---------
    Total Current Liabilities.............    77,533      57,094       28,336            -      162,963

Long-term debt less current maturities....   435,092     155,065          199                   590,356
Reserve for product warranty claims.......    18,495                    4,127                    22,622
Other liabilities.........................    18,925                    2,218                    21,143
                                           ---------   ---------    ---------    ---------    ---------
Total Liabilities.........................   550,045     212,159       34,880            -      797,084
                                           ---------   ---------    ---------    ---------    ---------

Stockholders' equity, net.................    69,515     235,648       28,444     (264,092)      69,515
                                           ---------   ---------    ---------    ---------    ---------
Total Liabilities and Stockholders' Equity $ 619,560   $ 447,807    $  63,324    $(264,092)   $ 866,599
                                           =========   =========    =========    =========    =========
</TABLE>



                                       16

<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 7.  Guarantor Financial Information - (Continued)

<TABLE>

                    Building Materials Corporation of America
                 Condensed Consolidating Statement of Cash Flows
                          Six Months Ended July 4, 1999
                                   (Thousands)

<CAPTION>



                                                       Parent     Guarantor   Non-Guarantor
                                                       Company   Subsidiaries  Subsidiaries  Consolidated
                                                      ---------  ------------ -------------  ------------
<S>                                                   <C>         <C>           <C>           <C>
Cash and cash equivalents, beginning of period....... $       3   $  21,746     $   3,238     $  24,987
                                                      ---------   ---------     ---------     ---------
Cash provided by(used in)operating activities:
Net income(loss).....................................     1,842      17,654        (3,718)       15,778
Adjustments to reconcile net income(loss)to net
  cash provided by(used in)operating activities:
    Depreciation.....................................     1,281       9,139         4,080        14,500
    Goodwill amortization............................       320                       697         1,017
    Deferred income taxes............................     8,893                                   8,893
    Noncash interest charges.........................     2,290                                   2,290
Increase in working capital items....................   (57,593)     (6,741)      (23,291)      (87,625)
Purchases of trading securities......................              (124,696)                   (124,696)
Proceeds from sales of trading securities............               224,452                     224,452
Change in net receivable from/payable to
  related parties....................................     6,373    (100,899)       32,528       (61,998)
Other, net...........................................    (5,710)     (6,635)          361       (11,984)
                                                      ---------   ---------     ---------     ---------
Net cash provided by(used in)operating activities....   (42,304)     12,274        10,657       (19,373)
                                                      ---------   ---------     ---------     ---------
Cash provided by(used in)investing activities:
  Capital expenditures...............................       120     (18,765)       (8,035)      (26,680)
  Purchases of available-for-sale securities.........               (56,469)                    (56,469)
  Purchases of held-to-maturity securities...........                (1,401)                     (1,401)
  Proceeds from sales of available-for-sale
    securities.......................................                59,493                      59,493
  Proceeds from held-to-maturity securities..........                 7,758                       7,758
  Proceeds from sales of other short-term
    investments.......................................               21,145                      21,145
                                                      ---------   ---------     ---------     ---------
Net cash provided by(used in)investing activities....       120      11,761        (8,035)        3,846
                                                      ---------   ---------     ---------     ---------

Cash provided by(used in)financing activities:
  Proceeds from sale of accounts receivable..........    43,494                                  43,494
  Increase in short-term debt........................                    48                          48
  Proceeds from issuance of long-term debt...........                 3,500                       3,500
  Repayments of long-term debt.......................      (614)     (2,208)          (43)       (2,865)
  Financing fees and expenses........................      (425)       (171)                       (596)
                                                      ---------   ---------     ---------     ---------
Net cash provided by (used in) financing activities..    42,455       1,169           (43)       43,581
                                                      ---------   ---------     ---------     ---------
Net change in cash and cash equivalents..............       271      25,204         2,579        28,054
                                                      ---------   ---------     ---------     ---------
Cash and cash equivalents, end of period............. $     274   $  46,950     $   5,817     $  53,041
                                                      =========   =========     =========     =========
</TABLE>




                                       17

<PAGE>


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


Results of Operations - Second Quarter 1999 Compared With
                        Second Quarter 1998

     The  Company  recorded  second  quarter  1999 net  income of $14.7  million
compared with $11.0 million in the second quarter of 1998. The 33.6% increase in
net income was primarily the result of higher  operating and other income,  net,
partially offset by increased interest expense.

     The Company's net sales for the second quarter of 1999 were $310.5 million,
an 8.5% increase  over second  quarter 1998 sales of $286.2  million.  The sales
growth was due to net sales  gains in  residential  products  together  with the
inclusion of the LL Building  Products,  Inc.  business,  acquired in June 1998,
partially offset by declines in commercial roofing products. The increase in net
sales of the  Company's  residential  roofing  products  reflected  higher sales
volumes and average selling prices, while the decline in net sales of commercial
roofing products resulted from lower sales volumes and average selling prices.

     Operating  income for the second quarter of 1999 was $29.1 million,  a 9.0%
increase compared with $26.7 million in the second quarter of 1998. The improved
operating  income was  achieved  due to a  reduction  in  selling,  general  and
administrative  expenses  as a  percentage  of net sales to 20.1% in the  second
quarter of 1999 from 20.4% in the second  quarter of 1998 and the  inclusion  of
the LL Building Products,  Inc.  business,  partially offset by a decline in the
gross  margin  from  30.0% in 1998 to 29.7% in 1999.  The  decline  in the gross
margin was  attributable to lower average  pricing,  partially offset by reduced
manufacturing costs.

     Interest  expense for the second quarter of 1999 was $12.9 million compared
with $12.7 million in the same period in 1998,  due primarily to higher  average
borrowings,  partially offset by lower average interest rates. The lower average
interest  rates  resulted from the  refinancing  of $279.7  million in aggregate
principal  amount at maturity of the  Company's 11 3/4% Senior  Deferred  Coupon
Notes due 2004 with  substantially all of the net proceeds from the issuances of
$150 million in aggregate  principal amount of the Company's 7 3/4% Senior Notes
due 2005 and $155  million in  aggregate  principal  amount of the  Company's 8%
Senior Notes due 2008 in July and December 1998, respectively.

     Other income, net, for the second quarter of 1999 was $7.1 million compared
with $4.1 million in the second  quarter of 1998,  with the  increase  resulting
from higher investment income.


Results of Operations - Six Months 1999 Compared With
                        Six Months 1998

     For the first six months of 1999, the Company  recorded net income of $15.8
million  compared with $13.2 million for the first six months of 1998. The 19.7%
increase in net income resulted from higher  operating income and lower interest
expense, partially offset by lower other income, net.

     The  Company's  net  sales for the  first  six  months of 1999 were  $573.4
million,  a 15.0% increase over last year's sales of $498.7  million.  The sales

                                       18
<PAGE>

growth was due to net sales gains in residential  roofing products together with
the inclusion of the LL Building Products, Inc. business, acquired in June 1998,
partially offset by lower net sales in commercial roofing products. The increase
in net sales of residential  roofing products resulted from higher sales volumes
and average selling prices, while the decline in net sales of commercial roofing
products resulted from lower average selling prices.

     Operating  income  for the  first  six  months  of 1999 was  $43.2  million
compared  with  $32.7  million  for the  first  six  months  of 1998.  The 32.1%
improvement in operating  income was attributable to higher gross profit margins
due to improved pricing administration and reduced manufacturing costs, together
with  the  inclusion  of the LL  Building  Products,  Inc.  business.  Partially
offsetting these  improvements were higher selling,  general and  administrative
expenses due to the LL Building Products, Inc. acquisition and costs incurred to
achieve the higher net sales. Selling,  general and administrative  expenses for
the first six months of 1999,  as a percentage  of net sales,  declined to 20.7%
from 21.3% for the same period in 1998.

     Interest expense declined to $24.7 million for the first six months of 1999
from $25.4  million for the same period in 1998,  due primarily to lower average
interest rates, partially offset by higher average borrowings.

     Other  income,  net,  for the  first six  months  of 1999 was $6.6  million
compared  with  $14.4  million  in the same  period  in 1998.  The  decline  was
principally due to lower investment income and higher other expenses.


Liquidity and Financial Condition

     Net cash  outflow  during  the first six  months of 1999 was $15.5  million
before financing  activities,  and included the use of $19.4 million of cash for
operations,  the  reinvestment  of $26.7 million for capital  programs,  and the
generation   of  $30.5  million  from  net  sales  of   available-for-sale   and
held-to-maturity securities and other short-term investments.

     Cash invested in additional  working  capital  totaled $87.6 million during
the first six  months of 1999,  primarily  reflecting  a  seasonal  increase  in
inventories  of $31.4  million  and a $61.9  million  increase  in  receivables,
including  an $8.8  million  increase  in the  receivable  from the trust  which
purchases certain of the Company's trade accounts  receivable,  partially offset
by a $6.6 million increase in accounts payable and accrued liabilities.  The net
cash used for operating  activities  was net of a $99.8 million cash inflow from
net sales of  trading  securities  and also  included a $62.0  million  net cash
outflow for related party transactions, which included $68.7 million of advances
to the Company's parent companies.

     Net cash provided by financing  activities totaled $43.6 million during the
first six months of 1999,  mainly  reflecting $43.5 million in proceeds from the
sale of the  Company's  trade  receivables  and $3.5 million  proceeds  from the
issuance of an industrial revenue bond.

     As a result of the foregoing factors,  cash and cash equivalents  increased
by $28.1 million during the first six months of 1999 to $53.0 million, excluding
$65.7 million of trading and available-for-sale  securities and other short-term
investments.

                                       19
<PAGE>

     See Note 4 to Consolidated  Financial Statements for information  regarding
contingencies.


Year 2000 Compliance

     The Company  has  implemented  a Year 2000  program (i) to address its year
2000 issues,  i.e.,  the  inability of some IT and non-IT  equipment,  including
embedded  technology,  to accurately  read and process certain dates in the year
2000 and  afterwards,  (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 an internal  study and believes it has remediated
substantially  all of its core  systems.  The  Company  has also  evaluated  and
believes  it  has  remediated  substantially  all  of  its  personal  computers,
mainframe computers and computer network.  The Company believes that the core IT
systems  remediation has corrected Year 2000 programming  issues in all critical
areas of the Company's business.

     The Company's  independent  third party  consultants  have  inventoried and
evaluated substantially all of the Company's non-IT equipment, i.e., voice mail,
telephone,   fire  and  security  systems,   numerically  controlled  production
machinery and  computer-based  production  equipment,  and the Company is in the
process of  remediating  and testing  this  equipment.  The  Company  expects to
complete these activities by the end of the third quarter of 1999.

     The  Company  has  requested   compliance   information   in  the  form  of
questionnaires  sent to significant vendors and customers.  When appropriate,  a
lack of a response to these  questionnaires was followed by direct contact.  The
Company  has  received  compliance  information  from  substantially  all of its
significant  vendors  and  customers.  Each of  these  significant  vendors  and
customers  has advised  the Company  that they are or expect to be ready for the
Year 2000 by the end of 1999.

     Notwithstanding  the  compliance  information  received from  vendors,  the
Company is moving forward with contingency plans that include the identification
of secondary  suppliers  to minimize the impact of any Year 2000 related  issues
that may develop.  The secondary  suppliers  are being  contacted in the form of
direct  questionnaires  to determine their  readiness for Year 2000 issues.  The
Company  expects  this phase of the  project to be  completed  by the end of the
third quarter of 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  $800,000 to date and anticipates that
additional outside costs should approximate no more than an additional  $200,000
in the  aggregate.  The Company will charge these  costs,  as incurred,  against
results of operations.

     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.  Management believes that the most reasonably likely "worst
case  scenario"  resulting  from Year 2000  issues  could be the  failure by the
Company's key  suppliers,   service  providers,  customers  and   other   third

                                       20
<PAGE>

parties  to  address  their  Year  2000 issues.  If this were to occur, then the
Company's usual channels of supply and  distribution  could be disrupted and the
Company could experience a material  adverse impact on its business,  results of
operations or financial position.

                                     * * *

Forward-looking Statements

     This   Quarterly   Report  on  Form  10-Q  contains  both   historical  and
forward-looking  statements.  All statements other than statements of historical
fact are, or may be deemed to be, forward-looking  statements within the meaning
of section 27A of the  Securities  Act of 1933 and section 21E of the Securities
Exchange Act of 1934. These forward-looking  statements are only predictions and
generally can be identified  by use of statements  that include  phrases such as
"believe," "expect," "anticipate," "intend," "plan," "foresee" or other words or
phrases of similar  import.  Similarly,  statements  that describe the Company's
objectives,  plans or goals also are forward-looking  statements.  The Company's
operations  are  subject to certain  risks and  uncertainties  that could  cause
actual  results to differ  materially  from those  contemplated  by the relevant
forward-looking  statement.  The forward-looking  statements included herein are
made only as of the date of this  Quarterly  Report on Form 10-Q and the Company
undertakes no obligation to publicly update such  forward-looking  statements to
reflect  subsequent  events or  circumstances.  No assurances  can be given that
projected results or events will be achieved.



















                                       21

<PAGE>



                Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK


     Reference  is made to  Management's  Discussion  and  Analysis of Financial
Condition  and  Results  of  Operations  in the Form  10-K for a  discussion  of
"Market-Sensitive  Instruments  and Risk  Management."  As of December 31, 1998,
equity-related  financial  instruments  employed by the Company to reduce market
risk included long contracts  valued at $35.2 million and short contracts valued
at $143.2 million.  At July 4, 1999, the Company had no remaining long contracts
and  the  value  of  short  contracts  was  $2.1  million.   Since  the  Company
marks-to-market  such instruments each month,  there was no economic cost to the
Company to terminate these instruments.






































                                       22
<PAGE>


                                     PART II

                                OTHER INFORMATION


Item 1.  Legal Proceedings

     Plaintiffs Joseph Rossi,  Rossi Florence Corp. and Rossi Roofing Inc. filed
a complaint in the United States  District  Court for the District of New Jersey
on December 24, 1992 against several roofing and siding manufacturers, including
GAF Building Materials Corporation,  several roofing and siding distributors and
one national purchasing cooperative,  alleging that defendants participated in a
group  boycott  against  plaintiffs  to keep  plaintiffs  from  competing in the
Northern New Jersey roofing and siding  distribution  market in violation of the
Sherman Act, 15 U.S.C. section 1, et seq., and state antitrust laws.  Plaintiffs
also asserted a tortious  interference claim against defendants under New Jersey
state law.  Plaintiffs are seeking  unspecified  damages,  including  treble and
punitive  damages,  and  attorney's  fees.  The District  Court entered  summary
judgment  in  favor  of  GAF  Building  Materials  Corporation  and  four  other
defendants  in March  1997.  The United  States  Court of Appeals  for the Third
Circuit  reversed the  District  Court's  judgment  with respect to GAF Building
Materials  Corporation  and two other  defendants.  The matter is scheduled  for
trial in the United  States  District  Court for the  District  of New Jersey in
September  1999.  In  connection  with its  formation,  the Company  assumed any
liability that may arise from this action.  GAF Building  Materials  Corporation
has  advised the Company  that it intends to defend this action  vigorously  and
believes that it will prevail on all of plaintiffs'  claims,  although there can
be no assurance in this regard.


     For information  relating to certain other legal proceedings,  see "Item 3.
Legal Proceedings - Other  Litigation"  contained in the Form 10-K and "Part II,
Item 1. - Legal Proceedings" contained in the Company's Quarterly Report on Form
10-Q for the quarter ended April 4, 1999.


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     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 July 4, 1999.











                                       23

<PAGE>


                                   SIGNATURES
                                  -----------



     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrants  listed below have duly caused this report
to be signed on their behalf by the undersigned, thereunto duly authorized.


                          BUILDING MATERIALS CORPORATION OF AMERICA
                          BUILDING MATERIALS MANUFACTURING CORPORATION
                          BUILDING MATERIALS INVESTMENT CORPORATION


DATE:  August 16, 1999         BY:   /s/William C. Lang
       ---------------               ------------------

                                     William C. Lang
                                     Executive Vice President,
                                       Chief Administrative Officer
                                       and Chief Financial Officer
                                     (Principal Financial Officer)


DATE:  August 16, 1999         BY:   /s/James T. Esposito
       ---------------               --------------------
                                     Vice President and Controller
                                     (Principal Accounting Officer)






















                                       24
<PAGE>