UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.  20549

FORM 10-Q

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

OR

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

Commission file number 0-19335

|
|

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

|Delaware                                                       | 91-1834269                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

Four Embarcadero Center, Suite 3250, San Francisco, CA 94111(Address of principle executive offices, including zip code)

(415) 627-9100
  (Registrants telephone number, including area code)

N/A(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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes X No

The number of shares outstanding of the registrants common stock as of November 2, 2004 was 13,718,366.

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BUILDING MATERIALS HOLDING CORPORATION

INDEX

|                                                                                                                    | PageNumber
|------------------------------------------------------------------------------------------------------------------- | ----------
|PART I - FINANCIAL INFORMATION                                                                                      |           
|                                                                                                                   
|Item 1 - Financial Statements (unaudited)                                                                          
|                                                                                                                   
|Consolidated Statements of Income for the three and nine months ended September 30, 2004
                  and 2003 | 3         
|                                                                                                                   
|Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003                                          | 4         
|                                                                                                                   
|Consolidated Statements of Cash Flows for the nine months ended September 30, 2004
                  and 2003       | 5         
|                                                                                                                   
|Notes to Consolidated Financial Statements                                                                          | 6         
|                                                                                                                   
|Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations                      | 15        
|                                                                                                                   
|Item 3 - Quantitative and Qualitative Disclosures about Market Risk                                                 | 23        
|                                                                                                                   
|Item 4 - Controls and Procedures                                                                                    | 24        
|                                                                                                                   
|                                                                                                                   
|PART II - OTHER INFORMATION                                                                                         |           
|                                                                                                                   
|Item 1 - Legal Proceedings                                                                                          | 25        
|                                                                                                                   
|Item 6 - Exhibits                                                                                                   | 25        
|                                                                                                                   
|                                                                                                                   
|SIGNATURES                                                                                                          | 26        
|                                                                                                                   
|CERTIFICATIONS                                                                                                      | 27        

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Building Materials Holding CorporationConsolidated Statements of Income(thousands, except per share data)(unaudited)

|                                                           | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|---------------------------------------------------------- | ------------------------------- | ------------------------------
|                                                          
|Sales                                                      |                                 |                               
|Building products                                          |                                 |                               
|Construction services                                      |                                 |                               
|Total sales                                                |                                 |                               
|                                                           |                                 |                               
|Costs and operating expenses                               |                                 |                               
|Cost of goods sold                                         |                                 |                               
|Building products                                          |                                 |                               
|Construction services                                      |                                 |                               
|Impairment of assets                                       |                                 |                               
|Selling, general and administrative                        |                                 |                               
|expenses                                                   |                                 |                               
|Other (income) expense, net                                |                                 |                               
|Total costs and operating expenses                         |                                 |                               
|                                                           |                                 |                               
|Income from operations                                     |                                 |                               
|                                                           |                                 |                               
|Interest expense                                           |                                 |                               
|                                                           |                                 |                               
|Income before income taxes, minority                       |                                 |                               
|interests and equity earnings                              |                                 |                               
|                                                          
|Income taxes                                               |                                 |                               
|                                                           |                                 |                               
|Minority interests (income), net                           |                                 |                               
|                                                           |                                 |                               
|Equity earnings, net of tax of $206 and  $918 respectively |                                 |                               
|                                                           |                                 |                               
|Net income                                                 |                                 |                               
|                                                           |                                 |                               
|Net income per share:                                      |                                 |                               
|                                                           |                                 |                               
|Basic                                                      |                                 |                               
|                                                           |                                 |                               
|Diluted                                                    |                                 |                               

The
accompanying notes are an integral part of these consolidated financial statements.

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Building Materials Holding CorporationConsolidated Balance Sheets(thousands, except share data)(unaudited)

|                                                                                                                                    | September 30, |         | December 31,
|----------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------- | ------------
|                                                                                                                                   
|ASSETS                                                                                                                              |               |         |             
|Cash                                                                                                                                |               |         | $           
|Receivables, net of allowances of $5,137 and $2,425                                                                                 |               |         |             
|Inventory                                                                                                                           |               |         |             
|Costs in excess of billings                                                                                                         |               |         |             
|Deferred income taxes                                                                                                               |               |         |             
|Prepaid expenses and other current assets                                                                                           |               |         |             
|                                                                                                                                    |               |         |             
|Total current assets                                                                                                                |               |         |             
|                                                                                                                                    |               |         |             
|Property and equipment, net                                                                                                         |               |         |             
|Other long-term assets                                                                                                              |               |         |             
|Deferred loan costs                                                                                                                 |               |         |             
|Other intangibles, net                                                                                                              |               |         |             
|Goodwill                                                                                                                            |               |         |             
|                                                                                                                                    |               |         |             
|Total assets                                                                                                                        |               |         | $           
|                                                                                                                                    |               |        
|                                                                                                                                    |               |        
|                                                                                                                                    |               |        
|LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY                                                                           
|Accounts payable and accrued expenses                                                                                               |               |         | $           
|Billings in excess of costs and estimated earnings                                                                                  |               |         |             
|Current portion of long-term debt                                                                                                   |               |         |             
|                                                                                                                                    |               |         |             
|Total current liabilities                                                                                                           |               |         |             
|                                                                                                                                    |               |         |             
|Deferred income taxes                                                                                                               |               |         |             
|Long-term debt                                                                                                                      |               |         |             
|Other long-term liabilities                                                                                                         |               |         |             
|                                                                                                                                    |               |         |             
|Total liabilities                                                                                                                   |               |         |             
|                                                                                                                                    |               |         |             
|Minority interests                                                                                                                  |               |         |             
|                                                                                                                                    |               |        
|Shareholders' equity                                                                                                                |               |        
|Common stock, $0.001 par value, 20,000,000 shares authorized;  13,706,540 and 13,333,711 shares issued and outstanding respectively | 13            |         |             
|Additional paid-in capital                                                                                                          |               |         |             
|Accumulated other comprehensive (loss)                                                                                              |               |         |             
|Retained earnings                                                                                                                   |               |         |             
|                                                                                                                                    |               |         |             
|Total shareholders' equity                                                                                                          |               |         |             
|                                                                                                                                    |               |         |             
|Total liabilities, minority interests and shareholders' equity                                                                      | $             | 782,233 |             

The accompanying notes are an integral part of these consolidated financial statements.

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Building Materials Holding CorporationConsolidated Statements of Cash Flows(thousands)(unaudited)

|                                                                               | Nine Months EndedSeptember 30,
|------------------------------------------------------------------------------ | ------------------------------
|
|Net income                                                                     |                               
|Items in net income not using (providing) cash:                                |                               
|Depreciation and amortization                                                  |                               
|Deferred income taxes                                                          |                               
|Loss (gain) on sale of assets, net                                             |                               
|Equity earnings, net of amortization and before taxes of $918                  |                               
|Deferred financing costs                                                       |                               
|Minority interests income, net                                                 |                               
|Changes in assets and liabilities, net of effects of acquisitions and sales of |                               
|business units:                                                                |                               
|Receivables, net                                                               |                               
|Inventory                                                                      |                               
|Costs in excess of billings                                                    |                               
|Prepaid expenses and other current assets                                      |                               
|Accounts payable and accrued expenses                                          |                               
|Billings in excess of costs and estimated earnings                             |                               
|Other long-term assets and liabilities                                         |                               
|Other, net                                                                     |                               
|Cash flows provided by operating activities                                    |                               
|                                                                               |                               
|Investing Activities                                                           |                               
|Purchases of property and equipment                                            |                               
|Acquisitions and investments in businesses, net of cash acquired               |                               
|Proceeds from dispositions of property and equipment                           |                               
|Proceeds from sales of business units, net of cash sold                        |                               
|Purchase of marketable securities                                              |                               
|Other, net                                                                     |                               
|Cash flows used by investing activities                                        |                               
|                                                                               |                               
|Financing Activities                                                           |                               
|Net borrowings under revolving credit facility                                 |                               
|Principal payments on term note                                                |                               
|Borrowings under term note                                                     |                               
|Principal payments on other notes payable                                      |                               
|(Decrease) increase in book overdrafts                                         |                               
|Deferred financing costs                                                       |                               
|Stock options exercised                                                        |                               
|Dividends                                                                      |                               
|Other, net                                                                     |                               
|Cash flows provided by financing activities                                    |                               
|                                                                               |                               
|Net Change in Cash                                                             |                               
|Cash, beginning of period                                                      |                               
|Cash, end of period                                                            |                               
|                                                                               |                               
|Supplemental Disclosure of Cash Flow Information                               |                               
|Accrued but unpaid dividends                                                   |                               
|Cash paid for interest                                                         |                               
|Cash paid for taxes                                                            |                               

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  BASIS OF PRESENTATION

The quarterly consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and disclosures normally included in
        financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to those rules and
        regulations.  These consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes included
        in our Annual Report on Form 10-K for the year ended December 31, 2003.

The quarterly consolidated financial statements have not been audited by independent accountants.  However, in the opinion of management, all adjustments necessary to present fairly the results for the
        period have been included.  The preparation of these consolidated financial statements required estimates and assumptions.  Actual results may differ from
        those estimates.

Certain reclassifications have been
made to amounts reported in prior periods, none of which affected financial position,
results of operations or cash flows.

2.  NET INCOME PER SHARE

Net income per share was determined using the following information (thousands, except per share data):

|                                                                                 | Three Months EndedSeptember 30, |  | Nine Months EndedSeptember 30,
|-------------------------------------------------------------------------------- | ------------------------------- |  | ------------------------------
|                                                                                
|                                                                                 |                                 |  |                               
|Net income                                                                       |                                 |  | $                             
|                                                                                 |                                 | 
|                                                                                 |                                 | 
|Weighted average shares used to   determine basic net income per share           |                                 |  |                               
|Net effect of dilutive stock options and
                   restricted stock (1) |                                 |  |                               
|Weighted average shares used to   determine diluted net income per share         |                                 |  |                               
|                                                                                 |                                 | 
|Net income per share:                                                            |                                 | 
|Basic                                                                            |                                 |  | $                             
|Diluted                                                                          |                                 |  | $                             
|                                                                                 |                                 |  |                               
|Cash dividends per share (2)                                                     |                                 |  | $                             

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Stock options to purchase 589,254 shares for the third quarter of 2003 and stock options to
                        purchase 30,665 and 578,004 shares for the nine months ended September 30, 2004 and 2003
                        respectively, were not dilutive and therefore excluded in the computations of diluted
                        income per share.  Stock options categorized as not dilutive were defined on the basis
                        of the exercise price being greater than the average market value of the shares of common
                        stock in the periods presented.

|(2) | Cash dividends were $1.1 million and $0.7 million for the third quarter of 2004 and 2003
                        respectively, and $2.7 million and $2.0 million for the nine months ended September 30,
                        2004 and 2003 respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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3.  STOCK-BASED COMPENSATION

Incentive and Performance Plan
        The 2004 Incentive and Performance Plan (2004 Plan) was approved by shareholders at the annual meeting in May 2004 and replaces the 2000 Stock Incentive Plan (2000 Plan), the Second Amended and Restated Non-Employee Director
        Stock Option Plan (Director Plan) and Senior Officer Performance Bonus Plan (Bonus Plan).  No further grants or awards will be made under the 2000 Plan, Director Plan or Bonus Plan.  The 2004 Incentive and Performance
        Plan provides performance-based compensation to employees and non-employee directors.  The plan provides for the granting of stock options, stock
        appreciation rights, restricted stock, other stock-based awards, performance awards and non-discretionary awards.  A total of 1.2 million shares of common stock are
        reserved for issuance under the plan, of which 201,000 options and 74,500 shares of restricted stock have been authorized and issued.  Stock options vest ratably
        over three years and restricted stock vests after three years.

As of September 30, 2004, there were six stock-based compensation plans.  Currently, stock-based compensation is issued only under the 2004 Plan.  Stock-based compensation plans are more fully described in Note 13 of the Annual Report on Form 10-K.  As permitted by
        Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, the stock compensation measurement principles of
        Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and its related interpretations were retained.  Under APB Opinion No.
        25, compensation expense is recognized based upon the difference, if any, at the measurement date between the market value of stock and the option exercise
        price.  The measurement date is the date at which both the number of options and the exercise price for each option are known.  The following table illustrates
        the effect on net income and net income per share if the fair value recognition provisions of SFAS No. 123 were applied (thousands, except per share data):

|                                                                                                                                                   | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------
|                                                                                                                                                  
|Net Income                                                                                                                                         |                                 |                               
|Add (Deduct): Total stock-based   employee compensation expense   determined under intrinsic value   method, net of related tax effects            |                                 |                               
|                                                                                                                                                   |                                 |                               
|(Deduct): Total stock-based employee   compensation expense determined   under fair value based method for all   awards,net of related tax effects |                                 |                               
|Pro forma net income                                                                                                                               |                                 |                               
|                                                                                                                                                   |                                 |                               
|Net income per share:                                                                                                                              |                                 |                               
|Basic - as reported                                                                                                                                |                                 |                               
|Basic - pro forma                                                                                                                                  |                                 |                               
|                                                                                                                                                   |                                 |                               
|Diluted - as reported                                                                                                                              |                                 |                               
|Diluted - pro forma                                                                                                                                |                                 |                               

4.  MINORITY INTERESTS AND EQUITY EARNINGS

Acquisitions are accounted for under the purchase method of accounting.  The purchase price is allocated to the assets acquired, including intangible assets, and liabilities assumed based on their
        estimated fair values at the date of acquisition.  Any excess of the purchase price over the estimated fair value of the identifiable assets and liabilities acquired is
        recorded as goodwill.  Minority interest reflects the other owners proportionate share in the fair value of the identifiable assets and liabilities acquired
        as of the date of purchase adjusted by the proportionate share of post-acquisition income or loss of the subsidiary.  As the operating results of entities with minority
interest are consolidated, minority interest

---

(income) loss represents the income or loss attributable to the other owners.  Operating results of the acquired businesses
        are included in the consolidated statements of income from the date of acquisition.

WBC Mid-Atlantic
        In October of 2003, a 67.33% interest in a newly formed construction business, WBC Mid-Atlantic LLC, was acquired for approximately $5.1 million in cash and the issuance of 15,059 shares of common
        stock.  The remaining 32.67% interest is owned by ANM Carpentry, Inc. (ANM) and is recognized as minority interest.  The business venture provides framing
        services for high-volume production homebuilders in Virginia, Maryland, the District of Columbia and Delaware.

Under the purchase agreement, the Company has the option to purchase the remaining 32.67% of WBC Mid-Atlantic prior to October 1, 2010 subject to certain limitations, or prior to October 1, 2006 contingent on
        the written consent of ANM or if certain other conditions are met.  The principals of ANM have the option to require the Company to purchase the remaining 32.67%
        interest from October 1, 2008 through October 1, 2010.  The purchase price for the remaining interest will generally be based on a multiple of historical earnings.

WBC Construction
        In January of 2003, a 60% interest in a newly formed construction business, WBC Construction, LLC (WBC), was acquired for approximately $22.9 million in cash and the issuance of 70,053 shares of common
        stock.  The remaining 40% interest is owned by Willard Brothers Construction, Inc. and its principal members.  WBC contracts with high-volume production
        homebuilders in Florida to construct the slab and structural shell of homes.

Under the purchase agreement, the Company has the option to purchase the remaining 40% interest in WBC from January 16, 2006 through January 16, 2009 and the principals of Willard Brothers Construction, Inc. have
        the option to require the Company to purchase the remaining 40% of WBC from January 16, 2007 through January 16, 2009.  The purchase price for the remaining interest
        will generally be based on a multiple of historical earnings.

When purchased, the investment in WBC was accounted for using the equity method of accounting because the minority owners had certain approval and other rights that precluded consolidation.  On August 11,
        2003, WBCs operating agreement was amended to eliminate certain approval and other rights of the minority interest shareholders.  As a result, the equity method of
        accounting was ceased and the results of WBCs operations have been included in the consolidated financial statements effective August 12, 2003.  The 40% ownership
        interest is recognized as minority interest.  The consolidation of WBC resulted in an increase in assets of $41.2 million, an increase in liabilities of $12.7 million, an
        increase in minority interest of $2.3 million and a decrease in equity investments in an unconsolidated company of $26.2 million.

While accounted for under the equity method prior to August 12, 2003, the condensed income statement for WBC was as follows (thousands):

|                              | July 1, 2003through |  | Year-to-date periodending
|----------------------------- | ------------------- |  | -------------------------
|                             
|Sales                         |                     |  | $                        
|Income from operations        |                     |  |                          
|Net income                    |                     |  |                          
|                              |                     |  |                          
|Company's share of net income |                     |  |                          
|Amortization of intangibles   |                     |  |                          
|Equity  earnings before taxes |                     |  | $                        

KBI Norcal
        In July 2002, a 51% interest in a newly formed partnership, KBI Norcal, was acquired for approximately $5.8 million in cash, $0.8 million of assumed debt and the issuance of 34,364 shares of common
        stock.  The remaining 49% interest was owned by RJ Norcal, LLC and recognized as minority interest.  KBI Norcal provides  framing services in northern California.

---

As a majority-owned subsidiary, the financial information for KBI Norcal was previously consolidated.  Minority interest represents the other owner's proportionate share in the fair value of the identifiable assets and liabilities acquired as of the date of purchase and their subsequent proportionate share of income or loss.

In July 2004, BMC Construction acquired the remaining 49% of KBI Norcal for $14.0 million in cash.  Assets acquired included intangibles of $4.7 million and goodwill of $6.5 million.

5.  MARKETABLE SECURITIES

Investments in marketable securities at our captive insurance subsidiary are considered available-for-sale and recorded at fair values.  Unrealized gains
	and losses are recorded as a component of accumulated other comprehensive income (loss), a component of shareholders' equity.  As of September 30, 2004, marketable securities that
	mature in less than a year are $1.8 million and are a component of other current assets and long-term marketable securities of $11.7 million have maturities
	of one to five years and are a component of other long-term assets.

6.  ACQUISITIONS

Acquisitions are accounted for under the purchase method of accounting.  The purchase price is allocated to the
        assets acquired, including intangibles assets, and liabilities assumed based on their estimated fair values at the date of acquisition.  Any excess of the purchase
        price over the estimated fair value of the identifiable assets and liabilities acquired is recorded as goodwill.

In March 2004, BMC Construction acquired a distribution facility and associated operating assets in Tucson, Arizona for $4.0 million in cash.  Assets acquired included accounts receivable of $1.3
        million, inventory of $0.7 million, property and equipment of $2.3 million and liabilities of $0.3 million.  Had this acquisition taken place as of the beginning of 2003,
        pro forma results of operations would not have been significantly different from reported amounts.

In June 2004, BMC West acquired a framing business in Denver, Colorado for $0.8 million in cash.  Assets acquired included intangibles of $0.2 million, goodwill of $0.2 million and other assets of $0.4
        million.  Had this acquisition taken place as of the beginning of 2003, pro forma results of operations would not have been significantly different from reported amounts.

In July 2004, our majority-owned subsidiary WBC Construction acquired a 51% interest in a truss facility in Boynton Beach, Florida for $2.1 million in cash and $4.3 million in liabilities.  Information required
        to complete the purchase price allocation for certain tangible property is not yet available.  Final allocation of the purchase price will be completed as soon as
        this information is available.  Had this acquisition taken place as of the beginning of 2003, pro forma results of operations would not have been significantly
        different from reported amounts.

7.  IMPAIRMENT OF ASSETS

Long-lived assets such as property, equipment and intangibles with finite lives are evaluated for impairment whenever events or changes in circumstances indicate the carrying amount may not be
        recoverable.  An impairment is recognized if the carrying amount is more than the estimated future operating cash flows on an undiscounted basis.  In the
        first quarter of 2004, an impairment of $1.3 million for certain BMC West properties was recognized.

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8.  INTANGIBLE ASSETS AND GOODWILL

Intangible assets represent the values assigned to customer relationships and covenants not to compete.  Intangible assets are amortized on a straight-line basis over their expected useful
        lives.  Customer relationships are amortized over two to seventeen years and covenants not to compete over three to five years.  Intangible assets consist of the following (thousands):

|                         | September 30, 2004
|------------------------ | ------------------
|                         |                   
|Customer relationships   |                   
|Covenants not to compete |                   
|Other                    |                   
|                         |                   

|                         | 
|------------------------ | 
|
|                         | 
|Customer relationships   | 
|Covenants not to compete | 
|Other                    | 
|                         | 

There are no intangible assets with indefinite useful lives.  Estimated amortization expense for intangible assets  is $1.0 million for the remainder of 2004, $2.7 million for
        2005, $2.6 million for 2006, $1.9 million for 2007, $1.3 million for 2008 and $4.4 million thereafter.

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets of acquired businesses.  An annual assessment for impairment is completed in the
        fourth quarter and whenever events and circumstances indicate the carrying amount may not be recoverable.  An impairment is recognized if the carrying amount is more than
        the estimated future operating cash flows as measured by fair value techniques.

Changes in the carrying amount of goodwill by business segment are as follows (thousands):

|                            | BMC West | BMCConstruction | Total
|--------------------------- | -------- | --------------- | -----
|Balance, December 31, 2003  |          |                 | $    
|Goodwill acquired           |          |                 |      
|Balance, September 30, 2004 |          |                 | $    

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9.  DEBT

Long-term debt consists of the following (thousands):

|As of September 30, 2004  |   |         |  |                                                                      | NotionalAmount ofInterestRate Swaps | Effective Interest Rate
|------------------------- | - | ------- |  | -------------------------------------------------------------------- | ----------------------------------- | -----------------------
|
|Revolving credit facility | $ | 108,125 |  | LIBOR plus
                2.75% or 
                Prime plus1.50% |                                     | $                      
|Term note                 |   | 123,437 |  | LIBOR plus2.75% or Prime plus2.00%                                   |                                     |                        
|                          |   |         |  |                                                                      |                                     |                        
|Other                     |   | 5,686   |  | Various                                                              |                                     |                        
|                          |   | 237,248 |  |                                                                      |                                     | $                      
|                          |   |         |  |                                                                      |                                     |                        
|Less: Current portion     |   | 2,958   |  |                                                                      |                                     |                        
|                          |   |         |  |                                                                      |                                     |                        
|                          | $ | 234,290 |  |                                                                      |                                     |                        

|As of December 31, 2003   |   |         |  |                                                                     | NotionalAmount ofInterestRate Swaps | Effective Interest Rate
|------------------------- | - | ------- |  | ------------------------------------------------------------------- | ----------------------------------- | -----------------------
|
|Revolving credit facility | $ | 60,400  |  | LIBOR plus
                2.50% or
                Prime plus1.75% |                                     | $                      
|Term note                 |   | 124,375 |  | LIBOR plus3.25% orPrime plus2.50%                                   |                                     |                        
|                          |   |         |  |                                                                     |                                     |                        
|Other                     |   | 4,903   |  | Various                                                             |                                     |                        
|                          |   | 189,678 |  |                                                                     |                                     | $                      
|                          |   |         |  |                                                                     |                                     |                        
|Less: Current portion     |   | 2,905   |  |                                                                     |                                     |                        
|                          |   |         |  |                                                                     |                                     |                        
|                          | $ | 186,773 |  |                                                                     |                                     |                        

Revolving Credit Facility
        In August 2003, the Company entered into a $175 million revolving credit facility with a group of lenders.  In July 2004 and pursuant to the agreement, the borrowing capacity of the revolving credit
        facility was increased by $50 million.  Borrowings under the revolving credit facility are limited to 60% of inventory plus 80% of trade receivables.  The
        borrowing base is calculated monthly and limited to $225 million.  The revolving credit facility matures in August 2008.

The revolving credit facility consists of both LIBOR and Prime based borrowings.  In May 2004, the revolving credit facility was amended to reduce the interest rates by 0.25%.  Interest rates are subject to quarterly adjustment based on operating performance and range from LIBOR plus 1.0% to 2.75%, or Prime plus 0.0% to 1.5%.

---

As of September 30, 2004, the borrowing base was limited to the maximum of $225.0 million, $108.1 million of which was outstanding.  Revolver availability was $87.1 million, net of $29.8 million in outstanding letters of credit.

Term Note
        In August 2003, the Company entered into a $125 million term note with a group of lenders.  The term note matures in August 2010 and is payable in quarterly installments for the first six years in amounts
        equal to 1% of the initial principal amount per year and equal quarterly installments for the remaining principal balance during year seven.  In May 2004, the term note
        was amended to reduce the interest rates by 0.50%.  The interest rates for the term note are LIBOR plus   2.75%, or Prime plus  2.00%.

The revolving credit facility and term note are collateralized by all tangible and intangible property, except the captive insurance subsidiary.  The revolving credit facility and term note contain
        covenants and conditions requiring the maintenance of certain financial ratios.  At September 30, 2004, the Company was in compliance with these covenants and conditions.

Other
        Other long-term debt consists of a term note, equipment notes and capital leases for equipment and software.  Interest rates are various and dates of maturity are through April 2006.

Hedging Activities
        In June 2004, the Company entered into interest rate swap contracts that effectively convert a portion of the floating rate borrowings of the term note to a fixed interest rate through June 2009, thus reducing the
        impact of changes in interest rates on future interest expense.  Approximately 81% of the outstanding floating rate borrowings of the term note as of September 30, 2004
        have been hedged through the designation of interest rate swap contracts accounted for as cash flow hedges.  The interest rate on $100 million of the $123.4 million
        floating rate borrowings outstanding at September 30, 2004 is fixed at an average rate of 7.14%.  After giving effect to the interest rate swap contracts, total
        borrowings are 45% fixed and 55% floating.

The fair value of derivative instruments is based on pricing models using current market rates.  The fair value of the interest rate swap contracts was a long-term liability of $3.2 million as of
        September 30, 2004.  The effective portion was recorded as accumulated other comprehensive income (loss), a separate component of shareholders equity, and is subsequently
        reclassified into earnings in the same financial statement line item, interest expense, in the same period during which the hedged transaction is recognized in
        earnings.  A corresponding deferred tax asset of $1.3 million was also recorded in accumulated other comprehensive income (loss) for the income tax deduction related to the estimated
        liability of the interest rate swap contracts.  The ineffective portion of the gain or loss is immediately recognized as a component of interest
        expense.  There was no hedge ineffectiveness for the period ended September 30, 2004.  Management may choose not to swap floating debt to a fixed rate or may
        terminate a previously executed swap if the floating rate positions are more beneficial.

Scheduled maturities of long-term debt are as follows (thousands):

| | 2004       |  |  | $ | 504     | 
| | ---------- |  |  | - | ------- | 
| | 2005       |  |  |   | 3,029   | 
| | 2006       |  |  |   | 4,147   | 
| | 2007       |  |  |   | 1,614   | 
| | 2008       |  |  |   | 109,703 | 
| | Thereafter |  |  |   | 118,251 | 
| |            |  |  | $ | 237,248 | 

As of September 30, 2004 and December 31, 2003, there were $29.8 million and $26.5 million respectively, of letters of credit
        that guaranteed performance or payment to third parties.  These letters of credit reduce borrowing availability under the revolving credit facility.

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10.  COMPREHENSIVE INCOME

Other comprehensive income refers to revenue, expenses, gains and losses and their related tax effects that under generally accepted accounting
	principles are recorded as an element of shareholders' equity and excluded from net income.  Our comprehensive income is comprised of
	unrealized losses on the fair value of interest rate swap contracts and unrealized gains on marketable securities.  The following table
	summarizes comprehensive income, net of taxes (thousands):

|                                      | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|------------------------------------- | ------------------------------- | ------------------------------
|                                     
|                                      |                                 |                               
|Net income                            |                                 |                               
|Unrealized loss on interest rate swap |                                 |                               
|contracts                             |                                 |                               
|Unrealized gain on marketable         |                                 |                               
|securities                            |                                 |                               
|Comprehensive income                  |                                 |                               

11.  LEGAL PROCEEDINGS

The Company is involved in litigation and other legal matters arising in the normal course of business.  In the opinion of management, the recovery or liability, if any, under any of these matters will
        not have a material adverse effect on the consolidated financial position, results of operations or cash flows.

12.  RECENT ACCOUNTING PRINCIPLES

In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, an interpretation of ARB No. 51, which was further revised in
        December 2003.  FIN 46 required consolidation of entities in which there is a controlling interest or insufficient equity to finance their activities without additional
        subordinated financial support.  FIN 46 also required disclosure of significant interests in these entities if not consolidated.  We adopted the revised
        provisions of FIN 46 in the first quarter of 2004.  This adoption had no impact on the consolidated financial position, results of operations or cash flows.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.  The statement establishes standards for how an issuer classifies
        and measures certain financial arrangements with characteristics of both liabilities and equity.  It requires that an issuer classify a financial arrangement that is
        within its scope as a liability or an asset in some circumstances.  We adopted this statement on July 1, 2003.  This adoption had no impact on the consolidated
        financial position, results of operations or cash flows.  Also, certain provisions of this statement were deferred for an indefinite period.  We
        continue to monitor the deliberations on SFAS No. 150 for its impact, if any, on the consolidated financial position, results of operations or cash flows.

13.  SEGMENT INFORMATION

The consolidated financial statements include operations from two reportable segments: BMC West and BMC Construction.  These segments represent distinct businesses that are managed
        separately.  Each of these businesses require distinct operating and marketing strategies.  Management reviews the
        financial performance of the Company based on these operating segments.

BMC West markets and sells building products, manufactures building components and provides construction services.  Products include structural lumber and building materials purchased
        from other manufacturers and manufactured building components including millwork, trusses and wall panels.  Construction services  include framing and installation of miscellaneous building materials.  Building products and
        construction services are sold principally to custom and low-volume professional homebuilders.

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BMC Construction provides framing and other construction services to high-volume production homebuilders.  Framing and other construction services include managing labor, materials and construction schedules.

The financial performance for these reporting segments is based on income from operations before interest expense, income taxes, minority interests and equity earnings.  The segments follow the
        accounting principles described in the Summary of Significant Accounting Policies included in the Annual Report on Form 10-K for the year ended December 31,
        2003.  Selected financial information by segment is as follows (thousands):

|                                        | Sales | Income (Loss) Before Taxes andMinority Interests
|--------------------------------------- | ----- | ------------------------------------------------
|                                        |       |                                                 
|Three Months Ended   September 30, 2004 |       |                                                 
|BMC West                                |       |                                                 
|BMC Construction                        |       |                                                 
|Corporate and other                     |       |                                                 
|                                        |       |                                                 
|Interest expense                        |       |                                                 
|                                        |       |                                                 
|                                        |       |                                                 
|Three Months Ended   September 30, 2003 |       |                                                 
|BMC West                                |       |                                                 
|BMC Construction                        |       |                                                 
|Corporate and other                     |       |                                                 
|                                        |       |                                                 
|Interest expense                        |       |                                                 
|                                        |       |                                                 
|                                        |       |                                                 
|                                        |       |                                                 
|Nine Months Ended   September 30, 2004  |       |                                                 
|BMC West                                |       |                                                 
|BMC Construction                        |       |                                                 
|Corporate and other                     |       |                                                 
|                                        |       |                                                 
|Interest expense                        |       |                                                 
|                                        |       |                                                 
|                                        |       |                                                 
|Nine Months Ended   September 30, 2003  |       |                                                 
|BMC West                                |       |                                                 
|BMC Construction                        |       |                                                 
|Corporate and other                     |       |                                                 
|                                        |       |                                                 
|Interest expense                        |       |                                                 
|                                        |       |                                                 

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Item 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS

Overview

The consolidated financial statements include operations from two business segments: BMC West and BMC Construction.  Sales and income are derived from providing building products and
        construction services to homebuilders and contractors at the local, regional and national levels.  BMC West markets building products and construction services principally to custom
        and low-volume professional homebuilders.  BMC Construction provides framing and other construction services to high-volume production homebuilders.

We grow the construction services side of the business through acquisitions and the expansion of service offerings at existing operations.  We believe low and high-volume homebuilders are aligning with
        full-service providers that offer both building materials and construction services.  Our efforts continue to focus on pursuing this market.

Construction activity in our markets remained strong for the quarter as well as the first nine months of 2004, as evidenced by building permits in our markets exceeding prior year levels.  We continue to benefit from a
stable economy and  favorable interest rates which have provided strength for home construction activity.

Sustained higher commodity wood product prices have also augmented sales and operating income.  However, commodity wood product prices have historically been subject to significant volatility and
        therefore cannot be predicted in the short or long-term.  We also typically experience a seasonal slowdown in construction activity during the fourth and first quarters of a calendar year.

As we look ahead to the fourth quarter and beyond, recent trends indicate a softening in commodity wood product prices which may moderate our growth.  Additionally, unusually robust housing demand in selected markets has
        enabled us to be more selective in our contractual arrangements, leading to enhanced operating results.  If housing demand slackens, we may not experience the same business opportunities.

We remain cautiously optimistic that relatively strong housing demand will continue into the fourth quarter of 2004, although at a seasonally adjusted slower pace.

We evaluate our results of operations including and excluding acquisitions.  We believe a presentation of sales and operating income excluding recent acquisitions enhances an understanding of the
        acquisitions as well as comparable operations for the respective periods.  In the discussion for the three and nine months ended September 30, 2004 and 2003, a
        reconciliation of sales and operating income before recent acquisitions has been provided.

---

Results of Operations

The following table sets forth for the periods indicated, the percentage relationship to consolidated sales of certain costs, expenses and income items.  The table and subsequent discussion should be read
        in conjunction with the consolidated financial statements and the related notes appearing elsewhere in this document and in the Annual Report on Form 10-K for the year ended December 31, 2003.

|                                             | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|-------------------------------------------- | ------------------------------- | ------------------------------
|                                            
|Sales                                        |                                 |                               
|Building products                            |                                 |                               
|Construction services                        |                                 |                               
|Total sales                                  |                                 |                               
|                                             |                                 |                               
|Costs and operating expenses                 |                                 |                               
|Cost of goods sold                           |                                 |                               
|Building products(1)                         |                                 |                               
|Construction services(2)                     |                                 |                               
|Total cost of goods sold                     |                                 |                               
|                                             |                                 |                               
|Impairment of assets                         |                                 |                               
|Selling, general and administrative expenses |                                 | 14                            
|Other (income) expense, net                  |                                 |                               
|Income from operations                       |                                 |                               
|                                             |                                 |                               
|Interest expense                             |                                 |                               
|Income taxes                                 |                                 |                               
|Minority interests (income), net             |                                 |                               
|Equity earnings, net of tax                  |                                 |                               
|Net income                                   |                                 |                               

As the above table indicates, construction services continue to expand as a larger portion of total sales primarily due to the impact of acquisitions at BMC Construction.  For the three and nine months ended September 30, 2004, both housing demand and sustained higher commodity wood product prices ultimately contributed to a significant improvement in income from operations as a percentage of  sales.

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THIRD QUARTER OF 2004 COMPARED TO THE THIRD QUARTER OF 2003

Consolidated Sales

The following table presents consolidated and business segment sales adjusted for the impact of acquisitions for the quarter ended September 30, 2004 and 2003 (millions):

|                   | BMC West | BMC
                Construction | Total
|------------------ | -------- | -------------------------------- | -----
|                   |         
|Sales              |          |                                  | $    
|Less: Acquisitions |          |                                  |      
|                  
|Adjusted sales     |          |                                  | $    

Consolidated sales for the third quarter of 2004 were $591.5 million, a 49% increase over sales of $396.3 million
  for the same period in 2003.  The increase was attributable to growth in comparable business unit sales at the
  BMC West and BMC Construction business segments, acquisitions that were not consolidated or present in the third
  quarter of 2003 and higher commodity wood product prices.  After removing the impact of acquisitions, adjusted
  sales were $540.7 million, a 36% increase over the prior year.

BMC West
    Sales at BMC West were $379.0 million in the third quarter of 2004, an increase of 35% compared to $280.8 million
    for the comparable period in 2003.  The increase in sales relative to prior year was primarily due to the growth
    in comparable business unit sales and higher prices for commodity wood products.  Sales benefited from strong
    homebuilding activity in all the regions served by BMC West.  As an indicator of building activity in our markets,
	the issuance of single-family building permits, which precede the actual start of
    construction, were 9.6% higher  compared to the prior year as reported by the U.S. Commerce Department.

BMC Construction
    Sales at BMC Construction were $212.5 million for the third quarter of 2004, an increase of 84% compared to
    $115.5 million for the same period in 2003.  After adjusting for the impact of acquisitions which were not
    consolidated or present in the comparable quarter of 2003, sales were $174.8 million, an increase of 51% over the prior year.  Significant growth in comparable sales, particularly in the Southwest region, contributed to
    the improvement.  Additionally, sales benefited from the favorable impact of acquisitions that were not
    consolidated or included in operating results for the comparable period in 2003.

Income from Operations

The following table provides operating income by business segment for the quarter ended September 30, 2004 and 2003 (millions):

|                                            | BMC West | BMCConstruction | Corporateand Other | Total
|------------------------------------------- | -------- | --------------- | ------------------ | -----
|                                            |          |                
|Operating income                            |          |                 | $                  | 31.6 
|Less: Acquisitions  (income) loss           |          |                 |                    | 0.1  
|Adjusted operating
                  income |          |                 | $                  | 31.7 

---

BMC West
        Income from operations at BMC West rose 70% to $31.6 million for the third quarter of 2004 compared to $18.6
        million in 2003.  Housing demand was strong in our markets which enhanced both sales and operating income.  Gross margins were lower as a percentage of sales, but were more than offset by management of inventory
        costs and effective monitoring of fixed and variable operating expenses.

BMC Construction
        Income from operations at BMC Construction increased substantially to $17.9 million for the third quarter of 2004
        compared to $6.2 million for the same period in 2003.  Operations in the Southwest region were particularly
        strong, contributing significantly to the improvement in operating income for the three month period.  Also,
        robust housing demand and continuous alignment of our resources with production homebuilders who value our
        services, contributed to improved operating results in the Southwest and Florida markets.  During the quarter,
        BMC Construction completed the acquisition of the remaining 49% interest in KBI Norcal, a construction
        partnership in northern California.  Northern California contributed solidly to operating results due to
        improvements in the integration of distribution and manufacturing operations as well as strong demand for housing.

FIRST NINE MONTHS OF 2004 COMPARED TO THE FIRST NINE MONTHS OF 2003

Consolidated Sales

The following table shows consolidated and business segment sales adjusted for the impact of acquisitions for the periods ended September 30, 2004 and 2003 (millions):

|                   | BMC West | BMCConstruction | Total
|------------------ | -------- | --------------- | -----
|                   |         
|Sales              |          |                 | $    
|Less: Acquisitions |          |                 |      
|                  
|Adjusted sales     |          |                 | $    

Consolidated sales for the nine months of 2004 were $1,551.7 million, a 56% increase over sales of $994.9 million for
        the same period in 2003.  After removing the impact of acquisitions, adjusted sales were $1,345.2 million in
        2004, a 35% increase over sales of $994.9 million in the prior year.

BMC West
        Sales at BMC West were $1,014.2 million for the  nine months of 2004, an increase of 38% compared to $735.4
        million for the comparable period in 2003.  The higher sales were primarily due to rising commodity wood product
        prices as well as growth in comparable business unit sales.  In particular, the Colorado market significantly
        improved over the prior year.  In all of our regions, we continue to experience strong housing demand as
        evidenced by favorable building permit activity.  Single-family building permits, which precede the actual start
        of construction were 15.6% higher compared to the prior
        year as reported by the U.S. Commerce Department.

BMC Construction
        Sales at BMC Construction for the period ended September 30, 2004, were $537.5 million, more than double the
        $259.5 million for the same period in 2003.  Acquisitions were largely responsible for
        this significant increase. After adjusting for the impact of acquisitions which were not consolidated or
        present during the first half of 2003, sales were $363.8 million, an increase of 40% compared to $259.5 million
        in 2003.  Consistent with the third quarter, operations in the Southwest region were substantially ahead of prior
        year levels, while northern California also experienced solid growth.  Aside from the benefit of acquisitions,
        the improvement was largely attributable to higher sales as a function of strong housing demand in our markets.

---

Income from Operations

The following table provides operating income by business segment for the periods ended September 30, 2004 and 2003 (millions):

|                                            | BMC West | BMCConstruction | Corporateand Other | Total
|------------------------------------------- | -------- | --------------- | ------------------ | -----
|                                            |          |                
|Operating income                            |          |                 | $                  | 72.1 
|Less: Acquisitions  (income) loss           |          |                 |                    | 2.8  
|Adjusted operating
                  income |          |                 | $                  | 74.9 

Consolidated operating income rose to $72.2 million in 2004 compared to $28.0 million in 2003.  Corporate and
        other costs were higher compared to the prior period mainly due to compensation expense related to improved
        operating performance.  The following analysis of income from operations by business segment provides further
        explanation of the period comparisons.

BMC West
        Income from operations at BMC West rose to $72.1 million for the nine months of 2004 compared to $39.8 million for
        the same period in 2003.  The elevated sales relative to prior year, due to higher commodity wood product prices
        and comparable store sales growth, were a key driver in achieving the results for the period.  Consistent with
        the third quarter, careful monitoring of inventory and operating expenses helped to preserve the profits from
        increased sales  and contribute to markedly improved operating income relative to the prior year.

BMC Construction
        Income from operations at BMC Construction was $38.0 million for the nine months of 2004 compared to $14.3
        million for the same period in 2003.  After excluding the impact of acquisitions that were not consolidated or
        present in comparable periods, operating income was $32.7 million in 2004 compared to $14.3 million in the prior
        year period.  Operations particularly in the Southwest region as well as northern California were instrumental in
        achieving the year-to-date results.

LIQUIDITY AND CAPITAL RESOURCES

The primary need for capital resources is to fund working capital and acquisitions, as well as finance capital
        expenditures.  Capital resources have primarily consisted of cash flows from operations and the incurrence of
        debt.  For the  nine months of 2004, cash was largely utilized to fund working capital requirements,
        acquisitions and investments in marketable securities.  Cash in the same period for 2003 was primarily used to fund
        working capital requirements and acquisitions.

Operations
        For the period ended September 30, 2004, net cash provided by operating activities was $10.3 million compared to
        $11.8 million provided in the same period of 2003.  The strength of home construction activity resulted in significantly higher net income and  provided $20.7
        million additional cash flow over 2003.  However, this was offset by the seasonality of working capital requirements.

Capital Investments and Acquisitions
        For the period, $46.8 million was used for investing activities.  Cash use included $22.9 million for property
        and equipment, $20.9 million for the acquisition of four businesses and $13.5 million invested in marketable
        securities at the captive insurance subsidiary.  This was $23.1 million higher than the same period last year
        when $23.7 million was used primarily for the acquisition of new businesses.

Financing
        Net cash provided by financing activities was $40.5 million for the  nine months of 2004, compared to $22.5
        million in 2003.  The primary source of cash from financing activities during the period ended September 30, 2004
        was $47.7 million in net borrowings from the revolving credit facility.

---

Revolving Credit Facility
        In August 2003, the Company entered into a $175 million revolving credit facility with a group of lenders.  In
        July 2004 and pursuant to the agreement, the borrowing capacity of the revolving credit facility was increased by
        $50 million.  Borrowings under the revolving credit facility are limited to 60% of inventory plus 80% of trade
        receivables.  The borrowing base is calculated monthly and limited to $225 million.  The revolving credit
        facility matures in August 2008.

The revolving credit facility consists of both LIBOR and Prime based borrowings.  In May 2004, the revolving credit facility was amended to reduce the interest rates by 0.25%.  Interest rates are subject to quarterly adjustment based on operating performance and range from LIBOR plus 1.0% to 2.75%, or Prime plus 0.0% to 1.5%.

As of September 30, 2004, the borrowing base was limited to the maximum of $225.0 million, $108.1 million of which was outstanding.  Revolver availability was $87.1 million, net of $29.8 million in outstanding letters of credit.

Term Note
        In August 2003, the Company entered into a $125 million term note with a group of lenders.  The term note matures in August 2010 and is payable in quarterly installments for the first six years in amounts equal to 1% of the
        initial principal amount per year and equal quarterly installments for the remaining principal balance during year seven.

As of September 30, 2004, $123.4 million was outstanding under the term note.  In May 2004, the term note was
        amended to reduce the interest rates by 0.50%.  The interest rates for the term note are LIBOR plus
         2.75%, or Prime plus  2.00%.

The revolving credit facility and term note are collateralized by all tangible and intangible property, except
        the captive insurance subsidiary.  The revolving credit facility and term note contain covenants and conditions
        requiring the maintenance of certain financial ratios.  At September 30, 2004, the Company was in compliance with these
        covenants and conditions.

Hedging Activities
        In June 2004, the Company entered into interest rate swap contracts that effectively convert a portion of the
        floating rate borrowings of the term note to a fixed interest rate through June 2009, thus reducing the impact of
        changes in interest rates on future interest expense.  Approximately 81% of the outstanding floating rate
        borrowings of the term note as of September 30, 2004 have been hedged through the designation of interest rate
        swap contracts accounted for as cash flow hedges.  The interest rate on $100 million of the $123.4 million
        floating rate borrowings outstanding at September 30, 2004 is fixed at an average rate of 7.14%.  After giving
        effect to the interest rate swap contracts, total borrowings are 45% fixed and 55% floating.

The fair value of derivative instruments is based on pricing models using current market rates.  The fair value
        of the interest rate swap contracts was a long-term liability of $3.2 million as of September 30, 2004.  The
        effective portion was recorded as accumulated other comprehensive income (loss), a separate component of shareholders' equity, and
        is subsequently reclassified into earnings in the same financial statement line item, interest expense, in the
        same period during which the hedged transaction is recognized in earnings.  A corresponding deferred tax asset of
        $1.3 million was also recorded in accumulated other comprehensive income (loss) for the income tax deduction related to the
        estimated liability of the interest rate swap contracts.  The ineffective portion of the gain or loss is
        immediately recognized as a component of interest expense.  There was no hedge ineffectiveness for the period
        ended September 30, 2004.  Management may choose not to swap floating debt to a fixed rate or may terminate a
        previously executed swap if the floating rate positions are more beneficial.

Equity
        In the third quarter of 1998, a shelf registration was filed with the Securities and Exchange Commission to
        register two million shares of common stock.  The Company may issue these shares from time to time in connection
        with future business combinations, mergers or acquisitions.  As part of the acquisition of WBC Mid-Atlantic in October 2003, WBC in January 2003 and KBI Norcal in July 2002, 15,059, 70,053 and 34,364 shares of common
        stock respectively, were issued from this registration (see Note 4).

---

Based on the historical ability to generate cash flows from operations, borrowing capacity under the revolving
        credit facility and access to debt and equity markets, management believes it will have sufficient capital to
        meet  anticipated needs.

New Accounting Standards
        In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (FIN 46), Consolidation of
        Variable Interest Entities, an interpretation of ARB No. 51, which was further revised in December 2003.  FIN 46
        required consolidation of entities in which there is a controlling interest or insufficient equity to finance
        their activities without additional subordinated financial support.  FIN 46 also required disclosure of
        significant interests in these entities if not consolidated.  We adopted the revised provisions of FIN 46 in the
        first quarter of 2004.  This adoption had no impact on the consolidated financial position, results of operations
        or cash flows.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of
        Both Liabilities and Equity.  The statement establishes standards for how an issuer classifies and measures
        certain financial arrangements with characteristics of both liabilities and equity.  It requires that an issuer
        classify a financial arrangement that is within its scope as a liability or an asset in some circumstances.  We
        adopted this statement on July 1, 2003.  This adoption had no impact on the consolidated financial position,
        results of operations or cash flows.  Also, certain provisions of this statement were deferred for an indefinite
        period.  We continue to monitor the deliberations on SFAS No. 150 for its impact, if any, on the consolidated
        financial position, results of operations or cash flows.

Forward-Looking Statements
        Certain statements made in this Form 10-Q constitute forward-looking statements within the meaning of the Private
        Securities Litigation Reform Act of 1995.  Statements that are not historical or current facts, including statements about our expectations, anticipated financial results and future business prospects are forward-looking statements.  While these statements represent our current judgment on what the future may hold and we believe these judgments are reasonable, these statements involve inherent risks and
        uncertainties that may cause actual results to differ materially from our historical experience and present
        expectations.  These risks or uncertainties may include, but are not limited to:

- changes in the overall condition of the U.S. economy, including job formation, interest rates and consumer confidence,
- fluctuations in our costs and availability of sourcing channels for commodity wood products and building materials,
- changes in the business model of our customers,
- changes in our competition,
- future integration of acquired businesses which may not result in anticipated cost savings and revenue synergies being fully realized or it may take longer to realize than expected,
- availability of and ability to attract, train and retain highly-qualified individuals,
- unanticipated weather conditions, including natural catastrophic events such as earthquakes, fire, flood, hurricanes, tornadoes, etc.,
- implementation of cost structures that align with revenue growth,
- actual and perceived vulnerabilities as a result of terrorist activities and armed conflict,
- international supply and demand for key building materials and
- numerous other matters of a local and regional scale, including those of a political, economic, business, competitive or regulatory nature.

Additional information regarding these and other risks is contained in our Annual Report on Form 10-K for the
        period ended December 31, 2003 and periodic filings with the Securities and Exchange Commission.  Undue reliance
        should not be placed on such forward-looking statements, as such statements speak only as of the date of this
        Form 10-Q.  We undertake no obligation to update forward-looking statements.

Critical Accounting Estimates
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses.  These estimates and assumptions include critical accounting estimates which are defined by the Securities and Exchange
Commission as those that are most important to the portrayal of our financial condition, results of operations or cash flows.  These estimates require
 management's subjective and complex judgments often as a result of the

---

need to estimate matters that are
          inherently uncertain.  For us, these critical accounting estimates are: revenue recognition for construction contracts, estimated losses on uncompleted contracts and changes in contract estimates and goodwill impairment.  Management believes the estimates utilized are reasonable under the circumstances, however
          actual result could differ from these estimates and require adjustment in future periods.  There have been no significant changes during the nine months ended September 30, 2004 to the
          critical accounting estimates disclosed in Management's Discussion and Analysis in our Annual Report on Form 10-K
          for the year ended December 31, 2003.

Quarterly Results and Seasonality
        The first and fourth quarters historically have been, and are expected to continue to be, adversely affected by
        weather patterns in some markets, causing decreases in levels of residential construction activity.  In addition,
        quarterly results historically have reflected and are expected to continue to reflect, fluctuations from period
        to period from various other factors including general economic conditions, commodity wood product prices,
        interest rates, building permit activity, single-family housing starts, employment levels, consumer confidence
        and the availability of credit to professional builders and contractors.

---

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Prices of commodity wood products, which are subject to significant volatility, adversely impact operating income
        when prices rapidly rise or fall within a relatively short period of time.  Derivative financial instruments are
        not utilized to hedge commodity wood product prices.

Home mortgage interest rates are an important factor influencing the homebuilding industry.  The current economic
        environment is characterized by interest rates that are at historically low levels.  As interest rates rise, the
        level of homebuilding activity may be adversely impacted.

Changes in interest expense occur when market interest rates change.  Changes in the carrying amount of debt
        could also increase these risks.  Interest rate swap contracts are currently utilized to hedge interest rate
        risks.  Approximately 81% of the outstanding floating rate borrowings of the term note as of September 30, 2004
        have been hedged through the designation of interest rate swap contracts accounted for as cash flow
        hedges.  After giving effect to the interest rate swap contracts, total borrowings are 45% fixed and 55%
        floating.  Based on debt outstanding as of September 30, 2004, a 0.25% increase in interest rates would
        result in approximately $0.3 million of additional interest expense annually.

The cash equity incentive plan is partially based on changes in the stock price.  Under the plan, an increase or
        decrease in the stock price after September 30, 2004 is not expected to have a significant impact on income from
        operations.

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Item 4 - Controls and Procedures

As of the end of the period covered by this report, management carried out an evaluation, under the supervision
        and with the participation of the Chief Executive Officer and Chief Financial Officer, of the design and
        operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the
        Securities and Exchange Act of 1934.  This evaluation was conducted to determine whether the disclosure controls
        and procedures were effective and timely in bringing material information to the attention of senior
        management.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our
        disclosure controls and procedures are effective in ensuring material information required to be disclosed in
        reports filed under the Act is recorded, processed, summarized and reported within the time periods specified in
        the Securities and Exchange Commission's rules and forms and is accumulated and communicated to our Chief
        Executive Officer and Chief Financial Officer to allow timely decision regarding required disclosure.

We have enhanced internal controls related to the availability of loss data and actuarial information for
        insurance deductibles and our routine assessment for the potential impairment of intangible assets and
        goodwill.  We also enhanced internal controls related to the assimilation and integration of acquired businesses
        and our internal communications regarding compensation matters.  We monitor the effectiveness of our internal
        controls on a continuous basis in order to preserve our ability to record, process, summarize, report and
        disclose accurate and timely information for decision-making and financial reporting purposes.

Our disclosure controls and procedures and internal controls over financial reporting are routinely evaluated and
        tested for effectiveness.  These evaluations are discussed with management and the Audit Committee.  As a result
        of these evaluations, revisions and corrective actions are made to ensure the effectiveness of our disclosure
        controls and procedures and internal controls over financial reporting.  During the quarterly period covered by
        this report, there were no other significant changes in the design or operation of our internal controls over
        financial reporting that could materially affect, or are reasonably likely to materially affect, the internal
        controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1          Legal Proceedings

The Company is involved in litigation and other legal matters arising in the normal course of business.  In the
        opinion of management, the recovery or liability, if any, under any of these matters will not have a material
        adverse effect on the consolidated financial position, results of operations or cash flows.

|Item 6 | Exhibits |  |                                                                    |  | 
|------ | -------- |  | ------------------------------------------------------------------ |  | 
|       |          |  |                                                                    |  | 
|(a)    | Exhibits |  |                                                                    |  | 
|       | Number   |  | Description                                                        |  | 
|       |          |  |                                                                    |  | 
|       | 11.0     |  | Statement regarding computation of earnings per share (see Note 2) |  | 
|      
|       | 31.1     |  | Section 302 Certification                                          |  | 
|      
|       | 31.2     |  | Section 302 Certification                                          |  | 
|      
|       | 32.0     |  | Section 906 Certifications                                         |  | 
|       |          |  |                                                                    |  | 
|       | 99.1     |  | News release regarding increase in quarterly cash dividend         |  | 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BUILDING MATERIALS HOLDING CORPORATION

|Date:  November 3, 2004 | /s/ Robert E. MellorRobert E. MellorChairman of the Board, President and Chief Executive Officer(Principal Executive Officer)
|----------------------- | -----------------------------------------------------------------------------------------------------------------------------
|                       
|Date:  November 3, 2004 | /s/ William M. SmarttWilliam M. SmarttSenior Vice President and Chief Financial Officer(Principal Financial Officer)         

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