**FORM      10-Q**

**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**

*www.bmhc.com*

**Building      Materials Holding Corporation**

| **Delaware**                                           |   | **91-1834269**                                      |
|--------------------------------------------------------|--------|-----------------------------------------------------|
| (State                of                incorporation) |   | (I.R.S.                Employer Identification No.) |

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

**(415)      627-9100**

**N/A**

----

**FORM      10-Q**

**INDEX**

|                                                                                                                                                                                        | **Page                Number** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|
|                                                                                                                                                                                        |                           |
| **PART                I - FINANCIAL INFORMATION**                                                                                                                                           |                           |
|                                                                                                                                                                                        |                           |
|  **Item                1**-                Financial                Statements (unaudited)                                                                                             | 2                              |
|                                                                                                                                                                                        |                           |
|    Consolidated                Statements of Operations for the Three Months Ended March 31, 2008                and                2007                                     | 2                              |
|                                                                                                                                                                                        |                           |
|    Consolidated                Balance Sheets as of March 31, 2008 and December 31, 2007                                                                                     | 3                              |
|                                                                                                                                                                                        |                           |
|    Consolidated                Statements of Shareholders’ Equity for the Three Months Ended      March                31, 2008 and 2007 | 4                              |
|                                                                                                                                                                                        |                           |
|    Consolidated                Statements of Comprehensive Loss for the Three Months Ended       March                31, 2008 and 2007        | 5                              |
|                                                                                                                                                                                        |                           |
|    Consolidated                Statements of Cash Flows for the Three Months Ended March 31, 2008                and                2007                                     | 6                              |
|                                                                                                                                                                                        |                           |
|    Notes                to Consolidated Financial Statements                                                                                                                 | 7                              |
|                                                                                                                                                                                        |                           |
| ** Item                2**                -                Management's Discussion and Analysis of Financial Condition and Results                of                Operations         | 36                             |
|                                                                                                                                                                                        |                           |
|  **Item                3**                -                Quantitative and Qualitative Disclosures about Market Risk                                                                  | 46                             |
|                                                                                                                                                                                        |                           |
| ** Item                4**                - Controls                and Procedures                                                                                                     | 47                             |
|                                                                                                                                                                                        |                           |
|                                                                                                                                                                                        |                           |
| **PART                II - OTHER INFORMATION**                                                                                                                                              |                           |
|                                                                                                                                                                                        |                           |
| ** Item                1**                - Legal                Proceedings                                                                                                           | 48                             |
|                                                                                                                                                                                        |                           |
| ** Item                1A**                - Risk                Factors                                                                                                               | 49                             |
|                                                                                                                                                                                        |                           |
| ** Item                2**                -                Unregistered Sales of Equity Securities and Use of                Proceeds                                                  | 53                             |
|                                                                                                                                                                                        |                           |
| ** Item                3**                - Defaults                Upon Senior Securities                                                                                             | 54                             |
|                                                                                                                                                                                        |                           |
| ** Item                4**                - Submission                of Matters to a Vote of Security Holders                                                                         | 55                             |
|                                                                                                                                                                                        |                           |
| ** Item                5**                - Other                Information                                                                                                           | 56                             |
|                                                                                                                                                                                        |                           |
| ** Item                6**                -                Exhibits                                                                                                                    | 57                             |
|                                                                                                                                                                                        |                           |
|                                                                                                                                                                                        |                           |
| **SIGNATURES**                                                                                                                                                                              | 58                             |
|                                                                                                                                                                                        |                           |

----

**Item      1.**
**Financial      Statements**

**Building      Materials Holding Corporation**

**Consolidated      Statements of Operations**

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

**(unaudited)**

|                                                                                                                                                         |   |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   | **2008** |   |   | **2007** |   | **2007** |
| **Sales**                                                                                                                                                    |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Building                products                                                                                                           |   |   |                                                             |   |                                                        |   | **$** | **180,050 ** |   | $ | 242,334  |   | $ | 1,001,284  |
|    Construction                services                                                                                                       |   |   |                                                             |   |                                                        |   |   | **174,696 ** |   |   | 317,049  |   |   | 1,272,290  |
| **      Total                sales**                                                                                           |   |   |                                                             |   |                                                        |   |   | **354,746 ** |   |   | 559,383  |   |   | 2,273,574  |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| **Costs                and operating expenses**                                                                                                              |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Cost                of goods sold                                                                                                          |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|       Building                products                                                                                         |   |   |                                                             |   |                                                        |   |   | **130,739 ** |   |   | 175,569  |   |   | 725,847  |
|       Construction                services                                                                                     |   |   |                                                             |   |                                                        |   |   | **161,849 ** |   |   | 273,720  |   |   | 1,106,739  |
|    Impairment                of assets                                                                                                        |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | —  |   |   | 337,074  |
|    Selling,                general and administrative       expenses                                            |   |   |                                                             |   |                                                        |   |   | **87,321 ** |   |   | 111,517  |   |   | 435,200  |
|    Other                income, net                                                                                                           |   |   |                                                             |   |                                                        |   |   | **(4,419)** |   |   | (1,835) |   |   | (9,970) |
|       Total                costs and operating expenses                                                                        |   |   |                                                             |   |                                                        |   |   | **375,490 ** |   |   | 558,971  |   |   | 2,594,890  |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |      |   |   |      |   |   |   |
| **(Loss)                income from operations**                                                                                                             |   |   |                                                             |   |                                                        |   |   | **(20,744)** |   |   | 412  |   |   | (321,316) |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Interest                expense                                                                                                            |   |   |                                                             |   |                                                        |   |   | **11,638 ** |   |   | 8,218  |   |   | 33,800  |
|  **Loss                from continuing operations****   before                income taxes and minority****   interests** |   |   |                                                             |   |                                                        |   |   | **(32,382)** |   |   | (7,806) |   |   | (355,116) |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Income                tax (expense) benefit                                                                                                |   |   |                                                             |   |                                                        |   |   | **(1,667)** |   |   | 2,873  |   |   | 30,129  |
|    Minority                interests loss (income)                                                                                            |   |   |                                                             |   |                                                        |   |   | **39 ** |   |   | (376) |   |   | (853) |
| **Loss                from continuing operations**                                                                                                           |   |   |                                                             |   |                                                        |   |   | **(34,010)** |   |   | (5,309) |   |   | (325,840) |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    (Loss)                income from discontinued       operations                prior to sale                 |   |   |                                                             |   |                                                        |   |   | **(1,125)** |   |   | 549  |   |   | 2,548  |
|    Gain                on sale of discontinued operations                                                                                     |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | —  |   |   | 20,029  |
|    Income                tax benefit (expense)                                                                                                |   |   |                                                             |   |                                                        |   |   | **1,274 ** |   |   | (206) |   |   | (9,450) |
| **Income                from discontinued operations**                                                                                                       |   |   |                                                             |   |                                                        |   |   | **149 ** |   |   | 343  |   |   | 13,127  |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| **Net                loss**                                                                                                                                  |   |   |                                                             |   |                                                        |   | **$** | **(33,861)** |   | $ | (4,966) |   | $ | (312,713) |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| **Net                (loss) income per share:**                                                                                                              |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                                       |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.18) |   |   | $(11.31) |
|    Discontinued                operations                                                                                                     |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | 0.01  |   |   | 0.45  |
|       Basic                                                                                                                    |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.17) |   |   | $(10.86) |
|                                                                                                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                                       |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.18) |   |   | $(11.31) |
|    Discontinued                operations                                                                                                     |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | 0.01  |   |   | 0.45  |
|       Diluted                                                                                                                  |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.17) |   |   | $(10.86) |

----

**Building      Materials Holding Corporation**

**Consolidated      Balance Sheets**

**(thousands)**

**(unaudited)**

|                                                            | **March                31** | **December                31** |   |   | **March                31** | **December                31** |
|-----------------------------------------------------------------|-----------------------------|--------------------------------|--------|--------|-----------------------------|--------------------------------|
|                                                            | **2008**                    | **2007**                       |   |   | **2008**                    |                           | **2007** |
| **Assets**                                                      |                        |                           |   |   |                        |                           | **Liabilities,                Minority Interests and****Shareholders’                Equity** |   |   |   |   |   |
| Cash                and cash                equivalents         | **$**                       | **41,105 **               |   | $      | 60,587                 |                           |   |   |   |   |   |   |
| Marketable                securities                            |                        | **2,678 **                |   |   | 1,872                  |                           | Accounts                payable | **$** | **70,727 ** |   | $ | 76,764  |
| Receivables,                net of allowances                   |                        |                           |   |   |                        |                           | Accrued                compensation |   | **28,660 ** |   |   | 31,843  |
|    of                $7,717 and $5,545           |                        | **193,385 **              |   |   | 208,244                |                           | Insurance                deductible reserves |   | **26,410 ** |   |   | 28,217  |
| Inventory                                                       |                        | **109,156 **              |   |   | 116,653                |                           | Other                accrued                liabilities |   | **32,541 ** |   |   | 29,432  |
| Unbilled                receivables                             |                        | **31,632 **               |   |   | 39,863                 |                           | Billings                in                excess of costs and estimated |   |   |   |   |   |
| Deferred                income taxes                            |                        | **1,889 **                |   |   | 11,470                 |                           | earnings |   | **25,170 ** |   |   | 23,531  |
| Prepaid                expenses and other                       |                        | **26,172 **               |   |   | 18,850                 |                           | Current                portion of long-term debt |   | **4,729 ** |   |   | 4,923  |
| Assets                of                discontinued operations |                        | **925 **                  |   |   | 1,375                  |                           | Liabilities                of                discontinued operations |   | **1,021 ** |   |   | 1,024  |
| **   Current                assets**             |                        | **406,942 **              |   |   | 458,914                |                           | **Current                liabilities** |   | **189,258 ** |   |   | 195,734  |
|                                                            |                        |                           |   |   |                        |                           |   |   |   |   |   |   |
| Property                and                equipment            |                        |                           |   |   |                        |                           | Insurance                deductible reserves |   | **26,175 ** |   |   | 27,898  |
|    Land                                          |                        | **62,695 **               |   |   | 62,737                 |                           | Long-term                debt |   | **340,630 ** |   |   | 344,376  |
|    Buildings                and improvements     |                        | **141,392 **              |   |   | 138,602                |                           | Other                long-term liabilities |   | **47,375 ** |   |   | 44,503  |
|    Equipment                                     |                        | **189,242 **              |   |   | 191,968                |                           |   |   |   |   |   |   |
|    Construction                in progress       |                        | **17,584 **               |   |   | 16,215                 |                           | Minority                interests |   | **145 ** |   |   | 8,591  |
|    Accumulated                depreciation       |                        | **(163,416)**                  |   |   | (159,771)                   |                           |   |   |   |   |   |   |
| Marketable                securities                            |                        | **43,616 **               |   |   | 40,039                 |                           | Commitments                and contingent liabilities |   | **— ** |   |   | —  |
| Deferred                income taxes                            |                        | **3,450 **                |   |   | 11,269                 |                           |   |   |   |   |   |   |
| Deferred                loan                costs               |                        | **6,546 **                |   |   | 4,358                  |                           | Shareholders’                equity |   |   |   |   |   |
| Other                long-term assets                           |                        | **28,838 **               |   |   | 30,981                 |                           |    Common                shares, $0.001 par value: |   |   |   |   |   |
| Other                intangibles, net                           |                        | **62,126 **               |   |   | 64,948                 |                           | authorized                50                million shares; issuedand outstanding 29.4 and 29.2 million                shares |   | ** 29 ** |   |   | 29  |
| Goodwill                                                        |                        | **14,196 **               |   |   | 14,196                 |                           | Additional                paid-in capital    |   | **165,013 ** |   |   | 164,043  |
| Assets                of                discontinued operations |                        | **— **              |   |   | 388                    |                           | Deferred                compensation commonshares obligation |   | **1,221 ** |   |   | 1,427  |
|                                                            | **$**                       | **813,211 **              |   | $      | 874,844                |                           | Deferred                compensation commonshares |   | **(1,221)** |   |   | (1,427) |
|                                                            |                        |                           |   |   |                        |                           | Retained                earnings |   | **60,621 ** |   |   | 94,482  |
|                                                            |                        |                           |   |   |                        |                           | Accumulated                other comprehensiveloss, net |   | **(16,035)** |   |   | (4,812) |
|                                                            |                        |                           |   |   |                        |                           | **Shareholders’equity** |   | **209,628 ** |   |   | 253,742  |
|                                                            |                        |                           |   |   |                        |                           | **      ** | **$** | **813,211 ** |   | $ | 874,844  |

----

**Building      Materials Holding Corporation**

**Consolidated      Statements of Shareholders’ Equity**

**(thousands)**

**(unaudited)**

|                                                                                                                  | **Three                Months Ended****March                31** |                         | **Year                Ended****December                31** |
|-----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|------------------------------|-------------------------------------------------------------|
|                                                                                                                  |                                                             | **2008**                     |                                                        |   | **2007** |   | **2007** |
| Common                shares                - beginning balance                                                       | **$**                                                            | **29 **                 |                                                        | $ | 29  |   | $ | 29  |
|    Shares                issued from Incentive and Performance Plans                                   |                                                             | **— **            |                                                        |   | —  |   |   | —  |
| **Common                Shares**                                                                                      | **$**                                                            | **29 **                 |                                                        | $ | 29  |   | $ | 29  |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| Additional                paid-in capital - beginning balance                                                         | **$**                                                            | **164,043 **            |                                                        | $ | 154,405  |   | $ | 154,405  |
|    Shares                issued from Incentive and Performance Plans                                   |                                                             |                         |                                                        |   |   |   |   |   |
|       Options                exercised - Management                                     |                                                             | **9 **                  |                                                        |   | 35  |   |   | 203  |
|          (Taxes)                tax benefit for share options exercised  |                                                             | **(27)**                     |                                                        |   | 28  |   |   | 29  |
|       Restricted                shares - Management                                     |                                                             | **— **            |                                                        |   | 2,007  |   |   | 2,614  |
|          Unearned                compensation                            |                                                             | **— **            |                                                        |   | (2,007) |   |   | (2,614) |
|          Tax                benefit for dividends on restricted shares   |                                                             | **— **            |                                                        |   | —  |   |   | 63  |
|       Shares                issued to Directors                                         |                                                             | **— **            |                                                        |   | —  |   |   | 405  |
|    Earned                compensation                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
|       Options                - Management                                               |                                                             | **998 **                |                                                        |   | 1,254  |   |   | 5,177  |
|       Restricted                shares - Management                                     |                                                             | **694 **                |                                                        |   | 796  |   |   | 3,317  |
|          (Taxes)                tax benefit for vested restricted shares |                                                             | **(704)**                    |                                                        |   | —  |   |   | 167  |
|    Shares                issued from Employee Stock Purchase Plan                                      |                                                             | **— **            |                                                        |   | 276  |   |   | 277  |
| **Additional                paid-in capital**                                                                         | **$**                                                            | **165,013 **            |                                                        | $ | 156,794  |   | $ | 164,043  |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| Deferred                compensation common shares obligation - beginning                balance                      | **$**                                                            | **1,427 **              |                                                        | $ | 1,200  |   | $ | 1,200   |
|    Shares                purchased with deferred compensation                                          |                                                             | **45                 ** |                                                        |   | 36  |   |   | 364  |
|    Shares                purchased with dividends                                                      |                                                             | **11  **           |                                                        |   | 9  |   |   | 38                  |
|    Distributions                                                                                       |                                                             | **(262) **              |                                                        |   | —  |   |   | (175)  |
| **Deferred                compensation common shares obligation**                                                     | **$**                                                            | **1,221 **              |                                                        | $ | 1,245  |   | $ | 1,427                  |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| Deferred                compensation common shares - beginning balance                                                | **$**                                                            | **(1,427)**                  |                                                        | $ | (1,200) |   | $ | (1,200) |
|    Shares                purchased                                                                     |                                                             | **(56)**                     |                                                        |   | (45) |   |   | (402) |
|    Distributions                                                                                       |                                                             | **262 **                |                                                        |   | —  |   |   | 175  |
| **Deferred                compensation common shares**                                                                | **$**                                                            | **(1,221)**                  |                                                        | $ | (1,245) |   | $ | (1,427) |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| Retained                earnings - beginning balance                                                                  | **$**                                                            | **94,482 **             |                                                        | $ | 418,927  |   | $ | 418,927  |
|    Net                loss                                                                             |                                                             | **(33,861)**                 |                                                        |   | (4,966) |   |   | (312,713) |
|    Cash                dividends on common shares                                                      |                                                             | **— **            |                                                        |   | (2,918) |   |   | (11,732) |
| **Retained                earnings**                                                                                  | **$**                                                            | **60,621 **             |                                                        | $ | 411,043  |   | $ | 94,482  |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| Accumulated                other comprehensive loss, net - beginning                balance                           | **$**                                                            | **(4,812)**                  |                                                        | $ | (732) |   | $ | (732) |
|    Interest                rate swap contracts:                                                        |                                                             |                         |                                                        |   |   |   |   |   |
|       Unrealized                loss                                                    |                                                             | **(8,419)**                  |                                                        |   | (851) |   |   | (7,673) |
|          (Taxes)                tax benefit for unrealized loss          |                                                             | **(3,266)**                  |                                                        |   | 321  |   |   | 2,933  |
|    Marketable                securities:                                                               |                                                             |                         |                                                        |   |   |   |   |   |
|       Unrealized                gain                                                    |                                                             | **700 **                |                                                        |   | 193  |   |   | 1,000  |
|          Taxes                for unrealized gain                        |                                                             | **(238)**                    |                                                        |   | (65) |   |   | (340) |
| **Accumulated                other comprehensive loss, net**                                                          | **$**                                                            | **(16,035)**                 |                                                        | $  | (1,134) |   | $ | (4,812) |
|                                                                                                                  |                                                             |                         |                                                        |   |   |   |   |   |
| **Shareholders’                Equity**                                                                         | **$**                                                            | **209,628 **            |                                                        | $ | 566,732  |   | $ | 253,742  |

----

**Building      Materials Holding Corporation**

**Consolidated      Statements of Comprehensive Loss**

**(thousands)**

**(unaudited)**

|                                                                                       |   |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|--------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                                                       |   |   |                                                             |   |                                                        |   |   | **2008** |   |   | **2007** |   | **2007** |
|                                                                                       |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                    |   |   |                                                             |   |                                                        |   | **$** | **(33,861)** |   | $ | (4,966) |   | $ | (312,713) |
|                                                                                       |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| Unrealized                loss on interest rate swap    contracts:          |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Unrealized                loss                                           |   |   |                                                             |   |                                                        |   | **$** | **(8,419)** |   | $ | (851) |   | $ | (7,673) |
|       (Taxes)                tax benefit for unrealized loss |   |   |                                                             |   |                                                        |   |   | **(3,266)** |   |   | 321  |   |   | 2,933  |
|                                                                                       |   |   |                                                             |   |                                                        |   | **$** | **(11,685)** |   | $ | (530) |   | $ | (4,740) |
| Unrealized                gain on marketable    securities:                 |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Unrealized                gain                                           |   |   |                                                             |   |                                                        |   |   | **700 ** |   |   | 193  |   | $ | 1,000  |
|       Taxes                for unrealized gain               |   |   |                                                             |   |                                                        |   |   | **(238)** |   |   | (65) |   |   | (340) |
|                                                                                       |   |   |                                                             |   |                                                        |   | **$** | **462 ** |   | $ | 128  |   | $ | 660  |
|                                                                                       |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| **Comprehensive                loss**                                                      |   |   |                                                             |   |                                                        |   | **$** | **(45,084)** |   | $ | (5,368) |   | $ | (316,793) |

----

**Building      Materials Holding Corporation**

**Consolidated      Statements of Cash Flows**

**(thousands)**

**(unaudited)**

|                                                                                                                                                                                                                         | **Three                Months Ended****March                31** |              | **Year                Ended****December                31** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|-------------------|-------------------------------------------------------------|
|                                                                                                                                                                                                                         |                                                             | **2008**          |                                                        |   | **2007** |   | **2007** |
| **Operating                Activities**                                                                                                                                                                                      |                                                             |              |                                                        |   |   |   |   |   |
|    Net                loss                                                                                                                                                                                    | **$**                                                            | **(33,861)**      |                                                        | $ | (4,966) |   | $ | (312,713) |
|    Items                in net loss not using (providing) cash:                                                                                                                                               |                                                             |              |                                                        |   |   |   |   |   |
|       Minority                interests (loss) income, net                                                                                                                                     |                                                             | **(39)**          |                                                        |   | 376  |   |   | 853  |
|       Depreciation                and amortization                                                                                                                                             |                                                             | **10,522 **  |                                                        |   | 12,747  |   |   | 48,781  |
|       Deferred                loan cost amortization                                                                                                                                           |                                                             | **2,739 **   |                                                        |   | 281  |   |   | 1,123  |
|       Impairment                of assets                                                                                                                                                      |                                                             | **— ** |                                                        |   | —  |   |   | 337,074  |
|       Share-based                compensation                                                                                                                                                  |                                                             | **1,846 **   |                                                        |   | 2,113  |   |   | 8,944  |
|       Gain                on sale of discontinued operations                                                                                                                                   |                                                             | **— ** |                                                        |   | —  |   |   | (20,029) |
|       Gain                on sale of assets, net                                                                                                                                               |                                                             | **(3,435)**       |                                                        |   | (363) |   |   | (8,789) |
|       Realized                gain on marketable securities                                                                                                                                    |                                                             | **(186)**         |                                                        |   | (11) |   |   | (408) |
|       Deferred                income taxes                                                                                                                                                     |                                                             | **13,896 **  |                                                        |   | 2,443  |   |   | (19,452) |
|       Accrued                loss for acquisition purchase obligation                                                                                                                          |                                                             | **— ** |                                                        |   | —  |   |   | 5,500  |
|       Changes                in assets and liabilities, net of effects of acquisitions and         divestitures                of business units: |                                                             |              |                                                        |   |   |   |   |   |
|             Receivables,                net                                                                                                                      |                                                             | **15,435 **  |                                                        |   | (8,749) |   |   | 68,385  |
|             Inventory                                                                                                                                            |                                                             | **7,670 **   |                                                        |   | 5  |   |   | 24,599  |
|             Unbilled                receivables                                                                                                                  |                                                             | **8,271 **   |                                                        |   | (13,804) |   |   | 3,610  |
|             Prepaid                expenses and other current assets                                                                                             |                                                             | **(7,276)**       |                                                        |   | (7,386) |   |   | (7,758) |
|             Accounts                payable                                                                                                                      |                                                             | **4,909 **   |                                                        |   | 15,831  |   |   | (22,621) |
|             Accrued                compensation                                                                                                                  |                                                             | **(3,306)**       |                                                        |   | (13,494) |   |   | (16,536) |
|             Insurance                deductible reserves                                                                                                         |                                                             | **(1,756)**       |                                                        |   | 1,800  |   |   | 3,557  |
|             Other                accrued liabilities                                                                                                             |                                                             | **(2,540)**       |                                                        |   | (14,675) |   |   | (13,033) |
|             Billings                in excess of costs and estimated earnings                                                                                    |                                                             | **1,434 **   |                                                        |   | (401) |   |   | (3,843) |
|             Other                long-term assets and liabilities                                                                                                |                                                             | **(2,610)**       |                                                        |   | (10,057) |   |   | (12,560) |
|       Other,                net                                                                                                                                                                |                                                             | **(3,504)**       |                                                        |   | 256  |   |   | 2,595  |
| **Cash                flows provided (used) by operating activities**                                                                                                                                                        |                                                             | **8,209 **   |                                                        |   | (38,054) |   |   | 67,279  |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
| **Investing                Activities**                                                                                                                                                                                      |                                                             |              |                                                        |   |   |   |   |   |
|    Purchases                of property and equipment                                                                                                                                                         |                                                             | **(7,176)**       |                                                        |   | (8,651) |   |   | (32,995) |
|    Acquisitions                and investments in businesses, net of cash acquired                                                                                                                            |                                                             | **(2,450)**       |                                                        |   | (61,596) |   |   | (80,961) |
|    Proceeds                from dispositions of property and equipment                                                                                                                                        |                                                             | **5,187 **   |                                                        |   | 1,187  |   |   | 16,905  |
|    Proceeds                from sale of discontinued operations                                                                                                                                               |                                                             | **— ** |                                                        |   | —  |   |   | 27,176  |
|    Purchase                of marketable securities                                                                                                                                                           |                                                             | **(13,854)**      |                                                        |   | (8,739) |   |   | (35,239) |
|    Proceeds                from sales of marketable securities                                                                                                                                                |                                                             | **10,339 **  |                                                        |   | 9,150  |   |   | 52,650  |
|    Other,                net                                                                                                                                                                                  |                                                             | **(2,797)**       |                                                        |   | (463) |   |   | (628) |
| **Cash                flows used by investing activities**                                                                                                                                                                   |                                                             | **(10,751)**      |                                                        |   | (69,112) |   |   | (53,092) |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
| **Financing                Activities**                                                                                                                                                                                      |                                                             |              |                                                        |   |   |   |   |   |
|    Net                borrowings under revolver                                                                                                                                                               |                                                             | **— ** |                                                        |   | 79,200  |   |   | —  |
|    Principal                payments on term notes                                                                                                                                                            |                                                             | **(3,522)**       |                                                        |   | (875) |   |   | (3,500) |
|    Net                payments on other notes                                                                                                                                                                 |                                                             | **(418)**         |                                                        |   | (3,548) |   |   | (4,505) |
|    Decrease                in book overdrafts                                                                                                                                                                 |                                                             | **(4,413)**       |                                                        |   | (10,359) |   |   | (7,609) |
|    Proceeds                from share options exercised                                                                                                                                                       |                                                             | **9 **       |                                                        |   | 35  |   |   | 203  |
|    (Taxes)                tax benefit for share-based compensation                                                                                                                                            |                                                             | **(731)**         |                                                        |   | 28  |   |   | 259  |
|    Dividends                paid                                                                                                                                                                              |                                                             | **(2,938)**       |                                                        |   | (2,915) |   |   | (11,709) |
|    Deferred                financing costs                                                                                                                                                                    |                                                             | **(4,927)**       |                                                        |   | —  |   |   | —  |
|    Distributions                to minority interests                                                                                                                                                         |                                                             | **— ** |                                                        |   | (1,003) |   |   | (1,223) |
|    Other,                net                                                                                                                                                                                  |                                                             | **— ** |                                                        |   | 232  |   |   | 212  |
| **Cash                flows (used) provided by financing activities**                                                                                                                                                        |                                                             | **(16,940)**      |                                                        |   | 60,795  |   |   | (27,872) |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
| **Decrease                in Cash and Cash Equivalents**                                                                                                                                                                     |                                                             | **(19,482)**      |                                                        |   | (46,371) |   |   | (13,685) |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
|    Cash                and cash equivalents, beginning of period                                                                                                                                              |                                                             | **60,587 **  |                                                        |   | 74,272  |   |   | 74,272  |
|    Cash                and cash equivalents, end of period                                                                                                                                                    | **$**                                                            | **41,105 **  |                                                        | $ | 27,901  |   | $ | 60,587  |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
| **Supplemental                Disclosure of Cash Flow Information**                                                                                                                                                          |                                                             |              |                                                        |   |   |   |   |   |
|    Accrued                but unpaid dividends                                                                                                                                                                | **$**                                                            | **— ** |                                                        | $ | 2,918  |   | $ | 2,938  |
|    Cash                paid for interest                                                                                                                                                                      | **$**                                                            | **8,876 **   |                                                        | $ | 7,819  |   | $ | 32,827  |
|    Cash                paid for income taxes                                                                                                                                                                  | **$**                                                            | **78 **      |                                                        | $ | 1,820  |   | $ | 7,233  |
|                                                                                                                                                                                                                         |                                                             |              |                                                        |   |   |   |   |   |
| **Supplemental                Schedule of Investing Activities**                                                                                                                                                             |                                                             |              |                                                        |   |   |   |   |   |
|    Fair                value of assets acquired                                                                                                                                                               | **$**                                                            | **— ** |                                                        | $ | 715  |   | $ | 12,999  |
|    Liabilities                assumed (extinguished)                                                                                                                                                          | **$**                                                            | **(2,450)**       |                                                        | $ | 100  |   | $ | (3,680) |
|    Cash                paid for acquisitions made this period                                                                                                                                                 | **$**                                                            | **2,450 **   |                                                        | $ | 615  |   | $ | 16,679  |
|    Cash                paid for acquisitions made in prior period                                                                                                                                             | **$**                                                            | **— ** |                                                        | $ | 60,981  |   | $ | 64,282  |

----

***Notes      to Consolidated Financial Statements***

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

*Basis      of Presentation*

*Nature      of Operations*

*Principles      of Consolidation*

*Use      of Estimates*

----

| ·  | *                  Revenue Recognition for Construction                Services* |
|--------------|--------------------------------------------------------------------------------------------|

| ·  | *                    *Estimated                  Losses on Uncompleted Contracts and Changes in Contract                  Estimates** |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | *                      **Goodwill*** |
|--------------|------------------------------------------------|

| ·  | *                      **Insurance                    Deductible                    Reserves*** |
|--------------|-----------------------------------------------------------------------------------------------------------|

| ·  | *                      *Warranties** |
|--------------|------------------------------------------------|

| ·  | *                      **Share-based                    Compensation*** |
|--------------|-----------------------------------------------------------------------------------|

----

*Cash      and Cash Equivalents*

*Receivables*

*Inventory      Valuation*

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

*Property      and Equipment*

----

*Long-lived      Assets*

*Revenue      Recognition *

*Shipping      and Handling*

*Reclassifications*

*Recent      Accounting Principles*

*Disclosures about Derivative        Instruments and Hedging Activities. *

*Business      Combinations*

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

----

***2.***
***Impairment        of Assets***

| ·   | $30.0                million                for certain customer relationships at                SelectBuild, |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | $300.2                million for goodwill at SelectBuild, |
|--------------------|------------------------------------------------------------|

| ·   | $6.7                million                for goodwill at BMC West and |
|--------------------|-------------------------------------------------------------------------|

| ·   | $0.2                million                for certain equipment at                SelectBuild. |
|--------------------|-------------------------------------------------------------------------------------------------|

----

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

|                                                              | **March                31** |        | **December                31** |
|-------------------------------------------------------------------|-----------------------------|-------------|--------------------------------|
|                                                              | **2008**                    |        | **2007**                       |
| Assets                                                            | **$**                       | **925**     |                           | $ | 1,763 |
| Liabilities                                                       | **$**                       | **1,021**   |                           | $ | 1,024 |
|                                                              |                        |        |                           |   |   |
|                                                              |                        |        |                           |   |   |
|                                                              | **March                31** |        | **March                31**    |   | **December                31** |
|                                                              | **2008**                    |        | **2007**                       |   | **2007** |
| Sales                                                             |                        |        |                           |   |   |   |   |   |
|    Building                Products                | **$**                       | **—** |                           | $ | 7,762 |   | $ | 29,706 |
|    Construction                Services            | **$**                       | **894**     |                           | $ | 1,959 |   | $ | 11,397 |
| Income                from                discontinued operations | **$**                       | **149**     |                           | $ | 343 |   | $ | 13,127 |
|                                                              |                        |        |                           |   |   |   |   |   |

----

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

|                                                                         |   |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                                         |   |   |                                                             |   |                                                        |   |   | **2008** |   |   | **2007** |   | **2007** |
| Loss                from                continuing operations                |   |   |                                                             |   |                                                        |   | **$** | **(34,010)** |   | $ | (5,309) |   | $ | (325,840) |
| Income                from                discontinued operations            |   |   |                                                             |   |                                                        |   |   | **149 ** |   |   | 343  |   |   | 13,127  |
|    Net                loss                                    |   |   |                                                             |   |                                                        |   | **$** | **(33,861)** |   | $ | (4,966) |   | $ | (312,713) |
|                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Weighted                average shares - basic             |   |   |                                                             |   |                                                        |   |   | **28,972 ** |   |   | 28,768  |   |   | 28,807  |
|    Effect                of dilutive:                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|       Share                options             |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | —  |   |   | —  |
|       Restricted                shares         |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | —  |   |   | —  |
|    Weighted                average shares - assuming dilution |   |   |                                                             |   | **28,972 **                                            |   |   | 28,768  |   |   | 28,807  |
|                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| Net                (loss)                income per share:                   |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                       |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.18) |   |   | $(11.31) |
|    Discontinued                operations                     |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | 0.01  |   |   | 0.45  |
|       Basic                                    |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.17) |   |   | $(10.86) |
|                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                       |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.18) |   |   | $(11.31) |
|    Discontinued                operations                     |   |   |                                                             |   |                                                        |   |   | **— ** |   |   | 0.01  |   |   | 0.45  |
|       Diluted                                  |   |   |                                                             |   |                                                        |   |   | **$(1.17)** |   |   | $(0.17) |   |   | $(10.86) |
|                                                                         |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
| Cash                dividends                declared per share              |   |   |                                                             |   |                                                        |   |   | **$0.00 ** |   |   | $0.10  |   |   | $0.40  |

| ·   | options                with                exercise prices greater than the average market value of the common                shares                (options out-of-the-money) and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | unrecognized                compensation expense for restricted shares with after-tax proceeds                greater                than the average market value of the common shares. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|--------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                         |   |   |                                                             |   |                                                        |   |   | **2008** |   |   | **2007** |   | **2007** |
| Average                market                value of shares |   |   |                                                             |   |                                                        |   |   | **$5** |   | $22 |   |   | $14 |
| Share                options:                                |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Exercise                price range        |   |   |                                                             |   |                                                        |   | **$7                to $38** |   | $18                to                $38 |   |   | $15                to                $38 |
|    Not                dilutive                |   |   |                                                             |   |                                                        |   |   | **2,430** |   |   | 1,173 |   |   | 1,312 |
| Restricted                shares:                            |   |   |                                                             |   |                                                        |   |   |   |   |   |   |   |   |   |
|    Grant                price range           |   |   |                                                             |   |                                                        |   | **$15                to $42** |   | $35                to                $42 |   |   | $34 |
|    Not                dilutive                |   |   |                                                             |   |                                                        |   |   | **295** |   |   | 139 |   |   | 2 |

----

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

| ·   | In                March                2007, SelectBuild acquired a concrete services business in Fresno,                California for approximately $0.7 million in cash. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                January                2008, SelectBuild was required to purchase the remaining 49% interest                in                SelectBuild Illinois (RCI Construction) for $8.4 million in cash                of which                $2.4 million was paid January 2008 and $6 million is payable. The                fair                value of SelectBuild Illinois does not exceed its net book value.                As a                result, the $5.5 million excess of the purchase price for the minority                interest over the recorded amount for the minority interest in                SelectBuild Illinois was recognized as an expense in Other income,                net in                December 2007. In January 2005, SelectBuild acquired an initial 51%                interest for $4.9 million in cash. SelectBuild Illinois provides                framing                services to production homebuilders in the greater Chicago area. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                September                2007, SelectBuild acquired the remaining 49% interest in SelectBuild                Trim                for $0.5 million in cash. In January 2007, SelectBuild formed this                venture                for an initial 51% interest for $0.5 million in cash. SelectBuild                Trim                provides door and molding installation services in Las Vegas,                Nevada. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                September                2007, SelectBuild acquired the remaining 49% interest in A-1 Building                Components, LLC (A-1 Truss) for $5.0 million in cash. In September                2004,                SelectBuild acquired an initial 51% interest for $2.3 million in                cash. A-1                Truss manufactures trusses in Fort Pierce, Florida. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                May 2007,                SelectBuild acquired the remaining 33% interest in SelectBuild                Mid-Atlantic (WBC Mid-Atlantic) for no consideration pursuant to                the                operating agreement. In October 2003, SelectBuild acquired an initial                67%                interest for $5.1 million in cash and $0.2 million of our common                shares.                SelectBuild Mid-Atlantic provides framing services to production                homebuilders in Delaware, Maryland and                Virginia. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                April                2007, SelectBuild acquired the remaining 27% interest in Riggs Plumbing                for $10.5 million in cash. In July 2005, SelectBuild acquired an                additional 13% interest for $1.4 million in cash and in April 2005,                acquired an initial 60% interest for $17.8 million in cash. Riggs                Plumbing                provides plumbing services to production homebuilders in the Phoenix                and                Tucson markets.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                 | **March                31** | **December                31** |   |               | **March                31** | **December                31** |
|------------------------------------------------------|-----------------------------|--------------------------------|--------|--------------------|-----------------------------|--------------------------------|
|                                                 | **2008**                    | **2007**                       |   |               | **2008**                    |  **2007**                 |
| Receivables                                          | **$**                       | **—**                    |   | $                  | (21)                        |                           | Other                accrued                liabilities | **$** | **5,957 ** |   | $ | (60,787) |
| Prepaid                expenses and other            |                   | **—**                    |   |     | 18                     |                           |   |   |    |   |     |   |
| **   Current                assets**  |                        | **—**                    |   |               | (3)                         |                           | **   Current                liabilities** |   | **5,957 ** |   |   | (60,787) |
|                                                 |                        |                           |   |               |                        |                           |   |   |   |   |   |   |
| Property                and                equipment |                        | **—**                    |   |               | 216                    |                           | Deferred                income taxes |   | **— ** |   |   | (917) |
| Other                intangibles, net                |                        | **—**                    |   |               | 2,287                  |                           | Minority                interests |   | **(8,407)** |   |   | (3,680) |
| Goodwill                                             |                        | **—**                    |   |               | 13,077                 |                           |   |   |   |   |   |   |
|                                                 | **$**                       | **—**                    |   | $                  | 15,577                 |                           |   | **$** | **(2,450)** |   | $ | (65,384) |

----

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

|                                                  | **March                31** |       | **December                31** |
|-------------------------------------------------------|-----------------------------|------------|--------------------------------|
|                                                  | **2008**                    |       | **2007**                       |
| U.S.                government and agencies           | **$**                       | **18,301** |                           | $ | 18,380 |
| Asset                backed                securities |                        | **12,848** |                           |   | 9,798 |
| Corporate                securities                   |                        | **15,145** |                           |   | 13,733 |
|                                                  | **$**                       | **46,294** |                           | $ | 41,911 |

|                                              | **March                31** |       | **December                31** |
|---------------------------------------------------|-----------------------------|------------|--------------------------------|
|                                              | **2008**                    |       | **2007**                       |
| Less                than 1                year    | **$**                       | **2,678**  |                           | $ | 1,872 |
| Due                in 1 to 2                years |                        | **11,977** |                           |   | 12,683 |
| Due                in 2 to 5                years |                        | **31,639** |                           |   | 27,356 |
|                                              | **$**                       | **46,294** |                           | $ | 41,911 |

----

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

|                                                   | **March                31, 2008**           |
|--------------------------------------------------------|---------------------------------------------|
|                                                   | **Gross****Carrying                Amount** |   | **Accumulated****Amortization** |   | **Net                Carrying****Amount** |
| Customer                relationships                  | **$**                                       | **92,424** |   | **$** | **(34,933)** |   | **$** | **57,491** |
| Covenants                not                to compete |                                        | **11,560** |   |   | **(7,406)** |   |   | **4,154** |
| Trade                names                             |                                        | **204** |   |   | **(204)** |   |   | **—** |
| Favorable                leases                        |                                        | **780** |   |   | **(299)** |   |   | **481** |
|                                                   | **$**                                       | **104,968** |   | **$** | **(42,842)** |   | **$** | **62,126** |

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

|                                               | **BMC                West** |       | **SelectBuild** |   | **Total**   |
|----------------------------------------------------|-----------------------------|------------|-----------------|--------|-------------|
| **Balance                at December 31, 2007**    | $                           | 14,196     |            | $      | —     |   | $ | 14,196 |
|    Goodwill                acquired |                        | —    |            |   | —     |   |   | — |
|    Impairment                       |                        | —    |            |   | —     |   |   | — |
| **Balance                at March 31, 2008**       | **$**                       | **14,196** |            | **$**  | **—** |   | **$** | **14,196** |

|                                                 | **BMC                  West** |      | **SelectBuild** |   | **Total**   |
|------------------------------------------------------|-------------------------------|-----------|-----------------|--------|-------------|
| **Balance                  at December 31, 2007**    | $                             | 3,460     |            | $      | —     |   | $ | 3,460 |
|    Goodwill                  acquired |                          | —   |            |   | —     |   |   | — |
|    Impairment                         |                          | —   |            |   | —     |   |   | — |
| **Balance                  at March 31, 2008**       | **$**                         | **3,460** |            | **$**  | **—** |   | **$** | **3,460** |

----

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

| **As                  of March 31, 2008**         |   |              |   |                                                                                                                             |   |   | **Notional****Amount                  of**     |   | **Effective                  Interest Rate**       |
|---------------------------------------------------|--------|-------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|---------------------------------------------------------|
|                                              |   | **Balance**  |   | **Stated****Interest                  Rate**                                                                                |   |   | **Interest                  Rate Swaps**  |   | **Average**** for                  Quarter**  |   | **As                  of****March                  31**  |
| Revolver                                          | **$**  | **—**       |   | **LIBOR                  plus 4.50% or****Prime                  plus 2.50% and**** 0.50%                  commitment fee** |   | **$**  | **—**                                    |   | **8.9%**                                                |   | **n/a   ** |
|                                              |   |              |   |                                                                                                                             |   |   |                                           |   |                                                    |   |   |
| Term                  note                        |   | **342,103**       |   | **LIBOR                  plus 4.50% or****Prime                  plus 2.50%**                                                    |   |   | **200,000**                                    |   | **9.2%**                                                |   | **8.8%** |
|                                              |   |              |   |                                                                                                                             |   |   |                                           |   |                                                    |   |   |
| Other                                             |   | **3,256**         |   | **Various**                                                                                                                      |   |   | **—**                                    |   | **—   **                           |   | **—   ** |
|                                              |   | **345,359**       |   |                                                                                                                             |   | **$**  | **200,000**                                    |   |                                                    |   |   |
|                                              |   |              |   |                                                                                                                             |   |   |                                           |   |                                                    |   |   |
| Less:  Current                  portion |   | **4,729**         |   |                                                                                                                             |   |   |                                           |   |                                                    |   |   |
|                                              | **$**  | **340,630**       |   |                                                                                                                             |   |   |                                           |   |                                                    |   |   |

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

----

*Revolver*

| ·   | $100                million                or |
|--------------------|-----------------------------------------------|

| ·   | a                borrowing                base calculated on 50% of certain accounts receivable less 50% of                outstanding surety bonds. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

*Term      Note*

| ·   | quarterly                installments of $0.9 million, |
|--------------------|--------------------------------------------------------|

| ·   | any                net                proceeds of more than $1 million resulting from dispositions                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | remaining                principal due in November 2011. |
|--------------------|----------------------------------------------------------|

*Other*

*Covenants      and Maturities*

----

| 2008       | $      | 3,630   |
|------------|--------|---------|
| 2009       |   | 4,246   |
| 2010       |   | 3,969   |
| 2011       |   | 332,687 |
| 2012       |   | 80      |
| Thereafter |   | 747     |
|       | $      | 345,359 |

*Hedging      Activities*

----

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

*Preferred      Shares*

*Common      Shares*

| Employee                Stock Purchase Plan        | **4,767**  |
|----------------------------------------------------|------------|
| 2004                Incentive and Performance Plan | **73,598** |

*Dividends*

|                          | **2008** |         | **2007** |
|-------------------------------|----------|--------------|----------|
| First                quarter  |     | **$—** |     |   | $0.10 |
| Second                quarter |     | **—**  |     |   | 0.10 |
| Third                quarter  |     | **—**  |     |   | 0.10 |
| Fourth                quarter |     | **—**  |     |   | 0.10 |
|                          |     | **$—** |     |   | $0.40 |

*Repurchase      Program*

----

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

*Retirement      Plans*

*Savings      and Retirement Plan*

*Executive      Deferred Compensation*

| ·   | Compensation                deferred and invested in third-party investment options is recorded                in                Other long-term assets and Other long-term liabilities. As the investment                is settled for the value of the underlying investments, changes in                the                fair value of the investments are recognized in Other income and                changes                in the fair value of the liability are recognized in Selling, general                and                administrative expenses. Fair value is based on market quotes. The                fair                value of these investments was $8.5 million at March 31, 2008 and                $13.5                million at December 31, 2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Compensation                deferred and invested in our common shares is recorded as a component                of                shareholders’ equity. As the investment is settled for the fixed number of                common shares purchased, changes in fair value are not recognized.                Rather                purchases and distributions of the common shares are recorded at                historical cost. The historical cost of these common shares was $1.2                million or 87,650 common shares at March 31, 2008 and $1.4 million                or                105,189 common shares at December 31,                2007. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Supplemental      Retirement*

| ·   | 65%                of the                contributions are invested in company-owned life insurance polices                for                certain participants. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 35%                of the                contributions are made in our common shares and distributed to the                savings                and retirement plans of certain participants. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Management      Retention Compensation*

----

*Employee      Stock Purchase Plan*

*Incentive      and Performance Plans*

*Options*

| ·   | Grants                of                options under the 2004 Incentive and Performance Plan vest ratably                over 3                to 4 years from the date of grant and expire after 7 years if unexercised.                Under certain circumstances, some or all of the options may vest                earlier.                Options were awarded with exercise prices equal to the closing share                price                of our common shares on the date of grant. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

*Share-Based      Payment, *

----

|                                                | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|-----------------------------------------------------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                | **2008**                                                         |   | **2007**                                                    |   | **2007** |
| Expected                term                (years) | **—**                                                      |   | 5.2                                                         |   | 5.2 |
| Expected                volatility                  | **—**                                                      |   |  54.5%                                                 |   |  54.5% |
| Expected                dividend yield              | **—**                                                      |   |    2.0%                                      |   |    2.0% |
| Risk-free                interest rate              | **—**                                                      |   |    4.5%                                      |   |    4.5% |
| Exercise                price                       | **—**                                                      |   | $18                                                         |   | $18 |
| Weighted                average fair value          | **—**                                                      |   |   $8                                              |   |   $8 |

|                                                                                                  | **March                31****2008** |                                               | **March                31****2007**                                    |   | **Year                Ended****December                31****2007** |
|-------------------------------------------------------------------------------------------------------|-------------------------------------|----------------------------------------------------|------------------------------------------------------------------------|--------|---------------------------------------------------------------------|
|                                                                                                  | **Shares**                          | **Weighted                Average Exercise Price** | **Weighted                Average Remaining Contractual Term (years)** |   | **Shares**                                                          | **Weighted                Average Exercise Price** |   | **Shares** | **Weighted                Average Exercise Price** |
| Outstanding                at                beginning    of                the period | **2,978 **                     | **$15**                                            | **4.5**                                                                |   | 2,521                                                          | $14 |   | 2,521  | $14 |
|    Granted                                                                             | **— **                   | **$—**                                       |                                                                   |   | 354                                                            | $18 |   | 541  | $18 |
|    Exercised                                                                           | **(1)**                             | **  $6**                                 |                                                                   |   | (5)                                                                 |   $7 |   | (33) |  $6 |
|    Forfeited                                                                           | **(13)**                            | **$31**                                            |                                                                   |   | (1)                                                                 |   $6 |   | (51) | $28 |
| Outstanding                at                end of the   period                       | **2,964 **                     | **$15**                                            | **4.3**                                                                |   | 2,869                                                          | $15 |   | 2,978  | $15 |
|                                                                                                  |                                |                                               |                                                                   |   |                                                                |   |   |   |   |
| Exercisable                at                end    of                the period       | **2,407 **                     | **$13**                                            | **3.9**                                                                |   | 1,924                                                          | $11 |   | 2,079  | $11 |

|                                                       | **March                31** |   | **Year                Ended****December                31** |
|------------------------------------------------------------|-----------------------------|--------|-------------------------------------------------------------|
|                                                       | **2008**                    |   | **2007**                                                    |   | **2007** |
| Weighted                average grant-date fair value      | **$—**                |   | $8                                                          |   | $8 |
| Intrinsic                value of options exercised        | **$1**                      |   | $84                                                         |   | $299 |
| Fair                value of                options vested | **$4,120**                  |   | $3,834                                                      |   | $4,665 |

----

|                                     |   | **Options                Outstanding** |   | **Options                Exercisable**                   |
|------------------------------------------|--------|----------------------------------------|--------|----------------------------------------------------------|
| **Exercise                Price**        |   | **Shares**                             |   | **Weighted****Average****Exercise                Price** |   | **Intrinsic                Value** |   | **Weighted****Average****Remaining****Contractual****Life                (years)** |   | **Shares** |   | **Weighted****Average****Exercise                Price** |   | **Intrinsic                Value** |
| $5                                       |   | **534**                                |   | **  $5**                                       |   |   |   | **2.3** |   | **534** |   | **  $5** |   |   |
| $7                                       |   | **597**                                |   | **  $7**                                       |   |   |   | **4.5** |   | **597** |   | **  $7** |   |   |
| $8                                       |   | **200**                                |   | **  $8**                                       |   |   |   | **5.9** |   | **200** |   | **  $8** |   |   |
| $9                                       |   | **332**                                |   | **  $9**                                       |   |   |   | **3.1** |   | **332** |   | **  $9** |   |   |
| $17                to                $18 |   | **526**                                |   | **$18**                                                  |   |   |   | **6.0** |   | **91** |   | **$18** |   |   |
| $23                                      |   | **408**                                |   | **$23**                                                  |   |   |   | **3.9** |   | **406** |   | **$23** |   |   |
| $38                                      |   | **367**                                |   | **$38**                                                  |   |   |   | **4.8** |   | **247** |   | **$38** |   |   |
|                                     |   | **2,964**                              |   | **$15**                                                  |   |   |   |   |   | **2,407** |   | **$13** |   |   |
| In-the-money:                            |   |                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |
|    Outstanding            |   | **—**                            |   |                                                     |   | **$—** |   |   |   |   |   |   |   |   |
|    Exercisable            |   |                                   |   |                                                     |   |   |   |   |   |   |   | **—** |   | **$—** |

*Restricted      Shares*

|                                                                                                     | **March                31** |   | **Year                Ended****December                31**                                               |
|----------------------------------------------------------------------------------------------------------|-----------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                                                                                                     | **2008**                    |   | **2007**                                                                                                  |   | **2007** |
|                                                                                                     | **Shares**                  |   | **Weighted                Average**** Grant                Date**** Fair                Value** |   | **Shares** |   | **Weighted                Average**** Grant                Date**** Fair                Value** |   | **Shares** |   | **Weighted                Average**** Grant                Date**** Fair                Value** |
| Nonvested                at                beginning of    the                period | **410 **               |   | **$26**                                                                                                   |   | 396 |   | $24 |   | 396  |   | $24 |
|    Granted                                                                                | **— **           |   | ** $—**                                                                                        |   | 109 |   | $18 |   | 172  |   | $18 |
|    Vested                                                                                 | **(110)**                   |   | **  $6**                                                                                        |   | — |   | $— |   | (142) |   | $11 |
|    Forfeited                                                                              | **(3)**                     |   | **$38**                                                                                                   |   | — |   | $— |   | (16) |   | $30 |
| Nonvested                at                end of the    period                      | **297 **               |   | **$33**                                                                                                   |   | 505 |   | $23 |   | 410  |   | $26 |

----

|                                                                  | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|-----------------------------------------------------------------------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                                  | **2008**                                                         |   | **2007**                                                    |   | **2007** |
| Weighted                average grant-date fair value                 | **  $—**                                         |   |     $18                                 |   |      $18 |
| Fair                value of                restricted shares granted | **  $—**                                         |   | $2,007                                                      |   | $3,005 |
| Fair                value of                restricted shares vested  | **$673**                                                         |   |      $—                      |   | $1,556 |

*Shares*

|                                                                                                    |                                      | **Number                of Securities to be Issued Upon Exercise of Outstanding Options,                Warrants                and Rights** |                    | **Weighted                Average Exercise Price of Outstanding Options, Warrants and                Rights** |              | **Number                of Securities Remaining Available for Future Issuance Under Equity                Compensation Plans** |
|---------------------------------------------------------------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|---------------------------------------------------------------------------------------------------------------|-------------------|--------------------------------------------------------------------------------------------------------------------------------|
| Equity                compensation plansapproved                by                security holders      | **3,261**                                 |                                                                                                                                         | **$13**                 |                                                                                                          | **74**            |
| Equity                compensation plans not approved                by                security holders | **     —** |                                                                                                                                         | **  —** |                                                                                                          | ** —** |
|       Total                                                               |                                      | **3,261**                                                                                                                                    |                    | **$13**                                                                                                       |              | **74**                                                                                                                         |

----

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

|                                                          |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |     |
|---------------------------------------------------------------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|----------|
|                                                          |   | **2008**                                                         |   |                                                        | **2007** |   | **2007** |   |
|                                                          |   |                                                             |   | **Effective****Rate**                                       |     |   |   |   | **Effective****Rate** |   |   |   | **Effective****Rate** |   |
| Continuing                operations:                         |   |                                                             |   |                                                        |     |   |   |   |   |   |   |   |   |   |   |
|    Income                tax (expense) benefit | **$**  | **(1,667)**                                                      |   | **(5.2)%**                                                  |     | $ | 2,873  |   | 35.1% |   | $ | 30,129  |   | 8.5% |   |
| Discontinued                operations:                       |   |                                                             |   |                                                        |     |   |   |   |   |   |   |   |   |   |   |
|    Income                tax benefit (expense) | **$**  | **1,274 **                                                  |   | **113.2%**                                                  |     | $ | (206) |   | (37.5)% |   | $ | (9,450) |   | (41.9)% |   |

----

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

| ·    | $16.3                million                more than the amount of debt reported on the consolidated balance                sheet at                March 31, 2008 and |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

*Legal      Proceedings*

*Operating      Leases*

*Warranties*

|                                                             |   |   | **Three                Months Ended****March                31** |   | **Year                Ended****December                31** |
|------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                             |   |   |                                                             |   |                                                        |   |   | **2008** |   |   | **2007** |   | **2007** |
| Balance                at                beginning of the period |   |   |                                                             |   |                                                        |   | **$** | **6,805 ** |   | $ | 7,081  |   | $ | 7,081  |
|    Provision                for warranties        |   |   |                                                             |   |                                                        |   |   | **320 ** |   |   | 102  |   |   | 694  |
|    Warranty                charges                |   |   |                                                             |   |                                                        |   |   | **(608)** |   |   | (195) |   |   | (970) |
| Balance                at end                of the period       |   |   |                                                             |   |                                                        |   | **$** | **6,517 ** |   | $ | 6,988  |   | $ | 6,805  |

----

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

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

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

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

|                                                       |                                | **Fair                Value Measurements at Reporting Date Using** |
|------------------------------------------------------------|-------------------------------------|--------------------------------------------------------------------|
|                                                       | **March                31****2008** |                                                               | **Quoted                Prices in**** Active                Markets for****Identical                Assets** |   | **Significant                Other****Observable                Inputs** |   | **Significant****Unobservable                Inputs** |
| Marketable                securities                       | **$**                               | **46,294 **                                                   |   | **$** | **46,294** |   | **$** | **— ** |   | **$** | **—** |
| Interest                rate                swap contracts |                                | **(16,973)**                                                       |   |   | **—** |   |   | **(16,973)** |   |   | **—** |
|                                                       | **$**                               | **29,321 **                                                   |   | **$** | **46,294** |   | **$** | **(16,973)** |   | **$** | **—** |

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

----

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

| ·   | Other                intangibles at SelectBuild with a carrying amount of $93.7 million                were                written down to their implied fair value, resulting in an impairment                charge of $30.0 million in the fourth quarter of                2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Goodwill                at                BMC West with a carrying amount of $20.9 million was written down                to its                implied fair value of $14.2 million, resulting in an impairment charge                of                $6.7 million in the fourth quarter of                2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Goodwill                at                SelectBuild with a carrying amount of $300.2 million had no implied                fair                value, resulting in an impairment charge of $300.2 million in the                fourth                quarter of 2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

*BMC      West*

*SelectBuild*

*Corporate*

|                                                     | **Sales**                             | **(Loss)****(1)**** ****Income**** from                Continuing****Operations****Before**Taxes                and  | **Depreciation**                                    |                                                             |                          |
|----------------------------------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------|------------------------------------------------------------------|-------------------------------|
|                                                     | **Total**                             | **Inter-****Segment**                                                                                                          | **Trade**                                           | **Minority****Interests**                                        | **and****Amortization**  | **Capital****(2)****Expenditures**  | **Assets**  |
| **Three                Months Ended March 31, 2008**     |                                       |                                                                                                                                |                                                     |
| BMC                West                                  | **$     210,726** | **$      (144)**                                                                                      | **$    210,582**                     | **$        1,783 ** | **$   2,968**  | **$   6,658** | **$    367,562** |
| SelectBuild                                              | **144,485**                                | **(321)**                                                                                                                           | **144,164**                                              | **(17,322)**                                                     | **6,378**                     | **255** | **296,614** |
| Corporate                                                | **—**                                | **— **                                                                                                                   | **—**                                              | **(5,205)**                                                      | **1,158**                     | **263** | **148,110** |
| Discontinued                   operations | **—**                                | **— **                                                                                                                   | **—**                                              | **— **                                                | **—**                   | **—** | **925** |
|                                                     | **$     355,211** | **$      (465)**                                                                                      | **$    354,746**                     | **(20,744)**                                                     | **$ 10,504**             | **$   7,176** | **$    813,211** |
| Interest                expense                          |                                       |                                                                                                                                |                                                     | **11,638 **                                                 |                          |   |   |
|                                                     |                                       |                                                                                                                                | **$**    **(32,382)**                |                                                             |                          |   |
| **Three                Months Ended March 31, 2007**     |                                       |                                                                                                                                |                                                     |                                                             |                          |
| BMC                West                                  | $     278,993     | $      (122)                                                                                          | $    278,871                         | $      10,697                 | $   3,111      | $   1,938 | $    436,466 |
| SelectBuild                                              | 280,572                                    | (60)                                                                                                                                | 280,512                                                  | 2,772                                                       | 8,596                         | 5,886 | 728,424 |
| Corporate                                                | —                                    | —                                                                                                                        | —                                                  | (13,057)                                                         | 966                           | 1,003 | 133,467 |
| Discontinued                   operations | —                                    | —                                                                                                                        | —                                                  | —                                                     | —                       | 40 | 10,299 |
|                                                     | $     559,565     | $      (182)                                                                                          | $    559,383                         | 412                                                         | $ 12,673                 | $   8,867 | $ 1,308,656 |
| Interest                expense                          |                                       |                                                                                                                                |                                                     | 8,218                                                       |                          |   |   |
|                                                     |                                       |                                                                                                                                | $        (7,806) |                                                             |                          |   |
| **Year                Ended December 31, 2007**          |                                       |                                                                                                                                |                                                     |                                                             |                          |
| BMC                West                                  | $ 1,179,097                           | $   (1,386)                                                                                                          | $ 1,177,711                                         | $      64,653                 | $ 11,998                 | $ 21,302 | $    376,462 |
| SelectBuild                                              | 1,096,104                                  | (241)                                                                                                                               | 1,095,863                                                | (334,272)                                                        | 32,070                        | 8,806 | 324,744 |
| Corporate                                                | —                                    | —                                                                                                                        | —                                                  | (51,697)                                                         | 4,471                         | 2,936 | 171,875 |
| Discontinued                   operations | —                                    | —                                                                                                                        | —                                                  | —                                                     | —                       | 166 | 1,763 |
|                                                     | $  2,275,201                     | $   (1,627)                                                                                                          | $ 2,273,574                                         | (321,316)                                                        | $ 48,539                 | $ 33,210 | $    874,844 |
| Interest                expense                          |                                       |                                                                                                                                |                                                     | 33,800                                                      |                          |   |   |
|                                                     |                                       |                                                                                                                                | $ (355,116)                                         |                                                             |                          |   |

| ·   | $330.2                million for the carrying amount of certain customer relationships                and                goodwill at SelectBuild, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | $0.2                million                for the carrying amount of certain equipment at                SelectBuild. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

----

***16.***
***Quarterly      Results of Operations***

|                                                                               | **First** | **Second**         | **Third** | **Fourth**         |
|------------------------------------------------------------------------------------|-----------|--------------------|-----------|--------------------|
| **2008**                                                                           |      |               |      |               |
|   Sales                                                                  | **$**     | **354,746 **  | **$**     | **— **  | **$** | **— ** | **$** | **— ** |
|                                                                               |      |               |      | **— **  |   | **— ** |   | **— ** |
|   Loss                from continuing                operations          | **$**     | **(34,010)**       | **$**     | **— **  | **$** | **— ** | **$** | **— ** |
|   Income                from discontinued                operations (1)  | **$**     | **149 **      | **$**     | **— **  | **$** | **— ** | **$** | **— ** |
| Net                loss                                                            | **$**     | **(33,861)**       | **$**     | **— **  | **$** | **— ** | **$** | **— ** |
|                                                                               |      |               |      |               |   |   |   |   |
|   Net                (loss) income per                share:             |      |               |      |               |   |   |   |   |
|   Continuing                operations                                   |      | **$(1.17)**        |      | **$— ** |   | **$— ** |   | **$— ** |
|       Discontinued                operations         |      | **— **  |      | **— **  |   | **— ** |   | **— ** |
|          Diluted                      |      | **$(1.17)**        |      | **$— ** |   | **$— ** |   | **$— ** |
|                                                                               |      |               |      |               |   |   |   |   |
|   Common                share                prices:                     |      |               |      |               |   |   |   |   |
| High                                                                               |      | **$7 **       |      | **$— ** |   | **$— ** |   | **$— ** |
| Low                                                                                |      | **$4 **       |      | **$— ** |   | **$— ** |   | **$— ** |
|                                                                               |      |               |      |               |   |   |   |   |
|   Cash                dividends declared per                share        |      | **$— ** |      | **$— ** |   | **$— ** |   | **$— ** |
|                                                                               |      |               |      |               |
| **2007**                                                                           |      |               |      |               |
|   Sales                                                                  | $         | 559,383       | $         | 681,687            | $ | 614,946 | $ | 417,558     |
|                                                                               |      |               |      |               |   |   |   |   |
|   (Loss)                income from                continuing operations | $         | (5,309)            | $         | 18,623             | $ | 1,310 | $ | (340,464)(2) |
|   Income                from discontinued                operations (3)  | $         | 343           | $         | 794                | $ | 2,858 | $ | 9,132     |
|   Net                (loss)                income                        | $         | (4,966)            | $         | 19,417             | $ | 4,168 | $ | (331,332)    |
|                                                                               |      |               |      |               |   |   |   |   |
|   Net                (loss) income per                share:             |      |               |      |               |   |   |   |   |
|   Continuing                operations                                   |      | $(0.18)            |      | $0.63              |   | $0.04 |   | $(11.75) |
|    Discontinued                operations                           |      | 0.01          |      | 0.03               |   | 0.10 |   | 0.31  |
|          Diluted                      |      | $(0.17)            |      | $0.66              |   | $0.14 |   | $(11.44) |
|                                                                               |      |               |      |               |   |   |   |   |
| Common                share                prices:                                 |      |               |      |               |   |   |   |   |
| High                                                                               |      | $25           |      | $18                |   | $15 |   | $12  |
| Low                                                                                |      | $18           |      | $13                |   | $11 |   | $5  |
|                                                                               |      |               |      |               |   |   |   |   |
| Cash                dividends declared per share                                   |      | $0.10         |      | $0.10              |   | $0.10 |   | $0.10  |

|   | (1) | Includes                framing services in Virginia discontinued in March                2008. |
|--------|-----|-------------------------------------------------------------------------------------------------|

| ·   | $330.2                million for the carrying amount of certain customer relationships                and                goodwill at SelectBuild, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | $0.2                million                for the carrying amount of certain equipment at                SelectBuild. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes                discontinued operations from three Western Colorado building materials                distribution businesses sold in September 2007 and framing services                in                Virginia discontinued in March                2008. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      2.**
**Management's      Discussion and Analysis of Financial Condition and Results of      Operations**

**Our      Business**

**BMC      West**
**      SelectBuild**

**Business      Environment and Executive Overview**

----

**RESULTS      OF OPERATIONS**

***2008      COMPARED TO 2007***

|                                                                                                                                      | **Three                Months Ended****March                31** |
|-------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                                                                                                                      | **2008**                                                         |   | **2007** |
| **Sales**                                                                                                                                 |                                                             |   |   |   |   |   |   |   |   |   |   |
| Building                products                                                                                                          | **$**                                                            | **180 ** |   |   | **50.7%** |   | $ | 242  |   |   | 43.3% |
| Construction                services                                                                                                      |                                                             | **175 ** |   |   | **49.3   ** |   |   | 317  |   |   | 56.7    |
| **Total                sales**                                                                                                            |                                                             | **355 ** |   |   | **100.0   ** |   |   | 559  |   |   | 100.0    |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| **Costs                and operating expenses**                                                                                           |                                                             |   |   |   |   |   |   |   |   |   |   |
| Cost                of goods                sold                                                                                          |                                                             |   |   |   |   |   |   |   |   |   |   |
| Building                products                                                                                                          |                                                             | **131 ** |   |   | **72.8   ** |   |   | 175  |   |   | 72.3    |
| Construction                services                                                                                                      |                                                             | **162 ** |   |   | **92.6   ** |   |   | 274  |   |   | 86.4    |
| Selling,                general and administrative expenses                                                                               |                                                             | **87 ** |   |   | **24.5   ** |   |   | 112  |   |   | 20.0    |
| Other                income,                net                                                                                           |                                                             | **(4)** |   |   | **(1.1)  ** |   |   | (2) |   |   | (0.3)   |
| Total                costs                and operating expenses                                                                          |                                                             | **376 ** |   |   | **(105.9)  ** |   |   | 559  |   |   | 100.0    |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| **(Loss)                income from operations**                                                                                          |                                                             | **(21)** |   |   | **(5.9)  ** |   |   | —  |   |   | —    |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
|    Interest                expense                                                                                         |                                                             | **11 ** |   |   | **3.1   ** |   |   | 8  |   |   | 1.4    |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| **Loss                from continuing operations****   before                income taxes and minority interests**         |                                                             | **(32)** |   |   | **(9.0)  ** |   |   | (8) |   |   | (1.4)   |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
|    Income                tax (expense) benefit                                                                             |                                                             | **(2)** |   |   | **(0.6)  ** |   |   | 3  |   |   | 0.5    |
|    Minority                interests (loss) income                                                                         |                                                             | **— ** |   |   | **—   ** |   |   | —  |   |   | —    |
| **Loss                from continuing operations**                                                                                        |                                                             | **(34)** |   |   | **(9.6)  ** |   |   | (5) |   |   | (0.9)   |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| (Loss)                income                from discontinued operations       prior                to sale |                                                             | **(1)** |   |   | **—   ** |   |   | —  |   |   | —    |
| Income                tax                benefit (expense)                                                                                |                                                             | **1 ** |   |   | **—   ** |   |   | —  |   |   | —    |
| **Income                from discontinued operations**                                                                                    |                                                             | **— ** |   |   | **—   ** |   |   | —  |   |   | —    |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| **Net                loss**                                                                                                               | **$**                                                            | **(34)** |   |   | **(9.6)%** |   | $ | (5) |   |   | (0.9)% |
|                                                                                                                                      |                                                             |   |   |   |   |   |   |   |   |   |   |
| **Net                (loss) income per share:**                                                                                           |                                                             |   |   |   |   |   |   |   |   |   |   |
|    Continuing                operations                                                                                    | **$(1.17)**                                                      |   |   |   |   |   | $(0.18) |   |   |   |
|    Discontinued                operations                                                                                  |                                                             | **— ** |   |   |   |   |   | 0.01  |   |   |   |
|       Diluted                                                                                               | **$(1.17)**                                                      |   |   |   |   |   | $(0.17) |   |   |   |

----

***Consolidated      Financial Results***

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

|                                                   |   | **2008**      |   |   | **2007**      |   | **%                Change** |
|--------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|-----------------------------|
| **Sales**                                              |   |          |   |   |          |   |                        |
|    Building                products     | **$**  | **180 ** |   | $      | 242      |   | (26)%                       |
|    Construction                services |   | **175 ** |   |   | 317      |   | (45)%                       |
|                                                   | **$**  | **355 ** |   | $      | 559      |   | (37)%                       |
|                                                   |   |          |   |   |          |   |                        |
| **(Loss)                income from operations**       | **$**  | **(21)**      |   | $      | —  |   | n/m          |

| ·   | Gross                margins                declined to 17.5% of sales from 19.7% in the same period a year ago.                Competitive bidding for contracts resulted in lower construction                services                margins of 7.4% compared to 13.7%. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,                general and administrative expenses decreased 22% or $25 million                from the                same period a year ago. These expenses were lower due                to: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §  | a                20%                reduction in employees and related expenses                and |
|--------------|----------------------------------------------------------------------------------------------------|

| §  | incentive                compensation based on operating                performance. |
|--------------|--------------------------------------------------------------------------------------|

----

*Interest      Expense*

*Income      Taxes*

*Discontinued      Operations*

***Business      Segments***

|                    | **2008**  |        | **2007**                                                           |
|-------------------------|-----------|-------------|--------------------------------------------------------------------|
|                    | **Sales** |        | **(Loss)                Income****from                Operations** |   | **Sales** |   | **(Loss)****Income****from                Operations** |
| BMC                West | **$**     | **211**     |                                                               | **$** | **2 ** |   | $ | 279 |   | $ | 10  |
| SelectBuild             |      | **144**     |                                                               |   | **(17)** |   |   | 280 |   |   | 3  |
| Corporate               |      | **—** |                                                               |   | **(6)** |   |   | — |   |   | (13) |
|                    | **$**     | **355**     |                                                               | **$** | **(21)** |   | $ | 559 |   |   | —  |

***BMC      West***

|                                      |   | **2008** |   |   | **2007** |   | **%                Change** |
|-------------------------------------------|--------|----------|--------|--------|----------|--------|-----------------------------|
| **Sales**                                 | **$**  | **211**  |   | $      | 279      |   | (24)%                       |
|                                      |   |     |   |   |     |   |                        |
| **Income                from operations** | **$**  | **2**    |   | $      | 10  |   | (80)%                       |

----

| ·   | Gross                margins                were 25.8% of sales and consistent with the same period a year                ago. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,                general and administrative expenses decreased 10% or $6 million.                These                expenses decreased due to reductions in employees and related expenses                as                well as delivery and handling. Due to lower sales, these expenses                as a                percent of sales increased to 26.7% from 22.3% in the same period                a year                ago. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Income                from                operations benefited from an increase in Other income of $2.7 million                for                the sale of a building materials distribution facility in Boulder,                Colorado. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***SelectBuild***

|                                             |   | **2008**      |   |   | **2007** |   | **%                Change** |
|--------------------------------------------------|--------|---------------|--------|--------|----------|--------|-----------------------------|
| **Sales**                                        | **$**  | **144 ** |   | $      | 280      |   | (49)%                       |
|                                             |   |          |   |   |     |   |                        |
| **(Loss)                income from operations** | **$**  | **(17)**      |   | $      | 3        |   | n/m          |

| ·   | Gross                margins                were 5.3% of sales compared to 13.2% in the same period a year ago.                With a                limited number of contracts available for bidding, gross margins                have been                under substantial competitive                pressure. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,                general and administrative expenses declined 25% or $9 million. These                expenses were lower due to reductions                in: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §  | the                number of                employees and related expenses and |
|--------------|--------------------------------------------------------------------------------|

| §  | incentive                compensation based on operating                performance. |
|--------------|--------------------------------------------------------------------------------------|

***Corporate***

|                                  |   | **2008**    |   |   | **2007** |   | **%                Change** |
|---------------------------------------|--------|-------------|--------|--------|----------|--------|-----------------------------|
| **Operating                expenses** | **$**  | **6 ** |   | $      | 13  |   | (54)%                       |

| ·   | reductions                in                the number of employees and related expenses                and |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | incentive                compensation based on operating                performance. |
|--------------------|--------------------------------------------------------------------------------------|

----

**LIQUIDITY      AND CAPITAL RESOURCES**

*Operations*

*Capital      Investment and Acquisitions*

*Financing*

----

*Revolver*

| ·   | $100                million                or |
|--------------------|-----------------------------------------------|

| ·   | a                borrowing                base calculated on 50% of certain accounts receivable less 50% of                outstanding surety bonds. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

*Term      Note*

| ·   | quarterly                installments of $0.9 million, |
|--------------------|--------------------------------------------------------|

| ·   | any                net                proceeds of more than $1 million resulting from dispositions                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | remaining                principal due in November 2011. |
|--------------------|----------------------------------------------------------|

*Other*

*Covenants      and Maturities*

----

| 2008       |   | $      | 3,630   |   |
|------------|--------|--------|---------|--------|
| 2009       |   |   | 4,246   |   |
| 2010       |   |   | 3,969   |   |
| 2011       |   |   | 332,687 |   |
| 2012       |   |   | 80      |   |
| Thereafter |   |   | 747     |   |
|       |   | $      | 345,359 |   |

*Hedging      Activities*

*Repurchase      Program*

**OFF-BALANCE      SHEET ARRANGEMENTS**

**DISCLOSURES      OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS**

----

**CRITICAL      ACCOUNTING ESTIMATES **

| ·  | *                      Revenue Recognition for Construction                    Services* |
|--------------|----------------------------------------------------------------------------------------------------|

| ·  | *                      *Estimated                    Losses on Uncompleted Contracts and Changes in Contract                    Estimates** |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | *                      *Goodwill** |
|--------------|----------------------------------------------|

----

| ·  | *                        *Insurance                      Deductible                      Reserves** |
|--------------|---------------------------------------------------------------------------------------------------------------|

| ·  | *                            *Warranties** |
|--------------|------------------------------------------------------|

| ·  | *                          *Share-based                        Compensation** |
|--------------|-----------------------------------------------------------------------------------------|

----

**RECENT      ACCOUNTING PRINCIPLES**

*Disclosures about Derivative          Instruments and Hedging Activities. *

*Business      Combinations*

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

**BUSINESS      RISKS AND FORWARD-LOOKING STATEMENTS**

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

| ·   | our                business                model; |
|--------------------|---------------------------------------------------|

| ·   | our                ability                to implement and maintain cost structures that align with revenue                trends; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | compliance                with credit facility covenants in an uncertain housing                market; |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | changes                in                the business models of our customers may limit our ability to provide                building products and construction services required by our                customers; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                integration of acquired businesses may not result in anticipated                cost                savings and revenue synergies being fully realized or may take longer                to                realize than expected; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | losses                of and                changes in customers; |
|--------------------|-------------------------------------------------------------------|

| ·   | availability                of and our ability to attract, train and retain qualified                individuals; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | fluctuations                in our costs and availability of sourcing channels for commodity                wood                products, concrete, steel and other building                materials; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | intense                competition; |
|--------------------|-------------------------------------|

| ·   | weather                conditions including natural catastrophic                events; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | exposure                to                construction defect and product liability claims as well as other                legal                proceedings; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | disruptions                in our information systems; |
|--------------------|--------------------------------------------------------|

| ·   | actual                and                perceived vulnerabilities as a result of terrorist activities and                armed                conflict; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | costs                and/or                restrictions associated with federal, state and other regulations;                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | numerous                other matters of a local and regional scale, including those of a                political, economic, business, competitive or regulatory                nature. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | price                for our                shares may fluctuate significantly;                and |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | anti-takeover                defenses and certain provisions could prevent an acquisition of our                company or limit share price. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      3.**
**Quantitative      and Qualitative Disclosures About Market Risk**

*Inventory      Price Risk*

*Interest      Rate Risk*

----

**Item      4.**
**Controls      and Procedures**

*Evaluation      of Disclosure Controls and Procedures*

*Changes      in Internal Controls Over Financial Reporting*

----

**PART      II - OTHER INFORMATION**

**Item      1.**
**Legal      Proceedings**

----

**Item      1A.**
**Risk      Factors **

*Risks      Related to Our Business*

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

*There      are risks associated with our business model.*

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

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

----

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

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

| ·   | the                uncertainty that an acquired business will achieve anticipated operating                results; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | significant                expenses to integrate; |
|--------------------|---------------------------------------------------|

| ·   | diversion                of                management attention; |
|--------------------|------------------------------------------------------------------|

| ·   | departure                of                key personnel from the acquired                business; |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | effectively                managing entrepreneurial spirit and                decision-making; |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | integration                of different information systems; |
|--------------------|--------------------------------------------------------------|

| ·   | managing                new                construction service trades; |
|--------------------|-------------------------------------------------------------------------|

| ·   | unanticipated                costs and exposure to unforeseen liabilities;                and |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | impairment                of                assets. |
|--------------------|-----------------------------------------------------|

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

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

----

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

*Our      business is subject to intense competition.*

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

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

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

----

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

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

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

*Risks      Related to Our Shares*

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

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

----

**Item      2.**
**Unregistered      Sales of Equity Securities and Use of Proceeds**

----

**Item      3.**
**Defaults      Upon Senior Securities**

----

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

*Election      of Board of Directors*

|                                                 |   | **For**    |   | **Withheld** |
|------------------------------------------------------|--------|------------|--------|--------------|
| Robert                E.                Mellor       |   | 22,111,446 |   | 3,063,387    |
| Sara                L.                Beckman        |   | 22,143,078 |   | 3,031,755    |
| James                K.                Jennings, Jr. |   | 22,149,511 |   | 3,025,322    |
| Norman                J.                Metcalfe     |   | 22,158,058 |   | 3,016,775    |
| David                M.                Moffett       |   | 22,156,502 |   | 3,018,331    |
| R.                Scott                Morrison, Jr. |   | 22,143,628 |   | 3,031,205    |
| Peter                S.                O’Neill |   | 22,139,095 |   | 3,035,738    |
| Richard                G.                Reiten      |   | 22,166,545 |   | 3,008,288    |
| Norman                R.                Walker       |   | 22,153,011 |   | 3,021,822    |

*2008      Stock Incentive Plan*

| **For**    |   | **Withheld** |   | **Abstain** |   | **Not                Voted** |
|------------|--------|--------------|--------|-------------|--------|------------------------------|
| 10,428,254 |   | 3,380,120    |   | 112,825     |   | 11,253,634                   |

*Amended      and Restated Employee Stock Purchase Plan*

| **For**    |   | **Withheld** |   | **Abstain** |   | **Not                Voted** |
|------------|--------|--------------|--------|-------------|--------|------------------------------|
| 11,063,205 |   | 2,780,860    |   | 77,134      |   | 11,253,634                   |

*Ratification      of Independent Registered Public Accountants*

| **For**    |   | **Withheld** |   | **Abstain** |   | **Not                Voted** |
|------------|--------|--------------|--------|-------------|--------|------------------------------|
| 22,875,750 |   | 2,178,008    |   | 121,075     |   | 0                            |

----

**Item      5.**
**Other      Information**

----

**Item      6.**
**Exhibits**

| (a)    |   | Exhibits   |   |                                                                                                                                                                                                                                      |
|--------|--------|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | **Number** |   | **Description**                                                                                                                                                                                                                           |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.40      |   | Building                Materials Holding Corporation 2008 Annual Incentive Program for Certain                Employees of BMHC                                                                                                          |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.70      |   | Change                in                Control Severance Plan for Certain Executive Officers, Senior Management                and Key Employees of the Company and its Subsidiaries Effective May                1,                2008 |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.95      |   | Management                Retention Unit Agreement by and Between Robert E. Mellor and Building                Materials Holding Corporation as of February 19, 2008                                                                      |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.96      |   | Management                Retention Unit Agreement by and Between Stanley M. Wilson and Building                Materials Holding Corporation as of February 19, 2008                                                                     |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.97      |   | Management                Retention Unit Agreement by and Between Paul S. Street and Building                Materials Holding Corporation as of February 19, 2008                                                                        |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 10.98      |   | Management                Retention Unit Agreement by and Between Michael D. Mahre and Building                Materials Holding Corporation as of February 19, 2008                                                                      |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 11.0       |   | Statement                regarding computation of earnings per share (see Note 4 to Consolidated                Financial Statements)                                                                                                     |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 31.1       |   | Section                302                Certification                                                                                                                                                                                   |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 31.2       |   | Section                302                Certification                                                                                                                                                                                   |
|   |   |       |   |                                                                                                                                                                                                                                      |
|   |   | 32.0       |   | Section                906                Certifications                                                                                                                                                                                  |

----

**SIGNATURES**

|                                             | BUILDING                MATERIALS HOLDING CORPORATION                                                                                                                      |
|--------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date:                May 12,                2008 | */s/                Robert E. Mellor*                                                                                                                                           |   |
|                                             | Robert                E.                MellorChairman                of                the Board and Chief Executive Officer(Principal                Executive Officer)  |
| Date:                May 12,                2008 | */s/                William M. Smartt*                                                                                                                                          |   |
|                                             | William                M.                SmarttSenior                Vice                President and Chief Financial Officer (Principal                Financial Officer)     |

----