**FORM        10-Q**

| þ | **QUARTERLY                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934** |
|--------|---------------------------------------------------------------------------------------------------------------|

**OR**

|  ̈ | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934** |
|--------|--------------------------------------------------------------------------------------------------------------|

*www.bmhc.com*

**BUILDING        MATERIALS HOLDING CORPORATION**

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

**Four        Embarcadero Center, Suite 3250, San Francisco, CA 94111**

**(415)        627-9100**

**N/A**

----

BUILDING        MATERIALS HOLDING CORPORATION

**FORM        10-Q**

**INDEX**

| **PART                  I - FINANCIAL INFORMATION**                                                                                                                   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                  |   |
|  **Item                  1**-                  Financial                  Statements (unaudited)                                                                 |   |
|                                                                                                                                                                  |   |
|    Consolidated                  Statements of Income for the Three and Nine                  Months Ended September 30, 2005and                  2004 | 2      |
|                                                                                                                                                                  |   |
|    Consolidated                  Balance Sheets as of September 30, 2005 and                  December 31, 2004                                        | 3      |
|                                                                                                                                                                  |   |
|    Consolidated                  Statements of Shareholders’ Equity for the                  Nine Months Ended September 30, 2005and 2004        | 4      |
|                                                                                                                                                                  |   |
|    Consolidated                  Statements of Cash Flows for the Nine Months                  Ended September 30, 2005 and 2004                       | 5      |
|                                                                                                                                                                  |   |
|    Notes                  to Consolidated Financial                  Statements                                                                        | 6      |
|                                                                                                                                                                  |   |
| ** Item                  2**                  - Management's Discussion and Analysis of Financial                  Condition and Results of Operations           | 18     |
|                                                                                                                                                                  |   |
|  **Item                  3**                  -                  Quantitative and Qualitative Disclosures about Market                  Risk                     | 27     |
|                                                                                                                                                                  |   |
| ** Item                  4**                  - Controls and Procedures                                                                                          | 28     |
|                                                                                                                                                                  |   |
|                                                                                                                                                                  |   |
| **PART                  II - OTHER INFORMATION**                                                                                                                      |   |
|                                                                                                                                                                  |   |
| ** Item                  1**                  - Legal Proceedings                                                                                                | 29     |
|                                                                                                                                                                  |   |
| ** Item                  2**                  - Unregistered Sales of Equity Securities and Use of                  Proceeds                                     | 29     |
|                                                                                                                                                                  |   |
| ** Item                  3**                  - Defaults Upon Senior Securities                                                                                  | 29     |
|                                                                                                                                                                  |   |
| ** Item                  4**                  - Submission of Matters to a Vote of Security                  Holders                                             | 29     |
|                                                                                                                                                                  |   |
| ** Item                  5**                  - Other Information                                                                                                | 29     |
|                                                                                                                                                                  |   |
| ** Item                  6**                  - Exhibits                                                                                                         | 29     |
|                                                                                                                                                                  |   |
|                                                                                                                                                                  |   |
| **SIGNATURES**                                                                                                                                                        | 30     |
|                                                                                                                                                                  |   |

----

Index

**Item        1 - Financial Statements**

**Building        Materials Holding Corporation**

**Consolidated        Statements of Income**

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

**(unaudited)**

|                                                                                                                                                          | **Three                  Months EndedSeptember 30** |              | **Nine                  Months EndedSeptember 30** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------|----------------------------------------------------|
|                                                                                                                                                          |                                                | **2005**          |                                               |   | **2004** |   |   | **2005** |   |   | **2004** |
| **Sales**                                                                                                                                                     |                                                |              |                                               |   |   |   |   |   |   |   |   |
|    Building                  products                                                                                                          | **$**                                               | **360,202 ** |                                               | $ | 335,837  |   | **$** | **997,717 ** |   | $ | 902,450  |
|    Construction                  services                                                                                                      |                                                | **459,626 ** |                                               |   | 255,643  |   |   | **1,096,560 ** |   |   | 649,266  |
| **      Total                  sales**                                                                                          |                                                | **819,828 ** |                                               |   | 591,480  |   |   | **2,094,277 ** |   |   | 1,551,716  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| **Costs                  and operating expenses **                                                                                                       |                                                |              |                                               |   |   |   |   |   |   |
|    Cost                  of goods sold                                                                                                         |                                                |              |                                               |   |   |   |   |   |   |   |   |
|       Building                  products                                                                                        |                                                | **261,384 ** |                                               |   | 255,509  |   |   | **730,811 ** |   |   | 685,900  |
|       Construction                  services                                                                                    |                                                | **371,963 ** |                                               |   | 217,166  |   |   | **889,336 ** |   |   | 558,772  |
|    Impairment                  of assets                                                                                                       |                                                | **― ** |                                               |   | ―  |   |   | **463 ** |   |   | 1,273  |
|    Selling,                  general and      administrative                  expenses                           |                                                | **112,084 ** |                                               |   | 85,284  |   |   | **299,426 ** |   |   | 235,543  |
|    Other                  income, net                                                                                                          |                                                | **(1,423)**       |                                               |   | (1,559) |   |   | **(2,779)** |   |   | (1,976) |
|       Total                  costs and                  operating         expenses |                                                | **744,008 ** |                                               |   | 556,400  |   |   | **1,917,257 ** |   |   | 1,479,512  |
|                                                                                                                                                          |                                                |         |                                               |   |    |   |    |    |   |    |    |
| **Income                  from operations**                                                                                                                   |                                                | **75,820 **  |                                               |   | 35,080  |   |   | **177,020 ** |   |   | 72,204  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| Interest                  expense                                                                                                                             |                                                | **3,629 **   |                                               |   | 4,273  |   |    | **10,177 ** |   |   | 10,184  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| Income                  before                  income taxes   and minority interests                                                          |                                                | **72,191 **  |                                               |   | 30,807  |   |   | **166,843 ** |   |   | 62,020  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| Income                  taxes                                                                                                                                 |                                                | **25,474 **  |                                               |   | 11,815  |   |   | **58,855 ** |   |   | 22,763  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| Minority                  interests income                                                                                                                    |                                                | **(5,153)**       |                                               |   | (896) |   |   | **(11,962)** |   |   | (4,393) |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| **Net                  income**                                                                                                                               | **$**                                               | **41,564 **  |                                               | $ | 18,096  |   | **$** | **96,026 ** |   | $ | 34,864  |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                          |                                                |              |                                               |   |   |   |   |   |   |   |   |
| **Net                  income per share:**                                                                                                                    |                                                |              |                                               |   |   |   |   |   |   |   |   |
|    Basic                                                                                                                                       |                                                | **$2.94 **   |                                               |   | $1.34  |   |   | **$6.87 ** |   |   | $2.60  |
|    Diluted                                                                                                                                     |                                                | **$2.81 **   |                                               |   | $1.29  |   |   | **$6.57 ** |   |   | $2.53  |

----

Index

**Building        Materials Holding Corporation**

**Consolidated        Balance Sheets**

**(thousands,        except share data)**

**(unaudited)**

|                                                          |   | **September                  30** | **December                  31** |   |          |   | **September                  30**                                                                                                                                                               | **December                  31** |
|---------------------------------------------------------------|--------|-----------------------------------|----------------------------------|--------|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                                                          |   | **2005**                          | **2004**                         |   |          |   | **2005**                                                                                                                                                                                        | **2004**                         |
| **ASSETS**                                                    |   |                              |                             |   |          |   | **LIABILITIES,                  MINORITY INTERESTS AND SHAREHOLDERS’ EQUITY**                                                                                                             |                             |   |   |   |   |
| Cash                  and cash                  equivalents   | **$**  | **45,451 **                  |                             | $      | 19,496   |   |                                                                                                                                                                                            |                             |   |   |   |   |
| Marketable                  securities                        |   | **4,707 **                   |                             |   | 2,216    |   | Accounts                  payable                                                                                                                                                               | **$**                            | **153,978 ** |   | $ | 77,591  |
| Receivables,                  net of allowances               |   |                              |                             |   |          |   | Accrued                  compensation                                                                                                                                                           |                             | **63,493 ** |   |   | 34,078  |
|    of                  $4,721 and $4,367       |   | **365,588 **                 |                             |   | 238,071  |   | Insurance                  deductible reserves                                                                                                                                                  |                             | **39,401 ** |   |   | 26,639  |
| Inventory                                                     |   | **163,255 **                 |                             |   | 153,391  |   | Other                  accrued                  liabilities                                                                                                                                     |                             | **42,519 ** |   |   | 26,177  |
| Unbilled                  receivables                         |   | **55,448 **                  |                             |   | 17,196   |   | Billings                  in                  excess of costs and estimated                                                                                                                     |                             |   |   |   |   |
| Deferred                  income taxes                        |   | **13,534 **                  |                             |   | 11,913   |   |    earnings                                                                                                                                                                      |                             | **31,154 ** |   |   | 11,274  |
| Prepaid                  expenses and other                   |   | **4,553 **                   |                             |   | 7,317    |   | Current                  portion of long-term debt                                                                                                                                              |                             | **8,973 ** |   |   | 3,404  |
|    Total                  current assets       |   | **652,536 **                 |                             |   | 449,600  |   |    Total                  current liabilities                                                                                                                                    |                             | **339,518 ** |   |   | 179,163  |
|                                                          |   |                              |                             |   |          |   |                                                                                                                                                                                            |                             |   |   |   |   |
| Property                  and                  equipment      |   |                              |                             |   |          |   | Deferred                  income taxes                                                                                                                                                          |                             | **4,045 ** |   |   | 297  |
|    Land                                        |   | **44,821 **                  |                             |   | 37,036   |   | Long-term                  debt                                                                                                                                                                 |                             | **264,573 ** |   |   | 206,419  |
|    Buildings                  and improvements |   | **117,849 **                 |                             |   | 104,667  |   | Other                  long-term liabilities                                                                                                                                                    |                             | **28,193 ** |   |   | 23,162  |
|    Equipment                                   |   | **150,044 **                 |                             |   | 122,105  |   |    Total                  liabilities                                                                                                                                            |                             | **636,329 ** |   |   | 409,041  |
|    Construction                  in progress   |   | **8,441 **                   |                             |   | 4,956    |   |                                                                                                                                                                                            |                             |   |   |   |   |
|    Accumulated                  depreciation   |   | **(116,385)**                     |                             |   | (104,453)     |   | Minority                  interests                                                                                                                                                             |                             | **11,443 ** |   |   | 6,325  |
| Marketable                  securities                        |   | **22,330 **                  |                             |   | 16,760   |   |                                                                                                                                                                                            |                             |   |   |   |   |
| Deferred                  loan                  costs         |   | **3,679 **                   |                             |   | 2,084    |   | Commitments                  and contingent liabilities                                                                                                                                         |                             | **― ** |   |   | ―  |
| Other                  long-term assets                       |   | **18,925 **                  |                             |   | 16,281   |   |                                                                                                                                                                                            |                             |   |   |   |   |
| Other                  intangibles, net                       |   | **21,837 **                  |                             |   | 13,692   |   | Shareholders’                  equity                                                                                                                                                     |                             |   |   |   |   |
| Goodwill                                                      |   | **160,726 **                 |                             |   | 80,316   |   |    Common                  stock, $0.001 par value:                                                                                                                              |                             |   |   |   |   |
|    Total                  assets               | **$**  | **1,084,803 **               |                             | $      | 743,044  |   |                        authorized 50,000,000 shares;                                                                                                                   |                             |   |   |   |   |
|                                                          |   |                              |                             |   |          |   |                        issued and outstanding 14,365,233 and                                                                                                           |                             |   |   |   |   |
|                                                          |   |                              |                             |   |          |   |                        13,852,683 shares                                                                                                                               |                             | **14 ** |   |   | 14  |
|                                                          |   |                              |                             |   |          |   |    Additional                  paid-in capital                                                                                                                                   |                             | **142,799 ** |   |   | 124,594  |
|                                                          |   |                              |                             |   |          |   |    Unearned                  compensation                                                                                                                                        |                             | **(3,050)** |   |   | (1,383) |
|                                                          |   |                              |                             |   |          |   |    Retained                  earnings                                                                                                                                            |                             | **297,140 ** |   |   | 205,812  |
|                                                          |   |                              |                             |   |          |   |    Accumulated                  other comprehensive income      (loss),                  net                                                       |                             | **128 ** |   |   | (1,359) |
|                                                          |   |                              |                             |   |          |   |       Total                  shareholders’ equity                                                                                                           |                             | **437,031 ** |   |   | 327,678  |
|                                                          |   |                              |                             |   |          |   |       Total                  liabilities, minority interests and         shareholders’                  equity | **$**                            | **1,084,803 ** |   | $ | 743,044  |

----

Index

**Building        Materials Holding Corporation**

**Consolidated        Statements of Shareholders’ Equity**

**(thousands)**

**(unaudited)**

|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       | Accumulated                  OtherComprehensive                  Income (Loss) |              |   |
|----------------------------------------------------------------------------------------------|------------|--------|--------|--------------------------------|--------|-------------------------------------|-------------|----------|---------|-------------------|------------------------------------------------------|------------|-------------------|--------|-----------|-------------------------------------------------------------------|------------|--------------------------------------------------------------------------------|-------------------|--------|
|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      | Net                  Unrealized                  Gain (Loss) From |       |                                                                           |              |
|                                                                                         |       |   |   | Common                  Shares |   | Additional                  Paid-In |        | Unearned |    | Retained          | Interest                  Rate                  Swap | Marketable |              |   |      |
|                                                                                         |       |   |   | Shares                         |   |                                | Amount      |     | Capital |              | Compensation                                         |       | Earnings          |   | Contracts |                                                              | Securities |                                                                           | Total             |
| **Balance                  at December 31, 2003**                                            | **13,334** |   | **$**  | **13**                         |   | **$**                               | **115,282** |     | **$**   | **― ** |                                                 | **$**      | **155,715 ** |   | **$**     | **― **                                                 |       | **$**                                                                          | **― ** |   | **$** | **271,010 ** |
|    Net                  income                                                |       |   |   |                           |   |                                |        |     |    |              |                                                 |       | 34,864       |   |      |                                                              |       |                                                                           |              |   |   | 34,864  |
|    Unrealized                  loss                                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      | (3,213)                                                           |       |                                                                           |              |   |   | (3,213) |
|       Tax                  benefit for unrealized loss         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      | 1,269                                                        |       |                                                                           |              |   |   | 1,269  |
|    Unrealized                  gain                                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           | 72           |   |   | 72  |
| **   Comprehensive                  income**                                  |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | **32,992 ** |
|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   |   |
|    Share                  options exercised                                   | 271        |   |   |                           |   |                                | 3,304       |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 3,304  |
|       Tax                  benefit for share options exercised |       |   |   |                           |   |                                | 978         |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 978  |
|    Shares                  issued from Director Plan                          | 17         |   |   |                           |   |                                | 285         |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 285  |
|    Shares                  issued from Employee Plan                          | 10         |   |   |                           |   |                                | 198         |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 198  |
|    Issuance                  of restricted shares                             | 75         |   |   |                           |   |                                | 1,622       |     |    | (1,622)           |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | **― ** |
|       Earned                  compensation expense             |       |   |   |                           |   |                                |        |     |    | 93           |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 93  |
|    Cash                  dividends on common shares                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       | (2,704)           |   |      |                                                              |       |                                                                           |              |   |   | (2,704) |
| **Balance                  at September 30, 2004**                                           | 13,707     |   | $      | 13                             |   | $                                   | 121,669     |     | $       | (1,529)           |                                                 | $          | 187,875      |   | $         | (1,944)                                                           |       | $                                                                              | 72           |   | $ | 306,156 |
|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   |   |   |   |   |
|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   |   |   |   |   |
| **Balance                  at December 31, 2004**                                            | **13,853** |   | **$**  | **14**                         |   | **$**                               | **124,594** |     | **$**   | **(1,383)**       |                                                 | **$**      | **205,812 ** |   | **$**     | **(1,362)**                                                       |       | **$**                                                                          | **3 **       |   | **$** | **327,678 ** |
|    Net                  income                                                |       |   |   |                           |   |                                |        |     |    |              |                                                 |       | 96,026       |   |      |                                                              |       |                                                                           |              |   |   | 96,026  |
|    Unrealized                  gain                                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      | 2,741                                                        |       |                                                                           |              |   |   | 2,741  |
|       Taxes                  for unrealized gain               |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      | (1,053)                                                           |       |                                                                           |              |   |   | (1,053) |
|    Unrealized                  loss                                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           | (327)             |   |   | (327) |
|       Tax                  benefit for unrealized loss         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           | 126          |   |   | 126  |
| **   Comprehensive                  income**                                  |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | **97,513 ** |
|                                                                                         |       |   |   |                           |   |                                |        |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   |   |   |   |   |
|    Share                  options exercised                                   | 417        |   |   |                           |   |                                | 4,746       |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 4,746  |
|       Tax                  benefit for share options exercised |       |   |   |                           |   |                                | 8,640       |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 8,640  |
|    Shares                  issued from Director Plan                          | 7          |   |   |                           |   |                                | 381         |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 381  |
|    Shares                  issued from Employee Plan                          | 13         |   |   |                           |   |                                | 786         |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 786  |
|    Shares                  issued for acquisition                             | 17         |   |   |                           |   |                                | 1,000       |     |    |              |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 1,000  |
|    Issuance                  of restricted shares                             | 58         |   |   |                           |   |                                | 2,652       |     |    | (2,652)           |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | ―  |
|       Earned                  compensation expense             |       |   |   |                           |   |                                |        |     |    | 985               |                                                 |       |              |   |      |                                                              |       |                                                                           |              |   |   | 985  |
|    Cash                  dividends on common shares                           |       |   |   |                           |   |                                |        |     |    |              |                                                 |       | (4,698)           |   |      |                                                              |       |                                                                           |              |   |   | (4,698) |
| **Balance                  at September 30, 2005**                                           | **14,365** |   | **$**  | **14**                         |   | **$**                               | **142,799** |     | **$**   | **(3,050)**       |                                                 | **$**      | **297,140**       |   | **$**     | **326 **                                                     |       | **$**                                                                          | **(198)**         |   | **$** | **437,031 ** |

----

Index

**Building        Materials Holding Corporation**

**Consolidated        Statements of Cash Flows**

**(thousands)**

**(unaudited)**

|                                                                                                                      | **Nine                  Months EndedSeptember 30** |
|---------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|
|                                                                                                                      | **2005**                                           |   | **2004** |
| **Operating                  Activities**                                                                                 |                                               |   |   |   |   |
|    Net                  income                                                                             | **$**                                              | **96,026 ** |   | $ | 34,864** ** |
|    Items                  in net income not using (providing) cash:                                        |                                               |   |   |   |   |
|       Minority                  interests income                                            |                                               | **11,962 ** |   |   | 4,393** ** |
|       Impairment                  of assets                                                 |                                               | **463 ** |   |   | 1,273** ** |
|       Depreciation                  and amortization                                        |                                               | **18,872 ** |   |   | 17,239** ** |
|       Gain                  on sale of assets, net                                          |                                               | **(12)** |   |   | (3) |
|       Deferred                  income taxes                                                |                                               | **(1,924)** |   |   | (8,295) |
|       Tax                  benefit of share options exercised                               |                                               | **8,640 ** |   |   | 978  |
|       Changes                  in assets and liabilities, net of effects of acquisitions:   |                                               |   |   |   |   |
|          Receivables,                  net                                   |                                               | **(43,988)** |   |   | (76,475) |
|          Inventory                                                           |                                               | **(9,880)** |   |   | (49,163) |
|          Unbilled                  receivables                               |                                               | **(14,043)** |   |   | (10,633) |
|          Prepaid                  expenses and other current assets          |                                               | **5,388 ** |   |   | 2,655** ** |
|          Accounts                  payable                                   |                                               | **19,720 ** |   |   | 28,885** ** |
|          Accrued                  compensation                               |                                               | **22,779 ** |   |   | 18,939** ** |
|          Insurance                  deductible reserves                      |                                               | **9,669 ** |   |   | 15,427** ** |
|          Other                  accrued liabilities                          |                                               | **4,795 ** |   |   | 11,844** ** |
|          Billings                  in excess of costs and estimated earnings |                                               | **4,486 ** |   |   | 6,210** ** |
|          Other                  long-term assets and liabilities             |                                               | **4,889 ** |   |   | 2,868** ** |
|       Other,                  net                                                           |                                               | **3,924 ** |   |   | (999) |
|    Cash                  flows provided by operating activities                                            |                                               | **141,766 ** |   |   | 7** ** |
|                                                                                                                      |                                               |   |   |   |   |
| **Investing                  Activities**                                                                                 |                                               |   |   |   |   |
|    Purchases                  of property and equipment                                                    |                                               | **(32,219)** |   |   | (22,909) |
|    Acquisitions                  and investments in businesses, net of cash acquired                       |                                               | **(138,443)** |   |   | (20,927) |
|    Proceeds                  from dispositions of property and equipment                                   |                                               | **639 ** |   |   | 11,468** ** |
|    Purchases                  of marketable securities                                                     |                                               | **(8,458)** |   |   | (13,468) |
|    Other,                  net                                                                             |                                               | **822 ** |   |   | (860) |
|    Cash                  flows used by investing activities                                                |                                               | **(177,659)** |   |   | (46,696) |
|                                                                                                                      |                                               |   |   |   |   |
| **Financing                  Activities**                                                                                 |                                               |   |   |   |   |
|    Net                  (payments) borrowings under revolving credit facility                              |                                               | **(21,900)** |   |   | 47,725  |
|    Borrowings                  under term note                                                             |                                               | **75,000 ** |   |   | ―  |
|    Principal                  payments on term note                                                        |                                               | **(939)** |   |   | (938) |
|    Net                  payments on other notes payable                                                    |                                               | **(4,376)** |   |   | (645) |
|    Increase                  in book overdrafts                                                            |                                               | **18,073 ** |   |   | 4,302** ** |
|    Share                  options exercised                                                                |                                               | **4,746 ** |   |   | 3,304** ** |
|    Dividends                  paid                                                                         |                                               | **(3,652)** |   |   | (2,408) |
|    Deferred                  financing costs                                                               |                                               | **(2,266)** |   |   | (175) |
|    Other,                  net                                                                             |                                               | **(2,838)** |   |   | (426) |
|    Cash                  flows provided by financing activities                                            |                                               | **61,848 ** |   |   | 50,739** ** |
|                                                                                                                      |                                               |   |   |   |   |
| **Increase                  in Cash and Cash Equivalents**                                                                |                                               | **25,955 ** |   |   | 4,050** ** |
|    Cash                  and cash equivalents, beginning of year                                           |                                               | **19,496 ** |   |   | 19,506** ** |
|    Cash                  and cash equivalents, end of period                                               | **$**                                              | **45,451 ** |   | $ | 23,556** ** |
|                                                                                                                      |                                               |   |   |   |   |
| **Supplemental                  Disclosure of Cash Flow Information**                                                     |                                               |   |   |   |   |
|    Accrued                  but unpaid dividends                                                           | **$**                                              | **2,155 ** |   | $ | 1,096** ** |
|    Cash                  paid for interest                                                                 | **$**                                              | **9,715 ** |   | $ | 9,425** ** |
|    Cash                  paid for income taxes                                                             | **$**                                              | **46,355 ** |   | $ | 21,048** ** |

----

Index

***Notes        to Consolidated Financial        Statements***

***1.***
***Basis        of Presentation***

***Recent        Accounting Principles***

*Share-Based        Payment*
*Accounting        for        Stock Issued to Employees*

----

Index

***2.***
***Net        Income Per Share***

|                                                                                                                                                          | **Three                  Months EndedSeptember 30** |       | **Nine                  Months EndedSeptember 30** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|------------|----------------------------------------------------|
|                                                                                                                                                          |                                                | **2005**   |                                               |   | 2004 |   |   | **2005** |   |   | 2004 |
| Net                  income                                                                                                                                   | **$**                                               | **41,564** |                                               | $ | 18,096 |   | **$** | **96,026** |   | $ | 34,864 |
|                                                                                                                                                          |                                                |       |                                               |   |   |   |   |   |   |   |   |
| Weighted                  average shares   used to determine basic                  net   income per share                      |                                                | **14,143** |                                               |   | 13,525 |   |   | **13,986** |   |   | 13,429 |
| Net                  effect of                  dilutive stock   options                  and                  restricted stock (1) ** ** |                                                | **663**    |                                               |   | 473 |   |   | **636** |   |   | 352 |
| Weighted                  average shares used   to determine diluted                  net   income per share                    |                                                | **14,806** |                                               |   | 13,998 |   |   | **14,622** |   |   | 13,781 |
|                                                                                                                                                          |                                                |       |                                               |   |   |   |   |   |   |   |   |
| Net                  income                  per share:                                                                                                       |                                                |       |                                               |   |   |   |   |   |   |   |   |
|    Basic                                                                                                                                       |                                                | **$2.94**  |                                               |   | $1.34 |   |   | **$6.87** |   |   | $2.60 |
|    Diluted                                                                                                                                     |                                                | **$2.81**  |                                               |   | $1.29 |   |   | **$6.57** |   |   | $2.53 |
|                                                                                                                                                          |                                                |       |                                               |   |   |   |   |   |   |   |   |
| Cash                  dividends declared per   share                                                                                           |                                                | **$0.15**  |                                               |   | $0.08 |   |   | **$0.33** |   |   | $0.20 |

| (1)   | All                  options                  to purchase shares were included in the computation of net income                  per                  diluted share for the third quarter of 2005 and 2004 as well as                  the nine                  months ended September 30, 2005.  Options to purchase                  shares of                  30,665 for the nine months ended September 30, 2004 were not dilutive                  and                  therefore excluded from the computation of net income per diluted                  share.  Options categorized as not dilutive were                  defined on the                  basis of the exercise price being greater than the average market                  value of                  the common shares in the periods                  presented. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

***3.***
***Share-Based        Compensation***

*Accounting        for        Stock Issued to Employees*
*Accounting        for        Stock-Based Compensation*

|                                                                                                                                                                                                                                                                                                                                                                                                                                               | **Three                  Months EndedSeptember 30** |             | **Nine                  Months EndedSeptember 30** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|------------------|----------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                | **2005**         |                                               | 2004 |   |   | **2005** |   |   | 2004 |
| Net                  income,                  as reported                                                                                                                                                                                                                                                                                                                                                                                          | **$**                                               | **41,564 ** |                                               | $ | 18,096  |   | **$** | **96,026 ** |   | $ | 34,864  |
|                     Add: Share-based                  employee      compensation                  expense      determined                  under APB                  25,      net of related                  tax                  effects                                                                                                    |                                                | **214 **    |                                               |   | 152  |   |   | **559 ** |   |   | 491  |
|                     Deduct: Share-based      employee                  compensation      expense determined                  under      fair value                  method for                  all      awards, net                  of related                  tax      effects |                                                | **(782)**        |                                               |   | (564) |   |   | **(2,103)** |   |   | (1,381) |
| Pro                  forma net                  income                                                                                                                                                                                                                                                                                                                                                                                             | **$**                                               | **40,996 ** |                                               | $ | 17,684  |   | **$** | **94,482 ** |   | $ | 33,974  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                |             |                                               |   |   |   |   |   |   |   |   |
| Earnings                  per                  share:                                                                                                                                                                                                                                                                                                                                                                                              |                                                |             |                                               |   |   |   |   |   |   |   |   |
|    Basic                  - as reported                                                                                                                                                                                                                                                                                                                                                                                             |                                                | **$2.94 **  |                                               |   | $1.34  |   |   | **$6.87 ** |   |   | $2.60  |
|    Basic                  - pro forma                                                                                                                                                                                                                                                                                                                                                                                               |                                                | **$2.90 **  |                                               |   | $1.31  |   |   | **$6.76 ** |   |   | $2.53  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                |             |                                               |   |   |   |   |   |   |   |   |
|    Diluted                  - as reported                                                                                                                                                                                                                                                                                                                                                                                           |                                                | **$2.81 **  |                                               |   | $1.29  |   |   | **$6.57 ** |   |   | $2.53  |
|    Diluted                  - pro forma                                                                                                                                                                                                                                                                                                                                                                                             |                                                | **$2.77 **  |                                               |   | $1.26  |   |   | **$6.46 ** |   |   | $2.47  |

***4.***
***Impairment        of Assets***

----

Index

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

| ·   | In                  September                  2005, BMC Construction acquired a concrete and plumbing services                  business                  for $84.1 million in cash.  Concrete services are                  provided to                  high-volume production homebuilders in Las Vegas and concrete and                  plumbing                  services are provided to high-volume production homebuilders in                  southern                  California.  Information required to complete the purchase                  price                  allocation is not yet available.  Final allocation                  of the                  purchase price will be completed as soon as this information is                  available.   |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  September                  2005, BMC West acquired a truss manufacturing business in McCall,                  Idaho                  for $1.3 million in                  cash.   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  June 2005,                  BMC Construction acquired a stucco business in Las Vegas, Nevada                  for $6.1                  million in cash.   |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  June 2004,                  BMC West acquired a framing business in Denver, Colorado for $0.8                  million                  in cash.   |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  October                  2004, BMC Construction acquired a window installation business                  in Napa,                  California for $1.8 million in                  cash.   |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  March                  2004, BMC Construction acquired a distribution facility in Tucson,                  Arizona                  for $4 million in cash.   |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  January                  2003, BMC Construction acquired a 60% interest in WBC Construction,                  LLC                  (WBC Construction) for $22.9 million in cash and the issuance of                  70,053                  common shares.  In August 2005, BMC Construction                  acquired an                  additional 20% interest for approximately $15.0 million in                  cash.  An additional cash payment may be required                  based on                  operating performance.  The remaining 20% interest                  is owned by                  Willard Brothers Construction, Inc. and is recognized as minority                  interest.  WBC Construction provides concrete block                  masonry and                  concrete services to high-volume production homebuilders |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| ·   | In                  July 2005,                  BMC Construction acquired a 51% interest in BBP Companies for $8.6                  million                  in cash and 16,836 common shares.  The remaining                  49% is owned by                  BBP Concrete and is recognized as minority interest.  BBP                  Companies provide concrete services to high-volume production homebuilders                  in Arizona.  Information required to complete the purchase                  price                  allocation is not yet available.  Final allocation                  of the                  purchase price will be completed as soon as this information is                  available.   |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  April                  2005, BMC Construction acquired a 60% interest in Riggs Plumbing,                  LLC                  (Riggs Plumbing) for $17.8 million in cash.  In July                  2005, we                  acquired an additional 13% for $1.4 million in cash.  The                  remaining 27% is owned by Riggs & Associates, LLC and is recognized as                  minority interest.  Riggs Plumbing provides plumbing                  services to                  high-volume production builders in the Phoenix and Tucson                  markets.   |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  January                  2005, BMC Construction acquired a 51% interest in RCI Construction,                  LLC                  (RCI Construction) for $4.9 million in cash.  The                  remaining 49%                  is owned by Residential Carpentry, Inc. and is recognized as minority                  interest.  RCI Construction provides framing services                  to                  high-volume production builders in the greater Chicago                  area.   |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  September                  2004, our majority-owned subsidiary WBC Construction acquired a                  51%                  interest in A-1 Building Components, LLC (A-1 Truss) for $2.3 million                  in                  cash.  The remaining 49% is owned by A-1 Roof Trusses,                  Ltd.,                  Company and is recognized as minority interest.  A-1                  Truss                  manufactures trusses in Fort Pierce,                  Florida.   |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  July 2002,                  BMC Construction acquired a 51% interest in KBI Norcal for $5.8                  million in                  cash, $0.8 million of assumed debt and the issuance of 34,364 common                  shares.  The remaining 49% interest was owned by                  RJ Norcal, LLC                  and recognized as minority interest.  In July 2004,                  BMC                  Construction acquired the remaining 49% of KBI Norcal for $14.0                  million in                  cash.  KBI Norcal provides framing services to high-volume                  production homebuilders in northern                  California. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|                                                          | **September                  30** |              | December                  31 |   | **September                  30** |                                                                                                                                                                       | December                  31 |
|---------------------------------------------------------------|-----------------------------------|-------------------|------------------------------|--------|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                          | **2005**                          |              | 2004                         |   | **2005**                          |                                                                                                                                                                       | 2004                         |
| Cash                  and cash                  equivalents   | **$**                             | **1,644 **   |                         | $      | ―                      |                     Accounts payable                                                                                                                             | $                            | **35,689 ** |   | $ | 1,265  |
| Receivables                                                   |                              | **83,529 **  |                         |   | 4,594                        |                     Accrued compensation                                                                                                                         |                         | **6,636 ** |   |   | 194  |
| Inventory                                                     |                              | **(16)**          |                         |   | 1,987                        |                     Insurance deductible reserves                                                                                                                |                         | **3,093 ** |   |   | ―  |
| Unbilled                  receivables                         |                              | **24,209 **  |                         |   | ―                      |                     Other accrued liabilities                                                                                                                    |                         | **11,547 ** |   |   | 1,071  |
| Prepaid                  expenses and other                   |                              | **2,411 **   |                         |   | 127                          |                     Billings in excess of costs and                                                                                                              |                         |   |   |   |   |
|                                                          |                              |              |                         |   |                              |                        estimated earnings                                                                                                         |                         | **15,394 ** |   |   | ―  |
|                                                          |                              |              |                         |   |                              |                     Current portion of long-term                       debt                                                             |                         | **5,605 ** |   |   | 1,131  |
|    Total                  current assets  |                              | **111,777 ** |                         |   | 6,708                        |                        Total current liabilities                                                                                                  |                         | **77,964 ** |   |   | 3,661  |
|                                                          |                              |              |                         |   |                              |                                                                                                                                                                       |                         |   |   |   |   |
| Property                  and                  equipment      |                              | **24,567 **  |                         |   | 3,766                        |                     Deferred income taxes                                                                                                                        |                         | **4,051 ** |   |   | ―  |
| Other                  long-term assets                       |                              | **18 **      |                         |   | 528                          |                     Long-term debt                                                                                                                               |                         | **10,048 ** |   |   | ―  |
| Other                  intangibles, net                       |                              | **11,124 **  |                         |   | 5,868                        |                     Other long-term liabilities                                                                                                                  |                         | **― ** |   |   | 1,124  |
| Goodwill                                                      |                              | **82,276 **  |                         |   | 8,483                        |                                                                                                                                                                       |                         |   |   |   |   |
|                                                          |                              |              |                         |   |                              |                     Minority interests                                                                                                                           |                         | **(3,382)** |   |   | (2,081) |
|    Total                  assets               | **$**                             | **229,762 ** |                         | $      | 25,353                       |                        Total liabilities and                  minority                          interests | $                            | **88,681 ** |   | $ | 2,704  |

|                                                       | **Three                  Months EndedSeptember 30** |        | **Nine                  Months EndedSeptember 30** |
|------------------------------------------------------------|-----------------------------------------------------|-------------|----------------------------------------------------|
|                                                       |                                                | **2005**    |                                               |   | 2004 |   |   | **2005** |   |   | 2004 |
| Sales                  - as                  reported      | **$**                                               | **819,828** |                                               | $ | 591,480 |   | **$** | **2,094,277** |   | $ | 1,551,716 |
| Pro                  forma                  Sales          | **$**                                               | **860,098** |                                               | $ | 717,564 |   | **$** | **2,342,896** |   | $ | 1,929,967 |
|                                                       |                                                |        |                                               |   |   |   |   |   |   |   |   |
| Net                  income -                  as reported | **$**                                               | **41,564**  |                                               | $ | 18,096 |   | **$** | **96,026** |   | $ | 34,864 |
| Pro                  forma Net                  income     | **$**                                               | **42,942**  |                                               | $ | 21,058 |   | **$** | **103,976** |   | $ | 44,462 |
|                                                       |                                                |        |                                               |   |   |   |   |   |   |   |   |
| Net                  income                  per share:    |                                                |        |                                               |   |   |   |   |   |   |   |   |
|    Diluted                  - as reported   |                                                | **$2.81**   |                                               |   | $1.29 |   |   | **$6.57** |   |   | $2.53 |
|    Pro                  forma Diluted       |                                                | **$2.90**   |                                               |   | $1.50 |   |   | **$7.11** |   |   | $3.23 |

***Subsequent        to September 30, 2005***

| ·   | In                  October                  2005, BMC Construction acquired a framing services business for                  approximately $71.9 million in cash.  Framing services                  are                  provided to high-volume production homebuilders in San Diego.                   Information required to complete the purchase price allocation                  is not yet                  available.  Final allocation of the purchase price                  will be                  completed as soon as this information is                  available.   |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|                              | **Call                  Options**                                     |                                                                  | **Put                  Options**                                    |
|-----------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------|---------------------------------------------------------------------|
| BBP                  Companies    | July                  2008                  through June 2015         |                                                                  | July                  2008                  through June 2015       |
| Riggs                  Plumbing   | April                  2008                  through March 2013       |                                                                  | April                  2008                  through March 2013     |
| RCI                  Construction | January                  2008                  through January 2012   |                                                                  | January                  2008                  through January 2012 |
| A-1                  Truss        | September                  2004 through August 2014                   | September                  2009 through August 2014                   |
| WBC                  Mid-Atlantic | October                  2003                  through September 2010 | October                  2008                  through September 2010 |
| WBC                  Construction | January                  2006                  through January 2009   |                                                                  | January                  2007                  through January 2009 |

***6.***
***Intangible        Assets and Goodwill***

|                                                        | **September                  30, 2005**       |
|-------------------------------------------------------------|-----------------------------------------------|
|                                                        | **Gross****Carrying                  Amount** |   | **Accumulated                  Amortization** |   | **Net                  CarryingAmount** |
|    Customer                  relationships   | $                                             | 26,387  |   | $ | (7,511) |   | **$** | **18,876 ** |
|    Covenants                  not to compete |                                          | 4,641  |   |   | (1,939) |   |   | **2,702 ** |
|    Trade                  names              |                                          | 204  |   |   | (73) |   |   | **131 ** |
|    Other                                     |                                          | 146  |   |   | (18) |   |   | **128 ** |
|                                                        | $                                             | 31,378  |   | $ | (9,541) |   | **$** | **21,837 ** |

|                                                        | **December                  31, 2004**        |
|-------------------------------------------------------------|-----------------------------------------------|
|                                                        | **Gross****Carrying                  Amount** |   | **Accumulated                  Amortization** |   | **Net                  CarryingAmount** |
|    Customer                  relationships   | $                                             | 17,134  |   | $ | (5,116) |   | $ | 12,018  |
|    Covenants                  not to compete |                                          | 2,919  |   |   | (1,426) |   |   | 1,493  |
|    Trade                  names              |                                          | 204  |   |   | (23) |   |   | 181  |
|    Other                                     |                                          | 500  |   |   | (500) |   |   | ―  |
|                                                        | $                                             | 20,757  |   | $ | (7,065) |   | $ | 13,692  |

----

Index

|                                                                | **BMC                    West** |             | **BMC                    Construction** |   | **Total**         |
|---------------------------------------------------------------------|---------------------------------|------------------|-----------------------------------------|--------|-------------------|
| Balance                    at                    December 31, 2004  | $                               | 20,063      |                                    | $      | 60,253       |   | $ | 80,316  |
|                       Goodwill acquired                   |                            | 140         |                                    |   | 80,270       |   |   | 80,410  |
| Balance                    at                    September 30, 2005 | **$**                           | **20,203 ** |                                    | **$**  | **140,523 ** |   | **$** | **160,726 ** |

***7.***
***Debt***

| **As                    of                    September 30, 2005** |   | **Stated****Interest Rate** | **Notional****Amount of****Interest****Rate Swaps** | **Effective                    Interest Rate**                                             |
|--------------------------------------------------------------------|--------|----------------------------------|---------------------------------------------------------------|--------------------------------------------------------------------------------------------|
|                                                               |   | **Balance**                      |                                                          | **Average****for Quarter**                                                            | **As                    of****September 30** |
| Revolving                    credit facility                       | **$**  | **59,300 **                 |                                                          | LIBOR                    plus0.75%                    orPrime                    plus0.00% | **$** | **― ** | **6.46%** |   | **5.64%** |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |
| Term                    note                                       |   | **75,000 **                 |                                                          | LIBOR                    plus0.75%                    orPrime                    plus0.00% |   | **― ** | **4.25%** |   | **4.78%** |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |
| Term                    note                                       |   | **122,188 **                |                                                          | LIBOR                    plus1.75%                                                         |   | **100,000 ** | **5.98%** |   | **6.08%** |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |
| Other                                                              |   | **17,058 **                 |                                                          | Various                                                                                    |   | **― ** | **―**    |   | **―**    |
|                                                               |   |                             | **273,546 **                                             |                                                                                       |   | **$** | **100,000 ** |   |   |   |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |   |
| Less:  Current                    portion                |   | **8,973 **                  |                                                          |                                                                                       |   |   |   |   |   |
|                                                               |   | **$**                            | **264,573 **                                             |                                                                                       |   |   |   |   |   |   |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |   |
| **As                    of                    December 31, 2004**  |   | **Stated****Interest Rate** | **Notional****Amount of****Interest****Rate Swaps** | **Effective                    Interest Rate**                                             |
|                                                               |   | **Balance**                      |                                                          | **Average                    for Year**                                               |   | **As                    of****December 31** |
| Revolving                    credit facility                       | $      | 81,200                      |                                                          | LIBOR                    plus1.75%                    orPrime                    plus0.50% | $ | ―  | 4.88% |   | 5.25% |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |
| Term                    note                                       |   | 123,125                     |                                                          | LIBOR                    plus2.00%                                                         |   | 100,000  | 5.65% |   | 6.80% |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |
| Other                                                              |   | 5,498                       |                                                          | Various                                                                                    |   | ―  | ―    |   | ―    |
|                                                               |   |                             | 209,823                                                  |                                                                                       |   | $ | 100,000  |   |   |   |
|                                                               |   |                             |                                                          |                                                                                       |   |   |   |   |   |   |
| Less:  Current                    portion                |   | 3,404                       |                                                          |                                                                                       |   |   |   |   |   |
|                                                               |   | $                                | 206,419                                                  |                                                                                       |   |   |   |   |   |   |

----

Index

***Revolving        Credit Facility***

***Term        Notes***

***Other***

***Expansion        of Credit Facility, Covenants and Maturities***

|       |   |          |
|------------|--------|---------------|
| 2005       | $      | 4,010    |
| 2006       |   | 10,075   |
| 2007       |   | 13,642   |
| 2008       |   | 13,843   |
| 2009       |   | 77,780   |
| Thereafter |   | 154,196  |
|       | $      | 273,546  |

----

Index

***Hedging        Activities***

***8.***
***Shareholders’        Equity***

***Common        Shares***

***9.***
***Legal        Proceedings***

----

Index

***10.***
***Segment        Information***

----

Index

|                                                             | **Sales** |                               | **Income                  BeforeTaxes and Minority Interests** |
|------------------------------------------------------------------|-----------|------------------------------------|----------------------------------------------------------------|
|                                                             |      | **Segment                  Sales** |                                                           |   | **Intersegment                  Eliminations** |   |   | **Total** |   |
|  **Three                  Months Ended September 30, 2005** |      |                               |                                                           |   |   |   |   |   |
|    BMC                  West                      | $         | 418,073                       |                                                           | $ | (645) |   | **$** | **417,428 ** |   | **$** | **43,644 ** |
|    BMC                  Construction              |      | 403,013                       |                                                           |   | (613) |   |   | **402,400 ** |   |   | **47,118 ** |
|    Corporate                  and other           |      | ―                       |                                                           |   | ―  |   |   | **― ** |   |   | **(14,942)** |
|                                                             | $         | 821,086                       |                                                           | $ | (1,258) |   | **$** | **819,828 ** |   |   | **75,820 ** |
| Interest                  expense                                |      |                               |                                                           |   |   |   |   |   |   |   | **3,629 ** |
|                                                             |      |                               |                                                           |   |   |   |   |   |   | **$** | **72,191 ** |
|                                                             |      |                               |                                                           |   |   |   |   |   |   |   |   |
| **Three                  Months Ended September 30, 2004**       |      |                               |                                                           |   |   |   |   |   |
|    BMC                  West                      | $         | 379,017                       |                                                           | $ | (17) |   | $ | 379,000  |   | $ | 31,564  |
|    BMC                  Construction              |      | 212,667                       |                                                           |   | (187) |   |   | 212,480  |   |   | 17,941  |
|    Corporate                  and other           |      | ―                       |                                                           |   | ―  |   |   | ―  |   |   | (14,425) |
|                                                             | $         | 591,684                       |                                                           | $ | (204) |   | $ | 591,480  |   |   | 35,080  |
| Interest                  expense                                |      |                               |                                                           |   |   |   |   |   |   |   | 4,273  |
|                                                             |      |                               |                                                           |   |   |   |   |   |   | $ | 30,807  |

|                                                            | **Sales** |                               | **Income                  BeforeTaxes and Minority Interests** |
|-----------------------------------------------------------------|-----------|------------------------------------|----------------------------------------------------------------|
|                                                            |      | **Segment                  Sales** |                                                           |   | **Intersegment                  Eliminations** |   |   | **Total** |   |
|  **Nine                  Months Ended September 30, 2005** |      |                               |                                                           |   |   |   |   |   |
|    BMC                  West                     | $         | 1,147,122                     |                                                           | $ | (1,122) |   | **$** | **1,146,000 ** |   | **$** | **113,549 ** |
|    BMC                  Construction             |      | 949,162                       |                                                           |   | (885) |   |   | **948,277 ** |   |   | **112,406 ** |
|    Corporate                  and other          |      | ―                       |                                                           |   | ―  |   |   | **― ** |   |   | **(48,935)** |
|                                                            | $         | 2,096,284                     |                                                           | $ | (2,007) |   | **$** | **2,094,277 ** |   |   | **177,020 ** |
| Interest                  expense                               |      |                               |                                                           |   |   |   |   |   |   |   | **10,177 ** |
|                                                            |      |                               |                                                           |   |   |   |   |   |   | **$** | **166,843 ** |
|                                                            |      |                               |                                                           |   |   |   |   |   |   |   |   |
| **Nine                  Months Ended September 30, 2004**       |      |                               |                                                           |   |   |   |   |   |
|    BMC                  West                     | $         | 1,015,327                     |                                                           | $ | (1,127) |   | $ | 1,014,200  |   | $ | 72,129  |
|    BMC                  Construction             |      | 537,744                       |                                                           |   | (228) |   |   | 537,516  |   |   | 38,008  |
|    Corporate                  and other          |      | ―                       |                                                           |   | ―  |   |   | ―  |   |   | (37,933) |
|                                                            | $         | 1,553,071                     |                                                           | $ | (1,355) |   | $ | 1,551,716  |   |   | 72,204  |
| Interest                  expense                               |      |                               |                                                           |   |   |   |   |   |   |   | 10,184  |
|                                                            |      |                               |                                                           |   |   |   |   |   |   | $ | 62,020  |

----

Index

**Item        2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL        CONDITION        AND              RESULTS        OF OPERATIONS**

***Overview***

**BMC        West**
**BMC        Construction**

| ·   | A                  framing                  services business in San Diego (October                  2005) |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | A                  concrete                  services business in Las Vegas and concrete and plumbing services                  in                  southern California (September                  2005) |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  stucco                  business in Las Vegas (June 2005) |
|--------------------|------------------------------------------------------------------------------|

| ·   | BBP                  Companies                  - a 51% interest in a concrete services business in Arizona (July                  2005) |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Riggs                  Plumbing - a 73% interest in a plumbing services business in Phoenix                  and                  Tucson (60% acquired in April 2005 and 13% in July                  2005) |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | RCI                  Construction - a 51% interest in a framing services business in                  Chicago                  (January 2005) |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

***Results        of Operations***

|                                                                                                                                           | **Three                  Months Ended September 30** |              | **Nine                  Months Ended September 30** |
|------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|-------------------|-----------------------------------------------------|
|                                                                                                                                           | **2005**                                             |              | 2004                                                |   | **2005** |   | 2004 |
| **Sales**                                                                                                                                      |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                     Building products                                                                                                | **$**                                                | **360.2 **   | **43.9%**                                           |   | $ | 335.8  | 56.8% |   | **$** | **997.7 ** | **47.6%** |   | $ | 902.4  | 58.2% |
|                     Construction services                                                                                            |                                                 | **459.6 **   | **56.1   **                          |   |   | 255.7  | 43.2    |   |   | **1,096.6 ** | **52.4   ** |   |   | 649.3  | 41.8    |
| **                       Total sales**                                                                                |                                                 | **819.8 **   |                                                |   |   | 591.5  |   |   |   | **2,094.3 ** |   |   |   | 1,551.7  |   |
|                                                                                                                                           |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Costs                  and operating expenses**                                                                                              |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                     Cost of goods sold                                                                                               |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                        Building products                                                                              |                                                 | **261.4 **   | **72.6   **                          |   |   | 255.5  | 76.1    |   |   | **730.8 ** | **73.2   ** |   |   | 685.9  | 76.0    |
|                        Construction services                                                                          |                                                 | **371.9 **   | **80.9   **                          |   |   | 217.2  | 84.9    |   |   | **889.3 ** | **81.1   ** |   |   | 558.8  | 86.1    |
|    Impairment                  of assets                                                                                        |                                                 | **― ** | **―   **                       |   |   | ―  | ―    |   |   | **0.5 ** | **―   ** |   |   | 1.3  | 0.1    |
|    Selling,                  general and      administrative                  expenses            |                                                 | **112.1 **   | **13.7   **                          |   |   | 85.3  | 14.4    |   |   | **299.4 ** | **14.3   ** |   |   | 235.5  | 15.2    |
|    Other                  income, net                                                                                           |                                                 | **(1.4)**         | **(0.2)                   **                   |   |   | (1.6) | (0.3)                    |   |   | **(2.7)** | **(0.1)                   ** |   |   | (2.0) | (0.1)                    |
|                        Total costs and operating                          expenses |                                                 | **744.0 **   | **90.8   **                          |   |   | 556.4  | 94.1    |   |   | **1,917.3 ** | **91.5   ** |   |   | 1,479.5  | 95.3    |
|                                                                                                                                           |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from operations**                                                                                                    |                                                 | **75.8 **    | **9.2   **                           |   |   | 35.1  | 5.9    |   |   | **177.0 ** | **8.5   ** |   |   | 72.2  | 4.7    |
|                                                                                                                                           |                                                 |              |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense                                                                                                              |                                                 | **3.6 **     | **0.4   **                           |   |   | 4.3  | 0.7    |   |   | **10.2 ** | **0.5   ** |   |   | 10.2  | 0.7    |
| Income                  before                  income taxes and   minority interests                                           |                                                 | **72.2 **    | **8.8   **                           |   |   | 30.8  | 5.2    |   |   | **166.8 ** | **8.0   ** |   |   | 62.0  | 4.0    |
| Income                  taxes                                                                                                                  |                                                 | **25.4 **    | **3.1   **                           |   |   | 11.8  | 2.0    |   |   | **58.8 ** | **2.8   ** |   |   | 22.7  | 1.5    |
| Minority                  interests income                                                                                                     |                                                 | **(5.2)**         | **(0.6)                   **                   |   |   | (0.9) | (0.1)                    |   |   | **(12.0)** | **(0.6)                   ** |   |   | (4.4) | (0.3)                    |
| **Net                  income**                                                                                                                | **$**                                                | **41.6 **    | **5.1   **                           |   | $ | 18.1  | 3.1    |   | **$** | **96.0 ** | **4.6   ** |   | $ | 34.9  | 2.2    |

**THIRD        QUARTER OF 2005 COMPARED TO THE THIRD QUARTER OF 2004**

***Consolidated        Financial Results***

|                                                     | **Three                  Months Ended****September                  30** |            |   |   |        |   |
|----------------------------------------------------------|--------------------------------------------------------------------------|-----------------|--------|--------|-------------|--------|
|                                                     | **2005**                                                                 |            | 2004   |   | Change      |
| Sales                                                    |                                                                     |            |   |   |        |   |   |   |   |
|                     Building products          | **$**                                                                    | **360.2 ** |   | $      | 335.8  |   | $ | 24.4  | 7.3% |
|                     Construction services      |                                                                     | **459.6 ** |   |   | 255.7  |   |   | 203.9  | 79.7    |
|                                                     | **$**                                                                    | **819.8 ** |   | $      | 591.5  |   | $ | 228.3  | 38.6    |
|                                                     |                                                                     |            |   |   |        |   |   |   |   |
| Income                  from                  operations | **$**                                                                    | **75.8 **  |   | $      | 35.1   |   | $ | 40.7  | 116.0    |

----

Index

***BMC        West***

|                                                     | **Three                  Months Ended****September                  30** |            |   |   |        |   |
|----------------------------------------------------------|--------------------------------------------------------------------------|-----------------|--------|--------|-------------|--------|
|                                                     | **2005**                                                                 |            | 2004   |   | Change      |
|                                                     |                                                                     |            |   |   |        |   |   |   |   |
| Sales                                                    | **$**                                                                    | **417.4 ** |   | $      | 379.0  |   | $ | 38.4  | 10.1% |
|                                                     |                                                                     |            |   |   |        |   |   |   |     |
| Income                  from                  operations | **$**                                                                    | **43.6 **  |   | $      | 31.6   |   | $ | 12.0  | 38.0    |

***BMC        Construction***

|                                                     | **Three                  Months Ended****September                  30** |            |   |   |          |   |
|----------------------------------------------------------|--------------------------------------------------------------------------|-----------------|--------|--------|---------------|--------|
|                                                     | **2005**                                                                 |            | 2004   |   | Change        |
|                                                     |                                                                     |            |   |   |          |   |   |   |   |
| Sales                                                    | **$**                                                                    | **402.4 ** |   | $      | 212.5    |   | $ | 189.9  | 89.4% |
|                     Less: Acquisitions         |                                                                     | **(116.8)**     |   |   | ―  |   |   | (116.8) | ―    |
|                                                     | **$**                                                                    | **285.6 ** |   | $      | 212.5    |   | $ | 73.1  | 34.4    |
|                                                     |                                                                     |            |   |   |          |   |   |   |   |
| Income                  from                  operations | **$**                                                                    | **47.1 **  |   | $      | 17.9     |   | $ | 29.2  | 163.1    |
|                     Less: Acquisitions         |                                                                     | **(11.7)**      |   |   | ―  |   |   | (11.7) | ―    |
|                                                     | **$**                                                                    | **35.4 **  |   | $      | 17.9     |   | $ | 17.5  | 97.8    |

----

Index

***Corporate        and Other***

|                                                           | **Three                  Months Ended****September                  30** |           |   |   |       |   |
|----------------------------------------------------------------|--------------------------------------------------------------------------|----------------|--------|--------|------------|--------|
|                                                           | **2005**                                                                 |           | 2004   |   | Change     |
|                                                           |                                                                     |           |   |   |       |   |   |   |   |
| Corporate                  and                  other expenses | **$**                                                                    | **14.9 ** |   | $      | 14.4  |   | $ | 0.5  | 3.5% |

**NINE        MONTHS OF 2005 COMPARED TO THE NINE MONTHS OF 2004**

***Consolidated        Financial Results***

|                                                     | **Nine                  Months Ended****September                  30** |              |   |   |          |   |
|----------------------------------------------------------|-------------------------------------------------------------------------|-------------------|--------|--------|---------------|--------|
|                                                     | **2005**                                                                |              | 2004   |   | Change        |
| Sales                                                    |                                                                    |              |   |   |          |   |   |   |   |
|                     Building products          | **$**                                                                   | **997.7 **   |   | $      | 902.4    |   | $ | 95.3  | 10.6% |
|                     Construction services      |                                                                    | **1,096.6 ** |   |   | 649.3    |   |   | 447.3  | 68.9    |
|                                                     | **$**                                                                   | **2,094.3 ** |   | $      | 1,551.7  |   | $ | 542.6  | 35.0    |
|                                                     |                                                                    |              |   |   |          |   |   |   |   |
| Income                  from                  operations | **$**                                                                   | **177.0 **   |   | $      | 72.2     |   | $ | 104.8  | 145.2    |

----

Index

***BMC        West***

|                                                     | **Nine                  Months Ended****September                  30** |              |   |   |          |   |
|----------------------------------------------------------|-------------------------------------------------------------------------|-------------------|--------|--------|---------------|--------|
|                                                     | **2005**                                                                |              | 2004   |   | Change        |
|                                                     |                                                                    |              |   |   |          |   |   |   |   |
| Sales                                                    | **$**                                                                   | **1,146.0 ** |   | $      | 1,014.2  |   | $ | 131.8  | 13.0% |
|                                                     |                                                                    |              |   |   |          |   |   |   |     |
| Income                  from                  operations | **$**                                                                   | **113.5 **   |   | $      | 72.1     |   | $ | 41.4  | 57.4    |

***BMC        Construction***

|                                                     | **Nine                  Months Ended****September                  30** |            |   |   |          |   |
|----------------------------------------------------------|-------------------------------------------------------------------------|-----------------|--------|--------|---------------|--------|
|                                                     | **2005**                                                                |            | 2004   |   | Change        |
|                                                     |                                                                    |            |   |   |          |   |   |   |   |
| Sales                                                    | **$**                                                                   | **948.3 ** |   | $      | 537.5    |   | $ | 410.8  | 76.4% |
|                     Less:  Acquisitions   |                                                                    | **(193.8)**     |   |   | ―  |   |   | (193.8) | ―    |
|                                                     | **$**                                                                   | **754.5 ** |   | $      | 537.5    |   | $ | 217.0  | 40.4    |
|                                                     |                                                                    |            |   |   |          |   |   |   |   |
| Income                  from                  operations | **$**                                                                   | **112.4 ** |   | $      | 38.0     |   | $ | 74.4  | 195.8    |
|                     Less:  Acquisitions   |                                                                    | **(16.2)**      |   |   | ―  |   |   | (16.2) | ―    |
|                                                     | **$**                                                                   | **96.2 **  |   | $      | 38.0     |   | $ | 58.2  | 153.2    |

----

Index

***Corporate        and Other***

|                                                           | **Nine                  Months Ended****September                  30** |           |   |   |       |   |
|----------------------------------------------------------------|-------------------------------------------------------------------------|----------------|--------|--------|------------|--------|
|                                                           | **2005**                                                                |           | 2004   |   | Change     |
|                                                           |                                                                    |           |   |   |       |   |   |   |   |
| Corporate                  and                  other expenses | **$**                                                                   | **48.9 ** |   | $      | 37.9  |   | $ | 11.0  | 29.0% |

**LIQUIDITY        AND CAPITAL RESOURCES**

***Operations***

***Capital        Investments and Acquisitions***

***Financing***

----

Index

***Revolving        Credit Facility***

***Term        Notes***

***Other***

***Expansion        of Credit Facility, Covenants and Maturities***

***Hedging        Activities***

----

Index

***Equity***

***Business        Risks and Forward-Looking Statements***

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

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

| ·   | changes                  in                  the business models of our                  customers; |
|--------------------|-----------------------------------------------------------------------------------------------------|

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

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

| ·   | our                  ability                  to identify suitable acquisition                  candidates; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

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

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

----

Index

| ·   | implementation                  of cost structures that align with revenue                  growth; |
|--------------------|-----------------------------------------------------------------------------------------------------|

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

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

***Critical        Accounting Estimates***

| ·   | revenue                  recognition for construction                  services |
|--------------------|---------------------------------------------------------------------------------|

| ·   | estimated                  losses on uncompleted contracts and changes in contract                  estimates |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | goodwill |
|--------------------|----------|

| ·   | insurance                  deductible reserves |
|--------------------|------------------------------------------------|

----

Index

**Item        3 **
*** ***
**Quantitative        and Qualitative Disclosures about Market Risk**

----

Index

**Item        4 **
*-*
**        Controls        and Procedures**

**Evaluation        of Disclosure Controls and Procedures**

**Changes        in        Internal Controls Over Financial Reporting**

----

Index

**PART        II -        OTHER INFORMATION**

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

**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**

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

**Item        6 **
**        Exhibits**

| (a)    |   | Exhibits               |   |                                                                                                 |
|--------|--------|------------------------|--------|------------------------------------------------------------------------------------------------------|
|   |   |                   |   |                                                                                                 |
|   |   | **Number**             |   | **Description**                                                                                      |
|   |   |                   |   |                                                                                                 |
|   |   |    11.0 |   | Statement                  regarding computation of earnings per share (see Note                  2) |
|   |   |                   |   |                                                                                                 |
|   |   |    31.1 |   | Section                  302                  Certification                                          |
|   |   |                   |   |                                                                                                 |
|   |   |    31.2 |   | Section                  302                  Certification                                          |
|   |   |                   |   |                                                                                                 |
|   |   |    32.0 |   | Section                  906                  Certifications                                         |

----

Index

**SIGNATURES**

|                                    | BUILDING                  MATERIALS HOLDING CORPORATION                                                                                                                                         |
|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date:                  November 1, 2005 | */s/                  Robert E. Mellor*                                                                                                                                                              |   |
|                                    | Robert                  E.                  MellorChairman                  of                  the Board, President and Chief Executive Officer(Principal                  Executive Officer)  |
| Date:                  November 1, 2005 | */s/                  William M. Smartt*                                                                                                                                                             |   |
|                                    | William                  M.                  SmarttSenior                  Vice                  President and Chief Financial Officer (Principal                  Financial Officer)                |

----