================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ----------------

                                    FORM 10-K

            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                      OR

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

               FOR THE TRANSITION PERIOD FROM ________ TO ________

                         COMMISSION FILE NUMBER 33-81808


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

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

              1361 ALPS ROAD                                       07470
            WAYNE, NEW JERSEY                                    (Zip Code)
(Address of Principal Executive Offices)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (973) 628-3000

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

                    SEE TABLE OF ADDITIONAL REGISTRANTS BELOW

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

      As of March 20, 2002,  1,015,010 shares of Class A Common Stock, $.001 par
value,  and 15,000 shares of Class B Common Stock,  $.001 par value, of Building
Materials  Corporation of America were  outstanding.  There is no trading market
for the common stock of Building Materials Corporation of America.

      As of March 20, 2002, each of the additional registrants had the number of
shares  outstanding  which is shown on the table  below.  No shares were held by
non-affiliates.

================================================================================

<PAGE>

<TABLE>
<CAPTION>
                             ADDITIONAL REGISTRANTS

                                      STATE OR OTHER                    REGISTRATION NO./  ADDRESS, INCLUDING ZIP CODE AND
                                      JURISDICTION OF      NO. OF        I.R.S. EMPLOYER     TELEPHONE NUMBER, INCLUDING
   EXACT NAME OF REGISTRANT          INCORPORATION OR      SHARES        IDENTIFICATION      AREA CODE, OF REGISTRANT'S
  AS SPECIFIED IN ITS CHARTER          ORGANIZATION      OUTSTANDING         NUMBER          PRINCIPAL EXECUTIVE OFFICE
-----------------------------         --------------     ----------      --------------       -------------------------

<S>                                      <C>                 <C>          <C>                 <C>
Building Materials                       Delaware            10           333-69749-01/       1361 Alps Road
  Manufacturing Corporation                                                22-3626208         Wayne, New Jersey 07470
                                                                                              (973) 628-3000

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



<PAGE>

                                     PART I

ITEM 1.BUSINESS

GENERAL

     Building  Materials  Corporation of America  ("BMCA") is a leading national
manufacturer of a broad line of asphalt roofing products and accessories for the
steep  slope  and low  slope  roofing  markets.  We also  manufacture  specialty
building  products  and  accessories  for the  professional  and  do-it-yourself
remodeling and residential construction industries. BMCA, incorporated under the
laws of  Delaware  in  1994,  is a  wholly-owned  subsidiary  of  BMCA  Holdings
Corporation,  which is a  wholly-owned  subsidiary of G-I Holdings Inc. In 1994,
BMCA  acquired  the  operating  assets and certain  liabilities  of GAF Building
Materials Corporation, whose name has changed to G-I Holdings, Inc. G-I Holdings
Inc. is a  wholly-owned  subsidiary  of G Holdings  Inc.  As of March 20,  2002,
Samuel J. Heyman  beneficially owned (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934) approximately 99% of the capital stock of G Holdings. BMCA
does business under the name "GAF Materials Corporation."

     To facilitate  administrative  efficiency,  effective October 31, 2000, GAF
Corporation,  the  former  indirect  parent  of BMCA,  merged  into  its  direct
subsidiary,  G-I Holdings  Inc. G-I  Holdings  Inc.  then merged into its direct
subsidiary, G Industries Corp., which in turn merged into its direct subsidiary,
GAF Fiberglass  Corporation.  In that merger, GAF Fiberglass Corporation changed
its name to GAF  Corporation.  Effective  November  13,  2000,  GAF  Corporation
(formerly  known  as  GAF  Fiberglass   Corporation)   merged  into  its  direct
subsidiary,  GAF Building Materials  Corporation,  whose name was changed in the
merger to G-I Holdings Inc. G-I Holdings Inc. is now an indirect  parent of BMCA
and BMCA's direct parent is BMCA Holdings Corporation.  We refer to G-I Holdings
Inc. and any and all of its predecessor corporations, including GAF Corporation,
G-I Holdings  Inc., G  Industries  Corp.,  GAF  Fiberglass  Corporation  and GAF
Building Materials Corporation in this report as "G-I Holdings."

     On  January  5,  2001,  G-I  Holdings   filed  a  voluntary   petition  for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the District of New Jersey in Newark, New Jersey due to its
asbestos-related  bodily  injury claims  relating to the  inhalation of asbestos
fiber.  We refer to these  claims  in this  report  as  "Asbestos  Claims."  G-I
Holdings is a  privately-held  holding  company,  and we are its only  operating
subsidiary. We are not included in the bankruptcy filing.

     Our  executive  offices  are located at 1361 Alps Road,  Wayne,  New Jersey
07470 and our telephone number is (973) 628-3000.

STEEP SLOPE ROOFING

     We are a leading  manufacturer  of a complete  line of premium  steep slope
roofing products.  Steep slope roofing product sales  represented  approximately
65%, 67% and 73% of our net sales in 1999, 2000 and 2001, respectively.  We have
improved  our sales  mix of steep  slope  roofing  products  in recent  years by
increasing  our emphasis on  laminated  shingles and  accessory  products  which
generally are sold at higher prices with more attractive profit margins than our
standard strip shingle products. We believe that we are the largest manufacturer
of laminated steep slope roofing shingles and the second largest manufacturer of
strip shingles in the United States.  (Statements contained in this report as to
our competitive  position are based on industry  information which we believe is
reliable.)

     Our  two  principal   lines  of  steep  slope  roofing   shingles  are  the
Timberline(R)  series  and the  Sovereign(R)  series.  We also  produce  certain
specialty shingles.

   THE TIMBERLINE(R) SERIES.

     The Timberline(R)  series offers a premium laminated product line that adds
dramatic shadow lines and  substantially  improves the appearance of a roof. The
series includes:

     o  the  Timberline(R)  30 shingle,  a mid-weight  laminated  shingle  which
        serves as an economic  trade-up for  consumers,  with a 30-year  limited
        warranty;

                                        1
<PAGE>

     o  the Timberline(R) shingle, a heavyweight laminated shingle with superior
        fire resistance and durability, with a 40-year limited warranty; and

     o  the Timberline  Ultra(R) shingle, a super heavyweight  laminated shingle
        with the maximum durability of the Timberline(R) series, with a lifetime
        limited warranty.

   THE SOVEREIGN(R) SERIES.

     The Sovereign(R) series includes:

     o  the standard 3-tab Sentinel(R) shingle with a 20-year limited warranty;

     o  the Royal  Sovereign(R)  shingle,  a heavier 3-tab shingle,  designed to
        capitalize on the "middle market" for quality  shingles,  with a 25-year
        limited warranty; and

     o  the Marquis(R)  Weathermax(R) shingle, a superior performing heavyweight
        3-tab shingle with a 30-year limited warranty.

   SPECIALTY SHINGLES.

     Our specialty asphalt shingles include:

     o  the  Slateline(R)  shingle,  which  offers the  appearance  of slate and
        reduces labor costs in  installation  because of its larger size, with a
        40-year limited warranty;

     o  the Grand  Sequoia(R) shingle, a premier  architectural  shingle  with a
        lifetime limited warranty;

     o  the Country  Mansion(R) shingle,  a distinctive  high-end  architectural
        shingle with a lifetime limited warranty;

     o  the   Country  Estates(TM) shingle,    a   versatile   style,   high-end
        architectural shingle with a lifetime limited warranty; and

     o  the Grand Canyon(TM) shingle, a super heavyweight  architectural shingle
        with a rugged wood shake appearance with a lifetime limited warranty.

     WEATHER STOPPER(R) ROOFING SYSTEM.  In addition to shingles,  we supply all
the  components  necessary  to install a complete  roofing  system.  Our Weather
Stopper(R)  Roofing  System  begins  with  Weather  Watch(R)  and  Stormguard(R)
waterproof  underlayments  for eaves,  valleys and  flashings  to prevent  water
seepage  between  the roof  deck and the  shingles  caused by ice  build-up  and
wind-driven   rain.  Our  Weather   Stopper(R)   Roofing  System  also  includes
Shingle-Mate(R)   glass  reinforced   underlayment,   Timbertex(R)  and  Pacific
Ridge(TM) Hip and Ridge  shingles,  which are  significantly  thicker and larger
than standard hip and ridge shingles and provide  dramatic accents to the slopes
and  planes  of a roof,  and the  Cobra(R)  Ridge  Vent,  which  provides  attic
ventilation.

LOW SLOPE ROOFING

     We manufacture a full line of modified bitumen and asphalt built-up roofing
products, liquid applied membrane systems and roofing accessories for use in the
application  of low slope  roofing  systems.  We also market  thermoplastic  and
elastomeric  single-ply  products,  and in the first  quarter of 2001,  we began
manufacturing  thermoplastic  polyolefin  products  at our new  plant  in  Mount
Vernon, Indiana. Low slope roofing represented approximately 27%, 26% and 22% of
our net sales in 1999, 2000 and 2001,  respectively.  We believe that we are the
second largest manufacturer of asphalt built-up roofing products and the largest
manufacturer of modified bitumen products in the United States.

     We manufacture fiberglass-based felts under the trademark GAFGLAS(R), which
are made from  asphalt  impregnated  glass fiber mat for use as a  component  in
asphalt built-up roofing systems.  Most of our GAFGLAS(R) products are assembled
on the roof by applying successive layers of roofing with asphalt and topped, in
some  applications,  with gravel.  Thermal insulation may be applied beneath the
membrane.  We  also  manufacture  base  sheets,   flashings  and  other  roofing
accessories  for  use  in  these  systems;  our  TOPCOAT(R)  roofing  system,  a
liquid-applied  membrane  system  designed  to protect and  waterproof  existing
roofing systems; and roof maintenance products. In

                                        2
<PAGE>

addition, we market perlite roofing insulation products, which consist of low
thermal insulation that is installed as part of a low slope roofing application
below the roofing membrane, isocyanurate foam as roofing insulation, packaged
asphalt and accessories such as vent stacks, roof insulation fasteners, cements
and coatings.

     We sell  modified  bitumen  products  under  the  Ruberoid(R)  and  Brai(R)
Supreme(TM)   trademarks.   Modified   bitumen   products  are  used   primarily
in  re-roofing   applications   or  in  combination   with  glass  membranes  in
GAF CompositeRoof(TM)  systems.  These  products  consist of a roofing  membrane
utilizing  polymer-modified asphalt, which strengthens and increases flexibility
and is  reinforced  with a  polyester  non-woven  mat or a glass  mat.  Modified
bitumen systems provide high strength  characteristics,  such as weatherability,
water resistance and labor cost savings due to ease of application.

SPECIALTY BUILDING PRODUCTS AND ACCESSORIES

     We  manufacture  and market a variety of  specialty  building  products and
accessories for the professional and  do-it-yourself  remodeling and residential
construction industries. Specialty building products and accessories represented
approximately  8%,  7%  and  5% of  our  net  sales  in  1999,  2000  and  2001,
respectively.  These products primarily consist of steep slope attic ventilation
systems  and  metal  and  fiberglass  air  distribution  products  for the  HVAC
industry.

MARKETING AND SALES

     We have one of the  industry's  largest sales forces.  A staff of technical
professionals  who work directly with architects,  consultants,  contractors and
building owners  provides  support to the sales force. We market our roofing and
specialty  building  products  and  accessories  through  our own sales force of
approximately  250  experienced,   full-time  employees  and  independent  sales
representatives  who operate from six regional sales offices  located across the
United  States.  A major  portion of our roofing  product sales are to wholesale
distributors  who resell our products to roofing  contractors and retailers.  We
believe that our nationwide  coverage has  contributed to certain of our roofing
products being among the most recognized and requested brands in the industry.

     Our Customer Advantage(TM) Program offers marketing and support services to
a nationwide  network of  MasterElite(TM)  steep slope roofing  contractors  and
Authorized  Installers.  We view the Master Elite(TM) contractors and Authorized
Installers as an effective extension of our sales force which takes our products
directly to the  homeowner.  We also have  established  programs  with  approved
MasterSelect(TM),  Platinum(TM)  and Pride(TM)  contractors  to promote  premium
warranty systems and service programs for our low slope roofing products.

     No single  customer  accounted  for more than 10% of our net sales in 2001,
except for The Home Depot,  Inc.  and  American  Builders &  Contractors  Supply
Company, Inc.


RAW MATERIALS

     The  major  raw  materials  required  for the  manufacture  of our  roofing
products  are  asphalt,  mineral  stabilizer,  glass  fiber,  glass  fiber  mat,
polyester mat and granules.  Asphalt and mineral stabilizer are available from a
large number of suppliers on  substantially  similar  terms.  We currently  have
contracts  with  several  of  these   suppliers  and  others  are  available  as
substitutes. In 2001, prices of most raw materials other than asphalt and energy
have been relatively  stable,  rising moderately with general industrial prices,
while the  decrease in the price of asphalt was driven  mostly by the decline in
crude oil prices during 2001.

     The major raw  materials  required  for the  manufacture  of our  specialty
building  products  and  accessories  are steel  tubes,  sheet  metal  products,
aluminum,  motors and  cartons.  These raw  materials,  other than  motors,  are
commodity-type  products,  the pricing for which is driven by supply and demand.
Prices of other raw  materials  used in the  manufacture  of specialty  building
products and accessories are more closely tied to movements in inflation  rates.
In 2001,  substantially all of the motors used in our ventilation  products were
purchased  from a  domestic  supplier.  All of these  raw  materials,  including
motors, are available from a large number of suppliers on substantially  similar
terms.

     Five of our roofing  plants  have easy  access to deep water ports  thereby
permitting  delivery of asphalt by ship, the most economical means of transport.
Our Nashville, Tennessee plant manufactures a significant portion of our

                                        3
<PAGE>

glass fiber  requirements  for use in our Chester,  South  Carolina and Shafter,
California plants which  manufacture glass fiber mat substrate.  We purchase all
of  our   requirements   for  colored   roofing   granules  from  an  affiliate,
International Specialty Products Inc., under a requirements contract, except for
the  requirements  of certain of our roofing  plants which are supplied by third
parties.  This  contract  expires on December 31, 2002,  unless  extended by the
parties. We refer to International Specialty Products Inc. as "ISP".

SEASONAL VARIATIONS AND WORKING CAPITAL

     Sales of roofing and specialty  building  products and  accessories  in the
northern regions of the United States generally decline during the winter months
due to adverse weather  conditions.  Generally,  our inventory practice includes
increasing  inventory  levels in the first and second  quarters in order to meet
peak season demand in the months of June through November.

WARRANTY CLAIMS

     We provide  certain  limited  warranties  covering  most of our steep slope
roofing  products for periods  generally  ranging from 20 to 40 years,  although
certain of our styles provide for a lifetime limited warranty. Although terms of
warranties  vary, we believe that our warranties  generally are consistent  with
those offered by our competitors.  We also offer certain limited  warranties and
guarantees of varying  duration  covering most of our low slope roofing products
and limited  warranties  covering  most of our specialty  building  products and
accessories  for periods  generally  ranging from 5 to 10 years,  with  lifetime
limited  warranties  on  certain  products.  From time to time,  we  review  the
reserves established for estimated probable future warranty claims.

COMPETITION

     The roofing products  industry is highly  competitive and includes a number
of  national  competitors.  These  competitors  in the steep  slope  roofing and
accessories markets are Owens-Corning,  Tamko, Elcor and Certainteed, and in the
low slope  roofing  market  are  Johns  Manville,  Firestone  and  Carlisle.  In
addition, there are numerous regional competitors,  principally in the low slope
roofing market.

     Competition   is  based   largely  upon   products  and  service   quality,
distribution  capability,  price  and  credit  terms.  We  believe  that  we are
well-positioned  in the  marketplace  as a result of our broad  product lines in
both the steep slope and low slope markets,  consistently  high product quality,
strong sales force and national  distribution  capabilities.  As a result of the
growth  in  demand  for  premium  laminated   shingles,   a  number  of  roofing
manufacturers,  including our company,  have increased their  laminated  shingle
production capacity in recent years.

     Our  specialty  building  products  and  accessories   business  is  highly
competitive with numerous competitors due to the breadth of the product lines we
market. Major competitors include Certainteed, Solar Group Inc., Southwark, Inc,
Lomanco Inc. and Standex Air Distribution Products.


RESEARCH AND DEVELOPMENT

     We  primarily  focus  our  research  and  development   activities  on  the
development of new products, process improvements and the testing of alternative
raw materials and supplies. Our research and development  activities,  dedicated
to steep  slope,  low slope and  fiberglass  products,  are located at technical
centers  at Wayne,  New  Jersey  and  Nashville,  Tennessee.  Our  research  and
development expenditures were approximately $6.5, $5.9 and $5.9 million in 1999,
2000 and 2001, respectively.

PATENTS AND TRADEMARKS

     We own or license  approximately  110 domestic  and 115 foreign  patents or
patent applications.  In addition,  we own or license approximately 220 domestic
and 60 foreign  trademark  registrations or  applications.  While we believe the
patent  protection  covering  certain of our  products  to be  material to those
products,  we do not  believe  that any single  patent,  patent  application  or
trademark  is  material  to our  business  or  operations.  We believe  that the
duration of the  existing  patents and patent  licenses is  consistent  with our
business needs.

                                        4
<PAGE>

ENVIRONMENTAL COMPLIANCE

     Since 1970, federal, state and local authorities have adopted and amended a
wide  variety of federal,  state and local  environmental  laws and  regulations
relating to environmental  matters. These laws and regulations affect us because
of the nature of our operations and that of our  predecessor  and certain of the
substances  that are, or have been used,  produced or  discharged  at our or its
plants or at other  locations.  We made capital  expenditures  of  approximately
$2.7,  $2.5 and $1.3 million in 1999, 2000 and 2001,  respectively,  relating to
environmental  compliance.  These  expenditures  are  included in  additions  to
property, plant and equipment. We anticipate that aggregate capital expenditures
relating to environmental compliance in 2002 and 2003 will be approximately $1.0
million in each year.

     The environmental laws and regulations deal with air and water emissions or
discharges into the environment, as well as the generation,  storage, treatment,
transportation and disposal of solid and hazardous waste, and the remediation of
any releases of  hazardous  substances  and  materials  to the  environment.  We
believe that our  manufacturing  facilities comply in all material respects with
applicable  laws and  regulations.  Although  we  cannot  predict  whether  more
burdensome  requirements  will be adopted  by  governmental  authorities  in the
future, we believe that any potential liability for compliance with the laws and
regulations  will not  materially  affect our  business,  liquidity or financial
position.

     See Item 3, "Legal Proceedings--Environmental Litigation."


EMPLOYEES

     At December 31, 2001,  we employed  approximately  3,400 people  worldwide,
approximately  1,000 of which were subject to 13 union contracts.  The contracts
are effective for three- to four-year periods. During 2001, five labor contracts
expired and were renegotiated.  We believe that our relations with our employees
and their unions are satisfactory.



                                       5
<PAGE>

ITEM 2.PROPERTIES

     Our  corporate   headquarters   and  principal   research  and  development
laboratories  are located at a 100-acre  campus-like  office and  research  park
owned by a subsidiary of ISP, at 1361 Alps Road,  Wayne,  New Jersey  07470.  We
occupy our headquarters  pursuant to our management agreement with ISP. See Item
13, "Certain Relationships and Related Transactions--Management Agreement."

     We own or lease the  principal  real  properties  described  below.  Unless
otherwise  indicated,  the  properties  are  owned in fee.  In  addition  to the
principal  facilities  listed below,  we maintain sales offices and  warehouses,
substantially  all of which are in leased premises under  relatively  short-term
leases.

LOCATION                                FACILITY
--------------                          ------------
Alabama
     Mobile ..........................  Plant, Warehouses*
California
     Fontana .........................  Plant, Regional Sales Office
     Hollister .......................  Plant, Plant*
     Shafter .........................  Plant
     Stockton ........................  Plant, Plant, Warehouse*
Delaware
     Wilmington ......................  Regional Sales Office*
Florida
     Tampa ...........................  Plant, Regional Sales Office
Georgia
     Atlanta .........................  Sales Office*
     Savannah ........................  Plant
Indiana
     Mount Vernon ....................  Plant, Plant
     Michigan City ...................  Plant
Illinois
     Romeoville ......................  Regional Sales Office*
Maryland
     Baltimore .......................  Plant
Massachusetts
     Millis ..........................  Plant, Warehouse*
     Walpole .........................  Plant*
Minnesota
     Minneapolis .....................  Plant
Mississippi
     Purvis ..........................  Plant
New Jersey
     North Branch ....................  Plant, Warehouse*
     North Brunswick .................  Regional Sales Office*, Warehouse*
     Wayne ...........................  Headquarters*, Corporate Administrative
                                          Offices*, Research Center*
North Carolina
     Burgaw ..........................  Plant
     Goldsboro .......................  Plant
Ohio
     Wadsworth .......................  Plant*
Pennsylvania
     Erie ............................  Plant, Warehouse*
     Wind Gap ........................  Plant
South Carolina
     Chester .........................  Plant
Tennessee
     Nashville .......................  Plant, Research Center*
Texas
     Dallas ..........................  Plant, Regional Sales Office, Warehouse*
     Fannett .........................  Warehouse

----------
*    Leased property


                                       6
<PAGE>

     In addition to the foregoing list, we have three  manufacturing  facilities
in Monroe,  Georgia;  Port Arthur,  Texas; and Albuquerque,  New Mexico that are
currently  closed.  We  believe  that our plants  and  facilities,  which are of
varying ages and are of different  construction  types, have been satisfactorily
maintained,  are in good condition, are suitable for their respective operations
and generally provide sufficient capacity to meet production  requirements.  Due
to the seasonality of our business,  our production  facilities generally run at
full capacity  during the months  necessary to meet our peak seasonal  operating
demands.  Each  plant  has  adequate  transportation  facilities  for  both  raw
materials and finished products.  In 2001, we made capital expenditures of $28.1
million relating to property, plant and equipment.

ITEM 3.LEGAL PROCEEDINGS

     BODILY INJURY CLAIMS.In  connection with its formation,  BMCA contractually
assumed  and  agreed  to  pay  the  first  $204.4  million  of  liabilities  for
asbestos-related  bodily  injury claims  relating to the  inhalation of asbestos
fiber of its parent,  G-I Holdings.  We frequently refer to these claims in this
report as  "Asbestos  Claims."  As of March 30,  1997,  BMCA had paid all of its
assumed  asbestos-related  liabilities.  In January 2001,  G-I Holdings  filed a
voluntary  petition for reorganization  under Chapter 11 of the U.S.  Bankruptcy
Code due to its Asbestos Claims. This proceeding remains pending.

     Claimants in the G-I Holdings  bankruptcy,  including  judgment  creditors,
might seek to satisfy their claims by asking the bankruptcy court to require the
sale  of  G-I  Holdings'  assets,   including  its  holdings  of  BMCA  Holdings
Corporation's  common stock and its indirect  holdings of BMCA's  common  stock.
That action could result in a change of control of our company. See Notes 11 and
16 to Consolidated Financial Statements.  In addition,  those claimants may seek
to file Asbestos  Claims against our company (with  approximately  1,900 alleged
Asbestos  Claims pending against us as of December 31, 2001). We believe that we
will  not  sustain  any  liability  in  connection   with  these  or  any  other
asbestos-related  claims.  Furthermore,  on February 2, 2001,  the United States
Bankruptcy  Court for the District of New Jersey issued a temporary  restraining
order  enjoining any existing or future  claimant from bringing  Asbestos Claims
against  BMCA.  On June 22,  2001,  following a hearing,  the  Bankruptcy  Court
converted the temporary restraining order into a preliminary  injunction,  which
is expected  to remain in effect  pending  confirmation  of a Chapter 11 plan of
reorganization  for the G-I Holdings  estate.  On February 7, 2001, G-I Holdings
filed a defendant  class action in the United  States  Bankruptcy  Court for the
District of New Jersey seeking a declaratory judgment that BMCA has no successor
liability for Asbestos  Claims against G-I Holdings and that it is not the alter
ego of G-I Holdings. This action is in a preliminary stage and no trial date has
been set by the court. As a result, it is not possible to predict the outcome of
this litigation.  While we cannot predict whether any additional Asbestos Claims
will be asserted against us, or the outcome of any litigation  relating to those
claims,  we believe that we have meritorious  defenses to any claim that we have
asbestos-related liability, although there can be no assurances in this regard.

     ACTIONS  RELATING  TO G-I  HOLDINGS'  BANKRUPTCY.On  February  8,  2001,  a
creditors  committee  established  in G-I  Holdings'  bankruptcy  case  filed  a
complaint in the United States  Bankruptcy  Court for the District of New Jersey
against G-I Holdings and BMCA. The complaint requests substantive  consolidation
of BMCA with G-I  Holdings or an order  directing  G-I Holdings to cause BMCA to
file for  bankruptcy  protection.  BMCA and G-I  Holdings  intend to  vigorously
defend the  lawsuit.  We believe that no basis exists for the court to grant the
relief  requested.  The  plaintiffs  also filed for  interim  relief  absent the
granting of their  requested  relief  described  above.  On March 21, 2001,  the
bankruptcy court refused to grant the requested interim relief.

     ASBESTOS-IN-BUILDING   CLAIMS.G-I   Holdings  has  also  been  named  as  a
co-defendant in asbestos-in-buildings  cases for economic and property damage or
other injuries based upon an alleged  present or future need to remove  asbestos
containing  materials  from  public  and  private  buildings.  We  refer  to the
asbestos-in-building claims in this report as the "Building Claims." Since these
actions were first  initiated  approximately  20 years ago, G-I Holdings has not
only  successfully  disposed  of  approximately  145 of  these  cases,  but is a
co-defendant  in only three remaining  lawsuits,  one of which has been dormant.
These  actions have been stayed as to G-I Holdings  pursuant to the G-I Holdings
bankruptcy case. No new Building Claims were filed in 2001. BMCA has not assumed
any  liabilities  with  respect to  Building  Claims,  and  believes it will not
sustain any liability in connection with such claims.

     INSURANCE  MATTERS.In January 2000 and May 2000, G-I Holdings filed summary
actions in Superior Court of New Jersey, Middlesex County against several of its
insurers, which had indicated that the Center for Claims


                                       7
<PAGE>

Resolution,  or the CCR, a  non-profit  organization  set up to  administer  and
handle  asbestos-related   personal  injury  claims  against  the  participating
companies  and in which G-I  Holdings  was a member,  had claimed a right to G-I
Holdings' insurance proceeds to satisfy what the CCR contended are G-I Holdings'
share of  settlements  entered by the CCR while G-I  Holdings  was a member.  On
March 17, 2000 and July 28, 2000,  the trial court granted  summary  judgment in
favor of G-I  Holdings,  and the CCR's  motions for a stay  pending  appeal were
denied by both the trial court and the appellate division.  All insurers in both
actions have now paid the amounts in dispute to G-I  Holdings.  The CCR's appeal
of the trial and grant of summary  judgment has been  briefed and argued  before
the appellate division.

     In October 1983,  G-I Holdings  filed a lawsuit in Los Angeles,  California
Superior  Court  against  its past  insurance  carriers  to  obtain  a  judicial
determination  that those carriers were obligated to defend and indemnify it for
Building  Claims.  G-I  Holdings  is  seeking  declaratory  relief  as  well  as
compensatory  damages. This action is presently in the pre-trial pleading stage.
The parties have agreed to hold this action in abeyance pending  developments in
the Building Claims. Because this litigation is in early stages and evidence and
interpretations  of important legal questions are presently  unavailable,  it is
not possible to predict the future of this litigation.

     In all the  Building  Claims,  which  have been  stayed as to G-I  Holdings
pursuant to the G-I Holdings  bankruptcy case, G-I Holdings'  defense costs have
been paid by one of its primary  carriers.  While G-I Holdings expects that this
primary carrier  continues to be obligated to defend and indemnify G-I Holdings,
this  primary  carrier  has  reserved  its rights to later  refuse to defend and
indemnify  G-I  Holdings and to seek  reimbursement  for some or all of the fees
paid to defend and resolve the Building Claims.

ENVIRONMENTAL LITIGATION

     We, together with other companies,  are a party to a variety of proceedings
and  lawsuits   involving   environmental   matters   under  the   Comprehensive
Environmental Response Compensation and Liability Act and similar state laws, in
which  recovery  is sought  for the cost of  cleanup  of  contaminated  sites or
remedial  obligations are imposed,  a number of which are in the early stages or
have been dormant for  protracted  periods.  We refer to these  proceedings  and
lawsuits below as "Environmental Claims."

     In  connection  with  its  formation,   BMCA   contractually   assumed  all
environmental  liabilities of G-I Holdings  relating to existing plant sites and
the business of BMCA as then conducted.  The estimates referred to below reflect
those  environmental   liabilities  assumed  by  BMCA  and  other  environmental
liabilities of our company. The environmental  liabilities of G-I Holdings which
were not assumed by BMCA relate  primarily to closed  manufacturing  facilities.
G-I Holdings  estimates  that, as of December 31, 2001, its liability in respect
of the  environmental  liabilities  of G-I  Holdings  not  assumed  by BMCA  was
approximately  $11.7 million,  before the effect of the  bankruptcy,  and before
insurance  recoveries  reflected  on its balance  sheet of $10.0  million.  BMCA
estimates  its liability as of December 31, 2001 in respect of assumed and other
environmental  liabilities  is $2.0 million,  and expects  insurance  recoveries
reflected on its balance sheet, as discussed  below, of $0.8 million.  Insurance
recoveries  reflected on these  balance  sheets relate to both past expenses and
estimated future  liabilities.  We refer to these recoveries below as "estimated
recoveries."

     At most sites,  BMCA anticipates  that liability will be apportioned  among
the companies found to be responsible  for the presence of hazardous  substances
at the site.  Although it is  difficult to predict the  ultimate  resolution  of
these claims, based on BMCA's evaluation of the financial  responsibility of the
parties  involved  and their  insurers,  relevant  legal issues and cost sharing
arrangements  now in place,  BMCA estimates that its liability in respect of all
Environmental Claims,  including certain environmental compliance expenses, will
be as discussed  above.  While we cannot predict  whether  adverse  decisions or
events can occur in the future, in the opinion of management,  the resolution of
such  matters  should not be material  to our  business,  liquidity,  results of
operations,  cash flows or financial  position.  However,  adverse  decisions or
events,  particularly  as to  increases  in  remedial  costs,  discovery  of new
contamination,  assertion of natural resource damages, and the liability and the
financial  responsibility  of our insurers and of the other parties  involved at
each site and their  insurers,  could cause us to increase  our  estimate of our
liability in respect of those matters.  It is not currently possible to estimate
the amount or range of any additional  liability.  For  information  relating to
other environmental  compliance expenses,  see Item 1,  "Business--Environmental
Compliance".


                                       8
<PAGE>

     After  considering the relevant legal issues and other  pertinent  factors,
BMCA  believes  that it will  receive  the  estimated  recoveries  and the legal
expenses  incurred  by G-I  Holdings  on BMCA's  behalf.  We also  believe  that
recoveries could be in excess of the estimated  recoveries for all Environmental
Claims,  although there can be no assurances in this regard. BMCA believes it is
entitled  to  substantially  full  defense  and  indemnity  under its  insurance
policies  for most  Environmental  Claims,  although  BMCA's  insurers  have not
affirmed a legal  obligation  under the policies to provide  indemnity for those
claims.

     In June 1997, G-I Holdings commenced litigation on behalf of itself and its
predecessors,  successors,  subsidiaries and related  corporate  entities in the
Superior Court of New Jersey,  Somerset County, seeking amounts substantially in
excess of the estimated recoveries. This action was removed to the United States
Bankruptcy  Court for the District of New Jersey in February 2001 in conjunction
with the G-I Holdings'  bankruptcy case. The action is currently  pending in the
bankruptcy court,  although the defendant insurers have filed a motion to remand
the action to the  Superior  Court of New Jersey,  Somerset  County.  While BMCA
believes that its claims are  meritorious,  there can be no assurance  that BMCA
will  prevail in its  efforts to obtain  amounts  equal to, or in excess of, the
estimated recoveries.

     We  believe  that we will  not  sustain  any  liability  for  environmental
liabilities of G-I Holdings other than those that we have contractually  assumed
or that  relate to the  operations  of our  business.  While we  cannot  predict
whether any claims for non-assumed  environmental  liabilities  will be asserted
against us or our  assets,  or the outcome of any  litigation  relative to those
claims, we believe that we have meritorious defenses to those claims.

OTHER LITIGATION

     On or about April 29, 1996, an action was commenced in the Circuit Court of
Mobile County,  Alabama against G-I Holdings on behalf of a purported nationwide
class of purchasers  of, or current owners of,  buildings  with certain  asphalt
shingles  manufactured  by G-I  Holdings  and  affiliated  entities.  The action
alleged,  among other  things,  that those  shingles  were  defective and sought
unspecified  damages on behalf of the purported class. On September 25, 1998, we
agreed to settle this  litigation  on a national,  class-wide  basis for asphalt
shingles manufactured between January 1, 1973 and December 31, 1997. Following a
fairness hearing, the court granted final approval of the class-wide  settlement
in April  1999.  Under the terms of the  settlement,  we will  provide  property
owners  whose  shingles  were  manufactured  during this period and which suffer
certain damages during the term of their original warranty period,  and who file
a qualifying  claim,  with an opportunity to receive  certain  limited  benefits
beyond those  already  provided in their  existing  warranty.  Separate  actions
commenced in 1997 in the Superior  Court of New Jersey,  Middlesex  County,  the
Superior Court of New Jersey,  Passaic County and the Supreme Court of the State
of New York, County of Nassau,  and in 1996 in Pointe Coupee Parish,  Louisiana,
on behalf of purported  classes  alleging that our shingles  were  defective and
seeking unspecified damages,  have been dismissed in light of the final approval
of the settlement agreement in the Mobile County, Alabama action.

     In October  1998,  G-I Holdings  brought suit in the Superior  Court of New
Jersey,  Middlesex  County,  on our behalf,  against certain of its insurers for
recovery of the defense  costs in  connection  with the Mobile  County,  Alabama
class  action and a  declaration  that the  insurers  are  obligated  to provide
indemnification  for all damages paid  pursuant to the  settlement of this class
action and for other damages. This action is pending.

                                      * * *

     We believe that the ultimate disposition of the cases described above under
"Environmental Litigation," "Asbestos-in-Building Claims" and "Other Litigation"
will not,  individually or in the aggregate,  have a material  adverse effect on
our liquidity, financial position or results of operations.

TAX CLAIM AGAINST G-I HOLDINGS

     On  September  15, 1997,  G-I Holdings  received a notice from the Internal
Revenue  Service of a deficiency  in the amount of $84.4  million  (after taking
into account the use of net operating  losses and foreign tax credits  otherwise
available  for use in later years) in  connection  with the formation in 1990 of
Rhone-Poulenc  Surfactants  and  Specialties,  L.P., a partnership  in which G-I
Holdings held an interest. G-I Holdings has advised us that it believes


                                       9
<PAGE>

that it will prevail in this tax matter;  although  there can be no assurance in
this regard.  We believe that the ultimate  disposition  of this matter will not
have a material adverse effect on our business, financial position or results of
operations. On September 21, 2001, the Internal Revenue Service filed a proof of
claim with respect to such  deficiency  against G-I Holdings in the G-I Holdings
bankruptcy.  If that proof of claim is sustained,  BMCA and/or certain of BMCA's
subsidiaries   together  with  G-I  Holdings  and  several  current  and  former
subsidiaries of G-I Holdings,  would be severally  liable for a portion of those
taxes and  interest.  If the IRS were to  prevail  for the  years in which  BMCA
and/or certain of its  subsidiaries  were part of the G-I Holdings  Group,  BMCA
would be  severally  liable  for  approximately  $40.0  million  in  taxes  plus
interest,  although this  calculation is subject to  uncertainty  depending upon
various factors  including G-I Holdings'  ability to satisfy its tax liabilities
and the application of tax credits and deductions.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable

                                     PART II

ITEM 5. MARKETS FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

     There is no trading  market for BMCA's common stock.  As of March 20, 2002,
there is one holder of record of BMCA's  Class A common  stock and one holder of
record of its Class B common stock. See Item 12, "Security  Ownership of Certain
Beneficial Owners and Management."

ITEM 6. SELECTED FINANCIAL DATA

     See page F-7.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     See page F-2.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     See  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of  Operations--Liquidity  and  Financial   Condition--Market-Sensitive
Instruments and Risk Management" on page F-6.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Index on page F-1 and Financial  Statements and  Supplementary  Data on
pages F-9 to F-42.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.


                                       10
<PAGE>


                                    PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  table  sets  forth  the  name,  age,   position  and  other
information with respect to the directors and executive  officers of BMCA. Under
BMCA's By-laws,  each director and executive  officer  continues in office until
the company's next annual meeting of stockholders and until his or her successor
is elected and qualified. On July 15, 1998, ISP merged with and into its parent,
ISP Holdings Inc., and ISP Holdings changed its name to International  Specialty
Products Inc. As used in this section, "ISP" refers to both companies.

<TABLE>
<CAPTION>
                                                            PRESENT PRINCIPAL OCCUPATION
NAME AND POSITION HELD                  AGE        OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
----------------------                  ---        ----------------------------------------------
<S>                                     <C>     <C>
William W. Collins
     Director, Chief Executive
     Officer and President ...........  51      Mr. Collins has been  President and Chief  Executive
                                                Officer of BMCA and some of its  subsidiaries  since
                                                September  2000 and a  director  of these  companies
                                                since  July  1999.   He  was   President  and  Chief
                                                Operating   Officer  of  the  same   companies  from
                                                February  2000 to September  2000 and was  Executive
                                                Vice President and Chief Operating  Officer of these
                                                companies  from  July  1999 to  February  2000.  Mr.
                                                Collins  also was Senior  Vice  President--Marketing
                                                and Sales,  Steep Slope Roofing Products of BMCA and
                                                some of its subsidiaries  from November 1997 to July
                                                1999.  He was Vice  President--Marketing  and Sales,
                                                Low Slope  Roofing  Products of BMCA from March 1996
                                                to November  1997,  and Vice  President--Sales,  Low
                                                Slope of BMCA  from  December  1995 to  March  1996.
                                                Since  July  1999,  Mr.  Collins  also  has  been  a
                                                director of G-I Holdings, a corporation that filed a
                                                voluntary petition for reorganization  under Chapter
                                                11 of the U.S.  Bankruptcy  Code in January 2001 due
                                                to its Asbestos Claims.

Richard A. Weinberg
     Executive Vice President,
     General Counsel
     and Secretary ...................  42      Mr.  Weinberg  has been  Executive  Vice  President,
                                                General  Counsel  and  Secretary  of  BMCA  and  its
                                                subsidiaries  since  May  1998 and was  Senior  Vice
                                                President, General Counsel and Secretary of BMCA and
                                                its  subsidiaries  from May 1996 to May 1998. He has
                                                been a director, Chief Executive Officer,  President
                                                and  Secretary of G Industries  Inc.  since  January
                                                2002.  Since  September  2000,  he  has  been  Chief
                                                Executive  Officer,  President,  General Counsel and
                                                Secretary of G-I Holdings,  a corporation that filed
                                                a  voluntary  petition  for   reorganization   under
                                                Chapter  11 of the U.S.  Bankruptcy  Code in January
                                                2001  due to its  Asbestos  Claims,  and  previously
                                                served as Executive Vice President,  General Counsel
                                                and  Secretary of G-I Holdings and its  subsidiaries
                                                from May 1998 to September 2000. Prior to that time,
                                                he held the  positions  of  Senior  Vice  President,
                                                General  Counsel and  Secretary  of these  companies
                                                from May 1996 to May 1998.  Mr.  Weinberg has served
                                                as a director  of G-I  Holdings  since May 1996.  He
                                                also  has been  Executive  Vice  President,  General
                                                Counsel and  Secretary  of ISP and its  subsidiaries
                                                since  May  1998  and  was  Senior  Vice  President,
                                                General   Counsel  and  Secretary  of  ISP  and  its
                                                subsidiaries  from May 1996 to May 1998. He was Vice
                                                President and General Counsel of BMCA from September
                                                1994 to May 1996.
</TABLE>


                                                 11
<PAGE>

<TABLE>
<CAPTION>
                                                            PRESENT PRINCIPAL OCCUPATION
NAME AND POSITION HELD                  AGE        OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
----------------------                  ---        ----------------------------------------------
<S>                                     <C>     <C>
David A. Harrison
     Director, Senior Vice President--
     Marketing, Contractor Services
     and Corporate  Development ......  45      Mr. Harrison has been a director of BMCA and some of
                                                its  subsidiaries  since September 2000. He also has
                                                been  Senior Vice  President--Marketing,  Contractor
                                                Services and Corporate  Development of BMCA and some
                                                of its  subsidiaries  since  July  2000.  He is also
                                                President  of  GAF  Materials  Corporation  (Canada)
                                                since   July   2000.    Mr.    Harrison   was   Vice
                                                President--Corporate  Marketing and  Development  of
                                                BMCA and some of its subsidiaries from November 1999
                                                to July 2000, Vice President--Marketing  Development
                                                of BMCA and some of its  subsidiaries  from  January
                                                1997 to July 1999 and Senior  Vice  President--Steep
                                                Slope Marketing of BMCA and some of its subsidiaries
                                                from April 1996 to January  1997.  From July 1999 to
                                                November   1999,   Mr.   Harrison  was  Senior  Vice
                                                President,    Corporate    Marketing    of    Centex
                                                Corporation,  a  company  in  the  construction  and
                                                related  financial  services  industries.  Prior  to
                                                joining  BMCA,  Mr.  Harrison was Vice  President of
                                                Global  Marketing of Armstrong World Industries Inc.
                                                from 1994 to 1996.

Robert B. Tafaro
     Director, Senior Vice President
     and General Manager--
     Steep Slope  Systems ............  51      Mr.  Tafaro has been a director  of BMCA and some of
                                                its  subsidiaries  since September 2000. He also has
                                                been    Senior    Vice    President    and   General
                                                Manager--Steep Slope Systems of BMCA and some of its
                                                subsidiaries   since   July   2000.   He  was   Vice
                                                President--Marketing  and Sales,  Low Slope  Roofing
                                                Products of BMCA and some of its  subsidiaries  from
                                                November   1997   to   July   2000.   He  was   Vice
                                                President--Steep  Slope  Marketing  of BMCA from May
                                                1997 to  November  1997,  Director  of  Steep  Slope
                                                Marketing  of BMCA from  February  1997 to May 1997,
                                                and Eastern  Regional  Sales Manager of BMCA and its
                                                predecessor company from July 1993 to February 1997.

Kenneth E. Walton
     Director,
     Senior Vice President--
     Operations ......................  45      Mr.  Walton has been a director  of BMCA and some of
                                                its  subsidiaries  since September 2000. He also has
                                                been Senior Vice  President--Operations  of BMCA and
                                                some of its  subsidiaries  since July  2000.  He was
                                                Vice President--Steep  Slope Operations of BMCA from
                                                March      1999     to     July      2000,      Vice
                                                President--Manufacturing  of  U.S.  Intec,  Inc.,  a
                                                former  subsidiary  of BMCA,  from  December 1997 to
                                                March 1999, Director of  Manufacturing--Roofing  and
                                                Felt  Operations of BMCA from April 1996 to December
                                                1997  and  Plant  Manager--Mobile,  Alabama  roofing
                                                facility of BMCA and its  predecessor  company  from
                                                May 1991 to April 1996.
</TABLE>



                                                 12
<PAGE>

<TABLE>
<CAPTION>
                                                            PRESENT PRINCIPAL OCCUPATION
NAME AND POSITION HELD                  AGE        OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
----------------------                  ---        ----------------------------------------------
<S>                                     <C>     <C>
John F. Rebele
     Director, Senior Vice President
     and Chief Financial Officer .....  47      Mr. Rebele has been a director of BMCA since January
                                                2001 and of BMCA's subsidiaries since March 2001. He
                                                also  has  been  Senior  Vice  President  and  Chief
                                                Financial   Officer   of  BMCA   and   some  of  its
                                                subsidiaries   since  December  2001  and  was  Vice
                                                President  and Chief  Financial  Officer of the same
                                                companies from January 2001 to December 2001. He was
                                                Vice  President--Finance  of  BMCA  and  some of its
                                                subsidiaries  from March  1998 to  January  2001 and
                                                Vice  President  and  Controller of BMCA and some of
                                                its subsidiaries from February 1994 to March 1998.

Susan B. Yoss
     Senior Vice  President ..........  43      Ms. Yoss has been Senior Vice  President of BMCA and
                                                its  subsidiaries  since  August 2001 and was Senior
                                                Vice  President and Treasurer of the same  companies
                                                from July 1999 to August 2001 and was Vice President
                                                and  Treasurer of the same  companies  from February
                                                1998 to July 1999.  Since  July  1999,  she also has
                                                been Senior Vice President,  Chief Financial Officer
                                                and  Treasurer of G-I Holdings,  a corporation  that
                                                filed a voluntary petition for reorganization  under
                                                Chapter  11 of the U.S.  Bankruptcy  Code in January
                                                2001 due to its Asbestos Claims. Ms. Yoss has served
                                                as Executive Vice  President--Finance  and Treasurer
                                                of ISP and some of its subsidiaries  since September
                                                2000, was Senior Vice President and Treasurer of ISP
                                                and  some  of its  subsidiaries  from  July  1999 to
                                                September  2000 and was Vice President and Treasurer
                                                of ISP from February 1998 to July 1999. Ms. Yoss was
                                                Assistant  Treasurer  of Joseph  E.  Seagram & Sons,
                                                Inc., a global beverage and  entertainment  company,
                                                for more than five years until February 1998.
</TABLE>



                                                 13
<PAGE>

ITEM 11.    EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The following table sets forth the cash and non-cash  compensation for each
of the last  three  fiscal  years  awarded  to or earned by the Chief  Executive
Officer and the four other most highly compensated executive officers of BMCA as
of December 31, 2001. The salaries and other  compensation  of Mr.  Weinberg and
Ms.  Yoss  for  services  provided  by them to our  company  are  paid by ISP in
accordance with a management agreement between ISP and our company. See Note (7)
to the table below.

<TABLE>
<CAPTION>
                                                                                    LONG-TERM
                                               ANNUAL COMPENSATION(7)             COMPENSATION
                                    -----------------------------------------     -------------
                                                                     OTHER         SECURITIES
                                                                    ANNUAL         UNDERLYING       ALL OTHER
NAME AND PRINCIPAL POSITION    YEAR      SALARY       BONUS(1)   COMPENSATION      OPTIONS(1)     COMPENSATION
-------------------------      -----      -----        -------    -----------      ----------     -------------
<S>                            <C>     <C>           <C>             <C>             <C>           <C>
William W. Collins ..........  2001    $284,583      $ 400,000                          --         $19,462(2)
   President and               2000     245,625        150,000                       6,500          19,251(2)
   Chief Executive             1999     194,750        100,000                       5,000          15,463(2)
   Officer

David A. Harrison ...........  2001    $233,500       $147,445                          --         $16,822(3)
   Senior Vice President       2000     207,375         39,995       $48,544(3)      4,500           9,722(3)
   Marketing, Contractor       1999     115,578(3)      26,137(3)         --(3)         --(3)       11,037(3)
   Services and Corporate
   Development

Robert B. Tafaro ............  2001    $231,751       $200,090                          --         $18,920(4)
   Senior Vice President and   2000     200,999         44,071                       1,500          18,057(4)
   General Manager--Steep      1999     164,000         36,183                          --          15,099(4)
   Slope Systems

Kenneth E. Walton ...........  2001    $186,287       $117,738                          --         $15,846(5)
   Senior Vice President--     2000     164,375         36,800                       2,000          15,011(5)
   Operations                  1999     151,018         34,110                       2,500          16,372(5)

John F. Rebele ..............  2001    $185,625       $114,002                          --         $15,824(6)
   Senior Vice President       2000     155,625         27,684                       1,000          15,278(6)
   and Chief Financial         1999     148,250         33,540                       1,000          13,617(6)
   Officer
</TABLE>

------------
(1)  Bonus  amounts  are  payable   pursuant  to  BMCA's   Executive   Incentive
     Compensation Program, except that a portion of the bonus amount paid to Mr.
     Harrison in 1999  represented a special bonus award.  The options relate to
     shares of redeemable  convertible preferred stock of BMCA. See "--Long-Term
     Incentive Plan."

(2)  Included in "All Other Compensation" for Mr. Collins are: $12,400,  $12,150
     and $11,450 representing BMCA's contribution under its 401(k) plan in 2001,
     2000, and 1999,  respectively;  $4,902,  $4,941 and $2,484 for the premiums
     paid  by  BMCA  for a  life  insurance  policy  in  2001,  2000  and  1999,
     respectively;  and $2,160,  $2,160 and $1,529 for the premiums paid by BMCA
     for a long-term disability policy in 2001, 2000 and 1999, respectively.

 (3) Included  in "Other  Annual  Compensation"  for Mr.  Harrison is $48,544 in
     payment  for  moving-related  expenses  in  2000.  Included  in "All  Other
     Compensation" for Mr. Harrison are: $12,150, $6,089 and $9,188 representing
     BMCA's  contribution  under  its  401(k)  plan  in  2001,  2000  and  1999,
     respectively;  $2,655,  $1,574 and $737 for the premiums paid by BMCA for a
     life insurance  policy in 2001,  2000 and 1999,  respectively;  and $2,017,
     $2,059 and $1,112 for the premiums paid by BMCA for a long-term  disability
     policy in 2001, 2000 and 1999, respectively. Mr. Harrison resigned from his
     employment with us in July 1999 and returned in November 1999.

(4)  Included in "All Other  Compensation" for Mr. Tafaro are: $12,400,  $12,150
     and $11,450 representing BMCA's contribution under its 401(k) plan in 2001,
     2000 and 1999,  respectively;  $4,518,  $3,913 and $2,078 for the  premiums
     paid  by  BMCA  for a  life  insurance  policy  in  2001,  2000  and  1999,
     respectively;  and $2,002,  $1,994 and $1,571 for the premiums paid by BMCA
     for a long-term disability policy in 2001, 2000 and 1999, respectively.


                                       14
<PAGE>

(5)  Included in "All Other  Compensation" for Mr. Walton are: $12,150,  $12,150
     and $11,503 representing BMCA's contribution under its 401(k) plan in 2001,
     2000 and 1999,  respectively;  $2,086,  $1,223 and $3,416 for the  premiums
     paid  by  BMCA  for a  life  insurance  policy  in  2001,  2000  and  1999,
     respectively;  and $1,610,  $1,638 and $1,453 for the premiums paid by BMCA
     for a long-term disability policy in 2001, 2000 and 1999, respectively.

(6)  Included in "All Other  Compensation" for Mr. Rebele are: $12,150,  $12,150
     and $11,350 representing BMCA's contribution under its 401(k) plan in 2001,
     2000 and 1999,  respectively;  $2,070,  $1,783 and $1,103 for the  premiums
     paid  by  BMCA  for a  life  insurance  policy  in  2001,  2000  and  1999,
     respectively;  and $1,604,  $1,345 and $1,164 for the premiums paid by BMCA
     for a long-term disability policy in 2001, 2000 and 1999, respectively.

(7)  The salary and other  compensation of Mr. Weinberg and Ms. Yoss are paid by
     ISP pursuant to our management agreement with ISP, except that BMCA granted
     to Mr. Weinberg options to purchase 6,453 shares of redeemable  convertible
     preferred  stock of BMCA in 1999. In 2001,  Mr.  Weinberg  converted  these
     options to 2,500 incentive  units,  see  "--Long-Term  Incentive  Plan." In
     addition, in 2001, Mr. Weinberg exercised 1,500 units and received $60,178.
     No allocation of compensation  for services to BMCA is made pursuant to the
     management agreement, except that BMCA reimbursed ISP $500,000 and $400,000
     for Mr.  Weinberg and $300,000 and $230,000 for Ms. Yoss for 2001 and 2000,
     respectively,  under the  management  agreement in respect of bonus amounts
     earned in connection with services  performed by them for BMCA during those
     years. In addition,  BMCA reimburses ISP, through payment of the management
     fees payable under the management  agreement,  for the estimated  costs ISP
     incurs for providing the services of these officers.  See Item 13, "Certain
     Relationships and Related Transactions--Management Agreement."

LONG-TERM INCENTIVE PLAN

     The  following  table  sets  forth  information  on awards  granted  to the
executive  officers  named in the Summary  Compensation  Table above during 2001
under our 2001 Long-Term Incentive Plan.

<TABLE>
<CAPTION>
                                        LONG-TERM INCENTIVE PLAN -- AWARDS IN 2001

                                    NUMBER OF    PERFORMANCE OR          ESTIMATED FUTURE PAYOUTS UNDER
                       DATE       SHARES, UNITS   OTHER PERIOD            NON-STOCK  PRICE-BASED PLANS
                        OF          OR OTHER    UNTIL MATURATION  --------------------------------------------
NAME                  GRANT        RIGHTS (1)     OR PAYOUT (1)   THRESHOLD($)(2)  TARGET($)(3)  MAXIMUM($)(3)
-----                 ------       ----------   ----------------  --------------   ------------  -------------
<S>                    <C>             <C>             <C>            <C>              <C>            <C>
William W. Collins     1/96            528(4)          --             $170.60          --             --
                       7/97            987(4)          --              206.01          --             --
                       10/97         2,814(4)          --              219.81          --             --
                       7/98          1,238(4)          --              242.33          --             --
                       7/99          1,779(4)          --              281.11          --             --
                       7/00          2,089(4)          --              311.19          --             --
                       7/01          2,000             --              278.73          --             --
David A. Harrison      1/00            849(4)          --             $294.40          --             --
                       7/00            643(4)          --              311.19          --             --
                       7/01            800             --              278.73          --             --
Robert B. Tafaro       1/96            352(4)          --             $170.60          --             --
                       7/97            515(4)          --              206.01          --             --
                       7/98          1,032(4)          --              242.33          --             --
                       7/00            482(4)          --              311.19          --             --
                       7/01            800             --              278.73          --             --
Kenneth E. Walton      1/96            410(4)          --             $170.60          --             --
                       7/97            367(4)          --              206.01          --             --
                       10/97           150(4)          --              219.81          --             --
                       7/98            619(4)          --              242.33          --             --
                       4/99            382(4)          --              261.91          --             --
                       7/99            534(4)          --              281.11          --             --
                       7/00            643(4)          --              311.19          --             --
                       7/01            800             --              278.73          --             --
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                    LONG-TERM INCENTIVE PLAN -- AWARDS IN 2001 (CONTINUED)

                                    NUMBER OF    PERFORMANCE OR          ESTIMATED FUTURE PAYOUTS UNDER
                       DATE       SHARES, UNITS   OTHER PERIOD            NON-STOCK  PRICE-BASED PLANS
                        OF          OR OTHER    UNTIL MATURATION  ---------------------------------------------
NAME                  GRANT        RIGHTS (1)     OR PAYOUT (1)   THRESHOLD($)(2)  TARGET($)(3)  MAXIMUM($) (3)
-----                 ------       ----------   ----------------   -------------- ------------ ----------------
<S>                    <C>             <C>             <C>            <C>              <C>            <C>
John F. Rebele         1/96            469(4)          --             $170.60          --             --
                       7/97            515(4)          --              206.01          --             --
                       10/97           211(4)          --              219.81          --             --
                       7/98            619(4)          --              242.33          --             --
                       7/99            356(4)          --              281.11          --             --
                       7/00            321(4)          --              311.19          --             --
                       7/01            800             --              278.73          --             --
</TABLE>

----------
(1)  Effective December 31, 2000, we adopted the 2001 Long-Term  Incentive Plan,
     which allows employees  participating in our Preferred Stock Option Plan to
     also  participate  in the 2001  Long-Term  Incentive  Plan.  Our  Long-Term
     Incentive  Plan  provides  long-term  compensation  to  employees  and  key
     management  personnel  based on BMCA's book value (as defined in the Plan).
     Our Long-Term  Incentive Plan  authorizes  the grant of incentive  units to
     eligible  employees.  Our Long-Term  Incentive  Plan is  administered  by a
     committee  appointed  by our board of  directors.  The number of  incentive
     units  granted  is  determined  by the  committee  in its sole  discretion.
     Generally,  incentive units vest cumulatively,  in 20% increments over five
     years,  except that incentive units granted in exchange for preferred stock
     options  retain  the vested  status and  vesting  schedule  of the  options
     exchanged.  The  committee  may,  in its sole  discretion,  however,  grant
     incentive  units  with any  vesting  schedule,  other  than  that  normally
     provided in the 2001 Long-Term  Incentive  Plan.  Vesting will end upon the
     termination of an employee's  employment  with us or any subsidiary for any
     reason. Incentive units generally are exercisable for a period of six years
     from the date of grant.  In the event of a change  of  control  of BMCA (as
     defined),  all incentive units will become fully and immediately vested and
     payable in cash.

(2)  Set forth under the "Threshold"  column is the "initial value" (as defined)
     per unit at which the respective incentive units were granted. The value of
     incentive  units is determined  at the end of each fiscal  quarter based on
     our book value at that date less book value as of the date of grant divided
     by 1,000,010.  Our Long-Term Incentive Plan will terminate five years after
     its  effective  date of  December  2000,  unless  terminated  sooner by the
     committee.

(3)  Upon exercise of an incentive unit, a participant  will receive in cash the
     excess,  if any,  of the value of such  incentive  unit as of the  relevant
     valuation date on or, in the event of an exercise between  valuation dates,
     immediately  preceding  the exercise  date,  over the initial value of such
     incentive unit, subject to all appropriate withholdings.  Accordingly,  the
     dollar value of future payouts is not readily ascertainable.

(4)  These  incentive  units  were  granted  in  exchange  for stock  options to
     purchase  shares  of our  preferred  stock  previously  granted  under  our
     Preferred Stock Option Plan.

EMPLOYMENT SECURITY AGREEMENTS

     In June 2001, we entered into employment  security  agreements with certain
of  our  executive  officers  and  key  personnel,  including  Messrs.  Collins,
Harrison, Tafaro, Walton and Rebele, in an effort to retain these individuals as
well as provide  security to us and the executives and to provide for continuity
of  management  in the  event of a change in  control.  The  agreements  have no
expiration date and provide for a single-sum  payment consisting of two to three
times salary and bonus and related benefits if employment is terminated within a
thirty-six month period following the change in control event.  Each officer who
is a member  of the  board of  directors  is a party to an  employment  security
agreement.

     A "change in control",  as defined in the agreements,  would occur when (1)
the  Heyman  Group  (as  described  below)  ceases to be the  beneficial  owner,
directly or indirectly,  of a majority voting power of the voting stock of BMCA,
(2) the transfer or sale of a substantial portion of the property of BMCA in any
transaction or series of  transactions  to any entity or entitites other than an
entity of which the  Heyman  Group  owns at least 80% of such  entity's  capital
stock or beneficial interest or (3) any person or entity,  other than the Heyman
Group, assumes, without


                                       16
<PAGE>

the consent of the Heyman Group, management  responsibilities for the affairs of
G-I Holdings or any subsidiary thereof.

     Under the  agreements,  the "Heyman Group" means (1) Samuel J. Heyman,  his
heirs, administrators,  executors and entities of which a majority of the voting
stock is owned by Samuel J. Heyman,  his heirs,  administrators or executors and
(2) any entity  controlled,  directly or indirectly,  by Samuel J. Heyman or his
heirs,   administrators  or  executors.  Also  for  purposes  of  this  section,
"beneficial ownership" shall be determined in accordance with Rule 13d under the
Securities Exchange Act of 1934, as amended.

COMPENSATION OF DIRECTORS

     Our directors do not receive any additional compensation for their services
as directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONS

     We do not have a separate compensation committee. Compensation policies are
established  by our board of directors,  each member of which is also one of our
executive   officers.   See  Item  13,   "Certain   Relationships   and  Related
Transactions."

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of March  20,  2001,  100% of our  outstanding  shares of Class A common
stock  and  Class  B  common  stock  were  owned  of  record  by  BMCA  Holdings
Corporation.

     The following table sets forth information with respect to the ownership of
BMCA's common  stock,  as of March 20, 2001, by each other person known to us to
own beneficially more than 5% of either class of the common stock outstanding on
that date and by all of our directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                                         AMOUNT AND
                                                                          NATURE OF                    TOTAL
                                                                         BENEFICIAL       PERCENT     VOTING
TITLE OF CLASS               NAME AND ADDRESS OF BENEFICIAL OWNER(1)      OWNERSHIP      OF CLASS      POWER
--------------               -------------------------------------       ---------       ------      ------
<S>                            <C>                                       <C>              <C>          <C>
Class A Common Stock           Samuel J. Heyman                          1,015,010(2)     100.0%       98.5%
                               All directors and executive officers of
                               BMCA as a group (7 persons)                      --         --          --
Class B Common Stock           Samuel J. Heyman                             15,000(2)     100.0%        1.5%
                               All directors and executive officers of
                               BMCA as a group (7 persons)                      --         --          --
</TABLE>


----------
(1)  The business  address for Mr. Heyman is 1361 Alps Road,  Wayne,  New Jersey
     07470.

(2)  The number of shares shown as being  beneficially owned (as defined in Rule
     13d-3 of the Exchange Act) by Mr. Heyman attributes ownership of the shares
     of BMCA  common  stock  owned by BMCA  Holdings  Corporation,  an  indirect
     wholly-owned subsidiary of G Holdings, to Mr. Heyman. As of March 20, 2002,
     Mr.  Heyman  beneficially  owned (as defined in Rule 13d-3 of the  Exchange
     Act) approximately 99% of the capital stock of G Holdings.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT AGREEMENT

     Pursuant  to a  management  agreement,  ISP  Management  Company,  Inc.,  a
wholly-owned  indirect subsidiary of ISP (of which Samuel J. Heyman beneficially
owns, as defined in Rule 13d-3 of the Exchange Act, approximately 81%), provides
some general management, administrative, legal, telecommunications,  information
and facilities  services to us,  including the use of our headquarters in Wayne,
New Jersey. We were charged approximately


                                       17
<PAGE>

$6.7  million  in 2001  for  these  services  under  the  management  agreement,
inclusive of the services  provided to G-I Holdings.  These  charges  consist of
management fees and other reimbursable  expenses attributable to us, or incurred
by ISP  Management  for our benefit.  They are based on an estimate of the costs
ISP Management incurs to provide those services.  Effective January 1, 2002, the
management agreement was amended to adjust the management fees payable under the
agreement.  The management  agreement also provides that we are  responsible for
providing  management  services to G-I Holdings and some of its subsidiaries and
that G-I Holdings pay to us a management fee for these  services.  The aggregate
amount paid by G-I Holdings to us for  services  rendered  under the  management
agreement in 2001 was approximately $0.6 million.  We also allocate a portion of
the  management  fees payable by us under the  management  agreement to separate
lease payments for the use of our  headquarters.  Based on the services provided
in 2001 under the management  agreement,  the aggregate  amount payable by us to
ISP  Management  under  the  management  agreement  for 2002,  inclusive  of the
services provided to G-I Holdings, is expected to be approximately $6.1 million.
Some of our executive  officers receive their  compensation from ISP Management.
ISP Management is indirectly reimbursed for this compensation through payment of
the management fee and other reimbursable  expenses payable under the management
agreement.

     Due to the unique  nature of the  services  provided  under the  management
agreements, comparisons with third party arrangements are difficult. However, we
believe that the terms of the management  agreement taken as a whole are no less
favorable to us than could be obtained from an unaffiliated third party.

CERTAIN PURCHASES

     We purchase all of our colored roofing granules requirements from ISP under
a  requirements  contract,  except for the  requirements  of some of our roofing
plants  which are supplied by third  parties.  Effective  January 1, 2002,  this
contract was amended to provide,  among other  things,  that the  contract  will
expire on December  31,  2002,  unless  extended  by the  parties.  In 2001,  we
purchased in the aggregate  approximately $63.4 million of mineral products from
ISP.

TAX SHARING AGREEMENT

     We entered  into a tax sharing  agreement  dated  January 31, 1994 with G-I
Holdings  with  respect  to the  payment  of federal  income  taxes and  related
matters.  During the term of the tax sharing  agreement,  which is effective for
the period during which we or any of our domestic  subsidiaries is included in a
consolidated  federal  income tax return for the G-I Holdings  consolidated  tax
group,  we are  obligated to pay G-I  Holdings an amount equal to those  federal
income  taxes we would  have  incurred  if we, on behalf  of  ourselves  and our
domestic  subsidiaries,  filed our own  federal  income tax  return.  Unused tax
attributes  will carry forward for use in reducing  amounts payable by us to G-I
Holdings in future  years,  but cannot be carried back. If we ever were to leave
the G-I  Holdings  consolidated  tax group,  we would be  required to pay to G-I
Holdings the value of any tax  attributes  to which we would  succeed  under the
consolidated  return  regulations to the extent the tax  attributes  reduced the
amounts otherwise payable by us under the tax sharing  agreement.  Under limited
circumstances,  the provisions of the tax sharing  agreement  could result in us
having a greater  liability under the agreement than we would have had if we and
our domestic  subsidiaries had filed our own separate federal income tax return.
Under the tax sharing  agreement,  we and each of our domestic  subsidiaries are
responsible  for any taxes that would be payable by reason of any  adjustment to
the tax  returns of G-I  Holdings  or its  subsidiaries  for years  prior to the
adoption of the tax sharing  agreement  that relate to our business or assets or
the  business  or assets of any of our  domestic  subsidiaries.  Although,  as a
member of the G-I Holdings  consolidated  tax group, we are severally liable for
all federal income tax liabilities of the G-I Holdings  consolidated  tax group,
including  tax  liabilities  not related to our  business,  we do not believe we
should be liable,  under any  circumstances,  for  liabilities  other than those
arising from our operations and the operations of our domestic  subsidiaries and
tax liabilities for tax years  pre-dating the tax sharing  agreement that relate
to our  business  or assets and the  business  or assets of any of our  domestic
subsidiaries.  The tax sharing agreement provides for analogous principles to be
applied to any  consolidated,  combined or unitary  state or local income taxes.
Under the tax sharing  agreement,  G-I Holdings makes all decisions with respect
to all matters relating to taxes of the G-I Holdings consolidated tax group. The
provisions  of the tax  sharing  agreement  take into  account  both the federal
income taxes we would have incurred if we filed our own separate  federal income
tax  return and the fact that we are a member of the G-I  Holdings  consolidated
tax group for federal income tax purposes.


                                       18
<PAGE>

INTERCOMPANY BORROWINGS

     BMCA makes loans to, and borrows  from,  G-I Holdings and its  subsidiaries
from time to time at prevailing  market  rates.  As of December 31, 2001, a $2.5
million  loan,  including  interest  of $0.1  million,  was owed to BMCA by BMCA
Holdings  Corporation at an interest rate of 4.75%.  In addition,  no loans were
owed  by us to  affiliates.  We  also  make  non-interest  bearing  advances  to
affiliates,  of which no balance was  outstanding at December 31, 2000 and 2001.
During 2000, we made a  distribution  of $106.2  million ($59.1 million of which
represents a non-cash  distribution in 2000 relating to the 1999 receivable from
G-I Holdings) to our parent corporations.  The distribution of $106.2 million in
2000  represented  the  write-off  of  outstanding  advances  made to our parent
corporations that we determined were uncollectible.  See Note 15 to Consolidated
Financial Statements.

                                     PART IV

ITEM 14.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

     The following documents are filed as part of this report:

     (a)(1)  Financial Statements: See Index on page F-1.

     (a)(2)  Financial Statement Schedules: See Index on page F-1.

     (a)(3)  Exhibits:


EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

2.1     Reorganization  Agreement,  dated as of December 31, 1998,  by and among
        BMCA,   Building  Materials   Manufacturing   Corporation  and  Building
        Materials Investment  Corporation  (incorporated by reference to Exhibit
        2.1 to  BMCA's  Registration  Statement  on Form S-4  (Registration  No.
        333-69749) (the "2008 Notes S-4")).

3.1     Amended and Restated  Certificate of Incorporation of BMCA (incorporated
        by  reference  to  Exhibit  3.1 to BMCA's  Form 10-K for the year  ended
        December 31, 1999).

3.2     By-laws of BMCA  (incorporated  by  reference  to Exhibit  3.2 to BMCA's
        Registration  Statement on Form S-4  (Registration  No.  33-81808)) (the
        "Deferred Coupon Note Registration Statement").

3.3     Certificate  of  Incorporation  of  Building   Materials   Manufacturing
        Corporation  (incorporated  by  reference  to Exhibit 3.3 to BMCA's Form
        10-K for the fiscal year ended December 31, 1998 (the "1998 10-K")).

3.4     By-laws of Building Materials Manufacturing Corporation (incorporated by
        reference to Exhibit 3.4 to the 1998 10-K).

3.5     Certificate   of   Incorporation   of  Building   Materials   Investment
        Corporation (incorporated by reference to Exhibit 3.5 to the 1998 10-K).

3.6     By-laws of Building Materials  Investment  Corporation  (incorporated by
        reference to Exhibit 3.6 to the 1998 10-K).

4.1     Indenture,  dated  July 5,  2000,  between  BMCA,  as  issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation,  as  guarantors,  and The  Bank  of New  York,  as  trustee
        (incorporated  by  reference to Exhibit 4.13 to BMCA's Form 10-K for the
        year ended December 31, 2000 (the "2000 10-K").

4.2     First  Supplemental  Indenture,  dated as of  December  4, 2000,  to the
        Indenture  dated as of July 5, 2000,  between BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.14 to the 2000 10-K).

4.3     Registration Rights Agreement,  dated July 5, 2000, between BMCA and BNY
        Capital Markets Inc.  (incorporated  by reference to Exhibit 4.15 to the
        2000 10-K).


                                       19
<PAGE>

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

4.4     First  Amendment  to the  Registration  Rights  Agreement,  dated  as of
        December 4, 2000, to Registration  Rights  Agreement dated July 5, 2000,
        among BMCA, as issuer, Building Materials Manufacturing  Corporation and
        Building  Materials  Investment  Corporation,  as  guarantors,  and  BNY
        Capital Markets,  Inc., as initial purchaser  (incorporated by reference
        to Exhibit 4.16 to the 2000 10-K).

4.5     Indenture,  dated as of December 9, 1996,  between  BMCA and The Bank of
        New York, as trustee (incorporated by reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-20859)).

4.6     First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of December 9, 1996 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 10.7 of the 2008 Notes S-4).

4.7     Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of December 9, 1996 among BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.5 to the 2000 10-K).

4.8     Indenture,  dated as of October 20,  1997,  between BMCA and The Bank of
        New York, as trustee (incorporated by reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-41531)).

4.9     First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of October 20, 1997 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation, as co-obligor,  Building Materials Investment
        Corporation,  as  guarantor,  and  The  Bank  of New  York,  as  trustee
        (incorporated by reference to Exhibit 10.8 of the 2008 Notes S-4).

4.10    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture dated as of October 20, 1997 among BMCA and Building Materials
        Manufacturing  Corporation,  as issuers,  Building Materials  Investment
        Corporation,  as guarantor, the Additional Guarantors signatory thereto,
        as  additional  guarantors,  and  The  Bank  of  New  York,  as  trustee
        (incorporated by reference to Exhibit 4.7 to the 2000 10-K).

4.11    Indenture,  dated as of July 17, 1998,  between BMCA and The Bank of New
        York,  as trustee  (incorporated  by  reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-60633)).

4.12    First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of July 17,  1998 among  BMCA,  as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 10.9 of the 2008 Notes S-4).

4.13    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of July 17,  1998 among  BMCA,  as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.9 to the 2000 10-K).

4.14    Indenture,  dated as of December 3, 1998,  between  BMCA and The Bank of
        New York,  as trustee  (incorporated  by reference to Exhibit 4.1 to the
        2008 Notes S-4).

4.15    First  Supplemental  Indenture  dated as of January 1, 1999 to Indenture
        dated as of December 3, 1998 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 4.4 to the 2008 Notes S-4).

4.16    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of December 3, 1998 among BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.12 to the 2000 10-K).

10.1    Amended and Restated Management Agreement,  dated as of January 1, 1999,
        among GAF, G-I  Holdings  Inc., G  Industries  Corp.,  Merick Inc.,  GAF
        Fiberglass  Corporation,  ISP, GAF Building Materials  Corporation,  GAF
        Broadcasting   Company,   Inc.,   BMCA  and  ISP  Opco   Holdings   Inc.
        (incorporated by reference to Exhibit 10.1 to the 1998 10-K).


                                       20
<PAGE>

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

10.2    Amendment No. 1 to the Management Agreement, dated as of January 1, 2000
        (incorporated  by reference to Exhibit 10.2 to  International  Specialty
        Products Inc. Annual Report on Form 10-K for the year ended December 31,
        1999).

10.3    Amendment No. 2 to the Management Agreement, dated as of January 1, 2001
        (incorporated  by reference to Exhibit 10.3 to  International  Specialty
        Products Inc. Annual Report on Form 10-K for the year ended December 31,
        2000).

10.4    Amendment No. 3 to the Amended and Restated Management Agreement,  dated
        as of June  27,  2001 by and  among  G-I  Holdings  Inc.,  Merick  Inc.,
        International   Specialty   Products   Inc.,   ISP  Investco   LLC,  GAF
        Broadcasting  Company,  Inc., Building Materials  Corporation of America
        and  ISP  Management  Company,  Inc.  as  assignee  of ISP  Chemco  Inc.
        (incorporated  by  reference  to  Exhibit  10.7 to the ISP  Chemco  Inc.
        Registration Statement on Form S-4 (Registration No. 333-70144)).

10.5    Amendment No. 4 to the Amended and Restated Management Agreement,  dated
        as of  January  1, 2002 by and among G-I  Holdings  Inc.,  Merick  Inc.,
        International   Specialty   Products   Inc.,   ISP  Investco   LLC,  GAF
        Broadcasting  Company,  Inc., Building Materials  Corporation of America
        and ISP Management Company, Inc.

10.6    Form of Option  Agreement  relating  to Series A  Cumulative  Redeemable
        Convertible  Preferred Stock  (incorporated by reference to Exhibit 10.9
        to BMCA's Form 10-K for the year ended December 31, 1996).*

10.7    Forms of Amendment to Option  Agreement  relating to Series A Cumulative
        Redeemable  Convertible  Preferred Stock  (incorporated  by reference to
        Exhibit  10.12 to BMCA's Form 10-K for the year ended  December 31, 1997
        (the "1997 Form 10-K").*

10.8    Form of Option  Agreement  relating  to Series A  Cumulative  Redeemable
        Convertible  Preferred Stock (incorporated by reference to Exhibit 10.13
        to the 1997 Form 10-K).*

10.9    BMCA Preferred Stock Option Plan  (incorporated  by reference to Exhibit
        4.2 to  BMCA's  Registration  Statement  on Form S-8  (Registration  No.
        333-60589)).*

10.10   BMCA 2001  Long-Term  Incentive  Plan.  (incorporated  by  reference  to
        Exhibit 10.8 to the 2000 10-K).*

10.11   Tax Sharing  Agreement,  dated as of January 31,  1994,  among GAF,  G-I
        Holdings Inc. and BMCA (incorporated by reference to Exhibit 10.6 to the
        Deferred Coupon Note Registration Statement).

10.12   Amendment to Tax Sharing Agreement,  dated as of March 19, 2001, between
        G-I Holdings and BMCA (incorporated by reference to Exhibit 10.10 to the
        2000 10-K).

10.13   Reorganization  Agreement,  dated as of  January  31,  1994,  among  GAF
        Building Materials Corporation, G-I Holdings Inc. and BMCA (incorporated
        by reference to Exhibit  10.9 to the Deferred  Coupon Note  Registration
        Statement).

10.14   Credit  Agreement,  dated as of December 4, 2000, by and among BMCA, the
        lenders  party  thereto,  and The Bank of New  York,  as  agent  for the
        lenders and as Swing Line Lender (the "Credit Agreement")  (incorporated
        by reference to Exhibit 10.12 to the 2000 10-K).

10.15   Amendment No. 1, dated as of December 22, 2000, to the Credit  Agreement
        (incorporated by reference to Exhibit 10.13 to the 2000 10-K).

10.16   Amendment  No. 2,  dated as of March 8, 2001,  to the  Credit  Agreement
        (incorporated by reference to Exhibit 10.14 to the 2000 10-K).

10.17   Amended and Restated Credit Agreement,  dated as of December 4, 2000, by
        and among BMCA,  the  lenders  party  thereto,  Fleet  National  Bank as
        Documentation  Agent, Bear Stearns Corporate Lending Inc. as Syndication
        Agent  and  the  Bank  of  New  York  as  Swing   Line   Lender  and  as
        Administration  Agent with BNY Capital Markets Inc. as Lead Arranger and
        Bookrunner (the "Amended and Restated Credit  Agreement")  (incorporated
        to reference to Exhibit 10.15 to the 2000 10-K).

10.18   Amendment  No. 1, dated as of  December  22,  2000,  to the  Amended and
        Restated Credit Agreement (incorporated by reference to Exhibit 10.16 to
        the 2000 10-K).

10.19   Amendment  No. 2, dated as of March 8, 2001, to the Amended and Restated
        Credit Agreement (incorporated by reference to Exhibit 10.17 to the 2000
        10-K).



                                       21
<PAGE>

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

10.20  Security Agreement,  dated December 22, 2000, by and among BMCA and each
       of the  grantors  party  thereto and The Bank of New York as  Collateral
       Agent (incorporated to reference to Exhibit 10.18 to the 2000 10-K).

10.21  Collateral Agent Agreement,  dated December 22, 2000, by and among BMCA,
       such Subsidiary of BMCA a party thereto,  the 1999 Administrative  Agent
       (as defined therein), each Senior Note Trustee (as defined therein), the
       2000  Administrative  Agent (as defined  therein),  the Chase  Manhattan
       Bank,  Fleet National Bank and the Bank of New York, as Collateral Agent
       (incorporated by reference to Exhibit 10.19 to the 2000 10-K).

10.22  Employment  Security  Agreement  between  BMCA and  William W.  Collins,
       effective May 2001.*

10.23  Employment  Security  Agreement  between  BMCA  and  David  A  Harrison,
       effective June 2001.*

10.24  Employment  Security  Agreement  between  BMCA  and  Robert  B.  Tafaro,
       effective June 2001.*

10.25  Employment  Security  Agreement  between  BMCA and  Kenneth  E.  Walton,
       effective June 2001.*

10.26  Employment Security Agreement between BMCA and John F. Rebele, effective
       June 2001.*

21     Subsidiaries of BMCA.

23.1   Consent of Arthur Andersen LLP.

99.1   Letter to Commission pursuant to Temporary Note 3T, dated March 26, 2002.

----------
*    Management and/or compensation plan or arrangement

     (b) Reports on Form 8-K

     No reports on Form 8-K were filed in the fourth quarter of 2001.



                                       22
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  each  registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                BUILDING MATERIALS CORPORATION OF AMERICA

                                BUILDING MATERIALS MANUFACTURING CORPORATION

Date: March 26, 2002            BY:            /s/ WILLIAM W. COLLINS
                                   ---------------------------------------------
                                   Name: William W. Collins
                                   Title: Chief Executive Officer and President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has been  signed  below  by the  following  persons  on  behalf  of each
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                     SIGNATURE                                   TITLE                            DATE
                     --------                                    -----                            -----
<S>                                                  <C>                                     <C>
             /s/ WILLIAM W. COLLINS                  President, Chief Executive Officer      March 26, 2002
-----------------------------------------------      and Director (Principal Executive
               William W. Collins                    Officer)


               /s/ JOHN F. REBELE                    Senior Vice President, Chief Financial  March 26, 2002
-----------------------------------------------      Officer and Director (Principal
                 John F. Rebele                      Financial Officer)


              /s/ DAVID A. HARRISON                  Director                                March 26, 2002
-----------------------------------------------
               David A. Harrison


              /s/ ROBERT B. TAFARO                   Director                                March 26, 2002
-----------------------------------------------
                Robert B. Tafaro


              /s/ KENNETH E. WALTON                  Director                                March 26, 2002
-----------------------------------------------
                Kenneth E. Walton


              /s/ JAMES T. ESPOSITO                  Vice President and Controller           March 26, 2002
-----------------------------------------------      (Principal Accounting Officer)
                James T. Esposito
</TABLE>



                                       23
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                      BUILDING MATERIALS INVESTMENT CORPORATION

Date: March 26, 2002                  BY:     /S/ WILLIAM W. COLLINS
                                         ---------------------------------------
                                         Name: William W. Collins
                                         Title: Chief Executive Officer and
                                                President

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been  signed  below by the  following  persons on behalf of each
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                     SIGNATURE                                   TITLE                            DATE
                     --------                                    -----                            -----
<S>                                                  <C>                                     <C>
             /s/ WILLIAM W. COLLINS                  President, Chief Executive Officer      March 26, 2002
-----------------------------------------------      and Director (Principal Executive
               William W. Collins                    Officer)


              /s/ BARRY A. CROZIER                   Director                                March 26, 2002
-----------------------------------------------
                Barry A. Crozier

               /s/ JOHN F. REBELE                    Director, Senior Vice President and     March 26, 2002
-----------------------------------------------      Chief Financial Officer
                 John F. Rebele                      (Principal Financial and
                                                     Accounting Officer)
</TABLE>


                                       24
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

2.1     Reorganization  Agreement,  dated as of December 31, 1998,  by and among
        BMCA,   Building  Materials   Manufacturing   Corporation  and  Building
        Materials Investment  Corporation  (incorporated by reference to Exhibit
        2.1 to  BMCA's  Registration  Statement  on Form S-4  (Registration  No.
        333-69749) (the "2008 Notes S-4")).

3.1     Amended and Restated  Certificate of Incorporation of BMCA (incorporated
        by  reference  to  Exhibit  3.1 to BMCA's  Form 10-K for the year  ended
        December 31, 1999).

3.2     By-laws of BMCA  (incorporated  by  reference  to Exhibit  3.2 to BMCA's
        Registration  Statement on Form S-4  (Registration  No.  33-81808)) (the
        "Deferred Coupon Note Registration Statement").

3.3     Certificate  of  Incorporation  of  Building   Materials   Manufacturing
        Corporation  (incorporated  by  reference  to Exhibit 3.3 to BMCA's Form
        10-K fr the fiscal year ended December 31, 1998 (the "1998 10-K")).

3.4     By-laws of Building Materials Manufacturing Corporation (incorporated by
        reference to Exhibit 3.4 to the 1998 10-K).

3.5     Certificate   of   Incorporation   of  Building   Materials   Investment
        Corporation (incorporated by reference to Exhibit 3.5 to the 1998 10-K).

3.6     By-laws of Building Materials  Investment  Corporation  (incorporated by
        reference to Exhibit 3.6 to the 1998 10-K).

4.1     Indenture,  dated  July 5,  2000,  between  BMCA,  as  issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation,  as  guarantors,  and The  Bank  of New  York,  as  trustee
        (incorporated  by  reference to Exhibit 4.13 to BMCA's Form 10-K for the
        year ended December 31, 2000 (the "2000 10-K").

4.2     First  Supplemental  Indenture,  dated as of  December  4, 2000,  to the
        Indenture  dated as of July 5, 2000,  between BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.14 to the 2000 10-K).

4.3     Registration Rights Agreement,  dated July 5, 2000, between BMCA and BNY
        Capital Markets Inc.  (incorporated  by reference to Exhibit 4.15 to the
        2000 10-K).

4.4     First  Amendment  to the  Registration  Rights  Agreement,  dated  as of
        December 4, 2000, to Registration  Rights  Agreement dated July 5, 2000,
        among BMCA, as issuer, Building Materials Manufacturing  Corporation and
        Building  Materials  Investment  Corporation,  as  guarantors,  and  BNY
        Capital Markets,  Inc., as initial purchaser  (incorporated by reference
        to Exhibit 4.16 to the 2000 10-K).

4.5     Indenture,  dated as of December 9, 1996,  between  BMCA and The Bank of
        New York, as trustee (incorporated by reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-20859)).

4.6     First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of December 9, 1996 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 10.7 of the 2008 Notes S-4).

4.7     Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of December 9, 1996 among BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.5 to the 2000 10-K).

4.8     Indenture,  dated as of October 20,  1997,  between BMCA and The Bank of
        New York, as trustee (incorporated by reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-41531)).

4.9     First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of October 20, 1997 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation, as co-obligor,  Building Materials Investment
        Corporation,  as  guarantor,  and  The  Bank  of New  York,  as  trustee
        (incorporated by reference to Exhibit 10.8 of the 2008 Notes S-4).


                                       25
<PAGE>

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

4.10    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture dated as of October 20, 1997 among BMCA and Building Materials
        Manufacturing  Corporation,  as issuers,  Building Materials  Investment
        Corporation,  as guarantor, the Additional Guarantors signatory thereto,
        as  additional  guarantors,  and  The  Bank  of  New  York,  as  trustee
        (incorporated by reference to Exhibit 4.7 to the 2000 10-K).

4.11    Indenture,  dated as of July 17, 1998,  between BMCA and The Bank of New
        York,  as trustee  (incorporated  by  reference to Exhibit 4.1 to BMCA's
        Registration Statement on Form S-4 (Registration No. 333-60633).

4.12    First Supplemental Indenture,  dated as of January 1, 1999, to Indenture
        dated as of July 17,  1998 among  BMCA,  as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 10.9 of the 2008 Notes S-4).

4.13    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of July 17,  1998 among  BMCA,  as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.9 to the 2000 10-K).

4.14    Indenture,  dated as of December 3, 1998,  between  BMCA and The Bank of
        New York,  as trustee  (incorporated  by reference to Exhibit 4.1 to the
        2008 Notes S-4).

4.15    First  Supplemental  Indenture  dated as of January 1, 1999 to Indenture
        dated as of December 3, 1998 among BMCA, as issuer,  Building  Materials
        Manufacturing Corporation and Building Materials Investment Corporation,
        as  guarantors,  and The Bank of New York, as trustee  (incorporated  by
        reference to Exhibit 4.4 to the 2008 Notes S-4).

4.16    Second  Supplemental  Indenture,  dated  as  of  December  4,  2000,  to
        Indenture  dated as of December 3, 1998 among BMCA, as issuer,  Building
        Materials  Manufacturing  Corporation and Building Materials  Investment
        Corporation, as original guarantors, the Additional Guarantors signatory
        thereto, as additional guarantors,  and The Bank of New York, as trustee
        (incorporated by reference to Exhibit 4.12 to the 2000 10-K).

10.1    Amended and Restated Management Agreement,  dated as of January 1, 1999,
        among GAF, G-I  Holdings  Inc., G  Industries  Corp.,  Merick Inc.,  GAF
        Fiberglass  Corporation,  ISP, GAF Building Materials  Corporation,  GAF
        Broadcasting   Company,   Inc.,   BMCA  and  ISP  Opco   Holdings   Inc.
        (incorporated by reference to Exhibit 10.1 to the 1998 10-K).

10.2    Amendment No. 1 to the Management Agreement, dated as of January 1, 2000
        (incorporated  by reference to Exhibit 10.2 to  International  Specialty
        Products Inc. Annual Report on Form 10-K for the year ended December 31,
        1999).

10.3    Amendment No. 2 to the Management Agreement, dated as of January 1, 2001
        (incorporated  by reference to Exhibit 10.3 to  International  Specialty
        Products Inc. Annual Report on Form 10-K for the year ended December 31,
        2000).

10.4    Amendment No. 3 to the Amended and Restated Management Agreement,  dated
        as of June  27,  2001 by and  among  G-I  Holdings  Inc.,  Merick  Inc.,
        International   Specialty   Products   Inc.,   ISP  Investco   LLC,  GAF
        Broadcasting  Company,  Inc., Building Materials  Corporation of America
        and ISP  Management  Company,  Inc.,  as  assignee  of ISP  Chemco  Inc.
        (incorporated  by  reference  to  Exhibit  10.7 to the ISP  Chemco  Inc.
        Registration Statement on Form S-4 (Registration No. 333-70144)).

10.5    Amendment No. 4 to the Amended and Restated Management Agreement,  dated
        as of  January  1, 2002 by and among G-I  Holdings  Inc.,  Merick  Inc.,
        International   Specialty   Products   Inc.,   ISP  Investco   LLC,  GAF
        Broadcasting  Company,  Inc., Building Materials  Corporation of America
        and ISP Management Company, Inc.

10.6    Form of Option  Agreement  relating  to Series A  Cumulative  Redeemable
        Convertible  Preferred Stock  (incorporated by reference to Exhibit 10.9
        to BMCA's Form 10-K for the year ended December 31, 1996).*

10.7    Forms of Amendment to Option  Agreement  relating to Series A Cumulative
        Redeemable  Convertible  Preferred Stock  (incorporated  by reference to
        Exhibit  10.12 to BMCA's Form 10-K for the year ended  December 31, 1997
        (the "1997 Form 10-K").*


                                       26
<PAGE>

EXHIBIT
NUMBER                             DESCRIPTIONS
-------                            ------------

10.8    Form of Option  Agreement  relating  to Series A  Cumulative  Redeemable
        Convertible  Preferred Stock (incorporated by reference to Exhibit 10.13
        to the 1997 Form 10-K).*

10.9    BMCA Preferred Stock Option Plan  (incorporated  by reference to Exhibit
        4.2 to  BMCA's  Registration  Statement  on Form S-8  (Registration  No.
        333-60589)).*

10.10   BMCA 2001  Long-Term  Incentive  Plan.  (incorporated  by  reference  to
        Exhibit 10.8 to the 2000 10-K).*

10.11   Tax Sharing  Agreement,  dated as of January 31,  1994,  among GAF,  G-I
        Holdings Inc. and BMCA (incorporated by reference to Exhibit 10.6 to the
        Deferred Coupon Note Registration Statement).

10.12   Amendment to Tax Sharing Agreement,  dated as of March 19, 2001, between
        G-I Holdings and BMCA (incorporated by reference to Exhibit 10.10 to the
        2000 10-K).

10.13   Reorganization  Agreement,  dated as of  January  31,  1994,  among  GAF
        Building Materials Corporation, G-I Holdings Inc. and BMCA (incorporated
        by reference to Exhibit  10.9 to the Deferred  Coupon Note  Registration
        Statement).

10.14   Credit  Agreement,  dated as of December 4, 2000, by and among BMCA, the
        lenders  party  thereto,  and The Bank of New  York,  as  agent  for the
        lenders and as Swing Line Lender (the "Credit Agreement")  (incorporated
        by reference to Exhibit 10.12 to the 2000 10-K).

10.15   Amendment No. 1, dated as of December 22, 2000, to the Credit  Agreement
        (incorporated by reference to Exhibit 10.13 to the 2000 10-K).

10.16   Amendment  No. 2,  dated as of March 8, 2001,  to the  Credit  Agreement
        (incorporated by reference to Exhibit 10.14 to the 2000 10-K).

10.17   Amended and Restated Credit Agreement,  dated as of December 4, 2000, by
        and among BMCA,  the  lenders  party  thereto,  Fleet  National  Bank as
        Documentation  Agent, Bear Stearns Corporate Lending Inc. as Syndication
        Agent  and  the  Bank  of  New  York  as  Swing   Line   Lender  and  as
        Administration  Agent with BNY Capital Markets Inc. as Lead Arranger and
        Bookrunner (the "Amended and Restated Credit  Agreement")  (incorporated
        to reference to Exhibit 10.15 to the 2000 10-K).

10.18   Amendment  No. 1, dated as of  December  22,  2000,  to the  Amended and
        Restated Credit Agreement (incorporated by reference to Exhibit 10.16 to
        the 2000 10-K).

10.19   Amendment  No. 2, dated as of March 8, 2001, to the Amended and Restated
        Credit Agreement (incorporated by reference to Exhibit 10.17 to the 2000
        10-K).

10.20   Security Agreement,  dated December 22, 2000, by and among BMCA and each
        of the  grantors  party  thereto and The Bank of New York as  Collateral
        Agent (incorporated to reference to Exhibit 10.18 to the 2000 10-K).

10.21   Collateral Agent Agreement,  dated December 22, 2000, by and among BMCA,
        such Subsidiary of BMCA a party thereto,  the 1999 Administrative  Agent
        (as defined therein), each Senior Note Trustee (as defined therein), the
        2000  Administrative  Agent (as defined  therein),  the Chase  Manhattan
        Bank,  Fleet National Bank and the Bank of New York, as Collateral Agent
        (incorporated by reference to Exhibit 10.19 to the 2000 10-K).

10.22   Employment  Security  Agreement  between  BMCA and  William W.  Collins,
        effective May 2001.*

10.23   Employment  Security  Agreement  between  BMCA  and  David  A  Harrison,
        effective June 2001.*

10.24   Employment  Security  Agreement  between  BMCA  and  Robert  B.  Tafaro,
        effective June 2001.*

10.25   Employment  Security  Agreement  between  BMCA and  Kenneth  E.  Walton,
        effective June 2001.*

10.26   Employment Security Agreement between BMCA and John F. Rebele, effective
        June 2001.*

21      Subsidiaries of BMCA.

23.1    Consent of Arthur Andersen LLP.

99.1    Letter to  Commission  pursuant to  Temporary  Note 3T,  dated March 26,
        2002.

----------
*    Management and/or compensation plan or arrangement




                                       27
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA
                                    FORM 10-K

                 INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS,
                 CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

                                                                           PAGE
                                                                           -----
Management's Discussion and Analysis of Financial Condition and
Results of Operations ....................................................  F-2

Selected Financial Data ..................................................  F-7

Report of Independent Public Accountants .................................  F-8

Consolidated Statements of Operations for the three years ended
December 31, 2001 ........................................................  F-9

Consolidated Balance Sheets as of December 31, 2000 and 2001 ............. F-10

Consolidated Statements of Cash Flows for the three years ended
December 31, 2001 ........................................................ F-11

Consolidated Statements of Stockholders' Equity (Deficit)
for the three years ended December 31, 2001 .............................. F-13

Notes to Consolidated Financial Statements ............................... F-14

Supplementary Data (Unaudited):
     Quarterly Financial Data (Unaudited) ................................ F-42

                                    SCHEDULES

Consolidated Financial Statement Schedules:
     Schedule II--Valuation and Qualifying Accounts ......................  S-1


                                      F-1
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     Building  Materials  Corporation of America ("BMCA"),  a subsidiary of BMCA
Holdings Corporation, was formed in January 1994 to acquire the operating assets
and certain  liabilities of GAF Building Materials  Corporation,  whose name was
changed to G-I Holdings Inc., an indirect parent of BMCA. G-I Holdings Inc. is a
wholly-owned  subsidiary of G Holdings Inc. See Note 1 to Consolidated Financial
Statements.

     To facilitate  administrative  efficiency,  effective October 31, 2000, GAF
Corporation,  the  former  indirect  parent  of BMCA,  merged  into  its  direct
subsidiary,  G-I Holdings  Inc. G-I  Holdings  Inc.  then merged into its direct
subsidiary, G Industries Corp., which in turn merged into its direct subsidiary,
GAF Fiberglass  Corporation.  In that merger, GAF Fiberglass Corporation changed
its name to GAF  Corporation.  Effective  November  13,  2000,  GAF  Corporation
(formerly  known  as  GAF  Fiberglass   Corporation)   merged  into  its  direct
subsidiary,  GAF Building Materials  Corporation,  whose name was changed in the
merger to G-I Holdings Inc. G-I Holdings Inc. is now an indirect  parent of BMCA
and BMCA's direct parent is BMCA Holdings Corporation. References herein to "G-I
Holdings"   mean  G-I  Holdings  Inc.  and  any  and  all  of  its   predecessor
corporations,  including GAF Corporation, G-I Holdings Inc., G Industries Corp.,
GAF Fiberglass Corporation and GAF Building Materials Corporation.

RESULTS OF OPERATIONS

   2001 COMPARED WITH 2000

     We recorded net income in 2001 of $18.8 million compared with a net loss of
$11.2 million in 2000. Excluding the impact in 2000 of the pre-tax gain of $17.5
million  ($11.0  million  after-tax)  from  the  sale of the  security  products
business of our subsidiary, LL Building Products Inc., a pre-tax charge of $15.0
million  ($9.5  million  after-tax)  related to an increase in product  warranty
reserves, pre-tax losses from the sale of investment securities of $18.1 million
($11.4 million  after-tax) and an after-tax  extraordinary loss of $0.3 million,
the net loss  would  have  been  $1.0  million  in 2000.  Results  for 2000 also
included  operating  income of the  security  products  business  of LL Building
Products Inc.,  which was sold in September  2000, of $3.7 million pre-tax ($2.3
million  after-tax).  The increase in 2001 net earnings was primarily the result
of higher operating income and lower other expenses,  partially offset by higher
interest expense.

     Net sales for 2001 were $1,293.0  million compared with $1,207.8 million in
the same period of 2000  representing an increase of 7.1%.  Excluding the impact
of the sale of the security  products business of LL Building Products Inc., net
sales  were  higher by 9.1% in 2001.  Higher  net  sales in 2001 were  primarily
attributable  to an  increase  in net  sales  of  premium  steep  slope  roofing
products,  partially offset by lower net sales in low slope roofing products and
the sale of the  security  products  business of LL Building  Products  Inc. The
increase in net sales of premium steep slope  roofing  products in 2001 resulted
from higher unit volumes and higher average selling prices, while the decline in
net sales of low slope  roofing  products  resulted  from lower unit volumes and
lower average selling prices.

     Operating  income for 2001 was a $97.0 million  compared with $63.9 million
in 2000,  representing an increase of $33.1 million or 51.8%. Excluding the $3.7
million of  operating  income of the security  products  business of LL Building
Products Inc.,  together with the $17.5 million gain on sale of these assets and
the $15.0 million  product  warranty  reserve charge in 2000,  operating  income
would  have been  higher by $39.3  million  or 68.1% in 2001.  Higher  operating
results in 2001 were  primarily  attributable  to an increase  in premium  steep
slope roofing products net sales along with lower manufacturing costs, partially
offset by higher selling, general and administrative expenses, a decrease in net
sales of low  slope  roofing  products,  and the sale of the  security  products
business  of  LL  Building  Products  Inc.  The  higher  selling,   general  and
administrative  expenses in 2001 were  principally  due to higher volume related
transportation and warehouse expenses.

     We recorded in 2000 a $17.5  million  pre-tax gain from the sale of certain
assets of the security  products business of LL Building Products Inc. (see Note
4 to  Consolidated  Financial  Statements),  a pre-tax  charge of $15.0  million
related to an increase in product warranty  reserves (see Note 2 to Consolidated
Financial Statements), pre-tax losses


                                      F-2
<PAGE>

from the  sale of  investment  securities  of $18.1  million,  and an  after-tax
extraordinary  loss of $0.3  million  related to the  write-off  of  unamortized
deferred financing fees in connection with the extinguishment of debt.

     Interest  expense  increased from $53.5 million in 2000 to $60.8 million in
2001 primarily due to lower capitalized  interest and higher average borrowings,
partially offset by lower interest rates. The lower capitalized interest in 2001
is the  result of the  completion  of  construction  of three new  manufacturing
facilities in the second half of 2000.  Other expense,  net was $6.4 million for
2001 compared to $27.6 million in 2000, with the decrease primarily attributable
to the pre-tax  loss of $18.1  million  from the sale of  investment  securities
occurring in 2000 and lower other expenses in 2001.

   2000 COMPARED WITH 1999

     We recorded a net loss in 2000 of $11.2 million compared with net income of
$24.0 million in 1999. The net loss in 2000 included a one-time  pre-tax gain of
$17.5 million ($11.0 million after-tax), a pre-tax charge of $15.0 million ($9.5
million  after-tax),  pre-tax  losses from the sale of investment  securities of
$18.1 million ($11.4 million after-tax),  and an after-tax extraordinary loss of
$0.3 million.  The net income in 1999 included a pre-tax  nonrecurring charge of
$2.7 million ($1.7 million  after-tax)  and an after-tax  extraordinary  loss of
$1.3  million.  Excluding the one-time  gains and losses in both years,  the net
loss for 2000 would  have been $1.0  million  compared  with net income of $27.0
million in 1999,  with the  decrease  primarily  the  result of lower  operating
income, lower investment income and higher interest expense.

     Net sales for 2000 were  $1,207.8  million,  a 5.9% increase over net sales
for 1999 of  $1,140.0  million,  with the  increase  due to net  sales  gains in
premium steep slope roofing  products,  partially  offset by slightly  lower net
sales of low slope roofing products.  The increase in net sales of premium steep
slope roofing  products in 2000 resulted from higher average  selling prices and
unit volumes,  while the decrease in net sales of low slope roofing  products in
2000  primarily  resulted  from lower unit volumes,  partially  offset by higher
average selling prices.

     Operating  income for 2000 was $61.4  million  compared  with $85.7 million
reported in 1999,  excluding the one-time items in both years.  Lower  operating
results in 2000 were primarily attributable to the higher cost of energy and raw
material  purchases,  principally the cost of asphalt due to high oil prices and
increased demand for asphalt by the paving industry,  partially offset by higher
average  selling prices for premium steep slope and low slope roofing  products,
higher premium steep slope roofing products unit volumes and lower manufacturing
costs.

     We recorded in 2000 a $17.5  million  pre-tax gain from the sale of certain
assets of the security  products business of LL Building Products Inc. (see Note
4 to  Consolidated  Financial  Statements),  a pre-tax  charge of $15.0  million
related to an increase in product warranty  reserves (see Note 2 to Consolidated
Financial Statements),  pre-tax losses from the sale of investment securities of
$18.1 million,  and an after-tax  extraordinary  loss of $0.3 million related to
the write-off of  unamortized  deferred  financing  fees in connection  with the
extinguishment  of debt. In 1999, we recorded  pre-tax  nonrecurring  charges of
$2.7  million  related to the  settlement  of a legal  matter  and an  after-tax
extraordinary  loss of $1.3  million  representing  the  premium  paid  upon the
extinguishment of debt.

     Interest  expense  increased  from  $48.3  million in 1999 to $53.5 in 2000
primarily due to higher average  borrowings and a higher average  interest rate.
Other  expense,  net was $27.6 million in 2000 compared to other income,  net of
$5.4  million in 1999,  with the decrease  primarily  due to the pre-tax loss of
$18.1 million from the sale of investment  securities,  lower investment  income
and higher other expenses.

LIQUIDITY AND FINANCIAL CONDITION

     Net cash inflow during 2001 was $45.2 million before financing  activities,
including $73.3 million of cash generated from  operations and the  reinvestment
of $28.1 million for capital programs.

     Cash invested in additional  working  capital  totaled $25.7 million during
2001,  primarily  reflecting  increases in accounts  receivable and inventory of
$26.6 and $0.5 million, respectively,  partially offset by increases in accounts
payable and accrued  liabilities  of $0.7 and $0.7 million,  respectively.  Cash
provided by operating  activities  also  reflected net proceeds from the sale of
accounts  receivable  of $34.7  million,  a $1.1 million  decrease  from related
parties/parent  corporations  transactions  and a $6.0  million  decrease in the
reserve for product warranty claims.


                                      F-3
<PAGE>

     Net cash  used in  financing  activities  totaled  $81.5  million  in 2001,
consisting of $70.0 million in  repayments of our  borrowings  under our amended
and restated $110 million secured revolving credit facility which we refer to as
the "Existing Credit Agreement", $6.0 million of repayments of long-term debt, a
$2.5 million loan to our parent corporation,  and $3.0 million in financing fees
and  expenses.  See Note 15 to  Consolidated  Financial  Statements.  Our 101/2%
Senior Notes due 2003,  our 73/4% Senior Notes due 2005,  our 85/8% Senior Notes
due  2006,  our 8% Senior  Notes  due 2007 and our 8% Senior  Notes due 2008 are
collectively referred to as the "Senior Notes."

     As a result of the foregoing factors,  cash and cash equivalents  decreased
by $36.4 million during 2001 to $46.4 million.

     In December  2000,  we entered  into a new $100 million  secured  revolving
credit facility which we refer to as the "New Credit  Agreement"  which is to be
used for working capital purposes subject to certain restrictions.  The Existing
Credit  Agreement  and the New Credit  Agreement  mature in August  2003.  As of
December  31,  2001,  there were no  outstanding  borrowings  under the Existing
Credit  Agreement or the New Credit  Agreement  and $41.7  million of letters of
credit were  outstanding  under the Existing Credit  Agreement.  Our obligations
under the Existing Credit Agreement and the New Credit Agreement, as well as our
obligations  under our $7.0 million precious metal note due 2003, which we refer
to as the "Precious Metal Note", and  approximately  $3.5 million of obligations
under a  standby  letter  of  credit,  collectively  referred  to as the  "Other
Indebtedness",  aggregated  $7.0  million  of  borrowings  and $45.2  million of
letters of credit  outstanding at December 31, 2001. All those  obligations  are
secured  by a  first-priority  lien on  substantially  all of our assets and the
assets of our  subsidiaries  on a pro-rata basis. We refer to these assets below
as the  "Collateral." The Existing Credit Agreement and the New Credit Agreement
have been  guaranteed  by all of our  current  and future  direct  and  indirect
domestic subsidiaries, other than BMCA Receivables Corporation. Our Senior Notes
are  secured  by a  second-priority  lien  on  these  assets  for so long as the
first-priority lien remains in effect, subject to certain limited exceptions and
have been  guaranteed by our  subsidiaries  that  guaranteed the Existing Credit
Agreement and the New Credit Agreement.  In connection with these  transactions,
we entered into a security  agreement  which  grants a security  interest in the
Collateral in favor of the  collateral  agent on behalf of the lenders under the
Existing Credit Agreement,  the New Credit Agreement and the Other  Indebtedness
and  the  holders  of our  outstanding  Senior  Notes.  We also  entered  into a
collateral agent agreement which provides,  among other things,  for the sharing
of proceeds  with respect to any  foreclosure  or other remedy in respect of the
Collateral.

     Under the terms of the Existing Credit Agreement,  the New Credit Agreement
and the  indentures  governing  our  Senior  Notes,  we are  subject  to certain
financial covenants. These include, among others,

     o  interest coverage,

     o  minimum   consolidated   EBITDA   (earnings   before  income  taxes  and
        extraordinary   items  increased  by  interest  expense,   depreciation,
        goodwill and other amortization),

     o  limitations   on  the  amount  of  annual   capital   expenditures   and
        indebtedness,

     o  restrictions  on  distributions  to  our  parent   corporations  and  on
        incurring liens, and

     o  restrictions  on  investments  and other  payments.  Dividends and other
        restricted  payments are  prohibited,  except  demand loans of specified
        amounts  made to any  parent  corporation,  subject to  limitations,  as
        described in those  agreements,  in future  periods.  As of December 31,
        2001, after giving effect to the most restrictive of the  aforementioned
        restrictions,  we could not have paid dividends or made other restricted
        payments except for demand loans up to $5.0 million.  In addition,  if a
        change of control as defined in the Existing  Credit  Agreement  and the
        New Credit  Agreement  occurs,  those agreements could be terminated and
        the loans  under  those  agreements  accelerated  by the holders of that
        indebtedness.  If that event  occurred,  it would cause our  outstanding
        Senior Notes to be  accelerated.  As of December  31,  2001,  we were in
        compliance with all covenants under the Existing Credit  Agreement,  the
        New Credit Agreement and the indentures governing our Senior Notes.

     In connection with entering into the New Credit Agreement, we also issued a
$7.0 million Precious Metal Note in order to finance precious metals used in our
manufacturing processes.

     The Existing  Credit  Agreement and the New Credit  Agreement  also provide
that in the event we become  the  subject  of any  bankruptcy  proceedings,  the
lenders will, subject to bankruptcy court approval, refinance and


                                      F-4
<PAGE>

consolidate in full the indebtedness  under the Existing Credit  Agreement,  the
New Credit Agreement and the Other Indebtedness with a new  debtor-in-possession
facility. The terms and conditions of that  debtor-in-possession  facility would
be  substantially  identical to the Existing  Credit  Agreement,  the New Credit
Agreement and the Other Indebtedness,  and would be in an aggregate amount equal
to the then  committed  amount under the New Credit  Agreement plus $110 million
plus the principal amount of the Other Indebtedness.  That facility would mature
on August 18, 2004 and would be secured by a first-priority security interest in
all of the Collateral.

     See Note 11 to Consolidated  Financial  Statements for further  information
regarding our debt instruments.

     At December 31, 2001, we had total outstanding consolidated indebtedness of
$605.5 million,  of which $5.6 million matures prior to December 31, 2002, and a
stockholders'  deficit of $61.6 million. We anticipate funding these obligations
principally from our cash, operations and/or borrowings.

     In December 2001, we entered into a new accounts receivable  securitization
agreement  under which we sell  certain of our trade  accounts  receivable  to a
special  purpose  subsidiary  of ours,  BMCA  Receivables  Corporation,  without
recourse,  which in turn  sells them to a third  party,  without  recourse.  The
agreement  provides for a maximum of $115.0 million in cash to be made available
to us based on the sale of eligible  receivables  outstanding from time to time.
This  agreement  expires in December  2004 and is subject to financial and other
covenants including a material adverse change in business conditions,  financial
or otherwise.  This  agreement  replaces a prior accounts  receivable  facility,
which expired December 2001. See Note 8 to Consolidated Financial Statements.

     We make loans to, and borrow from, G-I Holdings and its  subsidiaries  from
time to time at prevailing  market rates. As of December 31, 2001, BMCA Holdings
Corporation  owed  us  $2.5  million,   including   interest  of  $0.1  million,
representing a loan for payments made during 2001, at an interest rate of 4.75%.
At December 31, 2001, no loans were owed by us to affiliates.  In addition, from
time to time we make  non-interest  bearing advances to affiliates,  of which no
amounts  were  outstanding  at December 31,  2001.  See Note 15 to  Consolidated
Financial Statements.

     On  January  5,  2001,  G-I  Holdings   filed  a  voluntary   petition  for
reorganization  under  Chapter 11 of the U.S.  Bankruptcy  Code due to  asbestos
claims.  See Item 3,  "Legal  Proceedings"  for  further  information  regarding
asbestos-related matters. See Note 3 to the Consolidated Financial Statements.

     Our parent corporations,  G-I Holdings and BMCA Holdings  Corporation,  are
essentially holding companies without independent businesses or operations. As a
result,  they are presently  dependent upon the earnings and cash flows of their
subsidiaries,  principally our company,  in order to satisfy their  obligations,
including various tax and other claims and liabilities including tax liabilities
relating to  Rhone-Poulenc  Surfactants & Specialties,  L.P., a Delaware limited
partnership  in which G-I Holdings held an interest.  We do not believe that the
dependence of our parent  corporations  on the cash flows of their  subsidiaries
should have a material  adverse effect on our  operations,  liquidity or capital
resources.  For  further  information,  see  Notes  3,  7,  11,  15  and  16  to
Consolidated Financial Statements.

     We use  capital  resources  to  maintain  existing  facilities,  expand our
operations  and make  acquisitions.  In the first  quarter of 2001, we commenced
production at a new manufacturing  facility in Mt. Vernon,  Indiana for a single
ply low slope membrane  roofing  system.  We expect to generate  funding for our
capital program from results of operations and leasing transactions.

     In  response  to current  market  conditions,  to better  service  shifting
customer demand and to reduce costs, we closed four manufacturing  facilities in
2000 located in Monroe,  Georgia;  Port Arthur,  Texas;  Corvallis,  Oregon; and
Albuquerque,  New  Mexico.  In  December  2001,  we sold the  Corvallis,  Oregon
facility.  The sale of this  facility  did not  have a  material  impact  on the
results of operations.  See Note 4 to the Consolidated Financial Statements.  As
market growth and customer demand improves,  we may reinstate  production at one
or more of the remaining  three closed  manufacturing  facilities in the future.
The  effect of closing  these  facilities  was not  material  to our  results of
operations.

     We do not  believe  that  inflation  has had an  effect on our  results  of
operations during the past three years.  However,  we cannot assure you that our
business will not be affected by inflation in the future, or by increases in the
cost  of  energy  and  asphalt  purchases  used  in  our  manufacturing  process
principally due to fluctuating oil prices.


                                      F-5
<PAGE>

   MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT

     During 2000 and in prior years, our investment strategy was to seek returns
in excess of money market rates on our available  cash while  minimizing  market
risks.  We invested  primarily  in  international  and  domestic  arbitrage  and
securities of companies involved in acquisition or reorganization  transactions,
including at times,  common stock short positions which were offset against long
positions in securities which were expected, under certain circumstances,  to be
exchanged  or  converted  into the short  positions.  With respect to our equity
positions,  we  were  exposed  to  the  risk  of  market  loss.  See  Note  2 to
Consolidated Financial Statements. We are no longer permitted to engage in those
activities  under the terms of the Existing Credit  Agreement and the New Credit
Agreement.

     Under  the  terms  of the  Existing  Credit  Agreement  and the New  Credit
Agreement, we are only permitted to enter into hedging arrangements that protect
against or  mitigate  the effect of  fluctuations  in  interest  rates,  foreign
exchange rates or prices of commodities used in our business.

                                      * * *


FORWARD-LOOKING STATEMENTS

     This   Annual   Report  on  Form  10-K   contains   both   historical   and
forward-looking  statements.  All statements other than statements of historical
fact are, or may be deemed to be, forward-looking  statements within the meaning
of section 27A of the Securities Act and section 21E of the Securities  Exchange
Act of 1934. These forward-looking statements are only predictions and generally
can be identified by use of statements  that include  phrases such as "believe,"
"expect,"  "anticipate,"  "intend,"  "plan," "foresee" or other similar words or
phrases. Similarly, statements that describe our objectives, plans or goals also
are forward-looking  statements. Our operations are subject to certain risks and
uncertainties  that could cause actual results to differ  materially  from those
contemplated  by the relevant  forward-looking  statement.  The  forward-looking
statements included herein are made only as of the date of this Annual Report on
Form 10-K and we undertake no obligation to publicly update any  forward-looking
statements to reflect  subsequent events or circumstances.  We cannot assure you
that projected results or events will be achieved.



                                      F-6
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                             SELECTED FINANCIAL DATA

     The following table presents our selected  consolidated  financial data. As
of January 1, 1997,  G-I Holdings  contributed  all of the capital stock of U.S.
Intec,  Inc. to BMCA.  The results for the year ended  December 31, 1997 include
the  results  of the  Leatherback  Industries  business  from  the  date  of its
acquisition (March 14, 1997),  including net sales of $30.2 million. The results
for the year ended  December  31,  1998  include  the results of the LL Building
Products  Inc.  business  from  the  date of its  acquisition  (June  1,  1998),
including  net  sales of  $53.3  million,  and the  results  for the year  ended
December 31, 2000 include the results of the LL Building  Products Inc. security
products  business,  certain  assets  of  which  were  sold in  September  2000,
including net sales of $22.9 million.

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                      ----------------------------------------------------------
                                                       1997         1998        1999          2000        2001
                                                      ------     --------     --------     --------     --------
                                                                              (MILLIONS)
<S>                                                   <C>        <C>          <C>          <C>          <C>
OPERATING DATA:
   Net sales ......................................   $944.6     $1,088.0     $1,140.0     $1,207.8     $1,293.0
   Operating income ...............................     73.2         47.5*        83.1*        63.9*        97.0
   Interest expense ...............................     43.0         50.0         48.3         53.5         60.8
   Income (loss) before income taxes
     and extraordinary losses .....................     45.7         13.5         40.2        (17.2)        29.8
   Income (loss) before extraordinary losses ......     27.8          8.4         25.3        (10.8)        18.8
   Net income (loss) ..............................     27.8         (9.8)        24.0        (11.2)        18.8
</TABLE>

----------
* After  non-recurring  charges  of $27.6  and $2.7  million  in 1998 and  1999,
  respectively,  and a charge of $15.0  million  and a gain on sale of assets of
  $17.5 million in 2000.

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                      ----------------------------------------------------------
                                                       1997         1998        1999          2000        2001
                                                      ------     --------     --------     --------     --------
                                                                              (MILLIONS)
<S>                                                   <C>        <C>          <C>          <C>          <C>
BALANCE SHEET DATA:
   Total working capital ..........................   $283.1     $  220.1     $  109.9     $  129.9      $  84.6
   Total assets ...................................    829.7        867.0        895.1        771.2        706.3
   Long-term debt less current maturities .........    563.9        596.9        600.7        674.7        599.9
   Total stockholders' equity (deficit) ...........     89.5         52.2         21.7        (77.9)       (61.6)
</TABLE>


<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                      ----------------------------------------------------------
                                                       1997         1998        1999          2000        2001
                                                      ------     --------     --------     --------     --------
                                                                              (MILLIONS)
<S>                                                   <C>        <C>          <C>          <C>          <C>
OTHER DATA:
   Depreciation ...................................   $ 25.0       $ 28.9       $ 33.0      $  36.4      $  37.2
   Goodwill amortization ..........................      1.9          2.1          2.0          2.0          2.0
   Capital expenditures and acquisitions ..........     82.2        134.5         45.8         61.5         28.1
</TABLE>



                                      F-7
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Building Materials Corporation of America:

     We have audited the  accompanying  consolidated  balance sheets of Building
Materials  Corporation  of  America (a  Delaware  corporation  and  wholly-owned
subsidiary of BMCA Holdings  Corporation)  and  subsidiaries  as of December 31,
2000  and  2001,  and  the  related   consolidated   statements  of  operations,
stockholders' equity (deficit) and cash flows for each of the three years in the
period ended  December 31, 2001.  These  financial  statements  and the schedule
referred  to below  are the  responsibility  of the  Company's  management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial  statements referred to above,  appearing on
pages F-9 to F-41 of this Form 10-K,  present fairly, in all material  respects,
the  financial  position  of  Building  Materials  Corporation  of  America  and
subsidiaries  as of  December  31,  2000  and  2001,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United States.

     Our  audits  were made for the  purpose  of forming an opinion on the basic
financial  statements  taken as a whole.  The schedule  appearing on page S-1 of
this Form 10-K is presented for the purpose of complying with the Securities and
Exchange  Commission's rules and is not part of the basic financial  statements.
This schedule has been subjected to the auditing procedures applied in the audit
of the basic  financial  statements  and, in our opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.


                                                 /s/ Arthur Andersen LLP

                                                 ARTHUR ANDERSEN LLP

Roseland, New Jersey
February  15, 2002



                                      F-8
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                        ----------------------------------------
                                                            1999           2000           2001
                                                        ----------------------------------------
                                                                       (THOUSANDS)

<S>                                                     <C>            <C>            <C>
Net sales .........................................     $1,140,039     $1,207,759     $1,293,042
                                                        ----------     ----------     ----------
Costs and expenses:
   Cost of products sold ..........................        812,697        893,776        923,745
   Selling, general and administrative ............        239,560        250,542        270,280
   Goodwill amortization ..........................          2,034          2,024          2,024
   Gain on sale of assets .........................             --        (17,505)            --
   Warranty reserve adjustment ....................             --         15,000             --
   Nonrecurring charges ...........................          2,650             --             --
                                                        ----------     ----------     ----------
      Total costs and expenses ....................      1,056,941      1,143,837      1,196,049
                                                        ----------     ----------     ----------
Operating income ..................................         83,098         63,922         96,993
Interest expense ..................................        (48,317)       (53,468)       (60,803)
Other income (expense), net .......................          5,440        (27,640)        (6,409)
                                                        ----------     ----------     ----------
Income (loss) before income taxes and
   extraordinary losses ...........................         40,221        (17,186)        29,781
Income tax (provision) benefit ....................        (14,882)         6,359        (11,019)
                                                        ----------     ----------     ----------
Income (loss) before extraordinary losses .........         25,339        (10,827)        18,762
Extraordinary losses, net of income tax
   benefits of $761 and $194, respectively ........         (1,296)          (330)            --
                                                        ----------     ----------     ----------
Net income (loss) .................................     $   24,043     $  (11,157)    $   18,762
                                                        ==========     ==========     ==========
</TABLE>

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


                                      F-9
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               DECEMBER 31,
                                                                                        ------------------------
                                                                                           2000          2001
                                                                                        ---------      ---------
                                                                                             (THOUSANDS)
                                                          ASSETS
<S>                                                                                     <C>            <C>
Current Assets:
   Cash and cash equivalents ......................................................     $  82,747      $  46,387
   Accounts receivable, trade, less reserve of $1,798 and $1,058, respectively ....        19,474         23,490
   Accounts receivable, other .....................................................        51,843         39,769
   Tax receivable from parent corporations ........................................         1,500             --
   Inventories ....................................................................       101,702        102,245
   Other current assets ...........................................................         3,925          3,890
                                                                                        ---------      ---------
      Total Current Assets ........................................................       261,191        215,781
Property, plant and equipment, net ................................................       362,464        352,067
Excess of cost over net assets of businesses acquired, net of
   accumulated amortization of $14,346 and $16,370, respectively ..................        65,317         63,294
Deferred income tax benefits ......................................................        42,897         32,924
Tax receivable from parent corporations ...........................................         7,500          9,000
Other noncurrent assets ...........................................................        31,800         33,259
                                                                                        ---------      ---------
Total Assets ......................................................................     $ 771,169      $ 706,325
                                                                                        =========      =========
                                      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Current maturities of long-term debt ...........................................    $    5,908     $    5,556
   Accounts payable ...............................................................        57,520         58,235
   Payable to related parties .....................................................        10,052          8,910
   Accrued liabilities ............................................................        42,888         43,548
   Reserve for product warranty claims ............................................        14,900         14,900
                                                                                        ---------      ---------
      Total Current Liabilities ...................................................       131,268        131,149
                                                                                        ---------      ---------
Long-term debt less current maturities ............................................       674,698        599,896
                                                                                        ---------      ---------
Reserve for product warranty claims ...............................................        28,756         22,741
                                                                                        ---------      ---------
Other liabilities .................................................................        14,312         14,178
                                                                                        ---------      ---------
Commitments and Contingencies
Stockholders' Equity (Deficit):
   Series A Cumulative  Redeemable  Convertible  Preferred Stock, $.01 par value
      per share; 400,000 shares
      authorized; no shares issued ................................................            --             --
   Class A Common Stock, $.001 par value per share;
      1,300,000 shares authorized: 1,015,514 and
      1,015,010 shares issued and outstanding, respectively .......................             1              1
   Class B Common Stock, $.001 par value per share; 100,000
      shares authorized; 15,000 shares issued and outstanding .....................            --             --
   Loan receivable from parent corporation ........................................            --         (2,536)
   Accumulated deficit ............................................................       (77,866)       (59,104)
                                                                                        ---------      ---------
      Total Stockholders' Equity (Deficit) ........................................       (77,865)       (61,639)
                                                                                        ---------      ---------
Total Liabilities and Stockholders' Equity (Deficit) ..............................     $ 771,169      $ 706,325
                                                                                        =========      =========
</TABLE>


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


                                      F-10
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                         ---------------------------------------
                                                                            1999           2000           2001
                                                                         ---------      ---------      ---------
                                                                                       (THOUSANDS)
<S>                                                                      <C>            <C>            <C>
Cash and cash equivalents, beginning of year ........................    $  24,989      $  55,952      $  82,747
                                                                         ---------      ---------      ---------
Cash provided by (used in) operating activities:
   Net income (loss) ................................................       24,043        (11,157)        18,762
   Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Extraordinary losses ........................................        1,296            330             --
        Gain on sale of assets ......................................           --        (17,505)            --
        Depreciation ................................................       32,986         36,350         37,196
        Goodwill and other amortization .............................        2,675          2,866          3,794
        Deferred income taxes .......................................       14,132         (7,475)         9,973
        Noncash interest charges ....................................        3,321          2,648          4,556
   Increase in working capital items ................................      (26,200)       (19,791)       (25,744)
   Increase (decrease) in reserve for product
      warranty claims ...............................................      (14,318)         9,342         (6,015)
   Purchases of trading securities ..................................     (139,522)          (980)            --
   Proceeds from sales of trading securities ........................      243,097          2,172             --
   Proceeds from sale of accounts receivable ........................        5,640            925         34,669
   (Increase) decrease in other assets ..............................       (4,501)         1,264         (3,981)
   Decrease in other liabilities ....................................       (2,335)        (2,676)           (93)
   Change in net receivable from/payable to
      related parties/parent corporations ...........................      (48,793)       (13,972)        (1,142)
   Other, net .......................................................       (3,404)           517          1,286
                                                                         ---------      ---------      ---------
Net cash provided by (used in) operating activities .................       88,117        (17,142)        73,261
                                                                         ---------      ---------      ---------
Cash provided by (used in) investing activities:

   Capital expenditures .............................................      (45,322)       (61,543)       (28,085)
   Acquisitions .....................................................         (515)            --             --
   Proceeds from sale of assets .....................................           --         31,702             --
   Purchases of available-for-sale securities .......................      (76,048)          (882)            --
   Purchases of held-to-maturity securities .........................       (2,349)            --             --
   Proceeds from sales of available-for-sale securities .............       97,400         58,284             --
   Proceeds from held-to-maturity securities ........................        7,758             --             --
   Proceeds from sales of other short-term investments ..............       21,421          1,590             --
                                                                         ---------      ---------      ---------
Net cash provided by (used in) investing activities .................        2,345         29,151        (28,085)
                                                                         ---------      ---------      ---------
Cash provided by (used in) financing activities:

   Proceeds from issuance of long-term debt .........................       37,943         41,046             --
   Increase (decrease) in borrowings under revolving credit
      facilities ....................................................           --         70,000        (70,000)
   Repayments of long-term debt .....................................      (35,954)       (38,056)        (5,973)
   Distributions to parent corporations .............................      (60,000)       (47,029)            --
   Loan to parent corporation .......................................           --             --         (2,536)
   Net issuance (repurchase) of common stock ........................          870         (1,180)            --
   Financing fees and expenses ......................................       (2,358)        (9,995)        (3,027)
                                                                         ---------      ---------      ---------
Net cash provided by (used in) financing activities .................      (59,499)        14,786        (81,536)
                                                                         ---------      ---------      ---------
Net change in cash and cash equivalents .............................       30,963         26,795        (36,360)
                                                                         ---------      ---------      ---------
Cash and cash equivalents, end of year ..............................    $  55,952      $  82,747      $  46,387
                                                                         =========      =========      =========
</TABLE>


                                      F-11
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)

                                                     YEAR ENDED DECEMBER 31,
                                                 ------------------------------
                                                   1999       2000       2001
                                                 --------   --------   --------
                                                          (THOUSANDS)
Supplemental Cash Flow Information:
Effect on cash from (increase) decrease in
   working capital items*:
   Accounts receivable ........................  $(11,309)  $ 13,140   $(26,611)
   Inventories ................................   (14,912)     3,292       (543)
   Other current assets .......................     1,423       (653)        35
   Accounts payable ...........................     9,917    (26,814)       715
   Accrued liabilities ........................   (11,319)    (8,756)       660
                                                 --------   --------   --------
   Net effect on cash from increase in
     working capital items ....................  $(26,200)  $(19,791)  $(25,744)
                                                 ========   ========   ========
Cash paid during the period for:

   Interest (net of amount capitalized) .......  $ 44,109   $ 49,105   $ 59,996
   Income taxes (including taxes paid
     pursuant to the Tax Sharing Agreement) ...     1,250     10,121      1,046

----------
*  Working  capital  items  exclude  cash  and  cash   equivalents,   short-term
   investments,  short-term  debt and net  receivables  from/payable  to related
   parties/parent  corporations.  In addition, the increase in receivables shown
   above  does not  reflect  the cash  proceeds  from the sale of certain of the
   Company's  receivables (see Note 8); such proceeds are reflected in cash from
   operating  activities.   See  Note  1  for  a  description  of  the  non-cash
   contribution  of certain  assets,  including  the glass  fiber  manufacturing
   facility located in Nashville,  Tennessee,  and certain related  liabilities.
   See Notes 5 and 15 for a description of non-cash  capital  contributions  and
   distributions.


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


                                      F-12
<PAGE>

                    BUILDING MATERIALS CORPORATION OF AMERICA

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                    ACCUMULATED       LOAN
                                                  CAPITAL STOCK        OTHER       RECEIVABLE
                                                  AND ADDITIONAL   COMPREHENSIVE   FROM PARENT   ACCUMULATED   COMPREHENSIVE
                                                  PAID-IN CAPITAL  INCOME (LOSS)   CORPORATION     DEFICIT     INCOME (LOSS)
                                                  ---------------  -------------   -----------   -----------   -------------
                                                                              (THOUSANDS)
<S>                                                   <C>            <C>            <C>            <C>            <C>
Balance, December 31, 1998 .......................    $ 94,190       $(19,884)      $     --       $(22,089)
  Comprehensive income-year ended
  December 31, 1999:
    Net income ...................................          --             --             --         24,043       $ 24,043
                                                                                                                  --------
    Other comprehensive income, net of tax:
    Unrealized holding gains arising during the
      period, net of income taxes of $1,270 ......          --          1,424             --             --          1,424
    Less: Reclassification adjustment for gains
      included in net income, net of income tax
      effect of $1,227 ...........................          --          2,089             --             --          2,089
                                                                     --------                                     --------
    Change in unrealized losses on
      available-for-sale securities ..............          --           (665)            --             --           (665)
    Minimum pension liability adjustment .........          --          1,605             --             --          1,605
                                                                                                                  --------
  Comprehensive income                                                                                            $ 24,983
                                                                                                                  ========
  Distributions to parent corporations ...........     (58,046)            --             --         (1,954)
  Capital contributions ..........................       3,619             --             --             --
  Exercise of  stock options .....................         870             --             --             --
                                                      --------       --------       --------       --------
Balance, December 31, 1999 .......................    $ 40,633       $(18,944)      $     --       $     --
  Comprehensive income-year ended
    December 31, 2000:
    Net loss .....................................          --             --             --        (11,157)      $(11,157)
                                                                                                                  --------
    Other comprehensive income, net of tax:
    Unrealized holding gains arising during the
      period, net of income taxes of $3,577 ......          --          6,091             --             --          6,091
    Less: Reclassification adjustment for losses
      included innet loss, net of income tax
      effect of $6,755 ...........................          --        (11,502)            --             --        (11,502)
                                                                     --------                                     --------
    Change in unrealized losses on
      available-for-sale securities ..............          --         17,593             --             --         17,593
    Minimum pension liability adjustment .........          --          1,351             --             --          1,351
                                                                                                                  --------
  Comprehensive income                                                                                            $  7,787
                                                                                                                  ========
  Distributions to parent corporations ...........     (39,452)            --             --        (66,709)
  Net repurchase of common stock .................      (1,180)            --             --             --
                                                      --------       --------       --------       --------
Balance, December 31, 2000 .......................    $      1       $     --       $     --       $(77,866)
  Comprehensive income-year ended
    December 31, 2001:
    Net income ...................................          --             --                        18,762       $ 18,762
                                                                                                                  ========
  Loan to parent corporation .....................          --             --         (2,536)            --
                                                      --------       --------       --------       --------
Balance, December 31, 2001 .......................    $      1       $     --       $ (2,536)      $(59,104)
                                                      ========       ========       ========       ========
</TABLE>

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

                                      F-13
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Building  Materials  Corporation  of America (the  "Company") was formed on
January 31, 1994 and is a wholly-owned  subsidiary of BMCA Holdings  Corporation
("BHC"),  which is a  wholly-owned  subsidiary of G-I Holdings Inc. G-I Holdings
Inc. is a wholly-owned subsidiary of G Holdings Inc.

     To facilitate  administrative  efficiency,  effective October 31, 2000, GAF
Corporation,  the former indirect parent of the Company,  merged into its direct
subsidiary,  G-I Holdings  Inc. G-I  Holdings  Inc.  then merged into its direct
subsidiary, G Industries Corp., which in turn merged into its direct subsidiary,
GAF Fiberglass  Corporation.  In that merger, GAF Fiberglass Corporation changed
its name to GAF  Corporation.  Effective  November  13,  2000,  GAF  Corporation
(formerly  known  as  GAF  Fiberglass  Corporation),   merged  into  its  direct
subsidiary,  GAF Building Materials  Corporation,  whose name was changed in the
merger to G-I Holdings Inc. G-I Holdings  Inc. is now an indirect  parent of the
Company and the Company's direct parent is BHC. References below to G-I Holdings
means  G-I  Holdings  Inc.  and  any and  all of its  predecessor  Corporations,
including GAF Corporation, G-I Holdings Inc., G Industries Corp., GAF Fiberglass
Corporation and GAF Building Materials Corporation.

NOTE 1. FORMATION OF THE COMPANY

     The Company is a leading  national  manufacturer of a broad line of asphalt
roofing  products  and  accessories  for the steep  slope and low slope  roofing
markets.  The Company also manufactures and markets specialty  building products
and  accessories  for  the  professional  and   do-it-yourself   remodeling  and
residential construction industries. See Note 14.

     Effective as of January 31, 1994,  G-I Holdings  transferred to the Company
all  of  its  business  and  assets,   other  than  three  closed  manufacturing
facilities,  certain deferred tax assets and receivables  from  affiliates.  The
Company  recorded  the assets and  liabilities  related to such  transfer at G-I
Holdings'  historical  costs.  The  Company  contractually  assumed  all  of G-I
Holdings'   liabilities,   except  (i)  all  of  G-I   Holdings'   environmental
liabilities,  other than  environmental  liabilities  relating to the  Company's
plant sites and its business as then-  conducted,  (ii) all of G-I Holdings' tax
liabilities,  other than tax liabilities arising from the operations or business
of the  Company  and (iii) all of G-I  Holdings'  asbestos-related  liabilities,
other than the first $204.4 million of such  liabilities  (whether for indemnity
or defense)  relating to then-pending  asbestos-related  bodily injury cases and
previously  settled  asbestos-related  bodily  injury  cases  which the  Company
contractually assumed and agreed to pay.

     Effective  August 18,  1999,  G-I  Holdings,  in a series of  transactions,
contributed  certain assets,  including the Company's glass fiber  manufacturing
facility in Nashville, Tennessee (the "Nashville facility"), and certain related
liabilities to the Company.  Accordingly,  the Company's historical consolidated
financial  statements  reflect the results of operations,  cash flows and assets
and liabilities of the Nashville facility.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION

     All subsidiaries are consolidated and intercompany  transactions  have been
eliminated.

   FINANCIAL STATEMENT ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires management to make certain estimates.
Actual results could differ from those estimates.  In the opinion of management,
the financial  statements  herein contain all  adjustments  necessary to present
fairly the financial  position and the results of  operations  and cash flows of
the Company for the  periods  presented.  The Company has a policy to review the
recoverability  of  long-lived  assets and  identify  and measure any  potential
impairments. The Company does not anticipate any changes in management estimates
that would have a material impact on operations, liquidity or capital resources,
subject to the matters discussed in Note 16.

                                      F-14
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

   CASH AND CASH EQUIVALENTS

     Cash  and  cash  equivalents  include  cash on  deposit  and  certain  debt
securities purchased with original maturities of six months or less.

   SHORT-TERM INVESTMENTS

     For  securities   classified  as  "trading"  (including  short  positions),
unrealized gains and losses were reflected in income. For securities  classified
as "available-for-sale,"  unrealized gains and losses, net of income tax effect,
were  included in a separate  component of  stockholders'  equity,  "Accumulated
other  comprehensive  loss," and were $0 and $0 million as of December  31, 2000
and 2001, respectively.

     "Other income (expense), net" includes $12.8, ($18.1) and $0 million of net
realized and  unrealized  gains  (losses) on securities in 1999,  2000 and 2001,
respectively.  The  determination  of cost in computing  realized and unrealized
gains and losses is based on the specific identification method.

     Under the  Company's  new $100 million  secured  credit  facility (the "New
Credit  Agreement") and the Company's amended and restated existing $110 million
secured credit  facility (the "Existing  Credit  Agreement")  (see Note 11), the
Company is limited to  entering  into  investments  in highly  rated  commercial
paper,  U.S.  government  backed  securities,  certain time deposits and hedging
arrangements  that  protect  against or mitigate the effect of  fluctuations  in
interest  rates,  foreign  exchange rates or prices of  commodities  used in the
Company's business.

   INVENTORIES

     Inventories  are stated at the lower of cost or market.  The LIFO (last-in,
first-out)  method is utilized to determine  cost for a portion of the Company's
inventories.  All other inventories are determined principally based on the FIFO
(first-in, first-out) method.

   PROPERTY, PLANT AND EQUIPMENT

     Property,   plant  and  equipment  is  stated  at  cost  less   accumulated
depreciation.  Depreciation is computed  principally on the straight-line method
based  on the  estimated  economic  lives of the  assets.  The  Company  uses an
economic  life of 5 to 25  years  for  land  improvements,  10 to 40  years  for
buildings and building  equipment and 3 to 20 years for machinery and equipment,
which includes furniture and fixtures.  Certain interest charges are capitalized
during the period of  construction  as part of the cost of  property,  plant and
equipment.

   EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED ("GOODWILL")

     Goodwill  is  amortized  on  the  straight-line  method  over a  period  of
approximately  40 years.  The Company believes that the goodwill is recoverable.
To determine if goodwill is recoverable,  the Company  compares the net carrying
amount to  undiscounted  projected  cash flows of the  underlying  businesses to
which the goodwill pertains.  If goodwill is not recoverable,  the Company would
record an impairment based on the difference between the net carrying amount and
fair value. See New Accounting Standard discussion below.

   DEBT ISSUANCE COSTS

     Debt  issuance  costs are amortized to expense over the life of the related
debt.

                                      F-15
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

   SOFTWARE DEVELOPMENT COSTS

     Included in other  assets at December  31, 2000 and 2001 were $6.8 and $6.3
million, respectively, of capitalized purchased software development costs. Such
costs are amortized over a 5 year period.  For 1999,  2000 and 2001, the Company
amortized $0.6, $0.8 and $1.8 million, respectively, related to such costs.

   REVENUE RECOGNITION

     Revenue is recognized at the time products are shipped to the customer.

   SHIPPING AND HANDLING COSTS

     Shipping  and  handling  costs  are  included  in  "Selling,   general  and
administrative" expenses and amounted to $79.1, $84.6 and $91.3 million in 1999,
2000 and 2001, respectively.

   RESEARCH AND DEVELOPMENT

     Research and development expenses are charged to operations as incurred and
were $6.5, $5.9 and $5.9 million in 1999, 2000 and 2001, respectively.

   WARRANTY CLAIMS

     The Company provides certain limited warranties  covering most of its steep
slope roofing products for periods  generally  ranging from 20 to 40 years, with
lifetime limited  warranties on certain specialty shingle products.  The Company
also offers  certain  limited  warranties  and  guarantees  of varying  duration
covering most of its low slope roofing products and limited warranties  covering
most of its specialty  building  products and accessories for periods  generally
ranging  from  5 to 10  years,  with  lifetime  limited  warranties  on  certain
products.  Income from warranty  contracts related to low slope roofing products
is recognized  over the life of the  agreements,  and is included in the reserve
for product  warranty  claims,  net of the related costs of the warranty,  along
with the  administrative and legal costs associated with monitoring and settling
claims each year. For 1999,  2000 and 2001,  administrative  and legal costs for
steep  slope and low slope  roofing  products  amounted  to $1.0,  $1.4 and $1.5
million,  respectively.  The reserve for product warranty claims is estimated on
the basis of  historical  and  projected  claims  activity.  The accuracy of the
estimate  of  additional  costs is  dependent  on the  number and cost of future
claims  submitted  during the warranty  periods.  The Company  believes that the
reserves  established for estimated  probable future product warranty claims are
adequate.

     The Company recorded a $15.0 million product warranty reserve adjustment in
the fourth  quarter of 2000 based on an evaluation of claims  activity for 2000.
This  adjustment was recorded for a specific  alleged product defect relating to
prior production  processes,  and accordingly,  has been separately presented in
the Consolidated Statements of Operations. A settlement was reached in 1998 in a
national  class  action  lawsuit  related to this alleged  product  defect which
provides customers who purchased asphalt shingles manufactured from 1973 through
1997 the right to receive certain limited benefits beyond those already provided
in  their  existing  product  warranty.  See  Item 3,  "Legal  Proceedings-Other
Litigation", which is incorporated herein by reference.

     As discussed  in Item 3 "Legal  Proceedings-Other  Litigation",  in October
1998 G-I Holdings  brought suit against  certain of its insurers for recovery of
the defense  costs in  connection  with the class action  described  above and a
declaration that the insurers are obligated to provide  indemnification  for all
damages  paid  pursuant  to the  settlement  of this class  action and for other
damages. As of December 31, 2001, this action is pending.

                                      F-16
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

   ENVIRONMENTAL LIABILITY

     The  Company,  together  with other  companies,  is a party to a variety of
proceedings and lawsuits involving  environmental matters. The Company estimates
that its liability in respect of such environmental  matters,  and certain other
environmental  compliance  expenses,  as of December 31, 2001,  is $2.0 million,
before reduction for insurance recoveries reflected on its balance sheet of $0.8
million. The Company's liability is reflected on an undiscounted basis. See Item
3, "Legal  Proceedings--Environmental  Litigation," which is incorporated herein
by reference,  for further discussion with respect to environmental  liabilities
and estimated insurance recoveries.

   ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

     Comprehensive  income and its  components  in annual and interim  financial
statements  include net income,  unrealized gains and losses from investments in
available-for-sale  securities,  net of income tax effect,  and minimum  pension
liability  adjustments.  The Company has chosen to disclose comprehensive income
in the Consolidated Statements of Stockholders' Equity (Deficit).

     Changes  in the  components  of  "Accumulated  other  comprehensive  income
(loss)" for the years 1999, 2000 and 2001 are as follows:

                                  UNREALIZED GAINS      MINIMUM     ACCUMULATED
                                    (LOSSES) ON         PENSION        OTHER
                                 AVAILABLE-FOR-SALE    LIABILITY   COMPREHENSIVE
                                     SECURITIES       ADJUSTMENT   INCOME (LOSS)
                                 ------------------   ----------   -------------
                                                     (THOUSANDS)

Balance, December 31, 1998 .......    $(16,928)        $(2,956)      $(19,884)
Change for the year 1999 .........        (665)          1,605            940
                                      --------         -------       --------
Balance, December 31, 1999 .......    $(17,593)        $(1,351)      $(18,944)
Change for the year 2000 .........      17,593           1,351         18,944
                                      --------         -------       --------
Balance, December 31, 2000 .......    $     --         $    --       $     --
Change for the year 2001 .........          --              --             --
                                      --------         -------       --------
Balance, December 31, 2001 .......    $     --         $    --       $     --
                                      ========         =======       ========

   NEW ACCOUNTING STANDARD

     On June 30, 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 141, "Business  Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets".  SFAS No. 141 requires all
business  combinations  initiated  after June 30, 2001 to be accounted for using
the  purchase  method  of  accounting  and  eliminates  the  pooling  method  of
accounting. SFAS No. 141 will not have an impact on the Company's business since
the Company has historically  accounted for all business  combinations using the
purchase  method of  accounting.  With the  adoption of SFAS No. 142,  effective
January 1, 2002,  goodwill  will no longer be subject to  amortization  over its
estimated useful life.  However,  goodwill will be subject to at least an annual
assessment  for  impairment  and more  frequently  if  circumstances  indicate a
possible  impairment.   Companies  must  perform  a  fair-value-based   goodwill
impairment test. In addition,  under SFAS No. 142, an acquired  intangible asset
should be  separately  recognized  if the benefit of the  intangible is obtained
through  contractual or other legal rights,  or if the  intangible  asset can be
sold,  transferred,  licensed,  rented, or exchanged.  Intangible assets will be
amortized  over  their  useful  lives.  Early  adoption  of SFAS No.  142 is not
permitted.  On an annualized basis, effective January 1, 2002, the Company's net
income will  increase  by  approximately  $1.3  million,  unless any  impairment
charges are necessary.

   RECLASSIFICATIONS

     Certain  reclassifications  have  been  made to  conform  to  current  year
presentation.

                                      F-17
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3.  ASBESTOS-RELATED BODILY INJURY CLAIMS

     In connection  with its formation,  the Company  contractually  assumed and
agreed to pay the first  $204.4  million  of  liabilities  for  asbestos-related
bodily injury claims  relating to the  inhalation of asbestos  fiber  ("Asbestos
Claims") of its parent, G-I Holdings. As of March 30, 1997, the Company had paid
all of its assumed asbestos-related  liabilities.  In January 2001, G-I Holdings
filed a  voluntary  petition  for  reorganization  under  Chapter 11 of the U.S.
Bankruptcy Code due to its Asbestos Claims. This proceeding remains pending.

     Claimants in the G-I Holdings  bankruptcy,  including  judgment  creditors,
might seek to satisfy their claims by asking the bankruptcy court to require the
sale of G-I Holdings'  assets,  including its holdings of BHC's common stock and
its indirect holdings of the Company's common stock. That action could result in
a change of control of the Company.  In addition,  those  claimants  may seek to
file  Asbestos  Claims  against the Company  (with  approximately  1,900 alleged
Asbestos  Claims  pending  against  the Company as of December  31,  2001).  The
Company believes that it will not sustain any liability in connection with these
or any other  asbestos-related  claims.  Furthermore,  on February 2, 2001,  the
United States Bankruptcy Court for the District of New Jersey issued a temporary
restraining  order  enjoining  any  existing or future  claimant  from  bringing
Asbestos Claims against the Company. On June 22, 2001,  following a hearing, the
Bankruptcy  Court converted the temporary  restraining  order into a preliminary
injunction,  which is expected  to remain in effect  pending  confirmation  of a
Chapter 11 plan of  reorganization  for the G-I Holdings estate.  On February 7,
2001,  G-I  Holdings  filed  a  defendant  class  action  in the  United  States
Bankruptcy  Court for the District of New Jersey seeking a declaratory  judgment
that the Company has no  successor  liability  for Asbestos  Claims  against G-I
Holdings and that it is not the alter ego of G-I  Holdings.  This action is in a
preliminary  stage and no trial date has been set by the court. As a result,  it
is not  possible to predict the  outcome of this  litigation.  While the Company
cannot predict whether any additional  Asbestos Claims will be asserted  against
it, or the  outcome of any  litigation  relating  to those  claims,  the Company
believes   that  it  has   meritorious   defenses  to  any  claim  that  it  has
asbestos-related liability, although there can be no assurances in this regard.

     On February 8, 2001, a creditors  committee  established  in G-I  Holdings'
bankruptcy case filed a complaint in the United States  Bankruptcy Court for the
District of New Jersey  against G-I  Holdings  and the  Company.  The  complaint
requests substantive  consolidation of the Company with G-I Holdings or an order
directing G-I Holdings to cause the Company to file for  bankruptcy  protection.
The  Company and G-I  Holdings  intend to  vigorously  defend the  lawsuit.  The
Company  believes  that no  basis  exists  for the  court to  grant  the  relief
requested.  The plaintiffs  also filed for interim relief absent the granting of
their requested  relief described above. On March 21, 2001, the Bankruptcy Court
refused to grant the requested interim relief.

     For a further  discussion  with  respect to the  history  of the  foregoing
litigation and asbestos-related  matters, see Item 3,"Legal  Proceedings," which
is incorporated herein by reference, and Notes 11 and 16.

NOTE 4.  DISPOSITIONS

     On September  29, 2000,  the Company sold certain  manufacturing  and other
assets related to the Compton, California based security products business of LL
Building  Products Inc. for net cash proceeds of  approximately  $27.1  million,
which  resulted  in a  pre-tax  gain of $17.5  million.  The  security  products
business did not have a material impact on the Company's results of operations.

     In December  2001,  the Company sold the  Corvallis,  Oregon  manufacturing
facility  for  approximately  $0.9  million.  This sale did not have a  material
impact on the Company's results of operations.

                                      F-18
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5.  NONRECURRING CHARGES

     In July 1998, the Company  recorded a pre-tax  nonrecurring  charge of $7.6
million related to a grant to its former  President and Chief Executive  Officer
of 30,000 shares of  restricted  common stock of the Company (a portion of which
such officer  transferred to trusts for the benefit of his children) and related
cash payments to be made over a period of time  (substantially  all of which was
earned) in connection  with the  termination by an affiliate of preferred  stock
options and stock appreciation  rights held by such officer. Of the $7.6 million
charge, $2.5 million represented the value as of the date of grant of the 30,000
shares of restricted  common stock,  and $5.1 million  represented the aggregate
amount of the cash  payments  to which such  officer  was  entitled  (subject to
certain  future  vesting  requirements).  The  shares of  restricted  stock were
subject to certain  rights of the Company to  purchase,  and of such officer and
the  trusts to sell to the  Company,  such  shares at Book  Value (as  defined).
Effective  June 30,  1999,  such  officer  terminated  his  employment  with the
Company.  For 1999,  through the date of his termination,  the net book value of
the 30,000  shares of restricted  common stock held by such officer  appreciated
$0.6 million. In connection with this termination,  the Company's  obligation to
such officer to pay an aggregate  of $3.0 million  (representing  the balance of
the  cash  payments  described  above)  was  cancelled  and  was  treated  as an
additional capital contribution.

     Effective  September 30, 1999, an agreement  relating to restricted  common
stock between the Company and its former  President and Chief Executive  Officer
and the  trusts  (to  which  a  portion  of such  restricted  common  stock  was
transferred to the benefits of his children),  was terminated.  Such officer and
the trusts  contributed such stock to BHC in consideration  for equity interests
in BHC. As a result of this  transaction,  the $0.6 million  appreciation in the
net book value of the restricted common stock described above, was treated as an
additional capital contribution.

     In connection with the settlement of a legal matter, the Company recorded a
nonrecurring  charge of $2.7 million in  September  1999.  Such amount  includes
legal expenses incurred to defend such action.

NOTE 6.  MANUFACTURING FACILITIES SHUTDOWN

     In  response  to current  market  conditions,  to better  service  shifting
customer  demand and to reduce  costs,  the Company  closed  four  manufacturing
facilities  during  2000  located  in  Monroe,   Georgia;  Port  Arthur,  Texas;
Corvallis,  Oregon;  and Albuquerque,  New Mexico. As market growth and customer
demand  improves,  the Company may reinstate  production at one or more of these
manufacturing  facilities in the future.  The effect of closing these facilities
was not material to the Company's  results of  operations.  See Note 4 regarding
disposition of the Corvallis, Oregon facility in 2001.

NOTE 7.  INCOME TAXES (PROVISION) BENEFIT

     Income  tax  (provision)  benefit,  which has been  computed  on a separate
return basis, consists of the following:

                                                    YEAR ENDED DECEMBER 31,
                                              ---------------------------------
                                                1999        2000         2001
                                              --------     -------     --------
                                                         (THOUSANDS)

Federal-- deferred .......................    $(13,682)    $ 5,423     $(10,386)
                                              --------     -------     --------
State and local:
   Current ...............................        (750)     (1,116)      (1,046)
   Deferred ..............................        (450)      2,052          413
                                              --------     -------     --------
      Total state and local ..............      (1,200)        936         (633)
                                              --------     -------     --------
Income tax (provision) benefit ...........    $(14,882)    $ 6,359     $(11,019)
                                              ========     =======     ========

                                      F-19
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7.  INCOME TAXES (PROVISION) BENEFIT -- (CONTINUED)

     The  differences  between the income tax  (provision)  benefit  computed by
applying the statutory Federal income tax rate to pre-tax income, and the income
tax (provision)  benefit reflected in the Consolidated  Statements of Operations
are as follows:

                                                   YEAR ENDED DECEMBER 31,
                                              ---------------------------------
                                                1999        2000         2001
                                              --------     -------     --------
                                                         (THOUSANDS)

Statutory (provision) benefit ............    $(14,077)    $ 6,015     $(10,423)
Impact of:
   State and local taxes, net of
     Federal benefits ....................        (780)        608         (413)
   Nondeductible goodwill amortization ...        (275)       (185)        (286)
   Other, net ............................         250         (79)         103
                                              --------     -------     --------
Income tax (provision) benefit ...........    $(14,882)    $ 6,359     $(11,019)
                                              ========     =======     ========

     The components of the net deferred tax assets are as follows:

                                                               DECEMBER 31,
                                                          ---------------------
                                                            2000         2001
                                                          --------     --------
                                                                (THOUSANDS)

Deferred tax liabilities related to property,
  plant and equipment ................................    $ (9,449)    $(24,604)
                                                          --------     --------
Deferred tax assets related to:
   Expenses not yet deducted for tax purposes ........      42,154       36,351
   Net operating losses not yet utilized
     under the Tax Sharing Agreement .................      10,192       21,177
                                                          --------     --------
   Total deferred tax assets .........................      52,346       57,528
                                                          --------     --------
Net deferred tax assets ..............................    $ 42,897     $ 32,924
                                                          ========     ========

     As of December 31,  2001,  the Company had $57.2  million of net  operating
loss carryforwards available to offset future taxable income, as follows:

     YEAR OF

     EXPIRATION                                                    (THOUSANDS)
     --------                                                       ---------
     2011 ........................................................   $ 2,088
     2020 ........................................................    55,147
                                                                    ---------
     Total net operating loss carryforwards ......................   $57,235
                                                                    =========

     Management has determined, based on the Company's history of prior earnings
and its expectations for the future, that future taxable income will more likely
than not be sufficient to utilize fully the deferred tax assets recorded.

     As of  December  31,  2000 and 2001,  included  in current  assets is a tax
receivable from parent  corporations of $1.5 million and $0,  respectively,  and
included in long-term  assets is a tax receivable  from parent  corporations  of
$7.5 and $9.0 million,  respectively,  representing amounts paid to G-I Holdings
under the Tax Sharing  Agreement  (as  defined  below),  as  amended,  which the
Company will apply under the Tax Sharing  Agreement  against  future tax sharing
payments due G-I Holdings  over the next several  years based on current  income
estimates.

                                      F-20
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7.  INCOME TAXES (PROVISION) BENEFIT -- (CONTINUED)

     The Company and its subsidiaries  entered into a tax sharing agreement (the
"Tax Sharing  Agreement")  dated January 31, 1994 with G-I Holdings with respect
to the payment of federal income taxes and related  matters.  During the term of
the Tax Sharing  Agreement,  which is effective  for the period during which the
Company  or any of its  domestic  subsidiaries  is  included  in a  consolidated
federal  income tax  return for the G-I  Holdings  consolidated  tax group,  the
Company is obligated to pay G-I Holdings an amount equal to those federal income
taxes it would  have  incurred  if the  Company,  on behalf  of  itself  and its
domestic  subsidiaries,  filed its own  federal  income tax  return.  Unused tax
attributes will carry forward for use in reducing amounts payable by the Company
to G-I Holdings in future years, but cannot be carried back. If the Company ever
were to leave the G-I Holdings  consolidated  tax group, it would be required to
pay to G-I Holdings the value of any tax  attributes  to which it would  succeed
under the  consolidated  return  regulations  to the extent  the tax  attributes
reduced  the  amounts  otherwise  payable by the  Company  under the Tax Sharing
Agreement.  Under  limited  circumstances,  the  provisions  of the Tax  Sharing
Agreement  could  result in the  Company  having a greater  liability  under the
agreement than it would have had if it and its domestic  subsidiaries  had filed
its own separate federal income tax return. Under the Tax Sharing Agreement, the
Company and each of its domestic subsidiaries are responsible for any taxes that
would be payable by reason of any  adjustment to the tax returns of G-I Holdings
or its subsidiaries for years prior to the adoption of the Tax Sharing Agreement
that relate to the Company's business or assets or the business or assets of any
of  its  domestic  subsidiaries.  Although,  as a  member  of the  G-I  Holdings
consolidated  tax group,  the Company is  severally  liable for certain  federal
income tax liabilities of the G-I Holdings consolidated tax group, including tax
liabilities  not related to its business,  the Company should have no liability,
under any  circumstances,  other than  liabilities  arising  from the  Company's
operations and the operations of its domestic  subsidiaries  and tax liabilities
for tax years pre-dating the Tax Sharing  Agreement that relate to the Company's
business  or  assets  and  the  business  or  assets  of  any  of  our  domestic
subsidiaries.  The Tax Sharing Agreement provides for analogous principles to be
applied to any  consolidated,  combined or unitary  state or local income taxes.
Under the Tax Sharing  Agreement,  G-I Holdings makes all decisions with respect
to all matters relating to taxes of the G-I Holdings consolidated tax group. The
provisions  of the Tax  Sharing  Agreement  take into  account  both the federal
income  taxes the  Company  would  have  incurred  if it filed its own  separate
federal  income tax return and the fact that the  Company is a member of the G-I
Holdings consolidated tax group for federal income tax purposes.

     On  September  15, 1997,  G-I Holdings  received a notice from the Internal
Revenue  Service  (the  "IRS") of a  deficiency  in the amount of $84.4  million
(after  taking  into  account  the use of net  operating  losses and foreign tax
credits  otherwise  available  for use in later  years) in  connection  with the
formation  in 1990 of  Rhone-Poulenc  Surfactants  and  Specialties,  L.P.  (the
"surfactants  partnership"),  a  partnership  in  which  G-I  Holdings  held  an
interest.  G-I Holdings  has advised the Company  that it believes  that it will
prevail in this tax matter,  although  there can be no assurance in this regard.
The Company believes that the ultimate  disposition of this matter will not have
a material  adverse  effect on its  business,  financial  position or results of
operations. On September 21, 2001, the Internal Revenue Service filed a proof of
claim with respect to such  deficiency  against G-I Holdings in the G-I Holdings
bankruptcy.  If that proof of claim is sustained,  the Company and/or certain of
the Company's  subsidiaries  together with G-I Holdings and several  current and
former  subsidiaries of G-I Holdings would be severally  liable for a portion of
those taxes and interest.  If the IRS were to prevail for the years in which the
Company and/or certain of its subsidiaries  were part of the G-I Holdings Group,
the Company would be severally liable for  approximately  $40.0 million in taxes
plus interest,  although this  calculation  is subject to uncertainty  depending
upon  various  factors  including  G-I  Holdings'  ability  to  satisfy  its tax
liabilities and the application of tax credits and deductions.

                                      F-21
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8. SALE OF ACCOUNTS RECEIVABLE

     In  March  1993,   the   Company   sold  its  trade   accounts   receivable
("receivables")  to a trust,  without  recourse,  pursuant to an agreement which
provided  for a maximum  of $75.0  million in cash to be made  available  to the
Company based on eligible receivables outstanding from time to time. In November
1996, the Company  entered into new  agreements  which provided for a maximum of
$115.0  million,  pursuant to which it sold the receivables to a special purpose
subsidiary of the Company, BMCA Receivables Corporation, without recourse, which
in turn sold them without recourse.  In December 2001, this facility matured and
$115.0  million was repaid to settle  previous  amounts  made  available  to the
Company.

     In  December  2001,  the Company  entered  into a new  Accounts  Receivable
Securitization Agreement ("the Agreement") under which the Company sells certain
of its  trade  accounts  receivable  to BMCA  Receivables  Corporation,  without
recourse,  which in turn  sells them to a third  party,  without  recourse.  The
Agreement  provides for a maximum of $115.0 million in cash to be made available
to the Company based on the sale of eligible  receivables  outstanding from time
to time. This Agreement expires in December 2004 and is subject to financial and
other  covenants  including a material  adverse  change in business  conditions,
financial or otherwise.

     As of December 31, 2001,  the Company had $99.7 million  outstanding  under
the  Agreement.  The excess of accounts  receivable  sold over the net  proceeds
received  is  included  in  "Accounts   receivable,   other."  BMCA  Receivables
Corporation is not a guarantor under the Company's debt  obligations.  See notes
11 and 17. The effective  cost to the Company  varies with LIBOR and is included
in "Other income (expense),  net" and amounted to $5.5, $6.9 and $4.0 million in
1999, 2000 and 2001, respectively.

NOTE 9.  INVENTORIES

     At December 31, 2000 and 2001,  $11.2 and $9.2  million,  respectively,  of
inventories  were  valued  using the LIFO  method.  Inventories  consist  of the
following:

                                                         DECEMBER 31,
                                                   -----------------------
                                                      2000          2001
                                                   ---------     ---------
                                                         (THOUSANDS)

     Finished goods ...........................    $  61,606     $  66,417
     Work-in process ..........................       16,938         8,800
     Raw materials and supplies ...............       27,743        29,573
                                                   ---------     ---------
         Total ................................      106,287       104,790
     Less LIFO reserve ........................       (4,585)       (2,545)
                                                   ---------     ---------
     Inventories ..............................    $ 101,702     $ 102,245
                                                   =========     =========

NOTE 10.  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consists of the following:

                                                         DECEMBER 31,
                                                   -----------------------
                                                      2000          2001
                                                   ---------     ---------
                                                         (THOUSANDS)

     Land and land improvements ...............    $  32,603     $  35,677
     Buildings and building equipment .........       75,299        79,075
     Machinery and equipment ..................      369,102       389,445
     Construction in progress .................       20,776        19,033
                                                   ---------     ---------
         Total ................................      497,780       523,230
     Less accumulated depreciation
       and amortization .......................     (135,316)     (171,163)
                                                   ---------     ---------
     Property, plant and equipment, net .......    $ 362,464     $ 352,067
                                                   =========     =========

                                      F-22
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10.  PROPERTY, PLANT AND EQUIPMENT -- (CONTINUED)

     Included in the net book value of machinery  and  equipment at December 31,
2000 and 2001 was $8,863 and  $7,688,  respectively,  for assets  under  capital
leases.

NOTE 11.  LONG-TERM DEBT

     Long-term debt consists of the following:

                                                              DECEMBER 31,
                                                         ----------------------
                                                           2000         2001
                                                         ---------    ---------
                                                              (THOUSANDS)

     10 1/2% Senior Notes due 2003 ....................  $  34,235    $  34,528
     7 3/4% Senior Notes due 2005 .....................    149,584      149,675
     8 5/8% Senior Notes due 2006 .....................     99,704       99,753
     8% Senior Notes due 2007 .........................     99,492       99,567
     8% Senior Notes due 2008 .........................    154,334      154,418
     Borrowings under Existing Credit Agreement .......     70,000           --
     Industrial revenue bonds with various interest
       rates and maturity dates to 2029 ...............     23,060       22,995
     Obligations on equipment loans ...................         28           --
     Precious Metal Note due 2003 .....................      7,002        7,002
     Obligations under capital leases (Note 16) .......     39,966       35,141
     Other notes payable ..............................      3,201        2,373
                                                         ---------    ---------
         Total ........................................    680,606      605,452
     Less current maturities ..........................     (5,908)      (5,556)
                                                         ---------    ---------
     Long-term debt less current maturities ...........  $ 674,698    $ 599,896
                                                         =========    =========

     On July 5, 2000,  the Company  issued $35.0 million in aggregate  principal
amount of 10 1/2% Senior Notes, due 2002 at 97.161% of the principal amount, the
maturity  date of which was  extended to  September  2003 (the "2003  Notes") in
connection with the Company  entering into the New Credit  Agreement in December
2000 (see below).  The Company used the net proceeds  from  issuance of the 2003
Notes to repay a $31.9  million  bank term loan due 2004 (the "Term  Loan") with
the remaining net proceeds used for general  corporate  purposes.  In connection
with the  extinguishment of this debt,  unamortized  deferred  financing fees of
approximately  $0.3  million,  net of  tax,  were  written-off  as an  after-tax
extraordinary loss. The net proceeds of the Term Loan had been used, in 1999, to
purchase,  and  subsequently  cancel,  the remaining  $29.9 million in aggregate
principal  amount of the Company's  outstanding 11 3/4% Senior  Deferred  Coupon
Notes due 2004.  The  redemption  price was  105.875%  of the  principal  amount
outstanding,  and the premium was recorded as an after-tax  extraordinary  loss,
net of tax, of approximately $1.3 million.

     On December 3, 1998, the Company issued $155 million in aggregate principal
amount of 8% Senior Notes due 2008 (the "2008  Notes").  On July 17,  1998,  the
Company issued $150 million in aggregate principal amount of 7 3/4% Senior Notes
due 2005 (the "2005 Notes"). In October 1997, the Company issued $100 million in
aggregate  principal  amount of 8% Senior Notes due 2007 (the "2007 Notes").  In
December 1996, the Company issued $100 million in aggregate  principal amount of
8 5/8% Senior Notes due 2006 (the "2006 Notes").  Holders of the 2003 Notes, the
2005 Notes, the 2006 Notes, the 2007 Notes and the 2008 Notes (collectively, the
"Senior  Notes")  have the right under the  indentures  governing  such notes to
require  the  Company to  purchase  the  Senior  Notes at a price of 101% of the
principal  amount  thereof,  and the  Company has the right to redeem the Senior
Notes at a price of 101% of the principal  amount  thereof,  plus, in each case,
the  Applicable  Premium (as  defined  therein),  together  with any accrued and
unpaid interest, in the event of a Change of Control (as defined therein).

                                      F-23
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11.  LONG-TERM DEBT -- (CONTINUED)

     In August 1999, the Company entered into the Existing Credit Agreement.  In
December 2000, the Existing Credit  Agreement was amended to extend its maturity
until August 2003. The terms of the Existing Credit Agreement provide for a $110
million secured revolving credit facility, the full amount of which is available
for letters of credit, provided that total borrowings and outstanding letters of
credit may not  exceed  $110  million  in the  aggregate.  The  Existing  Credit
Agreement bears interest at a floating rate based on the lenders' base rate, the
federal funds rate or the Eurodollar  rate. As of December 31, 2001,  there were
no  outstanding   borrowings  and  $41.7  million  of  letters  of  credit  were
outstanding under the Existing Credit Agreement.

     In December 2000, the Company entered into the New Credit Agreement, a $100
million  secured  revolving  credit  facility,  which is to be used for  working
capital  purposes  subject to  certain  restrictions.  The New Credit  Agreement
matures in August  2003,  and bears  interest at rates  similar to the  Existing
Credit Agreement.  As of December 31, 2001, there were no outstanding borrowings
or  letters  of credit  under the New Credit  Agreement.  Obligations  under the
Existing Credit Agreement and the New Credit Agreement, as well as the Company's
obligations  under a $7.0 million  Precious Metal Note due 2003 (defined  below)
and  approximately  $3.5 million of obligations under a standby letter of credit
(collectively, the "Other Indebtedness"),  aggregated $7.0 million of borrowings
and $45.2  million of letters of credit  outstanding  at December 31, 2001.  All
these  obligations are secured by a first priority lien on substantially  all of
the  Company's  assets and the  assets of its  subsidiaries  (collectively,  the
"Collateral")  on a pro rata basis.  The Existing  Credit  Agreement and the New
Credit Agreement have been guaranteed by all of the Company's current and future
direct  and  indirect  domestic   subsidiaries,   other  than  BMCA  Receivables
Corporation.  The Senior Notes are secured by a second-priority lien on the same
assets for so long as the  first-priority  lien  remains  in effect,  subject to
certain  limited  exceptions and have been guaranteed by the  subsidiaries  that
guaranteed  the  Existing  Credit  Agreement  and the New Credit  Agreement.  In
connection  with  these  transactions,  the  Company  entered  into  a  security
agreement  which grants a security  interest in the  Collateral  in favor of the
collateral  agent on behalf of the lenders under the Existing Credit  Agreement,
the New  Credit  Agreement  and the Other  Indebtedness  and the  holders of the
Company's  outstanding  Senior Notes. The Company also entered into a collateral
agent agreement which provides,  among other things, for the sharing of proceeds
with respect to any foreclosure or other remedy in respect of the Collateral.

     Under the terms of the Existing Credit Agreement,  the New Credit Agreement
and the indentures governing the Senior Notes, the Company is subject to certain
financial covenants.  These include,  among others,  interest coverage,  minimum
EBITDA  (earnings  before  income  taxes and  extraordinary  items  increased by
interest expense, depreciation, goodwill and other amortization), limitations on
the amount of annual capital  expenditures  and  indebtedness,  restrictions  on
distributions  to the  Company's  parent  corporations  and on incurring  liens,
restrictions on investments and other payments.  Dividends and other  restricted
payments are  prohibited,  except demand loans of specified  amounts made to any
parent corporation, subject to limitations, as described in those agreements, in
future  periods.  As of  December  31,  2001,  after  giving  effect to the most
restrictive of the aforementioned restrictions,  the Company could not have paid
dividends or made other restricted payments,  except for demand loans up to $5.0
million.  In addition,  if a change of control as defined in the Existing Credit
Agreement  and the New  Credit  Agreement  occurs,  those  agreements  could  be
terminated  and the loans under those  agreements  accelerated by the holders of
that  indebtedness.  If that  event  occurred,  it  would  cause  the  Company's
outstanding Senior Notes to be accelerated. As of December 31, 2001, the Company
was in compliance with all covenants under the Existing  Credit  Agreement,  the
New Credit Agreement and the indentures governing the Senior Notes.

     In connection with entering into the New Credit Agreement, the Company also
issued a $7.0  million  note (the  "Precious  Metal  Note") to finance  precious
metals used in the Company's manufacturing processes.

                                      F-24
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11.  LONG-TERM DEBT -- (CONTINUED)

     The Existing  Credit  Agreement and the New Credit  Agreement  also provide
that in the event  the  Company  shall  become  the  subject  of any  bankruptcy
proceedings,  the lenders will, subject to bankruptcy court approval,  refinance
and consolidate in full the  indebtedness  under the Existing Credit  Agreement,
the  New   Credit   Agreement,   and   the   Other   Indebtedness   with  a  new
debtor-in-possession  facility  (the "DIP"  Facility")  on terms and  conditions
substantially  identical  to the  Existing  Credit  Agreement,  the  New  Credit
Agreement, and the Other Indebtedness,  in an aggregate amount equal to the then
committed  amount  under the New Credit  Agreement  plus $110  million  plus the
principal  amount of the Other  Indebtedness.  The DIP Facility  would mature on
August 18, 2004 and would be secured by a  first-priority  security  interest in
all of the collateral.

     In December 1995, the Company consummated a $40.0 million sale-leaseback of
certain equipment located at its Chester, South Carolina glass mat manufacturing
facility,  in a transaction  accounted for as a capital lease,  and the gain has
been deferred.  The lessor was granted a security  interest in certain equipment
at the Chester  facility.  The lease term extends to December 2005 with an early
buyout option in June 2003. In December  1994,  the Company  consummated a $20.4
million  sale-leaseback of certain equipment located at its Baltimore,  Maryland
roofing  facility,  in a transaction  accounted for as a capital lease,  and the
gain has been deferred.  The lessor was granted a security interest in the land,
buildings  and  certain  equipment  at the  Baltimore  facility.  The lease term
extends to December 2004 with an early buyout  option in July 2002.  The Company
has four  industrial  revenue bond issues  outstanding,  which bear  interest at
short-term  floating rates.  Interest rates on the foregoing  obligations ranged
between 1.50% and 4.75% as of December 31, 2001.

     The Company  believes  that the fair value of its  non-public  indebtedness
approximates the book value of such indebtedness,  because the interest rates on
substantially all such indebtedness are at floating short-term rates or the debt
has a relatively short maturity.  With respect to the Company's  publicly traded
debt securities,  the Company has obtained  estimates of the fair values from an
independent  source  believed to be reliable.  The estimated  fair values of the
Company's indebtedness at December 31, 2000 and 2001 are as follows:

                                                         DECEMBER 31,
                                                   -----------------------
                                                      2000          2001
                                                   ---------     ---------
                                                        (THOUSANDS)

     2005 Notes .................................  $ 47,867       $125,727
     2006 Notes .................................    31,905         81,797
     2007 Notes .................................    31,837         75,920
     2008 Notes .................................    49,387        115,041

     The aggregate  maturities of long-term debt as of December 31, 2001 for the
next five years are as follows:

                                                                (THOUSANDS)
                                                                ----------
           2002 .............................................   $   5,556
           2003 .............................................      47,985
           2004 .............................................       6,356
           2005 .............................................     158,260
           2006 .............................................     109,093

     In the above  table,  maturities  for the year 2003 include  $35.0  million
related to the 2003 Notes and $7.0 million  related to the Precious  Metal Note.
Maturities for the year 2005 include $150 million  related to the 2005 Notes and
$4.3 million  related to the Baltimore  manufacturing  facility  capital  lease.
Maturities for the year 2006 include  $100.0  million  related to the 2006 Notes
and $9.1 million related to the Chester glass mat manufacturing facility capital
lease.

                                      F-25
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 12.  BENEFIT PLANS

     Eligible, full-time employees of the Company are covered by various benefit
plans, as described below.

   DEFINED CONTRIBUTION PLAN

     The  Company  provides a defined  contribution  plan for  certain  salaried
eligible   employees.   The  Company  contributes  up  to  7%  of  participants'
compensation  and also contributes  fixed amounts,  ranging from $50 to $750 per
year depending on age, to the accounts of participants  who are not covered by a
Company-provided    postretirement   medical   benefit   plan.   The   aggregate
contributions by the Company were $4.4, $4.9 and $5.1 million for 1999, 2000 and
2001, respectively.

     The  Company  provides  a  defined  contribution  plan for  certain  hourly
eligible   employees.   The  Company   contributes  a   discretionary   matching
contribution  equal to 100% of each  participant's  eligible  contributions each
year up to a maximum of $1,000 for each  participant.  Such  contributions  were
$0.3, $0.3 and $0.2 million for 1999, 2000 and 2001, respectively.

   DEFINED BENEFIT PLANS

     The Company provides  noncontributory  defined benefit retirement plans for
certain hourly and salaried employees (the "Retirement  Plans").  Benefits under
these plans are based on stated amounts for each year of service.  The Company's
funding policy is consistent with the minimum funding requirements of ERISA.

     The Company's net periodic  pension cost for the Retirement  Plans included
the following components:

                                                      YEAR ENDED DECEMBER 31,
                                                  -----------------------------
                                                    1999       2000       2001
                                                  -------    -------    -------
                                                           (THOUSANDS)

Service cost ..................................   $   804    $   751    $   826
Interest cost .................................       949      1,066      1,216
Expected return on plan assets ................    (1,270)    (1,583)    (1,993)
Amortization of unrecognized prior
  service cost ................................        31         33         33
Amortization of net losses from
  earlier periods .............................       107         14         19
                                                  -------    -------    -------
Net periodic pension cost .....................   $   621    $   281    $   101
                                                  =======    =======    =======

                                      F-26
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 12.  BENEFIT PLANS -- (CONTINUED)

     The   following   tables   set   forth,   for  the  years  2000  and  2001,
reconciliations of the beginning and ending balances of the benefit  obligation,
fair value of plan assets, funded status, amounts recognized in the Consolidated
Balance  Sheets and changes in  accumulated  other  comprehensive  (income) loss
related to the Retirement Plans:

                                                               DECEMBER 31,
                                                           --------------------
                                                             2000        2001
                                                           --------    --------
                                                                (THOUSANDS)

Change in benefit obligation:
  Benefit obligation at beginning of year ..............   $ 17,601    $ 20,216
  Service cost .........................................        751         826
  Interest cost ........................................      1,379       1,542
  Amendments ...........................................         50          --
  Actuarial losses (gains) .............................      1,073       1,403
  Benefits paid ........................................       (638)       (686)
                                                           --------    --------
  Benefit obligation at end of year ....................   $ 20,216    $ 23,301
                                                           ========    ========
Change in plan assets:
  Fair value of plan assets at beginning of year .......   $ 18,348    $ 23,435
  Actual return on plan assets .........................      3,100       2,068
  Employer contributions ...............................      2,625       1,422
  Benefits paid ........................................       (638)       (686)
                                                           --------    --------
  Fair value of plan assets at end of year .............   $ 23,435    $ 26,239
                                                           ========    ========
Reconciliation of funded status:
  Funded status ........................................   $  3,219    $  2,937
  Unrecognized prior service cost ......................        264         231
  Unrecognized actuarial losses ........................        473       2,315
                                                           --------    --------
  Net amount recognized in Consolidated
    Balance Sheets .....................................   $  3,956    $  5,483
                                                           ========    ========
Amounts recognized in Consolidated Balance Sheets:
  Prepaid benefit cost .................................   $  3,956    $  5,483
                                                           ========    ========
Change for the year in accumulated other
  comprehensive (income) loss:
    Change in intangible asset .........................   $    247    $     --
    Change in additional minimum liability .............     (1,598)         --
                                                           --------    --------
    Total ..............................................   $ (1,351)   $     --
                                                           ========    ========

     In  determining  the projected  benefit  obligation,  the weighted  average
assumed discount rate was 7.50% and 7.25% for 2000 and 2001,  respectively.  The
expected  long-term rate of return on assets,  used in determining  net periodic
pension cost, was 11% for 2000 and 2001.

     The Company also provides a nonqualified  defined  benefit  retirement plan
for certain key employees. Expense accrued for this plan was not significant for
1999, 2000 and 2001.

   BOOK VALUE APPRECIATION UNIT PLAN

     A Book Value  Appreciation  Unit Plan was implemented  effective January 1,
1996. Under the plan, employees were granted units which vested over five years.
Upon  exercise,  employees  were entitled to receive a cash payment based on the
increase in Book Value (as  defined in the plan).  This plan was  terminated  in
1999  with  all  eligible  employees  receiving  their  respective  vested  cash
payments. Expense accrued under this plan was $1.2 million for 1999.

                                      F-27
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 12.  BENEFIT PLANS -- (CONTINUED)

   POSTRETIREMENT MEDICAL AND LIFE INSURANCE

     The  Company  generally  does not provide  postretirement  medical and life
insurance  benefits,  although it subsidizes such benefits for certain employees
and certain  retirees.  Such  subsidies  were  reduced or ended as of January 1,
1997.

     Net periodic postretirement benefit cost included the following components:

                                                         YEAR ENDED DECEMBER 31,
                                                        -----------------------
                                                         1999     2000     2001
                                                        -----    -----    -----
                                                               (THOUSANDS)
Service cost ........................................   $ 114    $  92    $ 109
Interest cost .......................................     476      354      318
Amortization of unrecognized prior service cost .....     (88)     (94)     (95)
Amortization of net gains from earlier periods ......    (209)    (271)    (269)
                                                        -----    -----    -----
Net periodic postretirement benefit cost ............   $ 293    $  81    $  63
                                                        =====    =====    =====

     The   following   table   sets   forth,   for  the  years  2000  and  2001,
reconciliations  of the  beginning  and ending  balances  of the  postretirement
benefit  obligation,  funded status and amounts  recognized in the  Consolidated
Balance Sheets related to postretirement medical and life insurance benefits:

                                                               DECEMBER 31,
                                                           --------------------
                                                             2000        2001
                                                           --------    --------
                                                               (THOUSANDS)

Change in benefit obligation:
    Benefit obligation at beginning of year ............   $  6,023    $  4,845
    Service cost .......................................         92         109
    Interest cost ......................................        354         318
    Amendments .........................................       (122)         --
    Actuarial gains ....................................     (1,098)       (316)
    Benefits paid, net of participant contributions ....       (404)       (274)
                                                           --------    --------
    Benefit obligation at end of year ..................   $  4,845    $  4,682
                                                           ========    ========
Change in plan assets:
    Fair value of plan assets at beginning of year .....   $     --    $     --
    Employer contributions .............................        404         274
    Participant contributions ..........................        104         169
    Benefits paid ......................................       (508)       (443)
                                                           --------    --------
    Fair value of plan assets at end of year ...........   $     --    $     --
                                                           ========    ========
Reconciliation of funded status:
    Funded status ......................................   $ (4,845)   $ (4,682)
    Unrecognized prior service cost ....................       (642)       (548)
    Unrecognized actuarial gains .......................     (5,227)     (5,274)
                                                           --------    --------
    Net amount recognized in Consolidated
      Balance Sheets as accrued benefit cost ...........   $(10,714)   $(10,504)
                                                           ========    ========

                                      F-28
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 12.  BENEFIT PLANS -- (CONTINUED)

     For  purposes  of  calculating  the  accumulated   postretirement   benefit
obligation,  the following  assumptions  were made.  Retirees as of December 31,
2001 who were formerly salaried employees (with certain exceptions) were assumed
to receive a Company  subsidy of $700 to $1,000 per year.  For retirees over age
65, this subsidy may be replaced by  participation  in a managed  care  program.
With respect to retirees who were formerly hourly employees,  most such retirees
are subject to a $5,000 per person  lifetime  maximum  benefit.  Subject to such
lifetime  maximum,  a 9% and 6% annual  rate of increase  in the  Company's  per
capita cost of providing  postretirement  medical  benefits was assumed for 2001
for such retirees  under and over age 65,  respectively.  To the extent that the
lifetime  maximum  benefits  have not been  reached,  the  foregoing  rates were
assumed to decrease gradually to an ultimate rate of 5% and 6%, respectively, by
the year 2009 and remain at that level thereafter.  The weighted average assumed
discount  rate  used  in  determining  the  accumulated  postretirement  benefit
obligation was 7.50% and 7.25% for 2000 and 2001, respectively.

     The health  care cost trend rate  assumption  has an effect on the  amounts
reported. To illustrate,  increasing the assumed health care cost trend rates by
one percentage point in each year would increase the accumulated  postretirement
benefit  obligation  as of  December  31,  2000 and 2001 by $33,000  and $9,000,
respectively,  and the aggregate of the service and interest cost  components of
the net  periodic  postretirement  benefit  cost for the years  2000 and 2001 by
$2,400 and $700,  respectively.  A decrease of one percentage point in each year
would decrease the accumulated  postretirement benefit obligation as of December
31, 2000 and 2001 by $31,000 and $8,000, respectively,  and the aggregate of the
service and interest cost components of the net periodic  postretirement benefit
cost for the years 2000 and 2001 by $2,400 and $600, respectively.

NOTE 13.  2001 LONG-TERM INCENTIVE PLAN AND PREFERRED STOCK OPTION PLAN

     On January 1, 1996,  the  Company  established  a plan to issue  options to
certain employees to purchase shares of redeemable  convertible  preferred stock
("Preferred  Stock") of the Company,  exercisable  at a price of $100 per share.
Each share of  Preferred  Stock is  convertible,  at the holder's  option,  into
shares of common stock of the Company at a formula price based on Book Value (as
defined in the  option  agreement)  as of the date of grant.  The  options  vest
rateably over five years and expire after nine years.  Dividends  will accrue on
the Preferred  Stock from the date of issuance at the rate of 6% per annum.  The
Preferred Stock is redeemable,  at the Company's option,  for a redemption price
equal to $100 per share plus accrued and unpaid dividends.  The Preferred Stock,
and common stock issuable upon  conversion of Preferred Stock into common stock,
is subject to repurchase by the Company under certain circumstances,  at a price
equal to current Book Value (as defined in the option  agreement).  The exercise
price of the options to purchase Preferred Stock was equal to the estimated fair
value  per  share  of the  Preferred  Stock at the date of  grant.  The  options
exercised in 1999 and 2000 were  converted into 4,611 and 1,868 shares of common
stock.  During 1999 no expense was  recorded in  connection  with the  Preferred
Stock options.

     The following is a summary of transactions pertaining to the plan:

                                                   YEAR ENDED DECEMBER 31,
                                             ----------------------------------
                                               1999         2000         2001
                                             --------     --------     --------
                                                     (NUMBER OF SHARES)
Outstanding, January 1 ....................   140,502      168,261      198,559
Granted ...................................    81,405       61,700           --
Exercised .................................    (8,704)      (3,653)          --
Forfeited .................................   (44,942)     (27,749)          --
Exchanged for incentive plan units ........        --           --     (198,559)
                                             --------     --------     --------
Outstanding, December 31 ..................   168,261      198,559           --
                                             ========     ========     ========
Options exercisable, December 31 ..........    45,517       66,675           --
                                             ========     ========     ========

                                      F-29
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13.  2001 LONG-TERM INCENTIVE PLAN AND PREFERRED STOCK OPTION PLAN--
          (CONTINUED)


     Effective  December  31,  2000,  the  Company  adopted  the 2001  Long-Term
Incentive  Plan,  which allows  employees  participating  in the Preferred Stock
Option Plan to also  participate in the 2001 Long-Term  Incentive  Plan.  During
2001, all employees  exchanged  their preferred stock options for incentive plan
units effective as of December 31, 2000. The Long-Term Incentive Plan authorizes
the grant of incentive  units  ("Incentive  Units") to eligible  employees.  The
Long-Term  Incentive Plan is administered by a Committee  appointed by the Board
of  Directors.  The  number of  Incentive  Units  granted is  determined  by the
Committee in its sole discretion.  Generally, Incentive Units vest cumulatively,
in 20%  increments  over five years,  except  that  Incentive  Units  granted in
exchange  for  Preferred  Stock  Options  retain the vested  status and  vesting
schedule of the options exchanged. Incentive Units generally are exercisable for
a period of six years from the date of grant.  The value of  Incentive  Units is
determined at the end of each fiscal  quarter based on Book Value (as defined in
the  plan) at that  date  less  Book  Value as of the date of grant  divided  by
1,000,010. The Incentive Plan will terminate five years after its effective date
of December 2000, unless terminated sooner by the Committee.

     In 2001,  employees exchanged an aggregate of 198,559 stock options granted
under the 1996 Plan  (discussed  above)  for an  aggregate  of 81,862  Incentive
Units.  In 2001,  21,001  Incentive  Units were  granted.  At December 31, 2001,
80,114 Incentive Units were outstanding. Compensation expense for such Incentive
Units was $1.4 and $1.7 million in 2000 and 2001, respectively.

NOTE 14.  BUSINESS SEGMENT INFORMATION

     The Company is a leading  national  manufacturer of a broad line of asphalt
roofing  products  and  accessories  for the steep  slope and low slope  roofing
markets.  The Company also manufacturers and markets specialty building products
and  accessories  for  the  professional  and   do-it-yourself   remodeling  and
residential  construction  industries.  The steep  slope  roofing  product  line
primarily consists of premium laminated  shingles,  strip shingles,  and certain
specialty shingles. Sales of steep slope roofing products in 1999, 2000 and 2001
were $736.7,  $808.8 and $939.4 million and represented  approximately  65%, 67%
and 73%,  respectively,  of the  Company's  net sales.  The  Company's low slope
roofing product line includes a full line of modified bitumen products,  asphalt
built-up roofing, liquid applied membrane, and roofing accessories. Sales of low
slope  roofing  products  and  accessories  in 1999,  2000 and 2001 were $315.4,
$311.7  and $283.7  million  and  represented  approximately  27%,  26% and 22%,
respectively,  of the  Company's  net  sales.  Sales of the  specialty  building
products and accessories  product line in 1999, 2000 and 2001 were $87.9,  $87.3
and $69.9 million and represented approximately 8%, 7% and 5%, respectively,  of
the Company's net sales.

     The Company aggregates the steep slope and low slope product lines into one
operating  segment  since they have  similar  economic  characteristics  and are
similar  in each of the  following  areas:  (i) the nature of the  products  and
services  are similar in that they perform the same  function -- the  protection
and  covering  of steep  slope  and low  slope  roofs;  (ii) the  nature  of the
production processes are similar;  (iii) the type or class of customer for their
products and services are similar;  (iv) the steep slope and low slope  products
have the same distribution channels,  whereby the main customers are wholesalers
or distributors; and (v) regulatory requirements are generally the same for both
the steep slope and low slope product lines. The specialty building products and
accessories  product  line did not meet  quantitative  thresholds  in 2001 to be
considered as a reportable segment.

     Included in net sales in 2000 were sales to two  customers  of 13% and 11%,
respectively,  and,  in 2001,  12% and  11%,  respectively.  No  other  customer
accounted for more than 10% of our net sales in 2000 and 2001.

                                      F-30
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 15.  RELATED PARTY TRANSACTIONS

     Included in the  Consolidated  Balance Sheets are the following  receivable
(payable)  balances  with  related  parties,  which  arise  from  operating  and
financing transactions between the Company and its affiliates:

                                                          DECEMBER 31,
                                                      --------------------
                                                        2000        2001
                                                      --------     -------
                                                           (THOUSANDS)
     Tax receivable from parent corporations .....    $  9,000     $ 9,000
                                                      ========     =======
     Payable to International Specialty
       Products Inc. ("ISP") .....................    $(10,052)    $(8,910)
                                                      ========     =======
     Loan receivable from parent corporation .....    $     --     $ 2,536
                                                      ========     =======

     The  Company  makes  loans to,  and  borrows  from,  G-I  Holdings  and its
subsidiaries  from time to time at prevailing  market rates  (between  4.75% and
9.00% during 2001);  however, no loans to G-I Holdings and its subsidiaries were
made during  2000,  and during  2001,  the  highest  amount of loans made by the
Company to BHC was $2.5 million. In addition,  no loans were made to the Company
by G-I Holdings and its  subsidiaries  during 2000 and 2001. Loans to any parent
corporation  are  subject to  limitations  as outlined  in the  Existing  Credit
Agreement,  the New Credit  Agreement and the Senior Notes. The Company advances
funds from time to time on a non-interest  bearing basis to G-I Holdings and its
subsidiaries.  There was no balance  outstanding of such advances as of December
31, 2000 and 2001.  During  2000,  the  Company  made a  distribution  of $106.2
million  ($59.1  million of which  represents  a non-cash  distribution  in 2000
relating to the 1999 receivable  from G-I Holdings) to its parent  corporations.
The  distribution  of  $106.2  million  in  2000  represents  the  write-off  of
outstanding  advances to the company's parent  corporations during 2000 that the
Company determined were  uncollectible.  Included in current assets in 2000 is a
tax  receivable  from  parent  corporations  of $1.5  million  (such  amount was
reclassified to long-term  assets in 2001) and included in long-term assets is a
tax  receivable  from parent  corporations  of $7.5 and $9.0 million in 2000 and
2001,  respectively,  representing  amounts paid to G-I  Holdings  under the Tax
Sharing Agreement. See Notes 7 and 16.

     MINERAL  PRODUCTS:  The Company and its subsidiaries  purchase all of their
colored roofing granules  requirements  from ISP under a requirements  contract,
except for the  requirements  of some of their roofing plants which are supplied
by third  parties.  Effective  January 1, 2002,  this  contract  was  amended to
provide, among other things, that the contract will expire on December 31, 2002,
unless  extended  by  the  parties.  Such  purchases  by  the  Company  and  its
subsidiaries  totaled  $57.3,  $59.3 and $63.4 million for 1999,  2000 and 2001,
respectively.  The amount  payable to ISP at December 31, 2000 and 2001 for such
purchases was $7.6 and $8.4 million, respectively.

     MANAGEMENT AGREEMENTS:  Pursuant to a Management Agreement (the "Management
Agreement"),  ISP Management Company,  Inc. ("ISP  Management"),  a wholly-owned
indirect subsidiary of ISP, provides certain general management, administrative,
legal,  telecommunications,  information and facilities services to the Company,
including the use of the Company's headquarters in Wayne, New Jersey. Charges to
the Company by ISP Management for these services under the management agreement,
inclusive of the services provided to G-I Holdings,  discussed below, aggregated
$5.3, $6.0 and $6.7 million for 1999, 2000 and 2001, respectively. These charges
consist of management fees and other reimbursable  expenses  attributable to the
Company,  or incurred by ISP  Management  for the  benefit of the  Company.  The
amount payable to ISP for  management  fees as of December 31, 2000 and 2001 was
$1.5 and $0.5 million,  respectively.  Effective January 1, 2002, the Management
Agreement was amended to adjust the management fees payable under the agreement.
The  Management  Agreement  also  provides that the Company is  responsible  for
providing  management  services to G-I Holdings and certain of its  subsidiaries
and that G-I Holdings pay to the Company a  management  fee for these  services.
The aggregate  amount paid by G-I Holdings to the Company for services  rendered
under the  Management  Agreement in 2001 was  approximately  $0.6  million.  The
Company also allocates a portion of the  management  fees payable by the Company
under the  Management  Agreement to separate  lease  payments for the use of the
Company's headquarters. Based on the services provided in

                                      F-31
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 15.  RELATED PARTY TRANSACTIONS -- (CONTINUED)

2001 under the Management Agreement, the aggregate amount payable by the Company
to ISP  Management  under the  Management  Agreement for 2002,  inclusive of the
services provided to G-I Holdings, is expected to be approximately $6.1 million.
Certain of the Company's  executive officers receive their compensation from ISP
Management.  ISP  Management  is  indirectly  reimbursed  for this  compensation
through payment of the management fee and other  reimbursable  expenses  payable
under the Management Agreement.

   TAX SHARING AGREEMENT: See Note 7.


NOTE 16.  COMMITMENTS AND CONTINGENCIES

     The discussions as to legal matters involving the Company contained in Item
3, "Legal  Proceedings--Environmental  Litigation" and "--Other  Litigation" are
incorporated herein by reference.

     G-I Holdings  and BHC are  presently  dependent  upon the earnings and cash
flows of their subsidiaries,  principally the Company, in order to satisfy their
net obligations,  including various tax and other claims and liabilities (net of
certain  insurance  receivables),  including  tax  liabilities  relating  to the
surfactants  partnership (see Note 7). G-I Holdings has advised the Company that
it expects to obtain funds to satisfy G-I  Holdings'  operating  expenses  from,
among other things, loans from subsidiaries (principally the Company). See Notes
3, 7 and 15.

     On  January  5,  2001,  G-I  Holdings   filed  a  voluntary   petition  for
reorganization  under Chapter 11 of the U.S. Bankruptcy Code due to its Asbestos
Claims.  The  Company  is not  included  in such  bankruptcy  filing.  There are
restrictions  under the  indentures  relating to the Senior Notes,  the Existing
Credit  Agreement and the New Credit Agreement on payments by the Company to its
parents.

     During the twelve months ended  December 31, 2002,  the Company  expects to
make  distributions  and/or  advances to its parents to satisfy the  obligations
discussed  above to not more than the extent  permitted by the  Existing  Credit
Agreement,  the New Credit  Agreement and the Senior Notes. The Company does not
believe  that the  dependence  of its parent  corporations  on the cash flows of
their  subsidiaries  should have a material  adverse  effect on the  operations,
liquidity or capital resources of the Company. See Notes 3, 7 and 11.

     In June 2001, the Company entered into employment  security agreements with
certain of its executive  officers and key  personnel.  The  agreements  have no
expiration date and provide for a single-sum  payment consisting of two to three
times salary and bonus and related benefits if employment is terminated within a
thirty-six month period following the change in control event.

     The leases for  certain  property,  plant and  equipment  at certain of the
Company's  glass mat and roofing  facilities are accounted for as capital leases
(see Note 11). The Company is also a lessee under operating  leases  principally
for  warehouses,  production  machinery and equipment,  and  transportation  and
computer  equipment.  Rental  expense on operating  leases was $15.5,  $18.7 and
$26.2 million 1999, 2000 and 2001,  respectively.  Future minimum lease payments
for  properties  which were held  under  long-term  noncancellable  leases as of
December 31, 2001 were as follows:

                                      F-32
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 16.  COMMITMENTS AND CONTINGENCIES -- (CONTINUED)

                                                       CAPITAL    OPERATING
                                                        LEASES     LEASES
                                                       -------    --------
                                                           (THOUSANDS)

     2002 ..........................................   $ 8,328    $ 17,146
     2003 ..........................................     8,291      15,567
     2004 ..........................................     8,183      14,896
     2005 ..........................................     9,333      13,926
     2006 ..........................................     9,285      11,437
     Thereafter ....................................        --      30,467
                                                       -------    --------
     Total minimum payments ........................    43,420    $103,439
                                                                  ========
     Less interest included above ..................    (8,279)
                                                      --------
     Present value of net minimum lease payments ...   $35,141
                                                      ========


NOTE 17.  GUARANTOR FINANCIAL INFORMATION

     All of the Company's subsidiaries,  other than BMCA Receivables Corporation
(see Note 8), are guarantors under the Existing Credit Agreement, the New Credit
Agreement and the indentures  governing the Senior Notes.  These  guarantees are
full,  unconditional  and joint and  several.  In addition,  Building  Materials
Manufacturing Corporation ("BMMC"), a wholly-owned subsidiary of the Company, is
a co-obligor on the 2007 Notes.

     The Company and BMMC entered into license agreements,  effective January 1,
1999, for the right to use intellectual property, including patents, trademarks,
know-how, and franchise rights owned by Building Materials Investment Company, a
wholly-owned subsidiary of the Company, for a license fee stated as a percentage
of net  sales.  The  license  agreements  are for a  period  of one year and are
subject to automatic renewal unless either party terminates with 60 days written
notice.  Also,  effective  January 1, 1999, BMMC sells all finished goods to the
Company at a manufacturing profit.

     In January 2001, certain subsidiaries of the Company were merged into BMMC,
and accordingly,  certain reclassifications were made to the guarantor financial
statements to conform to current year presentations.

     Presented below is condensed  consolidating  financial  information for the
Company, the guarantor subsidiaries and the non-guarantor  subsidiary,  prepared
on a basis which retroactively reflects the formation of such companies, for all
periods presented. This financial information should be read in conjunction with
the Consolidated Financial Statements and other notes related thereto.  Separate
financial  information  for the  Company,  the  guarantor  subsidiaries  and the
non-guarantor   subsidiary  is  not  included  herein  because   management  has
determined that such information is not material to investors.

                                      F-33
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 1999
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                              PARENT       GUARANTOR
                                              COMPANY    SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                            ----------   ------------   ------------   ------------
<S>                                         <C>            <C>           <C>            <C>
 Net sales ..............................   $1,014,155     $125,884      $      --      $1,140,039
Intercompany net sales ..................       51,474      753,235       (804,709)             --
                                            ----------     --------      ---------      ----------
   Total net sales ......................    1,065,629      879,119       (804,709)      1,140,039
                                            ----------     --------      ---------      ----------
Costs and expenses:
  Cost of products sold .................      845,616      771,790       (804,709)        812,697
  Selling, general and administrative ...      159,458       80,102                        239,560
  Goodwill amortization .................        1,290          744                          2,034
  Transition service agreement
    (income) expense ....................         (500)         500                             --
  Nonrecurring charges ..................        2,650           --                          2,650
                                            ----------     --------      ---------      ----------
      Total costs and expenses ..........    1,008,514      853,136       (804,709)      1,056,941
                                            ----------     --------      ---------      ----------
 Operating income .......................       57,115       25,983             --          83,098
Equity in loss of subsidiaries ..........       29,980           --        (29,980)             --
Intercompany licensing income
  (expense), net ........................      (30,425)      30,425                             --
Interest expense ........................      (26,565)     (21,752)                       (48,317)
Other income (expense), net .............       (7,489)      12,929                          5,440
                                            ----------     --------      ---------      ----------
 Income before income taxes
  and extraordinary losses ..............       22,616       47,585        (29,980)         40,221
Income tax (provision) benefit ..........        2,723      (17,605)                       (14,882)
                                            ----------     --------      ---------      ----------
 Income before extraordinary losses .....       25,339       29,980        (29,980)         25,339
Extraordinary losses, net of income
  tax benefits of $761 ..................       (1,296)          --                         (1,296)
                                            ----------     --------      ---------      ----------
 Net income .............................   $   24,043     $ 29,980      $ (29,980)     $   24,043
                                            ==========     ========      =========      ==========
</TABLE>

                                      F-34
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 2000
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                     PARENT          GUARANTOR
                                                     COMPANY       SUBSIDIARIES    ELIMINATIONS     CONSOLIDATED
                                                   -----------     ------------    ------------     ------------
<S>                                                <C>               <C>             <C>             <C>
Net sales .....................................    $1,081,918        $125,841        $      --       $1,207,759
Intercompany net sales ........................        45,771         822,283         (868,054)              --
                                                   ----------        --------        ---------       ----------
  Total net sales .............................     1,127,689         948,124         (868,054)       1,207,759
                                                   ----------        --------        ---------       ----------
Costs and expenses:
  Cost of products sold .......................       916,485         845,345         (868,054)         893,776
  Selling, general and administrative .........       169,575          80,967                           250,542
  Goodwill amortization .......................         1,304             720                             2,024
  Transition service agreement
    (income) expense ..........................           100            (100)                               --
  Gain on sale of assets ......................            --         (17,505)                          (17,505)
  Warranty reserve adjustment .................        15,000              --                            15,000
                                                   ----------        --------        ---------       ----------
     Total costs and expenses .................     1,102,464         909,427         (868,054)       1,143,837
                                                   ----------        --------        ---------       ----------
Operating income ..............................        25,225          38,697               --           63,922
Equity in earnings of subsidiaries ............        16,251              --          (16,251)              --
Intercompany licensing income
  (expense), net ..............................       (32,458)         32,458                                --
Interest expense ..............................       (24,932)        (28,536)                          (53,468)
Other expense, net ............................       (10,818)        (16,822)                          (27,640)
                                                   ----------        --------        ---------       ----------
Income (loss) before income taxes
  and extraordinary losses ....................       (26,732)         25,797          (16,251)         (17,186)
Income tax (provision) benefit ................        15,905          (9,546)                            6,359
                                                   ----------        --------        ---------       ----------
Income (loss) before extraordinary losses .....       (10,827)         16,251          (16,251)         (10,827)
Extraordinary losses, net of income
  tax benefits of $194 ........................          (330)             --                              (330)
                                                   ----------        --------        ---------       ----------
Net income (loss) .............................    $  (11,157)       $ 16,251        $ (16,251)      $  (11,157)
                                                   ==========        ========        =========       ==========
</TABLE>

                                      F-35
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 2001
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                     PARENT          GUARANTOR
                                                     COMPANY       SUBSIDIARIES    ELIMINATIONS     CONSOLIDATED
                                                   -----------     ------------    ------------     ------------
<S>                                                <C>               <C>             <C>             <C>
Net sales .....................................    $1,182,581        $110,461        $      --       $1,293,042
Intercompany net sales ........................        90,238         892,246         (982,484)              --
                                                   ----------        --------        ---------       ----------
    Total net sales ...........................     1,272,819        1,002,707        (982,484)       1,293,042
                                                   ----------        --------        ---------       ----------
Costs and expenses:
  Cost of products sold .......................     1,003,072         903,157         (982,484)         923,745
  Selling, general and administrative .........       198,336          71,944                           270,280
  Goodwill amortization .......................         1,303             721                             2,024
  Transition service agreement (income) expense           100            (100)                               --
                                                   ----------        --------        ---------       ----------
    Total costs and expenses ..................     1,202,811         975,722         (982,484)       1,196,049
                                                   ----------        --------        ---------       ----------
Operating income ..............................        70,008          26,985               --           96,993
Equity in earnings of subsidiaries ............        29,273              --          (29,273)              --
Intercompany licensing income (expense), net ..       (35,477)         35,477                                --
Interest expense ..............................       (43,357)        (17,446)                          (60,803)
Other income (expense), net ...................        (7,858)          1,449                            (6,409)
                                                   ----------        --------        ---------       ----------
Income before income taxes ....................        12,589          46,465          (29,273)          29,781
Income tax (provision) benefit ................         6,173         (17,192)                          (11,019)
                                                   ----------        --------        ---------       ----------
Net income ....................................    $   18,762        $ 29,273        $ (29,273)      $   18,762
                                                   ==========        ========        =========       ==========
</TABLE>

                                      F-36
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2000
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  NON-
                                                       PARENT      GUARANTOR    GUARANTOR
                                                       COMPANY   SUBSIDIARIES  SUBSIDIARY  ELIMINATIONS  CONSOLIDATED
                                                      --------   ------------  ----------  ------------  ------------
<S>                                                   <C>          <C>           <C>         <C>           <C>
ASSETS

Current Assets:
  Cash and cash equivalents ........................  $  9,741     $ 73,006      $    --     $      --     $ 82,747
  Accounts receivable, trade, net ..................     9,798        9,676           --                     19,474
  Accounts receivable, other .......................     5,027        2,947       43,869                     51,843
  Tax receivable from parent Corporations ..........     1,500           --           --                      1,500
  Inventories ......................................    55,891       45,811           --                    101,702
  Other current assets .............................     1,105        2,820           --                      3,925
                                                      --------     --------      -------     ---------     --------
    Total Current Assets ...........................    83,062      134,260       43,869            --      261,191
Investment in subsidiaries .........................   356,726           --           --      (356,726)          --
Intercompany loans including accrued interest ......   188,945     (184,531)      (4,414)                        --
Due from (to) subsidiaries, net ....................  (253,575)     249,612        3,963                         --
Property, plant and equipment, net .................    46,928      315,536           --                    362,464
Excess of cost over net assets of businesses
   acquired, net ...................................    41,562       23,755           --                     65,317
Deferred income tax benefits .......................    42,897           --           --                     42,897
Tax receivable from parent corporations ............     7,500           --           --                      7,500
Other assets .......................................    16,026       15,774           --                     31,800
                                                      --------     --------      -------     ---------     --------
Total Assets .......................................  $530,071     $554,406      $43,418     $(356,726)    $771,169
                                                      ========     ========      =======     =========     ========


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Current maturities of long-term debt .............  $    153     $  5,755      $    --     $      --     $  5,908
  Accounts payable .................................    19,871       37,649           --                     57,520
  Payable to related parties .......................     3,983        6,069           --                     10,052
  Accrued liabilities ..............................    18,865       24,023           --                     42,888
  Reserve for product warranty claims ..............    14,900           --           --                     14,900
                                                      --------     --------      -------     ---------     --------
    Total Current Liabilities ......................    57,772       73,496           --            --      131,268
Long-term debt less current maturities .............   507,878      166,820           --                    674,698
Reserve for product warranty claims ................    28,187          569           --                     28,756
Other liabilities ..................................    14,099          213           --                     14,312
                                                      --------     --------      -------     ---------     --------
Total Liabilities ..................................   607,936      241,098           --            --      849,034
Total Stockholders' Equity (Deficit) ...............   (77,865)     313,308       43,418      (356,726)     (77,865)
                                                      --------     --------      -------     ---------     --------
Total Liabilities and Stockholders'
Equity (Deficit) ...................................  $530,071     $554,406      $43,418     $(356,726)    $771,169
                                                      ========     ========      =======     =========     ========
</TABLE>

                                      F-37
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2001
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   NON-
                                                       PARENT      GUARANTOR    GUARANTOR
                                                       COMPANY   SUBSIDIARIES  SUBSIDIARY  ELIMINATIONS  CONSOLIDATED
                                                      --------   ------------  ----------  ------------  ------------
<S>                                                   <C>          <C>           <C>         <C>           <C>
ASSETS

Current Assets:
  Cash and cash equivalents ........................  $    133     $ 46,254      $    --     $      --     $ 46,387
  Accounts receivable, trade, net ..................    10,726       12,764           --                     23,490
  Accounts receivable, other .......................     5,005        1,827       32,937                     39,769
  Inventories ......................................    63,077       39,168           --                    102,245
  Other current assets .............................     1,487        2,403           --                      3,890
                                                      --------     --------      -------     ---------     --------
    Total Current Assets ...........................    80,428      102,416       32,937            --      215,781
Investment in subsidiaries .........................   379,589           --           --      (379,589)          --
Intercompany loans including accrued interest ......    81,781      (81,781)          --                         --
Due from (to) subsidiaries, net ....................  (213,596)     209,525        4,071                         --
Property, plant and equipment, net .................    45,128      306,939           --                    352,067
Excess of cost over net assets of businesses
  acquired, net ....................................    40,080       23,214           --                     63,294
Deferred income tax benefits .......................    32,924           --           --                     32,924
Tax receivable from parent corporations ............     9,000           --           --                      9,000
Other assets .......................................    16,654       16,605           --                     33,259
                                                      --------     --------      -------     ---------     --------
Total Assets .......................................  $471,988     $576,918      $37,008     $(379,589)    $706,325
                                                      ========     ========      =======     =========     ========


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Current maturities of long-term debt .............  $     --     $  5,556      $    --     $      --     $  5,556
  Accounts payable .................................    19,393       38,842           --                     58,235
  Payable to related parties .......................     1,296        7,614           --                      8,910
  Accrued liabilities ..............................    23,333       20,215           --                     43,548
  Reserve for product warranty claims ..............    14,900           --           --                     14,900
                                                      --------     --------      -------     ---------     --------
    Total Current Liabilities ......................    58,922       72,227           --                    131,149
Long-term debt less current maturities .............   438,374      161,522           --                    599,896
Reserve for product warranty claims ................    22,358          383           --                     22,741
Other liabilities ..................................    13,973          205           --                     14,178
                                                      --------     --------      -------     ---------     --------
Total Liabilities ..................................   533,627      234,337                                 767,964
Total Stockholders' Equity (Deficit) ...............   (61,639)     342,581       37,008      (379,589)     (61,639)
                                                      --------     --------      -------     ---------     --------
Total Liabilities and Stockholders'
  Equity (Deficit) .................................  $471,988     $576,918      $37,008     $(379,589)    $706,325
                                                      ========     ========      =======     =========     ========
</TABLE>

                                      F-38
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 1999
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                                                          NON-
                                                            PARENT      GUARANTOR      GUARANTOR
                                                           COMPANY     SUBSIDIARIES    SUBSIDIARY   CONSOLIDATED
                                                           -------     ------------    ----------   ------------
<S>                                                        <C>           <C>            <C>           <C>
Cash and cash equivalents, beginning of year ..........    $    53       $ 24,936       $    --       $ 24,989
                                                           -------       --------       -------       --------
Cash provided by (used in) operating activities:

Net income (loss) .....................................     (5,937)        29,980                       24,043
Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
      Extraordinary losses ............................      1,296             --                        1,296
      Depreciation ....................................      4,026         28,960                       32,986
      Goodwill and other amortization .................      1,931            744                        2,675
      Deferred income taxes ...........................     14,132             --                       14,132
      Noncash interest charges ........................      3,321             --                        3,321
   (Increase) decrease in working capital items .......     15,192        (40,065)       (1,327)       (26,200)
   Decrease in product warranty claims ................    (10,628)        (3,690)                     (14,318)
   Purchases of trading securities ....................         --       (139,522)                    (139,522)
   Proceeds from sales of trading securities ..........         --        243,097                      243,097
   Proceeds from sale of accounts receivable ..........      5,640             --                        5,640
   Increase in other assets ...........................     (1,392)        (3,109)                      (4,501)
   Decrease in other liabilities ......................     (1,987)          (348)                      (2,335)
   Change in net receivable from/payable to
      related parties/parent corporations .............     58,713       (108,833)        1,327        (48,793)
   Other, net .........................................    (18,020)        14,616                       (3,404)
                                                           -------       --------       -------       --------
Net cash provided by operating activities .............     66,287         21,830            --         88,117
                                                           -------       --------       -------       --------
Cash provided by (used in) investing activities:
   Capital expenditures ...............................     (3,562)       (41,760)                     (45,322)
   Acquisitions .......................................         --           (515)                        (515)
   Purchases of available-for-sale securities .........         --        (76,048)                     (76,048)
   Purchases of held-to-maturity securities ...........         --         (2,349)                      (2,349)
   Proceeds from sales of available-for-sale
      securities ......................................         --         97,400                       97,400
   Proceeds from held-to-maturity securities ..........         --          7,758                        7,758
   Proceeds from sales of other short-term
      investments .....................................         --         21,421                       21,421
                                                           -------       --------       -------       --------
Net cash provided by (used in) investing activities ...     (3,562)         5,907            --          2,345
                                                           -------       --------       -------       --------
Cash provided by (used in) financing activities:
   Proceeds from issuance of long-term debt ...........     31,850          6,093                       37,943
   Repayments of long-term debt .......................    (32,937)        (3,017)                     (35,954)
   Distributions to parent corporations ...............    (60,000)            --                      (60,000)
   Proceeds from issuance of common stock .............        870             --                          870
   Financing fees and expenses ........................     (2,358)            --                       (2,358)
                                                           -------       --------       -------       --------
Net cash provided by (used in) financing activities ...    (62,575)         3,076            --        (59,499)
                                                           -------       --------       -------       --------
Net change in cash and cash equivalents ...............        150         30,813            --         30,963
                                                           -------       --------       -------       --------
Cash and cash equivalents, end of year ................    $   203       $ 55,749       $    --       $ 55,952
                                                           =======       ========       =======       ========
</TABLE>

                                      F-39
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2000
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                                                           NON-
                                                            PARENT       GUARANTOR      GUARANTOR
                                                           COMPANY      SUBSIDIARIES    SUBSIDIARY   CONSOLIDATED
                                                           --------     ------------    ----------   ------------
<S>                                                        <C>           <C>             <C>           <C>
Cash and cash equivalents, beginning of year ..........    $    203       $ 55,749        $    --       $ 55,952
                                                           --------       --------        -------       --------
Cash provided by (used in) operating activities:
Net income (loss) .....................................     (27,408)        16,251                       (11,157)
Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
    Extraordinary losses ..............................         330             --                           330
    Gain on sale of assets ............................          --        (17,505)                      (17,505)
    Depreciation ......................................       4,406         31,944                        36,350
    Goodwill and other amortization ...................       2,146            720                         2,866
    Deferred income taxes .............................      (7,475)            --                        (7,475)
    Noncash interest charges ..........................       1,922            726                         2,648
  (Increase) decrease in working capital items ........     (33,237)         5,107          8,339        (19,791)
  Increase in product warranty claims .................       9,317             25                         9,342
  Purchases of trading securities .....................          --           (980)                         (980)
  Proceeds from sales of trading securities ...........          --          2,172                         2,172
  Proceeds from sale of accounts receivable ...........         925             --                           925
  (Increase) decrease in other assets .................       3,180         (1,916)                        1,264
  Decrease in other liabilities .......................      (2,303)          (373)                       (2,676)
  Change in net receivable from/payable to
     related parties/parent corporations ..............      37,493        (43,126)        (8,339)       (13,972)
  Other, net ..........................................       2,785         (2,268)                          517
                                                           --------       --------        -------       --------
Net cash used in operating activities .................      (7,919)        (9,223)            --        (17,142)
                                                           --------       --------        -------       --------
Cash provided by (used in) investing activities:
  Capital expenditures ................................      (1,417)       (60,126)                      (61,543)
  Proceeds from sale of assets ........................          --         31,702                        31,702
  Purchases of available-for-sale securities ..........          --           (882)                         (882)
  Proceeds from sales of available-for-sale
    securities ........................................          --         58,284                        58,284
  Proceeds from sales of other short-term
    investments .......................................          --          1,590                         1,590
                                                           --------       --------        -------       --------
Ne cash provided by (used in) investing activities ....      (1,417)        30,568             --         29,151
                                                           --------       --------        -------       --------
Cash provided by (used in) financing activities:
  Proceeds from issuance of long-term debt ............      34,044          7,002                        41,046
  Increase in borrowings under revolving
    credit facility ...................................      70,000             --                        70,000
  Repayments of long-term debt ........................     (34,198)        (3,858)                      (38,056)
  Distributions to parent corporations ................     (47,029)                                     (47,029)
  Net repurchase of common stock ......................      (1,180)            --                        (1,180)
  Financing fees and expenses .........................      (2,763)        (7,232)                       (9,995)
                                                           --------       --------        -------       --------
Net cash provided by (used in) financing activities ...      18,874         (4,088)            --         14,786
                                                           --------       --------        -------       --------
Net change in cash and cash equivalents ...............       9,538         17,257             --         26,795
                                                           --------       --------        -------       --------
Cash and cash equivalents, end of year ................    $  9,741       $ 73,006        $    --       $ 82,747
                                                           ========       ========        =======       ========
</TABLE>

                                      F-40
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17.  GUARANTOR FINANCIAL INFORMATION -- (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2001
                                   (THOUSANDS)

<TABLE>
<CAPTION>
                                                                                          NON-
                                                          PARENT        GUARANTOR      GUARANTOR
                                                         COMPANY       SUBSIDIARIES   SUBSIDIARY   CONSOLIDATED
                                                         --------      ------------   ----------   ------------
<S>                                                      <C>            <C>            <C>            <C>
------------------------
Cash and cash equivalents, beginning of year ........    $  9,741       $ 73,006       $     --       $ 82,747
                                                         --------       --------       --------       --------
Cash provided by (used in) operating activities:

Net income (loss) ...................................     (10,511)        29,273                        18,762
Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
    Depreciation ....................................       2,764         34,432                        37,196
    Goodwill and other amortization .................       3,073            721                         3,794
    Deferred income taxes ...........................       9,973             --                         9,973
    Noncash interest charges ........................       3,270          1,286                         4,556
  (Increase) decrease in working capital items ......     (39,153)         2,477         10,932        (25,744)
  Decrease in product warranty claims ...............      (5,829)          (186)                       (6,015)
  Proceeds from sale of accounts receivable .........      34,669             --                        34,669
  Increase in other assets ..........................      (2,673)        (1,308)                       (3,981)
  Decrease in other liabilities .....................         (85)            (8)                          (93)
  Change in net receivable from/payable to
     related parties/parent corporations ............      70,908        (61,118)       (10,932)        (1,142)
  Other, net ........................................         131          1,155                         1,286
                                                         --------       --------       --------       --------
Net cash provided by operating activities ...........      66,537          6,724             --         73,261
                                                         --------       --------       --------       --------
Cash provided by (used in) investing activities:

  Capital expenditures ..............................        (915)       (27,170)                      (28,085)
                                                         --------       --------       --------       --------
Net cash used in investing activities ...............        (915)       (27,170)            --        (28,085)
                                                         --------       --------       --------       --------
Cash provided by (used in) financing activities:
  Decrease in borrowings under revolving
    credit facility .................................     (70,000)            --                       (70,000)
  Repayments of long-term debt ......................        (175)        (5,798)                       (5,973)
  Loan to parent corporation ........................      (2,536)            --                        (2,536)
  Financing fees and expenses .......................      (2,519)          (508)                       (3,027)
                                                         --------       --------       --------       --------
Net cash used in financing activities ...............     (75,230)        (6,306)            --        (81,536)
                                                         --------       --------       --------       --------
Net change in cash and cash equivalents .............      (9,608)       (26,752)            --        (36,360)
                                                         --------       --------       --------       --------
Cash and cash equivalents, end of year ..............    $    133       $ 46,254       $     --       $ 46,387
                                                         ========       ========       ========       ========
</TABLE>

                                      F-41
<PAGE>


                    BUILDING MATERIALS CORPORATION OF AMERICA

                         SUPPLEMENTARY DATA (UNAUDITED)
                      QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                     2000 BY QUARTER                             2001 BY QUARTER
                                         ---------------------------------------     ---------------------------------------
                                         FIRST      SECOND      THIRD     FOURTH      FIRST     SECOND      THIRD     FOURTH
                                         ------     ------     ------     ------     ------     ------     ------     ------
                                                                              (MILLIONS)
<S>                                      <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Net sales ............................   $289.8     $325.8     $330.9     $261.3     $265.0     $354.9     $376.3     $296.8
Cost of products sold ................    214.4      230.3      242.5      206.7      199.0      254.2      256.8      213.7
                                         ------     ------     ------     ------     ------     ------     ------     ------
Gross profit .........................   $ 75.4     $ 95.5     $ 88.4     $ 54.6     $ 66.0     $100.7     $119.5     $ 83.1
                                         ======     ======     ======     ======     ======     ======     ======     ======
Operating income (loss)* .............   $ 14.8     $ 28.6     $ 39.6     $(19.1)    $  9.5     $ 32.2     $ 43.6     $ 11.7
                                         ======     ======     ======     ======     ======     ======     ======     ======
Interest expense .....................   $ 12.4     $ 12.5     $ 13.4     $ 15.1     $ 15.2     $ 15.4     $ 15.0     $ 15.2
                                         ======     ======     ======     ======     ======     ======     ======     ======
Income (loss) before income taxes
   and extraordinary losses ..........   $  1.2     $ 13.8     $ 23.5     $(55.7)    $ (7.1)    $ 14.9     $ 26.8     $ (4.8)
Income tax (provision) benefit .......     (0.5)      (5.1)      (8.7)      20.6        2.6       (5.5)      (9.9)       1.8
                                         ------     ------     ------     ------     ------     ------     ------     ------
Income (loss) before
   extraordinary losses ..............      0.7        8.7       14.8      (35.1)      (4.5)       9.4       16.9       (3.0)
Extraordinary losses .................       --         --       (0.3)        --         --         --         --         --
                                         ------     ------     ------     ------     ------     ------     ------     ------
Net income (loss) ....................   $  0.7     $  8.7     $ 14.5     $(35.1)    $ (4.5)    $  9.4     $ 16.9     $ (3.0)
                                         ======     ======     ======     ======     ======     ======     ======     ======
</TABLE>

----------

* The operating  income for the third and the fourth  quarters of 2000 reflect a
  $17.5 million gain on sale of assets,  and a $15.0 million charge related to a
  provision for warranty claims, respectively. See Notes 2 and 4 to Consolidated
  Financial Statements.

                                      F-42
<PAGE>


                                                                     SCHEDULE II

                    BUILDING MATERIALS CORPORATION OF AMERICA

                        VALUATION AND QUALIFYING ACCOUNTS

                          YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                       BALANCE   CHARGED TO                         BALANCE
                                                      JANUARY 1,  SALES OR                        DECEMBER 31,
DESCRIPTION                                              1999     EXPENSES   DEDUCTIONS    OTHER      1999
-----------                                           ---------  ----------  ----------    -----  ------------
                                                                            (THOUSANDS)
<S>                                                    <C>         <C>        <C>           <C>      <C>
Valuation and Qualifying Accounts Deducted from
  Assets To Which They Apply:
    Allowance for doubtful accounts ...............    $ 4,035     $   484    $   500(a)    $ --     $ 4,019(b)
    Allowance for discounts .......................     23,863      96,645     97,280        (33)     23,195
    Reserve for inventory market valuation ........      2,546       2,794      3,623         --       1,717
    Reserve for product warranty claims ...........     48,632      13,573     27,891         --      34,314


                                              YEAR ENDED DECEMBER 31, 2000

<CAPTION>
                                                       BALANCE   CHARGED TO                         BALANCE
                                                      JANUARY 1,  SALES OR                        DECEMBER 31,
DESCRIPTION                                              2000     EXPENSES   DEDUCTIONS    OTHER      2000
-----------                                           ---------  ----------  ----------    -----  ------------
                                                                            (THOUSANDS)
<S>                                                    <C>         <C>        <C>           <C>      <C>
Valuation and Qualifying Accounts Deducted from
  Assets To Which They Apply:
    Allowance for doubtful accounts ...............    $ 4,019     $   413    $ 2,634(a)    $ --     $ 1,798(b)
    Allowance for discounts .......................     23,195     110,291    107,683         --      25,803
    Reserve for inventory market valuation ........      1,717         658      1,083       (289)      1,003
    Reserve for product warranty claims ...........     34,314      32,926     23,584         --      43,656


                                              YEAR ENDED DECEMBER 31, 2001

<CAPTION>
                                                       BALANCE   CHARGED TO                         BALANCE
                                                      JANUARY 1,  SALES OR                        DECEMBER 31,
DESCRIPTION                                              2001     EXPENSES   DEDUCTIONS    OTHER      2001
-----------                                           ---------  ----------  ----------    -----  ------------
                                                                            (THOUSANDS)
<S>                                                    <C>         <C>        <C>           <C>      <C>
Valuation and Qualifying Accounts Deducted from
  Assets To Which They Apply:
    Allowance for doubtful accounts ...............    $ 1,798    $   346    $   786(a)    $(300)   $ 1,058(b)
    Allowance for discounts .......................     25,803    141,107    133,158         300     34,052
    Reserve for inventory market valuation ........      1,003      3,059        741         --       3,321
    Reserve for product warranty claims ...........     43,656     19,469     25,484         --      37,641
</TABLE>

----------
Notes:
(a)  Represents write-offs of uncollectible accounts net of recoveries.
(b)  The  balances at  December  31,  1999,  2000 and 2001  primarily  reflect a
     reserve  for  receivables  sold  to a  trust  (see  Note 8 to  Consolidated
     Financial Statements).

                                       S-1