The Company’s success in 2005 can be summed up in three central themes: 1) Our focus on anticipating and meeting the needs of our customers as we expand our construction services capabilities and extend our geographic reach; 2) Our adherence to BMHC’s core values as we grow the business, maintaining an entrepreneurial culture and a focus on customer service; 3) Our employees’ dedication to successfully meeting the demands of our business and their ability to assimilate tremendous growth. For the last several years, we have charted a strategy focused on becoming the leading construction services provider in targeted U.S. homebuilding markets that are experiencing positive growth trends. As the homebuilding industry has consolidated — resulting in large national builders controlling more of the residential development across the country — we have concentrated our efforts on meeting the specific needs of high-volume production homebuilders. We have always operated our business centered on a philosophy of anticipating and meeting our customers’ requirements. Reflecting what we view as a partnership with our customers, we have developed a business model that works for them and for BMHC. We have been proactive in the growth and expansion of our business by continuing to invest in the Company and our people. In the past year, we not only completed a number of strategic acquisitions, but also purchased real estate for new facilities and expanded our existing locations. We also successfully executed supply chain initiatives in certain target markets, such as integrating lumber and truss operations with our framing services. In all of our markets we remain committed to meeting the needs of our customers. We believe that BMHC is now firmly positioned in the right markets with the right products and services to serve our customers on the scale they require. The Company’s outstanding performance in 2005 was due in large part to our ability to execute our business strategy. We completed seven transactions in 2005, which played a significant role in driving our business to new heights during the year. We have continued this momentum, completing an additional three acquisitions in the first quarter of 2006. A large part of our business strategy has been to expand our range of services at BMC Construction as we become an integrated multi-trade residential construction company. By investing in the BBP Companies and acquiring the assets of Campbell Companies, we successfully expanded our services to include concrete and plumbing in high-growth markets, including Phoenix, Las Vegas and Southern California. We also extended our geographic reach to the Chicago market by investing in RCI Construction, and to the San Diego market through our acquisition of HnR Framing Systems. In January 2006, we acquired the assets of Benedetti Construction Management, a framing company in Southern California’s Inland Empire region, and MWB Building Contractors, which expands our Northern California framing operation and extends it into the Reno, Nevada market. In 2005, BMC West acquired the assets of Quality Truss, a provider of truss and roof components in Idaho, which complements our operations in the InterMountain region. We further expanded our BMC West millwork facility in Houston to support continued strong growth. In February 2006, we acquired the assets of Home Lumber in Houston, adding lumber and materials distribution and further increasing our millwork capabilities. This transaction significantly expands our operations in this important homebuilding market. We remained diligent in our evaluation of acquisition opportunities aimed at ensuring that each company we acquired was not only a leader in its market but also a good fit with our culture and business model. Prior to becoming part of the BMHC organization, all of the companies we acquired were leading service providers in their construction trades working with the top national and regional production homebuilders. The principals and employees of each company acquired in 2005 share our dedication to customer service and our vision of BMHC’s future in the industry. With this shared dedication and vision, all of our acquired companies have maintained the entrepreneurial spirit that is vital to our success in every market. The business strategy we developed several years ago is beginning to demonstrate its potential. We increased sales 39% in 2005, largely due to the acquisitions we completed and to the continued strength of our markets. Our efforts to leverage expenses against increased sales and to enhance operating efficiencies proved successful, and resulted in a 140% improvement to our bottom line. We reinforced our strong financial position by expanding our syndicated credit facility from $350 million to $500 million with an option to further increase the size to $650 million over the five-year-term. Further demonstrating our strong financial performance and commitment to enhancing shareholder value, we increased our quarterly dividend twice in 2005, by a total of 88%. In the first quarter of 2006, our board of directors approved a two-for-one stock split and another 33% increase in our cash dividend. The stock split and the third consecutive year of dividend increases reflect our ongoing confidence in our long-term growth prospects. Our dividend program enables shareholders to participate in BMHC’s success, and we believe the stock split should improve liquidity and allow broader ownership of the Company’s shares. The Company’s ability to grow successfully starts with our people. Without talented and motivated employees, we would not be able to support our growth and consistently provide the superior service our customers have come to expect from BMHC. Throughout this exciting phase of BMHC’s growth, we took important steps to ensure our infrastructure and systems were able to support our continuing expansion. We continued to identify and implement best practices throughout all levels of our organization. We improved the systems and controls essential to managing our business profitably and integrating newly acquired companies. We made significant progress in our plan to standardize our information technology platforms to support our field operations and back office, and added high-quality systems staff to support our rapid growth. BMHC’s ability to grow successfully starts with our people. Without talented and motivated employees, we would not be able to support our growth and consistently provide the superior service our customers have come to expect from BMHC. We continued to make employee-focused initiatives a priority — including professional and industry certification training, management training, financial and management support for participation in outside education and our constant attention to keeping safety a core component of our operations. The professional credibility, competence and business integrity of our people is evidenced by a growing number of our locations receiving quality certifications from the National Association of Home Builders. We also remain sensitive to the various cultures and needs of our employees. We have conducted outreach to minority communities in our markets and our corporate notices and information are bilingual. While we focus on being a leader in our industry, we also create a rewarding environment for our employees. Two individuals who have played major roles at BMHC have recently left the Company. Dr. James Brown, a director since 1991, retired from our board of directors in February 2006. Jim’s counsel and unique insights into the nation’s housing industry have been valuable contributions to the Company over the years. Ellis Goebel, a founder of BMC West in 1987, retired at the end of 2005. As Senior Vice President — Business Development and Investor Relations, and in his previous position as Senior Vice President of Finance and Treasurer, Ellis played a significant part in the development and expansion of the Company. On behalf of everyone involved with BMHC, I thank Jim and Ellis for their hard work and dedication. We also made two appointments to our board of directors in 2005, both of whom are nominated for election at this year’s annual meeting of shareholders. Dr. Eric Belsky and Mr. Norman Metcalfe bring a wealth of knowledge and industry expertise to the board and will be valuable contributors to us as we continue to grow our business. In this time of continued critical focus on corporate ethics, BMHC continues to consistently institute and follow a broad range of programs to ensure sound corporate governance and ethical business conduct throughout the organization, as the Company has done since its formation almost 19 years ago. Our strong corporate values and focus on good corporate citizenship have fostered a culture that encourages us to give back to the communities in which we operate, by donating time, resources and funds. We also made significant contributions during the year toward the recovery efforts from the Asian tsunami and Hurricane Katrina. Additionally, we continued our many years of work with Habitat for Humanity, which is a natural charitable opportunity for BMHC and a way to use our operations and the expertise of our people to benefit those in need. 2005 was a terrific year for BMHC, and was one in which everything came together — the strategy of the business as well as positive trends in the homebuilding industry. We are pleased with the acquisitions we completed, and the way our people continued to provide superior service to our customers. Employees and management recognized evolving industry trends and proactively pursued the growth of our business. Everyone worked hard in supporting our strategy and we are pleased to have been recognized for our efforts by those outside the Company, as BMHC was named 2005 Pro-Dealer of the Year by Home Channel News and was included for the first time on the Forbes Platinum 400 list. As we establish ourselves as the leader in our markets, our high standards and commitment to excellence continue to be the foundation upon which we build customer relationships and our reputation in the marketplace. Because of the steps we have taken, we are better positioned to capitalize on future opportunities in the homebuilding industry. In 2006, we expect the large homebuilders will continue to gain market share. We believe BMHC is in the right geographic areas where there will be strong demand for new homes. Our willingness to invest in the business enhances our leadership position. BMHC’s entrepreneurial spirit and strong culture drive our success. I appreciate and greatly value the hard work and loyalty of all our employees and our board of directors, and the continued support of our customers, suppliers and shareholders. Sincerely,