Headwaters Incorporated to Expand Alternative Fuels Position with Nort

    Business Editors/Energy Editors

    SOUTH JORDAN, Utah--(BUSINESS WIRE)--March 14, 2005--Headwaters Incorporated (Nasdaq: HDWR) announced today that it has completed a non-binding Memorandum of Understanding ("MOU") with Great River Energy ("GRE") to construct and operate a 50 million gallon per year ethanol production facility in North Dakota.
    The state-of-the-art facility would be located on land adjacent to GRE's Coal Creek power plant near Underwood, N.D. Headwaters and GRE hope to complete negotiations of a definitive agreement, obtain board approval, project financing and other conditions, and commence construction by fall of 2005 with operations commencing in fall of 2006.
    Headwaters would own a majority of the facility and provide construction and plant management services. GRE would be a minority owner and service provider.
    "By co-locating at Coal Creek Station, we are able to take advantage of waste steam from the power plant. This eliminates the need to build a boiler and reduces the overall cost of the ethanol plant," said Kirk Benson, Headwaters chairman and CEO. "Our goal is to enter the ethanol market with a significant facility that is a low-cost producer in the industry."
    Benson continued, "Ethanol production offers attractive synergies for the company's energy business. Headwaters is already a leading supplier of pre-combustion and post-combustion services to coal-based electric utilities nationwide. Advantages related to co-locating ethanol production with power plants could be substantial.
    "Furthermore, Headwaters is a leading provider of technologies for converting coal to clean-burning liquid fuels. As we move our coal-to-liquids program forward in the United States, access to alternative fuels markets will be important. A position in the existing ethanol industry will help us build our alternative fuels capabilities."
    Benson further stated, "Headwaters and GRE have enjoyed a long and productive working relationship. Headwaters markets coal fly ash produced at the Coal Creek power plant under a long-term contract with GRE. Headwaters and GRE are also cooperating on the commercialization of FlexCrete aerated concrete developed by Headwaters and a coal drying technology developed by GRE."

    About Great River Energy

    Great River Energy is a not-for-profit generation and transmission cooperative providing electricity to 28 distribution cooperatives in Minnesota and Wisconsin. It is the second largest power supplier in the state of Minnesota and the fourth largest cooperative of its type in the nation.

    About Headwaters Incorporated

    Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. Headwaters is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building products businesses, the company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

    Forward-Looking Statements

    Certain statements contained in this report are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe harbor created thereby.
    Forward-looking statements include Headwaters' expectations as to the managing and marketing of coal combustion products, the production and marketing of building materials and products, the licensing of technology and chemical sales to alternative fuel facilities, the receipt of product sales, license fees and royalty revenues, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters' future business plans, the operation of facilities, the availability of tax credits, the availability of feedstocks, and the marketability of the coal combustion products, building products, and synthetic fuel, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as "expects," "anticipates," "targets," "goals," "projects," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward looking.
    In addition to matters affecting the coal combustion product, alternative fuel, and building products industries or the economy generally, factors which could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the captions titled "Forward-looking Statements" and "Risk Factors" in Item 7 in Headwaters' Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2004, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses.
    Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
    Our Internet address is www.headwaters.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our Web site.

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CONTACT: Headwaters Incorporated, South Jordan Sharon Madden, 801-984-9400 (Investor Relations) or Financial Relations Board Tricia Ross, 617-520-7064 (Analysts)

KEYWORD: UTAH NORTH DAKOTA INDUSTRY KEYWORD: ENERGY MARKETING AGREEMENTS SOURCE: Headwaters Incorporated

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