COMPANY OVERVIEW

Headwaters is a leading participant in Light Building Products and Heavy Construction Materials. We are a leading manufacturer of building products for new residential, residential remodeling, and commercial construction. Headwaters’ portfolio of light building products includes architectural stone; resin-based exterior siding accessories, such as shutters, mounting blocks and gable vents; concrete block and brick; and other building products. Headwaters has more than 3,000 U.S. wholesale distributors and generates incremental sales through big box stores. We also market certain products through a direct sales force. The broad distribution system and extraordinary brand loyalty has enabled Headwaters to capture the number one market position in all of its key niche product categories.

Headwaters is the largest manager and marketer of coal combustion products in the heavy construction materials industry. The primary focus of our materials segment is to recycle high quality fly ash into a replacement for portland cement. Fly ash is used in virtually every concrete application, making it one of the most widely-used construction materials in the United States.

Headwaters’ focus on transforming underutilized resources into valuable products has helped us capitalize on the increasing demand for building materials that contribute to sustainability. Our fly ash business is a perfect example of sustainability. Fly ash is a by-product of burning coal at electric generating power plants and is generally disposed of if not recycled. Headwaters markets fly ash as a cement substitute that enhances the quality of concrete structures, reduces the need for virgin raw materials, reduces CO2 emissions and energy consumption. Because the use of fly ash produces a stronger, more durable concrete, the majority of this product is used in building infrastructure projects such as: roads, bridges, and highways. It is one of America’s greatest recycling success stories.

Headwaters also operates an Energy Technology segment. Included in this segment is Headwaters’ coal cleaning business, which adds value to coal by upgrading waste coal into a marketable product by converting coal into liquid fuels, and by utilizing waste heat from a coal-fired power plant in the production of ethanol. In January of 2011, Headwaters signed its first Notice of Intent to implement its heavy oil upgrading technology (HCAT®) on an on-going commercial basis at Neste Oil Porvoo’s refinery.

Niche Markets

Headwaters’ Light Building Products and Heavy Construction Materials businesses have the number one market position in all key market niches in which they compete. We operate leading businesses in siding accessories, manufactured architectural stone and concrete blocks. Our manufactured stone and building accessories products have a national presence in commercial, residential and remodeling markets. In Texas, Headwaters is also the leading supplier of concrete and specialty block. Headwaters is also the largest manager and marketer of fly ash in the United States.

Headwaters operates in three reporting segments: Headwaters Light Building Products, Headwaters Heavy Construction Materials, and Headwaters Energy Technologies.

HEADWATERS LIGHT BUILDING PRODUCTS
DEFENSIBLE POSITIONS IN ATTRACTIVE MARKETS

SIDING ACCESSORIES

Accessories and professional tools for exterior residential home improvements and construction
Low cost competitive manufacturing advantages
Diversified customer base
Major supplier to Lowe’s and Home Depot
Headwaters’ siding accessories business controls approximately 82% of this niche market

MANUFACTURED STONE

Manufactures one of the most authentic architectural stone products in the world
Multiple national brands
National manufacturing platform
Headwaters’ manufactured stone products control roughly 29% of this niche market

TEXAS CONCRETE BLOCK MARKET

Variety of concrete based masonry unit products
Regional branding
Regional distribution
Headwaters’ Texas block business dominates the market with a 65% market share

HEADWATERS HEAVY CONSTRUCTION MATERIALS
CONVERTING FLY ASH INTO A VALUABLE PRODUCT

WHY FLY ASH?

It can be used as a replacement for portland cement
20% — 60% less expensive than portland cement
Displaces portland cement production which emits approximately one ton of CO2 for every ton of cement produced
Produces a more durable concrete with greater long-term strength
Positive environmental impact by reducing landfill utilization

HEADWATERS HEAVY CONSTRUCTION MATERIALS
CONTROLS ALMOST HALF OF ALL FLY ASH SOLD IN THE U.S. TODAY

Competitive Advantages:
Exclusive long-term contracts with over 100 electric generating power plants across the country
Complete utility service capabilities
Nationwide infrastructure: 22 terminals, 100 plant site supply facilities, over 200 trucks and approximately 1,200 railcars

HEADWATERS ENERGY TECHNOLOGIES
IMPROVING NATURAL RESOURCE UTILIZATION

Coal cleaning technology that converts waste coal into marketable product

HCAT® heavy oil upgrading technology that processes heavy oil into lighter distillates such as diesel fuel
Owns and operates Blue Flint Ethanol plant that utilizes waste heat from a coal-fired power plant to produce low cost ethanol