Rating Review Presentation to Standard & Poor’s Rating Review Presentation to Standard & Poor’s 29 June 2006 Korea Western Power Co., Ltd.

Rating Review Presentation

to

Standard & Poor’s

Rating Review Presentation

to

Standard & Poor’s

29 June 2006 29 June 2006

Korea Western Power Co., Ltd.Korea Western Power Co., Ltd.

22

KOWEPO’s Credit Strengths KOWEPO’s Credit Strengths

High correlation between

electricity demand growth

and Korean GDP growth

Cost Based Pool System

expected to continue

Six Gencos account for

over 90% of Korean power

consumption

Stable revenue and cash

flows

Strong debt servicing

ability

Solid capital structure to

support capital

expenditure

Credit profile benefits from

the expected additional

capacity as required by the

Power Supply and Demand

Plan

Diversified and secured

sources of key raw

materials

Highly sophisticated and

experienced management

Prospering Economy & Solid

Sovereign Credit

Favorable Industry

Conditions & Regulatory

Environment

Strong Operations & Experienced Management

Solid Financials &

Robust Capital Structure

Strong outlook for GDP

growth

Outstanding external

liquidity position, dynamic &

diverse export sectors

Sound financial markets &

improving financial sector

Positive credit rating

momentum

33

Strong Mitigating Factors to Credit Concerns Strong Mitigating Factors to Credit Concerns

Capex Capex requirement to requirement to fund capacity fund capacity

expansion expansion

Strong debt servicing ability due to stable, recurring revenue and cash flows

Strong balance sheet to support business expansion

Increasing revenue led by stable growth of electricity demand

BBusiness risk usiness risk under the under the

deregulation plan deregulation plan

Delayed privatization plan of Gencos

Performance expected to be further enhanced once new generating units at Cheongsong and

Taean become operational in Dec 2006 and 2007/2008 respectively

KOWEPO is one of the best performers among Korean thermal Gencos

Ability to fully pass fuel cost to KEPCO under the current Cost Based Pool system (“CBP”)

CBP is expected to remain unchanged as MOCIE halted the distribution sector’s separation plan and suspended the implementation of Two-Way Bidding Pool system (“TWBP”)

Exposure to high Exposure to high raw material raw material

costscosts

Good operating track record of power plants with low historical incidents and diligent plant maintenance

Continuing investment to improve reliability of generation facilities

Exposure to Exposure to potential potential

generation unit generation unit breakdown breakdown

44

1. Company Overview

2. Regulatory Environment

3. Operations

4. Financial Management

5. Concluding Remarks

55

Introduction to KOWEPOIntroduction to KOWEPO

Inception Spun off from KEPCO in April 2, 2001

Credit Ratings A- (stable) / A1 (stable) vs. Korea sovereign A (stable) / A3 (positive)

Generation Capacity 8,880 MW (Operation: 7,280 MW, Construction: 1,600 MW)

Total Assets 2006 Q1: KRW 3,365 bn (USD 3.45 bn) 2005: KRW 3,262 bn (USD 3.22 bn)

Ownership 100% owned by KEPCO (54% owned by Korean Gov’t)

Total Revenue 2006 Q1: KRW 680 bn (USD 0.7 bn) 2005: KRW 2,227 bn (USD 2.20 bn)

Net Income 2006 Q1: KRW 79.7 bn (USD 82 mn)2005: KRW 180.6 bn (USD 178.3 mn)

(KRW/USD FX rate : 975.90 as of 31st Mar. 2006, 1013.00 as of 31st Dec. 2005)

66

Strategy – Maintain Market Position Strategy – Maintain Market Position

KOWEPO plans to maintain its leading market position and superior operating performance promoting growth with new plant constructions

Plant Type Generation capacity (MW) Construction Period Construction Cost*

Under Construction      

Cheongsong #1,2 Pumped Storage 600 Sep 2000 to Dec 2006 426

Taean #7,8 Thermal 1,000 Nov 2003 to Mar 2008 1,090

New Plants

Gunsan** Combined Cycle 700 Jun 2007 to Nov 2009 555

Taean Clean Coal Technology 300 Oct 2009 to Sep 2012 393

* KRW billion

** Not reflected in 2nd Power Supply and Demand Plan by MOCIE

77

Strategy – Diversify Revenue Sources Strategy – Diversify Revenue Sources

KOWEPO will diversify its revenue sources by investing in new business, overseas project, and new or renewable energy

Plant Type Capacity Remarks

New Business

Cheongra (Incheon)

District Cooling & Heating  

-

Plan to use Seoincheon C/C’s steam and waste heat

Consortium with Lotte Engineering &Construction and Incheon City Gas

Construction period: January 2006 to December 2012

Total investment: approx. KRW 162 billion (KOWEPO: KRW 11 billion)

Overseas Project

Laos Hydro Power 339 MW

Initial stage: formed a consortium with SK Engineering & Construction

BOOT (Build, Own, Operate, Transfer)

Expected joint partners: KEPCO and SK Engineering & Construction

KOWEPO is expected to provide the maintenance, and manage the operations

New/renewable Energy

Taean Solar 120 kW Completed the construction in August 2005

Samrangjin Solar 3,000 kW Plant to complete the construction in December 2008

TaeanSmall Hydro

Power 2,200 kW Plan to complete the construction by March 2007

88

1. Company Overview

2. Regulatory Environment

3. Operations

4. Financial Management

5. Concluding Remarks

99

Power Industry Restructuring ProcessPower Industry Restructuring Process

19991999 20002000 2002200220012001 20032003 20042004 20052005 20072007 2008200820062006 20092009

• The suspension of disco setup cleared the industry uncertainty considerably The suspension of disco setup cleared the industry uncertainty considerably • Expected continued government efforts in the industry restructuring with a well-paced, gradual approach Expected continued government efforts in the industry restructuring with a well-paced, gradual approach

• MOCIE announced restructuring plan for power industry

• Incorporation of generation companies

• Cost-based pool bidding (“CBP”) mechanism

• Expiration of vesting contracts

• Retail competition

• Introduction of vesting contracts for gencos

• Spin off distribution sector from KEPCO

• Wholesale competition

• Initiation of KOSEP privatization • Plan to separate KEPCO’s distribution sector

was halted due to substantial risk and uncertain benefits from the separation plan

• Determined that discos will operate as independent divisions within KEPCO and these divisions will compete internally within KEPCO

• IPO of KOSEP was delayed until the offering price exceeds the book price. The timing of IPO is unforeseeable

• Implementation of TWBP was suspended

HOLD

HOLD

HOLD

HOLD

The power industry restructuring plan has faced some obstacles, The power industry restructuring plan has faced some obstacles, and the implementation of future plans has been suspended and the implementation of future plans has been suspended

1010

Power Price Determination Power Price Determination

Power Demand

Nuclear

Coal

Oil / LNG

Base Load

PriceBase Load Price (Nuclear and Coal Power Plant): CP + BLMP

Capacity Payment BLMP

• CP includes construction cost and operation cost of standard coal fired power plants

• Fixed cost is reimbursed to Gencos by KEPCO regardless of their operation

Non-BaseLoad

• If fuel price/kWh is at or above KRW 18.95 - Fuel costs incurred by each generators are fully compensated

• If fuel price/kWh is below KRW 18.95- BLMP is set at the highest fuel cost among generators dispatched

Capacity Payment SMP

• CP includes construction cost and operation cost of peak-load power plants

• Fixed cost is reimbursed to Gencos by KEPCO regardless of the operation

• SMP is set at the highest fuel cost among generators dispatched

Non-Base Load Price (LNG, Oil, Hydro Power): CP + SMP

Prices are determined according to the type of markets – base load and non-base load

• To mitigate financial imbalance caused by oil price hikes between KEPCO and Gencos, the 5th Cost Assessment Committee decided to

lower CP of base load units on 29 May 2006

• CP for base load units will be reduced from KRW20.49/kWh to KRW13.22/kWh from June to August 2006, after which the Committee will

analyze the effects and review whether to continue the adjustments. The CP adjustments will only be effective until the end of 2006 at

the latest.

1111

CBP Market Improvements CBP Market Improvements

Korean Government is continuously working towards further improvements of the CBP market

process. It requested Korea Development Institute to prepare for a CBP market improvement plan.

The result was announced in February 2006

CBP market improvement plan will be implemented starting from 2007 to 2008 in phases

• As CBP system continues, gencos are expected to continue to generate stable profit and cash flowAs CBP system continues, gencos are expected to continue to generate stable profit and cash flow• After the introduction of CBP market improvement plan, profitability is expected to remain at similar levelsAfter the introduction of CBP market improvement plan, profitability is expected to remain at similar levels

Unification of Double MarketRegional Price DifferentiationPrice Differentiation by Seasonsand by Reserve Margin

• Unify currently split electricity

market (base load and non-base

load) into a single market

• To solve profit imbalance between

KEPCO and Gencos, it is expected

to introduce CfD (Contract for

Difference)

• Differentiate prices among power generators

based on the demand concentration of the

location

• Generators that are close to metropolitan

region are more beneficial

• Differentiate CP based on high

demand periods and normal

periods

• Such differentiation allows the

procurement of supply capacity

during peak periods of demand

1212

1. Company Overview

2. Regulatory Environment

3. Operations

4. Financial Management

5. Concluding Remarks

1313

Operation OverviewOperation Overview Base load, intermediate load, and peak load account for 41%, 19% and 40% respectively in terms of generation

capacity 90% of capacity is located in or near the Seoul and Gyeonggi metropolitan areas

Seoul and Gyeonggi metropolitan areas comprises approx. 40% of total national demand

TaeanPyeongtaek

Gunsan

Cheongsong(Under Construction)

CoalLNGBC Oil

Pumped Storage

Seoincheon

Samrangjin

Seoul Metropolitan Area

Generation Capacity by Type of Plant (1Q 2006) Location of Plant Complex

PyeongtaekC/C (480 MW)

Seoincheon C/C(1,800 MW)

Samrangjin P/S (600 MW)

CheongsongP/S (600 MW)

3,480MW

Pyeongtaek T/P(1,400 MW)

1,400MW Taean T/P(3,000 MW)

4,000MW

Taean T/P (1,000 MW)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Base Load Intermediate Load Peak Load

In Operation Under Construction

Note: T/P denotes “Thermal Power Plant”, C/C denotes “Combined Cycle”, P/S denotes “Pumped Storage”

1414

KOWEPO’s Market Position KOWEPO’s Market Position

KOSEP7,194

KOMIPO7,747

KOSPO7,571

EWP8,000

KHNP18,250

Others6,961

KOWEPO7,280

Generation Capacity Market Share (1Q 2006)

KOSEP11,227

KOMIPO10,441

KOSPO12,772

EWP10,876

KHNP34,190

Others1,581

KOWEPO9,668

Sales Volume Market Share (1Q 2006)(MW) (GWh)

Total Generation Capacity63,003 MW

Total Electricity Sales90,755 GWh

(12.3%)(29.0%)

(11.4%)

(11.6%)

(12.7%)

(11.0%)

(12.0%) (14.1%)

(12.4%)

(37.7%)

(1.7%)

(12.0%)

(11.5%)

(10.7%)

1515

Strong Operational Efficiency Strong Operational Efficiency

Thermal efficiency and utilization rate have been relatively stable over the years.

40.2

40.8 40.8

40.0

40.7

40.5

41.2

39.0

39.5

40.0

40.5

41.0

41.5

2003 2004 2005 2006

Full year

1Q

Thermal Efficiency Utilization Rate

59.759.1 59.2

60.9 60.7

64.7

63.7

55

59

63

67

2003 2004 2005 2006

Full year

1Q

% %

1616

Cost Saving MeasuresCost Saving Measures

Remarkable Cost Cutting Initiatives

SeoincheonSeoincheon

PyeongtaekPyeongtaek

Completed all units of Gas Turbines uprate in April 2006

Improvements

- Thermal efficiency: 3%

- Combined generation capacity: 10%

- NOx emission level reduction: 75%

Approximate annual saving of KRW 2.9 billion per turbine

Completed Desulfurization facility installment on February 2005

- Purchased cheaper high sulfur oil (2.59%) rather than low sulfur oil (0.3%)

- Increased utilization rate from 28.1% in 2004 to 44.8% in 2005

Fuel cost of saving of approximately KRW 27 billion per year

1717

1. Company Overview

2. Regulatory Environment

3. Operations

4. Financial Management

5. Concluding Remarks

1818

Capital Structure (1Q 2006) Capital Structure (1Q 2006)

Assets

KRW 3,365 billion – Fixed Assets/Total Assets Ratio : 89.6%

KRW 1,144 billion– Liability-to-Equity Ratio : 51.5%

KRW 2,221 billion– Stake is Wholly Owned by KEPCO

EBIT : KRW 114.1 billion - Net Income : KRW 79.7 billion

Liabilities

Shareholders’ Equity

Profitability

KRW 680 billion

Revenue

Capital Structure

3,1823,038 2,976

3,3653,262

2,2212,1982,0601,988

1,730

1,1441,064916

1,050

1,452

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2002 2003 2004 2005 2006 Q1

Total assets Total shareholders' equity Total liabilities

KRW billion

1919

Financial Performance Financial Performance

KOWEPO achieved robust performance in 1Q 2006 with revenue of KRW 680 billion and net income of KRW 79.7 billion despite high fuel costs

KOWEPO’s revenue has shown a stable performance Net Income in 2004 and 2005 were lower than in 2003 mainly due to:

In case of Taean T/P, it does not create margins in BLMP due to fuel price hikes from 2004

2,0132,134 2,058

2,227

469.2580.2 514.8

608.6 680.3

0

500

1,000

1,500

2,000

2,500

2002 2003 2004 2005 2006

Full year

1Q

RevenueKRW billion

Net Income

KRW billion

230.7252.9

161.0180.6

53.9 63.1 59.780.8 79.7

0

50

100

150

200

250

300

2002 2003 2004 2005 2006

Full year

1Q

2020

Reduced Interest Expense and LeverageReduced Interest Expense and Leverage

83.9

52.8

44.548.4

51.5

39.5

28.224.2 25.2 25.0

0

30

60

90

2002 2003 2004 2005 1Q 2006

Liability/equity Debt/capital

Leverage

20.2

5.8

9.2 9.6

14.6

17.2

7.4

11.6 11.1

16.4

0

5

10

15

20

25

2002 2003 2004 2005 1Q 2006

EBITDA/interest Funds from operation / interest

CoverageTimes

Coverage ratios have been increased significantly due to KOWEPO’s proactive debt restructuring activities including early redemptions of existing high interest rate debts and lowering funding rate

Leverage ratios have decreased since our inception in 2001, but have started to increase slightly due to the expansion of our capacity at our Taean Plant, which is expected to peak this year

%

2121

73.5

25.2

39.0

19.0

29.9

37.4

61.2

78.7

48.4

40.8

0

30

60

90

KOWEPO KOSEP KOMIPO KOSPO EWP

Debt/equity Debt/capital

2,175.32,244.62,227.02,095.4

2,847.1

0

500

1,000

1,500

2,000

2,500

3,000

KOWEPO KOSEP KOMIPO KOSPO EWP

KRW billion

138.5

185.9

221.3

255.7

291.7

0

50

100

150

200

250

300

350

KOWEPO KOSEP KOMIPO KOSPO EWP

102.4

216.8

180.6

105.8 107.2

0

50

100

150

200

250

KOWEPO KOSEP KOMIPO KOSPO EWP

Strong Competitive Position (FY 2005)Strong Competitive Position (FY 2005)

Revenue EBIT Net IncomeKRW billion KRW billion

6.4

13.0

11.510.6

6.5

0

5

10

15

KOWEPO KOSEP KOMIPO KOSPO EWP

7.8

15.916.4

9.610.5

0

5

10

15

20

KOWEPO KOSEP KOMIPO KOSPO EWP

EBIT Margin EBITDA Int. Coverage LeverageTimes% %

2222

Financial Forecast Financial Forecast

2,2272,328

2,4532,531 2,584

2,2812,2372,1892,054

1,971

303294264274256

0

500

1,000

1,500

2,000

2,500

3,000

2005(A) 2006(E) 2007(E) 2008(E) 2009(E)

Sales Revenue Costs EBIT

Revenue & Operating Cost Forecasts

KRW billion

2323

Ratio AnalysisRatio Analysis

Profitability

Profitability would increase in 2008 after the completion of Taean Plant #7 by 2007 and #8 by 2008 With lowered debts and strong cash flow, KOWEPO expects the leverage to fall gradually

Leverage

33.6

25.228.4

24.522.9

17.1

42.744.9

52.0

48.4

0

20

40

60

2005(A) 2006(E) 2007(E) 2008(E) 2009(E)

Liability/Equity Debt/capital

25.6

11.5 11.810.8

11.6 11.7

5.5 5.3 5.1 5.4 5.8

22.6 22.9 23.7

26.3

0

10

20

30

2005(A) 2006(E) 2007(E) 2008(E) 2009(E)

%

EBITDA margin

EBIT margin

ROA

2424

KRW74.5%

USD25.5%

KRW74.5%

USD25.5%

199.9

117.2

202.6185.0

1.3

0

50

100

150

200

250

2006(E) 2007(E) 2008(E) 2009(E) 2010(E)

199.9

117.2

202.6185.0

1.3

0

50

100

150

200

250

2006(E) 2007(E) 2008(E) 2009(E) 2010(E)

Eurobond26%

Long Term Borrowing

7%

KDB Private

Placement Bond11%

Corporate Bond56%

Eurobond26%

Long Term Borrowing

7%

KDB Private

Placement Bond11%

Corporate Bond56%

Debt RepaymentCurrency Distribution (1Q 2006)Type of Instrument (1Q 2006)

KOWEPO prefers long-term funding of at least 5 years as the plant construction usually takes around 5 years to complete

The company prefers to borrow 60% to 70% of its total debt from the domestic capital market and the remaining from the international markets.

82% of KOWEPO’s debts carry fixed interest rate, while 18% are in floating rate

All of our debts unsecured and our debt maturity profile evenly distributed

Total Debt Profile : KRW 711.1 billion

Debt Profile and Strategy Debt Profile and Strategy

KRW billionKRW billion

2525

Capex and FundingCapex and Funding

56

404

104

7

102

105

4 26

2

84

375

94

94

106

0

100

200

300

400

500

600

2006(E) 2007(E) 2008(E) 2009(E)

Cheongsong Pumped Storage #1,2 Taean Thermal Power # 7,8 Facility Improvement/Others

Taean CCT #1 Gunsan Combined Cycle (Planned)

Capital Expenditure ScheduleCapital Expenditure Schedule

KRW billion

568

290

491

214

2626

Risk Management and Hedging StrategyRisk Management and Hedging Strategy

KOWEPO introduced risk management in four areas – finance, fuel, electricity bidding, and generation facilities Risk management committee was established in November 2003 to oversee the risk management initiatives The committee meets every quarter to discuss key issues and to make decisions on the topics discussed

Finance Foreign currency risk management committee oversees the risk management on foreign currency debt The committee meets every quarter to establish foreign currency risk management planning, fix hedging ratio for foreign currency

risk, and review performance the hedging tools

Fuel

Electricity bidding system: KOWEPO has implemented a market simulator called “Plexos” which enables KOWEPO to predict market price and optimally place its bid into the power pool

Generation facilities Plants under operation are covered by package insurance based on repurchase prices (market price) which amount to around

KRW 3,400 billion. As for the plants under construction, all the risks relating to construction are covered by erection all risks insurance which amount

to around KRW 780 billion.

Bituminous

– China and Australia: conducted pricing negotiations in coordination with other Gencos - Cost saving per ton (compared with an average cost of Japanese electric companies*) : US$ 2 for imported coal from China, US$1 for imported coal from Australia

– Increased proportion of imported coal from Indonesia for diversification

Fuel oils– Increase the stability and efficiency through domestic/international bidding– Shift to low cost BC oil by installment of Desulphurization facility in Pyeongtaek T/P

LNG – Plan to participate direct gas import after 2010 if the government deregulates the market

*Source: Tex Report, Argus Coal Information, 2005

2727

1. Company Overview

2. Regulatory Environment

3. Operations

4. Financial Management

5. Concluding Remarks

2828

Concluding RemarksConcluding Remarks

FavourableFavourableIndustry Industry

Conditions &Conditions &

Strong Strong Operations & Operations & Experienced Experienced ManagementManagement

Solid Solid Financials & Financials &

Robust Capital Robust Capital StructureStructure

Prospering Prospering Economy & Solid Economy & Solid

Sovereign Sovereign CreditCredit Regulatory Regulatory

EnvironmentEnvironment

Korea Western Power Co. Ltd. Korea Western Power Co. Ltd.

Additional Information for S&P

3030

Key Assumptions Key Assumptions

Key Assumptions 2006(E) 2007(E) 2008(E) 2009(E)

Inflation        

Domestic 2.7% 2.7% 2.7% 2.7%

International 2.0% 2.0% 2.0% 2.0%

Average Exchange Rate for Year(KRW/USD) 950 950 950 950

Oil Price (US$/Barrel) 45.5 46.4 47.3 48.3

Korea GDP Growth (%) 5.0% 5.0% 5.0% 5.0%

Gross Generation (GWh) 39,070 44,413 45,432 45,342

Power Sold (GWh) 37,563 42,644 43,615 42,660

3131

Performance and Projection Performance and Projection In KRW billion unless otherwise stated Balance Sheet 2006(E) 2007(E) 2008(E) 2009(E)

Current assets 364.3 406.1 436.7 545.6

Non-Current Assets 3,201.3 3,177.7 3,300.0 3,158.9

Total Assets 3,565.6 3,583.8 3,736.7 3,704.5

Current Liabilities 442.3 477.2 497.2 513.6

Long Term Liabilities 777.8 633.9 620.8 418.9

Total Liabilities 1,220.1 1,111.1 1,118.0 932.5

Capital Stock 176.0 176.0 176.0 176.0

Capital Surplus 1,266.6 1,266.6 1,266.6 1,266.6

Retained Earnings 902.8 1,030.1 1,176.1 1,329.4

Total Stockholders Equity 2,345.4 2,472.7 2,618.7 2,772.0

Liabilities and Equity 3,565.6 3,583.8 3,736.7 3,704.5

Income Statement 2006(E) 2007(E) 2008(E) 2009(E)

Sales 2,327.8 2,453.3 2,531.3 2,583.6

Cost of Sales 2,053.4 2,189.3 2,237.4 2,280.5

Operating Income (or Loss) 274.4 264.0 293.9 303.1

Non-Operating Income 3.4 4.6 5.0 7.1

Non-Operating Expense 15.0 14.1 21.1 15.6

Income Before Tax 262.8 254.5 277.8 294.6

Tax Expense 72.3 70.0 76.4 81.0

Net Income (or Net Loss) 190.5 184.5 201.4 213.6

Cash Flow Statement 2006(E) 2007(E) 2008(E) 2009(E)

Operating activities (1) 501.0 484.1 577.3 586.5

Net income 190.5 184.5 201.4 213.6

Expense not involving cash payment 269.5 334.8 390.8 374.5

Depreciation 258.0 317.5 371.0 358.6

Others 11.5 17.3 19.8 15.9

Increase/Decrease in New Working Capital 41.0 -35.1 -14.8 -1.6

Investing activities (2) -565.3 -296.7 -497.1 -207.9

Financing activities (3) 108.8 -184.9 -78.7 -265.8

Cash Balance, Beginning of Year 2.2 46.6 49.1 50.6

Cash Balance, End of Year 46.6 49.1 50.6 163.5

3232

Long-Term Supply ContractsLong-Term Supply ContractsBituminous

Supplier Country Contract Amount (1,000 ton/year)

Terms

BHP-Billiton -Bayswater Australia 500 ‘ 95.1 - ‘ 07.12

Centennial Australia 500 ‘ 04.7 - ‘ 07.6

Xstrata-NCA Australia 1,100 ‘ 01.4 - ‘ 06.3*

RIO Tinto – Blair Athol Australia 500 ‘ 02.9 - ‘ 06.3*

Ensham Australia 500 ‘ 04.1 - ‘ 08.12

Peabody Australia 240 ‘ 05.1 - ‘ 07.12

Australia - Sub-total   3,340 (40%)  

SCIEGC China 1,000 ‘ 99.4 - ‘ 07.3

CCIEC China 500 ’ 96.1 - ‘ 07.3

SHENHUA China 960 ‘ 01.7 - ‘ 07.6

Minmetals China 360 ’06.5 – ’09.4

China - Sub-total   2,820 (34%)  

Indominco Indonesia 500 ‘ 03.10 - ‘ 06.12

Kideco Indonesia 300 ‘ 04.1 - ‘ 06.12

ABK Indonesia 200 ‘ 04.10 - ‘ 07.12

Tanito Harum Indonesia 200 ‘ 05.1 - ‘ 07.12

Peabody Indonesia 325 ’06.5 – ’09.4

ECM Indonesia 300 ’06.5 – ’09.4

Indonesia - Sub-total   1,825 (22%)  

Kuzbass Russia 300 ’06.4 – ’09.3

Russia - Sub-total 300(4%)

    8,285 (100%)  

Fuel Oil

Type Supplier Contract amount Terms

B.C oil (Sulfa 2.5%) GS Caltex 119,300 ㎘ ‘ 06. 7 –12

Kerosene for boiler Hyundai Oil Bank 10,126 ㎘ ‘ 06. 7 – 12

LNG

Supplier Contract amount (1,000 ton/year)

Terms

LNG KOGAS 1,408 ‘ 86 ～ ‘ 06 (20year)

KOWEPO enters into long-term supply contracts to: Control the costs of bituminous coal, oil and LNG

amid the rising prices Assure an adequate supply of the raw materials

for a smooth operation

Short-term, 20%

Long-term, 80%

Note: Long-Term Supply Contracts as of YE2005* Under discussion regarding volume, price, and terms

Bituminous Coal Contracts

3333

Composition of Liquid Assets (1Q 2006)Composition of Liquid Assets (1Q 2006)

347 (34%) Stored goods

667 (66%) Raw material

1,014 (100%)Inventory

302 (12%) Others*

66 (3%) Advance payments

55 (2%) Non trade receivables

2,034 (82%) Trade receivables

17 (1%) Cash & cash equiv.

2,474 (100%)Quick assets

Amount (KRW 100mn)Assets

Liquid Assets

* others include accrued revenue, prepaid expenses, short-term lending, and other quick assets.