You should read the following discussion on our operating and financial review and prospects together with our consolidated financial statements and the related notes which appear elsewhere in this annual report. Our results of operations, financial condition and cash flows may materially change from time to time, for reasons including various policy initiatives (including changes to the Restructuring Plan) by the Government in relation to the Korean electric power industry, and accordingly our historical performance may not be indicative of our future performance. See Item 4.B. “Business Overview—Restructuring of the Electric Power Industry in Korea” and Item 3.D. “Risk Factors—Risks Relating to KEPCO—The Government may adopt policy measures to substantially restructure the Korean electric power industry or our operational structure, which may have a material adverse effect on our business, operations and profitability.” 102 Table of Contents Item 5.A. Operating Results Overview We are a predominant market participant in the Korean electric power industry, and our business is heavily regulated by the Government, including with respect to the tariffs we charge to customers for the electricity we sell. In addition, our business requires a high level of capital expenditures for the construction of electricity generation, transmission and distribution facilities and is subject to a number of variable factors, including demand for electricity in Korea and fluctuations in fuel costs, which are in turn impacted by the movements in the exchange rates between the Won and other currencies. If fuel prices rise substantially and rapidly in the future, such an increase may have a material adverse effect on our results of operations and profitability. For example, our net losses in 2023 were largely due to sustained rise in fuel costs that were neither timely nor sufficiently offset by a corresponding rise in electricity tariffs that we charge to our customers. Even though the Government from time to time increases the electricity tariff rates, such increase may be insufficient to fully offset the adverse impact from the rises in fuel costs, and since tariff increase typically require lengthy public deliberations in order to be implemented, they often occur with a significant time lag and, as a result, our results of operations and cash flows may suffer. To reinforce the correlation between the costs we incur and the tariff we charge to our customers, we have implemented a new cost pass-through tariff system since January 1, 2021. However, such system also has built-in limits and subject to the Government’s discretion. For more information, please see Item 4.B. “Business Overview—Sales and Customers—Electricity Rates.” In addition, we expect complying with the Government’s environment-related initiatives and regulations may continue to impose significant costs and resources on us, which may adversely affect our results of operation, financial condition and cash flows. For example, we recognized Won 77 billion in 2023, Won 164 billion in 2024 and Won 247 billion in 2025 as costs to purchase greenhouse gas emission allowances. The general increase in such costs is largely attributable to the increase in the market price of the Korean Allowance Units (KAU), which is one of the main greenhouse gas allowances in Korea. As the price of KAUs is determined by the market, there is no guarantee that such price will not increase in the future. Furthermore, as we are required to supply increasing amount of renewable energy, we expect the associated cost will continue to rise. The results of our operations are largely affected by the following factors: • demand for electricity; • electricity rates we charge to our customers; • fuel costs; and • the exchange rates of Won against other foreign currencies, in particular the U.S. dollar. Demand for Electricity Our sales are largely dependent on the level of demand for electricity in Korea and the rates we charge for the electricity we sell. 103 Table of Contents The table below sets forth, for the periods indicated, the annual rate of growth in Korea’s GDP and the annual rate of growth in electricity demand (measured by total annual electricity consumption) on a year-on-year basis. In 2025, the GDP increased by 1.0% compared to 2024, whereas the demand for electricity in Korea decreased by 0.1% compared to 2024. 2021 2022 2023 2024 2025 Growth in GDP 4.6 % 2.7 % 1.4 % 2.0 % 1.0 % Growth in electricity consumption 4.7 % 2.7 % (0.4 )% 0.7 % (0.1 )% Demand for electricity may be categorized either by the type of its usage or by the type of customers. The following describes the demand for electricity by the type of its usage, namely, industrial, commercial and residential: • The industrial sector represents the largest segment of electricity consumption in Korea. Demand for electricity from the industrial sector was 280,221 gigawatt hours in 2025, representing a 2.1% decrease from 2024, due to economic slowdown in power-intensive industries such as petrochemicals and steel. • Demand for electricity from the commercial sector depends largely on the level and scope of commercial activities in Korea. Demand for electricity from the commercial sector increased to 138,315 gigawatt hours in 2025, representing a 2.6% increase from 2024, due to the effects of a gradual recovery in consumption and an increase in demand for cooling and heating. • Demand for electricity from the residential sector is largely dependent on population growth and use of heaters, air conditioners and other electronic appliances. Demand for electricity from the residential sector increased to 88,474 gigawatt hours in 2025, representing a 1.7% increase compared to 2024, due to the effects of increased demand for heating and cooling during the winter and summer seasons. • For a discussion on demand by the type of customers, see Item 4.B. “Business Overview—Sales and Customers—Demand by the Type of Usage.” • Since our inception, we have had the predominant market share in terms of electricity generated in Korea. As for electricity we purchase from the market for transmission and distribution to our end-users, our generation subsidiaries accounted for 68.3%, 67.7% and 65.9% in 2023, 2024 and 2025, respectively, while the remainder was accounted for by independent power producers. As for transmission and distribution of electricity, we have historically handled, and expect to continue to handle, substantially all of such activities in Korea. We expect that we will continue to have a dominant market share in the generation, transmission and distribution of electricity in Korea for the foreseeable future, absent any substantial changes to the Restructuring Plan or other policy initiatives by the Government in relation to the Korean electric power industry, or an unexpected level of market penetration by independent power producers, localized electricity suppliers under the Community Energy System or increases in direct PPA. However, our market dominance in the electricity distribution in Korea may face potential erosion in light of the recent Proposal for Adjustment of Functions of Public Institutions (Energy Sector) announced by the Government in June 2016. This proposal contemplates a gradual opening of the electricity trading market to the private sector although no detailed roadmap has been provided for such opening. It is currently premature to predict to what extent, or in what direction, the liberalization of the electricity trading market will happen. Any significant liberalization of the electricity trading market may result in substantial reduction of our market share in electricity distribution in Korea, which would have a material adverse effect on our business, results of operation and cash flows. See Item 4.B. “Business Overview—Competition.” Electricity Rates Under the Electric Utility Act and the Price Stabilization Act, electricity rates are established at the level that would enable us to recover our fair operating costs as well as receive a fair investment return on capital used in our operations. From time to time, our actual rate of return on invested capital may differ significantly from 104 Table of Contents the fair investment return that was assumed for the purposes of electricity tariff approvals, for reasons, among others, related to movements in fuel prices, exchange rates and demand for electricity that differs from what is assumed for determining our fair investment return. As of January 1, 2021, we implemented a new tariff system to reinforce the correlation between the costs we incur and the tariff we charge to our customers, among other changes. However, even under the new system, our ability to pass on fuel and other cost increases to our customers may be limited due to Government regulations on the electricity rates. For further discussion of the fair operating costs, the fair investment return and the new tariff system, see Item 4.B. “Business Overview—Sales and Customers—Electricity Rates.” Fuel Costs Because the Government heavily regulates the rates we charge for the electricity we sell (see Item 4.B. “Business Overview—Sales and Customers—Electricity Rates”), our ability to pass on cost increases to our customers is limited. Cost of fuel in any given year is a function of the volume of fuels consumed and the unit fuel cost for the various types of fuel used for generation of electricity which affects the cost structure for both our generation subsidiaries and independent power producers from whom we purchase electric power. A significant change in the unit fuel costs materially impacts the costs of electricity generated by our generation subsidiaries, which mainly comprise our fuel costs under the cost of sales, as well as, to our knowledge, the costs of electricity generated by the independent power producers that sell their electricity to us (see Item 4.B. “Business Overview—Purchase of Electricity—Cost-based Pool System”), which mainly comprise our purchased power costs under the cost of sales. We are however unable to provide a comparative analysis since the unit fuel cost information for independent power producers and their cost structures are proprietary information. Fuel costs constituted 30.1%, 27.5% and 24.1% of our cost of sales, and the ratio of fuel costs to our sales was 30.8%, 24.3% and 20.1% in 2023, 2024 and 2025, respectively. Substantially all of the fuel (except for anthracite coal) used by our generation subsidiaries is imported from outside of Korea at prices determined in part by prevailing market prices in currencies other than Won. In addition, our generation subsidiaries purchase a significant portion of their fuel requirements under contracts with limited quantity and duration. Pursuant to the terms of our long-term supply contracts, prices are adjusted from time to time subject to prevailing market conditions. See Item 4.B. “Business Overview—Fuel Sources and Requirements.” Coal accounted for 38.5%, 35.9% and 37.4% of our fuel requirements in 2023, 2024 and 2025, respectively. Nuclear generation accounted for 46.1%, 48.1% and 48.7% of our fuel requirements in 2023, 2024 and 2025, respectively. LNG accounted for 12.0%, 11.9% and 9.9% of our fuel requirements in 2023, 2024 and 2025, respectively. Oil accounted for 0.02%, 0.0% and 0.1% of our fuel requirements in 2023, 2024 and 2025, respectively. In each case, the fuel requirements are measured by the amount of electricity generated by us and our generation subsidiaries and do not include electricity purchased from independent power producers. In order to ensure stable supplies of fuel materials, our generation subsidiaries enter into medium and long-term contracts with various suppliers and supplement such supplies with fuel materials purchased on spot markets. The price of bituminous coal, which represents our largest fuel requirement, fluctuates significantly from time to time. In 2025, approximately 93.1% of the bituminous coal requirements of our generation subsidiaries was purchased under long-term contracts, and the remaining 6.9% was purchased on the spot market. For example, the average monthly spot price of Newcastle coal published on Ministry of Trade, Industry and Resources decreased from a monthly average price of US$126.63 per ton for December 2024 to a monthly average price of US$108.27 per ton for December 2025 and increased to a monthly average price of US$133.86 per ton for March 2026. If the price of bituminous coal were to sharply rise, our generation subsidiaries may not be able to secure their respective bituminous coal supplies at prices commercially acceptable to them. In addition, any significant interruption or delay in the supply of fuel, bituminous coal in particular, from any of their suppliers could cause our generation subsidiaries to purchase fuel on the spot market at prices higher than contracted, resulting in an increase in fuel costs. 105 Table of Contents The prices of oil and LNG also fluctuate significantly from time to time. The prices of oil and LNG are substantially dependent on the price of crude oil, and according to Bloomberg (Bloomberg Ticker: PGCRDUBA), the average daily spot price of Dubai crude oil decreased from US$81.93 per barrel in 2023 to US$79.67 per barrel in 2024 and US$ $68.37 per barrel in 2025, and increased further to US$89.55 per barrel as of April 10, 2026. Nuclear power has a stable and relatively low-cost structure and forms a significant portion of electricity supplied in Korea. Due to significantly lower unit fuel costs compared to those for thermal power plants, our nuclear power plants are generally operated at full capacity with only routine shutdowns for fuel replacement and maintenance, with limited exceptions. In case of shortage in electricity generation resulting from stoppages of the nuclear power plants, we seek to make up for such shortage with power generated by our thermal power plants. Because the Government heavily regulates the rates we charge for the electricity we sell (see Item 4.B. “Business Overview—Sales and Customers—Electricity Rates”), our ability to pass on cost increases to our customers is limited. Movements of the Won against the U.S. Dollar and Other Foreign Currencies Korean Won has fluctuated significantly against major currencies from time to time. For fluctuations in exchange rates, see pages 1-2 of this annual report. In particular, Korean Won underwent substantial fluctuations during the global financial crisis as well as recently, and remains subject to significant volatility. The Noon Buying Rate per one U.S. dollar was Won 1,291.0 on December 31, 2023, Won 1,477.9 on December 31, 2024, Won 1,444.6 on December 31, 2025 and Won 1,483.9 as of April 10, 2026. In 2024 and 2025, the Won generally depreciated against the U.S. dollar and other foreign currencies, and such depreciation has resulted in a significant increase in the cost of fuel materials and equipment purchased from overseas as well as the cost of servicing our foreign currency debt. As of December 31, 2025, 16.9% of our long-term debt (including the current portion but excluding original issue discounts and premium) without taking into consideration of swap transactions was denominated in foreign currencies, principally U.S. dollars. The prices for substantially all of the fuel materials and a significant portion of the equipment we purchase are stated in currencies other than Won, generally in U.S. dollars. Since a substantial portion of our revenues is denominated in Won, we must generally obtain foreign currencies through foreign currency-denominated financings or from foreign currency exchange markets to make such purchases or service such debt, fulfill our obligations under existing overseas investments and make new overseas investments. As a result, any significant depreciation of Won against U.S. dollar or other foreign currencies will have a material adverse effect on our profitability and results of operations. See Item 3.D. “Risk Factors—Risks Relating to KEPCO—The movement of Won against the U.S. dollar and other currencies may have a material adverse effect on us.” Recent Accounting Changes See Note 2.(5) to our consolidated financial statements included in this annual report for changes in accounting standards. We believe that these new and revised standards have no material impact on our consolidated financial statements. Material Accounting Policies See Note 3 to our consolidated financial statements included in this annual report for material accounting policies. Consolidated Results of Operations The selected consolidated financial data set forth below as of and for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements which have been prepared in accordance with IFRS. 106 Table of Contents You should read the following data with the more detailed information contained in Item 18. “Financial Statements.” Historical results do not necessarily predict future results. 2023 2024 2025 2025 (rounded to billions of Won and millions of US$)(1) Sales W 87,476 W 92,578 W 96,568 $ 66,850 Cost of sales 89,700 81,964 80,705 55,868 Gross profit (loss) (2,223 ) 10,614 15,863 10,981 Selling and administrative expenses 3,062 3,070 3,234 2,239 Other income, net 1,017 832 1,044 722 Other gains, net 23 85 339 235 Operating profit (loss) (4,245 ) 8,461 14,011 9,700 Finance expenses, net (3,922 ) (4,087 ) (3,001 ) (2,077 ) Profit related to associates, joint ventures and subsidiaries 613 882 576 399 Profit (loss) before income tax (7,554 ) 5,257 11,587 8,021 Income tax benefit (expense) 2,838 (1,635 ) (2,920 ) (2,022 ) Profit (loss) for the period (4,716 ) 3,622 8,667 6,000 Other comprehensive income (loss) (229 ) 629 (145 ) (101 ) Total comprehensive income (loss) (4,945 ) 4,251 8,521 5,899 Note: (1) The financial information denominated in Won as of and for the year ended December 31, 2025 has been translated into U.S. dollars at the exchange rate of Won 1,444.55 to US$1.00, which was the Noon Buying Rate as of December 31, 2025. 2025 Compared to 2024 In 2025, our consolidated sales, which is principally derived from the sale of electric power, increased by 4.3% to Won 96,568 billion in 2025 from Won 92,578 billion in 2024 primarily reflecting an increase in sales of electric power. Our sale of electric power increased by 4.6% to Won 95,168 billion in 2025 from Won 91,019 billion in 2024, primarily due to an increase in the average unit sales price. The volume of electricity sold decreases by 0.1% to 549,417 gigawatt hours in 2025 from 549,821 gigawatt hours in 2024 primarily due to a 2.1% decrease in the volume of electricity sold to the industrial sector, which represents the largest segment of electricity consumption in Korea, to 280,221 gigawatt hours in 2025 from 286,212 gigawatt hours in 2024, which was partially offset by a 2.6% increase in the volume of electricity sold to the commercial sector, which represents the second largest segment of electricity consumption in Korea, to 138,315 gigawatt hours in 2025 from 134,807 gigawatt hours in 2024, as well as a 1.7% increase in the volume of electricity sold to the residential sector to 88,474 gigawatt hours in 2025 from 86,989 gigawatt hours in 2024. The decrease in the volume of electricity sold to the industrial sector was primarily due to a decrease in industrial activities, such as the slowdown in the petrochemicals and steel industries. The increase in the volume of electricity sold to the commercial sector was primarily due to the gradual recovery in consumption and the rising demand for cooling caused by the higher average temperatures during the summer. The increase in the volume of electricity sold to the residential sector was primarily due to a record-long heatwave and prolonged tropical nights. The average unit sales price increased by 4.6% to Won 170.37 per kilowatt-hour in 2025 from Won 162.92 per kilowatt-hour in 2024, primarily due to an increase in the unit sales price in the industrial sectors. Our sales of construction services decreased by 20.7% to Won 674 billion in 2025 from Won 849 billion in 2024, primarily due to re-estimation of total expected project cost, reflecting increased claim costs related to our UAE nuclear power plant project. Our consolidated cost of sales, which is principally derived from the purchase of power from independent power producers, raw materials used and depreciation, decreased by 1.5% to Won 80,705 billion in 2025 from 107 Table of Contents Won 81,964 billion in 2024, primarily due to a 1.8% decrease in power purchase, a 11.5% decrease in raw materials used, and a 1.6% decrease in depreciation. Power purchase, which accounted for 42.2% and 42.3% of our cost of sales in 2025 and 2024, respectively, decreased by 1.8% to Won 34,053 billion in 2025 from Won 34,660 billion in 2024, primarily due to a decrease in the unit price of power purchase. The decrease in the unit price of power purchase was mainly due to a decrease in fuel costs. Raw materials used, which accounted for 23.1% and 25.7% of our cost of sales in 2025 and 2024, respectively, decreased by 11.5% to Won 18,643 billion in 2025 from Won 21,070 billion in 2024, primarily due to decreases in fuel prices. Depreciation expense, excluding amortization of nuclear fuel charged to fuel costs in the amounts of Won 1,794 billion and Won 2,217 billion in 2025 and 2024, respectively, increased by 1.9% to Won 11,593 billion in 2025 from Won 11,381 billion in 2024, primarily due to additional property, plant and equipment acquired in relation to the construction of new generation facilities pursuant to our capital investment program. Other cost of sales increased by 74.6% to Won 3,014 billion in 2025 from Won 1,726 billion in 2024, primarily due to an increase in our greenhouse gas emissions and related costs. For example, we spent approximately Won 247 billion on greenhouse gas emission allowances in 2025 compared to Won 164 billion in 2024. For further information, please see Item 4.B. “Business Overview—Environmental, Social and Governance Programs.” As a cumulative result of the foregoing factors, our consolidated gross profit increased to Won 15,863 billion in 2025 from Won 10,614 billion in 2024, and our consolidated gross profit margin improved to 16.4% in 2025 from 11.5% in 2024. The increase in our consolidated gross profit was largely attributable to a 1.5% decrease in our consolidated cost of sales (which was mainly due to a 1.8% decrease in power purchase costs, a 11.5% decrease in raw materials used), which was accompanied by a 4.3% increase in our consolidated sales which was primarily due to a 4.6% increase in the average unit sales price. Our consolidated selling and administrative expenses slightly increased by 5.3% to Won 3,234 billion in 2025 from Won 3,070 billion in 2024, mainly due to an increase in salaries, welfare and benefit expense and commission. Our consolidated other income, net of expenses, increased by 25.5% to Won 1,044 billion in 2025 from Won 832 billion in 2024, mainly as a result of a decrease in donations. Our consolidated net other gains increased to Won 339 billion in 2025 from Won 85 billion in 2024, mainly as a result of an increase in gains on disposal of property, plant and equipment. As a cumulative effect of the foregoing factors, our consolidated operating profit increased to Won 14,011 billion in 2025 from Won 8,461 billion in 2024, and our consolidated operating margin increased to 14.5% in 2025 from 9.1% in 2024. This was mainly due to decreased fuel costs at our subsidiaries as a result of lower prices of LNG and other raw materials, as well as decreased power purchase expenses from independent power generators as a result of a decrease in the unit price of power purchase which decreased as a result of lower system marginal prices driven by lower fuel costs. Our consolidated finance expenses, net, decreased by 26.6% to Won 3,001 billion in 2025 from Won 4,087 billion in 2024, primarily as a result of decreased losses on foreign currency translation. Our consolidated profit related to associates, joint ventures and subsidiaries decreased by 34.7% to Won 576 billion in 2025 from Won 882 billion in 2024, primarily due to a decreased share in the profit of Korea Gas Corporation. 108 Table of Contents As a cumulative effect of the foregoing factors, our consolidated profit before income taxes increased to Won 11,587 billion in 2025 from Won 5,257 billion in 2024. Our income tax expense increased to Won 2,920 billion in 2025 from Won 1,635 billion in 2024, largely as a result of the increase in profit before income tax. Our effective tax rate, which represents tax expense as a percentage of profit before income taxes, decreased to 25.2% in 2025 from 31.1% in 2024. The decrease in the effective tax rate was primarily attributable to non-recurring factors, including a one-off change in the statutory tax rate and the impact of non-taxable income. See Note 41 to our consolidated financial statements included in this annual report. As a cumulative result of the above factors, our consolidated profit increased to Won 8,667 billion in 2025 from Won 3,622 billion in 2024. Our consolidated net profit margin also increased to 9.0% in 2025 from 3.9% in 2024. Our profit attributable to the owners of the company increased to Won 8,545 billion in 2025 from Won 3,492 billion in 2024. Other comprehensive income of Won 629 billion in 2024 turned into a loss of Won 145 billion in 2025, largely due to a decrease in share of other comprehensive income of associates and joint ventures and foreign currency translation of foreign operations. As a cumulative result of the above factors, our consolidated total comprehensive income increased to Won 8,521 billion in 2025 from Won 4,251 billion in 2024. 2024 Compared to 2023 In 2024, our consolidated sales, which is principally derived from the sale of electric power, increased by 5.8% to Won 92,578 billion in 2024 from Won 87,476 billion in 2023 primarily reflecting an increase in sales of electric power. Our sale of electric power increased by 5.9% to Won 91,019 billion in 2024 from Won 85,940 billion in 2023, primarily due to an increase in the average unit sales price, as well as an increase in the volume of electricity sold. The volume of electricity sold increased by 0.7% to 549,821 gigawatt hours in 2024 from 545,966 gigawatt hours in 2023 primarily due to a 3.0% increase in the volume of electricity sold to the commercial sector, which represents the second largest segment of electricity consumption in Korea, to 134,807 gigawatt hours in 2024 from 130,844 gigawatt hours in 2023 as well as a 5.6% increase in the volume of electricity sold to the residential sector to 86,989 gigawatt hours in 2024 from 82,348 gigawatt hours in 2023, which was partially offset by a 1.5% decrease in the volume of electricity sold to the industrial sector, which represents the largest segment of electricity consumption in Korea, to 286,212 gigawatt hours in 2024 from 290,555 gigawatt hours in 2023. The increase in the volume of electricity sold to the commercial sector was primarily due to the rising demand for cooling caused by the higher average temperatures during the summer. The increase in the volume of electricity sold to the residential sector was primarily due to a record-long heatwave and prolonged tropical nights. The decrease in the volume of electricity sold to the industrial sector was primarily due to a decrease in industrial activities, such as the slowdown in the construction sector. The average unit sales price increased by 6.6% to Won 162.92 per kilowatt-hour in 2024 from Won 152.80 per kilowatt-hour in 2023, primarily due to an increase in the unit sales price in the residential and industrial sectors. Our sales of construction services increased by 8.2% to Won 849 billion in 2024 from Won 785 billion in 2023, primarily due to an increase in the sales amount recorded from the ongoing construction of our Guam Ukudu Combined thermal power plant project and El Dabaa nuclear power plant project as the construction projects progress over time. Our consolidated cost of sales, which is principally derived from the purchase of power from independent power producers, raw materials used and depreciation, decreased by 8.6% to Won 81,964 billion in 2024 from Won 89,700 billion in 2023, primarily due to a 9.5% decrease in power purchase and a 22.4% decrease in raw materials used, which was partially offset by a 7.7% increase in depreciation. Power purchase, which accounted for 42.3% and 42.7% of our cost of sales in 2024 and 2023, respectively, decreased by 9.5% to Won 34,660 billion in 2024 from Won 38,304 billion in 2023, primarily due to decreases in the unit price of power purchase. The decrease in unit price of power purchase was mainly due to a decrease in fuel costs. 109 Table of Contents Raw materials used, which accounted for 25.7% and 30.3% of our cost of sales in 2024 and 2023, respectively, decreased by 22.4% to Won 21,070 billion in 2024 from Won 27,136 billion in 2023, primarily due to decreases in fuel prices. Depreciation expense, excluding amortization of nuclear fuel charged to fuel costs in the amounts of Won 2,217 billion and Won 1,329 billion in 2024 and 2023, respectively, increased by 0.8% to Won 11,381 billion in 2024 from Won 11,294 billion in 2023, primarily due to additional property, plant and equipment acquired in relation to the construction of new generation facilities pursuant to our capital investment program. Other cost of sales increased by 10.1% to Won 1,726 billion in 2024 from Won 1,568 billion in 2023, primarily due to an increase in our greenhouse gas emissions and related costs. For example, we spent approximately Won 164 billion on greenhouse gas emission allowances in 2024 compared to Won 77 billion in 2023. For further information, please see Item 4.B. “Business Overview—Environmental, Social and Governance Programs.” As a cumulative result of the foregoing factors, our consolidated gross profit (loss) increased to Won 10,614 billion in 2024 from Won (2,223) billion in 2023, and our consolidated gross profit margin improved to a profit of 11.5% in 2024 from a loss of 2.5% in 2023. The increase in our consolidated gross profit was largely attributable to an 8.6% decrease in our consolidated cost of sales (which was mainly due to a 9.5% decrease in power purchase costs, a 22.4% decrease in raw materials used), which was accompanied by a 5.8% increase in our consolidated sales which was primarily due to a 35.2% increase in the average unit sales price. Our consolidated selling and administrative expenses slightly increased by 0.3% to Won 3,070 billion in 2024 from Won 3,062 billion in 2023, mainly due to an increase in salaries and repairs and maintenance expenses. Our consolidated other income, net of expenses, decreased by 18.2% to Won 832 billion in 2024 from Won 1,017 billion in 2023, mainly as a result of an increase in donations. Our consolidated net other gains increased to Won 85 billion in 2024 from Won 23 billion in 2023, mainly as a result of an increase in gains on disposal of property, plant and equipment. As a cumulative effect of the foregoing factors, our consolidated operating profit (loss) increased to Won 8,461 billion in 2024 from Won (4,245) billion in 2023, and our consolidated operating margin increased to 9.1% in 2024 from (4.9)% in 2023. This was mainly due to decreased fuel costs as a result of a lower price of LNG and other raw materials and decreased power purchase expenses as a result of a decrease in the unit price of power purchase due to a decrease in the system marginal price of electricity, which decreased as a result of lower fuel costs. Our consolidated finance expenses, net, increased by 4.2% to Won 4,087 billion in 2024 from Won 3,922 billion in 2023, primarily as a result of increased losses on foreign currency translation. Our consolidated profit related to associates, joint ventures and subsidiaries increased by 43.9% to Won 882 billion in 2024 from Won 613 billion in 2023, primarily due to an increased share in the profit of Korea Gas Corporation. As a cumulative effect of the foregoing factors, our consolidated profit (loss) before income taxes increased to Won 5,257 billion in 2024 from Won (7,554) billion in 2023. Our income tax expense increased to Won 1,635 billion in 2024 from an income tax benefit of Won 2,838 billion in 2023, largely as a result of the increase in profit before income tax. Our effective tax rate, which represents tax expense as a percentage of profit before income taxes, was 31.10% in 2024. See Note 41 to our consolidated financial statements included in this annual report. 110 Table of Contents As a cumulative result of the above factors, our consolidated profit (loss) increased to Won 3,622 billion in 2024 from Won (4,716) billion in 2023. Our consolidated net profit margin also increased to 3.9% in 2024 from (5.4)% in 2023. Our profit (loss) attributable to the owners of the company increased to Won 3,492 billion in 2024 from Won (4,823) billion in 2023. Other comprehensive income (loss) increased to Won 629 billion in 2024 from Won (229) billion in 2023, largely due to an increase in net change in fair value of equity investments at fair value through other comprehensive income and share of other comprehensive income of associates and joint ventures, net of tax. As a cumulative result of the above factors, our consolidated total comprehensive income (loss) increased to Won 4,251 billion in 2024 from Won (4,945) billion in 2023. Segment Results We operate in the following business segments: transmission and distribution, nuclear power generation, non-nuclear power generation, plant maintenance & engineering service and others. The transmission and distribution segment, which is operated by us, the parent company, consists of operations related to the transmission, distribution and sale to end-users of electricity purchased from our generation subsidiaries, as well as from independent power producers. The nuclear power generation segment is operated by our one nuclear generation subsidiary and non-nuclear power generation segment is operated by our five non-nuclear generation subsidiaries, which consist of operations related to the generation of electricity sold to the parent company through the Korea Power Exchange. The transmission and distribution segment, the nuclear power generation segment, and the non-nuclear power generation segment together represent our electricity business. The remainder of our operation consists primarily of operations related to the plant maintenance and engineering service and others including mainly overseas businesses. In 2023, 2024 and 2025, the unaffiliated revenues of the nuclear power generation and the non-nuclear power generation (representing the six generation subsidiaries) and all our other revenues in the aggregate amounted to only 4.7%, 4.3% and 4.4% of our consolidated revenues, respectively, and the results of operations for our business segments substantially mirror our consolidated results of operations. For further information, see Note 4 of the notes to our consolidated financial statements included in this annual report. Other Our operations are materially affected by the policies of or factors relating to the Government. See Item 4.B. “Business Overview—Regulation.” Item 5.B. Liquidity and Capital Resources We expect that our capital requirements, capital resources and liquidity position may change in the course of implementing the Restructuring Plan. See Item 4.B. “ —Business Overview—Restructuring of the Electric Power Industry in Korea” and Item 3.D. “Risk Factors—Risks Relating to KEPCO—The Government may adopt policy measures to substantially restructure the Korean electric power industry or our operational structure, which may have a material adverse effect on our business, operations and profitability.” Capital Requirements For the foreseeable future, we anticipate that the following will be the main drivers of our capital requirements: • working capital requirements, the largest component of which is fuel purchases and power purchase costs; • capital expenditures pursuant to our capital investment program; 111 Table of Contents • payment of principal and interest on our existing debt; and • overseas investments. In addition, if there is an unanticipated material change to the Restructuring Plan, the Basic Plan or other major policy initiatives of the Government relating to the electric power industry, or a natural disaster, such change may require a significant amount of additional capital requirements. Capital Expenditures We anticipate that capital expenditures will be the most significant use of our funds in the next several years. Our capital expenditures relate primarily to the construction of new generation units, maintenance of existing generation units and expansion of our transmission and distribution systems. Our capital expenditures generally follow budgets established under the Basic Plan, which contains projections relating to the supply and demand of electricity of Korea based on which we plan the construction of additional generation units and transmission systems. Our total capital expenditures for the construction of generation, transmission and distribution facilities were Won 15,518 billion, Won 16,720 billion and Won 18,701 billion in 2023, 2024 and 2025, respectively, and under our current budgets, are estimated to be approximately Won 23,099 billion, Won 27,391 billion and Won 27,625 billion in 2026, 2027 and 2028, respectively. We plan to finance our capital expenditures primarily through cash from operation of business, construction grants, issuance of securities in the capital markets and borrowings from financial institutions. In January 2016, the Ministry of Trade, Industry and Resources announced an initiative to promote the new energy industry by creating the New Energy Industry Fund, which is made up of funds sponsored by Government-affiliated energy companies. We contributed Won 500 billion to the funds in 2016. The purpose of these funds is to invest in substantially all frontiers of the new energy industry, including renewable energy, energy storage systems, electric vehicles, small-sized self-sustaining electricity generation grids known as “micro-grids”, among others, as well as invest in start-up companies, ventures, small to medium-sized enterprise and project businesses that engage in these businesses but have not previously attracted sufficient capital from the private sector. Furthermore, as part of the Comprehensive Measures against Particulate Matter and the Eighth, Ninth, Tenth, Eleventh Basic Plan, announced by the Government in September 2017, December 2017, December 2020 and January 2023 and February 2025 respectively, the Government set forth the following policy directions relating to coal-fired generation units: (i) 28 decrepit coal-fired generation units will be decommissioned and converted to LNG fuel use by 2036 and 12 decrepit coal-fired generation units will be converted to carbon-free energy sources, including pumped-storage hydro, hydrogen power generation and ammonia co-firing by 2038, (ii) in principle, construction of new coal-fired generation units shall not be planned, (iii) coal-fired generation units that are 30 years or older shall temporarily cease operations from December to February of each year from 2020, which has also been done from March to June in 2018 and 2019, (iv) coal-fired generation units shall be put through comprehensive functional and environmental upgrades and (v) coal-fired generation units shall be subject to emission standards that came into effect in January 2019 that are twice as more rigorous than the previous standards. Compliance with such measures is expected to result in significant additional costs. We also established a research and entrepreneurship-oriented university specializing in the energy field. See Item 4.B. “Business Overview—Establishment of a University.” On August 8, 2019, our board of directors resolved to make an initial contribution of Won 60 billion for the promotion, initial operation and the design of the university campus, and the actual contribution was made in 2020. On May 21, 2021, our board resolved to make an additional contribution of Won 64.5 billion to the university and Won 41.3 billon of such contribution was made in December 2021. The remaining contribution of Won 23.2 billion was made by our affiliates. In addition, on July 15, 2022, our and our affiliates’ boards decided to contribute Won 47.9 billion for funding the construction and operation of major campus facilities and completed the contribution by December 2022. In 112 Table of Contents 2023, our and our affiliates’ boards of directors decided to contribute additional Won 110.6 billion, of which we contributed Won 70.8 billion and our affiliates contributed the remaining Won 39.8 billion. In 2024, our and our affiliates’ boards of directors decided to contribute an additional Won 177.8 billion, of which we contributed Won 113.8 billion and our affiliates contributed the remaining Won 64 billion. In 2025, our and our affiliates’ boards of directors decided to contribute an additional Won 71.7 billion, of which we contributed Won 45.9 billion and our affiliates contributed the remaining Won 25.8 billion. In March 2026, our board of directors decided to make an initial contribution of Won 48.8 billion as part of the contribution for the fiscal year 2026. Fuel Purchases We require significant funds to finance our operations, principally in relation to the purchase of fuels by our generation subsidiaries for generation of electricity. In 2023, 2024 and 2025, fuel costs constituted 30.1%, 27.5% and 24.1% of our cost of sales and the ratio of fuel costs to our sales was 30.8%, 24.3% and 20.1%, respectively. We plan to fund our fuel purchases primarily with net operating cash, although in cases of rapid increases in fuel prices as is the case from time to time, we may also rely on borrowings from financial institutions and issuance of debt securities in the capital markets. Repayment of Existing Debt Payments of principal and interest on indebtedness will require considerable resources. The table below sets forth the scheduled maturities of outstanding interest-paying debt (excluding original issue discounts and premium) of us and our six wholly-owned generation subsidiaries as of December 31, 2025 for each year from 2026 to 2030 and thereafter without taking into consideration of swap transactions. As of December 31, 2025, such debt represented 96.6% of our outstanding debt on a consolidated basis. Year ended December 31 Local Currency Borrowings Foreign Currency Borrowings Domestic Debentures Foreign Debentures Total(1) (in billions of Won) 2026 18,124.9 — 21,710.0 5,338.5 45,173.4 2027 1.6 12.5 21,230.0 4,650.5 25,894.7 2028 1.2 — 14,482.2 3,102.1 17,585.5 2029 0.1 — 8,330.0 861.0 9,191.0 2030 0.1 — 5,690.0 1,482.7 7,172.7 Thereafter 54.5 — 19,200.8 1,281.5 20,536.7 Total(1) 18,182.3 12.5 90,643.0 16,716.2 125,554.1 Note: (1) The figures may not add up to the relevant total numbers due to rounding. We and our six wholly-owned generation subsidiaries incurred interest charges (including capitalized interest) in relation to our interest-bearing debt of Won 5,023 billion, Won 5,328 billion and Won 4,943 billion, in 2023, 2024 and 2025, respectively. We anticipate that interest charges will increase in future years because of, among other factors, anticipated increases in our long-term debt. See “—Capital Resources” below. The weighted average rates of interest on our and our six wholly-owned generation subsidiaries’ interest-bearing long-term debt and borrowings under existing swap contracts were 3.33%, 3.19% and 3.02% in 2023, 2024 and 2025, respectively. Overseas Investments As part of our revenue diversification strategy, we plan to continue to make overseas investments on a selective basis, which will be funded primarily through foreign currency-denominated borrowings and debt securities issuances as well as net operating cash from such investments. 113 Table of Contents Capital Resources The selected consolidated financial data set forth below as of and for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements which have been prepared in accordance with IFRS. You should read the following data with the more detailed information contained in Item 18. “Financial Statements.” Historical results do not necessarily predict future results. 2023 2024 2025 2025 (rounded to billions of Won and millions of US$)(1) Net cash provided by operating activities W1,522 W15,876 W20,880 $ 14,454 Long-term debt (excluding current portion)(2) 92,510 88,091 83,882 58,068 Current portion of the long-term debt 30,454 35,319 35,908 24,857 Total long-term debt(3) 123,163 123,646 120,005 83,074 Won-denominated long-term debt 104,964 102,096 99,743 69,047 Foreign currency-denominated long-term debt 18,199 21,550 20,262 14,027 Other long-term liabilities(4) 48,692 53,385 54,615 37,808 Short-term borrowings 10,667 9,123 9,979 6,908 Total equity 37,265 41,363 49,323 34,144 Notes: (1) The financial information denominated in Won as of and for the year ended December 31, 2025 has been translated into U.S. dollars at the exchange rate of Won 1,444.55 to US$1.00, which was the Noon Buying Rate as of December 31, 2025. (2) Long-term debt, net consists of long-term borrowings and debt securities (excluding the current portions but including original issue discounts and premiums) without taking into consideration of swap transactions. (3) Total long-term debt (including the current portion but excluding original issue discounts and premium) without taking into consideration of swap transactions. (4) Other long-term liabilities consist of total non-current liabilities of our consolidated financial statements included in this annual report minus long-term debt (excluding current portion) of this table. We have traditionally met our working capital and other capital requirements primarily from net cash provided by operating activities, issuance of debt securities and borrowings from financial institutions. Net cash provided by operating activities is primarily a function of electricity sales and fuel purchases and is also affected by increases and decreases in trade receivables, trade payables and inventory related to electricity sales and fuel purchases. Net cash provided by operating activities was Won 1,522 billion, Won 15,876 billion and Won 20,880 billion in 2023, 2024 and 2025, respectively. As of December 31, 2023, 2024 and 2025, our long-term debt (excluding the current portion but including original issue discounts and premium), without taking into consideration of swap transactions, amounted to Won 92,510 billion, Won 88,091 billion and Won 83,882 billion, respectively, representing 248.2%, 213.0%, 170.1% of equity, respectively, as of such dates. As of December 31, 2023, 2024 and 2025, the current portions of our long-term debt were Won 30,454 billion, Won 35,319 billion and Won 35,908 billion, respectively. As of December 31, 2023, 2024 and 2025, our short-term borrowings amounted to Won 10,667 billion, Won 9,123 billion and Won 9,979 billion, respectively. See Note 23 of the notes to our consolidated financial statements included in this annual report. Total long-term debt (including the current portion but excluding original issue discounts and premium), without taking into consideration of swap transactions, as of December 31, 2025 was Won 120,005 billion, of which Won 99,743 billion was denominated in Won and an equivalent of Won 20,262 billion was denominated in foreign currencies, primarily U.S. dollars. We, KHNP and KOMIPO also maintain global medium-term note programs in the aggregate amount of US$ 19 billion, of which approximately US$ 9 billion remains currently available for future drawdown. 114 Table of Contents As we experienced net losses during 2022 and 2023 as global energy prices increased significantly and the power purchase costs increased accordingly, we issued more debt securities than before to meet increased working capital requirement. On December 28, 2022, the National Assembly of Korea passed an amendment to Article 16 of KEPCO Act which increased our debt ceiling on total outstanding debt securities on a separate basis to be no greater than five times (or six times if the Minister of the Ministry of Climate, Energy and Environment approves if it is urgently required to resolve a business crisis situation) the sum of our share capital and reserves updated at the end of each year. Such share capital and reserves are calculated on a separate basis under the KEPCO Act. Before such amendment, our debt ceiling was two times the sum of our share capital and reserves. Such increase in debt ceiling will be effective until December 31, 2027 and we may make use of the new debt ceiling to issue more debt securities to cover our losses, refinance existing debt and finance new capital expenditures. However, if the sum of our share capital and reserves decreases (including as a result of continued significant net losses), our debt ceiling will decrease as well and there will be no assurance that we can meet our funding requirements for capital or operational expenditures or debt repayment obligations, which situation could have a material adverse impact on our business, results of operations and financial condition. Subject to the implementation of our capital expenditure plan and the sale of our interests in our generation subsidiaries and other subsidiaries, our long-term debt may increase or decrease in future years. Until recently, a significant portion of our long-term debt was raised through foreign currency-denominated borrowings. Our foreign currency-denominated long-term debt (including the current portion but excluding original issue discounts and premium), without taking into consideration of swap transactions, amounted to Won 21,550 billion and Won 20,262 billion as of December 31, 2024 and 2025, respectively. Our ability to incur long-term debt in the future is subject to a variety of factors, many of which are beyond our control, including, the amount of capital that other Korean entities may seek to raise in capital markets. Economic, political and other conditions in Korea may also affect investor demand for our securities and those of other Korean entities. In addition, our ability to incur debt will also be affected by the Government’s policies relating to foreign currency borrowings, the liquidity of the Korean capital markets and our operating results and financial condition. In case of adverse developments in Korea, the price at which such financing may be available may not be acceptable to us. We incur our short-term borrowings primarily through commercial papers sold to domestic financial institutions. We have not had any material difficulties in obtaining short-term borrowings. In addition, in order to prepare for potential liquidity shortage, we maintain several credit facilities with financial institutions, with Won-denominated facilities amounting to Won 15,828 billion in aggregate and foreign currency-denominated facilities amounting to US$ 1,760 million in aggregate. The full amount of these facilities was available as of December 31, 2025. We may raise capital from time to time through issuance of equity securities. However, there are certain restrictions on our ability to issue equity instruments, including limitations on shareholding by foreigners. In addition, without changes in the existing KEPCO Act which requires that the Government, directly or pursuant to the Korea Development Bank Act, through Korea Development Bank, own at least 51% of our capital stock, it may be difficult or impossible for us to undertake any equity financing other than sales of treasury stock without the Government’s participation. Even if we are able to conduct equity financing with the Government’s participation, prevailing market conditions may be such that we may not be able conduct equity financing on terms that are commercially acceptable to us. See Item 3.D. “Risk Factors—Risks Relating to Korea and the Global Economy.” Our total equity increased by 19.2% from Won 41,363 billion as of December 31, 2024 to Won 49,323 billion as of December 31, 2025, mainly as a result of an increase in total comprehensive income. 115 Table of Contents Liquidity The selected consolidated financial data set forth below as of and for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements which have been prepared in accordance with IFRS. You should read the following data with the more detailed information contained in Item 18. “Financial Statements.” Historical results do not necessarily predict future results. 2023 2024 2025 2025 (rounded to billions of Won and millions of US$)(1) Property, plant and equipment, net W 179,876 W 182,983 W 187,752 $ 129,972 Current trade and other payables, net 9,090 9,411 8,622 5,968 Current financial liabilities, net 41,140 44,466 45,939 31,802 Net cash provided by operating activities 1,522 15,876 20,880 14,454 Net cash used in investing activities (13,074 ) (14,093 ) (18,445 ) (12,769 ) Net cash provided by financing activities 12,662 (3,849 ) (2,635 ) (1,824 ) Net working capital (deficit)(2) (31,712 ) (34,714 ) (36,392 ) (25,193 ) Notes: (1) The financial information denominated in Won as of and for the year ended December 31, 2025 has been translated into U.S. dollars at the exchange rate of Won 1,444.55 to US$1.00, which was the Noon Buying Rate as of December 31, 2025. (2) Net working capital is defined as current assets minus current liabilities. For the periods indicated, current liabilities exceeded current assets, which resulted in working capital deficit for such periods. Our liquidity is substantially affected by our acquisition of property, plant and equipment, fuel purchases and schedule of repayment of debt. Our property, plant and equipment increased by 2.6% from Won 182,983 billion as of December 31, 2024 to Won 187,752 billion as of December 31, 2025. As the fuel costs decreased by 13.8% from Won 22,538 billion in 2024 to Won 19,436 billion in 2025, our current trade and other payables also decreased by 8.4% from Won 9,411 billion as of December 31, 2024 to Won 8,622 billion as of December 31, 2025. Our current financial liabilities increased by 3.3% from Won 44,466 billion as of December 31, 2024 to Won 45,939 billion as of December 31, 2025 according to our debt repayment schedule. Our net cash flow from operating activities increased by 31.5% to a net cash inflow of Won 20,880 billion in 2025 from a net cash inflow of Won 15,876 billion in 2024, primarily due to an increase in cash generated from sales of electricity. Our net cash flow from investing activities decreased by 30.9% to a net cash outflow of Won 18,445 billion in 2025 from a net cash outflow of Won 14,093 billion in 2024, primarily due to a decrease in acquisition of financial assets of Won 1,805 billion and a decrease in acquisition of property, plant and equipment of Won 1,618 billion, offset by an increase in proceeds from disposals of financial assets of Won 1,061 billion. Our net cash flow from financing activities increased by 31.6% to a net cash outflow of Won 2,635 billion in 2025 from a net cash outflow of Won 3,849 billion in 2024, primarily due to an increase in proceeds of short-term borrowings of Won 2,485 billion and an increase in proceeds from long-term borrowings and debt securities of Won 1,591 billion, offset by a decrease in repayment of long-term borrowings and debt securities of 2,411 billion. Due to the capital-intensive nature of our business as well as significant volatility in fuel prices, from time to time we operate with working capital deficits, and we may have substantial working capital deficits in the future. As of December 31, 2023, 2024 and 2025, we had a working capital deficit of Won 31,712 billion, Won 34,714 billion and Won 36,392 billion, respectively. We have traditionally met our working capital and 116 Table of Contents other capital requirements primarily with net cash provided by operating activities, issuance of debt securities, borrowings from financial institutions and construction grants. We also incur short-term borrowings primarily through commercial papers sold to domestic financial institutions. We have not had any material difficulties in obtaining short-term borrowings. See “—Capital Resources.” We may face liquidity concerns in the case of sudden and sharp depreciation of the Won against major foreign currencies or depreciation over a sustained period of time. While substantially all of our revenues and our cash and cash equivalents are denominated in Won, we pay for substantially all of our fuel purchases in foreign currencies. Furthermore, as a substantial portion of our long-term debt is denominated in foreign currencies, the payment of principal and interest thereon is made in foreign currencies. In the past, we have incurred foreign currency debt principally due to the limited availability and the high cost of Won-denominated financing in Korea. However, in light of increasing sophistication of Korean capital markets and the recent increase in Won liquidity in Korean financial markets, we plan to reduce the portion of our debt which is denominated in foreign currencies, even though we intend to continue to raise certain amounts of capital through long-term foreign currency debt for purposes of maintaining diversity in our funding sources as well as paying for overseas investments and fuel procurements in foreign currencies. As of December 31, 2025, 16.9% of our long-term debt (including the current portion but excluding original issue discounts and premium), without taking into consideration of swap transactions, was denominated principally in U.S. dollars. We enter into currency swaps and other hedging arrangements with respect to our foreign currency denominated debt only to a limited extent primarily due to the limited size of the Korean market for such derivative instrument. Such instruments include combined currency and interest rate swap agreements, interest rate swaps and foreign exchange agreements. We do not enter into derivative financial instruments for the purpose of hedging market risk resulting from fluctuations in fuel costs. Our policy is to hold or issue derivative financial instruments for hedging purposes only. See Note 12 of the notes to our consolidated financial statements. We did not pay any dividends in respect of fiscal year 2023 on a separate basis. In fiscal year of 2024, paid dividends of Won 213 per share, and the total dividend amount was Won 137 billion. In fiscal year of 2025, paid dividends of Won 1,542 per share, and the total dividend amount was Won 990 billion. Contractual Obligations The following summarizes our known contractual obligations on a consolidated basis as of December 31, 2025 and the effect such obligations are expected to have on liquidity and cash flow in future periods. See Note 45.(2) of the notes to our consolidated financial statements included in this annual report for our management of short, medium and long-term funding and liquidity management requirements. Contractual Obligations Less than 1 Year 1~2 Years 2~5 Years More than 5 Years Total(3) (In billions of Won) Borrowings and debt securities(1) W 49,273 29,496 38,176 27,052 143,997 Lease liabilities 526 473 1,141 1,407 3,547 Trade and other payables 8,112 344 618 426 9,500 Financial guarantee contracts(2) 4,092 — — — 4,092 Total(3) W 62,003 30,313 39,935 28,885 161,136 Notes: (1) These includes interest payments on the borrowings and debts for the periods indicated. (2) This represents the total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of December 31, 2024 and 2025 are Won 30,924 million and Won 50,709 million, respectively. 117 Table of Contents (3) The figures may not add up to the relevant total numbers due to rounding. For a description of our commercial commitments and contingent liabilities, see Note 50 of the notes to our consolidated financial statements included in this annual report. We meet our coal requirements primarily through purchases of bituminous coal and anthracite coal under long-term supply contracts with domestic and foreign suppliers. Under these long-term supply contracts, purchase prices are adjusted periodically based on prevailing market conditions. We also purchase a substantial portion of our LNG requirements from Korea Gas Corporation, a related party. We negotiate annually with Korea Gas Corporation and other suppliers to purchase LNG. We have also entered into long-term transportation contracts with Pan Ocean Co., Ltd. and others. We import all uranium ore concentrates from sources outside Korea (including Kazakhstan, Canada, France, the United Kingdom, Switzerland and Uzbekistan) under medium to long-term contracts and purchases in spot markets, and pay for such concentrates with currencies other than Won, primarily U.S. dollars. Except for certain fixed contract prices, contract prices for processing of uranium are adjusted annually based on base prices and spot market prices prevailing at the time of delivery. The fuel purchase price is typically negotiated near or at the time of purchase subject to prevailing market conditions. In 2025, the fuel cost incurred to us was Won 19,436 billion. See Note 49.(2) of the notes to our consolidated financial statements for further details of these contracts. Under the Long-term Transmission and Substation Plan approved by the Ministry of Climate, Energy and Environment, we are responsible for the construction of all of our power transmission facilities and the maintenance and repair expenses for such facilities. Also, our generation subsidiaries make plans for expanding our generation capacity based on the Basic Plan, which is generally revised and announced every two years by the Government. For a description of our commitments for acquisition of property, plant and equipment, see Note 49.(1) of the notes to our consolidated financial statements included in this annual report. Payment guarantee See Note 50.(2) to our consolidated financial statements included in this annual report for payment guarantees and short-term credit facilities from financial institutions. Overdraft and Others See Note 47.(7) to our consolidated financial statements included in this annual report for existing guarantees provided by us to our associates, joint ventures and others. Other than as described in this annual report and also in Notes 47 and 50 of the notes to our consolidated financial statements included in this annual report, we did not have any other material credit lines and guarantee commitments provided to any third parties as of December 31, 2025. Item 5.C. Research and Development, Patents and Licenses, etc. Research and Development In accordance with our 2035 mid-to-long-term strategy, we have established the development of core new energy technologies and the expansion of their commercialization as our strategic objectives. Accordingly, we are pursuing technology development with a focus on five core research and development areas: (1) sustainable 118 Table of Contents power grids, (2) AI for energy, (3) carbon neutrality, (4) expansion of new energy businesses, and (5) generation of new revenue streams. In line with these areas, we are developing core strategic technologies based on the development goals for each respective field. • Sustainable power grids. We are developing technologies to support the timely construction of transmission networks and to ensure the stability of the electric power system, in response to the expansion of renewable energy and the surge in electricity demand driven by high-tech industries. • AI for energy. We are integrating AI technology across all aspects of our operations to enhance operational efficiency. Furthermore, we are securing technologies for advanced facility management, prevention of serious accidents, and response to future cyber threats. • Carbon neutrality. We are focusing on the development of carbon capture, utilization, and storage(CCUS) technologies, life- cycle management of SF6 gas, and clean fuel combustion technologies to achieve national greenhouse gas reduction targets. • Expansion of new energy businesses. We are securing competitiveness within the renewable energy market and diversifying our business portfolio, including offshore wind power, solar energy, RE100 industrial complexes, and microgrids (MG). • Generation of new revenue streams. We are identifying new business models and developing related technologies to generate new revenue in response to future environmental changes, beyond our existing electric power business. In addition, we cooperate closely with several other electric utility companies and research institutes, both foreign and domestic, on various projects to diversify the scope and scale of our research and development activities. In 2026, consistent with the Government guidelines, we plan to invest approximately 1.97% of our annual estimated net sales on a separate basis in research and development. We and our six generation subsidiaries invested Won 865 billion, Won 859 billion and Won 860 billion in 2023, 2024 and 2025, respectively, and plan to invest Won 1,230 billion in 2026. We and the six generation subsidiaries have 1,503 employees engaged in research and development activities as of December 31, 2025. As a result of our research, we and the six generation subsidiaries have 11,589 registered patents and 14,015 patent applications outstanding in Korea and abroad as of December 31, 2025. Item 5.D. Trend Information Trends, uncertainties and events which could have a material impact on our sales, liquidity and capital resources are discussed above in Item 4.B. “Business Overview—Sales and Customers,” Item 5.A. “Operating Results” and Item 5.B. “Liquidity and Capital Resources.” Item 5.E. Critical Accounting Estimates See Note 2.(4) to our consolidated financial statements included in this annual report and other sections of our consolidated financial statements referred to thereunder for accounting estimates that have the most significant effect on the amounts recognized in our consolidated financial statements. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES