Moscow Yekaterinburg

Berlin London Brussels Minsk Warsaw Omsk On Track for Asia Paris Novosibirsk and Beyond Riom TSR

Bordeaux

Marseille Madrid Irkutsk Ulan-Ude Karimskaya Rome Aktogai Manzhouli Sevilla Istanbul Khavarovsk On Track for Asia Ulaanbaatar TMR Urumuchi TMGR Harbin Changchun

Vladivostok Teheran Shenyang TCR Beijing Khasan

Tianjin

and Beyond Sinuiju

Pyeongyang Zhengzhou New Delhi Nanjing

Dhaka Dali Shanghai Busan

Guangzhou Mandalay Hanoi Hong Kong

Yanggon

Bangkok

Ho Chi Minh

Kuala Lumpur

Singapore

Daejeon Government Complex, 139 Seonsa-ro, Seo-gu, Daejeon Metropolitan City, Korea TEL 82-1544-7788 FAX 82-42-472-3024 www..com Overseas Offices Paris 33-1-4562-0142, 0114 Tokyo 81-50-7535-0228 Beijing 86-10-6479-5561 Welcome to Korea Railroad Corporation A sustainable prospective future starts out from Korea Railroad Corporation’s platform energetically stepping forward toward the green growth in the 21st century.

Korea Railroad Corporation, in an attempt to open a sustainable world where man and nature coexist, greets the 21st

Contents century, the era of green development to start a railroad renaissance having the safest, most accurate and Our Journey 01 Welcome to KORAIL environmental way of transport. 08 CEO's Message 10 Mission & Vision

Our Future Having its basis through the best technology and competitive 14 Global Leader 16 Sustainable Growth power, Korea Railroad Corporation invites you to its long 18 Excellence in Service march making a future rich in energy, environment, Our Businesses 22 Passenger Services and prosperity. 24 Metropolitan Transit 25 Freight Logistics 26 Other Businesses 27 Affiliates

Our Strengths 28 Management Innovation 30 Environmental Stewardship 31 Community Service 32 People & Technology 33 International Activities 34 Making Connections 40 Milestones 300 km/h KTX Maximum Operating Speed

Times are Changing...Fast In the first decade of the 21st century, Korea Railroad Corporation has sparked a renaissance in rail travel. Our 300 km/h or KTX—the world’s fifth high-speed rail service—surpassed the 100-million passenger milestone within three short years of its April 2004 launch. This combination of superior speed and safety is enabling us to revolutionize Korea’s transportation industry as we continue to accelerate the pace of change.

KORAIL PASS NO. 01-592218 KORAIL PASS NO. 01-592310

110 Years of Credibility Within seven years of the launch of Korea’s first rail service in late 1899, the first Trans-Korea Railway line was in place, linking the port of Busan on Korea’s southern tip with Sinuiju on its northern border with China. In the century that has passed, Korail has helped Korea grow and prosper in countless ways. With the basis of hard labor and world’s best competitive power technology that cultivated 110 years of experience, Korea Railroad Corporation now goes beyond the Korean Peninsula to flourish railroad’s renaissance worldwide.

Long-Term Credit Ratings from Standard & Poor’s and Moody’s A, A2 KRW600mn The yearly reduced amount of energy and CO2 discharge cost when the railroad’s transportation expense rate is increased by 1%

Amidst the 21st Century’s Green Growth! The agenda in the 21st century is conceptualized by the world of eco-environment. With only the rise of 1% of transportation expense rate, a yearly cost of energy and CO2 discharge worth 600 billion won is reduced. Korea Railroad Corporation, the world’s fifth rapid transit railway, will use its successful management know-how to start a railroad renaissance within the country and globally for mankind to the sustainable green development.

KORAIL PASS NO. 01-645246 CEO’s Message

Our Goal is the “World’s Best, Korean Railroad”

We have run faithfully as ever for 110 years.

Since the Gyeongin line launched its first service in 1899, Korean railway has carried the energy of change to every corner of Korea to play the role of a secure main artery of modernization and industrialization.

Korean railway, which took off one step more, with the launch of the KTX service in 2004, has turned the whole country into a half-day life area, vitalizing the national economy and creating a new life style.

And right now, a dramatic leap for Korean railway is right in front of you.

At this time, when railway is in the global limelight as the safest, most punctual, and environmentally friendly mode of transportation, we will turn this trend into a firm turning point towards a railway renaissance era.

The goal that we would like to achieve through the renaissance of Korean railway is, the “World’s Best, Korean Railroad.”

Outside, we will stretch out everywhere in the global community with our successful operational know-how of the world’s fifth high speed train. Inside, we will let people consider railway as the friendliest mode of transportation through our best quality service.

The flag of Korean railway is being waved all around the world and in times of travel inside Korea, railway comes to our mind first — It is the features of the “World’s Best Korean Railroad,” that we are dreaming of. These are the true features of an advanced railway.

Our great challenge has already begun. We will be the railroad that the railways of the world will try to follow; Korean Railway rewrites the standard of the world’s railways. Huh, Joon-Young President & CEO of Korea Railroad Corporation

08 + 09 Mission & Vision

Becoming a World-Class Diversified Transportation Group

When we formally incorporated as Korea Railroad Corporation in January 2005, we also adopted a new vision and mission to guide us through the most challenging transition in our history.

The mission ‘Green Network creating a rich life’ offers environmental and sustainable service, and promises a railroad network where we can coexist with the natural environment.

In order to accomplish this, ‘Great KORAIL which raises the value of time and space’ vision is setup and is being concentrated at its utmost. It will offer the finest service to give sensation, it will lay an independent management foundation with the expansion of rapid transit railway’s area and the activation of a subsidiary enterprise, and it will offer a better life with an environmental and sustainable management facing the future.

Our Mission Green Network which creates a rich life Korea Railroad Corporation offers a sustainable railroad conveyance service with other various services and will do its utmost to create a new life value and to enrich national life.

Our Vision Great KORAIL which raises the value of time and space The speed service will be continuously renovated and the space of life culture will be expanded, and it will contribute to the national competitive power to be the ‘World’s Best Korean Railroad’.

10 + 11 Our Future is Right on Track

At Korea Railroad Corporation, the future isn’t some abstract concept. It’s a vision of global leader, sustainable growth, and excellence in service that we’re bringing closer to reality with each passing day. The future is just around the bend. And we’re ready to deliver it.

12 + 13 Global Leader and management know-how with regard to the railroad Our Future is system’s infrastructure construction is the key reasons Korea Railroad Corporation is vividly noticed in the railroad history. Transcontinental Korea Railroad Corporation has its basis on the best competitive power technology in railroad’s construction and management know-how, and is taking the lead as Korea’s The new paradigm of the 21st century’s global business is International operations new growth engine of 21st century. It has the whole world as Korea Railroad Corporation has 110 years of environment-friendly economy. In this change of paradigm, its target to build and manage railroad system experience in railroad system’s infrastructure for countries all over the world pursuing green development construction and management. Korea infrastructures, investigate project feasibility, manage railroad is in the spotlight of being the safest, most accurate Railroad Corporation’s ability in international processes, maintain, educate, advise in the construction and operations has already been affirmed with and environmental way of transport. EMU’s technical tie-up and consulting management of information systems, and promote actively With the greet of railroad’s renaissance all countries are business in Malaysia and with commissional various international operations concerning railroad. education of double track railroad paying attention to Korea Railroad Corporation, which has construction in Libya. International 110 years of management know-how and is successfully operations are processed with project feasibility, process management, managing the world’s fifth rapid transit railway system. maintenance, education, and advice in the Having the world’s finest competitive power technology construction and management of information systems.

KTX-II(Korean rapid transit train) KTX-II is a new rapid transit train manufactured with the technology within the

Yekaterinburg country. With the completion of KTX-II, our Moscow country has reached a rank in the Berlin London technological nation where rapid transit trains Brussels Minsk Omsk are manufactured and managed by our own Novosibirsk following Japan, France, and Germany with a PARIS TSR velocity greater than 300km. KTX-II came to Riom birth with safety, comfort, quietness, softness and trust, and will be on service from the Ulan-Ude Madrid Marseille Rome second half of year 2009. Karimskaya

Aktogai villa Manzhouli Istanbul Khavarovsk Ulaanbaatar TMR Urumuchi TMGR Harbin

Vladivostok Teheran Shenyang TCR I“ can’t forget October of 2008, when the Korean BEIJING Khasan rapid transit train KTX-II had its test operation Sinuiju and the people who watched it were deeply Seoul Zhengzhou Transcontinental railway impressed by its majestic appearance. The birth of Busan Mokpo TOKYO The dream of the transcontinental railway the rapid transit train KTX-II was a commemorate Shanghai that links the Korean peninsula and the of leaving Korea Railroad Corporation’s name on Dali continent will keep on. If the Iron Silk Road railroad’s technology nation. I wish the dream KTX- Mandalay Guangzhou Hanoi linking the Korean peninsula with II stretching everywhere comes true rapidly. Vladivostok, Moscow and China through ” Hong Kong TKR(Trans-Korea Railway), TSR(Trans-Siberian Ha Ki Bbeum Railway), TCR(Trans-China Railway) comes Public Relations, Korea Railroad Corporation Bangkok true, China, Russia and Europe can be traveled by train. 14 Ho Chi Minh + 15

Singapore Sustainable Growth In“ densely populated countries like Korea, the benefits of rail transportation are obvious. Our KTX service has taken these benefits to a whole new level, making it possible to travel between any of the nation’s five largest cities within three hours. And that means more convenience and opportunities for Our Future is both individuals and businesses. Economic Sustainability KTX service not only gets people to their Park” Eun Jung Sustainable destinations up to 36% faster, but also it Secretarial Services, Korea Railroad Corporation Secretary brings more profitability. In 2008, KTX carried over 34% percent of total intra- While rail networks have been long recognized as the city rail passengers while generating over With“ hundreds of stations serving millions of 68% of total passenger service revenues. most eco-friendly and cost-effective way to transport riders each day, we have a unique opportunity When the Daegu-Busan section of the and responsibility to make sure our operations freight by land, they also represent a compelling high-speed line is completed in 2010, are as “green” as they can be. From in-house Seoul-Busan travel time will fall to under solution for passenger travel. initiatives to prevent and reduce pollution, to our two hours, driving the next wave of participation in international initiatives such as growth in KTX ridership and profitability. Our launch of KTX high-speed rail service in April 2004 the UN Global Compact, we’re taking the lead in showing the way to a sustainable future. has significantly decreased travel time between Korea’s ” major population centers and nearly doubled Kim Jin Wha Passenger Services, KTX Steward passenger handling capacity on the Seoul-Busan and Seoul-Mokpo lines from 100,000 to 180,000 per day. Passengers can now travel from Seoul to Busan in just two hours and forty minutes, a time that’s very Environmental Sustainability competitive with air travel when door-to-door travel Compared to road vehicles, railways times are considered. produce under one-half and one- sixteenth the greenhouse gas emissions The introduction of our next-generation locally per passenger and ton of freight, designed and built KTX-II trainsets starting in 2009 and respectively. Railways also offer superior energy efficiency, consuming just one- the completion of the second phase of the high-speed sixteenth the fuel needed to move line in 2010 will further shorten travel time to under passengers and freight via passenger car and truck. two hours.

Today, KTX is spurring regional growth along its rail corridor as individuals and businesses take advantage of the new opportunities this fast, affordable high- speed rail service is creating.

Social Sustainability Roughly half of Korea’s population lives in the Seoul metropolitan region due to the unique business, educational, and cultural opportunities the capital provides. Our KTX service is proving to be a catalyst for growth and investment in the communities it serves, spurring renewed interest in regional development.

16 + 17 Excellence in Service

Ticketing Convenience After the Home Ticket and e-Ticket service in 2005 and ‘SMS Ticket’ in 2006, the ‘Mobile Ticket’ service is open for the first time in the world, where tickets can be booked and purchased through mobile phones. We continue to develop and adopt Our Future is alternative payment methods to make Satisfying it as easy as possible to travel by rail.

Since“ Korea Railroad Corporation was The number of customers served is an important incorporated back in 2005, we have made great strides benchmark in analyzing the performance of any service in improving customer service. In 2007, we topped the transportation sector on the business. Between April 2004 and March 2009, our KTX Korean National Customer Satisfaction Index for the service carried over 170 million passengers without a first time with a score of 75, up from 64 in 2005. Traveling Convenience While this recognition is gratifying, we won’t be major incident. While this number is impressive, we realize We make travel connections easier with satisfied until we have achieved a perfect satisfaction that the public has a variety of transportation options at shuttle bus services to major KTX rating and made rail travel the most comfortable and stations. We partner with Kumho Rent- their disposal. This is why we continue to upgrade our convenient way to travel. a-Car to meet the needs of travelers who value proposition with innovative services and amenities. require more mobility at their Baek” Sang Hoon destinations. We also provide Passenger Services, KTX Steward In November 2007, we became the first Korea-based complimentary departure-to-destination assistance and special seating for the company in any sector to acquire QualiCertTM‚ service disabled on all KTX trains. certification from Swiss-based SGS for our KTX high-speed rail service and stations. And we continue to listen to our customers as we strive to make the rail travel experience as comfortable and enjoyable as possible.

Touring Convenience To satisfy passengers’ increasing desire for leisure activities, Korea Railroad Corporation operates various thematic tourist trains such as wine train, MTB train (mountain bike train), ski train, and seaside train. In addition, Korea Railroad Corporation offers a running cinema train (KTX cinema) and the exclusive sightseeing Lady Bird Train, and it is also offering hotel type train exclusively for tourists like Rail Cruise Haerang and more.

18 + 19 About Korea Railroad Corporation At Korea Railroad Corporation, we work around-the-clock to keep Korea connected. From our intra-city passenger, metro transit, and freight logistics services to property development and other Keeping Korea businesses, we’re making our part of the world a better place. And whether it’s helping people commute to work, businesses get Connected their products to global markets, or reuniting families, we’re committed to becoming a world-class diversified transportation group as we connect Korea to the future.

Major Businesses ● Passenger and freight rail transport ● Intermodal passenger and freight transport ● Rolling stock maintenance and leasing ● Rail infrastructure repair and maintenance services ● Station and rail right-of-way property development ● Travel services and tours ● International consulting and services

Seoul-Busan Travel Time in hours and minutes

1900s 14:00

6,909 1940s 9:00

1950s 7:00

1960s 4:45

1980s 4:10

128 Freight 1,053 2000s 2:40

2010s <2:00 2,471 Metro transit 1,631

206 Other intra-city 1,360 Revenue Share by Business Segment in percent KTX intra-city 2006 2007 2008 104 2,865 Daily Passenger & Freight Revenues in KRW millions Transportation 73 75 77 Other Services 27 25 23

Passengers Served Transportation Services Revenue Breakdown in millions in percent 2006 2007 2008 2006 2007 2008 KTX intra-city 36 37 38 KTX intra-city 41 42 41 Other intra-city 78 73 75 Other intra-city 24 21 20 Daily Passenger & Freight Traffic Metro transit 855 879 902 Metro transit 21 22 24 in thousands of people and tons Total 969 989 1,015 Freight 14 15 15

20 + 21 Passenger Services Bringing Korea Closer

In 2008, our four intra-city passenger services transported over 113 million people. Since 2004, our KTX high-speed rail service has shuttled passengers between Seoul and Busan in just 2 hours and 40 minutes, making same-day return travel possible from anywhere in the nation. And travel will be getting even faster when we start rolling out our new KTX-II trainsets in 2009 and complete the Daegu-Busan section of the high-speed line in 2010.

But transportation networks aren’t just about speed and punctuality. For most of our history, we’ve played a major role in connecting villages and towns across Korea to KTX Rail Network major urban areas with our Saemaeul, Mugunghwa, and Standard-Speed Segments: Phase 1 Standard-Speed Segments: Phase 2 Tonggeun services. We’ve also created special rail tours High-Speed Segments: Phase 1 High-Speed Segments: Phase 2 to help people connect with their favorite leisure Main Stations pursuits. So whether you’re traveling or just sightseeing,

we can take you wherever you want to go. Goyang Site

Seoul Rail Tours

In addition to our scheduled intra-city rail services, we operate a number of Gwangmyeong themed rail tours in connection with regional festivals, seasonal leisure activities such as skiing and mountain biking, and the board and lodging Cheonan-Asan within the train, including culture events.

Visitor Travel Discounts(KR-PASS) Daily Statistics Daejeon Visitors to Korea are eligible to purchase the KR-Pass, a special discounted Seodaejeon KTX Passenger Service Standard Passenger Services ticket that allows unlimited use of KTX and standard rail services for periods Dongdaegu Trains: 140/181 on weekdays/weekends Trains: 455/460 on weekdays/weekends of 3, 5, 7, or 10 days. Gyeongju Passengers: 104,200 Passengers: 205,700 Iksan Revenue: KRW 2,865 million Revenue: KRW 1,360 million International Connections Busan Site We have joined JR of Japan and ferry operators to offer substantial discounts Masan to travelers who book their Korea-Japan itinerary on a single ticket. We also KTX & KTX-II Trainset Facts Busan Gwangju offer discounts to KTX travelers making ferry connections between Busan and KTX KTX-II Fukuoka as well as Mokpo and Jeju Island. Operating speed 300 km/h 300 km/h Train length 20 cars, ~388 meters 10 cars, ~201 meters Yeosu Mokpo Total seats 935 363 First class seats 125 30 Standard class seats 810 333

22 + 23 Metropolitan Transit

Shortening the Daily Statistics

Pyeongyang Trains: 327 on weekdays Commute Freight: 130,000 tons Revenue: KRW 1,053 million

Container Yards

Bongdong Munsan Seoul Donghae Our ten-line, 370km transit network carried over 882 Obong million commuters in 2008. Connecting Incheon, Cheonan, and other cities in and surrounding the Seoul metropolitan area, the network offers convenient transfers between the capital’s bus and subway Daejeon networks under a unified fare system. We plan to introduce a new generation of quiet, comfortable, and safe trainsets on ten new lines totaling 353km Dongdaegu scheduled for completion through 2015.

Busanjin

Gwangju

Soyosan Existing Lines Lines in Construction Gwangyanghang Planned Lines Mokpo Munsan

→ Chuncheon

Sungsan

Cheongyangni Guksu Freight Logistics → Incheon Incheon Over the past century, our rail network has been the International Airport Streamlining the backbone of Korea’s logistics infrastructure. In 2008, our modern 191-station network handled 47 million tons of Yeoju Suwon Distribution Chain freight. Focusing on tailored block-train services, we offer dependable, cost-effective nationwide transport with advanced real-time tracking and shipment

↓ Cheonan / Shinchang scheduling services available via the Internet. If the Iron Silk Road comes true, Korea Railroad Daily Statistics Corporation’s physical distribution business will be

Trains: 2,079/1,643 on weekdays/weekends vividly noticed. Passengers: 2.47 million Revenue: KRW 1,631 million

24 + 25 Korail Logis Co., Ltd. www.koraillogis.com Provides dock-to-door container transport through a nationwide network of 323 freight yards as well as freight forwarding, less-than-containerload vanning and devanning, and third-party logistics services. Founded: Dec 2003 | Ownership: 69.5% | 2008 Revenues: KRW 67,402 mn

Korail Tourservice Co., Ltd. www.korailtours.com Provides full-service domestic and international travel planning services with a special emphasis on domestic rail tours as well as handling KTX on-train passenger service and concession sales. Founded: Aug 2004 | Ownership: 51% | 2008 Revenues: KRW 47,490 mn

Korail Networks Co., Ltd. www.korailnetworks.com The membership business with Smartcard and Korea Railroad Corporation’s infrastructure, affiliate marketing business, VAN business, transportation card Other Businesses business, electric ticket business, passenger ticket business, customer’s service center In addition to our core passenger and freight service and the development of general station building business, the parking lot business using the unemployed, labor commission business are being improved to bring more operations, we are strategically expanding our comfort. Leveraging Our business scope to encompass property development, Founded: Sep 2004 | Ownership: 91.47% | 2008 Revenues: KRW 51,601 mn business incubation, leisure and culture, and IT Korail Retail Co., Ltd. services. These and other businesses that leverage our www.korailretail.com Strengths Manages all station and on-train retail operations, including Storyway convenience existing resources and core competencies will play a stores, Train Shop gift stores, and retail space leasing. Founded: Dec 2004 | Ownership: 100% | 2008 Revenues: KRW 225,853 mn crucial role in expanding our revenue base in the coming years. And we are offering clients various Korail Tech Co., Ltd. www.korailtech.kr services and being a general life service enterprise. On the railway crossing, train safety travel’s support business is in operation through safety control, electricity, railway vehicles, structure safety diagnosis, etc. Also with the maintenance methods of high quality and low expense, development of practical Property Development technology in each field is bringing advance. Property development project is in operation to develop railroad stations Founded: Dec 2004 | Ownership: 100% | 2008 Revenues: KRW 30,944 mn including its surroundings, to bring a better quality of life on the residents and bring more comfort on the use of railroad. The representative development project on Yongsan International Business Zone is the largest construction project to be built on , it is deemed as the first largest development project in Korea to build many complexes including a general establishment for international business affairs, commerce, culture, residing facilities, etc, and in here, the highest building within the country of a height of 665m is planned under construction. Apart businesses like from this station building development, site development area along railroads, capital station building constructions, and more are propelled. Affiliates Business Incubation Having the railroad infrastructure as the basis, fishing reef labor business, KTX character business, waste oil recycling and sales business, theme train and pension businesses are in operation. Specializing in Value Leisure & Culture We strive to maximize the value of our existing assets by marketing scenic The Korea Railroad Corporation Group currently includes five stations and unused rail lines as tourist attractions. other companies that support us in our mission of providing

IT Services our customers with world-class passenger and freight We are leveraging our IT infrastructure to build a collaborative network with services. In 2008, our affiliates continued to make strong our affiliates that will expand our business opportunities. revenue gains, growing over 17% for the year.

26 + 27 Good Times

Shared Dreams

Precious Memories

Good Times Tender Embraces

Pleasant Welcomes Rail travel holds a special place in the hearts of Koreans. Many of us have fond memories of riding the train home during the 1960s and 1970s when the “Miracle on the Han” was in full swing. We’ve fallen in love with the automobile since then, but there’s something about trains that makes us long for home whenever we see one. It’s a familiar and reassuring feeling that we strive to give our customers every time they ride with us. Everyone has dreams. Some are big, some are small. But all are important. Whether it’s salespeople on their way to pitch a big deal, newlyweds headed off on their honeymoon, or underprivileged kids taking their first train ride, we take pride in helping our customers quickly, comfortably, and safely get to where they want to go in life. Most of the time, people simply travel to get from point A to point B. But when the journey itself becomes part of the experience, the trip is all the more memorable. From cinema cars showing the latest blockbusters, to special train tours for wine lovers, coastal sightseers, mountain bikers, and skiers, we’re giving people another reason to take the train. There is a lot of fun on the rail. The beautiful landscapes outside the train window bring calmness and smile, and special cultural experiences and rests are remembered as to be comfortable. Rail Cruise Haerang makes you meet Korea in a special way, Haerang leads to happiness. Many times, the best gift you can give your loved ones is to simply spend time with them. And there’s no better way to make every minute of your visit count than by taking the train. There’s no need to travel out of the city to an airport a couple of hours in advance and then wait in long check-in and security screening lines. No traffic jams to delay or stress you out. No weather to cancel or delay your reunion. Just more time to embrace life with those you love. Transportation is an extremely competitive sector. Innovations in Service We’re making it more comfortable and convenient to take the train. We’ve While rail services have traditionally enjoyed a reduced ticketing wait time by encouraging the use of automated ticket machines competitive edge over airlines because of their easier and paperless online ticketing services based on smart card and SMS text messaging technology, Mobile Ticket. We’ve consistently improved our on-time access, service frequency, and reliability, the explosion arrival performance, achieving a better than 97.5% rating for KTX services. We’re in private car ownership in Korea over past three building customer loyalty with our Korail Membership program that lets decades has given people the ability to travel anywhere customers earn mileage that can be redeemed for future rail travel and purchases from Korail affiliates. We’re also adding innovative train tour products to tap into on their own schedules. This freedom has also increased Korea’s fast-growing leisure travel market. traffic congestion and pollution to a point where the Innovations in Satisfaction public is looking for better transportation solutions. At the time of our incorporation in 2005, we scored an overall rating of 64 points on the National Customer Satisfaction Index (NCSI) survey, lagging behind the domestic airline industry’s 69-point average. In just two years, our NCSI score rose At Korea Railroad Corporation, we believe we have a 11 points to 75 to top the transportation segment. We expect our November 2007 golden opportunity to grow our core rail business by acquisition of QualiCertTM‚ service quality certification from leading Swiss-based auditing, certification, testing, and verification organization SGS Group—a first for providing superior safety, speed, convenience, and a Korea-based business—to serve as a catalyst for even greater gains in customer punctuality. We’re steadily increasing the frequency of satisfaction in the years ahead. our profitable KTX service, preparing to introduce our Innovations in Management next-generation KTX-II trainsets in 2009, and wrapping Over the past decade, we have progressively adopted essential business tools and up the second phase of our Seoul-Busan high-speed rail methodologies such as total productive maintenance, knowledge management, Six Sigma, and ERP (Enterprise Resource Planning). We have also restructured our line that will cut travel time to under two hours. On the human resource management system to equip and reward our people for freight logistics side, we’re focusing on intermodal and superior performance. Our efforts have earned us an overall Management Quality Award at the Korea Management Grand Awards for five years running from KMAC, block-train transport to move shipments faster and Korea’s leading business consultancy. more efficiently. Today, these and other innovations are preparing us for the next phase of growth that will make us a truly world-class rail operator in every way. Leaping Ahead Our Customer Service Pledge We promise to always: ● Put your safety first. 2008 ● Operate according service timetables. ● Do our best to make your trip a pleasant one. ● Promptly address and compensate you for service issues. ● Listen to your feedback to improve our service. Progress Through Innovation 2004 Enterprise Resource Planning

2000 Six Sigma Management Innovation

Learning the Basics 1999 Knowledge Revolutionizing Innovating for Management Processes Excellence 1997 Total Productive Maintenance

1994 Customer Satisfaction

28 + 29 Perhaps no other company in Korea comes in contact with more communities and more people on a daily basis than we do. Our 3,392km rail network gives us a nationwide presence that we are increasingly using to be a good neighbor.

Community service activities are an important way we demonstrate our respect for the public as we help regional communities grow. While monetary and in-kind donations are essential, we believe that investing our

Environmental Stewardship Community Service Korea Railroad Corporation considers the environment we all should enjoy. In 2008, Korea Railroad Corporation proclaimed Making Life Reaching Out to ‘ECO-RAIL 2015’, which defines the vision of low-carbonized green growth. Now, it is propelling Greener Communities Eco-Design, Eco-Operation, Eco-Investment. Korea Railroad Corporation is continuously arranging measures to reduce greenhouse gas and energy use and is realizing it. It is also expanding railroad’s electrification blocks gradually on railroad routes to depend less on fossil fuels. Korea Railroad Corporation time and effort in these communities is even more joined the UN Global Compact in 2007, and in 2008 joined important. It is our aim to make a meaningful and UNEP’s affiliated organization GRI(Global Reporting lasting difference as we work steadily and Initiative), publishing its first report. systematically to meet the needs of our neighbors through our Korail Welfare Service organization.

Established in April 2006, Korail Welfare Service operates from our Daejeon headquarters, coordinating with some Carbon Emissions in tons per million km Railways 442 local service teams and over 19,000 employee Road Vehicles Passengers 10.6 volunteers to meet the needs of the disadvantaged in 26.2 local communities nationwide. Our programs span the 5.9 Freight 71.9 gamut from matching grants on employee “Love-Fund” donations, shut-in visits, special train tours, youth Energy Efficiency in kcal per km counseling, and winter homeless shelter placement to

Passengers 76 seasonal planting and harvest assistance, home repairs 1,192 and improvements, and community kitchens. We also Freight 106 1,674 work closely with local and national service organizations such as the Red Cross and Habitat for Humanity to support disaster relief, blood drives, and community pride initiatives.

30 + 31 People & Technology Although our rail services may currently be limited to the southern half of the Korean peninsula, our 110 years of Investing in experience in the field and successful entry into the high- speed rail club in 2004 have made us an increasingly Tomorrow influential member of the global rail industry. Today, we network with and source from a number of international rail authorities and partners through our liaison offices in Tokyo, Beijing, and Paris. Our international profile has soared since we launched

At Korea Railroad Corporation, we believe that people International Activities are our biggest asset. Our human resource management system is designed to progressively and systematically equip each employee to excel in their Working with area of responsibility. These efforts are enabling us make life-long customers as we lay a solid foundation the World for sustainable growth going forward.

In November 2005, we set up the Research & Development Center to take our technical capabilities to the next level. We’re now working on advanced rail technologies such as distributed traction control for our KTX high-speed rail service in April 2004. In 2006, it 400 km/h trains and active tilt control for tilting trains successfully hosted the 1st Asia Railway Summit in Seoul as we expand the marketing of our railway solutions in cooperation with the Union Internationale des Chemins and services to global markets. In the coming years, de fer (UIC). One year later, the President of Korea Railroad we’ll be focusing on next-generation breakthrough Corporation was elected as the first Chairman of the technologies as we study and address the operational newly launched UIC Asian Regional Assembly. challenges ahead in the age of transcontinental rail On the other hand, in May 2008, Korea successfully held transport and establish ourselves as a global the World Congress on Railway Research (WCRR), UIC innovator in the field. general assembly, and UIC Asian Regional Assembly. And in the same period IRaTCA was established for Asia’s promotion of railroad development and international co-operation. Korea Railroad Corporation also is working abroad. From 2007 it has begun a business in Malaysia with electric car’s maintenance consulting business, in Libya with commissional education for railroad staff, and in United States, Brazil, UAE, Nigeria with railroad construction, management and maintenance, information system, and education consulting.

32 + 33 Connecting People

At Korea Railroad Corporation, we know how to bring people together. Whether it’s helping families travel to their hometowns. Business people clinch important deals. Or even kids visit their grandparents. But the most rewarding thing is when our service puts smiles of satisfaction on the faces of our customers. Connecting to Life

At Korea Railroad Corporation, we have the opportunity to meet all kinds of people from across the nation and, increasingly, the world. Every community we serve is unique in some way. That’s why we’re proud to help enable the millions of everyday cultural exchanges that bring greater appreciation and enjoyment to life. Connecting to Tomorrow

At Korea Railroad Corporation, we’ve been around for more than a century now. And over the decades, we’ve steadily changed with the times to deliver new value to each new generation of customers. Today, we’re working hard to make rail travel Korea’s first choice for sustainable transportation. May 2008 World Congress on Railway Research (WCRR), UIC General Assembly, and UIC Asian Regional Assembly were held in Seoul Aug 2008 And the Next 100 Years of KTX exceeds 150 million passengers Oct 2008 Proclamation of the vision ‘ECO-RAIL 2015’ New Railroad Continues... Nov 2008 Declaration of a 100 persons for 100 years of railroad The time of Korea Railroad Corporation always flows towards future. The transcontinental railway beyond Asia and towards Europe, 2 hundred million customers using KTX, are results of ceaseless Apr 2004 Mar 2006 KTX service launched. Memorandum of understanding preparations and endeavors. signed with and Russia regarding the connection of the TKR and TSR. Korea Railroad Corporation prepares for the next 100 years and wishes one more dream. It is the dream of ‘World’s Best Korean Apr 2007 KTX service surpasses 100 million railroad’, where the whole nation consider it friendly and can Jan 2005 passenger milestone. Korea National Railroad May 2007 introduce it proudly. It is you, the partner of our dreams. incorporated as Korea Railroad South and North Korean trains make test Sep 1999 (Korail). runs across the border. Korean railroad centennial Oct 2007 anniversary. Agreement concluded on the operation of the South-North cargo train and repair of the Seoul- Sinuiju line during the “2007 South-North Summit” Dec 2007 Sep 1963 Priority bidder consortium selected for the Korea National Railroad Administration created Yongsan International Business Zone project. by the Ministry of Transportation. Dec 2007 Inter-Korea freight service resumes Jul 1900 (Munsan-Bongdong). Seoul Station opens. Jan 1905 Seoul-Busan rail services launched.

Sep 1899 Korea’s first rail line completed, linking Seoul’s Noryangjin district with Incheon. (33.2 km)