1Q 2010

Operating Performance

1Q 2010

Operating Performance

April 13, 2010April 13, 2010

▶ 1Q Operating Performance▶ 1Q Operating Performance

▪ Activities & Accomplishments

▪ Steel Industry Environment

▪ 2010 Business Plan

Figures provided in this presentation are based on unaudited financial statements of the Company.Certain contents in this presentation are subject to change during the course of auditing process.

3

Production · Sales

(in thousand ton)

--(32.8)(34.6)(31.1)(%)

1.3%75.2%452446258S T S

33.1%-318239-High-MillBlast Furnace △3.0%26.7%7,4587,6885,887

△10.9%32.2%2,4502,7491,853Export

’09.4Q QoQYoY

578

5,0257,4757,694

8,228

’10.1Q

32.9%

△3.3%

△5.9%

△4.1%

△1.7%

’09.1Q

△29.0%

22.5%

25.5%

32.6%

33.9%

435

5,196

7,945

8,027

8,373

814

4,102

5,955

5,802

6,145

Domestic

Crude Steel

Finished ProductF/P Sales Volume

F/P Inventory

Maintained full production · sales with improved market condition2.7Mt/m crude steel production & 2.5Mt/m product sales retainedSales volume dropped slightly due to scheduled maintenance of G) #2,3 HR

* Maintenance period : G) #2 HR (Jan 11th ~ 17th), #3 HR (Feb. 2nd ~8th)

4

Sales by Product

(in thousand ton)

△5.9%25.5%7,4757,9455,955Total3.8%29.6%324312250Others

△1.0%16.4%503508432Wire Rod0.7%64.0%3,1483,1261,920Cold Rolled

△0.4%36.6%239240175Electrical Steel

’09.4Q QoQYoY

411

1,1201,730

’10.1Q

1.0%

△8.3%△18.8%

’09.1Q

70.5%

△12.9%4.8%

407

1,2212,131

241

1,2861,651Hot Rolled

Plate*

S T S

* Includes HR Plates

* compared to the peak (’08.2Q)

CR, STS increased due to strong demand industry (auto, appliance)(%)Utilization Ratio by Industry* (Domestic)

’09.1Q 4Q ’10.1Q

Automobile Home Appliance Pipe Shipbuilding

72100 96 85 86 94

61100 100

82 92 84

’09.1Q 4Q ’10.1Q ’09.1Q 4Q ’10.1Q ’09.1Q 4Q ’10.1Q

5

Income Summary

(in billion KRW)

△6.8%133.4%1,9862,130851※ E B I T D A

’09.4Q QoQYoY

1,437

20.8%

1,447

5,155

6,950

’10.1Q

12.7%

-

△8.8%

△3.9%

△4.6%

’09.1Q

342.2%

-

287.9%

△11.4%

7.4%

1,275

21.8%

1,587

5,366

7,288

325

5.8%

373

5,816

6,471

OP Margin

Revenue

CoGs

Operating Income

Net Income

Over 20% op. margin maintained with higher export price, etc.

706672614574742Export (U$/t)

2,607

798’10.1Q

2,610

7924Q

2,561

7833Q

2,292

8102Q

2,648

987’09.1Q

S T S

Carbon Steel

Average Sales Price

(in thousand KRW/t)

6

12.7%-

--

1,733.3%0.8%

-

-

△8.8%-

3.6%

△6.7%-

△4.6%QoQ

287.9%-

1,447(20.8%)

1,587(21.8%)

373(5.8%)

Operating income(OP Margin)

22.6%347335283G G & A

’09.4Q YoY

1,437(20.7%)

△16855

1349

265

1,794(25.8%)

6,950

’10.1Q’09.1Q

342.2%-

-47.8%

△54.6%-

50.0%

636.1%

173.5%-

7.4%

1,275(17.5%)

△4-3

133△67

△65

1,922(26.4%)

7,288

325(5.0%)

△1746

121△120

6

36

656(10.1%)

6,471

Interest incomeDividend incomeEquity method gainFX related gainOthers

Revenue

Gross income(Gross Margin)

Non-op income (expense)

Net income(Profit Margin)

(in billion KRW)

Summarized Statement of Income (Parent Only)

7

Financial Structure

(in billion KRW)

--28.9%29.2%35.1%※ Debt / Equity

1.9%15.1%27,58327,07523,968Non-current

Current

’09.4Q QoQYoY

31,928

6,162

9,239

13,584

41,167

’10.1Q

3.2%

0.8%

2.2%

5.2%

2.9%

’09.1Q

15.9%

△11.5%

△4.6%

2.4%

10.6%

30,951

6,113

9,042

12,918

39,993

27,555

6,960

9,680

13,267

37,235

Debt

Assets

Liabilities

Equity

* 1Q major cash outflows (in billion KRW) : payment of dividend (500.7), payment of corporate tax (118.6)

Remain sound as asset grew over 40tn KRW & leverage dropped

8

△3.1%△4.2%6,1586,3566,427Long-term liabilities

2.5%13.9%17,06216,64614,978Fixed assets

13.4%△36.1%3,3982,9965,319Inventory

4.1%△3.0%2,7932,6842,879Notes receivable

2.9%

3.2%

0.8%

14.7%

2.2%

2.9%

1.0%

1.9%

△1.8%

5.2%

QoQ

Interest bearing debt △11.5%6,1626,1136,960

10.6%41,16739,99337,235Total liability & Equity

Investment securities 17.8%10,31110,2138,755

Cash equivalent assets 40.6%6,6336,7544,717

10.6%41,16739,99337,235Total assets

’09.4Q YoY

31,928

3,0819,239

27,583

13,584

’10.1Q’09.1Q

15.9%

△5.3%

△4.6%

15.1%

2.4%

30,951

2,686

9,042

27,075

12,918

27,555

3,252

9,680

23,968

13,267

Current liabilities

Current assets

Long-term assets

Liabilities

Equity

(in billion KRW)

Summarized Statement of Financial Position (Parent Only)

9

Consolidated Financial Summary

(in billion KRW)

7441

115’09.4Q

8141

122’10.1Q’09.1Q

111Total

74Overseas37Domestic

8,373206206

’09.4Q8,228

208203

’10.1Q6,145

128172

POSCOZhangjiagang

POSCO SS

’09.1Q(in thousand ton)

Revenue increased due to solid market condition in steel sector

No. Consolidated Subsidiaries Crude Steel Production

3.4%16.0%32,74631,66428,227Equity3.7%∆1.8%19,34618,64819,707Liabilities

14.4%263.7%1,4511,268399Net Income

∆12.4%-

161.1%-

1,530(15.5%)

1,747(18.0%)

586(6.7%)

OP Income(OP Margin)

’09.4QQoQYoY

Assets

Revenue

52,092

9,881

’10.1Q

3.5%

1.7%

’09.1Q

8.7%

12.4%

50,312

9,715

47,934

8,788

B/S

I/S

10

Consolidated Financial Summary

(in billion KRW)

1,747

1,689128

218

’09.4Q

9,715

11,2432,541

209166

’09.4Q ’10.1Q’09.1Q’10.1Q’09.1QSteel

E & CEnergy

IT & Others9,881

11,0841,840

209217

Consolidated 1,530

1,581681813

5868,788

348522414

9,4061,615

111145

OP IncomeRevenue

Financial Structure by Sector

52,4135,9932,2671,614

’10.1Q’09.4Q’10.1Q’09.4Q’10.1Q’09.4Q

32,746

36,8402,217

850712

31,664

35,8422,175

637519

Equity

SteelE & CEnergy

IT & Others52,092Consolidated 19,346

15,5733,7761,417

90218,64850,312

14,9533,9471,111

745

50,7956,1221,7481,264

LiabilitiesAssets

Income by Sector

(in billion KRW)

* Includes inter-company transactions

▪ 1Q Operating Performance

▶ Activities & Accomplishments▶ Activities & Accomplishments

▪ Steel Industry Environment

▪ 2010 Business Plan

12

Expand capacity & strengthen market base

Domestic capacity expansion- P) New steelmaking plant (~Sept.’10, progress 77%) : capacity increase (4.65Mt/yr, +195Mt)

- G) New plate plant (incl. steelmaking) (~Jul.’10, progress 91%) : capacity increase (+2Mt/yr)

- G) #4 BF achieved 5Mt/yr capacity : 15,613t/d, new world record

Strengthend long-term · stable sales base- Reinforce marketing to secure domestic market share : 47% (’09) → 50% (’10 target)

· Promote field sales activities, revise marketing strategies for each industry

- Expand sales to core · large customers : 12,519Kt (’09) → 14,180Kt (’10 target)

· Long-term contract with major customers, provide better service (lead time, A/S, etc.)

Strengthened market dominance for high-value-added products- Awarded ‘supplier of the year’ from global top automakers : GM (Mar, 3yr straight), Honda (Jan)

- EVI activities with automakers in emerging countries : Iran Saipa, Malaysia Proton· MOU to participate in new model development (Jan) : apply HVA product (TWB, Hydroforming, etc.)

Activities & Accomplishments

13

Invest for global growth

Accelerate overseas upstream projects- India Orissa integrated mill : 1st stage 4Mt (total 12Mt planned)

· Awaits supreme court’s final ruling for PL, groundbreaking to start during 2H’10

- Indonesia integrated mill J/V : 1st stage 3Mt (total 6Mt)· Investment incentives negotiation w/ gov’t in progress, set J/V (May~Jun), groundbreaking (Sept)

Expand downstream facilities & sales bases- Start construction of India CGL (Mar.’10 ~ May.’12) : automotive steel 450Kt/yr

- Expand SCM : start construction of US Alabama AAPC, China Tiangin CTPC#2 (total 42 1Q/e)

- Enhance sales network : open Thailand POSCO-South Asia (Apr), Egypt Cairo Office (Apr)

Invest in raw material mine development - Australia Roy Hill project : 1st acquired coversion right for 3.75% stake, total 15% planned

· Expect to increase self-sufficiency ratio with 10Mt/yr of iron-ore procurement (’14~)

Activities & Accomplishments

14

Promote new growth & green business

Lay basis for comprehensive material business- Joint study with MLTM & KIGAM* on commercialization of marine Li. extracting tech. (Feb)

- Signed MOU with RIST & Gangneung City for developing new Mg. smelting tech. (Mar)

- POS-HiMetal start construction of Fe-Mn plant in Gwangyang (Apr) : 75Kt/yr (~Sept.’11)

Invest in group synergy business - Sign share transfer agreement w/ Sungjin Geotec (Mar) : 40.5% stake *subject to BOD approval

· Enhance E&C sector competency with equipment manufacturing specialty & global network

Promote green growth business

- Set target to cut CO2 emission by 9% per ton of crude steel by 2020 (vs.’07~’09 avg.) (Feb)

· Reduce through gas-combined-power-generation, next-generation new steelmaking tech. etc.

- Sign MOU with KAERI* to cooperate on nuclear technology (Mar)

· Joint study on atomic-hydrogen-production-system, atomic materials* MLTM : The Ministry of Land, Transport and Maritime Affairs, * KIGAM :Korea Institute of Geoscience and Mineral Resources * KAERI : Korea Atomic Energy Research Institute

Activities & Accomplishments

15

Strengthen cost & technology competitiveness

1Q cost saving : 322.3bn KRW (progress 28%)

- Major activities : expand use of cheaper RM and by-products, etc.

R&D investment for technology leadership - Expand development · sales of World Best & World First product : 995Kt, OPM 26% (1Q)

· Heat-treatment free oil tubular API N80, Corrosion-resistance high Cr STS for exhausts, etc.

- Develop low-cost·high-quality technology : 15 cases (1Q), expected savings 92.9bn KRW· Low-cost·high-quality coke production increase tech., Scale free tech of ultra-thin HRc., etc.

2007 2008 2009 2010(target)

(in billion KRW)

Raw Material905.9

Maintenance70.8

Energy78.8

Outsourcing, etc.94.5

322.3(result)

828.7 738.2

1,150.01,359.51,112.1

2006

Cost Savings Results & Target

Activities & Accomplishments

16

No. 1 on most competitive company ranking (WSD, as of ’10 Jan.)

- Reclaim 1st rank in 6 years after ’04 (perfect score in 6 categories among 23 criteria)

42nd Annual General Meeting of ShareholdersEnhance group management & corporate governance - Restructure group organization into growth · customer · technology oriented structure

- Adjust BOD size for efficiency : No. of directors 15 (inside 6, outside 9) →13 (inside 5, outside 8)

Pay dividend of KRW 8,000/share (include interim)

- Payout Ratio : 19.4%, Dividend Yield : 1.29% (based on ’09/e share price)

capa. expansion, high growth mkt., low labor cost327.20Baoshan83

strong financials, advanced tech, low cost357.84POSCO12

capa. expansion, high growth mkt., RM sufficiency147.41SAIL220strong downstream, low country risk, advanced tech.247.28Nucor66

production size, M&A·J/V strategy, cost saving1297.10A-Mittal124Strong downstream, domestic mkt dominance, labor376.76NSC1921

Key competitivenessShipment(Mt/yr)

Score’10

Company’09

Rank

Activities & Accomplishments

17

Activities & Accomplishments

Preliminary Bid for Daewoo International

Introduction- Bidding stake : 68.2% stake (KAMCO, etc.), range : 50%+1share ~ 68.2%

Overview of Daewoo International (Business Division)

- Trading : No.1 revenue among peers in Korea (KRW1.1bn in ’09, 60% from steel/metal related)

- E&P : 15 projects including Myanmar LNG, Madagascar Nickel, Australia Bituminous coal

- Other : 24 investment businesses including 24% stake in Kyobo Life Insurance

Synergetic Opportunities- Strengthened overseas marketing competency : strong sales network in emerging market

- Enhanced group growth synergy: promote package deal, resource development business

Timeline- Preliminary bid (Mar.15th) → Select final bid candidates (POSCO, Lotte, Ji-Han consortium) (Mar.26th)

→ Pre. due diligence (Mar.26th~Apr.22nd)→Final bid (Early May)→Select Preferred Bidder (Mid May)

18

(POSCO Power)

(POSCO ICT)

SteelSteel

E&CE&C

EnergyEnergy

ICTICT

(POSCO E&C)

POSCO SS, Invest in Vietnam electric furnace project- To produce 1Mt/yr of long product (target to receive local investment admission by Apr ’10)

POSCO C&C, found R&D center to develop core surface treatment tech- Key study area : steel product for LED, displays, AL-STS for auto exhausts, etc.

Receive order for Chile Santa MariaⅡ400MW coal power plant (U$ 700mn)

Receive order for Cambodia Vattanac Capital Tower Project (U$ 66mn)

Lay foundation on building Smart Grid infrastructure business - Collect business reference by running test complex in Jeju (Feb.’10 ~ May ’13)- Establish Smart Industry for G) hydrogen plant (Feb.’10 ~ 1H ’13)

Promote business on safety-control-facilities for nuclear power plant- Seek to sign contract on supplying Ul-Jin #1,2 facility

Construction of Incheon power plant (1st 1,200MW, 2,400MW ~’15)- Period : Dec.’08 ~Jun.’11, progress 86.2%

Accelerate fuel-cell business - Start construction of Stack plant (100MW/yr - Full Capacity) (Apr 7th ’10)

Subsidiaries’ Key Activities

▪ 1Q Operating Performance

▪ Activities & Accomplishments

▶ Steel Industry Environment▶ Steel Industry Environment

▪ 2010 Business Plan

20

-60-40-20020406080

'09.1 3 5 7 9 11 '10.1

Global Steel Market Trend & Outlook

Prod’n · utilization ratio increased, steel price surged since March

Demand to stay firm globally, expecting over 10% increase

Demand Trend in Major Countries

* WSD (Mar.’10), Eurofer(Feb.’10), POSRI(Mar.’10)

5~8%570~585542435China14%635551India

1,117

12266

2009

10~14%1,230~1,2701,200World

2010 YoY2008

12%34%

13788

188110U.S

EU

Demand Forecasts by Countries(in million ton)

400

450

500

550

600

650

700

'09.1 3 5 7 9 11 '10.1 3-40

-20

0

2040

6080

100

'09.1 3 5 7 9 11 '10.1

* worldsteel (Mar.’10)

(%)

Crude Steel ProductionIncrease Rate (YoY)

80

Regional HRc Spot Price

Utilization Ratio

Crude Steel Prod’n & Utilization Ratio

* CRU, Mysteel (Mar.’10)

(U$/t)

E.U(Germany)

China(Shanghai)

U.S

6278

-24

2431

(%)

Steel demand increase rate (China)

S/C shipment increase rate (U.S)

* YoY

* MSCI, worldsteel (Mar.’10)

21

China Steel Market Trend & Outlook

Strong steel price to remain with economy growth & solid demandAnticipate quick economy growth : auto +13%, construction +6%, machinery +7% (YoY)

Expect 5~8% increase in steel consumption

Steel price continued rising due to RM price hike & lower inventorySpot price for iron-ore & coal rose quickly since MarchSteel inventory dropped for last 4 weeks : 19Mt (Mar 5th) →18 (Mar 19th) → 17 (Apr 2nd)

400

450

500

550

600

650

700

'09.1 3 5 7 9 11 '10.1 350

60

70

80

90

100

110

120

* Mysteel, CRU(Mar.’10)

Steel Price vs. Iron-ore Price Steel Demand Forecast

(in million ton)

542570

’08 ’09(F)

435

’10(F)

25%5.4%

3%

7.0%

585

8.0%

580

POSRIWSD SBB

*YoY

(US$/t) (US$/t)

Iron Spot Price(Left)

HRc Price in China(Right)

22

Domestic Steel Market OutlookSteel consumption to rise by 13% as consuming industry recovers

Consuming Industry Outlook

AutoAuto

Ship-building

Ship-building

Prod’n to grow by 7.5% w/ export recovery, despite weaker domestic mkt.- Auto production (in thousand unit) : 3,513 (’09) → 3,777 (’10)

Shipbuilding volume to decline due to order decrease & delivery delay- Shipbuilding (in million GT) : 29.3 (’09) → 23.9 (’10)

* POSRI(Apr.’10)

New capacity leads supply increase by 13%, import decreaseSupply & Demand Forecast (in thousand ton)

2008 2009 20101H 2H YoYApparent Demand 58,571 45,411 24,909 26,421 51,329 13.0%

Export 20,787 20,541 10,641 11,225 21,866 6.5%Production 64,357 56,919 30,633 33,642 64,275 12.9%

Import 15,001 9,033 4,916 4,004 8,920 -1.2%Incl. semi-products 28,941 20,581 9,607 9,313 18,920 -8.1%

* POSRI(Apr.’10)

HomeAppliance

HomeAppliance

Production to rise by 12.9% with strong domestic · export market - Production* (in million) : 21.9 (’09) → 24.8 (’10) * 5 Major products (LCD TV, Fridge, Laundry, etc.)

23

Raw Material

철광석 CoalIron Ore

Tight S/D due to rising demand in China- Demand grow in ex-China regions as well (EU)

- Spot price rise sharply with expectation ofeconomy recovery

Major 3 demanding quarter index pricing - Agreed on 2Q provisional price with Vale

: $110/t (+86%)

Tight supply and demand condition- Poor weather cause infrastructure issue in Aus.- Spot price kept rising with fierce competition

among steelmakers to secure volume

Quarter pricing for 2Q partly applied- HCC U$200/t (+55%), PCI U$170/t (+89%)

- Semi-Soft Coal in progress U$167/t (+109%)

-8

1,202

806

1,210

2012

-9-31210(b) – (a)

China

1,1171,020932846Demand(a)

1,017

652

2010

1,108944856

728623438

Supply(b)

2008 20112009

* Source : Macquarie Research (Mar.’10)

3

280

278

’12

Supply (b)

261245206223Demand (a)

-5

240

’10

-1--

261206223

(b) – (a)

’08 ’11’09(in million ton)(in million ton)

* Source : Macquarie Research (Mar.’10)

Iron Ore S/D Forecast Coal S/D Forecast

24

Stainless Steel Market Trend

Int’l price remains high due to RM pricehike & STS demand growth expectation- E.U : recovery mainly from auto, appliance- China : turned soft due to gov’t exit strategy- ’10.1Q price increase : E.U 25%, China 15%

Global market to improve as demand from E.U & America region recover

(U$/t)

’09.Jan Apr Dec ’10.Apr

2,300

2,140

3,2003,490

2,980

2,6103,000

China

E.U

Aug

2,800

Sept

1,8801,930

Nickel · Chrome

(in thousand ton)

Nickel- Accompanied by strong commodity market,

price rose sharply due to economy recovery &and expectation of strong STS demand

- Price to remain between U$23~25K/t in ’10

Chrome- S/D condition to improve w. demand driven supply - Price to rise from ’09 as processing cost increase

* Source : Macquarie (Mar.’10), CRU (Feb.’10)

Cr.285-84676494(b) – (a)

8,0475,7837,5447,692Supply (b)

7,7626,6296,7817,598Demand (a)

(b) – (a)

Supply (b)

Demand (a)

1,3791,3281,3921,40510

1,3182009

1,4321,2841,319Ni.

-53

2010

86

2007

108

2008

STS

STS CR Spot Price Trend Ni · Cr S/D Forecast

▪ 1Q Operating Performance

▪ Activities & Accomplishments

▪ Steel Industry Environment

▶ 2010 Business Plan▶ 2010 Business Plan

26

31.945.2

27.036.9

• Sales Revenue- Consolidated

32.428.4• Finished Product Sales

9.0*4.9• Investment

34.536.1

2010

• Crude Steel Production- Consolidated

29.531.1

2009

* Investment: CAPEX (4.9tn), Overseas Steel (0.8tn), Energy (0.3tn), Growth (3.0tn)

(in million ton, trillion KRW)

The data above represents the company’s internal objectives,thus should not be used as a basis for investment decisions.

2010 Business Plan (Financials)

1Q 2010

Operating Performance

1Q 2010

Operating Performance

April 13, 2010April 13, 2010