EBITDA forecast for the year ended 31 December 2007 and closing cash position guidance

We issued a Trading Update on 18 December 2007 which reported our contracted position for 2007, 2008 and 2009 in respect of power, coal and CO2 emissions allowances. In addition, we reported management’s expectation that EBITDA for the year ended 31 December 2007 would be around £500 million and that the cash position as at 31 December 2007 would be in the range £55 million to £60 million (together the “Forecast”). EBITDA was defined as profit before interest, tax, depreciation and amortisation, exceptional items and unrealised gains on derivative contracts.

In arriving at the Forecast, we took account of market prices as of 11 December 2007 for the uncontracted portion of power sales, and coal and CO2 emissions allowances purchases for the period to 31 December 2007. The Forecast also assumed that there would be no significant unplanned outages for the period to 31 December 2007.

Reported EBITDA of £506 million includes the impact on gross margin of a small improvement in dark green spreads between 11 December 2007 and 31 December 2007. The reported cash position as at 31 December 2007 was £60 million.