Interim Results Interim Results For the six months ended 31 October December 2009

Interim Results Definitions  Like-for-like amounts are derived, on a constant currency basis, by comparing the relevant year-to-date amount with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods.  Operating profit for a particular business unit or division within the Group refers to profit before net finance income/charges, taxation, intangible asset expenses, exceptional items and restructuring costs.  Operating margin for a particular business unit or division within the Group means operating profit as a percentage of revenue.  Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group.  Net debt is the net of cash and borrowings as reported on the consolidated balance sheet, adjusted to exclude any accrued interest and deferred gains on derivatives.

Interim Results Robert Speirs Chairman

Interim Results Highlights  Revenue growth in core UK divisions  Interim dividend of 2.0p, up 11.1%  Adjusted earnings per ordinary share down 25.6%  Reduced rail profit reflecting economic conditions  Above-inflation increases in fuel and pensions costs and significant premia payments to Government  Business is well placed to benefit from a recovery in economic conditions

Interim Results Martin Griffiths Finance Director

Interim Results Financial summary *Excluding exceptional items and intangible asset expenses Revenue - continuing operations Operating profit* - continuing operations Adjusted earnings per ordinary share* Basic earnings per ordinary share Net debt Dividend per ordinary share 31 Oct 0931 Oct 08 £1,081.4m £93.5m 9.0p 8.5p £(343.1)m 2.0p £1,045.0m £119.8m 12.1p 9.7p £(370.2)m 1.8p Change 3.5% (22.0)% (25.6)% (12.4)% (7.3)% 11.1%

Interim Results Summary income statement UK Bus operating profit North America operating profit excl megabus megabus North America operating loss UK Rail operating profit Share of joint ventures’ profit after tax Restructuring and group overheads Finance charges (net) Tax Profit excluding intangibles and exceptionals Intangibles and exceptionals, net of tax Reported profit from continuing operations 31 Oct 09 £m 31 Oct 08 £m (0.7) (6.2) (18.0) (11.1) 64.4 (7.7) (0.4) (8.2) (14.6) (18.9) 86.3 (16.9) 69.4 Change £m (2.0) (11.2) (0.3) (16.8) 2.0 (3.4) 7.8 (21.9) 9.2 (12.7)

Interim Results UK Bus  Continued underlying revenue growth  £8.6m increase in fuel costs and £4.0m increase in pension costs  Expected reduction in fuel costs in 2010/11  Flexible business model  OFT market review Revenue (£m) Like-for-like revenue (£m) Operating profit (£m) Operating margin Estimated like-for-like passenger journeys (m) Like-for-like vehicle miles operated (m) 31 Oct 0931 Oct % % Change 5.5% 4.4% (3.3)% (1.2)% (0.7)% (0.2)%

Interim Results North America  Excluding megabus, revenue down US$25.4m but costs down US$14.8m notwithstanding higher fuel cost per unit  Like-for-like revenue down 6.5%  Decisive action to reduce operating mileage and costs  Twin America joint venture performing to plan  US$12.5m dividends received  Expansion of megabus.com Wholly-owned, excluding megabus.com Share of Twin America Total excl. megabus.com megabus.com Total Revenue US$m Operating Profit US$m (1.1) 26.3 Operating Margin % 7.3% 31.2% 11.3% (5.5)% 10.0% Revenue US$m Operating Profit US$m 267.7* Nil Nil 38.0 (0.8) 37.2 Operating Margin % 14.2% n/a 14.2% (5.2)% 13.1% 6 months to 31 October months to 31 October 2008 *Includes US$47.5m for business transferred to Twin America from 31 March 2009

Interim Results UK Rail (wholly-owned)  Continued revenue growth  Increased payment to/decreased subsidy from Department for Transport  Significant cost savings  Additional revenue from special projects at Manchester Metrolink  SWT disputes hearing in February 2010 – decision by April 2010 Revenue (£m) Revenue excluding light rail (£m) Operating profit (£m) Operating margin South Western Trains estimated passenger miles (millions) East Midlands Trains estimated passenger miles (millions) 31 Oct 0931 Oct % 1, % 1, Change 5.4% 1.9% (53.0)% (3.6)% (2.4)% (6.3)%

Interim Results Virgin Rail Group  Number of services increased by approximately one-third from December 2008  Improvements in reliability of railway infrastructure  Step-up in infrastructure costs  Profit supported by revenue support Revenue - 49% share (£m) Operating profit - 49% share (£m) Operating margin Dividends received (£m) Estimated Passenger miles (millions) - West Coast 31 Oct 0931 Oct % 8.6 1, % ,378.0 Change 7.0% (34.0)% (4.7)% (55.7)% 21.2%

Interim Results Miscellaneous income statement items  Reduction in group overheads  Exceptional items include  a gain of £3.9m in relation to previous acquisitions & disposals  a gain of £4.3m on sale of properties  a loss of £4.1m on exit from certain operations  expenses of £2.7m in relation to proposal to acquire certain businesses of, or merge with, National Express Group plc Citylink joint venture (£m) Splash Tours joint venture (£m) Intangible asset expenses (£m) Group overheads (£m) Restructuring costs (£m) Post-tax exceptional items (£m) 31 Oct 0931 Oct (0.5) (5.7) (5.8) (0.4) (0.2) (6.5) (7.2) (1.0) (11.5) Change 28.6% 150.0% (12.3)% (19.4)% (60.0)% (108.7)%

Interim Results Finance charges and credit ratios Net Group finance charges (£m) Net finance charges, including net finance income from joint ventures (£m) EBITDA from continuing operations and joint ventures* (£m) - last six months - last twelve months Period-end net debt (£m) Net Debt/EBITDA (12 months)* EBITDA*/Net finance charges (including net finance income from joint ventures) 31 Oct 0931 Oct 08 (18.0) (17.9) x 8.3x (14.6) (13.0) x 12.0x Change 23.3% 37.7% (5.3)% (0.6)% (7.3)% (0.1)x (3.7)x *excluding exceptional items

Interim Results Liquidity & interest rate risk  Excellent liquidity  c.£525.3m of undrawn committed bank facilities at 31 October 2009  US$ bond redemption financed from existing facilities in November 2009  Key refinancing required by 2012  Other undrawn available credit lines – e.g. asset finance  Operating well within bank covenants  Encouraged by liquidity that was available to finance National Express opportunity  Cash generative  Planning for re-financing  Significantly higher margins for new UK asset finance  Likely step up in bank margins for refinancing  Debt capital markets offer longer maturities and reduced reliance on banks

Interim Results Taxation Excluding intangible asset expenses and exceptional items - Before joint ventures - Joint ventures Intangible asset expenses Exceptional items Reclassify joint venture taxation for reporting purposes Reported in income statement Pre-tax Profit £m Tax £m (5.7) (3.9) 71.2 (11.1) (3.9) 0.9 (14.1) (0.4) (14.5) 3.9 (10.6) Rate % 19.2% 18.1% 15.8% 19.1% 19.3% 14.9% 31 Oct 2009  Cash tax received was £10.6m

Interim Results EBITDA from Group companies before exceptionals Loss on disposal of plant and equipment Equity-settled share based payment Dividends from joint ventures Movement in retirement benefit obligations Working capital movements Net interest paid Tax received Net cash from operating activities Net capital expenditure including new hire purchase and finance leases Acquisitions of businesses, intangibles and investments Disposals of businesses and investments Movement in loans to joint ventures Token sales and redemptions Cash generation Foreign exchange/other Equity dividends Increase in net debt Opening net debt Closing net debt 31 Oct 09 £m (7.9) (53.0) (17.5) (71.6) (1.0) 1.6 (1.1) (30.1) (3.0) (340.1) (343.1) Movement in net debt

Interim Results Nil (3.5) (0.6) (11.7) (15.8) Capital expenditure UK Bus North America UK Rail New hire purchase and finance leases £m Impact of capex on net debt £m Disposal proceeds** £m Net £m Cash spent on capex* £m * Excludes capitalised intangible assets of £0.5m (2008: £3.1m) ** Excludes proceeds from selling businesses

Interim Results Defined benefit pensions  At 31 October 2009, the Group’s accounting post-tax net deficit was £177.2m  Rail schemes represent around 40% of pension assets and liabilities and is low risk  The Group’s main scheme is closed to new members  The accounting value of pension assets, liabilities and costs will continue to vary with market fluctuations and assumptions  Cash contributions expected to be more stable

Interim Results Fuel Hedging 2008/9- average effective price (per litre) 2009/10- % of forecast consumption hedged - average hedge price (per litre) 2010/11- % of forecast consumption hedged - average hedge price (per litre) 2011/12- % of forecast consumption hedged - average hedge price (per litre) Market price (per litre) UK Bus North America 32.0p 96.0% 46.0p 95.0% 35.9p 10.0% 37.2p 32.1p 63.1 cents 89.0% 82.4 cents 84.0% 50.5 cents 11.0% 54.2 cents 52.2 cents UK Rail 33.4p 77.0% 31.3p 76.0% 31.3p p Market prices are as at 20 November 2009 Prices excludes delivery margins, duty, taxes and Bus Services Operators’ Grant

Interim Results (202.3) 79.2 (123.1) (37.3) (5.0) (21.1) (186.5) (183.6) 78.3 (105.3) (27.9) (5.1) (21.4) (159.7) (179.4) 78.3 (101.1) (30.0) (5.1) (21.5) (157.7) Fuel costs Latest forecasts UK Bus, excluding BSOG* UK Bus, BSOG* UK Bus, including BSOG* North America South Western Trains East Midlands Trains Total 2009/10 Forecast £m 2010/11 Forecast £m 2011/12 Forecast £m Fuel costs (176.4) 75.9 (100.5) (32.8) (5.4) (20.0) (158.7) 2008/09 Actual £m Market prices are as at 20 November 2009, when Brent Crude was US$76 per barrel Forecast costs for the unhedged element of fuel are based on 20 November 2009 spot prices Above costs include delivery margins, duty and taxes (duty forecast at current levels) and exclude 3 rd party fuel costs *Bus Services Operators Grant (“BSOG”) represents a rebate of an element of fuel duty costs in respect of certain UK Bus Services

Interim Results Brian Souter Chief Executive

Interim Results Overview  Good performance despite downturn and step-up in costs  UK businesses - revenue growth ahead of inflation  Bus businesses - resilient and flexible business model  Management action to protect UK Rail business for the long-term  Excellent operational performance

Interim Results UK Bus  Resilient, flexible business model  Managed £12.6m in extra fuel and pensions costs  Strong industry-leading operating margin  Stable passenger volumes  Stable mileage  Sustained investment

Interim Results UK Rail  Focus on managing rail contracts  Revenue growth despite downturn  Early signs of improvement  Cost reduction programme  £70m recurring annual savings identified  Maintained excellent operational performance  Positive engagement with Department for Transport  South Western Trains contractual issues  Specific issues  Clear timeframe for resolution by April 2010

Interim Results North America  High unemployment levels impacting revenue  Decisive management action to reduce operating mileage and costs  Growth and further potential of megabus.com  Online bus sales – up 24% on 2008  Twin America joint venture positive development for New York sightseeing business

Interim Results Current trading and outlook  Current trading in line with management expectations  Balanced portfolio and resilient bus business  New, lean low cost rail model  Positive outlook for 2010/11  Reduced fuel costs  Entitlement to revenue support at South Western Trains  Pricing  Good shape for economic recovery

Interim Results Interim Results For the six months ended 31 October December 2009

Interim Results Appendices

Interim Results UK Bus Revenue Like-for-like Acquisitions: Highland excluding Inverness (acquired 16 May 2008) Preston Bus (acquired 23 January 2009) Eastbourne/Cavendish (acquired 18 December 2008) Stagecoach in Inverness* Start-ups: Rail replacement (started May 2008) Total reported Change % 4.4% 5.5% 31 Oct 2009 £m 31 Oct 2008 £m *Existing Inverness operations integrated with and now not distinguishable from Highland so Inverness excluded from like-for-like comparison

Interim Results Scheduled service/line run/commuter Charter School bus & contract Sightseeing & tour Like-for-like revenue excl megabus Closed/transferred operations and foreign exchange movements Total North America excl megabus megabus Total North America 31 Oct 09 US$m 31 Oct 08 US$m % Growth (8.0)% (10.7)% (9.3)% (10.0)% (9.1)% (97.5)% (24.8)% 30.5% (21.8)% North America revenue breakdown

Interim Results Divisional income statements Six months ended 31 October 2009 UK Rail £m (50.4) 34.6 (130.1) (15.4) (2.6) (14.7) (94.4) (2.3) (110.2) (19.4) (11.2) (31.8) (50.1) 14.9 UK Bus £m North America £m Nil 6.4 (219.1) (62.3) (15.7) (26.1) Nil (5.2) Nil (17.1) (35.0) Nil 1.6 (58.6) (20.2) (9.3) (9.8) Nil (3.0) Nil (9.6) (19.4) 8.3 VRG (100%) £m (36.3) 60.0 (67.1) (9.0) (1.4) (0.7) (105.4) Nil (77.1) (20.2) (22.4) Nil (42.0) 26.2 Revenue Rail franchise premia Other operating income (including revenue support) Staff costs Fuel costs (i.e. diesel) Insurance and claims costs Depreciation and impairment Rolling stock costs – lease & maintenance Other operating leases Network Rail Electricity for trains Commissions payable Material & consumables Other costs Operating profit

Interim Results Rail subsidy/(premia) profiles South Western £m East Midlands £m 21.1 (42.0) (96.3) (158.3) (228.1) (292.9) (357.7) (432.1) (429.4) (13.5) (32.4) (87.9) - West Coast £m Year to 31 March: The above amounts are subject to adjustment for: (1) various inflation measures (2) risks borne by the Department for Transport (3) called options and (4) changes in Regulated Network Rail charges. The amounts shown above are based on estimated inflation and options called to date. The amounts shown above do not reflect changes arising from changes to Network Rail charges for Control Period 4, which began on 1 April 2009, because these charges are not yet finalised.

Interim Results Exchange rates US$ C$ Closing rateAverage rate October 2008 Closing rateAverage rate October 2009

Interim Results Interim Results For the six months ended 31 October December 2009