Interim Results For the six months ended 31

Interim Results For the six months ended 31 October 2010 8 December 2010 Interim Results 2010

Cautionary statement This document is solely for use in connection with a briefing on Stagecoach Group plc (“the Group”). This document contains forward-looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries, sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forwardlooking statements in this presentation will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation. This document is not a full record of the presentation because it does not include comments made verbally by Stagecoach Group management or by others.

Robert Speirs Chairman

Highlights § Adjusted earnings per share up 35. 6% Revenue and operating profit growth in all divisions Strong organic growth with improving market conditions Excellent operational performance and customer satisfaction § Interim dividend of 2. 2 p, up 10% § Positive outlook

Martin Griffiths Finance Director

Summary income statement 31 Oct 10 £m 31 Oct 09 £m Change £m UK Bus (regional) operating profit 73. 3 58. 9 14. 4 UK Bus (London) operating loss (0. 1) Nil (0. 1) North America operating profit incl megabus 15. 1 8. 3 6. 8 North America joint ventures’ profit after tax 8. 8 7. 4 1. 4 UK Rail operating profit 22. 9 14. 9 8. 0 Virgin Rail Group profit after tax 10. 0 9. 3 0. 7 Restructuring costs, group overheads and other items (5. 3) Nil Operating profit 124. 7 93. 5 31. 2 Finance charges (net) (16. 0) (18. 0) 2. 0 Tax (21. 5) (11. 1) (10. 4) Profit excluding intangibles and exceptionals 87. 2 64. 4 22. 8 Intangibles and exceptionals, net of tax (1. 2) (7. 7) 6. 5 Reported profit from continuing operations 86. 0 56. 7 29. 3

UK Bus (regional operations) 31 Oct 10 445. 1 31 Oct 09 433. 0 438. 9 429. 2 2. 3% Operating profit (£m) 73. 3 58. 9 24. 4% Operating margin (%) 16. 5% 13. 6% Revenue (£m) Like-for-like revenue (£m) Change 2. 8% 290 bp Estimated like-for-like passenger journeys* (m) 334. 7 330. 5 1. 3% Like-for-like vehicle miles operated (m) 163. 2 167. 1 (2. 3)% First half performance Outlook § § § § § Modest fare rises, as planned Return to passenger volume growth Reduced fuel costs Other costs closely managed Sector-leading operating margin Modest revenue growth in second half Higher fuel costs in 2011/12 BSOG reduction in 2012/13 Flexible services and cost base Positive prospects notwithstanding short-term risks re government funding * Excludes inter-city coach services operated as a sub-contractor

Government spending & regulation Bus Revenue/ BSOG recognised in 2009/10 £m Area Developments Reaction Bus Services Operators Grant (“BSOG”) § 20% cut in England from April 2012 § Rate held for at least three years thereafter § No change as yet in Scotland/Wales § Better than some feared § Hedged fuel further out to protect “net” fuel costs § Factor into decisions on contract bids, fares and mileage 230. 0 UK Bus concessionary fares § No change to “no better or worse off” requirement § Government commitment to schemes § New Df. T guidance in England target to save costs Likely downward pressure on reimbursement § Responded to consultation § Challenge insufficient reimbursement rates § Factor into decisions on contract bids, fares and mileage 106. 3 Tendered bus services § Squeeze on local authority funding § Some authorities already planning cuts § Reduce costs where tendered revenue lost Competition Commission market study § Provisional findings expected January 2011 § Co-operating with study 80. 0 + London 20. 0 n/a

North America Revenue – wholly owned (US$m) 31 Oct 10 237. 3 31 Oct 09 221. 4 Revenue – joint ventures (US$m) 45. 4 41. 0 282. 7 262. 4 Operating profit – wholly owned (US$m) 23. 1 13. 5 Operating profit – joint ventures (US$m) 13. 9 12. 0 Operating profit – total (US$m) 37. 0 25. 5 Operating margin (%) 13. 1% Revenue – total (US$m) 9. 7% Change 7. 7% 45. 1% 340 bp First half performance Outlook § megabus. com revenue over 80% up § Stable revenue from other businesses § Reduced fuel costs § Higher fuel costs in 2011/12 § Further megabus. com growth opportunities § Ongoing recovery in other businesses

UK Rail (wholly-owned) Revenue (£m) Like-for-like revenue excluding tram (£m) Operating profit (£m) Operating margin (%) Estimated passenger miles - South Western Trains (m) Estimated passenger miles - East Midlands Trains (m) 31 Oct 10 525. 0 31 Oct 09 512. 9 505. 6 475. 0 6. 4% 22. 9 14. 9 53. 7% 4. 4% 1, 708. 4 647. 6 Change 2. 4% 2. 9% 150 bp 1, 635. 6 4. 5% 584. 8 10. 7% First half performance Outlook § Passenger volume growth in line with recovering economy § Revenue support at South Western Trains § Excellent punctuality and customer satisfaction § Awaiting final conclusions of rail refranchising review and Mc. Nulty study § No material financial effect on Group expected from change to RPI+3% fares regulation § East Midlands Trains revenue support from November 2011 § Could see reduced profit in subsequent years

Government spending & regulation Rail Area Developments Reaction Future of rail franchising § Strategy for implementing franchise reform announced 7 December 2010 § Announcements made on plans for specific franchises § Proposals for industry reform expected by November 2011 § Responded to consultation § Evaluating prospects Mc. Nulty study § Interim conclusions published 7 December 2010 § Final report expected April 2011 § Responded to consultation § Working with Mc. Nulty team § Supportive of efforts to reduce industry costs § Supportive of greater alignment of track and train § Analysing interim conclusions Fares regulation § Cap on increases in basket of regulated fares § Generally RPI + 1% moving to RPI + 3% for three years from 2012 § Agree changes to franchise payments with Df. T § Not expected to have material financial effect on Group

Virgin Rail Group Revenue - 49% share (£m) Operating profit - 49% share (£m) 31 Oct 10 195. 6 31 Oct 09 170. 4 13. 7 12. 8 Operating margin (%) 7. 0% 7. 5% Dividends received (£m) 7. 3 8. 6 Estimated Passenger miles (millions) 1, 790. 5 1, 594. 6 Change 14. 8% 7. 0% (50)bp (15. 1)% 12. 3% First half performance Outlook § Strong revenue growth § Improved Network Rail operational performance but still variable by day § Disappointment at Government decision not to extend franchise by two years § Good profit to franchise-end in March 2012 § Focus on bidding for new West Coast franchise – subject to understanding the detailed proposition from Government

Miscellaneous income statement items Citylink joint venture (£m) 31 Oct 10 1. 1 31 Oct 09 0. 9 Change 0. 2 Group overheads (£m) (5. 4) (5. 8) 0. 4 Restructuring costs (non-exceptional) (£m) (1. 0) (0. 4) (0. 6) (5. 3) Nil Intangible asset expenses (£m) (4. 4) (5. 7) 1. 3 Post-tax exceptional items (£m) 21. 2 1. 0 20. 2 Exceptional items: § £ 18. 5 m pre-tax gain – release of liabilities related to past business disposals § £ 4. 6 m pre-tax gain – pre-acquisition insurance provision no longer expected to be settled § £ 0. 6 m pre-tax loss – London Bus acquisition costs

Finance charges and credit ratios 31 Oct 10 Net Group finance charges, including net finance income from joint ventures (£m) 31 Oct 09 Change (15. 9) (17. 9) (11. 2)% - last six months 171. 7 147. 9 16. 1% - last twelve months 314. 9 300. 9 4. 7% (313. 4) (343. 1) (8. 7)% 1. 0 x 1. 1 x (0. 1)x 10. 8 x 8. 3 x 2. 5 x EBITDA from continuing operations and joint ventures* (£m) Period-end net debt (£m) Net Debt/EBITDA (12 months)* EBITDA*/Net finance charges (including net finance income from joint ventures) § Strong financial position § Ongoing evaluation of capital structure * excluding exceptional items

Taxation 31 Oct 2010 Pre-tax Profit £m Tax £m (26. 0) 0. 5 (1. 3) (26. 8) 4. 5 23. 0% 11. 4% 32. 5% 23. 8% Reclassify joint venture taxation for reporting purposes 113. 2 (4. 4) 4. 0 112. 8 (4. 5) Reported in income statement 108. 3 (22. 3) 20. 6% Excluding intangible asset expenses and exceptional items Intangible asset expenses Exceptional items Cash tax paid (net) 5. 8 Rate %

Movement in net debt 31 Oct 10 £m EBITDA from Group companies before exceptional items 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 paid Net cash from operating activities Net capital expenditure including new hire purchase and finance leases Acquisitions /disposals of businesses, intangibles and investments Token sales and redemptions/others Cash generation Foreign exchange/income statement movements Share capital movements Increase in net debt Opening net debt Closing net debt 147. 4 0. 7 2. 3 15. 5 (9. 2) (35. 0) (5. 1) (5. 8) 110. 8 (73. 7) (56. 8) (0. 9) (20. 6) 5. 7 (1. 8) (16. 7) (296. 7) (313. 4)

Capital expenditure Cash spent on capex £m UK Bus/Central North America UK Rail 47. 8 10. 9 19. 3 78. 0 New hire purchase and finance leases £m 5. 3 Impact of capex on net debt £m Disposal proceeds £m Net £m 53. 1 10. 9 19. 3 83. 3 (1. 4) (6. 8) (9. 6) 51. 7 9. 5 12. 5 73. 7

Pensions UK Bus/Central North America UK Rail 31 Oct 2010 Pension expense £m 31 Oct 2009 Pension expense £m 31 Oct 2010 Cash contributions £m 31 Oct 2009 Cash contributions £m 9. 4 0. 5 12. 2 22. 1 11. 8 0. 6 8. 1 20. 5 16. 6 0. 5 14. 2 31. 3 16. 7 0. 5 11. 2 28. 4 § Post-tax deficit of £ 80. 6 m (April 2010: £ 145. 7 m) § Accounting value of pension assets, liabilities and costs will continue to vary with market fluctuations and assumptions § Rail – risks mitigated with obligations limited to contributions payable over duration of franchises. Increase in contributions and expense reflects introduction of salary sacrifice scheme (with a corresponding reduction in salary costs) § Bus – schemes closed to new entrants and contributions have stabilised

Summary § Strong performance from all divisions Reflected in adjusted earnings per share up 35. 6% and dividend up 10. 0% § Management action and financial discipline underpin a strong business emerging from recession § Positive outlook for second half of financial year

Brian Souter Chief Executive

Overview § § § Strong financial position Strong organic growth across Group portfolio Improving economic environment Clearer picture on UK public sector spending Opportunities ahead: Maximise opportunities from commercial bus model Rail regulatory reform megabus. com expansion in North America

Growth strategy at UK Bus § Strong industry-leading margins and passenger growth § UK leader on commercial smartcard development § Turnaround plans at London bus Overhead reductions Business review Efficiency improvements

Rail recovery and reform § Strong revenue growth across all franchises § Cost control, operating performance and customer satisfaction § Significant opportunities from radical industry reform and better franchising

megabus. com: North America growth engine § Growing footprint and volumes in US and Canada § Focus of investment and redeployment of resources § Extension of successful hub concept § Stabilisation of non-megabus. com revenue

Current trading and outlook § Current trading in line with management expectations § Improving trends continue § Continued focus on organic growth and shareholder value

Interim Results For the six months ended 31 October 2010 8 December 2010

Appendices

Divisional income statements Six months ended 31 October 2010 Revenue Rail revenue support Rail franchise support Other operating income Staff costs Fuel costs (i. e. diesel) Insurance and claims costs Depreciation Rolling stock costs – lease & maintenance Other operating leases Network Rail Electricity for trains Commissions payable Material & consumables Other costs Operating profit UK Bus (regional) £m North America £m 445. 1 7. 8 (220. 0) (55. 5) (16. 4) (29. 7) (5. 3) (17. 2) (35. 5) 73. 3 155. 1 2. 1 (63. 3) (15. 7) (13. 7) (10. 7) (3. 8) -` (10. 8) (24. 1) 15. 1 UK Rail £m 525. 0 41. 5 (131. 7) 37. 2 (133. 7) (16. 7) (2. 7) (1. 7) (94. 4) (103. 4) (17. 0) (12. 6) (14. 9) (50. 6) 22. 9 VRG (100%) £m 399. 2 11. 8 (59. 2) 13. 2 (68. 3) (9. 7) (1. 3) (105. 8) (79. 3) (5. 0) (23. 2) (0. 7) (42. 0) 28. 0

UK Bus Revenue 31 Oct 2010 £m Like-for-like 438. 9 31 Oct 2009 £m 429. 2 Acquisitions: Islwyn Borough Transport (acquired January 2010) 1. 0 - Start-ups: Rail replacement South (started May 2009) 0. 6 0. 5 Preston Bus 4. 6 3. 3 445. 1 433. 0 Total reported Change % 2. 3% 2. 8%

North America revenue breakdown Scheduled service/line run/commuter Charter School bus & contract Sightseeing & tour Like-for-like revenue excl megabus Closed operations and foreign exchange movements Total North America excl megabus Total North America incl. megabus 60% share of Twin America Total North America incl Twin 31 Oct 10 US$m 31 Oct 09 US$m % Growth 96. 7 48. 3 38. 0 15. 0 198. 0 3. 0 201. 0 36. 3 237. 3 45. 4 282. 7 94. 3 49. 6 39. 6 14. 3 197. 8 3. 5 201. 3 20. 1 221. 4 41. 0 262. 4 2. 5% (2. 6)% (4. 0)% 4. 9% 0. 1% (14. 3)% (0. 1)% 80. 6% 7. 2% 10. 7% 7. 7%

Rail subsidy/(premia) profiles Year to 31 March: South Western £m 2010 (161. 6) 3. 8 (101. 0) 2011 (224. 9) (33. 5) (147. 8) 2012 (309. 6) (81. 8) (206. 9) 2013 (394. 9) (117. 3) - 2014 (448. 6) (124. 8) - 2015 (526. 4) (186. 3) - 2016 (609. 2) - - 2017 (582. 4) - - East Midlands £m West Coast £m The above amounts are subject to future 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 reflect estimated changes arising from changes to Network Rail charges for Control Period 4, which began on 1 April 2009. These changes to the rail subsidy/premia amounts are not yet finalised.

Fuel Hedging UK Bus (regional) UK Bus (London) UK Rail 76. 6 cents 32. 5 p 2009/10 - average effective price (per litre) 45. 4 p 2010/11 - % of forecast consumption hedged 98% - 82% 77% - average hedge price (per litre) 36. 0 p - 50. 5 cents 31. 3 p - % of forecast consumption hedged 78% 38% 77% 75% - average hedge price (per litre) 40. 6 p 41. 5 p 57. 7 cents 40. 4 p - % of forecast consumption hedged 50% 25% - average hedge price (per litre) 42. 5 p 42. 4 p 2011/12 2012/13 n/a North America 5% 62. 4 cents 28% 41. 0 p - % of forecast consumption hedged - 13% - - - average hedge price (per litre) - 43. 5 p - - Market price (per litre) 41. 3 p Market prices are as at 30 November 2010 Prices excludes delivery margins, duty, taxes and Bus Services Operators Grant 61. 2 cents 40. 0 p

Fuel costs Latest forecasts Fuel costs Volumes 2009/10 Actual £m 2010/11 Forecast £m 2011/12 Forecast £m 2012/13 Forecast £m 2013/14 Forecast £m 2011/12 Forecast Litres m UK Bus (regional), excluding BSOG* UK Bus (regional), BSOG* UK Bus (London), excluding BSOG* UK Bus (London), BSOG* North America South Western Trains East Midlands Trains (201. 2) 80. 0 (38. 7) (5. 0) (21. 3) (184. 8) 77. 0 (24. 5) 9. 7 (29. 9) (6. 2) (21. 4) (196. 8) 76. 2 (46. 0) 17. 9 (32. 4) (6. 4) (25. 8) (199. 0) 65. 1 (46. 1) 14. 4 (33. 5) (6. 4) (25. 7) (197. 8) 65. 1 (46. 1) 14. 4 (33. 5) (6. 4) (25. 6) 192. 7 45. 0 69. 1 12. 4 49. 2 Total (186. 2) (180. 1) (213. 3) (231. 2) (229. 9) 368. 4 Market prices are as at 30 November 2010, when Brent Crude was US$86 per barrel Forecast costs for the unhedged element of fuel are based on 30 November 2010 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. The forecasts are based on the latest announced BSOG rates and in the absence of any announcements, BSOG rates are assumed to remain constant.

Exchange rates October 2010 Closing rate US$ C$ 1. 5988 1. 6270 Average rate 1. 5301 1. 5851 October 2009 Closing rate 1. 6484 1. 7756 Average rate 1. 6207 1. 7885

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. § Gross debt is borrowings as reported on the consolidated balance sheet, adjusted to exclude accrued interest, deferred gains on derivatives and the effect of fair value hedges on the carrying value of borrowings, and to include the effect of foreign exchange derivatives that synthetically convert an element of borrowings from one currency to another. § Net debt (or net funds) is the net of cash and gross debt.

Interim Results For the six months ended 31 October 2010 8 December 2010