1. Review of Eversholt Rail Group
Mary Kenny and David Stickland
6 May 2015

2. Index Rail Industry Overview Eversholt Rail Business Overview
Review of 2014 Financial Performance
Covenants & Ratings
Ownership Changes
Executive Management Changes
Q&A

3. Rail Industry Overview DfT awards the first franchises since the Brown report
Industry Update
The Rolling Stock Strategy, published by the Rolling Stock Strategy Steering Group, (‘RSSSG’) reaffirmed its projection of a doubling of rolling stock numbers.
In February 2015, an updated ‘Long Term Passenger Rolling Stock Strategy’ was published by the RSSSG, which includes rolling stock owners, train operators and Network Rail. The group reaffirmed their previous long term conclusions that the industry will continue to be demand-led, with the UK passenger fleet size forecast to potentially double over the next 30 years
Network Rail
In March 2014, Network Rail published its five-year plan to invest £38bn in rail infrastructure. The plan (for the period April 2014 to March 2019) includes: up to 700 more trains a day between major northern cities, 20% capacity increase of London’s commuter trains, 850 miles of track to be electrified, upgrades for stations including Birmingham New Street and Manchester Victoria
Refranchising
DfT awarded:
Seven-year Thameslink, Southern and Great Northern franchise to Govia Thameslink Railway Limited
Fifteen-year contract to operate passenger services on the Essex Thameside rail franchise to the existing operator c2c
Eight-year contract to operate the Inter-City East Coast franchise to Inter City Railways, a joint venture of Stagecoach (90%) and Virgin (10%)
Transport Scotland awarded the 10-year ScotRail franchise to Abellio ScotRail, operations commenced on the 1 April 2015
DfT launched the TransPennine Express (TPE), Northern and East Anglia refranchising competitions. The TPE and Northern bids are due to be submitted during Q2 2015

4. Eversholt Business Overview Underlying demand remains high
Eversholt Rail’s Position
Eversholt Rail is currently in discussion with bidders, the DfT and TfL on all of the “live” franchises. Within these franchises there are several potential new build opportunities
Eversholt Rail is also in touch with the existing Train Operating Companies regarding potential directly-awarded extensions of the East Midlands Trains and First Great Western franchises
100% fleet utilisation of the passenger rolling stock for 2014 (2013:100%)
In November 2014, Eversholt Rail successfully negotiated a one year extension to its existing Revolving Credit facility (‘RCF’). The RCF is now due to mature in In addition the business also negotiated improved terms and conditions on both this facility and on its term loan
Lease extensions (2014)
In February, Eversholt Rail signed a series of Single Tender or Direct Award, (STA/DA) lease extensions with Northern Rail to keep our fleet of 3 Class 321s, 5 Class 322s and 10 Class 158s on lease until February 2016
In April, Eversholt Rail signed a lease extension with East Coast Main Line Limited to retain our IC225 fleet on lease until
In June, Eversholt Rail signed an STA lease extension with Abellio Greater Anglia to keep our fleets of 61 Class 315s and 94 Class 321s on lease until October 2016
In October Eversholt Rail signed an STA lease extension with London South Eastern Railway to keep our fleets of 112 Class 375s, 36 Class 376s, 29 Class 395s and 97 Class 465s on lease until June 2018

5. Financial performance (Security Group) For the year ended 31 December 2014
2013 £m
Capital rental income
270.0
268.1
Net maintenance income
10.5
5.2
Finance lease income (Depots)
0.9
0.6
Other income
3.6
3.1
Total Income
285.0
277.0
Overheads
(21.4)
(18.2)
263.6
258.8
Profit on disposal of property,
plant and equipment -
Depreciation
(125.5)
(128.6)
Fair value adjustment on
derivative financial instruments
(48.8)
34.7
Net interest and finance cost
(141.4)
(152.9)
(Loss)/profit before tax
(52.1)
12.6
Year ended
Capital rental marginally higher than 2013 due to additional investment in fleets
Higher net maintenance income arises from the increased level of maintenance activity in the year
Other income includes asset management fees received from Cross London Trains Ltd
Fair value adjustment on derivatives represents the movement in the fair value of the interest rate swaps
Net interest and finance cost in 2013 included the unwind of capitalised borrowing costs on the bank acquisition facilities

6. Statement of financial position (Security Group) As at 31 December 2014
Year ended
31 December 2014
31 December 2013 £m
Assets
Property, plant and equipment
1,708.4
1,818.4
Finance lease receivables
10.0
10.8
Trade and other receivables
24.7
15.5
Deferred Tax
22.5
12.1
Deferred Revenue
0.0
0.6
Investment in subsidiary
2.8
Inventory
1.6
1.8
Cash and cash equivalents
37.5
88.2
1,807.5
1,950.2
Liabilities
Trade and other payables
42.6
31.8
Borrowings
1,757.8
1,820.2
Derivative financial instruments
107.3
58.5
Amounts owed to Eversholt Rail (365) Limited
19.0
36.5
Deferred tax
85.7
89.4
Deferred revenue
100.6
115.7
2,113.0
2,152.1
Net assets
(305.5)
(201.9)
Equity
Share capital -*
Share premium account
13.7
Accumulated deficit
(319.2)
(215.6)
* £12,000
Property, plant and equipment lower as a result of annual depreciation charge partially offset by investment in the fleets
Year end cash of £37.5m after repayment in borrowings
Revolving Credit Facility maturity extended by one year to 2019 with a further option to extend by one more year
Negative mark to market valuation of interest rate swaps not expected to be realised

7. Key Funding Activities Enhanced funding platform with the capacity for additional investment in rolling stock
Financing
Facilities - Term loan 2018, Revolving Credit Facility 2019
Undrawn RCF provides same day liquidity
Improved financial efficiency using surplus cash to pay down drawings on RCF
Improved financial terms and conditions on the bank facilities following RCF extension agreement by 1 year to 2019
Average debt maturity until mid 2020s
31 Dec 2014
31 Dec 2013
Facility A 5 year term loan (2018)
£100m
Facility B 5+1 year RCF ( )
£35m
£16m
Bond A (2020)
£300m
Bond B (2025)
£400m
Bond C (Amort )
MetLife Note (Amort )
£150m
Total
£1,385.0m
£1,366.0m
Shareholder Loan (inc capitalised interest)
£340.6m
£422.8m
Current debt structure
Cash reserves of £37.5m:-
£27.0m Security deposit (restricted)
£10.5m Unrestricted cash

8. Covenants Ratios substantially below the lock up limits
All ratios were substantially below the lock up levels and are projected to remain so
Intention is to maintain these ratios with plenty of headroom to provide scope for investment
Leverage test
31-Dec-14
31-Dec-13
(Net debt / EBITDA)
Actual
Lock-up
Backward looking
5.16x
<
7.00x
4.96x
Forward looking
4.55x
5.21x
Interest cover ratio
(EBITDA / Interest)
2.87x
>
1.75x
2.48x
3.15x
2.88x
NPV test
(Net Debt / NPV)
50.9%
70.0%
47.2%

9. Ratings Fitch reaffirmed bond rating at A- (October 2014)
Net Debt to NPV considered comfortable
S&P reaffirmed bond rating at BBB, with a stable outlook (March 2015)
FFO to Debt 11.3%
Company and New Shareholders remain committed to ensuring that the bond ratings remain at these levels

10. Ownership changes CKI acquired Eversholt Rail on 17 April 2015
Business as usual
No change to strategy
CKI fully supportive of Executive approach & fully supportive of growth opportunities
Andy Hunter new Chairman
Non Executives from Industry continue
KYC (information will follow shortly)

11. Executive Management changes
David Stickland, CFO, joined Eversholt Rail in November 2014
Clive Thomas, Head of Commercial and Business Services, retires October Responsibilities for legal and company secretarial pass to Dave Stickland from 1 May 2015
Executive Team for 2015:
CEO: Mary Kenny
CFO: David Stickland
COO: Andy Course
Head of Relationship Development: Stephen Timothy

12. Questions?

13. Appendix - EBITDA Reconciliation

14. Copyright/confidentiality notice and disclaimer
© Eversholt Rail (UK) Limited 2015
The contents of this presentation are private and confidential and are provided on the basis that they are not copied, circulated or otherwise divulged to others without our express written consent.
We acknowledge that some recipients may be subject to the Freedom of Information Act 2000 and we therefore reserve the right to make representations as to whether or not, or on what basis, any information should be disclosed and, in particular, whether the exemptions set out in sections 41 and 43 of that Act are applicable.
This presentation is for general information only and is not intended to provide legal, accounting or tax advice. Although every care has been taken in its preparation we make no representation and give no warranty as to its accuracy or completeness. 14