1. Interim Results 2008 1 Interim Results For the six months ended 31 October 2008 3 December 2008

2. Interim Results 2008 2 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 (or net funds) 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.

3. Interim Results 2008 3 Robert Speirs Chairman

4. Interim Results 2008 4 Highlights  Good underlying revenue growth in all core divisions  Interim dividend of 1.8p, up 33.3%  Adjusted earnings per ordinary share up 28.7%  Challenging short-term outlook in UK Rail; decisive management action in anticipation of this

5. Interim Results 2008 5 Martin Griffiths Finance Director

6. Interim Results 2008 6 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 0831 Oct 07 £1,045.0m £119.8m 12.1p 9.7p £(370.2)m 1.8p £820.8m £100.0m 9.4p 9.0p £(494.7)m 1.35p Change 27.3% 19.8% 28.7% 7.8% 25.2% 33.3%

7. Interim Results 2008 7 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 08 £m 31 Oct 07 £m 60.9 20.2 (0.4) 31.7 15.6 (8.2) (14.6) (18.9) 86.3 (16.9) 69.4 52.5 18.0 (1.1) 25.3 13.2 (7.9) (15.4) (15.7) 68.9 (3.1) 65.8 Change £m 8.4 2.2 0.7 6.4 2.4 (0.3) 0.8 (3.2) 17.4 (13.8) 3.6

8. Interim Results 2008 8 UK Bus  Revenue and journeys benefiting from marketing campaigns, investment in fleet, excellent value fares and concessionary fare schemes  Acquisitions of small, complementary businesses  Continued underlying revenue and volume growth 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 0831 Oct 07 410.4 395.0 60.9 14.8% 325.2 157.4 367.1 361.6 52.5 14.3% 312.4 154.4 Change 11.8% 9.2% 16.0% 0.5% 4.1% 2.0%

9. Interim Results 2008 9 North America (excluding megabus)  Further margin improvement  Further expansion of megabus.com Revenue (US$m) Like-for-like revenue (US$m) Operating profit (US$m) Operating margin 31 Oct 0831 Oct 07 267.7 267.9 38.0 14.2% 258.9 257.0 36.2 14.0% Change 3.4% 4.2% 5.0% 0.2%

10. Interim Results 2008 10 UK Rail (wholly-owned)  Continued like-for-like revenue growth and good profitability  Risk and opportunities  Challenging economic environment  New timetable at East Midlands Trains  Two new stations at East Midlands Trains  Automatic ticket gates at London Waterloo and four major East Midlands Trains stations  East Midlands revenue up 14.1% compared to equivalent predecessor businesses in prior year Revenue (£m) Like-for-like revenue (£m) Operating profit (£m) Operating margin South Western Trains estimated passenger miles (millions) 31 Oct 0831 Oct 07 486.4 345.0 31.7 6.5% 1,675.6 322.7 318.8 25.3 7.8% 1,619.0 Change 50.7% 8.2% 25.3% (1.3)% 3.5%

11. Interim Results 2008 11 Virgin Rail Group  2007 includes CrossCountry franchise that ended November 2007  Plans to increase number of services by approximately one-third starting December 2008  Recent performance and revenue adversely affected by infrastructure work, however overall profitability not adversely affected Revenue - 49% share (£m) - West Coast - West Coast like-for-like Operating profit - 49% share (£m) Operating margin Dividends received (£m) Estimated Passenger miles (millions) - West Coast 31 Oct 0831 Oct 07 159.3 159.2 149.1 19.4 12.2% 19.4 1,378.0 225.8 149.1 16.3 7.2% 11.0 1,284.7 Change (29.5%) 6.8% 0.0% 19.0% 5.0% 76.4% 7.3%

12. Interim Results 2008 12 Miscellaneous income statement items  Increased group overheads includes higher share based payment expenses  Exceptional items include  £13.5m exceptional tax charge in relation to the abolition of UK Industrial Buildings Allowances  a gain of £2.2m in relation to resolution of acquisition & disposal liabilities 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 0831 Oct 07 0.7 (0.2) (6.5) (7.2) (1.0) (11.5) 0.6 (0.3) (6.2) (1.7) 2.0 Change 16.7% 33.3% (4.8)% (16.1)% 41.2% (675.0)%

13. Interim Results 2008 13 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 0831 Oct 07 (14.6) (13.0) 156.2 302.7 370.2 1.2x 12.0x (15.4) (13.6) 135.1 250.5 494.7 2.0x 9.9x Change 5.2% 4.4% 15.6% 20.8% 25.2% (0.8)x 2.1x *excluding exceptional items

14. Interim Results 2008 14 Liquidity & interest rate risk  Excellent liquidity  c.£500m of undrawn committed bank facilities  Sufficient bank facilities to refinance US$ bond in November 2009  Key refinancing required by 2012  Other undrawn available credit lines – e.g. asset finance  Operating well within bank covenants  Cash generative  Upward pressure on debt pricing  Significantly higher margins for new UK asset finance  Likely step up in bank margins for refinancing

15. Interim Results 2008 15 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 Cash tax paid (net) Pre-tax Profit £m Tax £m 89.6 21.6 (6.5) 104.7 2.0 106.7 (6.0) 100.7 (18.9) (6.0) 1.1 (23.8) (13.5) (37.3) 6.0 (31.3) 0.7 Rate % 21.1% 27.8% 16.9% 22.7% 35.0% 31.1% 31 Oct 2008

16. Interim Results 2008 16 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 paid 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 Foreign exchange/other Increase in net debt before cash flows with shareholders Equity dividends Share capital movements Increase in net debt Opening net debt Closing net debt 31 Oct 08 £m 136.2 0.6 1.2 19.4 (15.5) (19.6) (14.5) (0.7) 107.1 (79.1) (9.6) 0.3 (0.1) (1.8) (38.7) (21.9) (28.9) 0.3 (50.5) (319.7) (370.2) Movement in net debt

17. Interim Results 2008 17 28.2 7.7 Nil 35.9 54.2 13.1 15.9 83.2 (3.5) (0.5) (0.1) (4.1) 50.7 12.6 15.8 79.1 26.0 5.4 15.9 47.3 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 £3.1m (2007: £1.1m) and assets acquired through business combinations ** Excludes proceeds from selling businesses  Significant capital expenditure planned for second half of year to 30 April 2009

18. Interim Results 2008 18 Fuel Hedging 2007/8- average effective price (per litre) 2008/9- % of forecast consumption hedged - average hedge 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) Market price (per litre) UK Bus North America 26.5p 91.6% 33.6p 78.3% 49.2p 6.0% 41.9p 31.6p 56.3 cents 75.7% 61.5 cents 63.3% 90.8 cents 4.7% 67.9 cents 45.9 cents UK Rail 30.7p 76.1% 31.6p 74.7% 31.6p 74.7% 31.6p 30.7p Market prices are as at 26 November 2008 Prices exclude premia payable on fuel caps, delivery margins, duty, taxes and Bus Services Operators Grant

19. Interim Results 2008 19 (167.1) 73.7 (93.4) (33.6) (6.7) (133.7) (4.5) (20.6) (158.8) (183.6) 73.8 (109.8) (43.4) (5.4) (158.6) (5.8) (22.0) (186.4) (158.5) 73.8 (84.7) (30.1) (5.4) (120.2) (5.1) (22.0) (147.3) Fuel costs Latest forecasts UK Bus, excluding BSOG* UK Bus, BSOG* UK Bus, including BSOG* North America South Western Trains 2008/9 UK Bus Acquisitions (Bullocks, Highland) East Midlands Trains Total 2008/09 Forecast £m 2009/10 Forecast £m 2010/11 Forecast £m Fuel costs (150.1) 68.5 (81.6) (25.1) (5.3) (112.0) - (10.9) (122.9) 2007/08 Actual £m Market prices are as at 26 November 2008, when Brent Crude was US$50 per barrel Forecast costs for the unhedged element of fuel are based on 26 November 2008 spot prices Above costs include delivery margins, duty and taxes (duty forecast at current levels) *Bus Services Operators Grant (“BSOG”) represents a rebate of an element of fuel duty costs in respect of certain UK Bus Services 189.8 - 189.8 74.8 12.0 276.6 5.5 50.5 332.6 2008/9 Forecast Litres m Volumes

20. Interim Results 2008 20 Brian Souter Chief Executive

21. Interim Results 2008 21 Overview  Good growth in bus and rail services  Consumer demand for good value products and services  Planning for challenging economic conditions in 2009/10  Decisive management action now in UK Rail

22. Interim Results 2008 22 UK Bus  Excellent performance – like-for-like revenue up 9.2%  Further increase in like-for-like passenger volumes – 4.1%  Consumer demand for good value transport options  Successful discount ticketing strategy  Resilient and flexible business model

23. Interim Results 2008 23 UK Rail  Growing commuter and inter-city  Strong operational performance and delivery on franchise commitments  Planning for significant drop in Central London Employment  Decisive management action plan to minimise risk and maximise opportunities –Cost reduction programme –Revenue generation: new timetables, new stations, gating, off-peak travel

24. Interim Results 2008 24 UK Rail/Virgin Rail Group Management action plan  Critical review of cost base  Emphasis on sustainable savings at South Western Trains & West Coast Trains  Headcount reductions  Reduction in management and staff headcount and overhead costs  Significant improvement in staff productivity and ongoing investment in technology driven savings  Focus on maximising revenue generation from new initiatives – e.g. gates

25. Interim Results 2008 25 London Employment and Peak Arrivals Rail Trends 1988-1997 Passenger Volumes Sources:Central London employment – Greater London Authority South West peak arrivals – South Western Trains National Rail peak arrivals – National Rail Trends

26. Interim Results 2008 26 North America  Solid growth across diverse portfolio  Commuter services benefiting from modal shift  Successful contract renewal season  Weaker leisure demand in United States  megabus.com ahead of expectations –Increased product investment –Expansion to new locations –Attractive recession product

27. Interim Results 2008 27 Current trading and outlook  Current trading in line with management expectations  Further growth expected in UK Bus and American businesses  Challenging environment for UK Rail 2009/10  BUT management action plan to address cost base and maximise revenue opportunities  Robust and diverse portfolio of businesses with strong cash generation

28. Interim Results 2008 28 Interim Results For the six months ended 31 October 2008 3 December 2008

29. Interim Results 2008 29 Appendices

30. Interim Results 2008 30 UK Bus Revenue Like-for-like Acquisitions: Highland excluding Inverness (acquired 16 May 2008) Fens (acquired 28 March 2008) Rennies (acquired 14 March 2008) Bullocks (acquired 10 August 2008) Stagecoach in Inverness* Disposals: Darlington (disposed August 2007) Huddersfield (disposed April 2008) Start-ups: Rail replacement (started May 2008) Total reported Change % 9.2% 11.8% 31 Oct 2008 £m 31 Oct 2007 £m 395.0 3.6 2.6 1.3 0.3 5.3 Nil 2.3 410.4 361.6 Nil 3.0 0.9 1.6 Nil 367.1 *Existing Inverness operations integrated with and now not distinguishable from Highland so Inverness excluded from like-for-like comparison

31. Interim Results 2008 31 North America Excluding megabus megabus - Midwest - California - North East 31 Oct 2008 US$m 31 Oct 2007 US$m 38.0 1.8 Nil (2.6) 37.2 36.2 (0.5) (1.7) Nil 34.0 Operating Profit 31 Oct 2008 US$m 31 Oct 2007 US$m 267.7 9.4 0.4 5.6 283.1 258.9 4.4 0.4 Nil 263.7 Revenue

32. Interim Results 2008 32 Scheduled service/line run/commuter Sightseeing & tour Charter School bus & contract Like-for-like revenue excl megabus Closed operations and foreign exchange movements Total North America excl megabus megabus Total North America 31 Oct 08 US$m 31 Oct 07 US$m 103.7 60.8 57.9 45.5 267.9 (0.2) 267.7 15.4 283.1 100.3 60.8 54.9 41.0 257.0 1.9 258.9 4.8 263.7 % Growth 3.4% Nil 5.5% 11.0% 4.2% n/a 3.4% 220.8% 7.4% North America revenue breakdown

33. Interim Results 2008 33 Divisional income statements Six months ended 31 October 2008 UK Rail £m 486.4 70.3 31.7 (133.2) (15.1) (2.6) (0.8) (86.2) (3.6) (207.6) (14.4) (15.0) (78.2) 31.7 UK Bus £m North America £m 410.4 Nil 6.4 (206.4) (53.7) (13.9) (22.5) Nil (4.3) Nil (17.3) (37.8) 60.9 150.5 Nil 1.9 (60.6) (18.6) (9.0) (8.7) Nil (2.2) Nil (11.1) (22.4) 19.8 VRG (100%) £m 325.0 152.4 61.7 (69.8) (1.5) (1.9) (0.2) (106.0) Nil (242.7) (10.0) Nil (67.4) 39.6 Revenue 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 Material & consumables Other costs Operating profit

34. Interim Results 2008 34 Rail subsidy/(premium) profiles 2009 2010 2011 2012 2013 2014 2015 2016 2017 South Western £m East Midlands £m 20.9 (42.4) (89.6) (149.7) (224.8) (294.6) (358.1) (425.1) (419.0) 117.4 89.2 54.7 12.8 (18.6) (38.3) (93.3) n/a West Coast £m 291.6 264.4 226.0 195.0 n/a 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.

35. Interim Results 2008 35 Exchange rates US$ C$ Closing rateAverage rate 2.0774 1.9731 2.0133 2.1034 October 2007 Closing rateAverage rate 1.6158 1.9645 1.8811 1.9767 October 2008

36. Interim Results 2008 36 Interim Results For the six months ended 31 October 2008 3 December 2008