national express group plc annual report and accounts 2014
progress through 
partnership
annual report and accounts 2014 who we are national express group is a leading public transport operator 
with bus coach and rail services in the uk continental europe 
north africa north america and the middle east 
our vision our vision is to earn the lifetime  
loyalty of our customers by 
consistently delivering frequent  
high performing public transport 
services which offer excellent value
 read more p16
what’s inside
strategic report
 1 financial highlights
 2 national express group at a glance
 4 chairman’s letter 
 5 investment case
 6 market overview
 8 group chief executive’s review
12 our business model and strategy 
14 our strategy at a glance 
16  managing our resources 
and relationships
22 key performance indicators 
24 risk and risk management 
26 principal risks and uncertainties 
28 group finance director’s review
32 spain and morocco 
34 north america
36 uk bus
38 uk coach
40 rail
corporate governance 
4 2  cha i r ma n ’ s i n t r oduct i on 
to governance
44 board of directors
46 governance report
60 directors’ remuneration report
84 other statutory information
88 directors’ responsibilities statement
financial statements
 89 independent auditor’s report
 93 group income statement
 94  group statement of  
comprehensive income 
 95 group balance sheet
 96  group statement of changes 
in equity
 97 group statement of cash flows
 98 notes to the consolidated accounts
 153 company balance sheet
 154 notes to the company accounts
additional information
 1 64 shareholder information
 165 dividends and financial calendar
 1 66 glossary
 168 five year summary
 ibc corporate information
find out more
macbook pro
unless otherwise stated all operating profit operating margin and eps data refer to normalised results which can be found on the face of the group income statement in 
the first column the definition of normalised profit is as follows ifrs result found in the third column excluding intangible asset amortisation loss on disposal of businesses 
exceptional items and tax relief thereon the board believes that the normalised result gives a better indication of the underlying performance of the group
underlying revenue compares the current year with prior year on a consistent basis after adjusting for the impact of currency acquisitions disposals and rail franchises 
no longer operated 
likeforlike revenue measures underlying revenue after adjusting for increases or decreases in miles operated typically used as a metric in urban bus operations 
constant currency basis compares the current year’s results with the prior year’s results translated at the current year’s exchange rate
‘core nonrail’ businesses are uk bus uk coach spain including morocco and north america including transit it excludes german coach
operating margin is the ratio of normalised operating profit to revenue
‘return on capital employed’ ‘roce’ is normalised operating profit divided by tangible and intangible assets
‘return on assets’ ‘roa’ is normalised operating profit divided by tangible assets
operating cash flow is the cash flow equivalent of normalised operating profit free cash flow is the cash flow equivalent of normalised profit after tax a reconciliation is set 
out in the table within the group finance director’s review
net debt is defined as cash and cash equivalents cash overnight deposits and other shortterm deposits and other debt receivables offset by borrowings loan notes bank 
loans and finance lease obligations and other debt payable excluding accrued interest
eps generated by the rail business is the normalised operating profit of the rail division taxed at the uk tax rate divided by the basic number of shares in issue
nonrail eps is group normalised eps minus the eps generated by the rail business
the annual punctuality measure for c2c is the moving annual average ‘maa’ public performance measure ‘ppm’ to 4 january 2015
safety incidents measure those for which the group is responsible and is based on the fatalities and weighted injuries index used in the uk rail industry 
excellence 
we constantly strive 
to be excellent in all 
that we do
safety 
we only do what 
is safe and stop any
unsafe behaviour
commuinty
we are active in 
the communities we 
serve to generate 
economic social and 
environmental value
customers 
we place them at the
heart of our business
and relentlessly meet
their expectations
people
we develop the talents
reward the exceptional
performance and respect
the rights of all our employees
visit our group website to read our latest news 
access investor information and find out more 
about how we operate
wwwnationalexpressgroupcom strategic report
financial highlights
strong financial performance
1 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information
• group revenue increased 2 to £187 billion on a constant 
currency basis down 1 on a reported basis 2013 £189bn
• group normalised profit before tax rose 7 to £1454 million 
on a constant currency basis up 1 on a reported basis 
2013 £1437m
• statutory group profit before tax grew by 3 to £665 million 
2013 £644m up 10 on a constant currency basis
• group roce increased to 124 2013 1 17 
• yearonyear eps growth of 6 to 227 pence 2013 215 pence
• free cash flow of £190 million is £40 million ahead of target 
and higher than last year 2013 £1828m since 2009 
national express has generated £1 billion of free cash
• net debt reduced by over £80 million to £6643 million 
2013 £7461m
• full year proposed dividend of 103 pence up 3 yearonyear 
2013 100 pence
group revenue
£18674m
3000
2500
2000
1500
1000
500
0
2012 2013 2014
core nonrail operating profit
£1851m
2012 2013 2014
240
200
160
120
80
40
0
free cash flow
£1903m
2012 2013 2014
240
200
160
120
80
40
0
dividend per share
103p
2012 2013 2014
12
10
8
6
4
2
0
core nonrail roce
117
2012 2013 2014
12
10
8
6
4
2
0
operating margin
103
2012 2013 2014
12
10
8
6
4
2
0
summary of results 2014
normalised basis ifrs basis
2014
£m
2013
£m
2014
£m
2013
£m
revenue 18674 18913 18674 18913
operating profit 1931 1929 1142 1179
profit before tax 1454 1437 665 644
profit for the year 1177 1112 606 583
basic earnings per share pence 227 215 116 111
net debt 6643 7461 na na strategic report
national express group at a glance
a leading transport provider with a well balanced portfolio 
the group operates in the uk continental europe north africa north america and the middle east 
and at the end of the year we employed 42000 people and operated over 26000 vehicles passengers 
made more than 845 million journeys on our services in 201 4 the national express name first appeared 
on uk coaches in 1972 and the company was listed on the london stock exchange in 1992
spain  morocco bus  coach
• alsa
alsa is the leading company in the 
spanish road passenger transport sector 
and was acquired by national express 
in 2005 
with over 100 years’ experience it 
operates long distance regional and urban 
bus and coach services across spain and 
in morocco 
apart from its bus and coach services the 
business also operates service areas and 
other transportrelated businesses such 
as fuel distribution
revenue
£5381m
2013 £5646m
operating profit
£758m
2013 £815m
 read more p32
north america bus
• durham school services 
• stock transportation 
• petermann 
• national express transit
our business in north america has two 
areas of activity student transportation and 
transit services 
we operate in 32 us states and four 
canadian provinces 
the student transportation business 
operates through mediumterm contracts 
awarded by local school boards to provide 
safe and reliable transport for students 
and is the second largest private operator 
in north america 
revenue
£6202m
2013 £6450m
operating profit
£595m
2013 £626m
 read more p34
uk bus
• national express west midlands 
• national express coventry 
• national express dundee 
• midland metro
national express is the market leader in the 
uk’s largest urban bus market outside of 
london services are operated from nine 
garages across the west midlands we 
also run bus services in the cities of 
coventry and dundee 
in addition we operate the midland metro 
light rail service between birmingham and 
wolverhampton an extension of the route 
is due to be completed in 2015
revenue
£2810m
2013 £2734m
operating profit
£340m
2013 £312m
 read more p36
national express group plc annual report and accounts 2014 2 uk coach
• national express 
• eurolines 
• the kings ferry
national express is the largest operator of 
scheduled coach services in the uk the 
business operates high frequency services 
linking around 1000 destinations across 
the country we are the uk partner in the 
eurolines network which serves over 
500 destinations across europe and 
north africa 
the kings ferry is also part of the uk 
coach business and is a long established 
provider of commuter coach travel services 
in london and the south of england
revenue
£2752m
2013 £2635m
operating profit
£280m
2013 £245m
 read more p38
rail
• c2c
national express operates the industry
leading c2c franchise which serves london 
and south essex 
it is an important commuter route serving 
25 stations on the line out of fenchurch 
street station london the group will start 
to operate contracted rail services in 
germany from december 2015
revenue
£1516m
2013 £1430m
operating profit
£97 m
2013 £98m
 read more p40
3 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information
group revenue by end market
n spain and morocco 29
n north america 33
n uk bus 15
n uk coach 15
n rail 8
operating profit by end market
n spain and morocco 36
n north america 29
n uk bus 16
n uk coach 14
n rail 5
new markets
german rail
during 2013 we were awarded two 
contracts to serve cities in germany’s 
most populous region north rhine
westphalia which will start operating 
in december 2015 in february 2015 
we were named as the preferred bidder 
to run nuremberg sbahn services for 
12 years from december 2018
middle east
in february 2015 our joint venture 
bahrain public transport company 
began operating new bus services 
across bahrain the tenyear contract 
will initially see 141 new vehicles 
enter service
the first of our new german trains rolls off 
the production line ready to enter service 
in december 2015
international opportunities
our bid team continues to explore 
selected opportunities which leverage 
our skills in bus coach and rail markets strategic report
chairman’s letter
differentiated proposition to create 
superior shareholder value
dear shareholder 
i am pleased that national express has continued to deliver a strong 
financial and operational performance in 2014 i believe this progress 
and success demonstrate our strategy is delivering the services our 
customers want and thereby creating value for our shareholders
important progress
2014 saw passenger growth in every division key contracts retained 
and significant new markets entered we have a diversified portfolio of 
businesses that are all market leaders this not only provides a platform 
for financial progress – this is the fifth year of core nonrail profit growth 
and we have again beaten our free cash targets – but it also provides 
opportunities for new growth
we begin our german rail services later this year we have already 
started our bus operations in bahrain a key aspect of our success in 
both has been the strength of our reputation in our existing markets
this is why i am particularly pleased with our customer satisfaction 
scores across the business and the strong partnerships we have in 
place when we have met customers in the uk and abroad the board 
has been impressed by the strength of our relationships and the level 
of service delivered we believe this demonstrates that the company 
remains focused on delivering for our customers obviously crucial in 
sustaining the progress we have made in recent years
dividend
our financial performance in 2014 means we retain our clear and 
sustainable dividend policy to pay a dividend that is covered 
approximately twice by nonrail earnings the board is recommending 
that the dividend is increased to 103 pence which represents a 3 
increase for the year as a whole subject to approval by shareholders 
the final dividend will be paid out on 22 may 2015 to shareholders on 
the register on 1 may 2015
board
as i said last year optimising the skills diversity and experience of the 
board is a crucial consideration i am grateful for the experience and 
expertise jane kingston has brought to the board especially on hr 
issues for example the board now reviews a quarterly human capital 
report prepared by the group hr director covering important issues 
and trends in the business such as turnover diversity and succession
after ten years of invaluable service sir andrew foster announced last 
year that he will be standing down from the board at the agm jackie 
hunt has also recently announced she is stepping down as a non
executive director after three years with the group and will not seek 
reelection at the agm i would personally like to thank andrew and 
jackie for their wise counsel and support during my time at national 
express on behalf of the board i would like to wish them both well 
for the future
we are well underway with the recruitment of sir andrew’s and jackie’s 
replacements my aim is that they will bring new and complementary 
skills to strengthen the board as we meet future opportunities and 
challenges i expect to make an announcement soon i am very pleased 
that lee sander has agreed to become senior independent director 
to replace jackie
again on behalf of the whole board i would also like to thank 
jez maiden for his significant contribution to the group and the board 
as group finance director jez left the company for croda international 
at the end of 2014 jez played a particularly crucial role in both stabilising 
the company in 2009 and the progress since again i wish him all the 
best for the future
finally i am delighted to announce that matthew ashley was appointed 
as the new group finance director at the end of january matthew was 
previously finance director for uk bus and group financial controller 
and therefore brings significant financial corporate and operational 
experience to the role i look forward to continuing to work with him 
sir john armitt
chairman 
26 february 2015
governance highlights 
• corporate governance provides a framework within which 
the board sets its values and delivers longterm success for 
the company and its investors whilst recognising its duties 
towards the wider stakeholder community 
• through challenge and the application of objectivity in 
considering proposals on strategy the board’s role in its 
oversight continues to be fundamental in order to achieve 
the objectives required for driving our business forward
• the 2014 external performance evaluation of the board and 
its committees concluded that the board continues to operate 
effectively and that its structure governance and processes 
are appropriate for our current and future business 
• engagement with shareholders during 2014 has proven to be 
a valuable exercise in the board’s understanding of their views 
on issues which are pertinent to national express as a result 
of such open dialogue a restructured remuneration policy for 
our executive directors is being proposed at this year’s 
annual general meeting ‘agm’
 read more p46
national express group plc annual report and accounts 2014 4 strategic report
investment case
a sound investment case
1 a best in class public transport operator
margin  

best in  
class 
spain and morocco 141 nx
north america 96 nx
uk bus 121 15
uk coach 102 nx
rail 64 nx
group 103 nx
by margin
2 a sound strategy in place
 read more p12
delivering operational excellence
• best in class group margin of 103
• revenue growth of 23
• £87 billion of long term contracted or concessionary revenues
• sustainable long term earnings core nonrail profit 
growth to £185 1 million
generating superior cash and returns
• free cash flow of £190 million
• operating cash conversion of 128
• net debt reduced by over £80 million in 2014
• group roce increased by 70bps to 124
• surplus cash to be invested in targeted bolton acquisitions 
in north america from 2015 onwards
creating new business opportunities
• over £42 billion of new contracts won during the year
• middle east – won first urban bus contract in bahrain 
pursuing further opportunities in the region 
• transit – retention and growth of largest us transit contract 
annualised transit revenue now circa 80 million
• rail – retained essex thameside preferred bidder for 
nuremberg sbahn in germany
3 well balanced portfolio
4  stable long term finance in place and commitment 
to investment grade rating
gearing ratios 2014 2013 covenant
net debtebitda 225x 25x 35x
interest cover 63x 61x 35x
ratings grade outlook
moodys baa3 stable
fitch bbb stable
5  dividend policy based on sustainable  
nonrail earnings basis
2014 
p
2013 
p
basic eps nonrail 212 201
rail 15 14
group 227 215
dividend 103 100
divisional split by revenue
n spain and morocco 
n north america 
n uk bus 
n uk coach 
n rail 
modal split by revenue
n bus 
n school bustransit 
n coach 
n rail 
strong debt maturity profile
available
drawn
15 16 17 18 19 20 21
26 22
390
19
416
11
235
66
5 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
market overview
drivers of market growth
here we give an overview on how the megatrends are 
shaping business and society today and how they 
shape future performance
economic environment 
the propensity to travel is generally affected by levels of economic 
activity as represented by gdp growth although levels of 
transportation and mobility remain relatively stable through the 
economic cycle periods of gdp growth generate additional volume 
demand and pricing benefit
opportunity the global economy is emerging from recession and 
demand for public transport is likely to improve as the economy grows 
and employment levels rise
deregulation liberalisation and outsourcing
our markets are created when state provision of public transport is 
transferred to the private sector there are different models for this 
with examples ranging from the deregulated markets of our uk bus 
and uk coach divisions through the concessions and franchises of 
spain morocco and rail to the school board and transit contracts 
of north america
this is supported by a trend towards market liberalisation such as 
european union directives focused on opening up rail networks cost 
saving is increasingly a factor too through recognition of the superior 
efficiency of privately operated services
opportunity the current size of the european public transport market is 
estimated to be approximately €150 billion of which around €50 billion 
is at present outsourced liberalisation of the german and spanish rail 
markets present opportunities for growth
2010 public transportation market
total transport market €150bn
100
€27bn
8
19
20
6
1
3
3
25
22
7 15 4 4 2 4 3
€27bn €16bn €10bn €7bn €5bn €29bn €25bn
germany
source oecd closed open
france uk
ireland
benelux north
europe
east
europe
south
europe
other
europe
90
80
70
60
50
40
30
20
10
0
urbanisation and demographic changes
our services benefit from increasing urbanisation around the world in 
particular driving demand for bus operations existing towns and cities 
are expanding in addition to the creation of new centres of population 
these trends are driving the requirement for additional transportation 
services both within and between locations so our bus coach and rail 
operations are increasingly in demand in addition population growth 
in the uk and north america will drive further demand for public 
transport services
opportunity uk population growth is forecast to grow by 10 through 
to 2030 driving the need for further public transport services whilst the 
combination of an ageing and increasingly social and ethnically diverse 
population will drive the need for new products and services to meet 
changing customer needs 
share of global population living in cities
100
71
49
30
29 51 70
source oecd rural areas urban areas
uk
ireland
north
europe
south
europe
90
80
70
60
50
40
30
20
10
0
modal shift 
modal shift is the move by individuals from one form of transport to 
another for national express the relevant move is from the private car 
to bus coach and rail travel the biggest reason for this is an increase in 
the cost of motoring such as insurance pricing and the increasing use 
of mobile devices such as tablets and smartphones while travelling 
although other factors such as environmental concerns and congestion 
can also be important geopolitical and demographic changes in the 
middle east are increasing demand for affordable safe public transport 
opportunity the proliferation of realtime travel information and mobile 
devices improves the customer experience making public transport 
increasingly more attractive compared with the car
environment and congestion
environmental concerns continue to have an influence on customer 
behaviour bus coach and rail services are significantly more 
environmentally friendly forms of transport than the private car or air travel 
reducing both the level of carbon emissions per person travelling and 
travel congestion society as a whole and individuals are becoming 
increasingly concerned about the effect of emissions on the environment 
and are explicitly choosing public transport as an alternative
opportunity improved access to city centre locations such as priority 
bus lanes for environmentally friendly transport
national express group plc annual report and accounts 2014 6 here we put each of our markets into context and 
highlight the main drivers across all our divisions
spain and morocco
alsa holds the marketleading position in the regulated and highly 
segmented bus and intercity coach market in spain and also operates 
in three cities in morocco three levels of government regulation apply in 
spain national long distance coach regional regional coach and city 
urban bus each concession is exclusive to the operator based on 
compliance with the public service obligation intercity competition comes 
from statebacked rail and low cost airlines bus and coach concessions 
are awarded through competitive public tender typically every ten years
market size
€38bn
concessions
160
• 160 concessions 1 15 intercity coach concessions  
34 urban bus contracts 1 1 others
• concessional renewal and new urban contract wins in 
spain and morocco
• continuing urbanisation of the moroccan economy with 
rapid migration to the major cities
 read more p32
north america
national express is the second largest player in the north american 
school market with a 12 share of the outsourced school bus market 
32 of the market is outsourced with recent increases in outsource 
conversion being driven by pressure on public funding this trend is 
likely to continue as school district budgets remain constrained typically 
customers are local school boards where local relationships are key 
and service delivery is very important
market size
24bn
operates
21700
school buses
• bolton acquisition opportunities in school bus
• new business growth from winning contracts in school bidding 
season and through new transit contracts
 read more p34
uk bus
the largest five operators represent around 70 of the uk deregulated 
bus market with the remainder of the market made up of a large 
number of private operators active competition comes from national 
and local bus operators as well as private car and rail in the short term 
the market has been impacted by economic pressures from austerity 
and local unemployment but longer term economic regeneration and 
environmentally driven public transport present growth opportunities 
over the car
market size
£48bn
uk excluding london of 
which 97 is privatised
operates
1640
buses focused in the west midlands 
and dundee markets
• increase passenger volumes through investment in vehicles 
technology and people and through delivering high quality services
• low barriers to entry – flexibility and scale of operations is key
 read more p36
uk coach
national express has the only nationwide network of services with other 
competitors tending to focus on specific regions or corridors selective 
competition comes from rail particularly on discounted fares and 
from large bus operators and localised services drivers for demand 
include the level of fare discount to rail cost of private motoring and 
environmental friendliness customer satisfaction is also an important 
driver for longer term loyalty through consistent service and high 
customer safety standards
market size
£300m
of contested revenues in the 
scheduled coach market
destinations
1000
uk scheduled coach  
market leader
• revenue growth through competitive pricing better distribution 
channels and greater understanding of customers and their needs
• longer term implementation of improved retailing systems
 read more p38
rail
the uk rail market is a regulated market and is broadly dispersed 
between uk private train operators and overseas state market 
participants in the past ten years growth has been driven by passenger 
volumes with the levels of economic activity and employment also 
drivers a new framework for future uk franchises is likely to see 
franchise durations settle between seven and 15 years with the 
introduction of a quality element alongside pricing meanwhile the 
german rail market is liberalising and offering growth opportunities
market size
£85bn
of uk franchise revenues 
per annum with over 
£5 billion of franchise 
revenues up for renewal 
over the next four years 
based on proposed 
department for 
transport pipeline
 
€9bn
currently accessible german regional 
and urban market
• c2c rail franchise secured until 2029
• our first two german rail franchises commence in december 2015 
for 15 years with two more commencing in december 2018 for 
12 years
• growth through further bid wins in germany and the uk
• liberalisation of spanish rail market a future opportunity
 read more p40
7 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
group chief executive’s review
we are making sound progress in our strategy
overview of 2014
national express has delivered a good performance in 2014 with group 
revenue up 23 on a constant currency basis and both statutory and 
normalised profit before tax also up on a constant currency basis by 
10 and nearly 7 respectively our free cash generation remains very 
strong again beating our target for the year and during the course of 
the year we have reduced net debt by over £80 million we renewed a 
number of key concessions in the year and also successfully expanded 
our business into new markets
this performance demonstrates both the resilience and strength of our 
businesses we have had to overcome significant challenges from the 
first half of the year especially poor weather in the us strike action in 
spain and significant currency headwinds together these challenging 
events reduced profits by £5 million at the half year to have recovered 
from this position and delivered such a strong second half of the year 
is a particularly pleasing result 
to achieve these results we have again made good progress against 
our three strategic goals
first our operational excellence programme continues to be embedded 
across the business we place customers at the heart of our strategy 
causing us to focus on delivering continuously improving services whilst 
maintaining a relentless attention to efficiency to enable us to offer good 
value fares this has helped every division deliver an increase in revenue 
and passenger numbers this year the uk businesses have seen 
particularly good increases in revenues and passengers resulting in 
strong profit growth in uk bus and uk coach uk coach profits 
increased significantly to £280 million 2013 £245m and have now 
grown 36 in two years uk bus has also performed very strongly 
with profits increasing to £340 million 2013 £312m and its pioneering 
partnership with centro – transforming bus travel – winning two 
industry best practice awards in the year
pleasingly the benefits of our focus on operational excellence have 
also been seen in our customer satisfaction scores with most of our 
operations leaders in their markets north american school bus for 
example has retained 97 of its contracts significantly ahead of its 
peers over 93 of customers would also recommend us to other 
school boards with quality of service safety and value being the 
key considerations
we are determined to maintain this progress building on c2c’s success 
in achieving a five star rating in the european foundation for quality 
management assessment uk coach was awarded a four star rating 
in its first assessment uk coach is determined to emulate c2c and 
secure a five star rating at its next assessment the other divisions will 
soon be undertaking similar exercises as part of our programme to 
drive operational excellence across the group
second as well as these notable successes our focus on operational 
excellence is also underpinning our success in our strategic goal of 
generating superior cash and returns with another year of excellent 
cash flow we have again exceeded our free cash flow target for the 
year by £40 million with £190 million delivered in the period this 
has enabled us to further reduce net debt by over £80 million to 
£6643 million representing a gearing ratio of 225 times ebitda 
group roce has also increased to 124 2013 1 17 reflecting our 
continuous focus on delivering strong returns on our capital this has 
underpinned improving returns to shareholders with a proposed full 
year dividend up 3 to 103 pence per share even before this dividend 
nearly £200 million has been returned to shareholders since 201 1 and 
in the past two years net debt has been reduced by £164 million
we have incurred over £40 million in rationalisation and restructuring 
costs this year our strategic rationalisation programme in the us saw 
us make significant progress on exiting commercially unattractive 
contracts with all such contracts now provided for coupled with rising 
prices in north america we are confident this programme will deliver 
rising returns in the future following the success of this ‘up or out’ 
strategy we conducted a similar review in spain we also restructured 
across the group to remove costs and enhance future earnings 
together these rationalisation and restructuring programmes have 
made us more efficient and better able to meet the challenges and 
opportunities ahead and will help deliver improved returns in the 
coming years
third we have generated growth in new markets during the year we 
won a tenyear contract to operate buses in bahrain we believe this 
positions us well locally in bahrain where there is scope for further 
growth and also within the growing middle eastern market we 
withdrew from the german coach market during the year due to its 
unrealistic pricing structure making it impossible to sustain a profitable 
quality service we were also disappointed to have come second in 
both the crossrail and scotrail competitions with the scotrail result 
particularly disappointing as we were within 024 of the winning bid 
more recently we have however secured our third and fourth contract 
wins in german rail with our success in the nuremberg sbahn 
contract these 12 year contracts generating €14 billion of revenue will 
begin operation in december 2018 and represent further expansion for 
us in europe’s largest liberalising rail market deutsche bahn has again 
chosen to challenge the award as they did unsuccessfully with our 
previous two contracts in north rhinewestphalia we therefore remain 
confident of the award being confirmed in due course
dean finch
group chief executive 
26 february 2015
national express group plc annual report and accounts 2014 8 this new market growth has also complemented the significant 
progress we have made in retaining existing contracts including our 
largest us transit contract and our largest spanish concession to have 
come up for renewal to date our success in winning the essex 
thameside franchise competition means that our industryleading c2c 
services will continue securing around £4 billion of revenue and our 
presence in uk rail until 2029 coupled with our 15 and 12 year 
contracts in germany – themselves worth around €3 billion in revenue 
– we enter 2015 with both strong credentials and a uniquely longterm 
future in the rail industry
highlights
highlights of 2014 included
• in constant currency terms the group delivered a 2 increase in 
revenue and 7 increase in normalised profit before tax this is a 
significant achievement overcoming the headwinds in the first half of 
the year earnings per share increased to 227 pence 2013 215p 
group roce increased to 124 and free cash flow of £190 million 
again exceeded our target an increase in the proposed full year 
dividend to 103 pence per share is funded within our robust policy 
of two times nonrail earnings cover
• uk coach has grown revenue by 4 uk coach’s profits have 
grown by 36 in two years with operating margin increasing over 
the same period by over 25 to reach 102 we believe there are 
good opportunities for further growth as a focus on journey time 
improvements is combined with a continued emphasis on the 
customer including the increasing use of targeted marketing 
these initiatives continue to make our offer ever more attractive 
to customers and drive improved returns
• uk bus has had another strong year with revenue growth of 
28 and west midlands commercial patronage increasing 08 
our industryleading transforming bus travel partnership won two 
awards during 2014 and provides a stability that allows us to deliver 
significant investment in improving services 2014’s passenger 
focus results saw our services secure the fastest growth in 
customer satisfaction of any urban operator this progress is 
something we are looking to build on in 2015 with initiatives such as 
the extension of our smartticketing system to trams and pay as you 
go this will be underpinned by record investment in new vehicles 
and continued close working with local authorities to improve journey 
times and reliability
• in rail we successfully retained the c2c franchise during 2014 
guaranteeing our future in uk rail until 2029 c2c has maintained 
its industryleading performance for a third consecutive year and 
delivered 6 revenue growth and 2 passenger growth in year 
a slight decline in 2014’s profit and margin is explained by the more 
onerous contract terms during the franchise extension in place to 
september last year we are encouraged by the passenger response 
so far to the new franchise’s focus on customer service investment 
in wifi and new advance purchase offpeak tickets are already 
proving popular with new flexible ticketing and pioneering automatic 
delayrepay compensation being introduced in due course we are 
confident this enhanced customer service offer will continue to 
be popular
• north america delivered a strong second half performance to 
overcome the 6 1 million impact of the extreme weather in the first 
half and ended the year with both revenue and profit growth in 
constant currency in the last five years north american school bus 
has more than doubled its profitability to £595 million 2009 
£253m we made good progress on improving the quality of the 
portfolio by exiting poorly performing contracts and targeting those 
with better returns this was complemented by a significant bolton 
acquisition in philadelphia and our largest ever conversion contract 
in memphis us transit also secured its largest contract mbta for 
a further eight years our return on assets increased again to 238 
better pricing discipline in the market combined with our ongoing 
focus on efficient capital deployment means we are optimistic 
about our prospects in north america as set out below we believe 
we have significant opportunity for further growth in north america 
• spain delivered an increase in revenue in local currency but a decline 
in operating profit to €94 1 million 2013 €960m because of the 
impact of ongoing rail competition and a significant strike in april 
the implementation of revenue management and an improved 
service offer on the affected rail competed routes led to an improved 
performance in the second half with passenger growth at 4 and 
revenue only 2 lower on the affected routes strong growth in 
morocco continued including the benefit of a full year of the tangier 
operation alsa also successfully retained its bizkaia contract the 
largest to come up for renewal so far as the number of concession 
renewals increases in the coming years we believe the benefits of 
our focus on cost efficiency and revenue management mean we 
are well placed to achieve our aim of maintaining market share
our partnership with centro on transforming bus travel in the west midlands 
was recognised by two industry awards in 2014
9 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
group chief executive’s review continued
strategy
these results demonstrate how our consistent strategy has been 
improving returns for shareholders and positions us well for future 
growth opportunities
delivering operational excellence
our success in recent years has been rooted in operational excellence 
it is also increasingly clear that our future success depends on it it is 
what our customers demand as our most recent successes in german 
rail and bahrain demonstrate a reputation for operational excellence has 
been crucial in winning contracts in new markets
for national express excellence means delivering continuously 
improving services whilst ensuring a relentless focus on efficiency our 
aim is for national express to be known for both excellence in the quality 
of our operations and price leadership
for quality safety is fundamental and remains our first priority we have 
made important progress since launching driving out harm in 2010 
and i am pleased that our independent assessors arthur d little have 
reported a year on year improvement in our fatalities and weighted 
injuries index measure of safety of 17 and a reduction in total 
responsible harm of 54 in four years however safety requires 
a relentless focus and our ambition remains to eradicate all harm 
from our business and achieve world class standards of safety
another crucial aspect of quality is the delivery of punctual high 
performing services at any one time in peak hours we have over 
23000 vehicles on the road or rail we are proud that c2c has now 
been the uk’s most punctual operator for three years running as well 
as holding the annual and fourweek records our uk coach business 
has recently signed a groundbreaking agreement with the highways 
agency to help improve our punctuality and reliability
we remain focused on operating as efficiently as possible to help 
maintain our prices as competitively as we can the £31 million of cost 
savings delivered during 2014 is higher than in 2013 across the group 
many of the businesses have delivered year on year improvements in 
value for money scores in their customer surveys and all carried more 
passengers in 2014 compared with 2013 a particular highlight is our 
uk coach business being named the country’s ‘most trusted ground 
transportation company’ by the institute of customer service
an important part of our strategy is delivering price leadership and value 
for money for our customers we are particularly pleased that all of our 
divisions have grown patronage as it demonstrates that our excellent 
prices and deals are effective within the uk for example this year we 
are investing over £23 million in great value fares such as our coach 
funfares rewards for frequent bus users and new advanced offpeak 
fares in rail
getting the combination of price and quality right means we go some 
way to delivering on our vision of earning customers’ lifetime loyalty 
passengers are more likely to continue to use our services above other 
choices because they are receiving a good service at a good price 
equally contracting authorities or businesses are less likely to retender 
services or are more likely to award us new contracts if we consistently 
deliver excellence
this is why i am particularly pleased with our retention of major contracts 
in 2014 the 15 year c2c rail franchise ten year bizkaia contract in bilbao 
and the fiveyear mbta paratransit contract in boston 
results such as our north american school bus business retaining over 
97 of its contracts and uk bus demonstrating the fastest growth in 
passenger satisfaction of any urban operator in the 2014 passenger 
focus survey are further evidence of our continued progress
superior cash and returns
cash generation has been a particular focus of national express 
we have made this a priority because free cash flow pays dividends 
for shareholders funds future growth and reduces debt
in 2014 we have again made significant progress in delivering on our 
targets we have delivered £190 million of free cash £40 million ahead 
of target national express has now delivered £1 billion of free cash 
since 2009
over the year net debt has been reduced by over £80 million to 
£6643 million a gearing ratio of 225 times ebitda
we increased the group’s roce in 2014 to 124 a 6 increase 
yearonyear we invested £51 million of net capital during 2014 and 
have continued to deploy capital where it will deliver the best returns 
we have further improved our group operating margin in 2014 to 
103 and we continue to target both margin and roce improvement 
in the coming years
we set out our plan to reduce our gearing ratio by the end of 2014 to 
help mitigate the key risks the business faced the loss of the c2c 
franchise and spanish concession renewals these risks have either not 
materialised with the c2c franchise success or been delayed spanish 
concessions we also identified new opportunities for increased 
investment during 2014 to generate shareholder value in the coming 
years we believe there are further opportunities in the coming years 
and are therefore pausing our deleveraging while staying within our 
published target to use our continued strong cash generation to invest 
in specific new growth opportunities that meet our strict financial and 
strategic criteria
creating new business opportunities
we believe the principal opportunity for increased investment to 
deliver strong growth over the medium term is in our north american 
business we have already demonstrated our ability to grow this 
business significantly in recent years over the last five years north 
american school bus has more than doubled its profits additionally 
over the same period through a disciplined approach to capital 
allocation and contract selection we have nearly doubled margins 
in north america to 96 from 57 and have improved our roa by 
1 18 to 238
the first of our new german trains rolls off the production line
national express group plc annual report and accounts 2014 10 there are excellent opportunities for growth given this market’s highly 
fragmented nature and the continuing trend for conversions there are 
over 10000 private school bus businesses in the united states indeed 
in the last year we successfully boltedon a new school bus business in 
philadelphia that operates 318 routes through improved operational 
standards group purchasing power and management synergies from 
integration with our existing nearby locations we will have paid for the 
acquisition within three years we also won our largest ever conversion 
contract in shelby county tennessee this delivered 440 new buses to 
the 285 we already operated as we integrated the operations previously 
run by the local school board our success in integrating our major 
petermann acquisition three years ago is further evidence of our strong 
credentials here
with greater consolidation and increased outsourcing in the market our 
reputation for excellence strong capital discipline and cash generation 
and industryleading team provides the group with a strong opportunity 
for further growth in north american school bus
us transit also continues to provide opportunities for further growth 
2014 was the second consecutive year where we have retained 100 
of our contracted revenue up for renewal including the largest contract 
– mbta we also secured a fixedroute transit services contract in 
yuma arizona the first contract in this heavily contracted state and a 
strategic target of the division building on this we are currently working 
on a pipeline of over 300 million of annualised revenues and believe 
this remains an attractive market
in addition our unique portfolio of diversified bus coach and rail 
businesses means national express is well placed to grow in selected 
other markets to complement this opportunity for expansion in 
north america we believe morocco for example provides good 
opportunities for further growth building on our significant progress 
there in recent years 
we have also made significant progress during 2014 in growing in 
other markets our success in securing a tenyear contract in bahrain 
opens both that country and the wider middle east to further growth 
our recent award of the nuremberg sbahn network is a clear 
demonstration of the opportunity for further growth in the exciting 
german rail market we will begin operating services on our north 
rhinewestphalia contracts in december this year and have an active 
bidding pipeline we are currently shortlisted for three german contracts 
and there are up to 30 new tenders coming up in the next two years 
we are also monitoring rail liberalisation in spain
as the operator of the uk’s best performing franchise we will continue 
to monitor opportunities in the uk rail market we will maintain our 
selective and disciplined approach and only bid where we feel our 
expertise will significantly improve the service for passengers and deliver 
acceptable returns to shareholders however through our successes in 
germany and c2c we have now secured more than £6 billion of future 
revenue in rail
outlook 
during 2015 we expect our uk rail bus and coach businesses to 
build on their good progress during 2014 and to continue to perform 
well with strong cash generation in spain the main contract renewal 
process starts this year but any impact from new terms for our larger 
concessions is unlikely to be felt until 2017  whilst we expect some 
margin pressure on renewal as is normal we believe alsa can 
mitigate this risk through a combination of significant revenue and cost 
management actions as well as securing new growth opportunities 
we are determined to retain a significant market share in spain and as 
market leaders have demonstrated our ability to compete effectively 
we also expect the group to continue to successfully exploit a 
number of important opportunities in the middle east north africa 
and germany we are currently working on an active pipeline worth 
£8 billion of annualised revenues
the benefits from these new opportunities as well as our existing 
businesses will continue to be reflected in the strong cash generation 
with a target of £100 million this year we will continue to focus on 
margin and roce improvement and we are not anticipating there to 
be any exceptional costs from reorganisation or restructuring in 2015 
as  previously stated we are changing the accounting treatment of bid 
costs to be included in normal operating costs
the recent focus of our cash flow has been on debt reduction and 
growing our dividend we increased investment in new business 
opportunities during 2014 and believe we are now in a strong position 
to exploit other new growth opportunities with a focus in the north 
american school bus market where we have more than doubled 
profitability in the past five years while we will remain within our published 
target we believe we have the opportunity to use our continued strong 
cash generation to invest in new growth opportunities that meet our strict 
financial and strategic criteria there are excellent opportunities in the 
north american market given its highly fragmented nature and the 
continuing trend in conversions the success of last year’s bolton 
acquisition in philadelphia and the largest ever conversion contract 
in memphis demonstrates the opportunity here and we will continue 
to apply our proven model of excellence to deliver the services our 
customers value as well as generating good returns for our shareholders
dean finch
group chief executive
26 february 2015
the bahraini minister of transport marks the launch of our new 
bus service in bahrain
11 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information operational
excellence
safety
customer service
operational efﬁciency
economic returns
increasing numbers
of passengers and
contracts organic
revenue and proﬁt
growth cash
generation increasing
return on capital
employed
our markets
bus coach
school bus rail
resources and
relationships
customers employees
government communities
 knowhow
shareholder
value creation
our business model
delivering operational excellence
delivering new opportunities
generating superior cash and returns
our strategy 
customers
people
safety
excellence 
community 
resources and relationships
four years on from their launch our vision 
and values continue to provide the foundation 
for our business our vision to earn the 
lifetime loyalty of our customers by consistently 
delivering frequent high performing public 
transport services which offer excellent value 
provides a clear focus both in running our 
core operations and in developing new 
opportunities our five values continue to 
underpin the vision and help us to prioritise 
what we focus on the addition of excellence 
as a fifth value in 2013 reflected a desire to 
be excellent in everything we do during 2014 
excellence has become embedded in all 
our businesses
 read more p16
risk management 
the group has a well established governance 
structure with internal control and risk 
management systems the risk management 
process provides a framework to identify 
assess and manage risks to the group’s overall 
strategy and the contribution of its divisions 
it also gives business unit management formal 
tools to identify and manage risk and allows 
group management to identify and manage 
the risks that are likely to have a more 
significant impact on the financial results and 
strategy in addition it allows the board to fulfil 
its governance responsibilities by making a 
balanced and understandable assessment of 
the risk management process and outputs
 read more p24
corporate governance
governance provides a framework within 
which the board sets its values and delivers 
long term success for the company and its 
investors whilst recognising its duties towards 
the wider stakeholder community the 
national express board is committed to 
ensuring that high standards of good corporate 
governance values and behaviours are 
consistently applied throughout the group 
the corporate governance section of the 
annual report and accounts sets out our 
approach with regard to the various aspects of 
the governance of the company and includes 
reports from each of the board committees 
on their activities in 2014
 read more p42
strategic report
our business model and strategy
delivering long term shareholder value
national express group plc annual report and accounts 2014 12 our business model 
the group uses its operational expertise experience and accumulated 
knowhow to provide best in class transport services our customers 
value our safe punctual and frequent services that are available at 
affordable prices
private transport operators can provide a higher standard of service 
and better value for money than public or state management national 
express is able to leverage this expertise across different modes of 
transport and different geographies our focus on operational 
excellence allows us to deliver longterm sustainable growth 
• through the constant improvement of high standards in customer 
service we will grow revenue by increasing passenger and contract 
volumes as well as providing the credentials for growth in 
new markets 
• we are driving cost efficiencies across the group to protect and 
grow margins 
• most of all we will ensure that our customers and employees are 
safe at all times
the group has a relatively decentralised management structure with a 
strong degree of autonomy for each division’s leadership working within 
our framework of operational and financial strategic objectives there 
are some economies of scale in procurement insurance overhead 
costs and financing
the structurally cashgenerative nature of the business enables us 
to combine sustainable investment in both existing operations and new 
markets with the opportunity to build value through highreturn growth 
and capital returns to shareholders
spain and morocco
how we build longterm value
alsa is the largest private operator of buses and coaches in spain its 
portfolio provides a balance between long distance coach operations 
which receive no subsidy and take revenue risk in return for flexibility 
over the number of services operated and a regulated maximum fare 
and regional coach operations which may be partly subsidised by the 
autonomous governments 
we carry out urban bus operations in a number of smaller regional 
spanish cities and on suburban routes in madrid where we are paid to 
fulfil defined service obligations in morocco we operate in three cities 
taking revenue risk that is supported by high passenger demand alsa 
has won a number of new contracts in both countries in recent years
key risks to manage
• intercity concession renewal
• margin on renewals
• rail competition
 read more p32
north america
how we build longterm value
we are the second largest private school bus operator in north 
america we achieve high contract retention through our relentless 
focus on customer service and safety management of capital is key as 
asset utilisation is low due to the part time usage of these specialised 
vehicles scale is beneficial but not overarching – economies can be 
achieved through procurement centralisation of administration and 
locally tailored standard operating procedures
the group acquired its initial paratransit contracts as part of the 
petermann school bus purchase in 2012 since then the transit 
business has won a further five contracts using its credentials as an 
excellent operator of relevant transport services we continue to bid 
on a substantial pipeline of opportunities and have renewed and grown 
our largest transit contract in 2014 going forward we are looking to 
augment our school bus business with targeted bolton acquisitions
key risks to manage
• further healthcare and social security taxes
• external labour pressure
• severe weather
• transit contract churn
 read more p34
uk bus
how we build longterm value
revenue and profitability are driven by the scale of operations delivering 
frequent reliable and affordable services across a broad network 
passenger growth is supported by sustainable investment in a high 
quality fleet ticketing and operational technology we have a market
leading initiative to improve bus travel in the west midlands in 
partnership with centro our local passenger transport executive 
key risks to manage
• regional economic recovery remains fragile
• local authority funding risk to concessions
• student and college funding
 read more p36
uk coach
how we build longterm value
national express has a flexible outsourced business model where third 
party providers supply 80 of the coaches and responsibility for sales 
lies with the company with 90 brand recognition the national 
express coach business benefits from its integrated network and scale 
offering breadth and interconnectivity where competitors offer only 
pointtopoint services with limited infrastructure
key risks to manage
• competition – rail
 read more p38
rail
how we build longterm value
c2c is the uk’s best performing franchise for both punctuality and 
passenger approval which is an excellent credential to drive value in the 
uk and overseas the group is now starting to exploit its rail expertise 
in deregulating markets outside the uk particularly in germany where 
it has been selected to run its first two contracts which commence 
operation in december 2015 national express has successfully 
retained essex thameside through to 2029 and is preferred bidder 
for the nuremberg sbahn franchise in germany commencing in 
december 2018 with the intention to make bids for further german 
rail franchises in the coming year
key risks to manage
• successful mobilisation in uk and germany
 read more p40
13 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
our strategy at a glance
we are making sound progress in our strategy
our strategy performance future outlook measuring our progress key risks to manage
delivering operational  
excellence 
driving revenue growth and margin 
progression in our core divisions by 
delivering excellent customer service 
• alsa is the top rated transport company 
in spain best in sector customer 
satisfaction score passenger growth 
of 23 in morocco
• north america – 93 of customers would 
recommend us and 97 retention rate in 
school bus
• core passenger growth of 4 in uk coach 
ranked as top ground transport provider in 
uk customer satisfaction index efqm 
four star rating
• uk rail – efqm five star rating top quartile 
for customer satisfaction 89
• uk bus passenger focus score up 8
• uk bus – improve quality through the 
introduction of platinum bus services
• alsa – further implementation 
of revenue management
• targeting further passenger growth 
in uk coach
• north america leveraging customer 
reputation to win new business
• leveraging c2c rail credentials to 
win further franchises
0
2
4
6
8
10
metric revenue growth 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
revenue growth year on year on a 
constant currency basis
comment 
continuing to see revenue growth on 
a constant currency in all divisions 
despite oneoff headwinds in spain and 
north america in first half of the year
• delivery of service standards
• managing disruption to services
• concession and contract renewal
• managing stakeholder relationships  
eg to improve transport infrastructure
 read more p2627
0
3
6
9
12
15
metric margin 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
operating margin is the ratio of normalised 
operating profit to revenue
comment 
margin gains driven by strong 
performance in uk coach and uk bus
• control of cost base
• managing margin risk with renewal 
of concessions and contracts
 read more p2627
generating superior cash 
and returns
a strong cash flow and improving return
on the capital we invest will drive better 
returns for our shareholders 
• operating cash flow of £248 million
• 128 of group operating profit converted 
into cash
• free cash flow of £190 million
• group return on capital improved by 70bps 
to 124 
• targeting £100 million free cash flow pa
• free cash to be deployed in investing in 
growth opportunities in existing and 
new markets
• leveraging our expertise to take advantage 
of capital light opportunities
0
50
100
150
200
metric operating cash conversion 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
operating cash conversion is the ratio 
of operating cash flow to normalised 
operating profit
comment 
continuing strong free cash flow 
generation driven by strong operating 
performances in our uk bus and coach 
businesses and an improved working 
capital performance in our 
spanish business
• maintaining cash discipline through periods 
of profit growth and expansion
• maintaining disciplined approach to 
capital expenditure
• management of working capital
 read more p2627
creating new opportunities
our unique portfolio of international 
bus coach and rail businesses gives 
national express a significant 
opportunity to grow in selected 
new markets
• won our first bus contract in the middle 
east with bus service contract in bahrain
• preferred bidder for nuremberg sbahn 
in germany 
• built around 80 million of annual revenue in 
us transit
• successful delivery of our largest ever 
conversion in memphis
• further bid wins in uk and german rail
• further bid wins in bus in the middle east
• new opportunities in portugal and morocco
• building of north american school bus 
business through bolton acquisitions
metric contract wins by value £m
0
500
1000
1500
3500
4000
spain north
america
uk
coach
rail middle east
13 14 13 14 13 14 13 14 13 14
kpi definition 
value of contracts won
comment 
contract wins across all divisions 
including retention of our largest spanish 
concession and largest us transit 
contract together with contract wins 
in new markets
• winning new business on attractive 
economic terms
• building sufficient scale in new markets
• managing operational and safety risk in 
setting up in new markets
• appropriately skilled management team 
to develop and deliver new opportunities
 read more p2627
 european foundation for quality management – recognises operational excellence and awards ratings to businesses based on a number of criteria including quality of leadership and strategic direction 
together with development and improvement of people partnerships and processes in order to deliver valueadding products and services to their customers
national express group plc annual report and accounts 2014 14 our strategy performance future outlook measuring our progress key risks to manage
delivering operational  
excellence 
driving revenue growth and margin 
progression in our core divisions by 
delivering excellent customer service 
• alsa is the top rated transport company 
in spain best in sector customer 
satisfaction score passenger growth 
of 23 in morocco
• north america – 93 of customers would 
recommend us and 97 retention rate in 
school bus
• core passenger growth of 4 in uk coach 
ranked as top ground transport provider in 
uk customer satisfaction index efqm 
four star rating
• uk rail – efqm five star rating top quartile 
for customer satisfaction 89
• uk bus passenger focus score up 8
• uk bus – improve quality through the 
introduction of platinum bus services
• alsa – further implementation 
of revenue management
• targeting further passenger growth 
in uk coach
• north america leveraging customer 
reputation to win new business
• leveraging c2c rail credentials to 
win further franchises
0
2
4
6
8
10
metric revenue growth 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
revenue growth year on year on a 
constant currency basis
comment 
continuing to see revenue growth on 
a constant currency in all divisions 
despite oneoff headwinds in spain and 
north america in first half of the year
• delivery of service standards
• managing disruption to services
• concession and contract renewal
• managing stakeholder relationships  
eg to improve transport infrastructure
 read more p2627
0
3
6
9
12
15
metric margin 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
operating margin is the ratio of normalised 
operating profit to revenue
comment 
margin gains driven by strong 
performance in uk coach and uk bus
• control of cost base
• managing margin risk with renewal 
of concessions and contracts
 read more p2627
generating superior cash 
and returns
a strong cash flow and improving return
on the capital we invest will drive better 
returns for our shareholders 
• operating cash flow of £248 million
• 128 of group operating profit converted 
into cash
• free cash flow of £190 million
• group return on capital improved by 70bps 
to 124 
• targeting £100 million free cash flow pa
• free cash to be deployed in investing in 
growth opportunities in existing and 
new markets
• leveraging our expertise to take advantage 
of capital light opportunities
0
50
100
150
200
metric operating cash conversion 
spain north
america
uk
bus
uk
coach
rail
13 14 14 14 14 14 13 13 13 13
kpi definition 
operating cash conversion is the ratio 
of operating cash flow to normalised 
operating profit
comment 
continuing strong free cash flow 
generation driven by strong operating 
performances in our uk bus and coach 
businesses and an improved working 
capital performance in our 
spanish business
• maintaining cash discipline through periods 
of profit growth and expansion
• maintaining disciplined approach to 
capital expenditure
• management of working capital
 read more p2627
creating new opportunities
our unique portfolio of international 
bus coach and rail businesses gives 
national express a significant 
opportunity to grow in selected 
new markets
• won our first bus contract in the middle 
east with bus service contract in bahrain
• preferred bidder for nuremberg sbahn 
in germany 
• built around 80 million of annual revenue in 
us transit
• successful delivery of our largest ever 
conversion in memphis
• further bid wins in uk and german rail
• further bid wins in bus in the middle east
• new opportunities in portugal and morocco
• building of north american school bus 
business through bolton acquisitions
metric contract wins by value £m
0
500
1000
1500
3500
4000
spain north
america
uk
coach
rail middle east
13 14 13 14 13 14 13 14 13 14
kpi definition 
value of contracts won
comment 
contract wins across all divisions 
including retention of our largest spanish 
concession and largest us transit 
contract together with contract wins 
in new markets
• winning new business on attractive 
economic terms
• building sufficient scale in new markets
• managing operational and safety risk in 
setting up in new markets
• appropriately skilled management team 
to develop and deliver new opportunities
 read more p2627
 european foundation for quality management – recognises operational excellence and awards ratings to businesses based on a number of criteria including quality of leadership and strategic direction 
together with development and improvement of people partnerships and processes in order to deliver valueadding products and services to their customers
15 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
managing our resources and relationships
living our values
four years on from their launch our vision and values continue to 
provide the foundation for our business
our vision is to earn the lifetime loyalty of our customers by consistently 
delivering frequent high performing public transport services which 
offer excellent value this provides a clear focus both in running our 
core operations and in developing new opportunities
our five values continue to underpin the vision and help us to prioritise 
what we focus on the recent addition of excellence as a fifth value 
reflected a desire to be excellent in everything we do it is increasingly 
clear that our future success depends on it excellence is what our 
existing customers demand as our most recent successes in german 
rail and bahrain demonstrate a reputation for operational excellence 
has been crucial in winning contracts in new markets
excellence
that is why during 2014 the business focused on embedding 
excellence in all our business with efforts particularly channelled 
into achieving external accreditation for our approach to quality 
management
across the group work has progressed towards the goal of continually 
delivering sustainable excellence in europe we are working towards  
the european foundation for quality management efqm excellence 
model which provides a benchmark to compare ourselves against 
other leading companies accreditation is granted after a rigorous  
review by external assessors in north america we are working to 
the complementary baldrige excellence model
c2c was the first of our businesses to gain a five star quality rating in 
2013 and the experiences gained during that process have helped the 
uk bus and uk coach businesses in seeking accreditation
c2c continues to lead performance in the rail industry with three 
successive years at the top of the uk’s rail punctuality league table  
it also holds both the annual and four week punctuality records our 
plans for the new franchise we began operating in november 2014 will 
extend this approach to excellence and embrace new levels of customer 
service and technology to further enhance our operation 
during 2014 uk coach had its first efqm assessment and was 
awarded four stars by the british quality foundation the body  
which grants accreditation in the uk this was an excellent result  
excellence 
we constantly strive 
to be excellent in all 
that we do
safety 
we only do what 
is safe and stop any
unsafe behaviour
commuinty
we are active in 
the communities we 
serve to generate 
economic social and 
environmental value
customers 
we place them at the
heart of our business
and relentlessly meet
their expectations
people
we develop the talents
reward the exceptional
performance and respect
the rights of all our employees
our vision is to earn the lifetime loyalty of our 
customers by consistently delivering frequent high 
performing public transport services which offer 
excellent value
c2c continues to lead performance in the rail industry with three successive years 
at the top of the uk rail punctuality league table
partnerships deliver business benefits
our ability to build and maintain strong relationships with our 
partners is a key driver of our success both in delivering consistent 
high performing public transport services and in winning new 
contracts in both new and existing markets
throughout this report we provide examples of how working in 
partnership is helping to deliver benefits to our customers and the 
wider communities we operate in
• providing work experience opportunities in spain p33
• donating surplus school buses to help the community p35
• transforming bus travel in the west midlands p37
• creating an innovative partnership with the 
highways agency p39
• working with local authorities to improve rail services p41
national express group plc annual report and accounts 2014 16 and recognised uk coach’s approach to quality management and 
excellence uk coach is determined to emulate c2c and secure a  
five star rating at its next assessment
both alsa and uk bus are currently actively preparing for their first 
efqm assessments in the summer of 2015 north america expect 
their first illinois performance excellence assessment in autumn 2015
apart from achieving formal accreditation we are pleased to have gained 
external recognition during the year for a number of initiatives uk bus 
won awards at both the national transport awards and uk bus awards 
for its work with centro on transforming bus travel in the west midlands 
our ability to manage disruption at c2c was recognised at the golden 
whistles awards and we picked up two golden merit awards from the 
national school transportation association in the usa alsa also won  
a merit award in land transport from the ministry of public works in 
recognition of its reputation as an excellent public transport operator 
safety
safety is our highest priority in whatever we do as a business and we 
have appropriate management systems in place across the group 
overall responsibility for safety sits with our group chief executive  
dean finch and our divisional managing directors who set out annual 
plans and priorities for improved performance 
the driving out harm programme launched across national express 
group in 2010 aims to ensure that safety is always front of everyone’s 
mind so that we achieve a safety record which is best in class among 
transport operators our aim is to drive out all risks of harm to our 
customers our colleagues and others affected by our business
alongside our standard safety key performance indicators ‘kpis’ 
during 2014 we introduced a new fatalities and weighted injuries index 
providing a measure of total responsible harm this new index is based 
on the wellestablished harm index used across the uk rail industry 
this has been adapted to more accurately reflect the way the bus and 
coach industry records incidents with greater weighting being given 
to lost time injuries compared with the railonly methodology 
we have reviewed our safety performance since the 2010 launch 
of the driving out harm programme using this new index although 
safety requires a relentless focus this has helped identify the good 
progress we have made our external safety auditors arthur d little 
have concluded that total responsible harm has reduced by 54 in 
four years 
individual divisions have also recorded particular highlights in the year 
c2c for example had zero signals passed at danger spads during the 
year this was achieved through continual driver dialogue including 
driver and signaller workshops and targeted safety communications 
and training throughout the year 
uk coach was awarded the maximum five stars in the british safety 
council’s five star health and safety audit and was certified as meeting 
the ohsas 18001 international occupational health and safety 
management standard this award recognises the quality of our 
processes and systems you can find out more about this in our 
safety case study on page 39
in morocco the continuing focus on driver training including the use  
of bus simulators and twice yearly training and assessment days for 
drivers has delivered sustained improvements in safety performance 
you can read more about our safety performance in our 
key performance indicators section on page 22
the driving out harm programme 
aims to ensure that safety is always 
front of everyone’s mind so that we 
achieve a safety record which is best 
in class among transport operators
continual training for our drivers in morocco has delivered sustained 
improvements in safety
our reputation for delivering great service is reflected in a 97 retention rate for 
north american school bus contracts
17 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
managing our resources and relationships continued
customers
we never forget that without our customers we would not have a 
business so getting things right is critical our five customer golden 
rules set out the standard we expect all employees to follow 
we believe this is really delivering results with the benefit evident in our 
customer satisfaction scores where most of our operations are leaders 
in their markets north american school bus for example has retained 
97 of the contracts it bid for significantly ahead of its peers over 93 
of customers would also recommend us to other school boards with 
quality of service safety and value being the key considerations
a particular highlight is our uk coach business being named the 
country’s ‘most trusted ground transportation company’ by the institute 
of customer service with customers more likely to recommend it to 
others compared with competing rail bus and coach providers
the retention of the new essex thameside franchise provided an 
opportunity to launch a range of new customer initiatives including 
smart ticketing the new c2c smart card allows c2c season ticket 
holders to switch from paper tickets to an oysterstyle tapandgo 
smartcard ticket they can use anywhere on the c2c route in addition 
c2c and barclaycard have launched a pilot of the contactless c2c bpay 
wristband which allows passengers to pay for their travel without buying 
a separate ticket if successful passengers will be able to travel using 
the c2c bpay wristband and all forms of contactless payment across  
the entire c2c route
apart from smart ticketing c2c customers now benefit from the new 
travel app c2c live which provides the latest travel information and  
free wifi at stations
listening to our customers helps shape the services we deliver all  
of our businesses survey their customers with for example alsa 
increasing its activity in this area last year with 30000 surveys 
completed 10000 comments received and 100 facetoface interviews 
completed this activity helps increase customer loyalty and provides 
useful insights to improve service delivery
we have innovated for example in uk bus we have developed this 
key relationship by getting all 27 elected members of centro to adopt 
a bus route local to them the councillors regularly travel on the routes 
and see for themselves the issues which customers raise another 
initiative to get closer to passengers is the launch of our first customer 
panel in coventry the panel comprises eight customers who have a 
crosssection of user experiences and will be used to discuss concerns  
and provide feedback on new products and services
people
we continue to run employee surveys to measure the engagement of 
our people every year we use the results to influence how we make 
national express a better place to work 
as in previous years we used an external research company 
valuentis to conduct the uk surveys using the same company 
makes it easier to make comparisons across divisions the results show 
that in 2014 we made further progress in terms of engagement many  
of our business units are the highest in valuentis’ database
• our corporate functions have again registered the highest official 
engagement score in valuentis’ database the score of 782 is  
well ahead of the uk norm of 668
• uk coach has again achieved the highest score in the buscoach 
section of the valuentis database
• c2c has the highest score for any train operating company  
in valuentis’ database 
our north america employee survey is also run by an independent 
company in this case tns in 2014 91 of employees said they enjoy 
working for the business two percentage points ahead of the 2013 
score similarly there was a two percentage point increase in people 
saying they would recommend the business as a good place to work 
up to 84 referring to our results mike schroeder ceo of tns 
employee insights said “national express continues to demonstrate 
exceptional performance when it comes to employee satisfaction and 
engagement” 
across the group we employ 42000 people we want every one of 
them to reach their full potential and give their best we aim to reward 
exceptional performance and respect the rights of all our employees 
one of our aims for 2014 was to introduce a common employee benefits 
package for our uk employees this was to ensure all our people could 
benefit from the same discounts and offers this was launched using 
the my national express banner and was well received
during the year each business has progressed local initiatives to build 
employee engagement
in uk coach a coaching programme was introduced to help managers 
get the most from their teams and develop new ideas and revenue  
the programme covered 135 managers across uk coach
a new way of engaging with employees was piloted in uk bus 
a garage council was set up at the biggest garage in birmingham 
a common benefits package for uk employees has been developed and 
promoted under the my national express banner
centro members have adopted bus routes across the west midlands to get 
closer to customer issues
national express group plc annual report and accounts 2014 18 creating a forum for employees to discuss concerns and be consulted 
on changes the garage council has proved a success at bringing 
together people from different functions to debate shared issues
one of the challenges for c2c in preparing for its new franchise was  
the need to move everyone over seamlessly to a new company this 
involved transferring everyone through tupe including reorganising  
the management structure in time to meet all the committed obligations 
for launch 
alsa like all our divisions recognises long service with the company 
during 2014 alsa recognised 130 employees for long service of 20  
30 and 40 years the commitment of these employees is clear they 
have chosen to stay with alsa for the long term and we are pleased 
to be able to celebrate their service to the company
national express has a number of policies in place to protect 
and promote employee welfare such as the workplace rights and 
human rights policies as well as disability equal opportunities and 
whistleblowing policies any alleged breaches of these policies are 
fully investigated by the company and appropriate action taken 
where necessary wherever our employees choose to be represented 
by unions national express actively seeks to maintain relationships 
based on mutual respect and transparency
employee senior management and director numbers 
by gender at end 2014
male female
directors 8 2
senior managers 47 14
all employees 24400 17853
community 
we recognise that we have a number of important responsibilities 
towards the communities in which we operate be that delivering vital 
transport services to get people about managing our environmental 
impact or providing job opportunities for young people we have a 
strong record of community involvement and in 2014 this continued
we are a major employer and recognise our role in promoting new job 
opportunities for those in the communities we serve in the last year our 
uk bus and coach businesses took on 42 apprentices our ground
breaking west midlands ‘routes to work’ partnership with the 
department for work and pensions has seen over 1850 new job 
opportunities filled over the last three years as well as hiring new staff  
we hoped the partnership would broaden the diversity of our workforce 
we are pleased therefore that it has helped bring the average age of 
our workforce down by six years and also seen a record number of 
women apply for jobs
our groundbreaking west midlands 
‘routes to work’ partnership with the 
department for work and pensions 
has seen over 1850 new job 
opportunities filled over the last 
three years
the national express foundation completed its third year of operation 
supporting young people with challenging financial circumstances 
awards were made to 13 community groups and three educational 
establishments bringing the total of young people to benefit from the 
foundation since its inception to 2700
our national express giving foundation in north america is now 
established and providing grants to staff it is awaiting final approval  
from the us tax authorities to begin awarding external grants in 2014  
it provided 10000 in grants to staff
a highlight of the year was the launch of uk coach’s youth promise –  
an industryleading package of commitments shaped by members of  
the uk youth parliament the package includes the creation of new 
apprenticeships roll out of a structured work experience scheme and 
investment of thousands of employee hours in young people’s causes 
every member of uk coach staff has been granted one day of paid leave 
a year to volunteer to help achieve this the youth promise also includes 
specific partnerships with the prince’s trust scouts and whizzkidz 
the centenary of the start of the first world war was marked by uk bus 
with a special remembrance service at the business’ own war memorial 
in birmingham to support this event the business funded the creation 
of a special book which traced the history of all the former employees 
who are named on the memorial
the employee charity panel continues to support uk employees who 
are engaged in volunteering or fundraising during 2014 65 groups 
benefited from grants from the panel
our support for the special olympics continues in north america 
employees offer up their time to volunteer at events and we provide 
shuttle buses for the events this support was recognised by special 
olympics illinois in june when they presented durham school services 
with an outstanding organisation award
across the group we made charitable donations totalling £582012 
during 2014 2013 £356000
scouts is one of the organisations supported by the youth promise  
in uk coach
19 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
managing our resources and relationships continued
managing our environmental impacts
one of the key deliverables under our community value is meeting  
our environmental responsibilities under the guidance of our group 
property and environment director each division is challenged with 
taking the necessary actions to meet ambitious environmental targets
in 2014 we delivered a strong environmental performance and set new 
targets for the next new threeyear period expectations on businesses 
in this area have increased since the previous targets were set in 2010 
only fuel site energy and waste were considered as key indicators then 
but in setting the targets for 20142017 we have included additional 
indicators – water and total carbon emissions these new targets apply 
to all areas of our business and each managing director is accountable 
for delivering them
the new targets were set after considerable research into which 
environmental parameters have a significant impact on our carbon 
emissions and the climate change agenda we set targets on reducing 
our consumption of fuel site energy water and waste with the aim 
of reducing our total carbon emissions the targets set will stretch our 
divisions ensuring we meet our corporate ambition of demonstrating 
excellent global environmental performance we consider factors such 
as our supply chain available investment and what our competitors are 
doing in our sector the uniformity of reporting environmental kpi data in 
the transport sector is poor whilst competitors look to report the same 
key areas such as fuel site energy waste water and carbon they do 
not do it consistently across their businesses
group environmental kpi targets 20142017 
1 fuel 3 reduction in fuel consumption  
per passenger kilometre 
2 site energy 20 reduction in total consumption 
3 waste 80 reduction in nonhazardous waste to landfill 
4 water 10 m
3
 reduction in total consumption 
5 total carbon emissions 4 reduction in carbon emissions 
per passenger kilometre 
all kpis from 2013 baseline
we value external validation of our environmental performance as it 
provides assurance that our strategy is delivering and the opportunity  
to benchmark against our peers
one of those external measures is the carbon disclosure project 
cdp which helps us to manage our carbon usage the cdp is 
an independent assessment of a company’s strategy approach 
achievements and performance in all environmental matters in 
october 2014 the cdp released its formal assessment of over 2000 
uk companies we were awarded a performance band of b with a 
disclosure score of 85 a significant increase on our previous score 
and the largest improvement in the sector 
this significant improvement in the scoring was due to the efforts of  
all our divisions with each having its performance data independently 
assessed our score provides evidence that our strategy is working 
and providing tangible results in making us more efficient and 
sustainable further information on our carbon performance can 
be found on our group website
another external measure is the carbon saver standard our work to 
cut energy costs has continued to deliver carbon emission reductions 
resulting in our uk divisions achieving the top gold standard
in 2014 we made a new voluntary commitment to work towards the 
production and use of climate change related information in our annual 
report this commitment developed by the climate disclosure 
standards board highlights the importance we place in considering 
every opportunity associated with climate change
one of our goals to achieve excellence in our management of 
environmental performance is to work towards the relevant international 
standards for this activity significant progress was made in 2014 with 
our spanish division achieving both the iso 140012004 standard –  
for environmental management – and the iso 50001201 1 standard – 
for energy management standards in all its transport and maintenance 
companies and depots certifications were also obtained for four major 
coach stations in spain our other businesses are committed to 
achieving these standards as part of achieving external accreditation 
for excellence
in 2013 we reported the greenhouse gas ghg emissions for the whole 
group for the first time our continued focus on reducing emissions has 
resulted in a further reduction in emissions in 2014 this excellent 
performance was delivered in a year which saw a growth in our 
business and an increase in the number of vehicles we operate
national express group total emissions  
2013 vs 2014 tco
2
e
in 2014 we delivered a strong 
environmental performance 
and set new targets for the 
next threeyear period
900000
450000
600000
750000
300000
150000
0
2014 2013
national express group plc annual report and accounts 2014 20 in 2015 we are committed to ensuring that the ghg accounting system 
results and accompanying reports remain robustcontinue to enhance 
our group level emission performance and are in compliance with the 
mandatory requirement for carbon reporting
the safety  environment committee reviews and monitors our 
environmental systems and processes makes recommendations on 
specific issues and was responsible for setting the new group targets 
for 20142017  a priority for improvement is the consistency of our 
internal environmental reporting and these new targets will fully 
incorporate our spanish and north american businesses for the  
first time further information about the role and responsibilities 
of the committee can be found on page 59
greenhouse gas emissions reporting for 2014 tco
2
e
n coach owned and third party 104381
n bus incl metro 142312
n trains c2c 44724
n leased vehicles and business travel uk 443
n alsa 296214
n north america 236979
total 825053
13
17
5
36
29
greenhouse gas emissions reporting for 2014
emissions from
tonnes of  
co
2
e
combustion of fuel and operation of facilities  
ghg protocol scope 1
750523
electricity heat steam and cooling purchased for 
own use ghg protocol scope 2
66677
other upstream emissions  
ghg protocol scope 3
7853
total 825053
intensity metric tonnes co
2
e£million 
revenue
2014 2013 
tonnes co
2
e  £million revenue 442 441 019
group totals million passkm 35459 36379 –253
total tco
2
e per million passkm 2327 2295 140
revenue million 18674 18913 –001
methodology
national express has reported on all of the emission sources 
required under the companies act 2006 strategic report and 
directors’ report regulations 2013 these sources fall within our 
consolidated financial statements we do not have responsibility 
for any emission sources that are not included in our 
consolidated statements
the method we have used to calculate ghg emissions is the 
ghg protocol corporate accounting and reporting standard 
revised edition together with the latest emission factors from 
recognised public sources including but not limited to the 
department for environment food and rural affairs the 
international  energy agency the us energy information 
administration the us environmental protection agency 
and the intergovernmental panel on climate change
we have used a materiality threshold of 5 and have accounted 
for all material sources of ghg emissions
youngsters from arc theatre set up in basildon station to deliver their national 
express foundation funded performance about antisocial behaviour 
our continued focus on reducing 
emissions has resulted in a further 
reduction in emissions in 2014
21 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
key performance indicators
managing our progress
kpi definition
group normalised operating profit
kpi definition
free cash flow is the cash flow equivalent  
of normalised profit after tax
kpi definition
return on capital employed roce is 
normalised operating profit divided by 
tangible and intangible assets for our 
core nonrail businesses
kpi definition
this index is based on the fatalities and 
weighted injuries ‘fwi’ index used in the 
uk rail industry
this has been adapted to more accurately 
reflect the way the bus and coach industry 
records incidents with greater weighting being 
given to lost time injuries compared to the rail 
only methodology 
kpi definition
passenger numbers as measured by the 
aggregate of passenger journeys across our 
five operating divisions
our numbers for north america are estimated 
as our school bus services are nonticketed
kpi definition
our employee satisfaction survey is 
conducted by valuentis a company 
which is widely used as an employee survey 
provider in the uk transport industry the 
survey delivers an employee engagement 
score for each individual division with our 
score for north america being partially 
estimated from data provided by tns 
which conduct the employee surveys in 
north america
2014 performance
• further progress in group operating profit 
driven by strong performances in our 
uk bus and uk coach operations
• oneoff events in our north american  
and spanish operations depressed  
group performance
• strength of sterling depressed operating 
profit performance for the group 
2014 performance
• highest level of free cash generation for 
six years
• generated over £1 billion of free cash  
in the last six years
• operating cash flow conversion rate 
of 128
• targeting free cash flow of £100 million per 
annum going forward as we return to more 
typical levels of maintenance capital 
expenditure
2014 performance
• strong performances in our uk bus and 
uk coach operations driving higher returns 
for the group
• invested £51 million of net capital 
expenditure predominantly in growing 
our fleet in existing operations and also 
in new markets
2014 performance
• significant reduction in fwi over the past 
12 months reflecting ongoing success of 
the driving out harm safety programme 
with big improvements in morocco 
and spain
• 54 improvement in the safety 
performance since the introduction 
of driving out harm in 2010
2014 performance
• further growth in passenger numbers 
driven by continued investment in 
fleet improvement in services and 
attractive fares
• strong performance in uk coach and 
uk rail
• first year of operations in tangier plus 
strong growth in marrakech and agadir  
with new services added
2014 performance
• further progress in the year in all divisions 
with the exception of c2c
• small dip in c2c reflects challenges ahead 
of preparing for the new rail franchise and 
remains higher than the average train 
operating company score of 707
• our corporate functions have registered 
the highest official engagement score in 
the valuentis database at 782 versus 
the industry norm of 668
why we measure
we are focused on driving growth in operating 
profit in order to drive higher and sustainable 
returns for our investors
why we measure
a key part of the group’s strategy is to 
maximise the cash generation across all our 
operating divisions we view cash generation 
as a key driver for creating shareholder value
our core bus and coach operations are strong 
cash generators complemented by our 
capital light model for rail
why we measure
we are focused on improving return on the 
capital we invest in order to drive better 
returns for investors
we maintain a disciplined approach to 
capital investment and continue to invest in 
those areas for which we can deliver the 
best returns
why we measure
safety is at the heart of our vision and values 
and is our priority for both our customers  
and employees
high safety standards also help to drive 
sustainable growth through customer 
loyalty and new business wins
why we measure
passenger journeys are reflective of underlying 
demand for travel national express is 
targeting increased passenger ridership as 
a longer term driver of sustainable value
why we measure
we run employee surveys to measure the 
engagement of our people every year we 
use the results to influence how we make 
national express a great place to work
national express group plc annual report and accounts 2014 22
group normalised operating profit
2014 £1931m
2012 2013 2014
240
200
160
120
80
40
0
free cash flow
2014 £1903m
2012 2013 2014
240
200
160
120
80
40
0
return on capital employed 
2014 117 
2012
core nonrail roce
2013 2014
12
10
8
6
4
2
0 kpi definition
group normalised operating profit
kpi definition
free cash flow is the cash flow equivalent  
of normalised profit after tax
kpi definition
return on capital employed roce is 
normalised operating profit divided by 
tangible and intangible assets for our 
core nonrail businesses
kpi definition
this index is based on the fatalities and 
weighted injuries ‘fwi’ index used in the 
uk rail industry
this has been adapted to more accurately 
reflect the way the bus and coach industry 
records incidents with greater weighting being 
given to lost time injuries compared to the rail 
only methodology 
kpi definition
passenger numbers as measured by the 
aggregate of passenger journeys across our 
five operating divisions
our numbers for north america are estimated 
as our school bus services are nonticketed
kpi definition
our employee satisfaction survey is 
conducted by valuentis a company 
which is widely used as an employee survey 
provider in the uk transport industry the 
survey delivers an employee engagement 
score for each individual division with our 
score for north america being partially 
estimated from data provided by tns 
which conduct the employee surveys in 
north america
2014 performance
• further progress in group operating profit 
driven by strong performances in our 
uk bus and uk coach operations
• oneoff events in our north american  
and spanish operations depressed  
group performance
• strength of sterling depressed operating 
profit performance for the group 
2014 performance
• highest level of free cash generation for 
six years
• generated over £1 billion of free cash  
in the last six years
• operating cash flow conversion rate 
of 128
• targeting free cash flow of £100 million per 
annum going forward as we return to more 
typical levels of maintenance capital 
expenditure
2014 performance
• strong performances in our uk bus and 
uk coach operations driving higher returns 
for the group
• invested £51 million of net capital 
expenditure predominantly in growing 
our fleet in existing operations and also 
in new markets
2014 performance
• significant reduction in fwi over the past 
12 months reflecting ongoing success of 
the driving out harm safety programme 
with big improvements in morocco 
and spain
• 54 improvement in the safety 
performance since the introduction 
of driving out harm in 2010
2014 performance
• further growth in passenger numbers 
driven by continued investment in 
fleet improvement in services and 
attractive fares
• strong performance in uk coach and 
uk rail
• first year of operations in tangier plus 
strong growth in marrakech and agadir  
with new services added
2014 performance
• further progress in the year in all divisions 
with the exception of c2c
• small dip in c2c reflects challenges ahead 
of preparing for the new rail franchise and 
remains higher than the average train 
operating company score of 707
• our corporate functions have registered 
the highest official engagement score in 
the valuentis database at 782 versus 
the industry norm of 668
why we measure
we are focused on driving growth in operating 
profit in order to drive higher and sustainable 
returns for our investors
why we measure
a key part of the group’s strategy is to 
maximise the cash generation across all our 
operating divisions we view cash generation 
as a key driver for creating shareholder value
our core bus and coach operations are strong 
cash generators complemented by our 
capital light model for rail
why we measure
we are focused on improving return on the 
capital we invest in order to drive better 
returns for investors
we maintain a disciplined approach to 
capital investment and continue to invest in 
those areas for which we can deliver the 
best returns
why we measure
safety is at the heart of our vision and values 
and is our priority for both our customers  
and employees
high safety standards also help to drive 
sustainable growth through customer 
loyalty and new business wins
why we measure
passenger journeys are reflective of underlying 
demand for travel national express is 
targeting increased passenger ridership as 
a longer term driver of sustainable value
why we measure
we run employee surveys to measure the 
engagement of our people every year we 
use the results to influence how we make 
national express a great place to work
23 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information
safety fatalities and weighted 
injuries index 2014 127
2012 2011 2013 2014
2013 and 2014 include both north america transit 
and petermann
30
25
20
15
10
5
0
passenger journeys
2014 845m
2012 2013 2014
900000
750000
600000
450000
300000
150000
0
employee engagement
2014 by division
13
north
america
maximum score is 1000 spain conducts employee 
satisfaction surveys biannually and so is excluded
uk
coach
c2c uk 
bus
14 13 14 13 14 13 14
900
750
600
450
300
150
0 strategic report
risk and risk management
committed to managing risk effectively and robustly
the group has a well established governance structure with internal 
control and risk management systems the risk management process
• provides a framework to identify assess and manage risks both 
positive and negative to the group’s overall strategy and the 
contribution of its individual component divisions
• gives business unit management formal tools to identify and manage 
risks in their daytoday operations
• allows group executive management to identify and manage the 
risks that are likely to have a more significant impact on the financial 
results and strategy and share common issues and solutions across 
the group and
• allows the board to fulfil its governance responsibilities by making 
a balanced and understandable assessment of the operation of 
the risk management process and its outputs
responsibilities and actions
the board
• has overall responsibility for the group’s system of internal control 
and for reviewing its effectiveness
• has a mandate to define the group’s risk culture and to determine 
its appetite for risk in order to deliver the strategic objectives
• maintains full control and direction over appropriate strategic 
financial operational and compliance issues and
• has put in place an organisational structure with formally defined lines 
of responsibility delegated authorities and clear operating processes
the audit committee 
• has specific responsibility for reviewing and validating the 
effectiveness of the group’s internal control and risk 
management systems
• is responsible for the identification assessment and management 
of risk including actions taken and processes adopted to do so
• reviews and approves all financial information published by the 
group and
• reviews the internal audit programme considers major findings of the 
internal audit investigations and reviews management’s financial 
reporting and risk management
risk assessment
each division plus the group corporate functions is required to make a 
formal review of all risks to their business objectives assess the impact 
and likelihood of the risk occurring and put in place appropriate 
mitigating actions processes and systems to manage the risk
identify
identify risks to business objectives on a bottom up basis risks are 
described and categorised into operational strategic and financial 
risks in order to help define their precise nature and potential impact 
on the business
assess 
assess and quantify the potential impact on business objectives and 
determine the likelihood of the risk occurring this is done on a ‘before’ 
and ‘after’ basis where the impact of management controls is assessed 
in relation to the probability and severity of a risk
mitigating actions
take mitigating actions and implement systems to manage the likelihood 
and impact of the risk identify an individual with responsibility for 
each risk
review
risks are considered on a monthly basis at divisional level and formally 
updated twice a year these risks are documented on a divisional risk 
register management is encouraged to review the risk registers from 
other divisions to identify common issues and potential solutions
each divisional register including the group corporate functions register 
is consolidated into a group risk register
the group executive committee reviews the group risk register twice 
a year followed by the group audit committee the audit committee 
reports in turn to the main board 
internal audit
the internal audit function has responsibility for monitoring the risk 
management and internal control systems and facilitates the twice yearly 
formal update of the risk registers internal audit reports to management 
and the audit committee on the extent to which internal controls are 
adequately designed and implemented
risk assessment review 
risk assessment 
identify 
assess 
mitigating actions
review 
group executive 
committee 
audit committee
board 
review
national express group plc annual report and accounts 2014 24 during 2014 the group focused on the following key areas of risk
risk change why responsible
concession and contract renewal
continued bidding activity group chief executive and divisional 
managing directors
economic conditions and austerity
tight public budgets in persistently 
weak economic conditions
divisional managing directors
political and regulatory
ongoing regulatory changes in spain 
north america and uk
group chief executive and divisional 
managing directors
contract bidding
ongoing inherent risk in contract 
businesses
divisional managing directors
contract mobilisation
mobilisation for new bus and 
rail contracts in middle east 
and germany
managing directors of the international 
and rail divisions
the following are ongoing risks within the business
fuel cost
unplanned increases in the price of 
fuel continues to be a risk despite 
the significant fall in prices in the last 
quarter of 2014
group finance director
insurance and claims
continuing claims management and 
safety systems in place
group finance director
credit risk
payment terms and cash collection 
better in spain
divisional finance directors
currency
lessening threat of major disruption 
in eurozone
group finance director
25 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
principal risks and uncertainties
looking forward the group will focus on the following key areas of risk
risks assessment management potential impact
concession and contract renewal
much of the group’s business 
is secured through winning 
contracts and concessions 
particularly in our north american 
school bus and transit business 
in spain and in rail
2015 continues to see some 
significant bidding activity as 
the group seeks to expand its 
operations in the middle east 
and germany and continues 
bidding to renew intercity 
coach concessions in spain
approximately 65 of the group’s total 
revenue is either contract or concession 
based these contracts vary in length 
and are typically awarded for between 
12 months and 20 years
following the successful retention of 
the essex thameside rail franchise the 
group continues to bid for rail contracts 
in germany and will selectively bid for 
future uk rail franchises
the concession renewal process in 
spain has changed with the most 
significant difference being the removal 
of the incumbent advantage alsa 
currently expects about 60 of its 
national coach concessions to be bid in 
2015 and 2016
a reputation for high quality services helps 
to win and retain contracts the group 
has a good record of retaining contracts 
on a historical basis no national coach 
concession in spain has been lost before 
and retention rates in school bus are 
typically very high 97 in 2014 and 2013
national express was successful at retaining 
the essex thameside franchise and in 2015 
was awarded the contract to operate the 
nuremberg sbahn commuter rail service 
from 2018 further rail contracts are being 
bid for in germany
alsa is well prepared to submit high quality 
bids on its own and other concessions as 
and when they are called to tender
high
economic conditions and austerity
uncertain economic conditions 
continue to exist in europe and 
north america whilst some of 
the group’s businesses have 
naturally defensive characteristics 
some of the more discretionary 
parts of the business may be 
adversely affected by reduced 
economic activity
revenues in the bus coach and rail 
businesses in the uk and spain may be 
affected by lower passenger demand 
there is also some positive risk that the 
group would benefit from the prospect 
of modal shift towards its forms of 
transport in north america for example 
school boards may reduce their 
transportation budgets or look to shift 
provision to contractors like national 
express in spain the division may be 
affected by the effects of austerity and 
low gdp growth however they may 
benefit from the outsourcing of further 
urban bus operations
the group seeks to mitigate these risks 
through proactive cost control revenue 
management systems the careful economic 
modelling of new and existing contracts 
including sensitivities around expected 
growth rates and through sharing risk with 
contracting parties
high
political and regulatory
the group’s businesses are 
subject to numerous laws in the 
jurisdictions in which they operate 
regulating the operation of 
concessions safety procedures 
equipment specifications 
employment requirements 
environmental procedures and 
other operating issues
changes in political and regulatory 
environments can have a significant 
impact on regulated public transport 
operators from adding significant cost 
to changing the fundamental nature of 
a market for example
changes in uk government policy 
resulted in material decreases in 
subsidies paid in 2012 and 2013 for 
senior citizen discounts and fuel rebates
the uk department for transport is 
introducing reforms in the franchising 
process and has recently restarted the 
tendering process 
the spanish government has agreed 
the imposition of a fee on new 
concessions and the removal of a 5 
incumbency advantage on new national 
intercity concessions
the risk is reduced by maintaining close 
relationships with key stakeholders and 
ensuring that the economic advantages of 
our business models are fully understood 
and considered
in the longer term the group can mitigate 
risk by diversifying its operations into other 
geographies
medium
national express group plc annual report and accounts 2014 26 risks assessment management potential impact
contract management
the group has a significant 
proportion of its revenue that is won 
through contract and concession 
tenders
an inherent risk in contract bidding is 
that bid assumptions might prove to be 
incorrect if the group’s significant bid 
assumptions prove to be incorrect this 
could have an adverse effect on results 
of the operations and the group’s 
financial condition
the group seeks to mitigate the risk 
through careful economic modelling of new 
contracts and by sharing revenue risk with 
the awarding body for example with the 
dft in rail
proper mobilisation is a key part of ensuring 
that risk of divergence from bid assumptions 
is minimised 
medium
contract mobilisation
the mobilisation to deliver new 
services following a contract 
award is involved often requiring 
the purchase of new vehicles 
and in some cases such as 
in germany and the middle 
east the creation of a new 
business operation
while mobilisation is a core expertise 
of the group operating in new 
geographies and cultures increases the 
complexity and challenge of successful 
new contract startup the risk is greater 
where contracts are won with relatively 
short lead time to a fixed service start
startup activities are formally managed with 
dedicated skilled local teams supported by 
group expertise close senior management 
oversight ensures any key risks or issues are 
rapidly escalated and resolved
medium
the following are ongoing risks within the business
fuel cost
all of the group’s businesses are 
exposed to fuel costs – primarily 
diesel for buses and coaches 
fuel prices are subject to 
significant volatility due to 
economic political and 
climate circumstances
fuel costs constitute approximately 
10 of the group’s costs and 
consequently to the extent that price 
increases cannot be passed on to 
customers increases in fuel costs will 
affect profitability
the group seeks to mitigate risks of 
increases in fuel costs by entering into fuel 
swaps and forward purchase contracts 
in line with the group’s hedging strategy 
discussed on page 31 
medium
insurance and claims
the group’s policy is to selfinsure 
a number of potential claims 
within its business
there is a risk that a successful claim or 
series of successful claims may result in 
substantially higher charges to profit 
and cash outflow than expected
throughout the business a strong safety 
culture prevails led by the safety  
environment committee where claims arise 
they are managed by experienced claims 
handlers and professional advice is obtained 
in order to evaluate and minimise costs to 
the group 
medium
credit risk
as contractual operations the 
north american and spanish 
urban businesses are exposed to 
the risk that customers are either 
late or unable to pay sums owed 
to the group
payment terms and cash collections 
in north america are extremely good 
in spain the level of outstanding debt 
is in line with historical levels in 2012 
and 2013 all longterm outstanding 
amounts were settled through a federal 
government credit facility and through 
2014 the level of outstanding debt has 
continued to fall
receivables in each business are closely 
monitored based on robust and thorough 
documentation provisions are then made 
where appropriate on a prudent basis for 
a certain level of noncollection additional 
contractual terms for interest accrual and 
repayment of outstanding balances have 
been agreed with overdue debtors 
where necessary 
low
currency
the group’s exposure to 
overseas earnings through its 
spanish and north american 
operations creates a risk that 
movement in exchange rates may 
adversely impact translation of 
profit and cash flows together 
with group gearing
foreign currency movements impact 
the profit balance sheet and cash flows 
of the group during 2014 the euro 
depreciated against sterling whereas 
over the year the us dollar appreciated 
against sterling having initially 
weakened in the first half of the year 
the group holds euro denominated 
debt and us dollar finance leases 
the group uses currency debt and currency 
swaps to reduce the impact and mitigate the 
risk in addition management has flexibility 
to adjust group capital allocation 
the board has tested for the impact of 
a breakup of the eurozone or sovereign 
debt default on the group’s ability to fund 
and operate and has identified plans for 
such scenarios
low
27 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
group finance director’s review
secure and strong financial position
presentation of results
we present our financial results on two bases normalised results show 
the performance of the business before exceptional items loss on 
disposal of a business in 2013 and intangible amortisation since the 
board believes this gives the reader a clearer understanding of existing 
business performance ifrs results include these items to give the 
statutory results 
revenue
group revenue for the year grew 23 to £1867 4 million on a constant 
currency basis down 13 on a reported basis 2013 £18913m 
reflecting the strengthening of sterling against the euro and us dollar 
revenue bridge £m change
2013 full year revenue 1891
impact of oneoff events 6 03
organic growth 39 21
acquisitions 10 05
2014 revenue at constant currency 1934 23
currency translation 67 36
2014 full year revenue 1867 13
we have delivered revenue growth in local currency in all five of 
our divisions through pricing volume growth and new business 
the strengthening of sterling across the year led to a small decrease 
in group revenue on a reported basis
normalised profit
group normalised operating profit increased by 4 to £193 1 million 
on a constant currency basis up £02 million on a reported basis 
2013 £1929m group operating profit margin improved by 20 basis 
points on a constant currency basis to 103 10 basis points on a 
reported basis normalised operating profit performance continues 
to be robust in our core nonrail business increasing by 4 1 on a 
constant currency basis to £185 1 million a decrease of £04 million 
on a reported basis 2013 £1855m 
profit bridge £m change
2013 normalised operating profit 193
impact of oneoff events 5
organic revenue growth 17
acquisitions 3
general cost inflation 35
cost efficiencies 31
fuel price change –
other 3
2014 normalised operating profit 
 at constant currency 201 40
currency translation 8 40
2014 normalised operating profit 193
the strikes in spain and the particularly bad weather experienced in 
north america in the first half of the year reduced profits by £50 million 
despite these headwinds organic profit growth was 88 £17m and 
bolton acquisitions contributed £3 million cost inflation of £350 million 
was largely offset by cost savings of £310 million giving an overall 
growth in profit of 4 in constant currency
our uk coach and uk bus businesses were the strongest performers 
with uk coach operating profit increasing by 14 to £280 million and 
operating profit margin improving by 90 basis points uk bus delivered 
operating profit growth of 9 with operating margin improving by 70 basis 
points profit in spain fell with local currency profit €19 million lower 
reflecting the industrial action in the first half of the year combined with the 
impact of increased competition in the intercity market however spain 
returned to operating profit growth in the second half helped by the 
successful roll out of our revenue management programme in north 
america profit improved by us10 million on a constant currency basis 
with a significant recovery in the second half together with further 
progress in winning higher margin contracts central function costs were 
lower as a result of reductions in headcount startup losses in the 
german coach operation were £17 million and as previously announced 
the german coach operation was closed in the third quarter rail profit 
from the group’s c2c franchise was down £0 1 million reflecting slightly 
less favourable contract terms in the franchise extensions
operating profit
2014 
£m
2013 
£m
spain 758 815
north america 595 626
uk bus 340 312
uk coach 280 245
central functions 122 143
core nonrail profit 1851 1855
german coach 17 24
rail 97 98
group 1931 1929
net finance costs decreased to £480 million 2013 £498m benefiting 
from the strong cash generation of the group driving lower debt 
together with a lower cost of financing as a result of the group’s bank 
refinancing in july 2013 with associate income of £03 million 2013 
£06m normalised profit before tax was £1454 million 2013 £1437m 
matthew ashley
group finance director 
26 february 2015
national express group plc annual report and accounts 2014 28 2014 2013
summary income statement £m £m
revenue 18674 18913
operating costs 16743 16984
normalised operating profit 1931 1929
share of results from associates 03 06
net finance costs 480 498
normalised profit before tax 1454 1437
tax 277 325
normalised profit after tax 1177 1112
the normalised tax charge was £27 7 million 2013 £325m an effective 
normalised tax rate of 19 1 2013 226 just below the expected 
medium term rate due to reductions in the statutory tax rates in the uk 
and spain which result in favourable changes to deferred tax balances 
consequently the medium term expected tax rate range has reduced 
by 2 to a range of 2023 subject to future legislative changes 
normalised profit for the year was £1 17 7 million 2013 £1 1 12m giving 
a basic eps of 227 pence 2013 215p of which nonrail eps was 
212 pence 2013 20 1p an increase of 3 in the final dividend has 
been declared based on maintaining around two times nonrail 
earnings cover on a full year basis our proposed policy with regard to 
future rail profits is to return value to shareholders separately reflecting 
the franchise nature of the rail industry
exceptional items
from normalised profit before tax of £1454 million the group has 
invested £503 million in exceptional items in the period 2013 £257m 
this significant investment is focused on delivering two key objectives
• developing new business opportunities in rail and international 
markets to add value to the strongly performing existing operations
• restructuring of the existing nonrail operations to consolidate their 
market leading positions and to respond to both opportunities 
and challenges
2014 2013
exceptional items £m £m
rail bidding 198 93
international bidding 57 64
restructuring 258 54
strategic rationalisation 183 –
exceptional fuel credits 193 –
acquisition and integration costs – 46
exceptional items 503 257
business development
over the past year investment in new business opportunities has 
focused on securing future profits from a combination of new uk rail 
franchise competitions leveraging group rail expertise to capitalise 
on opportunities outside the uk and establishing and developing a 
presence in new international public transport markets
during 2014 the group invested £198 million bidding for three uk rail 
franchises and four regional rail opportunities in germany as previously 
announced the group won the essex thameside c2c franchise 
securing our presence in the uk rail market through to 2029 with the 
franchise expected to generate up to £200 million of operating profit 
over the 15year term of the contract more recently we have also 
secured our third and fourth contract wins in german rail with our 
success in the nuremberg sbahn contract these 12year contracts 
are expected to contribute €14 billion of revenue and will begin 
operation in december 2018
the group has also invested £57 million in order to develop new 
international markets where either the liberalisation of staterun public 
transport markets is presenting attractive opportunities or where there is 
the establishment of firsttime public transport operations as a result of 
this activity in 2014 national express successfully bid for a new urban 
bus contract in bahrain with operations having commenced in february 
2015 this will form the foundation for further expansion opportunities in 
bahrain and in the wider middle east region
as previously outlined our policy has been to charge development 
costs for new businesses to exceptional items until a revenue stream 
has been established in 2014 uk rail bidding costs were charged to 
exceptional costs on the basis of materiality given their relative scale 
in relation to the profit generated by the group’s remaining uk rail 
franchise having now secured the c2c franchise through to 2029 
together with business in german rail and international markets the 
board will not treat any bid costs as exceptional going forward
strategic rationalisation
as previously disclosed at the half year north america launched a 
strategic rationalisation programme to improve return on capital and to 
exit from commercially unattractive contracts the group recognised 
a charge of £1 12 million primarily providing for the future losses from 
onerous contracts in the business together with the associated costs of 
closing facilities and restructuring of related overhead costs this charge 
is expected to deliver an annual benefit of £3 1 million 
following the success of this oneoff ‘up or out’ programme in north 
america a detailed review of all of alsa ’s contracts was performed 
identifying six contracts that were loss making that required turnaround or 
exit we are in the process of renegotiating the improved terms or exit of 
these six contracts the associated costs of rationalising the business and 
improving or exiting these contracts are £7  1 million with estimated annual 
savings of £24 million this oneoff programme has now been completed
restructuring
the business has undergone a multidivisional comprehensive 
restructuring programme to reduce ongoing structural costs and 
enhance future earnings as a result of this programme average 
managerial and administrative headcount has reduced across the 
group by 72 year on year and total headcount by 335
in the uk there were three strands to the restructuring
1 an employee buyout from part of the principal defined benefit 
pension scheme combating the increased costs caused by changes 
in legislation
2 a oneoff reduction in headcount across all three businesses and 
the centre reducing managerial and administrative headcount by 20
3 a writedown and disposal of assets that were deemed surplus to 
the ongoing needs of the business
the restructuring costs of £146 million will result in annual savings 
of £50 million 
as previously announced due to the fierce competition and 
unsustainably low pricing a decision was made to close the loss
making german coach operation in the second half of this year 
resulting in an associated exceptional charge of £17 million 
in spain our ‘alsa futura’ restructuring programme is designed to 
address the significant competitive pressures in the domestic market 
we have achieved a reduction in headcount and central overheads 
through combining the domestic urban and city operations total costs 
were £48 million generating annual savings of £34 million
29 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
group finance director’s review continued
in north america our business has implemented a oneoff restructuring 
programme to reduce central overheads in our main corporate centre 
in the us together with the integration of our transit operations from 
cincinnati to warrenville this cost is £47 million and is expected to 
deliver an annual cost saving of £30 million 
exceptional fuel credits
following a decision by the european court rejecting a fuel duty levied 
in spain between 2005 and 2012 alsa has submitted claims to the 
spanish court for recovery of the duty paid on the basis of current 
approval of claims submitted £218 million has been recognised 
to date £95 million has been received in cash with the remainder 
expected to be received during 2015
this is partly offset by ineffectiveness of £25 million on the group’s fuel 
hedges following the exceptional volatility in market prices towards the 
end of the year
ifrs results
intangible amortisation decreased to £286 million 2013 £493m 
with the completion of amortisation on spanish concessions acquired 
with the alsa business statutory profit for the period was therefore 
£606 million 2013 £583m basic eps was 1 16 pence 2013 1 1 1p
2014 2013
ifrs profit £m £m
normalised profit before tax 1454 1437
exceptional items and loss on 
 disposal of business 503 300
intangible amortisation 286 493
profit before tax 665 644
tax charge 59 61
profit for the year 606 583
cash management
cash generation is core to our strategy representing a key driver of 
shareholder value the group’s core bus and coach operations are 
strong cash generators complemented by rail’s capitallight model 
in 2013 and 2014 the group has successfully delivered increased cash 
flow generation driven by a programme of capital rationalisation to 
produce higher returns 
in 2014 the group delivered operating cash flow of £248 1 million 
2013 £2480m representing a conversion rate of 128 of operating 
profit this reflects a lower level of maintenance capital expenditure net 
of disposals of £432 million which is 43 of the depreciation charge 
this includes investment in fleet replacement and ongoing capital 
discipline across the group 
we would expect maintenance capital expenditure to return to the more 
typical historical level of 1 1 to 12 times depreciation in the current year 
driven by the completion of the north american bus utilisation and 
cascade programme
working capital reduced by £48 million 2013 £305m reflecting 
continued discipline on cash management
£1903 million of free cash flow was generated over the year 2013 
£1828m reflecting more efficient use of capital and we would expect 
the level of free cash flow to return to a more typical level in the current 
year as we increase the level of maintenance capital expenditure as 
detailed above
2014 2013
free cash flow £m £m
normalised operating profit 1931 1929
depreciation and other  
 noncash items 1021 1082
ebitda 2952 3011
net maintenance capital expenditure 432 749
working capital reduction 48 305
pension contributions above 
 normal charge 87 87
operating cash flow 2481 2480
receipts frompayments to 
 associates and minorities 13 05
net interest paid 461 484
tax paid 130 163
free cash flow 1903 1828
uk rail franchise exit outflow 16 36
exceptional cash expenditure 447 229
cash flow available for  
 growth and dividends 1440 1563
free cash flow has funded £447 million of exceptional item expenditure 
leaving £1440 million 2013 £1563m available to invest in growth 
capital projects and bolton acquisitions we will continue to focus on 
capitallight investment opportunities which will drive a higher return on 
capital employed the group’s return on capital increased by 70 basis 
points to 124
with dividend payments of £516 million 2013 £503m the net inflow of 
funds in the year after foreign exchange movements was £818 million 
2013 £82 1m reducing net debt to £6643 million as at 31 december 
2014 2013 £7 46 1m
2014 2013
net funds flow £m £m
cash flow available for growth 
 and dividends 1440 1563
net growth capital expenditure 73 77
acquisitions and disposals 59 95
dividends 516 503
other including foreign exchange 26 67
net funds flow 818 821
the recent focus of our cash flow has been on debt reduction and 
growing our dividend we are now in a strong position to exploit new 
growth opportunities with a focus in the north american market where 
we have more than doubled profitability in the past five years we believe 
that there are excellent opportunities in this market given its highly 
fragmented nature and the continuing trend in conversions the 
success of last year’s bolton acquisition in philadelphia and the largest 
ever conversion contract in memphis demonstrate the opportunity here 
and we will continue to apply our proven model of excellence to deliver 
the services our customers value as well as generating good returns for 
our shareholders
national express group plc annual report and accounts 2014 30 treasury management
the group maintains a prudent approach to its financing and is 
committed to an investment grade credit rating it is the board’s policy 
to target a level of debt that enables disciplined investment and ample 
headroom on its covenants with group net debt to ebitda maintained 
at a ratio of 20x to 25x over the medium term
the group’s key accounting debt ratios as at 31 december 2014 were 
as follows
• gearing ratio 225 times ebitda 31 december 2013 25x bank 
covenant not to exceed 35x
• interest cover ratio ebitda 63 times interest 31 december 2013 
6 1x bank covenant not less than 35x
the group has a strong funding platform that underpins the delivery 
of its strategy core funding is provided from nonbank sources to 
provide improved certainty and maturity of funding at the end of 
2014 this represented £7428 million of funding primarily from 
two sterling denominated bonds comprised of a £350 million 
bond maturing in 2017 and a £225 million bond maturing in 2020 
together with a private placement of €78 million maturing in 2021 
and £110 million of finance leases 
additional committed bank funding of £416 million to meet seasonal 
working capital needs and to provide sufficient funding headroom is 
provided under the group’s unsecured revolving credit facility ‘rcf’ 
which was successfully renewed and extended to november 2019 
at a reduced margin of 06 over libor at 31 december 2014 the 
group had £4997 million in cash and undrawn facilities available
the group hedges its exposure to interest rate movements to maintain 
a balance between fixed and floating interest rates on borrowings to 
achieve the desired fixed to floating ratio the group has entered into a 
series of interest rate swaps that have the effect of converting fixed rates 
into floating rate debt the net effect of these transactions was that at 
31 december 2014 the proportion of group net debt at floating rates 
was 28 2013 33
the group’s exposure to foreign exchange is limited to translation of its 
earnings and assets as its overseas activities are naturally hedged by 
earning revenue and incurring costs in local currencies in order to 
hedge its exposure to currency fluctuations with regard to its financial 
ratios the group held at 31 december 2014 euro debt of €240 million 
and us dollar debt of 267 million these correspond to 18 times 
eurogenerated ebitda and 18 times us dollargenerated ebitda 
in 2014 
pensions
the group’s principal defined benefit pension schemes are all in the uk 
at 31 december 2014 these schemes had a combined deficit under 
ias 19 of £1 19 million an improvement from the deficit position of 
£30 1 million at 31 december 2013 primarily due to improved asset 
returns during the year the national express group staff pension plan 
‘uk coach plan’ is now closed to all future accrual a funding plan 
aimed at bringing the plan to selfsufficiency was agreed with the 
trustees in 2010 national express contributes £42 million per annum 
to this scheme in 201 1 uk bus agreed a £55 million annual deficit 
repayment plan with the trustees of the west midlands integrated 
transport authority pension fund ‘wm plan’ the wm plan remains 
open to accrual for existing active members only this scheme was 
further derisked during 2012 by securing future payments for existing 
pensioners in a £272 million insurance buyin to the scheme the group 
expects to contribute around £10 million per annum in total deficit 
contributions to its defined benefit schemes until 2017 
the ias 19 valuations at 31 december 2014 were as follows
• uk bus under the wm plan and the tayside transport 
superannuation fund £506 million deficit 2013 £408m deficit
• uk coach plan £306 million surplus 2013 £126m surplus
• uk railother £8 1 million surplus 2013 £19m deficit the 
group’s rail business participates in the railways pension scheme 
this exposure transfers to an incoming operator in the event of a 
franchise termination
fuel costs
the group consumes approximately 245 million litres of diesel and 
gasoline each year for which it is at risk ie there is no direct fuel escalator 
in the contract or concession price this relates to the nonrail divisions 
and represented a total cost including delivery and taxes to the group 
in 2014 of £167 million 10 of related revenue at an average fuel 
component cost of 49 pence per litre the group has adopted a forward 
fuel buying policy in order to secure a degree of certainty in its planning 
this policy is to hedge fully a minimum of 15 months’ addressable 
consumption against movements in price of the underlying commodity 
together with at least 50 of the next nine months’ consumption in the 
contract businesses currently the group is 100 fixed for 2015 at an 
average price of 47 pencelitre excluding delivery and tax 96 fixed for 
2016 at an average price of 43p and 81  fixed for 2017 at 43p the drop 
in the price of crude oil in q4 of 2014 resulted in an adverse movement 
in the value of these hedges to a liability of £71 million which will be 
offset by the lower price paid for fuel in 20152017  from an accounting 
perspective we have recognised £25 million of ineffectiveness as an 
exceptional cost representing 35 of the £71 million fair value liability
where businesses have freedom to price services this hedge provides 
sufficient protection to recover fuel price increases through the fare 
basket in contract businesses where price escalation may be restricted 
by a formula independent of fuel costs extended cover up to the life of 
the contract may be taken subject to availability and liquidity in the 
hedging market the latter is rarely available beyond three years from 
the trade date
principal risks and uncertainties 
the group’s other principal risks and uncertainties remain in line with 
those that are detailed on pages 26 and 27 and are summarised here 
• concession and contract renewal 2015 is likely to see some 
significant bidding activity by the group to retain and renew its 
existing portfolio of contracts and concessions for example in spain 
and north america which may be underbid by competitors
• economic conditions parts of the business may be adversely 
affected by economic conditions for example in spain and the uk 
as revenues in many of the businesses are historically correlated to 
gdp and employment
• political and regulatory changes changes in political and regulatory 
environments can impact a regulated transport business through 
the operation of concessions safety procedures equipment 
specifications employment requirements environmental procedures 
and other operating issues
• contract management an inherent risk of bidding for contracts is 
that bid assumptions prove to be incorrect
• fuel cost changes in economic and political climate can drive 
changes in cost for the group
• insurance and claims there is a risk that a successful insurance 
employment or other claim may result in material charges to profit 
and cash flow
• financial risks the group faces risks from deteriorating customer 
credit and to movements in currencies 
in addition the group has seen an increase in competitive pressure 
particularly in spain where high speed rail competition has impacted 
intercity coach revenues 
matthew ashley 
group finance director
26 february 2015
31 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
business review spain and morocco
challenging year but revenue management  
driving improvement in the second half
2014 2013
year ended 31 december £m £m
revenue £5381 £5646
normalised operating profit £758 £815
revenue €6677 €6650
normalised operating profit €941 €960
operating margin 141 144
overview of 2014
alsa saw a decline in normalised operating profit of 2 over the year 
on a local currency basis this performance reflects the ongoing impact 
of challenging economic conditions and rail competition on intercity 
coach patronage together with the effect of industrial action in spain 
in the first half the year despite these challenges overall revenue grew 
on a local currency basis with growth in the second half of the year 
more than offsetting the headwinds and oneoff events in the first half 
this growth has been driven by contract wins in spain including the 
successful retention of our largest concession to come up for renewal 
to date together with strong growth in morocco where revenues 
increased by 22 our moroccan performance has been driven by 
additional services on our existing operations in marrakech and agadir 
coupled with the first time contribution from our operations in tangier 
with the official launch of our fleet of 120 new buses in september
total revenue for the year in local currency grew by 04 to €667 7 
million 2013 €6650m although reported revenue declined by 5 to 
£538 1 million 2013 £5646m reflecting the appreciation of sterling 
over the year our intercity coach business has experienced growing 
competition on eight key corridors with five corridors competing against 
high speed rail while the other three are competing with aggressively 
priced regional rail together these eight corridors account for 24 of 
alsa’s total revenue as we reported at the half year renfe has been 
particularly aggressive on pricing with fare reductions of around 25 
while simultaneously increasing the quota of discounted tickets 
available while this activity has continued throughout the second half 
of the year we have taken action to respond rapidly and effectively to 
changes in the market implementing revenue management which has 
helped to drive an improved revenue performance in the second half 
of the year
underlying revenue for alsa including morocco increased by 1 
when adjusting for the oneoff impact of the industrial action revenue in 
spain fell 13 on a likeforlike basis and revenue in morocco increased 
by 22 primarily due to growth in tangier
normalised operating profit on a local currency basis was €94 1 million 
2013 €960m and £758 million in sterling terms 2013 £815m with a 
return to operating profit growth on a local currency basis in the second 
half of the year the operating margin of 14 1 2013 144 remains the 
best in class for a spanish bus and coach operator
operational excellence
alsa is recognised as an excellent operator in public transport and in 
2014 we received the merit award in land transport from the ministry 
of public works 
the economic environment remains challenging in spain which is 
impacting demand for travel particularly longdistance travel at the 
same time we are experiencing increased competition from rail on eight 
corridors with more aggressive regional pricing in response to this we 
have developed a strategic action plan to improve our competitive 
position and the customer travel experience 
this plan includes some additional services on certain routes journey 
time improvements onboard entertainment and the introduction of 
revenue management on 90 intercity routes this prompt response in 
mid2014 drew on the experience and expertise from within the group 
especially uk coach with a determination to ensure we retained price 
leadership on these routes we changed our organisational structure 
and strengthened our pricing capability to enable a quicker response 
on pricing decisions and the use of dynamic fares this has been 
combined with higher profile and more focused marketing emphasising 
our low cost services and we have also introduced new lower cost 
distribution channels significantly following these initiatives we have 
seen passenger volumes grow 4 in the second half with revenue only 
2 lower on routes where we have introduced revenue management
we remain focused on delivering further cost efficiencies in order 
to mitigate the impact of lower fares and cost inflation in 2014 we 
consolidated our intercity and urban transport operations into a single 
transport division and began centralising other business functions 
including purchasing we have also achieved further efficiencies in our 
sales network with a greater number of activities now being undertaken 
by our agents over the past year we have also increased our efficiency 
on fuel consumption resulting in a 2 reduction in fuel consumption 
driven by a programme of consumption improvement measures 
including fuel efficient driver training
these actions are already delivering efficiencies and we are working 
on other opportunities for further savings in fuel removing unprofitable 
mileage and consolidating corporate teams and functions drawing on 
the success of the north american ‘up or out’ strategy we have taken 
a similar targeted approach with uncommercial spanish contracts 
these actions will continue to deliver cost savings in 2015
€m
2013 normalised operating profit 960
net impact of changes in fares and 
 services increased competition 74
revenue management 40
other cost inflation 22
cost efficiencies 57
strike 20
2014 normalised operating profit 941
javier carbajo
chief executive alsa
national express group plc annual report and accounts 2014 32 cash and returns
in 2014 alsa delivered another strong performance generating 
operating cash of €122 million with operating cash conversion of 130 
reflecting improvement in working capital of €1 1 million mostly driven 
by action taken to reduce receivables
we have maintained our disciplined approach to capital investment 
in 2014 we invested €26 million mainly in fleet including new buses 
for our contract renewal in bizkaia
creating new opportunities
we believe there are further opportunities to be gained from the 
programmes we started in 2014 we will extend the revenue 
management system and are determined to ensure we maintain our 
price leadership our ‘up or out’ strategy has further to run and our 
ongoing cost efficiency programme will continue to deliver savings 
our focus is to ensure we are well placed for the upcoming concession 
renewal process the main contract renewal process starts this year 
with any impact from new terms for our larger concessions unlikely 
to be felt until 2017  we are determined to maintain our significant 
market share our bidding team is industryleading and has already 
demonstrated its effectiveness in retaining and growing our significant 
bizkaia contract in addition we have negotiated a fiveyear extension 
until 2024 to the madrid consortium contracts securing €350 million 
of additional revenues we expect some pressure on margins from the 
concession renewals which is why we already have cost efficiency 
and revenue management programmes in place we will also look to 
again leverage the group expertise and experience in customised 
emarketing building on uk coach’s leadership similar programmes 
will be rolled out across the businesses 
while the spanish market is clearly changing it is moving towards 
models we already operate under and have a significant level of 
expertise in
we will also analyse bolton acquisitions in spain as far as they meet 
our financial criteria we continue to monitor future prospects for private 
sector development in the domestic rail market while the liberalisation of 
the bus market in portugal could also present attractive opportunities
building on the success of our operations in a third moroccan city – 
tangier – we believe there continue to be good opportunities for further 
growth this is both through organic growth and in other cities across 
morocco where our services’ excellent reputation is opening up 
new opportunities
partnership muévete employment programme
gloria aza
director of the ma in t ransport and logistics management 
university of oviedo spain
alsa has introduced a work experience programme which is helping 
young people into work
“the muévete work programme for young people launched by alsa is 
an excellent initiative it provides spanish university students with an 
opportunity to have their first contact with the world of work and a real 
working experience within a company this will undoubtedly grant 
them access to more job opportunities in the future”
 
excellence – master driver
alsa drivers who participated in one of the master driver training courses
the national express master driver programme was created across 
the group to encourage and recognise excellence in driving it 
provides a framework to measure the performance of drivers and 
identify those with an impeccable safety record and outstanding 
driving skills but it goes beyond just driving skills to recognise those 
drivers who are ambassadors for customer service who impress 
customers each and every day through consistent and exceptional 
demonstration of national express’ customer service standards
the programme is being followed throughout the group’s businesses 
but alsa has made particularly good progress in introducing it the 
programme is based on an ongoing assessment of the results from 
each driver depending on their score they are classified into three 
categories – professional driver advanced driver and master driver 
drivers are incentivised to work on improving their scores enabling 
them to reach higher levels during 2014 more than 1300 drivers from 
alsa took part in the master driver programme achieving excellent 
results and 800 more will participate in 2015
33 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
business review north america
strong recovery in the second half
2014 2013
year ended 31 december £m £m
revenue £6202 £6450
operating profit £595 £626
revenue us10218 us10094
operating profit us980 us979
operating margin 96 97
overview of 2014 
our north american business has more than doubled profits over the 
last five years 2009 £253 million and has delivered another year of 
growth in revenue and operating profit offsetting significant headwinds 
seen during the first half of the year on a constant currency basis 
revenue grew by 2 with operating profit increasing to 980 million 
2013 97 0m a strong performance in the second half more than 
offset the oneoff impact of 6 1 million in lost profit in the first half from 
the extreme cold weather and snow
we continued to focus on increasing profitable growth and improving 
the quality of our portfolio exiting those contracts that fall below our 
minimum return criteria and winning new business which generates 
more attractive returns in the last bid season we achieved price 
increases on these contracts of nearly 5 and this trend of increasing 
prices has continued into the current bid season
this growth has been boosted by the first time contribution from 
our bolton acquisition in philadelphia where we were able to deliver 
synergy benefits through the seamless integration of the acquired 
business into our existing operations together with the largest 
conversion we have made to date we were able to leverage our 
previously existing 275 bus contract in memphis significantly growing 
the contract with an additional 440 buses we have also seen overall 
positive price movements on contract renewals of over 4 with over 
200 contracts renewed throughout the year 
we have maintained our relentless focus on costs and the streamlining 
of operations within school bus we have reorganised some support 
staff and head office functions and we have also consolidated our transit 
business into our warrenville headquarters with the upturn in the us 
economy and the associated fall in unemployment there are early signs 
of some upward pressure on drivers’ wages
m
2013 normalised operating profit 979
exchange movement cad to usd 09
2013 normalised operating profit  
 at constant currency 970
net impact of revenue growth 25
acquisitions 47
fuel cost 08
other cost inflation 150
cost savings including synergies 175
weather 61
other 18
2014 normalised operating profit 980
operational excellence
our north american operation already delivers best in class margin 
following the successful completion of our margin improvement 
programme between 2010 and 2012 traditionally the school bus 
industry is a capitalintensive low cash generation business over the 
past two years our focus has been to increase the return on capital 
across our portfolio of 500 contracts and generate a strong cash flow 
by focusing on contracts which generate adequate capital returns we 
have more defensible relationshipbased contracts where our service 
quality is valued by the customer where we are not able to obtain 
financial returns above our minimum criteria we have exited the contract 
– in the 201415 school year bid season we relinquished 1 1 contracts 
leading to a reduction net of bid wins of more than 550 buses 
operated we have continued to cascade buses where they meet 
the appropriate age criteria thereby increasing fleet utilisation
we continue to deliver superior service standards with over 93 of our 
customers willing to recommend us on the basis of quality of service 
safety and value this is also reflected in our industry leading contract 
retention rate which remains very high achieving over 97 again for 
the last bidding season excluding those contracts which we have not 
contested as they do not meet our minimum returns criteria we have 
invested further in improving our maintenance standards in the past 
year with enhanced training and skills testing programmes resulting 
in an increased number of quality assured automotive service 
excellence certified technicians in addition we are utilising our 
gps tracking technology across all our locations enabling ontime 
performance measurement for our businesses and are currently piloting 
a ‘where’s my bus’ app which provides parents with realtime tracking 
information and we are pleased that our employee survey has again 
demonstrated yearonyear improvements with over 90 saying they 
enjoy working for the company our north american foundation has 
also given its first grants within our business
david duke
chief executive national express corporation
  revenue and operating profit at constant currency adjusting for canadian dollar 
to us dollar foreign exchange rate movement in the year
national express group plc annual report and accounts 2014 34 cash and returns
operating cash flow represented a conversion of 1 19 of operating 
profit with 1 17 million of operating cash delivered in the year with the 
normal pattern of strong working capital collection at the school and 
calendar yearends continuing
as we commented last year our ongoing programme to improve 
contract capital returns has resulted in lower capital investment 
requirements as we look to increase asset utilisation actively managing 
spare capacity within our fleet together with cascading fleet from exited 
contracts this drive for more efficient capital deployment has delivered 
a significant improvement in return on assets over the past two years 
rising from 17 2 in 2012 to 238 in 2014 we are targeting yearon
year improvements in our operating margin as our more disciplined 
contract management and bidding and asset management 
programmes continue to deliver benefits we expect to return to a 
constant fleet replacement level in 2015 in line with depreciation 
creating new opportunities
our transit business provides a good business development opportunity 
in a growing market in most bids vehicles are funded either by the 
federal government or the customer resulting in a low capital 
investment requirement and high returns on capital using our 
operational expertise and superior track record of service delivery we 
will continue to seek further bid opportunities in this attractive market
we see attractive growth opportunities in the north american school 
bus market as it remains highly fragmented and the trend towards 
conversion continues with over 10000 private school bus businesses 
in the us we see significant opportunity for consolidation better pricing 
discipline in the market combined with our ongoing focus on efficient 
capital deployment means we are optimistic about our prospects in 
north america 
building on our recent successes we will continue to focus on further 
selective bolton acquisitions where we can leverage our existing 
operations and deliver synergy benefits we have demonstrated a 
strong track record of success here from the acquisition of petermann 
through to our more recent purchase of a school bus business in 
philadelphia we have a successful track record of acquiring and 
seamlessly integrating new businesses with all of our acquisitions 
exceeding original expectations and as we enter 2015 and beyond we 
expect to increase our level of investment in these attractive growth 
markets we will also continue to seek further conversion opportunities 
building on our recent success in memphis
 
community – blue valley school
blue valley’s friend of education award
the school buses we run in north america are part of the fabric of the 
local communities they operate in they provide a vital link which 
ensures students reach school safely the exceptional work carried out 
by our employees does not go unrecognised an example of this last 
year was when we were honoured by the blue valley school district in 
overland park kansas as a 2014 ‘friend of education’ for its excellent 
service to the district in providing student transportation 
“durham school services sees transportation as an extension of blue 
valley’s educational efforts durham’s attention to detail customer
oriented approach and willingness to go above and beyond the call of 
duty has helped to bring blue valley’s mission of ‘education beyond 
expectations’ to life” said steve davis director of business operations 
for blue valley school district 
each year the blue valley board of education recognises organisations 
and individuals who have played a critical role in bringing leadership 
and quality in education to the district according to steve davis 
recipients of the friend of education awards understand that student 
success depends on the combined efforts of the community
partnership school bus donation
rev dr charles b jackson
senior pastor  brookland baptist church west columbia 
south carolina
local organisations are benefiting as a result of our programme of 
donating surplus buses in north america
“this bus makes possible transportation for young people and 
provides not only encouragement but huge momentum in our efforts 
to reach out to them transportation has been a problem in terms of 
the services that our church wants to provide but these needs have 
been met by the contribution of the very beautiful bus that national 
express has made to us national express cares about people 
national express cares about communities”
35 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
business review uk bus
strong performance with the partnership approach 
driving further growth
2014 2013
year ended 31 december £m £m
revenue 2810 2734
operating profit 340 312
operating margin 121 114
overview of 2014
uk bus delivered a strong performance with revenue growth driven 
by a combination of increased passenger volume and price inflation 
passenger growth has reflected our continued investment in fleet 
service and technology 
total revenue grew by 3 to £2810 million 2013 £2734m with 
likeforlike commercial revenue growth of 3 in the west midlands 
commercial passenger journeys rose by nearly 1 in the year whilst 
concession and other income increased by 3
growth

likeforlike commercial revenue 3
mileage –
underlying commercial revenue 3
concession and other revenue 3
total revenue 3
normalised operating profit was strong with growth of 9 to 
£340 million 2013 £312m reflecting both revenue growth and cost 
efficiencies the operating margin has now risen to 12 1 2013 1 14 
and we believe this level of margin is sustainable supported by our 
strong partnership relationships 
£m
2013 normalised operating profit 312
net impact from revenue growth 53
fuel cost 06
other cost inflation 56
cost efficiencies 42
other 05
2014 normalised operating profit 340
operational excellence
we believe our partnership approach is a key driver for delivering a 
combination of superior service standards and customer offering 
together with profitable growth in 2014 our ‘transforming bus travel’ 
partnership with centro won two industry awards including the national 
transport award for the top transport teampartnership of the year 
recognising our industry leading relationship with centro the west 
midlands passenger transport executive we are making excellent 
progress towards meeting all of our commitments particularly with 
regard to safety and security
operational delivery is crucial for achieving profitable growth in 2014 
our service delivery has continued to improve with increased 
punctuality and a reduction in customer complaints this has been 
reflected in customer satisfaction of 86 in the 2014 passenger focus 
survey an 8 increase on the 2013 score after a strong performance 
last year we have seen punctuality improve by 2 despite 
unprecedented levels of roadworks in the second half of the year 
ongoing network improvements have driven further growth in 
passengers our network reviews enable us to drive further growth 
in passengers as we meet new customer demand for example 
working closely with jaguar land rover at their factories on the new 
i54 business park near wolverhampton and in birmingham and solihull 
the i54 development is an excellent example of how we have worked 
closely with employers local councils and centro by adapting our 
commercial services to support economic growth while delivering 
excellent value to both customers and the taxpayer
new routebranded buses have been introduced on key corridors 
supported by marketing campaigns driving higher levels of passenger 
volume growth on those routes we continue to drive improvements in 
operational performance through the use of technology in 2014 we 
rolled out our automatic vehicle location tracking system to ipads used 
by every roadside inspector allowing more responsive management of 
our services and improved customer information in addition over 
250000 mobile users downloaded our west midlands bus app and 
we have launched a new app for customers in coventry
our increasing number of ticket options and focus on value is driving 
growth in passenger volumes we have seen further growth in travelcards 
and day tickets both of which reduce cost to the passenger and increase 
loyalty to national express services in 2013 we helped introduce industry 
leading multioperator smartcards in partnership with centro and 
we have seen a huge increase over the past year with over 1 million 
smartcard passenger journeys taken and rapid expansion continuing 
driving revenue growth in 2015 we will reinforce our leadership 
credentials with the launch of a pay as you go smart ticketing option 
we have also made significant improvements in safety both for 
customers and employees resulting in a lower number of injuries 
and assaults and reduced cost of claims
peter coates
managing director uk bus
national express group plc annual report and accounts 2014 36 cash and returns
the uk bus business generates an excellent return on capital delivering 
good asset utilisation and profitable returns on investment in 2014 we 
delivered a strong performance generating operating cash of £45 million
we continue to maintain our disciplined approach to investment targeting 
areas which will deliver the greatest returns capital expenditure will rise in 
2015 predominantly due to the investment in new buses as described 
below which in turn will drive growth in passenger volumes
creating new opportunities
uk bus is a stable strong return on capital business with opportunity 
for organic revenue growth and margin improvement within its existing 
footprint through investment in fleet technology and structural 
cost reduction we are seeking to improve passenger volume growth 
and profitability 
via our groundbreaking ‘transforming bus travel’ partnership with 
centro we are jointly committed to a range of initiatives and investments 
to enhance bus services in the west midlands in 2015 we will make a 
record level of investment of £37 million of which £34 million is in 171 
new highquality vehicles importantly this investment has unlocked 
local authority commitment to make significant highways investment in 
bus priority schemes on key routes in birmingham and solihull these 
schemes will enable our new platinum buses to deliver faster journey 
times as well as superior passenger comfort helping to drive further 
growth in passengers we believe there is real opportunity to continue 
growing passenger numbers through this approach where our 
increased investment in improved services is complemented by local 
authority investment in improved road conditions and punctuality
in 2015 we will complete delivery of the 83 transforming bus travel 
partnership commitments and plan to sign the fourth generation of 
the partnership building upon our awardwinning achievements
we will also make further enhancements to our industryleading 
multioperator smartcards which will be extended to our tram operation 
and we will launch and roll out a pay as you go option both of which will 
promote greater customer loyalty and growth in passenger journeys 
our tram service will be extended through the centre of birmingham 
in 2015 with new longer trams now in service adding nearly 50 
additional capacity 
finally in 2014 we won a number of private tender contracts including 
business with john lewis amazon and dhl and we will look to build 
on this success in 2015
 
people – health bus
the health bus provides a well equipped quiet environment 
for personal consultations
a purpose built health bus complete with a fully trained nurse and 
consultation rooms is now visiting national express bus garages 
offering free health advice and support to all employees 
the bus was created following comments in our annual employee 
survey which praised our employee safety awareness but asked for 
similar support in health and wellbeing the health bus was designed 
and constructed by our own engineers and fitters who adapted a 
redundant bus into a modern mobile health facility offering two 
consultation areas and a waiting room confidential advice is offered 
during each 20minute appointment by a fully qualified nurse who also 
performs checks on blood pressure eyesight and cholesterol
our innovative and industryleading health bus now offers pre
bookable appointments with visits planned to ensure that it covers 
both day and night workers it has already supported over 1000 
employees who have overwhelmingly given this new facility their full 
support via feedback this initiative has also been welcomed by unite 
union representative noel mulvey who said “we’re really pleased that 
national express has invested in the health bus there is nothing 
more important than your health and it is great that the company is 
looking after us in this way” 
partnership transforming bus travel with centro
cllr john mcnicholas
chairman centro
since 2009 we have worked in partnership with the west midlands 
integrated transport authority centro to improve the experience of 
bus customers
“ our award winning partnership with national express has led to big 
increases in customer satisfaction record levels of investment and an 
industry leading smartcard we have delivered 100 of the objectives 
set in our last two partnerships and are on course to complete all of 
those set in our current agreement”
37 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
business review uk coach
strong revenue and margin performance
2014 2013
year ended 31 december £m £m
revenue 2752 2635
operating profit 280 245
operating margin 102 93
overview of 2014
uk coach has delivered another year of excellent performance with 
profit growth of 36 since 2012 £206 million the business has 
continued to build a strong financial and operational foundation which 
has enabled further revenue growth and margin improvement and 
continues to generate momentum for the future
total revenue increased by 4 to £2752 million 2013 £2635m core 
network revenue increased by 4 with new partnership agreements and 
dynamic pricing achieving passenger volume growth this was supported 
by a strong performance at the kings ferry where revenue increased by 
over 20 as it successfully grew its contract hire business 
growth

passenger yield –
passenger volume 4
change in core express revenue 4
other revenues 6
total revenue 4
normalised operating profit increased by 14 to £280 million 2013 
£245m and operating margin showed a further increase following on 
from the strong gains in 2013 rising to 102 2013 93 we provide 
passengers with easy access to lower fares thereby growing volumes 
and improving load factors together with more frequent and punctual 
services and this combined with investment in new coaches and 
greater cost efficiency all contributed to this strong performance
£m
2013 normalised operating profit 245
net impact of growth and new routes 44
cost inflation 43
cost efficiencies 34
2014 normalised operating profit 280
operational excellence
our customer service strategy has continued to focus on providing 
frequent coach services at low prices lower prices were sustained 
throughout the year and passenger volume growth has been achieved 
by flexing prices in response to market conditions this has been 
supported by increasing our sales distribution through the development 
of existing partnership arrangements with ryanair the post office and 
wizz air and creating new partnership arrangements with companies 
such as easybus 
during 2014 we enhanced the sophistication of our customer offers 
and marketing activities we have analysed our database of 14 million 
customers to create segments that then receive customised offers 
of the emails we send to our database 69 are now targeted 
compared with 18 in 2013 
following the success of christmas day services launched in 2013 
both routes and services were further expanded in 2014 enhancing our 
customer offer and delivering additional revenue growth
we have also focused on building on our contract capabilities retaining 
airport work at stansted and gatwick and carrying a record number of 
passengers to the glastonbury festival the kings ferry also expanded 
its contract work which included the provision of transportation at the 
nato summit in gwent 
investment has been made in customer facing systems with enhancements 
to the web and mobile sales channels and improvements in customer 
relationship management ‘crm’ capabilities allowing better targeting 
of marketing communications
punctuality of services improved during the year and national express 
was rated number 1 in the uk customer service index within the ground 
transportation sector safety also improved with lower levels of vehicle 
incidents and employee injuries during 2014 the business has been 
awarded a fivestar rating by the british safety council and also gained 
certification to bs ohsas 18001 for safety management standards
in 2014 uk coach was awarded a fourstar rating by the efqm in 
recognition of our high operational and service delivery standards 
demonstrating our commitment to constantly drive operational 
excellence throughout our network uk coach is determined to 
emulate the achievement of our uk rail operator c2c and secure 
a fivestar rating at our next assessment
tom stables
managing director uk coach
national express group plc annual report and accounts 2014 38 cash and returns
the uk coach business model has a particularly strong return on 
capital and cash generation outsourcing the majority of fleet provision 
and services to its partner operators in a capitallight model in 2014 
we delivered another strong performance generating operating cash 
of £37 million with operating cash conversion of 133 of profit capital 
expenditure remains primarily focused on technology and retail systems 
aimed at delivering improved crm capabilities together with enhanced 
mobile and online booking options for customers
creating new opportunities
attractive pricing coupled with improved yield management will 
allow the division to continue to grow volume improve load factors 
and drive profitability we are investing further in crm and targeting 
and believe there are good opportunities for growth the data we 
gather from this more sophisticated approach not only allows us to 
continually improve our targeting but also provides valuable inputs in 
to our reviews of network efficiency we are better able to match our 
stops and service patterns to geographical concentrations of particular 
customer segments
by leveraging the strength of our brand we will continue to grow the 
number of distribution channels to customers together with an ongoing 
focus on operational efficiency we remain committed to maintaining our 
competitive position against rail our key competitor
contract services will also continue to provide growth with further 
opportunities to expand airport services including the provision of 
transportation services for british airways at heathrow from mid2015 
which was recently awarded in a competitive tender process
the unique uk coach model with its low price modern frequent 
services is well placed to continue to grow both revenue and margin
 
safety – bs ohsas 18001 certification
craig barker head of safety uk coach receives the five star award from 
marianne phillips products and services director at the british safety council
uk coach has achieved a major milestone in its approach to 
managing safety during the year by being awarded 96 – the highest 
mark ever given on a first audit by the british safety council we also 
gained five out of five stars and an ‘excellent’ rating for our approach 
to safety management as a result of the review
the auditor conducting the review commented that in his seven years 
working for the british safety council he had never come across an 
organisation as advanced as national express at a first audit adding 
that he had been auditing some companies annually for seven years 
and they were yet to gain a five star status
gerard hand past president of the institute of occupational safety 
and health said “in the world of safety business leaders often use 
the words ‘passion priority morals’ to have it demonstrated in a 
pragmatic way which starts from the boardroom and infiltrates 
throughout all areas of the uk coach division gives me a great sense 
of pride to be part of their journey national express uk coach division 
doesn’t just say the words it believes them practises them and most 
importantly delivers in all aspects of safety their strategic strapline 
is to ‘drive out harm’ in everything they do my experience of them 
shows they clearly deliver”
partnership highways agency
graham dalton
chief executive highways agency
uk coach became the first commercial organisation to sign a formal 
agreement with the highways agency the agreement a formal 
commitment to work collaboratively is the first of its kind and marks the 
start of accelerated partnership working between the organisations to 
improve the experience of road users 
“ our partnership with national express is one which puts customers 
first our joint aim is to make the experience of using the strategic 
road network a better one working together on important topics 
such as punctuality and communication to improve journeys”
39 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
business review rail
a year of significant progress in both the uk and germany
2014 2013
year ended 31 december £m £m
revenue 1516 1430
operating profit 97 98
operating margin 64 69
overview of 2014
national express’ rail division has had a successful year we 
successfully retained the longterm contract for the operation of the 
essex thameside franchise through to 2029 and recently secured our 
third and fourth contracts in germany winning the nuremberg sbahn 
contract which will start in december 2018 over the coming year we 
will continue to leverage our uk rail expertise to bid for further selective 
franchise opportunities in both the uk and germany
total revenue in 2014 increased by 6 to £1516 million 2013 £1430m 
supported by passenger growth of 2 normalised operating profit was 
£97 million 2013 £98m reflecting an increase in franchise premiums 
coupled with a rise in train maintenance costs under the terms of the 
interim franchise extension resulting in a planned decrease in the 
operating margin to 64 2013 69
operational excellence
our rail division is at the forefront of the group’s drive for operational 
excellence in 2014 c2c retained its position as the top rated performer 
of all uk rail franchises with an annual average punctuality of 966 
significantly c2c has also improved its right time punctuality 
performance and is now rated the second best performing uk rail 
franchise on this measure
during the year we have demonstrated our ambition and capability 
to be at the forefront of international standards for customer service 
we have introduced a number of industryleading initiatives including 
the groundbreaking personal performance promise which lies within 
the passenger’s charter our industry leading consumer friendly 
compensation framework will significantly enhance the offer to all 
customers including season ticket holders
we continue to expand our offering to customers and are at the leading 
edge of new flexible ticketing systems having been previously selected 
by the dft to trial and then subsequently launch and rollout the use 
of smartcards across the route together with the introduction of 
contactless payment systems the launch of new discounted advanced 
fares enhances the offer to customers whilst at the same time enabling 
us to increase the utilisation of our offpeak capacity driving further 
growth in passenger volumes through modal shift and the creation of 
new demand
we are also delivering a technological revolution for our customers with 
the introduction of wifi in all of our stations together with a new mobile 
‘c2c live’ app which will allow customers to access live personalised 
information coupled with online purchase of tickets and car parking
as we move into 2015 we will continue to strive for operational 
excellence with the introduction of a new timetable later in the year 
which will improve capacity throughout the network and increase 
connectivity options in london we will refurbish all 26 stations across 
the network whilst the installation of smart meters will drive a reduction 
in energy consumption in line with our commitment to improving 
environmental performance
december 2015 will see the commencement of our first two german rail 
contracts in north rhinewestphalia we are making excellent progress 
with our mobilisation plans including the public launch of new trains in 
november 2014 establishing a new operational team and the 
recruitment and training of train drivers
cash and returns
rail offers a capitallight model with lower margins but high returns on 
capital in 2014 c2c converted 141 of normalised operating profit into 
operating cash
creating new opportunities
c2c is the best performing rail franchise in the uk and this strength in 
operational performance is helping to drive growth in new rail markets 
our strategy in rail is to secure smaller lower risk german rail franchises 
where the risk is acceptable and meets our capitallight investment 
criteria we will also continue to monitor the uk market and consider 
competitions as they arise and will bid for new franchises where they 
meet our strict financial criteria in addition we will regularly monitor the 
regulatory environment across europe and may look to enter other 
markets as they liberalise
in 2014 c2c successfully retained the essex thameside franchise 
which is expected to generate £4 billion of future revenue over the next 
15 years we are encouraged by the passenger response so far to the 
new franchise’s focus on customer service investment in wifi and 
new advance purchase offpeak tickets are already proving popular 
with new flexible ticketing and pioneering automatic delayrepay 
compensation being introduced in due course we are confident this 
enhanced customer service offer will continue to be popular
in addition we now have a total of four longterm contracts in 
germany having recently been awarded preferred bidder status for 
two contracts for the nuremberg sbahn covering five rail lines in 
bavaria this significant contract is expected to generate €14 billion 
of future revenues over 12 years starting in december 2018 whilst 
our operations in north rhinewestphalia will commence in december 
2015 and are expected to generate future revenues of €16 billion over 
15 years in a relatively short period of time we have built a business 
which will generate revenues of €3 billion and we expect to see further 
growth having successfully prequalified for three other franchises with 
up to 30 contracts coming to market in the next two years in german 
rail we see a strong pipeline of opportunities and we will continue to be 
selective in our bidding approach in order to drive the best returns 
andrew chivers
managing director rail
national express group plc annual report and accounts 2014 40  
customer – c2c live app and free wifi
rail minister claire perry tries out the new app with  
c2c managing directorjulian drury
the successful retention of the c2c franchise has enabled the 
launch of a raft of new customer benefits the c2c team worked 
hard to deliver many of these for the start of the new franchise on 
10 november 2014 
we were able to introduce a new app called c2c live which provides 
a onestopshop for passengers with everything from personalised 
journey information to buying tickets and even paying for car parking 
developed with ibm this is the first app made by a uk rail company 
to include nationwide doortodoor public transport journey planning 
enabling users to plan a route for any journey anywhere in the uk 
in future customers will also be able to use their c2c live app to 
register for automatic refunds which will be paid out whenever they 
are delayed by as little as two minutes
supporting the launch of c2c live we introduced free wifi at all 
stations and will be extending this in future to operate on board trains 
with download speeds of up 50mbs the service is the fastest in 
the uk rail network
welcoming these new benefits rail minister claire perry said 
“passengers deserve the best from our railways and they will see real 
benefits from this franchise with new and improved trains and extra 
services the technology improvements that i have seen will also make 
planning journeys and buying tickets easier than before”
our 2014 strategic report from page 1 to page 41 has 
been reviewed and approved by the board of directors on 
26 february 2015
dean finch
group chief executive 
26 february 2015
partnership thurrock council
john kent
chief executive thurrock council
thurrock council and c2c have formed a ground breaking partnership 
to improve rail services for people living in the district 
“this partnership is really good news for everyone who uses public 
transport in thurrock and those who have to cross the lines whether 
on foot or in a vehicle
“we have been doing a great deal of preparatory work but now we 
can ensure things start moving forward on all the projects
“the idea of a smartcard that works on c2c as well as thurrock bus 
journeys is a tremendous plan and i want to see us meeting with all 
the public transport providers to take that forward as soon as possible ”
41 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
chairman’s introduction to governance
committed to the values of good corporate governance
dear shareholder
as a uk company with a premium listing on the london stock 
exchange national express is subject to the uk corporate governance 
code the ‘code’ 
governance provides a framework within which the board sets its 
values and delivers longterm success for the company and its 
investors whilst recognising its duties towards the wider stakeholder 
community the national express board is therefore committed to 
ensuring that high standards of good corporate governance values and 
behaviours are consistently applied throughout the group this section 
of the annual report and accounts sets out our approach with regard 
to the various aspects of the governance of the company and includes 
reports from each of the board committees on their activities in 2014
i should like to share with you a few key areas which have received 
increased focus during the year as the board puts into practice its 
governance procedures
strategy oversight
the board’s role in the oversight of strategy continues to be 
fundamental the board sets the group’s threeyear forward looking 
strategy at its january meeting each year through challenge and the 
application of objectivity in considering proposals on strategy the board 
ensures that once strategic aims are agreed the necessary capital 
resources and performance monitoring processes are in place in order 
to achieve the objectives required for driving forward our business in 
both established territories and those that are new to us 
leadership and effectiveness
the board is committed to ensuring that it provides leadership to the 
business as a whole having regard to the interests and views of its 
shareholders and other stakeholders whilst also promoting high ethical 
standards as chairman i am responsible for leading the board and 
ensuring its effectiveness it is therefore important that the board 
comprises the right balance of skills and experience and that board 
members work together effectively 
during the year we have refreshed the board whilst making continued 
progress with succession planning at the end of the year jez maiden 
stepped down as group finance director after six years’ service on the 
board we are very sorry to lose jez and are very appreciative of the 
significant contribution he has made during his period of tenure as 
reported in the nomination committee report a thorough search 
was conducted to identify candidates both internal and external to 
succeed him to this role upon the recommendation of the nomination 
committee on 28 january the board appointed matthew ashley as 
group finance director matthew was formerly the finance director of 
the uk bus business having also previously held the position of group 
financial controller i am delighted that matthew has joined the board 
he brings with him significant financial corporate and operational 
experience and i look forward to continuing to work with him
nomination committee 
“i am pleased to report to you on the work undertaken 
by the committee during 2014”
sir john armitt nomination committee chair
how the committee spent its time
n new ned appointments 55
n electionreelection of directors 16
n new executive director appointment 12
n succession planning 17
 read more p58
audit committee 
“the audit committee plays a key role in the governance 
of the company and i am pleased to report to you on 
the work undertaken by the committee during 2014”
jackie hunt audit committee chair
how the committee spent its time
n financial statements and reports 25
n external audit 13
n internal audit and risk management 34
n taxtreasury 10
n corporate governance 18
 read more p54
national express group plc annual report and accounts 2014 42 we are also sorry that sir andrew foster will be retiring as a non
executive director at the forthcoming agm after more than nine years’ 
service i would like to thank sir andrew for his support and guidance to 
the board and in particular to the remuneration committee jackie 
hunt is also stepping down as a nonexecutive director after nearly 
three years on the board and will not be seeking reelection at the agm 
jackie has brought great insight to board discussions during her time 
with us i am very pleased to say that lee sander has agreed to 
become senior independent director with effect from 6 may 2015 
a search for an additional independent nonexecutive director is 
approaching its conclusion and we hope to be in a position to 
announce an appointment shortly 
external board performance evaluation
during 2014 the performance evaluation of the board and its 
committees was undertaken by an external facilitator in accordance 
with the code with the objective of the independent review being to 
ensure that the board’s structure governance and processes are 
appropriate for our current and future business the findings concluded 
that the board continues to operate effectively details of the external 
review process analysis and recommendations are given on page 51 
shareholder engagement on directors’ remuneration
in response to the relatively low margin of support for the resolution 
passed at the 2014 agm on last year’s annual report on remuneration 
members of the remuneration committee undertook to engage with 
significant institutional investors in order to gain a greater understanding 
of their views on the executive directors’ remuneration as a result of this 
open dialogue a restructured remuneration package for the executive 
directors was devised to take into account shareholder expectations 
in this area a fuller explanation and the details of this restructuring are 
provided within the letter from the remuneration committee chairman 
and in the directors’ remuneration report from pages 60 to 83 
this year our agm will be held at 200pm on 6 may 2015 in the purcell 
room at the queen elizabeth hall southbank centre belvedere road 
london se1 8xx and i would encourage you to attend to meet me and 
the board
sir john armitt
chairman 
26 february 2015
good governance helps us 
to implement our strategy 
achieve our objectives for 
the business and create 
value for our investors and 
other stakeholders
remuneration committee 
“i am pleased to be given the opportunity to introduce 
the directors’ remuneration report for the year ended 
31 december 2014”
sir andrew foster remuneration committee chair
how the committee spent its time
n bonuses 30
n ltip awards and vesting 20
n remuneration report review 10
n remuneration market practice 5
n executive directors‘ remuneration 25
n chairman’s fee 5
n good leaver approval 5
 read more p60
safety  environment committee 
“i am pleased to report that in 2014 we continued 
to make good progress in our safety performance 
and in the management of the company’s 
environment responsibilities”
chris muntwyler safety  environment committee chair
how the committee spent its time
n  external audit of corporate 
governance of safety 15
n driving out harm annual review 13
n safety performance review 25
n environment review 20
n maintenance audits 10
n specific site and topic reviews 10
n health and wellbeing 7
 read more p59
43 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
board of directors
a strong and experienced board with the right mix of skills and 
experience delivering effective oversight
sir john armitt chairman 69
appointment 1 january 2013 and as 
chairman on 1 february 2013
experience sir john armitt is currently 
deputy chairman of berkeley group 
holdings plc chairman of city and 
guilds and a member of the board of 
transport for london and of the airports 
commission sir john was chairman of 
the olympic delivery authority from 2007 
to 2014 and chairman of the engineering 
and physical science research council 
from 2007 to 2012 from 2001 to 2007 he 
was chief executive of network rail and 
its predecessor railtrack in 1997 he was 
appointed as chief executive of costain 
group plc a position he held until 2001 
before this sir john was chief executive 
of union railways the company 
responsible for the development of the 
high speed channel tunnel rail link 
this followed a 27year career at 
john laing plc
sir andrew foster  
nonexecutive director 70
appointment 1 august 2004
experience sir andrew foster has had 
an extensive career in the public sector 
having served as chief executive of the 
audit commission for england and wales 
between 1992 and 2003 before this he 
was deputy chief executive of the nhs 
and regional ceo for yorkshire from 
2003 to 2012 he was deputy chairman 
of royal bank of canada remaining a 
consultant until 2014 he was also 
chairman of the commonwealth games 
england team 2007 to 2014 sir andrew 
is currently also a nonexecutive director 
at pruhealth sir andrew has conducted 
independent reviews for the government 
into the intercity express project 
the building colleges for the future 
programme and previously into further 
education and the future of athletics 
sir andrew will not be seeking reelection 
at the 2015 agm
dean finch  
group chief executive 48
appointment 15 february 2010
experience prior to joining national 
express dean finch was group chief 
executive of tube lines from may 2009 
before that he worked for over ten years 
in senior roles within firstgroup plc he 
joined firstgroup in 1999 having qualified 
as a chartered accountant with kpmg 
where he worked for 12 years specialising 
in corporate transaction support 
services including working for the office 
of passenger rail franchising on the 
privatisation of train operating companies 
at firstgroup he was managing director 
of the rail division from 2000 to 2004 and 
then was appointed to the main board as 
group commercial director in 2004 
before being made group finance 
director with the completion of the 
laidlaw acquisition he became chief 
operating officer in north america 
before returning to the uk as group chief 
operating officer dean is also currently a 
nonexecutive director of the royal free 
london nhs foundation trust
joaquín ayuso independent 
nonexecutive director 59
appointment 1 june 2011
experience joaquín ayuso is board 
vice chairman for ferrovial the €8 billion 
spanish transport infrastructure and 
services group that employs over 70000 
people worldwide he has been with 
ferrovial since 1981 and was appointed 
ceo in 2002 and held that position until 
october 2009 during this period 
ferrovial expanded internationally with 
business interests in the uk us canada 
latin america and europe he is also 
currently a nonexecutive director of 
bankia a member of the board of 
autopista del sol sa independent 
director of hispania activos inmobiliarios 
sa and senior advisor to at kearney in 
spain and portugal
jane kingston independent 
nonexecutive director 57
appointment 26 february 2014
experience jane kingston is currently 
group human resources director at 
compass group plc and was previously 
group human resources director at 
bpb plc prior to this jane has worked 
in a variety of sectors including roles in 
blue circle industries plc enodis plc 
and coats viyella plc 
jackie hunt  
senior independent director 
from 26 february 2014 46
appointment 13 september 2012
experience jackie hunt was 
appointed chief executive of prudential 
uk  europe in september 2013 she 
joined prudential from standard life 
where she was chief financial officer 
prior to this jackie held a number of 
senior financial management 
positions in companies including 
norwich union insurance aviva 
hibernian group royal  sunalliance 
and pricewaterhousecoopers jackie 
was also chair of the association of 
british insurers’ prudential financial and 
taxation committee jackie is currently 
a nonexecutive director of thecityuk 
and a member of the fca practitioner 
panel jackie hunt will not be seeking 
reelection at the 2015 agm
lee sander independent 
nonexecutive director 58
appointment 1 june 2011
experience elliot lee sander is 
president and chief executive officer 
of the haks group inc an american 
citizen he has been executive director 
and ceo for the new york metropolitan 
transportation authority and has served 
as commissioner for the new york city 
department of transportation lee 
is chairman of the regional plan 
association a prominent ngo based 
in new york that has played a highly 
influential role in driving public policy and 
investments in the new york metropolitan 
area over the last 80 years in the past 
he has also served on the national 
surface transportation infrastructure 
finance commission 
matthew ashley  
group finance director 41 
appointment 28 january 2015
experience matt ashley joined national 
express as group financial controller 
in 2010 from deloitte where he was a 
director specialising in transport and 
infrastructure and the auditing of listed 
companies having previously qualified as 
a chartered accountant in 1998 he was 
then promoted to the role of finance 
director of the uk bus division in 2013 
before becoming interim group finance 
director in october 2014 he has no 
external directorships
national express group plc annual report and accounts 2014 44 the right mix of skills and experience
board experience
80 finance 1 female 7 male
100 operational 2 female 8 male
100 international 2 female 8 male
70 transport 7 male
80 public board 1 female 6 male
board composition
20 executive 2 male
80 nonexecutive 2 female 6 male
80 male 8 male
20 female 2 female
board tenure
n 20 02 years 1 female 1 male
n 50 24 years 1 female 4 male
n 10 46 years 1 male
n 20 6 10 years 2 male
committee membership
director
audit
committee
nomination
committee
remuneration
committee
safety 
environment
committee
sir john armitt  
jorge cosmen  
jackie hunt  
chris muntwyler  
sir andrew foster    
joaquín ayuso  
jane kingston  
lee sander  
dean finch
matthew ashley
 chairman  member
jorge cosmen  
deputy chairman 46
appointment 1 december 2005
experience jorge cosmen was 
appointed to the board at the time of the 
alsa transaction he was appointed 
deputy chairman in october 2008 he 
was corporate manager for the alsa 
group from 1995 becoming chairman 
in 1999 between 1986 and 1995 he 
worked in sales distribution and banking 
he is a business administration graduate 
and has an international mba from the 
instituto de empresa in madrid he is a 
nonexecutive director of bankia as 
well as of other private companies
chris muntwyler independent 
nonexecutive director 62
appointment 11 may 2011
experience chris muntwyler is ceo 
and chairman of the swiss management 
consulting company conlogic ltd he is 
also nonexecutive director of panalpina 
world transport holding ltd 
switzerland and the austrian post ltd 
austria during his 27 years at swissair 
he held top executive positions in 
switzerland sweden and north america 
in 1999 he joined dhl express serving 
as managing director of switzerland 
germany and central europe and from 
2005 to 2008 as ceo of dhl express 
uk ltd based in london
sandra forbes group general 
counsel and company secretary 
appointment 2 june 2014
experience sandra forbes is a qualified 
solicitor and prior to joining national 
express was a specialist banking and 
transport partner at burges salmon 
where she was the head of the corporate 
and financial institutions department 
and the firm’s banking sector head 
sandra is also a governor at the 
university of the west of england where 
she chairs the strategic planning and 
performance committee
45 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report
compliance with the uk corporate governance code 
the governance report set out below is designed to provide 
shareholders with a summary of the group’s governance policies and 
practices and an explanation of how the company has applied the main 
principles of the uk corporate governance code the ‘code’ that was 
published in 2012 by the financial reporting council and which applied 
to the company for the whole of the financial year ended 31 december 
2014 the directors believe that the company has complied with the 
provisions set out in the code during 2014 save as described below 
a copy of the code is available at wwwfrcorguk
as at 21 february 2014 tim score had served for more than nine 
years on the board meaning that for a short period of time until the 
appointment of jane kingston on 26 february 2014 the composition 
of the board did not meet the requirements under provision b 12 of 
the code
as reported last year sir andrew foster has served on the board for 
more than nine years and is no longer deemed to be independent under 
the code however as part of the board’s succession plans and in 
order to ensure continuity sir andrew was asked to remain a director 
until the conclusion of the agm to be held on 6 may 2015 given his 
significant experience he has continued to chair the remuneration 
committee until he steps down at the agm when jane kingston will 
become chair of that committee sir andrew remained a member of 
the nomination and audit committees throughout 2014 and will 
continue to be so until he stands down as a director as mentioned 
above the composition of the committees will then become in line with 
the code requirements with lee sander joining as a member of the 
audit committee with effect from 6 may 2015 as described in the 
nomination committee report on page 58 a search for an additional 
nonexecutive director commenced during the latter part of 2014
leadership
the role of the board
the board provides leadership of the group and direction for 
management it is collectively responsible and accountable to the 
company’s shareholders for the longterm success of the group and for 
ensuring the appropriate management and operation of the group in 
pursuit of its objectives the board is responsible for setting the group’s 
strategy values and standards and ensuring that the necessary controls 
and resources are in place to deliver these 
the chairman and the group chief executive
the roles of the chairman and group chief executive are held 
separately and the division of responsibilities between these roles is 
clearly established as shown below the chairman is responsible for 
leading the board and ensuring its effectiveness the group chief 
executive is responsible for running the business of the group and 
implementation of the strategy and policies adopted by the board 
chairman’s responsibilities
• chairing and managing the business of the board
• together with the group chief executive leading the board in 
developing the strategy of the business and ensuring its effective 
implementation by the executive management team
• ensuring effective dialogue with investors concerning mutual 
understanding of objectives
• in conjunction with the nomination committee taking 
responsibility for the composition and replenishment of the board
• periodically reviewing with the board its working practices and 
performance and
• ensuring there is an effective contribution from the nonexecutive 
directors and a constructive relationship between executive and 
nonexecutive directors
the chairman’s other significant commitments are detailed in his 
biography on page 44
group chief executive’s responsibilities
• communicating a shared purpose and the culture vision and 
values of the group
• the development and implementation of management strategy
• the daytoday management of the group
• managing the executive management team
• fostering relationships with key stakeholders
• leading the group executive committee
• in conjunction with the group finance director communicating 
the group’s financial performance to investors and analysts and
• liaising with the chairman to ensure effective dialogue with 
investors and stakeholders
national express group plc annual report and accounts 2014 46 nonexecutive directors
the nonexecutive directors collectively represent a robust element of 
the board and each brings with them his or her own expertise gained 
in a variety of business sectors they constructively challenge and 
scrutinise the performance of management and help develop proposals 
on strategy as well as ensuring high standards of financial probity and 
corporate governance the terms and conditions of appointment of the 
nonexecutive directors are available for inspection at each agm on 
the company’s website and at its registered office during normal 
business hours the nonexecutive directors disclose to the board 
their other significant commitments the procedure adopted by the 
company in relation to directors’ conflicts of interest is detailed on 
page 84
senior independent director
jackie hunt became the senior independent director ‘sid’ on 
26 february 2014 replacing tim score as well as being available to 
shareholders whose concerns have not been resolved through normal 
channels or when such channels would be inappropriate the sid 
provides a sounding board for the chairman and serves as an 
intermediary for the other directors where necessary following 
jackie hunt’s stepping down from the board at the 2015 agm 
lee sander will become senior independent director
executive directors
the executive directors are responsible for the daytoday management 
of the group’s businesses implementation of its strategy policies 
and budgets and its financial performance executive management 
meetings comprise the executive directors and senior management 
from the divisions and are held regularly to discuss current issues
company secretary
the board has access to the advice and services of the company 
secretary sandra forbes who has held this office since 2 june 2014 
she is a qualified solicitor the company secretary supports the 
chairman in the delivery of the corporate governance framework and 
is responsible for advising the board through the chairman on all 
governance matters including the planning of agendas for the annual 
cycle of board and committee meetings so that all key issues are 
considered at the appropriate times every effort is made to ensure that 
information reported to the board is of high quality in terms of accuracy 
quality appropriateness comprehensiveness and currency directors 
are able to seek clarification or amplification from management where 
necessary the company secretary also facilitates the induction 
process and assists with professional development for directors as 
required the company secretary acts as secretary to the board and 
each of its committees the appointment or removal of the company 
secretary is a matter for the board as a whole as well as the support of 
the company secretary there is a procedure in place for any director to 
take independent professional advice where considered necessary
corporate governance framework
the board discharges its responsibilities for the leadership and control 
of the group by
• providing strategic direction and support in a manner which 
maximises opportunities to develop the business profitability whilst 
at the same time assessing and managing associated risks
• engaging at board meetings with and challenging the group chief 
executive group finance director and other members of the senior 
management team as appropriate on the financial and operating 
performance of the group and external issues material to the 
group’s prospects and
• ensuring that the financial management and other resources 
required to meet its objectives are in place
to help discharge its responsibilities the board has a formal schedule 
of matters specifically reserved for its decision which forms the core of 
the board’s agenda the board has also delegated certain aspects of 
its responsibilities to the following principal committees the audit 
committee the remuneration committee the nomination committee 
and the safety  environment committee more details on each of these 
committees can be found in this report
key matters reserved for board approval 
group strategy and risk management
• formulation and approval of longterm objectives
• approval of changes to capital structure
• approval of major changes to management and control structures
• approval of extension of activities into new businesses or 
geographical areas
financial and internal controls
• oversight of risk management and internal control framework
• approval of financial statements and results announcements
• approval of shareholder communications circulars and notices 
of meetings
• approval of the auditor’s remuneration and recommendations 
for their appointmentremoval
• recommendation and declaration of dividends
• monitoring the group’s businesses against plan and budget
• approval of major capital expenditure projects
• approval of material contracts
board membership and committees
• appointment of directors
• approval of remuneration of the nonexecutive directors 
• setting of board committees’ terms of reference
• approval of new share incentive plans
corporate governance
• undertaking formal performance reviews of the board 
committees and individual directors
• determining the independence of directors
• receiving reports from the company’s major shareholders
policies
• review and approval of group policies for example 
• health and safety
• risk management strategy
• environment
• charitable and political donations
• workplace rights
• human rights
47 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report continued
committed to high standards of governance
board meetings
the board and its committees have regular scheduled meetings and 
hold additional meetings as and when required directors are expected 
where possible to attend all board meetings relevant committee 
meetings the agm and any general meetings the board met eight 
times during 2014 six meetings were held in the uk including a 
strategic review one in spain and one in the us the table below sets 
out the number of meetings of the board and its committees during the 
year and individual attendance by the board and committee members 
at these meetings
if a director is unable to attend a board or committee meeting he or she 
still receives all the papers and materials for discussion at the meeting 
he or she will review them and then advise the board chairman or 
committee chairman of their views and comments on the matters to 
be discussed so that they can be conveyed to others at the meeting
only members of the board are entitled to attend board meetings with 
the company secretary in attendance to formally record each meeting 
this is also the case in respect of committee members and meetings 
the executive directors and representatives of management together 
with the company’s advisors are also invited to attend committee 
meetings as required directors have the right to raise any concerns 
they may have about the running of the company or a proposed course 
of action which cannot be resolved and have them recorded in the 
relevant meeting minutes and may also provide a written statement to 
the chairman for circulation to the board setting out such concerns 
during the year the chairman met on several occasions with the 
nonexecutives without the executive directors present to allow 
informal discussions on a variety of issues
board agenda oversight and benchmarking
the chairman and the company secretary are responsible for ensuring 
that the directors receive accurate timely and clear information on all 
relevant matters so that they are properly briefed in advance of meetings 
reporting framework
group board
remuneration  
committee
nomination  
committee
audit  
committee
safety  environment 
committee
group executive committee
uk  
executive
spanish  
executive
north american 
executive
number of board meetings
board meetings
the board 
of directors
audit 
committee
nomination 
committee
remuneration 
committee
safety  environment 
committee
total meetings in 2014 8 4 3 2 3
executive directors
dean finch group chief executive 8 – – – –
jez maiden group finance director 8 – – – –
nonexecutive directors
sir john armitt 8 – 3 – 3
joaquín ayuso 5 – 2 – 2
jorge cosmen 8 – 3 – 3
sir andrew foster 7 3 3 2 2
jackie hunt 8 4 – – 2
chris muntwyler 8 3 – – 3
lee sander 8 – – 2 3
jane kingston 66 – – 11 22
tim score 22 22 – 11 11
group general counsel and company secretary sandra forbes also acts as secretary to the board committees
 appointed to the board on 26 february 2014 eligible meetings are shown in brackets
 resigned from the board on 25 february 2014 eligible meetings are shown in brackets
national express group plc annual report and accounts 2014 48 and the information is of sufficient quality to assist directors in making 
informed contributions and decisions
the board regularly and rigorously reviews and benchmarks operational 
and functional performance at each meeting the board receives a 
report from the group chief executive on operational performance 
and from the group finance director on the financial performance of 
the group as a whole and each of the group’s businesses individually 
other regular reports for the board’s consideration at its meetings 
include capital expenditure requests key project reviews summary 
activities of the board committees and human capital legal 
governance and investor relations reports presentations from either 
a business managing director or a functional head are also given at 
each meeting
the core activities of the board and its committees are documented 
and planned on an annual basis and a list of matters arising from 
each meeting is maintained and followed up at subsequent meetings 
the timeline below shows the main items of business addressed by the 
board during the year
principal committees of the board
the main committees established by the board are the audit 
committee the remuneration committee the nomination committee 
and the safety  environment committee each committee operates 
within defined terms of reference the full versions of which can be 
found on the company’s website at wwwnationalexpressgroupcom 
each committee reports its proceedings to the board through the 
submission of reports and minutes as appropriate a disclosure 
committee of the board is also established with its membership 
comprising the chairman group chief executive and group finance 
director this committee meets as required to deal with the control of 
price sensitive information within the group and to ensure that timely 
announcements are made in accordance with the company’s 
obligations under the listing rules and the disclosure and transparency 
rules its terms of reference are also available on the company’s 
website at wwwnationalexpressgroupcom
all board committees are authorised to obtain legal or other 
professional advice as necessary to secure the attendance of external 
advisors at their meetings and to seek information required from any 
employee of the group in order to perform their duties 
reports of each of the principal committees are provided on pages 54 
to 83 and include information on each committee’s membership duties 
and activities throughout the year
the group chief executive heads the group executive committee 
which meets on a monthly basis and is tasked with approving 
operational business matters in addition the uk spanish and north 
american executives meet on a monthly basis and matters dealt with 
at these meetings are reported to the group executive committee
the reporting framework of the board committees and of the group 
executive committee and its subcommittees is shown on page 48 
effectiveness 
composition of the board
we seek to build an effective and complementary board which 
comprises the correct balance of individuals whose capabilities are 
appropriate for the scale complexity and strategic positioning of our 
board activity throughout 2014  
excluding standing items
january
• review of the group strategic plan for 20142016
• rail bids update
• bus bids update
february
• capital investment
• succession planning 
• approval of the preliminary results announcement annual report 
and accounts for the year ended 31 december 2013 and notice 
of annual general meeting
• recommendation of the final dividend for financial year 2013
april
• rail bid scotrail
may
• capital investment
• update on uk and german coach businesses
 
june
• capital investment
• presentation on the spanish and moroccan businesses
july
• rail bids update
• approval of the half year results announcement and 
interim dividend
september
• capital investment
• presentation on the north american business
• north america safety and maintenance audit update
• north america hr strategy review
• financing structure 
• bank facility amendment and extension
november
• 2015 budget
• rail update
• executive directors’ remuneration
49 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report continued
business the board consists of an appropriate balance of executive 
and nonexecutive directors who collectively bring a strong and 
indepth mix of business skills and experience and considerable 
knowledge to assist with board decisions the process for board 
appointments is led by the nomination committee and is described 
on page 58
a list of the individual directors their biographies and committee 
memberships as at the date of this report are set out on pages 44 
and 45
independence
the board considers all of the nonexecutive directors to be 
independent other than jorge cosmen and sir andrew foster 
sir john armitt was considered to be independent prior to his 
appointment as chairman 
as at 21 february 2014 tim score had served for more than nine 
years on the board meaning that for a short period of time until the 
appointment of jane kingston on 26 february 2014 the composition of 
the board did not meet the requirements under provision b 12 of the 
code for the remainder of 2014 at least half of the board excluding 
the chairman comprised independent nonexecutive directors in 
accordance with the code 
jorge cosmen is not considered to be independent by the board due 
to his close links with the alsa business and significant interests in 
the shares of the company which are held through european express 
enterprises limited despite his nonindependence the board feels 
that it benefits greatly from jorge cosmen’s extensive local market 
knowledge and experience 
as at 1 august 2013 sir andrew foster had served on the board as 
a director for more than nine years as reported last year sir andrew 
agreed to remain on the board until the 2015 agm and the board 
believes that it has been in the best interests of the company and 
shareholders that he has done so given his wealth of experience 
and to ensure continuity following the recent changes to the 
board’s composition 
nonexecutive directors do not participate in any of the company’s 
share option or bonus schemes and their service is nonpensionable
time allocation
it is in the board’s interest to ensure that all directors have sufficient time 
to commit to their responsibilities as directors the chairman monitors 
the extent of directors’ other interests to ensure that the effectiveness of 
the individual and the board is not being compromised
in respect of the appointment of new nonexecutive directors to the 
board candidates are made aware of the time commitment expected of 
them which is reflected in their individual letters of appointment with the 
company the board considers that all the directors are currently able 
to devote sufficient time and attention to their duties and responsibilities 
to the company
as part of their continuing development and recognising the significant 
benefits to be derived to both the company and the individual executive 
directors are permitted to accept one external nonexecutive 
directorship with a noncompeting company provided they first obtain 
board approval during the year dean finch was appointed a non
executive director of the royal free london nhs foundation trust 
jez maiden continued to hold an external directorship with synthomer 
plc throughout 2014
induction of new directors
on appointment directors are offered training as appropriate and are 
thereafter encouraged to keep abreast of matters affecting their duties 
as a director and to attend training courses relevant to their role 
an induction process is in place for new directors the aim of which is to
• build an understanding of the nature of the group its businesses 
and the markets in which it operates
• establish a link with the group’s employees and
• build an understanding of the group’s main relationships including 
stakeholders and customers
the following information is provided as part of the induction and 
ongoing training and development of board directors
on appointment 
• governance information in relation to the group including the terms 
of reference of the board and its committees
• guidance for directors of uk public companies generally including 
under the law the code and the rules of the uk listing authority
• board minutes covering the previous year and
• information on key group policies
following appointment 
• business briefing meetings with the chairman the group 
chief executive and the group finance director
• meeting with the company secretary to discuss the group structure 
the company’s constitution and board procedures and terms of 
reference of the board and its committees
• meetings with senior management in the five divisions
• meeting with the director of safety for an overview of the group’s 
health and safety policy and safety record and
• meeting with the group’s auditor
national express group plc annual report and accounts 2014 50 performance evaluation
an evaluation of the effectiveness of the board and its committees is conducted annually 
in 2012 and 2013 internal evaluations of board effectiveness were conducted by the group hr advisor via a questionnaire circulated to all 
the directors 
actions implemented from the 2013 evaluation are detailed below
2013 recommendations actions
improve timing of delivery of board papers to directors changes in process were made to ensure more time between delivery of the 
board papers and the actual meetings
allow sufficient time for discussion of complex issues when producing agendas and during meetings as directed by the chairman 
more time has been allocated to such agenda items 
ensure the board has the right balance of skills this has been addressed through the ned search process that resulted in 
the appointment of jane kingston in february 2014 a search for an 
additional ned with a marketing and digital bias was commenced towards 
the end of 2014
provide the board with greater contact with 
senior management
the board continues to meet the north american and spanish management 
teams once a year and more opportunities have been created to give the 
board increased exposure to the uk management teams
for 2014 the board engaged advanced boardroom excellence ‘abe’ to undertake an independent external evaluation of the performance of the 
board comprising the stages and elements shown below abe has no other connection with the company
scoping abe engaged with the chairman and company secretary to set the context 
for the evaluation and to tailor the questionnaires to the specific 
circumstances of the company
interviews indepth structured facetoface interviews were conducted by consultants 
from abe with each board member and the company secretary the 
structure of the interviews was based on the financial reporting council’s 
criteria for board effectiveness
boardroom observation abe undertook an observation of the november board meeting this 
provided an opportunity to gain a clearer understanding of the board 
dynamics enabling greater development insight for the board beyond 
the procedural aspects of the board’s functioning
documentation review a review of the documentation of the board and its four principal committees 
covering a year’s worth of meeting packs was undertaken in order to ensure 
a complete picture of the interrelationship of the board and committees
report presentation and discussion the information gained from the interviews documentation review and 
boardroom observation was analysed to provide structured conclusions for 
the board review report which was initially submitted to and reviewed by the 
chairman abe then presented its final board review report and feedback to 
the board including appropriate recommendations and discussion of 
benchmark information and areas for board development to meet the 
company’s underlying strategic aims
the conclusions and recommendations for the board’s development have been reviewed by the board and an action plan and priorities for 2015 
agreed the key areas are set out below the action plan also covers areas of board processes and procedures to be tightened and documented 
nonexecutive director composition ned skills 
to be kept under review in relation to future digital 
knowledge and skills needs
board information the board to build further on exemplary 
board information provision
strategy the board to further enhance its processes 
for strategy setting
risk assessment the board to continue its proactive approach 
to risk assessment
communication to shareholders the board to 
continue to develop a more structured shareholder 
engagement plan following on from recent direct 
shareholder engagement on remuneration
documentation the company secretary to action the appropriate 
recommendations on tightening the terms of reference agenda 
developments for the board and its committees
succession the board to have enhanced engagement 
with the scheduled regular review of the executive 
succession pipeline
the outcomes arising from this external evaluation process will be further reported on in next year’s annual report
51 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report continued
reelection of directors
in accordance with the company’s articles of association and the 
code all directors of the company with the exception of sir andrew 
foster and jackie hunt both of whom will be stepping down from the 
board will offer themselves for either election or reelection at this year’s 
agm nonexecutive directors are appointed for specific terms subject 
to reelection nonexecutive directors will only be put forward for 
reelection if following performance evaluation the board believes the 
director’s performance continues to be effective and demonstrates 
commitment to the role 
accountability
internal control statement
the board’s responsibilities
the board has overall responsibility for the group’s system of internal 
control and for reviewing its effectiveness the board maintains full 
control and direction over appropriate strategic financial operational 
and compliance issues and has put in place an organisational structure 
with formally defined lines of responsibility delegated authorities and 
clear operating processes the systems that the board has established 
are designed to safeguard both the shareholders’ investment and the 
assets of the group and are described as follows 
key elements of the control framework
financial reporting process – management and specialists within 
the finance department are responsible for ensuring the appropriate 
maintenance of financial records and processes to ensure that all 
information is relevant reliable and in accordance with the applicable 
laws and regulations and distributed both internally and externally in a 
timely manner a review of the consolidation and financial statements 
is completed by management to ensure that the financial position 
and results of the group are appropriately reflected all financial 
information published by the group is subject to the approval of 
the audit committee
performance management – the performance of each division and 
operating company against its plan is closely monitored by a formal 
monthly reporting process and by the attendance of the relevant 
executive directors at monthly divisional executive meetings
annual fitness check process – group internal audit undertakes an 
annual review at each operating company to assess the integrity of the 
balance sheet and to check the effective operation of key financial 
reporting and information systems controls the results of the reviews 
are presented to both divisional and group finance with any required 
actions agreed with the relevant divisional finance director
strategic and financial planning – an annual budgeting and 
strategic planning process has been established whereby each division 
and constituent operating company assesses its competitive position 
and goals taking account of the strategic risks faced this strategy 
is translated into a financial plan with clear milestones and 
performance indicators
capital investment – a clear process is in place for the approval of 
capital expenditure which includes detailed appraisal of the benefits of 
the proposed investment and any associated key risks material capital 
expenditure requires board approval
health and safety – health and safety standards and benchmarks 
have been established in all of our businesses and the performance of 
operating companies in meeting these standards is closely monitored
risk management reporting process – each division and operating 
company evaluates its internal control environment and key risks and 
the results are reviewed at management level and passed to the audit 
committee before being presented to the board this process is 
reviewed on a regular basis to ensure the validity and relevance of the 
key risks included in reports the review covers strategic financial 
compliance and risk management controls these procedures are 
mandated and designed to manage the risk in order to ensure that 
the operations achieve their business objectives
internal audit – the internal control system is independently monitored 
and supported by a group internal audit function the group internal 
audit function reports to management and the audit committee on the 
group’s financial and operational controls and monitors and reviews the 
extent to which its recommendations have been implemented
boardlevel reporting on internal control 
during the year the audit committee reviews regular reports from 
the internal audit function the external auditor and group executive 
management on matters relating to internal control financial reporting 
and risk management the audit committee provides the board with an 
independent assessment of the group’s financial position accounting 
affairs and control systems in addition the board receives regular 
reports on how specific risks that are assessed as material to the 
group are being managed
review of internal control effectiveness
the system of internal control and risk management described above 
has been in place for the year under review and up to the date of 
approval of this annual report and accounts such a system is 
designed to manage rather than to eliminate the risks inherent in 
achieving the group’s business objectives and can therefore provide 
only reasonable and not absolute assurance against material 
misstatement or loss the effectiveness of this system has been 
regularly reviewed by the directors in line with the guidance on audit 
committees published by the financial reporting council where 
significant control failings or weaknesses have been identified 
appropriate corrective action has been taken
going concern
the group’s business activities together with the factors likely to affect 
its future development performance and position are set out in the 
strategic report the financial position of the group its cash flows 
liquidity position and borrowing facilities are described in the group 
chief executive’s review on pages 8 to 1 1 and the group finance 
director’s review on pages 28 to 31 in addition note 29 to the financial 
statements includes the group’s objectives policies and processes for 
managing its capital its financial risk management objectives details of 
its financial instruments and hedging activities and its exposure to credit 
risk and liquidity risk
the group has a formalised process of budgeting reporting and 
review which provides information to the directors which is used to 
ensure the adequacy of resources available for the group to meet its 
business objectives
the directors have a reasonable expectation that the company and the 
group have adequate resources to continue in operational existence for 
a period of at least 12 months from the date of signing the accounts 
accordingly they continue to adopt the going concern basis of 
accounting in preparing the annual financial statements
the board is mindful of the changes made to the uk corporate 
governance code in 2014 with regard to the longer term viability 
statement compliance with which will apply to the company for the 
financial year ended 31 december 2015 the directors are ensuring that 
processes are in place in order to be in a position to report in compliance 
with such enhanced disclosure in next year’s annual report
national express group plc annual report and accounts 2014 52 remuneration
the directors’ remuneration report including details of the revised 
remuneration policy and service contracts is set out on pages 60 
to 83
relations with shareholders
the board recognises the importance of maintaining good 
communications with the company’s shareholders to ensure 
mutual understanding of the group’s strategy objectives 
governance and performance
during the year shareholders are kept informed of the progress of the 
group through regular corporate communications the preliminary 
results announcement the annual report and accounts the half year 
results announcement the notice of annual general meeting interim 
management statements and press releases regarding any other 
significant developments as well as the dissemination of regulated 
information such communications are made available to the london 
stock exchange and are simultaneously available on the company’s 
website wwwnationalexpressgroupcom 
the company’s website houses a wide range of information about the 
group including the annual report and accounts press releases 
share price data and links to subsidiary company websites
from time to time the company invites research analysts and 
institutional investors to presentations and site visits that are designed 
to provide more understanding of the strengths and capabilities of its 
business operations and strategy 
shareholders can receive documentation such as the annual report 
and accounts electronically and are also able to cast their votes by 
proxy electronically the company also has an electronic proxy 
appointment service for crest members
institutional shareholders
the board is committed to maintaining an open dialogue with 
shareholders and recognises the importance of that relationship in 
the governance process a focused and proactive investor relations 
programme is place the chairman group chief executive and group 
finance director have held a number of meetings with existing and 
prospective institutional shareholders during the year as well as having 
given presentations following the full year and half year results they 
have also met and given presentations to research analysts and 
stockbrokers’ sales teams the company’s appointed brokers and 
investor relations advisors in turn have provided regular confidential 
feedback to the company on the views of the major institutions 
the chairman senior independent director and other nonexecutive 
directors are also given the opportunity to meet institutional 
shareholders and are available by contact through the normal channels 
during 2014 the chairman met with major shareholders to discuss the 
governance and direction of the company 
in response to the 36 vote against the resolution on the annual report 
on remuneration at the 2014 agm members of the remuneration 
committee engaged with the company’s key institutional shareholders 
and representative bodies in order to gain a greater understanding of 
their views on executive directors’ remuneration as a result of this open 
dialogue a restructured remuneration package for the executive 
directors and a revised remuneration policy have been devised to 
address the specific concerns raised by shareholders the directors’ 
remuneration report on pages 60 to 83 provides full details of the 
revised directors’ remuneration policy which will be put to shareholders 
for a binding vote at the 2015 agm 
the board is provided with regular updates on the views and issues 
raised by the company’s investors during the year the board received 
external presentations from advisors on shareholder and market 
perception of the group’s performance and strategy formal written 
responses are given to correspondence received from shareholders as 
well as bilateral engagement through the group chief executive group 
finance director and the company’s investor relations function
analyst coverage
the company is aware of 14 analysts who have published equity 
research notes covering national express group plc during 2014 and 
we provide names and contact numbers of their firms on our website
private shareholders
we welcome contact from our private shareholders and are pleased to 
answer their queries we encourage our shareholders to make use of 
our website to access company reports notices of meeting and 
general shareholder and dividend information the website also 
provides a direct link to shareview wwwshareviewcouk which 
enables shareholders to view and manage their shareholder 
account online
annual general meeting
notice of the annual general meeting and related papers are sent to 
shareholders at least 20 working days before the meeting last year’s 
annual general meeting included a presentation by the group chief 
executive on the progress of the business and an opportunity for 
shareholders to ask questions all of our directors were available 
formally to answer questions during the meeting and many circulated 
and talked to shareholders informally afterwards voting on the 
resolutions was conducted by poll some 83 of the shares in issue 
were voted and all the resolutions were passed 
the results were published on the group’s website shortly after the 
meeting we look forward to welcoming shareholders to our 2015 
annual general meeting and updating them on the progress of the 
business this year
wwwnationalexpressgroupcominvestors
53 wwwnationalexpressgroupcom
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governance report continued
dear shareholder
during the year the audit committee the ‘committee’ has 
continued to play a key role as an independent oversight body in 
ensuring the integrity of our financial reporting the appropriateness 
of our system of risk management and internal controls and the 
effectiveness of both our internal and external audit processes i am 
pleased to report that the regular challenge and engagement with 
management internal audit and the external auditor together with 
the timely and clear receipt of reports and information has enabled 
the committee to discharge its duties and responsibilities effectively 
i hope you find this report helpful in understanding the work of the 
audit committee 
membership
the membership of the committee during the year ended 
31 december 2014 is set out below attendance at meetings 
held during the year is shown on page 48
member position member since
jackie hunt committee chair and 
senior independent 
director
13 september 
2012
sir andrew foster nonexecutive director 23 november 
2004
chris muntwyler nonexecutive director 21 november 
2011
tim score senior independent 
director
21 february 
2005
 appointed committee chairman 26 february 2014
  resigned 25 february 2014
biographies appear on pages 44 and 45
other attendees at committee meetings
attendee
company secretary  
as secretary to the committee
company chairman
group chief executive
group finance director
head of group internal audit
group financial controller
external auditor deloitte llp
qualifications of audit committee members
following tim score’s stepping down from the board i took on 
the role of chair of the committee from 26 february 2014 i am 
considered by the board to meet the requirements of the code 
that at least one committee member has recent and relevant 
financial experience
audit committee overview
role and responsibilities
the primary role of the audit committee is to assist the board in fulfilling 
its oversight responsibilities with regard to financial reporting risk 
management and internal controls procedures and the work of its 
internal audit function and external auditors the committee’s terms of 
reference are reviewed annually and are available on the company’s 
website wwwnationalexpressgroupcom 
the committee’s main duties and responsibilities in advising the board 
include the following
• overseeing the process for selecting the external auditor assessing 
the continuing independence of the external auditor and 
recommending approval of the audit fee to the board
• responsibility for ensuring that provision of nonaudit services does 
not impair the external auditor’s independence or objectivity
• liaising with the external auditor on matters relating to the nature and 
scope of the audit and any issues or concerns arising from the 
audit process
• reviewing the effectiveness of the company’s internal control and risk 
management systems including the internal audit programme and 
major findings identified from internal audit investigations and 
reviews and
• reviewing the halfyear and annual financial statements including 
accounting judgements and policies
the audit committee routinely considers a number of standing items 
during the year such as consideration of the internal and external audit 
reports review of the annual report and accounts review of the 
preliminary and half year results announcements and review of the 
governance report
meetings
four committee meetings were held in 2014 details of attendance at 
these meetings can be found on page 48 outside of the meeting 
process the committee chair has regular contact with the executive 
directors other committee members and the auditor on a variety of 
topics the committee itself meets with both the head of group internal 
audit and the external auditor at least once a year without the executive 
directors being present
at the invitation of the committee and as appropriate to the matters 
under discussion meetings may be attended by the executive directors 
and internal and external auditors full minutes are kept by the secretary 
of the matters considered and decisions taken by the committee
main activities during the year 
during the year and through to the date of this report the activities of the 
committee included 
• a review of the 2013 and 2014 preliminary results and annual 
report and accounts including consideration of the going concern 
statement accounting policies and key areas of financial judgement 
and of the associated reports from the external auditor regarding 
their audit findings
• a review of the 2014 halfyear financial statement and the report from 
the external auditor regarding their review findings
national express group plc annual report and accounts 2014 54 • a review of the effectiveness of the external audit process and 
assessment of the performance continued independence and 
recommendation to the board of the reappointment of the external 
auditor and consideration of any external audit tendering
• approval of the 2014 external audit plan and fees
• approval of the internal audit charters
• approval of the internal audit plans for 2014 and 2015
• consideration of the results of internal audit compliance testing of 
financial controls annual fitness checks within the subsidiaries
• a review of the effectiveness of the group’s internal audit function 
and internal controls including feedback from divisional 
managing directors 
• a review of the group risk register
• a review of the group’s it disaster recovery strategy
• approval of the updated group treasury counterparty risk policy
• a review and approval of the audit and nonaudit services and fees
• a review of corporate governance and legal and regulatory 
compliance 
• an external review of the effectiveness of the committee concluding 
that it continued to operate effectively and
• a review and approval of the committee’s report for inclusion in the 
annual report
financial reporting and significant financial 
judgements for 2014
• goodwill impairment as it is required to do annually the 
committee considered whether the carrying value of goodwill and 
intangible assets held by the group should be impaired the 
judgements largely related to the assumptions applied in calculating 
the value in use of the spanish coach and bus and the north 
american school bus businesses when testing for impairment the 
key considerations were the underlying cash flows the discount 
rates and the future growth rates the committee received a detailed 
report on the outcome of the impairment reviews performed by 
management and took into account the views of the external auditor 
the committee concluded that the goodwill and intangible assets of 
the spanish coach and bus and the north american school bus 
businesses were not impaired and it approved the disclosures 
included in the 2014 financial statements
• spanish receivables the committee considered the assessment 
of the recoverability of the spanish coach and bus net trade 
receivables considerations were given to the nature of overdue 
balances and the ageing of trade receivables along with the 
associated provisions the committee received a report on the 
analysis of the net aged receivables from management and took 
into account the views of the external auditor the committee 
concluded that the spanish coach and bus net trade 
receivables were fairly stated
• insurance and other claims the committee considered the 
adequacy of the provisions associated with insurance and other 
claims risks particularly in north america the assessment focused 
on the advice received from a third party actuary in connection with 
the group’s exposure to auto and general liability and workers’ 
compensation insurance claims consideration was also given to the 
most likely outcome and associated financial effect of other claims 
and exposures facing the group the committee received a report 
from management on north american insurance and other claims 
and considered the views of the external auditor the committee 
concluded that the insurance and other claims provision was 
fairly stated
• exceptional items the committee considered the treatment and 
disclosure of exceptional income and expenditure the assessment 
focused on the nature of the costs and the appropriateness of 
presenting them as exceptional following the financial reporting 
council guidance issued in december 2013 the committee received 
a report on the group’s exceptional items from management and took 
into account the views of the external auditor consideration was given 
to the group’s success in winning new contracts in the year that the 
group is not anticipating there being any exceptional costs for 
reorganisation and restructuring in 2015 and also that bid costs 
will be included within operating costs from 2015
• other matters the committee also considered the key 
assumptions underpinning the group’s defined benefit pension 
obligations the adequacy of the liabilities arising from uncertain tax 
positions and the accounting for the group’s financial derivatives 
and the associated tests for hedge effectiveness the committee 
received reports from management and considered the views of 
the auditor on the appropriateness of the defined benefit pension 
assumptions with reference to the latest market assumptions and 
employee pension benefits similarly reports were received from 
management and the auditor on the taxation charge and the 
adequacy of the taxation liabilities in the context of uncertain tax 
positions reports were also received from management and the 
auditor on the fair value of the group’s financial derivatives and 
support for the tests for hedge effectiveness particularly on the 
group’s fuel derivatives following recent changes in market values 
how the committee spent its time
n financial statements and reports 25
n external audit 13
n internal audit and risk management 34
n taxtreasury 10
n corporate governance 18
55 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report continued
following consideration the committee concluded that the defined 
benefit pension assumptions were reasonable and the taxation 
liabilities and financial derivatives were fairly stated 
at the request of the board the committee undertook a formal review of 
the annual report process in terms of preparation quality of content key 
themes and messages consistency of information and presentation 
from the information and assurance provided by management and the 
review conducted by the external auditor the committee was able to 
confirm to the board that the 2014 annual report taken as a whole 
is fair balanced and understandable and provides the necessary 
information for shareholders to assess national express’ performance 
business model and strategy
risk management and internal controls
the board as a whole including the committee members considers 
the nature and extent of national express’ risk management framework 
and the risk profile that is acceptable to achieve the company’s strategic 
objectives as a result it is considered that the board has fulfilled its 
obligations under the code 
the committee continues to be responsible for reviewing and 
monitoring the adequacy design and effectiveness of the group’s 
ongoing systems of internal control and risk management in that 
regard the committee received reports from management the head 
of internal audit and the external auditor 
further details of the internal controls are set out on pages 52 
a summary of the company’s risk management framework and an 
overview of its principal risks are detailed on pages 26 and 27 
internal audit
the committee has oversight responsibilities for the internal audit 
function which is led by the head of group internal audit 
the purpose of the internal audit function is to provide an independent 
objective assessment of the effectiveness of internal controls risk 
management and governance processes throughout the group 
the function adds value by
• contributing to the continuous improvement of internal control and 
related processes including identifying and sharing good practice 
across the group 
• addressing the safeguarding of assets compliance with 
applicable laws and regulations and achievement of 
management’s operational objectives
• promoting business processes that deliver effective internal control 
at reasonable cost and
• providing alignment with the group’s risk management process
an internal audit charter sets out the responsibilities of both the internal 
audit function in terms of its focus programme of activity scope of 
investigations and reporting lines and management in terms of it 
providing support and cooperation at all levels of the business
during 2014 a targeted internal audit plan was agreed and undertaken 
on certain of the group’s operations systems and support functions 
with subsequent reports including management responses and 
recommended actions plans considered by the audit committee 
in january july and november
the performance of the group internal audit function itself continues to 
be assessed on an ongoing basis and we believe it is effective in the role 
it carries out
antibribery policy
a group antibribery policy has been established and issued to all 
group companies and is also available on the group’s website at  
wwwnationalexpressgroupcom the policy prohibits any inducement 
which results in a personal gain or advantage to the recipient or any 
person or body associated with them and which is intended to 
influence them to take action which may not be solely in the interests 
of the group or of the person or body employing them or which they 
represent the prevention detection and reporting of bribery is the 
responsibility of all employees throughout the group employees can 
report confidentially any suspicion of bribery via an externally facilitated 
whistleblower helpline
whistleblowing policy
whistleblowing policies are in place in each of the group’s 
businesses and are also available on the group’s website www
nationalexpressgroupcom the board supports the highest standards 
of corporate governance and ethical practices within all its operations 
and continues to review its policies on an ongoing basis the board has 
endorsed a set of principles which establish the framework for how its 
businesses operate key to these is working in an open and honest 
manner the group is committed to the highest standards of quality 
honesty openness and accountability employees are encouraged to 
raise genuine concerns under the policy either by contacting their line 
manager or telephoning a dedicated external helpline any concerns 
raised are investigated carefully and thoroughly to assess what action 
if any should be taken and confidential records are maintained the 
company secretary reports any matters of significance to the 
appropriate committee in 2014 there have been no cases relating 
to fraud or financial misconduct
external audit
the external auditor is engaged to express an opinion on the 
company’s financial statements the audit includes the review and test 
of the systems of internal financial control and the data contained in the 
financial statements to the extent necessary to express an audit opinion 
on the truth and fairness of the financial statements
the committee has responsibility to review and make 
recommendations with regard to the appointment reappointment and 
removal of the external auditor in making such recommendations the 
committee considers auditor effectiveness and independence partner 
rotation and any other pertinent factors which may impact the external 
auditor’s appointment 
external audit tendering
the committee currently has no set policy on the tendering frequency of 
the external auditor or the tenure of the external auditor the committee 
is aware of the audit tendering provisions in the code and regularly 
considers the marketplace benchmarking the current level of audit 
services that the company receives along with the fees it pays and the 
value being delivered the company last put its external audit contract 
out to tender in 201 1 following which deloitte llp was appointed as the 
company’s auditor the committee is satisfied that deloitte llp 
continues to provide an effective external audit service and it will 
continue to review the same each year in parallel with the committee’s 
review and determination as to when would be the most appropriate 
time to tender the external audit contract
national express group plc annual report and accounts 2014 56 assessment of the effectiveness and independence 
of the external auditor and external audit process
the audit committee assesses and reviews on a regular basis the 
independence and effectiveness of the external auditor as part of their 
determination the audit committee reviewed the scope materiality 
threshold and fees for the external audit plan and received and 
considered the external auditor’s assessment of the significant risks 
affecting the group as detailed above the committee also considers 
a report by the external auditor on the firm’s independence which is 
required in order to carry out their professional duties and responsibilities 
as auditor 
additionally the effectiveness of the 2014 external audit process was 
formally assessed by the committee to meet the expectations set out 
in provision c32 of the code this was carried out through the use of 
a survey and analysis approach taking into account the views and 
opinions of the group finance team and divisional finance directors in 
so doing the committee’s review and qualitative assessment focused 
on feedback and insights process and communication handling of 
issues and quality of team the committee is satisfied that the external 
audit process continues to be effective and provides an appropriate 
independent challenge to the group’s senior management a few minor 
areas were identified for further focus and improvement as a result of the 
assessment and these will be addressed during the current year
having completed its assessment of both the external audit process 
and the external auditor for the financial period under review the 
committee is satisfied that the auditor has performed satisfactorily in 
2014 that the audit process implemented was effective and that the 
external auditor remains independent
reappointment of auditor
the auditor is reappointed on an annual basis based on deloitte’s 
work during the year the committee concluded that it was satisfied with 
its performance and we were happy to recommend to the board that it 
be put forward to be reappointed at the 2015 agm 
nonaudit services
the committee has an approved policy on the provision of nonaudit 
services by its auditor for the following types of service
• services that are considered to have ‘general preapproval’ by the 
audit committee by virtue of the approval of the policy
• services that require ‘specific preapproval’ on a casebycase 
basis before any work can commence and
• services that cannot be supplied by the external auditor 
prohibited services
the services that have general preapproval are tax transaction 
investigation and advisory and corporate finance services the fees 
for these services are preapproved up to £50000 for each nonaudit 
assignment undertaken and subject to an overall limit of 75 of the total 
fees paid to the external auditor for services exceeding this limit specific 
preapproval is required in deciding whether or not to grant approval 
for the provision of specific services by the external auditor the audit 
committee includes in its consideration the following factors
i  whether the external auditor is best placed to provide an effective 
and efficient service given its knowledge and understanding of the 
company’s processes systems and people and
ii  the level of nonaudit fees paid to the external auditor in the year 
as a proportion of the annual external audit fee
the majority of nonaudit work undertaken by the external auditor 
during the year relates to advice in respect of tax advisory and other 
regulatory services 
the split between audit and nonaudit fees for the year ended 
31 december 2014 appears in note 6 to the consolidated accounts
jackie hunt
audit committee chair 
26 february 2015
57 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
governance report continued
dear shareholder
i am pleased to report on the work undertaken by the nomination 
committee the ‘committee’ during 2014 the main focus of the 
committee this year has been to continue to review the composition 
of our board both executive and nonexecutive and to ensure that 
succession planning for both directors and senior management 
remains high on the agenda i am delighted to report that the recent 
appointment of a new group finance director as detailed in this 
report together with the search for an additional independent 
nonexecutive director is progressing well we will further strengthen 
our board and its alignment to the company’s longterm operational 
needs and governance oversight 
membership
the membership of the committee during the year ended 
31 december 2014 is set out below attendance at meetings 
held during the year is shown on page 48
member position member since
sir john armitt committee chair and 
company chairman
1 january 2013
joaquín ayuso independent  
nonexecutive director
26 february 2013
jorge cosmen deputy company 
chairman
2 june 2008
sir andrew foster nonexecutive director 15 december 2004
biographies appear on pages 44 and 45
other attendees at committee meetings
attendee
company secretary  
as secretary to the committee
senior independent director
group chief executive
group human resources director
external advisors as appropriate
full minutes are kept by the secretary of the matters considered and 
decisions taken by the committee 
advisors
during the year the committee appointed search consultants 
the zygos partnership to undertake a search for an additional 
independent nonexecutive director in view of sir andrew foster’s 
retirement from the board with effect from the end of the 
forthcoming agm 
russell reynolds was also appointed to identify candidates for the 
role of group finance director to replace jez maiden who stepped 
down from the board as an executive director with effect from 
31 december 2014 
neither the zygos partnership nor russell reynolds has any other 
connection to the company 
role and responsibilities
the primary role of the nomination committee is to ensure that 
the board is appropriately structured and has in place the correct 
balance of individuals to discharge its duties effectively and to lead the 
process by which new board members are appointed it also advises 
the board on succession planning for directors 
the committee’s terms of reference are reviewed annually and are 
available on the company’s website wwwnationalexpressgroupcom
the committee’s main duties and responsibilities in advising the board 
are summarised below
• responsibility for identifying and nominating for the approval of the 
board candidates to fill board vacancies as and when they arise
• giving full consideration to succession planning and keeping under 
review the leadership needs of the organisation both executive and 
nonexecutive
• reviewing the time required from and spent by a nonexecutive 
director in fulfilling his or her duties and
• leading the process for board appointments and making 
recommendations to the board preparing a description of the role 
and requirements for any particular appointment based on its 
evaluation of the board as a whole 
activities
during the year the committee 
• reviewed succession plans across the group
• made a formal recommendation to the board for the appointment 
of jane kingston as a nonexecutive director with effect from 
26 february 2014 following a search conducted by jca group
• recommended to the board that jackie hunt succeed tim score 
both as senior independent director and as audit committee 
chairman with effect from 26 february 2014
• evaluated the balance of skills experience independence diversity 
and knowledge on the board and then prepared a description of 
the role and capabilities required for the recruitment of a new 
independent nonexecutive director
• oversaw the appointments process for a new independent non
executive director and interviewed shortlisted candidates and
• oversaw the process for the search for the vacant role of group 
finance director and interviewed shortlisted candidates both internal 
and external following which the appointment of matthew ashley 
was subsequently recommended to the board
diversity
our goal at national express is for our people to reach their full potential 
and to give their best as individuals and in teams in this context we are 
committed to never discriminate on the grounds of race colour creed 
disability religion ethnic origin sex sexual orientation or age we 
maintain a policy of selecting the best available candidate for any 
position and with respect to board appointments take into account the 
guidance issued by the equality and human rights commission on 
appointments to boards and equality law whilst national express has 
set the aspirational target that by the end of 2015 30 of the board will 
be women we are conscious of the ongoing debate regarding quotas 
and opportunities and the risks created by adhering to such quotas 
recognising that good progress has been made towards reaching our 
target with as at the date of this report 20 of our board being female 
we shall take the opportunity when available to increase the diversity of 
our board further 
sir john armitt
nomination committee chair
26 february 2015
nomination committee overview
national express group plc annual report and accounts 2014 58 dear shareholder
safety is one of our values we only do what is safe and stop any 
unsafe behaviour the management of the group’s environmental 
impact on the communities it serves also forms a key component of 
our community value the safety  environment committee the 
‘committee’ comprised solely of nonexecutive directors plays a 
fundamental role in reviewing and challenging the structure content 
and operation of the safety management arrangements which have 
been put in place by the executive and in monitoring environmental 
performance and targets i am pleased to report that in 2014 we 
continued to make good progress in our safety performance with 
a 17 improvement in responsible harm reported during the year 
with respect to the management of the company’s environmental 
responsibilities i am particularly pleased to report that the group 
received external recognition by the carbon disclosure project for 
its significant improvement in environmental performance and 
sustainability as a uk public company 
membership
the membership of the committee during the year ended 
31 december 2014 is set out below attendance at meetings held 
during the year is shown on page 48
member position member since
chris muntwyler committee chair 11 may 2011
sir john armitt company chairman 1 january 2013
jorge cosmen deputy company chairman 14 december 2005
joaquín ayuso independent  
nonexecutive director
1 june 2011
sir andrew 
foster
nonexecutive director 9 november 2004
lee sander independent  
nonexecutive director
1 june 2011
jackie hunt senior independent director 13 september 
2012
tim score senior independent director 23 march 2005
jane kingston independent  
nonexecutive director
26 february 2014
biographies appear on pages 44 and 45
 appointed senior independent director on 26 february 2014
 resigned 25 february 2014
 appointed 26 february 2014
other attendees at committee meetings
attendee
company secretary as secretary to the committee
group chief executive
group finance director
group safety director
group property and environment director
full minutes are kept by the secretary of the matters considered and 
decisions taken by the committee 
the committee’s terms of reference are reviewed annually and are 
available on the company’s website wwwnationalexpressgroupcom 
role and responsibilities
the committee’s key responsibilities are summarised below
• responsibility for reviewing and challenging constructively the 
structure content and operation of the safety management 
arrangements put in place by members of the executive 
management of the group’s operating companies
• reporting after every committee meeting to the board on its 
observations on the safety management arrangements in place 
and reviewing and making recommendations to the board on any 
specific safety management issues relating to the company or any 
subsidiary company and
• reviewing and monitoring the company’s environmental 
performance and targets
main activities during the year
during the year the committee 
• reviewed the findings and recommendations of the comprehensive 
external annual audit of corporate governance of safety undertaken 
by arthur d little for 2013 in line with our global safety standard
• reviewed the findings and recommendations from the 2013 
independent review of the group’s driving out harm programme
• monitored progress of the divisional action plans arising from the 
driving out harm review
• reviewed the findings and actions arising from a comprehensive 
audit of maintenance processes across the group
• reviewed activity in health and wellbeing in the divisions
• reviewed environmental policy strategy management and key 
environmental performance indicators across the group and
• monitored safety practices and procedures across the group
the company’s detailed mandatory report on greenhouse gas 
emissions in all of its businesses during 2014 can be found on 
pages 20 and 21
the safety of our employees and customers is of critical 
importance to the board as is the responsible management of our 
environmental obligations i would like to thank dean finch and his 
team for the leadership they show in these areas
chris muntwyler 
safety  environment committee chair
26 february 2015
safety  environment  
committee overview
59 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information dear shareholder
as the chairman of the remuneration committee ‘committee’ 
i am pleased to present the report of the board covering the 
remuneration policy and its implementation for 2014 the 
committee has undertaken a significant amount of work during 
the last year to review the remuneration arrangements for the 
executive team and we present a revised policy which will be 
put to shareholders for a binding vote at the 2015 agm 
membership
the membership of the committee during the year ended 
31 december 2014 is set out below attendance at meetings 
held during the year is shown on page 48
name of director position
sir andrew foster committee chair
lee sander independent nonexecutive director 
jane kingston independent nonexecutive director 
appointed 26 february 2014
tim score senior independent director  
resigned 25 february 2014
biographies appear on pages 44 and 45
other attendees at committee meetings
other attendees position
dean finch group chief executive
mike goddard human resources director
michael 
hampson
general counsel and company secretary 
until 30 may 2014
sandra forbes general counsel and company secretary 
from 2 june 2014
pwc llp independent remuneration consultants
corporate governance
directors’ remuneration report
chairman of the remuneration committee’s annual statement
company highlights for the 2014 financial year
the following financial results were achieved in 2014
• group revenue of £187bn a 2 increase on 2013 on a constant 
currency basis
• normalised group profit before tax of £1454 million which was 
a 7 increase on a constant currency basis from the prior year
• statutory group profit before tax of £665 million which was a 
10 increase on a constant currency basis from the prior year
• freecash flow was £190 million and net debt was £6643 million 
which was £818 million lower than in 2013
remuneration highlights for the 2014 financial year
the following remuneration events and decisions for 2014 took place
• the group’s financial performance for 2014 was considerably better 
than budgeted despite the unanticipated headwinds and executive 
directors performed strongly against the nonfinancial targets set for 
2014 bonuses equal to 13875 of salary were therefore determined 
by the remuneration committee for the year to reflect the overall 
strong performance of the executive directors
• some of the long term incentive awards granted in 2012 reached the 
end of their performance period at 31 december 2014 none of the 
awards vested under the eps or tsr conditions attached to these 
awards
• the committee determined that the comparator group for the tsr 
condition attached to the 2014 long term incentive awards should be 
amended to link more closely to the company’s comparators and to 
assess performance against a broader market index
• as a result of the feedback received from shareholders and the 
significant vote against our remuneration policy the committee has 
undertaken a full review of executive remuneration during 2014 
which completed at the beginning of 2015 the review has been 
undertaken to ensure effective alignment of the reward strategy 
with that of shareholders and to reward for the long term success 
of national express further details of this review and the outcomes 
are provided below
key activities of the remuneration committee
during the year the committee undertook the following
• conducted an extensive shareholder consultation in connection with 
the formulation of a revised directors’ remuneration policy including 
the simplification of the long term incentive arrangements into a 
single plan
• considered and approved a new long term incentive arrangement 
plan for the executive directors’ 2015 long term incentive plan 
including the types and range of performance conditions to be used 
which is to be approved at the 2015 agm
• approved the new remuneration arrangements for the incoming 
group finance director and agreement as to treatment of the 
outgoing group finance director jez maiden
• reviewed executive directors’ and senior executives’ salary levels
• approved annual bonus payments having duly considered the 
overall strong financial performance of the company including 
the exceptional items based on the clear business case and 
justification for the exceptional items incurred
• reviewed the chairman’s fees
• considered and approved performance targets to apply to the 2014 
long term incentive plan awards including the total shareholder 
return comparator group used and the range of earnings per share 
targets set
remuneration committee 
overview
national express group plc annual report and accounts 2014 60 • approved 2014 award levels under the company’s share plans
• tested performance conditions and approval of vesting of long term 
incentive plan awards granted in 201 1
• set targets for the group’s 2014 bonus scheme
• reviewed and approved the draft directors’ remuneration report 
for the year ended 31 december 2014
• reviewed advisors and fees paid to them
i hope that you find the information in this report helpful and i look 
forward to your support at the company’s annual general meeting 
i am always happy to hear from the company’s shareholders and 
you can contact me via the company secretary if you have any 
questions on this report or more generally in relation to the 
company’s remuneration
sir andrew foster
chair of the remuneration committee
26 february 2015
at a glance
introduction
in this section we summarise the purpose of our remuneration policy 
its linkage to our corporate strategic objectives and we highlight the 
performance and remuneration outcomes for the 2014 financial year 
more detail can be found in the annual report on remuneration
our principles of remuneration
the remuneration policy is based on the following broad principles set 
by the committee to
• provide a competitive remuneration package to attract and retain 
quality individuals
• align remuneration to drive the overall objectives of the business
• align the interests of management with the interests of shareholders 
and
• provide the foundation for overall reward and remuneration 
beyond the specific roles falling within the direct remit of the 
remuneration committee
in implementing its policy the committee gives full consideration to the 
principles set out in the code with regard to directors’ remuneration and 
due regard is given to the guidance issued by investor protection bodies 
and institutional investors more generally
remuneration policy is reviewed on an ongoing basis against the 
committee’s broad principles and in light of emerging best practice 
in corporate governance 
revised policy for executive directors
we have revised the policy approved at the 2014 agm in response 
to shareholder feedback received the following changes have 
been made
• three long term incentive arrangements have been simplified to a 
single plan awards under the share matching arrangement will 
cease and the five year awards will no longer be granted to the 
group chief executive
• the remuneration package of the group chief executive has been 
rebalanced to give less weighting to long term incentives and reduce 
the overall quantum
• the aggregated opportunity under long term plans for the group 
chief executive has been reduced from 320 of salary to 200 of 
salary and the committee has introduced a two year holding period 
postvesting 
• the maximum annual bonus for the group chief executive has 
increased from 150 to 200 of salary with 75 of the additional 
50 subject to compulsory deferral
• the shareholding requirement has been increased from 100 to 
200 of salary for the group chief executive and from 100 to 
150 of salary for the group finance director
• the unfunded pension arrangement for the group chief executive 
will cease to accrue upon the completion of a 12 month 
notice period 
notes
this directors’ remuneration report has been prepared in 
accordance with schedule 8 to the large and mediumsized 
companies and groups accounts and reports amendment 
regulations 2013 the ‘regulations’ and the provisions of the 2012 
corporate governance code in preparing the report the company 
has also taken into account the september 2014 corporate 
governance code in order to comply with both codes on a 
forwardlooking basis and the listing rules 
the report consists of the following sections
• the annual statement by the remuneration committee 
chairman
• the ‘at a glance’ section providing a summary overview
• the annual report on remuneration which sets out payments 
made to the directors and details the link between company 
performance and remuneration for the 2014 financial year
• the remuneration policy report which sets out the company’s 
remuneration policy for directors and the key factors that were 
taken into account in setting the policy this policy will apply for 
three years from its date of approval at the 2015 agm
the chairman’s annual statement and the annual report on 
remuneration will be subject to an advisory vote at the agm 
the policy will be subject to a binding vote
61 wwwnationalexpressgroupcom
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directors’ remuneration report continued
directors’ remuneration policy report
changes to policy for 2015
element operation of element potential value
performance metrics used weightings 
and time period applicable
salary no change no change for group ceo 
the incoming group fd will have 
a starting salary set at £300000 
which will be increased to median 
based upon development in role
na
benefits no change no change na
pension removal of ongoing accrual of the group 
ceo’s unfunded pension promise
no change to existing salary 
supplements 
the new group fd will receive a 
salary supplement of 25 in line 
with previous group fd
na
annual bonus no change to structure with exception of
• 75 of the additional bonus opportunity 
for the group ceo will be subject to 
deferral in shares for one year
deferral into shares of
• 25 of bonus earned up to 125 
of salary
• 50 of bonus earned between 125 
and 150 of salary and
• 75 of bonus earned above 150 of 
salary applies for group ceo only
the maximum bonus opportunity 
for 2015 will increase to 200 of 
salary for the group ceo
the new group fd will have a 
maximum opportunity of 150 
of salary
performance conditions for the 2015 
financial year and their weighting
• normalised pbt 50
• free cash flow 25 and
• nonfinancial objectives 25
longterm 
incentive plan
matching shares removed
chief executive’s five year award 
removed
introduction of new performance share 
plan measured over a three year 
performance period
overall quantum reduced from 
320 of salary to 200 of salary 
for group ceo and from 220 
of salary to 150 of salary for 
group fd
performance conditions and 
weightings will be
• 13 earnings per share
• 13 return on capital employed
• 13 total shareholder return split 
between 50 ftse 250 comparator 
group and 50 competitors
two year holding period added to 
performance shares
link to strategy
our focus is to deliver sustainable growth and profitability and we seek to achieve this through the following strategic initiatives
strategic initiatives measurement through the incentives
revenue growth short term through the profit targets in the annual bonus plan and longer term through eps 
growth targeted by the ltip
cost efficiency and better margins targeted through roce metric under the performance shares and indirectly through relative 
tsr condition attached to performance shares
operational excellence – safety 
customers people community
measured by nonfinancial metrics in the annual bonus plan
superior cash and returns measured by free cash flow metric in the annual bonus plan and roce and tsr conditions 
attached to the performance shares
creating new business opportunities measured by nonfinancial metrics in the annual bonus plan
how we have performed in 2014
bonus kpis threshold target maximum actual
normalised pbt £m £1284 £1352 £1487 £1454
net debt £m – £6717 – £6643
national express group plc annual report and accounts 2014 62 single total figure of remuneration for executive directors for 2014
£’000 base salary
taxable 
benefits
performance 
related bonus
value of
ltip vested
pension 
related 
benefits 2014 total 2013 total
group chief executive – dean finch 561 27 778 0 196 1562 1553
group finance director – jez maiden 428 25 594
1
0 107 1154 1155
1   
a portion of the bonus will be deferred in shares for one year although as he was not treated as a good leaver the shares will not vest
remuneration committee composition and 
terms of reference
the individuals who served on the remuneration committee during 
2014 and those individuals who attended remuneration committee 
meetings are set out on page 60 
role and responsibilities
the key responsibilities of the committee are to
• determine the fees of the chairman
• determine the remuneration and conditions of employment including 
any termination arrangements of the executive directors and 
company secretary
• review the remuneration and conditions of employment of the senior 
management team and
• select and appoint any remuneration consultants who advise 
the committee
the full terms of reference of the committee are available on the 
company’s website at wwwnationalexpressgroupcom 
meetings 
the committee met twice on a formal basis in 2014 and held a number 
of additional informal meetings during the year in relation to the 
remuneration restructuring for the group chief executive and the 
shareholder engagement on remuneration which was carried out 
details of attendance at the formal committee meetings can be found 
on page 48
the committee is authorised by the board to seek any information that 
it requires from any employee of the group 
the committee members and management attendees did not 
participate in any discussions directly relating to their own remuneration 
or performance during the year 
advisors to the committee
material advice or services were provided to the committee during the 
year by
• pricewaterhousecoopers llp ‘pwc’ – independent remuneration 
consultants
• dean finch – group chief executive
• mike goddard – group hr director
• michael hampson – general counsel and company secretary 
until 30 may 2014 and
• sandra forbes – general counsel and company secretary from 
2 june 2014
the group chief executive attends meetings of the committee to make 
recommendations relating to the performance and remuneration of his 
direct reports the group hr director guided the committee on reward 
matters relating to the executive directors and senior executives and the 
broader group hr strategy and policy the company secretary acts as 
secretary to the committee
during 2014 pwc provided advice to the management of the group 
on various matters including pensions international taxation and 
business consulting
from time to time the company submits the remuneration consultant 
function to tender 
pwc are members of the remuneration consultants group and the 
voluntary code of conduct of that body is designed to ensure objective 
and independent advice is given to remuneration committees
the committee is satisfied that advice received was appropriate 
objective and independent 
advisor fees in relation to remuneration advice £’000s
pwc 112
1
1  
this fee includes advice to management on remuneration issues as well as advice 
to the remuneration committee
remuneration structure from 2015
the table below sets out the key elements of the company’s 
remuneration policy for the executive directors with effect from the 
2015 agm and will apply for the period of three years from the date 
of approval the changes to the policy below reflect the detailed review 
of the existing policy and balance the desire to align remuneration to the 
long term success of the business and shareholders whilst also enabling 
the company to effectively recruit and motivate key individuals 
the remuneration policy in force during 2014 is set out in the 
remuneration report for the year ended 31 december 2013
consideration of shareholder views 
the committee is committed to an ongoing dialogue with shareholders 
and seeks shareholder views when any significant changes are being 
made to remuneration arrangements in particular the committee 
consulted with a number of major shareholders in the formulation of 
this remuneration policy to understand their views and to inform the 
committee’s approach the committee believes that the feedback 
received has been crucial in the development of the new structure 
for 2015
in addition to the components described below it is the policy of 
the company to honour any commitments made to a director before 
this policy takes effect or before heshe became a director such 
commitments include the group chief executive’s unfunded pension 
arrangement which is described on page 69 and his five year award 
which is described in the annual report on remuneration
63 wwwnationalexpressgroupcom
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directors’ remuneration report continued
directors’ remuneration policy report continued
remuneration policy table for executive directors
element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
base salary to provide a competitive 
level of salary as the main 
component of fixed 
remuneration enables the 
group to recruit and retain 
executive directors of the 
calibre required to fulfil 
the role and is key 
to developing and 
implementing business 
strategy without paying 
more than is necessary 
to do so
the salary of individual executive directors is paid monthly in cash and is normally 
reviewed annually 
in determining base salaries the committee considers
• pay levels at companies of a similar size and complexity in the ftse 250
• external market conditions
• general performance of the company
• pay and conditions elsewhere in the group and
• individual performance skills experience in post and potential
when considering pay increases the committee will use comparator groups that will 
be based on groups of transportleisure and general sector companies of a similar 
size the committee retains discretion to amend the comparator groups as necessary 
in order to remain relevant
any changes to the comparator group will be disclosed in the part of the report setting 
out the operation of the policy for the future year
the committee’s policy is to set base salary at an appropriate 
level taking into account the factors outlined in this table
the maximum annual salary increase will not normally exceed 
the average increase which applies across the wider workforce 
however larger increases may be awarded in certain 
circumstances including but not limited to
• increase in scope of responsibilities of the role
• to apply salary progression for a newly appointed director and
• where a director’s salary has fallen significantly below 
market position
in these circumstances subsequent increases may be staged 
over a number of years until the target positioning and desired 
performance is reached
in such circumstances the increase will not exceed rpi  10
the company will set out in the section headed ‘statement 
of implementation of remuneration policy’ in the following 
financial year the salaries for that year for each of the executive 
directors see page 82
not applicable
pension related 
benefits
to provide competitive 
benefits in line with market 
practice provide funds to 
allow executives to save 
for retirement pension 
benefits are a fixed 
element of remuneration
executive directors are provided a cash allowance in lieu of a pension provision in line 
with market practice 
the group ceo receives a cash supplement in lieu of pension at 35 of salary
the group fd receives a pension contribution or a cash supplement in lieu of pension 
at 25 of salary
only basic salary counts for the purpose of the allowance
the committee’s policy is that the maximum cash allowance 
payable in lieu of a pension will be 35
not applicable
benefits to provide competitive 
benefits as part of fixed 
remuneration in line with 
market practice to enable 
the group to recruit and 
retain talent
executive directors receive family private healthcare death in service and life 
assurance cover 4 x base salary long term sickness and disability insurance 
a cash alternative to a fully expensed car free travel on the company’s services 
and professional membership subscriptions
the committee has discretion to provide additional benefits or remove benefits in order 
to remain competitive or to meet the needs of the business for example to provide 
relocation expenses including financial tax and legal advice if applicable any change 
to benefit provision will be detailed on an annual basis
the cost to the company of providing the benefits may vary 
from year to year in accordance with market conditions and 
will therefore determine the maximum amount that would be 
paid in the form of benefits during the policy period
not applicable
national express group plc annual report and accounts 2014 64 remuneration policy table for executive directors
element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
base salary to provide a competitive 
level of salary as the main 
component of fixed 
remuneration enables the 
group to recruit and retain 
executive directors of the 
calibre required to fulfil 
the role and is key 
to developing and 
implementing business 
strategy without paying 
more than is necessary 
to do so
the salary of individual executive directors is paid monthly in cash and is normally 
reviewed annually 
in determining base salaries the committee considers
• pay levels at companies of a similar size and complexity in the ftse 250
• external market conditions
• general performance of the company
• pay and conditions elsewhere in the group and
• individual performance skills experience in post and potential
when considering pay increases the committee will use comparator groups that will 
be based on groups of transportleisure and general sector companies of a similar 
size the committee retains discretion to amend the comparator groups as necessary 
in order to remain relevant
any changes to the comparator group will be disclosed in the part of the report setting 
out the operation of the policy for the future year
the committee’s policy is to set base salary at an appropriate 
level taking into account the factors outlined in this table
the maximum annual salary increase will not normally exceed 
the average increase which applies across the wider workforce 
however larger increases may be awarded in certain 
circumstances including but not limited to
• increase in scope of responsibilities of the role
• to apply salary progression for a newly appointed director and
• where a director’s salary has fallen significantly below 
market position
in these circumstances subsequent increases may be staged 
over a number of years until the target positioning and desired 
performance is reached
in such circumstances the increase will not exceed rpi  10
the company will set out in the section headed ‘statement 
of implementation of remuneration policy’ in the following 
financial year the salaries for that year for each of the executive 
directors see page 82
not applicable
pension related 
benefits
to provide competitive 
benefits in line with market 
practice provide funds to 
allow executives to save 
for retirement pension 
benefits are a fixed 
element of remuneration
executive directors are provided a cash allowance in lieu of a pension provision in line 
with market practice 
the group ceo receives a cash supplement in lieu of pension at 35 of salary
the group fd receives a pension contribution or a cash supplement in lieu of pension 
at 25 of salary
only basic salary counts for the purpose of the allowance
the committee’s policy is that the maximum cash allowance 
payable in lieu of a pension will be 35
not applicable
benefits to provide competitive 
benefits as part of fixed 
remuneration in line with 
market practice to enable 
the group to recruit and 
retain talent
executive directors receive family private healthcare death in service and life 
assurance cover 4 x base salary long term sickness and disability insurance 
a cash alternative to a fully expensed car free travel on the company’s services 
and professional membership subscriptions
the committee has discretion to provide additional benefits or remove benefits in order 
to remain competitive or to meet the needs of the business for example to provide 
relocation expenses including financial tax and legal advice if applicable any change 
to benefit provision will be detailed on an annual basis
the cost to the company of providing the benefits may vary 
from year to year in accordance with market conditions and 
will therefore determine the maximum amount that would be 
paid in the form of benefits during the policy period
not applicable
65 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
directors’ remuneration report continued
directors’ remuneration policy report continued
element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
performance 
related bonus
to incentivise delivery of 
performance objectives 
which are directly linked to 
the financial and strategic 
priorities of the business
a portion of bonus is 
deferred into shares 
assisting retention of 
executive directors and 
aligning their financial 
interests with those 
of shareholders
bonus payments are based on the achievement of specified corporate financial and 
nonfinancial objectives over a oneyear performance period
a proportion of the bonus payments is subject to mandatory deferral into shares for 
one year from award as follows
• 25 of the bonus earned up to 125 of salary
• 50 of the bonus earned from 125 to 150 of salary and
• 75 of the bonus earned above 150 of salary applicable to group ceo only
dividends or dividend equivalents which may assume notional reinvestment are paid 
on these shares
the remuneration committee retains the discretion to standardise the percentage of 
the bonus deferred into shares if this is deemed appropriate in the future unless the 
committee determines otherwise the market price per share on the date of the award 
will be calculated on basis of the average market price share in the five days preceding 
the date of the grant
bonus payments are paid following year end and are not pensionable
only the executive directors currently participate in the company’s bonus deferral 
arrangements other employees may be invited to participate in future years at the 
committee’s discretion
achievement of each element of the bonus is assessed independently
provisions exist that require the deferred shares to be forfeited or repaid should it be 
necessary for the company to restate materially the financial results upon which the 
bonus was awarded within a twoyear period following the deferred bonus being 
awarded the proportion of the bonus that would be subject to this provision would 
depend on the extent to which the original bonus payment turned out to be false 
following the publication of corrected results
maximum 200 of base salary the targets for the bonus in respect of 2015 are as follows
• 75 bonus is subject to normalised profit and free cashflow targets
• 25 is subject to nonfinancial targets
the committee retains discretion in exceptional circumstances to 
amend the weightings of the financial and nonfinancial elements of 
the bonus from year to year and for each executive as appropriate 
the targets attached to the financial condition will typically relate to 
profit andor cash generation are set on an annual basis and are 
intended to be achievable at threshold and stretching at maximum 
the numerical values of the target will not be disclosed in advance 
as the committee considers this information commercially sensitive 
actual targets performance achieved and awards will be published 
at the end of the performance period in order that shareholders can 
fully assess the basis for any payouts under the annual bonus
the nonfinancial targets will be set annually based on strategic 
objectives for the year the nonfinancial targets include safety 
customer operational excellence and people objectives and will be 
determined by the committee on an annual basis the proportion of 
the bonus determined by performance against nonfinancial targets 
will only become payable when the company achieves a threshold 
level of normalised profit
it is a precondition to the award of any bonus that the remuneration 
committee has determined that there has been an improvement in 
safety processes procedures and outcomes during the year in the 
relevant business unit before any bonus is paid
for further details on the measures and targets which applied to 
bonuses in 2014 please see page 74
the annual bonus contains malus and clawback provisions
long term 
incentive plan 
– performance 
shares
to drive performance aid 
retention and align the 
interests of executive 
directors with 
shareholders 
the performance 
conditions are aligned with 
the long term performance 
of the business thereby 
driving participants to 
achieve outcomes that 
realise shareholder value
performance share awards in the form of conditional awards nilcost options or 
forfeitable shares are granted annually and vesting is dependent on the achievement 
of performance conditions measured over a threeyear period
an additional two year holding period has been introduced to increase alignment with 
shareholders dividend equivalents can be paid on these shares
awards are reviewed annually to ensure that grant levels performance criteria and 
other features remain appropriate to the company’s current circumstances
malus and clawback provisions are attached to awards made under the ltip which 
apply over a two year period post vesting
the group ceo is eligible to receive a conditional award of 
performance shares up to an equivalent of 200 of salary 
per annum
the group fd is eligible to receive a conditional award of 
performance shares up to an equivalent of 150 of base 
salary per annum
awards will be subject to stretching performance targets over a period 
of three years 
the committee may change the balance of the measures or use 
different measures for subsequent awards as appropriate no 
material change will be made to the type of performance conditions 
without prior shareholder consultation
for 2015 the awards will be based equally as follows
• 13 earnings per share
• 13 return on capital employed
• 13 total shareholder return split between 50 ftse 250 comparator 
group and 50 competitors
achievement of threshold performance results in 30 vesting for each 
part of the award
there is no ability to retest any of the performance conditions
the committee retains discretion under the rules of the ltip to amend 
existing performance conditions to take account of any events that 
may arise which would mean in its opinion if such adjustments were 
not made the performance condition would not constitute a fair 
measure of the company’s performance over the period
shareholding 
requirement
executive directors are encouraged to build up a shareholding over a five year period from 2015 the requirement 
for the group ceo will be equivalent to 200 of salary and for the group fd the requirement will be 150 of base 
salary adherence to these guidelines is a condition of continued participation in the equity incentive arrangements 
this policy ensures that the interests of executive directors and those of shareholders are closely aligned
national express group plc annual report and accounts 2014 66 element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
performance 
related bonus
to incentivise delivery of 
performance objectives 
which are directly linked to 
the financial and strategic 
priorities of the business
a portion of bonus is 
deferred into shares 
assisting retention of 
executive directors and 
aligning their financial 
interests with those 
of shareholders
bonus payments are based on the achievement of specified corporate financial and 
nonfinancial objectives over a oneyear performance period
a proportion of the bonus payments is subject to mandatory deferral into shares for 
one year from award as follows
• 25 of the bonus earned up to 125 of salary
• 50 of the bonus earned from 125 to 150 of salary and
• 75 of the bonus earned above 150 of salary applicable to group ceo only
dividends or dividend equivalents which may assume notional reinvestment are paid 
on these shares
the remuneration committee retains the discretion to standardise the percentage of 
the bonus deferred into shares if this is deemed appropriate in the future unless the 
committee determines otherwise the market price per share on the date of the award 
will be calculated on basis of the average market price share in the five days preceding 
the date of the grant
bonus payments are paid following year end and are not pensionable
only the executive directors currently participate in the company’s bonus deferral 
arrangements other employees may be invited to participate in future years at the 
committee’s discretion
achievement of each element of the bonus is assessed independently
provisions exist that require the deferred shares to be forfeited or repaid should it be 
necessary for the company to restate materially the financial results upon which the 
bonus was awarded within a twoyear period following the deferred bonus being 
awarded the proportion of the bonus that would be subject to this provision would 
depend on the extent to which the original bonus payment turned out to be false 
following the publication of corrected results
maximum 200 of base salary the targets for the bonus in respect of 2015 are as follows
• 75 bonus is subject to normalised profit and free cashflow targets
• 25 is subject to nonfinancial targets
the committee retains discretion in exceptional circumstances to 
amend the weightings of the financial and nonfinancial elements of 
the bonus from year to year and for each executive as appropriate 
the targets attached to the financial condition will typically relate to 
profit andor cash generation are set on an annual basis and are 
intended to be achievable at threshold and stretching at maximum 
the numerical values of the target will not be disclosed in advance 
as the committee considers this information commercially sensitive 
actual targets performance achieved and awards will be published 
at the end of the performance period in order that shareholders can 
fully assess the basis for any payouts under the annual bonus
the nonfinancial targets will be set annually based on strategic 
objectives for the year the nonfinancial targets include safety 
customer operational excellence and people objectives and will be 
determined by the committee on an annual basis the proportion of 
the bonus determined by performance against nonfinancial targets 
will only become payable when the company achieves a threshold 
level of normalised profit
it is a precondition to the award of any bonus that the remuneration 
committee has determined that there has been an improvement in 
safety processes procedures and outcomes during the year in the 
relevant business unit before any bonus is paid
for further details on the measures and targets which applied to 
bonuses in 2014 please see page 74
the annual bonus contains malus and clawback provisions
long term 
incentive plan 
– performance 
shares
to drive performance aid 
retention and align the 
interests of executive 
directors with 
shareholders 
the performance 
conditions are aligned with 
the long term performance 
of the business thereby 
driving participants to 
achieve outcomes that 
realise shareholder value
performance share awards in the form of conditional awards nilcost options or 
forfeitable shares are granted annually and vesting is dependent on the achievement 
of performance conditions measured over a threeyear period
an additional two year holding period has been introduced to increase alignment with 
shareholders dividend equivalents can be paid on these shares
awards are reviewed annually to ensure that grant levels performance criteria and 
other features remain appropriate to the company’s current circumstances
malus and clawback provisions are attached to awards made under the ltip which 
apply over a two year period post vesting
the group ceo is eligible to receive a conditional award of 
performance shares up to an equivalent of 200 of salary 
per annum
the group fd is eligible to receive a conditional award of 
performance shares up to an equivalent of 150 of base 
salary per annum
awards will be subject to stretching performance targets over a period 
of three years 
the committee may change the balance of the measures or use 
different measures for subsequent awards as appropriate no 
material change will be made to the type of performance conditions 
without prior shareholder consultation
for 2015 the awards will be based equally as follows
• 13 earnings per share
• 13 return on capital employed
• 13 total shareholder return split between 50 ftse 250 comparator 
group and 50 competitors
achievement of threshold performance results in 30 vesting for each 
part of the award
there is no ability to retest any of the performance conditions
the committee retains discretion under the rules of the ltip to amend 
existing performance conditions to take account of any events that 
may arise which would mean in its opinion if such adjustments were 
not made the performance condition would not constitute a fair 
measure of the company’s performance over the period
shareholding 
requirement
executive directors are encouraged to build up a shareholding over a five year period from 2015 the requirement 
for the group ceo will be equivalent to 200 of salary and for the group fd the requirement will be 150 of base 
salary adherence to these guidelines is a condition of continued participation in the equity incentive arrangements 
this policy ensures that the interests of executive directors and those of shareholders are closely aligned
67 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
directors’ remuneration report continued
directors’ remuneration policy report continued
elements of remuneration applying under the previous policy applicable for 2014
element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
long term 
incentive plan 
– matching 
shares
to drive performance aid 
retention and align the 
interests of executive 
directors with 
shareholders
participants only receive 
matching shares subject 
to investing into the 
business and therefore 
this mechanism adds 
an element of buyin to 
the remuneration
the performance 
conditions are aligned 
with the long term 
performance of the 
business thereby driving 
participants to achieve 
outcomes that realise 
shareholder value
executive directors are eligible to receive awards of matching shares that are based 
on a personal investment in national express group plc shares funded either through 
using an annual bonus award to purchase shares or through the pledging of shares 
held not already allocated to the ltip matching awards are made on the basis of up 
to four matching shares being awarded based on the value of the investment for 
each national express share pledged or purchased
reviewed annually to ensure that grant levels performance criteria and other features 
remain appropriate to the company’s current circumstances and to ensure that there 
are no features of the plans that could inadvertently motivate irresponsible behaviour
the maximum value of investment in any year is 30 of 
base salary
half of any award will be subject to eps growth the remaining half 
will be subject to the relative total shareholder return ‘tsr’ of the 
company measured against an appropriate group of companies
achievement of threshold performance results in 30 vesting for each 
part of the award
there is no ability to retest either performance condition
the committee retains discretion under the rules of the ltip to amend 
existing performance conditions to take account of any events that 
may arise which would mean in its opinion if such adjustments were 
not made the performance condition would not constitute a fair 
measure of the company’s eps or tsr growth over the period
ltip – performance conditions for the 2015 ltip
eps tsr and roce have been chosen for the ltip as appropriate 
measures of the group’s long term performance the table below 
summarises the rationale for the inclusion of these measures in the 
new ltip
measure rationale for performance measure
eps • important growth measure considered within the 
company and a driver of shareholder value
• provides a transparent and accessible method of 
gauging the financial performance of the company
• ensures the annual profit performance targeted by 
the annual bonus plan flows through to longterm 
sustainable eps growth 
• the company calculates performance against this 
measure by reference to the earnings per share 
figures reported in the company’s audited accounts
tsr • improves shareholder alignment
• consistent with the company’s objective of providing 
superior long term returns to shareholders
roce • added to the ltip for 2015
• demonstrates how efficiently the company is 
operating with the resources available
if the committee changes the performance conditions within the life 
of the policy it will inform shareholders of the changes made and the 
reason for making any change 
on a change of control performance shares will vest except to the 
extent they are exchanged for awards over shares in the acquiring 
company vesting will be subject to any performance conditions and will 
normally be reduced to reflect early vesting unless the remuneration 
committee determines that a reduction in the number of vested shares 
is considered inappropriate the number or class of shares under award 
may be adjusted on a rights issue variation of capital demerger or 
similar transaction
comparison with approach to remuneration 
across the group
national express group operates internationally and accordingly the 
remuneration policy for employees generally reflects the legislative and 
labour market requirements in each separate jurisdiction the group will 
always meet or exceed national minimum standards for terms and 
conditions of employment in each of our business areas offering pay 
terms and conditions that are appropriate to each labour market in 
which we operate base pay is set at a level that allows us to recruit and 
retain staff in each relevant labour market and performance related pay 
arrangements are based on the achievement of business unit and 
individual goals objectively assessed other than for a small number of 
senior executives in each business unit long term incentive plans are 
only applicable at executive director level
approach to recruitment remuneration 
of executive directors
in the event that the company recruits a new executive director either 
from within the organisation or externally when determining appropriate 
remuneration arrangements the committee will take into consideration 
all relevant factors including but not limited to quantum the type of 
remuneration being offered and the jurisdiction the candidate was 
recruited from to ensure that arrangements are in the best interests 
of both the company and its shareholders without paying more than 
is necessary to recruit an executive of the required calibre
the committee’s policy is for all executive directors to have rolling 
service contracts with a notice period of 12 months unless on an 
exceptional basis to complete an external recruitment successfully 
when a longer initial period reducing to 12 months may be used 
the committee would generally seek to align the remuneration of any 
new executive director following the same principles as for the current 
executive directors set out in the table above 
the elements that would be considered by the company for inclusion 
in the remuneration package for a new director are
• salary and benefits including defined contribution pension 
participation or a salary supplement in lieu of pension provision
• participation in the performance related bonus prorated for the year 
of recruitment to reflect the proportion of the year for which the new 
national express group plc annual report and accounts 2014 68 elements of remuneration applying under the previous policy applicable for 2014
element
how element supports 
business strategy operation maximum potential value performance conditions and assessment
long term 
incentive plan 
– matching 
shares
to drive performance aid 
retention and align the 
interests of executive 
directors with 
shareholders
participants only receive 
matching shares subject 
to investing into the 
business and therefore 
this mechanism adds 
an element of buyin to 
the remuneration
the performance 
conditions are aligned 
with the long term 
performance of the 
business thereby driving 
participants to achieve 
outcomes that realise 
shareholder value
executive directors are eligible to receive awards of matching shares that are based 
on a personal investment in national express group plc shares funded either through 
using an annual bonus award to purchase shares or through the pledging of shares 
held not already allocated to the ltip matching awards are made on the basis of up 
to four matching shares being awarded based on the value of the investment for 
each national express share pledged or purchased
reviewed annually to ensure that grant levels performance criteria and other features 
remain appropriate to the company’s current circumstances and to ensure that there 
are no features of the plans that could inadvertently motivate irresponsible behaviour
the maximum value of investment in any year is 30 of 
base salary
half of any award will be subject to eps growth the remaining half 
will be subject to the relative total shareholder return ‘tsr’ of the 
company measured against an appropriate group of companies
achievement of threshold performance results in 30 vesting for each 
part of the award
there is no ability to retest either performance condition
the committee retains discretion under the rules of the ltip to amend 
existing performance conditions to take account of any events that 
may arise which would mean in its opinion if such adjustments were 
not made the performance condition would not constitute a fair 
measure of the company’s eps or tsr growth over the period
recruit was in post maximum of 200 of salary if the 
commencement date is after 1 september in the year no award 
would normally be made for that year
• participation in the long term incentive plan the performance 
shares granted will be in line with the grant levels for that grade in the 
case of the appointment of a new group chief executive this grant 
would be a maximum of 200 and for any other position a grant of 
150 would be made the grant may be prorated depending on 
the time of appointment through the year and
• costs relating to but not limited to relocation london allowance 
legal financial tax and visa advice and preemployment 
medical checks
the committee may make awards on appointing an executive director 
to ‘buy out’ remuneration arrangements forfeited on leaving a previous 
employer the committee would take into account both market practice 
and any relevant commercial factors in considering whether any 
enhanced andor oneoff annual incentive or long term incentive award 
was necessary awards made by way of compensation for forfeited 
awards would be made on a comparable basis taking account of 
performance achieved or likely to be achieved the proportion of 
the performance period remaining and the form of the award 
compensation could be in cash or shares 
in the event of recruitment or retention other than buy out awards as 
described above the committee may also grant awards to a new or 
existing executive director under the listing rule 942 up to an 
equivalent of 200 of salary per annum 
executive directors 
the contract dates and notice periods for the executive directors are 
shown in the table below
executive directors’ service contracts and notice periods 
director contract date
notice period from 
the company
notice period from 
the director
dean finch 16 december 
2009
12 months 6 months
matthew ashley note 1 6 months 6 months
1 as at the date of this report the new service contract for matthew ashley is being 
agreed and his notice period will be aligned to that of the group chief executive
the service contract of dean finch which is a rolling contract contains 
a provision exercisable at the option of the company to pay an amount 
on termination of employment equal to one year’s salary salary 
supplement in lieu of pension and car allowance the director will not be 
obliged to mitigate his loss in relation to any payment in lieu of notice 
the company will use the payment in lieu of notice provisions when the 
speed certainty and protection of restrictive covenants afforded by such 
clauses are thought to be in the best interests of the company and the 
circumstances surrounding the departure of the director justify their use 
the service contracts for the current executive directors are available 
to view on request from the company secretary
the committee continuously reviews its policies on executive 
remuneration and severance in the best interests of shareholders 
guidance on best practice expectations is taken into account prior 
to agreeing directors’ contractual provisions 
the group chief executive is entitled under an unfunded pension 
arrangement to a pension based on the value of notional contributions 
of 25 of his salary plus a 5 per annum notional return the group 
chief executive will be given 12 months’ notice at the end of which this 
ongoing accrual will cease the pension normally becomes payable at 
the earliest on 1 april 2022 all or part of it may be paid as a lump sum 
executive directors are also provided with directors’ and officers’ 
insurance and are indemnified by the company against certain liabilities 
incurred in the course of their duties including the costs of defending 
actions against them
69 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
directors’ remuneration report continued
directors’ remuneration policy report continued
executive directors’ external appointments
under the terms of their service agreements board approval is required before any external appointment may be accepted by an executive 
director the executive director is permitted to retain any fees paid for such services 
details of fees received by executive directors in 2014 are shown below
director fee external appointment
dean finch £10275 royal free london nhs trust
jez maiden £55000 synthomer plc
executive directors’ termination payments
the company may at its discretion pay in lieu of notice payment in lieu of notice could potentially include up to 12 months’ base salary benefits 
and pension which may be payable in instalments and subject to mitigation 
the table below sets out the treatment of other elements of remuneration that would normally apply for executive directors whose service with 
national express terminates
reason for termination
salary and 
contractual benefits
performance related 
bonus awards
unvested 
deferred bonus 
awards
unvested long term incentive 
plan awards other
retirement disability 
redundancy death 
sale of part of 
company that 
employs participant or 
any other reason that 
the remuneration 
committee decides
payment equal to the 
aggregate of the 
basic salary and 
the value of any 
contractual benefits 
for the notice period 
including any accrued 
but untaken holiday
bonus awarded 
subject to satisfaction 
of performance 
targets for the 
relevant financial year
award vests on 
the date of 
cessation of 
employment
awards vest on the date of 
cessation of employment 
unless the remuneration 
committee determines it should 
vest at normal vesting date
the amount of award vesting will 
be subject to the satisfaction of 
performance conditions as at 
the date the award is deemed 
to vest
awards will normally be reduced 
time pro rata to reflect time 
elapsed between grant and 
cessation of employment
fees for 
outplacement 
and legal 
advice may 
be paid
other leavers paid to date of 
termination including 
any accrued but 
untaken holiday pay
no award for year of 
termination
1
award lapses on 
cessation of 
employment
awards lapse in full on 
leaving employment
1   pursuant to dean finch’s service contract dated 16 december 2009 if his contract is terminated for reasons other than for an event of default by the executive such as 
gross misconduct he is entitled subject to the applicable performance conditions to a pro rata bonus calculated up to the termination date from the commencement of 
the relevant bonus year in which termination takes place 
subject to the circumstances surrounding the termination the committee in its discretion may treat the individual as an approved leaver 
ie under the first section in the table above the committee will consider factors such as personal performance and conduct overall company 
performance and the specific circumstances of the executive’s departure including but not restricted to whether the executive is leaving by mutual 
agreement with the company 
in addition the committee will consider the above circumstances in considering whether awards in respect of approved leavers should be 
prorated to reflect the service completed
the committee reserves the right to make additional exit payments where such payments are made in good faith
• in discharge of an existing legal obligation or by way of damages for breach of such an obligation or
• by way of settlement or compromise of any claim arising in connection with the termination of a director’s office or employment
national express group plc annual report and accounts 2014 70 remuneration policy for nonexecutive directors
nonexecutive directors’ appointments
the nonexecutive directors do not have service contracts with the company and do not participate in the group’s pension scheme annual 
bonus scheme or long term incentive schemes nonexecutive directors have letters of appointment and are appointed for an initial threeyear 
term nonexecutive directors are typically expected to serve for two threeyear terms although their appointment can be terminated either by 
them or the company on one month’s written notice it is open to the company to invite a nonexecutive director to serve for a further period 
after the expiry of two threeyear terms the letters of appointment for the current nonexecutive directors can be found on the company’s 
website wwwnationalexpressgroupcom
nonexecutive directors are also provided with directors’ and officers’ insurance and are indemnified by the company against certain liabilities 
incurred in the course of their duties including the costs of defending actions against them
in accordance with the requirements of the code all directors are required to stand for election or reelection by shareholders each year 
the original appointment dates of the chairman and nonexecutive directors are shown in the table below the remuneration of any new  
nonexecutive director will be determined following the same principles as for the current nonexecutive directors
nonexecutive directors’ appointment dates
director date of appointment
notice period by either 
company or director
sir john armitt 1 january 2013 3 months
joaquín ayuso 1 june 2011 1 month 
jorge cosmen 1 december 2005 0 months
sir andrew foster 1 august 2004 1 month
jackie hunt 13 september 2012 1 month
chris muntwyler 11 may 2011 1 month
lee sander 1 june 2011 1 month
jane kingston 26 february 2014 1 month
tim score
1
21 february 2005 1 month
1 tim score resigned from his position on 25 february 2014
the table below sets out the company’s remuneration policy for the nonexecutive directors with effect from the 2015 agm
element purpose operation maximum potential value 
nonexecutive fees to attract and retain 
persons of a suitable 
calibre for a group 
of this size and to 
pay fees which 
are reflective of 
responsibilities 
competitive with 
peer companies 
without paying more 
than is necessary
the fees of the nonexecutive directors are set by the board 
as a whole and those of the chairman are set by the 
remuneration committee the fees are reviewed at 
appropriate intervals normally once every year the review 
takes account of fees paid for similar positions in the market 
the time commitment required from the director estimated to 
be 60 days per year for the chairman and 20 days per year 
for the other nonexecutive directors and any additional 
responsibilities undertaken such as acting as chairman to 
one of the board committees or fulfilling the role of senior 
independent director
nonexecutive directors are not eligible to receive pension 
entitlements or bonuses and may not participate in long term 
incentive arrangements
a travel allowance may be paid to nonexecutive directors for 
attendance at board meetings held outside the continent in 
which the nonexecutive director is resident
the committee’s 
policy is to set base 
fees at an appropriate 
level taking into 
account the factors 
outlined in this table
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illustrations of application of remuneration policy for executive directors
the chart below illustrates the remuneration that would be paid to each of the executive directors under three different performance scenarios 
i minimum ii ontarget and iii maximum 
3500
remuneration £’000
26 100
33
20
47
52 30
37
37
100
30
18
35
35
fixed annual variable
minimum ontarget
dean finch
maximum minimum ontarget
matthew ashley
maximum
3000
2500
2000
1500
1000
500
0
psp variable
the elements of remuneration have been categorised into three components i fixed ii annual variable and iii multiple reporting period which 
are set out in the future policy table below 
element descriptions 
fixed total amount of salary pension and benefits 
annual variable performance related bonus including deferred element
multiple reporting variable long term incentive plan
assumptions used in determining the level of payout under given scenarios are as follows
• salaries are as at 31 december 2014 for the group chief executive and on appointment at 28 january 2015 for the group finance director
• benefits are as at 31 december 2014 for the group chief executive and in line with the benefits received by the previous group finance director 
during 2014
• performance share awards are granted at the maximum level permitted under the policy
• minimum performance scenario assumes fixed pay only and no variable payments
• ontarget performance scenario assumes performance in line with the company’s expectations resulting in 30 of maximum vesting in 
respect of long term incentive awards and 50 of maximum payout assuming 50 achievement of personal objectives in respect of the 
annual bonus whilst the bonus scheme has targets for threshold ontarget and maximum the ltip only has targets for threshold and 
maximum the value shown above in the ontarget scenario includes the values for ontarget bonus and threshold ltip performance
• maximum performance scenario assumes outstanding level of performance ie maximum bonus and full vesting of long term incentives
share price appreciation is not allowed for
statement of conditions elsewhere in the group
the group operates across a number of countries and accordingly sets terms and conditions for employees which reflect the different legislative 
and labour market conditions that operate in each of our jurisdictions we set global people standards to provide a framework for recognition and 
rewards internationally we will always meet or exceed national minimum standards for terms and conditions of employment in each of our business 
areas pay arrangements in our businesses also reflect local performance with personal increases based on achievement individually assessed 
national express believes in the value of continuous improvement both for the individual and for the company the company did not consult with 
employees in drawing up the directors’ remuneration policy
when determining the remuneration of executive directors the remuneration committee takes into account business unit performance including 
both financial performance and safety improvements in the year because of the wide variety in labour market conditions and in exchange rate 
movements pay rates locally are not normally considered when considering executive director base pay reviews
the remuneration committee reviews and notes the salaries of senior executives within the group ltip awards are cascaded down below 
executive level to senior management aligning the senior team to deliver value for the group
national express group plc annual report and accounts 2014 72 corporate governance
directors’ remuneration report
annual report on remuneration
the following sections of the report explain how the remuneration policy approved in 2014 was implemented during the year following a thorough 
review the committee is proposing significant changes to this policy for 2015 onwards to simplify remuneration arrangements and to reflect 
changes in corporate governance best practice
the relevant sections of this report have been audited as required by the regulations
single total figure of remuneration
executive directors
the table below sets out the single total figure of remuneration and breakdown for each executive director in post during the 2014 financial year 
comparative figures for 2013 have also been provided
2014 2013
£’000
base
salary
taxable
benefits
1
performance 
related 
bonus
value of 
ltip 
vested
pension 
related 
benefits total
base
salary
taxable
 benefits
1
performance 
related bonus
value of 
ltip 
vested
pension 
related 
benefits total
dean finch 561 27 778 0 196
2
1562 550 26 785 0 192
2
1553
jez maiden 428 25 594
3
0 107 1154 420 25 605 0 105 1155
1  taxable benefits comprise a cash alternative to a fully expensed car £20000 for each of dean finch and jez maiden health insurance and death in service and life 
assurance cover
2 in addition dean finch has an entitlement under an unfunded pension arrangement as described on page 69
3 a portion of the bonus will be deferred in shares for one year although as he was not treated as a good leaver the shares will not vest
base salary
no increases were awarded to base salary for the executive directors for 2013
the committee decided to award a base salary increase for 2014 to the executive directors of 2 in line with the typical salary increases across 
group employees the rates of base salary for 2014 were
• group chief executive £561000
• group finance director £428000 
performance related bonus
a summary of the 2014 performance related bonus scheme is summarised below
the maximum potential bonus payable to executive directors in 2014 was 150 of salary for both executive directors
• for the group chief executive 25 of the bonus earned up to 125 of salary and 50 of the bonus earned from 125 to 150 of salary was 
to be deferred 
• for the group finance director 25 of the bonus earned up to 1 125 of salary and 50 of the bonus earned from 1 125 to 150 of salary 
was to be deferred
the amounts deferred under the bonus plan in 2014 are deferred into shares awarded under the executive deferred bonus plan ‘edbp’ for one 
year receipt of the deferred shares is subject to continued service and the same ‘good leaver’ provisions and other terms as noted for the long 
term incentive plan below the 2014 bonus also includes provisions that require the deferred shares to be forfeited or repaid should it be necessary 
for the company to restate materially its 2014 results within a twoyear period following the deferred bonus being awarded the proportion of the 
bonus that would be the subject to these provisions would depend on the extent to which the original bonus payment turned out to be false 
following the publication of corrected results
the committee has reviewed the performance against the conditions attached to the performance related bonus and in addition made an 
assessment of the performance of the group as a whole during 2014
the committee determined that the 2014 bonus for jez maiden should be paid as he left the employment of the group on 31 december 2014
the committee has full discretion in the payment of annual bonuses for any financial element to be payable the group must have achieved a 
threshold level of normalised profit target for the year in addition it is a precondition to the award of any bonus that the remuneration committee 
has determined that there has been an improvement in safety processes procedures and outcomes during the year before any bonus is paid 
in respect of the targets applying to the annual bonus for 2014 for the group chief executive and group finance director a maximum of 105 of 
salary was payable based on achievement against a sliding scale of challenging financial targets and a maximum of 45 of salary was payable 
based on nonfinancial targets that encompassed customer operational excellence and people objectives
the targets set in relation to nonfinancial performance are key strategic group objectives that are tailored to the responsibilities of each individual 
executive director and in aggregate are considered to be similarly challenging to the range of financial targets set 
the table below summarises the performance conditions attaching to the 2014 awards and the actual performance and bonus value achieved
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bonus structure for 2014
 of salary details
maximum bonus potential 150 proportion of bonus subject to mandatory deferral into 
company shares for one year from award 
bonus potential at threshold normalised profit before tax pbt 225 
ontarget bonus potential at 100 of budgeted normalised pbt 45 awarded on achieving budget
stretch bonus for 110 of budgeted normalised pbt 90 awarded on achieving a stretch target of 110 
of normalised pbt
net debt 15 
nonfinancial targets underpinned by achievement of threshold 
normalised pbt
45 awarded on meeting key strategic group objectives 
tailored to each executive director’s responsibilities
a summary of performance during 2014 the targets set and the extent to which the targets were met is set out in the following tables
summary of bonuses paid
performance condition weighting
threshold 
performance 
required
ontarget 
performance 
required
maximum 
performance 
required
actual 
performance
bonus value 
achievable 
for meeting 
threshold 
and 
maximum 
performance 
 salary
actual bonus 
value 
achieved
 salary
dean finch jez maiden
normalised profit 60 £1284m £1352m £1487m £1454m 225
90
7875
net debt 10 – £6717m – £6643m 375
15
15
nonfinancial targets 30 see detail 
below
045 45 45
total awarded 13875 
salary
13875 
salary
£778388 £593850
of which deferred 
in shares
3813 
salary
4125
salary
£213882 £176550
1
of which paid in cash 10062 
salary
9750
 salary
£564506 £417300
1 as jez maiden was not treated as a good leaver the shares will not vest
national express group plc annual report and accounts 2014 74 summary of nonfinancial conditions for 2014
dean finch
objective performance
1 support long term growth of group through effective leadership of 
the rebidding of current contracts and successfully win at least 
one contract in a new market
• key contracts retained in britain spain and north america
• announced as preferred bidder for the nuremberg sbahn 
contracts over a 12 year period
• bahrain bus bid won as joint venture with partners ama
2 successfully bid for and retain the essex thameside franchise • won 15 year essex thameside franchise which commenced in 
november 2014
3 continue to lead to effective implementation of the driving out 
harm initiative achieve 5 reduction in the overall responsible 
harm index fatalities and weighted injuries index against 2013
• fwi improved by 18 during the year
• maintenance audits independently conducted in all divisions
• comprehensive programme of additional work initiated in 
north america
• additional training of 500000 hours delivered
• exceeded target safety hours
4 maintain ability of north american employees to exercise freedom 
of choice in deciding matters of representation
• programme of briefings held with shareholders prior to agm
• reduced number of petitions for representation two in 2014 
down from four in 2013 eight in 2012 and ten in 201 1
• employee satisfaction increased during 2014
5 lead talent management and succession planning processes • continued development of key individuals in spain and 
north america
• implementation of a talent assessment process in all divisions
• continued management graduate programmes
6 continue to improve the group’s reputation through driving our 
operational excellence agenda achieve external accreditations 
to recognise achievement
• all divisions progressed towards delivery of 
operational excellence
• further accreditations included award of fourstar rating for 
uk coach by the british quality foundation winning two 
industry partnership awards for bus and c2c being the most 
punctual uk rail operating company for the third year 
in succession
jez maiden
objective performance
1 group responsible harm index fatalities and weighted injuries 
index to improve on 2013
• fwi improved by 18 during the year
• number of responsible fatalities lower in 2014 than in 2013
• fewer responsible major injuries and passenger injuries
2 secure at least one rail bid win • won 15 year essex thameside franchise which commenced in 
november 2014
3 secure at least one international bid win • contract in bahrain secured
4 identify and deliver cost saving opportunities within divisions and 
deliver savings from corporate costs
• divisional profit protection initiatives delivered in north america
• exceeded cost saving target for corporate costs delivered in it 
cost savings lower staffing and licence costs
• shared service function created to deliver financial transaction 
processing efficiently
• group financial reporting process improved
5 deliver more customercentric uk organisation and improve 
resilience of systems for uk businesses
• coach – improvements delivered to ensure systems resilience 
and affordable roadmap for customer systems development
• bus and rail – roll out of smartcard solution during 2014
• initial phase of data centre upgrade implemented successfully
based on the above assessment against the objectives set the committee determined that the performance of jez maiden and dean finch 
warranted maximum payout for the nonfinancial elements of the bonus
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ltip awards
performance share awards and matching share awards granted under the ltip in 2012 are scheduled to vest in 2015 the performance period 
relating to these awards ended on 31 december 2014 details of the performance conditions and the extent to which they have been satisfied are 
set out below
performance shares
performance 
condition weighting
threshold performance 
required
maximum performance 
required actual performance
ltip value 
achievable for 
meeting threshold 
and maximum 
performance
  salary
actual ltip value 
achieved
 salary
tsr
1
50 median of 
comparator group
20th percentile of 
comparator group
below median of 
comparator group
1550 0
eps 50 2014 eps of 237p 2014 eps of 264p 227p 1550 0
total 100 30100 30100 0 salary
nil
matching shares
performance 
condition weighting
threshold performance 
required
maximum performance 
required actual performance
ltip value 
achievable for 
meeting threshold 
and maximum 
performance
 salary
actual ltip value 
achieved
 salary
tsr
1
50 median of 
comparator group
20th percentile of 
comparator group
below median of 
comparator group
1860 0
eps 50 2014 eps of 237p 2014 eps of 264p 227p 1860 0
total 100 36
36120
36
36120
0 salary
nil
1   tsr was measured against a bespoke comparator group of transport companies taken predominantly from the ftse industrial transportation and 
ftse travel  leisure sectors
ltip awards held by jez maiden lapsed on 31 december 2014 upon cessation of employment
pension entitlements and cash allowances
under the terms of their service agreements executive directors are not entitled to become members of one of the group pension schemes 
the group chief executive receives a 35 salary supplement in lieu of pension contributions
the group chief executive has agreed to a one year notice period to stop any further accruals in respect of the unfunded pension arrangement 
the group finance director received a 25 salary supplement in lieu of pension contributions 
national express group plc annual report and accounts 2014 76 long term incentives awarded in 2014
the tables below set out the details of any longterm incentive award granted in the 2014 financial year where vesting will be determined according 
to the achievement of performance conditions that will be tested in future reporting periods 
dean finch
grant date award type
basis on which 
award made
face value of
award
1
£000
percentage of 
award vesting 
at threshold 
performance
performance 
period end 
date performance conditions
090414 ltip – performance 
shares
100 of salary 572 30 311216 tsr and eps  
equally weighted
090414 ltip – matching shares 120 of salary 686 30 311216 tsr and eps  
equally weighted
090414 chief executive’s five 
year award
100 of salary 572 30 311218 tsr and eps  
equally weighted
jez maiden
grant date award type
basis on which 
award made
face value of 
award
1
 £000
percentage of 
award vesting 
at threshold 
performance
performance 
period end 
date performance conditions
090414 ltip – performance 
shares
100 of salary 437 30 na
2
tsr and eps  
equally weighted
090414 ltip – matching shares 120 of salary 524 30 na
2
tsr and eps  
equally weighted
1  the face value in the tables above has been calculated by multiplying the maximum number of shares that could vest by the closing share price at the date of grant the 
share price was 2795p on 9 april 2014 
2 awards lapsed on 31 december 2014 upon cessation of employment
performance conditions for ltip awards made in 2014 – performance shares and matching shares
performance level
part a – eps condition 
50 of the award
part b – tsr condition v ftse 
250 comparator group rank over 
three years to 31 december 
2016 25 of the award
part c – tsr condition v index
1
 
over three years to 31 december 
2016 25 of the award vesting percentage of the award
below threshold less than 213p below median below index 0
threshold 213p median equal to index 30
maximum 239p or above 20th percentile equal or above index  
10 pa
100
threshold – maximum between 213p 
and 239p
between median and 
20th percentile
between index and 
index  10 pa
30100 pro rata
performance conditions for the chief executive’s five year award made in 2014
performance level
part a – eps condition 
50 of the award
part b – tsr condition v ftse 
250 comparator group rank over 
five years to 31 december 2018 
25 of the award
part c – tsr condition v index
1
 
over five years to 31 december 
2018 25 of the award vesting percentage of the award
below threshold less than 233p below median below index 0
threshold 233p median equal to index 30
maximum 282p or above 20th percentile equal or above index  
10 pa
100
threshold – maximum between 233p 
and 282p
between median 
and 20th percentile
between index and 
index  10 pa
30100 pro rata
1 index comprising of the total returns of three comparator companies
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indicative percentage of ltip awards vesting based on performance to 31 december 2014
the table below sets out the percentage of each extant award that would have vested if the performance conditions had been tested at 
31 december 2014 without making any allowance for pro rata reduction for any period of less than three years
year of award 
part a eps element  
50 of award
part b and c 2014 only 
tsr element 50 of award total max 100
2012 – chief executive’s five year award 0 0 0
2013 – performance shares and matching shares 462 0 231
2013 – chief executive’s five year award 0 0 0
2014 – performance shares and matching shares 677 0 338
2014 – chief executive’s five year award 0 0 0
the national express group executive deferred bonus plan executive deferred bonus plan
deferred bonuses awarded in 2014 based on performance to 31 december 2013 will vest on 28 february 2015 as set out in the table below
during year
as at 1 
january 
2014 granted vested lapsed
at 31 
december 
2014
market price 
at date of 
vesting date of grant
date of 
vesting
dean finch 2013 79523 – 79523 – 0 3040p 280213 280214
2014 – 73378 – – 73378 280214 280215
jez maiden 2013 62981 – 62981 – 0 3040p 280213 280214
2014 – 61220 – 61220 0 280214 na
1
1  awards lapsed on 31 december 2014 upon cessation of employment
the market price per share on the date of award was calculated on the basis of the average market share price in the five days preceding the date 
of the grant
deferred shares will be required to be forfeited or repaid should it be necessary to restate materially the company’s 2013 and 2014 results within a 
twoyear period following the award of the bonus the proportion of the bonus subject to these provisions would depend on the extent to which the 
original bonus turned out to be false following the publication of corrected results
nonexecutive directors
the table below sets out the single total figure of remuneration and breakdown for each nonexecutive director serving during 2014 the table 
includes only those columns in respect of elements of remuneration received by nonexecutive directors
2014 fees  
£’000 total
2013 fees  
£’000 total notes
sir john armitt 225 225 225 225
joaquín ayuso 51 51 49 49
jorge cosmen 47 47 45 45
sir andrew foster 57 57 55 55
jackie hunt 60 60 45 45
jane kingston 40 40 – – appointed on 26 february 2014
chris muntwyler 61 61 59 59
lee sander 71 71 73 73
tim score 10 10 60 60 resigned on 25 february 2014
in addition a travel allowance of £4000 is payable to joaquín ayuso chris muntwyler and lee sander for attendance at board meetings held 
outside the continent in which the nonexecutive director is resident 
with effect from 1 january 2014 it was agreed that the fees for the nonexecutive directors would increase to £47 000 but there would be no 
increase in the fees payable to the chairman
national express group plc annual report and accounts 2014 78 payments to past directors 
no payments were made to past directors during the period
payments for loss of office 
all loss of office payments to any person who has served as a director of the group will be disclosed in this report 
jez maiden’s employment with the group ceased on 31 december 2014 the treatment of his remuneration was agreed by the committee 
as follows
• salary pension and benefits – paid up to cessation of employment
• no further loss of office or termination payments were made
• annual bonus for 2014 – given that jez maiden was in service for the whole of 2014 the committee decided to award a bonus as disclosed on 
page 73 a portion of the bonus will be deferred in shares for one year although as he was not treated as a good leaver the shares will not vest
• long term incentives including deferred shares – all outstanding awards lapsed as at 31 december 2014 as jez maiden was not treated 
as a good leaver
statement of directors’ shareholdings 
directors’ shareholdings – executive directors’ interests and share ownership guidelines
in order to align the interests of the directors more closely with the shareholders the remuneration committee has determined that the executive 
directors are expected to build up a share fund as set out in the share ownership guidelines as described on page 66 of the policy this guideline 
has been increased this year from 100 to 200 of salary for the group chief executive and from 100 to 150 of salary for the group 
finance director
the beneficial and nonbeneficial interests of the executive directors in office and their connected persons as at 31 december 2014 and the details 
of long term incentive interests are shown below
shares held directly other shares held
shareholding 
requirement  
 salary
current shareholding
 as at 31 december
 2014
 salary
1
beneficially owned
edbp interests
not subject to 
performance 
conditions
ltip interests 
subject to 
performance 
conditions
shareholding 
requirement met
executive directors
dean finch 100 163 294598 73378 319967 yes
jez maiden
2
100 98 168919 0 0 yes
1 the share price of 2484p as at 31 december 2014 has been taken for the purpose of calculating the current shareholding as a percentage of salary 
2 jez maiden’s edbp and ltip interests lapsed on 31 december 2014 at cessation of employment 
please see the appendix on page 83 for more information on outstanding ltip awards
directors’ shareholdings – nonexecutive director interests
nonexecutive directors are not subject to a shareholding requirement details of their interests in shares and those of their connected persons as 
at 31 december 2014 all of which are held outright with no attaching performance conditions are shown below
at 31 december 2014
sir john armitt 6000
joaquín ayuso 0
jorge cosmen
1
 88860685
sir andrew foster 22893
jackie hunt 5000
chris muntwyler 0
lee sander 0
jane kingston 0
1 jorge cosmen’s holding includes shares held by european express enterprises ltd which are shown on page 86 in the list of major shareholdings in the company 
the register of directors’ interests maintained by the company contains full details of the directors’ holdings of shares and options over shares in 
the company the closing price of the company’s ordinary shares at 31 december 2014 was 2484 pence 2013 275p and the range during the 
year ended 31 december 2014 was 220 pence to 3049 pence
changes since year end
there have been no changes in the shareholdings of the directors between 31 december 2014 and the date of signing of this annual report 
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history of ceo’s pay 
the table below sets out the total remuneration delivered to the chief executive over the last six years valued using the methodology applied to the 
single total figure of remuneration
year 2009 2010 2011 2012 2013 2014
chief executive r bowker
2
d finch d finch d finch d finch d finch
total remuneration £’000 465 1356 1454 1701 1553 1562
annual bonus payment  
 maximum opportunity
0 100 100 78 95 93
ltip vesting level achieved
1
  
 maximum opportunity
na na na 325 0 0
1  the incumbent chief executive during each of 2009 2010 and 2011 did not have entitlement to any ltip awards with attaching performance conditions whose final year 
of performance ended during that year
2 r bowker resigned as chief executive on 10 july 2009 
comparison of overall performance 
the graph below shows a comparison of national express group plc’s sixyear total cumulative shareholder return against that achieved by the 
ftse 250 index this index has been selected because the company is a constituent of this index and the committee therefore feels that this is 
the most appropriate index with which to represent the company’s relative performance 
200
shareholder returns – six year history
31 dec 2008 31 dec 2009 31 dec 2010 31 dec 2011 31 dec 2012 31 dec 2014 31 dec 2013
180
160
120
80
40
0
140
100
60
20
20
40
national express group – cumulative return
ftse 250 – cumulative return
national express group – annual return
ftse 250 – annual return
the group has achieved a strong performance during 2014 beating the budgeted profit before tax by over 7 despite continuing austerity in 
spain adverse weather conditions in north america and continued strong competitive pressure in all markets strong focus was brought to all 
divisions to convert profits to cash and as a result the group’s free cashflow and net debt performance was improved on 2013 and budget for 
both measures significant progress was made in the development of a number of uk and international bids the essex thameside franchise was 
won which together with two rail contracts won in nuremberg germany has secured national express’ presence in rail until 2030 in addition 
a competitive tender for new bus operations in bahrain was awarded providing a platform for further growth in the middle east
national express group plc annual report and accounts 2014 80 group chief executive pay increases compared with total remuneration for uk employees 
the following table sets out the change in certain elements of the remuneration paid to the group chief executive from 2013 to 2014 compared 
with the average percentage change for the uk employee population 
the group uses the uk workforce who receive taxable benefits and bonus as an appropriate comparator group as this avoids complicated 
exchange rate adjustments that would have to be used if we included employees in the group’s overseas operations in the calculation
the group chief executive’s remuneration disclosed in the table below has been calculated to take into account base salary taxable benefits and 
annual bonus including any amount deferred on the basis used for determining the single figure the uk employee remuneration is based on the 
base salary taxable benefits and annual bonus of those uk employees that received taxable benefits and bonuses 
average percentage increase from 2013 to 2014
base salary taxable benefits performance related bonus
group chief executive 2 0 1
uk employee remuneration 2 2 5
relative importance of the spend on pay
the table below sets out the total spend on pay in the 2014 financial year and 2013 financial year compared with distributions to shareholders
2014  
£m
2013  
£m
 increase  
from 2013 to 2014
overall group spend on pay including directors 8503 8562 07
profit distributed by way of dividend
1
516 503 26
profit distributed by way of share buyback – – –
1  2013 figure has been restated
statement of voting at 2014 agm
at the agm held on 14 may 2014 votes cast by proxy and at the meeting in respect of the directors’ remuneration were as follows
for against
resolution text number of votes
 of proxy 
votes cast number of votes
of proxy 
votes cast total votes cast
 of issued
share capital
voted
1
votes withheld
2
2  to approve the directors’ 
remuneration policy 
report
336786129 8850 43775411 1150 380561540 7437 48452272
3  to approve the annual 
report on remuneration
271319309 6404 152348719 3596 423668028 8279 5315790
1 the total voting rights in the company as at the date of the meeting were 511738648 ordinary shares of 5 pence each each carrying one vote on a poll 
2 a vote withheld is not a vote in law and is not counted in the calculation of votes for or against the resolutions
the committee was pleased that the majority of shareholders voted in 2014 in favour of the 2013 remuneration report and directors’ 
remuneration policy whilst remaining sensitive to those who voted against given that a significant proportion of shareholders voted against the 
approval of the directors’ remuneration policy the committee has undertaken an extensive review of executive remuneration during 2014 and 
2015 this review has comprised consultations with major shareholders to understand their concerns a survey of market practice including 
remuneration benchmarking and a further round of investor consultations to propose new remuneration arrangements as a result of the review 
a number of amendments are proposed in a revised directors’ remuneration policy for 2015 and the committee hopes that shareholders will 
agree that the changes should be approved
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statement of implementation of remuneration policy in 2015
executive directors’ base salaries
the committee determined that the salary for the group chief executive should remain unchanged at £561000 for 2015 
matthew ashley was appointed to the role of group finance director on 28 january 2015 his base salary was set at £300000 which will be 
increased to median based upon development in role
pension entitlements and cash allowances
the group chief executive will receive a 35 salary supplement and the group finance director will receive a 25 salary supplement in lieu 
of pension contributions
the group chief executive has agreed to a one year notice period to stop future accrual in respect of the unfunded pension arrangement 
described on page 69 
performance related bonus
the annual bonus for the 2015 financial year will operate on a revised basis relative to the arrangements in place during 2014
the structure of the annual bonus for 2015 will be as follows
• an increased maximum bonus from 150 to 200 of salary for the group chief executive the maximum bonus for the group finance director 
will remain at 150 of salary
• the proportion of the bonus linked to nonfinancial measures will reduce to 25 previously 30 for the group chief executive based on 
operational excellence safety standards and other strategic objectives
• the remaining 75 of the bonus will be based on achievement of financial targets namely normalised profit before tax and free cash flow and
• a greater proportion of bonus earned will be deferred in shares for one year for 2015 25 of the bonus earned up to 125 of salary 50 of 
the bonus earned from 125 to 150 of salary and for the group chief executive 75 of bonus earned above 150 of salary will be deferred
when setting the bonus target for 2015 the committee have taken into account
• stock market consensus for 2015 profit
• the directors’ commitment to record all bid costs as normalised operating expenses
• the significant increase in rail franchise premium in c2c compared with 2014 and
• the increased competitive pricing pressure from renfe in spain
the committee will set calibrated targets for the bonus measures and intends to disclose actual performance against these targets in next year’s 
directors’ remuneration report as a matter of commercial sensitivity the committee has decided not to disclose performance targets in advance
long term incentives
long term incentive awards granted in the 2015 financial year will be granted in accordance with the policy detailed in the remuneration policy 
section of this report awards will be made worth 200 of salary for the group chief executive and 150 of salary for the group finance director
no further grants will be made in 2015 of the chief executive’s five year award or the matching shares
the performance measures their weightings and targets for the 2015 awards will be as follows
measure weighting performance required
threshold 30 vesting maximum 100 vesting
relative total shareholder return  
– ftse 250 comparator group
16 median upper quintile
relative total shareholder return  
– index of three comparators
16 equal to index equal to index  10 pa
earnings per share for 2017 13 eps target to be confirmed  
in notice of agm
average return on capital employed 13 roce target to be confirmed 
in notice of agm
straight line vesting will occur between threshold and maximum levels of performance
performance will be measured over a three year period and awards will be subject to a two year holding period post vesting
national express group plc annual report and accounts 2014 82 nonexecutive directors’ fees 
with effect from 1 january 2015 it was agreed that there would be no increase in the fees for the nonexecutive directors or for the chairman
the current fees for the nonexecutive directors with effect from 1 january 2015 are as follows
role fees £’000
nonexecutive director 47
chairman 225
senior independent director 5
chairman of board committee 10
in addition a travel allowance £4000 is payable to joaquín ayuso chris muntwyler and lee sander for attendance at board meetings held outside 
the continent in which the nonexecutive director is resident
appendix
ltip awards to executive directors
ltip share 
awards
at 1 
january 
2014 granted exercised expired
at 31 
december 
2014
market 
price on 
date of 
award
market 
price at 
date of 
exercise
date of 
award
date from 
which 
exercisable expiry date
dean 
finch
performance 
shares 
222672 – – 222672 – 2470p – 250211 250214 250814
matching 
shares
267204 – – 267204 – 2470p – 250211 250214 250814
performance 
shares
240069 – – – 240069 2284p – 110412 120415 121015
matching 
shares
288080 – – – 288080 2284p – 110412 120415 121015
performance 
shares 
280898  – – 280898 1999p – 100413 110416 111016
matching 
shares
337076  – – 337076 1999p – 100413 110416 111016
performance 
shares 
– 204520 – – 204520 2795p – 090414 090417 090417
matching 
shares
– 245424 – – 245424 2795p – 090414 090417 090417
five year 
award
261407 – – – 261407 2104p – 030812 030817 030818
five year 
award
257973  – – 257973 2100p – 230513 230518 230519
five year 
award
– 204520 – – 204520 2795p – 090414 090419 090420
1 details of the performance conditions applicable to the 2014 awards are shown on page 77 
2 the aggregate gain on the shares which were exercised in 2014 was £0
by order of the board
sir andrew foster 
remuneration committee chair
26 february 2015
83 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
other statutory information
this section contains additional information which the 
directors are required by law and regulation to include within 
the annual report and accounts this section along with the 
information from the chairman’s letter on page 4 to 
the statement of directors’ responsibilities on page 88 
constitutes the directors’ report in accordance with the 
companies act 2006
the information to be included in the annual report and 
accounts where applicable under lr 984 is set out in 
this section
strategic report
the company is required by the companies act to include a strategic 
report in this document the information that fulfils the requirements of 
the strategic report can be found on pages 1 to 41 which are 
incorporated in this report by reference
company status
the company company number 2590560 was incorporated under 
the companies act 1985 as a limited company on 1 1 march 1991 and 
reregistered as a public company on 20 october 1992 as national 
express group plc the company holds a premium listing on the 
london stock exchange’s main market for listed securities lon nex 
and is a constituent member of the ftse 250 index
disclaimer
this annual report and accounts is intended to focus on matters 
which are relevant to the interests of shareholders of the company the 
purpose of this annual report and accounts is to assist shareholders 
in assessing the strategies adopted and performance delivered by the 
company and the potential for those strategies to succeed it should 
not be relied on by any other party or for any other purpose
forward looking statements are made in good faith based on a number 
of assumptions concerning future events and information available to 
directors at the time of their approval of this report these forward 
looking statements should be treated with caution due to the inherent 
uncertainties underlying any such forward looking information the user 
of this annual report and accounts should not rely unduly on these 
forward looking statements which are not a guarantee of performance 
and which are subject to a number of uncertainties and other facts 
many of which are outside the company’s control and could cause 
actual events to differ materially from those in these statements no 
guarantee can be given of future results levels of activity performance 
or achievements
branches outside the uk
the company has branches in spain
results and dividends
the profit on ordinary activities before tax from continuing operations for 
the year ended 31 december 2014 was £665 million 2013 £644m 
and a profit attributable to equity shareholders of £59 1 million 2013 
£568m was transferred to reserves
the directors recommend a final dividend for the year of 695 pence per 
ordinary share 2013 675p which together with the interim dividend of 
335 pence per ordinary share 2013 325p paid on 19 september 
2014 gives a total dividend for the year of 103 pence per share 2013 
100p subject to shareholder approval the final dividend will be paid on 
22 may 2015 to ordinary shareholders on the register of members at the 
close of business on 1 may 2015
directors
the directors of the company as at the date of the approval 
of this annual report are listed on pages 44 and 45 together with 
their biographical details and identification of the board committees 
on which they serve
on 25 february 2014 tim score stepped down from the board
on 26 february 2014 jane kingston was appointed a nonexecutive 
director of the company 
jez maiden served as a director throughout the year until 31 december 
2014 when he stepped down as an executive director and group 
finance director on 28 january 2015 upon the recommendation of the 
nomination committee the board appointed matthew ashley as an 
executive director and group finance director matthew was formerly 
the finance director of the uk bus business having also previously held 
the position of group financial controller to ensure continuity and an 
orderly handover matthew fulfilled the role of interim group finance 
director from october 2014 until the conclusion of the search led by 
the nomination committee for a replacement executive director as 
confirmed above
powers of the directors
subject to its articles of association and relevant statutory law and to 
any direction that may be given by the company in general meeting by 
special resolution the business of the company shall be managed by 
the directors who may exercise all powers of the company which are 
not required to be exercised by the company in general meeting
appointment and replacement of directors
the rules for the appointment and replacement of directors of the 
company are set out in the articles of association the uk corporate 
governance code the ‘code’ the companies act 2006 and related 
legislation in accordance with the code all the directors will retire at 
the 2015 agm and offer themselves for election or reelection with the 
exception of sir andrew foster who is due to retire from the board 
as explained above and jackie hunt who will also not be seeking 
reelection after three years on the board the board is satisfied that 
each of those directors standing for election or reelection is qualified by 
virtue of their skills experience and contribution to the board 
directors’ conflicts of interest
the board has a procedure in place to deal with a situation where a 
director has a conflict of interest as required by the companies act 
2006 as part of this process the members of the board prepare a list 
of other positions held and all other conflict situations that may need 
authorising either in relation to the director concerned or his or her 
connected persons the board considers each director’s situation 
and decides whether to approve any conflict situations taking into 
consideration what is in the best interests of the company and whether 
the director’s ability to act in accordance with his or her wider duties is 
affected each director is required to notify the company secretary of 
any potential or actual conflict situations that will need authorising by the 
board authorisations given by the board are reviewed annually
national express group plc annual report and accounts 2014 84 directors’ and officers’ liability insurance
the company recognises the potential personal liabilities that the 
directors are subject to by agreeing to act as a board member and 
believes that it is both fair and reasonable to protect them from innocent 
error or omission the company therefore maintains directors’ and 
officers’ liability insurance in respect of legal action that might be 
brought against its directors which operates in certain circumstances 
this does not extend to cover the directors where it is proved they acted 
fraudulently or dishonestly pursuant to the company’s articles of 
association the company has indemnified its directors and officers in 
accordance with the provisions of section 233 of the companies act 
2006 a copy of the articles of association is available for inspection at 
the company’s registered office 
directors’ interests in contracts
except as stated in note 35 on page 150 no contract existed during the 
year in relation to the company’s business in which any director was 
materially interested
directors’ interests in shares
the board of directors’ interests in shares in the company are detailed 
on page 79
directors’ share options
details of directors’ share options are provided in the directors’ 
remuneration report on page 83
directors’ indemnities
the company has entered into deeds of indemnity with each of its 
directors which are qualifying indemnity provisions for the purpose of 
the companies act 2006 and remain in force at the date of this report
accountability and audit
statements of the respective responsibilities of the directors and 
auditors are set out on pages 88 to 92
corporate governance
a full report on corporate governance can be found in the governance 
section of this document and the company’s governance statement is 
on page 46 both are incorporated by reference into this report
post balance sheet events
on 2 february 2015 the company was awarded two 12year 
contracts to operate the whole sbahn nuremberg commuter rail 
services network the contracts will commence in december 2018 
and are expected to generate revenues in excess of €14bn over the 
12 year period
employment policies
the group strives to meet its business objectives by motivating and 
encouraging its employees to be responsive to the needs of its 
customers and continually improve operational performance the group 
is committed to providing equality of opportunity to employees and 
potential employees this applies to recruitment training career 
development and promotion for all employees regardless of physical 
ability gender sexual orientation religion age or ethnic origin all 
businesses in the group report diversity data
full and fair consideration is given to applications for employment 
received from disabled persons according to their skills and capabilities 
the services of any existing employee disabled during their period of 
employment are retained wherever possible
employee involvement
the group encourages employee involvement in its affairs subsidiary 
companies produce a range of internal newsletters and circulars 
which keep employees abreast of developments senior management 
within the group meet regularly to review strategic developments and 
management conferences are held at group and business levels to 
bring our senior managers together to share ideas and develop policy 
dialogue takes place regularly with trade unions and other employee 
representatives on a wide range of issues 
employee views are also sought through regular employee satisfaction 
questionnaires both within business units and across the group 
following such surveys results are shared with employees and action 
plans are put in place to deal with issues arising the group encourages 
innovation from all levels of employees and has a structured programme 
to encourage suggestions and to recognise employees through awards 
the group also has a welldeveloped succession planning process in 
place and succession plans are reviewed by the board annually as a 
key part of this process the company focuses on emerging talent to 
ensure the group has the right people being developed to meet our 
future business needs talent management remains an important 
priority for the group
environmental policy and greenhouse gas emissions
information on the group’s environmental initiatives including the 
mandatory reporting disclosure on greenhouse gas emissions can be 
found in the strategic report on pages 20 and 21 and on the company’s 
website wwwnationalexpressgroupcom
political contributions
it is the group’s policy not to make political donations and accordingly 
none were made in the year however the company did attend party 
political conferences during the year for which total expenditure was 
£10500 2013 £13500
financial instruments
details of the use by the company and its subsidiaries of financial 
instruments and any related risk management objectives and policies 
including hedging policy and exposure including price credit liquidity 
or cash flow risk of the company in connection with such financial 
instruments can be found in the notes to the consolidated accounts on 
pages 98 to 152 and are incorporated by reference into this report
85 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
other statutory information continued
no dividend is payable in respect of those default shares and that no 
transfer of any default shares shall be registered these restrictions end 
seven days after receipt by the company of a notice of an approved 
transfer of the shares or all the information required by the relevant 
section 793 notice whichever is earlier
the directors may refuse to register any transfer of any share which is 
not a fullypaid share although such discretion may not be exercised in 
a way which the financial conduct authority regards as preventing 
dealings in shares of that class from taking place on an open or proper 
basis the directors may likewise refuse any transfer of a share in favour 
of more than four persons jointly
the company is not aware of any other restrictions on the transfer of 
ordinary shares in the company other than
• certain restrictions that may from time to time be imposed by laws 
and regulations for example insider trading laws and
• pursuant to the listing rules of the financial conduct authority 
whereby certain employees of the company require approval of the 
company to deal in the company’s shares
the company is not aware of any agreements between shareholders 
that may result in restrictions on the transfer of securities or voting rights
resolutions will be proposed at the 2015 agm to authorise the directors 
to exercise all powers to allot shares or grant rights for or to convert any 
security into shares and approve a limited disapplication of statutory 
preemption rights details are set out in the notice of agm 
accompanying this document
share capital and rights attaching to the 
company’s shares
under the company’s articles of association any share in the company 
may be issued with such rights or restrictions whether in regard to 
dividend voting return of capital or otherwise as the company may 
from time to time by ordinary resolution determine or in the absence 
of any such determination as the directors may determine 
the company has one class of ordinary shares with a nominal value 
of 5 pence at the date of this annual report the issued share capital 
consisted of 51 1738648 ordinary shares of 5 pence each
at a general meeting of the company every member has one vote on a 
show of hands and on a poll one vote for each share held the notice 
of agm accompanying this document specifies deadlines for exercising 
voting rights either by proxy or by being present in person in relation to 
resolutions to be passed at a general meeting details of the authorised 
and issued share capital of the company and details of shares issued 
during the year can be found in note 31 on page 140 
no shareholder is unless the board decides otherwise entitled to 
attend or vote either personally or by proxy at a general meeting or to 
exercise any other right conferred by being a shareholder if he or she or 
any person with an interest in his or her shares has been sent a notice 
under section 793 of the companies act 2006 which confers upon 
public companies the power to require information with respect to 
interests in their voting shares and he or she or any interested person 
failed to supply the company with the information requested within 
14 days after delivery of that notice the board may also decide that 
major shareholdings
as at 31 december 2014 the company had been notified of the following interests in its shares which represent 3 or more of the voting rights in 
the company save where indicated below the company had not been notified of any changes to these interests subsequent to 31 december 
2014 and prior to 23 february 2015 being the latest practicable date before publication 
ordinary shares
percentage of
share capital
nature of  
holding
european express enterprises ltd 78795062 154 direct 
prudential plc 60396081 118 direct 
jupiter asset management ltd 26288829 51 direct 
schroders plc 26547716 52 direct
blackrock inc 25587658 50 indirect
 the holdings for european express enterprises ltd are included in jorge cosmen’s holdings which are shown in the directors’ remuneration report on page 79
  on 23 february 2015 blackrock inc notified the company that it no longer had a notifiable interest in the company’s shares for the purposes of the disclosure and 
transparency rules “dtrs”
analysis of ordinary shareholdings at 20 february 2015
number of 
accounts
percentage of 
total number  
of accounts
nature of  
shares
percentage of 
ordinary capital
by size of holding
1500 5877 4667 823700 016
5011000 1553 1233 1225746 024
10015000 3509 2786 8265391 162
500150000 1405 1116 16948206 331
500011000000 190 151 47006681 919
over 1000000 59 047 437468924 8548
12593 100 511738648 100
by investor type
individuals 11593 9205 23496571 459
institutional investors 506 402 416437892 8138
other corporate investors 494 393 71804185 1403
12593 100 511738648 100
national express group plc annual report and accounts 2014 86 the company was granted authority at the agm in 2014 to purchase 
its own shares up to an aggregate value of 10 of the issued nominal 
capital the authority was not used during the year the authority is 
renewed annually and approval will be sought at the agm in 2015 for its 
renewal further details are set out in the notice of agm accompanying 
this document
share schemes
first names jersey limited is trustee of the national express group 
employee benefit trust as at 23 february 2015 the trust held 541 184 
shares 0 1 1 of the issued share capital of the company for employee 
share schemes further details of the company’s employee share 
schemes together with dividend waivers in force can be found in 
note 7 on page 1 12 and note 16 on page 161 and are incorporated by 
reference into this report the trustee may vote the shares held by 
the trust at its discretion
the current investment association ‘ia’ guidance on dilution limits 
provides that the overall dilution under all share plans operated by a 
company should not exceed 10 over a tenyear period in relation to 
the company’s share capital with a further limitation of 5 in any 
tenyear period on executive plans national express share plans 
operate within ia recommended guidelines on dilution limits
articles of association
any amendments to the company’s articles of association may be 
made in accordance with the provisions of the companies act 2006
annual general meeting
the agm will be held at 200pm on 6 may 2015 in the purcell room at 
the queen elizabeth hall southbank centre belvedere road london 
se1 8xx at the meeting special resolutions will be proposed to 
authorise the directors to issue shares without applying statutory 
preemption rights to authorise the company to make market 
purchases of its own shares and to authorise the calling of general 
meetings other than annual general meetings on 14 clear days’ notice 
full details are provided in the notice of meeting if you would like to 
register any question you may have in advance of the agm you can 
do so at agmnationalexpresscom or you can write to the company 
secretary at national express group plc national express house 
birmingham coach station mill lane digbeth birmingham b5 6dd
material contracts and change of control agreements
under the terms of the company’s revolving credit facility upon a 
change of control the company would have five days to enter into 
negotiations with the lenders to alter the terms following ten days of 
negotiations if no agreement has been reached outstanding balances 
would become repayable 
under the terms of the £1000000000 euro medium term note 
programme under which the company issued medium term notes 
‘mtns’ to various institutions on 13 january 2010 as updated on 
19 november 2012 there is a change of control put option such that 
upon a change of control event any holder of any mtn may require the 
company to redeem or purchase that mtn 
the company entered into a private placement note purchase 
agreement on 30 july 2012 relating to the issue by the company of 
€78500000 455 senior notes due 16 august 2021 under the terms 
of the agreement the company is required to offer to note holders to 
repay to them the entire unpaid principal amount and interest thereon 
upon a change of control
the company’s uk rail subsidiary nxet trains limited which operates 
the essex thameside franchise is party to a franchise agreement with 
the dft the franchise agreement contains an event of default on a 
change in control of the franchisee which would be triggered on a 
change in control of the company if such change in control is not 
approved by the dft as well as the right for the dft to charge a 
facilitation fee on such change in control similarly the licences issued 
by the office of rail regulation ‘orr’ to nxet trains limited in 
connection with the franchise all contain change of control provisions 
which could result in the licences being revoked if the change in control 
is not approved by the orr 
the group’s uk bus business operates the midland metro tram service 
and the uk bus operating subsidiary is party to a contract with centro 
governing certain aspects of such operation the contract with centro 
contains an event of default on a change in control of the uk operating 
subsidiary which would be triggered on a change in control of the 
company if such change in control is not approved by centro 
the group’s uk coach business performs a number of coaching and 
bussing services from or at certain uk airports and the uk coach 
operating subsidiary is also contracted to provide passenger transport 
services for certain other third parties a number of these contracts 
contain rights for the counterparties to terminate them on a change of 
control of the relevant subsidiary company party to such contracts 
certain of which would be triggered by a change in control of the 
company while no one of these contracts is considered significant 
in the context of the group’s business as a whole the impact on the 
group if all such contracts were terminated could be significant 
similarly the group’s north american business operates school bus 
services under contracts with school boards as well as transit contracts 
with transit authorities many of those contracts contain termination 
rights for the benefit of the board or authority which could be triggered 
by a change of control in the company while no one single school bus 
contract is considered significant in the context of the group’s business 
as a whole the impact on the group in the event that each school board 
and each transit authority exercised its termination right on a change of 
control would be significant
directors’ and employees’ service contracts
there are no agreements between the company and its directors or 
employees providing for compensation for loss of office or employment 
whether through resignation purported redundancy or otherwise that 
occurs because of a takeover bid
risks
a summary of the company’s risk management framework and an 
overview of its principal risks are detailed on pages 26 and 27 and are 
incorporated by reference into this report
auditors
resolutions to reappoint deloitte llp as auditors of the company 
and to authorise the directors to determine their remuneration will be 
proposed at the 2015 agm
disclosure of information to auditors
the directors confirm that so far as they are aware there is no relevant 
audit information of which the company’s auditors are unaware and 
that each director has taken all the steps that they ought to have taken 
as a director in order to make themselves aware of any relevant audit 
information and to establish that the company’s auditor is aware of 
that information this confirmation is given and should be interpreted 
in accordance with the provisions of section 418 of the companies 
act 2006
by order of the board
sandra forbes
company secretary 
26 february 2015
87 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information corporate governance
directors’ responsibilities statement
the directors are responsible for preparing the annual report and the 
financial statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements for 
each financial year under that law the directors are required to prepare 
the group financial statements in accordance with international financial 
reporting standards ‘ifrss’ as adopted by the european union and 
article 4 of the ias regulation and have elected to prepare the parent 
company financial statements in accordance with united kingdom 
generally accepted accounting practice united kingdom accounting 
standards and applicable law under company law the directors must 
not approve the financial statements unless they are satisfied that they 
give a true and fair view of the state of affairs of the company and of the 
profit or loss of the company for that period 
in preparing the parent company financial statements the directors are 
required to
• select suitable accounting policies and then apply them consistently
• make judgments and accounting estimates that are reasonable 
and prudent
• state whether applicable uk accounting standards have been 
followed subject to any material departures disclosed and explained 
in the financial statements and
• prepare the financial statements on the going concern basis unless 
it is inappropriate to presume that the company will continue 
in business
in preparing the group financial statements international accounting 
standard 1 requires that directors
• properly select and apply accounting policies
• present information including accounting policies in a manner 
that provides relevant reliable comparable and understandable 
information 
• provide additional disclosures when compliance with the specific 
requirements in ifrss are insufficient to enable users to understand 
the impact of particular transactions other events and conditions 
on the entity’s financial position and financial performance and
• make an assessment of the company’s ability to continue as 
a going concern
the directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the company’s transactions and 
disclose with reasonable accuracy at any time the financial position of 
the company and enable them to ensure that the financial statements 
comply with the companies act 2006 they are also responsible 
for safeguarding the assets of the company and hence for taking 
reasonable steps for the prevention and detection of fraud and 
other irregularities
the directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company’s website 
legislation in the united kingdom governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions 
responsibility statement 
we confirm that to the best of our knowledge
• the financial statements prepared in accordance with the relevant 
financial reporting framework give a true and fair view of the assets 
liabilities financial position and profit or loss of the company and the 
undertakings included in the consolidation taken as a whole
• the strategic report includes a fair review of the development and 
performance of the business and the position of the company and 
the undertakings included in the consolidation taken as a whole 
together with a description of the principal risks and uncertainties 
that they face and
• the annual report and financial statements taken as a whole are 
fair balanced and understandable and provide the information 
necessary for shareholders to assess the company’s performance 
business model and strategy
by order of the board
dean finch
group chief executive 
26 february 2015
matthew ashley
group finance director 
26 february 2015
national express group plc annual report and accounts 2014 88 financial statements
independent auditor’s report to the members  
of national express group plc
opinion on financial statements of  
national express group plc
in our opinion
• the financial statements give a true and fair view of the state of the group’s and 
of the parent company’s affairs as at 31 december 2014 and of the group’s 
profit for the year then ended
• the group financial statements have been properly prepared in accordance 
with international financial reporting standards ifrss as adopted by the 
european union
• the parent company financial statements have been properly prepared in 
accordance with united kingdom generally accepted accounting practice and 
• the financial statements have been prepared in accordance with the 
requirements of the companies act 2006 and as regards the group financial 
statements article 4 of the ias regulation
the financial statements comprise the group income statement the group 
statement of comprehensive income the group and parent company balance 
sheets the group statement of cash flows the group statement of changes 
in equity the related notes 1 to 37 to the group financial statements and the 
related notes 1 to 21 to the company financial statements the financial reporting 
framework that has been applied in the preparation of the group financial 
statements is applicable law and ifrss as adopted by the european union 
the financial reporting framework that has been applied in the preparation of 
the parent company financial statements is applicable law and united kingdom 
accounting standards united kingdom generally accepted accounting practice
going concern as required by the listing rules we have reviewed the directors’ statement on 
page 52 that the group is a going concern we confirm that
• we have concluded that the directors’ use of the going concern basis of 
accounting in the preparation of the financial statements is appropriate and
• we have not identified any material uncertainties that may cast significant 
doubt on the group’s ability to continue as a going concern
however because not all future events or conditions can be predicted 
this statement is not a guarantee as to the group’s ability to continue as 
a going concern
our assessment of risks of material misstatement the assessed risks of material misstatement described below are those that had 
the greatest effect on our audit strategy the allocation of resources in the audit and 
directing the efforts of the engagement team 
the risk in respect of the recoverability of spanish receivables has not been 
included in the current year given the significant and sustained improvement in 
cash collections by the spanish operations against the backdrop of an improved 
economic climate in spain we have included fuel hedging as a risk given the 
market volatility prior to year end which has significantly increased the fair value 
of these forward contracts otherwise the risks are consistent with the prior year 
risk how the scope of our audit responded to the risk
impairment of goodwill and intangible assets
this is included in note 2 as one of the significant 
accounting judgements and key sources of estimation 
uncertainty given there are a number of key assumptions 
used in the assessment of the carrying value of goodwill 
and intangible assets as described in note 13 the most 
significant goodwill balances relate to the spanish 
division £665 1 million and the north american 
division £3350 million the assumptions include 
future projected cash flows the perpetual growth 
rate and the appropriate discount rate
our procedures for challenging management’s methodology and assumptions 
focused on the group’s interests in spain and north america and included
• assessing the appropriateness of any changes to assumptions since the 
prior period
• validating the integrity of the impairment models via reperformance of 
the calculations
• understanding the underlying process used to determine the risk adjusted cash 
flow projections and challenging them with reference to historical forecasts 
actual performance and expected future changes to the business 
• working with our valuation specialists to benchmark the discount rates and 
perpetuity growth rates applied to external macroeconomic and market data 
• reviewing trading including post period end trading to verify that it supported 
the forecast cash flows used in the impairment testing and
• assessing the appropriateness the disclosures included in the financial 
statements including the sensitivity analysis provided
89 wwwnationalexpressgroupcom
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independent auditor’s report to the members  
of national express group plc continued
claims provisions
given the claims provision of £393 million at 
31 december 2014 is inherently judgemental it is 
included in note 2 as one of the significant accounting 
judgements and key sources of estimation uncertainty 
the measurement of the selfinsured claims provision in 
north america uses actuarial assumptions and is based 
on an assessment of the expected settlement on known 
claims together with an estimate of settlements that will 
be made in respect of incidents occurring prior to the 
balance sheet date but for which claims have not been 
reported to the group
we used our actuarial specialists to challenge the assumptions inherent in the 
valuation produced by the group’s actuary in north america which is the territory 
with the largest potential exposures and most judgement such as the loss 
development factor and discount rate and to reperform the actuarial calculation 
to develop a valuation range we compared the level of provision recorded to the 
range determined by the group’s actuary and our actuarial specialists to conclude 
whether the level of provision was appropriate
exceptional items
management is required to exercise judgement in order 
to appropriately determine the items to be presented 
separately from normalised profit on the basis that they 
are material and nonrecurring in nature and therefore 
disclosed as exceptional items the net exceptional 
items before tax for the year ended 31 december 2014 
as detailed in note 5 are £503 million and are therefore 
significant to the statutory profit for the period 
a sample of exceptional items have been agreed to source documentation and 
challenged by the divisional and group audit teams as to their nature in order to 
validate that they are significant nonrecurring items which are appropriate to 
present as exceptional items with reference to the financial reporting council 
guidance issued in december 2013 we have also considered the appropriateness 
of the associated narrative disclosure in respect of each type of exceptional item
tax provisions
judgement is required in relation to the value of the tax 
provisions recorded in respect of a number of uncertain 
tax positions which have not yet been agreed by the 
tax authorities including ongoing tax audits in spain 
and certain elements of the financing structures within 
the group accordingly tax provisioning is included in 
note 1 as one of the significant accounting judgements 
and key sources of estimation uncertainty
we used our tax specialists to appraise the likely outcome of technical tax 
treatments based on their experience working with the revenue authorities and 
reviewed correspondence with the authorities to challenge the reasonableness 
of the provisions made including considering consistency and approach 
to judgements
pension deficit 
the measurement of the group’s net pension liability of 
£1 19 million requires management to make judgements 
on assumptions including price inflation discount rates 
pension increases mortality rates and earnings growth 
as explained in note 2 the significant accounting 
judgements and key sources of estimation uncertainty 
changes in these assumptions could significantly impact 
the amount of the group’s retirement benefit obligations
we reviewed the actuarial assumptions used to calculate the net pension liability 
and our actuarial specialists performed a critical assessment of the key 
assumptions as described in note 33 with reference to comparable market data
fuel hedging
it is the group’s policy to hedge fuel price fluctuations 
in order to provide short term cost certainty due to 
the market volatility prior to year end and associated 
significant fall in prices the fair value of the liability in 
respect of the forward fuel hedge contracts has increased 
from £08 million at 31 december 2013 to £713 million 
at 31 december 2014 the accounting policy is included 
in note 2 to the financial statements and accounting for 
fuel commodity contracts is an inherently complex area 
the volatility experienced prior to year end has further 
increased the risk given the increase in scale of 
the balance and the complexity of the hedge 
effectiveness testing 
we have worked with our treasury accounting specialists to 
• challenge the valuations of a sample of forward fuel hedge contracts 
by calculating independent fair values
• review the hedge documentation with reference to the requirements of ias 39 
and best practice and
• completed independent effectiveness testing for a sample of hedges 
national express group plc annual report and accounts 2014 90 the description of risks above should be read in conjunction with the significant 
issues considered by the audit committee discussed on pages 55 and 56
our audit procedures relating to these matters were designed in the context of 
our audit of the financial statements as a whole and not to express an opinion on 
individual accounts or disclosures our opinion on the financial statements is not 
modified with respect to any of the risks described above and we do not express 
an opinion on these individual matters
our application of materiality we define materiality as the magnitude of misstatement in the financial statements 
that makes it probable that the economic decisions of a reasonably knowledgeable 
person would be changed or influenced we use materiality both in planning the 
scope of our audit work and in evaluating the results of our work
we determined materiality for the group to be £8 million 2013 £9 million which is 
55 2013 63 of normalised pretax profit profit before exceptional items and 
amortisation and 1 2013 1 of equity normalised profit is one of the key 
metrics used both externally and internally as excluding exceptional items which are 
volatile as well as amortisation costs facilitates a better understanding of the 
underlying trading performance
we agreed with the audit committee that we would report to the committee all 
audit differences in excess of £160000 2013 £180000 as well as differences 
below that threshold that in our view warranted reporting on qualitative rounds 
we also report to the audit committee on disclosure matters that we identified 
when assessing the overall presentation of the financial statements 
an overview of the scope of our audit our group audit was scoped by obtaining an understanding of the group and its 
environment including groupwide controls and assessing the risks of material 
misstatement at the group level based on that assessment our group audit scope 
focused on the five operating divisions and the group head office division all of 
which were subject to a full scope audit for the year ended 31 december 2014 
these six divisions account for 100 of the group’s total assets revenue and 
operating profit audits of these divisions are performed at lower levels of materiality 
determined by reference to the relative scale of the business division concerned 
and no higher than £52 million
at the parent entity level we also tested the consolidation process
the group audit team continued to follow a programme of planned visits that 
has been designed so that the senior statutory auditor or a senior member of 
the group audit team visits each of the six full scope divisions at least once a year 
we also include the component audit teams in our team briefing discuss their 
risk assessment and review documentation of the findings from their work
opinion on other matters prescribed by the 
companies act 2006
in our opinion
• the part of the directors’ remuneration report to be audited has been properly 
prepared in accordance with the companies act 2006 and
• the information given in the strategic report and the directors’ report for the 
financial year for which the financial statements are prepared is consistent with 
the financial statements
matters on which we are required to report 
by exception
adequacy of explanations received 
and accounting records
under the companies act 2006 we are required to report to you if in our opinion
• we have not received all the information and explanations we require for our 
audit or
• adequate accounting records have not been kept by the parent company or 
returns adequate for our audit have not been received from branches not visited 
by us or
• the parent company financial statements are not in agreement with the 
accounting records and returns
we have nothing to report in respect of these matters
91 wwwnationalexpressgroupcom
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independent auditor’s report to the members  
of national express group plc continued
directors’ remuneration under the companies act 2006 we are also required to report if in our opinion 
certain disclosures of directors’ remuneration have not been made or the part 
of the directors’ remuneration report to be audited is not in agreement with 
the accounting records and returns we have nothing to report arising from 
these matters
corporate governance statement under the listing rules we are also required to review the part of the corporate 
governance statement relating to the company’s compliance with ten provisions 
of the uk corporate governance code we have nothing to report arising from 
our review
our duty to read other information in 
the annual report
under international standards on auditing uk and ireland we are required to 
report to you if in our opinion information in the annual report is
• materially inconsistent with the information in the audited financial statements or
• apparently materially incorrect based on or materially inconsistent with our 
knowledge of the group acquired in the course of performing our audit or
• otherwise misleading
in particular we are required to consider whether we have identified any 
inconsistencies between our knowledge acquired during the audit and the 
directors’ statement that they consider the annual report is fair balanced and 
understandable and whether the annual report appropriately discloses those 
matters that we communicated to the audit committee which we consider should 
have been disclosed we confirm that we have not identified any such 
inconsistencies or misleading statements
respective responsibilities of directors and auditor as explained more fully in the directors’ responsibilities statement the directors 
are responsible for the preparation of the financial statements and for being satisfied 
that they give a true and fair view our responsibility is to audit and express an 
opinion on the financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s ethical standards for auditors we also 
comply with international standard on quality control 1 uk and ireland our audit 
methodology and tools aim to ensure that our quality control procedures are 
effective understood and applied our quality controls and systems include our 
dedicated professional standards review team and independent partner reviews
this report is made solely to the company’s members as a body in accordance 
with chapter 3 of part 16 of the companies act 2006 our audit work has been 
undertaken so that we might state to the company’s members those matters we 
are required to state to them in an auditor’s report and for no other purpose to the 
fullest extent permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for our audit 
work for this report or for the opinions we have formed
scope of the audit of the financial statements an audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting policies are appropriate to 
the group’s and the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the financial 
statements in addition we read all the financial and nonfinancial information in 
the annual report to identify material inconsistencies with the audited financial 
statements and to identify any information that is apparently materially incorrect 
based on or materially inconsistent with the knowledge acquired by us in the 
course of performing the audit if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report
nigel mercer senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
birmingham united kingdom
26 february 2015
national express group plc annual report and accounts 2014 92 additional information
strategic report corporate governance financial statements
 
 
93 wwwnationalexpressgroupcom
financial statements 
group income statement  
for the year ended 31 december 2014 
 
 
  note 
total before 
intangible 
amortisation and 
exceptional items 
2014 
£m 
intangible 
amortisation and 
exceptional items 
2014 
£m 
total 
2014 
£m 
total before 
intangible 
amortisation and 
exceptional items  
2013  
£m 
intangible 
amortisation and 
exceptional items 
2013 
£m 
total 
2013
£m 
continuing operations        
revenue 35  18674 – 18674 18913 – 18913 
operating costs before intangible 
amortisation and exceptional items   16743 – 16743 16984 – 16984
intangible amortisation  513  – 286 286 – 493 493
exceptional items  5  – 503 503 – 257 257
total operating costs  6  16743 789 17532 16984 750 17734
group operating profit 5 1931 789 1142 1929 750 1179 
loss on disposal of business 18 – – – – 43 43
share of results of associates  17  03 – 03 06 – 06 
finance income  39  65 – 65 68 – 68 
finance costs  9  545 – 545 566 – 566
profit before tax   1454 789 665 1437 793 644 
tax charge 10  277 218 59 325 264 61
 
profit for the year  1177 571 606 1112 529 583 
profit attributable to  
equity shareholders   1162 571 591 1097 529 568 
profit attributable to  
noncontrolling interests   15 – 15 15 – 15 
  1177 571 606 1112 529 583 
earnings per share        
– basic earnings per share  12    116p   111p 
– diluted earnings per share  12   115p   111p 
normalised earnings per share        
– basic earnings per share  12 227p   215p   
– diluted earnings per share  12 227p   214p   
financial statements
group income statement
for the year ended 31 december 2014
93 wwwnationalexpressgroupcom
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94 national express group plc annual report and accounts 2014
financial statements 
group statement of comprehensive income  
for the year ended 31 december 2014 
 
 
 note 
2014 
£m 
2013 
£m 
profit for the year  606 583 
    
items that will not be reclassified subsequently to profit or loss     
actuarial gainslosses on defined benefit pension plans  33  101 190
deferred tax on actuarial gainslosses  23 37 
  78 153
    
items that may be reclassified subsequently to profit or loss    
exchange differences on retranslation of foreign operations net of hedging  250 10 
exchange differences on retranslation of noncontrolling interests   08 02 
lossgain on cash flow hedges   803 25 
less reclassification adjustments for gains or losses included in profit  123 35
tax on exchange differences   01 20 
deferred tax on cash flow hedges   136 03 
  801 25 
    
total comprehensive expenditureincome for the year   117 455 
    
total comprehensive expenditureincome attributable to    
equity shareholders   124 438 
noncontrolling interests   07 17 
  117 455 
 
financial statements
group statement of comprehensive income
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 94 additional information
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95 wwwnationalexpressgroupcom
financial statements 
group balance sheet 
at 31 december 2014 
 
d finch group chief executive 
m ashley group finance director  
26 february 2015 
 
note 
2014
£m 
2013 
£m 
noncurrent assets    
intangible assets  13 11774 12235 
property plant and equipment  14  7299 7514 
available for sale investments  16  68 74 
derivative financial instruments  16  265 185 
deferred tax assets 26 299 167 
investments accounted for using the equity method  17  54 51 
trade and other receivables  19  18 46 
defined benefit pension asset 33 406 126 
  20183 20398 
current assets    
inventories  20  218 212 
trade and other receivables  21  1996 1699 
derivative financial instruments  16  15 31 
current tax assets   13 16 
cash and cash equivalents  22  837 409 
  3079 2367 
total assets   23262 22765 
noncurrent liabilities    
borrowings  27  7418 7507
derivative financial instruments  27  361 16
deferred tax liability  26  660 751
other noncurrent liabilities  24  41 65
defined benefit pension liability  33  525 427
provisions  25  235 214
  9240 8980
current liabilities    
trade and other payables  23  4157 3516
borrowings  27  559 768
derivative financial instruments  27  358 19
current tax liabilities   233 229
provisions  25  353 280
  5660 4812
total liabilities   14900 13792
net assets   8362 8973 
shareholders’ equity    
calledup share capital  31  256 256 
share premium account   5327 5327 
capital redemption reserve   02 02 
own shares   15 08
other reserves  32  328 465 
retained earnings   2993 2824 
total shareholders’ equity   8235 8866 
noncontrolling interests in equity   127 107 
total equity   8362 8973 
financial statements
group balance sheet
at 31 december 2014
95 wwwnationalexpressgroupcom
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96 national express group plc annual report and accounts 2014
financial statements 
group statement of changes in equity  
for the year ended 31 december 2014 
 
 
 
share  
capital  
£m 
share 
premium 
account 
£m 
capital 
redemption 
reserve
 £m 
own 
shares 
note 31
£m 
other 
reserves 
note 32 
£m 
retained 
earnings  
£m 
total  
£m 
non
controlling 
interests
 £m 
total 
equity 
£m 
at 1 january 2014  256 5327 02 08 465 2824 8866 107 8973 
shares purchased  – – – 32 – – 32 – 32
own shares released to satisfy 
employee share schemes  – – – 25 – 25 – – – 
total comprehensive income  
and expenditure  – – – – 793 669 124 07 117
sharebased payments  – – – – – 31 31 – 31 
tax on sharebased payments  – – – – – 10 10 – 10 
dividends – – – – – 516 516 – 516
dividends paid to noncontrolling 
interests – – – – – – – 02 02
contribution from noncontrolling 
interest – – – – – – – 15 15 
at 31 december 2014  256 5327 02 15 328 2993 8235 127 8362 
 
 
share  
capital  
£m 
share 
premium 
account 
£m 
capital 
redemption 
reserve
 £m 
own 
shares 
note 31
£m 
other 
reserves 
note 32 
£m 
retained 
earnings  
£m 
total  
£m 
non
controlling 
interests
 £m 
total 
equity 
£m 
at 1 january 2013  256 5327 02 05 442 2907 8929 95 9024 
shares purchased  – – – 28 – – 28 – 28
own shares released to satisfy 
employee share schemes  – – – 25 – 25 – – – 
total comprehensive income  
and expenditure  – – – – 23 415 438 17 455 
sharebased payments  – – – – – 31 31 – 31 
tax on sharebased payments  – – – – – 01 01 – 01
dividends – – – – – 503 503 – 503
dividends paid to noncontrolling 
interests – – – – – – – 05 05
at 31 december 2013  256 5327 02 08 465 2824 8866 107 8973 
 
 
 
financial statements
group statement of changes in equity
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 96 additional information
strategic report corporate governance financial statements
 
 
 
97 wwwnationalexpressgroupcom
financial statements 
group statement of cash flows  
for the year ended 31 december 2014 
 
 
 
note 
2014 
£m 
2013 
£m 
cash generated from operations  36  2452 2964 
tax paid  130 163
net cash from operating activities   2322 2801 
cash flows from investing activities    
payments to acquire businesses net of cash acquired  18a 52 72
deferred consideration for businesses acquired and disposed 18a 05 37
proceeds from the disposal of business  – 14 
purchase of property plant and equipment   557 907
proceeds from disposal of property plant and equipment   139 121 
payments to acquire intangible assets   75 32
payments to acquire associates  02 – 
interest received   59 52 
net cash used in investing activities   493 861
cash flows from financing activities    
purchase of own shares   32 28
interest paid   497 510
finance lease principal payments   288 213
net loans repaid  97 994
receiptspayments for the maturity of foreign currency contracts  24 11
dividends paid to noncontrolling interests   02 05
contribution from noncontrolling interest  15 – 
dividends paid to shareholders of the company   516 503
net cash used in financing activities   1393 2264
increasedecrease in cash and cash equivalents   436 324
opening cash and cash equivalents   409 728 
increasedecrease in cash and cash equivalents   436 324
foreign exchange   08 05 
closing cash and cash equivalents  22  837 409 
 
financial statements
group statement of cash flows
for the year ended 31 december 2014
97 wwwnationalexpressgroupcom
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98 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts 
for the year ended 31 december 2014 
 
1 corporate information  
the consolidated financial statements of national express group plc and its subsidiaries ‘the group’ for the year ended 31 december 
2014 were authorised for issue in accordance with a resolution of the directors on 26 february 2015 national express group plc is a 
public limited company incorporated in england and wales whose shares are publicly traded on the london stock exchange  
the principal activities of the group are described in the strategic report that accompanies these financial statements  
2 accounting policies  
statement of compliance  
these financial statements have been prepared in accordance with international financial reporting standards ifrs and interpretations 
of the international financial reporting interpretations committee ifric as adopted by the european union eu and with those parts of 
the companies act 2006 applicable to companies reporting under ifrs  
basis of preparation  
these financial statements have been prepared on the going concern basis see governance report on page 52 under the historical cost 
convention except for the recognition of derivative financial instruments and available for sale investments  
these financial statements are presented in pounds sterling and all values are rounded to the nearest one hundred thousand pounds 
£01m except where otherwise indicated  
a summary of the group’s accounting policies applied in preparing these financial statements for the year ended 31 december 2014  
is set out below 
significant accounting judgements and key sources of estimation uncertainty 
the preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and 
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period although these estimates are based on management’s best knowledge actual results 
may ultimately differ from those estimates  
the key accounting estimates and judgements are 
goodwill impairment 
determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating units to which goodwill has been 
allocated the value in use calculation requires the entity to estimate the future cash flows expected to arise from the cashgenerating unit 
and a suitable discount rate in order to calculate present value details of the assumptions used and key sensitivities are set out in note 13 
to these financial statements 
pensions and other postretirement benefits 
determining the amount of the group’s retirement benefit obligations and the net costs of providing such benefits requires assumptions  
to be made concerning long term interest rates inflation salary and pension increases investment returns and longevity of current and 
future pensioners changes in these assumptions could significantly impact the amount of the obligations or the cost of providing such 
benefits  
the group makes assumptions concerning these matters with the assistance of advice from independent qualified actuaries details of the 
assumptions made are set out in note 33 
insurance  
the estimation of the insurance provisions is based on an assessment of the expected settlement on known claims together with an 
estimate of settlements that will be made in respect of incidents occurring prior to the balance sheet date but for which claims have not 
been reported to the group the group makes assumptions concerning these judgemental matters with the assistance of advice from 
independent qualified actuaries 
tax provisions 
assessing the outcome of uncertain tax positions requires judgements to be made regarding the result of negotiations with and enquiries 
from tax authorities in a number of jurisdictions the assessments made are based on advice from independent tax advisors and the status 
of ongoing discussions with the relevant tax authorities 
financial statements
notes to the consolidated accounts
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 98 additional information
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99 wwwnationalexpressgroupcom
2 accounting policies continued 
basis of consolidation  
these consolidated financial statements comprise the financial statements of national express group plc and all its subsidiaries drawn 
up to 31 december each year adjustments are made to bring any dissimilar accounting policies that may exist into line with the group’s 
accounting policies  
on acquisition of a business the purchase method of accounting is adopted and the group income statement includes the results of 
subsidiaries and businesses purchased during the year from the date control is assumed the purchase consideration is allocated to assets 
and liabilities on the basis of fair value at the date of acquisition on the sale of a business the group income statement includes the results 
of that business to the date of disposal  
intragroup transactions balances and unrealised gains and losses on transactions between group companies are eliminated  
noncontrolling interests represent the portion of comprehensive income and equity in subsidiaries that is not attributable to the parent 
company shareholders and is presented separately from parent shareholders’ equity in the consolidated balance sheet  
certain comparatives have been reclassified to be consistent with the current year’s changes in presentation 
changes in accounting policies and the adoption of new and revised standards 
the accounting policies adopted are consistent with those of the previous financial year except for the following new and revised standards 
and interpretations which have been adopted in the current year their adoption has not had any significant impact on the amounts 
reported in these financial statements 
ifrs 10 consolidated financial statements – the standard establishes the principles for the presentation of consolidated accounts when an 
entity controls one or more other entities  
ifrs 11 joint arrangements – the standard determines the type of joint arrangement by assessing the rights and obligations and accounts 
for those rights and obligations in accordance with that type of joint arrangement 
ifrs 12 disclosure of interests in other entities – the standard sets out the requirements to disclose information that enables users of 
accounts to evaluate the nature of and risks associated with its interests in other entities and the effects of these interests on its financial 
position financial performance and cash flows  
interests in joint ventures  
the group has a number of contractual arrangements with other parties to share control of other entities which represent joint ventures  
the group recognises its interest in the entities’ assets and liabilities using the equity method of accounting the group balance sheet 
includes the appropriate share of these joint ventures’ net assets or liabilities and the income statement includes the appropriate share  
of their results after tax  
financial statements of joint ventures are prepared for the same reporting period as the group adjustments are made in the group’s 
financial statements to eliminate the group’s share of unrealised gains and losses on transactions between the group and its joint 
ventures the group ceases to use the equity method from the date it no longer has joint control over the entity  
interests in associates  
companies other than subsidiaries and joint ventures in which the group has an investment representing not less than 20 of the  
voting rights and over which it exerts significant influence are treated as associates the consolidated financial statements include 
the appropriate share of these associates’ results and net assets based on their latest financial statements under the equity method 
of accounting 
income statement presentation  
the group income statement has been presented in a columnar format to enable users of the financial statements to view the normalised 
results of the group normalised results are defined as the statutory results excluding loss on the sale of a business intangible asset 
amortisation exceptional items and tax relief thereon  
exceptional items  
exceptional items are material items of income or expenditure which in the opinion of the directors due to their nature and infrequency 
require separate identification on the face of the income statement to allow a better understanding of the financial performance in the year 
in comparison to prior years 
revenue recognition  
rendering of services  
revenue comprises income from road passenger transport train passenger services and related activities in the uk north america  
and europe where appropriate amounts are shown net of rebates and sales tax  
revenue is recognised by reference to the stage of completion of the customer’s travel or services provided under contractual 
arrangements as a proportion of total services to be provided  
99 wwwnationalexpressgroupcom
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100 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
2 accounting policies continued 
rail revenue includes amounts attributed to the train operating companies tocs based principally on agreed models of route usage  
by railway settlement plan limited which administers the income allocation system within the uk rail industry in respect of passenger 
receipts in addition net franchise agreement receipts from the department for transport rail division dft rail and local passenger 
transport executives ptes are treated as revenue net franchise agreement payments to dft rail are recognised in operating costs 
uk coach revenue comprises amounts receivable generated from ticket sales uk bus and spanish coach and bus revenue comprises 
amounts receivable generated from ticket sales and revenue generated from services provided on behalf of local transport authorities 
which is recognised as the services are provided for all the divisions noted above the relevant share of season ticket or travelcard income 
is deferred within liabilities and released to the income statement over the life of the relevant season ticket or travelcard north american 
bus revenue from school boards and similar contracts is recognised as the services are provided  
rental income  
rental income is accounted for on a straightline basis over the lease term  
finance income  
revenue is recognised using the effective interest method  
government grants  
government grants relating to property plant and equipment are included in liabilities as deferred income and are credited to the income 
statement over the expected useful economic life of the assets concerned other grants are credited to the income statement as the 
related expenditure is expensed  
segmental reporting  
each of the group’s business and geographical segments provides services that are subject to risks and returns that are different from 
those of the other business segments due to the nature of the group’s operations the distinct business segments align directly with 
geographical segments which are operating in separate economic environments  
the group’s segments comprise uk bus uk coach rail north american bus spanish coach and bus and central functions 
these segments are described in more detail in the business review accompanying these financial statements  
leases  
leases of property plant and equipment where substantially all the risks and rewards of ownership of the asset have passed to the group 
are capitalised in the balance sheet as property plant and equipment finance leases are capitalised at the lower of the fair value of the 
leased property and the present value of the minimum lease payments the capital element of future obligations under hire purchase 
contracts and finance leases is included as a liability in the balance sheet the interest element of rental obligations is charged to the 
income statement over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding 
property plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the 
lease term  
leases of property plant and equipment where a significant portion of the risks and rewards of ownership are retained by the lessor are 
classified as operating leases rentals paid under operating leases are charged to the income statement on a straightline basis over the 
term of the lease incentives received under operating leases and initial direct costs in negotiating the lease are amortised to the income 
statement on a straightline basis over the term of the lease  
all material arrangements and transactions entered into by the group are reviewed to check whether they contain elements that meet 
the accounting definition of a lease although they may not follow the legal form of a lease  
borrowing costs  
borrowing costs are recognised as an expense when incurred except where they are directly attributable to the acquisition construction 
or production of a qualifying asset in which case they are capitalised as part of the cost of that asset 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 100 additional information
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101 wwwnationalexpressgroupcom
2 accounting policies continued 
current tax and deferred tax  
current tax is provided on taxable profits earned according to the local tax rates applicable where the profits are earned income taxes are 
recognised in the income statement unless they relate to an item accounted for in other comprehensive income or equity in which case 
the tax is recognised directly in other comprehensive income or equity the tax rates and tax laws used to compute the current tax are 
those that are enacted or substantively enacted by the balance sheet date  
deferred tax is provided in full in respect of all material temporary differences at the balance sheet date between the tax bases of assets 
and liabilities and their carrying amounts for financial reporting purposes apart from the following exceptions  
• where the temporary difference arises from the initial recognition of goodwill  
• where an asset or liability is recognised in a transaction that is not a business combination and that at the time of the transaction affects 
neither accounting nor taxable profit or loss and  
• in respect of investment in subsidiaries associates and joint ventures where the group is able to control the reversal of the temporary 
difference and it is probable that the temporary difference will not reverse in the foreseeable future  
deferred tax is measured on a nondiscounted basis at tax rates that are expected to apply in the periods in which the temporary 
differences reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date  
deferred tax assets are recognised to the extent that it is considered more likely than not that future taxable profits will be available  
against which the underlying temporary differences can be deducted their carrying amount is reviewed at each balance sheet date  
on the same basis 
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the group 
intends to settle its current tax assets and liabilities on a net basis  
intangible assets  
intangible assets acquired separately that meet the recognition criteria of ias 38 intangible assets are capitalised at cost and when 
acquired in a business combination are capitalised at fair value at the date of acquisition following initial recognition finite life assets are 
amortised on a straightline basis and indefinite life assets are not amortised the amortisation expense is taken to the income statement 
through operating costs  
finite life intangible assets have a residual value of £nil and are amortised over their estimated useful lives as follows  
intangible assets with indefinite lives are tested annually for impairment the useful lives of finite life intangible assets are examined on an 
annual basis and adjustments where applicable are made on a prospective basis finite life assets are reviewed for impairment where 
indicators of impairment exist 
the group’s only indefinite life intangible asset is goodwill  
software  
computer software that is not integral to an item of property plant and equipment is recognised separately as an intangible asset and  
is carried at cost less accumulated amortisation and accumulated impairment losses costs include software licences consulting costs 
attributable to the development design and implementation of the computer software and internal costs directly attributable to the 
development design and implementation of the computer software costs in respect of training are expensed as incurred amortisation  
is calculated using the straightline method so as to charge the cost of the computer software to the income statement over its estimated 
useful life 3 to 7 years  
the carrying value of intangibles is reviewed for impairment if events or changes in circumstances indicate that the carrying value may not 
be recoverable  
 
customer contracts  – over the life of the contract between 1 and 33 years  
contract mobilisation costs  – over th e life of the franchise 15 years  
brands – over the life of the brand 5 years 
101 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
102 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
2 accounting policies continued 
goodwill  
goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the group’s interest  
in the net fair value of the identifiable assets liabilities and contingent liabilities following initial recognition goodwill is stated at historic 
cost less any accumulated impairment if an acquisition gives rise to an excess of the acquirer’s interest in the net fair value of the 
acquiree’s identifiable assets liabilities and contingent liabilities over cost previously referred to as negative goodwill this is credited 
immediately to the income statement  
in accordance with ifrs 3 goodwill is not amortised all goodwill is subject to an annual test of impairment and an impairment charge 
recognised as required  
fair value accounting adjustments are made in respect of acquisitions fair value adjustments based on provisional estimates are amended 
within one year of the acquisition if required with a corresponding adjustment to goodwill in order to refine adjustments to reflect further 
evidence gained postacquisition  
where goodwill forms part of a cashgenerating unit and all or part of that unit is disposed of the associated goodwill is included in the 
carrying amount of the operation when determining the gain or loss on the disposal of the operation  
property plant and equipment  
all property plant and equipment is stated at historic cost less accumulated depreciation and accumulated impairment losses under  
the transitional arrangements of ifrs 1 the group elected to deem the fair value of certain revalued assets to be equivalent to cost  
land and buildings comprise mainly vehicle depots and garages and offices freehold land is not depreciated other property plant 
and equipment are depreciated on a straightline basis over their estimated useful lives as follows  
useful lives and residual values are reviewed annually and adjustments where applicable are made on a prospective basis repairs and 
maintenance are charged to the income statement during the financial period in which they are incurred  
an item of property plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from 
the continued use of the asset any gain or loss arising on the derecognition of the asset is included in the income statement in the period 
of derecognition  
impairment of nonfinancial assets  
all noncurrent assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not 
be recoverable except for indefinite life intangible assets and goodwill which are reviewed annually an impairment loss is recognised for the 
amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s fair value less costs to 
sell and its value in use for the purposes of assessing impairment assets are grouped at the lowest level for which there are separately 
identifiable cash inflows  
in assessing value in use the estimated risk adjusted future cash flows are discounted to their present value using a pretax discount rate 
that reflects current market assessments of the time value of money impairment losses are recognised in the income statement in expense 
categories consistent with the function of the impaired asset  
except for goodwill impairments a review is made at each reporting date of any previous impairment losses to assess whether they  
no longer exist or may have decreased if such indication exists the asset’s recoverable amount is estimated and any previously 
recognised impairment loss is reversed only if there has been a change in the estimates used to assess the recoverable amount since the 
last impairment loss was recognised if that is the case the carrying amount of the asset is increased subject to a limit of the asset’s net 
book value had no previous impairment loss been recognised such reversal is recognised in the income statement future depreciation or 
amortisation is then adjusted to allocate the asset’s revised carrying amount over its remaining useful economic life impairments to goodwill 
cannot be reversed  
 
freehold buildings  – 30 to 50 years  
long leasehold property 
improvements  
– 15 to 40 years  
public service vehicles  – 8 to 15 years  
plant and equipment fixtures 
and fittings  
– 3 to 15 years  
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 102 additional information
strategic report corporate governance financial statements
 
 
103 wwwnationalexpressgroupcom
2 accounting policies continued 
financial instruments  
the group determines the classification of its financial instruments at initial recognition the group classifies its financial assets in the 
following categories at fair value through profit or loss loans and receivables and availableforsale the classification depends on 
the purpose for which the financial assets were acquired  
financial assets at fair value through profit or loss  
financial assets at fair value through profit or loss are financial assets held for trading a financial asset is classified in this category  
if acquired principally for the purpose of selling in the short term derivatives are also categorised as held for trading unless they are 
designated as hedges assets in this category are classified as current assets  
financial assets at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the income 
statement gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are 
presented in the income statement within finance costs in the period in which they arise  
loans and receivables  
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market  
they are included in current assets except for maturities greater than 12 months after the balance sheet date which are classified as  
noncurrent assets the group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in  
the balance sheet  
availableforsale financial assets  
availableforsale financial assets are nonderivatives that are either designated in this category or not classified in any of the other  
categories they are included in noncurrent assets unless management intends to dispose of the investment within 12 months  
of the balance sheet date  
the group’s investments in entities that are not subsidiaries associates or joint ventures are classified as availableforsale financial assets 
after initial recognition these assets are measured at fair value with gains or losses being recognised as a separate component of equity 
until the investment is derecognised or the investment is determined to be impaired at which time the previously reported cumulative gain 
or loss is included in the income statement where there is no active market for the group’s investments fair value is determined using 
valuation techniques including recent commercial transactions and discounted cash flow analyses in the absence of any other reliable 
external information assets are carried at cost or amortised cost as appropriate  
the group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets 
is impaired in the case of equity securities classified as available for sale a significant or prolonged decline in the fair value of the security 
below its cost is considered as an indicator that the securities are impaired if any such evidence exists for availableforsale financial assets 
the cumulative loss – measured as the difference between the acquisition cost and the current fair value less any impairment loss on that 
financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement impairment losses 
recognised in the income statement on equity instruments are not reversed through the income statement 
financial liabilities 
when a financial liability is recognised initially the group measures it at its fair value financial liabilities include trade payables accruals 
other payables borrowings and derivative financial instruments in the case of a financial liability not at fair value through profit or loss 
an adjustment is made for transaction costs that are directly attributable to the issue of the financial liability subsequent measurement 
depends on its classification as follows 
financial liabilities at fair value through profit or loss 
financial liabilities classified as held for trading and derivative liabilities that are not designated as effective hedging instruments are classified 
as financial liabilities at fair value through profit or loss these liabilities are carried on the balance sheet at fair value with gains or losses 
being recognised in the income statement 
other 
all other financial liabilities not classified as fair value through profit or loss are measured at amortised cost using the effective  
interest method 
 
103 wwwnationalexpressgroupcom
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104 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
2 accounting policies continued 
derivative financial instruments  
the group uses derivative financial instruments such as foreign currency forward exchange contracts fuel derivatives and interest rate 
derivatives to hedge its risks associated with foreign currency fuel price and interest rate fluctuations such derivative financial instruments 
are initially recognised at fair value and subsequently remeasured to fair value for the reported balance sheet the fair value of foreign 
currency forward exchange contracts interest rate and fuel derivatives is calculated by reference to market exchange rates interest rates 
and fuel prices at the period end  
the group’s fuel derivatives are designated as cash flow hedges the gain or loss on the hedging instrument that is determined to be 
an effective hedge is recognised in equity with any material ineffective portion recognised in the income statement the gains or losses 
deferred in equity in this way are recycled through the income statement in the same period in which the hedged underlying transaction 
or firm commitment is recognised in the income statement  
the group’s interest rate derivatives are designated as fair value hedges the gain or loss on the hedging instrument is recognised 
immediately in the income statement the carrying amount of the hedged item is adjusted through the income statement for the gain  
or loss on the hedged item attributable to the hedged risk in this case movements in the risk free interest rate 
foreign currency derivatives are used to hedge the group’s net investment in foreign currency denominated operations and to the extent 
they are designated and effective as net investment hedges are matched in equity against foreign exchange exposure in the related assets 
and liabilities gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed 
of or sold foreign currency forward contracts are also used to hedge transactional exposures these contracts are not hedge accounted 
and all gains and losses are taken directly to the income statement 
for derivatives that do not qualify for hedge accounting gains or losses are taken directly to the income statement in the period  
hedge accounting is discontinued when the hedging instrument expires is sold terminated exercised or no longer qualifies for 
hedge accounting  
inventories  
inventories are valued at the lower of cost and net realisable value on a first infirst out basis after making due allowance for obsolete 
or slow moving items 
contract mobilisation costs  
costs associated with securing new rail franchises and other significant nonrail contracts are expensed as incurred up to the point when 
a bid is awarded from this point in time appropriate costs are recognised as an asset and are expensed to the income statement over 
the life of the contract costs associated with the commencement of all new contracts other than these contracts are expensed as incurred  
trade and other receivables  
trade and other receivables are recognised and carried at original invoice amount less an allowance for any uncollectable amounts 
doubtful debts are provided for when collection of the full amount is no longer probable whilst bad debts are written off when identified  
cash and cash equivalents  
cash and cash equivalents as defined for the cash flow statement comprise cash in hand cash held at bank with immediate access other 
short term investments and bank deposits with maturities of three months or less from the date of inception and bank overdrafts in the 
consolidated balance sheet cash includes cash and cash equivalents excluding bank overdrafts bank overdrafts that have no legal right 
of setoff against cash and cash equivalents are included within borrowings in current liabilities  
trade and other payables  
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method  
interestbearing borrowings  
all loans and borrowings are initially recognised at cost being the net fair value of the consideration received plus transaction costs that  
are directly attributable to the issue of the financial asset or liability after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective interest method  
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 104 additional information
strategic report corporate governance financial statements
 
 
105 wwwnationalexpressgroupcom
2 accounting policies continued 
insurance  
the group’s policy is to selfinsure high frequency claims within the businesses to provide protection above these types of losses  
the group purchases insurance cover from a selection of proven and financially strong insurers the insurance provision is based on 
estimated exposures at the year end principally for claims arising in the uk and north america prior to the year end date subject to  
the overall deductible within the group’s insurance arrangements the majority of provisions will be utilised within five years and the 
provisions have been discounted to take account of the expected timing of future cash settlements  
pensions and other postemployment benefits  
the group has a number of pension schemes both of a defined benefit and defined contribution nature full details are provided in 
note 33  
the balance sheet position in respect of defined benefit schemes comprises the net of the present value of the relevant defined benefit 
obligation at the balance sheet date and the fair value of plan assets the trustees complete a full actuarial valuation triennially separately 
for each plan but the obligation is updated annually for financial reporting purposes by independent actuaries using the projected unit 
credit method the present value of the obligation is determined by the estimated future cash outflows discounted using interest rates 
of high quality corporate bonds which have terms to maturity equivalent to the terms of the related liability  
the current service cost and gains and losses on settlements and curtailments are recognised in staff pension costs within operating costs 
in the income statement past service costs are included in operating costs where the benefits have vested otherwise they are amortised 
on a straightline basis over the vesting period net interest is calculated by applying a discount rate to the net defined benefit liability or 
asset and is recognised within finance costs actuarial gains and losses arising from experience adjustments and changes in actuarial 
assumptions are charged or credited to other comprehensive income in the period in which they arise  
our uk tocs participate in the rps a defined benefit scheme which covers the whole of the uk rail industry this is partitioned into 
sections and the group is responsible for the funding of these sections whilst it operates the relevant franchise in contrast to the pension 
schemes operated by most businesses the rps is a shared cost scheme which means that costs are formally shared 60 by the 
employer and 40 by the employee a liability is recognised in line with other defined benefit schemes in the group although this is 
offset by a franchise adjustment so that the net liability represents the deficit that the group expects to fund during the franchise term  
the charges in respect of defined contribution schemes are recognised when they are due the group has no legal or constructive 
obligation to pay further contributions into a defined contribution scheme if the fund has insufficient assets to pay all employees benefits 
relating to employee service in the current and prior periods  
sharebased payment  
the group awards equitysettled sharebased payments to certain employees under which the group receives services from employees as 
consideration for equity instruments options of the group the fair value of the employee services received in exchange for the grant of the 
options is recognised as an expense the total amount to be expensed is determined by reference to the fair value of the options granted 
excluding the impact of any nonmarket service and performance vesting conditions for example profitability sales growth targets and 
remaining an employee of the entity over a specified time period nonmarket vesting conditions are included in assumptions about the 
number of options that are expected to vest the total amount expensed is recognised over the vesting period which is the period over 
which all of the specified vesting conditions are to be satisfied at each balance sheet date the entity revises its estimates of the number 
of options that are expected to vest based on the nonmarket vesting conditions it recognises the impact of the revision to original 
estimates if any in the income statement with a corresponding adjustment to equity  
provisions  
provisions are recognised when the group has a present legal or constructive obligation as a result of past events it is probable that an 
outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made provisions are measured 
at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present 
value where the effect is material using a pretax discount rate the amortisation of the discount is recognised as a finance cost  
contingent liabilities are obligations that arise from past events that are dependent on future events they are disclosed in the notes to the 
accounts where the expected future outflow is not probable  
105 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
106 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
2 accounting policies continued 
share capital share premium and dividends  
where either the company or employee share trusts purchase the company’s equity share capital the consideration paid including 
any transaction costs is deducted from total shareholders’ equity as own shares until they are cancelled or reissued any consideration 
subsequently received on sale or reissue is included in shareholders’ equity  
dividend distributions to the company’s shareholders are recognised as a liability in the group’s financial statements on the date 
when dividends are approved by the company’s shareholders interim dividends are recognised in the period they are paid  
noncurrent assets held for sale and discontinued operations  
noncurrent assets or disposal groups are classified as assets held for sale when their carrying amount is to be recovered principally 
through a sale transaction and a sale is considered highly probable they are stated at the lower of carrying amount and fair value less 
costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use  
a discontinued operation is a component of the group that has been disposed of or is classified as held for sale and it either represents a 
separate major line of business or geographical area is part of a plan to dispose of a separate major line of business or geographical area 
or was an acquired subsidiary intended for resale the resulting profit or loss from discontinued operations is reported separately in the 
income statement  
property plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised  
foreign currencies  
the trading results of foreign currency denominated subsidiaries joint ventures and associates are translated into sterling the presentation 
currency of the group and functional currency of the parent using average rates of exchange for the year as a reasonable approximation 
to actual exchange rates at the dates of transactions  
the balance sheets of foreign currency denominated subsidiaries joint ventures and associates are translated into sterling at the rates  
of exchange ruling at the year end and exchange differences arising are taken directly to the translation reserve in equity on disposal of a 
foreign currency denominated subsidiary the deferred cumulative amount recognised in the translation reserve since 1 january 2004 under 
the transitional rules of ifrs 1 relating to that entity is recognised in the income statement all other translation differences are taken to the 
income statement with the exception of differences on foreign currency borrowings and forward foreign currency contracts which are used 
to provide a hedge against the group net investments in foreign enterprises these are taken directly to equity until the disposal of the net 
investment at which time they are recognised in the income statement  
new standards and interpretations not applied  
at the date of authorisation of these financial statements the following standards and interpretations which have not been applied in these 
financial statements were in issue but not yet effective and have not yet been adopted by the eu 
ifrs 9 financial instruments – effective for periods beginning on or after 1 january 2018 the standard deals with the classification 
recognition and measurement of financial assets and liabilities 
ifrs 15 revenue from contracts with customers – effective for periods beginning on or after 1 january 2017 the standard establishes 
the principles for reporting the nature amount timing and uncertainty of revenue and cash flows arising from contracts with customers 
the directors assess that ifrs 15 is not likely to have a significant impact on future financial statements but that ifrs 9 may impact both 
the measurement and disclosures of the group’s financial instruments 
 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 106 additional information
strategic report corporate governance financial statements
 
 
107 wwwnationalexpressgroupcom
3 revenue 
4 exchange rates 
the most significant exchange rates to uk sterling for the group are as follows 
if the results for the year to 31 december 2013 had been retranslated at the average exchange rates for the year to 31 december 2014  
north american bus would have achieved normalised operating profit of £589m on revenue of £607m compared to normalised operating 
profit of £626m on revenue of £645m as reported and spanish coach and bus would have achieved a normalised operating profit of 
£774m on revenue of £536m compared to normalised operating profit of £815m on revenue of £565m as reported 
5 segmental analysis 
the operating businesses are organised and managed separately according to the nature of the public transport services they provide 
and the geographical market they operate in commentary on the segments is included in the strategic report 
revenue is analysed by reportable segment and geographical location as follows 
german coach is not considered to be an operating or a reportable segment 
all revenue in the rail segment is generated in the uk 
intersegment sales in uk bus represent internal commission on ticket sales intersegment sales in uk coach represent rail replacement 
services provided to rail intersegment trading is undertaken on standard arm’s length commercial terms due to the nature of the group’s 
businesses the origin and destination of revenue is the same no single external customer amounts to 10 or more of the total revenue 
 
2014 
 £m 
2013
 £m 
rendering of services  18650 18888 
rental income  24 25 
revenue  18674 18913 
finance income  65 68 
total revenue from continuing operations  18739 18981 
 
2014 
closing rate 
2014 
average rate 
2013 
closing rate 
2013
average rate 
us dollar  156 165 166 156 
canadian dollar  181 182 176 161 
euro  129 124 120 118 
 
external 
revenue 
2014 
£m 
inter
segment 
sales 
2014 
£m 
segment 
revenue 
2014 
£m 
external  
revenue  
2013  
£m 
inter 
segment 
sales 
2013 
 £m 
segment 
revenue 
2013 
£m 
uk bus  2808 02 2810 2733 01 2734 
uk coach  2746 06 2752 2633 02 2635 
north american bus  6202 – 6202 6450 – 6450 
spanish coach and bus  5381 – 5381 5646 – 5646 
core nonrail businesses 17137 08 17145 17462 03 17465 
german coach 21 – 21 21 – 21 
nonrail businesses 17158 08 17166 17483 03 17486 
rail  1516 – 1516 1430 – 1430 
intersegment sales elimination  – 08 08 – 03 03
total revenue  18674 – 18674 18913 – 18913 
107 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
108 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
5 segmental analysis continued 
operating profit is analysed by reportable segment as follows 
intangible asset amortisation is analysed by reportable segment as follows 
exceptional costsincome are analysed by reportable segment as follows 
 
 
normalised 
operating 
profit 
2014 
£m 
intangible 
amortisation 
and 
exceptional 
items 
2014
£m 
segment 
result 
2014
£m 
normalised 
operating  
profit  
2013  
£m 
intangible 
amortisation 
and 
exceptional 
items 
2013 
£m 
segment 
result 
2013
£m 
uk bus  340 70 270 312 14 298 
uk coach  280 35 245 245 19 226 
north american bus  595 275 320 626 181 445 
spanish coach and bus  758 72 686 815 372 443 
central functions 122 112 234 143 64 207
core nonrail businesses  1851 564 1287 1855 650 1205 
german coach 17 21 38 24 07 31
nonrail businesses 1834 585 1249 1831 657 1174 
rail  97 204 107 98 93 05 
operating profit from continuing operations  1931 789 1142 1929 750 1179 
loss on disposal of business   –   43
share of results of associates   03   06 
net finance costs    480  498
profit before tax    665   644 
tax charge    59  61
profit for the year    606   583 
 
2014 
£m 
2013 
£m 
uk coach  05 03 
north american bus  113 135 
spanish coach and bus  163 354 
german coach 04 – 
central functions  01 01 
total  286 493 
 
 
2014 
£m 
2013 
£m 
uk bus  70 14 
uk coach  30 16 
rail 204 93 
north american bus  162 46 
spanish coach and bus  91 18 
german coach 17 07 
central functions 111 63 
total  503 257 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 108 additional information
strategic report corporate governance financial statements
 
 
109 wwwnationalexpressgroupcom
5 segmental analysis continued 
exceptional costsincome are further analysed by type as follows 
in the year to 31 december 2014 exceptional costs of £170m 2013 £74m were incurred in relation to uk rail bids this includes the  
costs of bidding for the essex thameside crossrail and scotrail rail franchises in addition £28m 2013 £19m was incurred in bidding 
for regional rail opportunities in germany during the year the group secured the 15 year essex thameside uk rail franchise and was 
recently announced as preferred bidder for two contracts to operate the nuremberg sbahn commuter rail service 
£57m 2013 £64m of business development costs have been incurred across the group as part of a major investment to create other 
new contract and passenger business pipelines in new markets this included costs incurred to win a tenyear contract to operate bus 
services in the kingdom of bahrain 
exceptional restructuring costs of £258m 2013 £54m have been incurred across the group including costs to rationalise 
structural overheads in uk bus spain north america and central functions and onerous contract costs incurred on exit of the 
german coach operation 
to improve returns on capital and exit poor performing contracts the spanish and north american operations undertook a major exercise 
in the year to rationalise onerous contracts and to provide against future losses the cost of this strategic rationalisation exercise was 
£183m 2013 £nil 
exceptional fuel credits predominantly relate to spanish fuel duty credits partly offset by ineffectiveness of £25m on the group’s fuel 
hedges following the exceptional volatility in market prices during the year in 2014 the court of justice of the eu ruled that spain’s tax on 
the retail sales of hydrocarbons ‘fuel duty tax’ was contrary to the eu’s legal framework regarding taxation and that accordingly all fuel 
duty tax collected from the inception of the tax in 2005 to the cessation of the tax in january 2013 should be repaid as at year end the 
group’s spanish business had received £63m of fuel duty refunds a further £155m has been assessed as virtually certain and therefore 
recognised as a receivable at year end bringing the total amount recognised in the year to £218m 
exceptional costs of £nil 2013 £46m were incurred in relation to the acquisition and integration of school bus and transit businesses  
in north america 
 
2014 
 £m 
2013
 £m 
uk rail bids  170 74 
other rail bids 28 19 
other business development  57 64 
 255 157 
   
restructuring 258 54 
strategic rationalisation 183 – 
exceptional fuel credits 193 – 
north america acquisition and integration – 46 
 503 257 
109 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
110 national express group plc annual report and accounts 2014
5 segmental analysis continued 
assets liabilities and capital expenditure are analysed by reportable segment as follows 
   noncurrent assets only include intangible assets property plant and equipment 
 the net capital expenditure after allowing for the movements in capital creditors disposal of fixed assets and payments to acquire intangibles 
was £505m 2013 £826m 
the majority of noncurrent assets in the rail segment are located in the uk 
capital expenditure comprises property plant and equipment additions as disclosed above and in note 14 in 2014 software intangible 
assets of £60m 2013 £34m were acquired as disclosed in note 13 
unallocated assets and liabilities comprise the following items 
 
 
assets  
2014  
£m 
of which 
noncurrent 
assets 
2014
£m 
liabilities 
2014 
£m 
capital
expenditure 
2014 
£m 
assets 
2013 
£m 
of which  
noncurrent 
assets  
2013 
£m 
liabilities 
2013
£m 
capital
expenditure 
2013
£m 
uk bus  1562 1358 1443 49 1535 1347 1187 271 
uk coach  507 359 393 23 590 450 367 38 
rail  241 46 419 29 134 18 457 – 
north american bus  8245 7384 1937 227 7957 7225 1952 161 
spanish coach and bus  10844 9863 1780 218 11481 10652 1506 364 
central functions  451 63 531 11 262 57 442 14 
unallocated  1505 – 8490 – 892 – 7967 – 
intercompany elimination  93 – 93 – 86 – 86 – 
total  23262 19073 14900 557 22765 19749 13792 848 
 
unallocated 
assets 
2014 
£m 
unallocated 
liabilities  
2014 
£m 
unallocated 
assets 
2013 
£m 
unallocated 
liabilities 
2013 
£m 
cash and cash equivalents  837 – 409 – 
other debt receivables 08 – 10 – 
current tax  13 233 16 229
available for sale investments  68 – 74 – 
derivative financial assetsliabilities  280 719 216 35
borrowings excluding finance leases  – 6872 – 6946
dividends payable  – 06 – 06
deferred tax  299 660 167 751
total  1505 8490 892 7967
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 110 additional information
strategic report corporate governance financial statements
 
 
111 wwwnationalexpressgroupcom
6 operating costs 
the tocs have fixed track access contracts with network rail infrastructure limited for access to the railway infrastructure tracks 
stations and depots the tocs also have contracts under which rolling stock is leased the capital element of the rolling stock lease 
charge is based on the purchase price capital funded refurbishments and modifications the noncapital element of the lease charge 
includes heavy maintenance charges and charges based on mileage 
an analysis of fees paid to the group’s auditors is provided below 
 
 
2014 
£m 
2013 
£m 
cost of inventories recognised in expense 709 752 
staff costs including exceptional costs of £155m 2013 £77m  8503 8562 
depreciation – owned assets including exceptional costs of £34m 2013 £nil 864 883 
 – leased assets  185 191 
amortisation of fixed asset grants  08 11
operating lease charges  rolling stock capital element 290 275 
 public service vehicles  91 60 
 other  98 81 
 – plant and equipment  479 416 
 fixed track access  72 136 
 other  225 236 
 – land and buildings  297 372 
foreign exchange differences 05 09
other charges including exceptional expense of £314m 2013 £180m  6222 6085 
operating costs before intangible asset amortisation  17246 17241 
intangible asset amortisation  286 493 
total operating costs  17532 17734 
 
2014 
£m 
2013
£m 
fees payable to the company’s auditors for the audit of the consolidated and parent company accounts  03 03 
fees payable to the company’s auditors and its associates for other services   
the audit of the company’s subsidiaries  07 06 
other services  02 01 
 12 10 
111 wwwnationalexpressgroupcom
strategic report corporate governance financial statements   
 
 
 
112 national express group plc annual report and accounts 2014
7 employee benefit costs 
a staff costs 
the average number of employees including executive directors during the year was as follows 
included in the above costs are the following costs related to the group’s key management personnel who comprise the directors of the 
parent company 
b share schemes 
details of options or awards outstanding as at 31 december 2014 under the group’s share schemes are as follows 
i executive share option plan  
the company operated tax approved and unapproved executive share option schemes open to group employees in senior management 
positions options granted by this plan had a maximum term of ten years the options vested after three years subject to the satisfaction of 
certain performance criteria
 
based on the achievement of a target growth in earnings per share from 2005 executive share option grants 
were replaced by awards made under the long term incentive plan as described in ii 
ii long term incentive plan ltip  
the ltip was introduced in 2005 on the recommendation of the remuneration committee to replace the annual award under the 
executive share option plan to executive directors and to certain senior employees under the ltip a performance award to acquire a 
specified number of free shares may be made to the employee or director in addition a matching award may be made as described in iii 
performance conditions are attached to the vesting of performance and matching awards based on both the achievement of target growth 
in earnings per share and the relative total shareholder return tsr of the company against a comparator group of companies if the 
performance conditions are met performance and matching awards vest on the third anniversary of the grant date and remain exercisable 
for a period of up to six months following the vesting date there are no cash settlement alternatives at present  
 
 
2014 
£m 
2013 
£m 
wages and salaries  7336 7384 
social security costs  1037 1048 
pension costs note 33  99 99 
sharebased payment note 8  31 31 
 8503 8562 
 2014 2013 
managerial and administrative  3869 3941 
operational  38058 38321 
 41927 42262 
 
2014 
£m 
2013 
£m 
basic salaries  10 10 
benefits  04 03 
performancerelated bonuses  14 14 
sharebased payment  11 10 
 39 37
 
number of 
share options 
2014 
number of 
share options 
2013 
exercise 
price 
future 
exercise 
periods 
executive share option plan  – 16286 – – 
long term incentive plan  10498399 nil 20152020 
share matching plan  360233 724494 nil 2015 
deferred annual share bonus plan  478820 846474 nil 2015 
wmt long service option scheme  258525 262171 129p599p 20152024 
executive deferred bonus plan 134598 142504 nil 2015 
 11295046 12490328   
10062870 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 112 additional information
strategic report corporate governance financial statements
 
 
113 wwwnationalexpressgroupcom
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
7 employee benefit costs continued 
b share schemes continued  
since 2011 hmrc approved share option plans were added as an appendix to the ltip ‘approved plan’ a participant can only hold 
an option under the approved plan over shares with a market value of up to £30000 at the grant date options under the approved plan 
are granted in tandem with the usual options under the ltip the options are structured such that on exercise the proportion of the gain 
in respect of the first £30000 worth of shares as measured at the date of grant will be delivered under the approved option and the 
ltip option shall be scaled back to deliver the remaining gross gain that would have been delivered had the option been granted alone 
the excess shares under the ltip will be forfeited such that both awards will never become fully vested 
since 2012 a supplementary fiveyear long term incentive award was granted to the chief executive subject to targets linked to the 
group’s fiveyear plan this comprised a performance award with no matching element if performance conditions are met the 
performance award will vest on the fifth anniversary of the grant date and remain exercisable for a period of up to twelve months 
following the vesting date there are no cash settlement alternatives at present 
iii share matching plan the ‘plan’  
the share matching plan was introduced in 2005 as part of the new ltip arrangements described in ii under the plan a matching award 
to acquire a specified number of shares for free may be made if the employee pledges a number of shares as investment shares which 
are then matched by the company on up to a 41 basis with the number of shares that could have been purchased with the grosstax 
equivalent of the amount invested the matching awards vest on the third anniversary of the grant date and remain exercisable for a period 
of up to six months following the vesting date there are no cash settlement alternatives at present  
iv deferred annual share bonus plan  
the deferred annual share bonus plan is a discretionary scheme which forms part of the bonus arrangements for certain senior 
employees under the scheme part of any bonus may be received in cash whilst the remainder is used to make an award of nil cost 
options which vest three years after the award date the options must be exercised within six months of vesting there are no cash 
settlement alternatives at present  
v west midlands travel ltd wmt long service option scheme  
the wmt long service option scheme utilises a fixed amount of shares set aside for this purpose following the acquisition of wmt in 1995 
and is open to all wmt employees who have been in service for more than 25 years the options are exercisable between three and ten 
years following the grant date there are no cash settlement alternatives  
vi twm share incentive plan the ‘sip’  
the twm sip exists for the benefit of wmt employees at the end of the year 1079 2013 1079 national express group plc shares 
were held for the benefit of the trustee dividends on shares held in the sip forfeited shares account are waived there are no cash 
settlement alternatives  
vii executive deferred bonus plan 
as detailed in the directors’ remuneration report the committee considered it appropriate for bonuses awarded in respect of the calendar 
year to be deferred for a period of one year and that these would vest subject to the terms of the award and the relevant director’s 
continuing employment the deferred forfeitable ordinary shares are awarded under the terms of the national express group executive 
deferred bonus plan which was adopted by the board of the company on 10 march 2009  
the principal terms of awards under the executive deferred bonus plan are summarised below 
• awards under the plan may be cash awards conditional awards or forfeitable shares awards 
• awards normally vest one year from the date of grant subject to the relevant director’s continued employment with the company 
• the committee may decide that participants shall be entitled to receive a benefit determined by reference to the value of the dividends 
that would have been paid on the vested shares in respect of dividend record dates occurring during the period between the grant date 
and the date of vesting and 
• the awards will normally lapse on cessation of employment save in certain compassionate ‘good leaver’ circumstances eg death  
or disability 
in the event of a variation of the share capital of the company the committee may make such adjustments to the awards as it 
considers appropriate 
113 wwwnationalexpressgroupcom
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114 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
8 sharebased payments 
the charge in respect of sharebased payment transactions included in the group’s income statement for the year is as follows 
there were exceptional costs included within the charge during the year of £07m 2013 £01m 
during the year ended 31 december 2014 the group had seven sharebased payment arrangements which are described in note 7b  
for the following disclosure share options with a nil exercise price have been disclosed separately to avoid distorting the weighted average 
exercise prices the number of share options in existence during the year was as follows 
the options outstanding at 31 december 2014 had exercise prices that were between 129p and 599p 2013 between 129p and 599p 
excluding options with a nil exercise price the range of exercise prices for options was as follows 
the options have a weighted average contractual life of one year 2013 one year options were exercised regularly throughout the year 
and the weighted average share price at exercise was 280p 2013 201p 
 
2014 
£m 
2013 
£m 
expense arising from share and share option plans – continuing operations  31 31 
  2014   2013 
 
number 
of share 
options 
weighted 
average 
exercise  
price  
p 
number 
of share 
options 
weighted 
average 
exercise
price
p 
options without a nil exercise price     
at 1 january  278457 380 319136 368 
granted during the year  31876 280 14840 252 
forfeited during the year  9120 354 5892 377 
exercised during the year 10721 192 10501 196 
expired during the year 31967 359 39126 276 
outstanding at 31 december 258525 379 278457 380 
exercisable at 31 december  188470 422 225895 411 
options with a nil exercise price     
at 1 january  12211871 nil 9528570 nil 
granted during the year  3985698 nil 5106185 nil 
forfeited during the year  1657616 nil 209721 nil 
exercised during the year  962147 nil 1426737 nil 
expired during the year 2541285 nil 786426 nil 
outstanding at 31 december  11036521 nil 12211871 nil 
exercisable at 31 december  58755 nil – nil 
total outstanding at 31 december  11295046  12490328  
total exercisable at 31 december  247225  225895  
exercise price p  2014 2013 
0350  118916 104166 
351650 139609 174291 
 258525 278457 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 114 additional information
strategic report corporate governance financial statements
 
 
115 wwwnationalexpressgroupcom
8 sharebased payments continued 
the weighted average fair value of the share options granted during the year was calculated using a stochastic model with the following 
assumptions and inputs 
experience to date has shown that approximately 24 2013 24 of options are exercised early principally due to leavers this has been 
incorporated into the calculation of the expected option life for the share options without nil exercise price 
expected volatility in the table above was determined from historical volatility over the last eight years adjusted for oneoff events that 
were not considered to be reflective of the volatility of the share price going forward the expected dividend yield represents the dividends 
declared in the 12 months preceding the date of the grant divided by the average share price in the month preceding the date of the grant 
for share options granted during the year under the ltip the tsr targets have been reflected in the calculation of the fair value of the  
options above 
9 net finance costs 
 
 share options without nil exercise pri ce share options with nil exercise price 
 2014 2013 2014 2013 
risk free interest rate 173 119 113181 035084 
expected volatility  300 381 300 292442 
peer group volatility  – – 280300 368443 
expected option life in years  5 years 7 years 35 years 35 years 
expected dividend yield  364 473 358 464488 
weighted average share price at grant date 275p 206p 280p 201p 
weighted average exercise price at grant date 280p 252p nil nil 
weighted average fair value of options at grant date 51p 32p 194p 128p 
 
2014 
 £m 
2013
£m 
bond and bank interest payable  475 502
finance lease interest payable  42 44
other interest payable  05 02
unwind of provision discounting  12 13
net interest cost on defined benefit pension obligations 11 05
finance costs  545 566
other financial income 65 68 
net finance costs  480 498
of which from financial instruments  
cash and cash equivalents  23 27
financial liabilities measured at amortised cost  467 487
derivatives used for hedging  58 59 
loan fee amortisation  21 24
115 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
116 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
10 taxation 
a analysis of taxation charge in the year 
b tax on items recognised in other comprehensive income or equity 
 
2014 
 £m 
2013
 £m 
current taxation 
 
 
charge on exchange movements offset in reserves  – 01
 – 01
deferred taxation   
deferred tax chargecredit on actuarial losses  23 37 
deferred tax credit on cash flow hedges  136 03 
deferred tax credit on foreign exchange differences 01 21 
deferred tax creditcharge on sharebased payments 10 01
 124 60 
 
 
2014 
 £m 
2013
 £m 
current taxation 
 
 
uk corporation tax  06 39 
overseas taxation  143 144 
current income tax charge  137 183 
adjustments with respect to prior years – uk and overseas 09 – 
total current income tax charge 146 183 
deferred taxation note 26   
origination and reversal of temporary differences – continuing operations  113 118
adjustments with respect to prior years – uk and overseas 26 04
deferred tax credit 87 122
total tax charge 59 61 
   
the tax charge is disclosed as follows   
tax charge on profit before intangible asset amortisation and exceptional items  277 325 
tax credit on intangible asset am ortisation and exceptional items  218 264
 59 61 
   
tax credit on intangible asset amortisation and exceptional items is analysed as follows   
tax credit on intangible asset amortisation 109 174
tax credit on exceptional items 109 68
tax credit on loss on disposal of business – 22
 218 264
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 116 additional information
strategic report corporate governance financial statements
 
 
117 wwwnationalexpressgroupcom
10 taxation continued 
c reconciliation of the total tax charge 
d temporary differences associated with group investments 
no deferred tax 2013 £nil is recognised on the unremitted earnings of subsidiaries associates and joint ventures as the group has 
determined that these undistributed profits will not be distributed in the near future as a result of changes to tax legislation in 2009 
overseas dividends received on or after 1 july 2009 are generally exempt from uk corporation tax but may be subject to withholding 
tax there are no temporary differences 2013 £nil associated with investments in subsidiaries associates and joint ventures for which 
a deferred tax liability has not been recognised but for which a tax liability may arise 
e unrecognised tax losses 
deferred income tax assets are recognised for tax loss carryforwards to the extent that the realisation of the related tax benefit against 
future taxable profits is probable uk and overseas deferred tax assets that the group has not recognised in the financial statements 
amount to £187m 2013 £111m which arise in tax jurisdictions where the group does not expect to generate sufficient suitable future 
taxable profits in addition there are capital losses of £11m 2013 £31m which have not been recognised recoverability of which is 
dependent on capital gains arising  
the £11m 2013 £31m of unrecognised capital losses will expire at various dates from 2015 through to 2018 as follows 
f deferred tax included in the income statement 
details on the balance sheet position of deferred tax are included in note 26 
g factors that may affect future tax charges 
on 21 march 2012 the uk chancellor of the exchequer announced a 1 reduction in the uk corporation tax rate to 24 effective from  
1 april 2012 along with two subsequent reductions to 23 from 1 april 2013 and 22 from 1 april 2014 on 20 march 2013 in the 
chancellor’s 2013 budget statement further reductions to 21 on 1 april 2014 and 20 on 1
 
april 2015 were announced 
at the balance sheet date a rate of 20 2013 21 was substantively enacted the change in rate from 21 to 20 has resulted in 
a tax charge of £03m to the income statement 
in june 2014 the spanish government announced a tax rate reduction from 30 to 28 during 2015 and then from 28 to 25 in 2016 
at the balance sheet date a rate of 28 was recognised the change in rate from 30 to 28 has resulted in a £27m credit to the 
income statement 
 
 
2014 
£m 
2013 
£m 
profit before income tax  665 644 
notional charge at uk corporation tax rate of 2150 2013 2325  143 150 
nondeductible goodwill impairment and intangible amortisation  10 18 
recognition of a deferred tax asset for previously unrecognised tax losses  05 01
effect of reduction in tax rates note 10g 49 01
prior year adjustments within current and deferred tax  35 04
european reinvestment relief and other tax credits 23 12
effect of overseas tax rates  94 52 
tax on european goodwill and intangibles  53 61
overseas financing deductions 78 68
nondeductible expenditure  05 12
total tax charge reported in the income statement note 10a  59 61 
 £m 
2015 08 
2016 01 
2017 01 
2018 01 
 11 
 
2014 
£m 
2013 
£m 
accelerated capital allowances  111 68
other short term temporary differences 04 110
utilisation of losses  28 56 
deferred tax credit 87 122
117 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
118 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
 
11 dividends paid and proposed 
12 earnings per share 
basic earnings per share is calculated by dividing the earnings attributable to equity shareholders of £591m 2013 £568m by the 
weighted average number of ordinary shares in issue during the year excluding those held by the group’s employee benefit trust note 31 
which are treated as cancelled 
for diluted earnings per share the weighted average number of ordinary shares in issue during the year is adjusted to include the weighted 
average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares 
the reconciliation of basic and diluted weighted average number of ordinary shares is as follows 
the normalised basic and normalised diluted earnings per share have been calculated in addition to the basic and diluted earnings  
per share required by ias 33 since in the opinion of the directors they reflect the underlying performance of the business’ operations  
more appropriately 
the reconciliation of the earnings and earnings per share to their normalised equivalent is as follows 
 
 
2014 
£m 
2013 
£m 
declared and paid during the year   
ordinary final dividend for 2013 paid of 675p per share 2012 660p  345 337 
ordinary interim dividend for 2014 of 335p per share 2013 325p 171 166 
 516 503 
proposed for approval not recognised as a liability at 31 december 
 
 
ordinary final dividend for 2014 of 695p per share 2013 675p per share  355 345 
 2014 2013 
basic earnings per share 116p 111p 
normalised basic earnings per share  227p 215p 
diluted earnings per share  115p 111p 
normalised diluted earnings per share  227p 214p 
 2014 2013 
basic weighted average shares  511125312 511114989 
adjustment for dilutive potential ordinary shares  970374 1425106 
diluted weighted average shares  512095686 512540095 
   2014   2013 
 £m 
basic eps 
p 
diluted eps 
p £m 
basic eps 
p 
diluted eps 
p 
profit attributable to equity shareholders  591 116 115 568 111 111 
intangible amortisation  286 56 56 493 97 96 
exceptional items  503 98 98 257 50 50 
loss on disposal of business – – – 43 08 08 
tax relief on the above items  218 43 42 264 51 51
normalised profit from continuing operations  
and attributable to equity shareholders 1162 227 227 1097 215 214 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 118 additional information
strategic report corporate governance financial statements
 
 
119 wwwnationalexpressgroupcom
13 intangible assets  
 
 
customer 
contracts  
£m 
 
brand 
£m 
software 
£m 
contract 
mobilisation 
costs
£m 
total finite 
life assets  
£m 
goodwill 
£m 
total 
£m 
cost        
at 1 january 2014  5252 23 330 – 5605 11271 16876 
acquisitions 42 – – – 42 16 58 
additions 07 – 60 16 83 10 93 
reclassifications 40 23 73 – 90 – 90 
disposals – – 05 – 05 – 05
foreign exchange  210 – 12 – 198 345 543
at 31 december 2014  5131 – 470 16 5617 10952 16569 
amortisation and impairment        
at 1 january 2014  3601 08 190 – 3799 842 4641 
charge for year  227 – 59 – 286 – 286 
disposals – – 05 – 05 – 05
reclassifications 16 08 72 – 80 – 80 
foreign exchange  192 – 08 – 184 23 207
at 31 december 2014 3652 – 324 – 3976 819 4795 
net book value        
at 31 december 2014  1479 – 146 16 1641 10133 11774 
at 1 january 2014  1651 15 140 – 1806 10429 12235 
119 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
120 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
13 intangible assets continued 
goodwill has been allocated to individual cashgenerating units for annual impairment testing on the basis of the group’s business 
operations the carrying value by cashgenerating unit is as follows 
the recoverable amount of indefinite life intangible assets has been determined based on a value in use calculation using cash flow projections 
based on financial budgets and forecasts approved by senior mana gement covering a fiveyear period the assumptions including growth rates 
and operating margins are based on historical experience and detailed budget plans as well as management’s assessment of curre nt market and 
economic conditions growth has then been extrap olated forward from the end of the forecasts 
 
 
customer 
contracts 
£m 
 
brand 
£m 
software 
£m 
total finite  
life assets  
£m 
goodwill 
£m 
total 
£m 
cost       
at 1 january 2013  5188 23 319 5530 11213 16743 
acquisitions 37 – – 37 39 76 
additions 35 – 34 69 34 35 
transfer to property plant  
and equipment 
33 – 02 35 33 02
disposals – – 03 03 – 03
companies divested 22 – 04 26 36 62
foreign exchange  47 – 14 33 56 89 
at 31 december 2013  5252 23 330 5605 11271 16876 
amortisation and impairment       
at 1 january 2013  3120 03 157 3280 834 4114 
charge for year  443 05 45 493 – 493 
disposals – – 01 01 – 01
companies divested 02 – 02 04 – 04
transfer to property plant  
and equipment 
– – 01 01 – 01
foreign exchange  40 – 08 32 08 40 
at 31 december 2013 3601 08 190 3799 842 4641 
net book value       
at 31 december 2013  1651 15 140 1806 10429 12235 
at 1 january 2013  2068 20 162 2250 10379 12629 
     
2014 
£m 
2013
£m 
uk coach     132 132 
north american bus      3350 3199 
spanish coach and bus     6651 7098 
     10133 10429 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 120 additional information
strategic report corporate governance financial statements
 
 
121 wwwnationalexpressgroupcom
13 intangible assets continued 
the calculation of value in use for each group of cashgenerating units is most sensitive to the assumptions over discount rates and the 
growth rate used to extrapolate cash flows beyond the threeyear period of the management plan  
the key assumptions used for the cashgenerating units are as follows 
the value in use of the north american bus division exceeds its carrying amount by £1694m 2013 £1611m sensitivity analysis has 
been completed on each key assumption in isolation and this indicates that the value in use of the division will be equal to its carrying 
amount following an increase in the pretax discount rate of 140 basis points 2013 150 basis points or a reduction in the growth rates 
used to extrapolate cash flows beyond the threeyear period of the management plan of 160 basis points 2013 150 basis points  
the value in use of the spanish coach and bus division exceeds its carrying amount by £1071m 2013 £2129m sensitivity analysis 
has been completed on each key assumption in isolation and this indicates that the value in use of the division will be equal to its carrying 
amount following an increase in the pretax discount rate of 70 basis points 2013 140 basis points or a reduction in growth rates used 
to extrapolate cash flows beyond the threeyear period of the management plan of 70 basis points 2013 150 basis points  
the headroom has decreased for spanish coach and bus reflecting a cautious approach in forecasting revenue and profit based on 
an assessment of the bidding and contract renewal environment and the response to increased levels of competition north america 
has improved headroom as an increase in the asset base is more than offset by future profit projections 
it is believed that any reasonably possible movement on key assumptions will not lead to an impairment of goodwill allocated to uk coach 
sensitivities to other assumptions 
in north american bus a reduction in operating profit margin of 160 basis points 2013 170 basis points will result in the value in use 
of the division being equal to its carrying amount in spanish coach and bus a reduction in operating profit margin of 110 basis points 
2013 200 basis points will also result in the value in use of the division being equal to its carrying amount 
the directors consider the assumptions used to be consistent with the historical performance of each cashgenerating unit and to be 
realistically achievable in light of economic and industry measures and forecasts 
 
pretax discount 
 rate applied to  
cash flow projections 
growth rate used to 
extrapolate cash flows 
beyond fiveyear period of 
management plan 
 2014  2013  2014  2013 
uk coach 85 94 20 20 
north american bus  86 91 25 25 
spanish coach and bus 85 86 20 20 
121 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
 
122 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
14 property plant and equipment 
 
freehold land 
and buildings 
£m 
long 
leasehold 
property 
improvements 
£m 
public service 
vehicles  
£m 
plant and 
equipment 
fixtures 
and fittings 
£m 
total 
£m 
cost      
at 1 january 2014  1008 48 11785 1741 14582 
additions  22 04 838 128 992 
acquisitions  – – 15 – 15 
disposals  19 04 212 62 297
reclassifications – 01 02 94 93
foreign exchange  44 04 51 24 13
at 31 december 2014  967 51 12479 1689 15186 
depreciation 
     
at 1 january 2014 172 27 5479 1390 7068 
charge for the year  24 07 916 102 1049 
disposals 10 04 105 48 167
reclassifications 01 01 04 70 74
foreign exchange  04 03 32 20 11 
at 31 december 2014  181 34 6318 1354 7887 
net book value 
     
at 31 december 2014  786 17 6161 335 7299 
at 1 january 2014 836 21 6306 351 7514 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 122 additional information
strategic report corporate governance financial statements
 
 
 
123 wwwnationalexpressgroupcom
14 property plant and equipment continued 
property plant and equipment held under finance lease agreements are analysed as follows 
finance leased assets and assets under hire purchase contracts are pledged as security for the related finance lease and hire 
purchase liabilities 
freehold land 
and buildings 
£m 
long 
leasehold 
property 
improvements 
£m 
public service 
vehicles  
£m 
plant and 
equipment 
fixtures 
and fittings 
£m 
total 
£m 
cost      
at 1 january 2013  985 41 11399 1643 14068 
additions  22 09 700 117 848 
acquisitions  – – 25 – 25 
disposals  13 – 206 22 241
companies divested – – 06 – 06
transfer from intangible assets – – – 02 02 
foreign exchange  14 02 127 01 114
at 31 december 2013  1008 48 11785 1741 14582 
depreciation 
     
at 1 january 2013 154 23 4736 1281 6194 
charge for the year  25 07 917 125 1074 
disposals 07 – 90 17 114
companies divested – – 03 – 03
transfer from intangible assets – – – 01 01 
foreign exchange  – 03 81 – 84
at 31 december 2013  172 27 5479 1390 7068 
net book value 
     
at 31 december 2013  836 21 6306 351 7514 
at 1 january 2013 831 18 6663 362 7874 
  
2014 
£m 
2013
£m 
long leasehold property  – cost – 08 
 – depreciation – – 
net long leasehold property   – 08 
public service vehicles  – cost  2575 2565 
 – depreciation 1026 852
net public service vehicles   1549 1713 
plant and equipment  – cost  – 02 
 – depreciation  – 01
net plant and equipment   – 01 
total net book value   1549 1722 
123 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
124 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
15 subsidiaries 
the companies listed below include all those which principally affect the results and net assets of the group a full list of subsidiaries joint 
ventures and associates will be annexed to the next annual return to companies house the principal country of operation in respect of 
the companies below is the country in which they are incorporated 
national express group plc is the beneficial owner of all the equity share capital either itself or through subsidiaries of the companies 
the group’s train passenger services in the uk are operated through franchises awarded by dft rail as delegated by the uk government 
incorporated in england and wales  
national express limited  administration and marketing of express coach services in great britain 
eurolines uk limited  administration and marketing of express coach services to europe 
airlinks airport services limited  operation of coach services 
the kings ferry limited operation of coach services 
west midlands travel limited  operation of bus services 
nxet trains limited operation of train passenger services 
 
incorporated in scotland  
tayside public transport co limited trading as travel dundee operation of bus services 
 
incorporated in the us  
durham school services lp  operation of school bus services 
petermann llc operation of school bus services 
national express transit corporation operation of transit bus services 
national express transit services corporation  operation of transit bus services  
 
incorporated in canada  
stock transportation limited  operation of school bus services 
 
 
 the main holding companies of the alsa group 
the group has no material noncontrolling interests that require separate disclosure 
incorporated in spain  
nex continental holdings sl holding company for operating companies 
tury express sa  holding company for operating companies 
general tecnica industrial slu  holding company for operating companies 
incorporated in morocco  
gat groupe alsa transport sa marrakech operation of bus services 
tvam transport de voyageurs en autocar maroc s a marrakech 
alsa tanger sa 
operation of bus services 
operation of bus services 
aca alsa city agadir sa  operation of bus services 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 124 additional information
strategic report corporate governance financial statements
 
 
125 wwwnationalexpressgroupcom
16 derivative financial assets and available for sale investments 
further information on the group’s use of fuel interest rate and foreign exchange derivatives is included in note 30 
available for sale investments 
the principal available for sale investments are as follows 
 
 
2014 
£m 
2013 
£m 
available for sale investments – unlisted ordinary shares  68 74 
derivative financial instruments – interest rate derivatives 265 176 
derivative financial instruments – fuel derivatives – 09 
derivative financial instruments included in noncurrent assets  265 185 
derivative financial instruments – fuel derivatives  – 09 
derivative financial instruments – foreign exchange derivatives 15 22 
derivative financial instruments included in current assets  15 31 
 
2014 
 £m 
2013
 £m 
cost or valuation and net book value   
at 1 january  74 71 
additions – 01 
provided in the year 01 – 
foreign exchange 05 02 
at 31 december  68 74 
   2014 
proportion 
held 
 
2013 
proportion 
held 
 name  country of registration class of share 
metros ligeros de madrid sa mlm  spain ordinary shares  15 15 
various investments within alsa and continental auto  spain ordinary shares  116 116 
125 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
126 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
17 investments accounted for using the equity method 
investments accounted for using the equity method are as follows 
the group’s share of posttax results from associates and joint ventures accounted for using the equity method is as follows 
a investments in joint ventures 
the group’s interests in joint ventures are as follows 
during the year the group formed a joint venture entity bahrain public transport company wll to operate a tenyear bus services 
contract in the kingdom of bahrain commencing in 2015 the group’s share of the investment in the joint venture at year end was £02m 
the financial information of iberoeurosur sl is summarised below 
a reconciliation of the above summarised financial information to the carrying amount in the consolidated financial statements is as follows 
 
 
2014 
£m 
2013 
£m 
joint ventures  27 24 
associates  27 27 
total investments accounted for under the equity method  54 51 
 
2014 
£m 
2013
£m 
share of joint ventures’ profit 02 02 
share of associates’ profit 01 04 
total share of results from associates and joint ventures 03 06 
name  country of registration activity 
proportion held 
 
iberoeurosur sl  spain holding company of deutsche touring 20 
bahrain public transport company wll kingdom of bahrain operation of bus services 50 
 iberoeurosur sl 
share of the joint venture’s balance sheet and results 
2014 
£m 
2013 
£m 
noncurrent assets  33 35 
current assets  – 01 
share of gross assets 33 36 
noncurrent liabilities  05 07
current liabilities  03 05
share of gross liabilities  08 12
net assets  25 24 
   
revenue 02 03 
operating profit 02 02 
profit for the year and total comprehensive income 02 02 
   
dividends received from the joint venture during the year – – 
 iberoeurosur sl 
 
2014 
£m 
2013 
£m 
net assets of the joint venture 123 121 
proportion of interest belonging to joint venture partners  98 97
group share of net assets 25 24 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 126 additional information
strategic report corporate governance financial statements
 
 
127 wwwnationalexpressgroupcom
17 investments accounted for using the equity method continued 
b investments in associates 
the group’s interests in associates are as follows 
spanish coach and bus’s associates are generally involved in the operation of coach and bus services management of bus stations  
and similar operations 
the aggregate amounts related to associates of which none are individually material are summarised below 
the carrying amount of the investment in associates matches the group’s share of the net assets 
18 business combinations 
a acquisitions 
on 28 february 2014 in the united states the group acquired certain trade and assets of atlantic express transportation corp and its 
subsidiaries which operates school bus transportation services in the city of philadelphia the fair value of net assets acquired was £36m 
consideration was £52m resulting in provisional goodwill of £16m there was £nil cash acquired in the business therefore the net cash 
outflow for the group was £52m 
there were no other material acquisitions during 2014 
in 2013 the group acquired a number of small school bus businesses in north america details of these acquisitions are disclosed in the 
group’s 2013 annual report and accounts no changes were made to the fair values during 2014 
deferred consideration of £05m 2013 £37m was paid in the year relating to acquisitions in north america in earlier years 
b disposals 
there were no material business disposals during 2014 
on 23 august 2013 the group disposed of ycn transportation inc which provided special education transportation services to certain 
school districts in the state of massachusetts the loss incurred on disposal was £43m further details are disclosed in the group’s 2013 
annual report and accounts 
19 noncurrent assets – trade and other receivables 
20 inventories 
the movement on the provision for slow moving and obsolete inventory is immaterial 
name   country of registration  proportion held  
spanish coach and bus associates  spain  2050 
 
2014 
£m 
2013 
£m 
share of operating profit 01 04 
share of profit for the year and total comprehensive income 01 04 
group share of net assets 27 27 
 
2014 
£m 
2013
£m 
trade receivables – 11 
prepayments 01 08 
other receivables 17 27 
 18 46 
 
2014 
£m 
2013
£m 
raw materials and consumables  218 212 
127 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
128 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
21 current assets – trade and other receivables 
an analysis of the provision for impairment of receivables is provided below 
amounts included within trade receivables which are past due at the reporting date are shown in note 29 the directors believe that based 
on the ongoing contractual relationships with predominantly government bodies these amounts will be collected 
22 cash and cash equivalents 
cash and cash equivalents include restricted balances of £28m 2013 £29m held by the rail subsidiaries tocs under the terms of the 
train franchise agreements cash can only be distributed by the tocs either up to the value of retained profits or the amount determined by 
prescribed liquidity ratios the restricted cash represents the balance that is either not available for distribution or the amount required to 
satisfy the liquidity ratio at the balance sheet date 
cash at bank and in hand earns interest at floating rates based on daily bank deposit rates short term deposits are made for varying 
periods of between one day and three months depending on the immediate cash requirements of the group and earn interest at the agreed 
short term floating deposit rate the fair value of cash and cash equivalents is equal to the carrying value 
23 current liabilities – trade and other payables 
trade payables are noninterest bearing and are normally settled on 30 day terms and other payables are noninterest bearing and have 
an average term of two months included within other payables are deferred fixed asset grants from government or other public bodies 
of £11m 2013 £09m 
 
2014 
£m 
2013 
£m 
trade receivables  1168 1103 
less provision for impairment of receivables  112 113
trade receivables – net  1056 990 
amounts due from associates and joint ventures note 35 12 11 
amounts due from other related parties note 35 07 10 
other receivables  562 344 
prepayments 237 184 
accrued income 122 160 
 1996 1699 
 
2014 
£m 
2013 
£m 
at 1 january  113 101
utilisedprovided in the year  01 12
at 31 december 112 113
 
2014 
£m 
2013 
£m 
cash at bank and in hand  363 377 
overnight deposits  69 – 
other short term deposits  405 32 
cash and cash equivalents  837 409 
 
2014 
£m 
2013 
£m 
trade payables  1442 1297 
amounts owed to associates and joint ventures note 35 09 08 
amounts owed to other related parties note 35 07 09 
other tax and social security payable  274 268 
accruals and deferred income  1156 1129 
other payables  1269 805 
 4157 3516 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 128 additional information
strategic report corporate governance financial statements
 
 
129 wwwnationalexpressgroupcom
24 other noncurrent liabilities 
25 provisions 
1
 the claims provision arises from estimated exposures at the year end for auto and general liability workers’ compensation and environmental 
claims the majority of which will be utilised in the next five years it comprises provisions for claims arising in the uk and north america 
2
 other includes amounts provided for restructuring activities across the group loss making contracts and dilapidation provisions in rail 
when the effect is material the provisions are discounted to their net present value 
26 deferred tax 
based on current capital investment plans the group expects to be able to claim capital allowances in excess of depreciation  
in future years at a similar level to the current year 
deferred tax assets and liabilities within the same jurisdiction have been offset 
 
2014 
£m 
2013
£m 
deferred fixed asset grants 34 47 
other liabilities 07 18 
 41 65 
  
claims 
provision
1
 
£m 
other
2
£m 
total 
£m 
at 1 january 2014   450 44 494 
charged to the income statement   224 174 398 
utilised in the year  325 24 349
unwinding of discount   12 – 12 
acquired in business combinations  19 – 19 
exchange difference   13 01 14 
at 31 december 2014   393 195 588 
current 31 december 2014  232 121 353 
noncurrent 31 december 2014   161 74 235 
  393 195 588 
current 31 december 2013   236 44 280 
noncurrent 31 december 2013  214 – 214 
  450 44 494 
 
2014 
£m 
2013 
£m 
net deferred tax liability at 1 january 584 770
credit to income statement  87 122 
credit to other comprehensive income or equity 124 61 
exchange differences  03 04
acquired in business combinations 09 07 
net deferred tax liability at 31 december 361 584
129 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
130 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
26 deferred tax continued 
deferred tax assets 
2014 
£m 
2013
£m 
accelerated tax depreciation 39 07 
losses carried forward  64 89 
other short term temporary differences  196 71 
total  299 167 
 
27 borrowings and derivative financial liabilities 
an analysis of interestbearing loans and borrowings is provided in note 28 further information on derivative financial instruments 
is provided in note 30 
deferred tax liabilities 
2014 
£m 
2013
£m 
accelerated tax depreciation  1500 1585
losses carried forward  421 364 
other short term temporary differences 419 470 
total 660 751
 
2014 
£m 
2013
£m 
noncurrent   
bank loans  26 52 
bonds 5853 5795 
finance lease obligations 876 1007 
other debt payable  663 653 
noncurrent borrowings  7418 7507 
fuel derivatives  361 11 
interest rate derivatives – 05 
noncurrent derivative financial instruments  361 16 
noncurrent borrowings and derivative financial liabilities  7779 7523 
current   
bank loans  26 141 
bonds – accrued interest 292 292 
finance lease obligations  229 322 
other debt payable  12 13 
current borrowings  559 768 
fuel derivatives 352 15 
foreign exchange derivatives  06 04 
current derivative financial instruments  358 19 
current borrowings and derivative financial liabilities  917 787 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 130 additional information
strategic report corporate governance financial statements
 
 
131 wwwnationalexpressgroupcom
28 interestbearing borrowings 
the effective interest rates on loans and borrowings at the balance sheet date were as follows 
1
 this date is the ultimate maturity date of the syndicated credit facility there was £nil drawn down at year end 
in november 2014 the group amended and extended its committed unsecured revolving bank facility increasing it from a £410m to 
a £416m facility with an extension from july 2018 to november 2019 the group amended the facility in order to take advantage of 
favourable movements in bank loan margins and fees at 31 december 2014 there was €nil 2013 €20m drawn down on the facility 
with £34m of capitalised deal fees remaining 
under the terms of the £1bn emtn programme there is a change in control put option such that upon a change of control event  
any holder of any mtn may require the company to redeem or purchase that mtn 
details of the group’s interest rate risk management strategy and associated interest rate derivatives are included in notes 29 and 30 
the group is subject to a number of financial covenants in relation to its syndicated credit facilities which if contravened could result  
in its borrowings under the facility becoming immediately repayable these covenants specify maximum net debt to ebitda and minimum 
ebitda to net interest payable 
 
2014  
£m  maturity 
effective
 interest rate 
2013
£m maturity  
effective 
interest rate 
sevenyear sterling bond 3530 january 2017 654 3520 january 2017 654 
tenyear sterling bond 2323 january 2020 685 2275 june 2020 685 
bonds 5853   5795   
accrued interest – bonds 292   292   
european bank loans – november 2019
1
libor  060 130 july 2018 libor  110 
european bank loans 36 20152016 425 57 20142016 508 
european bank loans  30 20152017 euribor  191 06 20142016 euribor  287 
us bank loans 20  115 –  – 
bank loans  86   193   
us dollar finance leases  
at fixed rate  931 20152020 204 1124 20142020 221 
european finance leases  
at fixed rate 20 20152017 541 42 20142017 568 
european finance leases  
at floating rate  52 20152022 euribor  106 31 20142017 euribor  131 
sterling finance leases  
at fixed rate  102 20152018 561 132 20142018 476 
finance leases  1105   1329   
euro private placement 656 august 2021 455 645 august 2021 455 
accrued interest – private placement 11   11   
euro loans  08 2026  10 20142017  
other debt payable  675   666   
total  8011   8275   
131 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
132 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
28 interestbearing borrowings continued 
the following table sets out the carrying amount by maturity of the group’s interestbearing borrowings and deposits 
as at 31 december 2014 
 1 year  
£m 
12 years 
£m 
23 years 
£m 
34 years 
£m 
45 years  
£m 
 5 years 
£m 
total 
£m 
fixed rate        
bank loans 30 05 – – – – 35
bonds – – 3530 – – 2323 5853
finance leases  211 198 335 185 108 15 1052
other debt payable 12 01 05 – – 657 675
floating rate   
cash assets  837 – – – – – 837 
bank loans 04 – 21 – – – 17
finance leases 18 12 09 04 04 06 53
 
29 financial risk management objectives and policies 
financial risk factors and management 
the group’s multinational operations and debt levels expose it to a variety of financial risks of which the most material are market risks 
relating to fuel prices foreign currency exchange rates interest rates and the availability of funding at reasonable margins the group has 
in place a risk management programme that seeks to manage the impact of these risks on the financial performance of the group by using 
financial instruments including borrowings committed facilities and forward foreign exchange fuel and interest rate derivatives 
the board of directors has delegated the responsibility for implementing the financial risk management policies laid down by the board  
to the group finance director and the director of capital markets the policies are implemented by the group treasury department with 
regular reporting to the group finance director and the audit committee on its activities 
as at 31 december 2013 
 1 year  
£m 
12 years 
£m 
23 years 
£m 
34 years 
£m 
45 years  
£m 
 5 years 
£m 
total 
£m 
fixed rate        
bank loans 09 47 01 – – – 57
bonds – – – 3520 – 2275 5795
finance leases  310 203 187 312 172 114 1298
other debt payable 13 01 02 02 01 647 666
floating rate        
cash assets  409 – – – – – 409 
bank loans  132 03 01 – – – 136
finance leases 12 12 05 02 – – 31
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 132 additional information
strategic report corporate governance financial statements
 
 
133 wwwnationalexpressgroupcom
29 financial risk management objectives and policies continued 
foreign currency 
the group has major foreign operations in the us canada and spain and as a result is exposed to the movements in foreign currency 
exchange rates on the translation of these foreign currency denominated net assets and earnings these movements can have a significant 
impact on the group’s reported results the group seeks to manage this foreign currency exchange movements risk by aligning its foreign 
currency denominated liabilities with the ebit generated in each currency such that some protection is afforded to the net debt ebitda 
covenant within the group’s core borrowing facility this is achieved by a combination of foreign currency borrowings and finance leases 
and entering into derivative financial instruments such as interest rate swaps and foreign exchange swaps at the year end the group had 
outstanding foreign exchange derivatives of €1700m and us1300m swaps of us730m €790m and c353m and finance leases of 
us1449m and €93m 
derivative financial instruments are designated as net investment hedges of foreign currency assets the effective portion of the gain or loss 
on the hedge is recognised in the group statement of comprehensive income and recycled to the income statement at the same time as 
the underlying hedged net assets affect the income statement any material ineffectiveness is taken to the income statement 
the table below demonstrates the sensitivity of the group’s financial instruments to a reasonably possible change in foreign exchange  
rates with all other variables held constant this would affect the group’s profit before tax and translation reserve the effect on the 
translation reserve represents the movement in the translated value of the foreign currency denominated loans and change in fair value  
of crosscurrency swap contracts these movements would be offset by an opposite movement in the translated value of the group’s 
overseas net investments it is estimated that a 10 change in the corresponding exchange rates would result in an exchange gain  
or loss in the translation reserve of £76m 
interest rate risk 
the group is exposed to movements in interest rates on both interestbearing assets and liabilities it is the group’s policy to maintain an 
appropriate balance between fixed and floating interest rates on borrowings in order to provide a level of certainty to interest expense in the 
short term and to reduce the year on year impact of interest rate fluctuations over the medium term to achieve the desired fixedfloating 
ratio the group has entered into a series of interest rate swaps that have the effect of converting fixed rate debt to floating rate debt the 
net effect of these transactions was that as at 31 december 2014 the proportion of group net debt at floating rates was 28 2013 33  
the following table demonstrates the sensitivity of the group’s financial instruments to a reasonably possible change in interest rates 
with all other variables held constant on the group’s profit before tax and on the group’s hedging reserve  
the sensitivity analysis covers all floating rate financial instruments including the interest rate swaps if the interest rates applicable 
to floating rate instruments denominated in sterling were increased by 100bps it is estimated that the group’s profit before taxation 
would decrease by approximately £14m if the interest rates applicable to floating rate instruments denominated in us were increased 
by 50bps it is estimated that the group’s profit before taxation would remain unchanged if the interest rates applicable to floating rate 
instruments denominated in euro were increased by 75bps it is estimated that the group’s profit before taxation would reduce by £04m 
the analysis assumes that the amount and mix of floating rate debt including finance leases remains unchanged from that in place at 
31 december 2014 
   2014   2013 
as at 31 december 
strengthening
weakening
 in currency 
effect 
on profit
 before tax 
£m 
effect on 
translation  
reserve  
£m 
effect 
on profit 
before tax 
£m 
effect on 
translation 
reserve 
£m 
us dollar  10 – 02 – 26
euro  10 – 77 01 59 
canadian dollar  10 03 01 02 02 
us dollar 10 – 02 – 26 
euro  10 – 77 01 59
canadian dollar  10 03 01 02 02
133 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
134 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
29 financial risk management objectives and policies continued 
interest rate risk continued 
commodity prices 
the group is exposed to movements in commodity prices as a result of its fuel usage it is the group’s policy to hedge this exposure  
in order to provide a level of certainty as to its cost in the short term and to reduce the year on year impact of price fluctuations over the 
medium term this is achieved by entering into fuel derivatives at 31 december 2014 the group had hedged approximately 100 of  
its 2015 expected usage 96 of its expected usage in 2016 and 81 of its expected usage in 2017 see the group finance director’s 
review for further details  
the table below demonstrates the effect of a reasonably possible variation in fuel prices with all other variables held constant on the fair 
value of the group’s financial instruments and accordingly on the group’s profit before tax and on the group’s hedging reserve 
the sensitivity analysis includes all fuel derivatives the effect on the hedging reserve arises through movements on the fair value of the 
group’s fuel derivatives for these derivative contracts the sensitivity of the net fair value to an immediate 20 increase or decrease 
in all prices would have been £389m at 31 december 2014 the figure does not include any corresponding economic advantage or 
disadvantage that would arise from the natural business exposure which would be expected to offset the gain or loss on the derivatives 
credit risk 
the maximum credit risk exposure of the group is the gross carrying value of each of its financial assets this risk is mitigated by a number 
of factors many of the group’s principal customers suppliers and financial institutions with which it conducts business are public or quasi
public bodies both national dft rail and network rail in the uk and local school boards in north america municipal authorities in spain 
and morocco transport for london and centro in the uk the group does not consider these counterparties to pose a significant credit 
risk outside of this the group does not consider it has significant concentrations of credit risk the group has implemented policies that 
require appropriate credit checks on potential customers before sales commence 
the only elements of the group’s financial assets which are not impaired but are past due are certain trade receivable items an ageing  
of the assets which are past due is included in the following table in terms of trade receivables that are neither impaired nor past due there 
are no indications as at the year end reporting date that the debtors will not meet their payment obligations see risk and risk management 
section for details of how management manages this process 
   2014  2013 
as at 31 december 
increase
decrease 
in basis
points 
effect 
on profit 
before tax
 £m 
effect on 
hedging  
reserve 
 £m 
effect 
on profit 
before tax 
 £m 
effect on 
hedging 
reserve 
£m 
sterling  100 14 – 18 – 
us dollar 50 – – – – 
euro  75 04 – 05 – 
sterling  100 14 – 18 – 
us dollar  50 – – – – 
euro  75 04 – 05 – 
   2014  2013 
as at 31 december 
increase
decrease
 in price 
effect 
on profit 
before tax 
£m 
effect on  
hedging  
reserve  
£m 
effect
on profit 
before tax 
£m 
effect on 
hedging 
reserve 
£m 
sterling denominated ulsd  20 – 141 – 158 
us dollar denominated heating oildiesel  20 – 96 – 86 
euro denominated ulsd  20 – 152 – 168 
sterling denominated ulsd  20 – 141 – 158
us dollar denominated heating oildiesel  20 – 96 – 86 
euro denominated ulsd  20 – 152 – 168
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 134 additional information
strategic report corporate governance financial statements
 
 
135 wwwnationalexpressgroupcom
29 financial risk management objectives and policies continued 
credit risk continued 
liquidity risk 
the group’s liquidity risk is managed centrally by the group treasury department with operating units forecasting their cash requirements 
the group actively maintains a mixture of long term and medium term committed facilities that are designed to ensure the group has 
sufficient available funds to meet current and forecast funding requirements in managing the liquidity risk the group has access to a range 
of funding sources through the banking and capital markets  
in november 2014 the group amended its committed unsecured revolving bank facility increasing it from a £410m to a £416m facility 
with an extension of maturity from july 2018 to november 2019 the group amended the facility in order to take advantage of favourable 
movements in bank loan margins and fees at 31 december 2014 £416m of this facility remained unused 2013 £3934m 
at 31 december 2014 the group had committed bank borrowing and finance lease facilities of £5265m 2013 £5429m  
the table below summarises the maturity profile of the group’s financial liabilities at 31 december 2014 based on the contractual 
undiscounted cash flows including interest cash flows as such the amounts in this table will not agree to the carrying amounts disclosed 
in the balance sheet or other notes the table includes cash flows associated with derivative hedging instruments their amounts reflect 
the maturity profile of the fair value liability where the instrument will be settled net and the gross settlement amount where the pay leg 
of a derivative will be settled separately to the receive leg 
year ended 31 december 2014 
on demand 
£m 
less than 
1 year 
£m 
15 years  
£m 
 5 years 
£m 
total 
£m 
bank loans  – 59 28 – 87 
bonds – 368 4534 2399 7301 
finance lease obligations  – 264 938 20 1222 
other debt payable – 29 111 717 857 
trade and other payables  – 4146 07 – 4153 
 – 4866 5618 3136 13620 
foreign exchange derivatives – 09 – – 09 
interest rate derivatives – 58 163 50 271
fuel derivatives – 334 376 – 710 
 – 285 213 50 448 
 
year ended 31 december 2013 
on demand 
£m 
less than 
1 year 
£m 
15 years  
£m 
 5 years 
£m 
total 
£m 
bank loans  – 180 50 – 230 
bonds – 368 4753 2548 7669 
finance lease obligations  – 367 1018 115 1500 
other debt payable – 40 119 734 893 
trade and other payables  – 3507 18 – 3525 
 – 4462 5958 3397 13817 
foreign exchange derivatives – 18 – – 18 
interest rate derivatives – 60 108 06 174
fuel derivatives – 06 19 – 25
 – 48 127 06 181
   of which not impaired and past due in the following periods 
 
carrying 
amount 
£m 
of which 
neither 
impaired 
nor past due 
£m 
less than 
30 days 
£m 
between  
30 and 60 days  
£m 
between 
61 and 90 days 
 £m 
over 90 days
 £m 
trade receivables at 31 december 2014  1056 793 112 47 25 79 
trade receivables at 31 december 2013  1001 602 171 75 35 118 
135 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
136 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
29 financial risk management objectives and policies continued 
capital risk management 
the group seeks to adopt efficient financing structures that enable it to use its balance sheet strength to achieve the group’s objectives 
without putting shareholder value at risk the group’s capital structure comprises its equity refer to the group statement of changes in 
equity and its net debt refer to note 36  
the decrease in the group’s net debt from £7461m to £6643m excluding accrued interest is explained in the finance director’s review 
information about the financial covenants in relation to the group’s borrowing facilities is included in note 28  
30 financial instruments including cash trade receivables and payables 
fair values 
the table below illustrates the fair values of all financial assets and liabilities held by the group at 31 december 2014 
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market they 
are measured at amortised cost using the effective interest rate method and the carrying value in all cases approximates to the fair value  
available for sale investments are nonderivative assets that are either designated as available for sale or are not classified as loans and 
receivables or held to maturity investments the group’s available for sale investments have no active market and in the absence of any 
other reliable external information are carried at cost or amortised cost which approximates to the fair value 
the fair value of derivatives is either determined by the thirdparty financial institution with which the group holds the instrument in line  
with the market value of similar financial instruments or by use of valuation techniques using market data derivatives other than those 
designated as effective hedging instruments are classified as fair value through profit or loss and are carried on the balance sheet at their 
fair value with gains or losses recognised in the income statement derivatives designated as hedging instruments in an effective hedge are 
carried on the balance sheet at their fair value for cash flow hedges and hedges of net investments in foreign operations the effective 
portion of the gain or loss on the hedging instrument is recognised directly in other comprehensive income while the ineffective portion is 
recognised in the income statement amounts taken to other comprehensive income are transferred to the income statement when the 
hedged transaction affects profit or loss or when the foreign operation is sold or partially disposed for fair value hedges all gains or losses 
are recognised in the income statement 
derivatives are the only instrument which the group holds at fair value the fair value measurement of these instruments is categorised 
within level 2 ie the fair values are derived based on observable market inputs the group has no financial instruments with fair values 
that are determined by reference to significant unobservable inputs ie those that would be classified as level 3 in the fair value hierarchy 
nor have there been any transfers of assets or liabilities between levels of the fair value hierarchy there are no nonrecurring fair 
value movements 
the group’s bonds are held at a hybrid amortised cost with a fair value adjustment after initial recognition at fair value the bonds are 
measured at amortised cost using the effective interest rate method a portion of the bonds are designated as the hedged item in an 
effective fair value hedging relationship as such the carrying value of this portion is adjusted for changes in fair value attributable to the risk 
being hedged this net carrying value will differ to the fair value depending on movements in the group’s credit risk movements in interest 
rates on the unhedged portion and unamortised fees 
all other liabilities including finance leases bank loans trade and other payables and other debt payable are held at amortised cost  
after initial fair value recognition these instruments are measured at amortised cost using the effective interest rate method the carrying 
value of these liabilities approximates to the fair value 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 136 additional information
strategic report corporate governance financial statements
 
 
137 wwwnationalexpressgroupcom
30 financial instruments including cash trade receivables and payables continued 
fair values continued 
 
other receivables and other payables are to be settled in cash in the currency they are held in 
in accordance with ias 39 financial instruments recognition and measurement the group has reviewed all contracts for embedded 
derivatives that are required to be separately accounted for no embedded derivatives have been identified 
classification of financial instruments  
as at 31 december 2014 
loans and 
receivables 
£m 
available
forsale 
assets 
£m 
derivatives 
used for 
hedging 
£m 
liabilities 
measured at 
amortised 
cost  
£m 
at fair value 
through 
profit or loss 
£m 
total 
£m 
assets       
investments  – 68 – – – 68 
foreign exchange derivatives – – 15 – – 15 
interest rate derivatives – – 265 – – 265 
cash and cash equivalents  837 – – – – 837 
trade and other receivables  1652 – – – – 1652 
 2489 68 280 – – 2837 
liabilities       
bank loans  – – – 52 – 52
bonds including accrued interest – – – 6145 – 6145
finance lease obligations  – – – 1105 – 1105
other debt payable  – – – 675 – 675
fuel derivatives – – 713 – – 713
foreign exchange derivatives – – 06 – – 06
trade and other payables  – – – 4153 – 4153
 – – 719 12130 – 12849
classification of financial instruments  
as at 31 december 2013 
loans and 
receivables 
£m 
available
forsale 
assets 
£m 
derivatives 
used for 
hedging 
£m 
liabilities 
measured at 
amortised cost  
£m 
at fair value 
through 
profit or loss 
£m 
total 
£m 
assets       
investments  – 74 – – – 74 
fuel derivatives  – – 18 – – 18 
foreign exchange derivatives – – 22 – – 22 
interest rate derivatives – – 176 – – 176 
cash and cash equivalents  409 – – – – 409 
trade and other receivables  1393 – – – – 1393 
 1802 74 216 – – 2092 
liabilities       
bank loans  – – – 193 – 193
bonds including accrued interest – – – 6087 – 6087
finance lease obligations  – – – 1329 – 1329
other debt payable  – – – 666 – 666
fuel derivatives – – 26 – – 26
interest rate derivatives – – 05 – – 05
foreign exchange derivatives – – 04 – – 04
trade and other payables  – – – 3525 – 3525
 – – 35 11800 – 11835
137 wwwnationalexpressgroupcom
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138 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
30 financial instruments including cash trade receivables and payables continued 
fair values continued 
the group assesses at each year end reporting date whether a financial asset or group of financial assets is impaired in the financial year 
2014 there was no objective evidence that would have necessitated the impairment of loans and receivables or availableforsale assets 
except the provision for impairment of receivables see note 21 
hedging activities 
the group uses derivative financial instruments to manage exposures to market risk such as movements in foreign exchange rates  
fuel prices and interest rates such derivative financial instruments are initially recognised at fair value and are subsequently remeasured 
at fair value in line with ias 39 the group classifies hedges as a fair value hedges used to hedge exposure to changes in the fair value of 
a recognised asset or liability b cash flow hedges used to hedge exposure to variability in cash flows associated with a recognised asset 
or liability or a highly probable forecast transaction and c hedges of a net investment in a foreign operation  
in 2014 the group applied cash flow hedge accounting for hedging floating fuel price risks in highly probable forecast purchase transactions 
and for hedging net investments in us dollar and euro foreign operations the group applied fair value hedge accounting for the fair value 
interest rate risk on £200m of the group’s fixed rate bonds and €785m private placement 
the movement on derivative financial instruments is detailed below 
 
the movement on the hedging reserve is detailed below 
 
 
interest rate 
swaps
 £m 
foreign  
exchange 
forward  
contracts  
£m 
fuel swaps 
£m 
total 
£m 
net assetliability at 1 january 2014 171 18 08 181 
transfers to the income statement on cash flow hedges – – 98 98 
cash settlementsaccrual 01 25 – 26
revaluation through income statement  95 – – 95 
revaluation through other comprehensive income – – 803 803
exchange differences – 16 – 16 
net assetliability at 31 december 2014  265 09 713 439
 
interest rate 
swaps
 £m 
foreign  
exchange 
forward  
contracts  
£m 
fuel swaps 
£m 
total 
£m 
net assetliability at 1 january 2013 310 04 – 306 
transfers to the income statement on cash flow hedges – – 35 35
cash settlementsaccrual 04 11 – 15 
revaluation through income statement  143 – – 143
revaluation through other comprehensive income – – 27 27 
exchange differences – 11 – 11 
net assetliability at 31 december 2013  171 18 08 181 
 
2014 
£m 
2013 
£m 
at 1 january  21 28 
transferred to income statement 123 35
revaluation through other comprehensive income 803 27 
exchange differences – 02
tax on revaluation 136 03 
at 31 december  523 21 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 138 additional information
strategic report corporate governance financial statements
 
 
139 wwwnationalexpressgroupcom
30 financial instruments including cash trade receivables and payables continued 
hedge of net investments in foreign entities 
the group uses foreign currency borrowings and derivative financial instruments to hedge the net investment in material foreign currency 
net assets of the group which are used to reduce the exposure to foreign exchange rate movements at 31 december 2014 the group 
had designated €170m of synthetic debt in the form of foreign exchange derivatives and €785m private placement as net investment 
hedges of the net assets of its spanish subsidiaries similarly 130m of synthetic debt in the form of foreign exchange derivatives were 
designated as a hedge of the net assets of the group’s us subsidiaries no ineffectiveness was recognised in relation to these hedges 
fuel derivatives 
the group has a number of fuel derivatives in place to hedge the different types of fuel used in each division ultra low sulphur diesel  
is used in the uk bus uk coach and spanish coach and bus divisions and is hedged by swaps in the same type of fuel diesel used  
in the north american bus division is hedged using the diesel market the timing of the swap cash flows match underlying fuel purchases 
from 2015 through to 2017  
during the year £803m of fair value losses 2013 £27m gains have been transferred to the hedging reserve due to movements in market 
fuel prices a fair value loss of £98m 2013 £35m gain has been transferred from the hedging reserve to the income statement following 
settlement of fuel trades of which £06m was recognised in the hedging reserve at 1 january 2014 and the remainder was generated 
during the year due to the movement in market fuel prices in addition a loss of £25m was recognised in the income statement for 
hedge ineffectiveness during the year 2013 £nil 
fuel derivatives can be analysed as follows 
 
 
31 december 
2014 
fair value 
£m 
31 december 
2013 
 fair value  
£m 
31 december 
2014 
volume 
million litres 
31 december 
2013
volume 
million litres 
hedge fuel derivatives     
sterling denominated – uk bus uk coach and rail  144 07 860 835 
us dollar denominated – north american bus  87 08 549 692 
euro denominated – spanish coach and bus  121 07 895 930 
fuel derivatives included in current assetsliabilities 352 06 2304 2457 
sterling denominated – uk bus uk coach and rail  139 08 1360 860 
us dollar denominated – north american bus 101 07 935 549 
euro denominated – spanish coach and bus  121 01 1705 895 
fuel derivatives included in noncurrent assetsliabilities 361 02 4000 2304 
total hedge fuel derivatives  713 08 6304 4761 
139 wwwnationalexpressgroupcom
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140 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
30 financial instruments including cash trade receivables and payables continued 
interest rate swaps at fair value through profit or loss 
in july 2010 the group entered into four £50m denominated interest rate swaps on a total of £200m of the group’s sterling bonds these 
interest rate swaps all pay floating interest libor  a margin semiannually receive fixed interest annually with maturities matching the 
group’s sterling bonds two swaps with total notional value £100m mature in january 2017 two swaps with notional value £100m mature 
in june 2020 and are designated as a fair value hedge of the interest rate risk on £200m of these bonds these swaps are measured at 
fair value through profit or loss with any gains or losses being taken immediately to the income statement to offset any fair value gains or 
losses due to changes in the risk free interest rate on the swapped portion of the bonds as at 31 december 2014 a total fair value gain 
of £42m was recognised in the income statement in relation to these swaps this is offset by a fair value loss of £42m on the underlying 
hedged item in this case changes in fair value on the £200m of the group’s bonds due to changes in the risk free interest rate 
in september 2012 the group entered into two €3925m denominated interest rate swaps equal in value to the euro private placement 
these interest rate swaps all pay floating interest euribor  a margin semiannually receive fixed interest annually with maturities 
matching the euro private placement and are designated as a fair value hedge of the interest rate risk on the private placement these 
swaps are measured at fair value through profit and loss with any gains or losses being taken immediately to the income statement to 
offset any fair value gains or losses due to changes in the risk free rate on the euro private placement as at 31 december 2014 a total 
fair value gain of £52m was recognised in the income statement in relation to these swaps this is offset by a fair value loss of £52m 
on the underlying hedged item in this case changes in fair value of the euro private placement due to changes in the risk free interest rate 
31 calledup share capital 
the total number of share options exercised in the year by employees of the group was 972868 2013 1431193 of which 882000 
2013 1431193 exercises were satisfied by transferring shares from the national express employee benefit trust the remaining 
exercises were settled via a direct purchase of shares from the open market 
own shares 
own shares comprises 553268 2013 426630 ordinary shares in the company that have been purchased by the trustees of the 
national express employee benefit trust the ‘trust’ during the year the trust purchased 1033000 2013 1322165 shares and 
882000 20131431193 shares were used to satisfy options granted under a number of the company’s share schemes 24362 
2013 nil shares were sold during the year to the open market 
the market value of the shares held by the trust at 31 december 2014 was £14m 2013 £12m the dividends payable on these shares 
have been waived 
 
2014 
£m 
2013 
£m 
at 31 december   
authorised   
800000000 2013 800000000 ordinary shares of 5p each 400 400 
issued calledup and fully paid   
511738648 2013 511738648 ordinary shares of 5p each  256 256 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 140 additional information
strategic report corporate governance financial statements
 
 
141 wwwnationalexpressgroupcom
32 other reserves 
 
merger
 reserve 
£m 
hedging  
reserve  
£m 
translation 
reserve 
£m 
total 
£m 
at 1 january 2014  154 21 290 465 
hedge movements net of tax – 544 – 544
exchange differences net of tax  – – 249 249
at 31 december 2014 154 523 41 328
 
the nature and purpose of the other reserves are as follows 
• the merger reserve includes the premium on shares issued to satisfy the purchase of prism rail plc in 2000  
• the hedging reserve records the movements on designated hedging items offset by any movements recognised in equity on underlying 
hedged items and 
• the translation reserve records exchange differences arising from the translation of the accounts of foreign currency denominated 
subsidiaries offset by the movements on loans and derivatives used to hedge the net investment in foreign subsidiaries 
33 pensions and other postemployment benefits 
a summary of pension benefits and assumptions 
the uk bus and uk coach divisions operate both funded defined benefit schemes and a defined contribution scheme the majority of 
employees of the rail companies are members of the appropriate sharedcost section of the railways pension scheme rps a funded 
defined benefit scheme the assets of all schemes are held separately from those of the group contributions to the schemes are 
determined by independent professionally qualified actuaries 
subsidiaries in north america contribute to a number of defined contribution plans the group also provides certain additional unfunded 
postemployment benefits to employees in north america and spain which are disclosed in section c in the ‘other’ category 
the defined benefit pension schemes typically expose the group to actuarial risks such as investment risk interest rate risk longevity risk 
and salary risk 
the uk coach plan is now closed to all future accrual a funding plan aimed at bringing the plan to selfsufficiency over a sixyear 
period was agreed in 2010 national express contributes £42m annually to this scheme in 2011 uk bus agreed a £55m annual 
deficit repayment plan with the trustees of the west midlands integrated transport authority pension fund to fund a £71m scheme 
funding deficit over 12 years the plan remains open to accrual for existing members only 
the total pension cost charged to operating profit in the year was £99m 2013 £99m of which £37m 2013 £32m relates to the 
defined contribution schemes 
 
 
merger
 reserve 
£m 
hedging  
reserve  
£m 
translation 
reserve 
£m 
total 
£m 
at 1 january 2013  154 28 260 442 
hedge movements net of tax – 07 – 07
exchange differences net of tax  – – 30 30 
at 31 december 2013  154 21 290 465 
141 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
142 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
33 pensions and other postemployment benefits continued 
a summary of pension benefits and assumptions continued  
the defined benefit pension liabilityasset included in the balance sheet is as follows 
the valuations conducted for financial reporting purposes are based on the triennial actuarial valuations a summary of the latest triennial 
actuarial valuations and assumptions made is as follows  
 amounts included in the income statement other comprehensive income and the balance sheet are calculated using the projected 
unit method 
the most recent triennial valuations are then updated by independent professionally qualified actuaries for financial reporting purposes  
in accordance with ias 19 the main actuarial assumptions underlying the ias 19 valuations are 
 
 
2014 
£m 
2013 
£m 
uk bus  506 408
uk coach  306 126 
rail  100 04
other 19 15
total  119 301
  uk bus  uk coach rail 
date of actuarial valuation 
tayside 
31 march 
2011 
travel west 
midlands  
31 march  
2013 
5 april 
2013 
31 december 
2013 
actuarial method used  attained age attained age  projected unit projected unit 
rate of investment returns per annum  4369 3555  41 5073 
increase in earnings per annum  50 26  – 42 
scheme assets taken at market value  £455m £4489m  £773m £824m 
funding level  97 84  82 84100 
   2014   2013 
 uk bus uk coach rail uk bus  uk coach rail 
rate of increase in salaries  25 25 24 25 25 29 
rate of increase of pensions  19 29 19 24 34 24 
discount rate  36 36 36 46 46 46 
inflation assumption rpi 29 29 29 34 34 34 
inflation assumption cpi 19 19 19 24 24 24 
postretirement mortality in years       
current pensioners at 65 – male  212 242  214 242  
current pensioners at 65 – male pension under  
£10300 pa or pensionable pay under £35000 pa   209   207 
current pensioners at 65 – male – others    232   229 
current pensioners at 65 – female  240 267  241 267  
current pensioners at 65 – female pension under  
£3700 pa or pensionable pay under £35000 pa    227   226 
current pensioners at 65 – female – others    245   250 
future pensioners at 65 – male  226 260  227 260  
future pensioners at 65 – male pension under 
£10300 pa or pensionable pay under £35000 pa    232   231 
future pensioners at 65 – male – others    255   251 
future pensioners at 65 – female  255 287  256 287  
future pensioners at 65 – female pension under  
£3700 pa or pensionable pay under £35000 pa    251   251 
future pensioners at 65 – female – others    268   274 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 142 additional information
strategic report corporate governance financial statements
 
 
143 wwwnationalexpressgroupcom
33 pensions and other postemployment benefits continued 
a summary of pension benefits and assumptions continued 
the demographic assumptions reflect those adopted in the most recent triennial actuarial valuation for the rail scheme mortality 
assumptions have been set by reference to the recent experience of the scheme mortality is assumed to improve in the future in line  
with the ‘core projection’ model published by the actuarial profession’s continuous mortality investigation incorporating a long term 
improvement rate of 15 pa 
the directors regard the assumption around the discount rate to be the key assumption in the ias 19 valuation and the following table 
provides an approximate sensitivity analysis of the impact of a 01 change in the discount rate assumption 
scheme assets are stated at their market values at the respective balance sheet dates the expected rate of return on scheme assets  
is determined based on market returns on each category of scheme assets 
b accounting for the railways pension scheme  
the majority of employees of the rail companies are members of the appropriate section of the rps a funded defined benefit scheme  
the rps is a shared cost scheme which means that costs are formally shared 60 employer and 40 employee to date the group  
has experienced 11 changes of rail franchise ownership where the current owner has funded the scheme during the franchise term and the 
pension deficit at franchise exit has transferred to the new owner without cash settlement by entering into the franchise contract the toc 
becomes the designated employer for the term of the contract and under the rules of the rps must fund its share of the pension liability in 
accordance with the schedule of contributions agreed with the scheme trustees and actuaries  
in determining the appropriate accounting policy for the rps to ensure that the group’s accounts present fairly its financial position  
financial performance and cash flows management has consulted with toc industry peers and has concluded that the group’s 
constructive obligations should be accounted for in accordance with ias 19 this accounting policy which in all other respects is 
consistent with that set out in this note for the group’s other defined benefit schemes means that the group’s accounts reflect that 
element of the deficits anticipated to be settled by the group during the franchise term and will prevent gains arising on transfer of the 
existing rps deficits to a new owner at franchise exit  
in calculating the group’s constructive obligations in respect of the rps the group has calculated the total pension deficits in each of the 
rps sections in accordance with ias 19 and the assumptions set out above these deficits are reduced by a ‘franchise adjustment’ which 
is that portion of the deficit projected to exist at the end of the franchise and which the group will not be required to fund the franchise 
adjustment which has been calculated by the group’s actuaries is offset against the present value of the rps liabilities so as to fairly 
present the financial performance position and cash flows of the group’s obligations  
the franchise adjustment increased from £155m at 31 december 2013 to £308m at 31 december 2014 the principal reason for the 
increase was the renewal of the essex thameside franchise previously c2c that increased the franchise adjustment by £107m in addition 
the adjustment increased due to interest on the franchise adjustment of £07m and other net actuarial movements of £39m in the prior 
year the franchise adjustment decreased from £181m at 31 december 2012 to £155m at 31 december 2013 the principal reason for 
the decrease was the interest on the franchise adjustment of £07m and other net actuarial movements of £18m 
 
uk bus  
£m 
uk coach 
£m 
rail
 £m 
defined benefit pension liabilityasset at 31 december 2014 506 306 100 
effect of a 01 increase in the discount rate  82 16 20
current service cost for the year ended 31 december 2014 33 – 24
effect of a 01 increase in the discount rate  01 – – 
143 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
144 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
33 pensions and other postemployment benefits continued 
c financial results for pension benefits 
the amounts charged to the group income statement and group statement of comprehensive income for the years ended 31 december 
2014 and 2013 are set out in the following tables 
group income statement 
uk bus 
2014 
£m 
uk coach 
2014
£m 
rail  
2014 
£m 
other 
2014 
£m 
total 
2014
£m 
amounts chargedcredited      
current service cost  33 – 24 05 62
curtailment 06 – – – 06 
net interest expenseincome 17 07 07 01 18
interest on franchise adjustment – – 07 – 07 
total chargecredit to income statement  44 07 24 06 67
 
during the year £06m 2013 £05m of administrative expenses were incurred 
the net interest expense together with the interest on franchise adjustment has been included within finance costs see note 9 
group statement of comprehensive income 
uk bus 
2014
 £m 
uk coach  
2014 
£m 
rail 
2014 
£m 
total 
2014
£m 
actuarial lossgain during the period 474 85 76 483
expected return on plan assets greaterless than discount rate 327 226 31 584 
net actuarial gainslosses 147 141 107 101 
 
group income statement 
uk bus 
2013 
£m 
uk coach 
2013
£m 
rail  
2013 
£m 
other 
2013 
£m 
total 
2013
£m 
amounts chargedcredited  
current service cost  34 – 23 05 62
net interest expenseincome 13 08 07 – 12
interest on franchise adjustment – – 07 – 07 
total chargecredit to income statement  47 08 23 05 67
 
group statement of comprehensive income 
uk bus 
2013
 £m 
uk coach  
2013 
£m 
rail 
2013 
£m 
total 
2013
£m 
actuarial loss during the period 143 51 02 196
expected return on plan assets greaterless than discount rate 14 28 20 06 
net actuarial lossesgains  129 79 18 190
 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 144 additional information
strategic report corporate governance financial statements
 
 
145 wwwnationalexpressgroupcom
33 pensions and other postemployment benefits continued 
c financial results for pension benefits continued  
the amounts recognised in the balance sheet at 31 december are 
as at 31 december 2014 
uk bus 
2014
 £m 
uk coach 
2014
£m 
rail  
2014 
£m 
other 
2014 
£m 
total 
2014
£m 
equities  1037 – 796 – 1833 
bonds  657 1239 44 – 1940 
property  43 – – – 43 
insurance policy 2417 – – – 2417 
diversified growth fund 729 – – – 729 
other  51 221 04 – 166
fair value of scheme assets  4934 1018 844 – 6796 
present value of scheme liabilities  5440 712 1185 19 7356
franchise adjustment  – – 308 – 308 
defined benefit obligation  5440 712 877 19 7048
members’ share of deficit  – – 133 – 133 
defined benefit pension deficitsurplus 506 306 100 19 119
 
the movement in the present value of the defined benefit obligation in the year is as stated below for rail the rps is a shared cost 
scheme which means that costs are formally shared 60 employer and 40 employee 
the group’s defined benefit obligation comprises £7029m 2013 £6450m including the members’ share of the deficit arising from plans 
that are wholly or partly funded and £19m 2013 £15m from unfunded plans 
 
as at 31 december 2013 
uk bus 
2013
 £m 
uk coach 
2013
£m 
rail  
2013 
£m 
other 
2013 
£m 
total 
2013
£m 
equities  1005 – 707 – 1712 
bonds  569 992 39 – 1600 
property  38 – – – 38 
insurance policy 2267 – – – 2267 
diversified growth fund 621 – – – 621 
other  64 246 04 – 178
fair value of scheme assets  4564 746 750 – 6060 
present value of scheme liabilities  4972 620 1013 15 6620
franchise adjustment  – – 155 – 155 
defined benefit obligation  4972 620 858 15 6465
members’ share of deficit  – – 104 – 104 
defined benefit pension deficitsurplus 408 126 04 15 301
 
uk bus 
 £m 
uk coach 
£m 
rail  
£m 
other 
£m 
total 
£m 
defined benefit obligation at 1 january 2014 4972 620 858 15 6465
current service cost  33 – 24 05 62
curtailment 06 – – – 06 
benefits paid  267 21 25 02 315 
contributions by employees 11 – 15 – 26
finance charge 223 28 28 01 280
interest on franchise adjustment  – – 07 – 07 
members’ share of movement on liabilities – – 60 – 60
actuarial loss arising from changes in financial assumptions 436 85 43 – 478
actuarial gain arising from changes in demographics 07 – 02 – 05 
actuarial loss arising from experience adjustments 45 – 35 – 10
defined benefit obligation at 31 december 2014 5440 712 877 19 7048
145 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
 
 
146 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
33 pensions and other postemployment benefits continued 
c financial results for pension benefits continued 
the movement in the fair value of scheme assets is as follows 
 
uk bus 
£m 
uk coach  
£m 
rail 
£m 
total 
£m 
fair value of scheme assets at 1 january 2014 746 750 6060 
expected return on plan assets  206 35 21 262 
expected return on plan assets greaterless than discount rate 327 226 31 584 
cash contributions – employer  96 32 23 151 
administrative expenses 03 – 03 06
cash contributions – employee  11 – 15 26 
benefits paid  267 21 25 313
members’ share of return on assets  – – 32 32 
fair value of scheme assets at 31 december 2014 4934 1018 844 6796 
 
 
uk bus 
£m 
uk coach  
£m 
rail 
£m 
total 
£m 
fair value of scheme assets at 1 january 2013 4480 731 671 5882 
expected return on plan assets  194 32 18 244 
expected return on plan assets greaterless than discount rate 14 28 20 06 
cash contributions – employer  98 31 22 151 
administrative expenses 02 – 05 07
cash contributions – employee  12 – 14 26 
benefits paid  232 20 14 266
members’ share of return on assets  – – 24 24 
fair value of scheme assets at 31 december 2013 4564 746 750 6060 
 
 
uk bus 
 £m 
uk coach 
£m 
rail  
£m 
other 
£m 
total 
£m 
defined benefit obligation at 1 january 2013 4809 565 812 12 6198
current service cost  34 – 23 05 62
benefits paid  233 20 14 02 269 
contributions by employees 12 – 14 – 26
finance charge 207 24 25 – 256
interest on franchise adjustment  – – 07 – 07 
members’ share of movement on liabilities – – 03 – 03
actuarial loss arising from changes in financial assumptions 114 28 01 – 143
actuarial gain arising from changes in demographics – 15 – – 15 
actuarial loss arising from experience adjustments 29 38 01 – 68
defined benefit obligation at 31 december 2013 4972 620 858 15 6465
4564 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 146 additional information
strategic report corporate governance financial statements
 
 
147 wwwnationalexpressgroupcom
33 pensions and other postemployment benefits continued 
c financial results for pension benefits continued 
the group expects to contribute £164m to its defined benefit pension plans in 2015 
the cumulative amount of actuarial gains and losses recognised in the statement of comprehensive income since 1 january 2004 is 
£592m loss 2013 £693m loss the directors are unable to determine how much of the pension scheme deficit recognised on transition 
to ifrss and taken directly to equity of £519m is attributable to actuarial gains and losses since inception of those pension schemes 
consequently the directors are unable to determine the amount of actuarial gains and losses that would have been recognised in the 
statement of comprehensive income before 1 january 2004 
history of experience gains and losses 
2014 
£m 
2013 
£m 
2012 
 £m 
2011 
 £m 
2010 
£m 
uk bus      
fair value of scheme assets  4934 4564 4480 4319 4295 
present value of defined benefit obligation 5440 4972 4809 4487 4348
deficit in the scheme 506 408 329 168 53
experience adjustments arising on liabilities  45 29 50 233 01
experience adjustments arising on assets  327 14 86 73 213 
uk coach      
fair value of scheme assets  1018 746 731 679 596 
present value of defined benefit obligation  712 620 565 493 596
surplusdeficit in the scheme  306 126 166 186 – 
experience adjustments arising on liabilities  – 38 – 01 27 
experience adjustments arising on assets 226 28 05 97 23 
rail     
fair value of scheme assets  844 750 671 3210 3183 
present value of defined benefit obligation  877 858 812 3637 3728
members’ share of deficit  133 104 123 405 508 
deficit in the scheme 100 04 18 22 37
experience adjustments arising on liabilities  35 01 27 85 122 
experience adjustments arising on assets  31 20 80 134 61 
other     
fair value of scheme assets  – – – – – 
present value of defined benefit obligation 19 15 12 14 14
deficit in the scheme 19 15 12 14 14
experience adjustments arising on liabilities – – – – – 
147 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
148 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
34 commitments and contingencies 
operating lease commitments 
the group’s total operating lease commitments are as follows 
rail lease commitments  
rail division companies have contracts with network rail infrastructure limited for access to the railway infrastructure tracks stations and 
depots they also have contracts under which rolling stock is leased the tocs’ obligations to fulfil these commitments exist only as part 
of their franchise agreement the table below reflects the commitments up to the current franchise end dates unless an extension or new 
franchise agreement has been signed the commitments are based on charges advised by the rail regulator for the period starting on 
1 april 2010 commitments for future minimum rental payments under these contracts are shown below 
fixed track access agreements have an average remaining life of 150 years 2013 07 years and other land and buildings have an average 
duration of 150 years 2013 07 years rolling stock agreements have an average life of 150 years 2013 07 years and other plant and 
equipment 127 years 2013 07 years  
  
2014 
£m 
2013 
£m 
future minimum rentals payable under noncancellable operating leases   
within one year  land and buildings  206 289 
 plant and equipment  423 337 
  629 626 
after one year but not more than five years  land and buildings  555 309 
 plant and equipment  1390 471 
  1945 780 
more than five years  land and buildings  1028 479 
 plant and equipment  2432 33 
  3460 512 
  6034 1918 
  land and buildings  plant and equipment 
rail division commitments   
2014 
£m 
2013  
£m 
2014 
£m 
2013 
£m 
future minimum rentals payable under noncancellable operating leases     
within one year  fixed track access 40 104 – – 
 rolling stock  – – 242 167 
 other  17 35 01 05 
  57 139 243 172 
after one year but not more than five years  fixed track access 159 – – – 
 rolling stock – – 969 – 
 other 66 – 02 – 
  225 – 971 – 
over five years  fixed track access 397 – – – 
 rolling stock – – 2422 – 
 other 165 – 05 – 
  562 – 2427 – 
  844 139 3641 172 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 148 additional information
strategic report corporate governance financial statements
 
 
149 wwwnationalexpressgroupcom
34 commitments and contingencies continued 
other lease commitments  
outside of the rail division the group has entered into operating leases on certain properties public service vehicles and various items  
of plant and equipment commitments for future minimum rental payments under noncancellable operating leases are shown below 
the average remaining life of operating lease commitments in the other divisions is 67 years 2013 63 years for land and buildings 
34 years 2013 41 years for public service vehicles and 26 years 2013 24 years for other plant and equipment 
operating lease agreements where the group is the lessor 
the group receives rent on properties as follows 
the leases have an average unexpired duration of 64 years 2013 07 years  
finance lease commitments 
the group has finance leases for public service vehicles and various items of plant and equipment these leases have terms of renewal but 
no purchase options and escalation clauses renewals are at the option of the specific entity that holds the lease 
capital commitments 
the group is committed to vehicle purchases and various land and buildings improvements the commitments include orders for vehicles 
placed by the uk bus division and orders for capital items placed with suppliers for the new national express essex thameside franchise 
within the rail division 
contingent liabilities and assets 
guarantees 
the group has guaranteed credit facilities totalling £29m 2013£nil of certain joint ventures 
bonds and letters of credit 
in the ordinary course of business the group is required to issue counterindemnities in support of its operations as at 31 december 2014 
there were rail performance bonds of £613m 2013 £94m and rail season ticket bonds of £216m 2013 £212m the group has other 
performance bonds which include performance bonds in respect of businesses in the us of £1145m 2013 £1051m and the rest of 
europe of £321m 2013 £262m letters of credit have been issued to support insurance retentions of £657m 2013 £488m 
 land and buildings public service vehicles other 
other divisions’ commitments 
2014 
£m 
2013 
£m 
2014 
£m 
2013  
£m 
2014 
£m 
2013
£m 
within one year  149 150 179 163 01 02 
after one year but not more than five years  330 309 417 468 02 03 
more than five years 466 479 05 32 – 01 
 945 938 601 663 03 06 
 
2014 
£m 
2013
£m 
future minimum rentals receivable under noncancellable operating leases   
within one year  01 01 
after one year but not more than five years 15 – 
over five years 24 – 
 40 01 
  2014   2013 
 
minimum 
payments 
£m 
present value  
of payments  
£m 
minimum 
payments 
£m 
present value 
of payments 
£m 
within one year  255 229 354 322 
after one year but not more than five yea rs  895 856 960 893 
more than five years  20 20 116 114 
total minimum lease payments  1170 1105 1430 1329 
less future financing charges 65 – 101 – 
present value of minimum lease payments  1105 1105 1329 1329 
 
2014 
£m 
2013
£m 
contracted  770 190 
149 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
 
150 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
 
34 commitments and contingencies continued 
contingent liabilities and assets continued 
spanish fuel duty credits 
as disclosed in note 5 during the year the group recognised £218m in relation to spanish fuel duty credits which have either been 
received or are considered to be virtually certain 
additional claims are subject to assessment and approval and have therefore not yet been recognised 
35 related party transactions 
a number of spanish companies have leased properties from companies related to the cosmen family jorge cosmen is a nonexecutive 
director of the group and was appointed as deputy chairman in october 2008 these leases were in place before the group’s acquisition 
of alsa and are for appropriate market rates  
the details of the postemployment benefit plans operated for the benefit of employees of the group are disclosed in note 33 
compensation of key management personnel of the group 
 
 
 amount of transactions 
amounts due from  
related parties amounts due to related parties 
 
2014
£m 
2013
£m 
2014
 £m 
2013 
 £m 
2014 
 £m 
2013
 £m 
associates       
spain associates  21 18 12 11 09 08
trade investments     
spain trade investments  39 44 04 05 04 07
property transactions     
north america 04 01 – –  – 
spain  33 65 03 05 03 02
total other related parties  76 110 07 10 07 09
total  97 128 19 21 16 17
 
2014 
£m 
2013 
£m 
total compensation paid to key management personnel note 7 39 37 
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 150 additional information
strategic report corporate governance financial statements
 
 
151 wwwnationalexpressgroupcom
36 cash flow statement 
the net cash inflows from operating activities include outflows of £447m 2013 £229m from continuing operations which are related  
to exceptional costs 
a reconciliation of group profit before tax to cash generated from operations 
b analysis of changes in net debt 
 excludes accrued interest on long term borrowings 
short term deposits included within liquid resources relate to term deposits repayable within three months 
borrowings include noncurrent interestbearing borrowings of £7418m 2013 £7507m as disclosed in note 27 
other noncash movements in net debt represent finance lease additions of £12m 2013 £08m and a £23m reduction in loan and bond 
arrangement fees 2013 £26m the £94m increase to the fair value of the hedging derivative is offset by equal and opposite movements 
in the fair value of the related hedged borrowings this comprises a £42m fair value movement in bonds and a £52m fair value movement 
in other debt payable 
total operations 
2014 
£m 
2013 
£m 
net cash inflow from operating activities   
profit before tax 665 644 
net finance costs  480 498 
share of posttax results under the equity method 03 06
depreciation of property plant and equipment  1049 1073 
intangible asset amortisation  286 493 
amortisation of fixed asset grants  08 11
profit on disposal of property plant and equipment 17 11
loss on disposal of business – 43 
sharebased payments 31 31 
increase in inventories  06 22
increasedecrease in receivables  269 219 
increase in payables  268 139 
decrease in provisions 24 126
cash generated from operations  2452 2964 
 
at 
1 january 
2014
£m 
cash flow 
£m 
exchange 
differences  
£m 
other 
movements 
£m 
at 
31 december 
2014
£m 
cash  377 06 08 – 363 
overnight deposits  – 69 – – 69 
other short term deposits  32 373 – – 405 
cash and cash equivalents  409 436 08 – 837 
other debt receivables  10 02 – – 08 
borrowings      
 bank and other loans 193 96 52 07 52
 bonds 5795 – – 58 5853
 fair value of hedging derivatives 92 – – 94 186 
 finance lease obligations  1329 288 52 12 1105
 other debt payable  655 01 42 52 664
total borrowings 7880 385 42 35 7488
net debt 7461 819 34 35 6643
151 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
 
152 national express group plc annual report and accounts 2014
financial statements 
notes to the consolidated accounts continued 
for the year ended 31 december 2014 
 
36 cash flow statement continued 
b analysis of changes in net debt continued 
 excludes accrued interest on long term borrowings 
c reconciliation of net cash flow to movement in net debt 
37 post balance sheet events 
on 2 february 2015 the group was awarded two 12year contracts to operate the whole sbahn nuremberg commuter rail services 
network the contracts will commence in december 2018 and are expected to generate revenues in excess of €14bn over the  
12year period 
 
at 
1 january 
2013
£m 
cash flow 
£m 
exchange 
differences  
£m 
other 
movements 
£m 
at 
31 december 
2013
£m 
cash  417 45 05 – 377 
overnight deposits  286 286 – – – 
other short term deposits  25 07 – – 32 
cash and cash equivalents  728 324 05 – 409 
other debt receivables  10 – – – 10 
borrowings      
 bank and other loans 1146 996 32 11 193
 bonds 5900 – – 105 5795
 fair value of hedging derivatives 234 – – 142 92 
 finance lease obligations  1547 213 13 08 1329
 other debt payable  661 02 14 22 655
total borrowings 9020 1207 33 34 7880
net debt 8282 883 28 34 7461
 
2014 
£m 
2013 
£m 
increasedecrease in cash and cash equivalents in the year  436 324
cash outflow from movement in other debt receivables  02 – 
cash inflow from movement in debt and finance leases  385 1207 
change in net debt resulting from cash flows  819 883 
change in net debt resulting from noncash movements 01 62
movement in net debt in the year  818 821 
opening net debt 7461 8282
net debt  6643 7461
financial statements
notes to the consolidated accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 152 additional information
strategic report corporate governance financial statements
 
 
153 wwwnationalexpressgroupcom
financial statements 
company balance sheet  
at 31 december 2014 
 
d finch group chief executive  
m ashley group finance director 
26 february 2015 
company number 2590560 
 
 
note 
2014 
£m 
2013
£m 
fixed assets    
intangible assets 4 02 03 
tangible assets  5  02 02 
investments  6  17367 11172 
derivative financial instruments 7 265 176 
  17636 11353 
current assets    
debtors  8  718 7117 
derivative financial instruments  7  15 22 
cash at bank and in hand  9  1302 276 
  2035 7415 
creditors amounts falling due within one year  10  3231 2736
derivative financial instruments  7 06 04
provisions for liabilities and charges 12 27 02
net current liabilitiesassets  1229 4673 
total assets less current liabilities   16407 16026 
creditors amounts falling due after more than one year  11  6509 6440
derivatives more than one year 7 –  05
net assets   9898 9581 
shareholders’ equity    
calledup share capital  15  256 256 
share premium account  16  5327 5327 
capital redemption reserve  16 02 02 
own shares  16 15 08
profit and loss account  16  4328 4004 
shareholders’ equity   9898 9581 
financial statements
company balance sheet
at 31 december 2014
153 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
154 national express group plc annual report and accounts 2014
financial statements 
notes to the company accounts  
for the year ended 31 december 2014 
 
1 accounting policies  
basis of preparation  
the separate accounts of the parent company are presented as required by the companies act 2006 the accounts have been prepared 
on the going concern basis and under the historic cost convention except for the recognition of derivative financial instruments and 
available for sale investments detailed below and in accordance with applicable accounting standards in the united kingdom  
in applying these policies management is required to make estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date of the accounts and the reported amounts of revenue and expenses 
during the reporting period actual results could differ from those estimates  
certain comparatives have been reclassified to be consistent with the current year’s changes in presentation 
no profit and loss account is presented by the company as permitted by section 408 of the companies act 2006  
the profit of the company for the year is £849m 2013 £2004m 
for the year ending 31 december 2015 the company intends to transition to reporting under frs 101 as issued by the financial reporting 
council and intends to take advantage of the disclosure exemptions available under that standard any shareholder who objects to this 
proposal should write to the company secretary at the registered office as set out at the back of the annual report and accounts 2014 
leases  
leases of tangible fixed assets where substantially all the risks and rewards of ownership of the asset have passed to the company are 
classified as finance leases and the assets are capitalised in the balance sheet as plant and equipment finance leases are capitalised 
at the present value of the minimum lease payments the capital element of future obligations under hire purchase contracts and finance 
leases is included as a liability in the balance sheet the interest element of rental obligations is charged to the profit and loss account 
over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding assets acquired 
under finance leases are depreciated over the shorter of the useful life of the asset and the lease term  
leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating 
leases rentals paid under operating leases are charged to the profit and loss account on a straightline basis over the term of the lease 
incentives received under operating leases and initial direct costs in negotiating the lease are amortised to the profit and loss account on 
a straightline basis over the term of the lease or to the first review if shorter  
tangible fixed assets  
tangible fixed assets are stated at historic cost less accumulated depreciation and any impairment tangible fixed assets are depreciated 
on a straightline basis over their estimated useful lives as follows  
the carrying value of fixed assets is reviewed for impairment if events or changes in circumstances indicate that the current carrying value 
may not be recoverable and are written down immediately to their recoverable amount repairs and maintenance are charged to the profit 
and loss account during the financial period in which they are incurred  
software  
computer software that is not integral to an item of property plant and equipment is recognised separately as an intangible asset and  
is carried at cost less accumulated amortisation and accumulated impairment losses costs include software licences consulting costs 
attributable to the development design and implementation of the computer software and internal costs directly attributable to the 
development design and implementation of the computer software costs in respect of training are expensed as incurred amortisation  
is calculated using the straightline method so as to charge the cost of the computer software to the income statement over its estimated 
useful life 3 to 7 years  
the carrying value of intangibles is reviewed for impairment if events or changes in circumstances indicate that the carrying value  
may not be recoverable  
investments in subsidiaries  
investments are held at historic cost less any provision for impairment  
available for sale investments  
available for sale financial assets are nonderivative financial assets that are designated as such or that are not classified as a loan or 
receivable held to maturity or at fair value through profit or loss after initial recognition these assets are measured at fair value with gains 
or losses being recognised as a separate component of equity until the investment is derecognised or the investment is determined to be 
impaired at which time the previously reported cumulative gain or loss is included in the income statement  
interestbearing loans and borrowings  
loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs after initial recognition  
interestbearing loans and borrowings are subsequently measured at amortised cost using the effective interest method  
hedge accounting is adopted where derivatives such as fixed to floating interest rate swaps are held as fair value hedges against fixed 
interest rate borrowings under fair value hedge accounting fixed interest rate borrowings are revalued at each balance sheet date by 
the change in fair value attributable to the interest rate being hedged 
plant and equipment  – 3 to 5 years  
financial statements
notes to the company accounts
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 154 additional information
strategic report corporate governance financial statements
 
 
155 wwwnationalexpressgroupcom
1 accounting policies continued 
provisions  
provisions are recognised when the company has a present legal or constructive obligation as a result of past events it is probable  
that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made where the  
company expects a provision to be reimbursed the reimbursement is recognised as a separate asset but only when reimbursement  
is virtually certain  
pensions  
the company participates in both the national express group multiemployer funded defined benefit scheme and a defined contribution 
scheme the company is unable to identify its share of the underlying assets and liabilities of the multiemployer scheme on a consistent 
and reasonable basis and therefore has accounted for the scheme as if it were a defined contribution scheme under the requirements of 
frs 17 retirement benefits  
sharebased payment  
the company awards equitysettled sharebased payment to certain employees equitysettled sharebased payments are measured at fair 
value at the date of grant by an external valuer using a stochastic model nonmarketbased performancerelated vesting conditions are not 
taken into account when estimating the fair value instead those nonmarket conditions are taken into account in calculating the current 
best estimate of the number of shares that will eventually vest and at each balance sheet date before vesting the cumulative expense is 
calculated based on that estimate marketbased performance conditions are taken into account when determining the fair value and at 
each balance sheet date before vesting the cumulative expense is calculated irrespective of whether or not the market conditions are 
satisfied provided that all other performance conditions are met  
deferred tax  
deferred tax is recognised in respect of all material timing differences that have originated but not reversed by the balance sheet date 
deferred tax is measured on a nondiscounted basis at tax rates that are expected to apply in the periods in which the timing differences 
reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date deferred tax assets are recognised 
where it is more likely than not that there will be suitable taxable profits from which the future reversal of underlying timing differences 
can be deducted  
foreign currencies  
foreign currency assets and liabilities are translated into sterling at the rates of exchange ruling at the year end foreign currency 
transactions arising during the year are translated into sterling at the rate of exchange ruling on the date of the transaction 
any exchange differences so arising are dealt with through the profit and loss account  
derivative financial instruments  
the company uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks 
associated with foreign currency and interest rate fluctuations such derivative financial instruments are initially recognised at fair value 
and subsequently remeasured to fair value for the reported balance sheet the fair value of forward exchange contracts and interest 
rate swaps is calculated by reference to market exchange rates and interest rates at the period end  
in relation to cash flow hedges which meet the conditions for hedge accounting the portion of the gain or loss on the hedging instrument 
that is determined to be an effective hedge is recognised directly in equity and the ineffective portion in the profit and loss account the 
gains or losses deferred in equity in this way are recycled through the profit and loss account in the same period in which the hedged 
underlying transaction or firm commitment is recognised in the profit and loss account  
for derivatives that do not qualify for hedge accounting including the foreign currency contracts gains or losses are taken directly  
to the profit and loss account in the period  
hedge accounting is discontinued when the hedging instrument expires is sold terminated or exercised or no longer qualifies 
for hedge accounting  
the company has taken advantage of the exemption under frs 29 for parent company accounts the disclosures are included 
within the consolidated accounts 
155 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
156 national express group plc annual report and accounts 2014
financial statements 
notes to the company accounts continued 
for the year ended 31 december 2014 
 
2 exchange rates 
the most significant exchange rates to uk sterling for the company are as follows 
3 directors’ emoluments 
detailed information concerning directors’ emoluments shareholdings and options is shown in the directors’ remuneration report 
4 intangible fixed assets 
 
 2014 2013 
 closing rate average rate closing rate average rate 
us dollar  156 165 166 156 
canadian dollar  181 182 176 161 
euro  129 124 120 118 
 
software 
£m 
cost  
at 1 january and 31 december 2014 04 
amortisation  
at 1 january 2014 01 
charge in the year 01 
at 31 december 2014 02 
net book value  
at 31 december 2014 02 
at 31 december 2013  03 
financial statements
notes to the company accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 156 additional information
strategic report corporate governance financial statements
 
 
157 wwwnationalexpressgroupcom
5 tangible fixed assets 
6 financial assets investments 
the information provided below is given for the company’s principal subsidiaries a full list of subsidiaries and investments will be annexed 
to the next annual return to companies house the principal country of operation in respect of the companies below is the country in 
which they are incorporated 
the group’s train passenger services in the uk are operated through franchises awarded by dft rail as delegated by the uk government 
the following holdings are 100 held directly by the company 
incorporated in england and wales  
national express intermediate holdings limited holding company for all group operating companies except rail 
national express trains limited  holding company for rail operating companies 
national express finance company limited finance company for group fuel derivative arrangements 
 
 
 
plant and 
equipment 
£m 
cost  
at 1 january 2014 24 
disposals 21
at 31 december 2014 03 
depreciation  
at 1 january 2014 22 
disposals 21
at 31 december 2014 01 
net book value  
at 31 december 2014 02 
at 31 december 2013 02 
   
investments in 
subsidiaries
 £m 
cost or valuation    
at 1 january 2014   21230 
additions   6562 
disposals   904
at 31 december 2014   26888 
provisions    
at 1 january 2014   10058
charge in the year   04
disposals   541 
at 31 december 2014   9521
net carrying amount    
at 31 december 2014    17367 
at 31 december 2013   11172 
incorporated in guernsey  
national express guernsey limited  insurance captive 
157 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
158 national express group plc annual report and accounts 2014
financial statements 
notes to the company accounts continued 
for the year ended 31 december 2014 
 
 
7 derivative financial instruments 
full details of the group’s financial risk management objectives and policies can be found in note 29 to the consolidated accounts as the 
holding company for the group the company faces similar risks over foreign currency and interest rate movements 
the company has taken advantage of the exemption under frs 29 for parent company accounts the disclosures are included within  
the consolidated accounts 
8 debtors 
9 cash at bank and in hand 
cash at bank and in hand earns interest at floating rates based on daily bank deposit rates short term deposits are made for varying 
periods of between one day and three months depending on the immediate cash requirements of the company and earn interest at the 
respective short term deposit rates the fair value of cash equals the carrying value 
10 creditors amounts falling due within one year 
trade creditors are noninterest bearing and are normally settled on 30 day terms and other creditors are noninterest bearing and have  
an average term of six months
 
2014 
£m 
2013 
£m 
interest rate derivatives 265 176 
derivative financial assets due over one year 265 176 
foreign exchange forward contracts 15 22 
derivative financial assets due under one year  15 22 
interest rate derivatives – 05
derivative financial liabilities due over one year – 05
foreign exchange forward contracts  06 04
derivative financial liabilities due under one year  06 04
 
2014 
£m 
2013 
£m 
amounts falling due within one year 
amounts owed by subsidiary undertakings  570 7001 
corporation tax recoverable 22 19 
other debtors  21 34 
prepayments 36 03 
 649 7057 
deferred tax asset amounts falling due afte r more than one year see note 13 69 60 
 718 7117 
 
2014 
£m 
2013 
£m 
short term deposits  400 – 
cash at bank  902 276 
 1302 276 
 
2014 
£m 
2013 
£m 
bank overdraft 430 461 
bank loans  – 130 
trade creditors  50 04 
amounts owed to subsidiary undertakings  2317 1668 
accruals and deferred income  131 170 
bonds – accrued interest 292 292 
other debt payable 11 11 
 3231 2736 
financial statements
notes to the company accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 158 additional information
strategic report corporate governance financial statements
 
 
159 wwwnationalexpressgroupcom
11 creditors amounts falling due after more than one year 
12 provisions for liabilities and charges 
13 deferred tax 
the major components of the provision for deferred taxation are as follows 
the reconciliation of deferred tax balances is as follows 
timing differences associated with group investments 
no deferred tax 2013 £nil is recognised on the unremitted earnings of subsidiaries and associates as no dividends have been accrued 
as receivable and no binding agreement to distribute the past earnings in future has been entered into by the subsidiaries 
unrecognised tax losses 
deferred income tax assets are recognised for tax loss carryforwards to the extent that the realisation of the related tax benefit 
against future taxable profits is probable deferred tax assets that the company has not recognised in the accounts amount to 
£43m 2013 £26m which arise where the company does not expect to generate sufficient suitable future profits  
 
2014 
£m 
2013 
£m 
bonds 5853 5795 
other debt payable 656 645 
 6509 6440 
    
claims 
provision 
£m 
at 1 january 2014    02 
charged to profit and loss    25 
at 31 december 2014    27 
 
2014 
£m 
2013
£m 
accelerated capital allowances  02 02 
other timing differences  01 01 
losses carried forward 66 57 
net deferred tax asset  69 60 
 £m 
deferred tax asset at 1 january 2014 60 
charged to profit and loss 09 
deferred tax asset at 31 december 2014 69 
159 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
160 national express group plc annual report and accounts 2014
financial statements 
notes to the company accounts continued 
for the year ended 31 december 2014 
 
 
14 interestbearing loans and borrowings 
the effective interest rates at the balance sheet date were as follows 
1
 this date is the ultimate maturity date of the syndicated credit facility there was £nil drawn down at year end 
details of the company’s interest rate management strategy and interest rate swaps are included in note 29 and note 30 to the 
consolidated accounts 
15 calledup share capital 
the total number of share options exercised in the year by employees of the group was 972868 2013 1431193 of which 882000 
2013 1431193 exercises were satisfied by transferring shares from the national express employee benefit trust the remaining 
exercises were settled via a direct purchase of shares from the open market 
 
 
2014  
£m  maturity effective interest rate 
2013 
£m maturity  effective interest rate 
current       
bank overdraft  430   461 on demand libor  1 
european bank loans – november 2019
1
libor  060 130 july 2018 libor 110 
bank loans –   130   
accrued interest 303   303   
total current  733   894   
noncurrent       
sevenyear sterling bond 3530 january 2017 654 3520 january 2017 654 
tenyear sterling bond 2323 january 2020 685 2275 june 2020 685 
bonds 5853   5795   
euro private placement 656 august 2021 455 645 august 2021 455 
other debt payable 656   645   
total noncurrent  6509   6440   
 
2014 
£m 
2013
 £m 
at 31 december   
authorised   
800000000 2013 800000000 ordinary shares of 5p each 400 400 
issued calledup and fully paid   
511738648 2013 511738648 ordinary shares of 5p each  256 256 
financial statements
notes to the company accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 160 additional information
strategic report corporate governance financial statements
 
 
161 wwwnationalexpressgroupcom
16 shareholders’ funds and statement of changes in shareholders’ equity 
own shares 
own shares comprises 553268 2013 426630 ordinary shares in the company that have been purchased by the trustees of the national 
express employee benefit trust the ‘trust’ during the year the trust purchased 1033000 2013 1322165 shares and 882000 
20131431193 shares were used to satisfy options granted under a number of the company’s share schemes 24362 2013 nil shares 
were sold during the year to the open market 
the market value of the shares held by the trust at 31 december 2014 was £14m 2013 £12m the dividends payable on these shares 
have been waived 
17 retirement benefits 
the company participates in both the national express group staff pension fund a multiemployer funded defined benefit scheme and 
a defined contribution scheme the company is unable to identify its share of the underlying assets and liabilities of the multiemployer 
scheme on a consistent and reasonable basis and therefore has accounted for the scheme as if it were a defined contribution scheme 
under the requirements of frs 17 retirement benefits contributions to this scheme are determined by independent professionally qualified 
actuaries the details of the latest actuarial valuation are detailed in note 33 to the consolidated accounts 
the total defined benefit pension charge for the year including contributions to the defined benefit scheme above the normal charge 
amounted to £32m 2013 £31m 
 
share
 capital 
£m 
share 
premium 
£m 
capital 
redemption 
reserve 
£m 
own  
shares  
£m 
profit and 
 loss account 
£m 
total 
£m 
at 1 january 2014 256 5327 02 08 4004 9581 
shares purchased  – – – 32 – 32
own shares released to satisfy employee  
share schemes – – – 25 25 – 
sharebased payments – – – – 16 16 
profit for the year – – – – 849 849 
dividends – – – – 516 516
at 31 december 2014  256 5327 02 15 4328 9898 
 
share
 capital 
£m 
share 
premium 
£m 
capital 
redemption 
reserve 
£m 
own  
shares  
£m 
profit and 
 loss account 
£m 
total 
£m 
at 1 january 2013 256 5327 02 05 2515 8095 
shares purchased  – – – 28 – 28
own shares released to satisfy employee  
share schemes – – – 25 25 – 
sharebased payments – – – – 13 13 
profit for the year – – – – 2004 2004 
dividends – – – – 503 503
at 31 december 2013  256 5327 02 08 4004 9581 
161 wwwnationalexpressgroupcom
strategic report corporate governance financial statements  
 
162 national express group plc annual report and accounts 2014
financial statements 
notes to the company accounts continued 
for the year ended 31 december 2014 
 
 
18 sharebased payment  
during the year ended 31 december 2014 the company had the following sharebased payment arrangements which are described  
in note 7b to the consolidated accounts  
the number of share options in existence during the year was as follows 
there were 58755 options outstanding at 31 december 2014 2013 none 
the options have a weighted average contractual life of one year 2013 one year options were exercised throughout the year and the 
weighted average share price at exercise was 280p 2013 200p 
the weighted average fair value of the remaining share options granted during the year was calculated using a stochastic model with the 
following assumptions and inputs 
experience to date has shown that approximately 24 2013 24 of options are exercised early principally due to leavers this has been 
incorporated into the calculation of the expected option life for the share options without nil exercise price  
expected volatility in the table above was determined from historic volatility over the last nine years adjusted for oneoff events that were 
not considered to be reflective of the volatility of the share price going forward the expected dividend yield represents the dividends 
declared in the 12 months preceding the date of the grant divided by the average share price in the month preceding the date of the grant 
for share options granted during the year under the ltip the tsr targets have been reflected in the calculation of the fair value of the  
options above  
  2014  2013 
 
number 
of share 
options 
weighted 
average  
exercise price  
p 
number 
of share 
options
weighted
average 
exercise price 
p 
options with a nil exercise price     
at 1 january  7172135 nil 5469047 nil 
granted during the year  2495876 nil 3036117 nil 
forfeited during the year 1335165 nil 48431 nil 
group transfers during the year 336563 nil – nil 
exercised during the year  304079 nil 741976 nil 
expired during the year 1623102 nil 542622 nil 
total outstanding at 31 december  6742228 nil 7172135 nil 
total exercisable at 31 december  58755 nil – nil 
 share options with nil exercise price 
  2014   2013 
risk free interest rate  113181 035084 
expected volatility  300 292442 
peer group volatility  280300 368443 
expected option life in years  35 years 35 years 
expected dividend yield 358 464488 
weighted average share price at grant date 280p 202p 
weighted average exercise price at grant date nil nil 
weighted average fair value of options at grant date 196p 130p 
financial statements
notes to the company accounts continued
for the year ended 31 december 2014
national express group plc annual report and accounts 2014 162 additional information
strategic report corporate governance financial statements
 
 
163 wwwnationalexpressgroupcom
19 commitments and contingencies  
operating lease commitments  
the company has entered into operating leases on certain properties annual commitments under noncancellable operating leases  
are as follows 
contingent liabilities  
a guarantees  
the company has guaranteed credit facilities totalling £163m 2013 £190m of certain subsidiaries  
b bonds and letters of credit  
in the ordinary course of business the company is required to issue counterindemnities in support of its operations letters of credit have 
been issued to support insurance retentions of £657m 2013 £488m 
20 related party transactions  
the company has taken advantage of the exemption in paragraph 3c of frs 8 related party disclosures from disclosing transactions with 
wholly owned subsidiaries  
21 post balance sheet events 
there are no post balance sheet events 
 land and buildings 
 
2014 
£m 
2013
£m 
operating leases which expire   
within two to five years  01 01 
163 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information
shareholder information
registrars’ details
all matters relating to the administration of 
shareholdings in national express group plc 
such as the loss of a share certificate dividend 
payments or a change of address should be 
directed to our registrars equiniti limited 
aspect house spencer road lancing west 
sussex bn99 6da shareholder helpline 
number 0871 384 2152 or 44 121 415 7047 
from overseas if you are registered for online 
shareholder communications you can contact 
the registrars via wwwshareviewcouk
shareholder electronic 
communications
national express encourages shareholders 
to use our online communications service 
by registering for electronic communications 
this provides a faster way to receive information 
and helps us to reduce print paper and 
postage costs 
log on to wwwshareviewcouk if you would 
like to
• register your email so that you are able 
to access future shareholder information 
including the annual report and accounts 
electronically
• check the balance of your shareholding
• set up a dividend mandate online
• change your registered postal address 
or your dividend mandate details or 
• submit your vote online prior to a 
general meeting
to sign up for the first time you should click on 
‘register’ and follow the simple instructions – 
you will need your shareholder reference 
number from your share certificate or dividend 
voucher or any other correspondence sent to 
you by equiniti limited
if you have any queries contact our registrars 
equiniti limited on the shareholder helpline 
number 0871 384 2152 or 44 121 415 7047 
from overseas
dividends paid direct to your 
bank account
having dividends paid direct to your bank 
account has the following advantages
• avoids the risk of cheques being lost and 
incurring a replacement fee
• saves you time in presenting the cheque 
for payment and
• the dividend is credited to your account 
on the payment date
consolidated tax vouchers
the company now issues a consolidated 
tax voucher ctv once a year to all 
shareholders save for corporate and 
institutional shareholders a ctv is 
included with the 2015 agm mailing
to set up a new dividend mandate please 
log on to shareviewcouk or contact our 
registrars equiniti limited on the 
shareholder helpline number 0871 384 2152 
or 44 121 415 7047 from overseas
share dealing service
a telephone and internet share dealing service 
which provides a simple way to buy and sell 
shares is available through our registrars 
equiniti for further information log on to 
shareviewcoukdealing or telephone 
0845 603 7037 calls to this number are 
charged by bt at the local rate or 
44 121 415 7560 from overseas
company website
the company website at www
nationalexpressgroupcom has information 
about the group including press releases 
share price data and copies of the halfyear 
results and annual report and accounts as 
well as corporate responsibility reporting 
the company no longer publishes the halfyear 
results in hard copy these will continue to be 
available via the website
sharegift
sharegift is an independent charity share 
donation scheme administered by the orr 
mackintosh foundation registered charity 
number 1052686 those shareholders who 
hold only a small number of shares the value 
of which makes it uneconomic to sell them 
can donate the shares to sharegift who will 
sell them and donate the proceeds to a wide 
range of charities further information about 
sharegift can be obtained from its website 
at sharegiftorg and a sharegift transfer 
form can be downloaded from  
wwwnationalexpressgroupcom
unclaimed assets register
the company participates in the unclaimed 
assets register uar which provides a 
search facility for shareholdings and other 
financial assets that may have been forgotten 
for further information contact uar by 
email at uarenquiriesukexperiancom 
tel 0844 481 8180 or visit wwwuarcouk
unsolicited mail
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of members available subject to a proper 
purpose test to the public as a consequence 
of this some shareholders might receive 
unsolicited mail shareholders wishing to limit 
the amount of such mail should write to the 
mailing preference service freepost 29 
lon20771 london w1e 0zt 
shareholders can also register online at  
wwwmpsonlineorguk or request an 
application form by calling from within 
the uk 0845 703 4599 or by  
email to mpsdmaorguk
warning about share fraud
share fraud includes scams where investors 
are called out of the blue and offered shares 
that often turn out to be worthless or non
existent or an inflated price for shares they 
own these calls come from fraudsters 
operating in ‘boiler rooms’ that are mostly 
based abroad
while high profits are promised those who 
buy or sell shares in this way usually lose 
their money
the financial conduct authority fca and 
prudential regulatory authority pra which 
replaced the financial services authority on 
1 april 2013 have found most share fraud 
victims are experienced investors who lose 
an average of £20000 with around £200m 
lost in the uk each year
how to avoid share fraud
if you are offered unsolicited investment advice 
discounted shares a premium price for shares 
you own or free company or research reports 
you should take these steps before handing 
over any money
1 get the name of the person and 
organisation contacting you
2 check the fca register at wwwfcaorguk
register to ensure they are authorised
3 use the details on the fca register to 
contact the firm
4 call the fca consumer helpline 
on 0800 1 1 1 6768 freephone or  
44 20 7066 1000 from overseas if there 
are no contact details on the register or 
you are told they are out of date
5 search the fca’s list of unauthorised 
firms and individuals to avoid doing 
business with
6 remember if it sounds too good to be 
true it probably is
if you use an unauthorised firm to buy or sell 
shares or other investments you will not have 
access to the financial ombudsman service 
or financial services compensation scheme 
fscs if things go wrong
report a scam
if you are approached by fraudsters please tell 
the fca using the share fraud reporting form 
at wwwfcaorgukscams where you can find 
out more about investment scams or call the 
fca consumer helpline on 0800 1 1 1 6768
if you have already paid money to share 
fraudsters you should contact actionfraud 
on 0300 123 2040
  calls to this number cost 8p per minute plus network 
extras lines open 830am to 530pm monday to friday
national express group plc annual report and accounts 2014 164 additional information
dividends and financial calendar
final dividend ex dividend date 30 april 2015
final dividend record date 1 may 2015
annual general meeting 6 may 2015
final dividend payment date 22 may 2015
half year results announced 29 july 2015
interim dividend ex dividend date 3 september 2015
interim dividend record date 4 september 2015
interim dividend payment date 25 september 2015
 provisional dates
165 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information agm annual general meeting
bps basis points
bsog bus service operators grant
code the uk corporate governance code published by the financial reporting council in june 2010
the company national express group plc
cpi consumer price index
ctv consolidated tax voucher
dft department for transport
dtrs disclosure and transparency rules
ebit earnings before interest and tax
ebitda earnings before interest and tax plus depreciation and amortisation it is calculated by taking 
normalised operating profit and adding back depreciation fixed asset grant amortisation 
normalised profit on disposal of noncurrent assets and sharebased payments
efqm european foundation for quality management
eps earnings per share – the profit for the year attributable to shareholders divided by the weighted 
average number of shares in issue excluding those held by the employee benefit trust which are 
treated as cancelled
eu european union
euribor euro interbank offered rate
gearing ratio is calculated as net debt divided by ebitda
the group the company and its subsidiaries
hmrc her majesty’s revenue and customs
ias international accounting standards
ifric international financial reporting interpretations committee
ifrs international financial reporting standards
kpi key performance indicator
libor london interbank offered rate
ltip long term incentive plan
net capital expenditure the increase in net debt arising on the purchase of property plant and equipment and intangible 
assets less proceeds from disposals of property plant and equipment it excludes capital 
expenditure arising from uk rail franchise entry and exits and discontinued operations which are 
included in these headings growth capital expenditure is calculated as investment in fleet for new 
contracts and concessions after deducting fleet released from contracts and concessions lost 
and fleet reused in new contracts and concessions
net debt is defined as cash and cash equivalents cash overnight deposits other short term deposits and 
other debt receivables offset by borrowings loan notes bank loans and finance lease obligations 
and other debt payable excluding accrued interest
net interest expense is finance costs less finance income 
additional information
glossary
national express group plc annual report and accounts 2014 166 normalised earnings per share earnings per share excluding the loss on sale of a business intangible asset amortisation 
exceptional items and tax relief thereon
normalised operating profit statutory operating profit excluding intangible asset amortisation and exceptional items  
the board believes that the normalised profit gives a better indication of the underlying 
performance of the group
normalised result the statutory result excluding loss on the sale of a business intangible asset amortisation 
exceptional items and tax relief thereon
operating cash flow is intended to be the cash flow equivalent of normalised operating profit
operating margin is normalised profit divided by revenue expressed as a percentage
orr office of rail regulation
rcf revolving credit facility
return on assets roa is normalised operating profit divided by tangible assets
return on capital employed roce is normalised operating profit divided by tangible and intangible assets
rpi retail prices index
rps railways pension scheme
spad signal passed at danger
toc train operating company
tsr total shareholder return – the growth in value of a shareholding over a specified period assuming 
that dividends are reinvested to purchase additional shares
ulsd ultra low sulphur diesel
underlying revenue compares the current year with the prior year on a consistent basis after adjusting for the impact  
of currency acquisitions disposals and rail franchises no longer operated
167 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information 2014  
£m
2013  
£m
2012  
£m
2011  
£m
2010  
£m
bus and coach core nonrail
revenue 17137 17462 16361 15497 14884
normalised operating profit 1851 1855 1852 1818 1704
return on capital pre tax 117 111 106 106 102
basic earnings per share 212p 201p 216p 207p 188p
group normalised
revenue 18674 18913 18312 22380 21259
normalised operating profit 1931 1929 2119 2252 2042
return on capital pre tax 124 117 122 141 132
diluted earnings per share 227p 214p 254p 269p 235p
ifrs
revenue 18674 18913 18312 22380 21259
operating profit 1142 1179 1176 1744 859
profit before tax 665 644 698 1294 402
basic earnings per share 116p 111p 118p 199p 120p
dividends per share – declared 1030p 1000p 975p 950p 600p
net debtfunds
cash at bank and in hand 837 409 728 925 1288
other debt receivable 08 10 10 07 07
bonds 5853 5795 5900 5834 5656
bank and other loans 52 193 1146 79 398
fair value of bond hedging 
derivatives
186 92 234 164 11
finance lease obligations 1105 1329 1547 1513 1316
other debt payable 664 655 661 07 18
net debt 6643 7461 8282 6337 6104
gearing ratio 225x 25x 25x 19x 21x
additional information
five year summary
national express group plc annual report and accounts 2014 168 additional information
corporate information
secretary and registered office 
sandra forbes
national express group plc 
national express house 
birmingham coach station 
mill lane 
birmingham  
b5 6dd 
tel 44 08450 130130 
wwwnationalexpressgroupcom
registered number
2590560
auditor
deloitte llp
four brindleyplace 
birmingham 
b1 2hz
registrar
equiniti limited
aspect house 
spencer road 
lancing 
west sussex 
bn99 6da 
shareholder helpline 0871 384 2152  
or 44 121 415 7047 from overseas
  calls to this number cost 8p per minute plus network 
extras lines open 830am to 530pm monday to friday
principal banker
hsbc bank plc
8 canada square 
london 
e14 5hq
corporate solicitors
ashurst llp
broadwalk house 
5 appold street 
london 
ec2a 2ha
financial advisors
bank of america merrill lynch
2 king edward street 
london 
ec1a 1hq
stockbrokers
bank of america merrill lynch
2 king edward street 
london 
ec1a 1hq
morgan stanley
25 cabot square 
canary wharf 
london 
e14 4qa
cautionary statement
this annual report and accounts is intended 
to focus on matters which are relevant to the 
interests of shareholders of the company the 
purpose of this annual report and accounts 
is to assist shareholders in assessing the 
strategies adopted and performance delivered 
by the company and the potential for those 
strategies to succeed it should not be relied  
on by any other party or for any other purpose 
forward looking statements are made in good 
faith based on a number of assumptions 
concerning future events and information 
available to directors at the time of their 
approval of this report these forward looking 
statements should be treated with caution 
due to the inherent uncertainties underlying 
any such forward looking information the 
user of this annual report and accounts 
should not rely unduly on these forward 
looking statements which are not a guarantee 
of performance and which are subject to 
a number of uncertainties and other facts 
many of which are outside the company’s 
control and could cause actual events to differ 
materially from those in these statements  
no guarantee can be given of future results 
levels of activity performance or achievements
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silk and amadeus 100 offset which are made using 100  
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national express group plc annual report and accounts 2014


Summary:
 strategic report
group chief executive’s review
we are making sound progress in our strategy
overview of 2014
national express has delivered a good performance in 2014 with group 
revenue up 23 on a constant currency basis and both statutory and 
normalised profit before tax also up on a constant currency basis by 
10 and nearly 7 respectively our free cash generation remains very 
strong again beating our target for the year and during the course of 
the year we have reduced net debt by over £80 million we renewed a 
number of key concessions in the year and also successfully expanded 
our business into new markets
this performance demonstrates both the resilience and strength of our 
businesses we have had to overcome significant challenges from the 
first half of the year especially poor weather in the us strike action in 
spain and significant currency headwinds together these challenging 
events reduced profits by £5 million at the half year to have recovered 
from this position and delivered such a strong second half of the year 
is a particularly pleasing result 
to achieve these results we have again made good progress against 
our three strategic goals
first our operational excellence programme continues to be embedded 
across the business we place customers at the heart of our strategy 
causing us to focus on delivering continuously improving services whilst 
maintaining a relentless attention to efficiency to enable us to offer good 
value fares this has helped every division deliver an increase in revenue 
and passenger numbers this year the uk businesses have seen 
particularly good increases in revenues and passengers resulting in 
strong profit growth in uk bus and uk coach uk coach profits 
increased significantly to £280 million 2013 £245m and have now 
grown 36 in two years uk bus has also performed very strongly 
with profits increasing to £340 million 2013 £312m and its pioneering 
partnership with centro – transforming bus travel – winning two 
industry best practice awards in the year
pleasingly the benefits of our focus on operational excellence have 
also been seen in our customer satisfaction scores with most of our 
operations leaders in their markets north american school bus for 
example has retained 97 of its contracts significantly ahead of its 
peers over 93 of customers would also recommend us to other 
school boards with quality of service safety and value being the 
key considerations
we are determined to maintain this progress building on c2c’s success 
in achieving a five star rating in the european foundation for quality 
management assessment uk coach was awarded a four star rating 
in its first assessment uk coach is determined to emulate c2c and 
secure a five star rating at its next assessment the other divisions will 
soon be undertaking similar exercises as part of our programme to 
drive operational excellence across the group
second as well as these notable successes our focus on operational 
excellence is also underpinning our success in our strategic goal of 
generating superior cash and returns with another year of excellent 
cash flow we have again exceeded our free cash flow target for the 
year by £40 million with £190 million delivered in the period this 
has enabled us to further reduce net debt by over £80 million to 
£6643 million representing a gearing ratio of 225 times ebitda 
group roce has also increased to 124 2013 1 17 reflecting our 
continuous focus on delivering strong returns on our capital this has 
underpinned improving returns to shareholders with a proposed full 
year dividend up 3 to 103 pence per share even before this dividend 
nearly £200 million has been returned to shareholders since 201 1 and 
in the past two years net debt has been reduced by £164 million
we have incurred over £40 million in rationalisation and restructuring 
costs this year our strategic rationalisation programme in the us saw 
us make significant progress on exiting commercially unattractive 
contracts with all such contracts now provided for coupled with rising 
prices in north america we are confident this programme will deliver 
rising returns in the future following the success of this ‘up or out’ 
strategy we conducted a similar review in spain we also restructured 
across the group to remove costs and enhance future earnings 
together these rationalisation and restructuring programmes have 
made us more efficient and better able to meet the challenges and 
opportunities ahead and will help deliver improved returns in the 
coming years
third we have generated growth in new markets during the year we 
won a tenyear contract to operate buses in bahrain we believe this 
positions us well locally in bahrain where there is scope for further 
growth and also within the growing middle eastern market we 
withdrew from the german coach market during the year due to its 
unrealistic pricing structure making it impossible to sustain a profitable 
quality service we were also disappointed to have come second in 
both the crossrail and scotrail competitions with the scotrail result 
particularly disappointing as we were within 024 of the winning bid 
more recently we have however secured our third and fourth contract 
wins in german rail with our success in the nuremberg sbahn 
contract these 12 year contracts generating €14 billion of revenue will 
begin operation in december 2018 and represent further expansion for 
us in europe’s largest liberalising rail market deutsche bahn has again 
chosen to challenge the award as they did unsuccessfully with our 
previous two contracts in north rhinewestphalia we therefore remain 
confident of the award being confirmed in due course
dean finch
group chief executive 
26 february 2015
national express group plc annual report and accounts 2014 8 this new market growth has also complemented the significant 
progress we have made in retaining existing contracts including our 
largest us transit contract and our largest spanish concession to have 
come up for renewal to date our success in winning the essex 
thameside franchise competition means that our industryleading c2c 
services will continue securing around £4 billion of revenue and our 
presence in uk rail until 2029 coupled with our 15 and 12 year 
contracts in germany – themselves worth around €3 billion in revenue 
– we enter 2015 with both strong credentials and a uniquely longterm 
future in the rail industry
highlights
highlights of 2014 included
• in constant currency terms the group delivered a 2 increase in 
revenue and 7 increase in normalised profit before tax this is a 
significant achievement overcoming the headwinds in the first half of 
the year earnings per share increased to 227 pence 2013 215p 
group roce increased to 124 and free cash flow of £190 million 
again exceeded our target an increase in the proposed full year 
dividend to 103 pence per share is funded within our robust policy 
of two times nonrail earnings cover
• uk coach has grown revenue by 4 uk coach’s profits have 
grown by 36 in two years with operating margin increasing over 
the same period by over 25 to reach 102 we believe there are 
good opportunities for further growth as a focus on journey time 
improvements is combined with a continued emphasis on the 
customer including the increasing use of targeted marketing 
these initiatives continue to make our offer ever more attractive 
to customers and drive improved returns
• uk bus has had another strong year with revenue growth of 
28 and west midlands commercial patronage increasing 08 
our industryleading transforming bus travel partnership won two 
awards during 2014 and provides a stability that allows us to deliver 
significant investment in improving services 2014’s passenger 
focus results saw our services secure the fastest growth in 
customer satisfaction of any urban operator this progress is 
something we are looking to build on in 2015 with initiatives such as 
the extension of our smartticketing system to trams and pay as you 
go this will be underpinned by record investment in new vehicles 
and continued close working with local authorities to improve journey 
times and reliability
• in rail we successfully retained the c2c franchise during 2014 
guaranteeing our future in uk rail until 2029 c2c has maintained 
its industryleading performance for a third consecutive year and 
delivered 6 revenue growth and 2 passenger growth in year 
a slight decline in 2014’s profit and margin is explained by the more 
onerous contract terms during the franchise extension in place to 
september last year we are encouraged by the passenger response 
so far to the new franchise’s focus on customer service investment 
in wifi and new advance purchase offpeak tickets are already 
proving popular with new flexible ticketing and pioneering automatic 
delayrepay compensation being introduced in due course we are 
confident this enhanced customer service offer will continue to 
be popular
• north america delivered a strong second half performance to 
overcome the 6 1 million impact of the extreme weather in the first 
half and ended the year with both revenue and profit growth in 
constant currency in the last five years north american school bus 
has more than doubled its profitability to £595 million 2009 
£253m we made good progress on improving the quality of the 
portfolio by exiting poorly performing contracts and targeting those 
with better returns this was complemented by a significant bolton 
acquisition in philadelphia and our largest ever conversion contract 
in memphis us transit also secured its largest contract mbta for 
a further eight years our return on assets increased again to 238 
better pricing discipline in the market combined with our ongoing 
focus on efficient capital deployment means we are optimistic 
about our prospects in north america as set out below we believe 
we have significant opportunity for further growth in north america 
• spain delivered an increase in revenue in local currency but a decline 
in operating profit to €94 1 million 2013 €960m because of the 
impact of ongoing rail competition and a significant strike in april 
the implementation of revenue management and an improved 
service offer on the affected rail competed routes led to an improved 
performance in the second half with passenger growth at 4 and 
revenue only 2 lower on the affected routes strong growth in 
morocco continued including the benefit of a full year of the tangier 
operation alsa also successfully retained its bizkaia contract the 
largest to come up for renewal so far as the number of concession 
renewals increases in the coming years we believe the benefits of 
our focus on cost efficiency and revenue management mean we 
are well placed to achieve our aim of maintaining market share
our partnership with centro on transforming bus travel in the west midlands 
was recognised by two industry awards in 2014
9 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information strategic report
group chief executive’s review continued
strategy
these results demonstrate how our consistent strategy has been 
improving returns for shareholders and positions us well for future 
growth opportunities
delivering operational excellence
our success in recent years has been rooted in operational excellence 
it is also increasingly clear that our future success depends on it it is 
what our customers demand as our most recent successes in german 
rail and bahrain demonstrate a reputation for operational excellence has 
been crucial in winning contracts in new markets
for national express excellence means delivering continuously 
improving services whilst ensuring a relentless focus on efficiency our 
aim is for national express to be known for both excellence in the quality 
of our operations and price leadership
for quality safety is fundamental and remains our first priority we have 
made important progress since launching driving out harm in 2010 
and i am pleased that our independent assessors arthur d little have 
reported a year on year improvement in our fatalities and weighted 
injuries index measure of safety of 17 and a reduction in total 
responsible harm of 54 in four years however safety requires 
a relentless focus and our ambition remains to eradicate all harm 
from our business and achieve world class standards of safety
another crucial aspect of quality is the delivery of punctual high 
performing services at any one time in peak hours we have over 
23000 vehicles on the road or rail we are proud that c2c has now 
been the uk’s most punctual operator for three years running as well 
as holding the annual and fourweek records our uk coach business 
has recently signed a groundbreaking agreement with the highways 
agency to help improve our punctuality and reliability
we remain focused on operating as efficiently as possible to help 
maintain our prices as competitively as we can the £31 million of cost 
savings delivered during 2014 is higher than in 2013 across the group 
many of the businesses have delivered year on year improvements in 
value for money scores in their customer surveys and all carried more 
passengers in 2014 compared with 2013 a particular highlight is our 
uk coach business being named the country’s ‘most trusted ground 
transportation company’ by the institute of customer service
an important part of our strategy is delivering price leadership and value 
for money for our customers we are particularly pleased that all of our 
divisions have grown patronage as it demonstrates that our excellent 
prices and deals are effective within the uk for example this year we 
are investing over £23 million in great value fares such as our coach 
funfares rewards for frequent bus users and new advanced offpeak 
fares in rail
getting the combination of price and quality right means we go some 
way to delivering on our vision of earning customers’ lifetime loyalty 
passengers are more likely to continue to use our services above other 
choices because they are receiving a good service at a good price 
equally contracting authorities or businesses are less likely to retender 
services or are more likely to award us new contracts if we consistently 
deliver excellence
this is why i am particularly pleased with our retention of major contracts 
in 2014 the 15 year c2c rail franchise ten year bizkaia contract in bilbao 
and the fiveyear mbta paratransit contract in boston 
results such as our north american school bus business retaining over 
97 of its contracts and uk bus demonstrating the fastest growth in 
passenger satisfaction of any urban operator in the 2014 passenger 
focus survey are further evidence of our continued progress
superior cash and returns
cash generation has been a particular focus of national express 
we have made this a priority because free cash flow pays dividends 
for shareholders funds future growth and reduces debt
in 2014 we have again made significant progress in delivering on our 
targets we have delivered £190 million of free cash £40 million ahead 
of target national express has now delivered £1 billion of free cash 
since 2009
over the year net debt has been reduced by over £80 million to 
£6643 million a gearing ratio of 225 times ebitda
we increased the group’s roce in 2014 to 124 a 6 increase 
yearonyear we invested £51 million of net capital during 2014 and 
have continued to deploy capital where it will deliver the best returns 
we have further improved our group operating margin in 2014 to 
103 and we continue to target both margin and roce improvement 
in the coming years
we set out our plan to reduce our gearing ratio by the end of 2014 to 
help mitigate the key risks the business faced the loss of the c2c 
franchise and spanish concession renewals these risks have either not 
materialised with the c2c franchise success or been delayed spanish 
concessions we also identified new opportunities for increased 
investment during 2014 to generate shareholder value in the coming 
years we believe there are further opportunities in the coming years 
and are therefore pausing our deleveraging while staying within our 
published target to use our continued strong cash generation to invest 
in specific new growth opportunities that meet our strict financial and 
strategic criteria
creating new business opportunities
we believe the principal opportunity for increased investment to 
deliver strong growth over the medium term is in our north american 
business we have already demonstrated our ability to grow this 
business significantly in recent years over the last five years north 
american school bus has more than doubled its profits additionally 
over the same period through a disciplined approach to capital 
allocation and contract selection we have nearly doubled margins 
in north america to 96 from 57 and have improved our roa by 
1 18 to 238
the first of our new german trains rolls off the production line
national express group plc annual report and accounts 2014 10 there are excellent opportunities for growth given this market’s highly 
fragmented nature and the continuing trend for conversions there are 
over 10000 private school bus businesses in the united states indeed 
in the last year we successfully boltedon a new school bus business in 
philadelphia that operates 318 routes through improved operational 
standards group purchasing power and management synergies from 
integration with our existing nearby locations we will have paid for the 
acquisition within three years we also won our largest ever conversion 
contract in shelby county tennessee this delivered 440 new buses to 
the 285 we already operated as we integrated the operations previously 
run by the local school board our success in integrating our major 
petermann acquisition three years ago is further evidence of our strong 
credentials here
with greater consolidation and increased outsourcing in the market our 
reputation for excellence strong capital discipline and cash generation 
and industryleading team provides the group with a strong opportunity 
for further growth in north american school bus
us transit also continues to provide opportunities for further growth 
2014 was the second consecutive year where we have retained 100 
of our contracted revenue up for renewal including the largest contract 
– mbta we also secured a fixedroute transit services contract in 
yuma arizona the first contract in this heavily contracted state and a 
strategic target of the division building on this we are currently working 
on a pipeline of over 300 million of annualised revenues and believe 
this remains an attractive market
in addition our unique portfolio of diversified bus coach and rail 
businesses means national express is well placed to grow in selected 
other markets to complement this opportunity for expansion in 
north america we believe morocco for example provides good 
opportunities for further growth building on our significant progress 
there in recent years 
we have also made significant progress during 2014 in growing in 
other markets our success in securing a tenyear contract in bahrain 
opens both that country and the wider middle east to further growth 
our recent award of the nuremberg sbahn network is a clear 
demonstration of the opportunity for further growth in the exciting 
german rail market we will begin operating services on our north 
rhinewestphalia contracts in december this year and have an active 
bidding pipeline we are currently shortlisted for three german contracts 
and there are up to 30 new tenders coming up in the next two years 
we are also monitoring rail liberalisation in spain
as the operator of the uk’s best performing franchise we will continue 
to monitor opportunities in the uk rail market we will maintain our 
selective and disciplined approach and only bid where we feel our 
expertise will significantly improve the service for passengers and deliver 
acceptable returns to shareholders however through our successes in 
germany and c2c we have now secured more than £6 billion of future 
revenue in rail
outlook 
during 2015 we expect our uk rail bus and coach businesses to 
build on their good progress during 2014 and to continue to perform 
well with strong cash generation in spain the main contract renewal 
process starts this year but any impact from new terms for our larger 
concessions is unlikely to be felt until 2017  whilst we expect some 
margin pressure on renewal as is normal we believe alsa can 
mitigate this risk through a combination of significant revenue and cost 
management actions as well as securing new growth opportunities 
we are determined to retain a significant market share in spain and as 
market leaders have demonstrated our ability to compete effectively 
we also expect the group to continue to successfully exploit a 
number of important opportunities in the middle east north africa 
and germany we are currently working on an active pipeline worth 
£8 billion of annualised revenues
the benefits from these new opportunities as well as our existing 
businesses will continue to be reflected in the strong cash generation 
with a target of £100 million this year we will continue to focus on 
margin and roce improvement and we are not anticipating there to 
be any exceptional costs from reorganisation or restructuring in 2015 
as  previously stated we are changing the accounting treatment of bid 
costs to be included in normal operating costs
the recent focus of our cash flow has been on debt reduction and 
growing our dividend we increased investment in new business 
opportunities during 2014 and believe we are now in a strong position 
to exploit other new growth opportunities with a focus in the north 
american school bus market where we have more than doubled 
profitability in the past five years while we will remain within our published 
target we believe we have the opportunity to use our continued strong 
cash generation to invest in new growth opportunities that meet our strict 
financial and strategic criteria there are excellent opportunities in the 
north american market given its highly fragmented nature and the 
continuing trend in conversions the success of last year’s bolton 
acquisition in philadelphia and the largest ever conversion contract 
in memphis demonstrates the opportunity here and we will continue 
to apply our proven model of excellence to deliver the services our 
customers value as well as generating good returns for our shareholders
dean finch
group chief executive
26 february 2015
the bahraini minister of transport marks the launch of our new 
bus service in bahrain
11 wwwnationalexpressgroupcom
strategic report corporate governance financial statements additional information