annual report and accounts 2013
national express group plc annual report and accounts 2013
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strategic report
01 financial highlights
02 national express group at a glance
04 chairman’s statement 
06 group chief executive’s review
11 market overview 
13 investment case 
14 our business model and strategy 
16 strategy in action 
19 managing our relationships and resources 
24 risk and risk management 
26 principal risks and uncertainties 
28 group finance director’s review
32 spain 
36 north america
40 uk bus
44 uk coach
48 rail
corporate governance 
53 chairman’s introduction
54 board of directors
56 governance report
64 board committees
68 directors’ remuneration report
88 other statutory information
92 directors’ responsibilities statement
financial statements
93 auditor’s report
97 group income statement
98 group statement of comprehensive income 
99 group balance sheet
100 group statement of changes in equity
101 group statement of cash flows
102 notes to the consolidated accounts
157 company balance sheet
158 notes to the company accounts
additional information
168 shareholder information
169 dividends and financial calendar
170 glossary
172 five year summary
ibc corporate information
national express group is a 
leading public transport provider 
delivering services in the uk  
north america spain germany  
and morocco 
our vision is to earn the lifetime 
loyalty of our customers by 
consistently delivering frequent high 
performing public transport services 
which offer excellent value 
unless otherwise stated all 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 business 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
‘core nonrail’ businesses are uk bus uk coach spain including morocco and north america including transit it excludes the german coach startup
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 for the core nonrail businesses
‘return on assets’ ‘roa’ is normalised operating profit divided by tangible assets
operating cash flow is intended to be the cash flow equivalent of normalised operating profit free cash flow is intended to be the cash flow equivalent of normalised profit after tax 
a reconciliation is set out in the table within the 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
the annual punctuality measure for c2c is the moving annual average maa public performance measure ppm to 4 january 2014
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 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
ebitda is ‘earnings before interest tax 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 it is defined in line with the group’s banking documentation strategic report
financial highlights
a strong performance in 2013
• group revenue increased 3 to £189 billion 2012 
£183 billion with 7 growth in total nonrail revenue
• normalised operating profit from core nonrail businesses 
reached a record £1855 million
• group operating margin of 102 reflects lower rail profits 
and headwinds in spain and the uk
• full year proposed dividend of 100 pence  
up 3 yearonyear
• free cash flow of £1828 million over £30 million  
ahead of target
• core nonrail roce increased to 1 1 1 through focus  
on capital deployment and targeted investment
summary of results 2013
normalised basis ifrs basis
2013 
£m
2012 
£m
2013 
£m
2012 
£m
revenue 18913 18312 18913 18312
operating profit 1929 2119 1179 1176
profit before tax 1437 1641 644 698
profit for the year 1112 1314 583 613
basic earnings per share pence 215 255 111 118
net debt 7461 8282 na na
core nonrail operating profit
£1855
m
2013 £1855m
£1852m
£1818m
2012
2011
group revenue
£18913
m
2013 £18913m
£18312m
£22380m
2012
2011
operating margin
102

2013 102
116
101
2012
2011
dividend per share
100
p
2013 100p
975p
95p
2012
2011
2013 £1828m
£1408m
£984m
2012
2011
free cash flow
£1828
m
core nonrail roce
111

2013 111
106
106
2012
2011
01 wwwnationalexpressgroupcom
strategic report pp0151 a leading public transport provider 
we deliver services in the uk north america spain germany 
and morocco every year more than 800 million journeys  
are made on our buses trains light rail services and coaches
strategic report 
national express group at a glance
spain bus and 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
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 36 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 
our transit business is growing the number  
of transit and paratransit contracts we 
operate in the us
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
£5646
m
2012 £5350m
operating profit
£815
m
2012 £838m
revenue
£6450
m
2012 £5783m
operating profit
£626
m
2012 £591m
revenue
£2734
m
2012 £2690m
operating profit
£312
m
2012 £341m
read more p32 read more p36 read more p40
02 national express group plc  
annual report and accounts 2013 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
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
£2635
m
2012 £2551m
operating profit
£245
m
2012 £206m
revenue
£1430
m
2012 £1951m
operating profit
£98
m
2012 £267m
national express group
the group operates in the uk north 
america spain germany and morocco and 
at the end of the year we employed 42000 
people and operated over 25000 vehicles 
passengers made more than 800 million 
journeys on our services in 2013 
the national express name first appeared  
on uk coaches in 1972 and the company 
was listed on the london stock exchange  
in 1992
 excludes corporate and german coach  excludes german coach
new markets
• city2city 
we operate scheduled coach services 
between a number of major cities in 
germany through our city2city business 
the business was launched in april 
2013 and operates services between 
major cities including frankfurt cologne 
dusseldorf and munich
• german rail
during 2013 we were awarded two 
contracts to serve cities including cologne 
and frankfurt in germany’s most populous 
region north rhinewestphalia and these 
will start operating in december 2015 
• international
we have invested in a bid team to explore 
selected opportunities which leverage  
our skills in international bus coach 
and rail markets
read more p44 read more p48
group operating proﬁt by end market

spain  £815m 389
north america  £626m 299
uk bus  £312m 149
uk coach  £245m 117
rail  £98m 46
group revenue by end market
spain  £5646m 299
north america  £6450m 341
uk bus  £2734m 145
uk coach  £2635m 139
rail  £1430m 76
03 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
chairman’s statement 
building a sustainable business 
dear shareholder
i am pleased to report that national express 
has delivered another year of good financial 
and operational performance our core nonrail 
businesses have continued to make progress 
achieving a record normalised operating profit 
and producing excellent free cash flow 
delivering our strategy
our portfolio of bus and coach operations in 
different geographies is a key strength first  
our services deliver excellent value for customers 
meeting the needs of the challenging economic 
environment – national express companies play 
an essential role in getting passengers to work 
to school and to see family and friends second 
our approach to operational excellence which 
we are embedding across all of our operations 
is delivering great customer service efficiency 
and safety 
the balance of our portfolio means that we 
have been able to grow in uk coach and 
north america school bus while we have 
mitigated much of the impact of recession and 
government austerity in spain and uk bus 
at the same time we continue to operate the 
best performing rail franchise in the uk this 
has helped us to prequalify for three uk rail 
franchises currently out to tender it has also 
provided the platform to win our first contracts 
in the german regional rail market from 2015 
and prequalify for more
i am excited by the further opportunities which 
we see in both existing and new markets 
during our board visit to morocco in 2013 we 
were able to experience the success that this 
market has become for national express not 
only have we now started our third domestic 
bus concession in tangiers but it is also 
a strong credential for other international 
opportunities where the development and 
liberalisation of public transport are common 
themes i believe these opportunities can  
add further to the shareholder returns that  
we generate from our core businesses
2013 results
in 2013 we delivered a normalised profit before 
tax of £1437 million and a statutory profit for the 
year of £583 million we generated over £180 
million of free cash flow which we have used to 
reduce net debt fund ongoing investment in our 
fleet and invest in new business development 
our board policy is to maintain debt gearing 
between 2 and 25 times ebitda and we 
continue to achieve this i am pleased to see 
that total shareholder return of 41 for the year 
has reflected the performance and progress  
we have delivered
dividend
we have a clear sustainable dividend policy –  
to pay a dividend that is covered approximately 
twice by our nonrail earnings the board  
is recommending that the final dividend  
is increased to 675 pence which when  
added to the interim dividend of 325 pence 
represents an increase of 3 for the year as  
a whole subject to approval by shareholders 
the final dividend will be paid on 23 may 2014  
to shareholders on the register on 2 may 2014 
board
optimising the skills diversity and experience of 
the board is key thus i am delighted to welcome 
jane kingston as a nonexecutive director 
jane is group human resources director 
at compass group and will make a strong 
contribution to board and people matters 
at the same time tim score has stepped  
down from the board after serving for nine years 
i would like to thank tim for his commitment 
and contribution over that period acting as 
senior independent director chair of the audit 
committee and at one point interim chairman 
jackie hunt will take over as chair of the audit 
committee and as senior independent director 
i greatly value sir andrew foster’s support and 
guidance and welcome his decision to take up 
the offer to remain as a director until the 2015 
annual general meeting to ensure continuity  
on the board 
sir john armitt
chairman 
27 february 2014
04 national express group plc  
annual report and accounts 2013 our values and employees
at national express we have a set of values 
that are at the heart of everything we do 
operational excellence now sits alongside 
safety customers people and community 
these values are demonstrated every day by 
our 42000 committed employees reflected  
in the high levels of employee engagement  
i have seen in the uk us and other locations 
around the group 
the board strongly believes that it has the 
right systems of governance in place to ensure 
that national express is delivering on its vision 
and values and thereby has a sustainable 
and profitable future in its selected transport 
markets we are determined to build on the 
good progress that we are already making 
in every area and will continue to monitor 
development on a regular basis 
on behalf of the board i would like to thank 
all of our employees for their hard work during 
2013 and their ongoing commitment to  
national express 
i look forward to 2014 with confidence  
we have a sound strategy and strong market 
positions and a range of business development 
opportunities that can deliver additional growth 
and improved shareholder returns
sir john armitt
chairman 
27 february 2014
our vision is to earn the lifetime loyalty of our customers by consistently 
delivering frequent high performing public transport services which offer 
excellent value
safety
we only do what is safe and stop any unsafe behaviour
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
community
we are active in the communities we serve to generate economic 
social and environmental value
excellence 
we constantly strive to be excellent in all that we do
“ t otal shareholder return of 41  
for the year has reflected the 
performance and progress  
we have delivered”
05 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
group chief executive’s review
operational excellence lies at the heart 
of everything we do
overview of 2013
national express has delivered a strong 
financial performance in 2013 normalised 
group profit before tax was £1437 million 
ahead of our target with a fourth consecutive 
record year for operating profit in our core  
nonrail business total group revenue grew  
3 and we secured £18 billion of future revenue 
from markets where we didn’t operate just  
two years ago we generated over £180 million  
of free cash flow and reduced our net debt  
by over £80 million
this reflects the good progress we have made 
in 2013 against each of our three strategic 
goals first in our core markets we grew both 
revenue and nonrail profit this is part of our 
‘operational excellence’ programme with  
each division committed to delivering better 
customer service and lower costs second  
we have delivered excellent cash flow which  
we have used to reinvest in the business  
pay an increased dividend to shareholders 
and pay down debt third we have generated 
growth in new markets which offer future 
revenue and profit potential to supplement  
our existing businesses 
we have exceeded our profit and cash 
generation expectations at the start of 2013 
we recognised the challenging headwinds 
we faced – a total of £39 million of fuel price 
inflation ongoing impacts from government 
austerity cuts in the uk north america and 
spain pension accounting changes and the 
loss of contribution from the national express 
east anglia nxea rail franchise which ended 
during 2012 we have delivered £21 million in 
profit from revenue growth and £30 million in 
cost savings and synergy whilst the reduction 
in rail profits led to 2013 group profit before 
tax declining to £1437 million 2012 £164 1m 
normalised operating profit from our core  
nonrail businesses reached a record level  
of £1855 million 2012 £1852m
our core businesses in diversified international 
bus and coach markets are providing a strong 
platform for growth group revenue increased by 
3 to £189 billion 2012 £183bn with revenue 
growth in every division except rail uk coach 
was the standout success as it bounced back 
from the impact of the previous withdrawal of 
senior citizen concession funding excluding 
oneoff olympics profits in 2012 uk coach 
profit increased by 30 yearonyear the key 
was to give customers what they wanted – 
easy access to lower fares more frequent and 
punctual services and investment in our third 
party operated fleet of modern coaches
excellent customer service also drove success 
in the north america business 97 contract 
retention in school bus led to a record operating 
profit in 2013 supported by the second year 
of a programme to improve operating margin 
and return on capital by contract conditions 
were challenging for our other divisions – uk 
bus increased profit contribution through cost 
efficiency and fleet investment but overall profit 
fell due to pension accounting changes and 
the reduction in government fuel duty rebate 
from 2012 spain suffered a 7 reduction in 
operating profit reflecting a challenging trading 
environment in the face of economic recession 
and the eurozone crisis improved customer 
service reduced costs and winning new 
contracts such as guadalajara and tangiers 
were key to offsetting these headwinds 
for our investors we are backing our revenue 
and profit performance with strong cash 
generation and an improving return on capital 
employed at the beginning of 2013 we set 
ourselves the targets of delivering £125 to  
£150 million of free cash flow and increasing  
our pretax return on capital from our core  
nonrail business ‘roce’ we achieved 
over £180 million of free cash flow in 2013 
and increased roce to 1 1 1 2012 106 
net debt reduced to £7 46 1 million 2012 
£8282m we continue to invest in our fleet 
but are using capital more efficiently reflecting 
economic conditions in spain and our margin 
improvement programme in north america 
our reputation operational expertise and 
contracting knowhow in the uk spain and 
north america is being leveraged to create  
new business opportunities in selected markets 
and geographies over the last two years we 
have invested to build business development 
teams with the skills and experience to deliver 
success in target contract and concession 
markets and are currently working on a 
pipeline of opportunities worth over £10 billion 
of revenue in 2013 this produced sizeable 
contract wins and new business opportunities 
securing £18 billion of future revenue from new 
markets in germany we won our first two rail 
dean finch
group chief executive 
27 february 2014
external view – safety 
“driving out harm is an exemplar safety 
improvement programme and has led to  
a 50 reduction in harm in just two years 
the leadership of safety from the group 
chief executive is as strong and effective as 
we’ve seen anywhere and is transforming 
the culture of safety throughout the group”
richard clarke 
director arthur d little
06 national express group plc  
annual report and accounts 2013 contracts and launched coach services in  
the newly liberalised domestic market in us 
transit we have won five new contracts taking 
annual revenue to 80 million in just 18 months  
building on our operational excellence in c2c 
the uk’s best performing and customer rated 
rail franchise we have submitted strong bids for 
the essex thameside and crossrail contracts 
and successfully prequalified for the scotrail bid 
in total we invested £257 million in exceptional 
costs to drive new business development  
cost efficiency and acquisition integration
highlights
highlights of 2013 included
• the group delivered 7 growth in total 
nonrail revenue increasing core nonrail 
business operating profit for the fourth year in 
succession and delivering nonrail normalised 
earnings per share ‘eps’ of 20 1 pence  
with a robust policy to cover regular 
dividends approximately two times from  
nonrail earnings the full year proposed 
dividend has increased 3 to 100 pence 
free cash flow beat the enhanced target  
set in july 2013 by over £30 million
• uk coach grew total revenue 3 with 
express passenger revenue 7 higher and 
volume growth in all core segments driven 
by better pricing improved punctuality and 
new distribution agreements operating 
margin exceeded 9 for this capitallight 
business which generated over £30 million  
in operating cash
• north america grew total revenue by 10 
successfully completing the integration of  
the petermann school bus acquisition from 
2012 and winning new transit contracts  
97 contract retention conversion bid 
success and a focus on investing only in 
contracts generating adequate returns led  
to a five percentage point improvement  
in pretax return on assets ‘roa’ to 22  
and operating cash generation of almost 
us200 million in 2013
• uk bus grew commercial revenue by 2 
launched commercial smartcards in the  
west midlands and signed a ground
breaking agreement with centro the west 
midlands integrated transport authority  
to jointly develop new bus opportunities  
cost efficiency and new fleet increased profit 
contribution before pension accounting and 
bsog fuel duty impacts
• spain saw profit fall due to the impact of 
recession and rail competition on intercity 
coach patronage but nevertheless delivered 
a normalised operating profit of €96 million 
with its flexible operating model resulting 
in reduced kilometres operated and urban 
growth in spain and morocco alsa’s third 
contract in morocco – tangiers – started  
in november
• in rail c2c continued its excellent 
performance remaining the best uk 
franchise for punctuality throughout 2013  
it received 5star quality accreditation  
and in may secured a franchise extension  
to september 2014
strategy
in 201 1 i set out our strategy for national 
express we have delivered a step change  
in our nonrail businesses improving margins 
generating cash and driving returns our portfolio 
today comprises well established businesses 
operating in stable markets effectively run by 
experienced management teams and which 
give access to attractive growth opportunities 
our three part strategy is successfully building 
shareholder value by delivering consistent 
progress in our core divisions generating 
superior cash and returns and creating  
profits from new capitallight markets
1 delivering operational excellence
our objective is to provide safe punctual and 
frequent public transport services at excellent 
prices to achieve this our businesses each 
focus on delivering operational excellence 
comprising
• consistent service performance for our 
customers leading to revenue growth
• continuous cost efficiency improvement 
leading to better margins and returns  
and living our core values every day  
leading to a sustainable business 
revenue growth
we have seen revenue growth in every business 
in 2013 after adjusting for the end of the nxea 
franchise total revenue in the core bus and 
coach operations has grown by 7 through 
service improvement contract wins and 
selective acquisitions in spain we grew total 
revenue by 1 as new contracts and growth in 
urban bus concessions offset lower passenger 
demand in the recessionhit intercity coach 
sector total revenue in north america grew by 
10 we retained all the customers transferred 
through the petermann acquisition achieved 
97 contract retention in our existing school 
bus business and increased the price we 
achieved on contract renewal as we focused 
on more sustainable relationshipbased 
contracts generating better capital returns 
where service quality is valued by the customer
in the uk lower fares on our express coach 
network resulted in 7 revenue growth through 
increased passenger volume this created 
a better load factor per coach which with 
improved yield management significantly 
increased profit for the division bus grew  
likeforlike commercial revenue by 2 –  
we carried almost a million more commercial 
passenger journeys and more customers 
bought travelcards which lower travel costs 
whilst encouraging loyalty to national express 
services rail revenue at c2c rose by 4 as  
we carried more passengers 
delivering revenue growth through better 
customer service requires us to understand  
our customers’ needs better build partnerships 
with our stakeholders tackle the root causes  
of poor service delivery and be agile on pricing
we work hard to understand and meet  
our customers’ needs customer surveys 
panels and focus groups inform our actions  
and customer satisfaction is strong across  
the group
• alsa was rated the best transport 
company in spain for customer excellence 
it successfully retained its urban contract 
in palencia on renewal and was awarded 
new contracts in tangiers and guadalajara 
against the backdrop of a tough economic 
environment our customer recommendation 
rate increased by five percentage points  
to 87
• north america school bus achieved 92 
customer satisfaction up from 85 in 2012 
reaping the benefits of our local focus on 
service delivery and improved key account 
management 
• both uk bus and uk coach deployed 
customer technology in response to 
changing customer expectations over 
100000 people have now downloaded the 
national express west midlands app whilst 
coach travellers can follow their services real 
time coach customers can now buy tickets 
through a host of new distribution channels 
including ryanair and the post office
• c2c has now been the best performing 
operator in the uk rail industry for a record
breaking two years continuously with an 
annual punctuality measure of 969 at  
year end 
• we invested over £80 million in net capital 
expenditure in 2013 adding nearly 900 new 
vehicles across our operations in uk bus 
spain and north america
we have built constructive partnerships with 
our key stakeholders uk bus has a partnership 
with centro to ‘transform bus travel’ in 
the west midlands this embraces a good 
relationship with our principal local authority 
committing both sides to investment in fleet 
and road prioritisation fair pricing provision of 
customer realtime information and roll out of 
smartcards our town centre turnaround vehicle 
cleaning programme has driven customer 
satisfaction well above the network average
where our performance fails to meet customer 
expectations we have embedded structured 
solutions uk bus implemented automatic 
07 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
group chief executive’s review continued
vehicle location to improve the consistency 
of services punctuality improved by 7 
and our high frequency services in the black 
country are amongst the most punctual in 
the uk bus customer complaints are down 
a fifth uk coach created a programme to 
empower customer service staff at coach 
stations to resolve customer issues there and 
then ensuring the customer gets safely to their 
destination in the event of service problems 
in morocco we analysed the agadir network 
which we started up in 2010 and identified 
significant improvements which have better  
met customer needs and driven a 32  
increase in total ridership
we deliver great value for money in our fares 
for passengers uk coach cut prices in 2012 
and drove a 6 increase in volume in 2013 
we cut prices again delivering a further 9 
growth in passengers in spain high speed 
rail a competitor on 20 of our intercity coach 
routes introduced substantial discounts in 
2013 we have responded by discounting 
coach fares and in 2014 we will invest further 
in yield management to improve the value we 
deliver in uk bus our roll out of smartcard 
products allows customers to get even better 
value services
cost efficiency
we have grown core nonrail operating profit to 
£1855 million in 2013 through revenue growth 
and cost efficiency we have delivered £30 
million of cost efficiency and synergy a 2 
reduction in our cost base which was delivered 
through a structured review of all controllable 
costs in future we will target to reduce annual 
costs by 1 in real terms drive down costs 
through synergy productivity and use of 
technology reconfigure networks to deliver 
efficiency and secure procurement savings  
in 2013 achievements included
• in north america we completed the 
successful integration of petermann securing 
annualised saving of 10 million through 
procurement insurance and overhead 
savings our gpsbased ‘compass’ system 
has matched driving time to payroll and 
customer invoicing delivering 3 million of 
efficiencies we are standardising processes 
at each customer service centre csc to 
improve quality and efficiency and have 
centralised ‘back office’ processes 
• alsa reduced network kilometres in spain 
by 3 in 2013 showing the flexibility of the 
intercity coach model to reduce capacity 
to match lower passenger demand in 
our bilbao acquisition completed in 2012 
improvements in scheduling employee 
management and stakeholder relations  
have delivered a significant turnaround  
in performance 
• uk bus delivered £9 million of efficiency 
savings to help mitigate headwinds from 
fuel prices lower fuel duty rebates and the 
impact of pension accounting changes this 
included reducing lost mileage by managing 
congestion using realtime location information 
together with savings in engineering 
procurement and overhead costs 
• alongside strong revenue growth uk coach 
delivered £7 million of cost savings with an 
overhaul of the route network consolidating 
routes and reducing some frequencies whilst 
expanding new services such as at luton 
airport productivity in owned operations 
improved with the closure of the crawley 
depot whilst streamlining of third party 
operations produced efficiency gains for  
both ourselves and our partners
to strengthen operational excellence we 
are implementing structured processes in 
each business using a recognised quality 
management framework these frameworks 
also help us replicate our success in our existing 
businesses in new market opportunities in 
2013 c2c was awarded the maximum 5 star 
rating by the european foundation for quality 
management efqm this has been a key 
component of our success in delivering the uk’s 
best performing franchise whilst also being 
recognised in our german and uk rail bids 
our values
we continue to support operational excellence 
through our focus on our core values – safety 
customers people and community employee 
engagement is strong across the group 
supported by formal training programmes  
such as ‘master driver’ which accredits  
drivers to key standards and provides non
monetary rewards for exceptional performance 
north america reported a record level of 89 
employee satisfaction up for the third year in 
a row i would personally like to acknowledge 
the efforts and commitment of our employees 
in helping to achieve our customer service and 
safety improvements i am also delighted with 
the progress of our community programmes 
including 2400 young people helped by our 
uk initiative to support the further education 
of disadvantaged students and a us4 million 
commitment to community support in north 
america we are proud to be the first company 
to sign the uk government’s corporate 
covenant that supports armed forces 
personnel including helping their return  
to private sector employment
safety remains the first priority in all our 
operations three years ago we introduced  
our ‘driving out harm’ programme and we 
have made good progress in improving the 
group’s safety culture and incident rate over 
two years we have halved safety incidents  
external view – customers 
“in mountain regions like la alpujarra  
with small and scattered communities  
and very difficult communications the 
service provided by alsa coaches is vital 
our transport routes provide daily access 
for inhabitants to health and educational 
services with complete ease and they  
are particularly convenient for the elderly  
and young people living in our region”
maría teresa blanco
mayor of órgiva granada
08 national express group plc  
annual report and accounts 2013 external view – people 
“valuentis works with national express 
to conduct its annual employee surveys in 
the uk national express has been diligent 
in the timing and consistency of approach 
with significant attention paid to results 
and followup in 2013 national express 
recorded one of the highest engagement 
scores registered with ‘best in class’ scores 
in two business units”
graeme cohen 
graeme cohen director valuentis ltd 
for which we are responsible as we strive to 
improve our performance further 2013 success 
has included 
• recognition by the american national 
standards institute for safety in our school 
bus business the first industry operator  
to achieve this
• recordbreaking low levels of employee lost 
time injuries ltis for the group including  
a 38 reduction in uk bus
• a 34 reduction in signals passed at danger 
spad at c2c
• a major reduction in passenger incident 
claims down 40 yearonyear in coach 
and 9 in spain and
• over £1 million in insurance premium savings 
during the year 
2 superior cash and returns
national express is focused on cash 
generation our free cash flow pays dividends to 
shareholders funds future growth and reduces 
debt a strong cash flow and improving return 
on the capital we invest in the business will drive 
better returns for our shareholders maintaining 
a strong and flexible balance sheet gives us 
choices for the future 
at the start of 2013 we set out our goals to  
drive superior cash and returns
• to generate £125150 million of free cash  
flow in 2013
• to maintain our gearing ratio at between  
2 and 25 times net debt to ebitda over  
the medium term but to reduce our gearing 
to around 2 times at the end of 2014
• to improve our core nonrail roce from 
106 that we achieved in 2012 and
• to achieve a 20 pretax return on assets 
‘roa’ in north america
we have been successful in 2013 in delivering 
against these goals our free cash flow 
was over £180 million the group has now 
generated almost £600 million of free cash flow 
in the last four years working capital reduced 
by £31 million in 2013 as we further reduced 
contract receivables in spain and north 
america group operating cash conversion  
was 129 of operating profit with the stand  
out performer north america generating 
almost 200 million of operating cash flow 
equivalent to repaying the cash cost of the 
petermann acquisition in just a year 
we reduced net debt in 2013 by £82 million 
to £7 46 million a gearing ratio of 25 times 
ebitda with lower debt offsetting the loss of 
nxea earnings in 2012 we continue to target 
a gearing ratio of around two times at the end 
of 2014
we increased the group’s core nonrail roce 
to 1 1 1 in 2013 we invested over £80 million 
in net capital expenditure mostly in new fleet 
we are targeting where we invest carefully – 
we are renewing the uk bus fleet investing 
over one and a half times depreciation in 
2013 to introduce over 130 buses leading to 
more passengers travelling with us our north 
american school bus business is implementing 
a programme to use capital more efficiently 
targeting lower capital ‘conversion’ contracts 
not renewing existing contracts which don’t 
cover their cost of capital and reducing the 
number of spare vehicles required through 
more effective preventative maintenance  
which saw the spare ratio fall to 1 1 2012 
12 as a result of this this division now  
has a 22 roa 2012 17 
in spain we invested £44 million in net capital 
expenditure broadly in line with depreciation 
we are benefiting from negotiating extensions 
to fleet lives in urban bus contracts to help our 
austerityimpacted city council customers 
growth in our capitallight businesses – uk 
coach germany uk rail and us transit – are 
an integral part of driving higher group returns
3 creating new business 
opportunities
our unique portfolio of international bus coach 
and rail businesses gives national express  
a significant opportunity to grow in selected 
new markets in particular we have identified 
markets that are capitallight in nature allowing 
us to drive future profitable growth offering  
the prospect of exciting additional returns  
to shareholders
in addition to organic growth in our existing uk 
spain and north america businesses in 2013 
we secured £18 billion of revenue from future 
market opportunities we are currently working 
on a pipeline of opportunities worth over £10 
billion revenue including uk rail german rail 
and us transit as well as exploring interesting 
international markets and developing regular 
coach services in germany
09 wwwnationalexpressgroupcom
strategic report pp0151 during 2013 we developed the following  
new opportunities
• germany we are now well established 
in the german rail bidding market with an 
experienced local team in place we are 
targeting capitallight regional ‘revenue 
risk’ and ‘gross cost’ contracts with pro
competition regional authorities in 2013 we 
won two 15year contracts to run the rhine 
munsterland express expected to generate 
€70 million of annual revenue from the end 
of 2015 mobilisation is now well underway 
using this successful credential and building 
on our record of delivering high quality 
service in c2c we have prequalified for the 
prestigious berlin ringbahn tender later in 
2014 as part of a bid pipeline of 18 contracts 
with annual revenue of €1 billion our rail 
operations are being supplemented by  
our launch of ‘city2city’ a coach operation  
in germany we are using the uk coach  
model of working with local coach partners  
to serve munich stuttgart cologne frankfurt 
and hamburg our startup in 2013 saw  
a normalised operating loss of £24 million  
as we invest in marketing and promotion  
to develop this newly liberalised market 
• us transit within 18 months we have 
built us80 million of annual revenue 
and are currently working on a revenue 
pipeline of over us200 million focused 
on the paratransit shuttle and fixed route 
segments we have won five contracts 
targeted in smaller lower risk markets  
the industry is typically capitallight  
with publicly funded fleet investment
• uk rail having secured the extension of 
c2c to september 2014 we are bidding 
selectively within a programme of significant 
rail refranchising in the uk as the uk’s 
best performing franchise operator we 
are pleased that quality is a factor in bid 
evaluation having prequalified for three 
tenders during the year we have now 
submitted the essex thameside and 
crossrail bids and expect to submit our 
scotrail bid in april 2014 
• international opportunities we expect 
public transport to grow significantly in the 
medium term through liberalisation and the 
development of infrastructure in emerging 
economies building on alsa’s success 
developing the moroccan market we have 
invested in a bid team to explore selected 
opportunities which leverage national 
express’ strengths in international bus coach 
and rail markets where the risk is appropriate 
and capital requirements generally light 
outlook
we intend to grow profit across all of our non
rail businesses and develop our rail business 
by winning new franchises we will continue 
to make progress against our three strategic 
goals focused on delivering operational 
excellence our coach services in uk and spain 
will benefit from continued development of yield 
management and greater retail distribution  
bus will benefit from our focus on service 
quality network improvements and greater 
use of technology in the uk and further new 
contract opportunities in spain and morocco 
north america school bus will continue 
to improve its contract portfolio driving 
capital returns and selectively adding bolton 
acquisitions and conversion opportunities 
all businesses will deliver a minimum 1 real 
reduction in costs supported by unchanged 
hedged fuel prices driving margin progress 
across the group
with our focus on superior cash generation 
we have a robust financial platform which 
has underpinned an increased dividend to 
shareholders in 2014 we are targeting further 
free cash flow of £150 million our strong cash 
generation and targeted capital deployment 
will further reduce net debt improve returns 
to shareholders and fund our new business 
development programme in the last three 
months alone we have submitted two rail 
tenders successfully bid for two bolton 
acquisitions begun bus operations in tangiers 
and submitted contract tenders in spain 
and north america transit we expect good 
progress from our £10 billion pipeline of capital
light bid opportunities securing new contracts 
concessions and business opportunities  
to enhance shareholder value
dean finch
group chief executive 
27 february 2014 
external view – community 
“i am grateful to national express for 
being the first company to sign up to the 
corporate covenant it is a great british 
company recognising the significant 
contribution and sacrifice of our armed 
forces and their families”
mark francois mp 
minister of state for the armed forces 
strategic report 
group chief executive’s review continued
10 national express group plc  
annual report and accounts 2013 understanding our markets
the key drivers for the group’s strategy include mobility 
economic activity liberalisation and urbanisation these 
are explained in this section
strategic report 
market overview 
group 
the national express group is a 
leading operator in the global public 
transportation market growth in these 
markets is mainly driven by economic 
activity increasing social mobility and 
the outsourcing of public provision 
of services the forecast trend is for 
ongoing liberalisation in both developed 
and developing economies
■  urbanisation and  
increased mobility
source kpmg
■  gr e en fi e l d  
projects 
■  deregulation and  
liberalisation
economic activity
the propensity to travel is generally 
affected by levels of economic activity 
as represented by gdp growth 
although absolute levels of transport 
and mobility remain stable through 
the economic cycle periods of gdp 
growth generate additional volume 
demand and pricing benefit
 
real gdp growth 
6
4
2
0
2
4
6
8
10
2015 2014 2013 2012 2011 2010 2009 2008
united kingdom
united states
spain
germany
morocco source eiu
11 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
market overview continued
deregulation liberalisation and outsourcing
our markets have been 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 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
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
urbanisation
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 often this is 
accompanied by significant investment in infrastructure  
this in turn requires additional transportation services  
both within and between locations so our bus coach  
and rail operations are increasingly in demand
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 rising fuel and insurance prices although other factors 
such as environmental concerns and congestion can also 
be important in spain we have seen additional support for 
demand in long distance coach services as air travel has  
either become more expensive or capacity has reduced 
environment and congestion
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
0
10
20
30
40
50
60
70
80
90
100
other
europe
south
europe
east
europe
north
europe
benelux uk
ireland
france germany
8
19
4
6
2
3
4
3
15
1
7
20
4
25
3
22
€27bn €27bn €16bn €10bn €7bn €5bn €29bn €25bn
closed source oecd open
2010 public transportation market
t otal transport market €150bn
share of global population living in cities 
0
10
20
30
40
50
60
70
80
90
100
2050 2010 1950
51 70
30
49
29
71
rural areas source oecd urban areas
12 national express group plc  
annual report and accounts 2013 3 well balanced portfolio
divisional split by revenue
modal split by revenue
a sound proposition for investors
strategic report 
investment case 
1 a best in class public transport operator
margin  

best in  
class 
spain 144 nx
north america 97 nx
uk bus 114 15
uk coach 93 nx
rail 69 nx
group 102 nx
by margin
delivering operational excellence
• best in class group margin of 102
• revenue growth of 3
• £46 billion of long term contracted or  
concessionary revenues
• sustainable long term earnings core nonrail profit growth 
to £1855 million
generating superior cash and returns
• free cash flow of over £180 million
• operating cash conversion of 129
• net debt reduced by over £80 million in 2013
• core nonrail roce increased by 50bps to 1 1 1
2 a sound strategy in place 
4  stable long term finance in place and 
commitment to investment grade rating
gearing ratios 2013 2012 covenant
net debtebitda 25x 25x 35x
interest cover 61x 67x 35x
ratings grade outlook
moodys baa3 positive
fitch bbb stable
strong debt maturity profile
5  dividend policy based on sustainable nonrail 
earnings basis
2013  
p
2012  
p
basic eps nonrail 201 216
rail 14 39
group 215 255
dividend 100 975
bus
school bustransit
coach
rail
excludes german coach
spain
north america
uk bus
uk coach
rail
excludes german coach
34 26 19 11
227
64
383
410
17
21 20 19 18 17 16 15
drawn
14
available
13 wwwnationalexpressgroupcom
strategic report pp0151
pipeline of substantial capitallight growth 
opportunities starting to deliver
• over £18 billion of new contracts won during the year
• german rail – won rhine munsterland express contract ending  
in november 2030 prequalified for berlin ringbahn
• t ransit – 5 contracts won annualised t ransit revenue  
now 80 million
• rail – bids submitted for essex thameside and crossrail 
prequalified for scotrail
read more p14 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 
delivering long term shareholder value
strategic report 
our business model and strategy 
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 
excellent 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 will allow us to target long term sustainable 
growth of the business 
• 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 of 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 existing operations with  
the opportunity to build value through highreturn growth and  
capital returns to shareholders
14 national express group plc  
annual report and accounts 2013 our strategy 2013 performance measuring our performance
delivering operational 
excellence 
driving revenue growth and margin 
progression in our core divisions by 
delivering excellent customer service 
and cost efficiency 
customer service
• alsa the top rated transport company  
in spain passenger growth of 15  
in morocco
• 92 customer satisfaction and 97 
retention rate in school bus
• core passenger growth of 9 in uk coach
• recordbreaking performance at c2c
cost efficiency
• nonrail profit increased to £1855 million
• group margin best in class at 102 reflects 
smaller rail business
• four out of five divisions have best  
in class margins
• £30 million of cost savings across the group
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 increased by  
£38 million to £2480 million
• 129 of group operating profit converted 
into cash
• free cash flow of £183 million
• nonrail return on capital improved by 
50bps to 1 1 1 
delivering 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 rail contracts in germany
• built over 80 million of annual revenue  
in us transit 
• won tangiers and guadalajara urban  
bus contracts in alsa
• launched german coach operations
• bid submitted for essex thameside and 
crossrail prequalified for scotrail in the uk
local currency  
rail revenue growth is adjusted for the handover of nxea in 2012
5
0
5
10
15
20
metric revenue growth 
spain north
america
uk
bus
uk
coach
rail
12 13 13 13 13 13 12 12 12 12
metric margin 
0
5
10
15
20
spain north
america
uk
bus
uk
coach
rail
12 13 13 13 13 13 12 12 12 12
metric operating cash conversion 
0
50
100
150
200
spain north
america
uk
bus
uk
coach
rail
12 13 13 13 13 13 12 12 12 12
metric contract wins by value £m
0
300
600
900
1200
1500
spain north
america
uk
coach
rail
12 13 13 13 13 12 12 12
15 wwwnationalexpressgroupcom
strategic report pp0151 strategy in action 
delivering operational  
excellence  
c2c is the uk’s  
top performing  
rail franchise
national express has been the uk’s top performing 
franchise for punctuality for the last two years 
delivering an average annual punctuality measure 
of 969 at the end of 2013 we are also the most 
popular franchise in london and the south east  
as recognised in the autumn 2013 national 
passenger survey results
16 national express group plc  
annual report and accounts 2013 generating superior  
cash and returns
school bus business  
drives 196 million of  
operating cash flow
we have had great success in 2013 with our 
increased focus on cash generation and returns 
in school bus our most capital intensive division 
we have converted 200 of operating profit into 
cash and increased return on assets to 22  
we worked with our customers to extend vehicle 
lives cascaded buses around the fleet according 
to demand and kept our spares ratio low at 1 1
wwwnationalexpressgroupcom 17 strategy in action 
pipeline of substantial  
capitallight growth  
opportunities  
t angiers win adds to  
our moroccan footprint
the group has unique access to international 
passenger transport markets this year we started 
to operate city bus services in tangiers adding 
to our existing marrakech and agadir contracts 
our track record of high quality operations and 
investment in fleet gives us a key advantage in 
securing similar opportunities
18 national express group plc  
annual report and accounts 2013 living our values 
strategic report 
managing our relationships and resources
our vision and values were launched three 
years ago as a fundamental statement of who 
we are as a business and how we operate
they originate from the conviction of the company 
that national express wants to be rather 
than the potential ‘gloss’ of corporate social 
responsibility the way we act as a business 
embodies these vision and values in national 
express’ view being a good and successful 
company should be – and are – synonymous
since their introduction their relevance has 
become ever more important in difficult 
economic times our vision ‘to earn the lifetime 
loyalty of our customers by consistently 
delivering frequent high performing public 
transport services which offer excellent  
value’ has helped to ensure we carried  
more passengers in 2013 than in 201 1
underpinned by our values of safety customers 
people and community the vision and values 
have guided how we operate as a business 
and prioritised what we have focused on
this year we have refreshed the values to 
include a fifth excellence by being excellent 
in all that we do we will meet customer 
expectations deliver industryleading services 
and act as a willing and constructive partner 
we will be reporting on our achievements under 
the new excellence value in future years
ultimately national express firmly believes 
that these vision and values help us to deliver 
excellent services and drive growth in  
our business
safety
safety is our priority we have made significant 
progress in recent years but are aware there is 
always more to do for us safety is ‘relentless’ 
it requires a continual focus on our processes 
and our practices
we have robust processes in place to manage 
performance with ultimate responsibility lying 
with dean finch the group chief executive  
we review our health and safety strategy  
every three years with objectives and targets 
set for each of our divisions – reflecting the 
fact that each business has its own unique 
challenges each divisional head is responsible 
for developing and managing appropriate  
health and safety management systems
we have seen significant progress since 
we launched the ‘driving out harm’ safety 
programme across the group in 201 1 ‘driving 
out harm’ sets out global safety standards for 
all our businesses and employees to follow 
the programme is reviewed annually by 
independent assessors from arthur d 
little their 2013 review found significant 
progress in safety performance and the 
further strengthening of safety leadership and 
upgrading of processes for controlling key risks
this progress is borne out by our performance 
compared with 2010 across the group 
responsible major injuries have fallen by 48 
total employee injuries are down by 39 and 
preventable accidents have reduced by 21
 normalised without national express east anglia
safety performance
2013 2010  change
responsible major injuries 37 71 48 reduction
preventable accidents 578 729 21 reduction
total employee injuries 1571 2568 39 reduction
we have continued to promote our ‘driving 
out harm’ safety campaign including 
reinforcing the golden rules
our vision
to earn the lifetime loyalty of our customers 
by consistently delivering frequent high 
performing public transport services which 
offer excellent value
our values
excellence
safety
customers 
people
community
19 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
managing our relationships and resources continued
customers
customers are at the heart of everything we 
do we continue to work to achieve their lifetime 
loyalty through delivering excellent services  
our five customer golden rules set out  
a groupwide standard which all employees  
are required to follow
this approach is leading to some significant 
achievements for example c2c is currently 
the most popular commuter train operator in 
london and the south east according to the 
national passenger survey c2c also has the 
highest uk performance statistics in four of 
the survey’s key categories satisfaction with 
the train 92 punctuality 94 transport 
connections 88 and information provided  
at stations 88 and in spain an external 
survey by pricewaterhousecoopers has  
ranked alsa as one of the top customer 
service providers in the country
we measure customer satisfaction across 
all businesses these measures are used to 
set strategy and improve services in line with 
customers’ expectations our businesses are 
aligning their own internal kpis with those our 
customers tell us are most important to them
people
delivering on our vision and for our customers 
is only possible if national express is a good 
place to work national express recognises that 
our workforce is our greatest asset and we want 
each of our 42000 employees to reach their full 
potential and to give their best 
a renewed groupwide people strategy has 
been developed to further build employee 
engagement and to develop management 
capability to ensure we have the skill sets in 
place to drive operational excellence this new 
strategy will be rolled out during 2014 and will 
include a common employee benefits package 
making it easier for our employees to take 
advantage of discounts and offers
this renewed strategy builds on encouraging 
results in recent years each business runs 
an employee survey to measure engagement 
and gauge opinion on issues such as safety 
employee morale and relationships with 
managers these results are used to guide our 
businesses’ actions and strategies to ensure 
we are doing all that we can to ensure national 
express is a good place to work
our uk employee surveys are carried out by 
the same firm valuentis which is widely 
used as an employee survey provider by the uk 
transport industry we are able to benchmark 
our engagement against the broader industry
our results for 2013 demonstrate that we have 
been making important strides forward the 
result for corporate employees is amongst the 
highest engagement score for any business 
or part of a business in valuentis’ database 
c2c’s engagement score is the highest of any 
train company in valuentis’ database and  
uk coach has registered the highest score in the 
uk buscoach section of valuentis’ database
again we see that this is delivering results  
in the last three years improvements have  
been achieved in four of the five main businesses 
with only uk coach seeing a slight reduction 
in customer satisfaction this was mainly due 
to a higher number of roadworks and delays 
on major roads in the last year impacting 
on performance we are also embracing 
new technology to improve the customer 
experience across the business we are using 
mobile apps twitter and facebook to provide 
realtime travel information for customers and 
new ways for them to interact with us 
we have also established an annual customer 
service week with all senior managers across 
the business working with operational staff and 
serving customers we believe this firsthand 
experience across the business is crucial as 
we deliver on our vision of earning the lifetime 
loyalty of our customers
overall customer satisfaction
coach bus c2c alsa
north 
america
2011 83 80 91 74 86
2012 84 82 91 77 85
2013 82 83 92 77 92
businesses across the group took part in 
customer service week in 2013
as part of the customer service week 
activities michael hampson general 
counsel and company secretary met 
drivers at baltimore
the deputy prime minister the rt hon nick 
clegg mp  visited our birmingham central 
bus garage to highlight the importance of 
apprenticeships
20 national express group plc  
annual report and accounts 2013 our north american school bus survey 
continues to produce strong scores in the  
latest survey 89 of employees say they  
enjoy working for the business
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
we are also committed to widening 
employment opportunities for young people 
we were delighted when this was recognised 
by the deputy prime minister the rt hon nick 
clegg mp  with a visit in november to meet 
engineering apprentices at our birmingham 
central bus garage the uk bus training team 
have also worked with the department for work 
and pensions to develop the first sectorbased 
work academy for driving skills these initiatives 
form part of our routes to work programme 
which is creating 1700 job opportunities over 
a threeyear period
another example from spain is the launch of 
the muevete programme providing 80 trainees 
with work experience in alsa placing them  
in a stronger position to apply for jobs
the armed forces provide a valuable source 
of skilled recruits to our uk businesses 
recognising the importance of this pool 
of talent we were proud to be the first uk 
company to sign the government’s corporate 
covenant among other benefits this provides 
all suitably qualified exservice personnel with 
a guaranteed interview our leadership here 
has been recognised by the uk government 
including the prime minister the rt hon david 
cameron mp 
community
as a transport company we don’t just move 
vehicles we are proud to play a vital part in our 
communities – whether that’s getting people to 
work taking them to see loved ones effectively 
managing our environmental impact or above 
all taking children safely to and from school
both directly through the services we offer and 
through the jobs we provide and more widely 
we are making a difference in our communities 
we believe we have made significant strides  
in the last year 
the national express foundation continued 
into its second year making more awards to 
community groups and providing bursaries 
for students with challenging financial 
circumstances since its launch the foundation 
has helped around 2400 young people through 
supporting students at 6 further or higher 
education institutions and 15 community groups 
a third round of grants will be made shortly
following its success in the uk work has 
progressed to establish the national express 
giving foundation in the us as in the uk this 
new foundation is supporting students and 
community groups but also has the remit to 
support employees who are suffering hardship
in addition to the foundations each business 
continues to progress its own community 
initiatives
in spain 6000 employees participated in the 
kilos y kilometres initiative in september which 
collected 10 tonnes of foodstuffs through 
50 collection points across the country the 
donations supported the work of food banks 
across spain
the partnership between uk bus and transaid 
expanded with the visit of two engineers to 
tanzania to assess training needs of local staff 
at the national institute of transport this was 
in addition to training inputs from four driver 
trainers in building the capability of local staff to 
deliver professional driver training
the special olympics continue to be the main 
charitable cause in north america we provided 
the transportation at a number of special 
olympics events throughout the us 
in the uk the employee charity panel made 
donations of almost £17 000 to 50 different 
charities and community groups the panel 
only supports groups where an employee is 
personally involved in fundraising or volunteering 
and the awards it makes generate a huge 
amount of goodwill in the local community
across the group charitable donations totalling 
£356000 were made during the year
employee senior management 
and director numbers by gender 
at end 2013
male female
directors 9 1
senior managers 53 15
all employees 25065 17459
  the gender split of the board changed with the 
appointment of jane kingston as an independent 
nonexecutive director on 26 february 2014 and  
the resignation of tim score on 25 february 2014
newman university in birmingham was 
one of the successful recipients of national 
express foundation funding in 2013
21 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
managing our relationships and resources continued
managing our  
environmental impacts 
an important component of our community 
value is ensuring we meet our environmental 
responsibilities our group property and 
environment director works with the responsible 
director from each division to ensure we comply 
with relevant legislation set ambitious targets 
and deliver against them 
2013 was a year of strong environmental 
performance at national express in the uk 
we set threeyear targets in 2010 which we 
achieved by the end of 2012 a year earlier than 
planned these targets were exceeded in 2013 
we improved our position in the uk carbon 
reduction commitment efficiency scheme 
league table to become the best performing 
public transport company and are now ranked 
21st of all companies reporting in the uk we 
have also delivered energy reductions at our 
sites in spain we are determined to build on 
these achievements and consistently deliver 
excellence in our environmental performance 
and reporting 
february 2014 saw national express achieve 
full compliance in the crc energy efficiency 
scheme formerly known as the carbon 
reduction commitment which provides  
a clear demonstration that we are actively 
responding to the climate change agenda  
in our development and drive of energy  
and carbon management strategies
we are fully engaged with the carbon 
disclosure project and it is helping us manage 
carbon usage and our impacts on climate 
change you can find out more about our  
work in this area on our group website
greenhouse gas emissions reporting for 2013 tco
2
e uk greenhouse gas emissions 
tco
2
e
for 2013 we are reporting our greenhouse gas 
ghg emissions for the whole group for the first 
time in the uk we have already made significant 
progress in reducing our emissions since 2010 
our uk businesses have seen a 43 reduction 
in emissions see panel on page 23 for more  
detail on how we report ghg emissions
we have delivered these improvements through 
improved management and investment for 
example we have rolled out telematics widely 
across our bus and coach fleets through the 
review of driving styles and vehicle efficiencies 
we have delivered the 5 reduction target in 
fuel consumption a year early
we have invested in a renewables programme 
new solar panels generated on average 7 of 
site energy at the six locations where they are 
installed in total 244540 kwh of renewable 
energy was generated in 2013 this amount 
would be sufficient to power the milton keynes 
coach station all year
we have also achieved the energy reduction 
targets through the use of energy efficient 
heating cooling lighting and voltage 
optimisation technology
we have made considerable progress with 
recycling waste across the group c2c has 
performed particularly strongly 9125 of all 
waste produced at our stations was recycled 
with many locations achieving 100 across 
the year
the board’s safety  environment committee 
reviews and monitors our environmental 
systems and processes and makes 
recommendations on specific issues further 
information on its role and responsibilities can 
be found on page 67  the committee will set 
new groupwide targets for 20142017 in the 
coming months a priority for the group has 
been to improve its environmental reporting  
and these new targets will fully incorporate  
our spanish and north american businesses 
for the first time
performance area
kpi target by end 2013 on target
fuel 5 reduction in uk fleet  
consumption mwh
exceeded  
69 reduction
site energy 10 reduction in uk site electricity gas 
and oil consumption
exceeded 
1 128 reduction
waste 40 reduction in uk nonhazardous waste 
going to landfill
exceeded 
93 reduction
all kpis from 2010 baseline
10 11 12 13
600000
500000
400000
300000
200000
100000
0
coach owned and 3rd party 107174
bus incl metro 140773
trains c2c 42816
leased vehicles and 
business travel uk 611
alsa 302683 
north america 237957
13
17
5
29
36
22 national express group plc  
annual report and accounts 2013 external view
“our transforming bus travel partnership 
with national express is genuinely industry 
leading it sets tough targets that make sure 
both organisations work together to achieve 
the best deal for bus passengers and deliver 
the quality of service customers expect this 
is only possible because of the strength of 
our relationship”
geoff inskip
chief executive centro
greenhouse gas emissions reporting for 2013
global ghg emissions data for calendar year 2013
emissions from tonnes of co
2
e
combustion of fuel  operation of facilities ghg protocol scope 1 765526
electricity heat steam and cooling purchased for own use  
ghg protocol scope 2
61808
other upstream emissions ghg protocol scope 3 7158
total 834492
intensity metric tonnes co
2
e£million revenue 441
building strong relationships
national express believes that building  
strong relationships is crucial to our ability both 
to deliver our vision of consistently excellent 
services for our customers and win new 
contracts in our existing and new markets  
but as our community value makes clear 
seeking to forge strong relationships is also  
an important part of who we are as a business 
public transport services require many 
institutions and organisations to work closely 
together to ensure their delivery this is why 
we seek to build genuine partnerships to help 
ensure we can deliver our vision
our ability to deliver excellent rail services 
requires a strong relationship with network rail 
– that is why we were the first rail company to 
form an ‘alliance’ with network rail and have a 
joint control centre in upminster we believe 
this partnership approach has been crucial in 
delivering c2c’s industryleading performance
our ability to deliver excellent bus and coach 
services and grow patronage requires a strong 
relationship with the relevant authorities that is 
why for example we have signed the industry
leading transforming bus travel 3 agreement 
with centro see right as the majority of our 
uk coach journeys are on the strategic road 
network we are working in partnership with the 
highways agency to help deliver our punctuality 
and reliability ambitions 
our aim is to provide safe excellent north 
america school bus services that meet the 
needs of children and parents but also the 
local school boards we look to forge close 
relationships with local boards to create 
partnerships that deliver the services we all 
want to see that is why we are so proud of  
our customer service scores and testimonials 
such as that from the school board at racine 
below right
this is an approach that we are taking into new 
markets as well we have worked very closely 
with the relevant authorities in north rhine 
westphalia as we prepare for the start of our 
services there next year 
being an active partner in the areas we 
serve also means looking beyond dayto
day business activity and playing a broader 
community role that is why we launched the 
national express foundation we recognised 
that as birmingham’s largest employer we had 
a responsibility to the community we served 
we were proud to be the first company to sign 
up to the uk government’s military corporate 
covenant see external view – community on 
page 10 our north american business has 
supported the special olympics for a number of 
years and we are active supporters of projects 
run by unicef in morocco and transaid in 
tanzania there are many other examples of 
partnership and support 
being a trusted partner is good business but 
as with our vision and values national express 
believes that being a good partner is the sign of 
a good business
ghg reporting methodology
we have 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 statement we do not 
have responsibility for any emission sources that are not 
included in our consolidated statement
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 defra 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 greenhouse  
gas emissions 
analysis of our ghg emissions is carried out externally 
by ecometrica 
external view
“we have worked in partnership with 
durham school services since 2000 and 
the level of safety delivery and customer 
service we have received is outstanding  
the team is knowledgeable responsive  
and customer service driven consistently 
looking for ways to provide efficient and 
reliable service”
patrick starken
transportation supervisor 
racine unified school district wisconsin
23 wwwnationalexpressgroupcom
strategic report pp0151 committed to managing  
risk effectively and robustly 
strategic report 
risk and 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 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 function 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 
function 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 the monitoring of the risk management and 
internal control systems 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
plc board 
review
24 national express group plc  
annual report and accounts 2013 during 2013 the group focused on the following key areas of risk 
risk change why responsible
concession and contract 
renewal
significant increase in 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 management ongoing inherent risk in contract businesses divisional managing directors
the following are ongoing risks within the business 
fuel cost changes in the price of fuel will continue to be 
a risk
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 north america and spain
divisional finance directors
currency lessening threat of major disruption  
in eurozone
group finance director
25 wwwnationalexpressgroupcom
strategic report pp0151 strategic report 
principal risks and uncertainties 
looking forward the group will focus on the following key areas of risk 
concession and contract renewal
risks
much of the group’s business is secured 
through winning contracts and concessions 
particularly in its north american school bus 
and transit business in spain and in rail
2014 sees some significant bidding activity 
such as the essex thameside c2c rail 
franchise and the expected start of bidding  
to renew coach concessions in spain
assessment 
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
essex thameside is the group’s last 
remaining rail franchise and so represents 
all of the current rail revenue the group has 
secured its participation in the rail industry 
in future by winning contracts to operate 
services in germany until 2030
the concession renewal process in spain 
is undergoing regulatory change with the 
most significant difference the removal of 
the incumbent advantage alsa currently 
expects about 20 of its national coach 
concessions to be bid in 2014 and 2015
management 
a reputation for high quality services helps 
to win and retain contracts the group has 
a good record of retaining contracts on a 
historic basis no national coach concession 
in spain has been lost before and retention 
rates in school bus are typically very high 
97 in 2013
national express has now submitted its bids 
for essex thameside and crossrail it has 
also prequalified to tender for scotrail during 
2014 further rail contracts are being bid  
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
potential  
impact
high 
economic conditions and austerity
risks
uncertain economic conditions currently 
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
assessment 
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
management 
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
potential  
impact
high 
political and regulatory
risks
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
assessment 
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
management 
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
potential  
impact
medium
26 national express group plc  
annual report and accounts 2013 contract management
risks
as noted above the group has a significant 
proportion of its revenue that is won through 
contract and concession tenders
assessment 
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
management 
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 
potential  
impact
medium
the following are ongoing risks within the business
fuel cost
risks
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
assessment 
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
management 
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 30 we have hedge 
protection into 2016
potential  
impact
medium
insurance and claims
risks
the group’s policy is to selfinsure a number 
of potential claims within its business
assessment 
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
management 
throughout the business a strong safety 
culture prevails led by the board safety and 
environmental 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 it has also reduced 
selfinsurance values and increased external 
market coverage
potential  
impact
medium
credit risk
risks
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
assessment 
payment terms and cash collections in 
north america are extremely good in spain 
the level of outstanding debt is in line with 
historic levels in 2012 and 2013 all long term 
outstanding amounts were settled through 
a federal government credit facility and the 
level of outstanding debt is back to normal 
levels and continues to fall
management 
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 
potential  
impact
low
currency
risks
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
assessment 
foreign currency movements impact  
the profit balance sheet and cash flows  
of the group during 2013 both the euro  
and us dollar appreciated against sterling 
the group holds eurodenominated debt 
and us dollar finance leases 
management 
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
potential  
impact
low
27 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
group finance director’s review
outstanding cash generation
presentation
we present our financial data on two bases 
normalised results show the performance 
of the business before exceptional items 
loss on disposal of a business 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 in 2013 was £18913 million 
2012 £18312m increasing by 3 overall as 
underlying revenue growth and new contracts 
offset the handover during 2012 of the nxea 
rail franchise on a constant currency basis and 
adjusted for the rail handover revenue grew by 
over 4 as shown in the table below
£m
2012 revenue 1831
nxea handover 57
2012 revenue adjusted for 
nxea handover 1774
acquisitions and disposals 51
organic growth 31
2013 revenue at constant 
currency 1856
impact of currency translation 35
2013 reported revenue 1891
we have delivered growth in four out of our  
five divisions through pricing volume and  
new business 
normalised profit
group normalised operating profit decreased 
to £1929 million 2012 £21 19m reflecting the 
loss of rail earnings from nxea normalised 
operating profit performance has been robust 
in our core nonrail business increasing to a 
record level of £1855 million 2012 £1852m 
normalised operating profit increased by 19 
in uk coach and 6 in sterling terms in north 
america 4 in local currency in spain profit 
reduced by 3 in sterling terms 7 in local 
currency a resilient performance in challenging 
economic conditions in uk bus profit was 
9 lower due to a reduction in fuel duty rebate 
bsog £12 million and pension accounting 
changes £25 million rail profit reduced by 
63 following the end of the nxea franchise  
in february 2012
operating profit £m 2013 2012
spain 815 838
north america 626 591
uk bus 312 341
uk coach 245 206
centre 143 124
core nonrail profit 1855 1852
german coach  
startup 24 –
rail 98 267
group 1929 2119
we have successfully offset both economic and 
regulatory changes in 2013 organic revenue 
growth added £21 million of profit growth with 
volume growth in north america uk bus uk 
coach and rail supported by pricing in spain 
uk bus north america and rail synergies 
from the petermann acquisition together with 
cost efficiency benefits from our operational 
excellence programmes across the group 
added £30 million helping offset underlying 
cost inflation pressures of £34 million and fuel 
prices £12 million higher than 2012 fuel prices 
peaked in 2013 with hedged prices for 2014 
unchanged and lower into 2015 and 2016
£m
2012 normalised operating profit 212
nxea handover 17
government subsidy change 2
pension accounting 4
cost inflation 34
fuel price inflation 12
reduction in discretionary  
us routes 4
acquisitions and disposals 3
new business startup 2
olympics 2
organic growth 21
synergy  cost savings 30
impact of currency translation 5
other 1
2013 normalised operating profit 193
jez maiden
group finance director  
27 february 2014
28 national express group plc  
annual report and accounts 2013 group operating margin of 102 2012 1 16 
reflected lower rail profits as well as economic 
and regulatory headwinds in spain and the uk 
four of the five divisions continued to achieve 
industryleading margins
net finance costs remained broadly flat at 
£498 million 2012 £492m reflecting higher 
yearonyear debt in the first four months due 
to the petermann acquisition partly offset by 
the progressive benefit during the year of lower 
debt from our cash generation programme 
and lower interest margin payable on our bank 
facility renewed in july 2013 normalised profit 
before tax was £1437 million 2012 £164 1m
the normalised tax charge was £325 million 
2012 £327m an effective normalised tax rate 
of 226 2012 199 this marks a return 
to our expected normalised tax rate range of 
22 to 25 following a oneoff benefit in 2012 
normalised profit for the year was £1 1 12 million 
2012 £1314m giving a basic eps of 215 
pence 2012 255p of which nonrail eps was 
20 1 pence 2012 216p
ifrs results
exceptional costs for the year reduced to 
£257 million 2012 £426m firstly we are 
investing to develop our pipeline of new 
business opportunities business development 
costs totalled £157 million – our rail bidding 
activity cost £93 million including work on 
prequalification and full bid submissions for 
the essex thameside crossrail and scotrail 
franchises in the uk together with german rail 
our other business development activity cost 
£64 million including prestartup costs  
to develop german coach and investment  
in a bid team to explore selected opportunities 
in new international bus coach and rail markets  
to drive future revenue and profit
the group’s accounting policy for business 
development costs is to charge development 
costs for new businesses in new markets to 
exceptional items until such time as a revenue 
stream has been created from which time the 
business bears its own development costs 
as part of normalised profit hence business 
development costs in north america school 
bus and transit uk bus and coach spain 
and morocco are all charged to normalised 
profit uk rail bidding costs are charged to 
exceptional items as the scale of the bidding 
costs is material relative to the profit generated 
by the group’s only rail franchise c2c
exceptional costs also included north  
america acquisition and integration costs of 
£46 million primarily relating to completing the 
integration of the 2012 petermann acquisition 
and restructuring and rationalisation costs 
of £54 million to deliver cost efficiency 
improvements as part of our operational 
excellence programme activities in the latter 
included closing the crawley depot and 
relocating the customer contact centre in uk 
coach closing the uk bus call centre and 
significant headcount efficiencies delivered 
across the group restructuring costs are 
not expected to continue once the group’s 
operational excellence initiative is fully embedded
a loss of £43 million 2012 £nil was incurred 
on disposal of a business as part of the north 
america programme to improve contract 
returns intangible asset amortisation decreased 
to £493 million 2012 £517m and relates 
principally to the group’s concessions in spain 
and contracts in north america group ifrs 
profit for the year was £583 million 2012 
£613m ifrs basic earnings per share were 
1 1 1 pence 2012 1 18p
cash management
operating cash flow
cash generation is core to our strategy 
representing a key driver of shareholder value 
firstly we focus on converting operating profit 
into operating cash flow in each division except 
where capital investment in excess of the rate 
of depreciation is required to expand our fleet 
in 2013 national express converted 129 
2012 99 of its normalised operating profit 
into operating cash flow the cash equivalent 
of operating profit overall operating cash 
flow grew by £384 million to £2480 million 
2012 £2096m
2013 
£m
2012 
£m
normalised operating 
profit 1929 2119
depreciation 1073 1098
grant amortisation 
profit on disposal  
sharebased payment 09 05
ebitda 3011 3212
net maintenance 
capital expenditure 749 1086
working capital 
movement 305 67
pension contributions 
above normal charge 87 97
operating cash flow 2480 2096
as outlined in our strategy we have brought 
increased focus to improving our return on 
capital during this year maintenance capital 
expenditure reduced by £34 million to 70  
of depreciation 2012 99 capital deployed 
into fleet in north america was limited as part  
of the contract improvement programme 
capital efficiency in spain will also improve 
reflecting the agreement to longer fleet ages  
in urban bus we continue to invest in improving 
the fleet and driving patronage in uk bus 
we remain well invested in each area with an 
average vehicle age of 7 2 years 2012 7 0yrs 
we anticipate that our lower investment 
programme will be sustained in 2014 before 
returning to more typical levels around 1 1  
to 12 times depreciation from 2015 
normalised profit growth and cost efficiency have offset inflation
£17m
£212m
£6m
£4m
£34m
£12m
£4m £3m
£21m
£30m
£5m
£1m
£193m
2012
 operating proﬁt
nxea exit
gov’t subsidy
pension accounting
startup
olympics
cost inﬂation
fuel price
discretionary
us routes
ma
organic growth
synergy and
cost savings
fx
other
2013
 operating proﬁt 29 wwwnationalexpressgroupcom
strategic report pp0151 working capital again improved by 
£305 million in 2013 as we sustained our tight 
control over receivables in the north american 
and spanish contract businesses outstanding 
net receivables from public bodies in spain 
reduced by a further €16 million in 2013 and 
remain in excellent control
2013 
£m
2012 
 £m
operating cash flow 2480 2096
payments to associates 
and minorities 05 82
net interest 484 473
taxation paid 163 133
free cash flow 1828 1408
uk rail franchise exit 
outflow 36 870
cash flow after rail 
handover 1792 538
with little yearonyear change in interest and 
tax the improvement in operating cash flow 
was carried through to free cash flow free  
cash flow increased in 2013 by £420 million  
and reached £1828 million 2012 £1408m 
this was an excellent cash performance  
nearly £60 million ahead of our initial target  
set in february 2013 the prior year rail cash 
outflow related primarily to the handover of  
the nxea franchise 
2013  
£m
2012  
£m
cash flow after rail 
handover 1792 538
net growth capital 
expenditure 77 168
financial investments  
and shares 28 08
exceptional cash flow 229 407
acquisitions and disposals 95 1578
cash flow on the maturity 
of foreign exchange 
contracts 11 89
foreign exchange 
and other noncash 
movements 28 82
dividends paid 503 493
net funds flow 821 1945
growth capital investment was limited  
reflecting our focus on capital discipline and 
driving growth in capitallight opportunities  
for example in our new contract in tangiers 
we have initially redeployed fleet previously used 
in spain exceptional cash flow reflected our 
investment in developing growth opportunities 
acquisitions and disposals related primarily 
to the purchase of two ‘bolton’ school bus 
businesses in north america giving us local 
scale and greater access to higher return 
business the dividend grew by 2 as a result 
of this strong cash performance group net 
debt reduced by £82 1 million to £7 46 1 million 
at 31 december 2013 2012 £8282m 
capital returns
the group’s objective is to maximise long 
term shareholder returns through the 
disciplined deployment of its funds our 
portfolio of assets has a mix of attributes that 
reflect stable profitability organic growth and 
exciting strategic opportunities in 2013 we 
strengthened our focus on capital deployment 
to target improved pretax return on capital 
employed by only investing where returns are 
significantly in excess of our cost of capital by 
improving the redeployment of surplus fleet and 
through our capitallight business development 
opportunities we have set a minimum hurdle 
of 12 pretax roce for investments based 
on our estimated posttax weighted average 
cost of capital of 7 5 as a consequence of 
this focus the group’s core nonrail roce 
increased by 50 basis points in 2013 to 1 1 1 
2012 106 
treasury management
funding sources
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 2013 the group 
had committed funding of £768 million 2012 
£787m from nonbank sources this included 
two public bonds – a 2017dated £350 million 
bond at 625 and a 2020dated £225 million 
bond at 6625 – which are investment grade 
rated at bbb with fitch stable outlook 
and baa3 from moodys positive outlook 
the board is committed to maintaining an 
investment grade rating the group also has 
in place a private placement note purchase 
agreement for €78 million at 455 due in 
2021 and finance leases of £133 million that 
provide a low cost means to purchase vehicles 
primarily in north america 
additional committed bank funding of £410 
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 
renewed in july 2013 and matures in 2018 
following strong demand from our banking 
group the margin on the new rcf was 
reduced to 1 1 over libor the previous 
facility was priced at an average margin of 
145 at 31 december 2013 the group 
had drawn €20 million on the rcf and had 
cash and committed undrawn facilities of 
£434 million 
financial ratios
the board has a prudent approach to covenant 
compliance on its banking debt which is to 
maintain its debt gearing ratio at between 20 
and 25 times ebitda at 31 december 2013  
its financial ratios were as follows
• debt gearing ratio net debt to ebitda 
25 times 2012 25 times covenant not  
to exceed 35 times
• interest cover ebitda to net interest 
6 1 times 2012 67 times covenant not  
to be less than 35 times
interest rate and currency hedging
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 
2013 the proportion of group net debt at 
floating rates was 33 2012 37
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 regards to its financial 
ratios the group held at 31 december 2013 
euro debt of €269 million and us dollar debt 
of 308 million these correspond to 20 times 
eurogenerated ebitda and 22 times us 
dollargenerated ebitda in 2013 
strategic report
group finance director’s review continued
30 national express group plc  
annual report and accounts 2013 fuel risk management
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 2013 of £172 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 2014 at an average price of  
49 pence per litre excluding delivery and tax 
90 fixed for 2015 at an average price of 47p 
and 50 fixed for 2016 at 44p
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
pensions
the group’s principal defined benefit pension 
schemes are all in the uk at 31 december 
2013 these schemes had a combined deficit 
under ias19 of £30 1 million an increase 
from the deficit position of £193 million at 
31 december 2012 primarily due to lower 
asset returns and higher inflation 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 
self sufficiency 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 
passenger 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 ias19 valuations at 31 december 2013 
were as follows
• uk bus under the wm plan and the 
tayside transport superannuation fund 
£408 million deficit 2012 £329m deficit
• uk coach plan £126 million surplus 
2012 £166 million surplus and
• uk railother £19 million deficit 2012 £30m 
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
during the year the group adopted the revised 
ias19 pension accounting standard this 
replaced the interest cost and expected return 
on plan assets with a net interest charge on the 
net defined benefit liability the full year impact 
on group profit was a reduction of £4 1 million 
which mainly affected the uk bus business  
no adjustment has been made to the prior year 
on the grounds of materiality there was no 
cash impact from this change
jez maiden
group finance director 
27 february 2014
31 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
spain
growing revenue and 
underpinning profit
overview of 2013
alsa saw normalised operating profit fall 
in 2013 by 7 in local currency due to the 
impact of recession and rail competition on 
intercity coach patronage coupled with higher 
fuel costs despite the challenging economic 
conditions overall revenue grew with contract 
wins in the urban business in spain and 
growth in morocco while the intercity business 
partly mitigated lower revenue by reducing its 
mileage through its flexible operating model 
as economic signs improve in spain better 
revenue management continued efficiency 
and contract wins should allow alsa to 
respond to pressure from austerity rail and 
concession renewal whilst providing a valuable 
platform from which to develop new growth 
opportunities across the group
total revenue for the year in local currency 
grew by 1 to €6650 million 2012 €659 1m 
and by 6 in sterling terms to £5646 million 
2012 £5350m underlying revenue in intercity 
coach decreased by 1 reflecting reduced 
consumer discretionary spend but showed 
an improving trend through the year delivering 
positive growth at the end of 2013 urban bus 
revenue in spain increased by 10 in total 
benefiting from new concessions in bilbao and 
guadalajara likeforlike growth from existing 
concessions was unchanged on 2012 – the 
urban business operates under contract to city 
councils and does not generally take passenger 
revenue risk it is also a platform for growth 
in morocco which saw underlying revenue 
increase by 14 and a new concession secured
underlying 
growth 

intercity – passenger revenue 1
urban spain – likeforlike growth 0
urban morocco – likeforlike growth 5
normalised operating profit in local currency 
was €960 million 2012 €1033m and 
£815 million in sterling terms 2012 £838m 
intercity profit fell due to lower passenger 
volume particularly impacting services from 
madrid with discounting by high speed rail 
exacerbating weakness in the domestic 
economy partly offset by lower mileage  
fleet and overhead cost efficiencies urban 
profit grew with the benefit of volume growth 
in morocco the operating margin of 144 
2012 157 remains best in class for a 
spanish bus and coach operator
operational excellence
alsa is recognised as an excellent operator 
in public transport in 2013 it was voted best 
transport company in spain for customer 
excellence ahead of coach airline and rail 
our business model 
how our business works
the intercity coach market in spain is regulated and supported by long term 
concession agreements provided to operators in exchange for public service 
obligations concessions typically run for 10 to 15 years public transport is seen 
as an essential service in spain concessions are operated exclusively resulting  
in competition being primarily intermodal ie with rail low cost airlines and the car  
rather than other coach and bus operators where competition is at point of tender 
alsa also operates urban buses on a 10 to 20 year contract basis in spain  
and morocco
how we build long term value
alsa is the largest private operator of 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
• rail competition
• austerity impact on urban budgets
javier carbajo
chief executive alsa
year ended 31 december 2013
m
2012
m
revenue £5646 £5350
normalised operating profit £815 £838
revenue €6650 €6591
normalised operating profit €960 €1033
operating margin 144 157
32 national express group plc  
annual report and accounts 2013
read more p26 putting our markets into context
market size 
€35
bn
regulated bus and intercity coach market
composition
alsa has the leading position in a highly fragmented market
trends
slight decline in bus and coach market passenger volumes since  
mid 2012 reflecting resilience in public transport trends compared  
with other modes of transport and wider austerity impact in spain 
passenger growth in morocco
features
regulated and highly segmented market with three levels of 
government regulation 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 
flexibility required to meet changing demand
customers
urban all ages work and study multiple trips per week
intercity mostly young people few trips per year for leisure  
visiting family on regional services also work and study
competition
intercity competition from statebacked rail and low cost airlines  
cutting capacity in 2013 bus and coach concessions are awarded 
through competitive public tender typically every ten years
concessions
193
alsa has 159 intercity coach concessions 32 urban bus contracts  
and two other concessions
labour
historically less flexible labour market reflecting domestic practices 
unionised austerity measures driving positive reform
growth
new business growth from concession renewal urban contract wins  
in spain and morocco
alsa revenue by market
intercity coach concessions 
urban bus contracts 
other concessions 
alsa revenue split 
passenger
contract
subsidy
other
strategic report pp0151
wwwnationalexpressgroupcom 33 strategic report
spain 
measuring our performance – kpis
superior cash and returns
operating cash conversion
110

safety
lost time injuries per 1000 fte
236
operational excellence
passenger journeys
2502
m
operational excellence
mileage
1796
m
operational excellence
revenue growth – total
1

operational excellence
margin
144

why we measure
a key part of the group’s strategy is to maximise the cash  
generated by the divisions within the framework of their market  
and operating model
2013 performance
reflects continued fleet investment balanced against inflows from 
strong working capital management
why we measure 
safety is a key national express value with a groupwide objective 
of reducing injuries to employees and making our customers feel 
secure this will support sustainable revenue growth and save costs 
maintenance insurance claims 
2013 performance
stable progress in initiatives in spain good improvement in morocco 
– 12 better
why we measure
passenger journeys are reflective of underlying demand for bus and 
coach travel national express is targeting increased passenger 
ridership as a long term driver of sustainable value
2013 performance
continued high growth in new routes and contracts in morocco 
intercity coach passengers down 3 reflecting economic conditions
why we measure
mileage is a both a key cost management tool and also an indicator 
of organic growth the alsa model allows for flexibility in kilometres 
operated to match demand
2013 performance
mileage reduced by 3 in intercity and urban to protect profitability 
increase in morocco to meet demand
why we measure
each national express division is targeting revenue growth as  
a core driver of value
2013 performance
underlying reduction in intercity and urban services offset by new 
contracts and strong morocco demand
why we measure
normalised operating margin reflects pricing operational efficiencies 
and cost control
2013 performance
efficiency and savings not enough to offset fuel price economic 
conditions and the impact of rail competition
2011
2012
2013
1
4
4
2011
2012
2013
236
231
428
2011
2012
2013
144
157
164
2011
2012
2013
1796
1817
1699
2011
2012
2013
2502
2423
2075
2011
2012
2013
110
119
54
34 national express group plc  
annual report and accounts 2013 competition our customer recommendation 
rate increased by five percentage points to 87 
despite the background of more demanding 
times this success was also reflected in 
concession renewal and wins alsa renewed 
its urban bus contract in palencia and was 
awarded new contracts in guadalajara palma 
san sebastian tarrega and tangiers the 
latter is the third concession to be awarded 
to alsa in morocco building on the success 
of marrakech and agadir we were able to 
meet our local stakeholder’s need to start the 
concession early by deploying fleet from spain
through our operational excellence programme 
we are responding better to customer needs in 
intercity coach operations we saw substantial 
discounts introduced by the stateowned high 
speed rail operator which significantly impacted 
our volume on the 20 of competed intercity 
services we responded through selective 
discounting and will invest further in yield 
management utilising our experience in the 
uk in agadir a major network improvement 
programme has boosted passengers by 33 
and we see additional ridership opportunities 
in 2014 
cost efficiency of €6 million was achieved and 
has been key to protecting profit from the impact 
of lower revenue and higher fuel prices network 
mileage was reduced by 3 to match lower 
demand procurement and overhead savings 
were delivered to help offset a fuel impact of 
€5 million and a reduction of €3 million in quality 
bonus payments available in urban bus alsa’s 
2012 bilbao acquisition has seen improved 
scheduling better employee management and 
stronger stakeholder relations which have seen 
a significant turnaround in performance from 
this previously lossmaking acquisition
€m
2012 normalised operating profit 103
net impact of changes in  
fares  services
–
fuel cost 5
cost inflation 6
cost efficiencies 6
other 2
2013 normalised operating profit 96
our focus on safety through the ‘driving out 
harm’ programme has benefited customers 
financial performance and our bidding 
credentials passenger injuries decreased 
in morocco by 60 and by 10 in spain 
passenger claims in spain were down 9 
and in morocco employee lost time injuries 
decreased 12 with good progress in a 
challenging operating environment
cash and returns
in 2013 alsa converted 1 10 of operating 
profit into operating cash working capital 
continued to improve – strong management 
of receivables saw the balance owing from 
public bodies primarily city councils fall to an 
exceptionally low €19 million 2012 €35m 
our capital investment approach is disciplined 
in 2013 we spent £44 million including over 
250 new buses and coaches broadly in line 
with depreciation in the urban bus business 
we have agreed to reduce mileage operated in 
return for extending asset lives lowering future 
investment the cascading of spare fleet from 
spain to tangiers has also deferred capital 
expenditure to 2015 more targeted capital 
deployment will help alsa offset profit  
pressure and retain its strong roa 
creating new opportunities
alsa’s diversified bus and coach portfolio 
operating within a regulated concessionary 
framework provides a platform for the growth 
of the group in liberalising international markets 
we have utilised alsa’s skills and systems to 
startup coach operations in germany and 
2014 is likely to bring opportunities through 
liberalisation of the bus market in portugal our 
success in morocco has led to discussions with 
potential partners and customers internationally 
we also remain interested in future prospects 
for private sector development in the domestic 
rail market 
we expect to see further opportunities in 
morocco where we have over the past 13 
years established a reputation for innovation 
and excellence in operations we commenced 
our second contract in agadir in 2010 where 
revenue grew 25 in 2013 to over €13 million 
and are already carrying 50000 passengers  
a day on 65 buses in the tangiers operation  
we started in november 2013 which we expect 
to grow during 2014 we expect to see further 
urban contract opportunities and potential 
intercity coach services benefiting from good 
road infrastructure 
our customer recommendation rate in alsa 
increased by five percentage points to 87
in 2014 we expect a slowly improving 
consumer economy in spain to continue 
the improving outlook for intercity coach 
investment in yield management will help 
mitigate sustained competition from rail and 
selected low cost airline activity with coach 
travel continuing to deliver excellent value to 
cashconstrained customers the national 
coach concession renewal programme has 
been delayed into 2014 and the removal of 
the incumbent advantage is expected to be 
confirmed on publication of the first tenders 
however we do not expect a material impact 
on performance in 2014 and as the best in 
class operator we expect our high quality  
bids to maximise retention and present  
new concession opportunities in a highly 
competitive market 
we will seek to protect urban services during 
the current period of council spending austerity 
and support our capital return through greater 
fleet efficiency cost efficiency will underpin 
profitability supported by unchanged hedged 
fuel costs in 2014 and reduced cost in 2015
35 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
north america
driving capital return and  
customer service
overview of 2013
our north america business had a successful 
2013 exceeding us1 billion of revenue for the 
first time growing profit by 4 in local currency 
generating nearly us200 million of operating 
cash flow and improving roa to 22 this 
reflects our strategy to reshape the school 
bus business by driving incremental return 
on capital and to grow the transit business 
established in 2012 this performance was 
achieved despite a significant fuel cost increase 
and a reduction in discretionary school routes 
we have created a strong position from which 
to increase school bus returns and expand  
the transit operation
total revenue in local currency grew by 10  
to us10094 million 2012 us9194m as we 
completed integration of the petermann school 
bus business acquired in may 2012 underlying 
revenue grew by 3 with improved pricing on 
school bus contract renewal an increase in 
the number of school buses operated from the 
previous bid season and us20 million of new 
contract revenue secured in transit charter 
and field trip revenue increased by 9 and is a 
key focus for added value development in 2014 
we have a current order book of us15 billion
normalised operating profit increased to 
us97 9 million 2012 us940m revenue 
growth and further synergy benefits from  
the integration of petermann helped offset  
a us7 million increase in the price of fuel  
and investment in bid development resource  
in transit operating margin decreased by  
50 basis points to 97 as we grow the transit 
business this will generally be at lower margin 
than school bus reflecting the former’s  
capitallight nature 
operational excellence
our north america school bus operation 
already delivers best in class margin 
following successful completion of our margin 
improvement programme between 2010 and 
2012 traditionally the school bus industry is a 
capital intensive low cash generation business 
in 2013 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 201314 school 
year bid season we relinquished 16 contracts 
leading to a reduction net of bid wins  
of 200 buses operated
our business model 
how our business works
in north american school bus the group’s operations are carried out by 
our subsidiaries durham school services us petermann us and stock 
transportation canada the outsourced private operator market is only around 
one third of the total with the remainder being insourced that is owned and run 
by the school boards themselves contracts typically run from three to five years 
once secured contracts have low revenue risk over the contract life 
national express transit is focused primarily on the paratransit segment of the 
market where it operates services on behalf of municipalities to fulfil federally 
mandated social mobility obligations contracts also typically last for three to five 
years with a mix of revenue risk and gross cost contracts vehicles are generally 
provided by the federal or local authorities 
how we build long term value
we are the second largest school bus private operator in north america with high 
contract retention and a focus on customer service 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 business development
the group acquired its initial paratransit contracts as part of the petermann school 
bus purchase in 2012 since then the national express 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
key risks to manage
• further healthcare and social security taxes
• external labour pressure
• severe weather
• transit contract churn
david duke
chief executive national 
express corporation
year ended 31 december 2013
m
2012
m
revenue £6450 £5783
operating profit £626 £591
revenue us10094 us9194
operating profit us979 us940
operating margin 97 102
read more p26
36 national express group plc  
annual report and accounts 2013 putting our markets into context
market size 
24
bn
total school bus market in north america represented by 530000  
route buses
32 is outsourced 68 inhouse
market share
14 of outsourced school bus market
national express operates 20000 school buses
composition
top four players operate approximately 90000 routes
40 companies operate 200 buses rest of outsourced market split 
between 4000 operators
trends
growth traditionally inflation and population driven recent increase  
in outsource conversion due to public funding pressures
features
local relationship and service delivery important
customers
local school boards funded largely by local property taxation
transport is a significant part of local education spending
competition
bigger players have access to capital geographical reach and some 
scale advantages
potential for some market consolidation
labour
traditionally part time workforce
over 30 of national express staff unionised
growth
securing price increases to meet required return on capital from existing 
customer base and winning contracts in the school bidding season 
primarily through outsourcingconversion as well as market share shift 
new transit business has a pipeline of contracts being targeted
market share
national express group
others
revenue split
passenger
contract
subsidy
other
strategic report pp0151
wwwnationalexpressgroupcom 37 measuring our performance – kpis
strategic report  
north america
why we measure
school bus operations have low asset utilisation compared  
with other bus and coach businesses our strategy is now focused  
on improvement in operating returns
2013 performance
capital discipline and improving quality of the contract portfolio
superior cash and returns
return on assets
217

safety
total injuries per 200000 hrs
576
why we measure
safety is a key national express value with a groupwide objective 
of reducing injuries to employees and making our customers feel 
secure this will support sustainable revenue growth and save costs 
maintenance insurance claims 
2013 performance
18 decrease in total injuries since 201 1 through training 
consultation process improvement
operational excellence
retention rate
97

why we measure
as a contracting business retention rate is a key measure of success 
in retaining contracts
2013 performance
high retention rate maintained through excellent customer 
relationships and account management
superior cash and returns
operating cash conversion
200

why we measure
a key part of the group’s strategy is to maximise the cash  
generated by the divisions within the framework of their market  
and operating model
2013 performance
higher fleet utilisation and productivity improvement significantly 
reducing expenditure on vehicles
operational excellence
revenue growth – total
10

why we measure
each national express division is targeting revenue growth as  
a core driver of value
2013 performance
underlying growth of 3 supplemented by petermann acquisition
operational excellence
margin
97

why we measure
normalised operating margin reflects pricing operational efficiencies 
and cost control
2013 performance
reduced due to fuel price increase of 7m
2011
2012
2013
576
549
706
2011
2012
2013
97
102
100
2011
2012
2013
97
97
98
2011
2012
2013
217
172
160
2011
2012
2013
10
19
8
2011
2012
2013
200
69
41
38 national express group plc  
annual report and accounts 2013 our superior service delivery was reflected in 
our high contract retention rate achieving 97 
during the last school bus bidding season  
and 100 for acquired petermann customers 
over 92 of school customers would 
recommend us we have invested in a new 
‘master driver’ programme to enhance 
driver skills and achieved 89 employee 
satisfaction a record performance a new key 
account management programme is helping 
our focus on contract retention whilst we 
continue to target school board outsourcing 
or ‘conversion’ contracts which require lower 
capital and give better returns we secured  
13 new conversion contracts in 2013 
the market remains highly competitive and 
delivering cost efficiencies is crucial in 2013 
we achieved us13 million of efficiency and 
synergy our approach focuses on simplification 
and standardisation across our 230 field 
locations utilising technology and continuously 
improving safety performance following  
a successful pilot in 2013 we are now rolling 
out standardised processes and management 
systems to bring cost savings and a greater 
degree of control this will support our gps
based ‘compass’ system which was fully 
implemented during 2013 – it integrates driver 
hours to payroll and customer invoicing and 
has generated savings of 3 million through 
scheduling and fuel improvements compass 
also supports our safety programme ‘driving 
out harm’ by recording details of the inspection 
before and after every journey we have also 
achieved further reductions in accident rates – 
over three years preventable street accidents 
fell by 19 and total accidents by 25 – and 
reduced insurance premiums 
usm
2012 normalised operating profit 94
annualisation of petermann acquisition 5
net impact of changes in pricing  
 contracts 7
reduction in discretionary routes  
in school bus 7
fuel cost 7
cost inflation 10
synergies  cost efficiencies 13
other 3
2013 normalised operating profit 98
cash and returns
operating cash flow represented a conversion 
of 200 of operating profit the equivalent of 
paying for the petermann acquisition in one 
year working capital collection at the traditional 
times of school and calendar yearends was 
very strong in addition the programme to 
improve contract capital returns has led to 
lower capital investment requirements this 
has been supported by negotiated extension 
to vehicle lives redeploying vehicles that were 
surplus fleet the spare vehicle ratio has been 
reduced to 1 1 from 18 three years ago 
and cascading fleet from exited contracts in 
addition conversion contracts tend to require 
less initial capital expenditure we expect capital 
requirements in 2014 to remain suppressed as 
the contract return improvement programme 
continues before returning to a constant fleet 
replacement rate in 2015 and 2016 the fleet 
remains well invested with an average age of 
7  1 years 2012 69 years
improved profitability and more efficient capital 
deployment have combined to increase roa 
to 217 from 17 2 in 2012 during the year 
we also acquired two small ‘bolton’ school 
bus operations in canada adding scale and 
capabilities to existing local operations at 
attractive values and sold a low return business 
in boston
the north american transit business provides an exciting capitallight business development opportunity
creating new opportunities
the north america transit business provides 
an exciting capitallight business development 
opportunity in a growing market within 18 
months we have built us80 million of annual 
revenue in the disabled transport ‘paratransit’ 
shuttle and fixed route bus segments 
building on our three seed acquisitions 
in 2012 we have now won five contracts 
targeted in smaller lower risk markets using 
our operational expertise and track record 
of service delivery we are bidding an active 
current pipeline of 200m in annual revenue  
in most bids vehicles are funded by the federal 
government or the customer margins therefore 
tend to be lower than school bus but return on 
capital is high 
in school bus we expect to maintain capital 
returns above 20 as we improve the contract 
portfolio a continued focus on cost efficiency 
and the benefit of hedged fuel costs at or below 
2013 levels through to 2016 should also support 
margin growth and offset rising welfare and 
medical taxes market pricing is likely to remain 
highly competitive we will be selective in targeting 
new contracts focusing on conversion and high 
service contracts such as special education 
39 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
uk bus
delivering better  
customer service
overview of 2013
after a strong turnaround in profits between 
2010 and 2012 uk bus experienced a decline 
in 2013 due to a change in pension accounting 
standard and reduced government fuel duty 
rebate ‘bsog’ likeforlike commercial 
revenue growth up 3 in the second half of  
the year together with cost efficiency more 
than offset other headwinds which included 
higher fuel costs passenger growth reflected 
our investment in fleet service and technology 
total revenue grew by 2 to £2734 million 
2012 £2690m likeforlike commercial 
revenue increased by 2 for the full year and 
4 in the second half following a weather
impacted first quarter commercial passenger 
journeys rose 1 in the year and concession 
income increased by 2 during the second half 
of the year 
growth  

likeforlike commercial revenue 2
mileage increasereduction –
underlying commercial revenue 2
concession revenue – 
total revenue 2
normalised operating profit for the year reduced 
by £29 million to £312 million 2012 £34 1m 
an operating margin of 1 14 2012 127 
pension accounting and bsog changes cost 
£37 million more than accounting for the lower 
profit revenue growth and £9 million of cost 
efficiencies mitigated the impact of cost inflation 
and a £3 million increase in fuel prices
operational excellence
customer service delivery is vital to achieving 
profitable growth in 2013 we improved our 
offering introduced technology and increased 
punctuality resulting in better customer 
satisfaction and improved efficiency we 
improved punctuality by 7 and reduced 
customer complaints by 12 customer 
satisfaction rose to 83 our network 
improvements have driven patronage growth – 
by over 10 in north birmingham supported 
by new buses high profile marketing and strong 
branding on key corridors passenger volumes 
rose by up to 5 in both wolverhampton and 
coventry following network reviews overall we 
increased our network mileage for example 
working closely with jaguar land rover and 
the merry hill shopping centre to meet new 
demand over 130 new buses were added to 
the network and new programmes such as 
city centre vehicle turnaround cleaning have 
been well received new services have been 
introduced and 2013 saw our best ever boxing 
day revenue performance reflecting changes  
to traditional demand patterns
“ we improved our offering 
introduced technology and 
increased punctuality resulting 
in better customer satisfaction 
and improved efficiency”
our business model 
how our business works
national express west midlands is the market leader in the largest single urban 
network in the uk deregulated market the deregulated model allows for total 
flexibility in both fares and service the business also receives a government
funded subsidy for senior citizen travel the business has a high regional market 
share with strong competition from multiple operators on specific routes modal 
competition is principally from private cars 
how we build long term 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 marketleading 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
peter coates
managing director uk bus
year ended 31 december 2013
£m
2012
£m
revenue 2734 2690
operating profit 312 341
operating margin 114 127
read more p26
40 national express group plc  
annual report and accounts 2013 putting our markets into context
market size 
£48
bn
uk excluding london
97 is privatised
market share
1660 buses operated in the fleet
focused on the west midlands and dundee markets
composition
largest five operators represent around 70 of the uk  
deregulated market
remainder made up of a large number of private operators 
trends
short term economic pressures from austerity and local unemployment
longer term economic regeneration and environmentally driven public 
transport growth opportunities over the car
features
primarily deregulated market vehicleregulatory oversight
low barriers to entry – flexibility and scale of operations is key
customers
over 90 of west midlands network is commercial remainder mostly 
public service tenders
around 75 of revenue from passengers balance concessionary
competition
active competition from national and local bus operators as well as 
private car and rail
labour
primarily unionised with good industrial relations 
growth
growth strategy is focused on increasing passenger volumes through 
investment in vehicles technology and our people as well as delivering 
high quality services
customers
passenger fares
concessions
revenue split
passenger
contract
subsidy
other
41 wwwnationalexpressgroupcom
strategic report pp0151 measuring our performance – kpis
strategic report  
uk bus
why we measure
a key part of the group’s strategy is to maximise the cash  
generated by the divisions within the framework of their market  
and operating model
2013 performance
broadly flat from prior year due to sustained investment in the fleet 
above depreciation level
superior cash and returns
operating cash conversion
61

safety
lost time injuries per 1000 fte
126
why we measure
safety is a key national express value with a groupwide objective 
of reducing injuries to employees and making our customers feel 
secure this will support sustainable revenue growth and save costs 
maintenance insurance claims 
2013 performance
safety significantly improved as safety culture processes and  
systems become embedded supported by investment in facilities  
and safety equipment
operational excellence
passenger journeys
2709
m
why we measure
passenger journeys are reflective of underlying demand for bus travel 
national express is targeting increased passenger ridership as a long 
term driver of sustainable value
2013 performance
good commercial passenger growth but lower concessionary 
passengers in the first half of the year due to exceptionally  
poor weather
operational excellence
mileage
689
m
why we measure
mileage is both a key cost management tool and also an indicator  
of organic growth
2013 performance
small decrease from network reviews and reduced unprofitable 
frequencies
operational excellence
revenue growth – likeforlike commercial
2

why we measure
each national express division is targeting revenue growth as  
a core driver of value
2013 performance
increase driven by balanced rise in passenger journeys  1  
and yield improvement  1
operational excellence
margin
114

why we measure
normalised operating margin reflects pricing operational efficiencies 
and cost control
2013 performance
margin affected by pension accounting changes lower fuel duty 
rebate and higher fuel price despite good cost efficiency savings
2011
2012
2013
126
228
414
2011
2012
2013
114
127
124
2011
2012
2013
2709
2716
2736
2011
2012
2013
61
59
103
2011
2012
2013
2
4
6
2011
2012
2013
689
692
698
42 national express group plc  
annual report and accounts 2013 operational performance improvement was 
driven through technology our central control 
centre uses automatic vehicle location ‘avl ’ to 
manage frequencies and to adapt timetables to 
traffic patterns driving better punctuality in turn 
this information is fed to the network’s bus stops 
as realtime information for passengers over 
100000 mobile users also downloaded our 
west midlands bus app 
we also expanded the ways in which 
customers can buy tickets to travel travelcards 
have been increasingly popular – these reduce 
cost to the passenger and increase loyalty to 
national express services we also introduced 
smartcards to the west midlands with 100000 
journeys already taken in coventry dundee  
and the west midlands 
we are seeking to drive margins nearer best 
in class through cost efficiency in 2014 we 
will be seeking to improve structural cost 
efficiency in driving and engineering changes 
in maintenance practice have produced 
improved fleet reliability safety improvements 
are also driving cost savings with annual claims 
costs down £25 million since 201 1 employee 
lost time injuries have improved by 38 and 
passenger injuries were 23 better
£m
2012 normalised operating profit 34
fuel cost 3
fuel duty bsog reduction 1
changes to pension accounting 3
cost inflation 8
net impact from revenue growth 4
cost efficiencies 9
other 1
2013 normalised operating profit 31
cash and returns
the uk bus business generates an excellent 
return on capital delivering good asset 
utilisation and profitable returns on investment 
we believe that investing in new fleet and 
technology to drive passenger growth is vital 
capital expenditure during the year was  
£27 million representing 17 times depreciation 
we are well invested in the fleet and vehicle 
age continues to reduce now at 85 years 
2012 88yrs as a result of the investment 
programme operating cash flow was 61  
of profit roa for the division remains strong
creating new opportunities
uk bus is a stable strong return on capital 
business with opportunity for 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 stable hedged fuel prices and no 
further planned austerity measures will help 
in 2014 however the regional economies in 
which we operate remain fragile and longer  
term funding pressures on concession 
arrangements remain
our groundbreaking ‘transforming bus travel’ 
partnership with centro is important for the 
medium term we have jointly committed to  
a range of initiatives and investments to enhance 
bus services in the west midlands these 
include sustainable fares reliable and punctual 
services investment in 300 new environmentally 
friendly vehicles promoting bus ridership 
through realtime information 350 new bus 
shelters refurbished bus stations and bus road 
priority schemes we will also be introducing 
new longer trams in 2014 we believe the 
partnership leads the uk industry in stakeholder 
relations as the largest single commercial 
network in the uk together with spain and 
morocco this is also a powerful credential  
as we explore international opportunities
our central control centre uses automatic vehicle location avl to manage frequencies and drive punctuality
our network improvements have driven  
patronage growth
43 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
uk coach
strong year growing revenue  
and profit 
overview of 2013
uk coach has delivered a strong turnaround 
performance recovering from the previous 
withdrawal of senior citizen concession funding 
the business has reestablished a solid financial 
and operational foundation from which to 
drive continued revenue growth and margin 
improvement generating momentum for  
the future
total revenue increased by 3 to £2635 
million 2012 £255 1m core express revenue 
increased by 7 with dynamic pricing network 
improvements and new distribution agreements 
achieving passenger volume growth of 9 
this was supported by good performances in 
eurolines airlinks and the kings ferry with only 
rail replacement significantly lower following 
the handback of the nxea rail franchise in 2012 
growth 

passenger yield 2
passenger volume 9
change in core express revenue 7
other revenues primarily rail 
replacement
6
total revenue 3
normalised operating profit increased by 
£39 million to £245 million 2012 £206m 
and operating margin was 93 2012 8 1 
excluding the oneoff profit in 2012 from 
olympics contracts the underlying profit 
improvement was over £6 million an increase 
of 30 yearonyear giving passengers easy 
access to lower fares more frequent and 
punctual services investment in new coaches 
and greater cost efficiency all contributed to  
this progress
£m
2012 normalised operating profit 21
cost inflation 11
impact of government rebate changes 1
net impact of growth and new contracts 13
olympic contracts 2
cost efficiencies  network changes 7
other 2
2013 normalised operating profit 25
“ we reestablished a solid 
financial and operational 
foundation from which to drive 
continued revenue growth and 
margin improvement”
our business model 
how our business works
‘national express’ is the national coach network operator in the uk offering  
great value and accessible travel to all it operates the only scheduled national  
uk coach network and the largest in europe in a deregulated market where  
we have flexibility over pricing and supply competition is modal against rail  
and private car national express runs 500 coaches a day serving around  
1000 domestic destinations 
how we build long term 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
t om stables
managing director uk coach
year ended 31 december 2013
£m
2012
£m
revenue 2635 2551
operating profit 245 206
operating margin 93 81
read more p26
44 national express group plc  
annual report and accounts 2013 putting our markets into context
market size 
£300
m
market size 
£300m of contested revenues in the scheduled coach market
market share
around 1000 destinations served
national express is the uk scheduled coach market leader
composition
national express has the only nationwide network of services
other competitors tend to focus on specific regions or corridors
trends
core revenue growth reflecting value and convenience of coach
price competition from rail through discounted fares
features
highly deregulated market
customer safety and disability access supported by regulation
operators able to compete flexibly on selected routes
customers
customer satisfaction important in driving longer term loyalty
attracted by fare discount to rail increasing cost of private motoring  
and environmental friendliness
competition
selective competition from rail large bus operators and  
localised services
labour
outsourced model 80 operated by thirdparty partners on  
long term contract
consistent service and behaviour standards across all operators
growth
revenue growth through competitive pricing better distribution channels 
and greater understanding of our customers and their needs in the 
longer term we will implement improved retailing systems
operations
third party operators
owned operations
revenue split
passenger
contract
subsidy
other
strategic report pp0151
wwwnationalexpressgroupcom 45 measuring our performance – kpis
strategic report  
uk coach
why we measure
a key part of the group’s strategy is to maximise the cash  
generated by the divisions within the framework of their market  
and operating model
2013 performance
lower vehicle acquisitions in the owned fleet plus a move to using 
more operating leases to match fleet life 
superior cash and returns
operating cash conversion
140

safety
lost time injuries per 1000 fte
140
why we measure
safety is a key national express value with a groupwide objective 
of reducing injuries to employees and making our customers feel 
secure this will support sustainable revenue growth and save costs 
maintenance insurance claims 
2013 performance
accident rate broadly stable and a significant twoyear improvement
operational excellence
passenger journeys
180
m
why we measure
passenger journeys are reflective of underlying demand for travel 
national express is targeting increased passenger ridership as a long 
term driver of sustainable value
2013 performance
introduction of faster routes and new distribution channels  
ryanair post office
operational excellence
mileage
842
m
why we measure
mileage is both a key cost management tool and also an indicator  
of organic growth
2013 performance
we reduced mileage to drive faster journey times removing stops  
in smaller locations and selecting more direct routes
operational excellence
revenue growth – core network
7

why we measure
each national express division is targeting revenue growth as  
a core driver of value
2013 performance
strong recovery in core business after loss of concession income  
in 2012
operational excellence
margin
93

why we measure
normalised operating margin reflects pricing operational efficiencies 
and cost control
2013 performance
increase from cost control and profitable revenue growth
2011
2012
2013
140
132
353
2011
2012
2013
93
81
135
2011
2012
2013
180
165
168
2011
2012
2013
140
101
70
2011
2012
2013
7
2
4
2011
2012
2013
842
850
822
46 national express group plc  
annual report and accounts 2013 operational excellence
our customer service strategy has focused on 
providing frequent coach services at low prices 
firstly network changes have shortened journey 
times – for example along the m4 corridor 
between the west country and heathrow and 
london supported by technology through real 
time coach monitoring punctuality improved 
by over one percentage point secondly lower 
prices which were reduced during 2012 have 
been sustained whilst better yield management 
has allowed us to encourage travellers by flexing 
pricing in line with market conditions this has 
been supported by enhanced products such 
as the senior citizen coach card
ease of access to fares has been improved 
by broadening retail distribution with particular 
focus on target customer segments this has 
resulted in distribution agreements with the post 
office where we access customers through 
1 1000 branches and ryanair via their website 
during the inbound passenger booking process 
we have also focused on building on our 
contract capabilities commencing operations 
to serve luton airport from london 70 times 
a day extending airport work at gatwick and 
carrying a record number of passengers to the 
glastonbury festival distribution through wizz 
air a key luton airport carrier was added at 
the end of 2013 the kings ferry expanded 
its popular commuter operation with a new 
service serving north somerset and bristol 
we operated express coach services linking 
ten cities with london heathrow and gatwick 
on christmas day for the first time all but one 
service was sold out
as a result of this strategy all express segments 
have seen increased patronage with airport 
routes particularly popular this has driven 
efficiency through better load factors per 
coach coupled with streamlining of our third 
party network and cost efficiency in our owned 
operations with the closure of the crawley 
depot in total saving over £7 million this has 
driven significant margin improvement safety 
improvements saw customer injury frequency 
down 40 and vehicle collisions 8 lower 
cash and returns
the uk coach business model has particularly 
strong return on capital and cash generation 
outsourcing the majority of fleet provision and 
services to its partner operators in a capitallight 
model operating cash conversion was 140 
of profit in 2013 capital expenditure is primarily 
focused on technology and retail systems
creating new opportunities
attractive pricing alongside improved yield 
management will allow the division to continue 
to grow volume improving load factors and 
profitability distribution channels to customers 
will be expanded alongside a continued focus 
on operational efficiency remaining competitive 
against our key competitor  rail will be a key focus
the unique uk coach model with its low price 
modern frequent services is well placed to 
continue to grow both revenue and margin 
the concept is also applicable to developing 
international markets as a template for capital
light growth – for example we have adopted  
the partner model to develop our german 
coach operation mitigating significant 
investment cost in new markets coach 
services were launched in germany in april 
2013 with three initial services expanded to 
five in july linking munich stuttgart frankfurt 
cologne dusseldorf and hamburg during this 
startup period revenue has been €24 million 
and normalised operating loss €28 million  
the latter reflecting significant marketing 
investment we expect the loss to be similar  
in 2014 as market development continues
new distribution agreements with airlines and the post office have improved ease of access to tickets
better yield management has allowed us to 
encourage travellers by flexing pricing in line with 
market conditions
47 wwwnationalexpressgroupcom
strategic report pp0151 strategic report
rail 
international growth builds from  
c2c success 
overview of 2013
2013 saw national express secure new 
long term contracts in rail building on the 
performance of c2c as the uk’s top performing 
franchise we secured two new contracts 
in germany to run until 2030 with the c2c 
franchise extended until september 2014 
our focus is on the significant bid pipeline 
of opportunities in the uk where we are 
shortlisted for three contracts and in germany
total revenue in 2013 was £1430 million 2012 
£195 1m the yearonyear reduction reflecting 
the end of the nxea franchise during 2012  
the c2c franchise increased underlying revenue 
by 4 normalised operating profit was £98 
million 2012 £267m leading to an operating 
margin of 69 2012 137 the c2c franchise 
was extended by the department for transport 
‘dft’ in may 2013 and was in 100 profit 
share to the dft at the end of 2013 this is  
reset for 2014 until the expiry of the franchise  
in september
operational excellence
the rail division is at the forefront of the group’s 
drive for operational excellence in december 
c2c was awarded a 5star rating by the 
european foundation for quality management 
the highest level attainable this is an important 
credential for bidding in rail c2c’s customer 
service is evident – it has been the top rated 
performer of all uk rail franchises throughout 
2012 and 2013 with an annual average 
punctuality of 969 customer satisfaction 
and national passenger survey results are also 
industry leading with the latter recording a 92 
score making c2c the best dft franchise 
our offering to customers continues to expand 
in august we were selected by the dft to trial a 
flagship paperless flexible ticketing system using 
smartcards this follows the addition of 14000 
extra seats per week in the new may timetable 
safety performance also improved with its 
lowest ever rate of employee accidents 
cash and returns
rail offers a capitallight model with lower 
margins but high returns in 2013 c2c converted 
150 of normalised operating profit into 
operating cash in the event that national 
express did not retain the c2c franchise in 
september 2014 the cash outflow associated 
with the franchise handover would be around 
£22 million
“ c2c was awarded a 5star 
rating by the european 
foundation for quality 
management the highest  
level attainable”
our business model 
how our business works
national express has a strong operational skills base in rail one of the few 
privatised systems in europe the rail industry comprises franchises awarded 
on an exclusive operation basis to private operators prices are predominantly 
regulated and costs are substantially fixed around track access rolling stock and 
franchise payments franchisees therefore primarily target passenger volume 
growth whilst fulfilling their service obligations 
how we build long term 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 national express is currently bidding for essex thameside 
crossrail and scotrail in the uk and the berlin sbahn in germany
key risks to manage
• loss of c2c
andrew chivers
managing director rail 
year ended 31 december 2013
£m
2012
£m
revenue 1430 1951
operating profit 98 267
operating margin 69 137
read more p26
48 national express group plc  
annual report and accounts 2013 putting our markets into context
market size 
£85
bn
£85bn of uk franchise revenues over next five years  
based on proposed dft pipeline
€6bn currently accessible german regional rail market
market share
one franchise currently c2c essex thameside
composition
market share broadly dispersed between uk private train operators  
and overseas state market participants
trends
growth over the past decade driven by passenger volumes
dependent on gdp and employment particularly central london 
employment for c2c
regulated fares likely to increase by 01 in real terms over next  
two years
liberalising german rail market
features
regulated environment
new framework for future franchises likely to settle between 7 15 year 
duration with introduction of quality element alongside pricing
highly regulated qualification and operational processes
customers
steady growth in passenger volume over last 20 years
competition
increased international competition in uk franchise bidding
labour
relationships are managed within each franchise with high  
union representation
growth
successful bid to retain c2c and bidding for other uk franchises  
further bid wins in germany
strategic report pp0151
wwwnationalexpressgroupcom 49 measuring our performance – kpis
 all kpis refer to c2c only except margin which is total rail division
strategic report  
rail 
why we measure
a key part of the group’s strategy is to maximise the cash  
generated by the divisions within the framework of their market  
and operating model
2013 performance
high natural cash conversion in rail franchises c2c only in 2013
superior cash and returns
operating cash conversion
154

safety
lost time injuries per 1000 fte
17
why we measure
safety is a key national express value with a groupwide objective 
of reducing injuries to employees and making our customers feel 
secure this will support sustainable revenue growth and save costs 
maintenance insurance claims 
2013 performance
excellent performance in safety improvement
operational excellence
passenger journeys
375
m
why we measure
passenger journeys are reflective of underlying demand for travel 
national express is targeting increased passenger ridership as a long 
term driver of sustainable value
2013 performance
increase in journeys led by operational quality and marketingoffpeak 
initiatives
operational excellence
public performance measure
969

why we measure
this is the rail industry standard measurement of performance  
it also enables franchises to be benchmarked against each other
2013 performance
recordbreaking performance continuous period of two years  
as uk top performing franchise
operational excellence
revenue growth 
4

why we measure
each national express division is targeting revenue growth as  
a core driver of value
2013 performance
revenue growth driven by fare increases and incremental passenger 
volume growth
operational excellence
margin
69

why we measure
normalised operating margin reflects pricing operational efficiencies 
and cost control
2013 performance
lower margin as nxea franchiseend effects finish profit share 
mechanism on contract extension
2011
2012
2013
17
82
127
2011
2012
2013
69
137
63
2011
2012
2013
375
372
356
2011
2012
2013
154
126
108
2011
2012
2013
4
7
7
2011
2012
2013
969
975
967
50 national express group plc  
annual report and accounts 2013 creating new opportunities
leveraging our uk rail experience and the 
operational performance credentials of c2c our 
strategy in rail is to secure a number of smaller 
lower risk uk and german rail franchises where 
the franchise risk is acceptable other markets 
may liberalise and be attractive in due course 
for example spain 
in 2013 we won two rail contracts to provide 
services to the nord rhine westphalia regional 
government in germany these contracts 
operating as the ‘rhine munsterland express’ 
will generate €70 million of revenue per year 
and will run for 15 years from december 2015 
securing our participation in rail until 2030 
the mobilisation is underway with the first of 
35 trains procured on behalf of the regional 
authority from bombardier due to be delivered 
in june 2014 we have also prequalified for the 
berlin ringbahn contract due to be bid later this 
year and are looking at other suitable contracts 
in germany as well as in the neighbouring 
czech republic we are currently working on  
18 opportunities with annual revenue of £1 billion
in the uk we have a skilled and experienced 
bid team and have submitted bids to the dft 
for essex thameside where we are the current 
operator as c2c and to transport for london 
for crossrail we have also been selected by 
transport scotland to bid for the scotrail 
franchise in april
c2c has been the top rated performer of all uk rail franchises throughout 2012 and 2013
we were selected by the dft to pilot a new smartcard 
ticketing system
our 2013 strategic report from page 01 
to page 51 has been reviewed and 
approved by the board of directors 
on 27 february 2014
dean finch
group chief executive 
27 february 2014
“ in 2013 we won two rail contracts  
to provide services to the  
nord rhine westphalia regional 
government in germany”
51 wwwnationalexpressgroupcom
strategic report pp0151 corporate governance  
contents 
53 chairman’s introduction
54 board of directors
56 governance report
64 board committees
68 directors’ remuneration report
88 other statutory information
92 directors’ responsibilities statement
52 national express group plc  
annual report and accounts 2013 what does good governance 
mean to national express
corporate governance
chairman’s introduction 
dear shareholder
as a listed company in the uk national express 
is subject to the uk corporate governance 
code the ‘code’ the code encourages me to 
report personally on how the principles relating 
to the role and effectiveness of the board have 
been applied and i am happy to do so
the board believes that maintaining the highest 
standards of corporate governance is essential 
to protecting shareholder value and the 
sustainable growth of the group we do not see 
governance as a box ticking exercise but as an 
integral part of ensuring we do the right things in 
the right way and that is fully embraced by all of 
our employees across the group
this section of the annual report and accounts 
explains the various aspects of the governance 
of the company including reports from our 
board committees on their work in 2013
the role of the board is to provide leadership 
of the company with myself as chairman 
responsible for leading the board and ensuring 
its effectiveness it is therefore important that 
the board has the correct balance of skills 
and experience and that board members 
work together effectively during the year 
under review i was appointed as chairman 
taking over from john devaney while more 
recently jane kingston has been appointed 
as a nonexecutive director on 25 february 
2014 tim score stepped down from the board 
and jackie hunt became senior independent 
director and chair of the audit committee from 
26 february 2014 i would like to thank tim for 
his significant contribution to the company over 
the past nine years in view of these changes 
and to ensure continuity i asked sir andrew 
foster to remain on the board even though he 
has served for more than nine years sir andrew 
brings a wealth of knowledge and experience 
and i greatly value andrew’s support and 
guidance and welcome his decision to take up 
the offer to remain as a director until the 2015 
annual general meeting
national express supports diversity throughout 
the group as well as in the boardroom 
while our existing policy is to select the best 
available candidate for any role irrespective 
of race gender disability or age we have 
set the aspirational target that by 2015 30 
of the board will be women in line with the 
recommendation of the davies report on 
boardroom diversity we are making good 
progress towards our target and with the recent 
appointment of jane kingston 20 of our 
board are now women
in 2013 the review of the performance of 
the board was carried out internally via a 
questionnaire circulated to all directors the 
review confirmed that the board continued  
to operate effectively more details are set out  
on page 61
there have been a number of changes in 
reporting requirements introduced this year by 
the september 2012 edition of the code and 
the large and mediumsized companies and 
groups accounts and reports amendment 
regulations 2013 the ‘regulations’ the most 
significant reporting changes have been to our 
directors’ remuneration report as a result 
of the regulations with the introduction of the 
binding vote on our remuneration policy and 
the way we are required to report on some 
elements of remuneration 
this year our annual general meeting will be 
held at 200 pm on 14 may 2014 at hall 5 
international convention centre broad street 
birmingham b1 2ea and i would encourage 
you to attend to meet me and the board 
sir john armitt
chairman 
27 february 2014
corporate governance pp5292
53 wwwnationalexpressgroupcom corporate governance
board of directors
the right mix of skills and experience 
delivering effective oversight 
sir john armitt chairman 68
committee membership 
nomination chair 
safety  environment
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 chairman of 
the olympic delivery authority and a member 
of the transport for london board sir john 
was chairman of the engineering and physical 
science research council until 31 march 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
dean finch group chief executive 47
committee membership
na
appointment 15 february 2010
experience prior to joining national express 
dean finch was group chief executive of tube 
lines from june 2009 before that he worked 
for over 10 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 20002004 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
tim score senior independent director 
until 25 february 2014 53
committee membership
audit chair until 25 february 2014 
remuneration  
safety  environment
appointment 21 february 2005  
resigned 25 february 2014
experience tim score was appointed to  
the board in february 2005 and acted as 
interim chairman between december 2008 
and april 2009 he is chief financial officer 
at arm holdings plc before joining arm he 
worked as finance director of rebus group 
limited which he joined in 1999 between 
1997 and 1999 he was group finance 
director of william baird plc which he joined 
from lucasvarity plc he is a chartered 
accountant as announced on 28 january 
2014 tim score stepped down from the 
board on 25 february 2014
jez maiden group finance director 52
committee membership
na
appointment 17 november 2008
experience jez maiden was formerly chief 
finance officer at northern foods plc prior 
to that he was group finance director of 
british vita plc director of finance of britannia 
building society and group finance director 
of hickson international plc he is currently 
a nonexecutive director of synthomer plc 
and is a fellow of the chartered institute of 
management accountants
jorge cosmen deputy chairman 45
committee membership
nomination  
safety  environment
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 nonexecutive director of 
bankia as well as of other private companies
jackie hunt independent nonexecutive 
director appointed senior independent 
director from 26 february 2014 45
committee membership
audit chair from 26 february 2014 
safety  environment
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 was appointed senior independent 
director and chair of the audit committee from 
26 february 2014
54 national express group plc  
annual report and accounts 2013 chris muntwyler independent  
nonexecutive director 61
committee membership
audit  
safety  environment chair
appointment 1 1 may 201 1
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
joaquín ayuso independent  
nonexecutive director 58
committee membership
nomination 
safety  environment
appointment 1 june 201 1
experience joaquín ayuso is board vice 
chairman for ferrovial the €12 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 currently a nonexecutive 
director of bankia chairman of the board  
of ausol in spain and senior advisor to  
at kearney in spain and portugal
lee sander independent nonexecutive 
director 57
committee membership
remuneration 
safety  environment
appointment 1 june 201 1
experience elliot lee sander is president 
and chief executive officer of the haks group 
inc an american citizen he was recently 
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 he has 
also played a very active role on the national 
surface transportation infrastructure finance 
commission having been appointed by the 
united states congress in 2006
sir andrew foster  
nonexecutive director 69
committee membership
audit 
nomination 
remuneration chair 
safety  environment
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 he currently works for royal bank 
of canada and is chairman of commonwealth 
games england he is also 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
jane kingston independent  
nonexecutive director 56
committee membership
remuneration 
safety  environment
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
michael hampson general counsel  
company secretary
committee membership
na
appointment 30 january 2012
experience prior to joining national express 
michael hampson held the position of general 
counsel and company secretary at whitbread 
plc rmc group plc and charter international 
plc he was also the director of corporate 
development at anglian water group plc he 
is currently chairman of the royal society for 
the prevention of accidents and is a barrister 
and chartered secretary 
corporate governance pp5292
55 wwwnationalexpressgroupcom corporate governance
governance report
key matters reserved for board approval 
 
group strategy and risk management
• formulation and approval of long term 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
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’ as relevant for the company in 2013 
the directors believe that the company has 
complied with the provisions set out in the  
code during 2013 save as described below  
a printed copy of the code can be obtained 
free of charge from frc publications by 
telephone 44 020 8247 1264 email  
cchwolterskluwercouk and online at www
frcpublicationscom
as part of the board’s succession plans and 
in order to ensure there was continuity it was 
decided to ask sir andrew foster to remain a 
director until the 2015 annual general meeting 
‘agm’ with effect from 1 august 2013 sir 
andrew has served on the board for more 
than nine years and is no longer deemed 
independent under the code however it was 
felt important that with his significant experience 
he remain the chair of the remuneration 
committee and a member of both the 
nomination and audit committees the 
intention is that sir andrew will continue to be a 
member of these committees until he stands 
down at the 2015 agm the composition of the 
committees will then be brought into line with 
the code requirements
56 national express group plc  
annual report and accounts 2013 group 
board 
remuneration committee  
nomination committee  
 
 
 
audit committee 
safety  environment committee 
group executive committee 
 
uk executive 
 
spanish executive north american executive 
board committee executive committee
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 long term 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 the 
necessary controls and resources are in place 
to deliver it to help discharge its responsibilities 
the board has a formal schedule of matters 
specifically reserved for its decision which 
form the core of the board’s agenda the 
board has also delegated certain aspects of 
its responsibilities to the following committees 
the audit committee the remuneration 
committee the nomination committee and 
the safety  environment committee more 
details about these committees can be found 
in this report
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 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 on page 59 shows the 
main items of business addressed by the board 
during the year the nonexecutive directors 
also meet during the year without the executive 
directors being present
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 54
reporting framework
corporate governance pp5292
57 wwwnationalexpressgroupcom 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
nonexecutive directors
nonexecutive directors constructively 
challenge and scrutinise the performance of 
management and help develop proposals 
on strategy 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 88
senior independent director
tim score was the senior independent 
director ‘sid’ of the company during 2013 
as announced on 28 january 2014 tim score 
stepped down from the board on 25 february 
2014 and jackie hunt became the sid from  
26 february 2014 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 the sid 
also has responsibility for leading the annual 
appraisal of the chairman’s performance
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
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 
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 committees are 
provided on pages 64 to 87  and include 
information on each committee’s membership 
duties and work 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 57 
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
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
corporate governance 
governance report continued 
number of board meetings
board meetings
the board 
of directors
audit 
committee
nomination 
committee
remuneration 
committee
safety  environment 
committee
total meetings in 2013 7 3 1 4 3
executive directors
dean finch group chief executive 7 – – – –
jez maiden group finance director 7 – – – –
nonexecutive directors
sir john armitt 7 – 1 – 3
joaquín ayuso 7 – 1 – 2
jorge cosmen 7 – 1 – 2
john devaney
1
0 1 – – – –
sir andrew foster 6 2 1 4 1
jackie hunt 6 3 – – 3
chris muntwyler 6 2 – – 3
lee sander 7 – – 3 3
tim score 7 3 – 3 3
company secretary michael hampson also acts as secretary to the board committees
1
 resigned from the board on 31 january 2013 maximum possible meetings shown in brackets
58 national express group plc  
annual report and accounts 2013 board activity throughout the year excluding standing items
january 2013 • review of the group strategic plan for 20132017
• capital investment
• german rail bids update
february 2013 • capital investment
• treasury funding update
• approval of the preliminary results announcement annual report and accounts for the year ended 31 december 
2012 and notice of annual general meeting
• recommendation of the final dividend for financial year 2012
may 2013 • approval of the establishment of the national express giving foundation 
in north america
• approval of the international bid strategy
• update on uk and german coach businesses
june 2013 • broker feedback
• presentation on the uk bus business
• rail bids update
• capital investment
• approval of the new revolving credit facility
july 2013 • review of the north american hr strategy
• capital investment
• approval of the half year results announcement and interim dividend
october 2013 • presentation on the spanish and moroccan businesses
• presentation on the results of the executive committee’s strategic away day
• capital investment
november 2013 • presentation on rail franchising by the department of transport
• approval of the essex thameside rail bid
• approval of the 2014 budget
• presentation on group succession planning
• review of the results of the 2013 board performance evaluation
• presentation on the work of the national express foundation
corporate governance pp5292
59 wwwnationalexpressgroupcom board oversight 
and benchmarking
• the board regularly and rigorously  
reviews and benchmarks operational  
and functional performance
• at each board 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
• the board normally receives 
presentations at each of its meetings from 
either a business managing director or  
a functional head
corporate governance 
governance report continued 
effectiveness 
composition of the board
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 
during 2013 at least half of the board 
excluding the chairman comprised 
independent nonexecutive directors in 
accordance with the code 
a list of the individual directors their biographies 
and committee memberships as at the date  
of this report are set out on pages 54 to 55
independence
the board considers all of the nonexecutive 
directors to be independent other than jorge 
cosmen sir andrew foster and tim score sir 
john armitt was considered to be independent 
prior to his appointment as chairman 
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 having been appointed on 1 august 
2004 sir andrew has agreed to remain on 
the board until the 2015 agm and the board 
believe that it is in the best interests of the 
company and shareholders that he should do 
so given his wealth of experience and to ensure 
continuity following the recent changes to the 
board’s composition
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 
nonexecutive directors do not participate in 
any of the company’s share option or bonus 
schemes and their service is nonpensionable
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 british 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
information and support
reports from the executive directors which 
include indepth financial information are 
circulated to board members prior to every 
board meeting senior management and 
advisers make presentations to the board  
on significant matters during the year 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 
all directors have access to the advice and 
services of the company secretary who 
is responsible to the board for ensuring 
compliance with the board procedures 
the company secretary is responsible for 
advising the board through the chairman on 
all governance matters under the direction of 
the chairman the company secretary’s role 
includes ensuring good information flows within 
the board and its committees and between 
senior management and nonexecutive 
directors as well as facilitating induction 
and assisting with professional development 
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
60 national express group plc  
annual report and accounts 2013 performance evaluation
an evaluation of the effectiveness of the board 
and its committees is conducted annually 
in 201 1 an external evaluation of the board’s 
performance was led by geoffrey shepheard 
of icsa board evaluation who had no other 
connection with the company in accordance 
with the code it is the board’s intention that 
the board evaluation in 2014 will be externally 
facilitated
in 2012 and 2013 internal evaluations of 
board effectiveness were conducted by 
stephen connock group hr adviser via a 
questionnaire circulated to all the directors 
actions implemented from the 2012 evaluation 
are detailed below 
2012 recommendations actions
increase focus on 
action plans arising 
from board decisions 
with clear 
responsibilities and 
timescales for 
resulting actions
a list of matters arising 
from each board and 
committee meeting 
is maintained with 
clear responsibilities 
and deadlines for 
completion and 
followed up at 
subsequent meetings 
with actions remaining 
on the list until they  
are completed
further development 
of board succession 
planning including an 
analysis of the future 
composition 
of the board
changes have 
been made to the 
composition of the 
board in 2013
the results of the 2013 internal evaluation were 
discussed at the november board meeting  
the board’s discussions highlighted a number 
of areas of strength and it was felt that the 
board continued to work well areas identified 
for action from the 2013 evaluation include  
the following 
2013 evaluation – areas for action
improve timing of 
delivery of board 
papers to directors
changes will be 
considered when 
preparing the 2015 
board calendar to 
ensure there is more 
time between delivery 
of the board papers 
and the actual meetings
allow sufficient time 
for discussion of 
complex issues
when producing 
agendas more time will 
be allocated to such 
agenda items
ensure the board 
has the right balance 
of skills
this was addressed 
through the current 
ned search process 
that resulted in the 
appointment of jane 
kingston
provide the board with 
greater contact with 
senior management
the board meet the 
north american and 
spanish management 
teams once a year 
and opportunities will 
be provided to give 
the board increased 
exposure to the uk 
based management 
teams
outcomes arising from this evaluation process 
will be further reported on in next year’s  
annual report
reelection of directors
in accordance with the company’s articles 
of association and the code all directors of 
the company will offer themselves for either 
election or reelection at this year’s agm non
executive 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
corporate governance pp5292
61 wwwnationalexpressgroupcom corporate governance 
governance report continued 
annual fitness check process – group 
internal audit undertake 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 in december 2010 where 
significant control failings or weaknesses have 
been identified appropriate corrective action 
has been taken
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  
wwwnationalexpressgroupcom 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 2013 there have been no cases relating  
to fraud or financial misconduct
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 6 to 10 and 
the group finance director’s review on pages 
28 to 31 in addition note 30 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
62 national express group plc  
annual report and accounts 2013 remuneration
the directors’ remuneration report including 
details of remuneration policy and service 
contracts is set out on pages 68 to 87 
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 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 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 2013 the chairman met with 
major shareholders to discuss the governance 
and direction of the company
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 15 analysts who 
have published equity research notes covering 
national express group plc during 2013 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 80 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 2014 
annual general meeting and updating them on 
the progress of the business this year
corporate governance pp5292
63 wwwnationalexpressgroupcom corporate governance 
board committees
audit committee 
overview
dear shareholder
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 2013
composition
the individuals who served on the committee 
during 2013 are set out below
name of director position
tim score committee chair  
until 25 february 2014
sir andrew 
foster
nonexecutive director
jackie hunt independent nonexecutive 
director appointed committee 
chair from 26 february 2014
chris 
muntwyler
independent nonexecutive 
director 
both myself and jackie hunt are considered by 
the board to meet the requirements of the code 
that at least one committee member has recent 
and relevant financial experience
on 25 february 2014 i stepped down from the 
board and jackie hunt took on the role of chair 
of the committee from 26 february 2014
responsibilities
the audit committee’s primary responsibilities 
comprise the duties and tasks delegated to it  
by the board and 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
three committee meetings were held in 2013 
details of attendance at these meetings can 
be found on page 58 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 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 the committee considered  
the following 
• review of compliance with code
• review of the effectiveness of the group’s 
internal audit function and internal controls 
and approval of the internal audit plan for 
2013
• review of the group risk register
• review of the group’s it strategy
• approval of the updated group treasury 
counterparty risk policy
• review and approval of the audit and  
nonaudit services and fees
• consideration of the results of internal  
audit compliance testing of financial  
controls annual fitness checks within  
the subsidiaries
• review of the effectiveness of the external 
audit process and the independence of  
the external auditor
• consideration and recommendation to  
the board of the reappointment of the 
external auditor
• approval of the 2013 external audit plan  
and fees
• undertook a self assessment of the 
effectiveness of the committee and 
concluded that it continued to operate 
effectively
• review of the company’s preliminary results 
full year and half year financial statements 
and accounting policies
• review of the operation of the group’s 
whistleblowing and antibribery and 
corruption policies
• review and approval of the committee’s 
report for inclusion in the annual report and
• consideration and recommendation to 
the board for approval of the updated 
committee’s terms of reference
significant issues
the significant issues considered in the year are 
detailed below
• 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 2013 financial statements
64 national express group plc  
annual report and accounts 2013 • 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
• 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
• other matters – the committee also 
considered the key assumptions 
underpinning the group’s defined benefit 
pension obligations as well as the adequacy 
of the liabilities arising from uncertain tax 
positions 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 following 
consideration the committee concluded 
that the defined benefit pension assumptions 
were reasonable and the taxation liabilities 
were fairly stated
risk management and  
internal control
the committee continued to monitor the 
group’s internal financial controls and risk 
management systems
further details of the internal controls are set 
out on pages 61 to 62 a summary of the 
company’s risk management framework and 
an overview of its principal risks are detailed  
on pages 24 to 27 
internal audit
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
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 introduction 
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 
were appointed as the company’s auditor
effectiveness and independence  
of external auditor 
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 
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 
we believe the auditor has performed 
satisfactorily in 2013 that the audit process they 
implemented was effective and they remain 
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 their performance and we were happy 
to recommend to the board that they be put 
forward to be reappointed at the 2014 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 2013 appears  
in note 6 to the consolidated accounts
 
tim score
audit committee chair  
25 february 2014
corporate governance pp5292
65 wwwnationalexpressgroupcom 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 while 
maintaining our existing policy of selecting the 
best available candidate for any position national 
express has set the aspirational target that by 
2015 30 of the board will be women in line 
with the recommendations of the davies report 
on boardroom diversity we are making good 
progress towards our target and with the recent 
appointment of jane kingston 20 of our board 
are now women
sir john armitt
nomination committee chair 
27 february 2014
nomination committee 
overview
dear shareholder
i am pleased to report to you on the  
work undertaken by the committee 
during 2013
composition
the individuals who served on the committee 
during 2013 are set out below
 name of director position
sir john armitt committee chair appointed 
a committee member on 
1 january 2013 and as 
committee chair on 1 february 
2013
joaquín ayuso independent nonexecutive 
director appointed 26 february 
2013
jorge cosmen deputy company chairman
john devaney company chairman resigned 
31 january 2013
sir andrew 
foster
nonexecutive director
responsibilities
the key responsibilities of the nomination 
committee 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 
and preparing a description of the role and 
requirements for any particular appointment 
based on its evaluation of the board  
as a whole
meetings
one committee meeting was held in 2013 
details of attendance at this meeting can be 
found on page 58 
at the invitation of the committee and as 
appropriate to the matters under discussion 
meetings may be attended by the executive 
directors and external advisers 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 the committee 
• 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 nonexecutive director
• appointed search consultants jca group 
who have no other connection with the 
company to identify a shortlist of candidates 
for the role of nonexecutive director and 
interviewed candidates following which 
the appointment of jane kingston was 
recommended to the board and
• reviewed succession plans across the group
corporate governance 
board committees continued
66 national express group plc  
annual report and accounts 2013 safety  environment  
committee overview
dear shareholder
i am pleased to report that in 2013 
we continued to make good progress 
in our safety performance and in 
the management of the company’s 
environmental responsibilities
composition
the individuals who served on the committee 
during 2013 are set out below 
name of director position
chris 
muntwyler
committee chair 
sir john armitt company chairman 
appointed 1 january 2013
joaquín ayuso independent nonexecutive 
director
jorge cosmen deputy company chairman
sir andrew 
foster
nonexecutive director
jackie hunt independent nonexecutive 
director 
lee sander independent nonexecutive 
director
tim score senior independent director 
resigned 25 february 2014
jane kingston was appointed a member of the 
committee on 26 february 2014 
responsibilities
the key responsibilities of the committee are 
as 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 periodically 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
meetings
three meetings were held in 2013 details of 
attendance at these meetings can be found on 
page 58 
at the invitation of the committee and as 
appropriate to the matters under discussion 
meetings may be attended by the executive 
directors senior management responsible for 
safety and environmental matters and external 
advisers 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 the committee 
• reviewed the findings and actions from the 
2012 review of the group’s ‘driving out 
harm’ programme
• monitored progress of the divisional action 
plans stemming from the 2012 ‘driving out 
harm’ review
• reviewed the findings and recommendations 
of the external audit of corporate governance 
of safety and agreed a further external audit 
should be carried out in 2014 in line with the 
global safety standard
• reviewed environmental management across 
the group
• monitored safety practices and procedures 
across the group and
• considered and recommended to the board 
for approval the updated committee’s terms 
of reference
it is now mandatory for uk public companies 
to report on greenhouse gas emissions in all of 
their businesses from 2013 and more details on 
this can be found on pages 22 to 23
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 
27 february 2014
corporate governance pp5292
67 wwwnationalexpressgroupcom corporate governance 
directors’ remuneration report 
embracing new
remuneration reporting
dear shareholder
i am pleased to be given the opportunity 
to introduce the directors’ remuneration 
report for the year ended 31 december 
2013
during the 2013 financial year we have 
continued to see a focus on executive 
remuneration in line with the revised 
remuneration disclosure regulations that 
came into force in 2013 we have split  
the report into two parts
• the directors’ remuneration policy 
report sets out the company’s 
remuneration policy for directors for 
three years from the date of the 2014 
agm and the key factors that were 
taken into account in setting the policy 
this policy is subject to a binding 
shareholder vote at the 2014 agm  
and after that at least every third year 
• the annual report on remuneration 
sets out payments and awards made 
to the directors and details the link 
between company performance and 
remuneration for the 2013 financial 
year this report together with this letter 
is subject to an advisory shareholder 
vote at the 2014 agm
the turnaround of the group has 
continued during 2013 with a strong 
financial performance having been 
delivered the highlights of the year were
• normalised group profit before tax  
of £1437 million with an increase in 
core nonrail normalised operating 
profit to £1855 million
• 7 growth in uk coach core  
service revenue
• secured £18 billion in contract wins
• delivered over £180 million of free  
cash flow
• reduced net debt by £82 million
• strong improvement in roce and
• delivered a total shareholder return  
of 41 in 2013
against this background our pay and 
benefits must be at a level that will attract 
and retain high quality management 
who are fully incentivised to deliver 
outstanding performance we operate 
in an international market that places 
a premium on successful individuals 
we have in our executive directors 
individuals of proven ability and the 
changes we made to their remuneration 
in 2012 helped the company to retain 
and motivate them this was very much 
in the long term interests of shareholders 
after a pay freeze of two years for 
2012 and for 2013 the committee has 
decided that a modest 2 increase 
to base pay for executive directors is 
appropriate effective from 1 january 
2014 a similar rise has been agreed  
for other managers in the group
remuneration committee 
overview
we have made no other changes to the 
structure of our executive remuneration 
during 2013 bonuses of 14289 and 
14408 of base salary were achieved 
by the group chief executive and 
group finance director respectively 
the remuneration committee were 
comfortable that these bonus payments 
were based on performance against 
financial and safety targets alongside 
the achievement of specific personal 
objectives set at the beginning of  
the year
we consulted many shareholders during 
2013 on our remuneration packages 
and the board will continue to liaise with 
shareholders on this important subject 
as part of its ongoing dialogue with them 
we believe that the remuneration policy 
report for 2014 is appropriate for future 
years and we look to our shareholders  
to approve the report
 
sir andrew foster 
remuneration committee chair 
27 february 2014
68 national express group plc  
annual report and accounts 2013 introduction
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 has 
taken account of the directors’ remuneration 
reporting guidance issued by the gc100 
and investor group it will be submitted to 
shareholders for their approval at the agm 
to be held on 14 may 2014 in carrying out its 
functions the committee has followed the 
provisions of schedule a to the september 
2012 edition of the code which is published 
by the financial reporting council further 
information on the code can be found on  
the financial reporting council’s website  
frcorguk
in this section of the report we have provided 
details of the company’s remuneration policy 
for directors which is proposed to be applicable 
from the date of the 2014 agm and the key 
factors taken into account when setting 
this policy
remuneration policy for  
executive directors
commencing from the 2014 agm shareholders 
will be provided with the opportunity to endorse 
the company’s remuneration policy through 
a binding vote at least every three years the 
first binding vote on the directors’ remuneration 
policy set out in this section of the report will be 
put to shareholders at the 2014 agm
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
• to align remuneration to drive the overall 
objectives of the business
• to align the interests of management with  
the interests of shareholders and
• to 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 
the committee believes that it continues 
to take into account the principles of sound 
risk management when setting pay the 
remuneration policy provides for a substantial 
proportion of the current remuneration 
packages of the executive directors to be 
weighted towards long term performance 
with the annual bonus also the subject of part 
deferral into the company’s shares provisions 
also apply in the event of a misstatement of 
the company’s results and a broad range of 
financial and nonfinancial targets are included 
in our incentive programmes appropriate 
liaison takes place between the remuneration 
and audit committees as part of an effective 
remuneration risk assessment process in 
line with the association of british insurers’ 
guidelines on responsible investment 
disclosure the committee ensures that the 
incentive structure for executive directors and 
senior management will not raise environmental 
social or governance ‘esg’ risks by 
inadvertently motivating irresponsible behaviour 
more generally with regard to the overall 
remuneration structure there is no restriction 
on the committee which prevents it from taking 
into account corporate governance on esg 
matters and it takes due account of issues 
of general operational risk when structuring 
incentives the committee takes due account 
of remuneration structures elsewhere in the 
group when setting pay for the executive 
directors for example consideration is given 
to the overall salary increase budget and the 
incentive structures that operate across  
the group 
the group operates a leadership and 
development programme which includes 
an appraisal system for directors and 
senior management in 2013 the appraisal 
system used balanced scorecards to assess 
performance against safety customer people 
and community objectives the results of 
the annual appraisal system are taken into 
consideration when setting remuneration levels
directors’ remuneration policy report
corporate governance pp5292
69 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration 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 are 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
• pay and conditions elsewhere in the group and
• individual performance skills experience in post and potential
a greater increase may be granted if there is a substantive change to an executive’s role or 
responsibility for example following promotion or if an executive’s salary falls significantly 
below market positioning the committee may stage increases in these circumstances over 
a number of years and the increases may be contingent on performance in role
when considering pay increases the committee intends to 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 to make 
them more appropriate
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 directors’ salary has fallen 
significantly below market position
in such circumstances the increase will 
not exceed rpi  10
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 chief executive receives a cash supplement in lieu of pension at 35 of salary 
the group finance director receives 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
performance 
related bonus
to incentivise delivery of 
performance objectives that 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 paid following year end
bonus payments are not pensionable
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 dividends or dividend equivalents which may assume notional reinvestment are 
paid on these shares 
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 is 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 is to be deferred the remuneration committee retains the discretion to 
standardise the percentage of the bonus deferred into shares if this is felt 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
maximum 150 of base salary the targets for the bonus in respect of 2013 were as follows
for the group chief executive 70 bonus is subject to normalised financial targets 30 subject  
to nonfinancial targets
for the group finance director 60 bonus is subject to normalised financial targets 40 subject  
to nonfinancial targets
the committee retains discretion 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 but will be disclosed when they are considered no longer 
commercially sensitive
remuneration structure from 2014
the table below sets out the key elements of the company’s remuneration policy for the executive directors with effect from the 2014 agm whilst 
there is no major change in policy identified in these tables the remuneration committee always seeks to retain flexibility in setting pay and benefits 
this reflects competitive and other pressures which might affect our ability to recruit retain and motivate key individuals 
70 national express group plc  
annual report and accounts 2013 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 are 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
• pay and conditions elsewhere in the group and
• individual performance skills experience in post and potential
a greater increase may be granted if there is a substantive change to an executive’s role or 
responsibility for example following promotion or if an executive’s salary falls significantly 
below market positioning the committee may stage increases in these circumstances over 
a number of years and the increases may be contingent on performance in role
when considering pay increases the committee intends to 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 to make 
them more appropriate
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 directors’ salary has fallen 
significantly below market position
in such circumstances the increase will 
not exceed rpi  10
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 chief executive receives a cash supplement in lieu of pension at 35 of salary 
the group finance director receives 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
performance 
related bonus
to incentivise delivery of 
performance objectives that 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 paid following year end
bonus payments are not pensionable
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 dividends or dividend equivalents which may assume notional reinvestment are 
paid on these shares 
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 is 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 is to be deferred the remuneration committee retains the discretion to 
standardise the percentage of the bonus deferred into shares if this is felt 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
maximum 150 of base salary the targets for the bonus in respect of 2013 were as follows
for the group chief executive 70 bonus is subject to normalised financial targets 30 subject  
to nonfinancial targets
for the group finance director 60 bonus is subject to normalised financial targets 40 subject  
to nonfinancial targets
the committee retains discretion 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 but will be disclosed when they are considered no longer 
commercially sensitive
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 and his 
retention award both of which are described on page 7 4
corporate governance pp5292
71 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration report continued 
remuneration policy table for executive directors continued
notes
long term incentive arrangements
ltip – performance conditions
the performance condition attached to onehalf of an award part ‘a’ is based on the group’s 
normalised earnings per share ‘eps’ growth performance in excess of inflation over the 
performance period three or five financial years commencing with the financial year in which 
the award is made
the performance condition attached to the other half of an award part ‘b’ is based on the 
company’s total shareholder return ‘tsr’ performance over the same fixed performance 
period relative to the tsr performance of an appropriate group of companies 
eps and tsr have been chosen for the ltip as the most appropriate measures of the 
group’s long term performance since eps is an important growth measure considered within 
the company and a driver of shareholder value and tsr improves shareholder alignment 
and is consistent with the company’s objective of providing superior long term returns to 
shareholders 
to determine vesting of ltip awards the committee retains independent consultants to test 
the proportion of an award vesting under the relative tsr test and then reviews the conclusion 
of this analysis before shares formally vest 
with regard to the eps targets vesting is based on the company’s audited results with liaison 
as required between the audit and remuneration committees
the committee believes that eps growth as a performance measure for the long term 
incentives in most normal circumstances provides a transparent and accessible method of 
gauging the financial performance of the company the company calculates performance 
against this performance measure by reference to the earnings per share figures reported in 
the company’s audited accounts tsr measured against an appropriate group of companies 
has been used by the company as a primary performance measure for awards made to 
executive directors under the ltip as outlined in this report
the current ltip rules expire in may 2015 and the intention is that these are renewed at the 
agm in 2015 on the same terms but with the inclusion of a provision that would enable awards 
to be reduced should it be necessary for the company to restate materially the financial results
the ltip grant in 2014 will include a provision that will enable awards to be reduced should it 
be necessary for the company to restate materially the financial results
the committee may grant awards under the listing rule 942 which allows for the granting 
of awards specifically to facilitate in unusual circumstances the recruitment or retention of an 
executive director without seeking prior shareholder approval up to an equivalent of 100 of 
salary per annum the company will explain the reasons for making any awards under listing 
rule 942 in the following year 
on a change of control deferred bonus awards and 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
all employee share schemes
currently the company does not operate any all employee share plans however if the 
company implements any allemployee share schemes in the future the executive directors 
would be eligible to join such schemes 
element how element supports business strategy operation maximum potential value performance conditions and assessment
performance 
related bonus
continued
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
the nonfinancial targets will be set annually based on strategic objectives for the year the non
financial 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  
at least 95 of budget 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 2013 please see page 79 
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 dividend equivalents can be paid on  
these shares
a proportion of the award is made as approved share options under an hmrc approved 
option plan structure this does not increase the gross benefit to the participant or the costs 
to the company or shareholders
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
executive directors are eligible to receive a 
conditional award of performance shares 
up to an equivalent of 100 of base salary 
per annum
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
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
72 national express group plc  
annual report and accounts 2013 element how element supports business strategy operation maximum potential value performance conditions and assessment
performance 
related bonus
continued
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
the nonfinancial targets will be set annually based on strategic objectives for the year the non
financial 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  
at least 95 of budget 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 2013 please see page 79 
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 dividend equivalents can be paid on  
these shares
a proportion of the award is made as approved share options under an hmrc approved 
option plan structure this does not increase the gross benefit to the participant or the costs 
to the company or shareholders
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
executive directors are eligible to receive a 
conditional award of performance shares 
up to an equivalent of 100 of base salary 
per annum
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
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
corporate governance pp5292
73 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration report continued 
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
however the committee reserves the right 
to make payments outside of this policy in 
exceptional circumstances the committee 
would only use this right where it believes that 
this is in the best interests of the company 
and when it would be disproportionate to seek 
specific approval from a general meeting
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 recruit was in post maximum of 150 
of salary if the commencement date is after 
1st september in the year no award would 
normally be made for that year
• participation in the long term incentive plan 
performance shares equivalent to up to 
100 of salary matching scheme up to 
four matching shares based on an executive 
director’s investment of up to 30 of salary 
and any all employee share plans operating 
at that time 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 100 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
jez maiden 17 november 2008 12 months 12 months
dean finch 16 december 2009 12 months 6 months
the service contracts of both the executive directors which are rolling contracts contain a provision exercisable at the option of the company  
to pay an amount on termination of employment equal to one year’s salary or in the case of dean finch 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 relevant 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 pension normally becomes payable at the earliest on 1 april 2022 all or part of it may be paid  
as a lump sum the group chief executive may request early payment on a change of control 
the group chief executive is eligible to receive a conditional retention award of performance shares equivalent to 100 of base salary per annum 
vesting is dependent on the achievement of performance conditions measured over a fiveyear period half of any award is subject to eps growth 
and the remaining half is subject to the relative total shareholder return tsr of the company measured against an appropriate group of companies
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
74 national express group plc  
annual report and accounts 2013 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 2013 are shown below
director fee external appointment
jez maiden £50000 2012 £50000 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
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 equal to at least one year’s current salary over a period of five years
the details of the interests of the executive directors in shares and long term incentive interests are set out on page 83 together with the extent to 
which each of the executive directors has complied with the guidelines as at 31 december 2013
corporate governance pp5292
75 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration report continued 
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
the table below sets out the company’s remuneration policy for the nonexecutive directors with effect from the 2014 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 non
executive 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
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 201 1 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 1 1 may 201 1 1 month
lee sander 1 june 201 1 1 month
tim score 21 february 2005 1 month
76 national express group plc  
annual report and accounts 2013 remuneration £’000
fixed
annual variable
multi reporting variable
0
500
1000
1500
2000
2500
3000
3500
4000
maximum maximum ontarget 
jez malden
minimum ontarget 
dean finch
minimum
100 50
27
23
100
28
23
49
31
42
27
28
30
42
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 
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 in respect of 2013
annual  
variable 
performance related bonus 
including deferred element
multiple 
reporting 
variable
long term incentive plan 
performance shares and 
matching shares
assumptions used in determining the level of 
payout under given scenarios are as follows
• salaries are as at 31 december 2013
• performance share awards are granted  
at the maximum level permitted under  
the policy
• each director will own shares with a value 
of 30 of his base salary and will receive up 
to four matching shares for each national 
express share pledged or purchased
• 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 
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 performance shares and matching 
shares are cascaded down below executive 
level to senior management aligning the senior 
team to deliver value for the group
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
the committee reflected on the views of 
shareholders from the agm in 2013 we remain 
sensitive to such views and sought to consult 
many of our leading shareholders during 
2013 and 2014 on remuneration issues we 
explained the rationale for our actions in 2012 
and reassured shareholders that there would be 
no major changes to the remuneration policy in 
2013 the committee will continue to monitor 
shareholder comments and retain an open 
dialogue as necessary
corporate governance pp5292
77 wwwnationalexpressgroupcom corporate governance 
directors’ remuneration report continued
the relevant sections of this report have been 
audited as required by the regulations
composition
the individuals who served on the 
remuneration committee during 2013 and 
those individuals who attended remuneration 
committee meetings are set out below 
name of director position
sir andrew foster committee chair
lee sander independent non
executive director 
tim score senior independent 
director resigned 
25 february 2014
management attendees position
dean finch group chief executive
stephen connock mbe group hr adviser
michael hampson general counsel and 
company secretary
jane kingston was appointed a member of the 
committee on 26 february 2014 
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 four times in 2013 details 
of attendance at these meetings can be found 
on page 58
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 
main activities during the year
during the year the committee considered the 
following items of business
• review of executive directors’ and senior 
executives’ salary levels
• approval of annual bonus payments
• review of the chairman’s fees
• consideration and approval of performance 
targets to apply to the 2013 long term 
incentive plan awards including the total 
shareholder return comparator group used 
and the range of earnings per share  
targets set
• approval of 2013 award levels under the 
company’s share plans
• testing of performance conditions and 
approval of vesting of long term incentive 
plan awards granted in 2010
• setting targets for the group’s 2013  
bonus scheme
• review and approval of the draft directors’ 
remuneration report for the year ended 
31 december 2013
• approval of the appointment of 
pricewaterhousecoopers as new 
independent remuneration consultants from 
1 august 2013 following a tender process
• consideration and recommendation to 
the board for approval of the updated 
committee’s terms of reference and
• review of advisers and fees paid to them
advisors to the committee
material advice or services were provided  
to the committee during the year by
pricewaterhousecoopers llp ‘pwc’ – 
independent remuneration consultants from 
1 august 2013
new bridge street ‘nbs’ – independent 
remuneration consultants up to 1 august 2013
dean finch – group chief executive
stephen connock mbe – group hr adviser
michael hampson – general counsel and 
company secretary
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 adviser 
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
following a competitive tender process 
the committee appointed independent 
remuneration consultants pwc to advise on all 
aspects of senior executive remuneration pwc 
was appointed from 1 august 2013
during 2013 pwc provided advice to the 
management of the group on various matters 
including pensions information technology 
internal audit and tax advice
prior to 1 august 2013 nbs were the appointed 
independent advisers to the committee nbs 
has no other connection with the group other 
than in the provision of advice on executive and 
employee remuneration and nor does its ultimate 
parent aon plc 
from time to time the company submits the 
remuneration consultant function to tender 
nbs and 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
nbs 36
pwc 35
base salary
no increases were awarded to base salary for 
the executive directors for 2012 or for 2013 
performance related bonus
a summary of the 2013 performance related 
bonus scheme is summarised below
the maximum potential bonus payable to 
executive directors in 2013 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 is 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 is 
to be deferred
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 2013
in respect of the targets applying to the annual 
bonus for 2013 for the group chief executive 
and group finance director a maximum of 
105 of salary and 90 of salary respectively 
was payable based on achievement against 
a sliding scale of challenging financial targets 
a maximum of 45 and 60 of salary 
respectively was payable based on non
financial targets that encompassed customer 
operational excellence and people objectives
annual report on remuneration
78 national express group plc  
annual report and accounts 2013 in relation to the proportion of the bonus determined 
by performance against normalised profit 
targets no bonus is payable unless the company 
achieves at least 95 of budget and the maximum 
amount is only payable on the achievement of a 
stretch target of 1 10 of budget the 2013 target 
set in relation to budget was £1326 million
the 2013 target set in relation to net debt was  
to deliver a net debt of £799 1 million
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 2013 awards and the 
actual performance and bonus value achieved
the committee has full discretion in the payment 
of annual bonuses for any financial element 
to be payable the group must have achieved 
at least 95 of its normalised profit targets 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 as the financial targets are considered  
to be commercially sensitive and potentially 
provide information to competitors they will not 
be disclosed in advance but will be disclosed  
the following year
nonfinancial objectives are logged with the 
committee at the beginning of each year and 
then performance is reviewed at the end of 
the year in detail before any bonus payment is 
determined the committee believes that the 
nonfinancial targets are commercially sensitive 
since they may provide competitors with insight 
into the group’s strategic plans and will not 
be disclosed in advance the committee’s 
intention is that a summary of these targets  
will be disclosed the following year
the amounts deferred under the bonus plan 
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 
t erm incentive plan below the 2013 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 
2013 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 deferred bonuses awarded to both 
executive directors in 2013 based on 
performance to 31 december 2012 are  
due to vest on 28 february 2014
single total figure of remuneration
executive directors
the table below sets out the single total figure of remuneration and breakdown for each executive director paid in the 2013 financial year 
comparative figures for 2012 have also been provided
2013 2012
£’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 550 26 785 0 192
2
1553 550 26 644 289 192
2
1701
jez maiden 420 25 605 0 105 1155 420 24 491 227 105 1267
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 82
2013 bonus scheme
 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 95 of budgeted 
normalised profit before tax pbt
225 for group chief executive 
1875 for group finance director
ontarget bonus potential at 100 of 
budgeted normalised pbt
45 for group chief executive 
37 5 for group finance director
awarded on achieving budget
stretch bonus for 110 of budgeted 
normalised pbt
90 for group chief executive 
75 for group finance director
awarded on achieving a stretch target of 110 of normalised pbt
net debt 15 for group chief executive 
15 for group finance director
nonfinancial targets underpinned by achievement of 95 
of budgeted normalised pbt
45 for group chief executive 
60 for group finance director
awarded on meeting key strategic group objectives tailored to each 
executive director’s responsibilities
performance 
condition weighting
threshold 
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 dean finch jez maiden dean finch jez maiden dean finch jez maiden
normalised profit 60 50 95 110 1084 1084 22590 187575 8289 6908
net debt 10 10 – – 10 10 37515 37515 15 15
nonfinancial targets 30 40 – – 30 40 045 060 45 60
total 100 100
14289
 salary
14408
 salary
£785000 £605000
corporate governance pp5292
79 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration report continued 
ltip awards
performance share awards and matching share awards granted under the ltip in 201 1 are scheduled to vest in 2014 the performance period 
relating to these awards ended on 31 december 2013 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
dean finch jez maiden dean finch jez maiden
tsr
1
50
median of 
comparator group
20th percentile of 
comparator group
below 
median of 
comparator 
group 1550 1550 0 0
eps 50 2013 eps of 26 1p 2013 eps of 293p 215p 1550 1550 0 0
total 100 30100 30100
0 salary 0 salary
£nil £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
dean finch jez maiden dean finch jez maiden
tsr
1
50
median of 
comparator group
20th percentile of 
comparator group
below 
median of 
comparator 
group 1860 1860 0 0
eps 50 2013 eps of 26 1p 2013 eps of 293p 215p 1860 1860 0 0
total 100 36120 36120
0 salary 0 salary
£nil £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
long term incentives awarded in 2013
the tables below set out the details of any longterm incentive award granted in the 2013 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
100413
ltip – performance 
shares 100 of salary 561 30 311215
tsr  eps 
equally weighted
100413
ltip – matching 
shares 120 of salary 673 30 311215
tsr  eps 
equally weighted
230513
chief executive’s 
five year award 100 of salary 541 30 311217
tsr  eps 
equally weighted
80 national express group plc  
annual report and accounts 2013 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
100413
ltip – performance 
shares 100 of salary 428 30 311215
tsr  eps 
equally weighted
100413
ltip – matching 
shares 120 of salary 514 30 311215
tsr  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 
1999p on 10th april 2013 and 210p on 23 may 2013 
performance conditions for ltip awards granted in 2013
part a of the award – eps conditions
eps for the financial year ending 31 december 2015 percentage of part a of the award that vests
less than 22 1 pence 0
22 1 pence 30
247 pence or above 100
between 22 1 pence and 247 pence 30100 pro rata
part b of the award – tsr conditions
rank of the company’s tsr percentage of part b of the award that vests
below median 0
median 30
20th percentile 100
between median and 20th percentile 30100 pro rata
performance conditions for the chief executive’s five year award
part a of the award – eps conditions relating to one half of the award
eps for the financial year ending 31 december 2017 percentage of part a of the award that vests
less than 234 pence 0
234 pence 30
283 pence or above 100
between 234 pence and 283 pence 30100 pro rata
part b of the award – tsr conditions relating to one half of the award
rank of the company’s tsr percentage of part b of the award that vests
below median 0
median 30
20th percentile 100
between median and 20th percentile 30100 pro rata
corporate governance pp5292
81 wwwnationalexpressgroupcom corporate governance  
directors’ remuneration report continued 
indicative percentage of ltip awards vesting based on performance to 31 december 2013
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 
2013 without making any allowance for pro rata reduction for any period of less than three years
year of award 
tsr element 
max 50
eps element 
max 50
total 
max 100
2012 – performance shares and matching shares 0 0 0
2012 – chief executive’s five year award 0 0 0
2013 – performance shares and matching shares 195 0 195
2013 – chief executive’s five year award 195 0 195
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 in addition 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 pension normally becomes payable at the earliest on 1 april 2022 all or part of it may be paid as a lump sum the group  
chief executive may request early payment on a change of control 
the group finance director receives a 25 salary supplement in lieu of pension contributions 
ceo’s pay in last five financial years
the table below sets out the total remuneration delivered to the chief executive over the last five years valued using the methodology applied to  
the single total figure of remuneration
year 2009 2010 2011 2012 2013
chief executive r bowker
2
d finch d finch d finch d finch
total remuneration £’000 465 1356 1454 1701 1553
annual bonus payment  maximum opportunity 0 100 100 78 95
ltip vesting level achieved
1
  maximum opportunity na na na 325 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
the national express group executive deferred bonus plan executive deferred bonus plan
deferred bonuses awarded in 2013 based on performance to 31 december 2012 will vest on 28 february 2014 as set out in the table below 
during year
as at 
1 january 
2013 granted vested lapsed
at 
31 december 
2013
market  
price at date  
of vesting
date of  
grant
date of  
vesting
dean finch 2012 75417 – 75417 – 0 2185p 020312 020313
2013 – 79523 – – 79523 280213 280214
jez maiden 2012 51832 – 51832 – 0 2185p 020312 020313
2013 – 62981 – – 62981 280213 280214
the market price per share on the date of award was calculated on the basis of the average market price share 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 2012 and 2013 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
82 national express group plc  
annual report and accounts 2013 nonexecutive directors
the table below sets out the single total figure of remuneration and breakdown for each nonexecutive director serving during 2013  
the table includes only those columns in respect of elements of remuneration received by nonexecutive directors
2013 fees 
£000 total
2012 fees 
£000 total notes
sir john armitt 225 225 – –
appointed to the board on  
1 january 2013 and as chairman 
on 1 february 2013
joaquín ayuso 49 49 49 49
jorge cosmen 45 45 45 45
john devaney 19 19 225 225
resigned as chairman on  
31 january 2013
sir andrew foster 55 55 51 51
jackie hunt 45 45 13 13
chris muntwyler 59 59 59 59
lee sander 73 73 69 69
tim score 60 60 60 60
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 
in line with the decision not to increase the basic salaries of the executive directors in 2013 it was agreed that there would be no increase in the fees 
paid to the nonexecutive directors in 2013 the fees payable to the chairman also did not increase 
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 no such payments were made 
in 2013
statement of directors’ shareholding 
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 75 of the policy
the beneficial and nonbeneficial interests of the executive directors in office and their connected persons as at 31 december 2013 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 2013 
 salary
1
beneficially 
owned
edbp interests 
not subject to 
performance 
conditions
ltip interests 
subject to 
performance 
conditions
shareholding 
requirement  
met
executive directors
dean finch 100 166 252527 79523 2155379 yes
jez maiden 100 152 168919 62981 1249310 yes
1
 the share price of 2752p as at 31 december 2013 has been taken for the purpose of calculating the current shareholding as a percentage of salary 
please see the appendices on page 87 for more information on ltip awards
corporate governance pp5292
83 wwwnationalexpressgroupcom 20
0
20
40
60
80
dec 13 dec 12 dec 11 dec 10 dec 09
index –
cumulative return
national express group –
cumulative return
national express 
group – annual return
index – 
annual return
shareholder return over period dec 20090
40
20
0
20
40
60
80
100
120
140
160
180
200
dec 13 dec 12 dec 11 dec 10 dec 09 dec 08
shareholder return over period dec 20080
national express group
cumulative return
ftse 250
cumulative return
national express 
group – annual return
ftse 250 – 
annual return
corporate governance  
directors’ remuneration report continued 
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 2013 all of which 
are held outright with no attaching performance 
conditions are shown below
at 31 december 2013
sir john armitt 6000
joaquín ayuso 0
jorge cosmen
1
 88860685
sir andrew foster 22893
jackie hunt 5000
chris muntwyler 0
lee sander 0
tim score 0
1
  jorge cosmen’s holding includes shares held by european 
express enterprises ltd which are shown on page 89 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 midmarket 
price of the company’s ordinary shares at 
31 december 2013 was 275 pence 2012 
204 pence and the range during the year 
ended 31 december 2013 was 191 pence  
to 276 pence
changes since year end
there have been no changes in the 
shareholdings of the directors between 
31 december 2013 and the date of signing  
of this annual report
comparison of overall performance 
the first graph shows a comparison of national 
express group plc’s fiveyear 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 
the second graph shows a comparison of 
national express group plc’s cumulative return 
and annual return since the commencement 
of the turnaround of the business from 
31 december 2009 against that achieved by  
a bespoke index of first group stagecoach 
and goahead
the group has executed a strong turnaround 
with a new management team following a 
period of intense instability in 2008 and 2009 
which involved a rights issue debt restructuring 
and the handback of the east coast main line 
despite market concerns in 201 1 and 2012 
regarding the group’s macro exposure to 
spain underlying performance measured by 
nonrail revenues earnings and return on capital 
have all improved since then
84 national express group plc  
annual report and accounts 2013 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 2012 to 2013 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 2012 to 2013
base salary taxable benefits
performance 
related bonus
group chief executive 0 0 2197
uk employee remuneration 263 1237 
1
1377
1
  the 2013 increase in taxable benefits was driven by an increase in healthcare premium
relative importance of the spend on pay
the table below sets out the total spend on pay in the 2013 financial year and 2012 financial year compared with distributions to shareholders
2013 
£m
2012 
£m
 increase from  
2012 to 2013
overall group spend on pay including directors 8558 7881 86
profit distributed by way of dividend 503 493 20
profit distributed by way of share buyback – – –
statement of voting at 2013 agm
at the agm held on 9 may 2013 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
votes  
withheld
2  to approve the remuneration report for 
the year ended 31 december 2012 277 526180 7152 110503482 2848 388029662 7583 18006199
21  to approve amendments to the rules of 
the company’s long term incentive plan 299426247 7378 106436183 2622 405862430 7931 187907
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 2013 in favour of the 2012 remuneration report whilst remaining sensitive  
to those who voted against we had made some major structural reforms to our pay and benefits package for our group chief executive in 2012  
and these reflected serious concerns about our ability to retain him over the long term we engaged with our major shareholders who backed  
these improvements and the reasons for making them in view of the votes at the 2013 agm however directors have continued to engage  
with shareholders during 201314 and have made themselves available to those shareholders who wished to raise issues of pay and benefits  
these discussions have been advantageous and helpful to the remuneration committee and no changes are being proposed to the structure  
of remuneration for 2014
corporate governance pp5292
85 wwwnationalexpressgroupcom statement of implementation of remuneration policy in 2014
executive directors’ base salaries
after a pay freeze of two years the committee has decided that a modest 2 increase to base pay for executive directors is appropriate effective 
from 1 january 2014 as of 1 january 2014 the current salaries for the group chief executive and group finance director are £561000 and 
£428000 respectively
performance related bonus
the annual bonus for the 2014 financial year will operate on the same basis for the 2013 financial year and will be consistent with the policy detailed 
in the remuneration policy section of this report in terms of the maximum bonus opportunity and performance conditions the targets themselves 
as they relate to the 2014 financial year are deemed to be commercially sensitive however retrospective disclosure of the targets and performance 
against them will be provided in next year’s remuneration report to the extent that they do not remain commercially sensitive at that time 
long term incentives
long term incentive awards granted in the 2014 financial year will be granted in accordance with the policy detailed in the remuneration policy section 
of this report
nonexecutive directors’ fees 
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
the current fees for the nonexecutive directors with effect from 1 january 2014 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
corporate governance  
directors’ remuneration report continued 
86 national express group plc  
annual report and accounts 2013 appendices
ltip awards to executive directors
during year
ltip share 
awards
at 
1 january 
2013 granted exercised expired
at 
31 december 
2013
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 227 272 – 73863 153409 – 2203p 1958p 150310 150313 150913
matching 
shares 227 270 – 73863 153407 – 2203p 1958p 150310 150313 150913
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
jez maiden
performance 
shares 174672 – 56768 117904 – 2300p 1999p 010410 010413 011013
matching 
shares 174670 – 56768 117902 – 2300p 1999p 0104010 010413 011013
performance 
shares 170040 – – – 170040 2470p – 250211 250214 250814
matching 
shares 204048 – – – 204048 2470p – 250211 250214 250814
performance 
shares 183326 – – – 183326 2284p – 110412 120415 121015
matching 
shares 219988 – – – 219988 2284p – 110412 120415 121015
performance 
shares – 214504 – – 214504 1999p – 100413 110416 111016
matching 
shares – 257404 – – 257404 1999p – 100413 110416 111016
1
 details of the performance conditions applicable to the 2013 awards are shown on page 81
2
  the tsr performance conditions applicable to the 2011 and 2012 awards are the same as for the 2013 awards and the relevant maximum and minimum eps figures are 293 pence and 261 
pence and 264 pence and 237 pence respectively
3
 the aggregate gain on the shares which were exercised in 2013 was £516000
group chief executive’s five year retention award
during year
ltip share 
awards
at 1 january 
2013 granted exercised expired
at 
31 december 
2013
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 261407 – – – 261407 2104p – 030812 030817 030818
performance 
shares – 257973 – – 257973 2100p – 230513 230518 230519
1 details of the performance conditions applicable to the 2013 award are shown on page 81
2
  the tsr performance conditions applicable to the 2012 award is the same as for the 2013 award and the relevant maximum and minimum eps figures are 28 pence and 25 pence respectively
by order of the board
sir andrew foster 
remuneration committee chair 
27 february 2014
corporate governance pp5292
87 wwwnationalexpressgroupcom 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 
this section along with the information from 
the chairman’s statement on page 4 to the 
statement of directors’ responsibilities on 
page 92 constitutes the directors’ report in 
accordance with the companies act 2006
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 51 which are incorporated in this report 
by reference
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 2013 was £644 million 2012 
£698m and a profit attributable to equity 
shareholders of £568 million 2012 £60m  
was transferred to reserves
the directors recommend a final dividend for 
the year of 675 pence per ordinary share 2012 
66p which together with the interim dividend 
of 325 pence per ordinary share 2012 3 15p 
paid on 20 september 2013 gives a total 
dividend for the year of 100 pence per share 
2012 975p subject to shareholder approval 
the final dividend will be paid on 23 may 2014  
to ordinary shareholders on the register  
of members at the close of business on  
2 may 2014
directors
the directors of the company as at the date  
of the approval of this annual report are listed  
on pages 54 to 55
on 1 january 2013 sir john armitt was 
appointed a director of the company
on 31 january 2013 john devaney resigned  
as chairman of the board
on 1 february 2013 sir john armitt was 
appointed chairman of the board
on 25 february 2014 tim score stepped down 
from the board
on 26 february 2014 jackie hunt was 
appointed senior independent director 
and chair of the audit committee and jane 
kingston was appointed a nonexecutive 
director of the company from this date
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 companies act and 
related legislation in accordance with the uk 
corporate governance code all the directors 
will retire at the 2014 agm and offer themselves 
for election or reelection the board is satisfied 
that each director is qualified for reelection 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
directors’ and officers’ liability 
insurance
the company maintains directors’ and officers’ 
liability insurance in respect of legal action that 
might be brought against its directors 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 36 on page 154  
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 pages 83 and 84
directors’ share options
details of directors’ share options are provided 
in the directors’ remuneration report on  
page 87 
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 
92 and 96
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 56 both are incorporated 
by reference into this report
post balance sheet events
as at the date of this report there were no post 
balance sheet events to report
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 
appropriate 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 
88 national express group plc  
annual report and accounts 2013 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 in place known 
as ‘make a difference’ to develop ideas 
and track them through to implementation 
innovation sponsors agents and champions 
are appointed in the business and their work is 
coordinated by an innovations council at group 
level for national express innovation is a way 
of life that involves and engages our people
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
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 19 
to 23 and on the company’s website www
nationalexpressgroupcom
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 £13500 2012 
£6750
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 102  
to 156 and are incorporated by reference into  
this report
major shareholdings
as at 24 february 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
ordinary shares
percentage of  
share capital nature of holding
european express enterprises ltd 78795062 154 direct 
prudential plc 66764762 130 direct 
jupiter asset management ltd 26288829 51 direct 
 the holdings for european express enterprises ltd are included in jorge cosmen’s holdings which are shown in the directors’ remuneration report on page 84
analysis of ordinary shareholdings at  
21 february 2014 number of accounts
percentage of total  
number of accounts number of shares 
percentage of  
ordinary capital
by size of holding
1500 6424 4819 895299 017
5011000 1660 1245 1308489 026
10015000 3581 2687 8374981 164
500150000 1427 1071 16900098 330
500011000000 181 136 49975242 977
over 1000000 56 042 434284539 8486
13329 10000 511738648 10000
by investor type
individuals 12368 9278 24746685 483
institutional investors 499 375 481626562 9412
other corporate investors 462 347 5365401 105
13329 10000 511738648 10000
corporate governance pp5292
89 wwwnationalexpressgroupcom 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 15 on page 164 
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 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 services 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 
services 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 2014 
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
the company was granted authority at the 
agm in 2013 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 2014 for  
its renewal further details are set out in the 
notice of agm accompanying this document
share schemes
first names jersey limited formerly ifg trust 
jersey limited are trustee of the national 
express group employee benefit trust as at 
24 february 2014 they held 426630 shares 
008 of the issued share capital of the 
company for employee share schemes  
further details of the company’s employee 
share schemes can be found in note 7 on  
page 1 16 and are incorporated by reference  
into this report the trustee may vote the  
shares held by the trust at its discretion
the current abi guidance on dilution limits 
provide 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 abi 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 14 may 2014 
at hall 5 international convention centre broad 
street birmingham b1 2ea 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
corporate governance
other statutory information continued
90 national express group plc  
annual report and accounts 2013 the group currently runs one dft franchise 
c2c the rail franchise agreement with dft 
contains termination rights for the benefit of  
dft which would be triggered by a change  
of control in national express group plc
the group’s rail franchisee c2c leases its 
rolling stock and its leases with porterbrook 
leasing company limited contain termination 
rights for the benefit of the lessor which would 
be triggered by a change of control in national 
express group plc
the group’s north american business operates 
school bus services under contracts with 
school boards those contracts invariably 
contain a change of control clause for the 
benefit of the board which would be triggered 
by a change of control in national express 
group plc while no one single school bus 
contract could be considered significant in 
the context of the group turnover the impact 
on that turnover in the event that each school 
board 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 24 to 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 2014 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
michael hampson
company secretary  
27 february 2014
corporate governance pp5292
91 wwwnationalexpressgroupcom 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 
27 february 2014
jez maiden
group finance director 
27 february 2014
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 
92 national express group plc  
annual report and accounts 2013 financial statements pp93167
financial statements 
independent auditor’s report to the members  
of national express group plc 
 
93 wwwnationalexpressgroupcom
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 company’s affairs as at 31 december 2013 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 company balance sheets the group statement 
of changes in equity the group statement of cash flows the related notes 1 to 38 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 
62 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 
risk how the scope of our audit responded to the risk 
impairment of goodwill 
the key assumptions used in the 
assessment of the carrying value of goodwill 
and intangible assets this is determined 
with reference to judgemental factors such 
as future projected cash flows and the 
appropriate discount rate 
 
we assessed management’s assumptions used in the impairment model for goodwill and 
intangible assets described in note 14 specifically including the risk adjusted cash flow 
projections discount rates perpetuity growth rates and sensitivities applied particularly in 
respect of the group’s interests in spain and north america  
our procedures included reviewing forecast cash flows with reference to historical trading 
performance using our valuation specialists and benchmarking assumptions such as the 
perpetual growth rate and discount rate to external macroeconomic and market data 
spanish receivables 
the judgement used to estimate the bad 
debt provision in respect of the receivables 
due from public authorities and private 
companies in spain is challenging given the 
current economic climate which means the 
receivables can become aged before they 
are recovered in particular those due from 
public authorities 
 
we assessed the adequacy of management’s provision against spanish receivables and 
their recoverability by testing the controls over the credit management process and 
performing substantive procedures such as confirming cash receipts received post year 
end for a sample of receivables reviewing aging and obtaining evidence to support the 
recoverability of aged receivables not provided for historically for the public authority 
receivables we also obtained evidence of the agreed payment plans and confirmed  
on a sample basis that these had been adhered to  financial statements 
independent auditor’s report to the members  
of national express group plc continued 
 
 
94 national express group plc  
annual report and accounts 2013 
 
insurance provisions 
the measurement of the selfinsured claims 
provision uses actuarial assumptions to 
determine the quantum of claims which are 
likely to arise in respect of past events but 
are not yet known to the company these 
claims are inherently difficult to predict and 
quantify as no two individual claims are the 
same and the settlement outcome is 
subject to multiple variables 
 
we used our actuarial specialists to challenge the assumptions inherent in the valuation 
produced by the group’s actuary particularly in respect of north america such as the 
claim rate probability and to reperform the actuarial calculation to develop a valuation 
range we compared the level of provision recorded to the range determined by our 
actuarial specialists and the group’s actuary to conclude that 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 operating profit 
on the basis that they are material and  
nonrecurring in nature and therefore 
disclosed as exceptional items 
 
a sample of exceptional items including all material items have been agreed to source 
documentation and challenged by the local and group audit teams as to their nature in 
order to validate that they are material nonrecurring items which are appropriate to 
present outside of normalised operating profit 
tax provisions 
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 
 
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  
pension deficit  
the measurement of the group’s net 
pension liability requires management to 
make judgements on assumptions including 
price inflation discount rates pension 
increases mortality rates and earnings 
growth 
 
we tested 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 34 with reference to comparable market data 
 the audit committee’s consideration of these risks is set out on pages 64 to 65 
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 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 £9 million which is approximately 6  
of normalised pretax profit profit before exceptional items and amortisation the 
exceptional items are volatile and their exclusion as well as the exclusion of amortisation 
costs is consistent with the group’s internal and external reporting to facilitate a better 
understanding of the underlying trading performance we agreed with the audit 
committee that we would report to the committee any audit adjustments in excess  
of £02 million as well as any adjustments below that threshold that in our view 
warranted reporting on qualitative grounds we also report to the audit committee  
on disclosure matters that we identified when assessing the overall presentation  
of the financial statements  financial statements pp93167
 
 95 wwwnationalexpressgroupcom
 
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 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 2013 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 at the parent entity level we also tested the consolidation process 
the group audit team includes the component audit teams in our audit team briefing 
discusses their risk assessment and reviews documentation of the findings from their 
work there is a programme of planned site visits so that the senior statutory auditor or 
another senior member of the group audit team visits each of the six full scope divisions  
at least once a year 
opinion on other matters prescribed  
by the companies act 2006 
in our opinion 
• 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 and 
• the part of the directors’ remuneration report to be audited has been properly 
prepared in accordance with the companies act 2006 
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 
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 nine 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  financial statements 
independent auditor’s report to the members  
of national express group plc continued 
 
 
96 national express group plc  
annual report and accounts 2013 
 
respective responsibilities of directors 
and auditor 
as explained more fully in the directors’ responsibility statement set out on page 92 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 
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 
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 uk 
united kingdom 
27 february 2014  financial statements pp93167
financial statements 
group income statement  
for the year ended 31 december 2013 
 
97 wwwnationalexpressgroupcom
 
  note 
total before 
intangible 
amortisation and 
exceptional items 
2013 
£m 
intangible 
amortisation and 
exceptional items 
2013 
£m 
total 
2013 
£m 
total before 
intangible 
amortisation and 
exceptional items  
2012  
£m 
intangible 
amortisation and 
exceptional items 
2012 
£m 
total 
2012
£m 
continuing operations        
revenue 4  18913 – 18913 18312 – 18312 
operating costs before intangible 
amortisation and exceptional items   16984 – 16984 16193 – 16193
intangible amortisation  514  – 493 493 – 517517
exceptional items  5  – 257 257 – 426426
total operating costs  6  16984 750 17734 16193 94317136
group operating profit  1929 750 1179 2119 9431176 
loss on disposal of business 19 – 43 43 – – – 
share of results of associates  18  06 – 06 14 – 14 
finance income  49  68 – 68 44 – 44 
finance costs  9  566 – 566 536 – 536
profit before tax   1437 793 644 1641 943 698 
tax charge 10  325 264 61 327 242 85
 
profit for the year  1112 529 583 1314 701613 
profit attributable to  
equity shareholders   1097 529 568 1301 701600 
profit attributable to  
noncontrolling interests   15 – 15 13 – 13 
  1112 529 583 1314 701613 
earnings per share        
– basic earnings per share  13    111p   118p 
– diluted earnings per share  13   111p   117p 
normalised earnings per share        
– basic earnings per share  13 215p   255p   
– diluted earnings per share  13 214p   254p    financial statements 
group statement of comprehensive income  
for the year ended 31 december 2013 
 
98 national express group plc  
annual report and accounts 2013 
 
 note 
2013 
£m 
2012 
£m 
profit for the year  583 613 
    
items that will not be reclassified subsequently to profit or loss    
actuarial losses on defined benefit pension plans  34  190 311
deferred tax on actuarial losses  37 72 
  153 239
    
items that may be reclassified subsequently to profit or loss    
exchange differences on retranslation of foreign operations net of hedging  10 442
exchange differences on retranslation of noncontrolling interests   02 02
gain on cash flow hedges   25 22 
less reclassification adjustments for gains or losses included in profit  35 202
tax on exchange differences   20 16 
deferred tax on cash flow hedges   03 49 
  25 559
    
total comprehensive incomeexpenditure for the year   455 185
    
total comprehensive incomeexpenditure attributable to    
equity shareholders   438 196
noncontrolling interests   17 11 
  455 185
  financial statements pp93167
financial statements 
group balance sheet 
at 31 december 2013 
 
99 wwwnationalexpressgroupcom
d finch group chief executive 
j k maiden group finance director  
27 february 2014 
 note 
2013
£m 
2012 
£m 
noncurrent assets    
intangible assets  14 12235 12629 
property plant and equipment  15  7514 7874 
available for sale investments  17  74 71 
derivative financial instruments  17  185 311 
investments accounted for using the equity method  18  51 44 
trade and other receivables  20  46 56 
defined benefit pension asset 34 126 166 
  20231 21151 
current assets    
inventories  21  212 193 
trade and other receivables  22  1699 1948 
derivative financial instruments  17  31 47 
deferred tax assets 27 167 78 
current tax assets   16 08 
cash and cash equivalents  23  409 728 
  2534 3002 
total assets   22765 24153 
noncurrent liabilities    
borrowings  28  7507 7868
derivative financial instruments  28  16 22
deferred tax liability  27  751 848
other noncurrent liabilities  25  65 59
defined benefit pension liability  34  427 359
provisions  26  214 283
  8980 9439
current liabilities  
trade and other payables  24  3516 3484
borrowings  28  768 1690
derivative financial instruments  28  19 30
current tax liabilities   229 199
provisions  26  280 287
  4812 5690
total liabilities   13792 15129
net assets   8973 9024 
shareholders’ equity    
calledup share capital  32  256 256 
share premium account   5327 5327 
capital redemption reserve   02 02 
own shares   08 05
other reserves  33  465 442 
retained earnings   2824 2907 
total shareholders’ equity   8866 8929 
noncontrolling interests in equity   107 95 
total equity   8973 9024  financial statements 
group statement of changes in equity  
for the year ended 31 december 2013 
 
100 national express group plc  
annual report and accounts 2013 
 
 
share  
capital  
£m 
share 
premium 
account 
£m 
capital 
redemption 
reserve
 £m 
own 
shares 
note 32
£m 
other 
reserves 
note 33 
£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 
 
 
share  
capital  
£m 
share 
premium 
account 
£m 
capital 
redemption 
reserve
 £m 
own 
shares 
note 32
£m 
other 
reserves 
note 33 
£m 
retained 
earnings  
£m 
total  
£m 
non
controlling 
interests
 £m 
total 
equity 
£m 
at 1 january 2012  256 5327 02 140 999 3131 9575 79 9654 
shares purchased  – – – 48 – – 48 – 48
own shares released to satisfy 
employee share schemes  – – – 45 – 45 – – – 
disposal of own shares – – – 138 – 98 40 – 40 
total comprehensive income  
and expenditure – – – – 557 361 196 11 185
sharebased payments  – – – – – 52 52 – 52 
tax on sharebased payments  – – – – – 01 01 – 01
dividends – – – – – 493 493 – 493
adjustment from changes in  
noncontrolling interests – – – – – – – 05 05 
at 31 december 2012  256 5327 02 05 442 2907 8929 95 9024 
  financial statements pp93167
financial statements 
group statement of cash flows  
for the year ended 31 december 2013 
 
101 wwwnationalexpressgroupcom
 
 note 
2013 
£m 
2012 
£m 
cash generated from operations  37  2964 1696 
tax paid  163 134
net cash from operating activities   2801 1562 
cash flows from investing activities    
payments to acquire businesses net of cash acquired  19a 72 1569
deferred consideration for businesses acquired and disposed 19a 37 06
proceeds from the disposal of business 19b 14 – 
purchase of property plant and equipment   907 1038
proceeds from disposal of property plant and equipment   121 167 
payments to acquire intangible assets   32 29
payments to acquire associates  – 05
proceeds from disposal of associates  – 16 
dividends received from associates  – 09 
interest received   52 37 
net cash used in investing activities   861 2418
cash flows from financing activities    
proceeds from the sale of treasury shares  – 40 
purchase of own shares   28 48
interest paid   510 488
finance lease principal payments   213 180
net loans repaiddrawn down  994 1745 
paymentsreceipts for the maturity of foreign currency contracts  11 89 
dividends paid to noncontrolling interests   05 01
dividends paid to shareholders of the company   503 493
net cash used infrom financing activities   2264 664 
decrease in cash and cash equivalents   324 192
opening cash and cash equivalents   728 925 
decrease in cash and cash equivalents   324 192
foreign exchange   05 05
closing cash and cash equivalents  23  409 728 
  financial statements 
notes to the consolidated accounts 
for the year ended 31 december 2013 
 
102 national express group plc  
annual report and accounts 2013 
1 corporate information  
the consolidated financial statements of national express group plc and its subsidiaries ‘the group’ for the year ended 31 december 
2013 were authorised for issue in accordance with a resolution of the directors on 27 february 2014 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 62 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 2013  
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 statement 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 14 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 34 
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 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 pp93167
 
 
103 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 years’ changes in presentation 
changes in accounting policies 
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 13 fair value measurement effective for annual periods beginning on or after 1 january 2013 – the standard defines fair value  
and a framework for measuring fair value 
ias 19 revised employee benefits effective for annual periods beginning on or after 1 january 2013 – the standard has impacted the 
measurement of the various components representing movements in the defined benefit pension obligation and associated disclosures  
but not the group’s total obligation following the replacement of expected returns on plan assets with a net finance cost in the income 
statement the operating profit for the period has been reduced and accordingly other comprehensive income increased  
amendment to ias 1 presentation of financial statements – the amendments require items of other comprehensive income to be grouped  
by those items that may be reclassified subsequently to profit or loss and those that will never be reclassified together with their associated 
income tax the amendments have been applied retrospectively and hence items of comprehensive income have been represented to reflect 
the change the effect of these changes is evident from the consolidated statement of comprehensive income  
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 entity’s 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 jointly controlled entities 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 jointly 
controlled entities 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 before the following as appropriate profit or loss on the sale of 
businesses exceptional profit or loss on the sale of noncurrent assets and charges for goodwill impairment amortisation of intangible assets 
exceptional items and tax relief on qualifying exceptional items and intangibles  
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 
   financial statements 
notes to the consolidated accounts continued 
 
 
104 national express group plc  
annual report and accounts 2013 
2 accounting policies continued 
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  
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 pp93167
 
 
105 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  
right to operate toc franchises  – over the life of the franchise between 1 and 7 years  
contractual relationships – over the life of the relationship between 8 and 20 years 
brands – over the life of the brand 5 years  financial statements 
notes to the consolidated accounts continued 
 
 
106 national express group plc  
annual report and accounts 2013 
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 pp93167
 
 
107 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 carried 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 
  financial statements 
notes to the consolidated accounts continued 
 
 
108 national express group plc  
annual report and accounts 2013 
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 portion of the gain or loss on the hedging instrument that is determined 
to be an effective hedge is recognised in equity and the ineffective portion 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 
precontract costs  
precontract costs associated with securing new rail franchises are expensed as incurred up to the point when a franchise 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 franchise 
costs associated with the commencement of all new contracts other than rail franchises 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 pp93167
 
 
109 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 34  
the balance sheet position in respect of defined benefit schemes comprises the net value for each scheme of the present value of the 
relevant defined benefit obligation at the balance sheet date less 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 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   financial statements 
notes to the consolidated accounts continued 
 
 
110 national express group plc  
annual report and accounts 2013 
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 in some cases had not yet been adopted by the eu 
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  
ifrs 9 financial instruments – the standard deals with the classification recognition and measurement of financial assets and liabilities  
but has yet to be adopted by the eu  
ias 36 recoverable amount disclosures for nonfinancial assets – the amendment addresses the disclosure of information about  
the recoverable amount of impaired assets if that amount is based on the fair value less costs of disposal 
the directors assess that the standards and interpretations issued but not yet effective are not likely to have a significant impact on future 
financial statements with the exception of ifrs 9 which will impact both the measurement and disclosures of financial instruments 
  financial statements pp93167
 
 
111 wwwnationalexpressgroupcom
3 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 2012 had been retranslated at the average exchange rates for the year to 31 december 2013  
north american bus would have achieved normalised operating profit of £598m on revenue of £5848m compared to normalised operating 
profit of £591m on revenue of £5783m as reported and spanish coach and bus would have achieved a normalised operating profit of 
£877m on revenue of £5595m compared to normalised operating profit of £838m on revenue of £5350m as reported 
4 revenue 
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 
 
2013 
closing rate 
2013 
average rate 
2012 
closing rate 
2012
average rate 
us dollar  166 156 163 159 
canadian dollar  176 161 161 159 
euro  120 118 123 123 
 
2013
 £m 
2012
 £m 
rendering of services  18888 18280 
rental income  25 32 
revenue  18913 18312 
finance income  68 44 
total revenue from continuing operations  18981 18356 
 
external 
revenue 
2013 
£m 
inter
segment 
sales 
2013 
£m 
segment 
revenue 
2013 
£m 
external  
revenue  
2012  
£m 
inter
segment 
sales 
2012
 £m 
segment 
revenue 
2012 
£m 
uk bus  2733 01 2734 2688 02 2690 
uk coach  2633 02 2635 2540 11 2551 
north american bus  6450 – 6450 5783 – 5783 
spanish coach and bus  5646 – 5646 5350 – 5350 
core nonrail businesses 17462 03 17465 16361 13 16374 
german coach 21 – 21 – – – 
nonrail businesses 17483 03 17486 16361 13 16374 
rail  1430 – 1430 1951 – 1951 
intersegment sales elimination  – 03 03 – 1313
total revenue  18913 – 18913 18312 – 18312  financial statements 
notes to the consolidated accounts continued 
 
 
112 national express group plc  
annual report and accounts 2013 
5 segmental analysis continued 
operating profit is analysed by reportable segment as follows 
intangible asset amortisation is analysed by reportable segment as follows 
exceptional items are analysed by reportable segment as follows 
 
 
normalised 
operating 
profit 
2013 
£m 
intangible 
amortisation 
and 
exceptional 
items 
2013
£m 
segment 
result 
2013
£m 
normalised 
operating  
profit  
2012  
£m 
intangible 
amortisation  
and  
exceptional  
items  
2012 
£m 
segment 
result 
2012
£m 
uk bus  312 14 298 341 37 304 
uk coach  245 19 226 206 25 181 
north american bus  626 181 445 591 259 332 
spanish coach and bus  815 372 443 838 418 420 
central functions 143 64 207 124 27 151
core nonrail businesses  1855 650 1205 1852 766 1086 
german coach 24 07 31 – – – 
nonrail businesses 1831 657 1174 1852 766 1086 
rail  98 93 05 267 177 90 
operating profit from continuing operations  1929 750 1179 2119 943 1176 
loss on disposal of business  43  – 
share of posttax results from associates  
and joint ventures  06   14 
net finance costs   498  492
profit before tax    644   698 
tax charge    61  85
profit for the year    583   613 
 
 
2013 
£m 
2012 
£m 
uk bus  – – 
uk coach  03 – 
rail  – 01 
north american bus  135 111 
spanish coach and bus  354 404 
central functions  01 01 
total  493 517 
 
 
2013 
£m 
2012 
£m 
uk bus  14 37 
uk coach  16 25 
rail 93 176 
north american bus  46 148 
spanish coach and bus  18 14 
central functions 63 26 
other 07 – 
total  257 426  financial statements pp93167
 
 
113 wwwnationalexpressgroupcom
5 segmental analysis continued 
exceptional items are further analysed by type as follows 
in the year to 31 december 2013 exceptional costs of £74m 2012 £163m 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 £19m 2012 £13m was incurred in bidding  
for regional rail opportunities in germany 
£64m 2012 £30m 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 
exceptional costs of £46m 2012 £134m were incurred in relation to the acquisition and integration of school bus and transit businesses  
in north america further details of the acquisitions are disclosed in note 19  
exceptional restructuring and rationalisation costs of £54m 2012 £86m have been incurred primarily within uk bus uk coach and  
spanish coach and bus 
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 £826m 2012 £1254m 
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 15 in 2013 software intangible assets 
of £34m 2012 £66m were acquired as disclosed in note 14 
 
2013
 £m 
2012
 £m 
uk rail bids  74 163 
other rail bids 19 13 
other business development  64 30 
 157 206 
north america acquisition and integration 46 134 
restructuring and rationalisation  54 86 
 257 426 
 
assets  
2013  
£m 
of which 
noncurrent 
assets 
2013
£m 
liabilities 
2013 
£m 
capital
expenditure 
2013 
£m 
assets 
2012 
£m 
of which  
noncurrent 
assets  
2012 
£m 
liabilities 
2012
£m 
capital
 expenditure 
2012
£m 
uk bus  1535 1347 1187 271 1429 1245 1151 247 
uk coach  590 450 367 38 667 530 365 66 
rail  134 18 457 – 147 24 476 02 
north american bus  7957 7225 1952 161 8780 7894 2039 589 
spanish coach and bus  11481 10652 1506 364 11725 10763 1597 431 
central functions  262 57 442 14 340 47 57303 
unallocated  892 – 7967 – 1253 – 9116 – 
intercompany elimination  86 – 86 – 188 – 188 – 
total  22765 19749 13792 848 24153 20503 15129 1338  financial statements 
notes to the consolidated accounts continued 
 
 
114 national express group plc  
annual report and accounts 2013 
5 segmental analysis continued 
unallocated assets and liabilities comprise the following items 
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 
 
 
unallocated 
assets 
2013 
£m 
unallocated 
liabilities  
2013 
£m 
unallocated 
assets 
2012 
£m 
unallocated 
liabilities 
2012 
£m 
cash and cash equivalents  409 – 728 – 
other debt receivables 10 – 10 – 
current tax  16 229 08 199
available for sale investments  74 – 71 – 
derivative financial assetsliabilities  216 35 358 52
borrowings excluding finance leases  – 6946 – 8011
dividend payable  – 06 – 06
deferred tax  167 751 78 848
total  892 7967 1253 9116
 
2013 
£m 
2012 
£m 
cost of inventories recognised in expense 752 670 
staff costs including exceptional costs of £77m 2012 £58m  8558 7881 
depreciation – owned assets including exceptional costs in 2012 of £26m 883 900 
 – leased assets  191 198 
amortisation of fixed asset grants  11 12
operating lease charges  rolling stock capital element 275 310 
 rolling stock noncapital element  – 50 
 public service vehicles  60 40 
 other  81 60 
 – plant and equipment  416 460 
 fixed track access  136 149 
 other  236 237 
 – land and buildings  372 386 
foreign exchange differences 09 04
other charges including exceptional expense of £180m 2012 £342m  6089 6140 
operating costs before intangible asset amortisation  17241 16619 
intangible asset amortisation  493 517 
total operating costs  17734 17136 
 
2013 
£m 
2012
£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  06 06 
other services  01 03 
 10 12  financial statements pp93167
 
 
115 wwwnationalexpressgroupcom
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 2013 under the group’s share schemes are as follows 
 
 
2013 
£m 
2012 
£m 
wages and salaries  7384 6799 
social security costs  1048 961 
pension costs note 34  95 69 
sharebased payment note 8  31 52 
 8558 7881 
 2013 2012 
managerial and administrative  3941 3659 
operational  38321 35737 
 42262 39397 
 
2013 
£m 
2012 
£m 
basic salaries 10 10 
benefits  03 03 
performancerelated bonuses  14 11 
sharebased payment  10 15 
 37 39 
 
number of 
share options 
2013 
number of 
share options 
2012 
exercise 
price 
future 
exercise 
periods 
executive share option plan  16286 35508 207p354p 2014 
long term incentive plan  10498399 6986836 nil 20142019 
share matching plan  724494 1089251 nil 20142015 
deferred annual share bonus plan  846474 1325234 nil 20142015 
wmt long service option scheme  262171 283628 129p599p 20142023 
executive deferred bonus plan 142504 127249 nil 2014 
 12490328 9847706    financial statements 
notes to the consolidated accounts continued 
 
 
116 national express group plc  
annual report and accounts 2013 
7 employee benefit costs continued 
b share schemes continued  
i executive share option plan  
the company operates tax approved and unapproved executive share option schemes open to group employees in senior management 
positions options granted by this plan have a maximum term of ten years the options vest after three years subject to the satisfaction  
of certain performance criteria
 
based on the achievement of a target growth in earnings per share if the performance criteria are not met when 
initially tested in some instances they may be reassessed during the term of the option from 2005 executive share option grants have been 
replaced by awards made under the long term incentive plan as described in ii there are no cash settlement alternatives  
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  
in 2011 2012 and 2013 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 long term incentive plan 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 2012 965 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   financial statements pp93167
 
 
117 wwwnationalexpressgroupcom
7 employee benefit costs continued  
b share schemes continued  
 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  financial statements 
notes to the consolidated accounts continued 
 
 
118 national express group plc  
annual report and accounts 2013 
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 £01m 2012 £01m 
during the year ended 31 december 2013 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 2013 had exercise prices that were between 129p and 599p 2012 between 129p and 604p 
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 2012 one year options were exercised regularly throughout the year and 
the weighted average share price at exercise was 201p 2012 225p 
 
2013 
£m 
2012 
£m 
expense arising from share and share option plans – continuing operations  31 52 
  2013   2012 
 
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  319136 368 1277006 445 
granted during the year  14840 252 26660 252 
forfeited during the year  5892 377 9708 424 
exercised during the year 10501 196 29877 146 
expired during the year 39126 276 944945 475 
outstanding at 31 december 278457 380 319136 368 
exercisable at 31 december  225895 411 211343 430 
options with a nil exercise price     
at 1 january  9528570 nil 7285150 nil 
granted during the year  5106185 nil 4754977 nil 
forfeited during the year  209721 nil 333117 nil 
exercised during the year  1426737 nil 1954978 nil 
expired during the year 786426 nil 223462 nil 
outstanding at 31 december  12211871 nil 9528570 nil 
exercisable at 31 december  – nil 197069 nil 
total outstanding at 31 december  12490328  9847706  
total exercisable at 31 december  225895  408412  
exercise price p  2013 2012 
0300  104166 123278 
300350 – 12141 
350650 174291 183717 
 278457 319136  financial statements pp93167
 
 
119 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 2012 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 price share options with nil exercise price 
 2013 2012 2013  2012 
risk free interest rate  119 050116 035084 050055 
expected volatility  381 368400 292442 400445 
peer group volatility  – – 368443 385455 
expected option life in years  7 years 36 years 35 years 35 years 
expected dividend yield  473 397416 464488 416456 
weighted average share price at grant date 206p 239p 201p 225p 
weighted average exercise price at grant date 252p 252p nil nil 
weighted average fair value of options at grant date 32p 49p 128p 171p 
 
2013
 £m 
2012
£m 
bond and bank interest payable  502 474
finance lease interest payable  44 47
other interest payable  02 02
unwind of provision discounting  13 13
net interest cost on defined benefit pension obligations 05 – 
finance costs  566 536
other financial income 68 44 
net finance costs  498 492
of which from financial instruments 
cash and cash equivalents  27 16
financial liabilities measured at amortised cost  487 469
derivatives used for hedging  59 40 
loan fee amortisation  24 24 financial statements 
notes to the consolidated accounts continued 
 
 
120 national express group plc  
annual report and accounts 2013 
10 taxation 
a analysis of taxation charge in the year 
b tax on items recognised in other comprehensive income or equity 
 
2013 
 £m 
2012
 £m 
current taxation 
 
 
credit on exchange movements offset in reserves  01 – 
 01 – 
deferred taxation   
deferred tax charge on sharebased payment  – 01
deferred tax credit on actuarial losses  37 72 
deferred tax credit on cash flow hedges  03 49 
deferred tax credit on foreign exchange differences 21 16 
 61 136 
 
 
2013 
 £m 
2012
 £m 
current taxation 
 
 
uk corporation tax  39 16 
overseas taxation  144 70 
current income tax charge  183 86 
adjustments with respect to prior years – uk and overseas – 05
total current income tax charge 183 81 
deferred taxation note 27   
origination and reversal of temporary differences – continuing operations  118 03
adjustments with respect to prior years – uk and overseas 04 07 
deferred tax creditcharge 122 04 
total tax charge 61 85 
   
the tax charge is disclosed as follows   
tax charge on profit before intangible asset amortisation and exceptional items  325 327 
tax credit on intangible asset amortisation and exceptional items  264 242
 61 85 
   
tax credit on intangible asset amortisation and exceptional items is analysed as follows   
tax credit on intangible asset amortisation 174 151
tax credit on exceptional items 68 91
tax credit on loss on disposal of business 22 – 
 264 242 financial statements pp93167
 
 
121 wwwnationalexpressgroupcom
10 taxation continued 
c reconciliation of the total tax charge 
d temporary differences associated with group investments 
no deferred tax 2012 £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 2012 £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 
£61m 2012 £94m 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 £31m 2012 £59m which have not been recognised recoverability of which is dependent  
on capital gains arising  
the £31m of unrecognised capital losses will expire at various dates from 2014 through to 2016 as follows 
f deferred tax included in the income statement 
details on the balance sheet position of deferred tax are included in note 27 
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 21 2012 23 was substantively enacted the change in rate from 23 to 21 has resulted in  
a tax credit of £01m to the income statement 
the proposed changes to reduce the uk corporation tax rate from 21 to 20 on 1 april 2015 will have a similar effect in future years 
 
 
2013 
£m 
2012 
£m 
profit before income tax  644 698 
notional charge at uk corporation tax rate of 2325 2012 245  150 171 
nondeductible goodwill impairment and intangible amortisation  18 07 
recognition of a deferred tax asset for previously unrecognised tax losses  01 39
effect of reduction in uk tax rates note 10g 01 01
prior year adjustments within current and deferred tax  04 02 
european reinvestment relief and other tax credits 12 16
effect of overseas tax rates  52 68 
tax on european goodwill and intangibles  61 58
overseas financing deductions 68 91
nondeductible expenditure  12 42 
total tax charge reported in the income statement note 10a  61 85 
  
2013 
£m 
2014  14 
2015  10 
2016  07 
  31 
 
2013 
£m 
2012 
£m 
accelerated capital allowances  68 72 
other short term temporary differences 110 12
utilisation of losses  56 56
deferred tax creditcharge 122 04  financial statements 
notes to the consolidated accounts continued 
 
 
122 national express group plc  
annual report and accounts 2013 
11 discontinued operations 
in 2013 and 2012 there were no material movements arising from discontinued operations 
12 dividends paid and proposed 
13 earnings per share 
basic earnings per share is calculated by dividing the earnings attributable to equity shareholders of £568m 2012 £600m by the weighted 
average number of ordinary shares in issue during the year excluding those held by employee share ownership trusts and those held as 
treasury shares which are both 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 
 
 
2013 
£m 
2012 
£m 
declared and paid during the year   
ordinary final dividend for 2012 paid of 66p per share  337 332 
ordinary interim dividend for 2013 of 325p per share  166 161 
 503 493 
proposed for approval not recognised as a liability at 31 december 
 
 
ordinary final dividend for 2013 of 675p per share 2012 66p per share  345 337 
 2013 2012 
basic earnings per share 111p 118p 
normalised basic earnings per share  215p 255p 
diluted earnings per share  111p 117p 
normalised diluted earnings per share  214p 254p 
 2013 2012 
basic weighted average shares  511114989 510552927 
adjustment for dilutive potential ordinary shares  1425106 1626921 
diluted weighted average shares  512540095 512179848 
   2013   2012 
 £m 
basic eps 
p 
diluted eps 
p £m 
basic eps  
p 
diluted eps 
p 
profit attributable to equity shareholders  568 111 111 600 118 117 
intangible amortisation  493 97 96 517 101 101 
exceptional items  257 50 50 426 83 83 
loss on disposal of business 43 08 08 – – – 
tax relief on the above items  264 51 51 242 47 47
normalised profit from continuing operations  
and attributable to equity shareholders 1097 215 214 1301 255 254  financial statements pp93167
 
 
123 wwwnationalexpressgroupcom
14 intangible assets  
 
 
customer 
contracts  
£m 
 
brand 
£m 
software 
£m 
contractual 
relationships 
£m 
total finite life 
assets  
£m 
goodwill 
£m 
total 
£m 
cost        
at 1 january 2013  4601 23 319 587 5530 11213 16743 
acquisitions 37 – – – 37 39 76 
additions 34 – 34 01 69 34 35 
transfer to property plant  
and equipment 
– – 02 33 35 33 02
disposals – – 03 – 03 – 03
companies divested 22 – 04 – 26 36 62
foreign exchange  66 – 14 19 33 56 89 
at 31 december 2013  4716 23 330 536 5605 11271 16876 
amortisation and impairment        
at 1 january 2013  3088 03 157 32 3280 834 4114 
charge for year  410 05 45 33 493 – 493 
disposals – – 01 – 01 – 01
companies divested 02 – 02 – 04 – 04
transfer to property plant  
and equipment 
– – 01 – 01 – 01
foreign exchange  44 – 08 04 32 08 40 
at 31 december 2013  3540 08 190 61 3799 842 4641 
net book value        
at 31 december 2013  1176 15 140 475 1806 10429 12235 
at 1 january 2013  1513 20 162 555 2250 10379 12629  financial statements 
notes to the consolidated accounts continued 
 
 
124 national express group plc  
annual report and accounts 2013 
14 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 management covering a fiveyear period the assumptions including growth rates and 
operating margins are based on historical experience detailed budget plans as well as management’s assessment of current market and economic 
conditions growth has then been extrapolated forward from the end of the forecasts 
 
 
customer 
contracts  
£m 
rail  
franchise  
£m 
brand 
£m 
software 
£m 
contractual 
relationships 
£m 
total finite  
life assets  
£m 
goodwill 
£m 
total 
£m 
cost         
at 1 january 2012  4179 99 – 230 570 5078 10829 15907 
acquisitions 543 – 23 34 – 600 656 1256 
additions – – – 32 32 64 31 95 
transfer from property plant 
and equipment – – 
 
– 30 – 30 – 30 
disposal – 99 – – – 99 – 99
foreign exchange  121 – – 07 15 143 303 446
at 31 december 2012  4601 – 23 319 587 5530 11213 16743 
amortisation and impairment         
at 1 january 2012  2723 97 – 118 – 2938 844 3782 
charge for year  436 02 03 43 33 517 – 517 
disposals – 99 – – – 99 – 99
foreign exchange  71 – – 04 01 76 10 86
at 31 december 2012  3088 – 03 157 32 3280 834 4114 
net book value         
at 31 december 2012  1513 – 20 162 555 2250 10379 12629 
at 1 january 2012  1456 02 – 112 570 2140 9985 12125 
     
2013 
£m 
2012
£m 
uk coach     132 132 
north american bus      3199 3305 
spanish coach and bus     7098 6942 
     10429 10379  financial statements pp93167
 
 
125 wwwnationalexpressgroupcom
14 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 fiveyear 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 £1611m 2012 £554m 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 discount rate of 150 basis points 2012 40 basis points or a reduction in the growth rates used to extrapolate 
cash flows beyond the fiveyear period of the management plan of 150 basis points 2012 150 basis points  
the value in use of the spanish coach and bus division exceeds its carrying amount by £2129m 2012 £474m 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 discount rate of 140 basis points 2012 30 basis points or a reduction in growth rates used to extrapolate cash 
flows beyond the fiveyear period of the management plan of 150 basis points 2012 130 basis points  
the headroom in both north american bus and spanish coach and bus has improved during the year due to the reduced discount rate and  
the reduced asset values 
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 170 basis points 2012 60 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 200 basis points  
2012 80 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 
 2013  2012  2013  2012 
uk coach 94 119 20 20 
north american bus  91 115 25 25 
spanish coach and bus 86 90 20 20  financial statements 
notes to the consolidated accounts continued 
 
 
126 national express group plc  
annual report and accounts 2013 
15 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 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 
  financial statements pp93167
 
 
127 wwwnationalexpressgroupcom
15 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 2012  951 42 10255 1736 12984 
additions  37 02 1176 123 1338 
acquisitions of businesses 12 – 573 11 596 
transfer to intangible assets – – – 30 30
disposals  05 01 301 178 485
foreign exchange  10 02 304 19 335
at 31 december 2012  985 41 11399 1643 14068 
depreciation      
at 1 january 2012  130 20 4013 1276 5439 
charge for the year  21 05 950 122 1098 
disposals 02– 104 105211
foreign exchange  05 02 123 12 132
at 31 december 2012  154 23 4736 1281 6194 
net book value      
at 31 december 2012  831 18 6663 362 7874 
at 1 january 2012  821 22 6242 460 7545 
  
2013 
£m 
2012
£m 
land and buildings  – cost  – 13 
 – depreciation  – 01
net land and buildings   – 12 
long leasehold property  – cost 08 – 
 – depreciation – – 
net long leasehold property   08 – 
public service vehicles  – cost  2565 2554 
 – depreciation 852 751
net public service vehicles   1713 1803 
plant and equipment  – cost  02 02 
 – depreciation  01 02
net plant and equipment   01 – 
total net book value   1722 1815  financial statements 
notes to the consolidated accounts continued 
 
 
128 national express group plc  
annual report and accounts 2013 
16 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 
c2c rail 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 
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 marrakesh operation of bus services 
tvam transport de voyageurs en autocar maroc sa marrakesh operation of bus services 
aca alsa city agadir sa  operation of bus services 
incorporated in germany  
national express germany gmbh  operation of coach services  financial statements pp93167
 
 
129 wwwnationalexpressgroupcom
17 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 31 
available for sale investments 
the principal available for sale investments are as follows 
 
 
2013 
£m 
2012 
£m 
available for sale investments – unlisted ordinary shares  74 71 
derivative financial instruments – interest rate derivatives 176 310 
derivative financial instruments – fuel derivatives 09 01 
derivative financial instruments included in noncurrent assets  185 311 
derivative financial instruments – fuel derivatives  09 46 
derivative financial instruments – foreign exchange derivatives 22 01 
derivative financial instruments included in current assets  31 47 
 
2013
 £m 
2012
 £m 
cost or valuation and net book value   
at 1 january  71 76 
additions 01 – 
disposals – 03
foreign exchange 02 02
at 31 december  74 71 
   2013 
proportion 
held 
 
2012 
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  financial statements 
notes to the consolidated accounts continued 
 
 
130 national express group plc  
annual report and accounts 2013 
18 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 
the financial information of this joint venture is summarised below 
the carrying amount of the investment in joint ventures matches the group’s share of the net assets 
 
2013 
£m 
2012 
£m 
joint ventures  24 22 
associates  27 22 
total investments accounted for under the equity method  51 44 
 
2013 
£m 
2012
£m 
share of joint venture’s profit 02 01 
share of associates’ profit 04 13 
total share of results from associates and joint ventures 06 14 
name  country of registration activity 
proportion held 
 
iberoeurosur sl  spain holding company of deutsche touring  20 
share of joint venture’s balance sheet and results 
2013 
£m 
2012 
£m 
noncurrent assets  35 35 
current assets  01 – 
share of gross assets 36 35 
noncurrent liabilities  07 09
current liabilities  05 04
share of gross liabilities  12 13
share of net assets  24 22 
revenue 03 02 
share of profit 02 01  financial statements pp93167
 
 
131 wwwnationalexpressgroupcom
18 investments accounted for using the equity method continued 
b investments in associates 
the group’s interests in associates are as follows 
name   
country of
 registration 
proportion held 
 
spanish coach and bus associates  spain 2050 
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 are summarised below 
the carrying amount of the investment in associates matches the group’s share of the net assets 
19 business combinations 
a acquisitions 
during the year the group acquired a number of small school bus businesses in north america the total fair value of net assets acquired  
in these businesses was £37m total consideration was £76m including deferred consideration of £04m resulting in provisional  
goodwill of £39m 
deferred consideration of £37m was paid in the year relating to acquisitions in north america in earlier years 
in 2012 the group made a number of acquisitions including petermann partners inc the joint venture of thompson transit inc and ycn 
transportation llc and a number of small controlling interests in the group’s spanish division full details of these acquisitions are disclosed 
in the group’s 2012 annual report and accounts no changes were made to the fair values during 2013 
b disposals 
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 fair value of the net assets disposed was £57m consideration received was £14m 
resulting in a loss on disposal of £43m 
there were no business disposals in the group in 2012 
20 noncurrent assets – trade and other receivables 
21 inventories 
the movement on the provision for slow moving and obsolete inventory is immaterial 
share of associates’ balance sheets and results 
2013 
£m 
2012 
£m 
noncurrent assets  30 31 
current assets  41 39 
share of gross assets  71 70 
noncurrent liabilities  19 22
current liabilities  25 26
share of gross liabilities  44 48
share of net assets  27 22 
total revenue 198 127 
share of profit 04 13 
 
2013 
£m 
2012
£m 
trade receivables 11 11 
prepayments and accrued income  08 10 
other receivables 27 35 
 46 56 
 
2013 
£m 
2012
£m 
raw materials and consumables  212 193  financial statements 
notes to the consolidated accounts continued 
 
 
132 national express group plc  
annual report and accounts 2013 
22 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 30 the directors believe that based  
on the ongoing contractual relationships with predominantly government bodies that these amounts will be collected 
23 cash and cash equivalents 
 
2013 
£m 
2012 
£m 
cash at bank and in hand  377 417 
overnight deposits  – 286 
other short term deposits  32 25 
cash and cash equivalents  409 728 
cash and cash equivalents include restricted balances of £29m 2012 £67m 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 
24 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 £09 m 2012 £14m 
 
2013 
£m 
2012 
£m 
trade receivables  1103 1304 
less provision for impairment of receivables  113 101
trade receivables – net  990 1203 
amounts due from associates and joint ventures note 36 11 09 
amounts due from other related parties note 36 10 09 
other receivables  344 382 
prepayments and accrued income  344 345 
 1699 1948 
 
2013 
£m 
2012 
£m 
at 1 january  101 102
providedutilised in the year  12 01 
at 31 december 113 101
 
2013 
£m 
2012 
£m 
trade payables  1297 1331 
amounts owed to associates and joint ventures note 36 08 08 
amounts owed to other related parties note 36 09 36 
other tax and social security payable  268 238 
accruals and deferred income  1129 923 
other payables  805 948 
 3516 3484  financial statements pp93167
 
 
133 wwwnationalexpressgroupcom
25 other noncurrent liabilities 
26 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 and dilapidation provisions in rail 
when the effect is material the provisions are discounted to their net present value 
27 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 
 
2013
£m 
2012
£m 
deferred fixed asset grants 47 30 
other liabilities 18 29 
 65 59 
  
claims 
provision
1
 
£m 
other
2
 
£m 
total 
£m 
at 1 january 2013   506 64 570 
charged to the income statement   218 07 225 
utilised in the year  280 33 313
unwinding of discount   13 – 13 
acquired in business combinations  12 – 12 
exchange difference   19 06 13
at 31 december 2013   450 44 494 
current 31 december 2013   236 44 280 
noncurrent 31 december 2013   214 – 214 
  450 44 494 
current 31 december 2012   223 64 287 
noncurrent 31 december 2012  283 – 283 
  506 64 570 
 
2013 
£m 
2012 
£m 
net deferred tax liability at 1 january 770 952
charge to income statement  122 04
credit to other comprehensive income or equity 61 136 
exchange differences  04 30 
acquired in business combinations 07 20 
net deferred tax liability at 31 december 584 770 financial statements 
notes to the consolidated accounts continued 
 
 
134 national express group plc  
annual report and accounts 2013 
27 deferred tax continued 
deferred tax assets 
2013 
£m 
2012
£m 
accelerated tax depreciation 07 61
losses carried forward  89 103 
other short term temporary differences  71 36 
total  167 78 
 
28 borrowings and derivative financial liabilities 
an analysis of interestbearing loans and borrowings is provided in note 29 further information on derivative financial instruments is provided 
in note 31 
deferred tax liabilities 
2013 
£m 
2012
£m 
accelerated tax depreciation  1585 1583
losses carried forward  364 421 
other short term temporary differences 470 314 
total 751 848
 
2013 
£m 
2012
£m 
noncurrent   
bank loans  52 37 
bonds 5795 5900 
finance lease obligations 1007 1271 
other debt payable  653 660 
noncurrent borrowings  7507 7868 
fuel derivatives  11 22 
interest rate derivatives 05 – 
noncurrent derivative financial instruments  16 22 
noncurrent borrowing and derivative financial liabilities  7523 7890 
current   
bank loans  141 1109 
bonds – accrued interest 292 292 
finance lease obligations  322 276 
other debt payable  13 13 
current borrowings  768 1690 
fuel derivatives 15 25 
foreign exchange derivatives  04 05 
current derivative financial instruments  19 30 
current borrowings and derivative financial liabilities  787 1720  financial statements pp93167
 
 
135 wwwnationalexpressgroupcom
29 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 
in july 2013 the group renewed its committed unsecured revolving bank facility replacing the previous £500m facility which had been due 
to mature in 2014 with a £410m facility maturing in july 2018 
during 2012 the group issued a €785m private placement repayable in august 2021 at a fixed rate of 455 
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 30 and 31 
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 
 
2013  
£m  maturity 
effective
 interest rate 
2012 
£m maturity  
effective 
interest rate 
7 year sterling bond 3520 january 2017 654 3601 january 2017 654 
10 year sterling bond 2275 june 2020 685 2299 june 2020 685 
bonds 5795   5900   
accrued interest – bonds 292   292   
european bank loans 130 july 2018
1
libor  110 794 august 2014
1
 libor  145 
european bank loans –   284 february 2013 12 
european bank loans  57 20142016 508 58 20132017 502 
european bank loans 06 20142016 euribor  287 10 20132017 euribor  285 
bank loans  193   1146   
us dollar finance leases  
at fixed rate  1124 20142020 221 1275 20132019 234 
european finance leases  
at fixed rate 42 20142017 568 60 20132017 588 
european finance leases  
at floating rate  31 20142017 euribor  131 45 20132017 euribor  121 
sterling finance leases  
at fixed rate  132 20142018 476 167 20132018 476 
finance leases  1329   1547   
euro private placement 645 august 2021 455 652 august 2021 455 
accrued interest – private 
placement 11   12   
euro loans  10 20142017  09 20132016  
other debt payable  666   673   
total  8275   9558    financial statements 
notes to the consolidated accounts continued 
 
 
136 national express group plc  
annual report and accounts 2013 
29 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 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
 
30 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 group treasurer 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 2012 
 1 year  
£m 
12 years 
£m 
23 years 
£m 
34 years 
£m 
45 years  
£m 
 5 years  
£m 
total 
£m 
fixed rate        
bank loans 310 14 12 06 – – 342
bonds – – – – 3601 2299 5900
finance leases  261 321 209 186 282 243 1502
other debt payable 13 03 05 – – 652 673
floating rate        
cash assets  728 – – – – – 728 
bank loans  799 03 02 – – – 804
finance leases 15 12110502 – 45 financial statements pp93167
 
 
137 wwwnationalexpressgroupcom
30 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 us750m €49m c233m and finance leases of 
us1860m and €89m 
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 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 £35m 
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 2013 the proportion of group net debt at floating rates was 33 2012 37  
the table below 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 £18m 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 £05m the analysis assumes that the 
amount and mix of floating rate debt including finance leases remains unchanged from that in place at 31 december 2013 
   2013   2012 
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 – 26 – 80
euro  10 01 59 – 116
canadian dollar  10 02 02 – 05 
us dollar 10 – 26 – 80 
euro  10 01 59 – 116 
canadian dollar  10 02 02 – 05 financial statements 
notes to the consolidated accounts continued 
 
 
138 national express group plc  
annual report and accounts 2013 
30 financial risk management objectives and policies 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 2013 the group had hedged approximately 100 of  
its 2014 expected usage and 86 of its expected usage in 2015 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 £412m at 31 december 2013 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 table below 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 
   2013  2012 
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 18 – 16 – 
us dollar 50 – – 01 – 
euro  75 05 – 05 – 
sterling  100 18 – 16 – 
us dollar  50 – – 01 – 
euro  75 05 – 05 – 
   2013  2012 
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 – 158 – 149 
us dollar denominated heating oildiesel  20 – 86 – 96 
euro denominated ulsd  20 – 168 – 164 
sterling denominated ulsd  20 – 158 – 149
us dollar denominated heating oildiesel  20 – 86 – 96
euro denominated ulsd  20 – 168 – 164 financial statements pp93167
 
 
139 wwwnationalexpressgroupcom
30 financial risk management objectives and policies 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 july 2013 the group renewed its committed unsecured revolving bank facility replacing the previous £500m facility which had been due 
to mature in 2014 with a £410m facility maturing in july 2018 the group reduced the size of the facility which is primarily used for seasonal 
funding requirements in light of its lower debt forecast at 31 december 2013 £3934m of this facility remained unused 2012 £4193m 
at 31 december 2013 the group had committed bank borrowing and finance lease facilities of £5429m 2012 £6162m  
the table below summarises the maturity profile of the group’s financial liabilities at 31 december 2013 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 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
 
year ended 31 december 2012 
on demand 
£m 
less than 
1 year 
£m 
15 years  
£m 
 5 years 
£m 
total 
£m 
bank loans  – 1126 38 – 1164 
bonds – 368 4971 2697 8036 
finance lease obligations  – 297 1353 127 1777 
other debt payable – 38 116 768 922 
trade and other payables  – 3470 29 – 3499 
 – 5299 6507 3592 15398 
foreign exchange derivatives – 04 – – 04 
interest rate derivatives – 56214 47317
fuel derivatives – 19 14 – 05
 – 71 200 47 318
   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 2013  1001 602 171 75 35 118 
trade receivables at 31 december 2012  1214 822 191 83 23 95  financial statements 
notes to the consolidated accounts continued 
 
 
140 national express group plc  
annual report and accounts 2013 
30 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 37  
the decrease in the group’s net debt from £8282m to £7461m 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 29  
31 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 2013 
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 pp93167
 
 
141 wwwnationalexpressgroupcom
31 financial instruments including cash trade receivables and payables 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 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
classification of financial instruments  
as at 31 december 2012 
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  – 71 – – – 71 
fuel derivatives  – – 47 – – 47 
foreign exchange derivatives – – 01 – – 01 
interest rate derivatives – – 310 – – 310 
cash and cash equivalents  728 – – – – 728 
trade and other receivables  1651 – – – – 1651 
 2379 71 358 – – 2808 
liabilities       
bank loans  – – – 1146 – 1146
bonds including accrued interest – – – 6192 – 6192
finance lease obligations  – – – 1547 – 1547
other debt payable  – – – 673 – 673
fuel derivatives – – 47 – – 47
foreign exchange derivatives – – 05 – – 05
trade and other payables  – – – 3499 – 3499
 – – 5213057 – 13109 financial statements 
notes to the consolidated accounts continued 
 
 
142 national express group plc  
annual report and accounts 2013 
31 financial instruments including cash trade receivables and payables 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 
2013 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 22 
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 2013 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 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 
 
interest rate 
swaps
 £m 
foreign  
exchange 
forward  
contracts  
£m 
fuel swaps 
£m 
total 
£m 
net asset at 1 january 2012 237 78 180 495 
transfers to the income statement on cash flow hedges – – 202 202
cash settlementsaccrual 03 42 – 39
revaluation through income statement  70 – – 70 
revaluation through other comprehensive income – – 22 22 
exchange differences – 40 – 40
net asset at 31 december 2012  310 04 – 306 
 
2013 
£m 
2012 
£m 
at 1 january  28 159 
transferred to income statement – operating costs 35 202
revaluation through other comprehensive income 27 22 
exchange differences 02 – 
tax on revaluation 03 49 
at 31 december  21 28  financial statements pp93167
 
 
143 wwwnationalexpressgroupcom
31 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 2013 the group had 
designated €170m of synthetic debt in the form of foreign exchange derivatives €20m of revolving credit facility drawings 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 division is hedged using the diesel market the timing of the swap cash flows match underlying fuel purchases from 
2014 through to 2015 there was no significant element of hedge ineffectiveness requiring recognition in the income statement  
during the year £27m of fair value gains 2012 £22m have been transferred to the hedging reserve due to movements in market fuel prices 
fair value movements of £35m 2012 £202m have been transferred from the hedging reserve to the income statement following settlement 
of fuel trades of which £58m was recognised in the hedging reserve at 1 january 2013 and the remainder was generated during the year 
due to the movement in market fuel prices 
fuel derivatives can be analysed as follows 
 
 
31 december 
2013 
fair value 
£m 
31 december 
2012 
 fair value  
£m 
31 december 
2013
volume 
million litres 
31 december 
2012
volume 
million litres 
hedge fuel derivatives     
sterling denominated – uk bus uk coach and rail  07 02 835 769 
us dollar denominated – north american bus  08 01 692 669 
euro denominated – spanish coach and bus  07 22 930 930 
fuel derivatives included in current assetsliabilities 06 21 2457 2368 
sterling denominated – uk bus uk coach and rail  08 11 860 790 
us dollar denominated – north american bus 07 05 549 620 
euro denominated – spanish coach and bus  01 05 895 770 
fuel derivatives included in noncurrent assetsliabilities 02 21 2304 2180 
total hedge fuel derivatives  08 – 4761 4548  financial statements 
notes to the consolidated accounts continued 
 
 
144 national express group plc  
annual report and accounts 2013 
31 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 2013 a total fair value loss of £122m 
was recognised in the income statement in relation to these swaps this is offset by a fair value gain of £122m 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 2013 a total fair value loss of 
£21m was recognised in the income statement in relation to these swaps this is offset by a fair value gain of £21m 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 
32 calledup share capital 
 
2013 
£m 
2012 
£m 
at 31 december   
authorised   
800000000 2012 800000000 ordinary shares of 5p each 400 400 
issued calledup and fully paid   
511738648 2012 511732603 ordinary shares of 5p each  256 256 
the total number of share options exercised in the year by employees of the group was 1431193 2012 1984855 of which 1431193 
2012 1919772 exercises were satisfied by transferring shares from the national express employee benefit trust the remaining exercises 
in 2012 were settled via a direct purchase of shares from the open market 
own shares 
own shares comprises 426630 2012 535658 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 1322165 2012 2075000 shares and 1431193 
20121919772 shares were used to satisfy options granted under a number of the company’s share schemes the market value of  
these shares at 31 december 2013 was £12m 2012 £11m the dividends payable on these shares have been waived  financial statements pp93167
 
 
145 wwwnationalexpressgroupcom
33 other reserves 
 
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 
 
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 
34 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 
during the prior period certain liabilities of the travel west midlands pension fund relating to current and deferred pensioners valued at 
£238m on an accounting basis were insured at a cost of £272m at the transaction date as a result of this transaction further assets due  
to the travel west midlands pension fund were identified and recovered which substantially offset these losses this insurance policy is a 
qualifying insurance policy and therefore the value of the policy and the value of the liabilities have been recognised within actuarial losses  
in the group statement of comprehensive income this buyin has reduced risk and volatility and brought greater stability to the group’s 
pension contribution commitments  
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 passenger 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 £95m 2012 £69m of which £33m 2012 £35m relates to the defined 
contribution schemes 
 
 
merger
 reserve 
£m 
hedging  
reserve  
£m 
translation 
reserve
£m 
total 
£m 
at 1 january 2012  154 159 686 999 
hedge movements net of tax – 131 – 131
exchange differences net of tax  – – 426 426
at 31 december 2012  154 28 260 442  financial statements 
notes to the consolidated accounts continued 
 
 
146 national express group plc  
annual report and accounts 2013 
34 pensions and other postemployment benefits continued 
a summary of pension benefits and assumptions  
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 
 
 
2013  
£m 
2012 
£m 
uk bus  408 329
uk coach  126 166 
rail  04 18
other 15 12
total  301 193
  uk bus  uk coach rail 
date of actuarial valuation 
tayside 
31 march 
2011 
travel west 
midlands  
31 march  
2010 
5 april 
2013 
31 december 
2010 
actuarial method used  attained age attained age  projected unit projected unit 
rate of investment returns per annum  4369 5070  41 5576 
increase in earnings per annum  50 45  – 42 
scheme assets taken at market value  £455m £3820m  £773m £668m 
funding level  97 84  82 9599 
  2013   2012  
 uk bus uk coach rail uk bus  uk coach rail 
rate of increase in salaries  25 25 29 25 25 30 
rate of increase of pensions  24 34 24 20 28 20 
discount rate  46 46 46 44 44 44 
inflation assumption rpi 34 34 34 28 28 28 
inflation assumption cpi 24 24 24 20 20 20 
postretirement mortality in years       
current pensioners at 65 – male  214 242  210 247  
current pensioners at 65 – male pension under  
£9300 pa or pensionable pay under £35000 pa   207   206 
current pensioners at 65 – male – others    229   228 
current pensioners at 65 – female  241 267  237 276  
current pensioners at 65 – female pension under  
£3300 pa or pensionable pay under £35000 pa    226   225 
current pensioners at 65 – female – others    250   249 
future pensioners at 65 – male  227 260  224 267  
future pensioners at 65 – male pension under 
£9300 pa or pensionable pay under £35000 pa    231   230 
future pensioners at 65 – male – others    251   250 
future pensioners at 65 – female  256 287  253 296  
future pensioners at 65 – female pension under  
£3300 pa or pensionable pay under £35000 pa    251   250 
future pensioners at 65 – female – others    274   273  financial statements pp93167
 
 
147 wwwnationalexpressgroupcom
34 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 decreased from £181m at 31 december 2012 to £155m at 31 december 2013 the principal reason for the 
decrease is the interest on the franchise adjustment of £07m and other net actuarial movements of £18m in the prior year the franchise 
adjustment decreased from £596m at 31 december 2011 to £181m at 31 december 2012 the principal reason for the decrease was the 
handback of the east anglia franchise reducing the franchise adjustment by £490m in addition the adjustment increased due to interest  
on the franchise adjustment of £07m and other net actuarial movements of £68m  
 
uk bus  
£m 
uk coach 
£m 
rail
 £m 
defined benefit pension liabilityasset at 31 december 2013 408 126 04
effect of a 01 increase in the discount rate  74 13 – 
current service cost for the year ended 31 december 2013 34 – 23
effect of a 01 increase in the discount rate  01 – –  financial statements 
notes to the consolidated accounts continued 
 
 
148 national express group plc  
annual report and accounts 2013 
34 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 
2013 and 2012 are set out in the following tables  
group income statement 
uk bus 
2013 
£m 
uk coach  
2013 
£m 
rail 
2013 
£m 
total 
2013
£m 
amounts chargedcredited to group operating profit     
current service cost  34 – 23 57
net interest expenseincome 13 08 07 12
interest on franchise adjustment – – 07 07 
total chargecredit to income statement  47 08 23 62
 
during the year £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 
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
 
group income statement 
uk bus 
2012
£m 
uk coach  
2012 
£m 
rail 
2012 
£m 
total 
2012
£m 
amounts chargedcredited to group operating profit     
current service cost  33– 30 63
expected return on pension scheme assets  239 22 39 300 
interest on pension liabilities  219 24 35 278
interest on franchise adjustment – – 07 07 
total charge to income statement  13 02 19 34
actual return on plan assets 325 27 119 471 
 
group statement of comprehensive income 
uk bus 
2012
 £m 
uk coach  
2012 
£m 
rail 
2012 
£m 
total 
2012
£m 
actual return less expected return on pension scheme assets  86 03 78 167 
other actuarial gains and losses  331 63 84 478
actuarial losses  245 60 06 311
  financial statements pp93167
 
 
149 wwwnationalexpressgroupcom
34 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 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
 
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 £6450m 2012 £6186m including the members’ share of the deficit arising from plans 
that are wholly or partly funded and £15m 2012 £12m from unfunded plans 
 
as at 31 december 2012 
uk bus 
2012
 £m 
uk coach 
2012
£m 
rail  
2012 
£m 
other 
2012
£m 
total 
2012
£m 
equities  856 – 629 – 1485 
bonds  588 658 35 – 1281 
property  37 – – – 37 
insurance policy 2426 – – – 2426 
diversified growth fund 533 – – – 533 
other  40 73 07 – 120 
fair value of scheme assets  4480 731 671 – 5882 
present value of scheme liabilities  4809 565 993 12 6379
franchise adjustment  – – 181 – 181 
defined benefit obligation  4809 565 812 12 6198
members’ share of deficit  – – 123 – 123 
defined benefit pension deficitsurplus 329 166 18 12 193
 
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 financial statements 
notes to the consolidated accounts continued 
 
 
150 national express group plc  
annual report and accounts 2013 
34 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 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 
total 
£m 
fair value of scheme assets at 1 january 2012  4319 679 3210 8208 
expected return on plan assets  239 22 39 300 
cash contributions – employer  97 42 29 168 
cash contributions – employee  13 – 17 30 
benefits paid  274 15 34 323
members’ share of return on assets  – – 78 78 
franchise exit – – 2746 2746
actuarial loss recognised in statement  
of comprehensive income 86 03 78 167 
fair value of scheme assets at 31 december 2012 4480 731 671 5882 
 
 
uk bus 
 £m 
uk coach 
£m 
rail  
£m 
other 
£m 
total 
£m 
defined benefit obligation at 1 january 2012 4487 4933637 14 8631
current service cost  33– 30 – 63
benefits paid  274 15 34 02 325 
contributions by employees 13– 17 – 30
finance charge 219 24 35 – 278
interest on franchise adjustment  – – 07 – 07 
franchise exit – – 3073 – 3073 
members’ share of movement on liabilities – – 123 – 123
actuarial loss recognised in statement  
of comprehensive income 331 63 84 – 478
defined benefit obligation at 31 december 2012 4809 565 812 12 6198 financial statements pp93167
 
 
151 wwwnationalexpressgroupcom
34 pensions and other postemployment benefits continued 
c financial results for pension benefits continued 
the group expects to contribute £154m to its defined benefit pension plans in 2014  
the cumulative amount of actuarial gains and losses recognised in the statement of comprehensive income since 1 january 2004 is £693m 
loss 2012 £503m 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 
2013 
£m 
2012 
£m 
2011 
 £m 
2010
 £m 
2009 
£m 
uk bus      
fair value of scheme assets  4564 4480 4319 4295 3999 
present value of defined benefit obligation 4972 4809 4487 4348 4463
deficit in the scheme 408 329 168 53 464
experience adjustments arising on liabilities  29 50 233 01 02 
experience adjustments arising on assets  14 86 73 213 313 
uk coach      
fair value of scheme assets  746 731 679 596 516 
present value of defined benefit obligation  620 565 493 596 568
surplusdeficit in the scheme  126 166 186 – 52
experience adjustments arising on liabilities  38 – 01 27 – 
experience adjustments arising on assets 28 05 97 23 38 
rail      
fair value of scheme assets  750 671 3210 3183 2844 
present value of defined benefit obligation  858 812 3637 3728 3420
members’ share of deficit  104 123 405 508 557 
deficit in the scheme 04 18 22 37 19
experience adjustments arising on liabilities  01 27 85 122 11
experience adjustments arising on assets  20 80 134 61 232 
other      
fair value of scheme assets  – – – – – 
present value of defined benefit obligation 15 12 14 14 14
deficit in the scheme 15 12 14 14 14
experience adjustments arising on liabilities – – – – –  financial statements 
notes to the consolidated accounts continued 
 
 
152 national express group plc  
annual report and accounts 2013 
35 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 07 years 2012 04 years and other land and buildings have an average 
duration of 07 years 2012 04 years rolling stock agreements have an average life of 07 years 2012 04 years and other plant and 
equipment 07 years 2012 04 years  
  
2013 
£m 
2012 
£m 
future minimum rentals payable under noncancellable operating leases   
within one year  land and buildings  289 233 
 plant and equipment  337 195 
  626 428 
after one year but not more than five years  land and buildings  309 329 
 plant and equipment  471 234 
  780 563 
more than five years  land and buildings  479 510 
 plant and equipment  33 – 
  512 510 
  1918 1501 
   
land and 
buildings   
plant and 
equipment 
rail division commitments   
2013 
£m 
2012  
£m 
2013 
£m 
2012 
£m 
future minimum rentals payable under noncancellable operating leases     
within one year  fixed track access 104 54 – – 
 rolling stock  – – 167 95 
 other  35 19 05 03 
  139 73 172 98 
after one year but not more than five years  fixed track access – – – – 
 rolling stock – – – – 
 other – – – – 
  – – – – 
  139 73 172 98  financial statements pp93167
 
 
153 wwwnationalexpressgroupcom
35 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 63 years 2012 62 years for land and buildings  
41 years 2012 34 years for public service vehicles and 24 years 2012 20 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 07 years 2012 03 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 
contingent liabilities 
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 2013 
there were rail performance bonds of £94m 2012 £40m and rail season ticket bonds of £212m 2012 £211m the group has other 
performance bonds which include performance bonds in respect of businesses in the us of £1051m 2012 £1047m and the rest of europe 
of £262m 2012 £235m letters of credit have been issued to support insurance retentions of £488m 2012 £361m 
 land and buildings public service vehicles other 
other divisions’ commitments 
2013 
£m 
2012 
£m 
2013 
£m 
2012  
£m 
2013 
£m 
2012
£m 
within one year  150 160 163 93 02 04 
after one year but not more than five years  309 329 468 230 03 04 
more than five years 479 510 32 – 01 – 
 938 999 663 323 06 08 
 
2013
£m 
2012
£m 
future minimum rentals receivable under noncancellable operating leases   
within one year  01 04 
after one year but not more than five years – – 
 01 04 
  2013   2012 
 
minimum 
payments 
£m 
present value  
of payments  
£m 
minimum 
payments 
£m 
present value 
of payments 
£m 
within one year  354 322 282 275 
after one year but not more than five years  960 893 1134 1028 
more than five years  116 114 275 244 
total minimum lease payments  1430 1329 1691 1547 
less future financing charges 101 – 144 – 
present value of minimum lease payments  1329 1329 1547 1547 
 
2013 
£m 
2012
£m 
contracted  190 463  financial statements 
notes to the consolidated accounts continued 
 
 
154 national express group plc  
annual report and accounts 2013 
36 related party transactions 
a provision of £02m 2012 £02m has been booked against amounts due from spanish coach and bus associates which are 
presented net 
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 34 
compensation of key management personnel of the group 
 
 
 amount of transactions 
amounts due from  
related parties amounts due to related parties 
 
2013 
£m 
2012
£m 
2013
 £m 
2012 
 £m 
2013 
 £m 
2012
 £m 
associates       
icrrl  – 90 – – – – 
spain associates  18 23 11 09 08 08
total associates  18 113 11 09 08 08
trade investments      
spain trade investments  44 44 05 05 07 05
property transactions      
north america 01 27 – – – 26 
spain  65 37 05 04 02 05
total other related parties  110 108 10 09 09 36
total  128 221 21 18 17 44
 
2013 
£m 
2012 
£m 
total compensation paid to key management personnel note 7 37 39  financial statements pp93167
 
 
155 wwwnationalexpressgroupcom
37 cash flow statement 
the net cash inflows from operating activities include outflows of £229m 2012 £407m 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 £7507m 2012 £7868m as disclosed in note 28 
other noncash movements in net debt represent finance lease additions of £08m 2012 £262m and a £26m negative movement  
in loan and bond arrangement fees 2012 £07m net positive movement the £142m decrease 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 £120m fair value movement 
in bonds and a £22m fair value movement in other debt payable 
total operations 
2013 
£m 
2012 
£m 
net cash inflow from operating activities   
profit before tax 644 698 
net finance costs  498 492 
share of posttax results under the equity method 06 14
depreciation of property plant and equipment  1073 1098 
intangible asset amortisation  493 517 
amortisation of fixed asset grants  11 12
profit on disposal of property plant and equipment 11 45
loss on disposal of business 43 – 
sharebased payments 31 52 
increasedecrease in inventories  22 04 
decrease in receivables  219 684 
increasedecrease in payables  139 1455
decrease in provisions 126 323
cash generated from operations  2964 1696 
 
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 financial statements 
notes to the consolidated accounts continued 
 
 
156 national express group plc  
annual report and accounts 2013 
37 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 
38 postbalance sheet events 
there are no postbalance sheet events 
 
 
 
at 
1 january 
2012 
£m 
cash flow 
£m 
acquisitions
disposals 
£m 
exchange 
differences  
£m 
other 
movements  
£m 
at 
31 december 
2012 
£m 
cash  648 316 90 05 – 417 
overnight deposits  250 36 – – – 286 
other short term deposits  27 02 – – – 25 
cash and cash equivalents  925 282 90 05 – 728 
other debt receivables  07 03 – – – 10 
borrowings       
 bank loans 7910960329 03 1146
 bonds 5834 – – – 66 5900
 fair value of bond hedging derivatives 164 – – – 70 234 
 finance lease obligations  1513 181 11 58 262 1547
 other debt payable  07 654 – – – 661
total borrowings 726915691487 255 9020
net debt 6337 1848 76 82 255 8282
 
2013 
£m 
2012 
£m 
decrease in cash and cash equivalents in the year  324 282
cash inflow from movement in other debt receivables  – 03 
cash outflowinflow from movement in debt and finance leases  1207 1569
change in net debt resulting from cash flows  883 1848
change in net debt resulting from acquisitions and disposals  – 76 
change in net debt resulting from noncash movements 62 173
movement in net debt in the year  821 1945
opening net debt 8282 6337
net debt  7461 8282 financial statements pp93167
financial statements 
company balance sheet 
at 31 december 2013 
 
 
157 wwwnationalexpressgroupcom
 
d finch group chief executive  
j k maiden group finance director 
27 february 2014 
company number 2590560 
 
 note 
2013 
£m 
2012
£m 
fixed assets    
intangible assets 4 03 05 
tangible assets  5  02 01 
investments  6  11172 16051 
derivative financial instruments 7 176 310 
  11353 16367 
current assets    
debtors  8  7117 7420 
derivative financial instruments  7  22 01 
cash at bank and in hand  9  276 366 
  7415 7787 
creditors amounts falling due within one year  10  2736 9449
derivative financial instruments  7 04 05
provisions for liabilities and charges 12 02 26
net current assetsliabilities   4673 1693
total assets less current liabilities   16026 14674 
creditors amounts falling due after more than one year  11  6440 6552
derivatives more than one year 7 05 – 
provisions for liabilities and charges  12  – 27
net assets   9581 8095 
shareholders’ equity    
calledup share capital  15  256 256 
share premium account  16  5327 5327 
capital redemption reserve  16 02 02 
own shares  16 08 05
profit and loss account  16  4004 2515 
shareholders’ equity   9581 8095  financial statements 
notes to the company accounts 
 
158 national express group plc  
annual report and accounts 2013 
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  
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 £2004m 2012 £1807m 
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 pp93167
 
 
159 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  
in accordance with the transition provisions frs 20 has been applied to all grants after 7 november 2002 that were unvested as of  
1 january 2005  
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  financial statements 
notes to the company accounts continued 
 
160 national express group plc  
annual report and accounts 2013 
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 
 
 2013 2012 
 closing rate average rate closing rate average rate 
us dollar  166 156 163 159 
canadian dollar  176 161 161 159 
euro  120 118 123 123 
 
software 
£m 
cost  
at 1 january 2013 06 
disposals 02
at 31 december 2013 04 
amortisation  
at 1 january 2013 01 
charge in the year – 
at 31 december 2013 01 
net book value  
at 31 december 2013 03 
at 31 december 2012  05  financial statements pp93167
 
 
161 wwwnationalexpressgroupcom
5 tangible fixed assets 
6 financial assets investments 
the provisions in the year primarily relate to the liquidation of a number of dormant subsidiary companies as described in note 10 
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 
 
 
 
plant and 
equipment 
£m 
cost  
at 1 january 2013 21 
additions 03 
at 31 december 2013 24 
depreciation  
at 1 january 2013 20 
charge in the year 02 
at 31 december 2013 22 
net book value  
at 31 december 2013 02 
at 31 december 2012 01 
   
investments in 
subsidiaries
 £m 
cost or valuation    
at 1 january 2013   21110 
additions   120 
at 31 december 2013   21230 
provisions    
at 1 january 2013   5059
provided for in the year   4999
at 31 december 2013   10058
net carrying amount    
at 31 december 2013    11172 
at 31 december 2012   16051 
incorporated in guernsey  
national express guernsey limited  insurance captive  financial statements 
notes to the company accounts continued 
 
162 national express group plc  
annual report and accounts 2013 
7 derivative financial instruments 
full details of the group’s financial risk management objectives and policies can be found in note 30 of 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 
at the start of the year the company had amounts owing to a number of dormant subsidiary companies that were subsequently entered into 
liquidation during 2013 the loans were eliminated as part of the liquidation and the carrying value of the investments in these companies was 
written down note 6 
 
2013 
£m 
2012 
£m 
interest rate derivatives 176 310 
derivative financial assets due over one year 176 310 
foreign exchange forward contracts 22 01 
derivative financial assets due under one year  22 01 
interest rate derivatives 05 – 
derivative financial liabilities due over one year 05 – 
foreign exchange forward contracts  04 05
derivative financial liabilities due under one year  04 05
 
2013 
£m 
2012 
£m 
amounts owed by subsidiary undertakings  7001 7322 
corporation tax recoverable 19 – 
deferred tax asset see note 13  60 90 
other debtors  34 05 
prepayments and accrued income  03 03 
 7117 7420 
 
2013 
£m 
2012 
£m 
short term deposits  – 286 
cash at bank  276 80 
 276 366 
 
2013 
£m 
2012 
£m 
bank overdraft 461 408 
bank loans  130 1078 
trade creditors  04 03 
amounts owed to subsidiary undertakings  1668 7410 
corporation tax payable – 68 
accruals and deferred income  170 178 
bonds – accrued interest 303 304 
 2736 9449  financial statements pp93167
 
 
163 wwwnationalexpressgroupcom
11 creditors amounts falling due after more than one year 
12 provisions for liabilities and charges 
on 31 october 2013 the group’s deductible buydown programme ceased and £72m of claims provision was transferred from the company 
to the group’s north america division 
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 2012 £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 £26m 2012 £41m which 
arise where the company does not expect to generate sufficient suitable future profits  
 
2013 
£m 
2012 
£m 
bonds 5795 5900 
other debt payable 645 652 
 6440 6552 
    
claims 
provision 
£m 
at 1 january 2013    53 
charged to profit and loss account     24 
utilised in the year    03
transferred to subsidiary undertaking    72
at 31 december 2013    02 
 
2013
£m 
2012
£m 
accelerated capital allowances  02 02 
other timing differences  01 02 
losses carried forward 57 86 
net deferred tax asset  60 90 
 £m 
deferred tax asset at 1 january 2013 90 
charged to profit and loss 30
deferred tax asset at 31 december 2013 60  financial statements 
notes to the company accounts continued 
 
164 national express group plc  
annual report and accounts 2013 
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 
details of the company’s interest rate management strategy and interest rate swaps are included in note 30 and note 31 of the consolidated 
accounts 
15 calledup share capital 
the total number of share options exercised in the year by employees of the group was 1431193 2012 1984855 of which 1431193 
2012 1919772 exercises were satisfied by transferring shares from the national express employee benefit trust the remaining exercises 
in 2012 were settled via a direct purchase of shares from the open market 
 
2013  
£m  maturity effective interest rate 
2012 
£m maturity  effective interest rate 
current       
bank overdraft  461 on demand libor  1 408 on demand libor  1 
european bank loans 130 july 2018
1
libor 110 794 august 2014
1
 libor  145 
european bank loans –   284 feb 2013 12 
bank loans 130   1078   
accrued interest 303   304   
total current  894   1790   
noncurrent       
7 year sterling bond 3520 january 2017 654 3601 january 2017 654 
10 year sterling bond 2275 june 2020 685 2299 june 2020 685 
bonds 5795   5900   
euro private placement 645 august 2021 455 652 august 2021 455 
other debt payable 645   652   
total noncurrent  6440   6552   
 
2013 
£m 
2012
 £m 
at 31 december   
authorised   
800000000 2012 800000000 ordinary shares of 5p each 400 400 
issued calledup and fully paid   
511738648 2012 511732603 ordinary shares of 5p each  256 256  financial statements pp93167
 
 
165 wwwnationalexpressgroupcom
16 shareholders’ funds and statement of changes in shareholders’ equity 
own shares 
own shares comprises 426630 2012 535658 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 1322165 2012 2075000 shares and 1431193 
20121919772 shares were used to satisfy options granted under a number of the company’s share schemes the market value of these 
shares at 31 december 2013 was £12m 2012 £11m 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 34 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 £31m 2012 £42m 
 
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 
 
share
 capital 
£m 
share 
premium 
£m 
capital 
redemption 
reserve 
£m 
own  
shares  
£m 
profit and
 loss account 
£m 
total 
£m 
at 1 january 2012 256 5327 02 140 1304 6749 
shares purchased  – – – 48 – 48
own shares released to satisfy employee  
share schemes – – – 45 45– 
disposal of own shares – – – 138 98 40 
sharebased payments – – – – 40 40 
profit for the year – – – – 1807 1807 
dividends – – – – 493 493
at 31 december 2012  256 5327 02 05 2515 8095  financial statements 
notes to the company accounts continued 
 
166 national express group plc  
annual report and accounts 2013 
18 sharebased payment  
during the year ended 31 december 2013 the company had the following sharebased payment arrangements which are described  
in note 7b to the consolidated accounts  
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 
there were no options outstanding at 31 december 2013 excluding options with a nil exercise price 2012 none the range of exercise 
prices for options was as follows 
the options have a weighted average contractual life of one year 2012 one year options were exercised throughout the year and the 
weighted average share price at exercise was 200p 2012 223p 
  2013  2012 
 
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  – – 15035 479 
forfeited during the year  – – – – 
group transfers during the year  – – – – 
expired during the year – – 15035 479 
outstanding at 31 december – – – – 
exercisable at 31 december  – – – – 
options with a nil exercise price     
at 1 january  5469047 nil 3819477 nil 
granted during the year  3036117 nil 2564947 nil 
forfeited during the year 48431 nil 208594 nil 
group transfers during the year – nil 313161 nil 
exercised during the year  741976 nil 796482 nil 
expired during the year 542622 nil 223462 nil 
outstanding at 31 december  7172135 nil 5469047 nil 
exercisable at 31 december  – nil 193928 nil 
total outstanding at 31 december  7172135  5469047  
total exercisable at 31 december  –  193928  
exercise price p  2013 2012 
300600 – – 
 – –  financial statements pp93167
 
 
167 wwwnationalexpressgroupcom
18 sharebased payment continued 
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 2012 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  
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 £190m 2012 £159m 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 £488m 2012 £361m 
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 postbalance sheet events 
there are no postbalance sheet events 
 share options with nil exercise price 
  2013   2012 
risk free interest rate  035084 050055 
expected volatility  292442 400445 
peer group volatility  368443 385455 
expected option life in years  35 years 35 years 
expected dividend yield  464488 416456 
weighted average share price at grant date 202p 223p 
weighted average exercise price at grant date nil nil 
weighted average fair value of options at grant date 130p 167p 
 land and buildings 
 
2013 
£m 
2012
£m 
operating leases which expire   
within one year – 01 
within two to five years  01 02  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 
the first ctv is included with the 2014 agm 
mailing and will contain the tax and payment 
information for dividends paid during the tax 
year 201314
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  
now only 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
we are legally obliged to make our register 
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 wwwmpsonlineorg
uk 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
additional information
shareholder information 
168 national express group plc  
annual report and accounts 2013 final dividend ex dividend date 30 april 2014
final dividend record date 2 may 2014
annual general meeting 14 may 2014
final dividend payment date 23 may 2014
halfyear results announced 30 july 2014

interim dividend ex dividend date 3 september 2014

interim dividend record date 5 september 2014

interim dividend payment date 19 september 2014


 provisional dates
additional information
dividends and financial calendar 
additional information pp168172
169 wwwnationalexpressgroupcom additional information
glossary
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
ebit earnings before interest and tax
ebitda is ‘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 and shares 
held in treasury 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 is 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 
170 national express group plc  
annual report and accounts 2013 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 are the statutory results excluding loss on the sale of a business charges for goodwill impairment 
intangible asset amortisation exceptional items and tax relief thereon the board believes that the 
normalised result gives a better indication of the underlying performance of the group
normalised results are defined as the statutory results before the following as appropriate profit or loss on the sale 
of business exceptional profit or loss on sale of noncurrent assets and charges for goodwill 
impairment intangible asset amortisation exceptional items and tax relief thereon
nxea national express east anglia
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
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 railway 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
additional information pp168172
171 wwwnationalexpressgroupcom additional information
five year summary
2013  
£m
2012  
£m
2011  
£m
2010  
£m
2009 
£m
bus and coach core nonrail
revenue 17462 16361 15497 14884 15214
normalised operating profit 1855 1852 1818 1704 1478
return on capital pre tax 111 106 106 102 93
basic earnings per share 201p 216p 207p 188p 277p
group normalised
revenue 18913 18312 22380 21259 27111
normalised operating profit 1929 2119 2252 2042 1598
return on capital pre tax 117 122 141 132 107
diluted earnings per share
†
214p 254p 269p 235p 304p
ifrs
revenue 18913 18312 22380 21259 27111
operating profit 1179 1176 1744 859 06
profitloss before tax 644 698 1294 402 835
basic earningsloss per share
†
111p 118p 199p 120p 176p
dividends per share – declared 100p 975p 950p 600p –
net debtfunds
cash at bank and in hand 409 728 925 1288 1058
other debt receivable 10 10 07 07 08
bonds 5795 5900 5834 5656 –
bank and other loans 193 1146 79 398 6877
fair value of bond hedging derivatives 92 234 164 11 –
finance lease obligations 1329 1547 1513 1316 756
other debt payable 655 661 07 18 12
net debt 7461 8282 6337 6104 6579
gearing ratio 25x 25x 19x 21x 25x
† 
earnings per share figures have been restated for the effect of the 2009 rights issue
172 national express group plc  
annual report and accounts 2013 additional information
corporate information
secretary and registered office 
michael hampson
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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print managed by urbanprintsupportcouk national express group plc annual report and accounts 2013
national express group plc
national express house
mill lane
digbeth
birmingham b5 6dd
tel 44 0 8450 130130
wwwnationalexpressgroupcom national express group plc annual report and accounts 2013


Summary:
 strategic report
financial highlights
a strong performance in 2013
• group revenue increased 3 to £189 billion 2012 
£183 billion with 7 growth in total nonrail revenue
• normalised operating profit from core nonrail businesses 
reached a record £1855 million
• group operating margin of 102 reflects lower rail profits 
and headwinds in spain and the uk
• full year proposed dividend of 100 pence  
up 3 yearonyear
• free cash flow of £1828 million over £30 million  
ahead of target
• core nonrail roce increased to 1 1 1 through focus  
on capital deployment and targeted investment
summary of results 2013
normalised basis ifrs basis
2013 
£m
2012 
£m
2013 
£m
2012 
£m
revenue 18913 18312 18913 18312
operating profit 1929 2119 1179 1176
profit before tax 1437 1641 644 698
profit for the year 1112 1314 583 613
basic earnings per share pence 215 255 111 118
net debt 7461 8282 na na
core nonrail operating profit
£1855
m
2013 £1855m
£1852m
£1818m
2012
2011
group revenue
£18913
m
2013 £18913m
£18312m
£22380m
2012
2011
operating margin
102

2013 102
116
101
2012
2011
dividend per share
100
p
2013 100p
975p
95p
2012
2011
2013 £1828m
£1408m
£984m
2012
2011
free cash flow
£1828
m
core nonrail roce
111

2013 111
106
106
2012
2011
01 wwwnationalexpressgroupcom
strategic report pp0151