John G. Larkin, CFA jglarkin@stifel.com (443) 224-1315

Brady Cox coxbr@stifel.com (443) 224-1319

John Engstrom engstromj@stifel.com (443) 224 1356

Stifel Equity Trading Desk (800) 424-8870

Analysis of Sales/Earnings

Lowering Estimates for Student Transportation; Maintain Buy

We are updating our model to more accurately reflect the $80 million in

operating leases announced by the company for FY2015 in their F4Q14

conference call. As a result of the relatively affordable rates the company was

able to secure, the company opted to lock in the leases to fund their

maintenance capital expenditures for next year as well as some substantial

growth. The company noted that approximately $40.5 million of the operating

leases was attributable to maintenance capex, while the remainder was for

growth.

The companys fleet is now approximately 20% leased, after the additional

operating leases are considered. As well, 5% of the fleet is managed, where the

municipality owns the assets that the company operates. The remainder is

owned by the company. The company noted, however, that they have debt

covenants tied to EBITDA, so the amount of the fleet they are able to lease is

essentially capped (operating leases, of course, have the effect of increasing

operating expenses and decreasing depreciation & amortization, leading to a

lower EBITDA marginall else equal).

Lowering Estimates: The leases should be a margin headwind for the

company, and the company estimated that impact to be a 1.3% to 1.4% from

just the incremental operating leases (before considering lower D&A). As a

result, our FY2015, FY2016, and FY2017 EPS estimate decrease from $0.07,

$0.10, and $0.13 to $0.04, $0.08, and $0.09, respectively. A switch from capital

to operating leases, in itself, does not largely impact the companys cash flow

other than to shift the impact from financing outflows to operating outflows.

However, the total amount was larger than we had modeled for financed capex,

and as such our cash flow is reduced. A similar reduction in net debt, however,

reduces the negative impact to equity value for the company.

Maintain Buy: After incorporating the changes detailed above, our 12-month

fair value estimate reduces slightly, from $7.00 to $6.60. This currently provides

19.1% upside potential over the coming year when the companys 9.3%

dividend yield is included. That is enough upside, in our view, to maintain our

Buy rating on the companys common shares.

I N C O M E L I S T

Changes Previous Current

Rating Buy

Target Price $7.00 $6.60

FY15E EPS $0.07 $0.04

FY16E EPS $0.10 $0.08

FY15E Revenue $552.4

FY16E Revenue $586.4 $588.3

Price (10/13/14): $6.01

52-Week Range: $7 $6

Market Cap.(mm): 489.0

Shr.O/S-Diluted (mm): 81.4

Enterprise Val. (mm): $752.0

Avg Daily Vol (3 Mo): 79,596

LT Debt/Total Cap.: 63.3%

Net Cash/Share: $0.13

Book Value/Share: $1.95

Dividend($ / %) $0.56 / 9.3%

S&P Index 1,874.74

Dividend assumes CAD and USD trade atparity.

EPS 2014A 2015E 2016E

Q1 $(0.11) $(0.11) $(0.11)

Q2 0.04 0.04 0.05

Q3 0.01 0.03 0.04

Q4 0.06 0.07 0.08

FY Jun $(0.01)A $0.04 $0.08

P/E NM NM 75.1x

Revenue 2014A 2015E 2016E

FY Jun $489.5A $552.4 $588.3

EV/Rev 1.5x 1.4x 1.3x

One Year Price Chart October 14, 2014

Student Transportation Inc.

STB NASDAQ

BuyTransportation & Logistics

Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should beaware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors shouldconsider this report as only a single factor in making their investment decision.

All relevant disclosures and certifications appear on pages 7 - 8 of this report.

Target Price Methodology/Risks

Our 12-month target price of $6.60 is derived by taking the average of twomethodologies: dividend discount model and discounted free cash flow-to-equity.Our DDM divides the current annual dividend of C$0.56 by the calculated cost ofequity of 8.0% to arrive at a $7.00 implied price per share (assumes CAD/USD atparity). For the DCF-to-equity methodology, we forecasted FCFE and discounted itto May 2014 at the cost of equity to arrive at an implied value per share of $6.76;we subtract one annual dividend to arrive at a $6.20 target price.

In addition to general market and macroeconomic risks, risks include the company'sability to service and renew existing contracts, maintain its fleet operations, passalong increased transportation costs in long-term contracts, fairly price andintegrate future acquisitions/conversions, maintain its current payout structure, andexecute geographic expansions. Larger demographic trends of sustaineddecreased natality rates could reduce the need for school-related transportation. Afurther increase to the outstanding share count from the dividend re-investmentprogram, a decrease in DRIP participants, or an additional equity capital raise couldstrain the monthly dividend.

Company Description

Student Transportation Inc. is the third largest provider of school bus transportationservices in North America, conducting operations through wholly-owned operatingsubsidiaries. The company has become a leading school bus transportationcompany, aggregating operations through the consolidation of existing providers,targeted bid-ins and conversion of in-house operations in the fragmented industry.The company currently provides school bus transportation services in Ontario,Canada and the following U.S. states: California, Connecticut, Florida, Illinois,Maine, Minnesota, New Hampshire, New Jersey, New York, Pennsylvania, RhodeIsland, Texas, Vermont, Washington, and Wisconsin.

Page 2

Student Transportation Inc. (STB) October 14, 2014

(figures in $US millions, except per share amounts)

Closing

Price Diluted Market Total Cash & Book TTM 2014E TTM TTM TTM TTM TTM TTM PEG Div. 2014E

Company name (Ticker) Rating 10/13/2014 S/O cap. Debt equiv. TEV (a)

2013A(b)

2014E(b)

2015E(b)

value Revenue EBITDA EBITDA EBITDAR (c)

EBIT ROA ROE ROIC ratio(d)

Yield FCF Yld

Passenger Transportation

Student Transportation Inc. (STB) Buy 6.01 81.4 489.0 273.9 10.9 752.0 NM NM NM 3.1x 1.4x NM 11.0x 7.6x NM -0.2% -0.6% 2.4% NM 9.3% -2.0%

Stifel Transportation Average 9,817.3 1,676.6 389.2 11,146.5 21.6x 20.7x 16.4x 3.5x 2.0x 9.2x 9.6x 8.7x 14.7x 6.0% 17.8% 11.3% 1.6 1.0% 3.4%

(a) Total Enterprise Value = Market Capitalization of Equity + Total Debt - Cash + Market Value of Minority Interest

(b) Stifel estimates for those rated and First Call mean estimates for unrated securities

(c) Enterprise value adjusted to include the capitalization of off balance sheet operating leases with lease expense (or rent expense) being added back to EBITDA for the valuation multiple calculation

(d) 2014E P/E divided by First Call mean or Stifel estimated long-term growth rate

Excludes non-recurring items

Calculations may vary due to rounding

Source: Company data , First Call, and Stifel estimates

Earnings per Share

Equity Comps - Transportation

Comparative Valuation Matrix

Equity value as a multiple of Enterprise value as a multiple of

Page 3

Student Transportation Inc. (STB) October 14, 2014

John Larkin, CFA / jglarkin@stifel.com

Brady Cox / coxbr@stifel.com

(figures in $ millions, except per share amounts)

Fiscal year end June 30 Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun

2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 1QA 2QA 3QA 4QA 2014A 1QE 2QE 3QE 4QE 2015E 1QE 2QE 3QE 4QE 2016E 2017E

Gross revenues 62.7 133.0 168.1 205.2 227.9 267.2 305.3 369.0 423.7 73.1 135.5 138.3 142.6 489.5 81.9 153.1 157.6 159.7 552.4 87.2 163.1 167.9 170.1 588.3 626.5

% change y/y NA 26.4% 22.0% 11.1% 17.2% 14.3% 20.9% 14.8% 18.7% 13.6% 14.8% 16.6% 15.5% 12.0% 13.0% 14.0% 12.0% 12.8% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%

Operating expenses:

Cost of operations 43.8 95.4 122.3 146.4 163.2 187.7 222.6 271.2 315.0 65.6 99.0 104.8 103.7 373.1 74.8 114.5 118.9 116.4 424.7 77.2 116.8 122.0 117.8 433.9 461.6

General and administrative 6.1 12.8 17.1 21.2 23.5 28.7 31.4 38.5 42.4 10.9 11.6 12.4 11.7 46.7 12.4 14.4 15.2 14.2 56.3 13.1 15.4 16.5 15.3 60.4 64.2

Non-cash stock compenstion 0.0 0.9 1.9 1.4 2.0 2.0 2.5 3.6 3.3 0.7 2.6 0.7 0.0 3.9 0.9 0.0 0.7 0.0 1.7 0.8 1.2 1.3 1.2 4.5 4.8

Acquisition expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.9 0.0 0.1 0.0 0.2 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Depreciation and depletion expense 8.8 15.0 18.6 22.9 26.0 29.9 31.9 37.1 41.9 4.6 13.4 13.9 14.6 46.4 3.2 12.6 13.0 12.7 41.6 5.8 16.3 16.9 17.5 56.6 60.2

Amortization expense 3.2 6.2 5.9 2.6 2.7 2.8 3.4 3.4 4.2 1.0 0.9 0.8 0.8 3.6 1.1 1.4 1.5 1.4 5.5 1.2 1.5 1.6 1.5 5.8 6.2

Impairment of goodwill 0.0 0.0 0.0 0.0 4.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

(Gain) loss on sale of fixed assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total operating expenses 61.9 130.3 165.7 194.5 221.8 251.0 292.6 354.8 406.8 82.9 127.5 132.8 130.8 474.0 92.5 142.9 149.4 144.8 529.6 98.1 151.4 158.3 153.4 561.1 596.9

Operating ratio 98.7% 98.0% 98.6% 94.8% 97.3% 94.0% 95.9% 96.1% 96.0% 113.3% 94.0% 96.0% 91.8% 96.8% 112.9% 93.3% 94.8% 90.7% 95.9% 112.4% 92.8% 94.3% 90.2% 95.4% 95.3%

EBIT 0.8 2.7 2.4 10.7 6.1 16.1 12.7 14.2 16.9 (9.8) 8.1 5.5 11.7 15.5 (10.6) 10.3 8.2 14.8 22.7 (10.8) 11.7 9.6 16.7 27.2 29.6

% margin 1.3% 2.0% 1.4% 5.2% 2.7% 6.0% 4.1% 3.9% 4.0% -13.3% 6.0% 4.0% 8.2% 3.2% -12.9% 6.7% 5.2% 9.3% 4.1% -12.4% 7.2% 5.7% 9.8% 4.6% 4.7%

EBITDA 12.9 23.9 26.9 36.2 34.8 48.9 47.9 54.8 63.0 (4.1) 22.4 20.2 27.1 65.5 (6.2) 24.3 22.7 29.0 69.8 (3.9) 29.6 28.1 35.7 89.5 95.9

% margin 20.6% 17.9% 16.0% 17.6% 15.3% 18.3% 15.7% 14.9% 14.9% -5.7% 16.5% 14.6% 19.0% 13.4% -7.6% 15.8% 14.4% 18.2% 12.6% -4.4% 18.2% 16.7% 21.0% 15.2% 15.3%

Interest expense 5.7 13.3 15.8 13.5 10.4 10.5 14.4 15.3 14.3 3.8 3.9 4.4 4.6 16.6 4.1 4.6 4.5 4.3 17.6 3.8 4.4 4.3 4.0 16.4 16.6

Foreign currency loss (gain) 0.0 0.0 0.0 0.0 0.0 0.0 (4.6) (0.9) (0.2) 0.3 (0.0) (0.2) 0.3 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unrealized (gain) loss on forward contracts (1.0) (4.3) (1.5) 0.1 7.7 (3.1) 0.5 1.8 0.7 (0.4) 0.3 0.2 (0.8) (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unrealized re-measurement (gain) loss on 6.25% convertible debentures0.0 0.0 0.0 0.0 0.0 0.0 (0.6) 3.0 (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non-cash loss on 6.25% convertible debentures conversion feature0.0 0.0 0.0 10.7 1.3 3.7 0.0 1.0 (1.1) (0.4) 0.0 (0.2) (0.0) (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other expense, net 0.1 0.1 (0.6) (2.0) (5.8) 0.1 1.0 0.8 (2.7) 0.7 (0.6) 0.5 1.0 1.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Profit before tax (4.0) (6.4) (11.3) (11.6) (7.4) 5.0 2.0 (6.8) 6.1 (13.7) 4.5 0.7 6.7 (1.7) (14.7) 5.7 3.7 10.5 5.2 (14.6) 7.4 5.3 12.7 10.8 13.0

% margin -6.4% -4.8% -6.7% -5.7% -3.3% 1.9% 0.7% -1.8% 1.4% -18.7% 3.3% 0.5% 4.7% -0.4% -17.9% 3.7% 2.3% 6.6% 0.9% -16.7% 4.5% 3.1% 7.5% 1.8% 2.1%

Tax rate 35.6% 42.3% 38.7% 39.9% 8.6% 45.5% 24.8% 71.9% 36.6% 35.8% 36.0% 25.9% 29.5% 63.8% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0%

Income before minority interest (2.6) (3.7) (6.9) (7.0) (6.8) 2.7 1.5 (1.9) 3.9 (8.8) 2.9 0.6 4.7 (0.6) (9.1) 3.5 2.3 6.5 3.2 (9.0) 4.6 3.3 7.9 6.7 8.1

Minority interest 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net income (loss) from continuing operations (2.6) (3.9) (7.1) (7.0) (6.8) 2.7 1.5 (1.9) 3.9 (8.8) 2.9 0.6 4.7 (0.6) (9.1) 3.5 2.3 6.5 3.2 (9.0) 4.6 3.3 7.9 6.7 8.1

Extraordinary item (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.2 0.0 0.0 0.0 2.0 0.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net income (2.6) (3.9) (7.1) (7.0) (6.8) 2.7 1.5 2.3 3.9 (8.8) 2.9 2.6 4.7 1.4 (9.1) 3.5 2.3 6.5 3.2 (9.0) 4.6 3.3 7.9 6.7 8.1

% margin -4.1% -2.9% -4.2% -3.4% -3.0% 1.0% 0.5% 0.6% 0.9% -12.0% 2.1% 1.9% 3.3% 0.3% -11.1% 2.3% 1.4% 4.1% 0.6% -10.4% 2.8% 1.9% 4.6% 1.1% 1.3%

Average shares outstanding - basic 12.7 15.1 21.5 32.2 43.3 55.1 57.8 66.1 79.4 81.5 81.9 82.3 82.6 82.1 83.3 83.9 84.4 84.9 84.1 85.4 85.8 86.3 86.8 86.1 87.9

Average shares outstanding - diluted 12.7 15.1 21.5 32.2 43.3 65.1 73.6 84.1 94.0 94.8 99.6 103.8 104.0 100.6 104.6 105.1 105.6 106.1 105.3 99.7 100.1 100.6 101.1 100.4 102.3

EPS - diluted (continuing operations)1

NM ($0.26) ($0.33) ($0.22) ($0.16) $0.05 $0.03 ($0.03) $0.05 ($0.11) $0.04 $0.01 $0.06 ($0.01) ($0.11) $0.04 $0.03 $0.07 $0.04 ($0.11) $0.05 $0.04 $0.08 $0.08 $0.09

% change y/y NA NA 28.1% -34.5% -27.5% -131.2% -46.4% NM NM 8.1% -5.5% -69.0% -31.5% -115.8% 1.1% 17.9% 299.9% 26.3% NM -2.8% 23.1% 40.6% 16.5% 103.7% 18.3%

EPS - diluted NM ($0.26) ($0.33) ($0.22) ($0.16) $0.05 $0.03 $0.03 $0.05 ($0.11) $0.04 $0.03 $0.06 $0.02 ($0.11) $0.04 $0.03 $0.07 $0.04 ($0.11) $0.05 $0.04 $0.08 $0.08 $0.09

% change y/y NA NA 28.1% -34.5% -27.5% -131.2% -46.4% NM 42.9% 8.1% -5.5% 45.6% -31.5% -64.6% 1.1% 17.9% -14.9% 26.3% 120.2% -2.8% 23.1% 40.6% 16.5% 103.7% 18.3%

CY EPS - diluted (continuing operations) ($0.39) ($0.49) ($0.28) ($0.32) $0.15 $0.03 ($0.09) $0.05 $0.03 $0.01 $0.06 ($0.11) $0.04 ($0.00) $0.03 $0.07 ($0.11) $0.05 $0.04 $0.04 $0.08 ($0.11) $0.06 $0.07

% change y/y NA 24.4% -42.5% 13.5% -147.9% -81.8% NM NM NM -69.0% -31.5% 1.1% 17.9% NM 299.9% 26.3% -2.8% 23.1% NM 40.6% 16.5% 2.2% 8.6% NM

CY EPS - diluted ($0.39) ($0.49) ($0.28) ($0.32) $0.15 $0.03 ($0.09) $0.10 $0.03 $0.03 $0.06 ($0.11) $0.04 $0.02 $0.03 $0.07 ($0.11) $0.05 $0.04 $0.04 $0.08 ($0.11) $0.06 $0.07

% change y/y NA 24.4% -42.5% 13.5% -147.9% -81.8% NM NM NM 45.6% -31.5% 1.1% 17.9% NM -14.9% 26.3% -2.8% 23.1% NM 40.6% 16.5% 2.2% 8.6% NM

(1) For certain periods, the EPS calculation excludes the conversion of convertible debentures as they are anti-dilutive, thus EPS is based off of the basic shares outstanding.

Source: Company data and Stifel estimates

FY 2014 FY 2015 FY 2016

Student Transportation Income Statement

Page 4

Student Transportation Inc. (STB) October 14, 2014

John Larkin, CFA / jglarkin@stifel.com

Brady Cox / coxbr@stifel.com

(figures in $ millions, except per share amounts)

Fiscal year end June 30 Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun

2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 1QA 2QA 3QA 4QA 1QE 2QE 3QE 4QE 1QE 2QE 3QE 4QE 2017E

ASSETS

Current assets

Cash and cash equivalents 1.7 7.7 4.0 3.5 0.6 4.8 3.7 5.0 6.9 2.0 3.3 4.6 10.9 1.0 2.0 2.0 1.0 1.0 2.0 2.0 2.0 2.0

Accounts receivable, less allowances 9.5 12.2 15.0 19.7 18.1 24.9 30.8 35.5 41.0 51.0 43.8 57.3 44.0 54.4 55.5 63.9 50.3 59.1 59.0 66.5 51.8 55.1

Inventory 1.1 1.6 1.6 2.2 2.1 2.2 2.9 3.3 3.3 3.5 3.6 3.7 3.9 4.0 4.5 4.5 4.6 4.5 5.0 4.9 4.9 5.2

Prepaid Expenses 3.5 6.0 9.0 11.1 12.9 13.0 6.6 12.7 7.7 12.9 9.6 9.6 9.6 13.0 12.9 15.0 14.9 14.5 14.2 16.2 15.9 16.9

Other current assets 0.6 3.5 3.6 4.6 2.1 3.2 4.6 4.8 3.5 7.7 9.4 13.8 8.5 8.2 9.0 10.2 7.1 9.2 9.9 11.0 7.5 8.0

Total current assets 16.5 30.9 33.2 41.2 35.7 48.2 48.6 61.2 62.4 77.0 69.8 89.1 76.9 80.6 84.0 95.6 77.8 88.3 90.2 100.5 82.1 87.3

Land 0.2 0.2 0.2 2.6 3.4 2.8 2.8 4.7 5.3 6.1

Buildings 0.2 0.2 0.2 2.8 3.5 2.4 3.1 5.1 5.3 5.1

Transportation equipment 68.2 116.8 127.2 166.8 195.9 227.9 260.3 334.0 352.7 418.9

Leasehold improvements 0.2 0.3 0.5 0.8 1.0 1.2 1.5 3.8 5.1 6.5

Other machinery and equipment 0.9 1.3 1.7 2.8 4.1 5.5 7.0 9.2 14.1 20.2

Total property and equipment 69.7 118.9 129.8 175.9 207.9 239.7 274.6 356.7 382.5 456.8

Less accumulated depreciation (8.8) (23.3) (38.6) (55.4) (75.4) (93.1) (110.7) (137.2) (164.7) (225.5)

Property and equipment, net 60.9 95.5 91.2 120.5 132.5 146.6 164.0 219.5 217.8 248.9 235.8 241.7 231.4 235.2 223.6 211.4 198.8 204.1 194.4 184.3 172.9 145.3

Other assets 7.5 7.9 7.5 2.7 2.1 1.7 15.9 16.6 17.1 19.6 20.7 20.6 20.9 20.9 20.9 20.9 20.9 20.9 20.9 20.9 20.9 20.9

Oil and gas interests, net 0.0 0.0 0.0 16.0 16.9 16.2 7.0 7.2 7.5 7.7 8.2 8.1 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9

Foreign currency exchange contracts 0.9 4.0 4.7 3.6 0.0 0.6 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other intangible assets, net 48.9 51.7 47.5 53.9 53.9 58.7 68.7 74.6 69.8 69.2 67.7 68.0 67.7 67.7 67.7 67.7 67.7 67.7 67.7 67.7 67.7 67.7

Goodwill 44.0 64.1 73.9 98.9 94.0 103.8 125.8 142.7 138.3 142.4 141.1 139.5 139.2 139.2 139.2 139.2 139.2 139.2 139.2 139.2 139.2 139.2

Total assets 178.7 254.2 258.0 336.7 335.2 375.8 430.1 521.8 512.8 564.8 543.2 566.9 543.8 551.4 543.2 542.7 512.3 528.1 520.2 520.4 490.6 468.2

LIABILITIES AND EQUITY

Current liabilities

Accounts payable 0.9 1.6 1.3 1.7 1.2 1.2 1.8 1.0 1.7 2.7 1.7 1.6 1.7 1.8 3.3 2.6 2.7 2.0 3.6 2.8 2.9 3.1

Accrued expenses and other current liabilities 6.6 12.4 13.5 16.7 20.5 27.7 24.4 37.5 39.4 48.4 41.4 57.5 48.7 48.5 45.7 57.3 57.4 55.2 51.1 62.4 61.8 65.8

Income taxes payable 0.0 0.0 0.0 2.0 2.1 4.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 0.2 1.3 3.8 2.2 0.2 1.4 4.0 4.3

Current portion of long-term debt 0.4 2.5 2.3 0.3 0.6 0.8 35.8 0.6 0.0 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total current liabilities 7.9 16.5 17.1 20.6 24.3 33.8 62.1 39.1 41.1 51.3 43.4 59.4 50.5 52.5 49.3 61.5 64.1 59.6 55.0 66.9 68.9 73.3

Long-term debt 85.7 106.9 123.2 111.5 95.0 143.0 161.6 215.4 220.2 282.5 273.6 285.5 273.9 296.9 296.5 290.2 259.2 297.1 298.0 291.9 261.1 262.2

Foreign currency exchange contracts 0.0 0.0 0.0 0.0 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Asset retirement obligation 0.0 0.0 0.0 0.3 0.6 0.8 0.7 0.5 0.6 0.6 0.6 0.6 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4

Future income tax liability 27.0 32.5 24.9 29.4 29.4 32.2 36.4 42.7 40.3 36.6 37.9 39.8 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5

Class B-Series Two and Three common share liability 0.0 0.0 2.2 3.4 2.3 2.4 2.0 3.2 2.4 2.4 2.5 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7

Other liabilities 0.0 0.0 0.0 0.0 0.1 0.3 10.8 13.0 13.7 13.6 13.7 15.1 15.7 15.7 15.7 15.7 15.7 15.7 15.7 15.7 15.7 15.7

Minority interest 6.3 7.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Common stock 57.5 112.1 128.0 236.3 276.9 281.5 314.4 404.9 434.2 436.5 438.8 440.9 443.1

Equity component of convertible debentures 0.0 0.0 0.0 0.0 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Accumulated deficit (5.6) (16.3) (34.1) (58.8) (86.4) (112.8) (149.7) (191.3) (231.9) (251.6) (259.7) (270.8) (276.9)

Accumulated other comprehensive loss (0.2) (4.9) (3.4) (6.0) (8.6) (6.1) (8.1) (5.7) (7.9) (7.0) (7.5) (6.2) (7.1)

Total stockholders' equity 51.7 90.8 90.5 171.5 181.9 163.4 156.5 207.8 194.5 177.9 171.6 163.9 159.0 141.7 137.1 130.6 128.6 111.0 106.8 101.3 100.3 72.4

Total liabilities and stockholders' equity 178.7 254.2 258.0 336.7 335.2 375.8 430.1 521.8 512.8 564.8 543.2 566.9 543.8 551.4 543.2 542.7 512.3 528.1 520.2 520.4 490.6 468.2

Book value per share $4.09 $5.46 $3.82 $4.35 $3.96 $1.91 $2.08 $2.23 $2.06 $1.88 $1.72 $1.58 $1.53 $1.36 $1.30 $1.24 $1.21 $1.11 $1.07 $1.01 $0.99 $0.70

Cash per share $0.13 $0.46 $0.17 $0.09 $0.01 $0.06 $0.05 $0.05 $0.07 $0.02 $0.03 $0.04 $0.10 $0.01 $0.02 $0.02 $0.01 $0.01 $0.02 $0.02 $0.02 $0.02

Average age of receivables (days) 29.8 33.4 33.9 29.0 30.1 33.2 35.1 35.2 33.5 57.3 31.9 33.4 32.4 54.8 32.7 34.6 32.6 57.2 33.1 34.1 31.7 31.7

Net working capital 8.5 14.5 16.1 20.5 11.4 14.3 (13.5) 22.1 21.2 25.7 26.4 29.7 26.3 28.1 34.7 34.1 13.7 28.7 35.1 33.6 13.2 14.0

Current ratio 2.1x 1.9x 1.9x 2.0x 1.5x 1.4x 0.8x 1.6x 1.5x 1.5x 1.6x 1.5x 1.5x 1.5x 1.7x 1.6x 1.2x 1.5x 1.6x 1.5x 1.2x 1.2x

Total assets 178.7 254.2 258.0 336.7 335.2 375.8 430.1 521.8 512.8 564.8 543.2 566.9 543.8 551.4 543.2 542.7 512.3 528.1 520.2 520.4 490.6 468.2

Long-term debt 85.7 106.9 123.2 111.5 95.0 143.0 161.6 215.4 220.2 282.5 273.6 285.5 273.9 296.9 296.5 290.2 259.2 297.1 298.0 291.9 261.1 262.2

Total debt 86.1 109.4 125.5 111.8 95.5 143.8 197.4 216.0 220.2 282.7 273.8 285.7 274.1 297.1 296.7 290.4 259.4 297.3 298.2 292.1 261.3 262.4

Net debt (cash) 84.5 101.7 121.5 108.3 95.0 138.9 193.7 211.0 213.3 280.7 270.6 281.1 263.2 296.1 294.7 288.4 258.4 296.3 296.2 290.1 259.3 260.4

Debt / total book capitalization 62.5% 54.6% 58.1% 39.5% 34.4% 46.8% 55.8% 51.0% 53.1% 61.4% 61.5% 63.5% 63.3% 67.7% 68.4% 69.0% 66.9% 72.8% 73.6% 74.3% 72.3% 78.4%

Debt / TTM EBITDA 3.9x 4.4x 4.6x 3.9x 3.2x 3.1x 4.3x 3.7x 3.5x 3.9x 4.3x 4.4x 4.3x # 4.5x 4.5x 4.3x 3.9x # 3.9x 3.8x 3.6x 3.1x 2.9x

Debt / TTM EBIT -24.0x -80.4x 52.4x 13.1x 18.2x 9.5x 16.4x 14.3x 13.1x 13.6x 15.3x 17.6x 18.0x 19.4x 17.6x 15.0x 12.1x 12.4x 12.4x 11.6x 10.2x 9.4x

Stockholders' equity 51.7 90.8 90.5 171.5 181.9 163.4 156.5 207.8 194.5 177.9 171.6 163.9 159.0 141.7 137.1 130.6 128.6 111.0 106.8 101.3 100.3 72.4

Source: Company data and Stifel estimates

Student Transportation Balance Sheet

FY 2014 FY 2015 FY 2016

Page 5

Student Transportation Inc. (STB) October 14, 2014

John Larkin, CFA / jglarkin@stifel.com

Brady Cox / coxbr@stifel.com

(figures in $ millions, except per share amounts)

Fiscal year end June 30 Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun

2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 1QA 2QA 3QA 4QA 2014A 1QE 2QE 3QE 4QE 2015E 1QE 2QE 3QE 4QE 2016E 2017E

Operating Activities

Net income (2.6) (3.9) (7.1) (7.0) (6.8) 2.7 1.5 2.3 3.9 (8.8) 2.9 2.6 4.7 1.4 (9.1) 3.5 2.3 6.5 3.2 (9.0) 4.6 3.3 7.9 6.7 8.1

Adjustments

Minority Interst 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Deferred income taxes (1.5) (2.7) (4.4) (7.0) (2.7) (0.7) (0.8) (4.3) 1.0 (5.1) 1.5 0.4 3.3 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unrealized (gain) loss on forward contracts (1.0) (4.3) (1.5) 0.1 7.7 (3.1) 0.5 1.8 0.7 (0.4) 0.3 0.2 (0.8) (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Loss on subordinated notes extinguishment 0.0 0.0 0.0 10.8 1.4 3.7 0.0 1.0 (1.1) (0.4) 0.0 (0.2) (0.0) (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unrealized re-measurement (gain) loss on 6.25% convertible debentures0.0 0.0 0.0 0.0 0.0 0.0 (0.6) 3.0 (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unrealized foreign currency loss (gain) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.7) 0.2 (0.3) 0.4 0.1 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Amortization of deferred financing costs 0.7 1.4 1.6 0.7 0.7 1.1 2.9 1.7 2.2 0.3 0.4 0.5 0.5 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non-cash stock compenstion 0.0 0.9 1.9 1.4 2.0 2.0 2.5 3.6 3.3 0.7 2.6 0.7 0.0 3.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gain on disposal of fixed assets 0.1 0.1 (0.2) (0.4) (0.1) (0.1) (0.7) (0.6) (1.5) (0.1) (0.3) (0.1) 0.0 (0.5) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gain on bargain purchase of businesses acquired 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (6.9) 0.0 0.0 0.0 (2.8) 0.0 (2.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Depreciation and depletion expense 8.8 15.0 18.6 22.9 26.0 29.9 31.9 37.1 41.9 4.6 13.4 13.9 14.6 46.4 3.2 12.6 13.0 12.7 41.6 5.8 16.3 16.9 17.5 56.6 60.2

Amortization expense 3.2 6.2 5.9 2.6 2.7 2.8 3.4 3.4 4.2 1.0 0.9 0.8 0.8 3.6 1.1 1.4 1.5 1.4 5.5 1.2 1.5 1.6 1.5 5.8 6.2

Impairment of goodwill 0.0 0.0 0.0 0.0 4.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Changes in certain working capital items:

Accounts receivable 4.2 0.9 (2.8) (2.5) 1.2 (6.3) (3.9) 3.6 (5.7) (9.9) 6.9 (13.8) 13.5 (3.2) (10.3) (1.1) (8.4) 13.6 (6.2) (8.8) 0.1 (7.4) 14.7 (1.5) (3.4)

Prepaids, inventory and other current assets 0.5 (3.5) (2.1) (1.9) (0.6) 0.7 (2.2) (7.9) 3.3 (13.0) 4.2 (4.5) 3.8 (9.5) (3.5) (0.4) (2.1) 0.0 (6.0) 0.5 (0.2) (1.9) 0.3 (1.3) (1.3)

Accounts payable (1.2) 0.7 (0.3) 0.3 (0.4) (0.1) 0.4 (1.0) 0.8 0.9 (0.9) (0.1) 0.0 (0.1) 0.3 (0.8) (1.1) 3.1 1.4 (2.1) (0.7) (1.0) 3.5 (0.5) (0.5)

Accrued expenses and other current liabilities 0.0 1.6 (0.1) 2.4 0.1 8.9 (2.9) (1.8) 0.2 9.0 (9.5) 12.1 (7.7) 3.9 (0.1) (1.4) 11.0 0.2 9.8 (2.9) (2.6) 10.6 (0.6) 4.5 4.2

Changes in other assets and liabilities 0.0 0.2 0.4 (0.2) (0.0) 0.1 (0.1) 0.0 (0.0) (0.1) 0.3 1.8 0.6 2.5 2.0 (1.8) 1.2 2.4 3.8 (1.5) (2.1) 1.3 2.6 0.2 0.3

Total change in net working capital 3.5 (0.1) (4.9) (1.8) 0.3 3.4 (8.6) (7.1) (1.5) (13.1) 1.0 (4.5) 10.2 (6.4) (11.6) (5.6) 0.6 19.4 2.7 (15.0) (5.4) 1.5 20.4 1.5 (0.7)

Net cash provided by operations 11.3 12.8 10.1 22.4 35.5 41.7 32.1 34.9 52.1 (21.1) 22.3 11.8 33.4 46.4 (16.4) 11.9 17.3 40.1 53.0 (17.0) 17.0 23.3 47.3 70.5 73.7

Investing Activities

Capital expenditures, net (2.0) (22.5) (11.5) (28.3) (36.5) (36.6) (13.5) (48.6) (41.8) (30.4) (3.3) (2.0) (2.0) (37.8) (8.2) (2.4) (2.4) (1.6) (14.5) (12.2) (8.2) (8.4) (7.7) (36.4) (38.8)

Acquisition of business (132.2) (43.4) (10.1) (64.1) (12.5) (16.6) (53.3) (60.9) 0.0 (5.5) 0.0 (17.2) 0.0 (22.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Proceeds on sale of equipment 0.9 0.3 1.5 1.4 0.5 4.8 1.9 1.0 2.9 0.1 0.5 0.4 0.2 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other (8.9) 0.0 0.0 0.0 0.0 0.0 (0.8) (0.9) (0.4) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net cash (used in) provided by investing activities (142.2) (65.6) (20.1) (91.0) (48.5) (48.4) (65.7) (109.5) (39.4) (35.8) (2.8) (18.9) (1.9) (59.4) (8.2) (2.4) (2.4) (1.6) (14.5) (12.2) (8.2) (8.4) (7.7) (36.4) (38.8)

Cash available for (required by) financing (130.9) (52.8) (10.0) (68.7) (12.9) (6.7) (33.6) (74.5) 12.7 (56.9) 19.5 (7.1) 31.5 (13.0) (24.6) 9.5 15.0 38.5 38.4 (29.2) 8.8 14.9 39.7 34.1 34.9

Common share/Convertible Debenture offerings 57.5 54.6 16.2 57.8 35.5 96.8 60.0 79.6 0.0 0.0 71.4 0.0 (71.4) 0.0 0.0 0.0 0.0 (50.0) (50.0) 0.0 0.0 0.0 0.0 0.0 0.0

Expenses associated with convertible debenture offerings 0.0 0.0 0.0 (0.6) (0.6) (4.9) (3.0) 0.0 0.0 0.0 0.0 0.0 71.4 71.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Redemption of Class B Series Two and Three common shares0.0 0.0 (8.7) (0.3) (0.9) (40.7) (1.8) (1.5) (1.8) (0.2) (0.2) (0.2) (0.7) (1.3) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Deferred financing costs (7.0) (2.2) (1.6) (1.0) (0.1) (0.3) (1.8) (0.8) (0.8) 0.0 (3.5) (0.0) (0.0) (3.6) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Repurchase/redemption of common stock 0.0 0.0 (0.3) (0.4) 0.0 0.0 0.0 (0.6) (2.5) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Dividends paid (2.8) (7.3) (11.1) (17.3) (20.5) (24.3) (25.4) (28.3) (34.5) (8.7) (8.8) (8.5) (8.2) (34.1) (8.3) (8.1) (8.7) (8.5) (33.7) (8.6) (8.8) (8.8) (8.8) (34.9) (36.0)

Borrowings on credit facility 114.4 125.6 130.2 134.3 100.3 166.1 237.2 202.5 139.9 77.6 24.0 35.5 27.1 164.2 23.0 0.0 0.0 19.0 42.0 37.8 0.0 0.0 0.0 37.8 41.2

Payments on credit facility (29.4) (111.3) (115.5) (101.7) (103.6) (179.7) (233.7) (175.2) (110.8) (16.8) (101.2) (18.3) (43.4) (179.7) 0.0 (0.4) (6.2) 0.0 (6.6) 0.0 0.9 (6.1) (30.8) (36.0) (40.1)

Payments on seller debt (0.1) (0.5) (2.0) (3.0) (0.2) (1.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net cash (used in) provided by financing activities 132.6 58.8 7.2 67.9 9.9 11.9 31.5 75.6 (10.6) 51.9 (18.2) 8.5 (25.3) 16.9 14.7 (8.5) (15.0) (39.5) (48.3) 29.2 (7.8) (14.9) (39.7) (33.1) (34.9)

Beginning cash balance 0.0 1.7 7.7 4.0 3.5 0.6 4.8 3.7 5.0 6.9 2.0 3.3 4.6 6.9 10.9 1.0 2.0 2.0 10.9 1.0 1.0 2.0 2.0 1.0 2.0

Net increase (decrease) in cash and equivalents 1.7 6.0 (2.8) (0.7) (3.0) 5.1 (2.1) 1.1 2.1 (5.1) 1.3 1.4 6.2 3.9 (9.9) 1.0 0.0 (1.0) (9.9) 0.0 1.0 0.0 0.0 1.0 0.0

Effect of exchange rate changes on cash 0.0 0.0 (0.9) 0.2 0.1 (0.8) 0.9 0.2 (0.1) 0.1 0.0 (0.1) (0.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Ending cash balance 1.7 7.7 4.0 3.5 0.6 4.8 3.7 5.0 6.9 2.0 3.3 4.6 10.9 10.9 1.0 2.0 2.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 2.0

Net Free cash flow (after dividends) 7.3 (16.7) (10.9) (21.8) (20.8) (14.4) (4.9) (41.0) (21.4) (60.1) 10.8 1.7 23.3 (24.4) (32.9) 1.4 6.2 30.0 4.8 (37.8) 0.1 6.1 30.8 (0.8) (1.1)

Free cash flow (before dividends) 9.2 (9.7) (1.4) (5.9) (0.9) 5.1 18.6 (13.7) 10.3 (51.5) 19.1 9.8 31.3 8.6 (24.6) 9.5 15.0 38.5 38.4 (29.2) 8.8 14.9 39.7 34.1 34.9

Per share $0.73 ($0.65) ($0.07) ($0.18) ($0.02) $0.08 $0.25 ($0.16) $0.11 ($0.54) $0.19 $0.09 $0.30 $0.09 ($0.24) $0.09 $0.14 $0.36 $0.36 ($0.29) $0.09 $0.15 $0.39 $0.34 $0.34

Current share price $6.01

Net FCF yield (after dividends) 9.5% -18.4% -8.5% -11.3% -8.0% -3.7% -1.1% -8.1% -3.8% -4.0% 0.8% -0.1% -0.2%

FCF yield (before dividends) 12.1% -10.7% -1.1% -3.1% -0.4% 1.3% 4.2% -2.7% 1.8% 1.4% 6.1% 5.7% 5.7%

Dividend/FCF (before dividends) 30.7% -75.2% -792.6% -291.7% -2245.3% 480.9% 136.6% -206.5% 336.8% 396.3% 87.5% 102.4% 103.2%

CapEx, net/OCF 17.9% 176.0% 113.8% 126.4% 102.6% 87.9% 42.0% 139.3% 80.3% 81.4% 27.4% 51.6% 52.6%

Source: Company data and Stifel estimates

FY 2014 FY 2015 FY 2016

Student Transportation Statement of Cash Flows

Page 6

Student Transportation Inc. (STB) October 14, 2014

Important Disclosures and Certifications

I, John G. Larkin, certify that the views expressed in this research report accurately reflect my personal viewsabout the subject securities or issuers; and I, John G. Larkin, certify that no part of my compensation was, is,or will be directly or indirectly related to the specific recommendations or views contained in this researchreport. For our European Conflicts Management Policy go to the research page at www.stifel.com.

Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q34

5

6

7

8

2012 2013 2014 2015

05/22/12B:$7.3

09/28/12B:$7.2

11/13/12B:$7

05/13/13B:$6.9

01/09/14B:$7

Rating and Price Target History for: Student Transportation Inc. (STB) as of 10-13-2014

Created by BlueMatrix

Rating Key

B - Buy UR - Under Review

H - Hold NR - No Rating

S - Sell NA - Not Applicable

I - Initiation RS - Rating Suspended

D - Dropped

For a price chart with our ratings and target price changes for STB go tohttp://sf.bluematrix.com/bluematrix/Disclosure?ticker=STB

Student Transportation Inc. price chart reflects trading activity since shares began trading on NASDAQ.

Stifel expects to receive or intends to seek compensation for investment banking services from Student TransportationInc. in the next 3 months.

Stifel makes a market in the securities of Student Transportation Inc..

Stifel research analysts receive compensation that is based upon (among other factors) Stifel's overall investmentbanking revenues.

Our investment rating system is three tiered, defined as follows:

BUY -For U.S. securities we expect the stock to outperform the S&P 500 by more than 10% over the next 12 months.For Canadian securities we expect the stock to outperform the S&P/TSX Composite Index by more than 10% over thenext 12 months. For other non-U.S. securities we expect the stock to outperform the MSCI World Index by more than10% over the next 12 months. For yield-sensitive securities, we expect a total return in excess of 12% over the next 12months for U.S. securities as compared to the S&P 500, for Canadian securities as compared to the S&P/TSXComposite Index, and for other non-U.S. securities as compared to the MSCI World Index.

HOLD -For U.S. securities we expect the stock to perform within 10% (plus or minus) of the S&P 500 over the next 12months. For Canadian securities we expect the stock to perform within 10% (plus or minus) of the S&P/TSX CompositeIndex. For other non-U.S. securities we expect the stock to perform within 10% (plus or minus) of the MSCI WorldIndex. A Hold rating is also used for yield-sensitive securities where we are comfortable with the safety of the dividend,but believe that upside in the share price is limited.

SELL -For U.S. securities we expect the stock to underperform the S&P 500 by more than 10% over the next 12months and believe the stock could decline in value. For Canadian securities we expect the stock to underperform theS&P/TSX Composite Index by more than 10% over the next 12 months and believe the stock could decline in value.For other non-U.S. securities we expect the stock to underperform the MSCI World Index by more than 10% over the

Page 7

Student Transportation Inc. (STB) October 14, 2014

next 12 months and believe the stock could decline in value.

Of the securities we rate, 52% are rated Buy, 46% are rated Hold, and 2% are rated Sell.

Within the last 12 months, Stifel or an affiliate has provided investment banking services for 21%, 8% and 0% of thecompanies whose shares are rated Buy, Hold and Sell, respectively.

Additional Disclosures

Student Transportation Inc. is on the Income Opportunity Ideas List. This Income Opportunity Ideas List representsanalysts best yield ideas, however is not intended to represent a model portfolio. This list offers what the analystsbelieve are companies with solid fundamentals, a favorable valuation, and a current dividend of 2% or higher.

Please visit the Research Page at www.stifel.com for the current research disclosures and respective target pricemethodology applicable to the companies mentioned in this publication that are within Stifel's coverage universe. For adiscussion of risks to target price please see our stand-alone company reports and notes for all Buy-rated stocks.

The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by usand is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell anysecurities referred to herein. Opinions expressed are subject to change without notice and do not take into account theparticular investment objectives, financial situation or needs of individual investors. Employees of Stifel or its affiliatesmay, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinionsexpressed within. Past performance should not and cannot be viewed as an indicator of future performance.

Stifel is a multi-disciplined financial services firm that regularly seeks investment banking assignments andcompensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financialadvisor in a merger or acquisition, or serving as a placement agent in private transactions.

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Student Transportation Inc. (STB) October 14, 2014