thomas cook group plc
annual report  accounts 2008
wwwthomascookgroupcom
chairman’s statement 2
business at a glance 4
where we operate 6
chief executive ofﬁcer’s statement 8
our marketplace 12
our strategy 14
our strategy in action 17
operational review 28
corporate social responsibility 38
financial review 41
principal risks and uncertainties 46
directors’ report – business review
directors’ report – corporate governance
financial statements
contents
board of directors 48
group executive board 50
corporate governance report 51
other disclosures 57
remuneration report 59
independent auditors’ report 67
group income statement 68
group statement of recognised income
and expense 69
group balance sheet 70
group cash ﬂow statement 72
notes to the group ﬁnancial statements 73
company balance sheet 111
company statement of recognised income
and expense 112
company cash ﬂow statement 112
notes to the company ﬁnancial statements 113
appendix 1 – unaudited pro forma ﬁnancial information 120
appendix 2 – key performance indicators deﬁnitions 126
shareholder information 127
we are one of the world’s leading leisure travel groups with a focused
strategy a ﬂexible business model and a portfolio of marketleading
travel brands across our group we are committed to our vision of
going further to make dreams come true – exceeding our customers’
expectations offering fulﬁlling careers to the best team of people in
the industry and delivering sustainable value to our shareholders
with a heritage of more than 167 years in travel we understand the
importance of thinking beyond the short term we are focused on
building a stronger business today – to ensure we remain market
leaders tomorrow
thomas cook group plc annual report  accounts 2008
thom cookcoverqxdlayout 1  26109  1501  page 1 thomas cook group plc
annual report  accounts 2008
wwwthomascookgroupcom
chairman’s statement 2
business at a glance 4
where we operate 6
chief executive ofﬁcer’s statement 8
our marketplace 12
our strategy 14
our strategy in action 17
operational review 28
corporate social responsibility 38
financial review 41
principal risks and uncertainties 46
directors’ report – business review
directors’ report – corporate governance
financial statements
contents
board of directors 48
group executive board 50
corporate governance report 51
other disclosures 57
remuneration report 59
independent auditors’ report 67
group income statement 68
group statement of recognised income
and expense 69
group balance sheet 70
group cash ﬂow statement 72
notes to the group ﬁnancial statements 73
company balance sheet 111
company statement of recognised income
and expense 112
company cash ﬂow statement 112
notes to the company ﬁnancial statements 113
appendix 1 – unaudited pro forma ﬁnancial information 120
appendix 2 – key performance indicators deﬁnitions 126
shareholder information 127
we are one of the world’s leading leisure travel groups with a focused
strategy a ﬂexible business model and a portfolio of marketleading
travel brands across our group we are committed to our vision of
going further to make dreams come true – exceeding our customers’
expectations offering fulﬁlling careers to the best team of people in
the industry and delivering sustainable value to our shareholders
with a heritage of more than 167 years in travel we understand the
importance of thinking beyond the short term we are focused on
building a stronger business today – to ensure we remain market
leaders tomorrow
thomas cook group plc annual report  accounts 2008
thom cookcoverqxdlayout 1  26109  1439  page 1 celebrating 200 years
thomas cook 1808 – 1892
1808
design and production
black sun plc london
44 0 20 7736 0011
photos thomas cook getty
printed by park communications on hello silk fsc certiﬁed
paper and tauro from veriﬁed sustainable sources
1865
to cope with the number of tourists who
wish to visit the continent thomas opens
an ofﬁce in london – at 98 fleet street – in
april 1865 this is thomas cook’s ﬁrst high
street shop and it is to be managed by his
son john mason cook who joined the
family business only a few months before
187273
the climax of thomas’ travelling career
comes in september 1872 when at the age
of 63 he departs from liverpool with eight
companions on a 25000mile tour of the
world that will keep him away from home
for 222 days it has long been his ambition
to travel to ‘egypt via china’ but such a trip
only becomes practicable following the
opening of the suez canal in 1869
1874
cook’s circular note an early form of the
travellers cheque is launched in new york
1892
john mason cook takes over the
business on the death of his father
1808
thomas cook is born on 22 november
in melbourne derbyshire he is the
son of a labourer and the grandson
of a baptist minister
1828
on the completion of his apprenticeship
as a woodturner and cabinetmaker
thomas decides instead to pursue his
religious interests and becomes a
wandering baptist missionary
1841
thomas conducts his ﬁrst excursion
a 12mile rail journey from leicester to
a temperance gala in loughborough on
monday 5 july 1841 some 500 passengers
pay a shilling each for the experience the
day is a great success and thomas is soon
being asked to organise similar outings
for other local temperance societies and
sunday schools
1845
thomas conducts his ﬁrst trip for proﬁt
it is a railway journey to liverpool from
leicester nottingham and derby
1855
thomas successfully escorts his ﬁrst
‘package tourists’ to europe during the
summer of 1855 the ‘grand circular tour’
includes brussels cologne the rhine
heidelberg strasbourg and paris thomas
arranges hotels and meals in addition to
travel tickets he also deals with ‘foreign
exchange’ for his customers
1892
2008 marks 200 years since the
birth of thomas cook regarded as
the founder of popular tourism
as a company we continue to
be inspired by his vision and
pioneering spirit ‘to make travel
simple easy and a pleasure’
thomas cook once described
himself as ‘the willing and devoted
servant of the travelling public’ and
we believe that today across our
company we maintain many of his
original ideas and inspirations by
keeping the customer at the heart
of everything we do
thom cookcoverqxdlayout 1  26109  1237  page 2 celebrating 200 years
thomas cook 1808 – 1892
1808
design and production
black sun plc london
44 0 20 7736 0011
photos thomas cook getty
printed by park communications on hello silk fsc certiﬁed
paper and tauro from veriﬁed sustainable sources
1865
to cope with the number of tourists who
wish to visit the continent thomas opens
an ofﬁce in london – at 98 fleet street – in
april 1865 this is thomas cook’s ﬁrst high
street shop and it is to be managed by his
son john mason cook who joined the
family business only a few months before
187273
the climax of thomas’ travelling career
comes in september 1872 when at the age
of 63 he departs from liverpool with eight
companions on a 25000mile tour of the
world that will keep him away from home
for 222 days it has long been his ambition
to travel to ‘egypt via china’ but such a trip
only becomes practicable following the
opening of the suez canal in 1869
1874
cook’s circular note an early form of the
travellers cheque is launched in new york
1892
john mason cook takes over the
business on the death of his father
1808
thomas cook is born on 22 november
in melbourne derbyshire he is the
son of a labourer and the grandson
of a baptist minister
1828
on the completion of his apprenticeship
as a woodturner and cabinetmaker
thomas decides instead to pursue his
religious interests and becomes a
wandering baptist missionary
1841
thomas conducts his ﬁrst excursion
a 12mile rail journey from leicester to
a temperance gala in loughborough on
monday 5 july 1841 some 500 passengers
pay a shilling each for the experience the
day is a great success and thomas is soon
being asked to organise similar outings
for other local temperance societies and
sunday schools
1845
thomas conducts his ﬁrst trip for proﬁt
it is a railway journey to liverpool from
leicester nottingham and derby
1855
thomas successfully escorts his ﬁrst
‘package tourists’ to europe during the
summer of 1855 the ‘grand circular tour’
includes brussels cologne the rhine
heidelberg strasbourg and paris thomas
arranges hotels and meals in addition to
travel tickets he also deals with ‘foreign
exchange’ for his customers
1892
2008 marks 200 years since the
birth of thomas cook regarded as
the founder of popular tourism
as a company we continue to
be inspired by his vision and
pioneering spirit ‘to make travel
simple easy and a pleasure’
thomas cook once described
himself as ‘the willing and devoted
servant of the travelling public’ and
we believe that today across our
company we maintain many of his
original ideas and inspirations by
keeping the customer at the heart
of everything we do
thom cookcoverqxdlayout 1  26109  1237  page 2 thomas cook group plc annual report  accounts 2008 1
operational highlights
pro forma ﬁnancial highlights
1
• we achieved a strong ﬁnancial performance
with proﬁt from operations up almost 50 to
£3659m and operating proﬁt margin up 355
from 31 to 42
• adjusted earnings per share rose 409 to 241p
• the board is recommending a ﬁnal dividend
of 65p per share bringing the total dividend
for the period to 975p
• we are targeting merger synergies of £215m
by 2010 increased from the previous estimate
of £155m
• we have strong foundations for the current year
provided by capacity cuts cost savings fuel and
currency hedging and operational ﬂexibility
together with the merger synergies
• we remain conﬁdent of prospects for the full
year 20082009 and are targeting operating
proﬁt of £480m for the ﬁnancial year 20092010
we have further developed our
ecommerce business across
all markets with northern
europe setting the standard
our acquisition of thomas cook
india makes us the leading
foreign exchange business in
the region
the launch of our sentido hotels
concept is allowing us to build
an important new hotel brand
without owning the assets
revenue

£8809
•
8m

11
•
8
adjusted eps

24
•
1p

40
•
9
proposed dividend per share
9
•
75p

95
•
0
proﬁt from operations

£365
•
9m

49
•
8
operating proﬁt margin

4
•
2

35
•
5
statutory ﬁnancial highlights
revenue
£8167
•
1m
2007 £6404
•
5m
proﬁt before tax
£49
•
5m
2007 £190
•
2m
eps
4
•
7p
2007 22
•
0p
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008
for a deﬁnition of how these ﬁgures have been compiled please refer to appendices 1
and 2 on pages 120 to 126 the statutory results for the eleven months to
30 september 2008 are set out on pages 68 to 110 and a reconciliation between these
and the pro forma ﬁgures is set out on page 43 see appendix 2 on page 126 for key
18
22
we have signiﬁcantly strengthened
our independent travel offer
through acquisitions including
hotels4ucom and triwest travel
20
19 directors’ report
chairman’s statement
 wwwthomascookgroupcom
dr thomas middelhoff
chairman thomas cook group plc annual report  accounts 008 3
performance review
the new group’s ﬁrst full year since the
merger can best be characterised as one
in which we delivered strong ﬁnancial
performance and laid very ﬁrm foundations
for the future we have completed the
merger and signiﬁcantly outperformed
against synergy expectations developed
a credible strategy against which we have
made real progress and actively managed
our business to generate industryleading
margins and create real shareholder value
all of this has been achieved despite the
worsening economic conditions that have
emerged since the beginning of the year
our experienced management team under
the leadership of manny fontenlanovoa
anticipated the potential impact on our
businesses and has taken swift and effective
action to ensure we sustain our operational
and ﬁnancial strength in the current ﬁnancial
year and beyond
we will continue to maximise the advantages
we have created and developed these
include a strong ﬁnancial position a trusted
brand portfolio and the proven ability within
our ﬂexible model to manage our businesses
so that we meet the needs of our customers
in an ever changing environment
dividend
the board’s dividend recommendation
reﬂects thomas cook’s ﬁnancial achievement
the strength of our business model and our
commitment to delivering value to
shareholders
although the statutory ﬁnancial period
ended 30 september 008 is an eleven
month period the board has assessed the
total dividend on the basis of the pro forma
twelve month period ended 30 september
008 as a result the board is recommending
a ﬁnal dividend of 65 pence per share
which when combined with the interim
dividend of 35 pence per share paid on
5 september 008 makes a total dividend
for the year of 975 pence per share this
represents a payout of 41 of proﬁt after
tax before exceptional items this is in line
with our policy which remains to increase
dividends progressively paying between
40 and 50 of adjusted earnings by way
of dividend
board changes
changes to the board during the period
included the appointment of jürgen büser
as chief financial ofﬁcer from 1 july 008
this followed the decision of ludger heuberg
to step down from the board for personal
reasons and family commitments we
are pleased that he has remained with the
group in the role of chief financial ofﬁcer
for continental europe
angus porter resigned from the board as
a nonexecutive director on 5 april 008
following his appointment as group strategy
director a position he took up on  june 008
nigel northridge joined the board as an
independent nonexecutive director with
effect from 1 august 008 he is a member
of both the management development
 remuneration committee and the
nominations committee
with effect from  december 008 peter
diesch will be stepping down from the
board and will be replaced as an arcandor
ag nominated nonexecutive director by
dr karlgerhard eick i would like to thank
peter for his contribution to the deliberations
of the board since the merger
executive team
i and my fellow board members would once
again like to express conﬁdence in the group’s
executive team led by manny fontenlanovoa
he has engaged some of the most talented
people in the industry and together they have
continuously demonstrated their ability to lead
the organisation in a challenging marketplace
they have exceeded expectations across a
range of metrics delivering industryleading
margins making huge progress against our
strategic agenda and further strengthening
the thomas cook brand
employees
we are also very proud of our people at all
levels within the group they live our company
values and continually strive to understand
the requirements of our customers and
deliver their travel and holiday dreams we
believe their skills diversity and experience
are key to our ﬂexible approach and to our
continued success
outlook
the success manny and the executive team
have had in delivering a highly demanding
programme during the past year gives
my fellow board members and me every
conﬁdence that they will rise again to
the challenges of the year ahead
directors’ report – business review
the new group’s ﬁrst full year since the merger can best be
characterised as one in which we delivered strong ﬁnancial
performance and laid very ﬁrm foundations for the future
dr thomas middelhoff
chairman
19 december 008 • 63 million passengers
• 807 retail outlets
• 4 aircraft
• controlled distribution
‡
 68
• 75 million passengers
• 316 retail outlets
• 6 aircraft
• controlled distribution
‡
 38
directors’ report
business at a glance
4 wwwthomascookgroupcom
thomas cook group plc is one of the world’s leading leisure travel groups
with sales of £88 billion 3 million customers 31000 employees a
ﬂeet of 93 aircraft and a network of over 3400 owned and franchised
travel stores and interests in 86 hotels and resort properties it operates
under ﬁve geographic segments in 1 countries we are number one or
number two in our core markets
pro forma revenue

£3620
•
4m
007 £3049
•
0m
percentage of group
pro forma revenue
41
•
1
pro forma proﬁt from operations

£106
•
3m
007 £67
•
5m
operating proﬁt margin

2
•
9
007 
•

pro forma revenue

£3097
•
3m
007 £3131
•
8m
percentage of group
pro forma revenue
35
•
2
pro forma proﬁt from operations

£143
•
4m
007 £73
•
6m
operating proﬁt margin

4
•
6
007 4
continental europe
financial highlights
key facts
uk  ireland
∏
see appendix  on page 16 for key
∏
the key facts given for the uk  ireland exclude india
and the middle east • 15 million passengers
• 1 retail outlets
• 9 aircraft
• controlled distribution
‡
 79
• 08 million passengers
• 56 retail outlets
•  aircraft
• controlled distribution
‡
 7
• 68 million passengers
• 34 aircraft
• onethird of seats sold inhouse
thomas cook group plc annual report  accounts 008 5
directors’ report – business review
pro forma revenue

£971
•
6m
007 £806
•
6m
percentage of group
pro forma revenue
11
•
0
pro forma proﬁt from operations

£86
•
2m
007 £73
•
5m
operating proﬁt margin

8
•
9
007 9
•
1
pro forma revenue

£439
•
8m
007 £379
•
1m
percentage of group
pro forma revenue
5
•
0
pro forma proﬁt from operations

£6
•
0m
007 £4
•
9m
operating proﬁt margin

1
•
4
007 1
•
3
pro forma revenue

£978
•
2m
007 £855
•
8m
percentage of group
pro forma revenue
ø
7
•
7
pro forma proﬁt from operations

£45
•
4m
007 £46
•
m
operating proﬁt margin

4
•
6
007 5
•
4
north america airlines germany northern europe
note controlled distribution  includes independent
travel bookings
ø the percentage of group pro forma revenue
for airlines germany has been calculated using
the external revenue ﬁgure of £6807 million directors’ report
where we operate
 wwwthomascookgroupcom
uk  ireland india and middle east continental europe
distribution
independent
distribution
airlines
thomas cook group operates a portfolio of marketleading travel
brands in 21 markets we are committed to providing the best
quality products and services to our customers and continuing
to deliver shareholder value
uk  ireland brands
mainstream
continental europe brands
mainstream
independent thomas cook group plc annual report  accounts 2008 
directors’ report – business review
north america northern europe
independent
distribution
independent
north america brands
mainstream
northern europe brands
mainstream
distribution directors’ report
chief executive ofﬁcer’s statement
8 wwwthomascookgroupcom
manny fontenlanovoa
chief executive ofﬁcer thomas cook group plc annual report  accounts 2008 9
directors’ report – business review
overall our results for the year demonstrate
that through our merger we have created a
strong company with a team that has the
knowledge and capability to read the market
and respond accordingly we have fully integrated
our merged business and a number of strategic
acquisitions overdelivered against our cost
reduction targets actively managed capacity
and successfully navigated our way through a
period of unprecedented oil price volatility
recent research and the high load factors we
are currently experiencing give us conﬁdence
that consumers remain intent on taking their
holidays we believe our strong ﬁnancial position
together with the increased synergy savings
and contingency measures we have put in
place will enable us to sustain a marketleading
performance throughout a challenging 2009
we are targeting further growth in margins in
2009 and 2010 and operating proﬁt of £480
million in 2010
the 2008 ﬁnancial period was the new group’s ﬁrst full
year of trading and a period in which we achieved a strong
ﬁnancial performance and made signiﬁcant progress against
our strategic agenda we have achieved industryleading
margins demonstrating the strength of our management
team and the ﬂexibility of our business model • we have hedged 100 of our fuel
requirements for winter 20082009 and
95 for summer 2009 ensuring certainty
of pricing
• we have hedged 98 of our dollar and
9 of our euro requirements for winter
20082009 and summer 2009
merger synergies
the integration of our operations since the
merger between thomas cook and mytravel
on 19 june 200 has been highly successful
and we have been operating on a single
platform from management commercial and
technological perspectives for over a year
by accelerating synergy delivery we realised
total savings of £142m in the 2008 pro forma
period of which £139m were additional
savings during the period the majority of
the savings came from the uk business
looking forward we now expect to deliver
new synergy targets of
• £185m of annual synergy savings
by the end of the 2009 ﬁnancial year
compared with the previous accelerated
target of £155m by 2009
• a total of £215m of savings by 2010
compared with the original target
of £155m by 2010
strategy
we have made signiﬁcant progress against
our strategy this year both through actions
which have optimised our existing business
and through acquisitions which have
allowed us to achieve a stepchange in
our performance and these are set out
in more detail on pages 14 to 2
share buyback
in december 200 we announced plans for
a £290m €35m share buyback programme
and the programme was launched in march
2008 following approval at an egm held on
12 march 2008 in proposing the programme
the board believed that the repurchase of
shares was the best way to return value to
shareholders while at the same time
improving earnings per share and balance
sheet efﬁciency
at the close of business on 30 september
2008 the group had purchased a total of
1012430 shares for cancellation at a total
cost of £235m excluding commission of
these shares 48595331 were purchased
from arcandor ag as a result of which
arcandor’s holding was 528 of the group
directors’ report
chief executive ofﬁcer’s statement continued
10 wwwthomascookgroupcom
pro forma ﬁnancial results
thomas cook has reported a strong set
of results this demonstrates the quality of
management the strength of our assetlight
business model and our operational and
cost ﬂexibility it was achieved against the
background of the merger integration and
the continued development of the group
through signiﬁcant strategic acquisitions
group pro forma revenue for the twelve months
to 30 september 2008 was £88098m 200
£885m an increase of 118 on the
prior year period excluding the impact of
translation and acquisitions group revenue
was ﬂat year on year this reﬂects a decrease
in uk and north america revenue as a
result of planned capacity cuts offset by
an increase in northern europe underlying
revenue in continental europe and airlines
germany was broadly ﬂat year on year
we delivered a 498 increase in group proﬁt
from operations to £359m 200 £2442m
the group operating proﬁt margin rose
355 from 31 to 42 last year despite
a signiﬁcant increase in fuel costs this
strong result reﬂected our ability to adapt
to changing demand by reducing capacity
changing our product mix cost discipline
and fuel and currency hedging as well as
our delivery of signiﬁcant synergy savings
pro forma ebitda proﬁt from operations before
depreciation and amortisation increased by
35 to £500m 200 £308m pro forma
adjusted earnings per share increased by 409
to 241p 200 11p
the segmental performance is reported in detail
in the operational review on pages 28 to 3
pro forma ﬁnancial position
thomas cook’s ﬁnancing position is robust
in may 2008 we replaced the existing debt
facility with a new credit facility amounting to
£14bn of which £10bn is available for
immediate use for the group’s general
corporate purposes including acquisitions
and the share buyback programme that we
have now completed
in view of the current uncertainties in
the credit markets we took the prudent
approach in october 2008 to draw down
fully our available facility thus ensuring
optimal ﬁnancial certainty for the group
operating cash ﬂow was £2202m in the
twelve months to 30 september 2008
compared with £2153m in the previous
year at 30 september 2008 net debt was
£2925m compared with net funds of
£393m in the previous year reﬂecting the
planned expenditure on the share buyback
programme and acquisitions
operational ﬂexibility cost base and hedging
the ﬂexibility within our assetlight business
model has been critical during the past
period and we have improved our ability
to underpin our future performance in
more challenging trading conditions
the resilience we believe we have in the
current difﬁcult trading conditions is
based on that ﬂexibility the strength of
our businesses postmerger and capacity
rationalisation throughout the industry
capacity reductions in the uk market for
example amount to approximately 25 over
the last two years through our actions and
those of other market participants
we are taking advantage of our buying
power to manage accommodation costs
which represent over 30 of revenue we
are conﬁdent that negotiations with our
suppliers will result in prices no higher than
last year’s levels across the group this year
despite adverse movements in currency
the ability to adjust our cost base for potential
changes in demand is also important
particularly in the current market conditions
only 10 of our groupwide hotel capacity
is committed for summer 2009 which
gives us considerable scope to make further
capacity adjustments and in the uk around
89 of our tour operator ﬂying requirements
are undertaken by our own ﬂeet allowing us
considerable ﬂexibility to cut capacity without
impacting our own airline’s operations
tight control of all costs is a fundamental
part of the thomas cook business model
in addition we have developed contingency
plans to cut our overhead costs further
should tougher market conditions prevail
hedging
fuel costs represent approximately 8 of
revenue and successful hedging has been
an important element of managing this cost
through a mixture of swaps and options we
avoided the worst of the high crude oil prices
in the summer of 2008 as well as realising
some beneﬁts when prices fell we have
now locked in our fuel costs for the current
ﬁnancial year
we are taking a similar cautious approach to
future costs and our policy is to hedge fuel
and foreign exchange between 12 and 18
months in advance of the expected
expenditure in line with this thomas cook group plc annual report  accounts 2008 11
group executive board
from left to right
standing angus porter jürgen büser thomas döring manny fontenlanovoa ralf teckentrup michael friisdahl mike cutt and ian derbyshire
sitting peter fankhauser pete constanti alexis colesbarrasso ludger heuberg sam weihagen and derek woodward
see page 50 for biographies
the share buyback programme concluded
on 9 october 2008 up to that date a total
of 12005911 shares were purchased
for cancellation at a total cost excluding
commission of £2899m of these shares
55425 were purchased from arcandor ag
maintaining its holding of 528 in the group
management team
this year’s impressive performance is the
result of the strong management team
working together and in the newly enlarged
thomas cook business being more capable
than ever of dealing effectively with the
challenges we face despite the backdrop of
integration our international team has been
determined that thomas cook should remain
resilient continue to make great progress
and put in place strong foundations upon
which to build its future i am incredibly
proud of the entire thomas cook team for
what they have achieved this year and look
forward to working with them to go even
further in 2009 and beyond
directors’ report – business review
outlook
a range of initiatives within our power
underpins our conﬁdence in our prospects
for the current ﬁnancial year our business
model allows us to ﬂex capacity and product
mix well into the summer 2009 booking
cycle in addition to our own capacity
management we have seen capacity
rationalisation throughout the industry
which gives us further conﬁdence that we
can trade successfully through the current
conditions capacity reductions in the uk
market for example amount to approximately
25 over the last two years through our actions
and those of other market participants
we have tight cost discipline throughout the
business we are negotiating with suppliers to
ensure that accommodation costs are no
higher than 2002008 levels despite
currency movements we are also hedging
fuel and currency against extreme volatility
in addition we have developed contingency
plans to cut our overhead costs further
should tougher market conditions prevail
and have increased synergy targets for 2010
to a total of £215m with £185m expected by
the end of the 2009 ﬁnancial year
the combination of our management team’s
long industry experience a restructured
marketplace our own initiatives and trading
which has been in line with expectations
supports our conﬁdence in our prospects for
the full year we are targeting further growth
in margins in 2009 and 2010 and operating
proﬁt of £480m in 2010
manny fontenlanovoa
chief executive ofﬁcer
19 december 2008 in this context it is unsurprising that much of
the growth in the market has been accounted
for by a sustained increase approximately 5
per annum in independent travel where
consumers buy the elements of a holiday
separately ﬁgure 2
resilience of package holidays
however this growth in independent travel
has not been at the expense of the package
holiday where demand remains robust as a
consequence of consumers’ appreciation of
the convenience quality and great value for
money such packages bring indeed the fact
that someone is there to sort things out if
something goes wrong – whether it be a major
crisis or something as simple as a ﬂight delay
leading to a missed connection – is something
many independent travellers have learned
to appreciate only when they have found
themselves without that reassurance
addressing our challenges
although there are concerns about the
sustainability of long distance mass market
leisure travel which has provided political
cover for increased taxation of aviation
these concerns have not as yet had any
discernible effect on demand and seem
unlikely to do so for the foreseeable future
directors’ report
chief executive ofﬁcer’s review of strategy and performance
12 wwwthomascookgroupcom
over the long term international leisure
travel has grown strongly at roughly twice
the growth rate of the economy as a whole
and it has proved resilient to major shortterm
shocks such as the early 1990s recession 911
and the 2003 sars health scares ﬁgure 1
the simple fact is that people enjoy holidays
and the generation which ﬁrst ventured
abroad for two weeks in august has matured
into one which is more conﬁdent has more
free time and disposable income and a
growing appetite for adventure they
have been joined as their children reach
adulthood by a new generation which
regards international travel as a top spending
priority many of them supplementing
a main summer holiday with a second
winter break and weekends abroad
growth in independent travel
many more choices are available to the
modern traveller than existed even ﬁve
years ago new destinations are opening
up all the time the internet provides almost
inﬁnite sources of information inspiration
and opportunities to make travel arrangements
much greater ﬂexibility exists in tailoring
holidays to individual requirements and
lowcost airlines have opened up new
destinations at affordable prices
our marketplace
leisure travel has grown strongly in the past
and will continue to do so in the future
80
100
120
140
160
180
200
220
240
260
280
300
320
340
07
year
06 05 04 03 02 01 00 99 98 97 96 95 94 93 92 91 90 89 88 87 86 85 84 83 82 81 80
global economic slowdown and
ﬁnancial crises in countries
such as sweden and norway
financial crisis in japan
911
sars
international tourist arrivals
tourist arrivals trend
real world gdp
real gdp trend
figure 1
tourism is a robust and growing industry that has quickly rebounded from external shocks
international tourist arrivals and real world gdp indexed to 1980 plus trends
source unwto world tourism barometer imf world economic outlook counterparts in the west in those developed
markets travel companies will be challenged
by the need to satisfy the growing demand
for holidays tailored to personal needs and
wants while still delivering convenience
reassurance and service
before the recession bit in addition recent
company failures have reminded people of
the security provided by the uk government
consumer protection schemes beneﬁting
those who book packages with a tour
operator a compelling reason for many
independent travellers to think again
at times like this there is no question that
consumers seek comfort in the reassurance
of buying from established and trusted
brands – and in that respect thomas cook
is clearly the number one brand in the uk
and a brand which has considerable equity
worldwide thanks to its history and ﬁnancial
services business uk consumer research
consistently shows the thomas cook brand as
enjoying a signiﬁcant advantage over its rivals
in terms of consumer trust and travel expertise
outlook
in the medium term there is every reason to
believe that the longerterm trend of strong
growth in demand for international travel
will continue and even accelerate as the
fastgrowing bric brazil russia india and
china markets develop and their huge
populations take advantage of their
increasing prosperity to experience the
same joys of international travel as their
while the longterm trends are clear
the current global economic crisis creates
signiﬁcant uncertainties in the short term
and we have already seen the failure of
a number of airlines and smaller tour
operators however the lessons of the
recession of the early 1990s are important
here at that time uk unemployment
approached three million and a major
uk tour operator ilg failed the reduction
in market capacity resulting from the failure
of ilg even after other tour operators added
further ﬂights to exploit the opportunity led
to a period in which despite recessionary
pressures tour operators delivered very
strong ﬁnancial results
while the situation in 2008 is very different in
some respects the consolidation we have
seen in the market following the mergers
of thomas cook and mytravel and tui
and first choice has led to similar levels of
capacity reduction and makes the immediate
prospects for the industry more positive than
for some other market sectors
furthermore a number of consumer studies
conducted during the ﬁnal quarter of 2008
have conﬁrmed that people are as committed
to their main annual holiday as they were
directors’ report – business review
thomas cook group plc annual report  accounts 2008 13
0
50
100
150
200
250
300
350
400
450
500
550
no of passengers million
2013
year
2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
historic 5 year cagr forecast 5 year cagr
2 2 total
46m
5 4 independent
27m
package
19m
1 0
figure 2
the uk leisure travel market continues to grow
uk leisure travel market 200013 number of passengers million
cagr compound annual growth rate
source mintel july 2008 directors’ report
chief executive ofﬁcer’s review of strategy and performance continued
14 wwwthomascookgroupcom
our strategy remains focused on four key
growth drivers maximising the value of
mainstream travel establishing thomas cook
as a leading provider of independent travel
building our position as a leading provider
of travelrelated ﬁnancial services and
extending our business through mergers
acquisitions and partnerships with a
particular focus on emerging markets
measuring our performance
there is a direct link between our strategy
and the key indicators of our businesses’
performance these indicators are regularly
monitored by the management team and
board to ensure we are meeting our objectives
maximise value of mainstream
our integrated business model maximises
our earnings from transport accommodation
and distribution through both retail and
online outlets it also gives us the ﬂexibility
to manage capacity and product mix
allowing us to adapt to differing market
conditions we therefore have considerable
ﬂexibility giving us relative resilience in an
economic downturn
• in northern europe our strong market
position and our focus on ecommerce
have allowed us to achieve another year
of record proﬁts
• in the uk our focus on medium haul has
proved helpful at a time when sterling’s
decline against the euro has augmented
the demand for destinations outside of the
traditional short haul destinations in the
eurozone our strong positions in turkey
and egypt give us considerable advantage
we are also beneﬁting from the shift to
higher margin allinclusive resorts
• while thomas cook france already enjoys
the position of being the country’s largest
travel retailer the combination of its tour
operating business with jet tours the paris
based premium tour operator ensures we
are now also the country’s third largest tour
operator with a combined market share
our strategy
thomas cook has a clear strategy of strengthening its
core mainstream business and investing for growth in
independent travel ﬁnancial services and emerging markets
highlights
• outstanding performance from
condor where following our
withdrawal from consolidation
negotiations ﬁrst with air berlin
and then with germanwings and
tuifly we demonstrated the
ability to operate successfully
and proﬁtably on a standalone
basis condor has delivered
a strong performance in a
challenging environment for
airlines generally as fuel prices
reached record levels and
more speciﬁcally in germany
where the industry is extremely
competitive condor’s result
reﬂects strong capacity
management cost discipline and
focus on operations at a time
when merger negotiations could
have resulted in distractions
• acquisitions that have transformed
our market positions in france
and canada
• the entry into a key strategic
emerging market through the
acquisition of thomas cook
india the largest travel and
foreign exchange business in
india at the same time we
regained the worldwide rights
to the thomas cook brand
• a stepchange in our ecommerce
performance spearheaded by
northern europe where recent
months have seen over 50 of
bookings being made online
in the uk 27 of total bookings
are now made online while in
germany where the internet
market has developed more
slowly 7 of our customers now
book online an increase of 14
year on year although a much
higher number research online
and then book through an agent
• rapid integration of our merged
uk businesses followed by
decisive action on capacity
which have allowed us to deliver
strong margin performance in
a highly challenging market thomas cook group plc annual report  accounts 2008 15
directors’ report – business review
strengthen mainstream and build longevity
in our business
our performance
our vision
growth drivers
strategic objective
we go further
to make dreams come true
1
maximise
value of
mainstream
2
leading
independent
travel provider
3
leading
travelrelated
ﬁnancial services
provider
4
capture growth
through mergers
and acquisitions
enablers product technology customer
insight
brands financial
rigour
people and the
proud values
pioneering
our future
results
orientated
obsessed
with customer
service
united as
one team
driving
robust
decisions

11
•
8
pro forma revenue

2008 £8810m

49
•
8
pro forma proﬁt
from operations

2008 £366m

35
•
5
pro forma operating
proﬁt margin

2008 4
•
2
our strategy is founded upon thomas cook people and values we focus
on the enablers and growth drivers in pursuit of the strategic objectives
inspired by our vision the success of our strategy is measured by strong
sustainable business performance
see appendix 2 on page 126 for key directors’ report
chief executive ofﬁcer’s review of strategy and performance continued
16 wwwthomascookgroupcom
of around 10 jet tours with its principal
brands jet tours club eldorador and austral
lagons serves approximately 270000
customers per year and complements
thomas cook’s existing offering
• the acquisition of 57 neckermann
urlaubswelten retail outlets in germany
helps strengthen our german distribution
which remains key to that market
• we have increased our stake in iberoservice
from 40 to 65 a controlling interest
the balance is still owned by iberostar
iberoservice is a ground handling agency in
spain and it supports both the mainstream
and the independent travel businesses
• sentido the new hotel franchise based
in germany gives us access to 17 hotels
principally in spain egypt cyprus greece
turkey and kenya and two nile river
boats without increasing our risk proﬁle
at the same time we have the control to
ensure they are high quality resorts and the
opportunity to develop this business further
• in october 2008 we launched a new
ecommerce platform starﬁsh to enhance
the functionality of the thomascookcom
website it is designed to enhance online
search by offering greater functionality and
ﬂexibility with higher quality information
including maps and imagery the ‘shortlist’
and ‘compare’ capabilities that allow
customers to draw up shortlists and
compare options they are considering
are proving particularly popular and the
conversion rate we are getting from visitors
using these functions is more than three
times the rate of other users of the website
leading independent travel provider
we continue to develop our independent
business and are beneﬁting from the rapid
growth in this area
• we have brought new focus to the
independent travel business in the uk
through a signiﬁcant organisational change
following which the uk business is now
jointly managed by pete constanti who
leads the mainstream travel operations
and ian derbyshire who leads the
independent travel business this allows us
to maximise the opportunities in each of
these areas and where appropriate to
work together to ensure continued overall
development in the uk
• the acquisition of hotels4ucom the uk’s
largest independent bed bank enhanced
the group’s independent travel offering
considerably hotels4u sells exclusively over
the internet providing accommodation
and resort transfers to over 500000
customers per annum it has access to
more than 30000 hotels internationally
our recently acquired business in india has
been among the ﬁrst to take advantage of
including hotels4u stock in their european
holiday programmes
• the acquisition of elegant resorts the
number one ukbased luxury travel
company supports our strategy of
strengthening our independent travel
position and builds on our current expertise
in highvalue luxury holidays elegant
resorts carries more than 20000 passengers
each year to luxury destinations including
the caribbean the indian ocean the
arabian gulf and luxury european resorts
• by acquiring triwest travel with its two
principal brands fun sun an independent
travel wholesaler and intair a leading
airline consolidator we are creating a
leading canadian independent travel
business with signiﬁcantly enhanced
customer reach and product offerings
the business will increase our proﬁts from
independent travel and improve our year
round proﬁtability which is currently
skewed towards the winter
• in december 2008 thomas cook
announced that it had agreed to
acquire a majority interest in gold medal
international limited one of the uk’s
leading independent travel companies
leading travelrelated ﬁnancial
services provider
the development of our ﬁnancial services
business is underpinned by the strength of the
thomas cook brand and by reestablishing
worldwide control over it we have
considerably enhanced the potential
to develop it in other markets
• india is one of the fastestgrowing travel
and travelrelated foreign exchange
markets in the world expanding by 15
per annum our acquisition of 749 of
thomas cook india gives us the opportunity
to drive this expansion we are conﬁdent
the strength of the foreign exchange
business will provide a strong platform
for proﬁt growth
• in the uk unlike many companies we
are already operating under the new and
increased regulation of the travel insurance
industry which comes into place at the
beginning of 2009
• also in the uk we expanded our foreign
exchange franchise in airports including
our highproﬁle appointment as the
leading partner in heathrow terminal 5
and manchester airport
capture growth and value through
mergers acquisitions and partnerships
the businesses acquired in 2008 are all
performing well and we are generating
synergies as planned we continue to
review opportunities for expansion but will
concentrate on those that are able to deliver
earnings accretion by year two and exceed
the cost of capital by year three
• we are focusing on those emerging markets
where tourism is growing at a faster rate
than in our traditional markets as
demonstrated by our acquisition of
thomas cook india mentioned above
we are particularly encouraged by the
opportunities in russia and china
• through the acquisition of thomas cook
egypt we have reacquired control over
the thomas cook brand in the important
and fastgrowing middle east region as
well as gaining an established and
proﬁtable business
strategy outlook
our strategy is serving us well and the
virtues of asset ﬂexibility prudent capacity
management and tight cost control are
manifest in these difﬁcult economic times
we therefore do not plan to deviate from
that strategy but will be fully mindful of the
conditions in which we are operating for
example in contemplating acquisitions –
where we will focus our attention on
emerging markets china and russia which
have clear strategic importance and on deals
where we see the opportunity to create
exceptional value for shareholders thomas cook group plc annual report  accounts 2008 17
we will also add further impetus to our
efforts to work together more effectively as
a group complementing our strategies in
each of our geographic segments with new
initiatives designed to extract further value
through collaboration for example across
our airlines and with appropriate groupwide
procurement initiatives we will also pay
particular attention to the ecommerce
opportunity where up to now we have
focused on building websites which are
integral to our local multichannel strategies
but where we see a global opportunity for
the thomas cook brand
finally we will examine our brand portfolio
where we believe we have a number of strong
brands but more than we can support
effectively central to our future is the
thomas cook brand it has been the leading
brand in the leisure travel market for over
160 years and remains – along with our
people – our most valuable asset
directors’ report – business review
our strategy in action
page 18
page 20
page 22
page 24
page 26
maximise value
of mainstream
our integrated business model ensures
we maximise earnings from transport
accommodation and distribution
through retail and online outlets
leading independent
travel provider
we continue to develop our independent
travel business and are beneﬁting from
the rapid growth in this area
leading travelrelated
ﬁnancial services provider
the development of our ﬁnancial services
business is underpinned by the strength
of the thomas cook brand
capture growth through
mergers and acquisitions
we made a number of key acquisitions
in 2008 and all are performing well
and providing the synergies expected
our people
our key differentiator
from booking a holiday through to the
airline and inresort service they provide
it is our people who make the difference
to our customers’ holiday experience maximise value of mainstream
our strategy in action
we continue to focus on
maximising the value of
mainstream package holidays
our integrated business model
ensures we maximise earnings
from transport accommodation
and distribution through retail
and online outlets
setting the standard for ecommerce
this year has seen a stepchange in our ecommerce
performance spearheaded by northern europe where
recent months have seen over 50 of bookings being
made online in the uk 27 of total bookings are now
made online while in germany where the internet
market has developed more slowly 7 of our customers
now book online an increase of 14 year on year
although a much higher number research online and
then book through an agent
18 wwwthomascookgroupcom directors’ report – business review
delivering the future
of package holidays
a new franchising hotel concept
sentido the new hotel franchise gives us access to 17
hotels principally in spain egypt cyprus greece turkey
and kenya and two nile river boats without increasing
our risk proﬁle at the same time we have the control to
ensure they are high quality resorts and the opportunity
to develop this business further
thomas cook group plc annual report  accounts 2008 19 20 wwwthomascookgroupcom
leading independent
travel provider
our strategy in action
we continue to develop our
independent travel business
and are beneﬁting from the
rapid growth in this area
accessing the uk’s largest hotel network
the acquisition of hotels4ucom the uk’s largest
independent bed bank enhanced the group’s
independent travel offering considerably hotels4u sells
exclusively over the internet providing accommodation
and resort transfers to over 500000 customers per
annum it has access to more than 30000 hotels
internationally our recently acquired
business in india has been among
the ﬁrst to take advantage of including
hotels4u stock in their european
holiday programmes directors’ report – business review
thomas cook group plc annual report  accounts 2008 21
exploring the world
with thomas cook
leading the canadian
independent travel market
by acquiring triwest travel with its two principal brands
fun sun an independent travel wholesaler and intair a
leading airline consolidator we are creating a leading
canadian independent travel business with signiﬁcantly
enhanced customer reach and product offerings the
business will increase our independent travel proﬁts and
improve our yearround proﬁtability which is currently
skewed towards the winter 22 wwwthomascookgroupcom
leading travelrelated
ﬁnancial services provider
our strategy in action
the development of our
ﬁnancial services business is
underpinned by the strength
of the thomas cook brand
leading the ﬁnancial services
market in india
india is one of the fastest growing travel and travel
related foreign exchange markets in the world
expanding by 15 per annum our acquisition of
749 of thomas cook india gives us the opportunity
to drive this expansion we are conﬁdent the strength
of the foreign exchange business will provide a
strong platform for proﬁt growth directors’ report – business review
thomas cook group plc annual report  accounts 2008 23
thomas cook in terminal 5
in line with our strategy to grow our ﬁnancial services
offering we have expanded our foreign exchange
franchise in airports this has included our high proﬁle
appointment as a partner in heathrow terminal 5 and
manchester airport the strength of the thomas cook
brand and the customer service we offer have combined
to allow us to establish ourselves as the market leader
in both locations
more than just
a travel agent 24 wwwthomascookgroupcom
capture growth through
mergers and acquisitions
our strategy in action
we continue to look for expansion
opportunities through acquisition
we made a number of key
acquisitions in 2008 and all are
performing well and providing
the synergies expected
number one in luxury travel
the acquisition of elegant resorts the number one
ukbased luxury travel company supports our strategy
of strengthening our independent travel position and
builds on our current expertise in highvalue luxury
holidays elegant resorts takes more than 20000
customers each year to luxury destinations including
the caribbean the indian ocean the arabian gulf and
luxury european resorts directors’ report – business review
thomas cook group plc annual report  accounts 2008 25
new companies
new opportunities
transforming our french business
while thomas cook france already enjoys the position
of being the country’s largest travel retailer the
combination of its tour operating business with
jet tours the parisbased premium tour operator
ensures we are now also the country’s third largest tour
operator with a combined market share of around 10
jet tours with its principal brands jet tours club
eldorador and austral lagons serves approximately
270000 customers per year and complements
thomas cook’s existing offering values
the group has adopted the ‘proud’ values as the cornerstone of
employee behaviour all thomas cook businesses now encourage
their employees to aspire to this way of working
pioneering our future – we inspire energy and enthusiasm we seek
constantly to be creative and innovative and challenge constructively
the status quo we thrive in an everchanging and dynamic world
results orientated – we take responsibility for achieving results
we are reliable and always deliver our promise we are committed
and determined to challenge and overcome barriers and solve
problems we always work to improve our own and others’
performance and capabilities
obsessed with customer service – we deliver the best possible
experience for our customers at all times we listen and respond
to their personal needs
united as one team – we support and respect each other and work
openly and collaboratively with our colleagues as a single worldwide
team we trust each other and always demonstrate integrity and honesty
driving robust decisions – we strive for quality speed and clarity of
decisions we learn from the past we ensure our decisions are based
on facts and are fair
employee engagement
thomas cook places a great deal of importance on internal
communication the group’s chief executive ofﬁcer visits each of
the operating markets at least once a year and communicates on a
monthly basis to update group employees on the company’s progress
and performance many regular communication vehicles are produced
by the group and its segments with the aim of keeping all employees
uptodate on the latest business and market developments in
addition many of our key markets also host annual conferences
to review the previous year’s performance and set out the priorities
for the coming year
26 wwwthomascookgroupcom
denise williams and anthony manning were
announced uk  ireland chief executive ofﬁcer
employees of the year for 200708 their reward
included a cruise to new york on the qe2 a
£4000 shopping allowance at london’s harvey
nichols and throughout the year they attended
all of the company’s key external events as
guests of honour
our people our key
differentiator
our strategy in action
we recognise that it is our people who
will be our key differentiator from
buying a holiday through to the airline
and inresort service they provide it
is our people who are making the
difference to the customers’
holiday experience
we are therefore committed to hiring
the best people training and developing
them to fulﬁl their potential and providing
career opportunities that keep them
within the thomas cook group
all of our businesses operate recruitment
training and development and reward
policies appropriate to their local markets
over and above this the new thomas cook
group has launched some ambitious
initiatives to keep the group’s people
at the forefront of its businesses directors’ report – business review
dr veronika békeﬁ chief executive ofﬁcer of
neckermann hungary was voted one of the 100
most successful businesswomen in hungary in
2007 by the hungarian marketing federation
succession planning
in january 2009 the board will for the ﬁrst time be able to view
succession plans for all senior positions across the group and will
manage talent at a group level
development
thomas cook has created a fasttrack development programme at
group level for highpotential employees from all of its businesses
as well as a handful of highpotentials hired into thomas cook from
outside the sector these individuals will receive business and
leadership development to prepare them to be the group’s
senior managers of the future
reward
as well as aligning reward for senior managers across the group
thomas cook launched an international save as you earn share
scheme for all its employees within a year of the merger some 3500
employees across all our businesses are now saving to become
shareholders in thomas cook group plc
this is just the beginning we will continue to build our people policies
to support the thomas cook brand as it expands across the world
employment policies
thomas cook group is committed to treating everyone fairly and
reasonably according to their individual merits and abilities measured
against our justiﬁable business needs therefore any form of unlawful
discrimination directly or indirectly on the grounds of sex gender
reassignment pregnancy colour race nationality ethnic or national
origins sexual orientation disability age religion or belief or because
someone is married or is a civil partner will not be tolerated
thomas cook group also aims to reﬂect the diversity of the community
in which it operates because it values the individual contribution
of all employees and recognises its legal and social responsibilities
thomas cook group is committed to promoting equality and all
employees have a duty to contribute towards ensuring that the
proud values are upheld and that the culture climate and working
environment are free from harassment and discriminatory treatment
gisela soekeland managing director of
thomas cook reisen was voted one of
the top 25 businesswomen in germany
by financial times deutschland
thomas cook group plc annual report  accounts 2008 27 directors’ report
operational review
28 wwwthomascookgroupcom
operational highlights
• we operate in a more rational market
where capacity has been reduced by
around 25 in the uk market over
the last two years
• the uk business is much stronger
following the merger with the
majority of the accelerated
synergy savings and margin
accretion arising in the uk
• strategic acquisitions including
hotels4ucom and elegant resorts
strengthened our platform for
future growth particularly in
independent travel
• the successful launch of starﬁsh a
sophisticated ecommerce platform
signiﬁcantly improves our customers’
experience when searching for and
booking holidays online
• we expanded our foreign exchange
franchise in airports and are the
leading partner in heathrow
terminal 5 and manchester airport
• we have established separate
divisions for our mainstream travel
and independent travel businesses
the uk has made excellent ﬁnancial and strategic progress we have considerable
ﬂexibility to adapt to changes in demand through our assetlight and integrated
business model this has served us well and underpins our conﬁdence looking
forward we have also strengthened our business through the merger acquisitions
and developments in ecommerce and financial services
key facts
financial highlights
1
uk 
ireland
ian derbyshire
chief executive ofﬁcer
independent travel uk
pete constanti
chief executive ofﬁcer
mainstream travel uk
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008 for a deﬁnition of how these ﬁgures have been compiled please refer to appendices 1
and 2 on pages 120 to 126 the statutory results for the eleven months to 30 september 2008 are set out on pages 68 to 110 see appendix 2 on page 126 for key
6
•
3m
passengers
807
retail outlets
42
aircraft
revenue £m
31318
30973
07 08
–1
•
1
proﬁt from operations £m
736
1434
07 08
94
•
8
operating proﬁt margin  
24
46
07 08
91
•
7 key performance indicators
controlled
distribution
‡
43
internet distribution
‡
129
passengers
†
–68
capacity
††
–75
average selling price

49
load factor
†††
06
brochure mix

38
the uk businesses performed extremely
well in the period under review delivering a
948 improvement in proﬁt from operations
despite tough market conditions and the
ongoing integration process
the pro forma revenue for the twelve months
to september 2008 was 11 lower than in
the prior year period at £30973m however
excluding the impact of acquisitions india
egypt lebanon hotels4u and elegant
resorts the pro forma revenue was 3
lower this reduction reﬂects lower capacity
partially offset by improved selling prices and
increased load factors other passengers
increased by 99 year on year reﬂecting
the acquisitions we made in the period
which underpin our strategy for growth
in the independent travel business retail
customers being third party tour operator
passengers booking predominantly through
thomas cook shops fell year on year by
95 largely due to the rationalisation of
the retail network of the combined group
following the merger which resulted in
the closure of 98 shops
one of the key success factors in managing
a tour operating business is ensuring that
supply and demand remain in balance and
eliminating lossmaking programmes and
holidays to achieve this management
reduced capacity on sale in the uk risk
business by 75 year on year with the larger
part of this reduction coming in the summer
season in addition in line with our strategy
we increased the proportion of our holidays
to medium haul destinations while reducing
our short haul and long haul programmes
as a result of the above actions the number
of passengers carried fell by 68 but the
average selling prices and margins achieved
on those holidays departing in the period
were signiﬁcantly increased year on year
in addition to the capacity management
measures above we were also able to
realise signiﬁcant merger synergies during
the period which offset the year on year
increase in fuel prices and the adverse
impact of changes in foreign currency
rates acquisitions in the period also
contributed to the proﬁt from operations
as a result the pro forma proﬁt from
operations was increased to £1434m from
£736m in the prior year an increase of
almost 100 the operating proﬁt margin
was also improved from 24 to 46
control of distribution and in particular
growth of sales through the internet is a key
cornerstone of our strategy for future success
the proportion of our mass market departed
passengers who booked on the internet was
262 an increase of 129 on the prior
year period the proportion of mass market
passengers departing in the period who
booked through our controlled distribution
channels owned websites shops and call
centres grew by 43 to 676
directors’ report – business review
thomas cook group plc annual report  accounts 2008 29
see appendix 2 on page 126 for key operational highlights
• strong performance driven by
excellent yield management
improved ﬂight utilisation in
germany and the turnaround of
our business in france where we
achieved signiﬁcant margin growth
• the acquisition of jet tours the
premium tour operator makes
us france’s third largest tour
operator and complements
our existing offering
• the acquisition of 57 neckermann
urlaubswelten retail outlets
in germany strengthens our
german distribution which
is key to that market
• sentido the new hotel franchise
gives us access to and quality control
of 17 hotels and two nile river boats
without increasing our risk proﬁle
• our controlling interest in iberoservice
a ground handling agency in spain
supports both mainstream and
independent travel operations
• we developed innovative holiday
concepts such as xperience in the
netherlands and belgium and
thomas cook villages in france
to target specialist interest groups
• this was our ﬁrst full year in the
czech market we are growing
rapidly and achieving high
margins throughout our
eastern european businesses
this segment comprises businesses in austria belgium the czech republic france
germany hungary the netherlands poland slovakia and switzerland they are diverse as
they reﬂect their speciﬁc markets but they are also united by the thomas cook asset
light approach and focus on margins capacity is more ﬂexible in continental europe
than elsewhere in the group giving us even greater adaptability to changing demand
key facts
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008 for a deﬁnition of how these ﬁgures have been compiled please refer to appendices 1
and 2 on pages 120 to 126 the statutory results for the eleven months to 30 september 2008 are set out on pages 68 to 110 see appendix 2 on page 126 for key
7
•
5m
passengers
2316
retail outlets
6
aircraft
30 wwwthomascookgroupcom
directors’ report
operational review continued
continental
europe
peter fankhauser
chief executive ofﬁcer
central europe
thomas döring
chief executive ofﬁcer
east and west europe
financial highlights
1
revenue £m
30490
36204
07 08
18
•
7
proﬁt from operations £m
675
1063
07 08
57
•
5
operating proﬁt margin  
22
29
07 08
31
•
8 key performance indicators
controlled
distribution
‡
53
internet distribution
‡
181
passengers
ﬂightinclusive
†
–08
passengers
nonﬂight inclusive
†
–17
average selling price

30
thomas cook group plc annual report  accounts 2008 31
directors’ report – business review
the performance in the continental european
businesses during the period was very strong
resulting in a £388m improvement in pro
forma proﬁt from operations and a 318
increase in the operating proﬁt margin
the pro forma revenue for the twelve months
to september 2008 increased by 187 to
£36204m however this increase was driven
by changes in translation exchange rates and
the impact of acquisitions iberoservice jet
tours neckermann urlaubswelten urlaubde
and the full year impact of the czech
business acquired in the previous year
as a result underlying revenue remained
at the same level as in the prior year with
lower passenger numbers in the german
and dutch businesses being offset by
increased passengers in the other western
markets belgium and france and improved
selling prices in germany and all our western
markets in the eastern markets poland
hungary czech republic where we are still
establishing our business we successfully
increased volumes and selling prices
the reduction in passenger numbers in
germany and the netherlands was expected
and reﬂects management’s focus on selling
proﬁtable holidays rather than protecting
market share this policy has proved
successful as both selling prices achieved
and margins have increased year on year
improved ﬂight utilisation in germany
also further helped to improve margins
year on year
the proﬁt from operations was further
improved by the realisation of synergy
beneﬁts in agency relationships including
the acquisition of a controlling stake in
iberoservice other acquisitions and changes
in exchange rates also beneﬁted the year
on year performance
as a result the pro forma proﬁt from operations
was increased to £1063m from £675m in the
prior year an increase of 575
the operating proﬁt margin for the continental
segment was improved from 22 to 29
the restructuring programmes we have
undertaken in all our western markets have
paid dividends in the period in france we
are especially pleased with the 56 margin
we achieved this is a strong improvement
on the prior year margin of 29 margins
also improved signiﬁcantly in belgium
48 compared to 29 and the netherlands
33 compared to 20 our relatively new
eastern division also achieved an operating
margin of 46 up from 41 in the prior
year the overall margin we achieved in
germany including airlines germany
was very pleasing at 31 compared
with 29 in the prior year
the proportion of our departed passengers
in the continental european markets who
booked on the internet was 85 an increase
of 181 on the prior year period while this
proportion seems low in comparison to the
uk and northern european markets it
continues to grow strongly and plays an
important role in our multichannel
proposition the proportion of passengers
departing in the period who booked through
our controlled distribution channels in
continental europe owned websites shops
and call centres grew by 53 to 377
see appendix 2 on page 126 for key
note flightinclusive passengers above includes
jet tours passengers postacquisition operational highlights
• we are monitoring capacity in the
northern european market to ensure
we are able to achieve the prices and
margins we expect
• the expansion of our medium haul
programmes in turkey the canaries
and egypt is proving right in current
market conditions as long haul
becomes less popular
• along with controlled distribution
and yield management our success
depends on our strong brands and
the quality of our products as we
are once again proving with the
launch of sunprime
• more than 45 of all bookings were
made online and we are launching
a new platform to improve our
online offering still further
• thomas cook airlines scandinavia
is according to an independent
survey the most environmentally
friendly nordic airline with regard
to co
2
emissions
we operate in sweden denmark norway and finland all major players in
the northern european market focus on margin rather than market share
resulting in a relatively stable and rational marketplace as a result of our
relatively high level of integration we have once again achieved industryleading
operating margins
key facts
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008 for a deﬁnition of how these ﬁgures have been compiled please refer to appendices
1 and 2 on pages 120 to 126 the statutory results for the eleven months to 30 september 2008 are set out on pages 68 to 110 see appendix 2 on page 126 for key
1
•
5m
passengers
21
retail outlets
9
aircraft
32 wwwthomascookgroupcom
directors’ report
operational review continued
northern europe
sam weihagen
chief executive ofﬁcer
financial highlights
1
revenue £m
8066
9716
07 08
20
•
5
proﬁt from operations £m
735
862
07 08
17
•
3
operating proﬁt margin  
91
89
07 08
–2
•
2 key performance indicators
controlled
distribution
‡
26
internet distribution
‡
188
passengers
†
32
capacity
††
32
average selling price

86
load factor
†††
–01
brochure mix

46
thomas cook group plc annual report  accounts 2008 33
directors’ report – business review
our northern european business has again
delivered a record performance in the period
under review increasing the pro forma proﬁt
from operations by £127m year on year and
maintaining an operating proﬁt margin of
around 9
the pro forma revenue for the twelve months
to september 2008 increased by 205 to
£9716m adjusting for the impact of changes
in the translation exchange rates underlying
revenue increased by 9 reﬂecting both
increased passenger numbers and improved
selling prices the beneﬁt from increased
selling prices and passenger numbers was
however partially offset by increased fuel
prices however underlying margin was
still improved year on year changes in
exchange rates also beneﬁted the year
on year performance
our northern european businesses continue
to lead the segments in terms of internet
distribution the proportion of our departed
mass market passengers who booked on
the internet was 456 an increase of 188
on the prior year the proportion of mass
market passengers departing in the
period who booked through our controlled
distribution channels in northern europe
owned websites shops and call centres
grew by 26 to 794
see appendix 2 on page 126 for key operational highlights
• strong performance through
improved aircraft utilisation reduced
peak season accommodation costs
and a further reduction in hotel
commitments
• triwest acquisition meeting our
strategic goals and integration
going well with synergies on track
• we are now a leading player in
independent travel in canada
• now achieving all yearround
proﬁtability by eradicating the
previous seasonality of the
mainstream tour operator while
still providing good utilisation
of the group’s aircraft during
the winter months
• strong growth in online bookings
of 24 at this early stage of
our development
34 wwwthomascookgroupcom
directors’ report
operational review continued
our north american business which operates mainly in canada has performed
well in this highly competitive market in which our competitors have added more
capacity coupled with aggressive pricing the acquisition of triwest makes us a
leading independent travel company in canada improves the balance of our
earnings through the seasons and reduces the overall risk proﬁle of our business
key facts
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008 for a deﬁnition of how these ﬁgures have been compiled please refer to appendices 1
and 2 on pages 120 to 126 the statutory results for the eleven months to 30 september 2008 are set out on pages 68 to 110 see appendix 2 on page 126 for key
0
•
8m
passengers
56
retail outlets
2
aircraft
financial highlights
1
revenue £m
3791
4398
07 08
16
•
0
proﬁt from operations £m
49
60
07 08
22
•
4
operating proﬁt margin  
13
14
07 08
7
•
7
michael friisdahl
chief executive ofﬁcer north america key performance indicators
controlled
distribution
‡
259
internet distribution
‡
244
passengers
†
–23
capacity
††
– 24
average selling price

–26
load factor
†††
01
brochure mix

66
directors’ report – business review
thomas cook group plc annual report  accounts 2008 35
our north american business has performed
solidly in the period under review despite
continued difﬁcult trading conditions and
overcapacity in mass market tour operating
in canada the pro forma proﬁt from
operations increased by £11m to £60m
and the operating proﬁt margin was
increased to 14
the pro forma revenue for the twelve months
to september 2008 increased by 160 to
£4398m adjusting for the impact of changes
in the translation exchange rates and the
acquisition of triwest underlying revenue
decreased by 8 reﬂecting both decreased
passenger numbers and lower selling prices
increased fuel costs adversely affected the
year on year margin performance however
excluding this underlying margins were
increased year on year through better ﬂight
utilisation and an improved brochure mix
despite the current market conditions in
addition the result beneﬁted from changes
in year on year exchange rates and the
acquisition of triwest going forward we
expect the proportion of proﬁts from our
independent businesses and in particular
triwest to increase signiﬁcantly thereby
reducing our exposure to the highly
competitive mass market operations
internet distribution continues to grow in
our canadian business the proportion of
passengers who booked on the internet was
158 an increase of 244 on the prior year
the proportion of passengers departing
in the period who booked through our
controlled distribution channels owned
websites shops and call centres grew to
272 an increase of 259 on the prior year
see appendix 2 on page 126 for key
note controlled and internet distribution percentages
include independent travel bookings operational highlights
• following the withdrawal from
consolidation negotiations ﬁrst
with air berlin and then with
germanwings and tuifly condor
continues to operate successfully
on a standalone basis
• condor operated proﬁtably for the
fourth year in a row through good
capacity management cost discipline
and the focus on proﬁtable tourist
destinations
• we reduced our ﬂeet by one aircraft
thus reducing capacity and at the
same time we increased seat load
factor by 24
• we invested in the quality of our
service through the introduction of
new premium economy seating and
the refurbishment of the cabins of
our boeing767 ﬂeet
• measures are in place to reduce costs
improve the technical performance
of our ﬂeet and increase fuel savings
condor delivered an outstanding performance in the highly competitive german
market despite record fuel prices in the summer around onethird of condor’s
passengers are customers of thomas cook’s german tour operator with the
balance comprising ‘seatonly’ passengers and other tour operators’ customers
key facts
financial highlights
1
1
these are unaudited pro forma ﬁgures for the twelve months ended 30 september 2008 for a deﬁnition of how these ﬁgures have been compiled please refer to appendices 1
and 2 on pages 120 to 126 the statutory results for the eleven months to 30 september 2008 are set out on pages 68 to 110 see appendix 2 on page 126 for key
36 wwwthomascookgroupcom
directors’ report
operational review continued
airlines
germany
ralf teckentrup
chief executive ofﬁcer
6
•
8m
passengers
34
aircraft
onethird
of seats sold inhouse
revenue £m
8558
9782
07 08
14
•
3
proﬁt from operations £m
462
454
07 08
–1
•
7
operating proﬁt margin  
54
46
07 08
–14
•
8 key performance indicators
capacity
††
– 47
yield

96
seat load factor
†††
24
sold seats
‡‡
change 
thomas cook tour operators –284
3rd party tour operators 185
external seat only –35
total sold seats –95
sold seats
‡‡
europe excl cities –108
long haul 15
cities –242
total sold seats –95
revenue
12 months 12 months
ended ended
30 september 30 september
2008 2007 change
£m £m 
revenue – external

6807 5117 330
revenue – internal

2975 3441 –135
total revenue

9782 8558 143
thomas cook group plc annual report  accounts 2008 37
directors’ report – business review
our airlines germany segment has performed
well in a period when other airlines have
suffered signiﬁcantly in the face of rising fuel
prices and intense competition although the
operating proﬁt margin reduced from 54
to 46 contribution to group proﬁtability
remained in line with the prior year with
pro forma proﬁt from operations at £454m
total revenue increased by 143 to
£9782m adjusting for the impact of
translation exchange rates underlying
revenue was broadly ﬂat year on year this
reﬂects the planned reductions in capacity
offset by improved load factors and yields
the increase in yield of 96 largely reﬂects
increased income from fuel surcharges and
a change in mix from selling to our own
german tour operator to selling more to
third party tour operators
fuel costs increased signiﬁcantly year on
year however we were able to largely
mitigate the impact of this at the gross
margin level by the improved yields and
load factors noted above together with
tight cost control beneﬁcial movements
in foreign exchange rates also contributed
positively to the year on year performance
see appendix 2 on page 126 for key 38 wwwthomascookgroupcom
directors’ report
corporate social responsibility
how we see csr
“thomas cook had a clear vision when he
devised the ﬁrst package holiday over 160
years ago he believed affordable travel could
change working people’s lives for the better
his company was inspired by a strong sense
of social justice and moral responsibility
today we are still inspired to deliver our
founder’s values we believe they make
a tangible difference to our customers’
holiday experience and to all the other
people whose lives we touch
in our corporate social responsibility policy
we deﬁne csr as ‘operating responsibly to
minimise negative and enhance positive
environmental social and economic impact
ensuring the longterm sustainability of
our business and of the resources on
which we depend’
the nature of our business means that we
cannot treat csr as peripheral or optional
the environment and communities in
destinations where we operate are integral
to the products we sell protecting them
is fundamental to our business and to
everyone on whom our business depends”
manny fontenlanovoa
chief executive ofﬁcer
read our csr policy in full on our csr website
at httpcsrthomascookgroupcouk
how we manage csr
csr is recognised as key to the group
strategy and progress against targets are
reviewed at the highest level the board’s
health safety  environmental committee
meets regularly to review the management
of health safety and environmental risks
and their impact on our activities and
the development and implementation
of relevant group policies
it oversees the work of the sustainability
team which formulates and implements
csr strategy shares best practice around
the group and reports on performance
the team’s primary role is to help secure
the longterm sustainability of the business
by integrating our csr strategy into our
normal business culture it now has four
fulltime professionals
key stakeholders
our stakeholders include customers
employees investors suppliers local
communities industry partners
governments and nongovernmental
organisations in our source countries
and the destinations where we operate
we work with them on identifying the issues
that can move our business forward in
particular we need the support of customers
employees and suppliers without them we
cannot achieve real sustainability so we
attach particular importance to raising their
awareness of csr issues and work with them
to enhance policies standards and practices
focus areas
these are the areas that particularly
concern us in relation to our principal
stakeholder groups and activities
customers
to succeed as a business we have to build
the best possible relationships with our
customers and build trust with everyone
we take on holiday we strive for continuous
improvement across all our customerfacing
activities this was recognised by a number
of industry awards during the year including
three of the top british travel awards
two at the globe travel awards including
best skiactivity operator for the ﬁfth year
running best sun holiday tour operator
also for the ﬁfth year running at the irish
travel trade news awards and three top
awards at the scottish passenger agents
association awards including overall
best tour operator
we listen to our customers through
independent research and their direct
feedback and use their comments to
guide changes and improvements we pay
particular attention to customers’ health
and safety our move in 2008 to devolve
responsibility for this to the operating
divisions helps us respond quickly to local
conditions and regulatory requirements
employees
our success depends absolutely on how
well we recruit develop train and motivate
our 31000 employees since the merger
thomas cook believed affordable travel could change
ordinary people’s lives for the better today we are still
inspired by that vision
thomas cook children’s critical care centre
in may 2008 manny fontenlanovoa proudly opened the doors of the
thomas cook children’s critical care centre at london’s kings college
hospital this new £23m centre is one of the ﬁrst of its kind in the uk
housing paediatric intensive care and a specialised paediatric high
dependency unit made possible by fundraising from thomas cook
employees and the generosity of our customers the stateoftheart
centre will treat more than 400000 sick children each year thomas cook group plc annual report  accounts 2008 39
directors’ report – business review
2008
2008 priorities progress details and further action
employees
environment
customers and products
communities
achieved
achieved
achieved
achieved
save as you earn saye launched internationally with 10 takeup among eligible
employees buy as you earn baye launched in the uk with 6 takeup
reaccredited including prestigious world class recognition
accreditation excludes retail and airline businesses
review complete diversity training developed for new employees and managers included
in induction at all levels local population profiling tool developed for recruitment
uk systems made more userfriendly retail management system streamlined with all risk
assessment forms and other information available online work continues on new intranet
partially
achieved
achieved
ongoing
partially
achieved
achieved
achieved
achieved
achieved
achieved
achieved
ongoing
ongoing
ongoing
ongoing
at draft stage target date for publication july 2009
appointed september 2008 group audit now underway to ensure completion
of other targets
co
2
emission data published in main csr report on wwwthomascookgroupcom
we set increasingly demanding standards to continue our longterm programme
but narrowly missed last year’s targets
work continues to improve access beyond statutory requirements
we maintained our iosa position next full audit due february 2009
in the uk we continue to work with suppliers to reach federation of tour operators
fto standards based on eu recommendations we are backing a major industry drive
for uniform safety legislation throughout the eu selfassessment protocols in place
webenabled systems due 2009
our child protection policy applies both in the uk and in resorts we work with
independent child protection consultants to monitor and enhance this policy
total raised over £350000
launch planned for early 2009
initial drafts shared with stakeholders for review before publication
appointed march 2008
113 audited during 200708
extensive section included in new minisite
launch share schemes for all employees
with shareholder approval
maintain uk investors in people accreditation
review uk diversity policies
make uk health and safety management system more
userfriendly with access for all retail employees
create new and expanded group
environmental policy
appoint a member of staff dedicated to
environmental management
report on co
2
emissions from uk airline in future
cut northern european airline fuel consumption
and emissions per passengerkm by 1 and cut
cabin waste per passenger by further 5
comply fully with new eu regulations on access
to air travel for people with reduced mobility in
force from july 2008
maintain iata operational safety audit iosa
registration for the combined uk airlines
move suppliers towards recognised international
fire and safety standards
work towards meeting uk ofsted good practice
guidance in all inhouse children’s club facilities
raise £300000 from customers for the travel foundation
launch thomas cook foundation as primary
vehicle for our corporate giving and support
of employees’ charity work
develop a sustainable tourism policy
appoint a member of staff dedicated to
sustainable tourism
audit a further 100 properties against
travelife criteria
expand information about animal welfare
on customer websites 40 wwwthomascookgroupcom
thomas cook has adopted a common set
of ﬁve values as the template for employee
behaviour throughout the organisation –
with an initial focus on one value in
particular ‘united as one team’ in 2009
the emphasis will move to another of these
values ‘pioneering our future’ the proud
values are set out on page 26 in 2008 we
introduced share plans for all employees
launched consistent rewards and succession
planning for senior managers across
the group and created a fasttrack
development programme for our high
potential employees
home communities
we believe we should play an active part
in the communities where most of our
people live and work – through encouraging
charitable donations and by supporting
employee volunteering and fundraising
we have been developing a more coherent
framework for our support including
establishing the thomas cook foundation
as our primary vehicle for charitable giving
by our customers and employees who will
be invited to serve as trustees
increasingly we focus our community
and charitable support on causes related
to children education and the environment
during 2008 the paediatric intensive care and
paediatric high dependency units opened in the
thomas cook children’s critical care centre in
london’s kings college hospital we met our 2005
pledge to cover the cost of building materials
reaching a ﬁnal target of £23m through funds
raised from customers and employees
destination communities
for destination communities and
environments tourism can bring great
economic and social beneﬁts it also provides
an incentive to preserve precious natural
attractions and cultural heritage but if
managed irresponsibly it can harm
communities and damage the human and
natural heritage that tourists have come to see
to avoid fostering these negative consequences
we work closely with the travel foundation
an initiative launched by the uk government
and major travel operators which focuses
on people and the environment in tourism
destinations it has become one of our key
partners and in 2008 our customers raised
over £350000 towards its work
supply chain
our principal suppliers are hotel owners
and operators we are working with them to
ensure increasingly high health safety and
environmental standards we have worked
with the federation of tour operators fto
to launch the travelife awards – an eu
backed and internationally recognised
sustainability scheme for hotels and other
tourism partners to achieve a travelife bronze
silver or gold award suppliers must be
audited across a wide range of sustainability
criteria during the year we audited 113
properties and we currently feature over 70
award winners in our brochures during a
visit to cyprus members of our sustainability
team completed eight travelife audits while
also promoting water conservation – the
island is suffering critical water shortages –
and hotels are keen to adopt the initiatives
they learned about during the audits
environment
our group environmental policy commits
us to doing as much as we can to protect the
resources on which our business depends
our progress in these areas was recognised
at the 2008 british travel awards where we
won silver awards in the most environmentally
responsible airline and most environmentally
responsible large tour operator categories
we constantly strive to reduce negative
impacts resulting from our operations and
help our suppliers to do the same we focus
particularly on aviation emissions and noise
natural resource use and waste management
our work in these areas has gained considerable
impetus from the appointment of a fulltime
environmental manager in september after
a lengthy search for someone with the right
qualiﬁcations and experience we are making
progress in monitoring our environmental
impacts and fuel consumption and emission
data for our uk airline is included in our
online csr report this report includes some
data for energy consumption in our ofﬁces
in the meantime we have developed
environmental labels for our uk aircraft ﬂeet
these give boarding passengers environmental
information in a form similar to the labels
used for cars and household appliances
the information will also be published
on our uk airline website at
wwwthomascookairlinescouk we now
need to work hard to create a more consistent
programme with our airlines across the group
more information
the thomas cook group corporate website
includes a csr section which sets out our
policies standards and performance we
also publish an annual report on our csr
priorities activities and performance to
conserve resources this is available online
only we welcome your feedback on all
aspects of csr and you can ﬁnd full
contact details on the website
csr website and annual csr report
httpcsrthomascookgroupcouk
email and contact details
httpcsrthomascookgroupcouktcg
servicescontact
directors’ report
corporate social responsibility continued
2
1 customers planting trees in sri lanka
as part of a regeneration project after
the tsunami
2 thomas cook aims to build the best
possible relationships with its customers
1 thomas cook group plc annual report  accounts 2008 41
basis of ﬁnancial information
the results included within this report
reﬂect both unaudited pro forma and
audited statutory information for thomas
cook group plc the pro forma information
has been prepared following the change in
year end from 31 october to 30 september
to allow a more meaningful year on year
comparison of the development of the
business and reﬂects the underlying results
for the twelve months to 30 september 2008
and the twelve months to 30 september 2007
the prior year pro forma ﬁgures have been
prepared as if the merger of thomas cook ag
and mytravel group plc had taken place
prior to 1 october 2006 the ﬁrst day of the
comparative accounting period presented
the pro forma ﬁnancial information has
been prepared on an adjusted basis which
means before exceptional items amortisation
of intangible assets that arose from the
business combination interest and tax
unless otherwise indicated and excludes
our share of the results of associates and
joint ventures
the audited statutory information reﬂects
the results of thomas cook group plc for the
eleven months to 30 september 2008 and
the twelve months to 31 october 2007 the
prior year comparatives reﬂect the results
of thomas cook ag only for the period from
1 november 2006 to 18 june 2007 and of
thomas cook group plc from 19 june 2007
being the date that the merger completed
during the period we changed the
presentational currency for the group to
sterling as we now expect to generate the
majority of our proﬁts in noneuro countries
with the uk being by far the largest
consequently all the ﬁnancial information
including the prior year comparatives included
in this report has been presented in sterling
pro forma unaudited ﬁnancial results
income statement highlights
revenue and proﬁt from operations
the group pro forma revenue for the period
was £88098m an increase of 118 on the
prior year period however excluding the
impact of translation and acquisitions
group revenue was ﬂat year on year with
an underlying decrease in uk revenue of
3 being offset by an increase in northern
europe of 9
the pro forma proﬁt from operations
increased by 498 to £3659m fuel costs
increased signiﬁcantly year on year however
this was more than offset by improvements
in underlying performance and increased
and accelerated synergy realisation from the
directors’ report – business review
pro forma group unaudited ﬁnancial results
12 months 12 months
ended ended
30 september 30 september change
2008 2007 
revenue £m

88098 78785 118
proﬁt from operations £m

3659 2442 498
operating proﬁt margin 

42 31 355
adjusted earnings per share p ‹ 241 171 409
dividend per share p 975 500 950
adjusted dividend cover › 25 25 –
operating cash ﬂow £m 2202 2153 23
net debtfunds £m 2925 3936
directors’ report
financial review
see appendix 2 on page 126 for key
dr jürgen büser
chief financial ofﬁcer
statutory group ﬁnancial results
11 months 12 months
ended ended
30 september 31 october
2008 2007
revenue £m 81671 64045
proﬁt before tax £m 495 1902
earnings per share p 47 220
operating cash ﬂow £m 3572 1606 42 wwwthomascookgroupcom
directors’ report
financial review continued
pro forma unaudited segmental performance review
12 months 12 months
ended ended
30 september 30 september
2008 2007 change
£m £m 
external revenue 
uk 30973 31318 –11
continental europe 36204 30490 187
northern europe 9716 8066 205
north america 4398 3791 160
airlines germany 6807 5117 330
corporate – 03
group 88098 78785 118
proﬁt from operations 
uk 1434 736 948
continental europe 1063 675 575
northern europe 862 735 173
north america 60 49 224
airlines germany 454 462 –17
corporate 214 215 05
group 3659 2442 498
merger of thomas cook and mytravel
together with a contribution from
acquisitions in the period and a net
beneﬁt from changes in exchange rates
exceptional operating items
pro forma exceptional operating items
amounted to £2053m 2007 £1712m
and largely relate to the costs of the merger
integration process the integration costs
for other acquisitions made in the year
and other business restructuring activities
a summary of the segmental pro forma
revenue and proﬁt from operations is shown
below further information on the movements
in revenue and proﬁt from operations are
given in the operational review on pages 28
to 37 further information on the exceptional
operating items is provided in the statutory
ﬁnancial results section of this financial
review on page 43
net ﬁnance costs
net ﬁnance costs excluding exceptional
ﬁnance costs in the period were £582m
2007 £79m the increase year on year
reﬂects lower interest rates on deposits and
lower cash balances due in part to expenditure
on acquisitions and integration costs increased
costs stemming from the new three year
revolving credit facility and the normalised
phasing effect of marking to market the
forward points on our foreign currency
hedging which should reverse next year
when the underlying transactions take place
exceptional ﬁnance costs in the period
amounted to £268m this includes £139m
of revaluation losses on trading securities
and £129m relating to the exceptional
element of the phasing effect of marking to
market the forward points on our foreign
currency hedging which arose in september
2008 as a result of the global banking crisis
earnings per share and dividends
the pro forma adjusted earnings per share
for the period was 241 pence compared
with 171 pence in the pro forma prior year
period pro forma adjusted earnings per
share has been calculated using the pro
forma proﬁt for the period before exceptional
items and amortisation of business
combination intangibles divided by the
weighted average number of shares in issue
for the prior year period the number of
shares in issue at the end of the period was
taken due to the distortion caused by the
merger adjustments have been made to reﬂect
a normalised preexceptional tax charge
the board is recommending a ﬁnal dividend
of 65 pence per share for payment after
and subject to shareholder approval at
the annual general meeting to be held
on 19 march 2009 this together with the
interim dividend of 325 pence paid on
5 september 2008 brings the total dividend
in respect of the period to 975 pence based
on the adjusted earnings per share ﬁgure
noted above this equates to a 41 payout
ratio for the full year
cash ﬂow and net debt
the net cash inﬂow from operating activities
during the pro forma period was £2202m
2007 £2153m this includes the proﬁt
from operations during the period partly
offset by the cash outﬂow on integration
costs tax paid and a small net outﬂow
on working capital of £383m
the net cash outﬂow from investing activities
was £3614m 2007 £1222m the outﬂow
in the period includes £2964m spent on
acquisitions of businesses and £1595m
expenditure on tangible and intangible
ﬁxed assets these were partly offset by
the realisation into cash of £759m of
our trading securities
the net cash inﬂow from ﬁnancing activities
was £281m 2007 outﬂow of £1035m the
inﬂow in the period largely comprises the net
draw down of borrowings under the credit
facility of £5036m offset by the cash outﬂow
in respect of the share buyback programme
of £2478m £782m paid out in dividends
prior year ﬁnal dividend and current year
interim dividend ﬁnance lease payments of
£918m and interest payments of £581m
cash and cash equivalents on the balance
sheet at 30 september 2008 were £7613m
2007 £8560m this excludes cash held in
shortterm securities of £1292m 2007
see appendix 2 on page 126 for key
the costs of running the corporate headquarters have remained broadly in line with the prior year with synergy beneﬁts
being offset by year on year net losses on translation due to adverse movements in exchange rates the review of
performance for all the other segments is included in the operational review on pages 28 to 37 thomas cook group plc annual report  accounts 2008 43
£1973m however the balance does include
restricted cash of £1271m 2007 £1043m
which is held in escrow accounts predominantly
in the us and canada in respect of local
regulatory requirements by white horse
insurance ireland limited the group’s
insurance company and in other securities
in addition it should be noted that the
group’s working capital cycle is such that
cash balances are at their lowest in the
winter months and at their peak in the
summer months
net debt at 30 september 2008 was £2925m
2007 net funds of £3936m the movement
year on year largely reﬂects the cash outﬂow
during the period on the share buyback
programme and the acquisitions made
which has resulted in the drawing down
of funds on the revolving credit facility
the ratio of net debt to adjusted ebitda
proﬁt from operations before depreciation
and amortisation at 30 september 2008
was 06 times
reconciliation of pro forma and statutory
proﬁt from operations
the table below sets out the key reconciling
differences in proﬁt from operations on a pro
forma basis compared with a statutory basis
for 2008 and the comparative period the
statutory group proﬁt from operations
for 2008 reﬂects 100 of the results of
thomas cook group plc for the eleven month
period ending on 30 september 2008 the
statutory group proﬁt from operations for
2007 reﬂects 100 of thomas cook ag for
the twelve month period ending 31 october
2007 and 100 of mytravel group plc and
thomas cook group plc from 19 june 2007
being the date of the merger to 31 october
2007 consequently the ﬁrst adjustment in
the table removes the premerger results of
mytravel group plc from the comparative
period as mytravel group plc made losses
in the winter period 2007 this adjustment
improves statutory proﬁtability in 2007
the pro forma information has been produced
on the assumption that the accounting
reference date for thomas cook group plc
has always been 30 september 2008 as a
result the second adjustment removes the
pro forma october 2007 result from the
current period and replaces the pro forma
october 2006 result with the statutory
october 2007 result in the prior year period
in preparing the pro forma proﬁt from
operations account was taken of the impact
of acquisition accounting as part of the fair
value adjustments a provision was made
in respect of above market rate hotel lease
rentals in addition the value of aircraft held
on the balance sheet was reduced in the
pro forma ﬁgures we have assumed that
both of these adjustments were made prior
to 1 october 2006 and as a result the impact
of a full year of lower rental costs and reduced
depreciation has been reﬂected in the pro forma
proﬁt from operations in the comparative
period the net effect of these fair value
adjustments has been to increase the pro
forma proﬁt from operations for the prior
period by £117m the third adjustment
therefore removes the impact of this
adjustment from the preacquisition period
the ias 39 business combination adjustment
represents unrecognised losses on hedging
instruments taken to reserves within the
mytravel business prior to the date of the
business combination on consolidation
these amounts are included within goodwill
and are therefore not recognised in the pro
forma ﬁgures but increase statutory proﬁt
from operations
statutory ﬁnancial results
as noted earlier the statutory group proﬁt
from operations for 2008 reﬂects 100 of
the results of thomas cook group plc for
the eleven month period ending on 30
september 2008 the statutory group proﬁt
from operations for 2007 reﬂects 100 of
thomas cook ag for the twelve month
period ending 31 october 2007 and 100
of mytravel group plc and thomas cook
group plc from 19 june 2007 being the
date of the merger to 31 october 2007
income statement highlights
revenue and proﬁt from operations
revenue in the period amounted to £81671m
compared with £64045m in the prior year
proﬁt from operations before exceptional
items and amortisation of business
combination intangibles was £3634m
compared with £3089m in the prior year
exceptional operating items
exceptional items are deﬁned as costs or
proﬁts that have arisen in the period which
management do not believe are a result of
normal operating performance and which if not
separately disclosed would distort the year
on year comparison of trading performance
total net exceptional operating costs
excluding amortisation of business
combination intangibles in the period were
£1796m compared with £1270m in the
prior year the increase year on year largely
reﬂects higher merger integration costs as we
accelerate and realise higher synergy savings
than previously anticipated together with
integration costs associated with new
acquisitions made in the period and
other restructuring costs
included within the net £1796m of exceptional
operating items are £1067m of costs associated
with the integration of the former mytravel
and thomas cook businesses the majority of
these costs have arisen in the uk businesses
and largely reﬂect redundancy and other
peoplerelated costs and costs of terminating
and amalgamating various contracts
other exceptional operating costs include
£464m in relation to provisions for the
integration of other businesses acquired during
the year and for restructuring projects within
the underlying thomas cook businesses
directors’ report – business review
2008 2007
£m £m
pro forma group proﬁt from operations  3659 2442
adjustments
premerger operating loss of mytravel – 552
net impact of change in year end 200 93
premerger impact of fair value adjustments – 117
ias 39 business combination adjustment 175 119
statutory group proﬁt from operations  3634 3089
see appendix 2 on page 126 for key and the income statement on page 68 which reconciles statutory group proﬁt from
operations of £3634m to statutory proﬁt before tax of £495m directors’ report
financial review continued
44 wwwthomascookgroupcom
amortisation of business combination intangibles
amortisation of business combination
intangibles in the period amounted to
£480m 2007 £301m of which £317m
relates to the amortisation of brand names
customer relationships and computer
software and £163m to the amortisation
of the order backlog that existed at the
time of the respective acquisitions
associates and joint ventures
our share of results of associates and joint
ventures before exceptional items was a
loss of £16m 2007 proﬁt of £18m the
reduction year on year largely reﬂects the
disposal in may 2008 of our 40 stake in
activos turisticos as part payment for the
acquisition of a 65 stake in viajes
iberoservice espana sl together with
increased losses in our barclaycard joint
venture arrangement
net investment income which reﬂects
dividends and interest received from
investments was £05m 2007 £17m
the proﬁt on disposal of associates in the
prior year of £355m largely reﬂected the
sale to arcandor on an arm’s length basis
of our 50 interest in sunexpress an airline
based in turkey
net ﬁnance costs
net ﬁnance costs excluding exceptional
ﬁnance costs in the period were £584m
2007 £06m the increase year on year
reﬂects lower interest rates on deposits
and lower cash balances due in part to
expenditure on acquisitions and integration
costs increased costs stemming from the
new three year revolving credit facility
increased costs on ﬁnance leases due to
the full year effect of including the former
mytravel leases and the normalised phasing
effect of marking to market the forward
points on our foreign currency hedging
which should reverse next year when the
underlying transactions take place
exceptional ﬁnance costs in the period
amounted to £268m this includes £139m
of revaluation losses on trading securities
and £129m relating to the exceptional
element of the phasing effect of marking
to market the forward points on our foreign
currency hedging which arose in september
as a result of the global banking crisis
proﬁt before tax for the eleven months ended
30 september 2008 was £495m twelve
months ended 31 october 2007 £1902m
tax
the tax charge in the period was £51m
2007 £395m excluding the effect of
adjustments to tax provisions made in respect
of previous years and exceptional items this
represents an effective tax rate of 261 on
the pre exceptional proﬁt for the year
the cash tax rate will continue to be
considerably lower than 261 as a result
of being able to utilise the losses available in
the uk and germany total losses available to
carry forward in the group at 30 september 2008
are £13 billion deferred tax assets have
been recognised in respect of £07 billion
of this amount
proﬁt after tax for the eleven months ended
30 september 2008 was £444m twelve
months ended 31 october 2007 £1507m
earnings per share and dividends
the basic and diluted earnings per share for
the period was 47 pence 2007 220 pence
the earnings per share ﬁgures noted here are
affected by the weighted average number of
shares in issue which are signiﬁcantly lower
for the comparative period due to the
nature of the merger transaction and
by the change in year end as a result
management believes that the adjusted
earnings per share ﬁgures included within
the pro forma unaudited ﬁnancial results
section of this ﬁnancial review are a more
meaningful measure of return
as noted in the pro forma unaudited ﬁnancial
results and performance review section of this
financial review the board is recommending
a ﬁnal dividend of 65 pence per share for the
period ended 30 september 2008 for payment
after and subject to shareholder approval at
the annual general meeting to be held on
19 march 2009 this together with the interim
dividend of 325 pence paid on 5 september
2008 brings the dividend for the eleven month
period to 975 pence
balance sheet cash ﬂow and net debt
net assets at 30 september 2008 were
£20092m 31 october 2007 £21206m
given the cyclical nature of the group’s
working capital cycle the change in
accounting reference date and the merger of
mytravel and thomas cook part way through
the prior year period any comparison of
statutory current period cash ﬂows against
the prior year is signiﬁcantly distorted as
a result the pro forma cash ﬂow analysis
included earlier in this financial review
should be used as the basis for understanding
the group’s cash ﬂows in the period
under review
cash and cash equivalents on the balance
sheet at 30 september 2008 were £7613m
31 october 2007 £6223m this excludes
cash held in shortterm securities of £1292m
2007 £2556m however the balance does
include restricted cash of £1271m 2007
£1162m which is held in escrow accounts
predominantly in the us and canada in
respect of local regulatory requirements
held by white horse insurance ireland
limited the group’s insurance company
and held in other securities
net debt at 30 september 2008 was £2925m
31 october 2007 net funds of £2487m
treasury policies
thomas cook group is subject to risks related
to changes in interest rates exchange rates
fuel prices and liquidity within the framework
of its business operations
to cover these risks the board of directors
has established treasury policies which are
reviewed regularly to ensure they remain
relevant to the business
the board approves all the ﬁnancial
instruments used by the group to limit
its risks internal guidelines provide
the framework governing actions taken
responsibilities and controls the use
of derivative ﬁnancial instruments is not
permitted for speculative purposes but
instead serves exclusively to hedge existing
underlying or planned transactions by the
business units
treasury activities are managed by group
treasury group treasury reports regularly
to the board and is subject to periodic
independent reviews and audits which
are presented to the audit  risk
management committee
in accordance with the provisions set out
in ias 39 all derivative ﬁnancial instruments
must be measured at their fair values the
market valuation of the derivative ﬁnancial
instruments used is based on market
information and appropriate valuation
methods the fair value of options is
determined by recognised option price
models and that of interest rates derivatives
takes account of terms to maturity based
on current market interest rates and the
interest rate yield curve positive market
values of derivative ﬁnancial instruments thomas cook group plc annual report  accounts 2008 45
are recognised as an asset while negative
market values are recognised as a liability
the group is ﬁnanced by a balanced mix of
equity and access to bank facilities
the liquidity position of the group is
signiﬁcantly inﬂuenced by the booking and
payment pattern of customers as a result
liquidity is at its lowest in the winter months
and at its highest in the summer months
the group manages the cyclical nature of
its liquidity by making use of its revolving
credit facility
for its longerterm liquidity requirements for
example for acquisitions the group makes
use of its term loan facility
foreign currency risks
the group is active in many destinations
and sales regions and as such is subject to
the risk of exchange rate ﬂuctuations in its
operating activities exchange rate risks arise
in connection with the sourcing of services
from destinations outside the source market
additionally us dollar payments are made
for the procurement of fuel and operating
supplies for aircraft as well as for
investments in aircraft
the group’s policy requires all subsidiaries
to hedge all tradegenerated exposures with
group treasury either as part of the budget
process or at the time of brochure launch
use is made in particular of currency forwards
currency swaps and plain vanilla currency
options in order to limit exchange rate risks
and these are usually designed as cash ﬂow
hedges of forecast future transactions
interest rate risks
the group is also subject to risks arising from
interest rate movements in connection with
its ﬁnancing of aircraft and acquisition of
investments floating rate medium to
longterm items are exposed to interest rate
change risks interest rate swaps and interest
rate collars are designated as cash ﬂow
hedges of the interest rate
cash from operations is invested in shortterm
bank deposits and money market funds
fuel price risk
fuel exposures relate to ﬂying costs for the
seasons on sale price hedging transactions
are undertaken for the purpose of limiting
the risk of unfavourable changes in the price
of fuel the aim of the hedging policy is to
hedge up to 95 of the fuel requirement for
the ﬂight schedule concerned
group policy requires the group airlines to
hedge all fuel exposures with group treasury
12 to 18 months prior to consumption
hedging is implemented primarily with a
combination of ﬁxed price contracts swaps
and net purchased options and is either in
crude oil gas oil or kerosene
liquidity risk
the group’s overall objective is to ensure
that it is at all times able to meet its ﬁnancial
commitments as and when they fall due
surplus funds are collected and invested with
approved counterparties within authorised
limits and with the aim of maintaining short
term liquidity while maximising yield
in may 2008 the group replaced the
existing debt facility with a new credit
facility amounting to €18bn £14bn at
the ﬁnancial period end of which €128bn
£10bn at the ﬁnancial period end is
available for immediate use for the group’s
general corporate purposes including
acquisitions and the recently completed
share buyback programme as well as
to manage the cyclical nature of the
group’s liquidity
the group uses its annual budget and three
year planning process to predict expected
future liquidity of the group the liquidity
forecast is reviewed and updated on a
regular basis
shortterm liquidity
shortterm liquidity is invested in a
combination of deposits and to a lesser
extent in securities having at least an
investment grade rating all securities
are denominated in euro and largely
represent corporate bonds government
bonds and asset backed securities with
an average rating of a for the portfolio
counterparty exposure
the group assesses its counterparty
exposure in relation to the investment of
surplus liquidity fuel foreign exchange and
interest rate hedging available undrawn
credit facilities drawn revolving credit
facilities and other facilities where
repayment is due within one year
credit default swap cds pricing and share
price performance in the previous 30 day
period are the criteria used to classify
counterparties into strong satisfactory and
weak categories the counterparty’s strength
deﬁnes the aggregate limit of the group’s
exposure towards the relevant party
directors’ report – business review 46 wwwthomascookgroupcom
directors’ report
principal risks and uncertainties
thomas cook group plc like all businesses faces risks and uncertainties as we conduct our operations and execute our strategy
we place great importance on internal control and risk management and the system and framework that the board has put
in place is described in the corporate governance report on page 51
the table below lists the principal risks and uncertainties that may affect the group and also highlights the mitigating actions
that are being taken the content in the table however is not intended to be an exhaustive list of all the risks and
uncertainties which may arise
risk impact mitigation
pressure on volumes
and margins
downturn in the economies
of our source markets leading
to a reduction in demand
for our products and services
• strategy to establish thomas cook as a leading provider of independent travel
• acquisitions in the independent sector eg hotels4ucom and elegant resorts in
the uk and triwest travel in canada
• split of uk sector into mainstream and independent businesses with dedicated chief
executive officers to focus on each specific market and maximise the opportunities in each
• shift to higher margin allinclusive resorts
• launch of our own hotel brand – sentido
• focus on expanding into new emerging markets
• step change achievements in our ecommerce performance
• proven resilience vs lowcost airlines through much better access to beds in destination
• focus on medium haul destinations not economically viable for lowcost airlines
further information can be found on pages 9 to 37
reduction of revenue and
pressure on margins
fall in demand for traditional
package tours and competition
from internet distributors and
lowcost airlines
• strategy to increase medium haul noneurozone destinations while reducing our
short haul and long haul programmes
• flexible and assetlight business model
• utilising our buying power to manage accommodation costs across the group
• increase in higher margin all inclusive holidays which give cost certainty to customers
further information can be found on pages 9 to 37
reduction in bookings to
traditional resorts in the eurozone
as prices appear expensive
customers’ exposure to the
falling value of sterling
• csr programme as detailed in the corporate social responsibility report
further information can be found on pages 38 to 40 and in the full online corporate
social responsibility report which can be found on wwwthomascookgroupcom
damage to the company’s
brand and reputation
corporate social responsibility
including environmental issues
• health and safety management embedded in each business with central
coordinating function
further information can be found on pages 38 to 40 and in the full online corporate
social responsibility report which can be found on wwwthomascookgroupcom
significant impact on reputation
as a trusted brand would lead to
reduction in bookings
a major incident caused by a
significant lapse in health and
safety procedures
• significant capacity reductions through our actions to maintain margins
• flexibility of business model
– less than 10 of our hotel capacity is committed
– around 89 of our uk tour operator flying requirements are undertaken by our own fleet
allowing considerable further flexibility to cut capacity without affecting our own airline
– changes in capacity can be accommodated late into the booking season
• assetlight business model
• utilising our buying power to manage accommodation costs across the group
• programme implemented in 2008 to reduce our cost base with defined contingency
plans to cut costs further if necessary
further information can be found on pages 9 to 37
inability to drive strategic
initiatives discontinuity in
management and leadership
loss of or difficulty in replacing
senior talent
• embedded new talent management processes to identify high potentials within the businesses
•embedded succession management processes to identify gaps and to deploy our talent optimally
• hired new talent from outside sector to fortify talent pipelines and provide senior succession
for the future
• created a high potential development programme to develop our most talented people
for the future
business disruption and loss
of profits
business continuity • existing business continuity plans being strengthened across the group
business disruption and loss
of profits
performance failure by
outsourced partners
• business continuity and service level agreements in place
operational and strategic risks thomas cook group plc annual report  accounts 2008 47
directors’ report – business review
risk impact mitigation
costs incurred may not be
recovered from customers
brochure prices do not
reflect actual cost of holiday
foreign currency risks • actively managed boardapproved hedging policy
further information can be found on pages 9 to 11 and 41 to 45 and in notes 24
and 25 to the financial statements
interest cost uncertainties interest rate risks • actively managed boardapproved treasury policy
further information can be found on pages 9 to 11 and 41 to 45 and in notes 24
and 25 to the financial statements
group is unable to meet its
financial commitments as
they fall due
liquidity risk • actively managed boardapproved treasury policy
• new £14bn credit facility put in place in may 2008
further information can be found on pages 9 to 11 and 41 to 45
loss of cash counterparty credit risk • daily assessment and management of cash balances
further information can be found on pages 9 to 11 and 41 to 45
inability to utilise losses due
to legislative or other changes
tax risk • compliance with boardapproved tax policy
further information can be found in note 27 to the financial statements
this may restrict investments
in the businesses
requirement to increase
defined benefit pension scheme
contributions which may be
imposed by the trustees or
the pensions regulator
• broadly diversified pension fund with limited exposure to single asset classes
• special contribution scheme started three years ago has reduced deficit significantly
inability to operate
loss of profit
reduction of revenue
and loss of profit
breakdown in internal controls • system of internal control in place which is continually monitored
further information can be found in the corporate governance report on pages 55 and 56
inability to obtain operating
andor route licences
leading ultimately to
cessation of operation
legal and regulatory risks
especially in respect of airline
operating licences insurance
and financial services sectors
and legislative impacts
failure to comply with new
regulations in relation to night
flying and environmental
emissions
money laundering legislation
in relation to financial services
• active legal and regulatory management programme in place
costs incurred may not be
recovered from customers
brochure prices do not
reflect actual cost of travel
volatility of fuel prices • actively managed boardapproved hedging policy
further information can be found on pages 9 to 11 and 41 to 45 and in notes 24
and 25 to the financial statements
financial risks
political military terrorist
security natural catastrophe
and health risks in key
tourist destinations
• ongoing monitoring by management
• assetlight and flexible business model
other risks that are continually monitored by management directors’ report
board of directors
48 wwwthomascookgroupcom
dr thomas middelhoff 55
title nonexecutive chairman
appointment march 2007
committee memberships member of audit 
risk management committee nominations
committee and management development
 remuneration committee
skills  experience thomas middelhoff is
chairman of the management board of
arcandor ag and was previously chairman
of the supervisory board of thomas cook ag
prior to joining arcandor ag he was head of
europe for corporate investment at investcorp
international and chairman and chief executive
officer of bertelsmann ag
external appointments chairman of senator
entertainment ag moneybookerscom ltd and co
chairman of germany1 acquisition limited he is
chairman and chief executive officer of arcandor
ag and director of new york times company
michael beckett 72
title nonexecutive deputy chairman  senior
independent director
appointment march 2007
committee memberships chairman of
nominations committee chairman of
management development  remuneration
committee member of audit  risk management
committee member of health safety 
environmental committee
skills  experience michael beckett was chairman
of mytravel group plc between 2004 and 2007 he
was chairman of coalcorp mining inc colombia
london clubs international plc ashanti goldfields
company limited and clarkson plc and was formerly
managing director of consolidated gold fields plc
external appointments nonexecutive active
chairman of endeavour financial corporation
canada nonexecutive director of northam
platinum ltd south africa orica ltd australia
the egypt trust luxembourg mvelaphanda
resources limited south africa and medoro
resources limited canada
manny fontenlanovoa 54
title chief executive ofﬁcer
appointment july 2007
committee memberships chairman of group
executive board member of health safety 
environmental committee
skills  experience manny fontenlanovoa joined
the company in 1996 following the acquisition of
sunworld which was then the uk’s fourth largest
tour operator he was a founding director of
sunworld and has 30 years’ experience in the
travel industry
he has held senior management positions within the
group latterly as chief executive officer of thomas
cook ag
external appointments director of arcandor ag
and mediterranean touristic management a joint
venture between thomas cook destinations gmbh
and iberostar hoteles y apartamentos sl
dr jürgen büser 42
title chief financial ofﬁcer
appointment july 2008
committee memberships member of group
executive board
skills  experience prior to his current role
jürgen büser was chief financial officer for the
uk  ireland division and spent three years before
that as head of controlling  ma for thomas
cook ag in germany before joining thomas cook
he held senior positions within siemens financial
services’ international consulting firm booz allen
 hamilton and westdeutsche landesbank
germany’s largest public sector bank
external appointments none
david allvey 63
title independent nonexecutive director
appointment march 2007
committee memberships chairman of audit 
risk management committee member of health
safety  environmental committee
skills  experience david allvey was non
executive director of mytravel group plc between
2003 and 2007 prior to this he was group finance
director of barclays bank plc bat industries plc
and allied zurich plc and held senior finance
positions with zurich financial services ag
external appointments chairman of costain
group plc and arena coventry ltd senior
independent director of intertek group plc and
nonexecutive director of william hill plc he
is a trustee of the william hill pension fund thomas cook group plc annual report  accounts 2008 49
roger burnell 58
title independent nonexecutive director
appointment march 2007
committee memberships chairman of health
safety  environmental committee member of
audit  risk management committee
nominations committee and management
development  remuneration committee
skills  experience roger burnell was a non
executive director of mytravel group plc from
april 2003 before joining mytravel he was chief
operating officer and a director of thomson
travel group plc other board experience includes
chairman of the first resort limited chairman
of international life leisure group limited and
chairman of homeform group limited
external appointments director of coventry
building society and clarence mansions
management company limited
dr peter diesch 54
1
title nonexecutive director
appointment march 2007
committee memberships member of audit 
risk management committee nominations
committee and management development
 remuneration committee
skills  experience peter diesch is chief financial
officer of arcandor ag before joining arcandor
he was cfo and hr director of linde ag cfo
and hr director of tchibo holding ag and cfo
of airbus gmbh
external appointments director of arcandor ag
and delton ag
hemjö klein 67
title independent nonexecutive director
appointment july 2007
committee memberships member of
management development  remuneration
committee and health safety  environmental
committee
skills  experience hemjö klein was formerly a
member of the executive board of lufthansa ag
and was a member of the executive board of
deutsche bundesbahn and deutsche reichsbahn
he has also held the position of chairman of the
supervisory board of sixt ag der deutsches
reisebüro gmbh and condor flugdienst gmbh
he was previously chairman of amadeus sa and
a member of the supervisory board of tui ag
he was chairman and president of the german
national tourist board
external appointments chairman and chief
executive officer of live holding ag chairman
and chief executive officer of telefunken holding
ag chairman of the supervisory boards of
humanoptics ag and payment solution ag
chairman of mountain partners ag director
of convergence ct inc and supervisory board
member of dvb bank
bo lerenius 62
title independent nonexecutive director
appointment july 2007
committee memberships member of audit 
risk management committee
skills  experience between 1992 and 1998
bo lerenius was chief executive of the then listed
company stena line and between 1998 and 1999
he was vice chairman of stena line and director
of new business at stena ab from 1985 to 1992
he was group president and chief executive of
swedish listed building materials group
ernstromgruppen he was group chief executive
of associated british ports holdings plc between
1999 and 2007
external appointments chairman of the swedish
chamber of commerce for the uk nonexecutive
director of g4s plc land securities group plc
ittur group sweden and rorvik timber sweden
he is an advisor to the infrastructure fund of
swedish venture capital group eqt
nigel northridge 52
title independent nonexecutive director
appointment august 2008
committee memberships member of
nominations committee and management
development  remuneration committee
skills  experience nigel northridge was chief
executive of gallaher group plc for seven years
until april 2007 over his 30year career with
the gallaher group he held a range of senior
positions in general management and sales
 marketing roles
external appointments senior independent
director of aggreko plc senior independent
director of paddy power plc and assumes the
role of nonexecutive chairman on 1 january
2009 he is also nonexecutive director of london
irish rugby club and pga european tour
directors’ report – corporate governance
1
peter diesch will resign from the board on 22 december 2008 and karlgerhard eick will be appointed as a
nonexecutive director as mentioned in the chairman’s statement on page 3 directors’ report
group executive board
50 wwwthomascookgroupcom
alexis colesbarrasso 44
title group director pr  communications
skills  experience alexis joined the company in 1993 prior to which she held a
number of senior marketing positions with the car rental business hertz and
worked for a corporate communications consultancy advising blue chip clients on
strategic communications
pete constanti 42
title chief executive ofﬁcer mainstream travel uk  ireland
skills  experience pete joined the company in 1996 he has 25 years of travel
industry experience previously working for ilg and sunworld where he was hr
director pete comes from a strong tour operating background including his last
position of executive director of thomas cook’s holidays division where he was
responsible for customer delivery and operations
mike cutt 50
title group director human resources
skills  experience mike has been group hr director at thomas cook group
plc since february 2008 prior to which he held hr director roles for boots
bq and kingfisher before that he spent 18 years at nationwide building
society although an hr director for the last 13 years mike has previously
worked in operations finance and strategy mike is also a nonexecutive
director for the land registry
ian derbyshire 40
title chief executive ofﬁcer independent travel uk  ireland
skills  experience ian joined the company in 2000 prior to which he held
senior positions within the leisure and travel sector with companies including
holiday autos the rank group and coop travel ian has 24 years of experience
in the travel industry
dr thomas döring 39
title chief executive ofﬁcer east and west europe
skills  experience thomas joined the company in 2001 and has been
responsible for the western and eastern european markets since 2006 he has
held senior positions leading the international markets division corporate
development and mergers  acquisitions before joining the company he spent
seven years with roland berger strategy consultants most recently as a partner
dr peter fankhauser 48
title chief executive ofﬁcer central europe
skills  experience peter joined the company in 2001 and has held a number of
senior roles within the group prior to joining the company he was director
general of kuoni reisen holding ag in zürich where he managed the company’s
european division and chief executive officer of ltu group in düsseldorf
michael friisdahl 46
title chief executive ofﬁcer north america
skills  experience michael joined mytravel north america as president in
2000 and was appointed chief executive officer north america in 2005 he has
25 years’ experience in the travel industry prior to joining the group he was a
partner and ceo of the holiday network which was acquired by airtours
international mytravel group plc in 2000
ludger heuberg 50
title chief financial ofﬁcer continental europe
skills  experience ludger joined the company in 2004 he was chief financial
officer of the company until june 2008 prior to joining the company he was cfo
of lufthansa cargo ag cfo of kolbenschmidtpierburg ag and director of mauser
waldeck ag
dr angus porter 51
title group director strategy
skills  experience angus was appointed to this position in june 2008 from june
2007 he was an independent nonexecutive director of thomas cook group plc
and prior to that was a nonexecutive director of mytravel group plc he has
most recently been global ceo of added value wpp’s brand development
consultancy before added value he held senior marketing sales and general
management roles with abbey national british telecom and mars
ralf teckentrup 51
title chief executive ofﬁcer airlines germany
skills  experience ralf joined the company in 2004 and has held a variety of
senior roles within the group previously he held a number of senior positions
with lufthansa ag
sam weihagen 58
title chief executive ofﬁcer northern europe
skills  experience sam has 33 years’ experience in the travel industry and has
held his current position since 2001 he was the former mytravel northern
europe chief executive and was an executive director of mytravel group plc for
three years prior to the merger he has served the company in several capacities
including commercial director with responsibility for purchasing and flight
planning he is chairman of the tour operating federation in his native sweden
derek woodward 50
title group company secretary
skills  experience derek joined the company in april 2008 before which he
spent six years as head of secretariat at centrica plc from 1998 he was company
secretary of allied zurich plc the uk listed holding company of the zurich
financial services group and between 1990 and 1998 he was assistant secretary
of bat industries plc directors’ report – corporate governance
corporate governance report  
thomas cook group plc annual report  accounts 2008 51
the board of directors of thomas cook group plc is committed to the 
principles of corporate governance contained in the combined code  
on corporate governance the “code” in determining its governance 
arrangements the board also has to have regard to the provisions of  
the relationship agreement between the company and arcandor ag 
“arcandor” this is explained below  
this report sets out how the company applied the code principles and  
the extent to which the company complied with the provisions of section 
1 of the code in the period 1 november 2007 to 30 september 2008  
the “financial period”  
the position of arcandor as major shareholder 
arcandor holds directly or indirectly 528 of the company’s shares 
upon the merger between mytravel group plc and thomas cook ag in 
june 2007 to form thomas cook group plc the “company” arcandor and 
the company entered into a relationship agreement the “relationship 
agreement” the relationship agreement sets out certain aspects of the 
company’s governance arrangements the board considers that these 
arrangements are in the best interest of the company in view of its 
ownership structure in particular the relationship agreement covers the 
following matters 
• arcandor has the right to appoint two nonexecutive directors 
thomas middelhoff and peter diesch were appointed under this 
provision as will dr karlgerhard eick with effect from 22 december 
2008 when peter diesch steps down from the board for so long as 
arcandor holds at least 40 or more of the shares in the company it 
also has the right to appoint one of those directors as chairman 
thomas middelhoff was appointed under this provision 
• at all times the independent nonexecutive directors will constitute  
a majority of the board excluding the chairman  
• the two arcandor appointed nonexecutive directors have the right 
to membership of the audit  risk management committee the 
management development  remuneration committee and the 
nominations committee however the relationship agreement 
provides that those committees should also comprise no fewer  
than three independent nonexecutive directors one of whom will 
be appointed committee chairman in respect of the audit  risk 
management committee and management development  
remuneration committee due to the arrangement provided by  
the relationship agreement the company is not compliant with  
the code provisions a31 and a22 
• for so long as arcandor holds 40 or more of the shares in  
the company the board cannot appoint a new chief executive officer 
without the prior written consent of arcandor 
• provided the nomination processes as set out in the relationship 
agreement are followed arcandor’s voting rights in respect of the 
election or reelection of any director at general meetings will be 
restricted to twothirds of the voting shares in issue which are not 
held or controlled by arcandor 
• the company carries on its businesses independently from arcandor 
any proposed transactions and relationships between the company 
and arcandor are to be on a normal commercial basis and are subject 
to the prior approval of a committee comprising the independent 
nonexecutive directors and to the provisions of chapter 11 of the 
listing rules of the uk financial services authority related party 
transactions in circumstances where chapter 11 of the listing rules 
would require a proposed transaction to be approved by 
shareholders arcandor shall not vote its shares on that resolution 
although not covered in the relationship agreement the company’s 
financing arrangements including the £14 billion credit facility 
referred to in the financial review on pages 41 to 45 are ringfenced 
from arcandor 
• the relationship agreement will terminate in the event of arcandor’s 
shareholding falling below 30 
 
the board of directors 
an effective board of directors leads and controls the group and has a 
schedule of matters reserved for its approval this schedule and the terms 
of reference for the audit  risk management management development 
 remuneration nominations and health safety  environmental 
committees are available on request and on the company’s website at 
wwwthomascookgroupcom the powers of the directors are set out in 
the company’s articles of association these are also available on the 
company’s website 
the board is specifically responsible for 
• approval of the group’s strategy and its budgetary and business plans 
• approval of significant investments and capital expenditure 
• approval of annual and halfyear results and interim management 
statements accounting policies and the appointment and 
remuneration of the external auditors 
• approval of interim and recommendation of final dividends 
• changes to the group’s capital structure and the issue of any securities 
• maintenance of the group’s system of internal control governance 
and approval authorities  
• executive performance and succession planning 
• determining standards of ethics and policy in relation to health 
safety environment social and community responsibilities 
one of the board’s meetings during the year is specifically devoted to the 
development of the group’s strategy strategy is continually monitored 
and reviewed by the board 
board meetings and attendance 
the board has regular scheduled meetings throughout the year and 
supplementary meetings are held as and when necessary the board  
held ten scheduled and ten unscheduled supplementary meetings during 
the financial period a table detailing individual director attendance at 
scheduled board and committee meetings during the financial period is 
set out on page 52 nonattendance at meetings was due to prior business 
commitments all directors who were unable to attend specific board or 
committee meetings reviewed the relevant briefing papers and provided 
their comments to the chairman of the board or committee as appropriate 
the chairman and each nonexecutive director has provided assurance  
to the board that they remain fully committed to their respective roles 
and can dedicate sufficient time to meet what is expected of them  corporate governance report continued 
wwwthomascookgroupcom 52 
the table below shows the number of scheduled board and committee meetings attended by each director out of the number convened during the 
time served by each director on the board or relevant committee during the financial period 
current directors 
name board
nominations
committee
audit  risk 
management 
committee 
management 
development  
remuneration
committee
health safety  
environmental
committee
thomas middelhoff nonexecutive chairman  910 22 1012 69 –
david allvey independent nonexecutive director 910 – 1212 – 22
michael beckett deputy chairman  senior independent director 1010 22 1112 99 22
jürgen büser chief financial officer
1
 22–– ––
roger burnell independent nonexecutive director 910 22 1212 89 22
peter diesch nonexecutive director 710 12 812 69 –
manny fontenlanovoa chief executive officer 1010 – – – 22
hemjö klein independent nonexecutive director 910 – – 79 22
bo lerenius independent nonexecutive director 710 – 1212 – –
nigel northridge independent nonexecutive director
2
 22 – – 23 –
former directors who served during the year 
name board
nominations 
committee
audit  risk 
management 
committee 
management 
development  
remuneration
committee
health safety  
environmental
committee
john bloodworth
3
 22–– ––
ludger heuberg
4
 88–– ––
peter mchugh
5
 22–– ––
angus porter
6
 56–– 45–
1
 jürgen büser was appointed to the board on 1 july 2008 
2
 nigel northridge was appointed to the board on 1 august 2008 
3 
john bloodworth resigned from the board on 31 december 2007 
4 
ludger heuberg resigned from the board on 1 july 2008 
5 
peter mchugh resigned from the board on 31 december 2007 
6 
angus porter resigned from the board on 25 april 2008 
board and committee composition 
the board comprises two executive directors and eight nonexecutive directors six of whom are considered to be independent biographical details  
of the directors can be found on pages 48 and 49 peter diesch will step down from the board with effect from 22 december 2008 he will be replaced 
as an arcandor nominated nonexecutive director by dr karlgerhard eick who will be appointed a director with effect from 22 december 2008 
as part of its annual review of corporate governance the board considered the independence of the nonexecutive directors against the criteria 
specified in the code and determined that david allvey michael beckett roger burnell hemjö klein bo lerenius and nigel northridge remained 
independent the arcandor nominated directors thomas middelhoff peter diesch and karlgerhard eick who will replace him on 22 december 2008 
are not considered as independent  
the roles of the chairman and chief executive officer are separate and distinct and each has a written statement of his respective responsibilities  
a summary of which can be found within the corporate governance compliance statement at wwwthomascookgroupcom 
the chairman thomas middelhoff is responsible for leading the board and chairing board and general meetings of the company  
the chief executive officer manny fontenlanovoa is responsible for the development of strategy and once approved by the board its implementation  
and the daytoday executive management of the group  
the senior independent director michael beckett is available to shareholders if they have concerns which have not or cannot be resolved through 
discussion with the chairman or the executive directors michael beckett chairs meetings of the independent nonexecutive directors who meet 
periodically throughout the year  
there is a formal rigorous and transparent process in place for the appointment of new directors to the board this process is described in the section 
on the nominations committee on page 54 in accordance with the code and the company’s articles of association all directors are subject to election 
by shareholders at the first annual general meeting “agm” following their appointment to the board and thereafter are subject to reelection every 
third year other than in respect of the arcandor appointed directors and michael beckett nonexecutive directors are initially appointed for a three
year term and subject to rigorous review and reelection can serve up to a maximum of three such terms  
upon the recommendation of the nominations committee david allvey will be proposed for reelection and jürgen büser nigel northridge and 
karlgerhard eick having been appointed to the board since the last agm will each retire and offer himself for reappointment by shareholders  
at the 2009 agm 
  directors’ report – corporate governance
 
thomas cook group plc annual report  accounts 2008 53
operation of the board 
before each board meeting directors received a comprehensive pack of 
papers and reports on the matters to be discussed at the meeting senior 
executives below board level also attended relevant parts of board 
meetings in order to make presentations on their areas of responsibility 
this gave the board access to a broader group of executives  
between board meetings directors are provided with relevant 
information on matters affecting the business  
the group company secretary who was appointed by the board is 
responsible for advising and supporting the chairman and the board on 
corporate governance matters all directors have access to the advice and 
services of the group company secretary and through him have access to 
independent professional advice in respect of their duties at the company’s 
expense the company maintains directors’ and officers’ liability insurance  
the code provides that the chairman and nonexecutive directors  
should meet without executives present such meetings have taken  
place however because of the governance structure adopted under the 
relationship agreement the company believes that the spirit of the code 
is also served by the meetings of independent nonexecutive directors as 
stated above these meetings are chaired by the deputy chairman who is 
also the senior independent director 
board evaluation 
an evaluation of the board and its committees was conducted during the 
financial period the board evaluation focused on the following areas 
• the board its size structure effectiveness range of skills and the 
appropriateness of its delegated authorities 
• the appropriateness of information circulated to the board for 
meetings and with regard to financial and operational matters 
• compliance with legislation regulation and codes and advice on 
corporate governance 
• the establishment competence and terms of reference of  
board committees 
the evaluation highlighted a small number of issues and appropriate 
actions have been taken to address them in addition the chairman  
was responsive to suggestions made by the independent nonexecutive 
directors regarding the operation and focus of the board in line with  
best practice the company has adopted an online evaluation system 
which will be used to conduct an evaluation of the board and its 
committees in the current year  
the independent nonexecutive directors reviewed the performance  
of the chairman as part of the company’s performance management 
system that applies to management at all levels across the group the 
performance of the chief executive officer and the chief financial officer 
is reviewed by the management development  remuneration committee 
board training and induction 
an induction programme tailored to meet the needs of individual 
directors is provided for each new director overall the aim of the 
induction programme is to introduce new directors to the group’s 
business its operations and its governance arrangements nigel 
northridge’s induction programme for example included meetings  
with senior management visits to the company’s offices in different 
geographical locations presentations on key business areas and  
relevant documentation 
directors also receive training throughout the year at board meetings 
and where appropriate committee meetings the directors receive 
regular updates and presentations on changes and developments to the 
business and to the legislative and regulatory environments during the 
financial period the board was provided with updates on the business 
environment and briefings on their codified duties conflicts of interest 
and a presentation on the law relating to corporate manslaughter  
directors’ conflicts of interest 
from 1 october 2008 a director has had a statutory duty to avoid a 
situation in which he has or can have an interest that conflicts or 
possibly may conflict with the interests of the company a director will 
not be in breach of that duty if the relevant matter has been authorised  
in accordance with the articles of association by the other directors  
the articles of association were amended to include the relevant 
authorisation for directors to approve such conflicts by a resolution  
of shareholders at the agm held on 10 april 2008 
prior to 1 october 2008 the board conducted a review of actual or 
possible conflicts of interest in respect of each director at its meeting  
in september 2008 the board approved a set of guiding principles on 
managing conflicts considered the process that had been adopted for 
identifying current conflicts authorised the conflicts that had been 
identified and stipulated conditions in accordance with the guiding 
principles and agreed a process to identify and authorise future conflicts 
it was also agreed that the nominations committee would review the 
authorised conflicts every six months or more frequently if the potential 
conflict situation materialises  
committees of the board 
the board has delegated authority to its committees on specific aspects  
of management and control of the group matters discussed and agreed 
at the committees are reported to the next board meeting 
group executive board 
the chief executive officer chairs the group executive board which meets 
ten times a year to oversee the strategic development and operational 
management of the group’s businesses the current members of the 
group executive board together with their biographies are set out on  
page 50 
finance  administration committee 
to facilitate swift and efficient operational management decisions  
the board has established the finance  administration committee 
comprising the chief executive officer and the chief financial officer 
which has delegated authority within clearly identified parameters  
in relation to daytoday financing and administrative matters 
audit  risk management committee  
role of the committee 
the board has delegated to the committee responsibility for overseeing 
the financial reporting and internal risk management control functions 
and for making recommendations to the board in relation to the 
appointment of the company’s internal and external auditors  
in accordance with its terms of reference the committee which reports 
its findings to the board is authorised to  
• monitor the integrity of the interim and annual financial statements 
including a review of the significant financial reporting judgements 
contained in them 
• review the company’s internal financial controls internal control  
and risk management systems 
• monitor and review the effectiveness of the company’s internal  
audit function 
• establish and oversee the company’s relationship with the external 
auditors including the monitoring of their independence and 
• monitor matters raised pursuant to the company’s whistleblowing 
arrangements 
the full terms of reference of the committee are available on 
wwwthomascookgroupcom or from the group company secretary at  
the registered office  corporate governance report continued 
 
wwwthomascookgroupcom 54 
the composition of the committee 
all members of the committee are nonexecutive directors consistent 
with the relationship agreement the two arcandor appointed 
nonexecutive directors thomas middelhoff and peter diesch and 
karlgerhard eick who will replace him on 22 december 2008 who  
do not meet the test of independence are members of the committee 
however the other four members of the committee are independent 
nonexecutive directors there were no changes to the composition  
of the committee during the financial period the composition of  
the committee at 30 september 2008 was 
david allvey chairman

 
michael beckett

 
roger burnell

 
peter diesch  
bo lerenius

 
thomas middelhoff 

 independent nonexecutive directors 
david allvey is considered by the board to have recent and relevant 
financial experience as required by the code  
meetings and attendance  
the committee which meets as often as required met twelve  
times during the financial period which included meetings held by 
teleconference to approve matters such as the provision of financial 
information to arcandor pursuant to the relationship agreement 
attendance by committee members at each meeting is set out in  
the attendance table on page 52 
during the financial period the committee met twice privately with  
the external auditors pricewaterhousecoopers llp and separately with 
representatives from ernst  young llp who have been appointed as  
the internal auditors of the company 
business conducted during the financial period 
• review of the annual and halfyearly results and interim 
management statements 
• review of the accounting judgements and policies adopted  
in connection with the above and the quarterly submission  
of financial information to arcandor 
• policy in relation to taxation 
• fuel hedging strategy 
• treasury policies and procedures  
• review and approval of the internal audit plan and the results  
of the audits conducted under that plan 
• review and approval of the external audit plan and 
• review of the principal risks  
support to the committee 
the committee received information and support from management during 
the year to enable it to carry out its duties and responsibilities effectively  
external auditors 
the committee has developed a policy for the provision of nonaudit 
services by the auditors and preapproves material fees for nonaudit 
services in accordance with that policy in order to ensure that the 
provision of nonaudit services does not impair the external auditor’s 
independence or objectivity the policy which is appended as a schedule 
to the audit  risk management committee’s terms of reference is 
published on the company’s website at wwwthomascookgroupcom  
an analysis of the fees earned by the group’s auditors for audit and 
nonaudit services is disclosed in note 10 to the financial statements 
pricewaterhousecoopers llp pwc were appointed as sole auditors of  
the company having previously been joint auditors following a tender 
process conducted at the beginning of the financial period they were 
appointed by shareholders at the agm held on 10 april 2008 upon the 
recommendation of the audit  risk management committee pwc  
will be proposed for reelection by shareholders at the agm to be held  
on 19 march 2009 pwc have confirmed their independence as auditors  
of the company in a letter addressed to the directors 
nominations committee  
role of the committee 
the board has delegated to the committee responsibility for reviewing 
and proposing appointments to the board and for recommending any 
other changes to the composition of the board or the board committees 
the principal responsibility of the committee is to make recommendations  
to the board on all new appointments to the board as well as board 
balance and composition the committee ensures that there is clarity  
in respect of the role description and capabilities for such appointments  
the full terms of reference of the committee are available on 
wwwthomascookgroupcom or from the group company secretary at  
the registered office 
the composition of the committee 
all of the members of the committee are nonexecutive directors two  
of whom thomas middelhoff and peter diesch who will be replaced  
by karlgerhard eick on 22 december 2008 do not meet the test of 
independence angus porter resigned from the board and therefore 
ceased to be a member of the committee on 25 april 2008 during  
the period from 25 april to 1 august 2008 the code requirement that  
a majority of the nominations committee comprise independent 
nonexecutive directors was not satisfied nigel northridge joined  
the board and was appointed to the committee on 1 august 2008  
at 30 september 2008 the composition of the committee was 
michael beckett chairman
 
 
roger burnell

 
peter diesch  
thomas middelhoff 
nigel northridge

 

 independent nonexecutive directors  
board appointments 
appointments to the board are made on merit and against objective 
criteria this process is led by the nominations committee which after 
evaluating the balance of skills knowledge and experience of each 
director makes recommendations to the board  
meetings and attendance  
during the financial period the committee had two formal meetings 
attendance by committee members at each meeting is given in the 
attendance table on page 52 
principal activities during the financial period 
the committee considered the appointment of a new chief financial 
officer following the decision of ludger heuberg to step down from the 
board for personal reasons and move back to germany to assume the 
role of cfo for the group’s continental european business segment in  
line with succession plans the nominations committee recommended 
jürgen büser formerly cfo for the uk  ireland division as the new  
chief financial officer and he was appointed with effect from 1 july 2008  
the committee engaged the services of an external search agency  
and other professional firms for the recruitment of nonexecutive 
directors this process resulted in the recommendation to the board  
of the appointment of nigel northridge with effect from 1 august 2008 
management development  remuneration committee 
a report detailing the composition responsibilities and work carried  
out by the management development  remuneration committee during 
the year including an explanation of how it applies the principles of the 
code in respect of executive directors’ remuneration is included within 
the remuneration report on pages 59 to 66 
the management development  remuneration committee does not 
determine the chairman’s remuneration and therefore does not comply 
with the code an explanation of this is set out in the remuneration 
report on pages 59 to 66 directors’ report – corporate governance
 
thomas cook group plc annual report  accounts 2008 55
all members of the committee are nonexecutive directors consistent 
with the relationship agreement the two arcandor appointed directors 
thomas middelhoff and peter diesch neither of whom meet the code’s 
test of independence are members of the committee however each of 
the other four members being a majority of the committee has been 
determined by the board as being independent as defined by the code 
health safety  environmental committee  
role of the committee 
the board has delegated to the committee responsibility to review 
develop and oversee consistent policy standards and procedures for 
managing health safety and environmental risks to the group’s business 
it is also responsible for the review and oversight of compliance with 
relevant legislation and regulation relating to health safety and the 
environment across the group 
the full terms of reference of the committee are available on 
wwwthomascookgroupcom or from the group company secretary  
at the registered office 
the composition of the committee 
the composition of the committee at 30 september 2008 was 
roger burnell chairman
 
 
david allvey

 
michael beckett

 
manny fontenlanovoa 
hemjö klein

 

 independent nonexecutive directors 
meetings and attendance  
during the financial period the committee met twice there was also  
a presentation and discussion on corporate manslaughter at a board 
meeting attendance by committee members at each meeting is set  
out in the attendance table on page 52 
during the financial period the committee reviewed and agreed the 
group’s health safety  environmental report reviewed the process  
of health and safety reporting across the group and agreed the group 
objectives in the fields of health safety and the environment for 200708  
the group’s corporate social responsibility report for 200708 is available 
on wwwthomascookgroupcom and contains the group’s health safety 
and environmental policies an explanation of how thomas cook 
manages corporate social responsibility and progress against targets  
a summary of the online report is contained on pages 38 to 40 in the 
business review 
shareholder communication 
the board promotes open communication with shareholders which is 
formalised within a framework of investor relations and includes formal 
presentations of full year and interim results trading statements and 
regular meetings between executive management and institutional 
investors in addition the board responds to ad hoc requests for 
information and all shareholders have an opportunity to question  
the board at the agm 
a review of the performance and financial position of the group and business 
segments and an explanation of the group’s strategy is provided on pages 
9 to 45 in the business review 
the deputy chairman who is also the senior independent director met a 
number of major institutional shareholders during the year to discuss the 
group’s remuneration policy and governance arrangements and to gain a 
firsthand understanding of any issues or concerns they may have had 
at its 2008 agm the company passed a resolution allowing the website 
and email to be used as the primary means of communication with  
its shareholders this arrangement provides significant benefits for 
shareholders and the company in terms of timeliness of information 
reduced environmental impact and cost shareholders may still opt to 
receive their communications in a paper format the company’s website 
contains information for shareholders including share price and news 
releases and can be found at wwwthomascookgroupcom  
risk management and internal control 
the board recognises its ultimate accountability for maintaining an 
effective system of internal control that is appropriate in relation to both 
the scope and the nature of the group’s activities and complies with the 
turnbull committee guidance on the combined code and has approved 
the framework and the standards implemented the board has delegated 
responsibility for the implementation of the group risk management 
policy to the chief financial officer the chief financial officer has formed  
the group risk management committee comprising senior executives 
from across the group to support him in fulfilling this responsibility 
the group risk management committee is responsible for 
• supervising a thorough and regular evaluation of the nature  
and extent of the risks to which the company is exposed 
• reviewing the corporate risk profile and recommending risk 
management strategies and  
• supervising and assessing the overall effectiveness of the risk 
management process 
to support the group risk management committee there are segment 
risk management committees each comprising the respective segment 
chief executive officer chief financial officer and other senior managers 
the group has established five segment risk committees which report into 
and support the work of the group risk management committee 
• uk  ireland 
• continental europe 
• northern europe 
• north america and 
• airlines germany 
by implementing the risk management policy the segments are 
responsible for 
• maintaining and updating risk reporting 
• managing risk action implementation and measurement systems and 
• maintaining and reviewing risk performance and measurement systems 
risk registers are compiled and submitted by each segment for review 
quarterly the group risk management committee prepares a halfyearly 
risk report for the attention of the audit  risk management committee 
based on the feedback from the segment risk management committees  
the report identifies the principal risks to the business and assesses the 
adequacy of controls and procedures in place to mitigate the likelihood 
and the impact of these risks the regular risk reporting regime has 
created an environment for the development and improvement of risk 
management procedures across the group the audit  risk management 
committee reviews the reports of the group risk management committee 
and makes recommendations to improve risk management and internal 
control this process of risk identification measurement and reporting 
provides a comprehensive ongoing assessment of the significant risks 
facing the group and the mitigating actions taken in respect of those risks 
this process ensures that the group complies with the relevant corporate 
governance best practice in relation to risk management including the 
guidance issued under the turnbull report the group’s internal audit 
function reports directly to the chairman of the audit  risk management 
committee internal audit makes recommendations to that committee in 
relation to the maintenance of a sound control environment throughout 
the group  corporate governance report continued 
 
wwwthomascookgroupcom 56 
the group encourages employees to report any concerns which they feel 
need to be brought to the attention of management and has adopted a 
whistleblowing policy and guidance on theft and fraud reporting policy 
these are published on the group’s intranet sites allowing such matters 
to be raised in confidence through the appropriate channels the group 
has a code of ethics which deals with  
• prohibitions on employees using their position for personal gain  
• prohibitions on improper business practices 
• a requirement for compliance with all internal approval and 
authorisation procedures and legal requirements and 
• a requirement to disclose potential conflicts of interest and potential 
related party contracts 
this code of ethics is contained within the group’s internal policies  
guide which is available to all employees and in particular those  
with responsibility for procurement or other dealings with third party 
suppliers in addition the group company secretary is available for 
advice on any matter which may give rise to cause for concern in  
relation to the code of ethics  
during the year the board through the work of the audit  risk 
management committee has conducted a review of the group’s system  
of internal control there is an ongoing process for the identification and 
evaluation of risk management and internal control processes which has 
been in place throughout the year and remains in place up to the date of 
the financial statements the board in reviewing the effectiveness of the 
system of internal control can confirm that necessary actions have been 
or are being taken to remedy any significant failings or weaknesses 
identified from that review 
going concern 
after making appropriate enquiries the directors have a reasonable 
expectation that the company and the group have adequate resources  
to continue in operational existence for the foreseeable future for this 
reason they continue to adopt the going concern basis in preparing the 
financial statements 
disclosure of information to auditors 
each of the directors who held office at the date of approval of this 
directors’ report confirms that so far as he is aware there is no relevant 
audit information of which the company’s auditors are unaware and that 
he has taken all steps that he ought to have taken as a director to make 
him aware of any relevant audit information and to establish that the 
company’s auditors are aware of that information 
statement of directors’ responsibilities in respect of the  
annual report the directors’ remuneration report and  
the financial statements  
the directors are responsible for preparing the annual report the 
directors’ remuneration 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 have prepared the 
group and the company financial statements in accordance with 
international financial reporting standards ifrss as adopted by the 
european union the financial statements are required by law to give a 
true and fair view of the state of affairs of the company and the group 
and of the profit or loss of the group for that period 
in preparing those financial statements the directors are required to 
• select suitable accounting policies and then apply them consistently 
• make judgements and estimates that are reasonable and prudent and 
• state that the financial statements comply with ifrss as adopted by 
the european union 
the directors confirm that they have complied with the above requirements 
in preparing the financial statements 
the directors are responsible for keeping proper accounting records that 
disclose with reasonable accuracy at any time the financial position of the 
company and the group and to enable them to ensure that the financial 
statements and the directors’ remuneration report comply with the 
companies act 1985 and as regards the group financial statements 
article 4 of the ias regulation they are also responsible for safeguarding 
the assets of the company and the group 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 
company’s website and legislation in the united kingdom governing the 
preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions  
  directors’ report – corporate governance
other disclosures 
thomas cook group plc annual report  accounts 2008 57
share capital  
the authorised share capital of the company is divided into two classes of 
share the company’s authorised ordinary share capital is €200000000 
divided into 2000000000 ordinary shares of €010 each and £50000 
divided into 50000 deferred shares of £1 each the ordinary shares carry 
the right to the profits of the company available for distribution and  
to the return of capital on a winding up of the company the ordinary 
shares carry the right to attend and speak at general meetings of the 
company each share holds the right to one vote the ordinary shares  
are admitted to trading on the official list of the london stock exchange 
the deferred shares carry no right to the profits of the company on  
a winding up the holders of the deferred shares would be entitled to  
receive an amount equal to the capital paid up on each deferred share  
the holders of the deferred shares are not entitled to receive notice 
attend speak or vote whether on a show of hands or on a poll at  
general meetings of the company 
authority to purchase shares 
at the extraordinary general meeting held on 12 march 2008 the 
company was authorised to make market purchases of ordinary shares  
up to a maximum number of 70386610 shares during the eleven month 
period ended 30 september 2008 the company acquired 58529399  
of its own ordinary shares nominal value €010 as part of the  
£290m €375m share buyback programme announced on  
30 january 2008 the total consideration paid for these shares  
was £1473m as a result of these market purchases the company 
purchased 48595331 shares from arcandor ag and karstadtquelle 
freizeit gmbh at a cost of £1162m  
share transfer restrictions 
the articles of association the “articles” are designed to ensure that  
the number of the company’s shares held by noneea nationals does  
not reach a level which could jeopardise the company’s entitlement to 
continue to hold or enjoy the benefit of any authority permission licence 
or privilege which it or any of its subsidiaries holds or enjoys and which 
enables an air service to be operated each an “operating right” in 
particular ec council regulation 100808 on licensing of air carriers 
requires that an air carrier must be majorityowned and effectively 
controlled by eea nationals  
the articles allow the directors from time to time to set a “permitted 
maximum” on the number of the company’s shares which may be owned 
by noneea nationals at such level as they believe is in compliance with 
the operating rights provided that the permitted maximum shall not  
be less than 40 of the total number of issued shares 
the company maintains a separate register the “separate register” of 
shares in which noneea nationals whether individuals bodies corporate 
or other entities have an interest such shares are referred to as “relevant 
shares” in the articles an interest in this context is widely defined see 
below the directors may require relevant members or other persons  
to provide them with information to enable them to determine whether 
shares are or are to be treated as relevant shares if such information  
is not provided then the directors will be able at their discretion to 
determine that shares to which their enquiries relate be treated as 
relevant shares registered shareholders will also be obliged to notify the 
company if they are aware either a that any share they hold ought to be 
treated as a relevant share for this purpose or b that any share they 
hold which is treated as a relevant share should no longer be so treated 
in this case the directors shall request such information and evidence as 
they require to satisfy themselves that the share should not be treated as 
a relevant share and on receipt of such evidence shall remove 
particulars of the share from the separate register if the directors 
determine that such action is necessary to protect any operating right 
due to the fact that an intervening act an “intervening act” being the 
refusal withholding suspension or revocation of any operating right or 
the imposition of materially inhibiting conditions or limitations on any 
operating right in either case by any state or regulatory authority has 
taken place or is contemplated threatened or intended or the aggregate 
number of relevant shares is such that an intervening act may occur or 
the ownership or control of the company is such that an intervening act 
may occur the directors may among other things  
• identify those shares which give rise to the need to take action and 
treat such shares as affected shares “affected shares” see below or  
• set a permitted maximum on the number of relevant shares which 
may subsist at any time which may not save in the circumstances 
referred to below be lower than 40 of the total number  
of issued shares and treat any relevant shares in excess of this 
permitted maximum as affected shares see below the directors 
may serve a notice an “affected share notice” in respect of any 
affected share an affected share notice can if it so specifies have 
the effect of depriving the registered holder of the right to attend 
vote and speak at general meetings which he would otherwise have 
had as a consequence of holding such shares such an affected share 
notice can if it so specifies also require the recipient to dispose of 
the affected shares so that the relevant shares will then cease to be 
affected shares within 21 days or such longer period as the directors 
may determine the directors are also given the power to sell such 
affected shares themselves where there is noncompliance with an 
affected share notice at the best price reasonably obtainable at the 
relevant time on behalf of the shareholder 
in deciding which shares are to be dealt with as affected shares the directors 
in their sole opinion will determine which relevant shares may give rise 
to the fact of risk of an intervening act occurring and subject to any such 
determination will have regard to the chronological order in which 
particulars of relevant shares have been or are to be entered in the 
separate register unless to do so would in the sole opinion of the directors  
be inequitable if there is a change in any applicable law or the company 
or any subsidiary receives any direction notice or requirement from any 
state or regulatory authority which in either case necessitates such 
action to overcome prevent or avoid an intervening act then the 
directors may either 
• lower the permitted maximum to the minimum extent that they 
consider necessary to overcome prevent or avoid an intervening  
act or  
• resolve that any relevant shares shall be treated as affected shares 
and the conversion permitted maximum the rights of the directors 
referred to above apply until such time as the directors resolve that 
grounds for the making of a determination have ceased to exist 
whereupon the directors must withdraw such determination the 
permitted maximum is set at 40 this permitted maximum may be 
varied by the directors if the directors resolve to vary the permitted 
maximum to deal with shares as affected shares or relax the 
ownership limitations they shall publish in at least one national 
newspaper in the united kingdom and in any other country in  
which the shares are listed notice of the determination and of  
any permitted maximum  
the directors shall publish from time to time 
• information as to the number of shares particulars of which have 
been entered on the separate register and 
• any permitted maximum which has been specified 
the directors may not register any person as a holder of shares unless 
such person has furnished to the directors a declaration together with 
such evidence as the directors may require stating a the name and 
nationality of any person who has an interest in any such share and if  
the directors require the nature and extent of such interest or b such 
other information as the directors may from time to time determine  
the directors may decline to register any person as a shareholder if 
satisfactory evidence of information is not forthcoming 
existing holders of shares will be recorded on the special register unless 
and until they have certified to the satisfaction of the company that  
they are eea nationals  other disclosures continued 
 
wwwthomascookgroupcom 58 
a person shall be deemed to have an interest in relation to  
thomas cook group plc shares if 
• such person has an interest which would subject as provided below 
be taken into account or which he would be taken as having in 
determining for the purposes of part 22 of the companies act 2006 
whether a person has a notifiable interest or 
• he has any such interest as is referred to in part 22 of the companies 
act 2006 but shall not be deemed to have an interest in any shares  
in which his spouse or any infant child or stepchild or in scotland 
pupil or minor of his is interested by virtue of that relationship or 
which he holds as a bare or custodian trustee under the laws of 
england or as a simple trustee under the laws of scotland and 
interested shall be construed accordingly 
agreements governing the transfer of shares  
under the relationship agreement arcandor ag has undertaken to give 
the company written notice of any intention to dispose of any shares and 
such disposal has to be carried out in consultation with the board of the 
company under the relationship agreement arcandor ag has agreed to 
certain restrictions on the ability of it and other members of the arcandor 
group of companies to acquire further shares in the company under 
these restrictions members of the arcandor group may not subject to 
certain exceptions acquire further shares in the company without the 
prior consent of the board provided that such consent will be given for  
a purchase of up to 5 of the company’s issued share capital unless such 
purchase would prejudice the company’s ability to maintain the free float 
required by the listing rules or result in the company becoming a close 
company 
provisions on change of control  
the company has a €18bn group facility agreement the “agreement”  
in place which provides that on any change of control of the company 
the lenders under the agreement are entitled to negotiate for a period 
not exceeding 30 days new terms for continuing the facilities but where 
agreement on new terms cannot be reached any such lender is entitled 
to i receive a repayment of amounts owing to such lender and ii 
cancel all commitments under the agreement 
contractual arrangements 
the group has contractual arrangements with numerous third parties in 
support of its business activities the disclosure in this report of information 
about any of those third parties is not considered necessary for an 
understanding of the development performance or position of the 
group’s businesses 
political donations 
the company did not make any political donations during the financial 
period 2007 nil 
supplier payment policy  
it is the company’s policy to comply with the terms of payment agreed 
with its suppliers where payment terms are not negotiated the company 
endeavours to adhere to suppliers’ standard terms as at 30 september 2008 
the company had no trade creditors 2007 nil  
major shareholdings 
as at 18 december 2008 the company had been notified in accordance 
with rule 5 of the disclosure rules and transparency rules of the uk 
listing authority of the following major shareholdings in the ordinary 
share capital of the company 
name number of shares held 
percentage of issued 
capital 
arcandor ag 226664045 2641
karstadtquelle freizeit gmbh
1
 226664045 2641
standard life investments 
limited 68719267 800
axa sa 48358692 507
1 karstadtquelle freizeit gmbh is a wholly owned subsidiary of arcandor ag 
auditors 
pricewaterhousecoopers llp have expressed their willingness to be 
reappointed as auditors of the company upon the recommendation  
of the audit  risk management committee resolutions to reappoint 
them as the company’s auditors and to authorise the directors to determine 
their remuneration will be proposed to the agm 
the directors’ report comprising pages 2 to 66 has been approved by  
the board and signed on its behalf by 
 
derek woodward 
group company secretary 
19 december 2008 
 
registered office 
the thomas cook business park 
coningsby road 
peterborough pe3 8sb  directors’ report – corporate governance
remuneration report  
thomas cook group plc annual report  accounts 2008 59
the management development  remuneration committee the 
“committee” has adopted the principles of good governance as set  
out in the combined code this report which has been prepared  
by the committee and approved by the board complies with the 
requirements of the companies act and the directors’ remuneration 
report regulations 2002 the “regulations” and meets the relevant 
requirements of the financial services authority’s listing rules as the 
regulations provide that certain of the information is to be the subject  
of the auditors’ report and other information is not this report is divided 
into sections of audited and unaudited information  
this report explains the group’s remuneration policy and provides details 
of the remuneration of the executive and nonexecutive directors for 
services to the company from 1 november 2007 to 30 september 2008 
the “financial period” this is an eleven month period as the company 
amended its accounting reference date to 30 september the comparative 
figures in the audited information are for the period from 19 june 2007 
the date of the completion of the merger between mytravel group plc 
and thomas cook ag to 31 october 2007 there was no remuneration  
for services to the company for the period from incorporation of the 
company on 8 february 2007 to 19 june 2007  
the committee has a policy of transparent reporting of executive director 
remuneration arrangements furthermore the committee through  
its chairman has given a recent undertaking that there will be full 
consultation with the company’s shareholders prior to any future  
change to or deviation from the company’s remuneration policy 
this report will be the subject of a separate resolution for approval at  
the annual general meeting to be held on thursday 19 march 2009 
information not subject to audit 
the members of the committee during the financial period were  
michael beckett chairman

 
roger burnell

 
peter diesch 
hemjö klein

 
thomas middelhoff 
nigel northridge

 appointed 1 august 2008 
angus porter

 resigned 25 april 2008 
 
independent nonexecutive directors 
pursuant to the relationship agreement as summarised on page 51 of  
the corporate governance report thomas middelhoff and peter diesch 
neither of whom are regarded as being independent in accordance with 
the provisions of the combined code are members of the committee 
each of the other members being a majority of the members of the 
committee has been determined by the board as being independent  
against the criteria set out in provision a31 of the combined code 
the committee is responsible for making recommendations to the board 
on the company’s framework of executive remuneration and its cost for 
reviewing and determining on behalf of the board the remuneration 
and incentive packages of the executive directors and for recommending 
and monitoring the level and structure of the remuneration of the senior 
executives of the group the terms of reference of the committee can be 
found on the company’s corporate website wwwthomascookgroupcom 
no director or senior executive is present at meetings when his or her 
own remuneration arrangements are being discussed 
the committee has held nine meetings during the financial period 
attendance at those meetings is disclosed in the corporate governance 
report matters discussed by the committee included 
• the group’s remuneration policy  
• achievement of the annual bonus targets for executive directors  
in respect of the previous financial period 
• the market competitiveness of the remuneration packages  
for executive directors 
• the service contracts for the executive directors 
• the terms of employment for the appointment of jürgen büser  
as chief financial officer 
• the introduction of a coinvestment plan “coip” for senior executives  
• the structure and targets of the annual bonus arrangements for  
the financial period 
• continued engagement of pricewaterhousecoopers llp “pwc”  
as remuneration advisors 
• the structure targets and payments made under the secured 
synergies bonus plan 
• introduction of a uk and international save as you earn share 
scheme and uk share incentive plan and 
• the policy in respect of external nonexecutive directorships and fees 
committee’s advisors 
the committee invites individuals to attend meetings as it deems 
beneficial to assist it in reviewing matters for consideration during  
the financial period these individuals included the group hr director 
the group head of reward and the group company secretary  
in performance of its duties the committee seeks assistance from 
external advisors where necessary to ensure it is suitably advised pwc  
has provided services relating to the design of incentive arrangements  
and benchmarking of salaries and benefits for executive directors 
legal advice is provided to the committee by slaughter and may in 
particular advice has been sought regarding executive directors’ service 
contracts and incentive arrangements the committee reviews the 
appointment of advisors on a regular basis pwc currently also act as 
auditors for the group and during the year the committee being highly 
satisfied with the performance of pwc and having taken advice from the 
audit  risk management committee that this work did not affect the 
independence of the audit agreed to continue with the engagement of pwc 
as remuneration advisors to the committee ernst  young llp have assisted 
the committee by conducting an independent review of synergy benefits 
remuneration policy 
the group’s remuneration policy is to ensure that executive directors  
and senior executives are rewarded in a way which attracts and retains 
management of the highest quality and motivates them to achieve the 
highest level of performance consistent with the best interests of the 
group its shareholders and employees in developing its remuneration 
policy the committee has had regard to the fact that the group has 
significant international operations and in order to compete in the global 
environment for the recruitment retention and incentivisation of high 
quality executive directors and senior executives it must offer upper 
quartile rewards for upper quartile performance 
the committee has therefore set its remuneration policy in view of and 
applying the following principles 
• the group’s objective is to deliver financial results which consistently 
outperform the average of the industry sector  
• the group will look to retain and attract executive directors and 
senior executives with aboveaverage skills and demonstrated 
leadership qualities 
• the remuneration of each executive director will be based on 
performance both of the group and the individual executive 
director potential ie the executive director’s potential to grow in 
responsibility and performance and scarcity ie the availability of 
candidates to replace the executive director should he leave the group 
• the proportion between fixed and variable remuneration will 
typically be targeted at 30 fixed and 70 variable  
subject to the specific exception agreed for the chief executive officer see 
page 60 for details the committee has determined that its policy for the 
design of remuneration arrangements for executive directors is that the 
fixed elements of remuneration shall be set in line with the median  
of a specified comparator group of companies and that total earnings  
made up of base salary pension supplement bonus and any other 
performancerelated elements of reward such as longterm incentive 
arrangements shall be targeted at the upper quartile of the comparator 
group subject to the attainment of appropriate and challenging 
performance criteria   remuneration report continued 
 
wwwthomascookgroupcom 60 
the remuneration of executive directors will be highly geared  
towards performance with the proportion of ‘at risk’ pay increasing 
disproportionately according to  
• the level of personal performance and  
• the seniority of the executive director and hisher ability to  
influence results 
a bespoke comparator group has been adopted to benchmark the 
remuneration of executive directors of the group this group consists of 
companies in the ftse 350 with significant international operations this 
particular comparator group has been chosen to reflect the international 
nature of the group’s business where specialist functions are concerned 
the committee may have reference to other comparator groups as it 
considers appropriate 
the relative importance of the fixed and variable elements of the 
remuneration packages of executive directors in circumstances of  
target and stretch performance is shown in the chart below 
the chart below assumes  
a base salaries in force at 30 september 2008 
b value of benefits provided in the financial period to 30 september 2008 
c pension 25 of base salary 
d annual bonus 
• 60 of full bonus paid at target performance  
• 100 of full bonus paid at maximum performance 
e performance share plan 25 of the award vests at target performance 
with 100 of the award vesting at maximum performance 
f coinvestment plan an initial investment of  
• at target performance 10 of base pay less tax  
• at maximum performance the excess of bonus paid above 100 
of salary less tax  
 at the end of the three year performance period initial investment 
will be matched 
 a 051 at target performance 
 b 351 at maximum performance 
relative importance of fixed and variable remuneration 
 
remuneration arrangements  
the remuneration of the executive directors in respect of the financial 
period is set out in the audited section of this report  
for the financial period the remuneration of the executive directors 
comprised base salary annual bonus synergy bonus participation in  
the performance share plan “psp” and the coinvestment plan “coip” 
other benefits including the provision of pensions private health 
insurance disability cover personal accident cover death in service 
benefit and a car allowance the only component of executive 
remuneration which is pensionable is base salary 
base salary and benefits 
in accordance with the company’s remuneration policy the base salary  
of executive directors reflects the size and scope of their responsibilities 
upon appointment as joint chief executive officer at the time of the 
merger in june 2007 the committee determined that the base salary  
of manny fontenlanovoa would be set at the lower quartile of the 
comparator group of companies the committee agreed that this would 
be reviewed after a period in office as the sole chief executive officer  
the review was undertaken throughout the year with the committee 
determining at its september 2008 meeting that his base salary should  
be increased in recognition of his operational and strategic achievements 
with specific reference to i financial performance including industry 
leading margins ii successful strategic development and execution iii 
acquisition activity most notably in india egypt france and canada in 
2008 iv the major reorganisation of the group in a seamless and 
effective manner and v organising a groupwide flexible action plan  
to address the uncertainties and challenges that may arise from the 
developing economic climate the committee has agreed that the chief 
executive officer’s base salary will next be reviewed at the end of 2009 
and any increase which would be effective from january 2010 will  
be aligned with remuneration policy the salary of the current chief 
financial officer was benchmarked against the market and agreed by  
the committee immediately prior to his appointment in july 2008 this 
will be reviewed in the second half of 2009 
the annual rates of base salary as at 30 september 2008 for the 
executive directors are shown in the table below 
name 
2007
£000
2008
£000
manny fontenlanovoa 630 850
jürgen büser – 425
annual bonus 
should all objectives be achieved in full the maximum annual bonus 
opportunity for the chief executive officer is 175 and for the chief 
financial officer is 150 of base salary of the maximum bonus payable 
i 75 is linked to the attainment of group financial targets and is 
earned on a pro rata basis by reference to the achievement of  
those targets and 
ii 25 is linked to the attainment of individual and other nonfinancial 
criteria linked to the development of the group and the implementation 
of the board’s strategy  
these targets are set by the committee and agreed with each executive 
director at the start of the financial year the individual and other non
financial criteria comprise targets in relation to customer satisfaction 
health and safety reputation of key brands and employee engagement  
the nonfinancial based element of the bonus will only vest and become 
payable rateably to the extent that the financially based elements of that 
executive director’s bonus vests 
the committee determines the extent to which it considers the targets 
and objectives have been met and the annual bonus payable for the  
financial period the committee considered that the financial stretch 
targets and the individual and other nonfinancial criteria had been  
met in full the executive directors were paid 1112ths of the maximum 
bonus to reflect the eleven month financial period 
0
20
40
60
80
100

target 
performance
target 
performance
max
performance
max
performance
chief executive ofﬁcer
fixed
variable
chief financial ofﬁcer directors’ report – corporate governance
 
thomas cook group plc annual report  accounts 2008 61
secured synergies bonus plan the “plan” 
incentive arrangements put in place to secure merger related synergies 
were successful in delivering significant value for shareholders shareholders 
were supportive of this incentive arrangement prior to the merger recognising 
the potential for considerable value creation during the first half of the 
year synergies totalling £136m €200m were secured against the original 
synergy target of at least £95m €140m  
following the success of the original synergy programme and in line with 
the group’s remuneration policy the committee considered it appropriate 
to develop a new bespoke incentive arrangement to incentivise further 
synergies in excess of the £136m €200m already secured the committee 
determined to pay a cash bonus on the securing of synergies of  
£204m €300m a 50 increase on synergies already secured and a  
114 increase on synergies initially targeted at the time of the merger 
the committee was advised in september 2008 that synergies secured 
were considerably in excess of £204m €300m as part of its assessment of 
the progress of achieving synergy targets the committee had access to an 
independent review of synergy benefits undertaken by ernst  young llp 
in september 2008 these additional synergies include improved terms 
negotiated with accommodation providers and overseas agents together 
with increased hotel settlement income such synergies being enhanced 
as a consequence of a healthier negotiation position post merger  
having exceeded all expectations in terms of both the amount and the 
date by which the synergies were secured the committee was satisfied 
that the exceptional performance and personal effort of the senior 
executives involved warranted payment of the maximum bonus under the 
plan accordingly a payment of £5m was made to the chief executive 
officer and a payment of £1275m was made to the chief financial 
officer both the chief executive officer and chief financial officer intend 
to make a significant investment in thomas cook group plc shares in 
early 2009  
pensions 
the executive directors’ pension arrangements are disclosed on page 66 
longterm incentive plans 
the committee believes the close alignment of executive directors’ 
remuneration with the interests of shareholders is an important element 
of the company’s remuneration policy and operates two sharebased 
longterm incentive plans one of which was introduced during the 
financial period both plans have been approved by shareholders 
thomas cook group plc 2007 performance share plan “psp” 
during the financial period ended 30 september 2008 a psp award equal 
to 175 of base salary was made to the chief executive officer an award 
of 150 of base salary was made to ludger heuberg when he held the 
position of chief financial officer and an award of 100 of base salary 
was made to jürgen büser prior to his appointment as chief financial 
officer awards with a value of 150 or less of base salary were also made 
to other senior executives it is expected that the chief executive officer 
and chief financial officer will receive an award of 175 and 150 
respectively in january 2009 with awards to other senior executives of 
150 or less unless there are exceptional circumstances awards are 
made within 42 days of the company’s final results being announced due 
to the change in accounting period the 2009 annual award will be made 
less than one year after the award made in 2008 which will result in an 
aggregate award level for that strict twelve month period which exceeds 
200 of base salary awards vest three years after the award date providing 
the participant is still employed by a company within the group and to 
the extent that the performance conditions have been met  
prior to making the awards the committee considered the performance 
conditions to ensure that they were sufficiently stretching the performance 
conditions are split into two elements the vesting of up to 50 of the 
award is dependent on the total shareholder return “tsr” of the 
company relative to the tsr of the comparator group the tsr 
comparator group consists of the 50 companies at the bottom of the  
ftse 100 and the 50 companies at the top of the ftse 250 this was 
chosen as it is a broad group of companies of similar size and against 
which the performance of the company’s management should be judged 
this comparator group excludes investment companies the comparator 
group is determined at the date the psp awards are made the remaining 
50 of the award will only vest if an absolute earnings per share “eps” 
target is achieved eps was chosen as it is regarded as a good reflector of 
business performance an absolute target was considered more appropriate 
than a percentage growth target as there is little historic data for the 
company having only been established in 2007 the eps target range  
was set by reference to consensus forecasts and consideration of business 
prospects none of the psp awards has been held for a full performance 
period as the first awards were made in 2007 at the end of the performance 
period tsr calculations will be made by the company’s external advisers 
using average share prices at the start and end of the performance period 
eps will be derived from the income statement for the last financial year 
ending prior to the end of the performance period  
the performance conditions attached to the outstanding psp awards are 
summarised in the table overleaf 
the committee will review the performance conditions attached to any 
future awards to ensure they are stretching and that the interests of the 
executive directors and senior executives are aligned with shareholders  
thomas cook group plc 2008 coinvestment plan “coip” 
executive directors and other senior executives are eligible to participate 
in the coip under the coip participants must purchase the company’s 
shares out of their bonus if the bonus paid is below 100 of salary 10 
of the participant’s net base salary or the whole of the net bonus if less 
must be invested if the bonus paid is above 100 of base salary all of  
the bonus payable above 100 of base salary subject to the minimum 
investment of 10 of net base salary must be used to acquire shares 
participants can also choose to defer a further part of their bonus  
to purchase shares the shares purchased either on a voluntary or 
mandatory basis are referred to as lodged shares participants may 
receive up to three and a half matching shares for every one lodged  
share at the end of the performance period subject to the satisfaction  
of the performance condition the requirement for compulsory investment 
under the coip will cease once the value of all shares held by a participant 
reaches a value equal to 200 of base salary this level of shareholding 
must be maintained 
two and a half matching shares for every one lodged share purchased 
will be awarded subject to the achievement of eps linked performance 
targets agreed by the committee measured over a three year period 
again eps was chosen as a good reflector of business performance the 
eps target range is an absolute target range and for the first coip awards 
is the same for the 2008 psp awards having had regard to the same consensus 
forecasts and business prospects eps will be derived from the income 
statement for the last financial year ending prior to the end of the 
performance period  
participants can receive up to one additional matching share for superior 
return on invested capital “roic” performance but the number of 
matching shares awarded is reduced to nil for a below target roic 
performance roic was chosen to measure the efficiency of the use of  
the group’s capital in achieving the underlying earnings target the roic 
ranges were set by reference to the weighted average cost of capital  
used by the group for the purposes of impairment testing roic will be 
calculated over the performance period by taking the post tax operating 
profit over the three year performance period and dividing this by the 
sum of the opening capital for each year in the period   remuneration report continued 
 
wwwthomascookgroupcom 62 
the performance conditions attached to the outstanding coip awards are summarised in the table below 
the committee will review the performance conditions attached to any future awards to ensure they are stretching and that the interests of the 
executive directors and senior executives are aligned with shareholders  
 
award date vesting criteria performance conditions over three year period 
performance share plan   
july 2007 and march 2008 50 – total shareholder return ranked against 
comparator group 
 
full vesting for upper quartile ranking zero 
vesting for submedian ranking vesting will 
increase on a straight line basis from 25 to  
100 of the tsr linked part of the initial award  
for ranking between median and upper quartiles
 50 – earnings per share july 2007 award full vesting for eps of 28 pence 
or above zero vesting for eps below 23 pence 
vesting will increase on a straight line basis from 
25 to 100 of the eps linked part of the initial 
award for eps between 23 pence and 28 pence 
march 2008 award the same vesting schedule 
applies as for the july 2007 awards but the eps 
targets are 28 pence to 33 pence 
coinvestment plan   
june 2008 earnings per share and return on invested  
capital achievement 
 
vesting of up to 25 matching shares for eps of  
33 pence or above zero vesting for eps below 28 
pence vesting will increase on a straight line basis 
from 05 matching shares to 25 matching shares 
for eps between 28 pence and 33 pence subject  
to ratchet if roic is below 4 no matching shares 
will vest if roic is above 10 the ratchet will 
gradually increase the level of award up to a 
maximum of 35 matching shares for roic 
achievement of 14 or above 
following the decision by the company to state its results in sterling the eps targets have been restated as follows 
  july 2007  march 2008 
psp eps target €c £p €c £p
zero vesting 34 23 41 28
full vesting 41 28 47 33
  
coip eps target  €c £p
zero vesting  41 28
full vesting  47 33
the committee elected to use the exchange rate of €14733£100 for the july 2007 psp award as it was the exchange rate as at the award date of  
12 july 2007 the committee elected to use the exchange rate of €1442£100 for the 2008 psp and coip awards as it was the exchange rate as at  
1 november 2007 the date the performance period began 
in the event of a change of control the awards shall vest at the committee’s discretion taking into account the period of time for which the award has 
been held by participants and the extent to which performance conditions have been achieved since the award date after an independent valuation of 
performance to date 
funding of share plans 
it is the company’s current intention to satisfy the requirements of its share schemes by acquiring shares in the market  
the committee has agreed that it is prudent and appropriate to hedge the shares awarded under the psp as at 30 september 2008 5049796 shares 
were held in the thomas cook group plc 2007 employee benefit trust which represents 66 of share incentive awards held on that date the level of 
hedging will be kept under review under the rules of the plans awards cannot be made if awards under any other discretionary employee share scheme 
operated by thomas cook group plc in the preceding tenyear period would exceed 5 of the company’s issued share capital at that time  
the trustee would not normally vote at general meetings on the thomas cook group plc shares held in the employee benefit trust  directors’ report – corporate governance
 
thomas cook group plc annual report  accounts 2008 63
service contracts 
each of the executive directors has a service contract with the company the date of the service contract and notice period for each executive director 
who held office at the end of the financial period are set out below 
name date of contract outstanding term notice period compensation arrangements 
manny fontenlanovoa 30 january 2008 to age 65 12 months see below 
jürgen büser 1 july 2008 to age 65 12 months see below 
the notice period for executive directors is twelve months the committee believes that this is appropriate given the need to retain the specialist skills  
that the executive directors bring to the business and to achieve continuity in the company’s senior management either the executive director or  
the company may terminate employment by giving one year’s written notice and the company may pay compensation in lieu of notice there is no 
clause in the executive directors’ contracts providing them with additional protection in the form of compensation for severance as a result of  
change of control  
external appointments 
the company recognises the benefits to the individual and to the group of executive directors taking on external appointments as nonexecutive 
directors subject to the approval of the committee and to such conditions as the committee may in its discretion attach an executive director may 
accept such appointments at other companies or similar advisory or consultative roles the committee has set a limit of one external appointment  
for each executive director to a ftse 100 or ftse 250 company or an international company of a similar size unless there is justification for a  
further appointment  
during the part of the financial period for which he was an executive director of the company ludger heuberg received a fee of €3000 from 
commerzbank ag in respect of his membership of their regional advisory committee on 23 april 2008 manny fontenlanovoa was appointed  
as a member of the arcandor ag management board he does not receive a fee for this appointment  
nonexecutive directors 
the fees for the chairman and deputy chairman are determined by a committee of independent nonexecutive directors excluding the deputy 
chairman the fees for the other nonexecutive directors are set by the board excluding these nonexecutive directors 
nonexecutive directors’ fees are reviewed every two years nonexecutive directors do not participate in any bonus plans are not eligible to participate 
in any longterm incentive plans and no pension contributions are made on their behalf 
the annual rates of nonexecutive director fees which have not changed since the merger of mytravel group plc and thomas cook ag in june 2007 
are shown in the table below 
position 
annual fees 
£000
chairman 250
deputy chairman and senior independent director 250
nonexecutive director 60
additional fee for the chair of audit  risk management committee 20
the fees paid to the chairman and the nonexecutive directors in respect of the financial period are set out in the audited section of this report 
nonexecutive directors including the chairman do not hold service contracts each of the nonexecutive directors has been appointed pursuant to a 
letter of appointment the appointments under these letters continue until the expiry dates set out below unless terminated for cause or on the period 
of notice stated below 
name date of letter of appointment expiry date notice period 
thomas middelhoff 18 june 2007 see note see note 
michael beckett 13 june 2007 see note 6 months 
david allvey 18 june 2007 18 june 2010  6 months 
roger burnell 18 june 2007 18 june 2010 6 months 
peter diesch 18 june 2007 see note see note 
hemjö klein 1 july 2007 30 july 2010 6 months 
bo lerenius 1 july 2007 30 june 2010 6 months 
nigel northridge 1 august 2008 31 july 2011 6 months 
thomas middelhoff and peter diesch’s appointments shall continue until terminated by arcandor ag by notice to the company the company has received notice from arcandor ag 
that peter diesch’s appointment to the board will terminate on 22 december 2008 michael beckett’s appointment continues until terminated by either party on six months’ notice    remuneration report continued 
 
wwwthomascookgroupcom 64 
performance graph 
the graph below shows the total shareholder return for holders of thomas cook group plc €010 ordinary shares for the period since listing on 19 june 2007 
measured against the ftse 100 index and the ftse travel  leisure index these indices were chosen as comparators because the company has been  
a constituent of the ftse 100 for the majority of the financial period and a member of the ftse travel  leisure index throughout the period since 
listing the calculation of total shareholder return follows the provisions of the regulations and is broadly the change in market price together with 
reinvestment of dividend income 
 
50
60
70
80
90
100
110
190908 190608 190308 191207 190907 190607
rebased total shareholder return
thomas cook
ftse 100
ftse travel  leisure
information subject to audit 
directors’ interests in shares 
the following table shows the beneficial interests of the directors who held office at the end of the financial period in the €010 ordinary shares  
of the company 
 
ordinary shares  
at 30 september 
2008 
ordinary shares at 
1 november 2007 
or on appointment
directors as at 30 september 2008  
executive directors  
manny fontenlanovoa
1
 239653 70643
jürgen büser
1
 21126 21126
nonexecutive directors  
thomas middelhoff 70000 70000
michael beckett 24999 24999
david allvey  –   – 
roger burnell 3692 3692
peter diesch  –   – 
hemjö klein  –   – 
bo lerenius 10000 10000
nigel northridge  –   – 
1 
the holdings of the executive directors include shares held as lodged shares under the coip 169010 held by manny fontenlanovoa 21126 held by jürgen büser 
none of the directors of the company held any interest in any other securities of thomas cook group plc during the financial period in the period 
between 30 september 2008 and 19 december 2008 there were no changes in the directors’ interests referred to above  directors’ report – corporate governance
 
thomas cook group plc annual report  accounts 2008 65
details of the remuneration of the directors for services to the company for the financial period are disclosed below  
name 
base  
salaryfees 
£000 
annual  
bonus  
payments
1
£000 
 
secured synergy 
bonus payment
£000
compensation 
for loss of office
£000
pay in lieu 
of pension
£000
benefits
3
 
£000  
total 
emoluments 
2008
£000
total 
emoluments 
2007
£000
executive directors    
manny fontenlanovoa 633 1364 5000 – – 40  7037 2888
jürgen büser
2
 106 159 1275 – 21 11  1572 –
   
nonexecutive directors   
thomas middelhoff 229 – ––– –  229 92
michael beckett 229 – ––– –  229 92
david allvey 73 – ––– –  73 29
roger burnell 55 – ––– –  55 22
peter diesch 55 – ––– –  55 22
hemjö klein 55 – ––– –  55 20
bo lerenius 55 – ––– –  55 20
nigel northridge 10 – ––– –  10 –
   
past nonexecutive director
5 
  
angus porter 30 – ––– –  30 22
   
past executive directors
5 
  
ludger heuberg
4 
283 406 800 – – 20  1509 1173
peter mchugh 105 – – 1000 26 6  1137 2536
john bloodworth 75 – – 769 32 158  1034 1924
   
total  1993 1929 7075 1769 79 235  13080 8840 
1
 annual bonus entitlement up to 175 and 150 of salary for the chief executive officer and chief financial officer respectively with 75 paid by reference to financial targets and 
25 payable by reference to personal objectives all targets and objectives for executive directors were satisfied in full under the terms of the bonus scheme part of the annual bonus 
paid to the executive directors must be invested in lodged shares under the coip – see page 61 for details 
2
 jürgen büser was paid a total of £1275000 under the secured synergy bonus plan a significant proportion of that amount is in respect of synergies secured during the financial 
period when he was cfo for the uk  ireland business segment prior to his appointment as cfo of the group on 1 july 2008 the amounts disclosed for base salary annual bonus 
pay in lieu of pension and benefits paid to jürgen büser relate specifically to the period when he was cfo of the group 
3
 benefits received by the executive directors include a car allowance petrol and private medical insurance and in respect of john bloodworth a payment under a tax  
equalisation agreement 
4
 ludger heuberg received £800000 as a synergy bonus payment under the scheme agreed at the time of the merger between thomas cook ag and mytravel group plc  
5
 the following directors left office during the year on the dates shown ludger heuberg left the board to become chief financial officer of continental europe having decided  
to return to germany for personal and family reasons 1 july 2008 john bloodworth 31 december 2007 peter mchugh 31 december 2007 and angus porter 25 april 2008  remuneration report continued 
 
wwwthomascookgroupcom 66 
directors’ pensions 
the company contributes each year into a pension scheme or other arrangement for each of the executive directors to an amount equivalent to 25  
of their annual base salary the executive directors are active members of the thomas cook pension plan a defined benefit pension scheme for salary 
above that which is pensionable in the uk defined benefit scheme contributions to a uk based tax approved money purchase pension scheme are 
made on behalf of manny fontenlanovoa jürgen büser receives a salary supplement of the balance the pay in lieu of pension salary supplement  
paid to jürgen büser is disclosed in the emoluments table on page 65 
 
accrued pension  
at 30 sep 2008 
£ pa 
increase in 
accrued pension 
during 2008
£ pa
increase in 
accrued pension 
during 2008 
net of inflation
£ pa
transfer value of 
accrued pension at 
30 sep 2008
£
transfer value of  
accrued pension at 
1 nov 2007 
£ 
director’s 
contributions 
during 2008
£
increase in 
transfer value 
during 2008 net 
of director’s 
contributions
£
manny fontenlanovoa 19470 2350 1682 214408 207160 5594 12932
jürgen büser 4455 1895 1795 22785 17672 5594 3588
an amount of £152406 was paid into manny fontenlanovoa’s uk based tax approved money purchase pension scheme an amount of £87352 was 
paid into ludger heuberg’s private pension 
share options and longterm incentive plans 
the following tables show in respect of each person who served as a director at any time during the financial period the number of ordinary shares  
of €010 each that were the subject of a share option or a share award at the start of the financial period or the date of appointment if later and  
at the end of the financial period or the cessation of appointment if earlier the nonexecutive directors did not hold any options or share awards 
during the period holdings relate to the coip and psp  
the following table gives details of psp awards held by executive directors who served during the year 
date of award 12 july 2007
 
11 march 2008 
total held at 
30 september 2008 
or at date of 
resignation
manny fontenlanovoa 283784 389576 673360
jürgen büser 56306 88339 144645
ludger heuberg
1 
127628 225265 352893
john bloodworth
2
 168919 – 168919
market price at award date pence 333 283 
end of performance period 12 july 2010 11 march 2011  
1
 on leaving the board ludger heuberg retained his psp awards subject to performance over the relevant threeyear performance periods 
2
 on leaving the company the board exercised its discretion and agreed that 50 of john bloodworth’s psp award would vest consequently he received 84460 ordinary shares in the 
company the remainder of his award lapsed   
vesting of awards made under the psp is dependent on 50 total shareholder return ranked against the comparator group and 50 growth in earnings 
per share further information on the performance conditions is detailed on page 62 
the following table gives details of the lodged shares purchased under the coip and the maximum number of matching shares each executive director 
can receive if the performance conditions are met in full 
 
total number of 
lodged shares held at 
1 november 2007 
or on appointment 
total number of 
matching shares held at 
1 november 2007 
or on appointment 
number of 
lodged shares 
purchased
maximum  
number of  
matching shares 
total held at 
30 september 2008
or at date of 
resignation
manny fontenlanovoa – – 169010 591535 760545
jürgen büser 21126 73941 – – 95067
ludger heuberg ––– – –
market price at award date pence 237 237 
end of performance period 25 june 2011 25 june 2011 
vesting of matching shares awarded under the coip is dependent on growth in earnings per share and return on invested capital achievement further 
information on the performance conditions is detailed on page 62 
the midmarket price of the company’s ordinary shares at the close of business on 30 september 2008 was 2215p and the range during the financial 
period was 174p to 318p these midmarket prices are as quoted on the london stock exchange 
on behalf of the board 
 
michael beckett 
chairman of the management development  remuneration committee 
19 december 2008  financial statements
independent auditors’ report to the members of thomas cook group plc 
thomas cook group plc annual report  accounts 2008 67
we have audited the group and parent company financial statements  
the ‘‘financial statements’’ of thomas cook group plc for the eleven 
months ended 30 september 2008 which comprise the group income 
statement the group and company balance sheets the group and 
company cash flow statements the group and company statements of 
recognised income and expense and the related notes these financial 
statements have been prepared under the accounting policies set out 
therein we have also audited the information in the remuneration 
report that is described as having been audited 
respective responsibilities of directors and auditors 
the directors’ responsibilities for preparing the annual report the 
remuneration report and the financial statements in accordance with 
applicable law and international financial reporting standards ifrss  
as adopted by the european union are set out in the statement of 
directors’ responsibilities 
our responsibility is to audit the financial statements and the part of the 
remuneration report to be audited in accordance with relevant legal and 
regulatory requirements and international standards on auditing uk and 
ireland this report including the opinion has been prepared for and 
only for the company’s members as a body in accordance with section 
235 of the companies act 1985 and for no other purpose we do not in 
giving this opinion accept or assume responsibility for any other purpose 
or to any other person to whom this report is shown or into whose hands 
it may come save where expressly agreed by our prior consent in writing 
we report to you our opinion as to whether the financial statements give 
a true and fair view and whether the financial statements and the part  
of the remuneration report to be audited have been properly prepared  
in accordance with the companies act 1985 and as regards the group 
financial statements article 4 of the ias regulation we also report to  
you whether in our opinion the information given in the directors’ report 
is consistent with the financial statements the information given in the 
directors’ report comprises the information supplied in the directors’ 
report – business review and directors’ report – corporate governance  
in addition we report to you if in our opinion the company has not kept 
proper accounting records if we have not received all the information 
and explanations we require for our audit or if information specified  
by law regarding directors’ remuneration and other transactions is  
not disclosed 
we review whether the corporate governance statement reflects the 
company’s compliance with the nine provisions of the combined code 
2006 specified for our review by the listing rules of the financial 
services authority and we report if it does not we are not required to 
consider whether the board’s statements on internal control cover all 
risks and controls or form an opinion on the effectiveness of the group’s 
corporate governance procedures or its risk and control procedures 
we read other information contained in the annual report and consider 
whether it is consistent with the audited financial statements the other 
information comprises only the directors’ report – business review and 
the directors’ report – corporate governance including the unaudited part 
of the remuneration report we consider the implications for our report if 
we become aware of any apparent misstatements or material inconsistencies 
with the financial statements our responsibilities do not extend to any 
other information 
basis of audit opinion 
we conducted our audit in accordance with international standards on 
auditing uk and ireland issued by the auditing practices board an audit 
includes examination on a test basis of evidence relevant to the amounts 
and disclosures in the financial statements and the part of the remuneration 
report to be audited it also includes an assessment of the significant 
estimates and judgements made by the directors in the preparation  
of the financial statements and of whether the accounting policies are 
appropriate to the group’s and company’s circumstances consistently 
applied and adequately disclosed 
we planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us 
with sufficient evidence to give reasonable assurance that the financial 
statements and the part of the remuneration report to be audited are free 
from material misstatement whether caused by fraud or other irregularity  
or error in forming our opinion we also evaluated the overall adequacy 
of the presentation of information in the financial statements and the 
part of the remuneration report to be audited 
opinion 
in our opinion 
• the group financial statements give a true and fair view in accordance 
with ifrss as adopted by the european union of the state of the group’s 
affairs as at 30 september 2008 and of its profit and cash flows for the 
eleven months then ended 
• the company financial statements give a true and fair view in accordance 
with ifrss as adopted by the european union as applied in accordance 
with the provisions of the companies act 1985 of the state of the parent 
company’s affairs as at 30 september 2008 and cash flows for the eleven 
months then ended 
• the financial statements and the part of the remuneration report to be 
audited have been properly prepared in accordance with the companies 
act 1985 and as regards the group financial statements article 4 of the 
ias regulation and 
• the information given in the directors’ report – business review and 
directors’ report – corporate governance is consistent with the 
financial statements 
 
 
 
pricewaterhousecoopers llp 
chartered accountants and registered auditors 
london 
19 december 2008  group income statement 
wwwthomascookgroupcom 68 
for the eleven months ended 30 september 2008 
 11 months ended 30 september 2008 year ended 31 october 2007 
notes 
preexceptional
items and
amortisation
of business
combination
intangibles
£m
exceptional
items and
amortisation
of business
combination
intangibles
notes 614
£m
total
£m
preexceptional 
items and 
amortisation 
of business 
combination 
intangibles 
£m 
exceptional
items and
amortisation
of business
combination
intangibles
notes 614
£m
total
£m
revenue 3 81671 – 81671 64045  – 64045 
cost of providing tourism services   62825 130 62955 48791 111 48902
gross profit  18846 130 18716 15254  111 15143 
other operating income  393 34 427 378  06 384 
personnel expenses 4 8493 470 8963 6707 667 7374
depreciation and amortisation 1415 1276 04 1280 1033 12 1045
amortisation of business combination 
intangibles 14  – 480 480  –  301 301
other operating expenses 5 5836 1209 7045 4803 607 5410
lossprofit on disposal of businesses  
and property plant and equipment 6  – 17 17  –  20 20 
profit on disposal of noncurrent assets 
held for sale   6  –  –  –  –  101 101 
profit from operations   3  3634 2276 1358 3089  1571 1518 
   
share of results of associates and joint 
ventures 16 16 – 16 18 – 18 
profit on disposal of associates 6  –  –  – – 355 355 
net investment income 7 05 – 05 17 – 17 
finance income 8 684 – 684 741 – 741 
finance costs  9  1268 268 1536 747 – 747
profit before tax 10 3039 2544 495 3118 1216 1902 
tax  11 51  395
profit for the period      444    1507 
   
attributable to   
equity holders of the parent  447 1498 
minority interests   03  09 
       444   1507 
   
earnings per share pence   
basic 13    47   220
diluted 13    47   220
all revenue and results arose from continuing operations 
  financial statements
group statement of recognised income and expense 
thomas cook group plc annual report  accounts 2008 69
for the eleven months ended 30 september 2008 
notes 
11 months ended 
30 september 
2008
£m
year ended
 31 october
 2007
£m
gainslosses on cash flow hedges 32 2814 627
lossesgains on availableforsale investments 32 09 04 
exchange differences on translation of overseas operations 32 1216 439 
actuarial lossesgains on defined benefit pension schemes 38 163 998 
tax on items taken directly to equity 11 745 222
net income recognised directly in equity    3113 592 
  
transfers  
transferred to profit or loss on cash flow hedges 32 1778 635 
transfer of translation losses to profit or loss on disposal 32  – 05
transfer of losses on availableforsale investments to profit or loss on disposal 32  – 05
tax on items transferred from equity 11 533 193
     1245 432 
  
profit for the period  444 1507 
  
total recognised income and expense for the period 30  2312 2531 
  
attributable to  
equity holders of the parent 30 2315 2517 
minority interests 30 03 14 
     2312 2531  group balance sheet 
wwwthomascookgroupcom 70 
at 30 september 2008 
 notes 
30 september
2008
£m
31 october
2007
restated
£m
noncurrent assets  
intangible assets 14 34324 28835
property plant and equipment – aircraft and aircraft spares 15 5848 5671 
 – investment property 15 157 – 
 – other 15 3128 2682 
investments in associates and joint ventures 16 427 357 
other investments 16 294 266 
deferred tax assets 27 3286 2945 
tax assets  99 37 
trade and other receivables 19 1264 988 
pension assets 38 04 03 
derivative financial instruments 24  556 208 
     49387 41992
  
current assets  
inventories 18 242 191 
tax assets  151 204 
trade and other receivables 19 10175 8644 
derivative financial instruments 24 2616 793 
cash and cash equivalents 20 7613 6223 
     20797 16055 
noncurrent assets held for sale 29  – 127 
total assets   70184 58174
  
current liabilities  
retirement benefit obligations 38 90 33
trade and other payables 21 18557 14359
borrowings 22 3560 521
obligations under finance leases 23 1826 810
tax liabilities  694 762
revenue received in advance  9175 6647
shortterm provisions 28 1839 1849
derivative financial instruments 24 1743 1172
   37484 26153
liabilities related to assets held for sale 29  – 68
 
  financial statements
 
thomas cook group plc annual report  accounts 2008 71
 
 notes 
30 september
2008
£m
31 october
2007
restated
£m
noncurrent liabilities  
retirement benefit obligations 38 1816 1722
trade and other payables 21 369 1240
longterm borrowings 22 4161 1304
obligations under finance leases 23 2283 3592
tax liabilities   – 21
revenue received in advance  09 05
deferred tax liabilities 27 978 838
longterm provisions 28 2323 1798
derivative financial instruments 24 669 227
     12608 10747
total liabilities    50092 36968
net assets    20092 21206
  
equity  
calledup share capital 3031 598 661 
share premium account 30 89 68 
merger reserve 30 19842 19842 
capital redemption reserve 30 64 – 
translation and hedging reserves 3032 2148 159 
retained earnings deficitsurplus 30 2646 442 
investment in own shares 30  130 49
equity attributable to equity holders of the parent   19965 21123 
minority interests 30 127 83 
total equity  30  20092 21206 
these financial statements were approved by the board of directors on 19 december 2008 
signed on behalf of the board 
 
 
 
manny fontenlanovoa   dr jürgen büser 
director   director 
  group cash flow statement 
wwwthomascookgroupcom 72 
for the eleven months ended 30 september 2008 
notes 
11 months ended
30 september
2008
£m
year ended
31 october
2007
£m
cash flows from operating activities  
cash generated by operations 33 4209 1904 
income taxes paid 33 637 298
net cash from operating activities 33  3572 1606 
  
investing activities  
proceeds on disposal of subsidiaries net of cash sold   – 313 
proceeds on disposal of associated undertakings   – 378 
proceeds on disposal of property plant and equipment  132 313 
proceeds of sale of noncurrent assets held for sale   – 222 
purchase of subsidiaries net of cash acquired 17 2964 1802 
purchase of tangible and financial assets  822 247
purchase of intangible assets  602 398
purchase of noncurrent financial assets   – 49
disposalpurchase of shortterm securities  1341 1992
net cash from investing activities    2915 342 
  
financing activities  
interest paid  552 321
dividends paid  782 – 
dividends paid to minority shareholders  19 – 
draw down of borrowings  7323 – 
repayment of borrowings  2217 152
repayment of finance lease obligations  913 463
purchase of own shares  2478 50
proceeds from issue of ordinary shares  22 72 
expenses of issue of ordinary shares   – 122
net cash used in financing activities   384 1036
  
net increase in cash and cash equivalents   1041 912 
cash and cash equivalents at beginning of period  5960 4910 
effect of foreign exchange rate changes  474 138 
cash and cash equivalents at end of period    7475 5960 
  
liquid assets 20 7613 6223 
bank overdrafts 22 138 263
cash and cash equivalents at end of period     7475 5960 
 
  financial statements
notes to the financial statements 
thomas cook group plc annual report  accounts 2008 73
1 general information 
thomas cook group plc is a limited liability company incorporated and domiciled in england and wales under the companies act 1985 and listed on 
the london stock exchange the address of the registered office is the thomas cook business park coningsby road peterborough cambridgeshire  
pe3 8sb the principal activities of the group are discussed in the business review on pages 2 to 47 
these consolidated financial statements were approved for issue by the board of directors on 19 december 2008 
the directors consider that arcandor ag is the company’s ultimate controlling party the largest and smallest group of undertakings for which consolidated 
financial statements are prepared and which include the financial statements of the thomas cook group is that headed by arcandor ag  
arcandor ag is incorporated in germany and copies of its financial statements which are publicly available may be obtained from arcandor ag 
theodoralthoffstr 2 d45133 essen germany 
at the date of authorisation of these financial statements the following standards and interpretations that are expected to impact on the group but 
which have not been applied in these financial statements were in issue but not yet effective  
ias 1 revised  ‘presentation of financial statements’ revised version issued in january 2008 effective for annual periods beginning on or after  
1 january 2009 this changes the presentation requirements for other comprehensive income and transactions with shareholders 
and requires increased disclosures when there is a restatement of comparatives adopting this standard will not affect the 
recognition measurement or disclosure of any transactions or events 
ias 23 amendment ‘borrowing costs’ revised version issued in march 2007 effective for annual periods beginning on or after 1 january 2009 this 
eliminates the option of expensing all borrowing costs when they are incurred and is not expected to have a material impact  
on the group 
ias 32 amendment ‘financial instruments presentation’ issued in february 2008 effective for annual periods beginning on or after 1 january 2009 
this clarifies the treatment of puttable financial instruments the adoption of this amendment is not expected to have a material 
impact on the group 
ias 27 revised  ‘consolidated and separate financial statements’ issued january 2008 effective for annual periods beginning on or after 1 july 2009  
this will require a different accounting treatment for minority interest but it is not expected to affect the group’s financial results 
or position materially 
ifrs 2 amendment ‘share based payments’ issued january 2008 effective for annual periods beginning on or after 1 january 2009 this provides a 
definition of vesting conditions and specifies the accounting treatment for nonvesting conditions it is not expected to materially 
affect the sharebased payment charge recognised in the group accounts 
ifrs 3 revised  ‘business combinations’ issued january 2008 effective for annual periods beginning on or after 1 july 2009 this will significantly 
change the recognition of goodwill acquisition costs and contingent consideration relating to acquisitions however it only applies to 
acquisitions made after it has been adopted 
ifrs 8  ‘operating segments’ issued in november 2006 effective for periods beginning on or after 1 january 2009 this may change the 
way in which we report operating segments a detailed review of the impact of this standard is currently in progress 
ifric 12  ‘service concession arrangements’ issued in december 2006 effective for annual periods beginning on or after 1 january 2008  
a detailed review of the impact of this interpretation is in progress 
ifric 13  ‘customer loyalty programmes’ issued in june 2007 effective for annual periods beginning on or after 1 july 2008 a detailed 
review of the impact of this interpretation is currently in progress 
ifric 14  ‘ias 19 – the limit on a defined benefit asset minimum funding requirements and their interaction’ issued in july 2007 effective 
for annual periods beginning on or after 1 january 2008 a detailed review of the impact of this interpretation is currently in progress 
ifric 16  ‘hedges of a net investment in a foreign operation’ issued july 2007 effective for annual periods beginning on or after 1 october 
2008 a detailed review of the impact of this interpretation is in progress 
the group will also perform a detailed review of the annual improvements project published by the international accounting standards board in may 2008 
2 accounting policies 
these financial statements have been prepared in accordance with ifrs and ifric interpretations and with those parts of the companies act 1985 
applicable to groups reporting under ifrs the financial statements have also been prepared in accordance with ifrs adopted for use in the european 
union and therefore comply with article 4 of the eu ias regulation 
the accounting policies adopted are consistent with those of the previous financial period except that the group has adopted ‘ifrs 7 financial 
instruments disclosures’ and the amendment to ‘ias 1 presentation of financial statements’ adoption of these standards has required additional 
disclosures on the credit quality of trade receivables financial risks and capital management ‘ifric 11 group and treasury share transactions’ came 
into effect in the current period however the interpretation had no impact on the group 
the financial statements have been prepared under the historical cost convention except for revaluation of certain financial instruments and 
investment property  
the principal accounting policies applied in the preparation of the financial information presented in this document are set out below these policies 
have been applied consistently to the periods presented  notes to the financial statements continued 
wwwthomascookgroupcom 74 
2 accounting policies continued 
basis of preparation 
during the period we changed the presentational currency for the group to sterling as we now expect to generate the majority of our profits in  
noneuro countries with the uk being by far the largest accordingly the prior period comparatives are represented in sterling the prior period 
comparatives for assets and liabilities were translated at the sterling to euro period end exchange rate 14346 the prior period comparatives for 
equity and income statement items were translated at the sterling to euro exchange rate on the date of the transactions  
during the period the prior year was restated for fair value adjustments related to the mytravel group plc acquisition the determination of fair  
values related to the mytravel group plc acquisition has now been concluded refer to note 17 of the group financial statements for further details 
during the period the year end of the group was changed from 31 october to 30 september as a result the current financial period results are for 
eleven months and are not comparable with the prior year numbers 
the group’s financial statements consolidate those of the company and its subsidiary undertakings the results of subsidiaries acquired or disposed of 
are consolidated for the periods from or to the date on which control passed subsidiaries are entities controlled by the company control is achieved 
where the company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities 
acquisitions are accounted for under the purchase method  
where a transaction is a business combination amongst entities under common control the requirements of ifrs 3 are applied the purchase method 
of accounting is used to account for the acquisition of subsidiaries by the group the cost of an acquisition is measured at fair value of the assets given 
equity instruments issued and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition identifiable 
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition 
date the excess of the cost of acquisition over the fair value of the group’s share of identifiable net assets acquired is recorded as goodwill 
where audited financial accounts are not coterminous with those of the group the financial information has been derived from the last audited 
accounts available and unaudited management accounts for the period up to the company’s balance sheet date  
all intragroup transactions balances income and expenses are eliminated on consolidation 
interpretation guidance included within ‘sic interpretation 12 consolidation – special purpose entities’ indicates that certain special purpose entities 
spes which are involved in aircraft leasing and other arrangements with the group should be interpreted as controlled by the group and therefore 
subject to consolidation even though the group has no direct or indirect equity interest in those entities as a consequence the group has consolidated 
twelve spes 
associates and joint ventures 
entities other than subsidiaries over which the group exerts significant influence but not control or joint control are associates entities which the 
group jointly controls with one or more other party under a contractual arrangement are joint ventures  
the group’s share of the results of associates and joint ventures is included in the group income statement using the equity accounting method 
investments in associates and joint ventures are included in the group balance sheet at cost as adjusted for postacquisition changes in the group’s 
share of the net assets of the entity and including any goodwill identified on acquisition net of any accumulated impairment loss when the group’s 
share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture including any other unsecured receivables 
the group does not recognise further losses unless it has incurred obligations or made payments on behalf of the associate or joint venture unrealised 
gains on transactions between the group and its associates are eliminated to the extent of the group’s interest in the associates unrealised losses are 
also eliminated unless the transaction provided evidence of an impairment of the asset transferred 
other noncurrent asset investments 
the fair value of investments in equity instruments that do not have a quoted market price in an active market are measured using an appropriate 
valuation technique where a fair value cannot be reliably measured the investment is measured at cost loans and receivables are initially recognised 
at fair value plus any directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method any 
impairment losses are recognised in the income statement 
intangible assets – goodwill 
goodwill arising on an acquisition represents any excess of the fair value of the consideration given over the fair value of the identifiable assets and 
liabilities acquired goodwill is recognised as an asset and is reviewed for impairment at least annually any impairment is recognised immediately  
in the group’s income statement and is not subsequently reversed for the purposes of assessing impairment assets are grouped at the lowest levels for 
which there are separately identifiable cash flows cashgenerating units the allocation of goodwill is made to those cashgenerating units that are 
expected to benefit from the business combination in which the goodwill arose the group allocates goodwill to each segment in which it operates 
on disposal of a subsidiary joint venture or associate the attributable amount of goodwill is included in the determination of the profit or loss on disposal 
intangible assets – other 
intangible assets other than goodwill are carried on the group’s balance sheet at cost less accumulated amortisation intangible assets with indefinite 
useful lives are not amortised for all other intangible assets amortisation is charged on a straight line basis over the asset’s useful life as follows 
brands  10 years to indefinite life 
customer relationship 1 to 12 years 
computer software 3 to 10 years 
other acquired intangible assets are assessed separately and useful lives established according to the particular circumstances 
indefinitelived intangible assets principally comprise those trademarks for which there is no foreseeable limit to the period over which they are expected to 
generate net cash inflows these are considered to have an indefinite life given the strength and durability of our brands and the level of marketing support 
the nature of the industry we operate in is such that brand obsolescence is not common if appropriately supported by advertising and marketing spend  financial statements
 
thomas cook group plc annual report  accounts 2008 75
intangible assets with indefinite useful lives are tested for impairment at least annually by comparing their carrying amount to their recoverable amount 
all other intangible assets are assessed at each reporting date for indications of impairment if such indications exist the recoverable amount is 
estimated and compared to the carrying amount if the recoverable amount is less than the carrying amount the carrying amount is reduced to  
the recoverable amount and the impairment loss is recognised immediately in the income statement 
property plant and equipment  
except for investment property property plant and equipment is stated at cost net of straight line depreciation and any provision for impairment  
where costs are incurred as part of the startup or commissioning of an item of property plant or equipment and that item is available for use but 
incapable of operating in the manner intended by management without such a startup or commissioning period then such costs are included within 
the cost of the item costs that are not directly attributable to bringing an asset to the location and condition necessary for it to be capable of operating 
in the manner intended by management are charged to the income statement as incurred  
depreciation on property plant and equipment other than freehold land and investment property upon which no depreciation is provided is 
calculated on a straight line basis and aims to write down their cost to their estimated residual value over their expected useful lives as follows  
freehold buildings 40 to 50 years  
leasehold properties shorter of remaining lease period and 40 years  
new aircraft  12 to 20 years or remaining lease period if shorter  
aircraft spares  5 to 15 years or remaining lease period if shorter  
other fixed assets 3 to 15 years 
estimated residual values and useful lives are reviewed annually 
investment property comprises land and buildings which are held for longterm rental yields and capital growth it is carried at fair value with changes 
in fair value recognised in the income statement investment property is valued annually by external qualified professional valuers in the countries 
concerned in the event of a material change in market conditions between the valuation date and balance sheet date an internal valuation is 
performed and adjustments made to reflect any material changes in fair value 
noncurrent assets held for sale 
the group classifies noncurrent assets as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through 
continuing use to be classified as held for sale the assets must be available for immediate sale in their present condition subject only to terms that are usual 
and customary for the sale of such assets and their sale must be highly probable sale is considered to be highly probable when management are committed  
to a plan to sell the assets and an active programme to locate a buyer and complete the plan has been initiated at a price that is reasonable in relation to their 
current fair value and there is an expectation that the sale will be completed within one year from the date of classification 
noncurrent assets classified as held for sale are carried on the group’s balance sheet at the lower of their carrying amount and fair value less costs to sell  
aircraft overhaul and maintenance costs 
the cost of major overhauls of owned and finance leased engines auxiliary power units and airframes is capitalised and then amortised over between 
two and ten years until the next scheduled major overhaul except where the maintenance of engines and auxiliary power units is carried out under 
fixed rate contracts in which case the cost is spread over the period of the contract provision is made for the future costs of major overhauls of leased 
engines auxiliary power units and airframes by making appropriate charges to the income statement calculated by reference to hours flown andor 
the expired lease period as a consequence of obligations placed upon the group under the terms of certain of the operating leases  
inventories 
inventories are stated at the lower of cost and net realisable value cost represents purchase price net realisable value represents the estimated selling 
price less all costs to be incurred in marketing selling and distribution 
revenue recognition and associated costs  
revenue represents the aggregate amount of gross revenue receivable from inclusive tours travel agency commissions receivable and other services 
supplied to customers in the ordinary course of business revenue and direct expenses relating to inclusive tours arranged by the group’s leisure travel 
providers including travel agency commission insurance and other incentives are taken to the income statement on holiday departure revenue 
relating to travel agency commission on thirdparty leisure travel products is also recognised on holiday departure other revenue and associated 
expenses are taken to the income statement as earned or incurred revenue and expenses exclude intragroup transactions  
income statement presentation 
profit or loss from operations includes the results from operating activities of the group before its share of the results of associates and joint ventures 
exceptional items are items that are unusual because of their size nature or incidence and which the group’s management consider should be 
disclosed separately to enable a full understanding of the group’s results 
material business combination intangible assets were acquired as a result of the merger between thomas cook ag and mytravel group plc and the 
subsequent acquisitions made in the current year the amortisation of these intangible assets is significant and the group’s management consider  
that it should be disclosed separately to enable a full understanding of the group’s results  
tax 
tax represents the sum of tax currently payable and deferred tax tax is recognised in the income statement unless it relates to an item recognised 
directly in equity in which case the associated tax is also recognised directly in equity 
tax currently payable is provided on taxable profits based on the tax rates and laws that have been enacted or substantively enacted at the balance 
sheet date provision is made for deferred tax so as to recognise all temporary differences which have originated but not reversed at the balance sheet 
date that result in an obligation to pay more tax or a right to pay less tax in the future except as set out below this is calculated on a nondiscounted 
basis by reference to the average tax rates that are expected to apply in the relevant jurisdictions and for the periods in which the temporary differences 
are expected to reverse the deferred income tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other 
than a business combination that at the time of the transaction does not affect either accounting or taxable profit or loss  notes to the financial statements continued 
wwwthomascookgroupcom 76 
2 accounting policies continued 
deferred tax assets are assessed at each balance sheet date and are only recognised to the extent that their recovery against future taxable profits is 
probable deferred tax liabilities are recognised for the temporary differences of overseas subsidiaries joint ventures and associates unless the group  
is able to control the timing of the distribution of those earnings and it is probable that they will not be distributed in the foreseeable future  
pensions 
pension costs charged against profits in respect of the group’s defined contribution schemes represent the amount of the contributions payable to the 
schemes in respect of the accounting period  
the group also operates a number of defined benefit schemes the pension liabilities recognised on the balance sheet in respect of these schemes 
represent the difference between the present value of the group’s obligations calculated using the projected unit credit method under the schemes 
and the fair value of those schemes’ assets actuarial gains or losses are recognised in the period in which they arise within the statement of recognised 
income and expense other movements in the pension liability are recognised in the income statement past service costs are recognised immediately 
in the income statement 
foreign currency 
average exchange rates are used to translate the results of all subsidiaries associates and joint ventures that have a functional currency other than 
sterling the balance sheets of such entities are translated at period end exchange rates 
the resulting exchange differences are recorded through a separate component of equity  
transactions in currencies other than the functional currency of an entity are translated at the exchange rate at the date of the transaction foreign 
currency monetary assets and liabilities held at the period end are translated at period end exchange rates the resulting exchange gain or loss is 
recorded in the income statement  
when a foreign entity is partially disposed of or sold exchange differences that were recorded in equity are recognised in the income statement as  
part of the gain or loss on sale 
leases 
leases under which substantially all of the risks and rewards of ownership are transferred to the group are finance leases all other leases are operating leases 
assets held under finance leases are recognised at the lower of the fair value of the asset and the present value of minimum lease payments within 
property plant and equipment on the balance sheet and depreciated over the shorter of the lease term or their expected useful lives the interest 
element of finance lease payments represents a constant proportion of the capital balance outstanding and is charged to the income statement  
over the period of the lease  
operating lease rentals are charged to the income statement on a straight line basis over the lease term 
derivative financial instruments 
derivatives are recognised at their fair value when a derivative does not qualify for hedge accounting as a cash flow hedge changes in fair value are 
recognised immediately in the income statement when a derivative qualifies for hedge accounting as a cash flow hedge changes in fair value that  
are determined to be an effective hedge are recognised directly in the hedging reserve any ineffective portion of the change in fair value is recognised 
immediately in the income statement  
if a hedged transaction subsequently results in the recognition of a nonfinancial asset or a nonfinancial liability the associated cumulative gain or loss 
is removed from the hedging reserve and is included in the initial cost or other carrying amount of the asset or liability for all other cash flow hedges 
the associated cumulative gain or loss is removed from the hedging reserve and recognised in the income statement in the same period or periods 
during which the hedged forecast transaction affects profit or loss  
when a derivative qualifies for hedge accounting as a fair value hedge changes in the fair value of the derivative are recognised in the income 
statement when the offsetting changes in the fair value of the hedged asset or liability attributable to the hedged risk occur 
nonderivative financial instruments 
financial assets and liabilities are recognised when the group becomes a party to the contractual provisions of the instrument financial assets  
are derecognised when the group transfers the financial asset or when the contractual rights expire financial liabilities are derecognised when  
the obligation is discharged cancelled or expires the measurement of particular financial assets and liabilities is set out below 
trade receivables 
trade receivables are recognised at their fair value and subsequently recorded at amortised cost using the effective interest method as reduced by 
allowances for estimated irrecoverable amounts an allowance for irrecoverable amounts is established when there is objective evidence that the group 
will not be able to collect all amounts due according to the original terms of the receivables the amount of allowance is the difference between the 
asset’s carrying amount and the present value of estimated future cash flows 
availableforsale financial assets 
availableforsale financial assets are recognised and subsequently recorded at their fair value gains or losses except for impairment losses and foreign 
exchange gains and losses are recognised directly in equity until the financial asset is derecognised at this point the cumulative gain or loss previously 
recognised in equity is recognised in the income statement any impairment losses foreign exchange gains or losses or dividends receivable are 
recognised in the income statement 
heldfortrading investments 
shortterm investments are classified as heldfortrading and are recognised and subsequently recorded at their fair value gains or losses are 
recognised in the income statement 
trade payables 
trade payables are recognised at their fair value and subsequently recorded at amortised cost using the effective interest method 
borrowings 
interest bearing borrowings are recognised at their fair value net of any directly attributable transaction costs they are subsequently recorded at 
amortised cost using the effective interest method  financial statements
 
thomas cook group plc annual report  accounts 2008 77
provisions 
provisions are recognised when the group has a present obligation as a result of a past event if it is probable that an outflow of resources will be 
required to settle the obligation and a reliable estimate of the amount of the obligation can be made  
provisions are recognised and subsequently recorded at the directors’ best estimate of the expenditure required to settle the obligation at the  
balance sheet date where the effect of the time value of money is material the provision is discounted to its present value 
termination benefits  
termination benefits are payable when employment is terminated by the group before the normal retirement date or whenever an employee  
accepts voluntary redundancy in exchange for these benefits the group recognises termination benefits when it is demonstrably committed to  
either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing 
termination benefits as a result of an offer made to encourage voluntary redundancy 
sharebased payments  
the group issues equity settled share options to certain employees as part of their total remuneration the fair values of the share options are 
calculated at the date of grant using an appropriate option pricing model these fair values are charged to the income statement on a straight  
line basis over the expected vesting period of the options with a corresponding increase in equity reserves  
insurance contracts and reinsurance contracts 
premiums written relate to business incepted during the year together with any differences between the booked premiums for prior years and those 
previously accrued less cancellations premiums are recognised as revenue earned premiums proportionally over the period of coverage premiums 
are shown after the deduction of commission and premium taxes where relevant 
claims and loss adjustment expenses are charged to income as incurred based on the estimated liability for compensation owed to policyholders or 
third parties damaged by policyholders the group does not discount its liabilities for unpaid claims liabilities for unpaid claims are estimated using 
the input of assessments for individual cases reported to the group and statistical analysis for the claims incurred but not reported 
contracts entered into by the group with reinsurers under which the group is compensated for losses on one or more contracts issued by the group  
and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held 
the benefits to which the group is entitled under its reinsurance contracts held are recognised as receivables from reinsurers the group assesses its 
reinsurance assets for impairment on an annual basis 
receivables and payables are recognised when due these include amounts due to and from insurance policyholders 
critical judgements in applying the group’s accounting policies 
in the process of applying the group’s accounting policies described above management has made the following judgements that have the most 
significant effect on the amounts recognised in the financial statements 
residual values of tangible fixed assets 
judgements have been made in respect of the residual values of aircraft included in property plant and equipment those judgements determine  
the amount of depreciation charged in the income statement 
recoverable amounts of goodwill and intangible assets with an indefinite life 
judgements have been made in respect of the amounts of future operating cash flows to be generated by certain of the group’s businesses in order to 
assess whether there has been any impairment of the amounts included in the balance sheet for goodwill or intangible assets with an indefinite life in 
relation to those businesses 
special purpose entities 
the nature of the relationship with certain special purpose entities involved in leasing aircraft to the group shows that they should be interpreted  
as controlled by the group and therefore consolidated even though the group has no direct or indirect equity interest in those entities 
key sources of estimation uncertainty 
the key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk  
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below 
impairment of goodwill and intangible assets with an indefinite life 
determining whether goodwill or intangible assets with an indefinite life are 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 group to estimate the future cash flows expected to arise from the 
cashgenerating unit and a suitable discount rate in order to calculate present value the carrying amounts of goodwill and intangible assets with an 
indefinite life at the balance sheet date were £29518m and £2109m respectively 2007 £24814m £1969m no impairment losses were recorded 
during the year 
recoverable amounts of deposits and prepayments 
estimates have been made in respect of the volumes of future trading with hoteliers and the creditworthiness of those hoteliers in order to assess  
the recoverable amounts of deposits and prepayments made to those hoteliers 
aircraft maintenance provisions 
provisions for the cost of maintaining leased aircraft and spares are based on forecast aircraft utilisation estimates of future maintenance costs  
and planned rollover and renewal of the aircraft fleet 
tax 
the group operates in many tax regimes and the tax implications of its operations are complex it can take several years for tax liabilities to be agreed 
with the relevant authorities tax assets and liabilities represent management’s estimate of tax that will be payable or recoverable in the future and 
may be dependent on estimates of future profitability 
in addition estimates have been made in respect of the probable future utilisation of tax losses and deferred tax assets have been recognised the 
recoverability of these assets is dependent on the agreement of the losses with the relevant authorities and the estimates of future profitability  notes to the financial statements continued 
wwwthomascookgroupcom 78 
3 segmental information 
for management purposes the group is currently organised into five geographic operating divisions uk and ireland continental europe northern 
europe north america and airlines germany these divisions are the basis on which the group reports its primary segment information certain 
residual businesses and corporate functions are not allocated to these divisions and are shown separately as corporate  
the primary business of all of these operating divisions is the provision of leisure travel services and accordingly no separate secondary segmental 
information is provided 
segmental information for these activities is presented below 
primary segments – management structure 
eleven months ended 30 september 2008 
uk and
ireland
£m
continental
europe
£m
northern
europe
£m
north  
america 
£m 
airlines 
germany 
£m 
corporate
£m
total
£m
revenue   
segment sales 28366 34034 9100 4208 8961  – 84669
intersegment sales 63 256 27 –  2652  – 2998 
total revenue  28303  33778  9073 4208  6309   –  81671 
   
result   
profitloss from operations before exceptional items  
and amortisation of business combination intangibles 1443 1031 798 147 401 186 3634
exceptional items 1147 331 02 52 26 238 1796 
amortisation of business combination intangibles  142 01 278 59  –   – 480 
segment result  154  699  518  36  375 424 1358 
share of results of associates and joint ventures   16
net investment income   05
finance income   684
finance costs          1536
profit before tax    495
tax   51
profit for the period          444 
   
other information   
capital additions 479 264 83 39 325 243 1433
depreciation 283 91 69 04 650 10 1107 
amortisation of intangible assets 216 39 282 63 01 52 653
impairment of property plant and equipment  – 13 –  –   –   – 13
reversal of impairment of property plant and equipment  –  –  –  –   –   –  – 
impairment of intangible assets 35 10 –  –   –  10 55
impairment of noncurrent investments –– –– – – –   financial statements
 
thomas cook group plc annual report  accounts 2008 79
primary segments – management structure 
eleven months ended 30 september 2008 
uk and
ireland
£m
continental
europe
£m
northern
europe
£m
north  
america 
£m 
airlines 
germany 
£m 
corporate
£m
total
£m
balance sheet   
assets   
segment assets 36619 16815 14861 3161 10294 29442 111192
intersegment eliminations         44971
   66221
investments in associates and joint ventures   427
tax and deferred tax assets   3536
total assets         70184
liabilities   
segment liabilities 22439 12062 8166 2555 6137 30202 81561
intersegment eliminations         44971
   36590
tax and deferred tax liabilities   1672
borrowings and obligations under finance leases   11830
total liabilities         50092
intersegment sales are charged at prevailing market prices 
segment assets consist primarily of goodwill other intangible assets property plant and equipment trade and other receivables and cash and cash equivalents 
segment liabilities comprise trade and other payables revenue received in advance and provisions 
tax and deferred tax assets include £nil 2007 £15m within noncurrent assets held for sale tax and deferred tax liabilities include £nil 2007 £03m 
within liabilities related to assets held for sale borrowings also include £nil 2007 £65m within liabilities related to assets held for sale see note 29 
capital additions comprise additions to property plant and equipment note 15 and other intangible assets note 14  notes to the financial statements continued 
wwwthomascookgroupcom 80 
3 segmental information continued 
year ended 31 october 2007 
uk and 
ireland
£m
continental
europe
£m
northern
europe
£m
north 
america 
£m 
airlines 
germany 
£m 
corporate
£m
total
£m
revenue   
segment sales 24681 30380 3046 837  8556  03 67503 
intersegment sales 43 39 24 –  3352  – 3458
total revenue 24638 30341 3022 837  5204  03 64045 
   
result   
profitloss from operations before exceptional items  
and amortisation of business combination intangibles 1698 674 435 24 462  156 3089 
exceptional items 1086 26 22 01 01  188 1270
amortisation of business combination intangibles 119 – 185 03   –   – 301
segment result 493 700 228 22 463  344 1518 
share of results of associates and joint ventures   18
profit on disposal of associates   355 
net investment income   17 
finance income   741 
finance costs         747
profit before tax   1902 
tax   395
profit for the year         1507 
   
other information   
capital additions 245 118 36 11  18  221 649 
depreciation 170 97 22 01  562  08 860 
amortisation of intangible assets 190 37 185  –   –  74 486 
impairment of property plant and equipment 31 02  –  –   –   – 33 
reversal of impairment of property plant and equipment  – 02 –  –   –   – 02
impairment of intangible assets 07 21  –  –   –   – 28 
impairment of noncurrent investments  – 16  –  –   –   – 16 
   
balance sheet   
assets   
segment assets 29554 11483 13399 2482  9628  14428 80974
intersegment eliminations         26358
   54616 
investments in associates and joint ventures   357 
tax and deferred tax assets   3201 
total assets         58174 
liabilities   
segment liabilities 16536 7458 4170 2123  5590  19533 55410 
intersegment eliminations         26358
   29052 
tax and deferred tax liabilities   1624 
borrowings and obligations under finance leases    6292
total liabilities        36968
  financial statements
 
thomas cook group plc annual report  accounts 2008 81
4 personnel expenses 
 
2008
£m
2007
£m
wages and salaries 7599 6126 
social security costs 968 860 
sharebased payments – equity settled 31 06
defined benefit pension costs see note 38 200 281
other pension costs see note 38 165 101 
  8963 7374 
   
the average number of employees of the group during the period was 
2008
number
2007
number
uk and ireland 16738 11953 
continental europe 7186 6121 
northern europe 2744 1000 
north america 1432 341 
airlines germany 2179 2300 
corporate 170 386 
 30449 22101 
disclosures of directors’ remuneration share options longterm incentive schemes pension contributions and pension entitlements required by the 
companies act 1985 and specified for audit by the financial services authority are on pages 64 to 66 within the remuneration report and form part of 
these audited financial statements disclosures in respect of remuneration of key management personnel are included in note 39 
5 other operating expenses 
 
2008
£m
2007
£m
advertising expenses 1597 1185 
rents and expenses for building maintenance 1202 1304 
information technology costs 1001 758 
travel expenses and ancillary personnel expenses 666 497 
telecommunications costs 383 290 
legal and consultancy fees 416 330 
impairment of current and noncurrent assets 261 199 
insurance 155 115 
training expenses 121 105 
other taxes 85 46 
other operating expenses 1158 581 
  7045 5410 
  notes to the financial statements continued 
wwwthomascookgroupcom 82 
6 exceptional items 
 
2008
£m
2007
£m
property costs redundancy and other costs incurred in integrating the thomas cook and mytravel businesses 1067 917
property costs redundancy and other costs incurred in other business integrations and reorganisations 464 134
disposal of property plant and equipment 17 20 
disposal of noncurrent assets held for sale  – 101 
impairment of assets 25 89 
other expenses incurred as a result of the merger 148 116
other exceptional operating items 75 135
exceptional items included within profit from operations  1796 1270
 
exceptional items have been included in the income statement as follows 
cost of providing tourism services 130 111
other operating income 34 06 
personnel expenses 470 667
depreciation and amortisation 04 12
other operating expenses 1209 607
lossprofit on disposal of businesses and property plant and equipment 17 20 
profit on disposal of noncurrent assets held for sale  – 101 
  1796 1270
 
share of associates’ exceptional items 
profit on disposal of associates  – 355 
  – 355 
 
exceptional finance costs 
loss on revaluation of trading securities 139 – 
impact of financial market volatility 129 – 
 268 – 
total exceptional items  2064 915
the £129m included in exceptional finance costs relates to the exceptional element of the phasing effect of marking to market the forward points on 
our foreign currency hedging which arose in september as a result of the global banking crisis 
the 2007 profit on disposal of associates of £355m principally relates to the disposal of the group’s 50 interest in sunexpress an airline based in 
turkey to arcandor on an arm’s length basis the proceeds from the sale amounted to £366m in cash and resulted in a profit on disposal of £340m 
in addition during 2007 the group disposed of its interests in falstacen sl thomas cook thailand and troll tours reisen gmbh realising further 
profits of £15m  
7 net investment income 
 
2008 
£m 
2007
£m
dividends received from other investments  – 12 
interest on fixed asset investments 05 05 
  05 17 
8 finance income 
 
2008 
£m 
2007
£m
income from loans included in financial assets  10 09
other interest and similar income 233 337
expected return on pension plan assets 419 389
fair value gains on derivative financial instruments 22 06
 684 741
 
  financial statements
 
thomas cook group plc annual report  accounts 2008 83
9 finance costs 
 
2008
£m
2007
£m
interest payable 409 206 
finance costs in respect of finance leases 222 129 
interest cost on pension plan liabilities 419 379 
forward points on future hedging contracts 128 – 
interest on overdue tax  – 03 
other finance costs including discounting charges 90 30 
   1268 747 
 
loss on revaluation of trading securities 139 – 
impact of financial market volatility 129 – 
 1536 747
the forward points on future hedging contracts of £128m 2007 £35m was included within “cost of providing tourism services” in the prior year  
the directors believe it is more relevant to include this cost within finance costs the prior year has not been restated and there is no net impact  
on earnings per share or profit before tax of this change 
10 profit before tax 
  
2008
£m
2007
£m
 profit before tax for the period has been arrived at after chargingcrediting 
 net foreign exchange gains 108 287
 depreciation of property plant and equipment – owned assets 765 518 
  – held under finance leases 342 342 
 amortisation of intangible assets 173 185 
 amortisation of business combination intangibles 480 301 
 cost of inventories recognised as expense 369 397 
 profit on disposal of associates  – 355
 operating lease rentals payable – hire of aircraft and aircraft spares 976 802 
  – other 671 1029 
 exceptional operating items see note 6 1796 1270 
 including  impairment of property plant and equipment  13 33 
  impairment of noncurrent investments  – 16 
  impairment of intangible assets 55 28 
 personnel expenses see note 4 8963 7374 
 auditors’ remuneration see below  45 95 
a more detailed analysis of auditors’ remuneration on a worldwide basis is as follows 
pricewaterhousecoopers llp 
2008
£m
2007
£m
fees payable to the company’s auditors for the audit of the company’s financial statements 02 04 
fees payable to the company’s auditors and their associates for other services 
the audit of the company’s subsidiaries pursuant to legislation 14 12 
total audit fees  16 16 
 
 other services pursuant to legislation 05 01 
 tax services 07 03 
 information technology services 02 03 
 valuation and actuarial services 01 01 
 recruitment and remuneration services 13 05 
 services relating to corporate finance transactions  – 24 
 all other services 01 03 
total nonaudit fees  29 40 
 
total fees  45 56 
 
in addition to the above £56000 2007 £57000 has been incurred in respect of the audits of the group pension schemes  notes to the financial statements continued 
wwwthomascookgroupcom 84 
10 profit before tax continued 
deloitte  touche llp 
2008
£m
2007
£m
fees payable to the company’s auditors for the audit of the company’s financial statements  – 02 
fees payable to the company’s auditors and their associates for other services  
 the audit of the company’s subsidiaries pursuant to legislation  – 08 
total audit fees   – 10 
 
 other services pursuant to legislation  – 01 
 tax services  – 07 
 information technology services  – 02 
 services relating to corporate finance transactions  – 19 
total nonaudit fees  – 29 
 
total fees  – 39 
£20m of the 2007 nonaudit fees paid to deloitte  touche llp were earned before the date of the merger of mytravel group plc and thomas cook ag 
fees paid to the company’s auditors and their associates for services other than the statutory audit of the company are not disclosed in subsidiaries’ accounts 
since the consolidated accounts of the subsidiaries’ parent thomas cook group plc are required to disclose nonaudit fees on a consolidated basis 
a description of the work of the audit and risk management committee is set out in the corporate governance report on pages 53 and 54 and includes  
an explanation of how auditor objectivity and independence is safeguarded when nonaudit services are provided by the auditors 
11 tax 
 
2008
£m
2007
£m
analysis of tax charge in the period 
current tax 
uk corporation tax charge for the period 27 – 
 incomereimbursements in respect of prior periods 12 03
  15 03
overseas corporation tax charge for the period 411 249 
 incomereimbursements in respect of prior periods 45 161
  456 88 
total current tax  471 85 
deferred tax 
 tax creditcharge for the period 256 323 
 adjustments in respect of prior periods 164 13
total deferred tax 420 310 
total tax charge 51 395 
 
tax reconciliation 
profit before tax 495 1902 
expected tax charge at the uk corporation tax rate of 2891 2007 30  143 571 
impact of changes in tax rates 09 66 
income not liable for tax 67 145
expenses not deductible for tax purposes 69 94 
losses for which tax relief is not available 44 – 
difference in rates of tax suffered on overseas earnings 67 25 
utilisation of tax losses not previously recognised 15 28
recognition of timing differences not previously recognised 27 – 
income tax charges in respect of prior periods 131 177
other 39 11
tax charge  51 395 
in addition to the amount charged to the income statement deferred tax relating to actuarial losses on pension schemes and the fair value of derivative 
financial instruments of £212m has been charged directly in equity 2007 £415m 
uk corporation tax is calculated at 2891 2007 30 of the estimated assessable profit for the period taxation for other jurisdictions is calculated  
at the rates prevailing in the respective jurisdictions 
surplus losses not recognised in deferred tax of £5310m 2007 £5580m are available in the uk and germany for offset against future profits  financial statements
 
thomas cook group plc annual report  accounts 2008 85
12 dividends 
 
2008
£m
2007
£m
interim dividend paid of 325 pence per share 2007 nil 294 – 
proposed final dividend for the period of 65 pence per share 2007 50 pence 558 488 
 852 488 
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in these 
financial statements 
13 earnings per share 
the calculations for earnings per share based on the weighted average number of shares are shown in the table below the weighted average number 
of shares shown excludes 26m shares held by the employee share ownership trusts 2007 05m 
basic and diluted earnings per share 
2008
£m
2007
£m
net profit attributable to equity holders of the parent 447 1498 
 
 millions millions
weighted average number of shares for basic earnings per share 9476 6811 
effect of dilutive potential ordinary shares – share options

 05 08 
weighted average number of shares for diluted earnings per share 9481 6819 

  awards of shares under the thomas cook performance share plan and buy as you earn scheme will be satisfied by shares held in trust and therefore are potentially dilutive  
the remainder of the share schemes will be satisfied by the purchase of existing shares in the market and will therefore not result in any dilution of earnings per share 
 pence pence
basic earnings per share 47 220 
diluted earnings per share  47 220 
14 intangible assets 
 
2008
£m
2007
restated
£m
goodwill 29518 24814 
business combination intangibles 3450 3212 
other intangible assets 1356 809 
 34324 28835 
 
goodwill 
 £m
cost 
at 1 november 2006 8494 
additions – restated see note 17 16650 
disposals 01
exchange differences 551 
at 31 october 2007 25694
additions see note 17 3226
exchange differences 1611
at 30 september 2008 30531 
 
accumulated impairment losses 
at 1 november 2006 845 
exchange differences 35 
at 31 october 2007 880 
exchange differences 133
at 30 september 2008  1013
 
carrying amount 
at 30 september 2008 29518 
at 31 october 2007 – restated 24814 
  notes to the financial statements continued 
wwwthomascookgroupcom 86 
14  intangible assets continued 
the carrying value of goodwill analysed by business segment is as follows 
 
2008
£m
2007
restated
£m
uk and ireland 19546 16671 
continental europe 1946 1196 
northern europe 6278 5841 
north america 1548 931 
airlines germany 200 175 
 29518 24814 
in accordance with accounting standards the group annually tests the carrying value of goodwill for impairment at 30 september 2008 the review  
was undertaken on a value in use basis assessing whether the carrying value of goodwill was supported by the net present value of future cash flows 
derived from those assets using cash flow projections discounted at a pretax rate of 10 to 13 2007 10 to 11 reflecting specific risks relating  
to the relevant segments 
the key assumptions used in the value in use calculations are those regarding the discount rates revenue and cost growth rates and the level of capital 
expenditure required during the period the group prepares cash flow forecasts derived from the most recently approved annual budgets and three 
year plans of the relevant businesses the cash flow forecasts reflect the risk associated with each asset cash flow forecasts for years beyond the three 
year plan period are extrapolated based on estimated growth rates which do not exceed the average longterm growth rates for the relevant markets 
there were no impairment losses for the period 2007 £nil and no reasonable change to the assumptions would lead to an impairment 
business combination intangibles 
 
brands and
customer
relationships
£m
order
backlog
£m
computer 
software 
£m 
other
£m
total
£m
cost  
at 1 november 2006  –  –  –   –  – 
additions 2963 334 121   – 3418 
exchange differences 85 06 04   – 95 
at 31 october 2007 3048 340 125   – 3513 
additions note 17 555 24 – 33 612
exchange differences 134 30 09 02 171
at 30 september 2008 3737 394 134  31 4296 
  
amortisation  
at 1 november 2006  –  –  –   –  – 
charge for the year 95 196 10   – 301 
at 31 october 2007 95 196 10  – 301 
charge for the period 286 163 31 – 480
impairment losses 35 – – – 35
exchange differences 06 23 01 – 30
at 30 september 2008 422 382 42  – 846
  
carrying amount  
at 30 september 2008 3315 12 92 31 3450
at 31 october 2007 2953 144 115  – 3212 
the initial valuation of business combination intangibles is based on applicable projected future cash flows discounted at an appropriate discount rate 
customer relationships are being amortised over periods of one to 15 years and computer software over a period of four years order backlog has been 
amortised over the period from acquisition to departure other includes the fair value attributed to a foreign exchange licence from the acquisition of 
thomas cook india which is being amortised over 25 years  
indefinitelived intangible assets principally comprise those trademarks for which there is no foreseeable limit to the period over which they are expected  
to generate net cash inflows these are considered to have an indefinite life given the strength and durability of our brands and the level of marketing 
support the nature of the industry we operate in is such that brand obsolescence is not common if appropriately supported by advertising and marketing 
spend the group annually tests the carrying value of indefinitelived intangibles for impairment on a value in use basis consistent with that disclosed 
for goodwill above 
the carrying value of brands with an indefinite life analysed by business segment is as follows 
 
2008
£m
2007
£m
uk and ireland 706 682 
northern europe 1155 1075 
north america 248 212 
 2109 1969  financial statements
 
thomas cook group plc annual report  accounts 2008 87
other intangible assets 
 
              concessions and 
               computer software 
 
other 
 
purchased
£m
internally 
generated 
£m 
 
purchased
£m
total
£m
cost   
at 1 november 2006 1157 230   – 1387 
additions 369 29   – 398 
acquisitions 85 28   06 119 
exchange differences 53 11    – 64 
reclassification  03 03    –  – 
transfer from noncurrent assets held for sale 01  –    – 01 
disposals 20 02   – 22
at 31 october 2007 1642 299  06 1947 
additions 448 154  – 602
acquisitions note 17 88 11  01 100 
exchange differences 157 41  – 198 
reclassification 548548  ––
disposals 14 35  – 49
at 30 september 2008 1773 1018   07 2798 
   
amortisation   
at 1 november 2006 801 109  – 910 
charge for the year 132 52   01 185 
impairment losses 28  –    – 28 
exchange differences 28 06    – 34 
transfer from noncurrent assets held for sale 01  –    – 01 
disposals 20 –    – 20
at 31 october 2007 970 167  01 1138 
charge for the period 69 100  04 173
impairment losses 10 10  – 20
exchange differences 109 26  – 135
reclassification 363363  ––
disposals 09 15  – 24
at 30 september 2008 786 651  05 1442
   
carrying amount   
at 30 september 2008 987 367  02 1356
at 31 october 2007 672 132  05 809 
computer software is amortised on a straight line basis over its estimated useful life of between three and ten years 
as a result of the integration of thomas cook and mytravel the directors have reviewed the classification of intangible fixed assets and as a consequence 
certain reclassifications have been made to more appropriately reflect the nature of the asset 
concessions include the value of licences granted to the group as well as copyrights and trademarks and similar items licences are amortised over  
the period of the licence up to a maximum of ten years and other items over their estimated useful lives of between three and five years  notes to the financial statements continued 
wwwthomascookgroupcom 88 
15 property plant and equipment 
 
       other property plant and equipment 
 
aircraft and
aircraft spares
£m
investment 
property
£m
freehold land
and buildings
£m
short 
leaseholds 
£m 
other
fixed assets
£m
total
£m
cost  
at 1 november 2006 10324  – 1260 1123  1469 3852 
additions 43  – 23 58  127 208 
acquisitions 1965  – 523 138  373 1034 
exchange differences 408  – 66 19  40 125 
transfer from noncurrent assets held for sale  –  –  – 23  52 75 
reclassification  –  – 04 01 04 01
disposals 269 – 0355 3290
at 31 october 2007 12471  – 1873 1305  2025 5203 
additions 422 – 10100 299409
acquisitions note 17  –  – 41 18 83 142 
exchange differences 1657 16 254 74 239 567 
transfer from noncurrent assets held for sale  – 141 –  –   –  – 
reclassification 88  – 45350 39388 
disposals 221 – 01121 74196 
at 30 september 2008 14417 157 2132 1726  2179 6037
  
accumulated depreciation and impairment  
at 1 november 2006 6075  – 400 697  1146 2243 
charge for the year 625  – 37 79  119 235 
provision for impairment 04  –  – 13  16  29
reversal of impairment provision  –  – 02 –   – 02 
exchange differences 263  – 15 06  26 47 
transfer from noncurrent assets held for sale  –  –  – 12  39 51 
disposals 167 – 0353 2682
at 31 october 2007 6800  – 447 754  1320 2521 
charge for the period 788 – 59 88 172 319 
provision for impairment  –  –  –  –  13 13 
exchange differences 1050 – 75 31 174 280 
reclassification 71 – 33301 33971 
disposals 140 –  – 96 57 153 
at 30 september 2008 8569  – 548 1078  1283 2909 
  
carrying amount  
at 30 september 2008 5848 157 1584 648  896 3128 
at 31 october 2007 5671  – 1426 551  705 2682 
freehold land with a cost of £347m 2007 £314m has not been depreciated  
the cost of property plant and equipment stated above does not include capitalised interest  
as a result of the integration of thomas cook and mytravel the directors have reviewed the classification of tangible fixed assets and as a consequence 
certain reclassifications have been made to more appropriately reflect the nature of the assets  
the net book value of aircraft and aircraft spares includes £2673m 2007 £3021m in respect of assets held under finance leases 
the net book value of other property plant and equipment includes £130m 2007 £118m in respect of assets held under finance leases 
capital commitments 
2008
£m
2007
£m
capital expenditure contracted but not provided for in the accounts 534 89
  financial statements
 
thomas cook group plc annual report  accounts 2008 89
16 noncurrent asset investments 
  other investments 
 
associates and 
joint ventures
£m
available  
forsale 
financial assets 
£m 
loans 
receivables
£m
total
£m
cost  
at 1 november 2007 600 153  135 288 
acquisitions note 17  12 –   –  – 
disposals 04 03  – 03
share of result of associates and joint ventures after tax 16 –   –  – 
additional loan investment 39 –  11 11
exchange differences 96 20  – 20
at 30 september 2008 703 170 146 316
  
amounts written off or provided  
at 1 november 2007 243 22   – 22 
acquisitions note 17 03 –   –  – 
disposals 04 01  – 01
exchange differences 34 01  – 01 
at 30 september 2008  276 22   – 22 
  
carrying amount  
at 30 september 2008 427 148 146 294
at 31 october 2007 357 131  135 266 
associates 
investments in associated undertakings at 30 september 2008 included a 40 interest in activos turisticos sa an incoming agency and hotel company and 
hispano alemana de management hotelero sa a hotel management company both companies are based in palma de mallorca spain investments 
also include a 251 interest in oasis company sae a hotel company in egypt as well as a number of other smaller associated undertakings 
the investment in associated undertakings acquired with mytravel represents a 1999 interest in aqua sol hotels limited a quoted hotel group  
based in cyprus the interest consists of 51574200 of the existing shares of aqua sol this investment is regarded as an associated undertaking and is 
accounted for under the equity method as the group is represented on the board of directors of aqua sol and therefore has significant influence over 
that undertaking the market value of the group’s investment in aqua sol at 30 september 2008 was £53m 2007 £111m compared with a carrying 
amount of £121m 2007 £95m the directors do not consider the investment to be impaired due to its value in use 
joint venture 
the joint venture is thomas cook personal finance limited this is a joint venture arrangement with barclays bank the group’s share being 50 
summarised financial information in respect of the associates and joint ventures is as follows 
 
joint
venture
2008
£m
associates 
2008 
£m 
joint
venture
2007
£m
associates
2007
£m
total assets 861 2678 291 3734
total liabilities 983 1156 335 1764
net assets 122 1522 44 1970
group’s share of net assets 61 446 22 514
revenue 08 1468 04 2376
lossprofit for the period 78 58 44 140
group’s share of associates’ and joint venture’s lossprofit for the period 39 23 21 39
the financial statements of activos turisticos sa are made up to 31 october each year the financial statements of the other associated undertakings 
are made up to 31 december each year being their financial reporting date for the purposes of applying the equity method of accounting for 2008 
the financial statements of these undertakings for the year ended 31 december 2007 have been used together with management accounts for the 
period from 1 january 2007 to 30 september 2008 
other investments 
loans and receivables include £146m in respect of the group’s investment as a member of the airline group in the uk national air traffic services 
nats the investment comprises ordinary shares and loan notes carrying interest at 8 and 11 in the airline group 
availableforsale financial assets include £83m in respect of a 10 interest in l’tur tourismus ag a german package tour operator and £51m  
in respect of a 249 interest in aldiana gmbh a german tour operator aldiana is not accounted for under the equity method as the group does  
not have significant influence over its activities  
there is no active market for the availableforsale financial assets consequently they are recorded at cost  notes to the financial statements continued 
wwwthomascookgroupcom 90 
17 subsidiaries and acquisitions 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest is given in note 
15 to the company’s separate financial statements all of the subsidiary undertakings have been consolidated in the group accounts 
interpretation guidance included within ‘sic interpretation 12 consolidation – special purpose entities’ indicates that certain special purpose entities 
spes which are involved in aircraft leasing arrangements with the group should be interpreted as being controlled by the group and therefore subject  
to consolidation even though the group has no direct or indirect equity interest in those entities as a consequence the group has consolidated twelve 
spes that own eleven aircraft operated by the group on operating leases 
acquisitions 
mytravel group plc 
on 19 june 2007 the group acquired 100 of the share capital of mytravel group plc provisional details of the net assets acquired were disclosed in 
note 18 to the 2007 financial statements the determination of the fair values has now been concluded and an additional provision of £95m in respect 
of offmarket contracts and related deferred tax asset of £27m have been recognised with a consequent £68m increase in goodwill in accordance with 
ifrs 3 the final fair values have been recognised from the date of acquisition and the comparative figures have been restated 
hotels4ucom 
on 14 february 2008 the group acquired the business of hotels4ucom limited an online retailer of hotel accommodation and resort transfers 
hotels4ucom limited owns the subsidiaries transfers4ucom limited 100 and trust accommodationcom limited 100 the purchase price  
was £390m of which £218m has been paid in cash and an estimated balance of £172m has been recognised in relation to an earn out based on 
profitability up to 2013  
details of the net assets acquired are set out in the table below  
 
carrying amount 
before business 
combination 
£m 
fair value 
adjustment
£m
amount 
recognised at 
acquisition date
£m
net assets acquired  
intangible assets – 141 141
property plant and equipment 01 – 01
trade and other receivables 292 280 12
cash and cash equivalents 07 – 07
trade and other payables 281 220 61
shortterm borrowings 15 – 15
deferred tax liability – 39 39
 04 42 46
goodwill  350
total consideration  396
satisfied by cash and attributable costs  224
 contingent consideration  172
  396
the purchase price of each asset component of the acquisition represents its provisional fair value based on management’s best estimates 
the acquired business contributed revenue of £123m and net loss of £06m to the group for the period from acquisition to 30 september 2008 
   financial statements
 
thomas cook group plc annual report  accounts 2008 91
thomas cook india 
on 27 march 2008 the group acquired 544 of thomas cook india limited a foreign exchange and travel company in india on 20 june and 4 july 
2008 the group acquired a further 14 and 1908 respectively thomas cook india limited owns a number of subsidiaries incorporated in india 
mauritius and sri lanka the purchase price was rs128856m £1591m cash less £22m contingent refund  
details of the net assets acquired are set out in the table below 
 
carrying amount 
before business 
combination 
£m 
fair value 
adjustment
£m
amount 
recognised at 
acquisition date
£m
net assets acquired  
intangible assets 14 306 320
property plant and equipment 74 16 90
trade and other receivables 377  – 377
cash and cash equivalents 216  – 216
trade and other payables 193  – 193
shortterm borrowings

 534  – 534
retirement benefit obligation 04  – 04
provisions for liabilities 01  – 01
deferred tax liability 03 90 93
 54 232 178
less minority interest  44
  134
goodwill  1469
total consideration  1603
satisfied by cash and attributable costs  1625
 contingent refund  22
  1603

 shortterm borrowings include £368m commercial paper and bank loans £129m preference share capital and £37m bank overdraft 
the purchase price of each asset component of the acquisition represents its provisional fair value based on management’s best estimates 
the acquired business contributed revenue of £202m and net profit after minority interest of £10m to the group for the period from acquisition  
to 30 september 2008 
triwest travel holdings 
on 1 august 2008 the group acquired triwest travel holdings limited triwest travel holdings is a canadian independent travel wholesaler which 
holds 70 of skylink voyages inc the purchase price was c1214m £596m of which c1147m £563m has been paid in cash and the balance of 
c67m £33m is subject to earn out based on profitability up to 2010 
details of the net assets acquired are set out in the table below  
 
carrying amount 
before business 
combination 
£m 
fair value 
adjustment
£m
amount 
recognised at 
acquisition date
£m
net assets acquired  
intangible assets  –  30 30
property plant and equipment 09 03 06
trade and other receivables 69  – 69
cash and cash equivalents 185  – 185
trade and other payables 214  – 214
deferred tax liability 54 46 08
 05 73 68
less minority interest  01
  67
goodwill  538
total consideration  605
satisfied by cash and attributable costs  572
 contingent consideration  33
  605
the purchase price of each asset component of the acquisition represents its provisional fair value based on management’s best estimates 
the acquired business contributed revenue of £455m and net profit of £14m to the group for the period from acquisition to 30 september 2008   notes to the financial statements continued 
wwwthomascookgroupcom 92 
17  subsidiaries and acquisitions continued 
jet tours 
on 4 august 2008 the group acquired jet tours sa a premium tour operator based in paris france jet tours owns a number of subsidiaries 
incorporated in france morocco and tunisia the purchase price was €700m £551m all of which was paid in cash  
details of the net assets acquired are set out in the table below  
 
carrying amount 
before business 
combination 
£m 
fair value 
adjustment
£m
amount 
recognised at 
acquisition date
£m
net assets acquired  
intangible assets 40 21 19
property plant and equipment 16 – 16
inventory 01 – 01
trade and other receivables 372 – 372
cash and cash equivalents 100 – 100
trade and other payables 494 03 497
shortterm borrowings 46 – 46
retirement obligation 07 – 07
provisions  07 – 07
deferred tax asset 61 – 61
 36 24 12
goodwill  552
total consideration  564
satisfied by cash and attributable costs  564
the purchase price of each asset component of the acquisition represents its provisional fair value based on management’s best estimates 
the acquired business contributed revenue of £521m and net loss of £21m to the group for the period from acquisition to 30 september 2008 
other 
during the period the group concluded a number of smaller acquisitions namely  
• 1 november 2007 100 of urlaubdegmbh urlaubshop gmbh 
• 3 april 2008 100 of elegant resorts limited 
• 4 april 2008 100 of thomas cook egypt thomas cook overseas limited and lebanon thomas cook lebanon sal 
• 1 may 2008 100 of neckermann urlaubswelten gmbh  cokg and  
• 1 may 2008 65 of viajes iberoservice espana sl  financial statements
 
thomas cook group plc annual report  accounts 2008 93
details of the net assets acquired are set out in the table below  
 
carrying amount 
before business 
combination 
£m 
fair value 
adjustment
£m
amount 
recognised at 
acquisition date
£m
net assets acquired  
intangible assets 09 193 202
property plant and equipment 29 – 29
inventory 02 – 02
deferred tax asset 02 – 02
trade and other receivables 631 – 631
cash and cash equivalents 206 – 206
trade and other payables 659 03 662
shortterm borrowings 34 – 34
provisions  20 – 20
deferred tax liability – 33 33
 166 157 323
less minority interest  17
  306
goodwill  317
total consideration  623
satisfied by cash and attributable costs  578
                     loan payable  20
                     contingent consideration  10
                     decrease in associate

  15
  623

  as part of the viajes iberoservice espana sl acquisition the group contributed a portion of its 40 stake in an existing associate activos turisticos sa 
the purchase price of each asset component of the acquisition represents its provisional fair value based on management’s best estimates  
the acquired businesses contributed revenue of £691m and net profit of £23m to the group for the period from acquisition to 30 september 2008 
pro forma revenue and net profit 
if all of the acquisitions excluding neckermann urlaubswelten gmbh  cokg and viajes iberoservice espana sl had occurred on 1 november 2007 
for the eleven months ended 30 september 2008 they would have contributed £6469m to consolidated revenue and £33m to consolidated net profit 
before accounting for £38m of amortisation of business combination intangibles pro forma revenue and net profit are based on available management 
information neckermann urlaubswelten gmbh  cokg and viajes iberoservice espana sl are excluded as preacquisition revenue and net profit 
information is not available 
net cash outflow from acquisitions  
 
hotels4u
£m
thomas cook 
india
£m
triwest
£m
jet tours 
£m 
other
£m
total
£m
net cash outflow from acquisitions  
cash consideration for shares 
including acquisition costs 224 1621 568 564 569 3546
cash and cash equivalents net of overdraft acquired 08 179 185 54 172 582
 2321442383510 3972964
18 inventories 
 
2008
£m
2007
£m
goods held for resale 195 128 
raw materials and supplies 47 63 
 242 191  notes to the financial statements continued 
wwwthomascookgroupcom 94 
19 trade and other receivables 
 
2008
£m
2007
£m
noncurrent assets 
trade receivables 01 01 
amounts owed by parent undertaking  – 33 
amounts owed by associates participations and joint ventures 21 18
deposits and prepayments 872 697 
loans 101 130 
securities 38 43 
other receivables 231 66 
 1264 988 
 
current assets 
trade receivables 3250 2111 
amounts owed by parent undertaking 117 34 
amounts owed by associates and joint ventures 104 107 
deposits and prepayments 3495 2812 
loans 199 24 
securities 1292 2556 
other taxes 402 338 
other receivables 1316 662 
  10175 8644 
the average credit period taken on invoicing of leisure travel services is eleven days 2007 nine days no interest is charged on the receivables the credit risk in 
respect of direct receivables from customers is limited as payment is required in full before the services are provided in the case of travel services sold by third
party agents the credit risk depends on the creditworthiness of those third parties but this risk is also limited because of the relatively short period of credit 
deposits and prepayments include amounts paid in advance to suppliers of hotel and other services in order to guarantee the provision of those supplies and 
historically have covered periods from 1 to 24 months in advance the group’s current policy is that deposits and prepayments will normally only be made for 
periods of up to twelve months in advance there is a credit risk in respect of the continued operation of those suppliers during those periods deposits and 
prepayments also include £633m 2007 £547m of deposits on aircraft lease arrangements which are primarily attributable to the uk airline  
securities include money market securities amounting to £37m 2007 £38m purchased as collateral against liabilities arising from parttime 
retirement contracts at thomas cook ag which are classified as availableforsale financial assets 
current asset securities of £1292m 2007 £2556m include £1292m 2007 £2038m in relation to a managed investment fund established to optimise the 
utilisation of the group’s surplus liquidity the fund is classified as heldfortrading investments and includes corporate and government bonds of £1292m  
2007 £1669m in the prior year there was also £71m quoted securities £262m unquoted securities and £36m other assets securities in the prior year also 
included money market deposits with a maturity of greater than three months of £518m classified as heldfortrading investments 
loans include advances of £21m 2007 £18m to two hotel companies in which the group has a participating interest these loans are interest  
bearing at rates based on euribor and are unsecured 
the amounts presented in the balance sheet are net of allowances for doubtful receivables an allowance for impairment is made where there is an 
identified loss event which based on previous experience is evidence of a reduction in the recoverability of the cash flows 
allowances for doubtful debts in respect of trade receivable balances are managed in the business units where the debts arise and are based on  
local management experience factors that are considered include the age of the debt previous experience with the counterparty and local trading 
conditions trade receivables arise from individual customers as well as businesses in the travel sector the directors do not consider there to be 
significant concentration of credit risk relating to trade and other receivables 
movement in allowances for doubtful receivables 
2008
£m
2007
£m
at beginning of period 510 362 
additional provision 118 129
exchange differences 48 10
acquisitions 16 140
receivables written off 167 94
unused amounts released 42 37
at end of period 483 510 
at the period end trade and other receivables of £1820m 2007 £797m were past due but not impaired 
the analysis of the age of these financial assets is set out below 
ageing analysis of overdue trade and other receivables 
2008
£m
2007
£m
less than one month overdue 894 321
between one and three months overdue 336 125
between three and twelve months overdue 428 203
more than twelve months overdue 162 148
 1820 797 financial statements
 
thomas cook group plc annual report  accounts 2008 95
trade and other receivables are not subject to restrictions on title and no collateral is held as security 
the directors consider that the carrying amounts of trade and other receivables approximates their fair values 
20 cash and cash equivalents 
 
2008
£m
2007
£m
cash at bank and in hand 4723 5568 
term deposits with a maturity of less than three months 2890 655 
 7613 6223 
included within the above balances is an amount of £564m 2007 £597m held within escrow accounts in the united states and canada in respect of 
local regulatory requirements also included within the above balances is an amount of £550m 2007 £565m of cash held by white horse insurance 
ireland limited the group’s captive insurance company and £157m held in other securities these balances are considered to be restricted 
cash and cash equivalents largely comprise bank balances denominated in both euro and other currencies for the purpose of settling current liabilities 
as well as balances arising from agency collection on the part of the group’s travel agencies 
at the balance sheet date surplus cash was placed on deposit at interest rates of up to 425 per annum 2007 up to 58 
the directors consider that the carrying amount of these assets approximates to their fair value 
21 trade and other payables 
 
2008
£m
2007
£m
current liabilities 
trade payables 8501 6744 
amounts owed to associates and participations 39 61 
amounts owed to parent undertaking 15 19 
social security and other taxes 402 789 
accruals and deferred income 7694 5970 
other payables 1906 776 
  18557 14359 
 
noncurrent liabilities 
accruals and deferred income 298 395 
other payables 71 845 
  369 1240 
the directors consider that the carrying amount of trade and other payables approximates their fair value 
the average credit period taken for trade purchases is 45 days 2007 34 days 
22 borrowings 
 
2008
£m
2007
£m
shortterm borrowings 
unsecured bank loans and other borrowings 1988 27
unsecured bank overdrafts  138 263
 2126 290
currentportion of longterm borrowings 1434 231
 3560 521
 
longterm borrowings 
bank loans – repayable within one year 1434 231
                   – repayable between one and five years 3991 1099
                   – repayable after five years  170 205
 5595 1535
less amounts due for settlement within one year shown under current liabilities 1434 231
amount due for settlement after one year 4161 1304
the currency analysis of borrowings is 
us dollar 650 650
euro 5037 1164
danish krone 12 11
indian rupee 428 –
sterling 1594 –
 7721 1825
the liabilities to banks primarily relate to the refinancing of purchased aircraft administrative buildings and hotel and club complexes the useful lives 
of the financed items and the maturities of the respective liabilities to banks are congruent 
  notes to the financial statements continued 
wwwthomascookgroupcom 96 
22  borrowings continued 
in may 2008 the group replaced its existing bonding facility with a new combined credit and bonding facility amounting to €18bn £14bn at period 
end exchange rates the facility incorporates three year revolving credit and term facilities each at a margin of 175bps above euriborlibor and a 
bonding facility the term facility may be drawn in a range of currencies and is repayable in four equal six monthly instalments commencing in 
september 2009 and a final bullet repayment in may 2011 the revolving credit facility and bonding facilities are repayable in may 2011 
for the eleven months ended 30 september 2008 the average effective borrowing rate was 638 2007 486 interest rates on £1173m 2007 £796m  
of borrowings are fixed at an average weighted interest rate of 651 2007 456 interest rates on the balance of the borrowings are floating with an 
average reference interest rate of 543 2007 508 
bank loans include £1138m 2007 £1128m relating to the financing of aircraft included in property plant and equipment which is secured via 
aircraft mortgages 
us dollar bank loans include £417m 2007 £457m relating to the financing of two aircraft owned by special purpose entities consolidated in the 
group’s financial statements in accordance with sic 12 see note 17 the loans are secured by a charge on those aircraft the loans carry interest at  
a rate of 055 over us 6 month libor fixed at six monthly intervals the average effective interest rate for the eleven months to 30 september 2008 
approximates 509 2007 605 the loans are repayable in instalments by the end of june 2009 
the danish krone loan represents a mortgage loan to finance a building extension the loan was taken out for a period of 15 years in august 2006  
at a fixed rate of interest of 498 per annum and is secured on the property in denmark 
in the currency analysis of borrowings the sterling loan represents utilisation of the term facility the interest and repayment terms are detailed in the 
description of the term facility above 
the eurodenominated borrowings include a £2380m term loan and £1590m revolving credit facility loan advance the interest and repayment terms 
of the term loan are detailed in the description of the term facility above the revolving credit facility loan advance is due to be repaid in january 2009  
included in the indian rupee bank loans is £122m redeemable preference shares repayable in january 2009 the preference shares were issued by 
thomas cook india limited and have an effective interest rate of 1448 
the directors consider that the fair value of the group’s borrowings with a carrying value of £7721m is £7700m 2007 carrying value £1825m fair 
value £1847m the fair values quoted were determined on the basis of the interest rates for the corresponding terms to maturityrepayment as at the 
period end 
borrowing facilities 
as at 30 september 2008 the group had undrawn committed debt guarantee and bonding facilities of £5587m 2007 £1527m 
23 obligations under finance leases 
 minimum lease payments 
      present value of  
     minimum lease payments 
 
2008
£m
2007 
£m 
 2008
£m
2007
£m
amounts payable under finance leases   
within one year 1977 1048  1826 810
between one and five years 2291 3713  2151 3351
after five years  226 338   132 241
 4494 5099  4109 4402
less future finance charges 385 697  – –
present value of lease obligations 4109 4402  4109 4402
   
less amount due for settlement within one year  
shown under current liabilities  
 
1826 810
amount due for settlement after one year     2283 3592
 
the currency analysis of amounts payable under finance leases is 
2008
£m
2007
£m
euro 3025 3193
us dollar 1084 1209
 4109 4402
finance leases principally relate to aircraft and aircraft spares  
the average lease term at inception was 115 years 2007 111 years and the average remaining lease term is 25 years 2007 28 years for the eleven 
months ended 30 september 2008 the average effective borrowing rate was 573  2007 576  interest rates on £3202m of lease obligations are fixed  
at 559 2007 £3423m at 541 interest rates on the balance of the finance lease obligations are floating and are fixed quarterly or sixmonthly in 
advance based on us libor no arrangements have been entered into for contingent rental payments  
the directors consider that the fair value of the group’s finance lease obligations with a carrying value of £4109m was £4091m at 30 september 2008 
2007 carrying value £4402m fair value £4550m the fair values quoted were determined on the basis of the interest rates for the corresponding 
terms to maturityrepayment as at the period end 
the group’s obligations under finance leases are secured by the lessors’ rights over the leased assets 
sublease rentals receivable 
during the period two aircraft 2007 two aircraft held under finance leases were sublet on operating leases for the whole or part of the period 
details of income receivable under operating subleases are provided in note 35  financial statements
 
thomas cook group plc annual report  accounts 2008 97
24  financial instruments 
carrying values of financial assets and liabilities 
the carrying values of the group’s financial assets and liabilities as at 30 september 2008 and 31 october 2007 are as set out below 
at 30 september 2008 
held for
trading
£m 
derivative 
instruments 
in designated 
hedging 
relationships
£m
loans  
receivables 
£m  
available
forsale
£m 
financial
 liabilities at 
amortised cost
 £m
noncurrent asset investments – – 146  148 –
trade and other receivables 1288 – 6152  38 –
cash and cash equivalents –– 7613  ––
trade and other payables – – – – 17335
borrowings ––– – 7721
obligations under finance leases ––– – 4109
derivative financial instruments 72 688 – – –
 1360 688 13911  186 29165
      
at 31 october 2007 
held for
trading
£m 
derivative 
instruments 
in designated 
hedging 
relationships
£m
loans  
receivables 
£m  
available
forsale
£m 
financial
 liabilities at 
amortised cost
 £m 
noncurrent asset investments ––135  131 –
trade and other receivables 2556 – 3810  43 –
cash and cash equivalents – – 6223  – –
trade and other payables – – – – 13429
borrowings ––– –1825
obligations under finance leases – – – – 4402
derivative financial instruments 122 276 – – –
 2434 27610168  174 19656
derivative financial instruments 
at the balance sheet date total notional amounts of outstanding forward contracts and other derivative instruments that the group has committed to  
are as below 
 
2008
£m
2007
£m
foreign exchange 33654 26903
interest rate swaps 5235 691
total 38889 27594
 
 metric tonnes metric tonnes
fuel 1880870 1675555
the fair values of derivative financial instruments at 30 september 2008 were 
 
interest
rate swaps
£m
currency 
contracts  
£m 
fuel
contracts
£m
total
£m
at 1 november 2006 24 250 120 154
fair values of derivatives at acquisition  – 239 28 267
movement in fair value during the year 17 416 456 23 
at 1 november 2007 41 905 548 398
fair value of derivatives at acquisition  – 05  – 05
movement in fair value during the period 11 2112 938 1163
at 30 september 2008 52 1202 390 760
 
 
2008
£m
2007
£m
noncurrent assets 556 208 
current assets 2616 793 
current liabilities 1743 1172
noncurrent liabilities 669 227
 760 398
  notes to the financial statements continued 
wwwthomascookgroupcom 98 
24  financial instruments continued 
the group uses derivative instruments to hedge against significant future transactions and cash flows the group enters into a variety of foreign 
currency forward contracts and options in the management of its exchange rate exposures the instruments used are primarily denominated in the 
currencies of the group’s principal markets and the currency exposures in those markets predominantly euro us dollar and sterling and are typically 
established for periods of 12 to 24 months in advance of a season to which the expected cash exposures pertain 
the group undertakes hedging transactions to limit the risk of unfavourable changes in the jet fuel prices and to reduce the weighted average cost  
of fuel the group’s hedging policy aims to hedge up to 95  of the group’s fuel requirements as at 30 september 2008 the group had put in place 
hedging transactions for fuel volumes of 1880870 metric tonnes 20071675555 metric tonnes with terms running up until september 2010 at the 
latest three future seasons the group uses combination of fixed price forward or swap contracts in either crude oil gas oil and kerosene and net 
purchased collars in crude oil to hedge against its fuel price risk 
the group is also subject to risks arising from interest rate movements in connection with the financing of aircraft and other assets interest rate swaps and 
cross currency swaps are designated as cash flow hedges of the interest rate and the us dollareurosterling currency risk on such borrowings interest rate 
currency swaps are reported within interest rate derivatives the maturities of interest rate derivatives extend out to may 2011 at the latest 
the fair values of the group’s derivative financial instruments set out before have been determined by reference to prices available from the markets in 
which the instruments are traded 
 
2008
£m
2007
£m
fair value of derivatives designated and effective as cash flow hedges deferred in equity at period end 688 276
during the period a gain of £1778m 2007 £635m loss was transferred from the hedging reserve to the income statement following recognition of the 
hedged transactions the amount included in each line item in the income statement is shown below in addition a loss of £257m was recognised in 
the income statement in respect of the ineffective portion of cash flow hedges 2007 £37m loss 
 
2008
£m
2007
£m
cost of providing tourism services 1778 672
finance costs 257 – 
 1521 672
25 financial risk 
the group is subject to risks related to changes in interest rates exchange rates fuel prices counterparty credit and liquidity within the framework of 
its business operations details of the nature of these risks and the policies and processes that the group operates to manage them and mitigate any 
financial impact are set out in the financial review on pages 44 and 45  
the market risks that the group is subject to have been identified as interest rate risk exchange rate risk and fuel price risk the impact of reasonably 
possible changes in these risk variables on the group based on the period end holdings of financial instruments have been calculated and are set out 
in the tables below in each case it has been assumed that all other variables remain constant as explained in note 24 fuel price risk is hedged through 
the use of a combination of derivative instruments for the purpose of illustrating sensitivity the price of the underlying commodity in each instrument 
has been assumed to change by 20 
 
interest rate risk              2008 
 
           2007 
 
impact on
profit
before tax
£m 
impact on 
equity 
£m  
 impact on
profit
before tax
£m 
impact on
equity
£m 
1 increase in interest rates 07 –   05 – 
1 decrease in interest rates  07 –    05 – 
 
exchange rate risk              2008 
 
           2007 
 
impact on
profit
before tax
£m 
impact on 
equity 
£m  
 impact on
profit
before tax
£m 
impact on
equity
£m 
5 strengthening of euro 14 372  11 253
5 weakening of euro 26 288  01 217
5 strengthening of us dollar 74 752  74 610
5 weakening of us dollar 23 677   61 552
 
fuel price risk              2008 
 
           2007 
 
impact on
profit
before tax
£m 
impact on 
equity 
£m  
 impact on
profit
before tax
£m 
impact on
equity
£m 
20 increase in fuel price  – 1500   – 346
20 decrease in fuel price  –  1381   –  435
  financial statements
 
thomas cook group plc annual report  accounts 2008 99
liquidity risk 
financial liabilities are analysed below based on the time between the period end and their contractual maturity the amounts shown are estimates of 
the undiscounted future cash flows and will differ from both carrying value and fair value 
 amount due  
at 30 september 2008 
in less than
3 months
£m
between
3 and 12 months
£m
between 
1 and 5 years 
£m 
in more than
5 years
£m
total
£m
trade and other payables 16414 808 88 – 17310
borrowings 504 3456 4418 181 8559
obligations under finance leases 697 1280 2291 226 4494
derivative financial instruments – payable 3661 4429 1763 – 9853
   – receivable 2222 3869 1370 – 7461
  19054 6104 7190 407 32755
 
 amount due 
at 31 october 2007 
in less than
3 months
£m
between
3 and 12 months
£m
between 
1 and 5 years 
£m 
in more than
5 years
£m
total
£m
trade and other payables 12571 – 858 – 13429
borrowings 2942931166 2171970
obligations under finance leases 183 865 3713 338 5099
derivative financial instruments – payable 6046 11515 3637 – 21198
   – receivable 5418 10891 3479 – 19788
  13676 1782 5895 555 21908
estimated undiscounted future cash flows are disclosed above in respect of derivatives with a negative fair value at the period end these cash flows 
include amounts in respect of fuel derivatives which are based on the period end fair values estimated cash flows relating to fuel option derivatives 
have all been reported in the “amount due in less than 3 months” category trade and other payables includes nonfinancial liabilities of £1616m 
2007 £2170m which have not been analysed above 
the group’s management of liquidity risk is addressed in the financial review on page 45 
counterparty credit risk 
the group is exposed to credit risk in relation to deposits derivatives with a positive fair value and trade and other receivables the maximum exposure 
in respect of each of these items at the balance sheet date is their carrying value the group’s approach to credit risk from deposits and derivatives with 
a positive fair value is explained in the financial review on page 45 the group’s approach to credit risk in respect of trade and other receivables is 
explained in note 19 
26 insurance 
management of insurance risk 
incidental to its main business the group through its subsidiary white horse insurance ireland limited issues contracts that transfer significant 
insurance risk and that are classified as insurance contracts as a general guideline the group defines as significant insurance risk the possibility  
of having to compensate the policyholder if a specified uncertain future event adversely affects the policyholder 
business written includes standard commercial risks for the group and travel insurance for both group and nongroup customers 
the principal nature of travel insurance risks is one of shortterm low value and high volume underwriting performance is monitored on an ongoing 
basis and pricing reviewed annually for each individual contract exposure is capped by specific limits within the insurance policy and by using reinsurance 
contracts for any claims in excess of these retention limits commercial policies with the group are subject to policy excesses and single event and 
aggregate limits 
insurance risk is spread across several european countries where the group operates including the uk ireland and scandinavia 
when estimating the cost of claims outstanding at the period end the principal assumption underlying the estimates is the group’s past development 
pattern this includes assumptions in respect of historic claims costs average claims handling expenses and market developments the group also uses 
an independent actuary to review its liabilities to ensure that the carrying values are adequate any changes to these variables are not expected to have 
a material effect on the group financial statements 
the group operates a reinsurance policy approved by the board which ensures that reinsurers have a financial stability rating of b a m best or above 
the group has assessed these credit ratings as being satisfactory in diminishing the group’s exposure to the credit risk of its insurance receivables 
income and expenses arising directly from insurance contracts 
 
2008
£m
2007
£m
revenue 
net earned premium income 78 55
deposit interest 25 11
 103 66
 
expenses 
claims incurred 144 88
other operating expenses 20 –
 164 88 notes to the financial statements continued 
wwwthomascookgroupcom 100 
26 insurance continued 
assets and liabilities arising directly from insurance contracts 
 
2008
£m
2007
£m
assets 
receivables arising out of direct insurance operations 18 48
prepayments 01 03
 19 51
 
liabilities 
deferred income arising from unearned premiums 17 27
claims accruals 104 129
insurance premium tax payable 03 09
other creditors 04 –
accruals and deferred income 07 13
 135 178
reconciliation of movement in insurance liabilities 
 
deferred income 
arising from 
unearned 
premiums
£m
claims 
accruals
£m
at 1 november 2007 27 129
net earned premium income 78 –
premiums written 68 –
claims incurred – 144
claims paid – 169
at 30 september 2008 17 104
27 deferred tax 
the following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting periods 
 
aircraft
finance
leases
£m
retirement
benefit
obligations
£m
fair value
of financial
instruments
£m
other 
temporary 
differences 
£m 
tax
losses
£m
total
£m
at 1 november 2006 385 853 90 316 727 1739 
chargecredit to income 03 265 03 150  195 310
credit to equity  – 340 75 –   – 415
acquisitions restated  – 14  – 328 1381 1067 
exchange differences 15 17 02 18 10 26 
at 31 october 2007 restated 397 279 20 512 1923 2107 
ifrs 5 transfer  –  –  – 16  – 16
chargecredit to income 121 46 03 410 180 420
chargecredit to equity  – 42 254 –   – 212 
acquisitions  –  –  – 110  – 110 
exchange differences 99 34 08 78 24 87
at 30 september 2008 375 309 229 274 2127 2308
certain deferred tax assets and liabilities have been offset the following is the analysis of the deferred tax balances for financial reporting purposes 
 
2008
£m
2007
£m
deferred tax assets 3286 2945
deferred tax liabilities 978 838
 2308 2107
at the balance sheet date the group had unused tax losses of £13279m 2007 £12550m available for offset against future profits deferred tax assets 
have only been recognised where there is sufficient probability that there will be future taxable profits against which the assets may be recovered the 
increase in recognised tax losses in the period relates to nonrecurring exceptional costs the uk and german business generated taxable profits before 
exceptional items which support the recognition of losses in these territories no deferred tax asset has been recognised in respect of tax losses of 
£5310m 2007 £5580m due to the unpredictability of future profit streams 
other temporary differences on which deferred tax has been provided primarily relate to the difference in book to tax value on qualifying tax assets 
provisions for which tax relief was not originally available and fair value accounting on properties acquired as part of the merger  
in addition the group had unused other shortterm timing differences in respect of which no deferred tax asset has been recognised amounting to 
£340m 2007 £470m also due to the unpredictability of future profit streams  
deferred tax liabilities were offset against the corresponding deferred tax assets where both items fell within the responsibility of the same tax authority   financial statements
 
thomas cook group plc annual report  accounts 2008 101
the deferred tax assets and liabilities at the period end without taking into consideration the offsetting balances within the same jurisdiction are £4765m 
and £2455m respectively  
at the balance sheet date the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which no deferred tax 
liabilities have been recognised was £2952m 2007 £2690m no liability has been recognised in respect of these differences because the group is in a 
position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future 
28 provisions 
aircraft 
maintenance 
provisions 
£m 
other
provisions
£m
total
£m
at 1 november 2007  1310  2337 3647
additional provisions in period 441 678 1119 
unused amounts released in period 87 135 222
unwinding of discount  –  90 90
utilisation of provisions 96 615 711
acquisitions  –  27 27
exchange differences 73 139 212
at 30 september 2008 1641  2521 4162 
  
included in current liabilities 652 1187 1839 
included in noncurrent liabilities 989 1334 2323
at 30 september 2008 1641 2521 4162 
  
included in current liabilities 506 1343 1849
included in noncurrent liabilities 804 994 1798
at 31 october 2007 1310 2337 3647
the aircraft maintenance provisions relate to maintenance on leased aircraft and spares used by the group’s airlines in respect of leases which include 
contractual return conditions this expenditure arises at different times over the life of the aircraft with major overhauls typically occurring between 
two and ten years see note 2 
other provisions relate to provisions for onerous contracts and future obligations including those arising as a result of reorganisation and restructuring 
plans that are irrevocably committed and include severance payments and provisions for social security compensation plans 
provisions included in noncurrent liabilities are principally in respect of onerous contracts and are expected to be utilised over the term of those 
contracts which extend up to ten years from the balance sheet date 
29 noncurrent assets classified as held for sale 
 
2008
£m
2007
£m
assets 
property plant and equipment – land and building – 112 
deferred tax assets – 15 
   – 127 
 
liabilities 
deferred tax liabilities – 03 
borrowings of companies held for sale – 65 
   – 68 
the noncurrent assets and liabilities held for sale in 2007 relate to land and a building owned by thomas cook nederland bv in the current period the 
land and building has been reclassified as an investment property prior to being reclassified the property was revalued to £141m 
  notes to the financial statements continued 
wwwthomascookgroupcom 102 
30 consolidated statement of changes in equity 
 
share 
capital 
£m 
share 
premium 
£m 
merger
reserve
£m
capital 
redemption 
reserve
£m
own
shares
£m
hedging
and
translation
reserves
£m
retained 
earnings 
deficit 
£m 
attributable 
to equity 
holders of 
the parent 
£m 
minority
interest
£m
total
£m
at 1 november 2006 2055  3652   –  –  – 207 1715 3785  218 4003 
total recognised income 
and expense for the year  –   –   –  –  – 366 2151  2517  14 2531 
equity credit in respect 
of sharebased payments  –   –   –  –  –  – 06  06   – 06 
capital increase  –  04   –  –  –  –  –  04   – 04 
issue of equity shares  
net of expenses 04  68  125 –  –  –  –  53  – 53
reclassification to 
thomas cook group plc 1711 3656 5367  –  –  –  –   –   –  – 
acquisition of mytravel 313   –  14600  –  –  –  –  14913  01 14914 
acquisition of  
minority interests  –   –   –  –  –  –  –   –  125 125
purchase of own shares  –   –   –  – 49 –  –  49  – 49
dividends paid  –   –   – – –  –  –   –  25 25
net change directly  
in equity 1394 3584 19842  – 49 – 06  14821  149 14672 
total movements 1394 3584 19842  – 49 366 2157  17338  135 17203 
at 31 october 2007 661  68  19842  – 49 159 442  21123  83 21206 
     
total recognised  
income and expense  
for the period – – –
–
– 1989 326 2315  03 2312 
equity credit in respect 
of sharebased payments – – – – – – 31 31 – 31
issue of equity shares  
net of expenses 01 21 – – – – – 22  – 22
acquisition of  
minority interests – – – – – – –  –  62 62
exchange difference  
on minority interest  – – – – – – – – 04 04
share buyback 64 – – 64 – – 2663 2663 – 2663
purchase of own shares – – – – 83 – – 83 – 83
disposal of own shares – – – – 02 – – 02 – 02
dividends paid – – –––– 782 782 19 801
net change directly  
in equity 63 21   – 64 81 – 3414 3473 47 3426
total movements 63 21   – 64 81 1989 3088 1158 44 1114
at 30 september 2008 598 89  19842 64 130 2148 2646 19965 127 20092 
the merger reserve arose on the reverse acquisition of thomas cook group plc and mytravel group plc by thomas cook ag in the case of thomas cook 
group plc the merger reserve represents the difference between the existing share capital and share premium of thomas cook ag and the share capital 
of thomas cook group plc issued in exchange and in the case of mytravel group plc the merger reserve represents the difference between the fair 
value and the nominal value of the share capital issued by thomas cook group plc  
the capital redemption reserve was created as a consequence of the share buyback further details of the share buyback are included in notes 31 and 39 
details of changes in hedging and translation reserves are set out in note 32  financial statements
 
thomas cook group plc annual report  accounts 2008 103
31 calledup share capital 
 
2008
£m
2007
£m
authorised 
50000 deferred shares of £1 each 2007 50000 01 01
2000000000 ordinary shares of €010 each 2007 2000000000  1352 1352
allotted calledup and fully paid 
879541536

 ordinary shares of €010 each 2007 976841152  598 661
allotted calledup and partly paid 
50000 deferred shares of £1 each £025 paid 2007 50000 – –

 excludes 25565969 shares which were repurchased by the group in accordance with the share buyback programme but had not been cancelled as at 30 september 2008 
contingent rights to the allotment of shares 
at 30 september 2008 options to subscribe to ordinary shares were outstanding with respect to the thomas cook group plc 2007 performance share 
plan the thomas cook group plc 2008 coinvestment plan and the thomas cook group plc 2008 save as you earn scheme for further details refer to 
note 37 on exercise the awards of shares under the plans will be satisfied by purchases in the market of existing shares 
own shares held in trust 
shares of the company are held under trust by halifax ees trustees international jersey limited and equiniti corporate nominees limited in connection 
with the thomas cook group plc 2007 performance share plan and buy as you earn scheme respectively in accordance with ifrs these are treated  
as treasury shares and are included in other reserves in the balance sheet 
the number of shares held at 30 september 2008 by halifax ees trustees international jersey limited and equiniti corporate nominees limited was 
5049795 2007 1670104 and 4506 2007 nil respectively the cost of acquisition of these shares was £83m 2007 £49m and the market value at 
30 september 2008 was £112m 2007 £50m shares held by the trust have been excluded from the weighted average number of shares used in the 
calculation of earnings per share 
share buyback 
during the period the group had purchased a total of 107124730 shares for cancellation at a total cost of £2635m excluding commission and other 
related costs 
capital management 
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders 
and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital 
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return capital to shareholders 
sell assets to reduce debt or issue new shares subject to the terms of the relationship agreement with arcandor 
the capital structure of the group consists of debt cash and cash equivalents and shortterm trading securities as shown in note 34 together with 
equity attributable to equity holders of the parent as shown in the group balance sheet at the balance sheet date the group had total capital of 
£22890m 2007 £18636m 
32 hedging and translation reserves 
hedging
reserve
£m
availableforsale 
investments 
£m 
translation
reserve
£m
total
£m
at 1 november 2006 179 01 27 207
exchange differences on translation of overseas operations  –  –  439 439 
valuation lossesgains taken to equity 627 04   – 623
transfer to profit or loss 635 05 05 625 
tax relating to valuation losses and transfers 75 –   – 75
at 31 october 2007 246 02 407 159 
exchange differences on translation of overseas operations  –  –  1216 1216 
valuation gainslosses taken to equity 2814 09  – 2805
transfer to profit or loss 1778 –   – 1778
tax relating to valuation losses and transfers 254 –   – 254
at 30 september 2008 536 11 1623 2148
  notes to the financial statements continued 
wwwthomascookgroupcom 104 
33 notes to the cash flow statement 
 
2008
£m
2007
£m
profit before tax 495 1902 
adjustments for 
finance income 684 741
finance costs 1536 747
net investment income 05 17
share of results of associates and joint ventures 16 18
depreciation of property plant and equipment 1107 860 
impairment of property plant and equipment 13 33 
amortisation of intangible assets 173 185 
impairment of intangible assets 55 28 
amortisation of business combination intangibles 480 301 
impairment of noncurrent investments – 16 
loan write offs impairment of trade receivables and other assets – 12
lossprofit on disposal of businesses and property plant and equipment 17 20
profit on disposal of noncurrent assets held for sale – 101
profit on disposal of associates – 355
sharebased payments 31 06 
other noncash items 327 122
increase in provisions 05 465 
income received from other noncurrent investments 04 12 
interest received  272 297 
operating cash flows before movements in working capital  3188 3490 
increase in inventories 47 27
increasedecrease in receivables 1216 840 
increasedecrease in payables 2284 2399
cash generated by operations  4209 1904 
income taxes paid 637 298
net cash from operating activities 3572 1606 
cash and cash equivalents which are presented as a single class of assets on the face of the balance sheet comprise cash at bank and other shortterm 
highly liquid investments with a maturity of three months or less 
34 net debt 
 
at
1 november
2007
£m
cash
flow
£m
other
noncash
changes
£m
acquisitions 
disposals 
£m 
exchange
movements
£m
at
30 september
2008
£m
liquidity  
cash and cash equivalents 6223 884 –  –  506 7613 
trading securities 2556 1341 230 – 307 1292 
 8779 457 230 –  813 8905
current debt  
bank overdrafts 263 157 –  –  32 138
shortterm borrowings 27 1447 09 496 27 1988
current portion of longterm borrowing 231 372 722 –  109 1434
borrowings classified as held for sale 65 – 79 –  14 –
obligations under finance leases 810 913 1789 01 139 1826
 1396 749 2423 497 321 5386
noncurrent debt  
longterm borrowings 1304 3287 634 –  204 4161
obligations under finance leases 3592 – 1789 –  480 2283
 4896 3287 2423 –  684 6444
total debt 6292 4036 – 497 1005 11830
net fundsdebt 2487 4493 230 497 192 2925
  financial statements
 
thomas cook group plc annual report  accounts 2008 105
35 operating lease arrangements 
the group as lessee 
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable operating leases which 
fall due as follows 
 
property
and other
2008
£m
aircraft and
aircraft 
spares
2008
£m
total
2008
£m
property 
and other 
2007 
£m 
aircraft and
aircraft
spares
2007
£m
total
2007
£m
within one year 728 1173 1901 967  1051 2018 
later than one and less than five years 1807 3023 4830 2988  2474 5462 
after five years 1396 315 1711 2314  207 2521 
  3931  4511  8442 6269  3732 10001 
operating lease payments principally relate to rentals payable for the group’s retail shop properties and for aircraft and aircraft spares used by the 
group’s airlines shop leases are typically negotiated for an average term of five years and aircraft leases for an average term of ten years 
the group as lessor 
at the balance sheet date the group had contracted with tenants for future minimum lease payments under noncancellable operating leases which 
fall due as follows 
 
property
2008
£m
aircraft
2008
£m
total
2008
£m
property 
2007 
£m 
aircraft
2007
£m
total
2007
£m
within one year 03 38 41 10  41 51 
later than one and less than five years 12 15 27 20  35 55 
after five years  –  –  – 03   – 03 
 15 53  68 33  76 109 
  
rental income earned during the period was 16 72 88 03  31 34 
certain of the group’s retail and other properties and aircraft that are not being used in the group’s businesses are sublet on the best terms available in the 
market for varying periods with an average future committed period of 26 years for property 2007 34 years and 12 months for aircraft 2007 13 months 
two of the aircraft sublet are held by the group on finance leases at 30 september 2008 these aircraft had an aggregate cost and a carrying amount  
of £203m 2007 £204m there were no impairment provisions relating to these aircraft and the depreciation charge for the period was £01m  
2007 £nil 
36 contingent liabilities 
 
2008
£m
2007
£m
contingent liabilities 1160 1193
contingent liabilities primarily comprise counterguarantees for bank funding letters of credit uncommitted facilities and other contingent liabilities 
relating to structured aircraft leases all of which arise in the ordinary course of business the amounts disclosed above represent the group’s 
contractual exposure 
the group complies with all the standards relevant to consumer protection and formal requirements in respect of package tour contracts and has  
all the necessary licences for the various sales markets the customer’s right to reimbursement of the return travel costs and amounts paid in case of 
insolvency or bankruptcy on the part of the tour operator or travel agency is guaranteed in all thomas cook sales markets in line with local legislation 
and within the various guarantee systems applied in the united kingdom under the former process the group was required to arrange for guarantees 
to be provided to the regulatory body the regulatory body has now introduced a fund mechanism whereby travel companies are required to collect 
and remit a small charge for each protected customer upon booking customer rights in relation to thomas cook group in germany belgium and 
austria are guaranteed via an insolvency insurance system in ireland scandinavia and france via guarantees provided by banks and insurance companies 
and in the netherlands via a guaranteed fund in north america customer payments are held in escrow accounts until the obligations of the tour operator 
or travel agent have been completed  notes to the financial statements continued 
wwwthomascookgroupcom 106 
37 sharebased payments 
the company operates four equitysettled sharebased payment schemes as outlined below the total expense recognised during the period in respect 
of equitysettled sharebased payment transactions was £31m 2007 £06m 
the thomas cook group plc 2007 performance share plan psp 
executive directors and senior executives of the company and its subsidiaries are granted options to acquire or contingent share awards of the 
ordinary shares of the company the awards will vest if performance targets for earnings per share eps and total shareholder return tsr are met 
during the three years following the date of grant subject to vesting conditions the options are exercisable up to ten years after the date of grant 
the thomas cook group plc 2008 coinvestment plan coip 
executive directors and senior executives may be required to purchase the company’s shares using a proportion of their net bonus lodged shares for each 
lodged share purchased participants may receive up to 35 matching shares if performance targets for eps and return on invested capital roic are met during 
the three years following the date of grant subject to vesting conditions the options are exercisable up to ten years after the date of grant 
the thomas cook group plc 2008 save as you earn scheme saye 
in may 2008 all eligible employees were offered options to purchase shares in the company by entering into a three year savings contract the option 
exercise price was set at a 20 discount to the market price at the offer date options are exercisable between three years and three years and six 
months after the start of the savings contract 
the thomas cook group plc 2008 hm revenue  customs approved buy as you earn scheme baye 
in may 2008 all eligible uk tax paying employees were offered the opportunity to purchase shares in the company by deduction from their gross pay 
for every ten shares an employee buys in this way the company will purchase one matching share on their behalf at 30 september 2008 4506 
matching shares had been purchased 
the movements in options and awards during the period were 
          2008 2007
psp coip saye psp
outstanding at beginning of period 2869648 – – –
granted 4304331 985046 3349444 2869648
exercised 83333 –   –  –
forfeited 516460 – 22294 –
outstanding at end of period 6574186 985046  3327150 2869648
exercisable at end of period –– – –
exercise price £ nil nil 215 nil
average remaining contractual life years 92 98 33 97
the weighted average share price at the date of exercise for the options exercised during the period was £240  
the fair value of options and awards subject to eps and roic performance targets was determined by the use of blackscholes models and the fair value 
of options subject to tsr performance targets was determined by the use of monte carlo simulations for options and awards granted during the period 
the key inputs to the models were 
           2008 2007
psp coip saye psp
share price at measurement date £ 280 237 241 297
exercise price £ nil nil 215 nil
expected volatility  34 34 34  32
expected volatility of comparator group  1655 na na 1343
expected correlation with comparator group  25 na na 14
option life years 3 3 33 3
risk free rate  39 52 55 57
expected dividend yield  55 5 3
weighted average fair value at date of grant £ 191 204 059 214
expected volatility has been based on the historic volatility of the company’s shares and the shares of other companies in the same or related sectors 
38 retirement benefit schemes 
pension schemes for the employees of the thomas cook group consist of defined contribution plans and defined benefit plans with the defined benefit 
plans being both funded and unfunded the obligations arising from defined contribution plans are satisfied by contribution payments to both private 
and staterun insurance providers 
unfunded defined benefit pension obligations 
unfunded defined benefit pension obligations primarily relate to the group’s employees in the german businesses of thomas cook ag and the condor 
group provisions are established on the basis of commitments made to those employees for oldage and transitional pensions based on the legal tax 
and economic circumstances of the individual countries and on the period of employment and level of remuneration of the respective employees 
provisions for pensions and similar obligations totalling £1389m 2007 £1409m were attributable to the pension commitments of condor group condor 
flugdienst gmbh and condor berlin gmbh for employees who joined a condor group company prior to 1995 the total pension commitment of the 
pensions authority of the german federal government and regional states was adjusted and maintained in the form of a company pension scheme  financial statements
 
thomas cook group plc annual report  accounts 2008 107
the flight crews were additionally entitled to a transitional provision for the period between the termination of their inflight employment and the time 
they became eligible for a staterun or company pension in both cases the benefit commitment depended on the final salaries of the employees 
concerned prior to the termination of their inflight employment final salary plan 
employees who joined a condor group company after 1994 participate in a company pension scheme under which the pension entitlements are based 
on the average salaries of those employees average salary plan condor group also has retirement obligations arising from individual commitments 
and transitional provisions 
in accordance with ias 19 all these commitments are classified as unfunded defined benefit obligations and classified as such in these financial statements 
the condor group defined benefit plans have been closed to new entrants with the exception of pilots since 2004 
there are additional unfunded defined benefit obligations comprising individual commitments to executive staff at thomas cook group and 
obligations in respect of past service for employees in sweden 
the unfunded pension benefits are accounted for as part of liabilities for retirement benefit obligations in the balance sheet 
the following weighted average actuarial assumptions were made for the purpose of determining the unfunded defined benefit obligations 
 
2008

2007

discount rate for scheme liabilities 616 550
expected rate of salary increases 298 280
future pension increases 234 200
the mortality tables 2005 g drawn up by prof dr klaus heubeck were used as the basis for the mortality assumptions used in arriving at the present 
value of the pension obligations at 30 september 2008 these assume a life expectancy for members currently aged 60 of 2235 years for men and 2698 
years for women 
amounts recognised in income in respect of these defined benefit schemes are as follows 
 
2008
£m
2007
£m
current service cost 73 102 
past service cost 03 – 
curtailment gain 13 –
interest cost on scheme liabilities 85 79 
total included in income statement  142 181 
service costs have been included in personnel expenses in the income statement and the unwinding of the discount rate of the expected retirement benefit 
obligations has been included in finance costs actuarial gains and losses have been reported in the statement of recognised income and expense 
changes in the present value of unfunded pension obligations were as follows 
 
2008
£m
2007
£m
at beginning of period 1623 1858 
current service cost 73 102 
past service cost 03 – 
interest cost 85 79 
benefits paid 35 83
settlements 78 33
curtailments 13 –
actuarial gains 236 424
acquisitions 07 55 
exchange difference 215 69 
at end of period 1638 1623 
  notes to the financial statements continued 
wwwthomascookgroupcom 108 
38  retirement benefit schemes continued 
funded defined benefit pension obligations 
the pension entitlements of employees of thomas cook uk the group’s dutch companies and employees in norway are provided through funded 
defined benefit schemes where pension contributions are paid over to the schemes and the assets of the schemes are held separately from those of  
the group in funds under the control of trustees pension costs are assessed in accordance with the advice of qualified actuaries in each country the 
fair value of the pension assets in each scheme at the period end is compared with the present value of the retirement benefit obligations and the net 
difference reported as a pension asset or retirement benefit obligation as appropriate pension assets are only recognised to the extent that they will 
result in reimbursements being made or future payments being reduced 
funded defined benefit pension obligations have been determined on the basis of assumptions relevant to each country and the weighted averages of 
these were 
 
2008

2007

discount rate for scheme liabilities 640 570
inflation rate 340 325
expected return on scheme assets 698 710
expected rate of salary increases 433 450
future pension increases 340 325
the thomas cook uk pension plan accounts for approximately 90 of the total funded defined benefit obligations and the mortality assumptions used 
in arriving at the present value of those obligations at 30 september 2008 are based on a life expectancy for members currently aged 60 of 252 years 
for men and 283 years for women 
the thomas cook uk pension plan has been closed to new entrants since april 2003 employees who have joined since that date participate in a new 
defined contribution scheme 
amounts recognised in income in respect of these defined benefit schemes are as follows 
 
2008
£m
2007
£m
current service cost 143 179 
past service cost – 02 
gain on settlements – 02
expected return on scheme assets 419 389
interest cost on scheme liabilities 334 300 
total included in income statement 58 90 
service costs have been included in personnel expenses in the income statement and the unwinding of the discount rate of the expected retirement 
benefit obligations has been included in finance costs the expected return on scheme assets has been included in finance income 
the actual return on scheme assets was £751m 2007 £490m 
actuarial gains and losses have been reported in the statement of recognised income and expense 
changes in the present value of funded defined benefit obligations were as follows 
 
2008
£m
2007
£m
at beginning of period 6481 6052 
current service cost 143 179 
past service cost – 02 
settlements – 02
interest cost 334 300 
benefits paid 145 123
acquisitions 12 75 
contributions paid by plan participants 36 37 
actuarial gains 771 149
exchange difference 16 110 
at end of period 6074 6481 
  financial statements
 
thomas cook group plc annual report  accounts 2008 109
changes in the fair value of scheme assets were as follows 
 
2008
£m
2007
£m
at beginning of period 6352 5130 
expected return on scheme assets 419 389 
contributions from the sponsoring companies 330 365 
contributions paid by plan participants 36 37 
actuarial lossesgains 1170 425 
benefits paid 145 123
acquisitions 07 74 
exchange difference 12 55 
at end of period 5817 6352 
during 2006 a special oneoff contribution payment was made by thomas cook uk to the pension fund amounting to £850m in order to offset 
actuarial losses in the subsequent five years an amount totalling £435m is to be paid to the pension fund on a quarterly basis the group is expected 
to make aggregate contributions to its funded defined benefit schemes of £343m during the year commencing 1 october 2008 
the fair value of scheme assets at the balance sheet date is analysed as follows 
 
2008
longterm
rate of return

2008 
£m 
2007 
longterm 
rate of return 
 
2007
£m
equities 74 2468 82 3027
property 63 720 66 805
fixed interest gilts 52 1731 56 1537
hedge funds 74 520 82 565
other 74 378 82 418
at end of period  5817   6352
the scheme assets do not include any of the group’s own financial instruments nor any property occupied by or other assets used by the group  
the expected rates of return on scheme assets have been calculated as the weighted average rate of return on each asset class the return on each  
asset class is taken as the market rate of return 
the amount included in the balance sheet arising from the group’s obligations in respect of its defined benefit pension schemes is as follows 
 
2008
£m
2007
£m
present value of funded defined benefit obligations 6074 6481 
fair value of scheme assets  5817 6352
asset cap 07 –
deficit on funded retirement benefit obligations 264 129 
present value of unfunded defined benefit obligations 1638 1623 
scheme deficits recognised in the balance sheet 1902 1752 
this amount is presented as follows 
noncurrent assets 04 03
current liabilities 90 33 
noncurrent liabilities 1816 1722 
   1902 1752 
the cumulative net actuarial losses recognised in the statement of recognised income and expense at 30 september 2008 were £1356m 2007 £1193m 
the history of the experience gains and losses of the schemes is as follows 
 
2008
£m
2007 
£m 
2006
£m
2005
£m
present value of defined benefit obligations 7712 8104  7910 7299 
fair value of scheme assets 5817 6352 5130 3687
scheme deficits  1895 1752  2780 3612 
  
experience adjustments on scheme liabilities  27 20 340 1018
experience adjustments on scheme assets  1166 112 218 250 
  notes to the financial statements continued 
wwwthomascookgroupcom 110 
38 retirement benefit schemes continued 
defined contribution schemes 
there are a number of defined contribution schemes in the group the principal ones being the mytravel uk group scheme which relates to employees 
of mytravel group plc and various of its uk subsidiary companies and the new scheme for thomas cook uk employees joining since april 2003 
the total charge for the period in respect of these and other defined contribution schemes including liabilities in respect of insured benefits relating to 
workers’ compensation arrangements amounted to £165m 2007 £101m 
the assets of these schemes are held separately from those of the group in funds under the control of trustees 
39 related party transactions 
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are not disclosed in this 
note transactions between the group and its associates and joint ventures are disclosed below transactions between the company and its subsidiaries 
and associates are disclosed in the company’s separate financial statements 
during the period the group acquired several assets from the arcandor group these transactions were undertaken at arm’s length the intangible 
assets and acquired businesses were  
• neckermann websites in eastern and western markets for £55m 
• right to place thomas cook link on neckermannde website for £60m and 
• neckermann urlaubswelten two companies owning a chain of 57 retail outlets for £08m 
during the period the group also bought back 48595331 shares for £1162m from arcandor this transaction is part of the share buyback programme 
and was at arm’s length as a result arcandor now owns 52817 of the ordinary share capital of the company 
until 2 april 2007 thomas cook ag was jointly owned by arcandor and lufthansa and both were regarded as related parties on 2 april 2007 arcandor 
acquired lufthansa’s interest in thomas cook ag and on 19 june 2007 contributed thomas cook ag to thomas cook group plc in exchange for shares 
in the company as a result arcandor controlled 52 of the ordinary share capital of the company and is therefore regarded as a related party 
transactions with arcandor for the period and the prior year and with lufthansa up to 2 april 2007 are included in the disclosures below as 
transactions with the parent company 
trading transactions 
during the period group companies entered into the following transactions with related parties who are not members of the group 
 
               associates joint ventures 
              and participations

 
 
    parent company 
 
2008 
£m 
2007 
£m 
 2008 
£m 
2007
£m
sale of goods and services 342   12   08  54 
purchases of goods and services 302 230  144 470 
interest receivable 01  01   06   – 
interest payable  –    –   01 03 
other income 56  02   26  05 
management fees and other expenses 15  –    –   11 
amounts owed by related parties 230

158   117  67 
provisions against amounts owed by related parties 44 32   –     – 
amounts owed to related parties 39  61  179
 
19 
all transactions are considered to have been made at market prices outstanding amounts will normally be settled by cash payment 

 participations are equity investments where the group has a significant equity participation but which are not considered to be associates or joint ventures 

 £164m of the amount owed to parent undertaking is included within borrowings £04m shortterm and £160m longterm 

 amounts owed by related parties includes £61m which for statutory purposes is reported as part of the associate investments  
remuneration of key management personnel 
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of the categories specified 
in ‘ias 24 related party disclosures’ further information about the remuneration of individual directors is provided in the audited part of the 
remuneration report on pages 64 to 66 
 
2008
£m
2007
£m
shortterm employee benefits 131 161 
postemployment benefits 02 05 
sharebased payments 06 02 
  139 168 
the above amounts for 2007 include the thomas cook ag key management for the full year and the thomas cook group plc key management for the 
period from 19 june 2007 to 31 october 2007 the 2007 amounts include £68m related to payments made to key management as compensation in 
respect of the transactions that led to the formation of thomas cook group plc these amounts were reimbursed by arcandor ag 
40 subsequent events 
on 18 december 2008 the group announced the acquisition of 5001 of gold medal international limited a leading uk independent travel company 
for £249m including £211m of net cash  financial statements
company balance sheet 
thomas cook group plc annual report  accounts 2008 111
at 30 september 2008 
notes 
30 september
2008
£m
31 october
2007
£m
noncurrent assets  
investments in subsidiaries 5 37308 32655
  37308 32655
current assets  
trade and other receivables 6 1619 838
cash and cash equivalents 7 17 –
  1636 838
total assets  38944 33493
  
current liabilities  
trade and other payables 8 1738 643
total liabilities  1738 643
net assets  37206 32850
  
equity  
calledup share capital 1011 598 661
share premium account 11 89 68
merger reserve 11 30513 30513
capital redemption reserve 11 64 –
translation reserve 11 5648 978
retained earnings surplus 11 424 679
investment in own shares 11 130 49
total equity  37206 32850
these financial statements were approved by the board of directors on 19 december 2008 
signed on behalf of the board 
 
 
 
 
 
manny fontenlanovoa    dr jürgen büser 
director     director 
 
notes 1 to 15 form part of these financial statements  
  company statement of recognised income and expense 
 
wwwthomascookgroupcom 112 
for the eleven months ended 30 september 2008 
 notes 
11 months ended
30 september
2008
£m
period ended
31 october
2007
£m
exchange differences from translating accounts into sterling  4670 978
tax on items taken directly to equity  – –
net income recognised directly in equity  4670 978
  
profit for the period  3159 679
  
total recognised income and expense for the period 11 7829 1657
 
 
company cash flow statement 
 
for the eleven months ended 30 september 2008 
 
11 months ended
30 september
2008
£m 
period ended
31 october
2007
£m 
cash flows from operating activities 
profit before tax 3075 617
dividend received 3394 700
finance income 39 –
finance expense 16 –
sharebased payments 31 –
change in debtors 32 75
change in creditors 360 158
net cash from operating activities 17 –
 
investing activities 
dividends received 2478 –
net cash flow from investing activities 2478 –
 
financing activities 
share buyback 2478 –
net cash used in financing activities 2478 –
 
net increase in cash and cash equivalents 17 –
cash and cash equivalents at beginning of period – –
effect of foreign exchange rate changes – –
cash and cash equivalents at end of period 17 –
 
liquid assets 17 –
cash and cash equivalents at end of period 17 –
 
  financial statements
notes to the company financial statements 
thomas cook group plc annual report  accounts 2008 113
1 accounting policies 
the accounting policies applied in the preparation of these company financial statements are the same as those set out in note 2 to the group financial 
statements with the addition of the following 
investments 
investments in subsidiaries are stated at cost less provision for impairment 
these policies have been applied consistently to the periods presented 
the functional currency of the company is euro however the directors have decided to adopt sterling as the presentational currency to be in line  
with the consolidated accounts 
during the period the company adopted international financial reporting standards ifrs as of its date of incorporation 8 february 2007 the company 
did not take advantage of the optional exemptions for the first time adoption of ifrs as set out in ‘ifrs 1 firsttime adoption of international financial 
reporting standards’ requirements 
the adoption of ifrs has had no impact on current or prior period results 
2 profit for the period 
as permitted by section 230 of the companies act 1985 the company has elected not to present its own income statement for the period  
the profit after tax of the company amounted to £3159m 2007 £679m 
the auditors’ remuneration for audit services to the company was £02m 2007 £06m  
3 personnel expenses 
  
2008
£m
2007
£m
wages and salaries  220 51
social security costs  13 06
sharebased payments – equity settled  10 –
  243 57
  
  
2008
number
2007
number
the average number of employees of the company during the period was  92 1
employees are based in the united kingdom and germany 
disclosures of individual directors’ remuneration share options longterm incentive schemes pension contributions and pension entitlements required by 
the companies act 1985 and specified for audit by the financial services authority are on pages 64 to 66 within the remuneration report and form part 
of these audited accounts 
the employees of the company are members of the group pension schemes as detailed in note 38 of the group financial statements 
4 dividends 
the details of the company’s dividend are disclosed in note 12 to the group financial statements  notes to the company financial statements continued 
wwwthomascookgroupcom 114 
5 investments in subsidiaries 
 £m
cost and net book value 
additions 32655
at 31 october 2007 32655
additions 16782
disposals – intra group 16738
exchange difference 4609
at 30 september 2008 37308
a list of the company’s principal subsidiary undertakings is shown in note 15 to the financial statements 
during the period the company acquired a further 1510914 ordinary shares of mytravel which had been issued by mytravel pursuant to the exercise 
of mytravel executive share options the consideration was satisfied by the issue of an equal number of new ordinary shares of the company 
on 30 january 2008 the company transferred its investment in mytravel group plc to thomas cook investments 2 limited at book value in exchange 
for newly issued fully paid shares in that company 
6 trade and other receivables 
  
2008
£m
2007
£m
amounts owed by subsidiary undertakings  1605 810
other receivables  08 03
deposits and prepayments  06 25
  1619 838
amounts owed by subsidiary undertakings are repayable on demand the average interest on overdue amounts owed by subsidiary undertakings is 
58 2007 58 the directors consider the fair value to be equal to the book value 
7 cash and cash equivalents 
  
2008
£m
2007
£m
cash at bank and in hand  17 –
 
8 trade and other payables 
  
2008
£m
2007
£m
amounts owed to subsidiary undertakings  1364 494
accruals  374 149
  1738 643
accruals include £176m for shares repurchased as part of the share buyback programme which is due to be paid within one month  
the average interest on overdue amounts owed to subsidiary undertakings is 58 2007 00 
amounts owing to subsidiary undertakings are repayable on demand the directors consider the fair value to be equal to the book value 
9 financial risk 
the company’s financial instruments comprise amounts due tofrom subsidiary undertakings cash and cash equivalents and other payables and 
receivables the company’s approach to the management of financial risks is discussed in the financial review on pages 44 and 45 the company 
believes the value of its financial assets to be fully recoverable 
the carrying value of the company’s financial instruments is exposed to movements in foreign currency exchange rates primarily sterling the 
company estimates that a 5 strengthening in sterling would increase profit before tax by £22m while a 5 decrease in the value of sterling  
would decrease profit before tax by £22m  
the maturity of contracted cash flows on the company’s trade and other payables are as follows 
 
2008 
£m 
 sterling euro total
no later than one year 1083 712 1795
 
 
2007 
£m 
 sterling euro total
no later than one year 603 41 644
all cash flow projections shown above are on an undiscounted basis any cash flows based on a floating rate are calculated using interest rates as at 
the date of the last rate reset  financial statements
 
thomas cook group plc annual report  accounts 2008 115
 
10 calledup share capital 
the details of the company’s share capital are the same as those of the group and are disclosed in note 31 to the group financial statements 
details of share options granted by the company are set out in note 37 to the group financial statements 
11 statement of changes in equity 
 
share
capital
£m
share
premium
£m
merger
reserve
£m
capital
redemption
reserve
£m
 
 
own 
shares 
£m 
 
 
translation 
reserve 
£m 
retained
earnings
£m
total
£m
total recognised income and expense for the period – – – – – 978  679 1657 
premium on allotments during the period – 68 – – – – – 68 
acquisition of thomas cook ag 344 – 16038 – – – – 16382 
acquisition of mytravel group plc 313 – 14600 – – – – 14913 
expenses of issue of shares 04 – 125 – – – – 121
purchase of own shares – – – – 49 – – 49
at 31 october 2007 661 68  30513 – 49 978  679 32850 
   
total recognised income and expense for the period – – – – – 4670  3159 7829 
issue of equity shares net of expenses 01 21 – – – – – 22 
equity credit in respect of sharebased payments – – – – – – 31 31 
share buyback 64 – – 64 – – 2663 2663
purchase of own shares – – – – 83 – – 83
disposal of own shares – – – – 02  – – 02 
dividends paid – – – – – – 782 782
at 30 september 2008 598 89 30513 64 130 5648  424 37206 
the merger reserve arose on the issue of shares of the company in connection with the acquisition of the entire share capital of thomas cook ag  
and mytravel group plc on 19 june 2007 
the share premium arises in connection with the issue of ordinary shares of the company following the exercise of mytravel executive share options 
at 30 september 2008 the company had distributable reserves of £424m 2007 £679m 
details of the own shares held are set out in note 31 to the group financial statements 
12 operating lease arrangements 
at the balance sheet date the company had outstanding commitments for future minimum lease payments related to property under noncancellable 
operating leases which fall due as follows 
  
2008
£m
2007
£m
within one year  10 –
later than one year and less than five years  24 –
after five years  31 –
  65 –
13 contingent liabilities 
at 30 september 2008 the company had contingent liabilities in respect of counterguarantees for bank funding letters of credit and guarantees of 
amounts owed by subsidiaries amounting to £7662m 2007 £1089m this predominantly relates to a guarantee on the drawn down portion of the  
new credit facility detailed in note 22 to the group financial statements also included are guarantees related to aircraft finance lease commitments 
estimated based on the current book value of the finance lease liabilities £561m 
the company complies with all the standards relevant to consumer protection and formal requirements in respect of package tour contracts and  
has all the necessary licences in the uk the customer’s right to reimbursement of the return travel costs and amounts paid in case of insolvency or 
bankruptcy on the part of the tour operator or travel agency is guaranteed in line with legislation in the uk via a fund mechanism whereby travel 
companies are required to collect and remit a small charge for each protected customer upon booking  notes to the company financial statements continued 
wwwthomascookgroupcom 116 
14 related party transactions 
subsidiaries 
the company transacts and has outstanding balances with its subsidiaries the company enters into loans with its subsidiaries at both fixed and 
floating rates of interest on a commercial basis hence the company incurs interest expense and earns interest income on these loans the company 
also received dividend income from its subsidiaries during the year 
  
2008
£m
2007
£m
transactions with subsidiaries  
interest receivable  39 –
interest payable  05 –
management fees and other expenses  81 27
dividend income received  3394 700
  
period end balances arising on transactions with subsidiaries  
loans receivable  1357 708
interest receivable  08 –
other receivables  240 102
loans payable  109 53
other payables  1255 441
parent company 
during the period the company incurred expenses of £02m 2007 £nil in respect of goods and services provided by arcandor  
at the period end the company had amounts payable to the parent of £02m 2007 £nil  
during the period the group bought back 48595331 shares for £1162m from arcandor this transaction is part of the share buyback programme  
and was at arm’s length as a result arcandor now owns 52817 of the ordinary share capital of the company 
all transactions are considered to have been made at market prices outstanding amounts will normally be settled by cash payment 
remuneration of key management personnel 
the remuneration of the directors who are the key management personnel of the company is set out in note 39 to the group financial statements  financial statements
 
thomas cook group plc annual report  accounts 2008 117
15 principal subsidiaries associates and joint ventures 
 
country of 
incorporation 
and operation 
proportion
held by
company 
proportion
held by
group 
direct subsidiaries  
thomas cook investments 2 limited england 100 100
thomas cook ag germany 100 100
  
indirect subsidiaries  
continental europe  
bucher reisen gmbh germany 100
chb ag switzerland 100
dos delfi nossociedade immob tourist lda portugal 100
gesellschaft fur reisevetriebssysteme mbh germany 100
gft gesellschaft fur touristic ag switzerland 100
golf novo sancti petri sa spain 8075
hotel investment sarigerme turizm ticaret ls turkey 100
hoteles y clubs de vacaciones sa spain 51
jet tours sa france 100
neckermann polska bp sp zoo poland 100
neckermann reisen doo  slovenia 100
neckermann reisen sro  czech republic 100
neckermann slovakia sro  slovakia 60
neckermann urlaubswelten gmbh  cokg germany 100
nur neckermann utazas szolgas szolgaltato kft  hungary 100
reisburo neckermann nederland bv  netherlands 100
satee gmbh  germany 100
tc touristik gmbh  germany 100
thomas cook austria ag  austria 100
thomas cook belgium nv  belgium 100
thomas cook air services sa france 100
thomas cook airlines belgium nv  belgium 100
thomas cook destinations gmbh  germany 100
thomas cook france sas  france 100
thomas cook france hoteliere holding sarl  france 100
thomas cook interservices nv  belgium 100
thomas cook nederland bv  netherlands 100
thomas cook service ag  switzerland 100
thomas cook service centre belgium nv  belgium 100
thomas cook retail belgium nv  belgium 100
thomas cook vertriebs gmbh  germany 100
thomas cook voyages sa france 100
tk touristik gmbh germany 100
travel plus sro  czech republic 100
  
germany airlines  
condor berlin gmbh germany 100
condor flugdienst gmbh germany 751
lufthansa leasing gmbh  co foxjuliett ohg  germany 100
lufthansa leasing gmbh  co foxkilo ohg  germany 100
lufthansa leasing gmbh  co foxlima ohg  germany 100
lufthansa leasing gmbh  co foxmike ohg  germany 100
lufthansa leasing gmbh  co foxnovember ohg  germany 100
lufthansa leasing gmbh  co foxoscar ohg  germany 100
lufthansa leasing gmbh  co foxpapa ohg  germany 100
lufthansa leasing gmbh  co foxzulu ohg  germany 100
llg nord gmbh  co delta ohg  germany 100
tc delta gmbh germany 100
  notes to the company financial statements continued 
wwwthomascookgroupcom 118 
15 principal subsidiaries associates and joint ventures continued 
 
country of 
incorporation 
and operation 
proportion
held by
company 
proportion
held by
group 
uk and ireland   
airtours holidays transport limited  england  100
cresta holidays limited england  100
capitol holdings limited  ireland  100
elegant resorts limited england  100
falcon istioploiki hellas sa  greece  100
jeropaturviagens e turismo ltda  portugal  100
thomas cook aircraft engineering limited  england  100
hotels4ucom limited england  100
mytravel uk limited  england  100
mytravel 330 leasing limited  cayman islands  100
neilson active holidays limited  england  100
neilson hellas ae greece  100
neilsen turizm danismanlik ve ticaret ltd sti  turkey  100
oa yacht charter sa greece  95
praznik doo za turizam  croatia  100
resorts mallorca hotels international sl spain  100
thomas cook airlines limited england  100
thomascookcom limited  england  100
thomas cook india limited india  100
thomas cook overseas limited england  100
thomas cook retail limited  england  100
thomas cook tour operations limited  england  100
thomas cook usa travel services limited  england  100
thomas cook tv limited  england  100
white horse insurance ireland limited ireland  100
    
northern europe   
hoteles sunwing sa  spain  100
thomas cook airlines scandinavia as  denmark  100
mytravel denmark as denmark  100
thomas cook northern europe ab  sweden  100
ving norge as  norway  100
ving sverige ab  sweden  100
oy tjareborg ab  finland  100
sunwing ekerum ab sweden  
   
north america   
thomas cook canada inc  canada  100
thomas cook usa holdings inc  usa  100
triwest travel holdings limited canada  100
nalg ireland  ireland  100
   
corporate   
airtours channel islands limited  channel islands  100
airtours finance limited  channel islands  100
thomas cook group uk limited england  100
blue sea overseas investments limited  england  100
“eurocenter” beteiligungsund reisevermittlung gmbh  germany  100
gut reisen gmbh  germany  100
mytravel group plc england  100
sandbrook uk investments limited england  100
sandbrook overseas investments limited  england  100
parkway limited partnership no 1 lp  channel islands  100
thomas cook continental holdings limited england  100
thomas cook group treasury limited england  100
thomas cook investments 1 limited england  100
thomas cook treasury limited  england  100
  financial statements
 
thomas cook group plc annual report  accounts 2008 119
 
 
country of 
incorporation 
and operation 
proportion
held by
company 
proportion
held by
group 
associates   
aqua sol hotels limited  cyprus  1999
activos turisticos sa spain  40
coplay 95 sl  spain  25
hispano alemana de management hotelero sa  spain  40
hotelera adeje sa  spain  25
oasis company sae  egypt  251
   
joint venture   
thomas cook personal finance limited  england  50
  appendix 1 – unaudited pro forma financial information 
unaudited pro forma group income statement 
wwwthomascookgroupcom 120 
for the twelve months ended 30 september 2008 
  note 
2008 
£m 
2007
£m
 revenue  2 88098 78785
 cost of providing tourism services  67799 61154
 gross profit  20299 17631
 other operating income  497 327
 personnel expenses  9991 9383
 depreciation and amortisation  1405 1266
 impairment of goodwill  – 91
 other operating expenses  7783 6639
 profit on disposal of businesses and property plant and equipment  11 151
 profit from operations  1606 730
    
 analysed between   
 profit from operations before exceptional items 2 3659 2442
 exceptional items 3 2053 1712
   1606 730
    
 share of results of associates and joint ventures  02 26
 profit on disposal of associates  – 370
 net investment income  14 07
 net finance costs 4 582 79
 exceptional finance costs 3 268 –
 profit before tax  772 1002
 tax  134 280
 profit for the period  638 722
    
 attributable to   
 equity holders of the parent  640 703
 minority interests  02 19
   638 722
    
 preexceptional earnings per share pence   
 basic  241 171
 diluted  241 171
all revenue and results arose from continuing operations 
  financial statements
unaudited pro forma group statement of net assets 
thomas cook group plc annual report  accounts 2008 121
at 30 september 2008 
 
2008
£m
2007
£m
noncurrent assets 
intangible assets 34324 29057
property plant and equipment  – aircraft and aircraft spares 5848 5806
  – investment property 157 –
  – other 3128 2181
investment in associates and joint ventures 427 335
other investments 294 267
deferred tax assets 3286 3326
tax assets 99 01
trade and other receivables 1264 1057
pension assets 04 03
derivative financial instruments 556 132
 49387 42165
 
current assets 
inventories 242 186
tax assets 151 180
trade and other receivables 10175 8927
derivative financial instruments 2616 482
cash and cash equivalents 7613 8560
 20797 18335
noncurrent assets held for sale – 750
total assets 70184 61250
 
current liabilities 
retirement benefit obligations 90 23
trade and other payables 18557 16577
borrowings 3560 710
obligations under finance leases 1826 784
tax liabilities 694 863
revenue received in advance 9175 7303
shortterm provisions 1839 1833
derivative financial instruments 1743 868
 37484 28961
liabilities related to assets held for sale – 413
 
noncurrent liabilities 
retirement benefit obligations 1816 1890
trade and other payables 369 1275
longterm borrowings 4161 1160
obligations under finance leases 2283 3641
revenue received in advance 09 03
deferred tax liabilities 978 935
longterm provisions 2323 1934
derivative financial instruments 669 166
 12608 11004
total liabilities 50092 40378
net assets 20092 20872
 
  unaudited pro forma group cash flow statement  
wwwthomascookgroupcom 122 
for the twelve months ended 30 september 2008 
 notes 
2008
£m
2007
£m
cash flows from operating activities 5 
cash generated by operations  2939 2738
income taxes paid  737 585
net cash from operating activities  2202 2153
  
investing activities  
dividends received from associates  – 41
proceeds on disposal of subsidiaries net of cash sold  – 258
proceeds on disposal of associated undertakings  – 514
proceeds on disposal of property plant and equipment  186 330
proceeds on sale of noncurrent assets held for sale  – 222
purchase of subsidiaries net of cash acquired  2964 272
purchase of tangible and financial assets  905 445
purchase of intangible assets  690 442
disposalpurchase of shortterm securities  759 1428
net cash from investing activities  3614 1222
  
financing activities  
interest paid  581 304
dividends paid  782 –
dividends paid to minority shareholders  19 05
draw down of borrowings  7322 299
repayment of borrowings  2286 518
repayment of finance lease obligations  918 589
purchase of own shares  2478 –
proceeds from issue of ordinary shares  23 82
net cash used in financing activities  281 1035
  
net decrease in cash and cash equivalents  1131 104
cash and cash equivalents at beginning of period  8132 8130
effect of foreign exchange rate changes  474 106
cash and cash equivalents at end of period  7475 8132
  
liquid assets  7613 8560
bank overdrafts  138 428
cash and cash equivalents at end of period  7475 8132
 
  financial statements
notes to the pro forma financial information 
thomas cook group plc annual report  accounts 2008 123
1 basis of preparation 
the financial information contained in this appendix is pro forma and unaudited and does not constitute full statutory accounts within the meaning  
of section 240 of the companies act 1985 the information has been prepared using the accounting policies and basis of preparation set out in note 2 
to the group financial statements except that for comparison purposes the amortisation of business combination intangibles has been excluded from 
the pro forma information 
2 segmental analysis 
twelve months to 30 september 2008 
uk and 
ireland
£m
continental 
europe
£m
northern 
europe
£m
north  
america 
£m 
airlines  
germany 
£m 
corporate
£m
total
£m
revenue   
segment sales 31044 36469 9749 4398 9782 – 91442
intersegment sales 71 265 33 – 2975 – 3344
total revenue 30973 36204 9716 4398 6807 – 88098
   
profitloss from operations before exceptional items 1434 1063 862 60 454 214 3659
 
twelve months to 30 september 2007 
uk and 
ireland
£m
continental 
europe
£m
northern 
europe
£m
north  
america 
£m 
airlines  
germany 
£m 
corporate
£m
total
£m
revenue   
segment sales 31387 30529 8119 3791 8558 03 82387
intersegment sales 69 39 53 – 3441 – 3602
total revenue 31318 30490 8066 3791 5117 03 78785
   
profitloss from operations before exceptional items 736 675 735 49 462 215 2442
intersegment sales are charged at prevailing market prices 
3 exceptional items 
 
2008 
£m
2007
£m
property costs redundancy and other costs incurred in integrating the thomas cook and mytravel businesses 1163 821
property costs redundancy and other costs incurred in other business integrations and reorganisations 471 604
disposal of property plant and equipment and other assets 11 151
impairment of assets 77 218
other expenses incurred as a result of the merger 217 47
other exceptional operating items 114 173
exceptional items included within profit from operations 2053 1712
 
share of associates’ exceptional items 
profit on disposal of associates  – 370
 – 370
 
exceptional finance costs 
loss on revaluation of trading securities 139 –
impact of financial market volatility 129 –
 268 –
 
total exceptional items 2321 1342
the exceptional finance costs consist of £139m of revaluation losses on trading securities and £129m relating to the exceptional element of the phasing 
effect of marking to market the forward points on our foreign currency hedging which arose in september as a result of the global banking crisis  notes to the pro forma financial information continued 
wwwthomascookgroupcom 124 
4 net finance costs 
 
2008
£m
2007
£m
finance income  
income from loans included in financial assets 10 09
other interest and similar income 321 367
expected return on pension plan assets 453 382
fair value gains on derivative financial instruments 22 06
 806 764
 
finance costs 
interest payable 484 243
finance costs in respect of finance leases  237 169
interest cost on pension plan liabilities 449 388
forward points on future hedging contracts 128 –
interest on overdue tax – 03
other finance costs including discounting charges 90 40
 1388 843
 
exceptional finance costs 
loss on revaluation of trading securities 139 –
impact of financial market volatility 129 –
 268 –
 1656 843
 850 79
5 notes to the cash flow statement 
 
2008
£m
2007
£m
profit before tax 772 1002
adjustments for 
net finance costs 850 79
net investment income 14 07
share of results of associates and joint ventures 02 26
depreciation of property plant and equipment and intangibles 1405 1266
impairment of assets 77 218
lossprofit on disposal of businesses and property plant and equipment and intangible assets 11 151
profit on disposal of associates – 370
sharebased payments 31 –
other noncash items 08 59
decreaseincrease in provisions 76 585
income received from other noncurrent investments 04 –
interest received 272 264
operating cash flows before movements in working capital 3322 2971
movement in working capital 383 233
cash generated by operations 2939 2738
income taxes paid 737 585
net cash from operating activities 2202 2153
cash and cash equivalents which are presented as a single class of assets on the face of the balance sheet comprise cash at bank and other shortterm 
highly liquid investments with a maturity of three months or less  financial statements
 
thomas cook group plc annual report  accounts 2008 125
6 net debt 
 
at 
1 october
2007
£m
cash flow 
£m
other 
noncash 
changes 
£m
acquisitions 
disposals 
£m 
exchange
movements
£m
at
30 september
2008
£m
liquidity  
cash and cash equivalents 8560 1453 – – 506 7613
trading securities 1973 759 230 – 308 1292
 105332212230– 814 8905
current debt  
bank overdrafts  428 322 – – 32 138
shortterm borrowings 27 1447 09 496 27 1988
current portion of longterm borrowing 255 302 780 – 97 1434
borrowings classified as held for sale 302 – 316 – 14 –
obligations under finance leases 784 918 1828 01 131 1826
 17965092283497 301 5386
noncurrent debt  
longterm borrowings 1160 3287 455 – 169 4161
obligations under finance leases 3641 – 1828 – 470 2283
 480132872283– 639 6444
total debt 6597 3796 – 497 940 11830
net fundsdebt 3936 6008 230 497 126 2925
  appendix 2 – key performance indicators definitions 
 
wwwthomascookgroupcom 126 
 revenue for the group and segmental analysis represents external 
revenue only except in the case of the airlines germany pro forma 
segmental key performance analysis where revenue of £2975m 
2007 £3441m largely to the continental europe division has 
been included  
 profit from operations is defined as earnings before interest  
and tax and has been adjusted to exclude exceptional items  
and amortisation of business combination intangibles it also 
excludes our share of the results of associates and joint ventures 
 the operating profit margin is the profit from operations as defined 
above divided by the external revenue except in the case of the 
airlines germany segmental key performance analysis where total 
revenue has been used as the denominator to more accurately 
reflect the trading performance  
‹ adjusted earnings per share for 2008 is calculated as pro forma net 
profit after tax but before exceptional items and amortisation of 
business combination intangibles divided by the weighted average 
number of shares in issue during the twelve months to september 
for 2007 the number of shares outstanding at 30 september 2007 
has been used as an approximation to the weighted average number  
of shares in the period profit after tax has been calculated using  
a notional tax rate of 261 for 2008 and 280 for 2007  
› adjusted dividend cover for 2008 is calculated by dividing the 
adjusted earnings per share see above by the pro forma full year 
paid and proposed dividends adjusted dividend cover for 2007 is 
as stated in the 2007 annual report and is calculated by dividing 
the adjusted earnings per share for the pro forma twelve months to 
october 2007 by the pro forma dividend assuming an interim 
dividend of onethird had been applicable 
 in the case of pro forma figures the figures reflect the normalised 
results for the twelve months to 30 september 2008 and the twelve 
months to 30 september 2007 and have been compiled as if the 
merger of thomas cook ag and mytravel group plc had taken 
place prior to 1 october 2006 the first day of the comparative 
period presented and as if the group had always had a september 
year end  
† passengers in the case of uk northern europe and north america 
represents the total number of passengers in thousands that 
departed on a thomas cook group plc holiday in the period it 
excludes customers who booked third party tour operator products 
through thomas cook retail channels for continental europe 
passengers represents all tour operator passengers departed in  
the period excluding those on which only commission is earned 
 mass market risk passengers in uk northern europe and north 
america represent those holidays sold where the business has 
financial commitment to the product flights and accommodation 
before the customer books the analysis excludes accommodation 
only passengers 
†† capacity for uk northern europe and north america represents 
the total number of holidays available to sell this is calculated by 
reference to committed airline seats both inhouse and third party 
 in the case of airlines germany capacity represents the total 
number of available seat kilometres ask ask is a measure of an 
airline’s passenger carrying capacity and is calculated as available 
seats multiplied by distance flown 
††† for uk northern europe and north america load factor is a 
measure of how successful the mainstream businesses were at 
selling the available capacity this is calculated by dividing the 
departed mainstream passengers in the period excluding 
accommodation only by the capacity in the period 
 for airlines germany seat load factor is a measure of how successful 
the airline was at selling the available capacity this is calculated 
by dividing the revenue passenger kilometres rpk by the available 
seat kilometres ask – see capacity definition above and is the 
recognised iata definition of load factor used for airlines rpk is  
a measure of the volume of passengers carried by an airline  
one rpk is flown when a passenger is carried one kilometre 
  average selling price for uk northern europe and north america 
represents the average selling price after discounts achieved  
per mainstream passenger departed in the period excluding 
accommodation only passengers for continental europe  
average selling price represents the average selling price after 
discounts achieved per passenger departed in the period 
 brochure mix is defined as the number of mainstream holidays 
excluding accommodation only sold at brochure prices divided  
by the total number of holidays sold excluding seat only and is  
a measure of how successful a business was at selling holidays 
early holidays are generally discounted closer to departure 
‡ controlled distribution is defined as the proportion of passengers 
booking through our inhouse retail shops call centres and websites 
internet distribution is a subset of controlled distribution and is 
defined as the proportion of passengers booking through inhouse 
websites both performance indicators are calculated on departed 
passengers in the period 
‡‡ sold seats in airlines germany represents the total number of one
way seats sold on aircraft in thousands that departed in the period 
 yield in airlines germany represents the average price achieved per 
seat departed in the period  financial statements
shareholder information 
thomas cook group plc annual report  accounts 2008 127
thomas cook ag  mytravel group plc merger 
thomas cook group plc was formed in june 2007 upon the merger  
of thomas cook ag and mytravel group plc  
mytravel group plc shareholders received one thomas cook group plc 
ordinary share for every one mytravel group plc share previously held 
mytravel group plc share certificates are no longer valid and can be 
destroyed replacement thomas cook group plc share certificates  
were sent to shareholders who held shares in certificated form  
on or around 19 june 2007 
electronic communications 
at the annual general meeting “agm” on 10 april 2008 the company 
passed a resolution allowing the thomas cook group plc website to be 
used as the primary means of communication with its shareholders a 
consultation card was sent to shareholders enabling them to choose 
either to  
• receive notification by email when shareholder documentation  
is available on the website 
• continue to receive shareholder documentation in hard copy 
shareholders who did not respond were deemed in accordance  
with the companies act 2006 to have agreed to receive shareholder 
documentation via the thomas cook group plc website the new 
arrangements for electronic shareholder communications provide 
shareholders with the opportunity to access information in a timely 
manner and help thomas cook group plc to reduce both its costs  
and environmental impact 
website 
the company’s website wwwthomascookgroupcom provides 
information including 
• news updates press releases and regulatory announcements 
• investor information including the annual report investor 
presentations and share price information 
• biographies of the board of directors and the senior executive team 
• details of the company’s governance framework 
• corporate responsibility reporting 
holiday booking discount 
shareholders subject to the restrictions set out below are entitled to 
receive a discount of 10 off the latest retail high street price of any 
holiday booked under the following brands airtours aspro club 1830 
cresta manos neilson panorama style sunset sunworld holidays 
ireland swiss travel service thomas cook thomas cook signature and 
thomas cook tours in order to benefit from this service shareholders 
should call the telephone number detailed below 
shareholder booking line 0844 800 7003 
opening times 900am to 530pm monday – saturday 
please note it is not possible to claim the discount through  
thomas cook stores other travel agents thomas cook websites  
or other telephone numbers 
to qualify shareholders must hold a minimum of 500 shares held for a 
period of six months prior to making the booking and will need to quote 
their shareholder number shown on their share certificate when booking 
their holiday shareholders who hold shares through a nominee can claim 
this discount but will be required to show proof of ownership from that 
nominee and that those shares continue to be held at the date of booking 
it is not possible to use this discount against “flightonly” bookings  
and it does not apply to “air passenger duty” fuel charges or any other 
supplements this discount may not be used in conjunction with  
any other offer 
preferential foreign exchange rates 
in addition to these travel benefits when buying foreign currency or travellers 
cheques in any thomas cook or going places store shareholders are entitled 
to a commission free transaction and a preferential exchange rate subject 
to the confirmation that they meet the shareholding criteria set out above  
shareview 
to be able to access information about their shares and other investments 
online shareholders can register with shareview wwwshareviewcouk 
where they can view details of recent movements in their shareholding 
and change their address and bank mandate details online once 
registered shareholders will also receive emails when shareholder 
documentation is available on the thomas cook group plc website 
wwwthomascookgroupcom and be able to register their vote for  
the agm online 
dividends  
an interim dividend payment of 325 pence per share was paid on  
5 september 2008 to all ordinary shareholders on the register at 500pm  
on 1 august 2008 the directors recommend the payment of a final 
dividend of 65 pence per share to be paid on 27 march 2009 to all 
shareholders on the register at 500pm on 6 march 2009  
as an alternative to having dividends paid by cheque shareholders can if 
they wish have them credited directly into their bank or building society 
account on the dividend payment date having dividends paid in this way 
avoids the risk of cheques being lost or intercepted in the post and is more 
convenient as payment is credited automatically on the payment date 
shareholders wishing to set up a dividend mandate can do so by completing 
the dividend mandate form attached to the dividend cheque or by 
contacting the registrar  
share register and shareholder enquiries 
the company’s share register is maintained by equiniti queries relating 
to thomas cook group plc shares should be addressed to 
the registrar 
equiniti  
aspect house 
spencer road 
lancing  
west sussex bn99 6da 
tel 0871 384 2154 international telephone number 44 0121 415 7047 
shareholders should quote the company reference number 3174 and 
their account number which can be found on their share certificates 
when contacting the registrar  
unsolicited telephone calls and correspondence 
shareholders are advised to be wary of any unsolicited advice offers to 
buy shares at a discount or offers of free reports about the company 
details of any share dealing facilities that the company endorses will  
be included in company mailings or on our website  
sharegift 
shareholders with a small number of shares the value of which make it 
uneconomical to sell may wish to consider donating them to the charity 
sharegift registered charity number 1052686 find out more about 
sharegift at wwwsharegiftorg or by telephoning 44 020 7930 3737 
shareview dealing 
a telephone and internet dealing service has been arranged through the 
registrar to provide a simple way of buying and selling thomas cook 
group plc shares for existing and prospective uk based shareholders for 
telephone sales call 08456 037 037 between 800am and 430pm monday to 
friday or visit the website wwwshareviewcoukdealing shareholders will 
need the shareholder reference number shown on their share certificates   shareholder information continued 
 
wwwthomascookgroupcom 128 
financial calendar 
interim management statement 12 february 2009 
exdividend date for 200708 final dividend 4 march 2009 
final dividend record date 6 march 2009 
last date for agm proxy votes to be received by  
the registrar 17 march 2009 
agm  19 march 2009 
final dividend payment date 27 march 2009 
200809 halfyear results announcement 14 may 2009 
exdividend date for 200809 interim dividend 5 august 2009 
interim dividend record date 7 august 2009 
interim management statement 13 august 2009 
interim dividend payment date 4 september 2009 
year end 30 september 2009
analysis of shareholders as at 30 september 2008 
distribution of shares by the type of shareholder 
number of 
holdings  number of shares
nominees and institutional investors 1110 901726630
individuals 15662 3380875
total 16772 905107505
 
size of shareholding number of holdings number of shares
1100 11455 363813
101500 3613 817502
5011000 669 479785
10015000 449 950433
500110000 89 643261
10001100000 230 8553698
100001500000 141 33807639
500000 and above 126 859491374
total 16772 905107505
registered office 
the thomas cook business park coningsby road peterborough pe3 8sb 
registered number 6091951 
shareholder contacts 
shareholder helpline 0871 384 2154  
international telephone number 44 0 121 415 7047 
website wwwthomascookgroupcom 
registrar’s website wwwshareviewcouk 
  celebrating 200 years
thomas cook 1808 – 1892
1808
design and production
black sun plc london
44 0 20 7736 0011
photos thomas cook getty
printed by park communications on hello silk fsc certiﬁed
paper and tauro from veriﬁed sustainable sources
1865
to cope with the number of tourists who
wish to visit the continent thomas opens
an ofﬁce in london – at 98 fleet street – in
april 1865 this is thomas cook’s ﬁrst high
street shop and it is to be managed by his
son john mason cook who joined the
family business only a few months before
187273
the climax of thomas’ travelling career
comes in september 1872 when at the age
of 63 he departs from liverpool with eight
companions on a 25000mile tour of the
world that will keep him away from home
for 222 days it has long been his ambition
to travel to ‘egypt via china’ but such a trip
only becomes practicable following the
opening of the suez canal in 1869
1874
cook’s circular note an early form of the
travellers cheque is launched in new york
1892
john mason cook takes over the
business on the death of his father
1808
thomas cook is born on 22 november
in melbourne derbyshire he is the
son of a labourer and the grandson
of a baptist minister
1828
on the completion of his apprenticeship
as a woodturner and cabinetmaker
thomas decides instead to pursue his
religious interests and becomes a
wandering baptist missionary
1841
thomas conducts his ﬁrst excursion
a 12mile rail journey from leicester to
a temperance gala in loughborough on
monday 5 july 1841 some 500 passengers
pay a shilling each for the experience the
day is a great success and thomas is soon
being asked to organise similar outings
for other local temperance societies and
sunday schools
1845
thomas conducts his ﬁrst trip for proﬁt
it is a railway journey to liverpool from
leicester nottingham and derby
1855
thomas successfully escorts his ﬁrst
‘package tourists’ to europe during the
summer of 1855 the ‘grand circular tour’
includes brussels cologne the rhine
heidelberg strasbourg and paris thomas
arranges hotels and meals in addition to
travel tickets he also deals with ‘foreign
exchange’ for his customers
1892
2008 marks 200 years since the
birth of thomas cook regarded as
the founder of popular tourism
as a company we continue to
be inspired by his vision and
pioneering spirit ‘to make travel
simple easy and a pleasure’
thomas cook once described
himself as ‘the willing and devoted
servant of the travelling public’ and
we believe that today across our
company we maintain many of his
original ideas and inspirations by
keeping the customer at the heart
of everything we do
thom cookcoverqxdlayout 1  26109  1237  page 2 thomas cook group plc
annual report  accounts 2008
wwwthomascookgroupcom
chairman’s statement 2
business at a glance 4
where we operate 6
chief executive ofﬁcer’s statement 8
our marketplace 12
our strategy 14
our strategy in action 17
operational review 28
corporate social responsibility 38
financial review 41
principal risks and uncertainties 46
directors’ report – business review
directors’ report – corporate governance
financial statements
contents
board of directors 48
group executive board 50
corporate governance report 51
other disclosures 57
remuneration report 59
independent auditors’ report 67
group income statement 68
group statement of recognised income
and expense 69
group balance sheet 70
group cash ﬂow statement 72
notes to the group ﬁnancial statements 73
company balance sheet 111
company statement of recognised income
and expense 112
company cash ﬂow statement 112
notes to the company ﬁnancial statements 113
appendix 1 – unaudited pro forma ﬁnancial information 120
appendix 2 – key performance indicators deﬁnitions 126
shareholder information 127
we are one of the world’s leading leisure travel groups with a focused
strategy a ﬂexible business model and a portfolio of marketleading
travel brands across our group we are committed to our vision of
going further to make dreams come true – exceeding our customers’
expectations offering fulﬁlling careers to the best team of people in
the industry and delivering sustainable value to our shareholders
with a heritage of more than 167 years in travel we understand the
importance of thinking beyond the short term we are focused on
building a stronger business today – to ensure we remain market
leaders tomorrow
thomas cook group plc annual report  accounts 2008
thom cookcoverqxdlayout 1  26109  1439  page 1


Summary:
 directors’ report
chief executive ofﬁcer’s statement
8 wwwthomascookgroupcom
manny fontenlanovoa
chief executive ofﬁcer thomas cook group plc annual report  accounts 2008 9
directors’ report – business review
overall our results for the year demonstrate
that through our merger we have created a
strong company with a team that has the
knowledge and capability to read the market
and respond accordingly we have fully integrated
our merged business and a number of strategic
acquisitions overdelivered against our cost
reduction targets actively managed capacity
and successfully navigated our way through a
period of unprecedented oil price volatility
recent research and the high load factors we
are currently experiencing give us conﬁdence
that consumers remain intent on taking their
holidays we believe our strong ﬁnancial position
together with the increased synergy savings
and contingency measures we have put in
place will enable us to sustain a marketleading
performance throughout a challenging 2009
we are targeting further growth in margins in
2009 and 2010 and operating proﬁt of £480
million in 2010
the 2008 ﬁnancial period was the new group’s ﬁrst full
year of trading and a period in which we achieved a strong
ﬁnancial performance and made signiﬁcant progress against
our strategic agenda we have achieved industryleading
margins demonstrating the strength of our management
team and the ﬂexibility of our business model • we have hedged 100 of our fuel
requirements for winter 20082009 and
95 for summer 2009 ensuring certainty
of pricing
• we have hedged 98 of our dollar and
9 of our euro requirements for winter
20082009 and summer 2009
merger synergies
the integration of our operations since the
merger between thomas cook and mytravel
on 19 june 200 has been highly successful
and we have been operating on a single
platform from management commercial and
technological perspectives for over a year
by accelerating synergy delivery we realised
total savings of £142m in the 2008 pro forma
period of which £139m were additional
savings during the period the majority of
the savings came from the uk business
looking forward we now expect to deliver
new synergy targets of
• £185m of annual synergy savings
by the end of the 2009 ﬁnancial year
compared with the previous accelerated
target of £155m by 2009
• a total of £215m of savings by 2010
compared with the original target
of £155m by 2010
strategy
we have made signiﬁcant progress against
our strategy this year both through actions
which have optimised our existing business
and through acquisitions which have
allowed us to achieve a stepchange in
our performance and these are set out
in more detail on pages 14 to 2
share buyback
in december 200 we announced plans for
a £290m €35m share buyback programme
and the programme was launched in march
2008 following approval at an egm held on
12 march 2008 in proposing the programme
the board believed that the repurchase of
shares was the best way to return value to
shareholders while at the same time
improving earnings per share and balance
sheet efﬁciency
at the close of business on 30 september
2008 the group had purchased a total of
1012430 shares for cancellation at a total
cost of £235m excluding commission of
these shares 48595331 were purchased
from arcandor ag as a result of which
arcandor’s holding was 528 of the group
directors’ report
chief executive ofﬁcer’s statement continued
10 wwwthomascookgroupcom
pro forma ﬁnancial results
thomas cook has reported a strong set
of results this demonstrates the quality of
management the strength of our assetlight
business model and our operational and
cost ﬂexibility it was achieved against the
background of the merger integration and
the continued development of the group
through signiﬁcant strategic acquisitions
group pro forma revenue for the twelve months
to 30 september 2008 was £88098m 200
£885m an increase of 118 on the
prior year period excluding the impact of
translation and acquisitions group revenue
was ﬂat year on year this reﬂects a decrease
in uk and north america revenue as a
result of planned capacity cuts offset by
an increase in northern europe underlying
revenue in continental europe and airlines
germany was broadly ﬂat year on year
we delivered a 498 increase in group proﬁt
from operations to £359m 200 £2442m
the group operating proﬁt margin rose
355 from 31 to 42 last year despite
a signiﬁcant increase in fuel costs this
strong result reﬂected our ability to adapt
to changing demand by reducing capacity
changing our product mix cost discipline
and fuel and currency hedging as well as
our delivery of signiﬁcant synergy savings
pro forma ebitda proﬁt from operations before
depreciation and amortisation increased by
35 to £500m 200 £308m pro forma
adjusted earnings per share increased by 409
to 241p 200 11p
the segmental performance is reported in detail
in the operational review on pages 28 to 3
pro forma ﬁnancial position
thomas cook’s ﬁnancing position is robust
in may 2008 we replaced the existing debt
facility with a new credit facility amounting to
£14bn of which £10bn is available for
immediate use for the group’s general
corporate purposes including acquisitions
and the share buyback programme that we
have now completed
in view of the current uncertainties in
the credit markets we took the prudent
approach in october 2008 to draw down
fully our available facility thus ensuring
optimal ﬁnancial certainty for the group
operating cash ﬂow was £2202m in the
twelve months to 30 september 2008
compared with £2153m in the previous
year at 30 september 2008 net debt was
£2925m compared with net funds of
£393m in the previous year reﬂecting the
planned expenditure on the share buyback
programme and acquisitions
operational ﬂexibility cost base and hedging
the ﬂexibility within our assetlight business
model has been critical during the past
period and we have improved our ability
to underpin our future performance in
more challenging trading conditions
the resilience we believe we have in the
current difﬁcult trading conditions is
based on that ﬂexibility the strength of
our businesses postmerger and capacity
rationalisation throughout the industry
capacity reductions in the uk market for
example amount to approximately 25 over
the last two years through our actions and
those of other market participants
we are taking advantage of our buying
power to manage accommodation costs
which represent over 30 of revenue we
are conﬁdent that negotiations with our
suppliers will result in prices no higher than
last year’s levels across the group this year
despite adverse movements in currency
the ability to adjust our cost base for potential
changes in demand is also important
particularly in the current market conditions
only 10 of our groupwide hotel capacity
is committed for summer 2009 which
gives us considerable scope to make further
capacity adjustments and in the uk around
89 of our tour operator ﬂying requirements
are undertaken by our own ﬂeet allowing us
considerable ﬂexibility to cut capacity without
impacting our own airline’s operations
tight control of all costs is a fundamental
part of the thomas cook business model
in addition we have developed contingency
plans to cut our overhead costs further
should tougher market conditions prevail
hedging
fuel costs represent approximately 8 of
revenue and successful hedging has been
an important element of managing this cost
through a mixture of swaps and options we
avoided the worst of the high crude oil prices
in the summer of 2008 as well as realising
some beneﬁts when prices fell we have
now locked in our fuel costs for the current
ﬁnancial year
we are taking a similar cautious approach to
future costs and our policy is to hedge fuel
and foreign exchange between 12 and 18
months in advance of the expected
expenditure in line with this thomas cook group plc annual report  accounts 2008 11
group executive board
from left to right
standing angus porter jürgen büser thomas döring manny fontenlanovoa ralf teckentrup michael friisdahl mike cutt and ian derbyshire
sitting peter fankhauser pete constanti alexis colesbarrasso ludger heuberg sam weihagen and derek woodward
see page 50 for biographies
the share buyback programme concluded
on 9 october 2008 up to that date a total
of 12005911 shares were purchased
for cancellation at a total cost excluding
commission of £2899m of these shares
55425 were purchased from arcandor ag
maintaining its holding of 528 in the group
management team
this year’s impressive performance is the
result of the strong management team
working together and in the newly enlarged
thomas cook business being more capable
than ever of dealing effectively with the
challenges we face despite the backdrop of
integration our international team has been
determined that thomas cook should remain
resilient continue to make great progress
and put in place strong foundations upon
which to build its future i am incredibly
proud of the entire thomas cook team for
what they have achieved this year and look
forward to working with them to go even
further in 2009 and beyond
directors’ report – business review
outlook
a range of initiatives within our power
underpins our conﬁdence in our prospects
for the current ﬁnancial year our business
model allows us to ﬂex capacity and product
mix well into the summer 2009 booking
cycle in addition to our own capacity
management we have seen capacity
rationalisation throughout the industry
which gives us further conﬁdence that we
can trade successfully through the current
conditions capacity reductions in the uk
market for example amount to approximately
25 over the last two years through our actions
and those of other market participants
we have tight cost discipline throughout the
business we are negotiating with suppliers to
ensure that accommodation costs are no
higher than 2002008 levels despite
currency movements we are also hedging
fuel and currency against extreme volatility
in addition we have developed contingency
plans to cut our overhead costs further
should tougher market conditions prevail
and have increased synergy targets for 2010
to a total of £215m with £185m expected by
the end of the 2009 ﬁnancial year
the combination of our management team’s
long industry experience a restructured
marketplace our own initiatives and trading
which has been in line with expectations
supports our conﬁdence in our prospects for
the full year we are targeting further growth
in margins in 2009 and 2010 and operating
proﬁt of £480m in 2010
manny fontenlanovoa
chief executive ofﬁcer
19 december 2008