thomas cook group plc  
annual report  accounts 2012
focusrebuild energise
thomas cook group plc annual report  accounts 2012  2012 group highlights
2012 financial summary
•	building on a stable platform the business transformation  
has begun and is focused on
building an effective organisation
–  changes in organisational structure and key management in order to break down 
historic silos energise our people and implement cultural change 
addressing cost and cash management
–  driving efficiency through global procurement centralised hotel purchasing and 
consolidation to reduce fixed and overhead costs and improve working capital  
over £100m of annual cost benefits and £50m of incremental working capital 
improvements already identified and significant further opportunities to come and 
 creating profitable growth
– developing an online centre of excellence with powerful channels tailored to local 
markets by leveraging the latest technology to deliver true omnichannel distribution
•	net debt reduced through asset disposals and working  
capital management 
– net debt reduced by £103m from £891m to £788m and
–  liquidity headroom at circa £1bn £160m higher than prior year
•	gross profit of £21bn with resilient gross margin despite input 
cost pressures underlying profit from operations 49 lower  
at £156m in line with expectations but significantly impacted  
by £110m in higher fuel costs
•	fourth quarter financial performance in line with the same 
period last year reflecting a significant improvement on the  
first three quarters of the year 
•	loss for the year of £590m including previously disclosed  
goodwill and other writedowns of £369m and business 
repositioning costs of £81m
•	good current trading with summer 12 ending strongly and  
winter 1213 trading off to a good start in our major markets  
with bookings ahead of committed capacity and improvements  
in pricing our capacity strategy will reduce operating risk in an 
uncertain consumer environment as the group implements its 
business transformation
year ended 30 september 2012 year ended 30 september 2011
£m unless otherwise stated underlying statutory underlying statutory
revenue 9491 9491 9809 9809
gross profit 2070 2075 2160 2098
profitloss from operations
1
 156 319 304 267
lossprofit for the year 37 590 103 518
lossearnings per share p 37 672 117 607
net debt 788 788 891 891
1  underlying profit from operations is considered by management to give a fairer view of the year on  
year comparison of trading performance and is defined as earnings before interest and tax excluding  
all separately disclosed items it also excludes our share of the results of associates and joint venture  
and net investment income
01 group highlights
04 chairman’s statement
06 group overview
08  group chief executive officer’s qa
12  market and business overview
15  strategy
18 risk management
20 operating review
28 financial review
32 sustainability
38 board of directors
40  corporate governance report
53 remuneration report
65 other disclosures
70 independent auditors’ report 
71 group income statement
72  group statement of  
comprehensive income
73 group cash flow statement
74 group balance sheet
76  group statement of changes  
in equity
77  notes to the financial statements
125 company balance sheet
126 company cash flow statement
127  company statement of changes  
in equity
128  notes to the company  
financial statements
134  appendix 1 – key performance 
indicators definitions
135 shareholder information
directors’ report business review directors’ report corporate governance financial statements 2
thomas cook group plc annual report  accounts 2012
holiday with heart
our products are designed with our 
customers in mind we will be offering a 
wider range of products and outstanding 
service which will exceed the expectations 
of our existing customers and attract new 
travellers to the group
23 
million customers
31000 
employees
8000 
employees have 
shared their views directors’ report corporate governance
thomas cook group plc annual report  accounts 2012
3
directors’ report business review
energising thomas cook with a renewed focus on 
exceeding customers’ expectations and broadening 
our product offering to ensure even greater 
flexibility and choice
energise
directors’ report
business review
04 group chairman’s statement
06 group overview
08  group chief executive officer’s qa
12  market and business overview
15  strategy
18 risk management
20 operating review
28 financial review
32 sustainability
financial statements 4
thomas cook group plc annual report  accounts 2012
i would like to thank sam weihagen who served as group ceo  
until 30 july and paul hollingworth who served as group cfo until 
30 june for the contribution they each made during a difficult and 
challenging period for the company 
at the beginning of my tenure i conducted a review of the board 
with the intention of making changes to refresh and further 
strengthen its nonexecutive composition the type of skills and 
experience required was reinforced by the output from our externally 
facilitated board evaluation that we carried out in the spring of this 
year as a result of our search i am very pleased that emre berkin 
recently joined our board as an independent nonexecutive director 
and we welcome the experience that he brings to our deliberations 
roger burnell our senior independent director and chairman of  
the remuneration committee who was due to retire at the agm in 
february 2013 will continue on the board for a further year to provide 
continuity and continue to share his significant industry experience
three of our nonexecutive directors retired at the agm in february 
2012 david allvey at the end of nine years’ service bo lerenius and 
peter middleton which gave me the opportunity to refresh the board 
at a crucial stage in the company’s evolution i would like to thank 
all three for their contribution to the board over the years 
the progress we have made with our corporate governance 
arrangements is fully covered in my letter to shareholders at the  
start of the governance report on page 40 
transforming the business and developing a strategy  
for the future
since joining the company harriet green has moved at pace as  
she and her senior leadership team supported by talent from across 
the group work to deliver on 15 turnaround initiatives focused on 
three essential elements
•	 building an effective organisation
•	 addressing costs and cash management and 
•	 creating a profitable growth strategy
the entire organisation is now fully mobilised around the 
transformation and the top 100 managers are fully engaged  
there have been a number of key management changes as harriet 
strengthens her team to take the business forward these management 
changes the transformation initiatives and the progress being made 
are described fully in the strategy review on pages 15 to 17
dear shareholder
as we emerge from a challenging year for the thomas cook group  
i am pleased to be able to report that the many actions we have 
taken are now starting to deliver results real progress has been 
achieved since we implemented our initial stabilisation plan 
described in more detail on page 15 with our strengthened balance 
sheet and a restructured board providing a firm foundation for us  
to now build upon significantly under the leadership of our new 
group ceo harriet green the organisation is mobilised around a full 
business transformation which will build a stronger and sustainable 
future i would like to focus on the progress that we have made and 
add greater insight to the initiatives that are underway 
strengthening the balance sheet
in may 2012 we announced the agreement with our lenders of  
a new more flexible financing package with an extended maturity  
to 31 may 2015 providing further stability to our business as part  
of our initial stabilisation plan we took decisions to sell noncore 
businesses including hcv and thomas cook india as well as 
conducting the sale and leaseback of 19 of our aircraft i would like 
to thank our shareholders for the overwhelming support that they 
gave for the board’s recommendations at the respective general 
meetings in may and august 2012 
the proceeds from these disposals and a substantial improvement  
in working capital management have resulted in a yearend net debt 
reduction of £103m from £891m to £788m and liquidity headroom 
at circa £1bn improved by £160m over the prior year there is a 
continued focus on cash management and improving our working 
capital position as part of the business transformation
building a stronger board 
one of my main priorities in my role as chairman was to recruit  
a high calibre group ceo to lead the significant transformation 
required to rebuild our company and i am delighted that harriet 
green agreed to take on the challenge harriet who joined us at the 
end of july is an extremely successful executive with the right 
combination of international business transformation and 
ecommerce experience that we need to take the group forward  
and build on our resilient brand michael healy who has successful 
experience of ecommerce corporate restructuring and highly 
leveraged businesses was appointed group cfo at the beginning  
of july 
chairman’s statement
good progress on 
actions to rebuild  
our business directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
5
directors’ report business review
since joining the board in october 2011 and taking on the role of 
chairman two months later i have travelled extensively across the 
group to better understand the opportunities and challenges facing 
our businesses and to meet the leaders and their teams who 
contribute to our success in addition to the overarching thomas 
cook brand we have other strong regional brands such as ving in 
northern europe and neckermann in continental europe to name 
but two which continue to perform well and deliver for our 
customers i have seen firsthand the pockets of excellence in each  
of our businesses this understanding gives me confidence that the 
actions being taken by harriet and her management team and the 
pace and vigour of the change they are heralding will enable us to 
rebuild and emerge even stronger than before
engaging with our important stakeholders
i would like to thank our many stakeholder communities for the 
support and trust they have shown us throughout the year loyalty 
that we intend to repay now by delivering on our commitments  
as we look to the future 
customers travelled with us in the same numbers as before over  
23 million in the last year trusting us to deliver a memorable holiday 
experience which our suppliers partnered with us to deliver
our shareholders and the wider financial community also 
demonstrated their support whilst our employees continued to focus 
on customer service excellence showing real strength resilience and 
passion for thomas cook they are energised by the changes we are 
making and excited to be part of the future we are building together 
again on behalf of the board i thank every one of our important 
stakeholders for their belief in us and our brands – the thomas cook 
brand which has a 171 year reputation for delivering innovation and 
outstanding service is now in safe hands
we are optimistic that even in the current economic environment  
the management team’s focus on providing customers with  
wonderful holiday experiences whilst improving our cash and 
financial management will lead to an improvement in the financial 
results and the building of a future for thomas cook worthy of  
its heritage
frank meysman
chairman
27 november 2012
 “ the entire organisation is  
now fully mobilised around  
the transformation and the top  
100 managers are fully engaged”
2012 governance highlights 
•	 new group ceo and group 
cfo leading renewed focus  
on risk management internal 
and financial control and the 
management and direction  
of internal audit new senior 
management appointments to 
support these important areas
•	 strengthened the board with 
executive and nonexecutive 
appointments
•	 improved diversity against  
a range of measures
•	 new chairs of the board’s 
committees
•	 externally facilitated board 
effectiveness review
– outputs shaped the candidate profile  
for new board appointments
– outputs debated by the board and agreed 
action plan in place being monitored with 
regular progress reports to the board
for more information on our governance  
see page 40 2
6
thomas cook group plc annual report  accounts 2012
northern europe
69 internet distribution
airlines germany
one of the most profitable  
airlines in germany
uk
£60m in benefits from turnaround plan
north america
new management has implemented 
plans to improve financial performance
central europe
öger tours expanded its product 
into tunisia and egypt
5
3
west europe
average selling price increased by 38
1
4
6
group overview
leveraging best practice across 
our geographic businesses
the group’s gross profit margin is in line with last year at 22 however with an operating profit margin  
of 16 there is a clear need to reduce costs reducing cost is a key focus of our transformation initiatives 
and we will do this through increased intragroup cohesion structural change and better use of technology 
with significant cost savings already identified we have an opportunity to leverage best practice in our 
more profitable businesses and apply this to our underperforming businesses particularly in the uk   directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
7
directors’ report business review directors’ report business review
uk
turnaround plan delivered benefits of £60m increasing 
the gross profit margin to 258 and work is ongoing  
to address the overhead cost base  
2012 2011
revenue £31094m £32550m
underlying profit from operations

£127m £341m
underlying gross profit 258 234
underlying operating profit margin

04 10
key facts
•	 passengers 66m
1
•	 retail outlets 1089
•	 aircraft 35
2
•	 controlled distribution
‡‡
 863
•	 internet distribution
‡‡
 347
central europe 
a solid year for the german business is masked by  
the inclusion of losses in our russian joint venture  
2012 2011
revenue £25865m £25464m
underlying profit from operations

£501m £723m
underlying gross profit 127 131
underlying operating profit margin

19 28
key facts
•	 passengers 47m
•	 retail outlets 1625
•	 controlled distribution
‡‡
 234
•	 internet distribution
‡‡
 68 
airlines germany
condor had a difficult winter season in a very 
competitive german airline market and against a strong 
prior year comparator but remains one of the most 
profitable airlines in germany 
2012 2011
revenue £11646m £11203m
underlying profit from operations

£357m £693m
underlying gross profit 275 334
underlying operating profit margin

31 62
key facts
•	 passengers 67m
3
•	 aircraft 38
2
•	 approximately onethird of seats sold inhouse
3
west europe
significantly impacted by the performance of the french 
business where results continue to be hit by lower 
demand for holidays to the important frenchspeaking 
northafrican destinations 
2012 2011
revenue £14674m £17040m
underlying profit from operations

£20m £379m
underlying gross profit 164 173
underlying operating profit margin

01 22
key facts
•	 passengers 27m
•	 retail outlets 793
•	 aircraft 6
2
•	 controlled distribution
‡‡
 602
•	 internet distribution
‡‡
 271
northern europe
a consistent performer northern europe delivered 
another highly profitable year with industry  
leading margins 
2012 2011
revenue £11671m £11527m
underlying profit from operations

£1009m £1063m
underlying gross profit 269 272
underlying operating profit margin

86 92
key facts
•	 passengers 15m
•	 retail outlets 11
•	 aircraft 12
2
•	 controlled distribution
‡‡
 871
•	 internet distribution
‡‡
 694
north america
overcapacity in the mainstream market resulted  
in significant winter losses actions have been taken  
to reduce the committed capacity risk and rebalance  
the product portfolio 
2012 2011
revenue £2962m £3492m
underlying profit from operations

£223m £105m
underlying gross profit 145 186
underlying operating profit margin

75 30
key facts
•	 passengers 10m
•	 retail outlets 119
•	 controlled distribution
‡‡
 141
•	 internet distribution
‡‡
 357
4
1
2
3
4
5
6
1
 includes 02m egypt passengers 
2
 as at 30 september 2012
3
 includes 22m inhouse passengers
4
 includes independent travel bookings
see appendix on page 134 for key 8
thomas cook group plc annual report  accounts 2012
the begi n n i ng of a new era  
at thomas cook
group chief executive officer’s qa
q what can you tell us about your first 100 days 
a exciting and illuminating i’ve learned a lot and now understand 
the strengths challenges and incredible opportunities facing the 
thomas cook group 
before i joined i spent time understanding how the group is viewed 
from the outside i met with customers suppliers key contacts in the 
city shareholders our banks and the media so i was already forming 
impressions before i joined once i started on 30 july 2012 i spent 
the first two months concentrating on understanding the insideout 
view of the organisation i have visited all of our major business 
centres hosted employee briefings and held indepth senior 
management sessions and budget reviews
i spoke to customers and travelled to some of our significant holiday 
destinations to get a real sense of the service and experience our 
customers receive and i spoke at length to some of our critical 
partners service matters so much in our business – we’re not just 
delivering a product but an experience fulfilling an expectation and 
creating lasting memories our customers trust us to deliver the best 
weeks of their year and we want to be sure they’ll return and travel 
with us again and again
i wanted to learn about our business from those who know it best – 
our employees so i invited them to share their views with me 
confidentially in a short feedback survey i was delighted by both the 
quality and the number of responses i received from over 8000  
of our global team – real insights solutions as well as problems all 
characterised by refreshing honesty and passion for this business  
and our customers
i was attracted to join thomas cook by its strong brands reputation 
for customer service and the opportunity to transform the business 
by harnessing its inherent potential and building a best in class 
online capability i almost feel that my entire career experience to 
date was preparing me for the challenges at thomas cook a set of 
challenges i firmly believe we will address the world in which we 
live is changing and we must capitalise on our many existing 
strengths whilst embracing new opportunities and different ways of 
working opportunities such as the way technology is transforming 
the travel industry particularly the web and mobile this influences 
the way consumers research and book holidays our customers want 
high tech and high touch – from our stores to our websites they want 
advice from our travel experts to help them make the choices that 
are right for them we will embrace all channels to ensure our 
customers get exactly what they need how and when they need it  
as we focus on becoming easier to do business with
 “ i was attracted to join  
thomas cook by its strong  
brands reputation for  
customer service and the 
opportunity to transform  
the business by harnessing  
its inherent potential”  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
9
directors’ report business review
the thomas cook family of brands are incredibly powerful and have 
proven themselves to be resilient bouncing back from the challenges 
of the last year we will now build on the trust placed in us by  
the 23 million customers who travel with us each year to ensure we 
deliver an experience that exceeds their expectations at the same 
time we will target new market areas to keep at the forefront of  
what customers need and attract new customers 
some parts of the business are currently not performing as well as we 
need them to but there are also areas of real strength in particular 
northern and continental europe whose strong brands such as ving 
spies tjäreborg and neckermann are well known and regarded in 
their markets we will work together to utilise best practice and 
learnings and really leverage the overall strength and expertise  
of the group
ours is a target rich environment with real opportunity to take out 
cost since i joined working closely with the senior team we have 
identified £100 million of cost savings and there is more to come 
these savings will come from greater efficiency and use of 
technology not at the expense of the customer experience 
pleasingly i have not found anything which i did not expect  
the historic underperformance i now believe is largely down to 
organisational complexity and structure a lack of focus on some of 
the core business essentials and a failure to integrate our different 
businesses successfully and learn from each other as well as other 
industries and sectors when i arrived the group felt like a collection 
the begi n n i ng of a new era  
at thomas cook
 “ some parts of the business are 
currently not performing as well 
as we need them to but there are 
also areas of real strength” 
of individual businesses working in silos making it harder for us to 
succeed collectively already this has started to change – i have been 
delighted by the quality of people i have found across the business 
many leaders with a verve for change and a desire to return the 
group’s financial performance to where it needs to be inevitably 
there will be leadership changes – my usual formula is ‘a third a 
third and a third’ – that’s a third of the existing team retained a 
third coming from internal promotions and a third of the leadership 
coming in externally bringing new strengths and skills this pattern  
is already reflected in my direct report team
we have made a number of critical appointments including peter 
fankhauser appointed as uk ceo in addition to his existing role as 
ceo of continental europe to leverage his business transformation 
experience susan duinhoven who previously led our west europe 
business has been appointed to lead the group’s web transformation 
including the integration of web back into the segments whilst 
maintaining a web centre of excellence christoph debus has been 
appointed as group head of air travel to review the group’s air travel 
strategy with regard to both our airlines and our purchasing of third 
party capacity in the tour operator and scheduled businesses in our 
benelux and east europe businesses reto wilhelm has been 
appointed as managing director bringing his extensive knowledge 
and experience to help drive an improved performance and joe 
o’neill joins as group treasurer as we also strengthen our finance 
communications investor relations audit and risk teams  10
thomas cook group plc annual report  accounts 2012
group chief executive officer’s qa continued
we are driving cultural change through greater collaboration and 
changing our structure to maximise the customer experience these 
changes are happening at speed to quickly invigorate the group  
and break down organisational silos and i firmly believe the recent 
appointments i have made will facilitate this driving faster decision 
making and reducing costs through back office rationalisation 
across the group customer service will be a priority as we embed the 
mantra “if you’re not serving the customer directly then brilliantly 
serve someone who is”
this is a £95 billion turnover business with a gross profit margin of 
22 reducing to an operating margin of just 16 there is a major 
opportunity here to reduce our costs and improve profitability we 
are targeting cost reduction through structural change and we have 
already identified £100m of savings with substantial further 
opportunities to come
the principles driving our focus on reducing costs and improving 
cash management are firstly acting cohesively as a group for 
example better leveraging our purchasing power centralising where 
it makes sense to do so whilst remaining committed to the 
importance of local knowledge and relationships for our customers 
and suppliers we are also reducing costs through immediate 
selfhelp measures which include our air travel strategy as we look 
for greater integration of maintenance activities and better yield 
management of seat only sales
further savings will be driven as we reshape the organisation and 
take out layers and also by making better use of existing technology 
for example standardisation of systems across the group and the 
consolidation of technology platforms
we also have an entire initiative dedicated to improving working 
capital management focused particularly on more disciplined cash 
collection and an improved procurement strategy these measures 
are already delivering improvements we have also identified 
significant gross cash flow improvements and expect to identify  
more benefits 
in the uk the turnaround plan has delivered significant benefits and  
we are accelerating the work to look at the high operating costs  
and opportunities for cash generation 
our entire customer proposition is also under detailed review 
encompassing our distribution channels our products and our 
brands we want to continue to improve our core products to ensure 
we retain our existing customers whilst also attracting new customers 
through innovation
the work on these transformational initiatives will drive immediate 
benefits and lay the foundations for the new strategy that we will  
be sharing in the spring of 2013
the entire organisation is now mobilised around the changes 
required our top 100 managers are fully engaged with the 
objectives we are working to achieve and we are actively changing 
the culture and ways of working as our transformation process 
begins to gain momentum over 100 of our teams globally are 
already working on our transformation projects which have been  
my real focus since the start of the new financial year
q have you established a list of priorities 
a my immediate priority was to accelerate the turnaround changes 
already underway and foster the heightened sense of urgency 
needed to transform the business being relatively new to the 
industry has proven to be an advantage as i ask the naïve questions 
and bring fresh experience of other industries and i hope therefore 
a different perspective to the business there are many excellent 
travel people within the business who i can rely on for industry 
knowledge to help inform my decisions 
i had an initial list of areas i wanted to focus on when i started but 
it has been an iterative process over the first 100 days resulting in 
the creation of a series of transformational initiatives that will build 
an effective organisation address the cost and cash issues we face 
and create profitable growth whilst delivering innovation and 
excellence for our customers
we want to deliver even more to our existing loyal customer groups 
whilst targeting new customer segments and responding to the 
increasingly diverse and individual needs of today’s leisure traveller 
in the spirit of our pioneering founder thomas cook we will 
continue to differentiate ourselves 
i shared these top priorities with the top 100 managers across the 
business that make up the thomas cook leadership council ‘tclc’ 
in september 2012 and since then we have been building the teams 
who will develop our future strategy there is a real sense of urgency 
and pace of change sweeping across the group as people engage 
and connect with these initiatives that will ultimately shape our 
future direction as i have already shared we will be ready to 
announce this information to all stakeholders in the spring of 2013 
each of our key strategic initiatives now has a strong team assigned 
to move it forward with clear timelines accountabilities and 
priorities and they fall into three main areas
•	 building an effective organisation
•	 addressing costs and cash management and
•	 creating a profitable growth strategy
building an effective organisation is the most important first step  
as it will underpin all our other work without this our strategic 
initiatives in both the short and longterm might fail our cost base  
is too high and this affects operating margin performance we need 
to reduce our costs and start generating cash whilst considering 
carefully the assets we hold finally we want to grow this business 
profitably for the future we can leverage the strength of our brands 
and significant customer base to build on our popular current core 
products to attract new and existing customers the way customers 
want to interact with us is changing and we will invest in our 
technology offering to meet their high tech and high touch needs  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
11
directors’ report business review
q are the financial problems of the past year behind  
you now
a we are making progress as already shared to address the 
challenges and the business improvements in q4 are encouraging 
clearly there are challenges ahead which will take time to resolve 
but as shared we have robust plans and processes in place now and 
a critical element of our business improvement plan is to address the 
group’s cost base and cash management and we will be reducing 
costs through the immediate selfhelp measures and more structural 
longerterm changes 
the uk turnaround plan is critical to restoring the financial health  
of the business and is covered in more detail on page 22 first 
announced last year the plan is progressing well delivering £60m  
of savings in the year largely through improved yield management 
£19m and cost synergies through the integration of the cooperative 
travel business £15m and the key actions taken in the year which 
include the return of six aircraft to the lessors removing 
underperforming hotels closing 149 stores and five head office 
properties and implementing a single commercial trading platform 
with the appointment of peter fankhauser to lead the uk we  
now have one business with one ceo which will further reduce 
duplication and drive out cost the strengths and contributions  
of northern europe and germany in particular continue to be high 
and as we increase intragroup partnerships work more as a 
cohesive group and leverage best practice we hope to see similar 
performance levels across the group
eliminating duplication will enable us to leverage our global 
purchasing power more effectively whilst reducing unnecessary 
overheads 
again while the group’s current gross profit margin is a respectable 
22 our group operating profit margin is just 16 which 
demonstrates the scale of the potential within this business once  
we reduce cost and build the right organisational and operational 
capabilities this is the central driving force of all of the work we  
are currently focused on and the senior team is totally committed  
to the improvements needed and the power of the transformation  
we are undertaking 
q how do you plan to energise focus and rebuild  
thomas cook
a we are breaking down barriers to growth removing silos  
and strengthening the management team as i hope i have already 
explained and restoring our financial health to build an effective 
organisation able to deliver good returns in the future we will  
be lean with ourselves and lavish with our customers and we  
will harness technology in all its forms to drive efficiency service  
and even easier access to information 
we’ll build on the strength and promise of our iconic and much 
loved travel brands and widen our product portfolio to address the 
insatiable desire of our existing and new customers to travel more 
flexibly and cost effectively increasingly our products are designed 
to target the specific needs of our different customer segments such 
as the familyfriendly sentido and sunwing concepts or the adult  
only sunprime and sunselect hotels which are very successful  
and popular targeting different customer groups in this way  
and developing compelling new propositions affords us a very  
real opportunity to attract new customers 
even in these tougher macroeconomic conditions when disposable 
income is down 41 of consumers surveyed regard their holiday  
as an essential purchase
we will continue to offer customers a full multichannel experience 
to ensure they can reach us however and whenever they want to 
harnessing technology and the web to drive differentiation at every 
point of the holiday experience the customer’s holiday must begin 
the first time they connect with us and last until they collect their 
luggage and return home every part of the process matters in 
creating the final experience and every one of our employees  
must understand this 
internally we will build a fresh culture centred on our core values 
our ways of working and the clear message that every act we each 
take every day matters instilling a high performance culture  
of accountability is vital to our strategic transformation and  
the new ways of working will help guide and shape our future
our values
succeed as one team 
deliver for our customers  
engage each other 
drive for results  
act with integrity
every act
every day
every one
q what is your vision for thomas cook 
a i believe thomas cook will become the ‘voyager android’ of the 
future we will be there for our customers however whenever and 
wherever they are in the world we will do this through innovation 
and by working more collaboratively as a group to share and expand 
on the best of what we already have and do we’ll help them sort the 
vast array of data into meaningful value adding information – we’ll 
use our expertise and knowledge of 171 years of travel to shape 
guide and inform their decisions in this web world as they remain  
at the heart of the organisation the primary driver of all we do  
harriet green
group chief executive officer
27 november 2012
 tns uk market insights report 2012 12
thomas cook group plc annual report  accounts 2012
market and business overview
understanding our 
market and business
despite the uncertain economic environment  
the longterm outlook for the international tourism 
industry remains attractive and the thomas cook 
group is well positioned for future growth
economic environment
following the international economic and financial crisis in 2008  
the gdp of our two largest source markets germany and the uk  
fell 5 and 4 respectively in 2009 whilst the nordic countries saw 
growth of only 1 since then economic conditions have improved 
slightly however the ongoing global economic uncertainty combined 
with the current sovereign debt crisis in europe continues to 
negatively impact the gdp of our source markets with gdp forecast 
to fall to just 05 in the uk 07 in germany and 15 in the 
nordic countries in 2012 although unemployment rates in both  
the uk and germany are beginning to fall the economic outlook  
for 2013 remains uncertain with different markets at different  
points in the economic cycle source imf
industry overview
in general the growth of global international tourism outpaces  
the growth of economic output according to the un world tourism 
organisation ‘unwto’ demand for global international tourism 
maintained momentum in 2011 and early 2012 with an expected 
growth in international tourism for the full year 2012 of 3 to 4 
between 2010 and 2030 the unwto estimates that global outbound 
tourism will grow at 33 pa with outbound tourism from europe 
growing at 25 pa vs 50 pa growth in the asia pacific region 
according to euromonitor the group’s top 10 source markets 
comprising the uk germany sweden norway denmark finland  
the netherlands belgium france and canada made up £355bn  
of global travel spend in 2011 there are two distinct segments  
in the leisure travel market direct suppliers and travel 
intermediaries direct suppliers are the airlines hotels and cruise 
companies that sell directly to the consumer thomas cook largely 
operates in the travel intermediary segment made up of travel 
agents and tour operators which accounted for £94bn 26  
of travel spend in 2011 
outlook and how the group is responding to changes  
in the market environment
in recent years a number of key trends in leisure travel namely 
increasing online distribution and the rise of lowcost carriers have 
facilitated a shift towards more flexible consumerled travel choices 
as a result there has been a decline in prepackaged holidays with  
a corresponding rise in dynamically packaged products and 
independent travel these do not always provide the same level  
of protection and customer peace of mind as our packaged products 
which is one of the reasons why we have such highly trusted brands 
the rate of shift between the traditional packages and dynamic 
packages varies by source market but is greater in those markets 
with more low cost carrier penetration such as germany and the uk 
the overall package holiday market across our top 10 source markets 
is expected to grow in line with the market remaining at 53 of the 
total intermediary leisure travel market between 2011 and 2016 
source euromonitor this is driven by the growth of dynamic 
packages offset by a decline in prepackaged products 
the growth of the internet has increased price transparency and 
choice making it easier for travellers to gather information about the 
destination they plan to visit at the same time the emergence  
of online intermediaries has also provided an alternative and easily 
accessible distribution channel for suppliers of holiday products 
moving the focus in holiday supply away from the traditional high 
street travel agents in 2011 29 of the market value was transacted 
through online channels and this is predicted to rise to 34 by 2016 
source euromonitor
split of travel intermediary market in 2011 £94bn euromonitor
accommodation only 8
car rental 1
cruise 7
flight 20
package holiday 53
insurance 1
other transport 4
other 6 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
13
directors’ report business review
key industry change thomas cook’s response
growth of online
online growth is predicted to be faster  
than offline growth across all our markets 
however the rate and total percentage of 
value transacted online vary significantly  
by source market
the web is an increasingly important channel for the distribution of all our 
products and is a key part of the group’s strategy and vision work is underway  
to energise our web channels through greater focus on product content 
performance and the overall customer experience we will leverage our existing 
web talent to build a centre of excellence whilst ensuring the development  
of powerful channels tailored to the local markets delivering a more  
integrated approach 
in 2012 thomas cook group made 25 of its sales through its own web channels 
with web sales in northern europe at 69 and the uk package business at 35 
web distribution is a key area of focus for the group going forward and will be 
developed as part of an omnichannel distribution strategy 
shift from prepackage to dynamic package
traditional package holidays are generally 
accepted to be in decline whilst the more 
flexible dynamic packages are growing  
as consumers value the security of a package 
with the choice and flexibility that are  
on offer 
the group continues to adjust its product range to increase the flexibility of the 
offering available to customers we have changed how we manage air capacity 
reducing the amount of committed capacity giving more flexibility to adjust  
to customer preferences as we build on our successful core product strength  
by broadening our product offer and developing compelling new propositions  
we have a huge opportunity to attract new customers 
in the uk passengers purchasing a dynamically packaged holiday increased  
12 in the year and now comprise 11 of total uk passengers
proportion and growth of online distribution 
thomas cook and market 
2011 2011 2007 2007
15
21
25
29
thomas cook
market
0
10
30
20
split of the group’s fy12 sales by distribution channel
retail store 27
web 25
call centre 3
third party 45
 “the web is an increasingly important 
channel for the distribution of all  
our products and is a key part of  
the group’s strategy and vision” 14
thomas cook group plc annual report  accounts 2012
market and business overview continued
thomas cook offers a wide range of holiday options from 
prepackaged holidays through to individual components and 
personally tailored holidays alongside our travel offering we  
provide a selection of travelrelated financial services in 2012  
23 million customers travelled with the group and each of  
our businesses tailors these offerings to their local market whilst  
our scale provides the opportunity to drive economies in sourcing 
and operations
our core product category is prepackaged holidays where flights 
hotels and transfers are bundled together and offered for sale as a 
single product within the traditional package holiday market the 
group has number one or two positions across all our major markets 
and with wellestablished and trusted brands package holidays 
comprised 53 of the intermediary leisure travel market in 2011 
source euromonitor and include both traditional prepackaged 
holidays and also the emerging dynamic packages where 
components are tailored to the individual customer traditional 
packages contributed 72 to group revenue in 2012 
independent travel products offered by the group encompass holiday 
components dynamic packaging and scheduled tours this provides 
customers with greater flexibility and choice to tailor their holiday  
to meet their personal requirements with regard to destination 
duration variety and quality independent travel including flight and 
accommodation only comprised 46 of the market in 2011 source 
euromonitor and represented 27 of the group’s revenue in 2012 
finally to complement its travel offerings the group offers 
travelrelated financial services including foreign exchange and 
travel assurance these can be bought by customers alongside  
or independently of their holiday purchases and represented  
1 of group revenue in 2012 
the group is focused on establishing an omnichannel distribution 
platform for its products including the web retail stores and call 
centres whilst driving an increase in inhouse distribution to reduce 
third party distribution costs in most of the group’s operating 
segments retail stores remain a significant distribution channel 
particularly for mainstream package products however the group 
recognises that as the importance of the web grows the business 
must continually reassess its presence on the high street as part of 
the uk turnaround plan the uk business has committed to reduce 
the number of retail stores it operates by at least 200 by the end  
of 2013 across the group we are increasing our focus on web 
distribution and as such have reorganised our talented web people 
to create a web centre of excellence whilst ensuring the development 
of powerful web channels tailored to local markets 
how we create value 
we offer our customers three product categories which are distributed through multiple channels  
both inhouse and through third parties additionally we sell third party products for which we receive a commission 
our 
customers
 
we offer a wide product 
range to suit all customer 
needs and will continue  
to broaden our offering  
we also offer products from  
other suppliers to provide  
our customers with  
a breadth of choice
 
reach customers 
seamlessly through 
omnichannel distribution
significant inhouse distribution 
ensures the best customer 
advice and support
 
 
our customer  
service representatives  
are present at many 
customer touch points 
including in destination 
providing reassurance and 
ensuring a high quality  
travel experience
 
 
thomas cook  
our global umbrella 
brand is highly resilient 
demonstrated by the 23m 
customers that booked with  
us in 2012 it stands alongside 
strong local brands with high 
brand awareness trust  
and consideration
brand
service
distribution
product directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
15
directors’ report business review
business transformation
a critical enabler of our transformation plan was a change in senior 
leadership harriet green and michael healy joined the group as  
ceo and cfo respectively in the summer and they have started  
to reenergise the entire organisation around reinvigorating the 
thomas cook brand to return us to profitable growth and to  
make us the travel partner of the future
the entire organisation is mobilised around the changes required 
and the top 100 leaders are engaged fully with what we are working 
to achieve we have 15 separate turnaround initiatives each of which 
is being led by business leaders a project management office with 
clear targets reporting and timelines supports these business 
transformation plans
our recovery is focused on the following three essential elements
building an effective organisation
the first crucial element is to build a more efficient and effective 
organisation structured to maximise the customer experience  
this revitalised organisation is driven by a sense of urgency and 
characterised by robust decisionmaking clear accountability and 
defined performance metrics there is a strong focus on rigorous 
execution and delivering our plans we are energising our people  
to drive the cultural change needed to break down historic regional 
silos through better communication and collaboration we have 
already made a number of key management changes as we build  
a strengthened team to take the business forward some of the key 
appointments are new to the group as we learn from best practice 
elsewhere but many have been promoted from within the group 
retaining the detailed knowledge of our business the key changes 
include the following 
•	 peter fankhauser appointed as uk ceo in addition to his existing 
role as ceo of continental europe to leverage his business 
transformation experience 
•	 susan duinhoven who previously led our west europe business 
has been appointed to lead the group’s web transformation 
including the closer integration of web development into  
the operating businesses whilst maintaining a web centre  
of excellence 
the past year has been challenging but the 
unwavering commitment of our employees to 
ensuring each of our customers had a wonderful 
experience saw 23m customers travel with us  
the same as the previous year thomas cook is  
an iconic and much loved travel brand with a 
demonstrable resilience
our success in the longterm will be achieved in two steps 
stabilisation and business transformation following our difficulties 
in november 2011 our immediate priority was stability to create a 
stable platform for recovery by improving our profitability and cash 
flow generation the next step business transformation will allow  
us to take advantage of strategic opportunities to create value in  
the travel market 
stability
we have made encouraging progress on a number of fronts
•	 continuing to drive the turnaround of our uk business 
implementation of the plan is underway and progressing well  
we expect to deliver a fully annualised improvement in 
profitability of £140m up from £110m as announced last year
•	 building on the solid performance of our northern europe  
and german businesses
•	 addressing our underperforming businesses particularly in 
canada france and russia
•	 reducing debt and improving the resilience of our financing  
and capital structure through asset disposals such as the sale  
of hoteles y clubs de vacaciones and thomas cook india  
aircraft disposals and minimising our financial commitments and
•	 stabilising our capital structure through the agreement of longer 
dated more flexible financing facilities as announced on  
5 may 2012
these initiatives mean that our customers suppliers and other 
stakeholders can trade with us with improved confidence
strategy
 evolving our strategy  
to deliver future growth 16
thomas cook group plc annual report  accounts 2012
•	 christoph debus has been appointed as group head of air travel 
to review the group’s air travel strategy with regard to both our 
airlines and our purchasing of third party capacity in the tour 
operator and scheduled businesses 
•	 within our new continental europe business segment reto 
wilhelm has been appointed as managing director with 
responsibility for benelux and east europe bringing his extensive 
knowledge and experience to help drive an improved 
performance and
•	 we have strengthened the group finance team with the external 
appointments of a new group treasurer joe o’neill group head 
of financial control and planning bill scott and a director of 
enterprise risk and audit lee bradley
there is a real passion for customer service within the organisation 
and a strong belief in the future of thomas cook our people want to 
be a part of the transformation and having consulted with them all 
over 8000 of them have shared their views to management in the 
last 100 days as part of our business transformation initiative 
addressing costs and cash management
the second element of our business improvement plan is to address 
the group’s cost base and cash management there are a number  
of initiatives in this area which broadly fall under two guiding 
principles 
•	 an increased degree of intragroup cohesion and 
•	 cost reduction through structural change 
the uk turnaround plan first announced last year is focused on 
both aspects turnaround in the uk is progressing well delivering 
£60m of financial benefits in the year these benefits arose largely 
through improved yield management £19m operational excellence 
initiatives £17m and cost synergies through the integration of the 
cooperative travel business £15m further detail is available on 
page 22 and the key actions taken in the year include 
•	 the return of six aircraft to lessors reducing the fleet size to 35  
at 30 september 2012 
•	 removal of more than 500 underperforming hotels with 150  
new properties added to the portfolio with 35 of mainstream 
customers choosing differentiated products 
•	 implementation of a single commercial trading platform with a 
coordinated discount approach to deliver substantial improvement 
in yield management and
•	 the closure of 149 stores and five head office properties
as a result of these actions the gross margin for the uk business 
improved to 247 however despite the gross margin 
improvements the uk business only delivered £1m at the operating 
profit level and as a result the business is now placing a greater 
emphasis on accelerating the transformation and work is underway 
to drive a faster reduction in overhead costs through increased 
consolidation measures particularly in noncustomer facing business 
support processes the team is targeting rapid organisational change 
and peter fankhauser who successfully transformed our business in 
central europe is now leading the business and the turnaround 
which is critical to improving the profitability of the uk business  
and the overall group 
throughout the organisation we are implementing measures to 
increase intragroup partnerships working as a more cohesive group 
and leveraging the best practice that already exists eliminating 
duplication will enable us to leverage our global purchasing power 
more effectively whilst reducing unnecessary overheads we will 
centralise where it makes sense to do so but will continue to 
recognise the importance of local knowledge and relationships  
for our customers 
while the group’s current gross profit margin is 22 our group 
operating profit margin is just 16 highlighting the need to improve 
operating efficiency the group is currently in the process of 
identifying structural cost savings and whilst very early in the 
process has already clearly established robust plans to achieve 
annualised savings of circa £100m these are largely expected to be 
realised in fy14 and fy15 at a cost of circa £65m over the next three 
years these savings are in addition to the £140m of anticipated 
benefits from the uk turnaround plan and represent just 1 of the 
group’s total cost base work is ongoing to quantify further potential 
savings in other areas of the business where substantial opportunities 
have been identified 
strategy continued
 “we are energising our people to  
drive the cultural change needed  
to break down historic regional silos 
through better communication  
and collaboration” directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
17
directors’ report business review
£m fy13 fy14 fy15 run rate
integrated air travel strategy 5 30 40 40
organisational structure 5 20 30 35
infrastructure technology and other 3 20 25 25
total 13 70 95 100
cost to achieve – income statement 65 – –
cost to achieve – cash flow 30 20 15
the group has also identified a number of areas where cash flow can 
be sustainably improved by changing working capital management 
processes ranging from more disciplined cash collection to 
transformational change in procurement strategy by developing a 
cash culture throughout the group and by operating in a coordinated 
way leveraging the group’s market position we expect to build on the 
cash benefits already achieved in these results although the ability to 
influence the absolute amount of working capital is partially driven by 
trading volumes which in turn will be impacted by capacity strategy 
we are already well advanced in identifying activating and 
monitoring multiple work streams that will aim to deliver gross  
cash flow improvements in the region of £50m in the current year 
creating a profitable growth strategy
the third element of our business transformation will be to create  
a strategy for profitable growth by unlocking the potential of the 
group’s brands through understanding and reacting to customer 
demands both in terms of product and distribution channel this 
will see both a change of emphasis in our approach and an ongoing 
review of all business areas to ensure more effective and efficient 
ways of working 
we will build and enhance our current core product strength by 
building stronger relationships and partnerships with hoteliers to 
deliver a differentiated proposition with the right balance of assets in 
our portfolio this will require us to look both at the hotels with which 
we choose to contract and the way in which we contract with them 
we are also working to strengthen our air travel proposition and have 
appointed christoph debus to lead this as group head of air travel 
starting with a review of our approach to capacity management 
we will continue to offer our customers a wide range of distribution 
channels to meet their needs and we will make it easier for our 
customers to access our deep travel knowledge making it available 
to them in whatever form they choose from wherever they want to 
access it we recognise the increasing importance of technology and 
the group already has pockets of excellence web distribution varies 
by market and ranges from 7 to 69 across the group 
our online business is changing and will become our key distribution 
channel as we will continue to invest in order to harness the power 
of technology we have appointed susan duinhoven to lead this 
transformation which will leverage our existing web talent to build  
a centre of excellence whilst ensuring the development of powerful 
channels tailored to the local markets delivering a more integrated 
approach our retail stores remain important for many of our 
customers and whilst we continue to review the scale of our retail 
operations in order to streamline where appropriate we will 
continue to invest in our most successful stores as part of our 
omnichannel distribution strategy 
we will continue to drive the transformation process with rigour over 
the coming months and the outcomes of the work already underway 
will shape our longerterm strategy which we will announce in the 
spring of 2013  18
thomas cook group plc annual report  accounts 2012
renewed focus 
on risk management
risk management
principal risks mitigating actions opportunity
threat of a continued downturn in 
demand due to adverse global 
economic factors
our flexible business model allows us to align our committed capacity to 
fluctuating demand we continue to develop multichannel distribution and 
develop strategies to improve product mix increase margins and reduce costs
our focus on delivery of our strategy means we are 
able to respond rapidly to economic improvement
failure to implement strategic 
initiatives results in projected cost 
savings and growth opportunities  
not being realised
we have a fully integrated transformation plan to align the business to 
future strategy delivery of strategic transformation is led by a high calibre 
team with regular reviews of the business’ progress by the executive team 
and board
to deliver sustainable growth in shareholder value 
balancing the needs of our customers employees and 
communities in which we work with our strategic 
objectives and corporate and social responsibilities
recruitment development or 
retention of talented people
our high potential talent is identified and nurtured through agreed 
development plans including a comprehensive mentoring programme as 
well as a focus on succession planning for our key leadership positions our 
reward schemes are constantly evaluated to drive and reward performance 
and ensure retention of key talent as we drive change throughout the 
organisation our competency development and evaluation processes are 
focused on encouraging change agility
the creation of a high performing actively engaged 
team which will consequently lead to improved 
business performance
a major health and safety incident 
impacting our customers or colleagues
there is a groupwide structure in place to support management through 
the provision of staff training auditing and specialist advice the assessment 
of health and safety risks is inbuilt into daily management routines and is 
monitored by a comprehensive structure of health and safety committees 
that are in turn overseen by a corporate health safety  environmental 
committee with board level oversight
we are committed to identifying initiatives that will 
enhance the safety culture and contribute to the 
continuous improvement of the safety and wellbeing 
of all our colleagues and customers
political and regulatory
dedicated management teams ensure full compliance with formal 
regulatory requirements we monitor stakeholder and political reactions  
to ensure we react to emerging political and regulatory developments
the group will continue to contribute to the 
constructive engagement with government agencies 
and other stakeholders to help create a sustainable 
framework for travel and tourism 
liquidity and counterparty credit 
we monitor liquidity and cashflow on a rolling 26week basis we continue  
to monitor and challenge the wider business to ensure cash targets are met 
in addition we monitor the performance of the group against the covenants 
set out in our lending facility we maintain ongoing communication with all 
providers of credit
the group will ensure it has sufficient liquidity 
cashflow and profit headroom to support delivery  
of our strategic initiatives
commodity currency and interest rate
we undertake hedging in line with group policy the group achieves certainty on which business 
segments can establish competitive brochure pricing
thomas cook group has a renewed  
focus on risk management
the board is committed to further enhancing our risk  
management capability and has recently appointed a highly 
experienced director of enterprise risk and audit working  
closely with our senior management team he will ensure that  
the management of risk is further embedded in the strategic  
and operational processes of the group this means that risk 
management is not a separate process or set of actions but part of 
normal business and daily management practice we are committed 
to promoting effective risk management as a core management 
capability that will support the group in achieving its targets 
it is the aim of the group to promote a culture where as a matter  
of good business practice both risk and opportunity are identified 
and managed thereby ensuring more informed and effective 
business decisions are made and that the group achieves its 
objectives and targets on an annual basis the board will review risk 
appetite to ensure it is calibrated to the group’s strategic objectives 
risk is assessed formally at business segment level through risk  
workshops and via the maintenance of risk registers the updating  
of the risk registers is a continuous process involving the 
identification evaluation and management of risks by individual 
managers risk exposure will be considered against risk appetite  
by profiling individual risks in respect of their potential impact  
and likelihood of occurrence after consideration of mitigating  
and controlling actions that are in place 
internal audit deliver a comprehensive riskbased combined 
assurance plan and regularly advise the board of the effectiveness  
of the design and operation of the control environment we are  
also committed to promoting a culture in which people will openly 
communicate risk to appropriate levels within the group and in 
which information on risk and the actions taken to manage risk  
is shared openly through an effective communication process
the table opposite lists the principal risks and uncertainties that may 
affect the group and highlights the mitigating actions that are being 
taken and the opportunities that we aim to capture the content of 
the table however is not intended to be an exhaustive list of all the 
risks and uncertainties that may arise directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
19
directors’ report business review
principal risks mitigating actions opportunity
threat of a continued downturn in 
demand due to adverse global 
economic factors
our flexible business model allows us to align our committed capacity to 
fluctuating demand we continue to develop multichannel distribution and 
develop strategies to improve product mix increase margins and reduce costs
our focus on delivery of our strategy means we are 
able to respond rapidly to economic improvement
failure to implement strategic 
initiatives results in projected cost 
savings and growth opportunities  
not being realised
we have a fully integrated transformation plan to align the business to 
future strategy delivery of strategic transformation is led by a high calibre 
team with regular reviews of the business’ progress by the executive team 
and board
to deliver sustainable growth in shareholder value 
balancing the needs of our customers employees and 
communities in which we work with our strategic 
objectives and corporate and social responsibilities
recruitment development or 
retention of talented people
our high potential talent is identified and nurtured through agreed 
development plans including a comprehensive mentoring programme as 
well as a focus on succession planning for our key leadership positions our 
reward schemes are constantly evaluated to drive and reward performance 
and ensure retention of key talent as we drive change throughout the 
organisation our competency development and evaluation processes are 
focused on encouraging change agility
the creation of a high performing actively engaged 
team which will consequently lead to improved 
business performance
a major health and safety incident 
impacting our customers or colleagues
there is a groupwide structure in place to support management through 
the provision of staff training auditing and specialist advice the assessment 
of health and safety risks is inbuilt into daily management routines and is 
monitored by a comprehensive structure of health and safety committees 
that are in turn overseen by a corporate health safety  environmental 
committee with board level oversight
we are committed to identifying initiatives that will 
enhance the safety culture and contribute to the 
continuous improvement of the safety and wellbeing 
of all our colleagues and customers
political and regulatory
dedicated management teams ensure full compliance with formal 
regulatory requirements we monitor stakeholder and political reactions  
to ensure we react to emerging political and regulatory developments
the group will continue to contribute to the 
constructive engagement with government agencies 
and other stakeholders to help create a sustainable 
framework for travel and tourism 
liquidity and counterparty credit 
we monitor liquidity and cashflow on a rolling 26week basis we continue  
to monitor and challenge the wider business to ensure cash targets are met 
in addition we monitor the performance of the group against the covenants 
set out in our lending facility we maintain ongoing communication with all 
providers of credit
the group will ensure it has sufficient liquidity 
cashflow and profit headroom to support delivery  
of our strategic initiatives
commodity currency and interest rate
we undertake hedging in line with group policy the group achieves certainty on which business 
segments can establish competitive brochure pricing
 “ it is the aim of the group to  
promote a culture where as a  
matter of good business practice 
both risk and opportunity are 
identified and managed”  20
thomas cook group plc annual report  accounts 2012
operating review
focused on improving  
our operations
the fourth quarter result was back in line with the 
prior year representing a major improvement in 
quarterly year on year financial performance 
the year end net debt position of £788m and substantial liquidity 
headroom of circa £1bn demonstrate the positive results of improved 
business performance monitoring together with the impact of asset 
disposals and the additional banking facilities secured during the year 
improvement in working capital practices combined with the 
development of robust cash forecasting processes has also enhanced 
the group’s ability to drive sustainable cash flow benefits 
the stabilisation plan implemented by the group early in the year  
is complete and provides a solid platform to build on the group is 
now focusing on improvements to its operations and some of the  
key focus areas for this are outlined in this report there is a real 
sense of urgency and pace of change sweeping across the group  
as we energise our people develop our strategic plan and drive  
its execution to rebuild a stronger sustainable group for the future 
revenue and underlying results
group revenue for the 12 months to 30 september 2012 was £9491m 
2011 £9809m down 3 but 1 higher on a constant currency 
basis likeforlike revenue was reduced by planned capacity 
management actions in the uk and west europe whilst the inclusion 
of acquisitions specifically in russia and the coop in the uk added 
£240m underlying gross profit was £2070m 2011 £2160m with  
the year on year reduction largely reflecting capacity reductions and 
higher fuel costs of £110m and the difficult trading environment 
despite input cost pressures the group’s overall gross margin was 
maintained at circa 22 through improved yield management and  
a reduction in unprofitable capacity particularly in the uk 
the group’s underlying profit from operations including an £11m 
contribution from the indian business which was disposed of during 
the year was £156m 2011 £304m significant progress was made 
under the uk transformation plan with benefits of £60m being 
recorded in the year however those benefits were offset by increased 
fuel costs and the adverse publicity surrounding our bank refinancing 
such that uk underlying profit from operations was £19m below last 
year northern europe had a strong end to the summer season and our 
german airline performed better in the second half of the year despite 
experiencing a difficult winter season the political upheaval in mena 
had a major negative impact on our french business whilst our  
north america business suffered from overcapacity in the market 
the group’s underlying net interest charge for the year was £146m 
an increase of £24m as a result of higher average debt and increased 
margin payable under our banking facilities 
separately disclosed items
included within separately disclosed items of £498m is a £300m 
charge as a result of a previously disclosed review of the carrying 
value of goodwill in our north america west europe and india 
businesses which was disclosed at the time of our interim results 
cash exceptional costs were £130m 2011 £90m and largely relate to 
the reorganisation and restructuring during the year of our uk north 
america and west europe businesses and costs in relation to the 
group’s financing 
earnings and dividends
as a result of the lower underlying operating profit and the 
separately disclosed items the group delivered a statutory loss 
before tax of £485m 2011 £398m loss the reported loss after tax 
was £590m 2011 £518m the underlying basic loss per share was 
37p 2011 earnings of 117p and the basic loss per share was 672p 
2011 607p no dividend will be paid for the year ended 30 
september 2012 
net debt
net debt was reduced by £103m to £788m as a result of proceeds 
from the sale of businesses and a substantial improvement in 
working capital management which compensated for the negative 
cash impact of circa £100m from committed capacity reductions  
the group’s asset disposal programme contributed £196m to the 
reduction in net debt and £346m to the increase in liquidity whilst 
the new management team began implementing improved 
processes to manage working capital 
outlook 
the group has embarked upon a transformation which will shape its 
future strategy and we anticipate making good progress during the 
current year as our customers are experiencing the financial realities 
of the weak economic environment we are focused on delivering 
higher quality and better value holidays whilst at the same time 
implementing measures to improve business profitability and  
cash flow
the year ahead is the initial stage in this recovery and as we embark 
upon our first year of business transformation we are optimistic 
about the future and will announce our full plans and additional 
financial benefits in the spring of 2013  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
21
directors’ report business review
uk
uk at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september  
2011 change
financial £m unless 
otherwise stated
external revenue 31094 32550 44
internal revenue 431 268 608
segment revenue 31525 32818 39
underlying gross profit 8143 7695 58
underlying gross profit  258 234 103
personnel costs 4274 4026
depreciation  amortisation 550 623
other operating expenses 3192 2705
underlying profit from 
operations

127 341 628
underlying operating profit 
margin 

04 10 600
nonfinancial
mass market risk
passengers
†
102
capacity
††
105
average selling price

49
load factor
†††
02
brochure mix

03
controlled distribution
‡‡
863 738 169
internet distribution
‡‡
347 301 153
see appendix 1 on page 134 for key
our uk business is undergoing a fundamental transformation and 
this year saw the first significant delivery of financial benefits from 
the series of initiatives to turnaround the uk business from a trading 
and operational perspective a full update on the progress under  
the plan is given on page 22 but the impact on operating profit 
performance for the year was principally through improved yield 
management processes and increased central control of discounts 
which together delivered significant benefits of around £45m in 
addition synergies from the coop transaction of approximately 
£15m were realised during the year and are expected to increase  
to around £25m annually in 201213
the positive impact of the turnaround actions was offset by trading 
pressures from the uncertain economic back drop increased input 
prices and the negative publicity surrounding the company in 
november 2011 underlying profit from operations reduced to 
£127m 2011 £341m and the underlying operating profit margin 
reduced to 04 2011 10 the underlying profit from operations 
does not include any impact from the sale of ticket and 
accommodation packages for the 2012 olympic and paralympic 
games this has been included within separately disclosed items
 
year ended 
30 september 
2012  
£m
year ended 
30 september 
2011  
£m
underlying profit from operations

   
uk  ireland 08 195
india 108 133
egypt 11 13
  127 341
management of our uk mainstream capacity to remove low or 
negative margin business resulted in a revenue reduction of around 
£240m but was broadly neutral at the ebit level and allowed 
significant fixed operating costs to be removed from the business 
the bookings intake pattern was distorted with a higher proportion 
of capacity being sold in the less profitable ‘lates’ market closer to 
departure as a result of negative publicity during the peak selling 
period of january to february 2012 however the actions we had 
taken to improve our yield management process and manage 
capacity together with the poor late summer weather in the uk 
ensured that we finished the year with strong sales and margins 22
thomas cook group plc annual report  accounts 2012
operating review continued
  £m
2011 uk underlying profit from operations 20
transformation benefits 60
fuel and hotel accommodation cost increases 62
management’s estimate of the impact of negative publicity 30
volume and mix 15
price and margin 6
overhead cost savings 34
2012 uk underlying profit from operations 1
controlled distribution of our mass market holidays rose to 863 
2011 738 primarily due to the impact of the coop transaction 
which completed at the start of the year and has now been fully 
integrated and is on track to deliver the planned synergies internet 
distribution of mass market products has also increased despite 
temporary issues with our main website at the start of the 2012 
calendar year which adversely impacted our growth in this area
our independent businesses in the uk faced strong competitive 
pressure which reduced margins in hotels4u and passenger volumes 
in our scheduled businesses sales of ancillary travel products and 
insurance also suffered volume decline which was directly linked  
to the reductions in footfall seen in our stores and our insurance 
business saw a rise in claims
in light of the continued difficult trading conditions cost control has 
been given much focus this year structural cost reductions included 
a reduction in our uk aircraft fleet which was reduced by six aircraft 
in winter 1112 and the closure of 149 retail stores in addition 
management took a number of additional actions to manage our 
cost base and reduce marketing spend and we benefited from the 
full year effect of closing the defined benefit pension scheme during 
the previous year
since the financial year end we have taken further action to ensure 
the size of our airline is appropriate for our business and have 
announced our intention to reduce the uk fleet by a further five 
aircraft during winter 1213 the reduced fleet will require fewer 
operational crew and fewer engineering and support staff and we are 
in a consultation period with the affected members of our business
also included in the uk segment for reporting purposes are the 
group’s indian and egyptian businesses which reported underlying 
profit from operations broadly in line with the prior year as part of 
the group’s actions to stabilise its financial position thomas cook 
india was sold in august 2012 reducing the net debt of the group by 
£80m our egyptian operation has broadly maintained its operating 
profit performance despite continuing political uncertainty
turnaround of our uk business 
for the financial year 201112 we delivered benefits of £60m  
at a cost of £36m which helped to mitigate the difficult trading 
environment and the negative publicity which we experienced  
earlier in the year we still expect over three years to deliver  
a fully annualised improvement in profitability of £140m  
for a total estimated cost of circa £70m
the initial focus of the uk turnaround plan has been on optimising 
yield reducing retail and tour operator discounts improving the 
operational efficiency of the organisation and facilitating faster  
more focused decision making the following is a summary of  
the key actions taken to date and the financial benefits delivered  
to date against target 
annual improvement
targeted by 
30 september 
2014 
£m
delivered at 
30 september 
2012 
£m
optimise the uk airline 10 5
refocus the product strategy in mainstream 
package holidays 15 4
improve yield management 40 19
rationalise distribution 30 15
operational excellence 45 17
total 140 60
1 optimise the uk airline
we reduced the uk fleet by six aircraft during winter 1112 as  
part of rightsizing the uk tour operator programme particularly  
in longhaul to reduce the risk to the business as previously 
announced around 350 employees left the business during the year 
through our constant review of customer requirements including 
the additional flexibility of third party flying arrangements we  
will continue to offer our customers greater flexibility and choice  
to this end we are currently consulting with our employees about  
our proposal to reduce the uk aircraft fleet by a further five aircraft 
at the end of their lease term during winter 1213 
2 refocus the product strategy in mainstream package holidays
for the summer 12 programme over 500 underperforming hotels 
were removed from the portfolio around 22 of properties whilst 
we introduced around 150 new properties focused on differentiation 
and exclusivity customers choosing differentiated products were  
up 17 making up 35 of package passengers for the summer 12 
season looking forward a further 220 underperforming properties 
have been removed for summer 13 as we continue to rationalise our 
product portfolio and pursue a narrower and deeper hotel strategy 
3 improve yield management
the implementation of a single commercial trading approach 
allowed us to better manage fast selling stock whilst a coordinated 
discounting approach to ensure that distribution channels are  
not competing against each other led to a substantial reduction  
in discount levels in retail shops we are now focused on rolling  
out the yield tools to our independent and specialist businesses 
4 rationalise distribution
since october 2011 we have closed 149 stores and five head office 
properties resulting in a headcount reduction of around 1200 
employees productivity improvements have been identified through 
a review and negotiation of commercial terms reduced discounting 
and alignment of terms and fees which will drive substantial 
commercial benefits 
5 operational excellence
as outlined previously operational excellence is about reducing and 
eliminating operational inefficiencies driven by organisational silos 
and overlapping manual processes in line with this we reviewed 
our contact centre operating model and location strategy in june 
2012 we proposed that the work currently undertaken in our 
bradford office would transfer to other thomas cook locations  
be outsourced to external specialists or be discontinued plans are 
now underway to close bradford and by march 2013 there will be an 
overall reduction of around 250 roles paperless tickets and epayslips 
have been launched during summer 12 and we have reduced 
brochures by 20 for the current financial year with further 
efficiencies expected in 201213 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
23
directors’ report business review
central europe
central europe at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september 
 2011 as restated change
financial £m unless 
otherwise stated
external revenue 25865 25464 16
internal revenue 511 538 50
segment revenue 26376 26002 14
underlying gross profit 3353 3415 18
underlying gross profit  127 131 31
personnel costs 1580 1546
depreciation  amortisation 94 120
other operating expenses 1178 1026
underlying profit from 
operations

501 723 307
underlying operating profit 
margin 

19 28 321
nonfinancial
mass market
passengers
†
62
flight inclusive 73
nonflight inclusive 36
average selling price

25
controlled distribution
‡‡
234 240 25
internet distribution
‡‡
68 70 29
see appendix 1 on page 134 for key
from 1 october 2011 the segment includes the east europe and russian businesses and 
the comparatives have been restated to reflect this nonfinancial data only includes 
russia in the year ended 30 september 2012 excluding russia from 2012 results in like 
for like comparators of passengers 05 thereof flight inclusive 10 nonflight 
inclusive 36 average selling price 27 controlled distribution 244 vs 240 
change 17 internet distribution 72 vs 70 change 29
our central europe segment now includes the east europe businesses 
in poland hungary and the czech republic together with our 
russian business which was acquired in july 2011
the segment delivered underlying profit from operations of £501m 
2011 £723m and an underlying operating margin of 19 
adversely affected by deteriorating margins in eastern europe and 
the inclusion of a full year result from russia revenue growth after 
adjusting for the impact of currency rates was 80 again principally 
reflecting the first full year of the russian business excluding russia 
currencyadjusted revenue growth was 27
 
year ended 
30 september 
2012  
£m
year ended 
30 september 
2011  
£m
underlying profit from operations

   
germany 606 696
east europe 19 07
russia 86 20
  501 723
in a highly competitive german market we achieved higher volumes 
and average selling prices with dynamically packaged products 
developing well and contributing to an improved gross profit on a 
currencyadjusted basis the economic crisis in greece led to an 18 
reduction in volume in that destination while we saw some recovery 
in demand for mena destinations which had been impacted in 
201011 öger tours our specialist tour operator to turkey 
successfully expanded its products into tunisia and egypt 
contributing to passengers for tunisia increasing by more than 35 
we also saw increased market share following the expansion of our 
sentido brand to tunisia combined with the results of airlines 
germany we generated an operating profit margin of 30 in the 
german market
our eastern markets experienced difficult market conditions with 
general economic uncertainty and some industry specific issues of 
overcapacity these pressures reduced revenue and margins resulting 
in lower gross profit winter sales of the newly integrated russian 
business were affected by issues in their important destinations of 
egypt and thailand overall russia made a positive contribution to 
gross profit but the year on year comparison is adversely impacted 
due to the inclusion of summer trading only in the prior year 24
thomas cook group plc annual report  accounts 2012
airlines germany
airlines germany at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september  
2011 change
financial £m unless 
otherwise stated
external revenue 8646 8016 79
internal revenue 3000 3187 59
segment revenue 11646 11203 40
underlying gross profit 3201 3745 145
underlying gross profit  275 334 177
personnel costs 1765 1777
depreciation  amortisation 619 571
other operating expenses 460 704
underlying profit from 
operations

357 693 485
underlying operating profit 
margin 

31 62 500
nonfinancial
sold seats
‡‡‡
thomas cook tour 
operators 33
3rd party tour operators 15
external seat only 323
total sold seats 96
sold seats
‡‡‡
short  medium haul 84
long haul 146
total sold seats 96
capacity
††
128
yield

39
seat load factor
†††
08
see appendix 1 on page 134 for key
our airlines germany segment reported underlying profit from 
operations of £357m 2011 £693m in a very competitive german 
airline market and against a very strong prior year comparator 
operating margin reduced to 31 2011 62 but remains market 
leading in germany results of the long haul business were slightly 
better than the prior year but short and medium haul margins were 
under pressure particularly in the first nine months of the year as a 
result of yield pressures from the significant market overcapacity in 
the winter season combined with german air passenger taxes and 
the impact of a considerable increase in fuel prices
total revenue was 40 higher at £11646m with currencyadjusted 
total revenue 104 ahead following the expansion of long haul 
capacity with the addition of two aircraft from winter 1112 the 
profitable growth to long haul destinations drove the 323 increase 
in seat only sales and saw yield growth of 41 while yields to short 
and medium haul destinations could only be increased by 14
the impact on the underlying profit from operations was mitigated 
by reductions in operating expenses as a result of the business’ 
ongoing efficiency programme and the groupwide airline synergies 
project ontime performance improved by 64 percentage points  
to 841 with consequent improvements in customer satisfaction
operating review continued
in russia we commenced a rigorous restructuring project to radically 
reduce the cost base and improve margins cost reductions are 
targeted through leaner back office functions and the closure  
of regional airport offices and nonprofitable shops margin 
improvement initiatives include the reduction of hotel and flight 
commitments more efficient capacity management together  
with hotel contracting rate benefits derived from the group’s 
purchasing power
controlled and internet distribution percentages show small declines 
following the inclusion of the russian business which is mainly 
distributed through third party retail agents excluding russia the 
remaining central europe businesses have seen growth in controlled 
and internet distribution
the central europe management team led by peter fankhauser  
has undertaken a thorough review of the german business and is 
focused on delivering our customers’ need for exclusive tailormade 
products in some circumstances and price competitive simple hotel 
accommodation in others in addition they continue to streamline 
processes in all central and support functions from 1 october 2012 
our operations in belgium and the netherlands also became the 
responsibility of the central europe team and consequently the 
segment will be renamed continental europe
as part of the actions to improve its financial position the group  
sold its interests in hoteles y clubs de vacaciones hcv on 27 july 
2012 hcv indirectly owns five hotels and a golf club and prior to 
sale it contributed an underlying profit from operations of £33m  
2011 £34m to the results of the central europe segment  
the sale reduced the group’s net debt by circa £80m directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
25
directors’ report business review
west europe
west europe at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september  
2011 as restated change
financial £m unless 
otherwise stated
external revenue 14674 17040 139
internal revenue 46 72 361
segment revenue 14720 17112 140
underlying gross profit 2411 2953 184
underlying gross profit  164 173 52
personnel costs 1192 1280
depreciation  amortisation 75 100
other operating expenses 1124 1194
underlying profit from 
operations

20 379 947
underlying operating profit 
margin 

01 22 955
nonfinancial
mass market
passengers
†
102
flight inclusive 92
nonflight inclusive 117
average selling price

38
controlled distribution
‡‡
602 609 11
internet distribution
‡‡
271 251 80
see appendix 1 on page 134 for key
from 1 october 2011 the east europe and russian businesses are reported within  
central europe and the comparatives have been restated to reflect this
our west europe segment comprises our operations in france 
belgium and the netherlands the underlying profit from operations 
was £20m 2011 £379m within this result france recorded an 
underlying loss from operations of £207m 2011 £109m on 
turnover of £4354m 2011 £5239m but operating profits were also 
reduced in belgium and the netherlands the underlying operating 
profit margin for the segment fell to 01 2011 22
 
year ended 
30 september 
2012  
£m
year ended 
30 september 
2011  
£m
underlying profit from operations

   
france 207 109
belgium  the netherlands 227 488
  20 379
the west europe segment has continued to be affected by the 
ongoing political unrest in the mena region and the economic 
uncertainty caused by the european debt crisis in the mena region 
we have seen some recovery in demand for tunisia but less than 
anticipated for morocco and the important market of egypt has 
deteriorated further external revenue in west europe decreased by 
139 on the prior year 74 on a currencyadjusted basis following 
capacity reductions in all markets but particularly in france due to 
carefully managed capacities the average selling price was increased 
by 38 but gross profit dropped by £542m £349m on a 
currencyadjusted basis to a 164 gross profit margin
the french market is acutely impacted by both domestic economic 
uncertainty and the political unrest in the mena region as the 
frenchspeaking destinations of tunisia and morocco are very 
popular with our french customers the french business has 
undertaken several initiatives to reduce the risk it carries and to 
strengthen its appeal in the current trading environment in addition 
to focusing closely on capacity management we introduced a new 
dynamic packaging engine to offer more flexibility to customers in 
terms of length of stay improved the value proposition of our 
differentiated ‘club’ products to interest more budgetorientated 
customers and have also shifted passenger volumes from mena 
affected countries to greece spain and other new destinations  
these improvements resulted in an increase in gross profit margin 
for the french business but this has been more than offset by the 
volume decrease 
the dutch market continues to be very price competitive and we 
have experienced strong margin pressure we further developed our 
differentiated and exclusive products and saw their share of revenue 
in the netherlands rise to more than 35 the belgian market  
was characterised by flight overcapacities and aggressive price 
competition strict capacity management in our tour operator to 
support margins led to revenue decreases in our belgian airline 
load factors improved by 48 percentage points to 887
overhead costs were reduced by £57m on a currencyadjusted basis 
the sale of the dutch retail shops in the prior year reduced the cost 
base by around £12m but it has been adversely affected by general 
inflationary pressures together with particular increases seen in it 
costs and in the property costs of the french retail network in 
belgium and the netherlands this was partly mitigated by reductions 
in personnel and marketing costs with belgium reducing full time 
staff by 60 and cutting its expenditure on temporary personnel
from 1 october 2012 responsibility for our operations in belgium 
and the netherlands was moved under the management of the 
current central europe segment team and restructuring plans have 
been established and initiated for these countries closer integration 
of all our continental europe businesses will provide the opportunity 
for cost efficiency and the sharing of best practice particularly by 
sharing common it systems and back office processes combined 
hotel contracting will further increase the purchasing power of  
these businesses
responsibility for the french business will be assigned to our group 
strategy director zubin randeria from 1 december 2012 the 
french management team supported by aforge finance is reviewing 
various options to help the business reach its full potential either 
through a restructuring a disposal of certain assets or a corporate 
transaction such as a merger or a sale 26
thomas cook group plc annual report  accounts 2012
northern europe
northern europe at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september  
2011 change
financial £m unless 
otherwise stated      
external revenue 11671 11527 12
internal revenue 65 65 00
segment revenue 11736 11592 12
underlying gross profit 3159 3157 01
underlying gross profit  269 272 11
personnel costs 1520 1467
depreciation  amortisation 171 167
other operating expenses 459 460
underlying profit from 
operations

1009 1063 51
underlying operating profit 
margin 

86 92 65
nonfinancial
mass market risk
passengers
†
19
capacity
††
19
average selling price

23
load factor
†††
00
brochure mix

67
controlled distribution
‡‡
871 857 16
internet distribution
‡‡
694 656 58
see appendix 1 on page 134 for key
operating review continued
aligning brands to 
maximise customer 
visibility
our northern europe segment delivered another very strong result 
with underlying profit from operations for the year of £1009m 2011 
£1063m this represents an improved performance in the second 
half of the year following a difficult winter affected by strong 
competition and weaker demand following floods in the key winter 
destination of thailand in the second half although the market 
remained competitive and input costs rose we were able to recover 
some ground on the record prior year performance to deliver an 
operating profit 5 behind the prior year
following winter capacity increases to maintain our position in a 
competitive market we took a prudent approach to summer capacity 
with a reduction of around 3 in light of the weak economic 
indicators this put us in a strong position to increase prices in both 
the brochure and late sales markets whilst improving our summer 
load factors as with the winter we saw a move towards later sales 
but this was much smaller and at significantly higher prices than  
the prior year currencyadjusted revenue for the year was up 41 
on the prior year driven by the higher average selling prices in  
the summer
the continuing success of our northern europe business is built  
on the strong focus on exclusive and differentiated products and on 
operational efficiency and cost control during the year we opened  
a further seven of our popular sunwing resorts and sunwing prime 
properties these hotels consistently book early and generate 
premium margins and in 201112 almost one in four of our 
customers stayed in one of these truly differentiated hotels in 
addition the distributional efficiency is enhanced by the high 
proportion of its bookings taken through controlled and internet 
distribution and we have again experienced strong growth in this 
area controlled distribution through owned websites shops and  
call centres accounted for 871 2011 857 of departed passengers 
and within that amount internet sales grew to 694 in the year
creating brand alignment
from december 2012 
thomas cook northern 
europe is introducing a 
single brand strategy 
symbolised by the heart logo 
the heart will have increased 
visibility throughout the 
customer journey with the 
aim being to improve 
customer loyalty directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
27
directors’ report business review
north america
north america at a glance financial highlights
key performance indicators
 
year ended 
30 september 
2012
year ended 
30 september  
2011 change
financial £m unless 
otherwise stated      
external revenue 2962 3492 152
internal revenue – – 00
segment revenue 2962 3492 152
underlying gross profit 430 648 336
underlying gross profit  145 186 220
personnel costs 410 365
depreciation  amortisation 40 39
other operating expenses 203 139
underlying lossprofit from 
operations

223 105 na
underlying operating 
margin 

75 30 na
nonfinancial
mass market risk
passengers
†
161
capacity
††
143
average selling price

44
load factor
†††
21
brochure mix

215
controlled distribution
‡‡
141 169 166
internet distribution
‡‡
357 364 19
see appendix 1 on page 134 for key
note internet distribution  includes independent travel bookings
as reported in our results for the first six months we made changes 
to the senior management of our north america segment during the 
first half of the year and the new team has taken action to stabilise 
the business and implement a turnaround programme for the 
mainstream operations this action includes changing our flying 
partner to deliver more flexibility and reduce our exposure to risk 
our new arrangements for the forthcoming winter programme will 
provide smaller seat allocations across a wider range of departure 
airports offering our customers greater choice and convenience  
it also removes the risk to the business of having to fill dedicated 
aircraft from a smaller number of airports we have also reviewed 
our hotel portfolio and are focusing on a core group of profitable 
hotels to improve our margins and enhance the experience for  
our customers
our north america segment had a very difficult year and reports  
an underlying operating loss of £223m 2011 profit of £105m this 
was caused primarily by continued market overcapacity which drove 
down average selling prices across our mainstream programme and 
the loss of an important premium hotel contract which adversely 
affected our mainstream product mix in addition demand was 
reduced by a very mild canadian winter which impacted the 
performance of our mainstream independent and retail businesses 
revenue in north america fell on a currencyadjusted basis by 
148 driven by reduced passenger volumes and average selling 
prices in mainstream and lower average selling prices across all 
businesses gross profit was adversely affected in mainstream by  
the lower prices and increased input costs in our independent 
operations which accounts for 75 of passenger volumes the  
impact on gross profit was principally from the lower average  
selling prices achieved 
overhead costs increased partly because of marketing support from 
hotel partners in the prior year and because of the full year impact 
of operating the sears travel agencies within sears retail stores the 
full integration of this licensing agreement was completed this year 
and we are beginning to see the benefits as the market share of  
our mainstream business through sears has increased threefold  
for winter 1213 mainstream controlled distribution decreased 
however we were able to increase sales of our independent products 
through sears by 70 within the overall overhead increase cost 
efficiencies of approximately £2m were delivered during the year  
and management continue to target further cost reductions 
principally through the adoption of simplified processes and 
technology based solutions
the turnaround plans initiated by the new management team in 
2012 are delivering significant trading improvements particularly  
in the mainstream business where we are exposed to significantly  
less risk in winter 1213 than in winter 1112 the management 
team continue to develop plans to derisk the business leverage  
its marketleading independent travel business and simplify 
operations to better align the cost base with revenues 28
thomas cook group plc annual report  accounts 2012
rebuilding strength and  
a sustainable future
financial results and performance review
£m unless otherwise stated
year ended 
30 september 
2012
year ended 
30 september 
2011
year on year 
change
revenue 94912 98089 3177
underlying gross profit 20697 21600 903
underlying profit from 
operations
1
1561 3036 1475
share of results of associates  
 joint venture 21 23 44
net investment incomeloss 04 48 52
finance charges 1459 1219 240
underlying profit before tax 127 1746 1619
separately disclosed items 4980 5728 748
loss before tax 4853 3982 871
tax 1048 1198 150
loss for the year 5901 5180 721
underlying lossearnings  
per share p 37 117 154
basic loss per share p 672 607 65
dividend per share p – 375 375
net cash flow
2
2450 801 3251
net debt 7883 8909 1026
1  underlying profit from operations is defined as earnings before interest and tax  
and has been adjusted to exclude all separately disclosed items it also excludes  
our share of the results of associates and joint venture and net investment income
2  net cash flow is the net movement in cash and cash equivalents including the 
proceeds of sale and leaseback excluding the drawdown and repayment of 
borrowings repayments under finance leases and the payment of facility fees
income statement
revenue and underlying profit from operations
group revenue for the year reduced by 32 to £94912m increase 
of 09 at constantcurrency largely reflecting the translation impact 
of the weakening euro and swedish krona on the group’s foreign 
currency denominated sales the underlying increase is the result  
of a number of offsetting movements acquisitions including 
cooperative travel in the uk and the full year impact of our russian 
business and sears travel in central europe and north america 
respectively added circa £240m our operations in central europe 
northern europe and airlines germany all increased capacity and 
added circa £250m to revenue while the uk west europe and north 
america segments reduced capacity and their revenue reduced  
by circa £400m group revenue was derived 72 from mainstream 
travel 27 from independent travel and 1 from financial services 
54 of passengers bought mainstream travel products and 46 of 
passengers bought independent travel products
group underlying profit from operations was £1561m a decrease  
of £1475m on the prior year we saw positive impacts from prudent 
capacity management in our major markets with a reduction of low 
or negative margin volumes in the uk and higher average selling 
prices in most markets in addition we saw the first financial benefits 
of the transformation programme underway in the uk with 
improved yield management increased central control of 
discounting and retail synergies delivering benefits of around £60m 
however these have been more than offset by a combination of 
higher input costs principally aviation fuel together with the impact 
of negative publicity following our announcement of discussions 
with our banking group in november 2011 
we saw a continuation of the previously announced poor trading in 
our french and north america businesses and we are taking steps to 
minimise cash requirements and considering the best longterm 
options for these businesses 
financial review directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
29
directors’ report business review
the main drivers of the year on year fall in underlying profit from 
operations were
£m 
2011 group underlying profit from operations 304
acquisitions and disposals 18
volume and mix 54
price and margin 68
fuel and hotel accommodation cost increases 157
overhead cost savings 35
exchange translation 22
2012 group underlying profit from operations 156
the group’s costs by type before separately disclosed items can be 
broken down as follows
year ended 
30 september 
2012
year ended 
30 september 
2011
year on year 
change
accommodation 34 35 1
aviation excl fuel 29 30 1
fuel 9 9 –
commission and other 8 7 1
personnel 12 11 1
other operating expenses 8 8 –
separately disclosed items
separately disclosed items consist of exceptional operating and 
finance items ias 39 fair value remeasurement profit or loss on 
disposal of associates impairment of goodwill and the amortisation 
of business combination intangibles these are costs or profits that 
have arisen in the year which management believes are not the 
result of normal operating performance they are therefore disclosed 
separately to give a more comparable view of the year on year 
underlying trading performance
the table below summarises the separately disclosed items  
which have been included in the full year accounts
£m
year ended 
30 september 
2012
year ended 
30 september 
2011
year on year 
change
affecting profit from operations
reorganisation and restructuring 807 737 70
refinancing costs 301 – 301
impairment of goodwill and 
other intangible assets and 
amortisation of business 
combination intangibles 3687 3969 282
ias 39 fair value remeasurement 91 59 150
other 50 937 887
4754 5702 948
affecting income from 
associates and jvs
lossprofit on disposal  
of associates 09 103 112
affecting net finance costs
write off of unamortised bank 
facility fees 231 09 222
other exceptional finance 
charges 09 29 20
ias 39 fair value remeasurement 23 91 114
217 129 88
total 4980 5728 748
reorganisation and restructuring costs of £807m principally relate  
to the projects underway to transform the uk business £356m  
and turn around the underperforming businesses in west europe 
£269m and north america £158m refinancing costs of £301m 
relate to costs incurred in relation to the renegotiation of the group’s 
banking facilities 
“ we saw the first financial benefits 
of the transformation programme 
underway in the uk” 30
thomas cook group plc annual report  accounts 2012
our decision to sell our indian business and the deterioration in 
profitability of our french and canadian businesses led to a 
reassessment of the carrying values of goodwill in those segments 
and certain other assets in total the writedown is £3687m and is  
of a noncash nature £2996m is impairment of goodwill of which 
£960m relates to the writedown of the carrying value of our indian 
business to fair value less costs to sell upon its classification as held 
for sale the sale of the indian business was subsequently completed 
in august 2012 
the remaining goodwill impairment relates to the french £944m 
and canadian £1092m businesses and reflects a decrease in 
management’s estimates of the likely future profitability and cash 
flows of those businesses £406m relates to the impairment of 
intangible fixed and current assets principally in respect of prepaid 
contracts for marketing and licensing and capitalised computer 
software costs for which management consider the carrying value to 
be in excess of the recoverable amount the software was considered 
to be impaired as part of the group’s review of its ecommerce 
offering the marketing and licensing costs were sunk costs in 
relation to agreements to sell ticket and accommodation packages 
for the 2012 olympic and paralympic games which management 
consider to have become onerous during the year the sale of 
packages themselves generated a trading profit of £96m which  
has been included within other separately disclosed items with an 
overall net loss of £172m recognised during the year we incurred 
noncash costs of £285m in relation to the amortisation of business 
combination intangibles
ias 39 fair value remeasurement
ias 39 as amended requires the time value element of options used 
for hedging the group’s fuel and foreign currency exposure to be 
written off to the income statement as incurred as this is purely a 
timing issue but can give rise to significant unpredictable gains and 
losses in the income statement management has decided to 
separately disclose the impact in the income statement to assist 
readers of the accounts in better understanding the underlying 
business development for consistency we also separately disclose 
the timing effect within net finance charges of marking to market  
the forward points on our foreign currency hedging we have 
therefore separately disclosed a profit of £91m in the operating 
result 2011 loss of £59m and a profit of £23m in net finance  
costs 2011 loss of £91m 
income from associates and joint ventures
our share of the results of associates and joint ventures which 
comprises mainly hotel participations was a profit of £21m 2011 
loss of £23m the prior year result reflected deteriorating trading in 
a business that was subsequently sold 
net investment income
the net investment income in the year was £04m 2011 loss of 
£48m the prior year loss mainly comprised a £38m impairment  
of an investment in a german tour operator aldiana 
net finance costs
net finance costs excluding separately disclosed items amounted  
to £1459m an increase of £240m on the prior year the increase 
reflects higher levels of average borrowings and an increase in 
margin payable following amendments to the group’s banking 
facilities in may 2012 
tax
the tax charge for the year was £1048m 2011 £1198m excluding 
the effect of separately disclosed items change in tax rates and the 
impairment of a deferred tax asset this represents an effective tax 
rate of 3890 2011 410 on the underlying profit for the year 
this percentage rate is heavily impacted by the low level of 
underlying profit and is not expected to be representative of the 
ongoing effective tax rate deferred tax assets of £448m in the uk 
have been derecognised following a revised assessment of the 
entities in which the forecast taxable profits are expected to arise  
and deferred tax assets of £223m in france have been derecognised 
following the deterioration in trading in that business and review  
by new management in each case the derecognition reflects the 
reduced likelihood of utilising the related taxable losses within an 
acceptable time period
total taxable losses available to carry forward in the group at 30 
september 2012 were £25bn and as at 30 september 2012 deferred 
tax assets were recognised with respect to £05bn of this amount
earnings per share and dividends
the underlying basic loss per share was 37p 2011 earnings of 
117p the basic loss per share was 672p 2011 607p
no dividends were paid in the year and as previously announced 
the board has decided not to declare any further dividend payments 
whilst the group rebuilds the balance sheet the total dividend per 
share for the prior year was 375p
cash and liquidity
£m
year ended 
30 september 
2012
year ended 
30 september 
2011
year on year 
change
net cash from operating activities 1519 2886 1367
exceptional items 1299 901 398
capital expenditure 1383 1865 482
interest paid 1165 983 182
free cash flow before 
exceptional items 270 939 669
acquisition of businesses 324 192 516
disposal of businesses 1227 32 1195
disposal of fixed assets 340 141 199
dividends received – 59 59
dividends paid 333 920 587
proceeds of sale and leaseback 1894 – 1894
other items net 27 41 14
exceptional items 1299 901 398
net cash inflowoutflow 2450 801 3251
as a result of the decline in underlying profitability the group saw a 
reduction of £1367m in cash inflow from operating activities and a 
£669m reduction in free cash flow before exceptional items during 
the year the reduction in free cash flow was mitigated by 
significantly lower capital expenditure mainly as a result of a 
reduction in nonessential it spend the increase in interest paid of 
£182m reflects the higher levels of average borrowings across the 
year and increases in interest rates arising from the amendments to 
the group’s banking facilities
financial review continued directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
31
directors’ report business review
acquisition of businesses inflow of £324m reflects cash received on 
the joint venture with the cooperative group and the midlands 
cooperative partially offset by cash paid for the acquisition of tour 
vital and panameo two specialist tour operators based in germany 
in addition acquisition of businesses includes adjustments to the 
consideration for algarve tours an incoming agency based in 
portugal that was acquired at the end of the prior year and payment 
of deferred consideration on other historical acquisitions gold 
medal essential travel and hotels4u disposal of businesses inflow  
of £1227m includes £610m of net proceeds from the disposal of the 
group’s indian business in august 2012 and £548m of net proceeds 
from the disposal of the group’s interest in hoteles y clubs de 
vacaciones in july 2012 as well as proceeds from the disposal of 
explorers hotel and the dutch retail business totalling £69m in 
addition the group’s asset disposal programme generated £340m 
during the year through the disposal of surplus office buildings in the 
netherlands and belgium and a vacant hotel in mexico with the sale 
and leaseback of aircraft in airlines germany and the uk adding a 
further £1894m
dividends paid includes £327m for payment of the interim dividend 
for 2011 of 375p per share since the declaration of the 2011 interim 
dividend the group has announced a suspension of dividend 
payments until it has rebuilt the balance sheet
net debt being cash less borrowings overdrafts and finance leases 
at the year end was £7883m 2011 £8909m £50m was repaid 
under the term loan agreement during october 2011 reducing the 
term loan from £200m to £150m headroom under the banking 
facilities and cash freely available to repay those facilities as at  
30 september 2012 was £981m compared to £821m as at  
30 september 2011
segmental performance review
segmental performance presented in the operating review on pages 
21 to 27 is based on underlying financial performance before 
separately disclosed items and the segmental narrative is provided 
on this underlying basis
corporate
financial £m
year ended 
30 september 
2012
year ended 
30 september 
2011 change
underlying loss from operations 230 268 142
see appendix 1 on page 134 for key 
the costs associated with running the corporate headquarters and 
central functions relating to the group ota destination management 
and central it functions reduced by £38m to £230m this 
movement reflects lower personnel costs offsetting increased costs  
in the ota 
treasury activities
the group’s treasury department has primary responsibility for 
treasury activities and these are reported regularly to the board the 
group treasury function is subject to periodic independent reviews 
and audits which are then presented to the audit committee
treasury policies
the group is subject to financial risks in respect of changes in fuel 
prices foreign exchange rates and interest rates it is also exposed to 
counterparty credit risk and availability of credit facilities within its 
business operations to manage these risks the board has approved 
clearly defined treasury policies covering hedging activities 
responsibilities and controls the policies are reviewed regularly to 
ensure that they remain appropriate for the underlying commercial 
risks the policies also define which financial instruments can be 
used by the group to hedge these risks the use of derivative 
financial instruments for speculative purposes is strictly prohibited
management of liquidity risk and financing
group treasury’s primary objective is to ensure that the group is  
able to meet its financial commitments as they fall due this  
involves preparing a mediumterm cash flow forecast using the 
annual budget and threeyear plan and ensuring that the group  
has sufficient available cash and headroom under its committed 
facilities in addition a rolling 26week cash flow forecast is used  
to manage the group’s shortterm cash and borrowing positions 
borrowing facilities
the group’s funding arrangements include a €400m bond maturing in 
june 2015 and a £300m bond maturing in june 2017 both issued in 
april 2010 in addition the group has committed bank credit facilities 
totalling £11bn provided by a syndicate of banks these comprise a 
£150m term loan a revolving credit facility of £850m and an additional 
revolving credit facility of £200m £89m of which was mandatorily 
prepaid and cancelled due to the sale of our indian business and is  
now £111m all of these facilities are committed and mature on  
31 may 2015 as at 30 september 2012 the average remaining term  
of the bonds and committed bank credit facilities was 30 years  
2011 32 years
guarantee facilities
in addition to debt facilities the group has a requirement for  
bonding and guarantee facilities principally for consumer protection 
guarantees the group has £200m of committed bonding and 
guarantee facilities provided by seven of the syndicate banks during 
the year these guarantee facilities were extended and now mature in 
may 2015 
counterparty credit risk
the group enters into fuel foreign exchange and interest rate 
derivative contracts and deposits surplus cash with approved banks 
and financial institutions with strong credit ratings each counterparty 
has a credit limit authorised by the board and credit risk is reduced  
by spreading the deposits and derivative contracts across a number  
of counterparties  32
thomas cook group plc annual report  accounts 2012
our approach
our approach to sustainability is aligned with the board’s 
responsibility for the longterm success of the group since the 
appointment of the group chief executive officer and the group 
chief financial officer in july 2012 there has been renewed focus 
and significant steps taken to develop and strengthen a number of 
key areas that fall within the sustainability agenda 
•	 the top 100 managers across the group are fully engaged with  
the objectives we are working to achieve we have 15 separate 
transformation initiatives each of which is being led by our most 
talented business leaders and high potential talent of the future 
see pages 15 to 17 for further information
•	 these initiatives are contributing to the development of a 
longerterm strategy which will be presented to the market in 
spring 2013
•	 a number of senior management appointments have been made 
to strengthen the areas of cash management and forecasting risk 
management internal and financial controls and the 
management of internal audit 
•	 the thomas cook leadership council has redefined the group’s 
values behaviours and ways of working in a major initiative to 
build a more effective organisation this initiative together with 
the focus on risk and controls and our trust commitments to our 
people and our stakeholders are being brought together under a 
new code of business conduct see page 33 and
•	 the thomas cook trust agenda includes our significant people 
initiatives as well as the commitments we make towards our 
customers our suppliers and the communities in which we work 
a summary of our approach to these three key areas is detailed  
on the following pages
our people
building an effective organisation
our people are at the heart of our business we have 31000 
employees across 21 countries who will be the driving force behind 
our future success as we rebuild the organisation we want to ensure 
that thomas cook is a great place to work therefore we have the 
following key priorities for our people agenda in the year ahead
renewed focus on 
longterm sustainability
engagement and involvement
•	 engage and energise all our employees by having clear objectives 
in place and regularly reviewing performance against them so 
that employees are motivated to deliver outstanding service that 
inspires and delights our customers 
•	 standardise our employee engagement surveys across the group 
and
•	 continue to encourage employees to provide the senior 
management team with input and feedback by email surveys  
and facetoface
talent assessment and development
•	 assess and develop our key talent to ensure that we have the best 
leaders running the group and appropriate succession plans  
in place 
reward and recognition 
•	 ensure that we have the right incentive programmes in place that 
recognise and reward employees against high performance goals 
and quantifiable measures
our global people agenda is being led by the group ceo and  
is focusing on how we embed the new values drive greater 
crossregion collaboration and alignment and further break down 
silo behaviour human resources teams across the group are working 
together to ensure an increased focus on our people to make sure 
they feel inspired engaged and recognised for their contribution  
and developed to reach their full potential wherever they work in  
the world
group ceo direct reports
the group ceo regularly holds meetings amongst her direct reports 
to discuss a range of issues in relation to the strategic and 
operational development and performance of the business the 
direct reports team comprises the most senior business leaders and 
group function heads and like the thomas cook leadership council 
see below is both culturally and gender diverse reflecting the wide 
range of diversity amongst employees across the group
thomas cook leadership council
on joining the group harriet green formed the thomas cook 
leadership council ‘tclc’ the tclc comprises her direct reports  
the individual business leaders and functional heads in september 
2012 the first meeting of the tclc took place in london this gave 
business leaders from across the group the opportunity to meet and  
it encouraged greater collaboration the sharing of best practice and 
breaking down of silos 
sustainability directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
33
directors’ report business review
our values
succeed as one team
we support and trust each other and work as a single 
worldwide high performing team
1
deliver for our customers
we are here to deliver the best possible customer experience 
today offering value flexibility and choice while innovating 
to meet the changing future needs of our customers
2
engage each other
we recognise thomas cook people are the heart of our 
success we are determined to energise and inspire each 
other seeking out ideas and making sure we’re all clear on 
our direction
3
drive for results
we are resilient and have the courage and determination to 
succeed and hold ourselves accountable for making robust 
factbased speedy decisions for lasting value
4
act with integrity
we maintain the highest ethical standards and transparency 
in our work and in our dealings with customers partners 
stakeholders and fellow employees we keep our 
commitments and are honest fair and trustworthy
5
going forward the tclc will meet four times a year to review the 
group’s performance and strategy to enable them to communicate 
effectively with the wider organisation
values and ways of working
at its first meeting the tclc worked together to create and gain 
alignment on leadership ways of working as well as on the new  
set of values that will help guide the group through its  
strategic transformation 
the values have now been launched across the group and are  
being brought to life and embedded through our behaviours  
and ways of working 
code of business conduct 
the values also fully support the group’s new code of business 
conduct which will guide how we work in the future the code will 
be launched in early 2013 and training will be given to all employees 
to ensure that they all live and work by the standards in the code 
compliance with the code will be a measurable objective for  
all managers
engagement and involvement
our people are well placed to tell us how we are performing as an 
employer and in 201112 they had many opportunities to do so 
in her first week as group ceo harriet green invited all employees  
to participate in the my views survey a confidential channel through 
which they could express their frustrations highlight opportunities 
and share what they would do if they were ceo through this survey 
as well as emails feedback through the group intranet and 
facetoface meetings more than 8000 people took the opportunity 
to have their say and the common themes are clearly visible in the 
shaping of the group’s longerterm strategy ensuring our people feel 
more involved and that their inputs are welcomed valued and are 
helping create our future 
for the fifth consecutive year we conducted employee engagement 
surveys which give every single employee across the group the 
opportunity to share their open and honest views on how they feel 
about working for the group what we are doing well and how we 
could improve a key objective for the current year is to improve  
and standardise these surveys across the group to ensure that  
they operate in the most effective way 
our global focus on people will drive us to continually do more  
to fully engage and inspire people and for the coming year every 
business leader will have a clear engagement performance measure 
and will be rewarded in line with their respective targets this builds 
on wellestablished and successful practice in some of our segments 
like northern europe where leaders’ reward is directly linked to the 
engagement survey and has resulted in continuous annual 
improvements in scores and response rates 
our people are hungry for information so regular open and honest 
communications from the leadership team are a priority going 
forward to succeed our people need clarity on where the group  
is headed our strategy to get there and the part they can play in 
delivering that success frequent effective communication is vital 
and with the creation of a new group intranet in 2012 and the 
appointment of our new group head of communications jenny 
peters the group will further improve its internal and external 
communications in 2013 and beyond 
reducing costs and improving cash generation are key 
transformation priorities as well as creating a profitable growth 
strategy in order to do so our people understand we have to make 
difficult decisions some with the potential to impact on them  34
thomas cook group plc annual report  accounts 2012
personally such decisions are necessary to secure a longterm and 
sustainable future for our businesses and whilst we are absolutely 
committed to taking the actions some can be painful for those 
directly impacted as a group we are committed to ensuring that 
anyone negatively impacted is treated fairly and with respect we 
ensure that any individual affected is fully supported to take the  
next steps in their career within or outside of the group 
talent assessment and development 
we will refocus our attention on effective succession planning to 
support our future growth strategy in 2013 providing the board  
and the group ceo’s direct reports with a detailed assessment of  
the talent in our businesses and succession coverage a significant 
number of external appointments recently have been recruited at 
the leadership level many of whom are already identified as having 
potential for further roles deeper into the organisation succession is 
being further strengthened for example in airlines germany 70 of 
its recent leadership positions were filled by internal promotions
to stretch our people we develop breadth as well as depth of 
knowledge through formal development programmes and offering 
work placements and secondments as the official provider of short 
breaks to the 2012 olympic and paralympic games we had the 
opportunity to involve our people through secondments and 
volunteering with locog as well as in our own ‘games time team’ 
who looked after our customers some even had the honour of being 
chosen as torch bearers nominated for their outstanding 
contribution and personal values in the latter part of 2012 and into 
2013 we are also developing the talent of our people through their 
involvement in the development of our strategic plan for the future
reward and recognition 
during the year we have placed renewed focus on ensuring a 
consistent approach to pay benchmarking across the group and  
work in this area will continue we have signalled that after the 
announcement of our strategy review there will be a review of 
reward policy that will underpin our efforts to ensure fair and 
effective reward policies across the group with outcomes clearly 
aligned to the achievement of strategic objectives 
many of our employees already have an element of their reward 
directly linked to their personal performance through group  
bonus programmes bonus targets are reviewed annually to  
reinforce the link between achievement of personal objectives the 
performance of the business and their reward we are intensifying 
efforts to ensure that individuals have clear strategic and financial 
objectives linked to high performance in the business and  
the transformation
we will continue to use reward tools such as bonus and recognition 
programmes to drive performance improvement and reward great 
individual and team achievements and positive role model 
behaviours share ownership is encouraged however with recent 
disappointing share price performance we have a need to act 
responsibly and prudently in our utilisation of share awards we are 
reinforcing the linkages between reward and talent so that we target 
our discretionary reward programmes to support the talent and 
succession initiatives
diversity and inclusion
we believe our diversity is an essential part of how we do business 
and meet the needs of our equally diverse customer base we 
operate in 21 countries employing people and working with 
customers and suppliers from a broad range of backgrounds  
and cultures 
recent appointments to the board have strengthened our diversity 
across a range of measures including skills experience nationality 
and gender the leadership teams across many of the group’s 
markets and the ceo’s direct reports are increasingly diverse 
greater sharing of best practice across the group and local insights 
further increase the breadth and depth of knowledge which 
contribute to effective and robust decision making looking 
specifically at gender diversity across the group women represent 
24 of our board and ceo direct report positions and circa 60 at 
middle and junior management levels 
we do not tolerate any form of discrimination and aim to reflect the 
diversity of the communities in which we operate we are committed 
to treating people fairly and ensuring that our employment policies 
are free from any form of unlawful discrimination against any 
employee on the grounds of sex gender reassignment sexual 
orientation pregnancy race colour nationality ethnic or national 
origin religion or belief age and disability
environment
we manage our environmental performance through our group 
environmental policy some of our operating companies have formal 
environmental management systems such as iso 14001 to which 
our uk and scandinavian airlines are accredited our head offices  
are also implementing local environmental management systems 
for instance our german head office achieved the ecoprofit 
accreditation in 2012 ecoprofit is a programme for sustainable 
development and stands for ecological project for integrated 
environmental technology
sustainability continued directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
35
directors’ report business review
we have invested in building a database system to strengthen our 
data reporting analysis and tracking and enable us to identify  
areas for improvement 
we continually assess changing environmental legislation and likely 
impacts on the business this includes the european emissions 
trading scheme affecting our group airlines the carbon reduction 
commitment energy efficiency scheme affecting the uk business  
and the introduction of mandatory reporting of greenhouse 
gas emissions
emissions and energy
although 95 of our carbon emissions come from our aircraft fleet 
our airlines are among the world’s most efficient due to our high load 
factors and continual investment in fuel efficiencies projects have 
included pilot training investment in lightweight equipment such  
as seats containers and trolleys and improving data management
the remaining carbon emissions come from electricity and gas 
consumption in our buildings and vehicle fuel used in business 
travel we have implemented a variety of projects to reduce 
electricity consumption including trialling led lighting in our retail 
stores replacing old inefficient lighting systems with systems with 
inbuilt occupancy and daylight sensors as well as raising employee 
awareness about saving energy
we report annually to the carbon disclosure project an independent 
organisation which works to drive greenhouse gas emissions 
reductions organisations are encouraged to measure disclose 
manage and share information about greenhouse gas emissions  
the company had a disclosure score of 77 for its 2012 response 
which placed us in the top quarter of ftse reporting companies
resource use and waste
while our priority is to avoid waste where waste is inevitable we  
aim to reuse or recycle it our airlines have set up inflight recycling 
programmes and encouraged their base airports to implement the 
necessary structure to receive recycled waste they have also worked 
on engaging destination airports to implement similar infrastructures 
to ensure waste can be recycled outbound as well as inbound many 
segments have moved towards edocumentation for both customers 
and employees to reduce paper consumption and brochure printing
marketplace
we have worked with our supply chain to build trust increase 
efficiency and reduce costs and waste in 2011 we subscribed  
as a group to the travelife sustainability system which is a  
system designed to assist the tourism supply chain measure their 
environmental and social impacts and is dedicated to making the 
holiday experience more sustainable through this we continue to 
encourage best practice worldwide and now have 228 contracted 
hotels holding a travelife award which is an increase of 71 from  
the previous year 
as well as encouraging all our contracted hotels to participate in 
travelife we have been working to improve our own hotels so  
that we can lead by example
•	 all 10 of our sunwing hotels have travelife gold awards  
and certain of our hotels also have euecolabel 
•	 our sentido brand launched an ambitious programme to have  
all hotels at travelife award level by 2013 sentido currently has 
16 hotels representing 34 of its total hotels at award level and 
is working to raise awareness with a large percentage of its 
customer base and
•	 our neilson hotels are subscribing to travelife for the second time 
and are going through the auditing process this financial year and 
our eldorador hotels are also working towards travelife awards 
customer health and safety is also a high priority both for our group 
airlines and in the hotels we sell all our operations are carefully 
managed and we aim to minimise risk and improve our processes 
wherever possible our airline businesses in particular have a strong 
safety culture and we apply many of the principles from those 
businesses to ensuring the safety of our customers in other parts  
of our supply chain
the group’s health and safety auditing for customer accommodation 
excursion and transport suppliers was outsourced to argent hs 
experts in health and safety and risk management in may 2012 this 
approach enables the auditing by qualified hs professionals of 
thomas cook suppliers to a consistent framework across our 
destinations argent risk assessments focus on the safety 
management systems employed by suppliers and evidence that these 
comply with our robust hs requirements escalating concerns and 
defects so that remedial action can be taken to mitigate andor 
remove any identified risks
whilst everything possible is done to ensure accidents are avoided  
it is not always possible to prevent all accidents therefore it is 
standard practice for a full review of any accidents to be initiated  
to establish details and enable learnings to be taken to prevent 
reccurrence incident details are recorded in a database and resulting 
management information is reviewed regularly to identify and act 
upon any emerging trends and used to benefit the continuous 
improvement of hs for our customers
communities
our business longevity depends on the health and prosperity of both 
our home communities where we live and work and destination 
communities where we visit we are developing a groupwide 
community strategy which will cover these communities each of our 
markets has responsibility for developing charitable activities in the 
uk for example the thomas cook children’s charity has raised over 
£1 million which has gone towards projects for sick and 
disadvantaged children 
in destination communities in particular it is our responsibility to 
promote and safeguard children’s welfare we must raise awareness 
among our people customers suppliers and other stakeholders 
ensuring they are suitably informed and trained to identify and react 
effectively when child safety may be at risk
further to the groupwide child protection policy we launched in 
2011 the group has committed to ‘the code’ – the international 
code of conduct driven by the industry which is designed to protect 
children from sexual exploitation in travel and tourism
progress towards our 2020 targets
we have established a series of targets and objectives looking 
forward to 2020 we will measure and report on progress towards 
those targets as part of our annual sustainability report  
wwwthomascookgroupcomsustainability 36
thomas cook group plc annual report  accounts 2012
over
310m 
website visits
69 
internet sales in 
northern europe
over
800 
destinations offered by 
central europe directors’ report corporate governance
thomas cook group plc annual report  accounts 2012
37
directors’ report business review
directors’ report
corporate governance
38 board of directors
40  corporate governance report
53 remuneration report
65 other disclosures
giving customers what they want by focusing on 
effective convenient distribution channels and  
a true multichannel experience
focus
high tech and high touch
we are harnessing technology to provide our customers with the information and  
ease of accessibility they need without ever losing the human touch to enhance  
their holiday experience from the first time they contact us
financial statements 38
thomas cook group plc annual report  accounts 2012
board composition
chairman 1
independent nonexecutive directors 4
nonexecutive director 1
executive directors 2
board tenure
 1 year
1 – 4 years
 4 years
board of directors
1 frank meysman nonexecutive chairman 60
appointment october 2011
committee memberships chairman of nominations committee
skills  experience frank meysman was appointed chairman 
designate of the company on 1 october 2011 and became chairman 
on 1 december 2011 he has had a successful executive career in 
dynamic global brand companies including procter  gamble 
between 1977 and 1986 douwe egberts between 1986 and 1990 and 
the sara lee corporation between 1990 and 2003 where from 1997 
he was executive vice president and a member of the board of 
directors since leaving sara lee frank has been a nonexecutive 
director including chairman of a number of public and private 
international companies
other appointments chairman of betafence and jbc nv  
he is also an independent representative director of picanol nv 
warehouses de pauw wdp and spadel sa 
2 harriet green obe group chief executive officer 50
appointment july 2012
committee memberships member of health safety  
environmental committee and nominations committee
skills  experience harriet green joined the company as group 
chief executive officer on 30 july 2012 prior to this she was chief 
executive officer of leading high service technology distributor 
premier farnell plc harriet is a global executive with extensive 
multichannel business leadership experience of the worldwide 
technology and industrial markets she has driven innovation and 
strategic transformation through profitable global growth strategies 
and delivered industry leading results harriet has a real focus on 
employee engagement having lived and worked on four continents 
running businesses for premier farnell and volume distributor arrow 
electronics inc
other appointments nonexecutive director of bae systems plc and 
emerson electric co she is also a member of the uk prime minister’s  
business advisory group and a founder member and trustee of the 
peaceworks foundation
5 4 9
1 2 3
6 7 8 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
39
directors’ report business review
7 peter marks nonexecutive director 63
appointment october 2011
committee memberships chairman of health safety  
environmental committee member of nominations committee
skills  experience peter marks was appointed as a nonexecutive 
director on 1 october 2011 he has over 45 years’ experience in the 
retail industry and has managed a broad range of businesses and 
functions he was appointed to his current role as group chief 
executive the cooperative group in 2007 and prior to this he  
held a number of senior positions including chief executive  
united cooperatives between 2002 and 2007 and chief executive 
yorkshire cooperatives from 2000 to 2002
other appointments he is on the board of a number of 
cooperative group businesses including the cooperative bank plc
8 martine verluyten independent nonexecutive director 61
appointment may 2011
committee memberships chairman of audit committee  
member of nominations committee and remuneration committee
skills  experience martine verluyten was appointed as an 
independent nonexecutive director on 9 may 2011 she has significant 
international financial and it expertise and has held a number of 
senior finance positions across the telecommunications electronics 
and materials sectors between 2006 and 2011 she was chief financial 
officer of umicore a brusselsbased materials technology group and 
from 2000 to 2006 she was group controller and subsequently chief 
financial officer of the mobile telephone operator mobistar 
other appointments nonexecutive director of 3i group plc 
supervisory board member of stmicroelectronics nv and board 
member of incofin cvso she also chairs the audit committee of the 
flemish region in belgium 
9 derek woodward group company secretary 54
appointment april 2008
skills  experience derek woodward joined the company as group 
company secretary in april 2008 prior to this 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 
3 michael healy group chief financial officer 52
appointment july 2012
skills  experience michael healy joined the company on 14 may 
2012 and became group chief financial officer on 1 july 2012 prior  
to this he was group finance director of kwikfit group michael  
has considerable international experience across a broad range of 
industries and was previously chief operating officer and finance 
director of the hong kong listed first pacific company limited and 
subsequently chief financial officer of ebookers plc 
4 dawn airey independent nonexecutive director 52
appointment april 2010
committee memberships member of audit committee health  
safety  environmental committee nominations committee and 
remuneration committee 
skills  experience dawn airey was appointed as an independent 
nonexecutive director on 12 april 2010 she has over 27 years’ 
experience in the media industry and has held senior positions at 
some of the uk’s leading media companies she is currently president 
of cltufa uk television limited within the rtl group and prior to 
this she was chair and chief executive officer of five tv after joining 
the company from her role as managing director global content at 
itv plc between 2004 and 2008 she was also a nonexecutive 
director of easyjet plc 
other appointments chair of the grierson trust and the national 
youth theatre of great britain she also sits on the board of the 
british library
5 emre berkin independent nonexecutive director 51
appointment november 2012
committee memberships member of nominations committee
skills  experience emre berkin was appointed as an independent 
nonexecutive director on 1 november 2012 he has considerable 
experience across the technological sector and international markets 
and being based in turkey he has vital knowledge of one of the key 
destinations for millions of our customers between 1993 and 2006 
he held a number of senior positions at microsoft latterly as 
chairman middle east  africa and vicepresident europe middle 
east  africa where he led all aspects of microsoft business in 79 
countries including emerging markets since 2006 he has acted  
as a nonexecutive director to a number of companies including 
pegasus airlines turkey’s leading low cost carrier and a broad  
range of technology companies including alcatel lucent  
teletas telekomunikasyon as which is listed on the istanbul  
stock exchange
other appointments nonexecutive director of alcatel lucent 
teletas telekomunikasyon as teleperformance turkey and  
pegasus airlines
6 roger burnell senior independent director 62
appointment march 2007
committee memberships chairman of remuneration committee 
member of audit committee health safety  environmental 
committee and nominations committee
skills  experience roger burnell was appointed senior 
independent director of the company on 4 august 2010 after joining 
the company as a nonexecutive director in march 2007 he was also 
a nonexecutive director of mytravel group plc from april 2003 and 
prior to this he was chief operating officer and a director of 
thomson travel group plc
other appointments nonexecutive director of coventry  
building society 40
thomas cook group plc annual report  accounts 2012
corporate governance report
strengthening 
our governance
dear shareholder
at the end of my ﬁ rst year as chairman i am pleased to report on the 
progress we have made to strengthen our governance arrangements
one of my main priorities was to strengthen our board in july 
harriet green became our new group chief executive ofﬁ cer and 
michael healy joined as our group chief financial ofﬁ cer both have 
a highly successful track record harriet brings a wealth of experience 
of successful corporate transformations and michael likewise with 
highly leveraged companies
at our 2012 agm three of our longserving nonexecutive directors 
stepped down to give me the opportunity to seek nonexecutive 
directors with more recent operational experience i am pleased 
to report that emre berkin with a wealth of skills and experience 
in the technological sector and international markets as well as 
experience of airlines joined our board as a nonexecutive director 
on 1 november 2012 we continue to work with an international 
search and selection ﬁ rm and expect to make further appointments 
in due course
in making these appointments the board has strengthened its 
diversity across a range of measures including skills experience 
nationality and gender which will help bring different perspectives 
to our deliberations and decision making as we face the challenges 
of rebuilding our business
we have also strengthened our board committees with the 
appointment of martine verluyten as chair of the audit committee 
roger burnell as chair of the remuneration committee and peter 
marks as chair of the health safety  environmental committee 
each committee has made real progress under its new leadership 
as detailed further in this report
in the spring of 2012 we conducted a review of board effectiveness 
with the assistance of external facilitators one of the key areas of 
focus was to evaluate the breadth of skills and experience on the 
board the output from that evaluation has helped shape the 
candidate proﬁ le for our search for additional board members 
there were a number of other outputs ranging from the need for the 
board to have greater visibility and connection with the organisation 
the need for improved ﬁ nancial information and forecasting and 
an increase in the time allocated for the board to review strategy 
succession planning and risk management there is an action plan 
in respect of each of those outputs see page 45 and progress is 
monitored by me and reported regularly to the board
whilst improved cash forecasting has been a priority of management 
and the board in the past year we are also taking signiﬁ cant steps 
under the leadership of the new group ceo and group cfo to 
strengthen risk management internal and ﬁ nancial control and 
the management and direction of internal audit in view of the 
importance and urgency in these areas a number of senior 
appointments have been made in recent months including a new 
group treasurer a new head of financial control  planning and 
a new director of enterprise risk and audit a number of other senior 
appointments have been made as detailed in the group ceo qa
on page 9
throughout the year roger burnell and i engaged with our major 
shareholders on a number of occasions across a range of issues 
including board appointments and remuneration and will continue 
to do so we are grateful for the feedback given which has been 
supportive and constructive
under my leadership we have made considerable progress towards 
achieving the highest standards of corporate governance and we 
will strive to build upon this during the course of the year ahead
frank meysman
chairman
27 november 2012 
“ harriet brings a wealth of 
experience of successful corporate 
transformations and michael likewise 
with highly leveraged companies”  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
41
directors’ report business review
compliance with the uk corporate governance code
this report sets out how the company applied the principles of 
the uk corporate governance code ‘the code’ and the extent to 
which the company complied with the provisions of the code in 
the year to 30 september 2012 during the year the company fully 
complied with the provisions of the code except for provision 
b33 in relation to executive directors taking on more than one 
nonexecutive directorship in a ftse 100 company and provision 
d15 in relation to directors’ notice or contract periods being set at 
one year or less these are explained in the relevant sections within 
the remuneration report on pages 53 to 64
the group’s business model and strategy
the group’s business model and strategy are summarised on pages 
12 to 17 of this report
the board of directors
the board of directors is responsible for the longterm success of 
the group and must ensure that there is a framework of effective 
controls which enables risk to be assessed and managed whilst 
improved cash forecasting has been a priority of management and 
the board in the past year signiﬁ cant steps are being taken under 
the leadership of the new group ceo and group cfo to strengthen 
risk management internal and ﬁ nancial control and the 
management and direction of internal audit a number of senior 
executive appointments have been made recently to support and 
drive forward these important areas more information is given 
below and in the risk management section on pages 18 and 19
the thomas cook leadership council see page 32 led by the 
group ceo has redeﬁ ned the group’s values behaviours and ways of 
working in a major initiative to build a more effective organisation 
this initiative together with the focus on risk and controls and our 
trust commitments to our people and our stakeholders are being 
brought together under a new code of business conduct this code 
will be fully embedded with every employee across the group to 
ensure it guides the way our people work in the future 
the board’s governance structure and the roles and activities of 
its committees are described on pages 46 to 51
responsibilities of the board
the board is speciﬁ cally responsible for
• approval of the group’s strategy and its budgetary and 
business plans
• approval of signiﬁ cant investments and capital expenditure
• approval of annual and halfyear results and interim management 
statements accounting policies and subject to shareholder 
approval the appointment and remuneration of the 
external auditors
• approval of the group’s dividend policy and the payment of 
interim and the recommendation of ﬁ nal dividends
• changes to the group’s capital structure and the issue of 
any securities
• establishing and maintaining the group’s risk appetite system 
of internal control governance and approval authorities
• monitoring executive performance and succession planning and
• reviewing standards of ethics and policy in relation to health 
safety environment social and community responsibilities
board activity during the year
at each board meeting the group ceo presents a comprehensive 
update on the business issues across the group and the group cfo 
presents a detailed analysis of the ﬁ nancial performance both at 
group and segment level senior executives below board level attend 
relevant parts of board meetings in order to make presentations on 
their areas of responsibility this gives the board access to a broader 
group of executives and helps the directors make assessments of the 
group’s succession plans in response to the output from the 2012 
board evaluation the board will hold some of its meetings in the 
segment locations where it will conduct an in depth review of 
operations and strategy as well as gain more visibility amongst 
management and staff
 “ in the spring of 2012 we conducted 
a review of board effectiveness with 
the assistance of external facilitators 
one of the key areas of focus was to 
evaluate the breadth of skills and 
experience on the board” 42
thomas cook group plc annual report  accounts 2012
corporate governance report continued
at its meetings during the year the board discharged its 
responsibilities as listed overleaf in particular the board reviewed
• the operational performance of each of the group’s segments 
performance and strategy are continually monitored and reviewed 
by the board and periodic updates are presented by the segment 
chief executive ofﬁ cers and their senior management teams
• the uk business transformation plan
• ﬁ nancial performance and treasury metrics including cash ﬂ ow 
and net debt forecasts
• the group’s annual budget
• external ﬁ nancial and narrative reporting and investor feedback
• the backdrop to the 22 november 2011 update to the market 
and endorsed management’s improvements to cash forecasting 
and management
• the group’s banking negotiations and reﬁ nancing
• the group’s ﬁ nancial covenants and liquidity analysis
• the group’s stabilisation plan
• the structure and process for identifying managing and 
monitoring risks across the group and the effectiveness of 
the group’s system of internal control
• the group’s health  safety and environmental policies
• the group’s disposal programme
• the shareholder circulars in connection with the disposal of hcv 
the aircraft sale and leaseback and the sale of the indian business
• the group’s it strategy and transformation programme and other 
major it projects including it security
• the group’s treasury policy
• the recruitment of the group ceo and group cfo and the 
appointment of additional nonexecutive directors
• the uk pension fund
• the division of responsibilities between the chairman and the 
group ceo and
• the directors’ conﬂ icts of interest register
current directors
name board
nominations 
committee audit committee
remuneration 
committee
health safety  
environmental 
committee 
frank meysman 89 23–––
harriet green
1
22––– 11
michael healy
2
22––––
dawn airey
3
89 23 22 12 55
roger burnell 99 33 44 44 55
peter marks 99 33 – – 22
martine verluyten
4
99 33 22 22 –
notes
in addition to the meetings detailed above the following additional meetings were held during the year to discuss the issues highlighted on the previous page board 17 
nominations committee 4 audit committee 4 remuneration committee 9
1  harriet green joined the board on 30 july 2012 and was appointed to the health safety  environmental committee on the same day
2  michael healy joined the board on 1 july 2012
3  dawn airey was appointed to the audit committee and remuneration committee on 8 february 2012
4  martine verluyten was appointed as chairman of the audit committee and a member of the remuneration committee on 8 february 2012
board meetings and attendance
the board and its committees have regular scheduled meetings 
throughout the year and supplementary meetings are held as and 
when necessary 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 year
frank meysman was unable to attend one board meeting due to a 
prior personal commitment that fell between the date of 
appointment to the board but prior to his appointment as 
chairman during that period he maintained contact with the board 
and gave his feedback on the matters under review dawn airey 
missed one board meeting one remuneration committee and one 
nominations committee meeting all on the same date due to an 
unavoidable prior business commitment she gave her input on the 
agenda items to the chairman prior to the meetings the chairman 
and each nonexecutive director have provided assurance to the 
board that they remain fully committed to their respective roles and 
can dedicate sufﬁ cient time to meet what is expected of them
in addition to the scheduled meetings the directors attended 
additional board and committee meetings please see the notes 
below to deal with a number of challenges being faced by the 
company including liquidity and cash management the new 
banking arrangements asset disposals executive director succession 
longterm incentive awards and the approval of shareholder 
circulars despite these meetings being held at relatively short notice 
attendance levels for each of the directors was high directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
43
directors’ report business review
board composition
as at 27 november 2012 the board comprised the chairman two 
executive directors four independent nonexecutive directors and 
one nonexecutive director biographical details of all directors 
can be found on pages 38 and 39 and on the company’s corporate 
website at wwwthomascookgroupcom
the chairman 
frank meysman was appointed chairman designate with effect from 
1 october 2011 he assumed the role of chairman from 1 december 
2011 following michael beckett’s retirement from the board on 
30 november 2011
the roles of the chairman and group ceo are separate and distinct 
during the year the board reviewed and approved a revised division 
of responsibilities which clearly sets out in writing their respective 
responsibilities this document can be found on the company’s 
corporate website at wwwthomascookgroupcom
the senior independent director
roger burnell was the senior independent director throughout 
the year and as such is available to shareholders should they have 
concerns that cannot be resolved through the normal channels 
involving the executive directors or the chairman
changes to the board
changes to the board during the year were as follows
• frank meysman and peter marks were appointed to the board 
as chairman designate and a nonexecutive director respectively 
on 1 october 2011
• harriet green was appointed as group ceo on 30 july 2012 in 
succession to sam weihagen who retired from the board on 
the same date
• michael healy was appointed to the board as group cfo on 1 july 
2012 in succession to paul hollingworth who resigned from the 
board on 30 june 2012
• david allvey bo lerenius and peter middleton each retired from 
the board on 8 february 2012
• in the current ﬁ nancial year emre berkin was appointed to 
the board as an independent nonexecutive director on 
1 november 2012
• the search selection and appointment process in respect of the 
above and the search for additional nonexecutive directors is 
fully described in the section on the nominations committee 
on page 48
board induction and training
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 such 
inductions typically include meetings with senior management visits 
to the company’s business segments where they receive a thorough 
brieﬁ ng on the business and meet with the management team and 
the receipt of presentations on other key business areas and relevant 
documentation individual induction requirements are monitored by 
the chairman with the support of the group company secretary to 
ensure that new and recently appointed directors gain sufﬁ cient 
knowledge about the group to enable them to contribute to the 
board’s deliberations as swiftly as possible as a number of new 
directors have joined the board during the course of the year 
there has been a high level of induction activity frank meysman 
conducted most of his induction in the period between joining the 
board in october 2011 and his appointment as chairman at the 
beginning of december 2011 he met with major shareholders 
following his appointment as chairman and has continued to engage 
with them on a range of issues during the year as explained on page 
51 harriet green and michael healy both conducted a signiﬁ cant 
element of their initial induction prior to joining the board in 
august and the early part of september 2012 they visited each of the 
company’s business segments and conducted extensive reviews of 
every element of the business as part of the business and budget 
planning process ahead of the new ﬁ nancial year during those visits 
they met with management and staff and gained valuable insights 
into the businesses both harriet green and michael healy have been 
on indestination visits during which time they met with ﬂ ight and 
indestination staff as they were taken through every aspect of the 
customer experience the induction content and process has evolved 
signiﬁ cantly over the year as we build on the experience of inducting 
each new director we are now using the beneﬁ t of that experience 
to revisit the induction and training given to our longerserving 
directors as we develop the programme for each new director we 
will give the longerserving directors the opportunity to accompany 
and participate in any aspect that they feel would further enhance 
their knowledge and understanding of the group 
directors also receive training throughout the year both at board 
and committee meetings and by way of attendance at external 
conferences and seminars
former directors who served during the year
name board
nominations 
committee audit committee
remuneration 
committee
health safety  
environmental 
committee 
michael beckett
1
22 11 – – –
david allvey
2
44 11 22 – 33
bo lerenius
2
14 11 12 22 –
peter middleton
2
24 11 – 22 –
paul hollingworth
3
77––––
sam weihagen
4
77 – – – 34
notes
1 michael beckett retired on 30 november 2011
2 david allvey bo lerenius and peter middleton each retired on 8 february 2012
3 paul hollingworth resigned on 30 june 2012
4 sam weihagen retired on 30 july 2012 44
thomas cook group plc annual report  accounts 2012
corporate governance report continued
the board has a programme for holding some of its meetings at 
the business segments where in addition to its normal business the 
board will focus on the strategy and operations of that segment and 
meet with management and staff in june 2012 the board held its 
meeting at the main uk segment ofﬁ ces and in october 2012 it 
did likewise at the main ofﬁ ces of the northern europe segment 
in march 2013 the board will hold its meeting in germany to receive 
presentations on and meet management and staff of the group’s 
continental europe and airlines germany businesses at other board 
meetings and where appropriate committee meetings the directors 
receive updates and presentations on developments and changes to 
the business and to the legislative and regulatory environments in 
addition to the indepth presentations on the company’s businesses 
the board was also provided during the year with
• presentations on the future of travel and the customer experience
• a brieﬁ ng on reward and the group’s remuneration policy and 
the internal and external context and
• a presentation on companies’ and directors’ responsibilities for 
health and safety
in the current ﬁ nancial year the nonexecutive directors have also 
been given a comprehensive update on our webbased distribution 
transformation and the developments to the end to end customer 
service experience in our uk business
director independence
at its september 2012 board meeting as part of its annual review 
of corporate governance against the code the board considered 
the independence of the nonexecutive directors against the criteria 
speciﬁ ed in the code and determined that dawn airey roger burnell 
and martine verluyten were independent when approving his 
appointment the board also determined that emre berkin was 
independent frank meysman chairman was independent 
on appointment
the board recognises that peter marks as group chief executive 
of the cooperative group which is a partner in the uk retail 
joint venture is not independent
the former nonexecutive directors david allvey bo lerenius 
and peter middleton were considered independent by the board
directors’ conﬂ icts of interest
from 1 october 2008 the companies act codiﬁ ed the directors’ duty 
to avoid a situation in which they have or can have an interest that 
conﬂ icts or possibly may conﬂ ict 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 board has established a set of guiding principles on managing 
conﬂ icts and has agreed a process to identify and authorise conﬂ icts 
as part of that process it has also agreed that the nominations 
committee should review the authorised conﬂ icts every six months 
or more frequently if a new potential conﬂ ict arises for an existing 
director the nominations committee reviews the interests of 
candidates prior to making recommendations for the appointment 
of new directors the nominations committee and board applied 
the above principles and process throughout the year to 
30 september 2012 and conﬁ rm that these have operated effectively 
when the board authorised the conﬂ ict relating to peter marks 
in relation to the company’s uk retail joint venture with the 
cooperative group it did so on the condition that peter would 
not receive board papers in respect of or be involved in decisions 
about the company’s uk retail jv
reappointment of directors
in accordance with the code and the company’s articles of 
association all directors are subject to election by shareholders 
at the agm held in february 2012 all the directors were submitted 
for electionreelection and the board has agreed that the directors 
will continue to be subject to annual election in the future 
nonexecutive directors are initially appointed for a threeyear term 
and subject to rigorous review by the nominations committee and 
annual reelection by shareholders can serve up to a maximum of 
three such terms
operation of the board
during the year we introduced a fully encrypted electronic board 
portal system which enables board and committee papers to be 
delivered securely to directors which they can access using electronic 
tablets this enables faster and more secure distribution of 
information and reduces resource usage directors were provided 
between meetings with relevant information on matters affecting the 
business such updates were carried out by a variety of methods 
including conference calls amongst the full board or between the 
chairman andor the group ceo and the nonexecutive directors 
and by way of the group company secretary circulating papers and 
updates on relevant issues electronically during the year the 
chairman held meetings with the nonexecutive directors without 
the executive directors present
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 as well as ensuring that there is a 
smooth ﬂ ow of information to enable effective decision making 
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 group company secretary acts as secretary to the 
board the finance  administration committee the disclosure 
committee the audit committee the nominations committee 
and the remuneration committee the deputy company secretary 
acts as secretary to the health safety  environmental committee
in accordance with its articles the company has granted a qualifying 
third party indemnity to the extent permitted by law to each 
director and the group company secretary the company also 
maintains directors’ and ofﬁ cers’ liability insurance
board evaluation
the board recognises the beneﬁ t of a thorough board and 
committee evaluation process leading to action to improve 
its effectiveness future composition and focus
a thorough evaluation of the board and its committees was 
conducted during the year this was facilitated by wickland westcott 
an independent and experienced ﬁ rm under the direction of the 
chairman wickland westcott has no other relationship with the 
company the process involved each of the directors completing a 
high level questionnaire which was structured to provide an 
introduction for a more indepth and comprehensive discussion 
between wickland westcott and each of the board members such 
meetings allowed each director to express their perspectives of the 
board’s effectiveness and performance as well as to highlight areas 
in which they wished to see improvement to provide further insight 
into the effectiveness of the board wickland westcott also 
interviewed a number of senior executives from across the group the 
output from the above was compiled by wickland westcott and the 
key themes and issues together with a range of recommendations 
were presented in the ﬁ rst instance to the chairman and then to 
the whole board for consideration and debate directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
45
directors’ report business review
one of the key areas of focus was to evaluate the breadth of skills 
and experience on the board the output from the evaluation which 
identiﬁ ed a requirement for a range of skills and experience helped 
shape the candidate proﬁ le in respect of the search for additional 
board members there were a number of other outputs ranging 
from the need for the board to have greater visibility and connection 
with the businesses the need for improved ﬁ nancial information and 
an increase in the time allocated for the board to review strategy 
succession planning and risk management the board has agreed an 
action plan in respect of each of these outputs and progress is being 
monitored by the chairman with the support of the company 
secretary and reported regularly to the board progress will be 
disclosed in the 2013 governance report
the board agreed that real progress had been made in respect of 
board and committee effectiveness during the year but welcomed 
the above actions in a move to higher standards
separately the nonexecutive directors under the leadership of 
the senior independent director and with input from the executive 
directors conducted an evaluation of the chairman the outputs 
from that evaluation were debated by the board in the absence 
of the chairman and feedback was given to him by the senior 
independent director
the company’s performance management system applies to 
management at all levels across the group the individual 
performance of the executive directors is reviewed separately 
by the chairman and the remuneration committee
outputs agreed action
a range of skills and experience 
including travel international technology 
and uk plc required of new 
nonexecutive directors
included in the candidate proﬁ le for the search for additional nonexecutive directors focus for 
international search and selection ﬁ rm
board needs to have greater visibility and 
connection with the businesses to build 
a mutual understanding of roles 
and challenges
board has agreed a programme for holding some of its meetings at the business segments where it 
will focus on the strategy and operations of that segment and will meet with management and staff
board induction programme ensures that new appointees visit each of the businesses shortly after 
joining existing directors given the opportunity to undergo ‘induction’ with new directors
need for improved ﬁ nancial information 
to the group and the board
new group cfo working with ﬁ nance community to develop and improve internal ﬁ nancial 
reporting and forecasting
board needs to devote more time to the 
development of strategy and succession 
 talent management
time allocated for strategy at each board meeting the new group ceo is driving the people agenda 
focusing on assessment development succession performance management engagement and 
recognition for high performance succession and talent management is scheduled to be presented 
to the board in spring 2013
board needs improved understanding 
of risk identiﬁ cation and management
a highly experienced new director of enterprise risk and audit was appointed on 29 october 2012 
to drive an increased focus on risk and controls across the group and improved reporting to 
the board and the audit committee he reports directly to the group ceo and through to the 
audit committee 
our board evaluation process
chairman and company 
secretary meet with 
external facilitator 
to discuss and agree 
approach and scope
 directors and senior 
executives complete high 
level questionnaire
 external facilitator meets 
with directors and senior 
executives individually
external facilitator 
compiles a report from 
the questionnaires 
and meetings
external facilitator meets 
with the chairman and 
the company secretary 
to discuss the ﬁ ndings 
and recommendations
board meeting at which
–  the external facilitator 
presents the report 
of ﬁ ndings and 
recommendations and
–  the board discusses and 
agrees an action plan
action plan continually 
monitored by the 
chairman and company 
secretary with regular 
reports to the board
1 2 3 4 46
thomas cook group plc annual report  accounts 2012
corporate governance report continued
chairman
martine verluyten

meetings
four
other members
dawn airey
roger burnell
meetings also regularly attended by

peter marks nonexecutive director
harriet green group ceo
michael healy group cfo
derek woodward group company secretary
andrew porter group finance
pricewaterhousecoopers llp ‘pwc’
ernst  young llp ‘ey’
following his appointment in october 2012 the new director of 
enterprise risk and audit attends the audit committee meetings
composition of the committee
during the year david allvey was chairman of the committee and 
bo lerenius was a member until their retirement from the board 
on 8 february 2012 on the same day martine verluyten and dawn 
airey were appointed members the former succeeding david allvey 
as chairman
audit committee
  martine verluyten is considered by the board to have recent and relevant ﬁ nancial 
experience as required by the code
  prior to his retirement on 30 july 2012 sam weihagen regularly attended the audit 
committee meetings
  prior to his resignation on 30 june 2012 paul hollingworth regularly attended the 
audit committee meetings
  prior to the appointment of lee bradley director of enterprise risk and audit 
paul wilkes head of internal control and project evaluation regularly attended 
the audit committee meetings
the group governance structure
the board has a schedule of matters reserved for its approval 
and has a formal structure of delegated authority whereby 
speciﬁ ed aspects of management and control of the group have 
been delegated to the group ceo the group cfo business segments 
and the board’s committees the board has agreed the terms of 
reference for the audit remuneration nominations disclosure 
and health safety  environmental committees and the division 
of responsibilities between the chairman and the group ceo
the schedule of matters reserved the terms of reference of each 
of the board’s committees and the division of responsibilities 
between the chairman and the group ceo 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 papers in respect of the audit remuneration nominations 
health safety  environmental and disclosure committees are 
circulated to all the nonexecutive directors regardless of committee 
membership major decisions taken under the group’s delegation 
of authority are reported to the next board meeting
group ceo direct reports
the group ceo regularly holds meetings amongst her direct 
reports to discuss a range of issues in relation to the strategic and 
operational development and performance of the businesses 
a comprehensive report of all key issues affecting the group is 
circulated to the board prior to each meeting the ceo’s direct 
reports team comprises the most senior business leaders and 
group function heads and like the thomas cook leadership 
council see below is both culturally and gender diverse reﬂ ecting 
the wide range of diversity amongst employees across the group
thomas cook leadership council
the group ceo has also established the thomas cook leadership 
council ‘tclc’ comprising the top 100 leaders across the group 
the tclc will meet four times a year to review performance and 
help develop the group’s strategy directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
47
directors’ report business review
role of the committee
the board has delegated to the committee responsibility for 
overseeing the ﬁ nancial reporting internal risk management 
and 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 ﬁ ndings to the board is authorised to
• monitor the integrity of the annual and halfyear results and 
interim management statements including a review of the 
signiﬁ cant ﬁ nancial reporting judgements contained in them
• review the company’s internal ﬁ nancial controls and 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
to enable it to carry out its duties and responsibilities effectively 
the committee relies on information and support from management 
across the business the full terms of reference of the committee are 
available at wwwthomascookgroupcom or from the group company 
secretary at the registered ofﬁ ce
principal activities during the year
at its meeting in july 2012 the committee agreed with the initiatives 
being led by the new group ceo and group cfo for a step change in 
respect of ﬁ nancial and operational controls risk identiﬁ cation and 
management and the management and direction of internal audit 
to support these important controls being more fully embedded 
across the organisation lee bradley a highly experienced director 
of enterprise risk and audit joined the company in october 2012 
he reports directly to the group ceo and through to the audit 
committee and is responsible for risk management internal 
audit and business continuity planning
at its meetings during the year the committee discharged its 
responsibilities as listed above and reviewed
• the full and halfyear results including accounting issues and 
judgements and the interim management statements issued 
during the year
• information in support of the statements in relation to going 
concern and disclosure of information to the auditors
• the group’s system of internal control receiving reports from 
management the external auditors and the internal auditors 
see section headed ‘risk management and internal control’ 
on page 51
• internal audit reports
• the annual work plan for each of the internal and 
external auditors
• the group’s main risks and mitigating actions
• the group’s business continuity plans and the work plan 
and timetable for further development
• the prevention detection and reporting of fraud and the group’s 
antifraud and ethics policies
• the group’s borrowing powers under the company’s articles 
of association
• the backdrop to the 22 november 2011 update to the market
• shareholder circulars and the notices of general meeting in 
connection with the disposal of hcv the aircraft sale and 
leaseback and the sale of the indian business
• the working capital reports prepared by pwc in respect of the 
above shareholder circulars
• the performance of the internal auditors leading to the 
reappointment of ey as the group’s internal auditors
• proposals for engaging the external auditors to carry out nonaudit 
related work see below
• the committee’s work plan for the year ahead and a review of 
historic activity against the committee’s terms of reference and
• revised committee terms of reference
external auditors
a policy is in place which requires all material nonaudit 
work proposed to be carried out by the external auditors to be 
preauthorised by the committee in order to ensure that the 
provision of nonaudit services does not impair the external auditors’ 
independence or objectivity the policy which is appended as a 
schedule to the audit 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 8 to the ﬁ nancial statements 
pwc were appointed as the sole auditors to the group in 2008 and 
since that date have complied with the partner rotation requirement 
set out in the ethical standards for auditors pwc were reappointed 
by shareholders at the agm held on 8 february 2012 upon the 
recommendation of the audit committee pwc will be proposed 
for reelection by shareholders at the agm to be held on 7 february 
2013 pwc have conﬁ rmed their independence as auditors of the 
company in a letter addressed to the directors 48
thomas cook group plc annual report  accounts 2012
corporate governance report continued
principal activities during the year
at its meetings during the year the committee discharged its 
responsibilities as listed above and in particular
• monitored the process in respect of the search and selection 
of a new group ceo leading to a recommendation for the 
appointment of harriet green
• monitored the process in respect of the search and selection 
of a new group cfo leading to a recommendation for the 
appointment of michael healy
• considered the reappointment of the directors before making 
a recommendation to the board regarding their reelection at 
the 2012 agm
• commenced the process to recruit additional nonexecutive 
directors in order to strengthen the board
• proposed changes to committee chairmanships and 
committee composition
• considered directors’ potential conﬂ icts of interest see page 44 
and
• revised committee terms of reference
board appointments policy
appointments to the board are made on merit against objective 
criteria and with due regard for the beneﬁ ts of diversity on the 
board this process is led by the committee which after evaluating 
the balance of skills knowledge and experience of each director 
makes recommendations to the board the board appointments 
policy reinforces the board’s principle that appointments are made 
on merit in line with its current and future requirements and reﬂ ect 
the international activity of the group the policy also recognises the 
beneﬁ ts of diversity including gender diversity appointments during 
the course of the year have been in line with that policy and have 
reinforced the diverse composition of the board the board endorses 
the aims of the davies’ report entitled ‘women on boards’ and when 
considering appointments in the future will with the support of the 
nominations committee aim to build on its ﬁ rm foundations a copy 
of the group’s board appointments policy can be found on our 
website at wwwthomascookgroupcom
chairman succession
during 2011 the nominations committee conducted a rigorous 
and transparent chairman succession process in advance of michael 
beckett’s planned retirement the committee comprising the 
independent nonexecutive directors under the leadership of roger 
burnell the senior independent director prepared a detailed job 
speciﬁ cation candidate proﬁ le and timetable to ensure an orderly 
and efﬁ cient process it appointed an international search and 
selection ﬁ rm to assist with the identiﬁ cation of potential candidates 
benchmarking and referencing towards the ﬁ nal stages of the 
process the committee took soundings from the company’s major 
shareholders and advisers to gain their views at the end of the 
process the board upon the unanimous recommendation of 
the committee took the decision to appoint frank meysman as 
chairman designate with effect from 1 october 2011 and as 
chairman from 1 december 2011 in reaching its decision the 
committee took account of frank meysman’s extensive experience 
as a nonexecutive director and chairman his successful executive 
career in international companies at both the operational and 
strategic levels his particular strength in marketing and his 
achievements in both brand building and product innovation
chairman
frank meysman
meetings
three
other members
dawn airey
emre berkin
roger burnell
harriet green
peter marks
martine verluyten
meetings also regularly attended by
derek woodward group company secretary
composition of the committee
a majority of the members of the committee are independent 
nonexecutive directors frank meysman was chairman of the 
committee from 1 december 2011 following michael beckett’s 
retirement from the board on 30 november 2011 peter marks 
joined the committee upon his appointment to the board on 
1 october 2011 david allvey bo lerenius and peter middleton 
left the committee upon their retirement from the board on 
8 february 2012 emre berkin and harriet green joined the 
committee on 1 november 2012 
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 required for such appointments 
the committee is also responsible for reviewing at least every 
six months or more frequently if required the directors’ potential 
conﬂ icts of interest and for making recommendations to the board 
in respect of authorising such matters
the full terms of reference of the committee are available at 
wwwthomascookgroupcom or from the group company secretary 
at the registered ofﬁ ce
nominations committee directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
49
directors’ report business review
chairman
peter marks
meetings
five
other members
dawn airey
roger burnell
harriet green
meetings also regularly attended by

senior managers with responsibility for health safety 
and environmental matters
derek woodward group company secretary
beth horlock deputy company secretary
composition of the committee
dawn airey and roger burnell were members of the committee 
throughout the year on 8 february 2012 peter marks was appointed 
to the committee and he replaced roger burnell as chairman sam 
weihagen was a member of the committee until his retirement from 
the board on 30 july 2012 harriet green was appointed a member 
of the committee on her appointment to the board on 30 july 2012 
david allvey left the committee upon his retirement from the board 
on 8 february 2012
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
nonexecutive appointments 
one of the key areas of focus in the 2012 board effectiveness review 
was to evaluate the breadth of skills and experience on the board 
the output from that evaluation see page 45 helped shape the 
candidate proﬁ le for the search for additional nonexecutive 
directors an international search and selection ﬁ rm was appointed 
to assist the chairman identify a range of suitable candidates for 
review by the nominations committee as a result of that process 
emre berkin was appointed to the board on 1 november 2012 the 
chairman and the committee will continue their work in the current 
year to develop further succession plans to strengthen the board
on 1 october 2011 frank meysman and peter marks were appointed 
to the board the succession process in respect of frank meysman 
is described in the section above entitled ‘chairman succession’ 
although the appointment of peter marks ceo of the cooperative 
group was recommended by the committee he was identiﬁ ed as a 
candidate during the discussions in respect of the agreement to form 
the uk retail joint venture with the cooperative group and midlands 
cooperative accordingly an external search agent was not used
group ceo and group cfo succession
during the year the committee conducted a search for a group ceo 
and a group cfo the committee established clear criteria for the 
required skills and experience and appointed an international search 
and selection ﬁ rm to assist with the identiﬁ cation of candidates 
benchmarking and referencing whilst this process led to the 
identiﬁ cation of candidates the two individuals who best met the 
established criteria and were appointed to these roles came to the 
attention of the committee by other means harriet green the group 
ceo made a direct approach to the chairman and michael healy the 
group cfo was brought to the attention of the committee by one 
of the company’s advisers these candidates went through the 
same process as those brought to the attention of the committee 
by the search and selection ﬁ rm
health safety  
environmental committee
  prior to his retirement on 30 november 2011 michael beckett regularly attended 
health safety  environmental committee meetings
  prior to his retirement on 30 july 2012 sam weihagen regularly attended 
health safety  environmental committee meetings 50
thomas cook group plc annual report  accounts 2012
corporate governance report continued
chairman
roger burnell
meetings
four
other members
dawn airey
martine verluyten
meetings also regularly attended by

frank meysman chairman
harriet green group ceo

peter marks nonexecutive director
judith mackenzie group head of reward
derek woodward group company secretary
composition of the committee
all members of the committee are independent nonexecutive 
directors during the year peter middleton was chairman of the 
committee until his retirement from the board on 8 february 2012 
roger burnell was appointed as chairman on the same day dawn 
airey and martine verluyten were appointed as members of the 
committee on 8 february 2012 bo lerenius left the committee upon 
his retirement from the board on 8 february 2012
a report detailing the composition responsibilities and work carried 
out by the 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 53 to 64
remuneration committee
  michael beckett attended the meetings of the committee until his retirement as 
chairman of the company on 30 november 2011
   david allvey attended the meetings of the committee until his retirement from 
the board on 8 february 2012
   harriet green does not attend in respect of matters relating to her remuneration
the full terms of reference of the committee are available at 
wwwthomascookgroupcom or from the group company secretary 
at the registered ofﬁ ce
principal activities during the year
at its meetings during the year the committee discharged its 
responsibilities as listed above and in particular
• reviewed and agreed the group’s sustainability report for 2011
• reviewed and monitored the group’s health and safety and 
sustainability strategies including performance against targets
• approved future health and safety performance targets
• reviewed the groupwide child protection policy and 
implementation plan
• approved a number of health and safety policies including 
the group’s environmental and sustainability policies
• reviewed the proposed outsourcing of customer health and 
safety data capture risk assessment and data storage functions
• reviewed overseas excursion compliance
• reviewed employee safety regulations
• reviewed the group’s airline safety 
• reviewed key health and safety risks facing the group and 
the mitigating actions taken
• monitored progress in relation to the group’s programme 
of government affairs and
• revised the committee’s terms of reference
the group’s 2011 sustainability report is available on 
wwwthomascookgroupcomsustainability and contains the group’s 
health  safety and environmental policies an explanation of how 
thomas cook manages sustainability and progress against targets 
the 2012 sustainability report will be available at 
wwwthomascookgroupcom in february 2013
a summary of the approach and the group’s performance in relation 
to sustainability is contained on pages 32 to 35 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
51
directors’ report business review
risk management and internal control
whilst improved cash forecasting has been a priority of management 
and the board in the past year signiﬁ cant steps are being taken 
under the leadership of the new group ceo and group cfo to 
strengthen risk management internal and ﬁ nancial control 
and the management and direction of internal audit 
the group’s new approach to risk management and internal 
control is more fully described in the risk management section 
on pages 18 and 19
the board recognises its ultimate accountability for maintaining 
an effective system of internal control and risk management 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 uk corporate governance code the ‘turnbull 
guidance’ and has approved the framework and the 
standards implemented 
this framework will be developed and standards improved 
as the new approach to risk management and internal control 
is implemented 
such a system is designed to manage rather than eliminate the 
risk of failure to achieve business objectives and can provide 
only reasonable but not absolute assurance against material 
misstatement or loss the board has delegated responsibility for the 
implementation of the group risk management policy to the group 
risk management committee ‘grmc’ which is now chaired by the 
newly appointed director of enterprise risk and audit and comprises 
senior executives from across the group
risk identiﬁ cation and reporting
each of the segments has a risk management committee which 
meets regularly 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 in addition a central risk register is maintained and 
updated by risk owners the grmc prepares a halfyearly risk report 
for the attention of the audit committee based on the feedback 
from the segment risk management committees and also a top down 
review of the risk register
the report and the risk register identify the principal risks to the 
business and assess the adequacy of controls and procedures in place 
to mitigate the likelihood and the impact of these risks there are 
also reports to the grmc by speciﬁ c risk owners on the effectiveness 
of actions taken to mitigate risks the regular risk reporting regime 
has created an environment for the development and improvement 
of risk management procedures across the group the audit 
committee reviews the reports of the grmc and makes 
recommendations to improve risk management and internal control 
this process of risk identiﬁ cation measurement and reporting 
provides a comprehensive ongoing assessment of the signiﬁ cant risks 
facing the group and the mitigating actions taken in respect of those 
risks this process ensures that the group complies with relevant 
corporate governance best practice in relation to risk management 
including the guidance issued under the turnbull guidance the 
group’s internal audit function reports directly to the director of 
enterprise risk and audit who makes recommendations to 
the audit committee in relation to the maintenance of a sound 
control environment throughout the group
finance  administration committee
to facilitate swift and efﬁ cient operational management decisions 
the board has established the finance  administration committee 
comprising any two directors one of whom must be an 
executive director which has delegated authority within clearly 
identiﬁ ed parameters in relation to daytoday ﬁ nancing and 
administrative matters
disclosure committee
the board has established a disclosure committee which is 
responsible for implementing and monitoring systems and controls 
in respect of the management of inside information and the 
disclosure of such information to the market in accordance with the 
company’s obligations under the uk listing authority’s disclosure 
and transparency rules the committee meets regularly during the 
year to consider the group’s activities and risks against its disclosure 
obligations and to review all results announcements following 
certiﬁ cation from individual executives from across the businesses
the committee comprises the group ceo who is the chairman the 
group cfo the director of enterprise risk and audit and the group 
company secretary other attendees include senior managers from 
group finance and investor relations 
shareholder communication and engagement
the board promotes open communication with shareholders this is 
formalised within a framework of an investor relations programme 
conducted by the group ceo the group cfo and the investor 
relations team the programme included the presentation of 
preliminary and halfyear results which can be accessed on the 
thomas cook group website at wwwthomascookgroupcom along 
with ﬁ nancial reports interim management statements other 
market announcements and trading updates the management team 
conducts regular meetings with institutional investors and welcomes 
the dialogue that this enables with shareholders the company 
makes every effort to ascertain investor perceptions of the company 
and regular reports of investor and analyst feedback are provided to 
the board additionally the board responds to adhoc requests for 
information and all shareholders are entitled to attend the agm 
where they have an opportunity to ask questions of the board 
including the chairs of the board’s committees
during the year frank meysman met with a number of major 
institutional shareholders on a number of occasions following the 
market announcement on 22 november 2011 and to discuss the 
appointment of harriet green as group ceo and governance issues 
in general roger burnell the chairman of the remuneration 
committee met with several major institutional shareholders and 
governance bodies to discuss remuneration matters including 
executive share scheme performance targets and the longterm 
incentive arrangements for the new executive directors these 
meetings were both supportive and constructive the board was 
briefed on the content of the above discussions
at its 2008 agm a resolution was passed allowing the company to 
use its website and email as the primary means of communication 
with its shareholders this arrangement provides signiﬁ cant beneﬁ ts 
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 corporate website contains information for shareholders 
including share price information and news releases it can be found 
at wwwthomascookgroupcom 52
thomas cook group plc annual report  accounts 2012
corporate governance report continued
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 ﬁ nancial statements
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 ﬁ nancial statements in 
accordance with applicable law and regulations company law 
requires the directors to prepare ﬁ nancial statements for each 
ﬁ nancial year under that law the directors have prepared the 
group and the company ﬁ nancial statements in accordance with 
international financial reporting standards ‘ifrss’ as adopted by 
the european union the ﬁ nancial 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 proﬁ t or loss of the group for that period
in preparing those ﬁ nancial statements the directors are required to
• select suitable accounting policies and then apply them 
consistently
• make judgements and accounting estimates that are reasonable 
and prudent and
• state that the ﬁ nancial statements comply with ifrss as adopted 
by the european union
the directors conﬁ rm that they have complied with the above 
requirements in preparing the ﬁ nancial statements
the directors are responsible for keeping proper accounting records 
that show and explain the company’s transactions and disclose with 
reasonable accuracy at any time the ﬁ nancial position of the 
company and the group and for ensuring that the ﬁ nancial 
statements and the directors’ remuneration report comply with the 
companies act 2006 and as regards the group ﬁ nancial 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 ﬁ nancial statements 
may differ from legislation in other jurisdictions
disclosure of information to auditors
each of the directors who held ofﬁ ce at the date of approval of this 
directors’ report conﬁ rms that so far as heshe is aware there is 
no relevant audit information of which the company’s auditors are 
unaware and that heshe has taken all steps that heshe ought to 
have taken as a director to make himher aware of any relevant 
audit information and to establish that the company’s auditors 
are aware of that information
responsibility statement of the directors in respect of 
the annual financial statements
each of the directors who were in ofﬁ ce at the date of this report 
whose names and responsibilities are listed on pages 38 and 39 
conﬁ rm that to the best of their knowledge
• the group ﬁ nancial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and fair 
view of the assets liabilities ﬁ nancial position and proﬁ t of the 
group and
• the directors’ report contained on pages 4 to 67 includes a fair 
review of the development and performance of the business and 
the position of the group together with a description of the 
principal risks and uncertainties that it faces
a schedule of the group’s principal risks and uncertainties and 
mitigating actions being taken by management is set out on 
pages 18 and 19
whistleblowing
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 as well as antibribery and theft 
and fraud reporting policies these are published on the group’s 
intranet site allowing such matters to be raised in conﬁ dence 
through the appropriate channels the helpline was relaunched 
by a groupwide communication to all employees in spring 2012 
in addition the new group ceo has launched a groupwide feedback 
facility to all employees which promotes feedback from all 
employees on any issue that they wish to raise
code of ethics
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 conﬂ icts 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 thirdparty 
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
the group’s code of ethics is further reinforced by a disclosure of 
interests and beneﬁ ts policy which applies to senior executives in the 
group this supplements similar policies that are in place in each of 
the segments a new code of business conduct is being developed 
along with comprehensive plans to launch and embed this in every 
part of the part of the group in the ﬁ rst half of 2013
review of system of internal control
during the year the board through the work of the audit 
committee has conducted a review of the effectiveness of the 
group’s system of internal control there is an ongoing process for 
the identiﬁ cation 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 ﬁ nancial statements this 
includes the process by which management prepares consolidated 
accounts the work conducted by management and described on 
pages 51 and 52 is complemented supported and challenged by the 
controls assurance work carried out independently by the external 
auditors pwc and the internal auditors ey regular reports on 
control issues are presented to the audit committee by pwc and ey 
the board in reviewing the effectiveness of the system of internal 
control can conﬁ rm that necessary actions have been or are being 
taken to remedy any signiﬁ cant failings or weaknesses identiﬁ ed 
from that review the recent appointment of a new director of 
enterprise risk and audit was approved by the audit committee 
during the year in response to ﬁ ndings from the audit committee’s 
ongoing review the new approach to risk management and control 
that is being implemented in the current ﬁ nancial year is set out in 
the risk management section on pages 18 and 19
going concern
after making appropriate enquiries and taking into account the 
matters set out in the risk management section on pages 18 and 19 
the directors have a reasonable expectation that the company and  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
53
directors’ report business review
remuneration report
this report provides information on remuneration in four 
sections and aims to do so with clarity and transparency 
to convey the context and intent as well as the detail
a governance
•	 	 composition	of	the	remuneration committee	
•	 	 terms	of	reference	of	the	remuneration committee
•	 meetings
•	 main	areas	of	focus
•	 advisers
•	 evaluation
b policy and approach
•	 remuneration	policy
•	 	 overview	of	remuneration	structure	for executive	
directors
c remuneration by pay element
•	 base	salary
•	 pensions
•	 annual	bonus
•	 longterm	incentives
•	 	 remuneration	arrangements	for	former	executive	
directors
•	 shareholder	engagement
•	 risk	assessment
•	 the	operation	of	historic	share	plans
•	 	 remuneration	arrangements	across	the group
•	 service	contracts
•	 external	appointments
•	 nonexecutive	directors
d audited information
•	 directors’	interests	in	shares
•	 	 share	options	and	share	awards	under	longterm	
incentive plans
•	 directors’	remuneration
•	 directors’	pensions
dear shareholder
after	another	year	of	great	challenge	and	significant	change	for	the	
company	i	am	pleased	to	report	on	directors’	remuneration	for	the	
year	to	30	september	2012
the	committee’s	agenda	has	been	heavily	influenced	throughout	the	
year	by	the	company’s	financial	circumstances	which	are	detailed	
elsewhere	in	the	directors’	report	i	am	satisfied	that	the	committee	
has	responded	appropriately	to	all	challenges	and	in	a	year	of	
transition	that	important	reward	decisions	have	been	taken	to	secure	 
a	strong	leadership	who	are	incentivised	to	drive	the	business	recovery	
we	have	engaged	with	shareholders	on	three	separate	occasions	during	
the	year	and	i	am	grateful	for	the	views	expressed	and	support	given
major	decisions	and	areas	of	activity	that	i	would	highlight	here	 
and	which	are	more	fully	explained	in	this	remuneration	report	are
•	 the	remuneration	packages	of	harriet	green	and	michael	healy	
are	highly	performance	leveraged	with	strong	alignment	to	
achievement	of share	price	targets	and	strategic	objectives
•	 to	avoid	inappropriate	levels	of	windfall	gains	and	to	manage	cost	
and	dilution	share	awards	granted	during	the	year	to	other	senior	
executives	in	the business	have	been	significantly	scaled	back	from	
levels	awarded	in	previous	years
•	 as	signalled	in	last	year’s	report	the	committee	determined	in	
december	2011	to	introduce	mandatory	deferral	with	clawback	
rights	to	a	portion	of	annual	bonus	for	senior	leaders	across	the	
business	this	has	been	implemented
•	 the performance conditions in respect of awards made under the 
performance	share	plan	and	the	coinvestment	plan	in	2009	and	
2010	have	not	been	achieved	accordingly	these	awards	have	
lapsed	with	no	vesting
•	 the	committee	has	been	strengthened	by	the	appointment	 
of	dawn	airey	and	martine	verluyten	as	members
•	 following	a	selection	process	the	committee	also	appointed	
deloitte	as	its	external	remuneration	adviser	during	the	year
the	committee	will	review	remuneration	policy	to	ensure	it	is	
aligned	to	the	future	needs	of	the	business	once	the	new	company	
strategy	is	communicated	in spring	2013	we	will	of	course	 
engage	with	our	major	shareholders	on	this matter
the	board	will	be	submitting	this	report	for	approval	by	
shareholders	at	our	annual	general	meeting	on	7	february	2013
roger burnell
chairman	remuneration	committee
27	november	2012
rewarding	 
progress 54
thomas cook group plc annual report  accounts 2012
remuneration report continued
a governance
composition
the	following	independent	nonexecutive	directors	are	members	 
of	the	remuneration	committee	the	‘committee’
roger	burnell	chairman
dawn airey
martine	verluyten
during	the	year	ended	30	september	2012	the	‘year’	peter	
middleton	was	chairman	of	the	committee	and	bo	lerenius	was	a	
member	until	their	resignation	from	the	board	at	the	conclusion	 
of	the	group’s	annual	general	meeting	on	8	february	2012	peter	
middleton	was	replaced	by	roger	burnell	as	chairman	of	the	
committee	and	the	composition	of	the	committee	was	further	
refreshed	with	the	appointment	of	dawn	airey	and	martine	
verluyten	as	committee	members	effective	from	8	february	2012
terms of reference
the	responsibilities	of	the	committee	include
•	 making	recommendations	to	the	board	on	the	company’s	
framework	of	executive	remuneration	and	its	cost	and
•	 reviewing	and	determining	on	behalf	of	the	board	the	
remuneration	and	incentive	packages	of	the	executive	directors	 
to ensure that they are appropriately rewarded for their individual 
contributions	to	thomas	cook’s	overall	performance
the	terms	of	reference	of	the	committee	are	available	at	 
wwwthomascookgroupcom	or	from	the	group	company	 
secretary	at the	registered	office
meetings
the	committee	held	four	scheduled	and	nine	unscheduled	
supplementary	meetings	during	the	year	attendance	at	the	
scheduled	meetings	is	disclosed	on	page	42	of	the	corporate	
governance	report
main	areas	of	focus
matters	discussed	by	the	committee	during	the	year	included
•	 reward	arrangements	for	the	group	chief	executive	officer	 
and	group	chief	financial	officer
•	 departure	terms	for	the	former	group	ceo
•	 the	group’s	remuneration	policy
•	 introduction	of	deferral	and	clawback	provisions	in	respect	 
of	the	annual	bonus	arrangements	for	the	year
•	 remuneration	of	senior	management	personnel
•	 uk	government’s	proposals	on	executive	remuneration
•	 views	expressed	during	consultations	with	institutional	
shareholder	and	governance	bodies	in	respect	of	performance	
targets	for	longterm	incentive	share	awards
•	 annual	bonus	outcome	of	the	annual	bonus	targets	for	executive	
directors	in	respect	of	the	previous	financial	year	and	the	
structure	performance	measures	and	targets	of	the	annual	bonus	
arrangements	for	the	year
•	 longterm	incentives	performance	against	targets	set	in	respect	of	
longterm	incentive	share	awards	granted	in	2009	2010	and	2011	
and	grant	policy	and	approval	of	grants	of	new	awards	in	line	
with	dilution	limits	and	institutional	shareholder	guidelines
•	 review	of	risk	in	remuneration	arrangements	and
•	 appointment	of	deloitte	llp	‘deloitte’	as	the	committee’s	
remuneration	adviser
advisers
the	committee	invites	individuals	to	attend	meetings	as	it	deems	
beneficial	to	assist	it	in	reviewing	matters	for	consideration	during	
the	year	these	individuals	included	the	chairman	of	the	company	
the	group	ceo	the	group	human	resources	director	the	group	
company	secretary	and	the	group	head	of	reward	martine	
verluyten	is	also	chairman	of	the	audit	committee	and	as	such	
ensures	that	there	is	coordination	on	risk	and	accounting	issues	
david	allvey	as	the	previous	chairman	of	the	audit	committee	
attended	meetings	prior	to	his	retirement	from	the	board	on	 
8	february	2012
no	director	or	senior	executive	is	present	at	meetings	when	his	 
or	her	own	remuneration	arrangements	are	being	discussed
in	the	performance	of	its	duties	the	committee	seeks	assistance	
from	external	advisers	where	necessary	to	ensure	it	is	suitably	
advised	in	june	2012	the	committee	formally	appointed	deloitte 
as	its	remuneration	adviser	since	the	appointment	deloitte	has	
provided	the	committee	with	independent	advice	in	relation	to	
various remuneration policy matters and the external  
remuneration	environment
deloitte	is	a	member	of	the	remuneration	consultants	group	and	 
as such voluntarily operates under the code of conduct in relation  
to	executive	remuneration	consulting	in	the	uk
other	parts	of	deloitte	have	provided	consulting	services	in	relation	
to	systems	and	organisational	design	projects	and	general	tax	and	
corporate	finance	advice	to	the	company
alithos	limited	‘alithos’	provided	advice	on	the	performance	of	the	
total	shareholder	return	‘tsr’	targets	attached	to	the	company’s	
longterm	incentive	schemes	the	committee	also	received	advice	
from	linklaters	llp	‘linklaters’	in	relation	to	the	group’s	executive	
share	schemes	and	towers	watson		co	‘towers	watson’	provided	
advice	in	respect	of	the	benchmarking	criteria	to	be	applied	to	the	
remuneration	of	the	group	ceo	and	group	cfo	linklaters	provide	
the	company	with	tax	and	legal	advice	in	germany	as	well	as	
providing	advice	to	trustees	on	the	thomas	cook	pension	plan	
towers	watson	act	as	actuaries	to	the	thomas	cook	pension	plan
evaluation
during	the	year	the	board	undertook	an	external	board	and	
committee	evaluation	details	of	which	are	on	page	45	the	board	
concluded	that	there	had	been	a	marked	improvement	in	the	
effectiveness	of	the	committee	during	the	year	and	that	significant	
progress	had	been	made	in	a	number	of	areas	as	detailed	in	the	
letter	from	the	chairman	of	the	committee	on	page	53 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
55
directors’ report business review
b policy and approach
the	committee	has	agreed	that	it	will	undertake	a	thorough	review	
of	the	remuneration	policy	following	the	completion	of	the	strategic	
review	in	spring	2013	detailed	below	is	a	summary	of	the	existing	
executive	director	remuneration	policy	adopted	in	2007	and	
amended	periodically
remuneration policy
the	group’s	remuneration	policy	is	to	ensure	that	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	managers	it	must	offer	rewards	which	on	the	
basis	of	above	average	performance	offer	upper	quartile	levels	 
of	reward
the	committee	will	continually	review	the	remuneration	policy	to	
ensure	it	remains	effective	appropriate	and	continues	to	support	 
the	group’s	objectives
the	committee	therefore	sets	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	directors	and	senior	
executives	with	above	average	skills	and	leadership	potential
•	 the	committee	will	look	for	the	group	to	provide	above	
industry average	total	remuneration	in	line	with	above	
average performance
•	 the	committee	has	determined	that	its	policy	for	the	design	of	
remuneration	arrangements	for	executive	directors	is	that	their	
base	salary	shall	be	set	in	line	with	the	median	of	a	peer	group	of	
companies	with	which	the	company	should	properly	be	compared	
and	that	total	remuneration	which	is	made	up	of	base	salary	
benefits	bonuses	and	longterm	incentive	awards	shall	be	set	in	
the	upper	quartile	of	the	comparator	group	but	subject	to	the	
attainment	of	appropriate	and	challenging	performance	criteria
•	 the	balance	of	remuneration	for	each	executive	director	will	be	
based	on	performance	both	of	the	group	and	of	the	individual	
executive	potential	ie	the	executive’s	potential	to	grow	in	
responsibility	and	performance	and	scarcity	ie	the	availability	 
of candidates to replace the executive should he or she leave  
the	group
•	 the	remuneration	for	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	his	or	her	ability	 
to	influence results
•	 the performance related portion of remuneration rewards 
shortterm	and	longterm	performance	separately	with	the	
potential	level	of	payment	being	heavily	weighted	in	favour	
of the longterm
•	 the	proportion	of	fixed	and	variable	remuneration	will	typically	 
be	targeted	at	30	fixed	and	70	variable
overview	of	remuneration	structure	for	executive	directors
the	remuneration	of	the	executive	directors	in	respect	of	the	year	 
is	set	out	in	the	audited	section	of	this	report
for	the	year	the	remuneration	of	the	executive	directors	comprised	
base	salary	participation	in	the	annual	bonus	and	longterm	
incentive	arrangements	and	benefits	the	main	benefits	are	the	
provision	of	pension	contributions	or	allowances	insured	benefits	
and	car	allowance	the	only	component	of	executive	remuneration	
that	is	pensionable	is	base	salary
in	benchmarking	the	separate	elements	of	remuneration	of	
executive	directors	the	remuneration	committee	references	i	a	
bespoke	group	comprising	selected	travel	and	leisure	companies	of	
broadly	similar	size	to	the	company	ii	a	group	with	similar	market	
capitalisation	levels	to	the	company	and	iii	a	group	with	similar	
revenue	levels	to	the	company
at	its	meeting	in	december	2011	the	committee	agreed	to	increase	
the	required	minimum	level	of	bonus	deferral	for	its	senior	
executives	and	to	introduce	clawback	provisions	in	respect	of	the	
deferred	bonus	this	will	be	implemented	in	respect	of	any	bonuses	
paid	to	senior	executives	for	the	year	and	future	years
further	details	of	the	remuneration	of	the	executive	directors	in	
respect	of	the	year	are	set	out	in	the	audited	section	of	this	report 56
thomas cook group plc annual report  accounts 2012
remuneration report continued
c remuneration by pay element
element objective performance	period further detail
base salary to	attract	and	retain	executive	
directors	of	the	quality	required
not	applicable reviewed	annually	with	regard	to	current	market	data	
and	relative	performance
retirement 
benefits
positioned	to	ensure	broad	
competitiveness	with	market	practice
not	applicable reviewed	periodically	to	ensure	alignment	with	
market	practice
bonus designed	to	provide	a	focus	on	the	
business	priorities	for	the	year	and	
reward	the	achievement	of	strategic	
objectives	
one	year
see	below	for	details	
reviewed periodically to ensure appropriateness of 
performance	measures	and	targets	75	of	bonus	will	
be	paid	as	cash	following	the	end	of	the	financial	year	
in	accordance	with	the	performance	achieved	
25	of	the	bonus	will	be	delivered	in	the	form	 
of shares and will normally vest one year after  
the	payment	date	subject	to	clawback	provisions
longterm 
incentive plans
designed	to	align	the	interests	of	
executive	directors	with	those	of	
shareholders	and	give	keen	incentives	
to	perform	at	the	highest	levels	over	
the	longerterm
three years
see	page	57	for	details
performance	conditions	aligned	with	turnaround	plans	
and	linked	to	share	price	growth	and	financial	targets
base	salary
in	accordance	with	the	group’s	remuneration	policy	the	base	 
salary	of	executive	directors	reflects	the	size	and	scope	of	their	
responsibilities	a	review	of	market	rates	of	base	salary	and	total	
remuneration	for	executive	directors	was	conducted	during	the	year	
in	advance	of	the	appointment	of	the	group	ceo	and	group	cfo
the	annual	rates	of	base	salary	as	at	27	november	2012	for	the	
executive	directors	are	shown	in	the	table	below
name role 
2012  
£‘000
2011  
£‘000	
harriet	green group	ceo 680 –
michael	healy group	cfo 480 –
pensions
the	committee	believes	that	the	executive	directors	should	be	
provided	with	competitive	post	retirement	benefits	in	respect	 
of	the	group	ceo	and	group	cfo	the	company	contributes	an	
amount	equivalent	to	30	and	25	respectively	of	base	salary	 
each	year	either	into	a	pension	scheme	or	as	a	cash	allowance
annual	bonus
the	committee	believes	that	it	is	important	to	incentivise	executive	
directors	by	ensuring	that	a	significant	portion	of	their	total	
remuneration	is	conditional	on	achievement	of	business	objectives	
across	both	annual	and	longerterm	time	periods	an	annual	cash	
bonus	may	be	earned	for	the	attainment	of	stretching	performance	
targets	these	targets	are	set	by	the	committee	at	the	start	of	the	
financial	year	or	upon	appointment	the	maximum	annual	bonus	
opportunity	is	determined	by	the	committee	from	time	to	time	
taking	account	of	the	internal	and	external	business	and	market	
context	to	ensure	an	appropriate	balance	between	fixed	short	and	
longerterm	pay	elements	and	being	mindful	of	market	benchmarks	
the	committee	has	reduced	the	ongoing	maximum	level	of	bonus	
payable	to	executive	directors	from	175	to	150	of	base	salary	 
75	of	any	bonus	earned	will	be	paid	following	the	end	of	the	
financial	year	in	accordance	with	the	performance	achieved	the	
remaining	25	of	annual	bonus	will	be	delivered	in	the	form	of	
shares	the	vesting	of	which	will	be	deferred	for	a	period	of	one	year	
from	the	payment	date	and	will	be	subject	to	clawback	provisions
the	committee	determines	the	extent	to	which	it	considers	 
the	objectives	have	been	met	and	the	annual	bonus	payable
harriet green
the	ongoing	maximum	bonus	payable	to	harriet	green	is	150	 
of	base	salary	although	for	the	initial	period	from	joining	on	 
30	july	2012	to	30	september	2013	her	maximum	annual	bonus	is	
225	of	base	salary	to	incentivise	significant	stretch	targets	linked	to	
the	transformation	plan	the	bonus	payable	for	the	period	30	july	
2012	to	30	september	2012	shall	be	calculated	and	paid	based	on	
achievement	of	objectives	set	for	the	year	to	30	september	2013	 
this	bonus	is	structured	as	20	linked	to	the	attainment	of	strategic	
targets	65	linked	to	the	attainment	of	cash	and	ebit	targets	and	
15	linked	to	the	attainment	of	people	and	engagement	targets
michael healy
the	maximum	bonus	payable	to	michael	healy	is	150	of	base	
salary	for	the	year	his	bonus	was	time	apportioned	for	the	period	
served	and	structured	as	40	linked	to	the	attainment	of	group	
financial	targets	35	linked	to	the	attainment	of	group	free	cash	
flow	targets	and	25	linked	to	the	attainment	of	personal	financial	
and	functional	targets
the	committee	reviewed	achievement	against	these	objectives	and	
determined	in	respect	of	the	period	that	michael	healy	was	a	
director	that	he	should	receive	a	bonus	of	625	of	the	maximum	
bonus	opportunity	for	the	year
michael	healy’s	bonus	in	respect	of	the	year	to	september	2013	is	
structured	as	35	linked	to	the	attainment	of	group	ebit	targets	
35	linked	to	the	attainment	of	group	free	cash	flow	targets	and	30	
linked	to	the	attainment	of	personal	financial	and	functional	targets directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
57
directors’ report business review
longterm	incentives
the	committee	believes	that	influencing	longterm	performance	and	
the	close	alignment	of	executive	directors’	remuneration	with	the	
interests	of	shareholders	is	an	important	element	of	the	company’s	
remuneration	policy	therefore	during	the	year	the	company	
operated	the	thomas	cook	group	plc	performance	share	plan	‘psp’	
and	the	thomas	cook	group	plc	coinvestment	plan	‘coip’
during	the	year	the	committee	operated	an	interim	grant	policy	
when	making	awards	under	the	psp	and	coip 	pending	the	completion	
of	the	strategic	review	in	spring	2013	the	drivers	for	this	interim	policy	
were	twofold
•	 aligning	performance	conditions	with	current	business	priorities	
and
•	 providing	awards	that	are	both	sustainable	and	appropriate	in	
terms	of	cost	and	dilution	but	also	sufficient	to	attract	and	retain	
key	talent
following	consultation	with	the	group’s	major	shareholders	the	
committee	approved	changes	to	the	performance	targets	attached	 
to	the	psp	and	coip	awards
the	committee	will	determine	the	performance	conditions	attached	
to	any	future	awards	to	ensure	they	are	stretching	and	that	the	
interests	of	the	executive	directors	and	senior	management	are	
aligned	with	shareholders
psp awards to executive directors
in	june	2012	the	committee	approved	awards	to	the	group	 
cfo	and	a	number	of	other	senior	executives	to	avoid	potential	
inappropriate	levels	of	windfall	gains	and	to	manage	cost	and	
dilution	these	awards	were	significantly	scaled	back	from	levels	
awarded	in	previous	years	this	award	will	vest	at	the	end	of	a	
threeyear	performance	period	based	on	a	share	price	target	full	
vesting	will	occur	if	the	share	price	is	100p	or	more	zero	vesting	if	
the	share	price	is	below	30p	vesting	will	increase	on	a	straightline	
basis	from	30	to	100	for	share	prices	between	30p	and	100p
in	september	2012	the	company	made	an	award	under	the	psp	to	
harriet	green	based	on	performance	conditions	explained	below	
the	committee	considers	that	it	is	essential	to	have	in	place	a	
coherent	reward	framework	for	the	leadership	team	and	therefore	 
a	performance	share	award	was	also	made	to	michael	healy	
recognising	his	critical	contribution	since	he	was	appointed	and	 
his	role	going	forward	in	delivering	the	group’s	turnaround	plan
the	committee	believed	that	the	performance	conditions	attached	 
to	these	awards	needed	to	be	relevant	to	the	task	ahead	including	
creating	value	to	shareholders	and	creating	a	strong	business	future	
through	the	transformation	and	the	development	of	a	strategic	plan	
to	be	announced	in	spring	2013	
accordingly	for	harriet	green	25	of	her	award	is	based	on	a	
rebuilding	share	price	target	20	of	the	award	is	based	on	an	
outstanding	achievement	share	price	target	and	55	of	the	award	 
is	based	on	create	a	strong	business	financial	performance	targets	 
to	be	aligned	with	the	strategic	plan	to	be	announced	in	spring	2013
the	allocation	of	the	performance	conditions	for	the	september	
award	for	michael	healy	were	set	such	that	when	taken	together	 
with	his	june	award	resulted	in	45	of	the	total	award	being	based	
on	a	rebuilding	the	share	price	target	and	55	based	on	create	a	
strong	business	financial	performance	targets	to	be	aligned	with	 
the	strategic	plan	to	be	announced	in	spring	2013
further details of the performance conditions attached to the 
september	2012	psp	awards	are	included	in	the	table	below
date of award   vesting	criteria   performance	targets	over	threeyear	period
september	2012 rebuilding	share	price	 
growth	target
full	vesting	for	share	price	of	100p	or	above	zero	vesting	for	share	price	below	30p	vesting	
will	increase	on	a	straight	line	basis	from	30	to	100	for	share	prices	between	30p	and	100p
create	a	strong	business	
financial	performance	targets
the	actual	measures	and	targets	will	be	determined	after	the	announcement	of	the	group’s	
strategic	plan	and	further	consultation	with	shareholders	in	spring	2013	there	will	be	a	30p	
share	price	underpin	attached	to	this	element	of	the	performance	target	in	the	interim	 
this	portion	of	the	award	will	be	subject	to	the	rebuilding	share	price	target
outstanding	achievement	
share	price	growth	target
full	vesting	for	share	price	of	140p	or	above	zero	vesting	for	share	price	below	56p	vesting	
will	increase	on	a	straight	line	basis	from	0	to	100	for	share	prices	between	56p	and	140p 58
thomas cook group plc annual report  accounts 2012
remuneration report continued
whilst	the	committee	is	aware	that	the	approach	to	setting	the	
financial	performance	targets	after	the	award	has	been	granted	 
is	not	typical	it	is	considered	that	this	is	the	most	appropriate	
approach	which	ensures	that	the	conditions	support	the	delivery	 
of	the	strategic	plan	and	that	the	award	acts	as	a	genuine	incentive	
this	approach	was	discussed	with	the	group’s	largest	shareholders	
who	were	broadly	supportive	of	the	approach	the	committee	
considers	that	the	vesting	criteria	set	out	on	page	57	provides	 
a	coherent	reward	framework	for	the	leadership	team	2012	total	
awards	for	each	executive	director	are	weighted	45	on	share	price	
growth	targets	and	55	on	financial	performance	targets
award grants in 201213
it	is	the	committee’s	intention	to	review	the	company’s	
remuneration	policy	after	the	completion	of	the	strategic	review	in	
spring	2013	the	future	operation	of	the	longterm	incentive	plans	
will	be	included	in	this	review	and	shareholders	will	be	asked	to	
approve	the	introduction	of	any	new	share	plans
remuneration	arrangements	for	former	executive	directors
sam weihagen
for	the	period	up	to	his	retirement	from	the	board	on	30	july	2012	
the	main	elements	of	sam	weihagen’s	compensation	comprised	base	
salary	of	£750000	maximum	annualised	bonus	of	175	of	base	
salary	a	pension	allowance	of	25	of	base	salary	and	due	to	the	
interim	nature	of	his	contract	he	received	accommodation	in	
london	and	regular	home	leave	flights	he	did	not	receive	awards	
under	the	company’s	longterm	incentive	plans for	the	period	from	
30	july	2012	to	30	september	2012	sam	weihagen	received	base	
salary	only	plus	accommodation	and	home	leave	flights	the	bonus	
arrangement	in	respect	of	sam	weihagen	reflected	the	special	
circumstances	and	uncertain	tenure	of	his	appointment	as	group	
ceo	targets	related	to	financial	performance	leadership	of	strategic	
and	change	projects	and	of	the	group	executive	board	and	his	
contribution	to	the	succession	process	for	the	period	to	30	july	 
2012	the	committee	agreed	to	award	him	a	total	bonus	of	23	 
of	his	maximum	bonus	opportunity
paul hollingworth
paul	hollingworth	resigned	from	the	board	and	from	his	role	as	
group	cfo	with	effect	from	30	june	2012	the	main	elements	of	 
his	compensation	comprised	base	salary	of	£480000	per	annum	 
a	maximum	annual	bonus	of	175	of	base	salary	and	a	pension	
allowance	of	25	of	base	salary	no	other	payments	have	been	paid	
or	are	due	to	paul	hollingworth	since	his	resignation	the	committee	
determined	that	no	bonus	would	be	payable	reflecting	the	overall	
financial	and	share	price	performance	of	the	company
longterm incentives
the	performance	targets	for	all	outstanding	awards	under	the	psp	
and	coip	to	sam	weihagen	and	paul	hollingworth	were	tested	from	
the	date	of	award	to	the	date	of	cessation	of	employment	as	these	
performance	tests	were	not	met	these	awards	lapsed	on	leaving	the	
company	sam	weihagen	had	six	months	in	which	to	exercise	his	
option	under	the	2007	psp	award	which	had	vested	in	2010
shareholder	engagement
during	the	year	the	committee	consulted	with	the	group’s	major	
shareholders	both	in	respect	of	the	proposed	changes	to	the	
performance	targets	for	the	company’s	longterm	incentive	share	
awards	made	in	june	2012	and	in	respect	of	the	performance	targets	
attached	to	longterm	incentive	awards	to	the	group	ceo	and	the	
group	cfo	in	september	2012	in	addition	roger	burnell	and	the	
company	chairman	met	with	a	number	of	major	shareholders	 
to	discuss	other	remuneration	matters	including	the	proposed	
remuneration	package	of	the	new	group	ceo	the	meetings	were	
supportive and constructive and all matters raised were reported 
back	to	the	board	at	its	next	meeting	it	is	intended	to	continue	 
with	a	significant	level	of	engagement	in	the	current	financial	year
risk	assessment
during	the	year	the	committee	considered	remuneration	in	relation	
to	risk	and	concluded	that	the	group’s	remuneration	structures	and	
incentives	were	appropriate	from	a	risk	management	perspective	
and	should	not	encourage	undue	risk	taking	out	of	line	with	its	risk	
policies	and	systems
operation	of	historic	share	plans
thomas cook group plc 2008 coinvestment plan ‘coip’
under	the	coip 	executive	directors	and	key	executives	were	required	
to	invest	a	portion	of	annual	bonus	in	the	purchase	of	shares	in	the	
company	referred	to	as	‘lodged	shares’	during	the	year	the	
committee	approved	a	number	of	changes	to	the	operation	of	the	
coip 	under	the	revised	terms	to	manage	dilution	and	cost	the	
maximum	investment	level	was	restricted	to	5	of	gross	salary	
participants	are	awarded	matching	shares	based	on	their	level	of	
investment	and	continued	holding	of	lodged	shares	matching	
shares	vest	at	the	end	of	the	threeyear	performance	period	subject	
to	the	satisfaction	of	the	performance	target	under	the	revised	terms	
of	the	coip 	the	maximum	match	has	been	reduced	from	35	to	2	
matching	shares	for	every	lodged	share	held
as	at	30	september	2012	neither	of	the	executive	directors	held	any	
lodged	shares	
following	the	end	of	the	year	the	committee	has	determined	that	it	
shall	make	no	further	awards	under	the	coip 	pending	the	future	
review	of	remuneration	policy
vesting of awards under longterm incentive plans
the	performance	measurement	period	in	respect	of	awards	granted	
under	the	psp	and	coip	in	2009	ended	during	the	year	as	the	targets	
had	not	been	met	the	committee	determined	that	no	part	of	the	
awards	would	vest	at	its	meeting	in	november	2012	the	committee	
made	the	same	determination	in	respect	of	the	psp	and	coip	awards	
granted	in	2010	as	it	was	clear	that	these	targets	would	similarly	not	
be	met
performance conditions attached to longterm incentive plans
details	of	the	performance	conditions	attached	to	former	psp	 
and	coip	awards	are	included	in	the	table	on	page	59	a	further	
explanation of the selection of the different performance measures 
is	given	on	page	60 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
59
directors’ report business review
total shareholder return
the	committee	selected	relative	tsr	as	a	performance	condition	
under	the	2009	2010	and	2011	psp	and	coip	as	it	considered	it	to	 
be	aligned	with	shareholder	interests	the	tsr	performance	of	the	
company	is	measured	relative	to	that	of	companies	in	the	following	
comparator	groups
•	 psp	2009	the	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	‘the	ftse	comparator	group’	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	
and
•	 psp	and	coip	2010	and	2011	two	comparator	groups	as	follows
–		 the	ftse	comparator	group	and
–		 a	tailored	peer	group	of	international	travel	operators	see	
details	on	page	60	the	committee	believes	that	this	second	
comparator	group	improves	the	relevance	of	the	performance	
target	to	participants
the	constituent	members	of	both	of	the	comparator	groups	are	
determined	on	the	date	the	awards	are	made	at	the	end	of	the	
performance	period	tsr	calculations	will	be	performed	by	the	
company’s	external	advisers	using	the	90day	average	share	price	 
at	the	start	and	end	of	the	performance	period
year	of	award vesting	criteria   performance	targets	over	threeyear	period
performance share plan    
2010 and 2011 50	–	total	shareholder	return	ranked	equally	
against	the	following	comparator	groups
•	 the	50	companies	at	the	bottom	of	the	ftse	
100 and the 50 companies at the top of the 
ftse	250	and
•	 sector	specific	comparator	group	see	page	60
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	each	comparator	group	determines	25	of	 
the	award
  50	–	earnings	per	share full	vesting	for	eps	growth	of	14	or	greater	zero	vesting	for	eps	growth	
of	less	than	6	vesting	will	increase	on	a	straight	line	basis	from	25	to	
100	of	the	eps	linked	part	of	the	award	for	eps	growth	between	6	
and	14
2009 50	–	total	shareholder	return	ranked	against	
the	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 full	vesting	for	adjusted	eps	of	40p	or	above	zero	vesting	for	eps	below	
35p	vesting	will	increase	on	a	straight	line	basis	from	25	to	100	of	
the	eps	linked	part	of	the	initial	award	for	eps	between	35p	and	40p
coinvestment plan    
2010 and 2011 50	–	earnings	per	share vesting	of	up	to	25	matching	shares	for	eps	growth	of	14	or	greater	
zero	vesting	for	eps	growth	of	less	than	6	vesting	will	increase	on	a	
straight	line	basis	from	25	to	100	of	the	eps	linked	part	of	the	award	
for	eps	growth	between	6	and	14
  50	–	total	shareholder	return	ranked	equally	
against	the	following	comparator	groups	
•	 the	50	companies	at	the	bottom	of	the	ftse	
100 and the 50 companies at the top of the 
ftse	250	and
•	 sector	specific	comparator	group	see	page	60
vesting	of	up	to	25	matching	shares	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	each	comparator	group	
determines	25	of	the	award
2009 100	–	earnings	per	share vesting	of	up	to	25	matching	shares	for	adjusted	eps	of	40p	or	above	
zero	vesting	for	eps	below	35p	vesting	will	increase	on	a	straight	line	
basis	from	05	matching	shares	to	25	matching	shares	for	eps	between	
35p	and	40p	subject	to	the	roic	ratchet	see	below
2009	2010	and	2011 return	on	invested	capital	achievement if	roic	is	below	4	no	matching	shares	will	vest	if	roic	is	between	 
4	and	6	a	reduction	of	up	to	40	is	applied	on	a	straight	line	basis	 
if	roic	is	between	6	and	10	matching	shares	vest	according	to	 
eps	performance	only	eps	and	tsr	performance	for	the	2010	award	
overall	opportunity	of	up	to	25	times	a	participant’s	investment	 
if	roic	is	between	10	and	14	an	uplift	of	up	to	40	is	applied	on 
a	straight	line	basis	subject	to	a	maximum	uplift	of	40	for	roic	in	
excess	of	14	this	will	increase	the	matching	ratio	to	35	matching	
shares	for	every	one	lodged	share 60
thomas cook group plc annual report  accounts 2012
remuneration report continued
earnings per share
the	committee	selected	eps	as	a	performance	condition	under	 
the	2009	2010	and	2011	psp	and	coip	as	it	is	regarded	as	a	good	
reflector	of	business	performance
•	 psp	and	coip	2009	the	committee	was	advised	that	an	absolute	
target	was	considered	more	appropriate	than	a	percentage	growth	
target	as	there	was	little	historic	data	for	the	company	having	
only been	established	in	2007	the	eps	target	range	was	set	by	
reference	to	early	consensus	forecasts
•	 psp	and	coip	2010	and	2011	the	eps	target	was	set	as	a	
compound	annual	growth	rate	over	a	threeyear	period
•	 eps	will	be	derived	from	the	income	statement	for	the	last	
financial	year	ending	prior	to	the	end	of	the	performance	period
return on invested capital
roic	in	relation	to	the	2009	2010	and	2011	coip	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	threeyear	performance	period	by	taking	the	post	tax	
operating	profit	over	the	performance	period	and	dividing	this	by	the	
sum	of	the	opening	capital	for	each	year	in	the	period
change of control and other circumstances 
in	the	event	of	a	change	of	control	the	awards	under	both	the	psp	
and	coip	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	where	options	have	been	granted	participants	would	have	
six	months	following	the	change	of	control	to	exercise	their	options	
to	the	extent	permitted	by	the	committee	on	the	death	of	a	
participant	or	in	the	case	of	early	termination	of	a	participant’s	
employment	where	the	committee	has	used	its	discretion	
participants	or	their	representatives	would	have	twelve	and	six	
months	respectively	to	exercise	their	options	to	the	extent	permitted	
by	the	committee
funding of share plans 
it	is	the	company’s	current	intention	to	satisfy	the	requirements	 
of	its	share	plans	in	the	method	best	suited	to	the	interests	of	the	
company	either	by	acquiring	shares	in	the	market	or	subject	to	
institutional	shareholder	guidelines	issuing	new	shares	as	at	30	
september	2012	3551668	shares	were	held	in	the	thomas	cook	
group	plc	2007	employee	benefit	trust	which	represents	10	of	
share	incentive	awards	held	on	that	date	and	04	of	the	total	issued	
share	capital	these	shares	can	be	used	to	satisfy	share	awards	on	
vesting	the	level	of	hedging	will	be	kept	under	review	subject	to	the	
rules	of	the	plans	awards	cannot	be	made	if	awards	under	any	
discretionary	employee	share	plan	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	
and	did	not	vote	at	the	agm	held	in	february	2012
remuneration	arrangements	across	the	group
thomas	cook	group	plc	is	a	large	international	business	with	
diversified	business	interests	across	the	travel	and	leisure	sector	as	
such	we	do	not	believe	it	is	appropriate	to	target	a	given	level	of	
correlation	between	pay	and	employment	conditions	of	employees	
of	the	wider	business	and	directors’	remuneration	rather	we	 
seek	to	ensure	that	core	principles	are	applied	in	determining	
remuneration	at	all	levels	across	the	group	following	the	
announcement	of	the	strategic	review	in	spring	2013	we	will	be	
reviewing	the	core	principles	and	all	aspects	of	remuneration	policy	
to	align	them	with	the	confirmed	business	strategy	leadership	
behaviours	and	company	values	through	this	we	will	intensify	 
our efforts to ensure that
•	 employees	including	the	executive	directors	are	paid	
competitively	and	fairly	by	reference	to	the	local	market	rate	
supported	by	appropriate	internal	and	external	benchmarking
•	 through	short	and	longterm	incentive	schemes	which	operate	
throughout	the	organisation	overall	pay	is	more	directly	and	
clearly	aligned	to	business	strategy	and	performance
the	sector	specific	comparator	group	applied	to	the	2010	and	2011	psp	and	coip	awards	consists	of	the	following	companies
company	name country	of	main	listing company	name country	of	main	listing
accor	sa france air	berlin	plc germany
air	franceklm	sa france avis	budget	group	inc us
avis	europe	plc
1
uk british	airways	plc
2
uk
carnival	corp		plc us deutsche	lufthansa	ag germany
easyjet	plc uk expedia	inc us
flight	centre	limited australia hogg	robinson	group	plc uk
holidaybreak	plc
3
uk intercontinental	hotels	group	plc uk
kuoni	reisen	holding	ag switzerland millennium		copthorne	hotels	plc uk
pricelinecom	inc us royal	caribbean	cruises	ltd us
ryanair	holdings	plc ireland sas	ab sweden
transat	at	inc canada trigano	sa france
tui	travel	plc uk    
1	 	 avis	europe	plc	‘avis’	was	acquired	by	avis	budget	group	by	means	of	a	scheme	of	arrangement	which	became	effective	on	3	october	2011	under	the	terms	of	the	psp	and	
coip’s	performance	targets	the	position	of	avis	was	established	at	the	date	the	scheme	of	arrangement	became	effective	and	its	position	frozen
2	 	 british	airways	plc	‘ba’	delisted	from	the	london	stock	exchange	on	24	january	2011	following	its	merger	with	iberia	under	the	terms	of	the	psp	and	coip’s	performance	targets	
the	position	of	ba	was	established	at	the	date	of	the	merger	and	its	position	frozen
3	 	 holidaybreak	plc	‘holidaybreak’	was	acquired	by	prometheon	holdings	uk	limited	a	whollyowned	subsidiary	of	cox		kings	limited	by	means	of	a	scheme	of	arrangement	
which	became	effective	on	27	september	2011	under	the	terms	of	the	psp	and	coip’s	performance	targets	the	position	of	holidaybreak	was	established	at	the	date	the	scheme	
of	arrangement	became	effective	and	its	position	frozen directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
61
directors’ report business review
•	 the	company	offers	a	range	of	benefits	depending	on	employee	
location	including	pensions	flexible	benefits	paid	annual	leave	
and	healthcare	insurance
•	 the	company	will	provide	increased	focus	on	offering	internal	
promotion	opportunities
•	 the	company	promotes	employment	conditions	that	are	
commensurate	with	a	good	employer	and	with	a	high	profile	
brand	including	high	standards	of	health	and	safety	and	policies	
on	equal	opportunity
•	 the	company	promotes	a	wide	range	of	best	practice	learning	and	
development	programmes	to	help	people	maximise	their	potential	
contribution	to	the	business	and	be	eligible	for	higher	levels	of	
reward	and	promotion	opportunities
•	 through	annual	employee	surveys	consultation	groups	and	other	
feedback	forums	the	company	will	intensify	its	commitment	to	
understanding	employee	views	and	to	taking	these	views	into	
account	in	designing	reward	and	other	peoplerelated	policies
for	further	information	on	our	people	and	the	key	priorities	for	our	
people	agenda	in	the	year	ahead	please	see	pages	32	to	34
service	contracts
each	of	the	executive	directors	who	served	during	the	year	has	or	
had	a	service	contract	with	the	company	the	date	of	the	current	
service	contract	and	the	notice	period	for	each	executive	director	 
are	set	out	below
name date of contract
current directors  
harriet	green 30	july	2012
michael	healy	 14	may	2012
former directors  
sam	weihagen 2	august	2011
paul	hollingworth 12	november	2009
upon	joining	the	company	the	period	of	notice	required	to	be	given	
by	the	company	to	harriet	green	was	24	months	reducing	by	one	
month	for	every	month	served	until	18	months	have	elapsed	from	
her	appointment	date	giving	an	ongoing	notice	period	of	six	
months	this	was	considered	appropriate	in	order	to	secure	the	
appointment	of	harriet	green	the	period	of	notice	required	to	 
be	given	by	harriet	green	to	the	company	is	six	months	michael	
healy’s	service	contract	can	be	terminated	on	six	months’	notice	by	
either	party	with	notice	by	the	company	not	to	be	given	earlier	than	 
six	months	from	the	date	of	appointment
either	the	executive	director	or	the	company	may	terminate	
employment	by	giving	the	relevant	period	of	written	notice	and	the	
company	may	pay	compensation	in	lieu	of	notice	under	its	terms	of	
reference	it	is	the	committee’s	responsibility	to	determine	the	basis	
on	which	the	employment	of	an	executive	director	is	terminated	
the	committee	aims	to	avoid	rewarding	poor	performance	and	to	
take	a	robust	line	on	reducing	compensation	to	reflect	any	obligation	
to	mitigate	loss	on	the	part	of	the	departing	executive	director	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
prior	to	his	retirement	from	the	board	and	his	position	as	group	 
ceo	on	30	july	2012	the	notice	period	for	sam	weihagen	was	 
three	months	but	the	stated	intention	of	the	parties	was	that	the	
appointment	would	last	until	a	successor	was	selected	on	24	may	
2012	it	was	announced	that	harriet	green	would	succeed	sam	
weihagen	as	group	ceo	effective	from	30	july	2012	and	that	sam	
weihagen	would	remain	with	the	group	until	30	september	2012	 
to	ensure	a	seamless	transition	sam	weihagen	did	not	receive	any	
additional	remuneration	from	the	company	following	30	september	
2012	paul	hollingworth	resigned	from	the	board	and	his	role	as	
group	cfo	on	30	june	2012	the	notice	period	for	paul	hollingworth	
was	12	months	however	the	committee	agreed	that	he	would	 
not	be	paid	for	any	of	his	notice	period	beyond	the	date	he	left	 
the	company
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
harriet	green	is	a	nonexecutive	director	of	bae	systems	plc	and	
emerson	electric	co	both	roles	were	held	prior	to	her	appointment	
as	group	ceo	on	her	appointment	the	board	agreed	that	she	 
should	continue	to	serve	on	both	boards	being	satisfied	that	she	will	
devote	sufficient	time	and	energy	to	the	company	and	that	being	a	
nonexecutive	director	is	a	mutual	benefit	to	the	executive	and	the	
company	for	the	period	from	her	appointment	to	30	september	
2012	she	received	fees	of	£17240	and	17833	respectively	which	
she	is	allowed	to	retain
whilst	serving	as	an	executive	director	of	the	company	paul	
hollingworth	was	a	nonexecutive	director	of	electrocomponents	plc	
for	the	period	1	october	2011	to	the	date	of	his	resignation	on	 
30	june	2012	he	received	a	fee	of	£41042	from	electrocomponents	
plc	which	he	was	allowed	to	retain
nonexecutive	directors	
the	committee	is	responsible	for	determining	the	fees	for	the	
chairman	of	the	company	the	fees	for	the	other	nonexecutive	
directors	are	set	by	the	board	no	director	votes	on	his	or	her	 
own	remuneration
the	nonexecutive	directors’	fees	were	reviewed	during	the	year	 
the	fees	were	benchmarked	against	companies	in	the	ftse	350	and	
following	the	review	it	was	agreed	that	no	increase	in	the	fees	should	
be	made	but	a	further	review	will	take	place	in	2013	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 62
thomas cook group plc annual report  accounts 2012
remuneration report continued
the	annual	rates	of	nonexecutive	director	fees	are	shown	in	the	
table	below
position annual fees £000
chairman

275
nonexecutive	director 60
additional	fee	for	the	chair	of	the	audit	committee 20
additional	fee	for	the	chair	of	the	 
remuneration	committee 20
additional	fee	for	the	chair	of	the	health	
safety  environmental	committee 10
	 	 this	is	the	annual	rate	of	fees	payable	to	frank	meysman	who	became	chairman	on	
1 december	2011	the	annual	rate	of	fees	paid	to	the	former	chairman	was	£250000
the	fees	paid	to	the	chairman	and	the	nonexecutive	directors	in	
respect	of	the	year	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	which	contain	a	six	month	
notice	period	the	appointments	under	these	letters	continue	until	
the	expiry	dates	set	out	below	unless	terminated	for	cause	or	on	 
the	period	of	notice	detailed	above
name
date of latest letter 
of appointment expiry	date
current directors
frank	meysman 1	october	2011 na
dawn airey 12 april 2010 11 april 2013
emre	berkin 1	november	2012 30	october	2015
roger	burnell 27 november	2012 2014	agm
peter	marks 1	october	2011 30	september	2014
martine	verluyten 9	may	2011 8	may	2014
former directors
david allvey 22	november	2010 na
michael	beckett 10	september	2009 na
bo	lerenius 22	november	2010 na
peter	middleton 30	november	2009 na
performance	graph
the	graph	below	shows	the	tsr	for	holders	of	thomas	cook	group	
plc	€010	ordinary	shares	for	the	period	since	listing	on	19	june	2007	
measured	against	the	ftse	250	and	the	ftse	all	share	travel		
leisure	index	these	indices	were	chosen	as	comparators	because	 
the	company	has	been	a	constituent	of	the	ftse	all	share	travel		
leisure	index	throughout	the	period	since	listing	and	was	a	
constituent	of	the	ftse	250	for	part	of	the	year	the	calculation	 
of	tsr	follows	the	provisions	of	the	regulations	and	is	broadly	the	
change	in	market	price	together	with	reinvestment	of	dividend	
income	this	graph	shows	the	spot	value	of	£100	invested	in	thomas	
cook	group	plc	on	19	june	2007	compared	with	the	value	of	£100	
invested	in	the	ftse	250	and	the	ftse	all	share	travel		leisure	
index	the	intermediate	points	are	the	spot	values	on	the	 
company’s	financial	year	ends
total shareholder return 
0
20
40
60
80
100
120
thomas cook
ftse 250
ftse all share 
travel and leisure
19 june 07 30 sep 07 30 sep 08 30 sep 09 30 sep 10 30 sep 11 30 sep 12
d audited information
directors’	interests	in	shares
the	following	table	shows	the	beneficial	interests	of	the	directors	who	held	office	at	the	end	of	the	year	in	the	€010	ordinary	shares	of	 
the	company
 
ordinary	shares	at	
30 september	2012
ordinary	shares	at	1 october	
2011	or on	appointment
directors as at 30 september 2012    
executive directors    
harriet	green – –
michael	healy – –
nonexecutive directors    
frank	meysman 200000 100000
dawn airey 10000 10000
roger	burnell 113692 53692
peter	marks 56064 –
martine	verluyten – –
share	options	and	share	awards	under	longterm	incentive	plans
the	following	tables	show	in	respect	of	each	person	who	served	as	a	director	at	any	time	during	the	year	the	number	of	ordinary	shares	 
of	€010	each	that	were	the	subject	of	a	share	option	or	contingent	share	award	at	the	start	of	the	year	and	at	the	end	of	the	year	or	on	the	
date	of	resignation	holdings	relate	to	the	psp	and	coip 	options	and	share	awards	under	the	psp	and	coip	are	awarded	as	‘nil	cost’	 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
63
directors’ report business review
the	following	table	gives	details	of	psp	awards	held	by	executive	directors	who	served	during	the	year
name date of award
number	of	
optionsshares	
awarded
share	price	on	
date of award 
pence
number	of	
optionsshares	
lapsed
total as at 
30 september	
2012 or on date 
of	resignation
earliest	exercisable
vesting date expiration	date
1
harriet	green 28	september	2012 6237488 175 – 6237488 28	september	2015 –
michael	healy 12	june	2012 500000 165 – 500000 12	june	2015 –
  28	september	2012 2000000 175 – 2000000 28	september	2015 –
paul	hollingworth
2
12	february	2010 411134 229 – 411134 12	february	2013 12	february	2020
  10	january	2011 486815 195 – 486815 10	january	2014 10	january	2021
sam	weihagen
2
12	july	2007 61387 297 – 61387 12	july	2010 12	july	2017
  9	january	2009 227394 194 227394 0 – –
  12	february	2010 315979 229 – 315979 12	february	2013 12	february	2020
  10	january	2011 198621 195 – 198621 10	january	2014 10	january	2021
1	 no	expiration	date	is	applicable	to	the	awards	made	in	2012	as	these	were	made	as	contingent	share	awards
2	 	 on	leaving	the	business	the	2009	2010	and	2011	psp	awards	held	by	sam	weihagen	and	the	2010	and	2011	psp	awards	held	by	paul	hollingworth	were	tested	against	the	
performance	target	as	these	performance	tests	were	not	met	these	awards	lapsed
for	uk	participants	£30000	of	awards	can	be	made	and	held	under	a	hmrc	approved	company	share	option	subplan	‘csosp’	 
the	following	table	gives	details	of	awards	made	under	the	csosp	in	conjunction	with	the	psp
  12	february	2010
total	held	at	30 september	
2012	or	on date	of	resignation	
paul	hollingworth
1
12847 12847
option	price	pence 234  
1	 	 on	leaving	the	business	the	csosp	award	held	by	paul	hollingworth	lapsed	as	the	2010	psp	award	made	in	conjunction	with	the	csosp	award	had	also	lapsed	due	to	the	
performance	target	not	being	met	
at	the	date	of	exercise	to	the	extent	that	there	is	a	gain	on	the	hmrc	approved	options	psp	options	will	be	forfeited	to	the	same	value
vesting	of	awards	made	under	the	psp	in	2009	including	the	hmrc	approved	options	was	dependent	on	50	tsr	ranked	against	the	ftse	
50	to	150	comparator	group	and	50	growth	in	earnings	per	share	during	the	year	the	2009	award	lapsed	as	the	performance	target	had	
not	been	met	between	the	end	of	the	year	and	the	date	of	this	report	it	became	apparent	that	the	eps	target	in	respect	of	the	2010	psp	
awards	had	not	been	achieved	and	that	the	tsr	target	would	not	be	achieved	therefore	the	psp	awards	made	in	2010	have	lapsed	vesting	
of	awards	made	under	the	psp	in	2011	is	dependent	on	25	tsr	ranked	against	the	ftse	50	to	150	comparator	group	25	tsr	ranked	
against	the	sector	specific	comparator	group	and	50	growth	in	earnings	per	share	vesting	of	awards	under	the	psp	in	june	2012	is	
dependent	on	share	price	growth	vesting	of	awards	made	under	the	psp	in	september	2012	is	dependent	on share	price	and financial	
targets	further	information	on	the	performance	conditions	is	detailed	on	pages	57	and	59
the	following	table	gives	details	of	the	maximum	number	of	matching	shares	each	executive	director	can	receive	under	the	coip	if	the	
performance	conditions	are	met	in	full	at	the	end	of	the	year	neither	harriet	green	nor	michael	healy	held	any	awards	under	the	coip	 
and	have	not	been	included	in	the	table	below
name date of award 
number	
of matching	
shares awarded
number	
of matching	
shares lapsed
total as 
at 30 september	
2012 or on date 
of resignation earliest	vesting	date expiration	date
paul	hollingworth
1
12	february	2010 222435 –  222435 12	february	2013	 12	february	2020
  21	may	2010 70052 –  70052 21	may	2013 21	may	2020
  10	january	2011 71151 –  71151 10	january	2014 10	january	2021
sam	weihagen
1
12	january	2009 36379 36379 0 12	january	2012 12	january	2019
  12	february	2010 205156 –  205156 12	february	2013	 12	february	2020
  21	may	2010 70000 –  70000 21	may	2013 21	may	2020
  10	january	2011 44467 –  44467 10	january	2014 10	january	2021
1	 	 on	leaving	the	business	the	2009	2010	and	2011	coip	awards	held	by	sam	weihagen	and	the	2010	and	2011	coip	awards	held	by	paul	hollingworth	were	tested	against	the	
performance	target	as	these	performance	tests	were	not	met	these	awards	lapsed
vesting	of	matching	shares	awarded	under	the	coip	in	2009	was	dependent	on	growth	in	eps	and	return	on	invested	capital	achievement	
during	the	year	the	2009	award	lapsed	as	the	performance	target	had	not	been	met	between	the	end	of	the	year	and	the	date	of	this	
report	it	became	apparent	that	the	performance	target	in	respect	of	the	2010	coip	awards	had	not	been	achieved	and	the	awards	of	
matching	shares	have	lapsed	vesting	of	matching	shares	awarded	under	the	coip	in	2011	is	dependant	on	growth	in	eps	tsr	ranked	 
against	the	comparator	groups	and	return	on	invested	capital	achievement	further	information	on	the	performance	conditions	is	 
detailed	on	page	59
none	of	the	directors	of	the	company	held	any	interest	in	any	other	securities	of	thomas	cook	group	plc	during	the	year	in	the	period	
between	30	september	2012	and	27	november	2012	there	were	no	changes	in	the	directors’	interests	referred	to	above
the	midmarket	price	of	the	company’s	ordinary	shares	at	the	close	of	business	on	30	september	2012	was	1750p	and	the	range	during	 
the	year	was	1020p	to	5665p	these	midmarket	prices	are	as	quoted	on	the	london	stock	exchange 64
thomas cook group plc annual report  accounts 2012
remuneration report continued
directors’	remuneration
details	of	the	remuneration	of	the	directors	for	services	to	the	company	for	the	year	are	disclosed	below
name
base	salary
fees £000
annual	bonus
payments
£000
pension
 allowance
1
£000
benefits
2
£000
payments	after	
service as   
a director 
£000
total 
emoluments 
2012 
£000
total 
emoluments 
2011 
£000
executive directors            
harriet	green
3
118 – 36 27 – 181 –
michael	healy
4
105 39 26 6 – 176 –
nonexecutive directors              
frank	meysman
5
275 – – 54 – 329 –
dawn airey 60 – – – – 60 60
roger	burnell 76 – – – – 76 70
peter	marks
5
66 – – – – 66 –
martine	verluyten 73 – – – – 73 24
past executive directors              
paul	hollingworth
6
360 – 90 57 – 507 627
sam	weihagen
7
622 300 156 93 141 1312 453
past nonexecutive directors              
david allvey
8
42 – – – – 42 80
michael	beckett
9
89 – – – – 89 250
bo	lerenius
8
43 – – – – 43 60
peter	middleton
8	10
58 – – – – 58 80
total
11
1987 339 308 237 141 3012 1704
1	 the	pension	allowance	is	calculated	by	reference	to	level	of	base	salary	 it	is	not	taken	into	account	when	calculating	bonus	or	longterm	incentive	targets
2	 	 benefits	received	by	all	executive	directors	include	private	medical	benefits	death	in	service	benefit	and	car	allowance	harriet	green	additionally	receives	income	protection	
personal	accident	cover	insurance	and	the	provision	of	accommodation	in	london	and	travel	costs	reimbursed	by	the	company	and	the	personal	income	tax	assessed	by	hmrc	as	
payable	on	those	amounts	paul	hollingworth	also	received	pay	in	lieu	of	holiday	entitlement	the	figure	disclosed	for	frank	meysman	is	in	respect	of	accommodation	in	london	
and	travel	costs	reimbursed	by	the	company	and	the	personal	income	tax	assessed	by	hmrc	as	payable	on	those	amounts
3	 harriet	green	was	appointed	group	ceo	on	30	july	2012
4	 	 michael	healy	joined	the	company	on	14	may	2012	and	was	appointed	as	group	cfo	on	1	july	2012	the	figure	for	michael	healy	reflects	the	three	month	period	of	the	year	 
he	was	a	director
5	 frank	meysman	and	peter	marks	were	both	appointed	to	the	board	on	1	october	2011
6	 paul	hollingworth	left	the	company	on	30	june	2012
7	 sam	weihagen	stepped	down	as	group	ceo	on	30	july	2012	but	remained	with	the	company	until	his	retirement	on	30	september	2012
8	 david	allvey	bo	lerenius	and	peter	middleton	retired	from	the	board	at	the	conclusion	of	the	company’s	agm	on	8	february	2012
9	 	 michael	beckett	retired	from	the	board	on	30	november	2011
10	 	 for	the	period	1	october	2012	to 8	february	2012	peter	middleton	also	received	a	pension	of	£21574	from	the	thomas	cook	defined	benefit	pension	scheme	this	pension	is	
fully	funded	and	accrued	in	the	period	1987	to	1992	when	he	was	ceo	of	thomas	cook
11	 	 as	disclosed	in	last	year’s	remuneration	report	the	former	group	ceo	manny	fontenlanovoa	left	office	on	2	august	2011	and	was	on	garden	leave	until	4	november	2011	
during	the	year	he	received	£851114	as	payment	in	lieu	of	the	balance	of	his	12month	notice	period	this	value	has	not	been	included	in	the	‘total’	value	stated	in	the	
table above
by	resigning	from	her	previous	position	to	join	the	company	harriet	green	forfeited	deferred	bonus	and	longterm	incentive	awards	granted	
by	her	former	employer	to	help	in	securing	her	appointment	the	company	agreed	to	provide	a	measure	of	compensation	for	these	awards	
based	on	an	independent	external	valuation	of	the	projected	vesting	level	as	a	result	the	company	will	pay	harriet	green	cash	payments	 
of	£244000	and	£292000	in	april	and	july	2013	respectively	such	dates	being	the	normal	vesting	dates	for	the	awards	made	by	her	 
former	employer
directors’	pensions
the	company	contributes	for	each	of	the	executive	directors	into	either	a	pension	scheme	or	as	a	cash	allowance	an	amount	equivalent	 
to	30	and	25	of	annual	base	salary	in	respect	of	the	group	ceo	and	group	cfo	respectively	to	the	extent	that	this	is	provided	as	a	cash	
allowance	it	is	disclosed	in	the	directors’	remuneration	table	as	pay	in	lieu	of	pension
both	harriet	green	and	michael	healy	receive	the	pension	contributions	as	cash	allowances	for	the	period	1	october	2011	until	their	
resignation	from	the	board	both	paul	hollingworth	and	sam	weihagen	were	paid	an	amount	equivalent	to	25	of	their	respective	 
annual	base	salaries	as	a	cash	allowance
this	report	on	remuneration	has	been	approved	by	the	board	of	directors	and	signed	on	its	behalf	by
roger burnell
chairman	remuneration	committee
27	november	2012 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
65
directors’ report business review
other	disclosures
share capital
the	company	has	the	following	two	classes	of	shares	in	issue
name
number	of	shares	in	issue	at	 
30	september	2012
ordinary	shares	of	€010	each 885900334
deferred shares of £1 each 50000
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	ordinary	shares	make	
up	the	significant	majority	of	the	share	capital	as	at	30	september	
2012	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
as	part	of	the	£200m	bank	facility	announced	on	25	november	2011	
the	company	issued	warrants	to	certain	of	its	lenders	giving	holders	
the	right	at	any	time	until	22	may	2015	to	subscribe	for	up	to	an	
aggregate	of	approximately	43m	ordinary	shares	representing	
approximately	49	of	the	issued	share	capital	of	the	company	at	 
the	date	of	issue	at	a	subscription	price	per	share	of	19875p
on	10	may	2012	the	company	issued	warrants	as	part	of	the	bank	
facility	amendment	announced	on	5	may	2012	to	certain	of	its	
lenders	giving	holders	the	right	at	any	time	until	22	may	2015	 
to	subscribe	for	up	to	an	aggregate	of	approximately	43m	ordinary	
shares	representing	approximately	50	of	the	issued	share	capital	
of	the	company	at	the	date	of	issue	at	a	subscription	price	per	share	
of	€010	in	addition	the	warrants	issued	as	part	of	the	bank	facility	
announced	in	november	2011	were	repriced	to	the	same	exercise	
price	as	at	26	november	2012	two	warrantholders	had	exercised	
their	subscription	rights	in	respect	of 15966244	warrants
articles of association
the	company’s	articles	of	association	the	‘articles’	may	only	 
be	amended	by	a	special	resolution	at	a	general	meeting	of	
shareholders	the	articles	are	available	on	the	company’s	website	 
at	wwwthomascookgroupcom
authority to purchase shares
the	company	currently	does	not	have	authority	to	purchase	its	 
own	shares
share transfer restrictions
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	10082008	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 66
thomas cook group plc annual report  accounts 2012
other	disclosures	continued
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	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
as	at	30	september	2012	201848	ordinary	shares	0023	were	held	
on	the	separate	register
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
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	interest	shall	be	construed	accordingly
provisions of change of control
the	company	has	a	facilities	agreement	the	‘agreement’	in	place	
which	consists	of	£12bn	term	and	revolving	credit	facilities	and	
£200m	bilateral	bonding	and	guarantee	facilities	the	agreement	
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	unless	extended	by	agreement	for	a	further	
period	not	exceeding	30	days	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	of	its	commitments	under	the	agreement	
the	amendments	to	the	agreement	dated	21	october	2010	15	july	
2011	2	december	2011	and	10	may	2012	did	not	affect	these	
provisions	regarding	change	of	control
the	company	also	has	outstanding	€400m	675	guaranteed	notes	
due	2015	and	£300m	775	guaranteed	notes	due	2017	together	
the	‘notes’	upon	the	occurrence	of	certain	change	of	control	events	
relating	to	the	company	and	then	only	if	certain	rating	conditions	in	
respect	of	the	relevant	notes	are	met	each	holder	has	the	option	to	
require	the	company	to	redeem	or	at	the	option	of	the	company	to	
purchase	the	notes	of	such	holder	at	par	value	plus	accrued	interest
the	company	through	its	subsidiaries	has	a	501	stake	in	itc	travel	
investments	sl	as	part	of	a	joint	venture	with	vao	intourist	under	
the	terms	of	the	joint	venture	agreement	if	a	change	of	control	of	
the	company	occurs	in	certain	circumstances	vao	intourist	is	
entitled	to	issue	an	irrevocable	notice	in	writing	requiring	the	
thomas	cook	group	to	purchase	the	itc	travel	investments	sl	
shares	held	by	vao	intourist	at	a	prescribed	default	value
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	year	2011	nil
charitable donations
the	company	made	no	cash	donations	during	the	financial	year	 
in	2011	the	company	made	cash	donations	of	£5000	to	leeds	
metropolitan	university	and	£25000	to	just	a	drop	charity
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	2012	the	company	had	no	trade	creditors	 
2011	nil	 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
67
directors’ report business review
major shareholdings
as	at	26	november	2012	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 as at 
26112012
percentage	of	issued	
capital		as	at	
26112012
number	of	shares	
held as at 
12122011
percentage	of	issued	
capital		as	at	
12122011	
invesco	ltd 149209379 1675 45085133 515
marathon	asset	management	llp 59283472 665 59283472 678
blackrock	inc 42946657 482 42946657 491
axa	sa 42030117 472 42030117 480
lloyds	banking	group	plc 40869697 459 40869697 467
massachusetts	financial	services	company 40726189 457 40726189 465
norges	bank 29060292 326 – –
independent auditors
pricewaterhousecoopers	llp	have	expressed	their	willingness	to	be	reappointed	as	auditors	of	the	company	upon	the	recommendation	 
of	the	audit	committee	resolutions	to	reappoint	them	as	the	company’s	auditors	and	to	authorise	the	directors	to	determine	their	
remuneration	will	be	proposed	to	the	2013	annual	general	meeting
the	directors’	report	comprising	pages	4	to	67	has	been	approved	and	is	signed	by	order	of	the	board	by
derek woodward
group	company	secretary
27	november	2012
registered office
6th	floor	south
brettenham	house
lancaster	place
london	wc2e	7en
registered number
6091951 68
thomas cook group plc annual report  accounts 2012
15 
transformation 
initiatives
100  
managers	focused	on	
the transformation
£100m 
	of	cost	savings	
identified	to	date thomas cook group plc annual report  accounts 2012
69
directors’ report	corporate	governance directors’ report	business	review
financial	statements
70	 independent	auditors’	report	
71	 group	income	statement
72	 	 group	statement	of	 
comprehensive income
73	 group	cash	flow	statement
74	 group	balance	sheet
76	 	 group	statement	of	changes	in	equity
77	 	 notes	to	the	financial	statements
125	 company	balance	sheet
126	 company	cash	flow	statement
127	 	 company	statement	of	changes	in	equity
128	 	 notes	to	the	company	financial	statements
134	 	 appendix	1	–	key	performance	indicators	definitions
135	 shareholder	information
rebuild
collaboration	and	
communication
our	employees	are	at	the	heart	of	delivering	great	
customer	service	we	have	updated	our	core	values	
to	reflect	the	company	we	are	becoming	as	we	 
focus	on	more	efficient	ways	of	working	better	
collaboration	breaking	down	silos	and	
communicating	transparently	
financial statements
we	are	rebuilding	the	strength	of	our	business	and	
creating	a	fresh	culture	centred	on	our	customers	
and	our	core	values	 70
thomas cook group plc annual report  accounts 2012
independent auditors’ report to the members  
of thomas cook group plc
we have audited the financial statements of thomas cook group plc 
for the year ended 30 september 2012 which comprise the group 
income statement the group statement of comprehensive income 
the group and company cash flow statement the group and 
company balance sheet the group and company statement of 
changes in equity and the related notes the financial reporting 
framework that has been applied in their preparation is applicable 
law and international financial reporting standards ifrss as 
adopted by the european union and as regards the parent company 
financial statements as applied in accordance with the provisions  
of the companies act 2006
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement 
the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view 
our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require  
us to comply with the auditing practices board’s ethical standards  
for auditors
this report including the opinions has been prepared for and only 
for the company’s members as a body in accordance with chapter 3 
of part 16 of the companies act 2006 and for no other purpose  
we do not in giving these opinions 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
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s and the parent company’s circumstances and have been 
consistently applied and adequately disclosed the reasonableness  
of significant accounting estimates made by the directors and the 
overall presentation of the financial statements in addition we  
read all the financial and nonfinancial information in the directors’ 
report to identify material inconsistencies with the audited financial 
statements if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications  
for our report
opinion on financial statements
in our opinion
•	 the financial statements give a true and fair view of the state of 
the group’s and of the parent company’s affairs as at 30 september 
2012 and of the group’s loss and group’s and parent company’s 
cash flows for the year then ended
•	 the group financial statements have been properly prepared in 
accordance with ifrss as adopted by the european union
•	 the parent company financial statements have been properly 
prepared in accordance with ifrss as adopted by the european 
union and as applied in accordance with the provisions of the 
companies act 2006 and
•	 the financial statements have been prepared in accordance with 
the requirements of the companies act 2006 and as regards the 
group financial statements article 4 of the las regulation
opinion on other matters prescribed by the companies 
act 2006 
in our opinion
•	 the part of the directors’ remuneration report to be audited  
has been properly prepared in accordance with the companies  
act 2006
the information given in the directors’ report for the financial year 
for which the financial statements are prepared is consistent with  
the financial statements
matters on which we are required to report by exception 
we have nothing to report in respect of the following 
under the companies act 2006 we are required to report to you if  
in our opinion
•	 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been 
received from branches not visited by us or
•	 the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by  
law are not made or
•	 we have not received all the information and explanations  
we require for our audit or
•	 a corporate governance statement has not been prepared  
by the parent company
under the listing rules we are required to review
•	 the directors’ statement set out on page 52 in relation to  
going concern
•	 the parts of the corporate governance statement relating to  
the company’s compliance with the nine provisions of the uk 
corporate governance code specified for our review and
•	 certain elements of the report to shareholders by the board  
on directors’ remuneration
john ellis senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
27 november 2012 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
71
directors’ report business review
group income statement
for the year ended 30 september 2012
    year ended 30 september 2012   year ended 30 september 2011
  notes
underlying
results
£m
separately
disclosed
items
note 5
£m
total 
£m  
underlying
results
£m
separately
disclosed 
items 
note 5
£m
total
£m
revenue 3 94912 – 94912   98089 – 98089
cost of providing tourism services   74215 56 74159  76489 623 77112
gross profit   20697 56 20753   21600 623 20977
personnel expenses 4 11086 426 11512  10682 551 11233
depreciation and amortisation 1213 1596 123 1719  1671 – 1671
net operating expenses 6 6454 1159 7613  6211 1352 7563
profitloss on disposal of assets 5 – 179 179   – 46 46
impairment of goodwill and amortisation of business 
combination intangibles 12 – 3281 3281  – 3130 3130
profitloss from operations 3 1561 4754 3193  3036 5702 2666
                 
share of results of associates and joint venture 14 21 – 21   23 – 23
lossprofit on disposal of associates 5 – 09 09  – 103 103 
net investment incomeloss 14 04 – 04   48 – 48
finance income 7 486 – 486   479 – 479 
finance costs 7 1945 217 2162  1698 129 1827
profitloss before tax 8 127 4980 4853  1746 5728 3982
tax 9 1048  1198
loss for the year   5901  5180
                 
attributable to                
equity holders of the parent   5859  5207
noncontrolling interests   42  27 
    5901  5180
 
loss per share pence              
basic 11 672  607
diluted 11 672  607
all revenue and results arose from continuing operations 72
thomas cook group plc annual report  accounts 2012
group statement of comprehensive income
for the year ended 30 september 2012
  notes
year ended
30 september
2012
£m
year ended
30 september 
2011
£m
loss for the year   5901 5180
       
other comprehensive income and expense      
foreign exchange translation losses 29 307 391
actuarial lossesgains on defined benefit pension schemes 35 357 410 
tax on actuarial lossesgains 9 123 170
       
fair value gains and losses      
lossesgains deferred for the year 29 319 1125 
tax on lossesgains deferred for the year 9 77 315
gains transferred to the income statement 29 484 342
tax on gains transferred to the income statement 9 121 97 
total comprehensive expense for the year   7047 4766
       
attributable to      
equity holders of the parent   7005 4793
noncontrolling interests   42 27 
total comprehensive expense for the year   7047 4766  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
73
directors’ report business review
group cash flow statement
for the year ended 30 september 2012
  notes
year ended
30 september 
2012
£m
year ended
30 september 
2011
£m
cash flows from operating activities      
cash generated by operations   1810 3209 
income taxes paid   291 323
net cash from operating activities 30 1519 2886 
       
investing activities      
dividends received from associates – 59 
proceeds on disposal of associates – 32 
proceeds on disposal of subsidiaries 15 1227  – 
proceeds on disposal of property plant and equipment   340 141 
purchase of subsidiaries net of cash acquired 15 324 192
purchase of tangible assets   969 1185
purchase of intangible assets   414 680
movement on noncurrent financial assets   24 47 
additional loan investment   03 06
movement on shortterm securities   02 –
net cash fromused in investing activities   527 1784
       
financing activities      
interest paid   1165 983
dividends paid 10 327 918
dividends paid to noncontrolling interests   06 02
draw down of borrowings   8692 4850 
repayment of borrowings   9305 3560
payment of facility setup fees   293 44
proceeds on sale and finance leaseback 21  1894  – 
proceeds on the issue of ordinary shares   08  – 
repayment of finance lease obligations   235 167
net cash used in financing activities   737 824
       
net increase in cash and cash equivalents   1309 278 
cash and cash equivalents at beginning of year   3417 3168 
effect of foreign exchange rate changes   191 29
cash and cash equivalents at end of year   4535 3417 
       
liquid assets 18 4603 3593 
bank overdrafts 20 68 176
cash and cash equivalents at end of year   4535 3417  74
thomas cook group plc annual report  accounts 2012
group balance sheet
at 30 september 2012
  notes
30 september
2012
£m
30 september
2011
£m
noncurrent assets      
intangible assets 12 31589 35500 
property plant and equipment      
– aircraft and aircraft spares 13 5996 6386 
– investment property 13 – 180 
– other 13 2412 2803 
investments in associates and joint venture 14 142 221 
other investments 14 114 134 
deferred tax assets 25 2047 2813 
tax assets   56 42 
trade and other receivables 17 1468 1530 
derivative financial instruments 22 02 126 
    43826 49735 
       
current assets      
inventories 16 305 387 
tax assets   501 402 
trade and other receivables 17 9441 10905 
derivative financial instruments 22 392 1172 
cash and cash equivalents 18 4603 3593 
    15242 16459 
noncurrent assets held for sale 27 – 704 
total assets   59068 66898 
       
current liabilities      
retirement benefit obligations 35 68 68
trade and other payables 19 20085 20082
borrowings 20 378 1795
obligations under finance leases 21 326 186
tax liabilities   904 927
revenue received in advance   10941 11672
shortterm provisions 26 2015 1876
derivative financial instruments 22 684 882
    35401 37488
liabilities related to assets held for sale 27 – 350 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
75
directors’ report business review
  notes
30 september
2012
£m
30 september
2011
£m
noncurrent liabilities      
retirement benefit obligations 35 3240 3242
trade and other payables 19 954 424
longterm borrowings 20 9776 9678
obligations under finance leases 21 2006 621
noncurrent tax liabilities   10 06
revenue received in advance   25 19
deferred tax liabilities 25 897 1209
longterm provisions 26 2143 1935
derivative financial instruments 22 37 94
    19088 17228
total liabilities   54489 55066
net assets   4579 11832 
       
equity      
calledup share capital 28 600 592 
share premium account   292 292 
merger reserve   15465 16178 
hedging and translation reserves 29 2257 3169 
capital redemption reserve   85 85 
retained earnings deficit   14500 8714
investment in own shares   134 133
equity attributable to equity holders of the parent   4065 11469 
noncontrolling interests   514 363 
total equity   4579 11832 
the financial statements on pages 71 to 124 were approved by the board of directors on 27 november 2012
signed on behalf of the board
michael healy
group chief financial officer  76
thomas cook group plc annual report  accounts 2012
group statement of changes in equity
for the year ended 30 september 2012
 
share capital 
 share
premium
£m
other 
reserves
£m
translation 
 hedging 
reserve
£m
retained
earnings
deficit
£m
attributable 
to equity
holders of 
the parent
£m
non
controlling
interests
£m
total
£m
opening balance at 1 october 2010 666 19794 2995 6269 17186 241 17427
               
lossprofit for the year – – – 5207 5207 27 5180
other comprehensive incomeexpense              
foreign exchange translation losses – – 391 – 391 – 391
actuarial gains on defined benefit pension schemes 
net of tax – – – 240 240 – 240
fair value gains and losses              
gains deferred for the year net of tax – – 810 – 810 – 810
gains transferred to the income statement net of tax – – 245 – 245 – 245
total comprehensive incomeexpense for the year – – 174 4967 4793 27 4766
equity debit in respect of sharebased payments – – – 32 32 – 32
recognition of put options to noncontrolling interests – – – 206 206 82 288
acquisition of itc travel investments 218 – – – 218 191 409
release of merger reserve – 3664 – 3664 – – –
derecognition of noncontrolling interest – – – 21 21 26 05
exchange difference on noncontrolling interests – – – – – 14 14
dividends – – – 925 925 02 927
at 30 september 2011 884 16130 3169 8714 11469 363 11832
               
loss for the year – – – 5859 5859 42 5901
other comprehensive expense              
foreign exchange translation losses – – 307 – 307 – 307
actuarial losses on defined benefit pension schemes 
net of tax – – – 234 234 – 234
fair value gains and losses              
loss deferred for the year net of tax – – 242 – 242 – 242
gains transferred to the income statement net of tax – – 363 – 363 – 363
total comprehensive expense for the year – – 912 6093 7005 42 7047
equity credit in respect of sharebased payments – – – 20 20 –  20
purchase of own shares – 01  –  – 01  –  01
issue of shares  08 – –  –  08  – 08 
release of merger reserve –  713  –  713  –  – – 
derecognition of put options to noncontrolling interests – – – 188 188 – 188
acquisition of coop – – – 614 614 367 247
disposal of hcv – – – – – 29 29
disposal of thomas cook india – – – – – 114 114
exchange difference on noncontrolling interests – – – – – 25 25
dividends –  –   –  – –  06  06 
at 30 september 2012 892 15416 2257 14500 4065 514 4579
other reserves consist of the merger reserve the capital redemption reserve and own shares held the capital redemption reserve was 
created as a consequence of the share buy back programme during the year ended 30 september 2009
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
details of changes in hedging and translation reserves are set out in note 29 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
77
directors’ report business review
notes to the financial statements
2 accounting policies
these financial statements have been prepared in accordance with ifrs and ifric interpretations and with those parts of the companies  
act 2006 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 financial statements have been prepared on a going concern basis and under the historical cost convention except for revaluation  
of certain financial instruments investment property sharebased payments and defined benefit pension obligations
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 unless otherwise stated
basis of preparation
adoption of new or amended standards and interpretations in the current year
in the current year the following new or amended standards have been adopted their adoption has not had a significant impact on the 
amounts reported or the disclosure and presentation in these financial statements but may impact the accounting or the disclosure and 
presentation for future transactions and arrangements
ias 24 amendment “related parties” is effective for annual reporting periods commencing on or after 1 january 2011 the amendment 
clarifies the definition of related parties 
ifric 14 amendment “prepayments of a minimum funding requirement” is effective for annual reporting periods commencing on or after  
1 january 2011 the amendment remedies one of the consequences of ifric 14 whereby an entity under certain 
circumstances is not allowed to recognise an asset for the prepayment of a minimum funding requirement
in addition the group has adopted the various amendments to international financial reporting standards and the related bases for 
conclusions and guidance made in the international accounting board’s annual improvement process the relevant ifrss subject to  
annual improvements 2010 and applicable to the group include
ifrs 3 business combinations
ifrs 7 financial instruments disclosure
ias 1 presentation of financial statements
ias 27 consolidated and separate financial statements
ias 34 interim financial reporting
new or amended standards and interpretations in issue but not yet effective and not eu endorsed
the following new standards amendments to standards and interpretations that are expected to impact the group which have not been 
applied in these financial statements were in issue but are not yet effective and are not eu endorsed
ifrs 9 “financial instruments” is effective for annual reporting periods commencing on or after 1 january 2015 the  
standard will eventually replace ias 39 but currently only details the requirements for recognition and measurement  
of financial assets
ifrs 10 “consolidated financial statements” is effective for annual reporting periods beginning on or after 1 january 2013  
this standard builds on existing principles by identifying the concept of control as the determining factor in whether  
an entity should be included within consolidated financial statements
ifrs 11 “joint arrangements” is effective for annual periods beginning on or after 1 january 2013 this standard provides for  
a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement  
rather than its legal form
ifrs 12 “disclosure of interests in other entities” is effective for annual periods beginning on or after 1 january 2013 this 
standard includes the disclosure requirements for all forms of interests in other entities including joint arrangements 
associates special purpose vehicles and other off balance sheet vehicles
ifrs 13 “fair value measurement” is effective for annual periods beginning on or after 1 january 2013 this standard applies to 
ifrss that require or permit fair value measurements or disclosures and provides a single ifrs framework for measuring 
fair value and requires disclosures about fair value measurement
ias 19 revised 2011 “employee benefits” is effective for annual periods beginning on or after 1 january 2013 this amendment makes 
significant changes to the recognition and measurement of defined benefit pension expense and termination benefits 
and to the disclosures for all employee benefits
1 general information
thomas cook group plc is a limited liability company incorporated and domiciled in england and wales under the companies act 2006 and 
listed on the london stock exchange the address of the registered office is 6th floor south brettenham house lancaster place london 
wc2e 7en the principal activities of the group are discussed in the directors’ report – business review on pages 4 to 35
these consolidated financial statements were approved for issue by the board of directors on 27 november 2012 78
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
2 accounting policies continued
ias 27 revised “separate financial statements” is effective for annual periods beginning on or after 1 january 2013 this standard 
includes the provisions on separate financial statements that are left after the control provisions of ias 27 have been 
included in the new ifrs 10
ias 28 revised “investments in associates and joint ventures” is effective for annual periods beginning on or after 1 january 2013  
this standard includes the requirements for joint ventures as well as associates to be equity accounted following  
the issue of ifrs 11
ias 32 “offsetting financial assets and liabilities” is effective for annual periods beginning on or after 1 january 2014  
and provides clarification on the application of offsetting rules
management is currently assessing the impact of adopting these new or amended standards and interpretations
basis of consolidation
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 3r 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 contingent consideration 
arrangements entered into and liabilities incurred or assumed at the date of exchange directly attributable transaction costs are expensed 
as incurred identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially  
at their fair values at the acquisition date when the ownership of an acquired company is less than 100 the noncontrolling interest is 
measured as the proportion of the recognised net assets attributable to the noncontrolling interest 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 is 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 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 three 2011 three spes that own four 2011 four aircraft operated by the group on operating leases in addition 
during 2009 the operations of the german airline were placed in a holding company in which the group owns a 500023 direct interest all 
risks and rewards continue to be held by the group and in accordance with accounting standards the entity has been treated as being 100 
controlled and fully consolidated by the group
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 shares 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
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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
79
directors’ report business review
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 straightline basis over the asset’s useful 
life as follows
brands 10 years to indefinite life
customer relationships 1 to 15 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
intangible assets with indefinite useful lives are tested for impairment at least annually at the cgu level 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 straightline 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 upon which no depreciation is provided is calculated on  
a straightline 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 
aircraft 18 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 is 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  80
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
2 accounting policies continued
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 operating 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 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 the costs attributable to producing brochures are expensed when the brochures are available to be sent to customers or retail 
outlets other revenue and associated expenses are taken to the income statement as earned or incurred revenue and expenses exclude 
intragroup transactions
income statement presentation and separately disclosed items
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
the group separately discloses in the income statement exceptional items impairment of goodwill and amortisation of business 
combination intangibles and ias 39 fair value remeasurement
exceptional items namely items that are material either because of their size or their nature and which are nonrecurring are presented 
within their relevant income statement category but highlighted through separate disclosure the separate reporting of exceptional items 
helps provide a full understanding of the group’s underlying performance
items which are included within the exceptional category include
•	 profits losses on disposal of assets or businesses and costs of acquisitions
•	 costs of integration of significant acquisitions and other major restructuring programmes
•	 significant goodwill or other asset impairments
•	 material writedown of assetsreassessment of accruals reflecting a more cautious evaluation in the light of current trading and economic 
conditions excluding errors or prior year items
•	 other individually material items that are unusual because of their size nature or incidence
material business combination intangible assets were acquired as a result of the merger between thomas cook ag and mytravel group plc 
and other business combinations made in subsequent years 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
ias 39 fair value remeasurement includes movements in forward points related to foreign exchange forward contracts and time value of 
options in cash flow hedging relationships both items are subject to market fluctuations and unwind when the options or forward contracts 
mature and therefore are not considered to be part of the group’s underlying performance directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
81
directors’ report business review
finance income and costs
finance income comprises interest income on funds invested expected return on pension plan assets and changes in the fair value of  
held for trading interestrelated derivatives
finance costs comprise interest costs on borrowings and finance leases unwind of the discount on provisions interest cost on pension  
plan liabilities changes in the fair value of held for trading interestrelated derivatives and the movement in forward points on outstanding 
foreign exchange forward contracts in cash flow hedging relationships 
the movement in forward points on outstanding foreign exchange forward contracts in cash flow hedging relationships is included  
as a separately disclosed item in the income statement under the description “ias 39 fair value remeasurement” 
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 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 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 under the schemes calculated using the projected 
unit credit method 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 comprehensive income and expense the current service cost representing benefits accruing over the year is 
included in the income statement as a personnel expense the unwinding of the discount rate on the scheme liabilities and the expected 
return on scheme assets are presented as finance costs and finance income respectively past service costs are recognised immediately in  
the income statement in personnel expenses
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 82
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
2 accounting policies continued
leases
leases under which substantially all of the risk 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 the 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 straightline basis over the lease term
borrowing costs
the group capitalises borrowing costs directly attributable to the acquisition construction or production of qualifying assets requiring a 
substantial amount of time to be ready for the intended purpose
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 forward points on foreign exchange 
forward contracts and time value of options are not designated as part of the hedging relationship and therefore are recorded in the income 
statement within finance costs and costs of providing tourism respectively any ineffective portion of the change in fair value of a derivative 
in a cash flow hedge is recognised immediately in the income statement within net operating expenses
for 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 the income statement
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 and other receivables
trade and other 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
held for trading investments
shortterm investments are classified as held for trading and are recognised and subsequently recorded at their fair value gains or losses  
are recognised in the income statement directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
83
directors’ report business review
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
trade and other payables
trade and other payables are initially recognised at their fair value and subsequently recorded at amortised cost using the effective  
interest method
borrowings
interest bearing borrowings are initially recognised at their fair value net of any directly attributable transaction costs they are subsequently 
recorded at amortised cost using the effective interest method
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 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 equitysettled 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 straightline basis over the expected vesting period of the options with a corresponding increase in equity
the grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as  
a capital contribution the fair value of employee services received measured by reference to the grant date fair value is recognised  
over the vesting period as an increase to investment in subsidiary undertakings with a corresponding credit to equity
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 the income statement 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 and useful economic lives of aircraft included in property plant and 
equipment those judgements determine the amount of depreciation charged in the income statement 84
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
2 accounting policies continued
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 at a suitable discount rate in order to calculate present value 
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 estimates 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 as a result the recoverability of these assets is dependent on the agreement of the losses with the relevant authorities and the 
estimates of future profitability
retirement benefits
the consolidated financial statements include costs in relation to and provision for retirement benefit obligations the costs and the present 
value of any related pension assets and liabilities depend on such factors as life expectancy of the members the salary progression of current 
employees the returns that plan assets generate and the discount rate used to calculate the present value of the liabilities the group uses 
previous experience and impartial actuarial advice to select the values of critical estimates the estimates and the effect of variances in  
key estimates are disclosed in note 35
3 segmental information
for management purposes the group is currently organised into six geographic operating divisions uk central europe west 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
these reportable segments are consistent with how information is presented to the group chief executive chief operating decision maker  
for the purpose of resource allocation and assessment of performance
following changes in management structure to transfer out east europe businesses from the former west  east segment to the central 
europe segment we have revised our segmental presentation and restated prior year segmental information to reflect the new structure  
the central europe segment now includes the businesses in poland hungary the czech republic and russia
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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
85
directors’ report business review
segmental information for these activities is presented below
year ended 30 september 2012
uk
£m
central 
europe
£m
west 
europe
£m
northern
europe
£m
north 
america
£m
airlines
germany
£m
corporate
£m
total
£m
revenue                
segment sales 31525 26376 14720 11736 2962 11646 – 98965
intersegment sales 431 511 46 65 – 3000 – 4053
total revenue 31094 25865 14674 11671 2962 8646 – 94912
                 
revenue by product  
mainstream 70957
independent 27073
financial services 935
intersegment sales 4053
total revenue 94912
                 
result                
underlying profitloss from operations 127 501 20 1009 223 357 230 1561
exceptional operating items 879 242 350 55 188 10 324 1564
ias 39 fair value remeasurement 11 03 02 28 – 51 – 91
impairment of goodwill and amortisation of 
business combination intangibles 1083 27 944 132 1095 – – 3281
segment result 1824 719 1276 850 1506 398 554 3193
share of results of associates and joint venture               21
loss on disposal of associates               09
net investment income                04
finance income                 486
finance costs               2162
loss before tax               4853
tax               1048
loss for the year               5901
                 
other information                
capital additions 613 112 71 173 44 2393 63 3469
depreciation 409 31 29 156 15 616 07 1263
amortisation of intangible assets 232 62 80 15 25 03 39 456
amortisation of business combination intangibles 123 27 – 132 03 – – 285
impairment of goodwill 960 – 944 – 1092 – – 2996
impairment of business combination intangibles –  –   06 –  –  –  –  06 
impairment of other intangible assets – 100 62 – 13 – 51 226
impairment of property plant  equipment – – – – 06 – – 06
                 
balance sheet                
assets                
segment assets 29962 19174 24025 19139 1797 10445 67453 171995
intersegment eliminations               115673
                56322
investments in associates and joint ventures               142
tax and deferred tax assets                2604
total assets               59068
liabilities                
segment liabilities 27033 22881 11892 9864 2302 5886 70792 150650
intersegment eliminations               110458
                40192
tax and deferred tax liabilities                 1811
borrowings and obligations under finance leases               12486
total liabilities               54489 86
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
3 segmental information continued
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
capital additions comprise additions to other intangible assets note 12 and property plant and equipment note 13
the entity is domiciled in the uk revenue from external customers in the uk was £29554m 2011 £30471m which is derived from  
the ‘uk’ segmental revenue shown above but excluding external revenue in india egypt ireland and spaindomiciled companies which 
would otherwise be included in the uk segment revenue from external customers in germany was £28847m 2011 £29633m
the total noncurrent assets other than financial instruments and deferred tax there are no employment benefits assets or rights arising 
under insurance contracts located in the uk was £20663m 2011 £22472m
year ended 30 september 2011
uk
£m
restated 
central 
europe
£m
restated  
west   
europe
£m
northern 
europe
£m
north 
america
£m
airlines
germany
£m
corporate
£m
total
£m
revenue                
segment sales 32818 26002 17112 11592 3492 11203 – 102219 
intersegment sales 268 538 72 65 – 3187 – 4130
total revenue 32550 25464 17040 11527 3492 8016 – 98089 
                 
revenue by product  
mainstream 74956
independent 26114
financial services 1149
intersegment sales 4130
total revenue 98089
               
result                 
underlying profitloss from operations 341 723 379 1063 105 693 268 3036 
exceptional operating items 1107 90 319 – 83 33 881 2513
ias 39 fair value remeasurement 16 04 23 28 – 66 – 59
impairment of goodwill and amortisation of 
business combination intangibles 2196 12 22 209 691 – – 3130
segment result 2946 617 61 826 669 594 1149 2666
share of results of associates and joint venture              23 
profit on disposal of associates               103 
net investment loss               48 
finance income               479 
finance costs               1827 
loss before tax               3982 
tax               1198 
loss for the year               5180
                 
other information                
capital additions 494 147 188 171 74 782 258 2114 
depreciation 426 65 34 155 15 568 05 1268 
amortisation of intangible assets 196 55 65 12 23 03 49 403 
amortisation of business combination intangibles 93 12 22 209 07 – – 343 
impairment of goodwill 2103 – – – 684 – – 2787 
impairment of other intangible assets 10 – – – – – 829 839 
impairment of property plant  equipment 99 – – – – – – 99  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
87
directors’ report business review
 
uk
£m
restated 
central 
europe
£m
restated 
west  
europe
£m
northern
europe
£m
north 
america
£m
airlines 
germany
£m
corporate
£m
total
£m
balance sheet                
assets                
segment assets 33391 10810 15488 18415 3149 9205 63982 154440
intersegment eliminations 91020
  63420 
investments in associates and joint ventures 221 
tax and deferred tax assets 3257 
total assets 66898 
liabilities                
segment liabilities 25923 12926 12653 9151 2060 5992 55093 123798 
intersegment eliminations 83154
  40644
tax and deferred tax liabilities 2142 
borrowings and obligations under finance leases 12280 
total liabilities 55066 
4 personnel expenses
 
2012
£m
2011
£m
wages and salaries 9698 9509 
social security costs 1394 1571 
sharebased payments – equity settled see note 34 20 32
defined benefit pension costs see note 35 85 191
curtailment gain see note 35 – 258
defined contribution pension costs see note 35 315 252 
  11512 11233 
 the defined benefit pension costs in the prior year are disclosed net of the curtailment gain on the uk defined benefit pension schemes further details are available in note 35
the average number of employees of the group during the year was
2012
number
2011
number
uk 18066 17227 
central europe 5727 3669 
west europe 2460 3427 
northern europe 2983 2794 
north america 1343 1275 
airlines germany 2759 2517 
corporate 255 188 
  33593 31097 
disclosures of directors’ remuneration share options longterm incentive schemes pension contributions and pension entitlements  
required by the companies act 2006 and those specified for audit by the financial services authority are on pages 62 to 64 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 36  88
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
5 separately disclosed items
 
2012
£m
2011
£m
affecting profit from operations    
reorganisation and restructuring costs 807 737
costs associated with refinancing 301 –
impairment of goodwill and other intangible assets and amortisation of business combination intangibles 3687 3969
ias 39 fair value remeasurement – time value component of option contracts  91 59 
other 50 937
4754 5702
     
affecting income from associates and jv    
lossprofit on disposal of associates 09 103 
  09 103 
     
affecting net finance costs    
write off of unamortised bank facility setup and related costs 231 09
other exceptional finance charges 09 29
ias 39 fair value remeasurement – forward points on foreign exchange cash flow hedging contracts  23 91 
  217 129
     
total separately disclosed items 4980 5728
reorganisation and restructuring costs of £807m principally relate to the projects underway to transform the uk business £358m and  
turn around our underperforming businesses in west europe £269m and north america £158m
other items affecting profit from operations of £50m include further provision for the settlement of a dispute with hmrc £122m profit  
on disposal of assets of £179m 2011 loss of £46m together with legal costs and gains and losses resulting from other exceptional operating 
events the prior year charge includes the initial provision for the dispute with hmrc £376m and the impact of balance sheet reviews  
in the uk and france £631m partially offset by a net gain on pension plan curtailment £245m
following poor trading and reviews by new management in canada and france during the first half of the year and the decision to sell 
the group’s indian business goodwill impairment losses totalling £2996m were recognised in the west europe £944m north american 
£1092m and uk segments £960m the group also wrote down the carrying value of purchased and internally generated computer 
software prepaid marketing and licencing costs which were assessed as generating no future economic benefit for the group giving rise  
to a total impairment loss of £406m the software was considered to be impaired as part of the group’s review of its ecommerce offering  
the marketing and licensing costs were sunk costs in relation to agreements to sell ticket and accommodation packages for the 2012 olympic 
and paralympic games which management consider to have become onerous during the year the sale of packages themselves generated  
a trading profit of £96m which has been included within other separately disclosed items with an overall net loss of £172m recognised
amortisation of business combination intangibles in the year was £285m 2011 £343m
the £09m loss on disposal of associates relates to the disposal by central europe of a minority stake in one egyptian hotel company directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
89
directors’ report business review
6 net operating expenses
 
2012
£m
2011
£m
advertising expenses 1785 1805 
rents and expenses for building maintenance 1596 1466 
information technology and telecommunication costs 1257 1240 
travel expenses and ancillary personnel expenses 923 670 
legal and consultancy fees 775 490 
impairment of current and noncurrent assets excluding goodwill 539 1012 
insurance 132 157 
training expenses 114 122 
other taxes 38 336 
other operating expenses 454 265 
  7613 7563 
7 finance income and costs
 
2012
£m
2011
£m
underlying finance income    
income from loans included in financial assets 04 02 
other interest and similar income 68 53 
expected return on pension plan assets note 35 414 421 
fair value gains on derivative financial instruments – 03 
  486 479 
     
underlying finance costs    
interest payable 1247 975
finance costs in respect of finance leases 54 64
interest cost on pension plan liabilities note 35 546 547
discounting of provisions and other noncurrent liabilities 98 112
  1945 1698
     
exceptional finance costs    
write off of unamortised bank facility setup and related costs 231 09
other exceptional finance charges 09 29
  240 38
     
ias 39 fair value remeasurement    
forward points on foreign exchange cash flow hedging contracts 23 91 90
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
8 loss before tax
loss before tax for the year has been arrived at after charging crediting
 
2012
£m
2011
£m
separately disclosed items affecting profit from operations see note 5 4754 5702
including    
– impairment of goodwill 2996 2787
– impairment of other noncurrent intangible assets 226 839 
–  amortisation of business combination intangibles 285  343 
depreciation of property plant and equipment    
– owned assets 1000 1038
– held under finance leases 263 230 
amortisation of intangible assets 456 403 
cost of inventories recognised as expense 704 425 
lossprofit on disposal of associates 09 103
operating lease rentals payable    
– hire of aircraft and aircraft spares 1031 1285
– other 1215 1122 
net foreign exchange gainslosses 199 44 
personnel expenses note 4 11512 11233 
auditors’ remuneration 60 52 
a more detailed analysis of auditors’ remuneration on a worldwide basis is provided below
 
2012
£m
2011
£m
   
audit of the company’s annual accounts 04 03 
audit of subsidiaries 23 23 
total audit fees 27 26 
     
audit related assurance services 03 02
other assurance services 11 02
total assurance services 14 04
tax compliance services 01 01 
services relating to taxation 01 01
other nonaudit services not covered above  18 21 
total other nonaudit services  18 21 
total nonaudit services 33 26 
total fees 60 52 
in addition to the above £69k 2011 £61k has been incurred in respect of the audits of the group pension schemes
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 committee is set out in the corporate governance report on pages 46 to 47 and includes an 
explanation of how auditor objectivity and independence is safeguarded when nonaudit services are provided by the auditors directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
91
directors’ report business review
9 tax
   
2012
£m
2011
£m
analysis of tax charge      
current tax      
uk corporation tax charge for the year – –
  adjustments in respect of prior periods 38 68
    38 68
overseas corporation tax charge for the year 338 351 
  adjustments in respect of prior periods 31 03 
    307 354 
total current tax   269 286 
deferred tax      
  tax charge for the year 519 738 
  adjustments in respect of prior periods 260 174 
total deferred tax   779 912 
       
total tax charge   1048 1198 
the tax on the group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable  
to profits of the company as follows
2012
£m
2011
£m
tax reconciliation    
loss before tax 4853 3982
expected tax charge at the uk corporation tax rate of 25 2011 27 1213 1075
income not liable for tax 183 193
expenses not deductible for tax purposes 126 98 
impairment for which no tax relief is due 765 1001 
losses and other timing differences for which tax relief is not available 894 764 
utilisation of tax losses not previously recognised 49 108
recognition of losses not previously recognised 125 346
derecognition of deferred tax previously recognised 671 941 
difference in rates of tax suffered on overseas earnings 116 86
impact of changes in tax rates note 25 87 92 
other – 01 
income tax charge in respect of prior periods 191 109 
tax charge 1048 1198 
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 £321m has been credited directly to equity 2011 charge of £388m uk corporation tax is calculated 
at 25 2011 27 of the estimated assessable loss for the year taxation for other jurisdictions is calculated at the rates prevailing in the 
respective jurisdictions 
surplus losses not recognised in deferred tax of £19339m 2011 £14273m are available in the uk france and germany for offset  
against future profits 92
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
11 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 37m shares held by the employee share ownership trusts 2011 38m
basic and diluted loss per share
2012
£m
2011
£m
net loss attributable to equity holders of the parent 5859 5207
     
  millions millions
weighted average number of shares for basic loss per share 8719 8582 
weighted average number of shares for diluted loss per share 8719 8582 
     
  pence pence
basic loss per share 672 607
diluted loss per share 672 607
underlying basic and diluted earnings per share
2012
£m
2011
£m
underlying net lossprofit attributable to equity holders of the parent

325 1003
     
  millions millions
weighted average number of shares for basic earnings per share 8719 8582 
effect of dilutive potential ordinary shares – share options

– 19 
weighted average number of shares for diluted earnings per share 8719 8601 
     
  pence pence
underlying basic earnings per share 37 117 
underlying diluted earnings per share 37 117 
  underlying net profit attributable to equity holders of the parent is derived from the preexceptional profit before tax for the year ended 30 september 2012 of £127m  
2011 £1746m and deducting a notional tax charge of £494m 2011 £716m
  awards of shares under the thomas cook performance share plan buy as you earn scheme restricted share plan and coinvestment plan 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
10 dividends
the following dividends have been deducted from equity in the year
 
2012
£m
2011
£m
2010 final dividend – 598 
2011 interim dividend – 327 
  – 925 
on 29 september 2011 the directors announced that they would not propose any further dividend payments whilst the group rebuilds  
its balance sheet directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
93
directors’ report business review
12 intangible assets
 
2012
£m
2011
£m
goodwill 26602 29816 
business combination intangible assets 3692 3933 
other 1295 1751 
  31589 35500 
goodwill
cost £m
at 1 october 2010 33272 
additions 686 
reassessment of goodwill 16
exchange differences 52
at 30 september 2011 33890
additions note 15 830
reassessment of goodwill note 15 77
disposals 1426 
exchange differences 818
at 30 september 2012 32553
   
accumulated impairment losses  
at 1 october 2010 1109 
impairment charge for the year 2787 
exchange differences 178 
at 30 september 2011 4074
impairment charge for the year 2996
disposals 995 
exchange differences 124
at 30 september 2012 5951
   
carrying amount  
at 30 september 2012 26602
at 30 september 2011 29816  94
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
12 intangible assets continued
the carrying value of goodwill is analysed by business segment as follows
 
2012
£m
2011
£m
uk

17460 18680 
central europe 1308 1313
west europe 316 1317
northern europe 7318 7220 
north america – 1069 
airlines germany 200 217 
  26602 29816 
 the carrying value of goodwill in the uk segment is comprised of the uk £17278m and the middle east £182m
in accordance with accounting standards the group tests the carrying value of goodwill for impairment annually and whenever events  
or circumstances change
impairment testing is performed by comparing the carrying value of each cashgenerating unit cgu to the recoverable amount determined 
on the basis of the cgu’s value in use the value in use is based on the net present value of future cash flow projections discounted at pretax 
rates appropriate for each cgu the group’s cgus are determined by geographical market and consist of uk egypt central europe west 
europe northern europe north america and airlines germany see note 3 for details of changes to the group’s cgus during the year
the future cash flow projections used to determine the value in use are based on the most recent annual budgets and threeyear plans for 
each of the cgu’s the key assumptions used to determine the mainstream business’ budget and threeyear plans relate to capacity and the 
pricing of accommodation and fuel inputs capacity is based on management’s view of market demand and the constraints to managing 
capacity such as aircraft lease commitments the accommodation pricing is primarily driven by the underlying bed rate and the foreign 
exchange hedges in place the former is based on the businesses’ ongoing dialogue with bed suppliers and local cost inflation the fuel 
pricing assumption is primarily driven by the fuel hedges in place and the forward fuel curve at the time that the budget is set the key 
assumptions used to determine the independent business’ budget and threeyear plans relate to passenger volumes and commission rates 
and are based on the individual businesses’ view of the market conditions
cash flow forecasts for years beyond the threeyear plan are extrapolated at an estimated average longterm nominal growth rate
the other key assumptions used in the value in use calculations are as follows
– a pretax discount rate of between 98 – 126 reflecting the specific risks of each cgu
– a longterm nominal terminal growth rate of 2 for all cgus with the exception of egypt 6
the decision to sell the india business and the deterioration in profitability of the french and canadian businesses led to the reassessment  
of the carrying values of goodwill on those segments during the current year the india business was classified as held for sale as at  
31 march 2012 and an impairment charge of £960m was calculated based on the fair value less cost to sell the sale of the indian business 
was subsequently completed in august 2012 see note 15 for further details value in use calculations were performed for the north america 
and west europe segments as at 31 march 2012 as a result an impairment charge of £2996m was recognised within impairment of goodwill 
and amortisation of business combination intangibles on the face of the balance sheet
a breakdown of the impairment charge is presented below along with the pretax discount rate and long term growth rate assumptions  
that were applied at 31 march 2012
 
goodwill
impairment
charge
£m
pretax
discount rate
used 

longterm
growth rate
west europe 944 923 10
north america 1092 924 20
india 960 na na
  2996 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
95
directors’ report business review
no additional impairments of goodwill were required as at 30 september 2012 2011 £2787m
the value in use calculations performed as at 30 september 2012 indicate that the west europe and north america cgu’s are no longer 
sensitive to reasonably possible changes in the key assumptions however a reasonably possible change in the uk cgu future cash flows 
would result in the unit’s carrying amount exceeding the value in use
as at 30 september 2012 the uk cgu’s value in use exceeds its carrying value by £229m based on a pretax discount rate of 101 a key 
assumption made in the uk cgu’s budget and three year plan is the success of the uk turnaround plan which is described in more detail  
on page 22 and is expected to deliver annualised benefits of £140m by 30 september 2014 a decrease in projected cash flow of £22m in  
year three of the value in use calculation will cause the uk’s value in use to equal its carrying value
a 1 increase in the discount rate will result in a £178m decrease in the uk cgu’s value in use whilst a 1 decrease in the discount rate will 
result in a £240m increase a 1 increase in the growth rate will result in a £218m increase in the uk cgu’s value in use whilst a 1 decrease 
in the growth rate will result in a £161m decrease neither of these changes applied individually will result in an impairment of the uk cgu
sensitivity analysis for the remaining segments has not been disclosed as management believe that any reasonable change in assumptions 
would not cause the carrying value of the cgus to exceed their recoverable amount
business combination intangibles
 
brands and
customer
relationships
£m
order
backlog
£m
computer
software
£m
other
£m
total
£m
cost          
at 1 october 2010 4840 410 157 36 5443 
additions 458 05 – – 463 
exchange differences 43 – 01 03 47
at 30 september 2011 5255 415 156 33 5859
additions note 15 271 15 – – 286
disposals 260  –  –  29  289 
exchange differences 40 01 01 04 44
at 30 september 2012 5226 429 157 – 5812
           
amortisation          
at 1 october 2010 1061 410 128 01 1600 
charge for the year 307 05 30 01 343 
exchange differences 15 – 02 – 17
at 30 september 2011 1353 415 156 02 1926
charge for the year 273 12 – – 285
impairment 06 –  –  –  06
disposals 99  –  –  02  101 
exchange differences 04 01 01 – 04
at 30 september 2012 1537 426 157 – 2120
 carrying amount          
 at 30 september 2012 3689   03 – –  3692 
 at 30 september 2011  3902 – –  31 3933 
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 1 to 15 years and computer software over a period of four years 
order backlog has been amortised over the period from acquisition to departure 
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 earlier in this note 96
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
12 intangible assets continued
the carrying value of brands with an indefinite life is analysed by business segment as follows
 
2012
£m
2011
£m
uk 706 706 
central europe 273 260
west europe 206 223
northern europe 1347 1329 
north america 239 234 
  2771 2752 
other intangible assets
 
computer software and 
concessions   other
purchased
£m
internally
generated
£m  
purchased
£m
total
£m
cost  
at 1 october 2010 2488 1751   204 4443 
additions 387 318   10 715 
acquisitions note 15 01 –   – 01 
transfer to noncurrent assets held for sale note 27 01 –   – 01
disposals 12 04  – 16
exchange differences 12 02  – 14
at 30 september 2011 2851 2063   214 5128
additions 63 349   02 414
reclassification 160 171   – 11
disposals 1154 244  07 1405
exchange differences 198 62  04 264
at 30 september 2012 1402 2277   205 3884
           
amortisation          
at 1 october 2010 1177 956   27 2160 
charge for the year 144 204   55 403 
impairment losses 834 05   – 839 
disposals 09 –   – 09
exchange differences 16 –   – 16
at 30 september 2011 2130 1165   82 3377
charge for the year 116 260   80 456
impairment losses 149 77   – 226
reclassification 28  28   –  – 
disposals 1138 127  07 1272
exchange differences 168 30  – 198
at 30 september 2012 1061 1373   155 2589
           
carrying amount          
at 30 september 2012 341 904   50 1295
 at 30 september 2011 721  898   132  1751 
computer software is amortised on a straightline basis over its estimated useful life of between three and ten years 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 other items are amortised over their estimated useful lives of between three and five years 
  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
97
directors’ report business review
13 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
other
total
£m
cost            
at 1 october 2010 17398 170 2393 1890 2661 6944 
additions 976 – 31 115 277 423 
acquisitions – – – – 05 05 
transfer to noncurrent assets held for sale note 27 – – 642 – 528 1170
revaluation – 10 – – – –
disposals 628 – 01 45 77 123
exchange differences 24 – 10 06 13 29
at 30 september 2011 17722 180 1771 1954 2325 6050 
additions 2769 – 35 87 164 286
acquisitions note 15 – – 11 73 23 107
reclassification – – – – 11 11
disposals 8234 166 235 296 341 872
exchange differences 1179 14 134 62 142 338
at 30 september 2012 11078 – 1448 1756 2018 5222
             
accumulated depreciation and impairment            
at 1 october 2010 10846 – 705 1213 1665 3583 
charge for the year 907 – 59 110 192 361 
provision for impairment 99 – – – – –
transfer to noncurrent assets held for sale note 27 – – 204 – 387 591
disposals 499 – – 36 54 90
exchange differences 17 – 04 02 10 16
at 30 september 2011 11336 – 556 1285 1406 3247 
charge for the year 949 – 46 110 158 314
provision for impairment note 5 – – – – 06 06
disposals 6313 – 89 230 250 569
exchange differences 890 – 50 44 94 188
at 30 september 2012 5082 – 463 1121 1226 2810
             
carrying amount            
at 30 september 2012 5996 – 985 635 792 2412
at 30 september 2011 6386 180 1215 669 919 2803 
freehold land with a cost of £243m 2011 £261m has not been depreciated
the net book value of aircraft and aircraft spares includes £3113m 2011 £1238m in respect of assets held under finance leases
the net book value of other property plant and equipment includes £109m 2011 £127m in respect of assets held under finance leases
capital commitments
 
2012
£m
2011
£m
capital expenditure contracted but not provided for in the accounts 81 316
in addition the group is contractually committed to the acquisition of twelve new airbus a321 aircraft which have a list price of 96m each 
before escalations and discounts these aircraft are scheduled for delivery in 2014 and will be the first aircraft to be delivered as part of the 
fleet replacement programme announced in december 2010  98
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
14 noncurrent asset investments
    other investments
 
associates and
joint venture
£m
availablefor
sale financial
assets
£m
loans 
receivables
£m
total other
investments
£m
cost        
at 1 october 2011 468 98 113 211 
disposals 87 08 – 08
group’s share of associates’ and joint venture’s profit for the year 21 – – –
interest received – – 21 21
additional loan investment 03 – 10 10
exchange differences 35 07 – 07
at 30 september 2012 370 83 102 185
         
amounts written off or provided        
at 1 october 2011 247 77 – 77 
disposals – 01 – 01
exchange differences 19 05 – 05
at 30 september 2012 228 71 – 71
         
carrying amount        
at 30 september 2012 142 12 102 114
at 30 september 2011 221 21 113 134 
associates
investments in associates at 30 september 2012 included a 40 interest in activos turisticos sa an incoming agency and hotel company 
based in palma de mallorca spain and a 25 interest in hotelera adeje sl a hotel company based in santa cruz tenerife
during the year the group disposed of its 251 interest in oasis company sae a hotel company in egypt the fair value of the consideration 
was £78m which will be received in quarterly instalments commencing in the next financial year
joint venture
the group’s joint venture entity 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 venture is as follows
 
2012
joint venture
£m
2012
associates
£m
2011
joint venture
£m
2011
associates
£m
total assets 570 972 753 1578
total liabilities 796 410 985 705
net liabilitiesassets 226 562 232 873
group’s share of net liabilitiesassets 113 164 116 242
revenue 82 512 95 960
profitloss for the year 04 39 12 01
group’s share of associates’ and joint venture’s profitloss for the year 02 19 06 17
the financial statements of the associated undertakings are made up at different times to that of the group for the purposes of applying the 
equity method of accounting the most recent financial statements of these undertakings and the management accounts are used to draw up 
the financial position and performance of each associate
other investments
during the year ended 30 september 2012 the group recognised income from availableforsale financial assets of £04m 2011 £05m 
there is no active market for the availableforsale financial assets consequently they are recorded at cost
loans and receivables of £102m are in respect of the group’s investment as a member of airline group in the uk national air traffic 
services nats the investment comprises ordinary shares accruing interest at 8 in the airline group directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
99
directors’ report business review
15 acquisitions and disposals
a list of the principal investments in subsidiaries including the name country of incorporation description and proportion of ownership 
interest is given in note 19 to the company’s separate financial statements all of the subsidiary undertakings have been consolidated in  
the group accounts
acquisitions made during the year
retail travel joint venture between thomas cook group the cooperative group and midlands cooperative
on 4 october 2011 the group concluded the merger of its high street travel agency and foreign exchange business with those of the 
cooperative group and midlands cooperative with the aim of combining two of the industry’s strongest brands to reach more customers 
and unlock synergy benefits the group acquired 665 of the new joint venture company with the cooperative group holding 30 and 
midlands cooperative society holding 35
details of the net assets acquired are set out in the table below
 
fair value as at 
acquisition 
date
£m
net assets acquired  
intangible assets 234 
property plant and equipment 107
trade and other receivables 262
cash and cash equivalents 394
trade and other payables 1364
deferred tax liability 11
provisions 49
  427
less noncontrolling interest 133
  294
goodwill 805
total consideration 511 
   
satisfied by  
noncontrolling interest in the joint venture 500
contingent consideration 11
   511
the purchase price of each asset component of the acquisition represents its fair value based on management’s best estimates the amount 
indicated above for trade and other receivables represents the fair value of the acquired receivables and is equal to the gross contractual  
cash flows all of which are expected to be recoverable
the contingent consideration represents the fair value of the group’s right and obligation to acquire the remaining shareholding at  
a value determined by profitability in 2016 or beyond and its obligation to ensure that the joint venture partners receive a minimum  
aggregate amount of dividend over the first five years of the joint venture’s operation
the acquired business contributed revenue of £1105m and a net loss of £60m to the group for the period from acquisition to  
30 september 2012
the goodwill of £805m reflects anticipated benefits and synergies expected by creating the uk’s largest high street travel network  
and increased inhouse distribution of thomas cook’s own travel products
the noncontrolling interest represents their proportionate share of the identifiable net liabilities of the acquired business 100
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
15 acquisitions and disposals continued
tour vital gmbh and panameo gmbh
on 1 october 2011 the group acquired 100 of the share capital of tour vital gmbh and panameo gmbh two germany based tour 
operators specialising in holidays with an accompanying doctor and activity experience orientated holidays respectively these acquisitions 
will allow the group to expand into new product sectors the consideration was £51m of which £23m has been paid in cash and £28m  
has been recognised in relation to an earn out to be settled by 1 april 2016
details of the net assets acquired are set out in the table below
 
fair value as 
at acquisition 
date 
£m
net assets acquired  
intangible assets 52
trade and other receivables 53
cash and cash equivalents 16
trade and other payables 79
provisions 01
deferred tax liability 15
  26
goodwill 25
total consideration 51
   
satisfied by  
cash paid 23
contingent consideration 28
  51
the purchase price of each asset component of the acquisition represents its fair value based on management’s best estimates the amount 
indicated above for trade and other receivables represents the fair value of the acquired receivables and is equal to the gross contractual  
cash flows all of which are expected to be recoverable
the acquired business contributed revenue of £302m and net loss of £10m to the group for the period from acquisition to 30 september 2012
the goodwill of £25m reflects the anticipated benefits arising from the acquisition of two specialist tour operators
adjustments to acquisitions made in the prior year
algarve tours – agência de viagens e turismo lda
on 20 september 2011 the group acquired 100 of algarve tours an incoming agency based in portugal for a cash consideration of £16m  
of which £04m was paid in the current year the fair value of net assets acquired was £10m including £14m of cash and cash equivalents and 
goodwill of £06m has been recognised including the current year reassessment impact of £05m the directors do not consider the fair value 
adjustments to be material to the group consequently the prior year comparatives have not been restated as required by ifrs3 revised
itc travel investments sl
during the year the fair value adjustments related to the itc travel investments sl acquisition were finalised  the directors do not consider 
the fair value adjustments to be material to the group consequently the prior year comparatives have not been restated as required by  
ifrs3 revised directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
101
directors’ report business review
the restatements would have had the following impact as at the date of acquisition 12 july 2011 and as at 30 september 2011
 
at date of
acquisition
£m
at 
30 september
2011
£m
balance sheet    
intangible assets    
– increase in goodwill 80 82
decrease in trade and other receivables 77 79
increase in trade and other payables 03 03
  – –
net cash inflow from acquisitions
 
current year
acquisitions
£m
gold medal
£m
algarve tours 
£m
think w3 ltd 
£m
hotels4u
£m
total
£m
net cash inflow from acquisitions
cash consideration for shares 23 – 04 – – 27
payment of contingent and deferred consideration – 40 – 25 08 73
cash and cash equivalents acquired net of overdraft 410 – 14 – – 424
total consideration 387 40 10 25 08 324
disposal of businesses during the year
hcv
on 27 july 2012 the group completed the sale of its interest in hoteles y clubs vacaciones sahcv to iberostar hoteles y apartamentos 
sl the hotel division of grupo iberostar hcv indirectly owns five hotels and one golf club and operates a second golf club in spain
the group received gross cash proceeds of €717m £573m for its shareholding
the assets and liabilities related to hcv form a disposal group however hcv is not a discontinued operation at 30 september 2012  
as it does not represent a major line of business
financial information related to the disposal is set out below
  £m
consideration received net of costs 570
less carrying amount of net assets disposed of 309
less options over minority interest derecognised 109
less share of translation reserve 02
less noncontrolling interests disposed of 29
profit on disposal 397
   
net cash inflow on disposal  
consideration received net of costs 570
less cash and cash equivalents disposed of net of overdraft 22
net cash inflow from disposal 548
thomas cook india
on 21 may 2012 the group announced that it had agreed to sell its 77 interest in thomas cook india limited “tcil” to fairbridge capital 
mauritius limited a subsidiary of fairfax financial holdings limited
the disposal was completed on 14 august 2012 the group received gross cash proceeds of inr 8174m for its shareholding equivalent to 
inr 50 per share under the terms of the sale agreement the group granted fairbridge a licence over the thomas cook brand for 125 years 
in the countries in which tcil currently operates
the assets and liabilities related to tcil form a disposal group however tcil is not a discontinued operation at 30 september 2012  
as it does not represent a major line of business
during the current year the assets and liabilities of the disposal group were tested for impairment and remeasured to the lower  
of carrying amount and fair value less cost to sell this resulted in goodwill being written down by £960m 102
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
15 acquisitions and disposals continued
financial information related to the disposal is set out below
  £m
consideration received net of costs 850
less carrying amount of net assets disposed of 924
less share of translation reserve 116
less noncontrolling interests disposed of 114
loss on disposal 76
   
net cash inflow on disposal  
consideration received net of costs 850
less cash and cash equivalents balance disposed of net of overdraft 240
net cash inflow from disposal 610
reisbureau neckermann nederland
on 1 october 2011 the group completed the sale of its retail stores business in the netherlands the net cash proceeds on disposal of the 
business were £46m
explorers
on 30 march 2012 the group disposed of the explorers hotel in france the net cash proceeds on disposal were £23m
16 inventories 
 
2012
£m
2011
£m
goods held for resale 72 154
raw materials and supplies 233 233
  305 387
17 trade and other receivables
 
2012
£m
2011 
£m
noncurrent assets    
trade receivables 01 01
other receivables 355 284
deposits and prepayments 1066 1158
loans 29 41
securities 17 23
amounts owed by associates and participations – 23
  1468 1530
     
current assets    
trade receivables 3173 3775
other receivables 621 802
deposits and prepayments 4949 5550
loans 26 265
securities   04 – 
amounts owed by associates and participations 75 50
other taxes 593 463
  9441 10905 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
103
directors’ report business review
the average credit period taken on invoicing of leisure travel services is 15 days 2011 13 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 thirdparty 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 the group’s current policy is that deposits and prepayments will normally be made for periods of up to two years in advance 
there is a credit risk in respect of the continued operation of those suppliers during those periods deposits and prepayments also include 
£208m 2011 £418m of deposits on aircraft lease arrangements which are primarily attributable to the uk airline
securities include money market securities amounting to £17m 2011 £23m purchased as collateral against liabilities arising from 
parttime retirement contracts at thomas cook ag which are classified as availableforsale financial assets
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
 
2012
£m
2011
£m
at beginning of year 614 558
additional provision 93 116
exchange differences 39 02
acquisitions 79 19
receivables written off 83 35
unused amounts released 101 42
at end of year 563 614
at the year end trade and other receivables of £969m 2011 £1534m 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
 
2012
£m
2011
£m
less than one month overdue 457 652
between one and three months overdue 222 400
between three and twelve months overdue 168 445
more than twelve months overdue 122 37
  969 1534
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 approximate to their fair values
18 cash and cash equivalents
 
2012
£m
2011
£m
cash at bank and in hand 4473 3486 
term deposits 130 107 
  4603 3593 
cash and cash equivalents largely comprise bank balances denominated in sterling euro and other currencies for the purpose of settling 
current liabilities as well as balances arising from agency collection on behalf of the group’s travel agencies
included within the above balance are the following amounts considered to be restricted 
•	 £805m 2011 £603m held within escrow accounts in canada uk switzerland and the czech republic in respect of local  
regulatory requirements
•	 £157m 2011 £116m of cash held by white horse insurance ireland limited the group’s captive insurance company and
•	 £78m 2011 £131m of cash held in countries where exchange control restrictions are in force egypt lebanon tunisia and morocco  
net of cash available to repay local debt in those countries
the directors consider that the carrying amounts of these assets approximate to their fair value 104
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
20 borrowings
 
2012
£m
2011
£m
shortterm borrowings    
unsecured bank loans and other borrowings 06 931
unsecured bank overdrafts 68 176
  74 1107
current portion of longterm borrowings 304 688
  378 1795
     
longterm borrowings    
bank loans and bonds    
– repayable within one year 304 688
– repayable between one and five years 9771 6729
– repayable after five years 05 2949
  10080 10366
less amount due for settlement within one year shown under current liabilities 304 688
amount due for settlement after one year 9776 9678
borrowings by class
  2012   2011
 
current
£m
noncurrent
£m  
current
£m
noncurrent
£m
group committed credit facility including transaction costs – 2806   436 2077
aircraftrelated bank loans including transaction costs 298 703   361 1072
other bank borrowings 80 151   998 170
issued bonds including transaction costs – 6116   – 6359
  378 9776   1795 9678
on 5 may 2012 the group agreed a new financing package with its lenders consisting of a total debt facility of £1200m that extends the 
maturity of its financing until 31 may 2015 the new facility comprises a £150m term loan with no fixed repayments a revolving credit 
facility of £850m and a super senior revolving credit facility of £200m following the disposal of the group’s share in thomas cook india 
limited in august 2012 the super senior revolving credit facility was reduced by £89m to £111m as at 30 september 2012 the £150m  
term loan 2011 £200m was drawn down and £142m 2011 £693m was drawn under the revolving credit facility
the directors consider that the fair value of the group’s borrowings with a carrying value of £10154m is £7394m 2011 carrying value 
£11473m fair value £9389m the fair values quoted were determined on the basis of the interest rates for the corresponding terms  
to maturity or repayment as at the year end the fair value of the issued bonds has been derived using the quoted market price as at  
30 september 2012 for items maturing in less than one year the directors consider that the fair value is equal to the carrying amount
19 trade and other payables
 
2012
£m
2011
£m
current liabilities    
trade payables 12211 11244
amounts owed to associates and participations 32 57
social security and other taxes 765 740
accruals and deferred income 5379 6031
other payables 1698 2010
  20085 20082
noncurrent liabilities    
accruals and deferred income 55 64
other payables 899 360
  954 424
the average credit period taken for trade purchases is 85 days 2011 59 days
the directors consider that the carrying amounts of trade and other payables approximate to their fair value  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
105
directors’ report business review
during the year £111m 2011 £63m of the capitalised transaction costs have been recognised within finance costs in the income statement 
in addition following the agreement of the new financing package £223m of the capitalised fees associated with the old debt facility has 
been written off and included within ‘separately disclosed items – finance costs’
borrowing facilities
as at 30 september 2012 the group had undrawn committed debt facilities of £7933m 2011 £7807m and undrawn committed debt 
facilities plus cash available to repay the revolving credit facility of £9808m 2011£7814m whilst these facilities have certain financial 
covenants they are not expected to prevent full utilisation of the facilities if required the group has complied with its covenants  
throughout the year
covenant measures
the covenant measures are tested on a quarterly rolling 12 month basis and consist of a leverage covenant and a fixed charge covenant  
the leverage covenant is a measure of preexceptional earnings before interest tax depreciation amortisation and aircraft operating  
lease rentals compared to net debt the fixed charge covenant is a measure of preexceptional earnings before interest tax depreciation 
amortisation and operating lease charges compared to net interest and operating lease charges the leverage and fixed charge covenant 
hurdles vary depending on the period that they relate to and range between 310x610x and 135x180x respectively
21 obligations under finance leases
  minimum lease payments  
present value of 
minimum lease payments
2012
£m
2011
£m
2012
£m
2011
£m
amounts payable under finance leases          
within one year 488 216   326 186
between one and five years 1706 543   1295 463
after five years 848 228   711 158
  3042 987   2332 807
less future finance charges 710 180  – –
present value of lease obligations 2332 807   2332 807
           
less amount due for settlement within 12 months shown under current liabilities   326 186
amount due for settlement after 12 months   2006 621
the currency analysis of amounts payable under finance leases is
 
2012
£m
2011
£m
euro 141 159
us dollar 2191 645
indian rupee – 03
  2332 807
finance leases principally relate to aircraft and aircraft spares
during the year the group received proceeds of usd 2941m £1849m from the sale and leaseback of 11 boeing 757 aircraft and 2 boeing 
767 aircraft with guggenheim aviation partners llc and 6 boeing 767 aircraft with aircastle advisor international limited the leaseback 
arrangements have been treated for accounting purposes as finance leases
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 £2332m was £2541m at  
30 september 2012 2011 carrying value £807m fair value £826m the fair values quoted were determined on the basis of the interest 
rates for the corresponding terms to repayment as at the year end the group’s obligations under finance leases are secured by the lessors’ 
rights over the leased assets
sublease rentals receivable
during the year one aircraft 2011 one held under a finance lease was sublet on an operating lease for the whole or part of the year 106
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
22 financial instruments
carrying values of financial assets and liabilities
the carrying values of the group’s financial assets and liabilities as at 30 september 2012 and 30 september 2011 are as set out below
at 30 september 2012
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 – – 102 12 –
trade and other receivables – – 4712 17 –
cash and cash equivalents – – 4603 – –
trade and other payables – – – – 19132
borrowings – – – – 10154
obligations under finance leases – – – – 2332
provisions arising from contractual obligations – – – – 3713
derivative financial instruments 34 361 – – –
  34 361 9417 29 35331
at 30 september 2011
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 – – 113 21 –
trade and other receivables – – 6128 23 –
cash and cash equivalents – – 3593 – –
trade and other payables – – – – 18323
borrowings – – – – 11473
obligations under finance leases – – – – 807
provisions arising from contractual obligations – – – – 3574 
derivative financial instruments 99 421 – – –
  99 421 9834 44 34177
derivative financial instruments
the fair values of derivative financial instruments as at 30 september 2012 were
 
interest 
rate swaps
£m
currency 
contracts
£m
fuel 
contracts
£m
total
£m
at 1 october 2010 91 326 320 97
movement in fair value during the year 61 721 363 419 
at 1 october 2011 30 395 43 322 
movement in fair value during the year 06 743 100 649
at 30 september 2012 36 348 57 327
 
2012
£m
2011
£m
noncurrent assets 02 126 
current assets 392 1172 
current liabilities 684 882
noncurrent liabilities 37 94
  327 322  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
107
directors’ report business review
fair value hierarchy
the fair value of the group’s financial instruments are disclosed in hierarchy levels depending on the valuation method applied the different 
methods are defined as follows
level 1 valued using unadjusted quoted prices in active markets for identical financial instruments
level 2 valued using techniques based on information that can be obtained from observable market data
level 3 valued using techniques incorporating information other than observable market data as at least one input to the valuation cannot 
be based on observable market data
the fair value of the group’s financial assets and liabilities at 30 september 2012 are set out below
 
level 1
£m
level 2
£m
level 3 
£m
total
£m
financial assets        
currency contracts – 259 – 259
fuel contracts – 134 – 134
securities 17 – – 17
financial liabilities  
currency contracts – 607 – 607
fuel contracts – 77 – 77
interest rate swaps – 36 – 36
at 30 september 2012 17 327 – 310
the fair value of the group’s financial assets and liabilities at 30 september 2011 are set out below
 
level 1
£m
level 2
£m
level 3 
£m
total
£m
financial assets        
currency contracts – 736 – 736
fuel contracts – 563 – 563
securities 23 – – 23
financial liabilities        
currency contracts – 341 – 341
fuel contracts – 606 – 606
interest rate swaps – 30 – 30
at 30 september 2011 23 322 – 345
the group uses derivative financial instruments to hedge significant future transactions and cash flows denominated in foreign currencies 
the group enters into foreign currency forward contracts swaps and options in the management of its exchange rate exposures the fair 
value of currency contracts designated in a cash flow hedge as at 30 september 2012 was a liability of £382m 2011 £494m asset
currency hedges are entered into up to a maximum of 18 months in advance of the forecasted requirement as at 30 september 2012  
the group had in place currency hedging derivative financial instruments with a maximum maturity of november 2013
the group also uses derivative financial instruments to mitigate the risk of adverse changes in the price of fuel the group enters into  
fixed price contracts swaps and net purchased options in the management of its fuel price exposures all fuel hedges are designated  
as cash flow hedges
fuel price hedges are entered into up to a maximum of 18 months in advance of forecasted consumption of fuel as at 30 september 2012 
the group had in place fuel price hedging derivative financial instruments with a maximum maturity of february 2014
in addition the group uses derivative financial instruments to manage its interest rate exposures the group enters into interest rate swaps 
to hedge against interest rate movements in connection with the financing of aircraft and other assets the group also enters into cross 
currency interest rate swaps to hedge the interest rate and the currency exposure on us dollar external borrowings all interest rate swaps 
and cross currency interest rate swaps are designated as cash flow hedges
as at 30 september 2012 the maximum maturity of interest rate derivatives was february 2017
the fair values of the group’s derivative financial instruments have been calculated using underlying market prices available on  
30 september 2012 108
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
 22 financial instruments continued
during the year a gain of £484m 2011 £357m gain 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 gain of £23m was 
recognised in the income statement in respect of the forward points on foreign exchange cash flow hedging contracts 2011 £91m loss and 
a gain of £91m in respect of the movement in the time value of options in cash flow hedging relationships 2011 £59m loss
 
2012
£m
2011
£m
cost of providing tourism services    
– release from hedge reserve 483 406
– time value on options 91 59
finance incomecosts  
– release from hedge reserve 01 49
– forward points on foreign exchange cash flow hedging contracts 23 91
during the year a loss of £47m 2011 £99m loss was taken directly to the income statement in respect of held for trading derivatives  
that are used to hedge group balance sheet exposure this has been recorded within net foreign exchange gain for the year of £199m  
2011 £44m loss which is included within cost of providing tourism services
the closing hedging reserve excluding the impact of tax was a loss of £263m 2011 £540m gain the periods in which the cash flows are 
expected to occur and when they are expected to impact the income statement are a loss of £253m 2011 £505m gain within one year  
and a loss of £10m 2011 £35m gain between one and five years
23 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 
interest rate risk
the group is subject to risks arising from interest rate movements in connection with its bank debt aircraft financing and cash investments 
interest rate swaps are used to manage these risks and are usually designated as cash flow hedges of the interest rate
exchange rate risk
the group has activities in a large number of countries and is therefore subject to the risk of exchange rate fluctuations these risks arise  
in connection with the procurement of services in destinations outside the source market in addition us dollar exposure arises on the 
procurement of fuel and operating supplies for aircraft as well as investments in aircraft
the group requires segments to identify and appropriately hedge all exposures in line with approved treasury policies designed to reflect the 
commercial risk of each underlying business each segmental hedging policy covers the hedge build up instruments in use and further risk 
mitigation the maximum hedge tenor is 18 months and in general each segment should achieve at least an 80 hedge ratio prior to the 
start of the season
the group uses currency forwards currency swaps and currency options to manage currency risks and these are usually designated as cash 
flow hedges of forecast future transactions
fuel price risk
exposure to fuel price risk arises due to flying costs incurred by the group’s aircraft 
the group requires segments to identify and appropriately hedge all exposures in line with approved treasury policies designed to reflect the 
commercial risk of each underlying business each segmental hedging policy covers the hedge build up instruments in use and further risk 
mitigation the maximum hedge tenor is 18 months and in general each segment should achieve at least an 80 hedge ratio prior to the 
start of the season
the group uses commodity derivative contracts including fixed price contracts swaps and net purchased options to manage fuel price risk 
and these are usually designated as cash flow hedges of the fuel price directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
109
directors’ report business review
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 at 30 september 
2012 the sensitivity of these risks to the defined scenario changes are set out below
interest rate risk
  2012   2011
 
impact 
on profit
before tax
£m
impact 
on equity
£m  
impact 
on profit
before tax
£m
impact 
on equity
£m
1 2011 1 increase in interest rates 12 –   71 –
025 2011 025 decrease in interest rates 03 –   18 –
exchange rate risk
  2012   2011
 
impact 
on profit
before tax
£m
impact 
on equity
£m  
impact 
on profit
before tax
£m
impact 
on equity
£m
5 strengthening of euro 124 190   112 238
5 weakening of euro 107 155  138 213
5 strengthening of us dollar 181 569   72 709
5 weakening of us dollar 163 525  66 639
fuel price risk
  2012   2011
 
impact 
on profit
before tax
£m
impact 
on equity
£m  
impact 
on profit
before tax
£m
impact 
on equity
£m
10 201120 increase in fuel price 01 324   56 949
10 201120 decrease in fuel price 38 270  155 780
given recent historical movements in fuel prices management believes a 10 shift is a reasonable possibility
liquidity risk
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 seasonal nature of its liquidity by making use 
of its bank facility the terms of which including the covenant measures are detailed in the borrowings note refer to note 20
the undrawn committed debt facility plus cash available to repay revolving credit facility ranged between £156m and £981m during the 
current financial year 2011 £188m£1098m
surplus shortterm liquidity is primarily invested in bank deposits
financial liabilities are analysed below based on the time between the year 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 2012
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 16570 1416 1116 30 19132
borrowings 114 270 11803 07 12194
obligations under finance leases 124 364 1706 848 3042
derivative financial instruments          
– payable 22643 10070 101 – 32814
– receivable 22463 9806 94 – 32363
provisions arising from contractual obligations 317 1278 1839 297 3731
  17305 3592 16471 1182 38550 110
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
23 financial risk continued
  amount due  
at 30 september 2011
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 16039 1377 888 19 18323 
borrowings 1435 383 7948 4317 14083 
obligations under finance leases 39 177 543 228 987
derivative financial instruments          
– payable 18583 22502 3977 – 45062
– receivable 18436 22337 3958 – 44731
provisions arising from contractual obligations 392 1061 2151 –  3604
  18052 3163 11549 4564 37328
for all gross settled derivative financial instruments such as foreign currency forward contracts and swaps the pay and receive leg has been 
disclosed in the table above for net settled derivative financial instruments such as fuel swaps and options the fair value as at the year end 
of those instruments in a liability position has been disclosed in the table above trade and other payables include nonfinancial liabilities  
of £1907m 2011 £2183m which have not been analysed above
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 assesses its counterparty 
exposure in relation to the investment of surplus cash fuel contracts foreign exchange and interest rate hedging contracts and undrawn 
credit facilities the group uses published credit ratings credit default swap prices and share price performance in the previous 30day  
period to assess counterparty strength and therefore to define the credit limit for each counterparty
the group’s approach to credit risk in respect of trade and other receivables is explained in note 17
24 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 continental europe
when estimating the cost of claims outstanding at the year 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 white horse insurance ireland ltd board of directors 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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
111
directors’ report business review
income and expenses arising directly from insurance contracts
 
2012
£m
2011
£m
revenue    
net earned premium income 100 115 
deposit interest 01 01 
  101 116 
     
expenses    
claims incurred 71 104
other operating expenses 07 24
  78 128
assets and liabilities arising directly from insurance contracts
 
2012
£m
2011
£m
assets    
receivables arising out of direct insurance operations 22 27
prepayments 01 01
  23 28
     
liabilities    
deferred income arising from unearned premiums 25 20
claims accruals 80 94
insurance premium tax payable 15 16
other creditors 02 01
accruals and deferred income 16 21
  138 152
reconciliation of movement in insurance liabilities   
 
deferred
income arising
from unearned
premiums
£m
claims
accruals
£m
at 1 october 2011 20 94
net earned premium income 100 –
premiums written 105 –
claims incurred – 71
claims paid – 85
at 30 september 2012 25 80 112
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
25 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 year
 
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 october 2010 17 702 55 350 2560 2950
chargecredit to income 55 122 55 54 736 912
charge to equity – 170 218 – – 388
reclassifications – 15 – 15 – –
acquisitions note 15 – – – 91 – 91
transferred to assets held for sale – – – 06 – 06 
exchange differences – 14 51 02 – 39 
at 30 september 2011 72 381 57 472 1824 1604 
chargecredit to income 473 52 75 283 462 779
credit to equity – 123 198 – – 321
reclassifications – 27 42 16 01 –
acquisitions note 15 – – – 26 – 26
disposals note 15 – – – 59 – 59
exchange differences – 08 03 12 46 29
at 30 september 2012 545 487 21 128 1315 1150
certain deferred tax assets and liabilities have been offset the following is the analysis of the deferred tax balances for financial  
reporting purposes
 
2012
£m
2011
£m
deferred tax liabilities 897 1209
deferred tax assets 2047 2813 
  1150 1604 
at the balance sheet date the group had unused tax losses of £24602m 2011 £21165m 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 decrease in recognised tax losses in the year relates to the review of the uk balance sheet which 
identified items whose recoverability is considered unlikely no deferred tax asset has been recognised in respect of tax losses of £19339m 
2011 £14273m 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 temporary differences in respect of which no deferred tax asset has been recognised amounting  
to £2535m 2011 £2290m 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
the deferred tax assets and liabilities at the year end without taking into consideration the offsetting balances within the same jurisdiction 
are £2665 and £1515m respectively
the march 2012 budget statement announced a proposed reduction in the main rate of uk corporation tax from 26 to 24 from  
1 april 2012 and a further reduction to 23 effective from 1 april 2013 finance act 2012 included legislation confirming this rate change  
and the effect has been to reduce the deferred tax assets by £87m as at 30 september 2012 2011 £92m 
the budget statement also proposed a further reduction in the main rate of corporation tax in the uk to 22 by 1 april 2014 the overall 
effect of the further changes from 24 to 22 if applied to the deferred tax balance at 30 september 2012 would be to reduce the deferred 
tax asset by approximately £55m directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
113
directors’ report business review
26 provisions
 
aircraft
maintenance
provisions
£m
other
provisions
£m
total
£m
at 1 october 2011 2160 1651 3811 
additional provisions in the year 945 861 1806
unused amounts released in the year 09 139 148
acquisitions note 15 – 61 61
unwinding of discount – 49 49
utilisation of provisions 529 715 1244
disposals –  01  01 
exchange differences 93 83 176
at 30 september 2012 2474 1684 4158
       
included in current liabilities 810 1205 2015
included in noncurrent liabilities 1664 479 2143
at 30 september 2012 2474 1684 4158
       
included in current liabilities 732 1144 1876 
included in noncurrent liabilities 1428 507 1935 
at 30 september 2011 2160 1651 3811 
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 accounting policies for more details 
other provisions
offmarket 
leases 
£m
insurance and 
litigation 
£m
reorganisation 
and 
restructuring 
plans 
£m
deferred and 
contingent 
consideration 
£m
other 
£m
total 
£m
at 1 october 2011 435 368 250 249 349 1651 
additional provisions 03 206 403 12 237 861
unused amounts released – 56 – 14 69 139
acquisitions – – 03 37 21 61
unwinding of discount 28 – – 21 – 49
utilisation of provisions 74 153 291 43 154 715
disposals –  –  –  – 01  01 
exchange differences 55 07 07 – 14 83
at 30 september 2012 337 358 358 262 369 1684
offmarket leases relate to leases acquired through the hihotels international limited acquisition and the cooperative group and  
midlands cooperative and mytravel group plc mergers which have commitments in excess of the market rate at the time of the 
transaction insurance and litigation represents costs related to legal disputes customer compensation claims and estimated costs arising 
through insurance contracts in the group’s subsidiary white horse insurance ireland limited reorganisation and restructuring plans 
predominantly represent committed restructuring costs in the uk and west europe segments deferred and contingent consideration 
represents future purchase options on the hotels4ucom limited and think w3 limited acquisitions
’other’ represents liabilities where there is uncertainty of the timing or amount of the future expenditure required in settlement and includes 
such items as onerous contracts dilapidations and emissions trading liabilities this grouping contains no single category larger than £15m
provisions included in noncurrent liabilities are principally in respect of offmarket lease contracts and are expected to be utilised over  
the term of those contracts which extend up to ten years from the balance sheet date and deferred and contingent consideration arising  
on acquisitions 114
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
27 noncurrent assets classified as held for sale
 
2012
£m
2011
£m
assets    
property plant and equipment    
– land and buildings – 534
– other fixed assets – 141
intangible assets – 01
trade and other receivables – 22
tax assets – 01
inventories – 05
  – 704
 
2012
£m
2011
£m
liabilities    
retirement benefit obligations – 15
trade and other payables – 102
borrowings – 221
obligations under finance leases – 01
tax liabilities – 03
revenue received in advance – 02
deferred tax liabilities – 06
  – 350
the noncurrent assets held for sale in 2011 relate to the assets and liabilities of hoteles y clubs vacaciones sa hcv and a hotel property  
in mexico these have been disposed of in the current year
28 calledup share capital
 
2012
£m
2011
£m
allotted calledup and fully paid    
885900334 ordinary shares of €010 each 2011 874990495 600 592
allotted calledup and partly paid    
50000 deferred shares of £1 each 25p paid 2011 50000 – –
contingent rights to the allotment of shares
as at 30 september 2012 options to subscribe for ordinary shares were outstanding with respect to the thomas cook group plc 2007 
performance share plan the thomas cook group plc 2008 coinvestment plan the thomas cook restricted share plan and the thomas cook 
group plc 2008 save as you earn scheme for further details refer to note 34 on exercise the awards of shares under these plans will be 
satisfied by either purchases in the market of existing shares or subject to institutional guidelines issuing new shares
as part of the £200m bank facility announced on 25 november 2011 the company issued warrants to certain of its lenders giving holders the 
right at any time until 22 may 2015 to subscribe for up to an aggregate of approximately 42914640 ordinary shares at a subscription price 
per share of 19875 pence on 10 may 2012 the company issued warrants as part of the bank facility amendment announced on 5 may 2012 
to certain of its lenders giving holders the right at any time until 22 may 2015 to subscribe for up to an aggregate of 43749516 ordinary 
shares at a subscription price per share of €010 per share in addition the warrants issued as part of the bank facility announced in 
december 2011 were repriced to the same exercise price directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
115
directors’ report business review
own shares held in trust
shares of the company are held under trust by ees trustees international limited in respect of the thomas cook group plc 2007 performance 
share plan the thomas cook group plc 2008 coinvestment plan and the thomas cook restricted share plan and are held by equiniti share 
plan trustees limited in connection with the thomas cook group plc buy as you earn scheme 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 2012 by ees trustees international limited and equiniti share plan trustees limited was 
3551668 2011 3863970 and 432653 2011 128316 respectively the cumulative cost of acquisition of these shares was £134m  
2011 £133m and the market value at 30 september 2012 was £15m 2011 £16m shares held by the trust have been excluded  
from the weighted average number of shares used in the calculation of earnings per share
issue of company shares
a total of 10909839 warrants to subscribe for ordinary shares of the group at a subscription price of €010 per share were exercised  
during the year
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
the group intends to strengthen its balance sheet and during the year it has already taken actions to do so including the sale of noncore 
assets and the suspension of dividends reducing the level of debt remains a focus for the group and as part of the business transformation 
further measures are being put in place to achieve this
the capital structure of the group consists of debt cash and cash equivalents as shown in note 31 and 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 £11948m 2011 £20378m
29 hedging and translation reserves
 
hedging
reserve
£m
available
forsale
investments
£m
translation
reserve
£m
total
£m
at 1 october 2010 164 12 3171 2995
foreign exchange translation losses – – 391 391
fair value gains deferred for the year 1125 – – 1125 
fair value gainslosses transferred to the income statement 357 15 – 342
tax on fair value gains and losses and transfers 215 03 – 218
at 30 september 2011 389 – 2780 3169 
foreign exchange translation losses – – 307 307
fair value losses deferred for the year 319 – – 319
fair value gains transferred to the income statement 484 – – 484
tax on fair value gains and losses and transfers 198 – – 198
at 30 september 2012 216 – 2473 2257 116
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
30 note to the cash flow statement
 
2012
£m
2011
£m
loss before tax 4853 3982
adjustments for    
finance income 486 479
finance costs 2162 1827 
net investment incomeloss 04 48 
lossprofit on disposal of associates 09 103
share of results of associates and joint venture 21 23 
depreciation of property plant and equipment 1263 1268 
amortisation of intangible assets 456 403 
amortisation of business combination intangibles 285 343 
impairment of assets 3234 3725 
write up in value of investment property – 10
profitloss on disposal of assets 179 46 
sharebased payments 20 32
other noncash items – 245
increasedecrease in provisions 231 262
income received from other noncurrent investments 04 05 
additional pension contributions 226 210
interest received 58 56 
operating cash flows before movements in working capital 1953 2421 
decreaseincrease in inventories 67 70
decreaseincrease in receivables 408 405
decreaseincrease in payables 618 1263 
cash generated by operations 1810 3209 
income taxes paid 291 323
net cash from operating activities 1519 2886 
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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
117
directors’ report business review
32 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 
2012
£m
aircraft and 
aircraft spares
2012
£m
total
2012
£m
property 
and other
2011 
£m
aircraft and 
aircraft spares
2011
£m
total
2011
£m
             
within one year 993 850 1843 1076 993 2069 
later than one and less than five years 2362 1788 4150 2513 1543 4056 
after five years 1602 1458 3060 1080 1717 2797 
  4957 4096 9053 4669 4253 8922 
operating lease payments principally relate to rentals payable for the group’s retail shop and hotel properties and for aircraft and spares  
used by the group’s airlines
shop leases are typically negotiated for an average term of five years 
leases for new aircraft are typically negotiated for an average term of 12 years leases for second hand aircraft and extensions are typically 
considerably shorter
31 net debt
 
at 
1 october
2011
£m
cash flow
£m
disposals  
£m
exchange
movements
£m
other
noncash
changes
£m
at 
30 september 
2012
£m
liquidity            
cash and cash equivalents 3593 1209 – 199 – 4603
  3593 1209 – 199 – 4603
current debt            
bank overdrafts 176 100 – 08 – 68
shortterm borrowings 891 656 183 46 – 06
loan note 40 40 – – – –
current portion of longterm borrowings 688 739 – 19 374 304
borrowings classified as held for sale 221 07 211 17 – –
obligations under finance leases classified as held for sale 01 01 – – – –
obligations under finance leases 186 225 01 16 382 326
  2203 1754 395 106 756 704
noncurrent debt
longterm borrowings 9678 481 – 370 13 9776
obligations under finance leases 621 09 03 115 1512 2006
  10299 472 03 485 1499 11782
total debt 12502 1282 398 591 2255 12486
net debt 8909 2491 398 392 2255 7883 118
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
32 operating lease arrangements continued
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
2012
£m
aircraft
2012
£m
total 
2012
£m
property
2011
£m
aircraft
2011
£m
total
2011
£m
             
within one year 17 47 64 28 – 28 
later than one and less than five years 42 – 42 115 – 115 
after five years 12 – 12 14 – 14 
  71 47 118 157 – 157 
             
rental income earned during the year was 28 63 91 47 36 83
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 29 years for property 2011 48 years and 6 months 
for aircraft 2011 nil months
at 30 september 2012 no aircraft held under operating leases 2011 nil were sublet by the group
34 sharebased payments
the company operates five equitysettled sharebased payment schemes as outlined below the total charge recognised during the year in 
respect of equitysettled sharebased payment transactions was £20m 2011 £32m income
the thomas cook group plc 2007 performance share plan psp and the hm revenue  customs approved company share option  
subplan csosp
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 adjusted earnings per share eps total shareholder 
return tsr and the company’s share price 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  
return on invested capital roic tsr and the company’s share price are met during the three years following the date of grant  
subject to vesting conditions the options or contingent share awards are exercisable up to ten years after the date of grant
the thomas cook group plc 2008 save as you earn scheme saye
eligible employees across the group were offered options to purchase shares in the company by entering into a three or four year savings 
contract the option exercise price was set at a 10 2010 grant or 20 2008 grant discount to the market price at the offer date  
options are exercisable during the six months after the end of the savings contract
33 contingent liabilities
 
2012
£m
2011
£m
contingent liabilities 1260 1247
contingent liabilities primarily comprise guarantees letters of credit and other contingent liabilities including contingent liabilities related  
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 customers’ 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 there is 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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
119
directors’ report business review
the thomas cook group plc 2008 hm revenue  customs approved buy as you earn scheme baye
eligible uk taxpaying employees are offered the opportunity to purchase shares in the company by deduction from their monthly 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 
2012 432471 matching shares had been purchased 2011 128316
the thomas cook group plc restricted share plan rsp
senior executives of the company and its subsidiaries are granted options to acquire or contingent share awards of the ordinary shares  
of the company executive directors are excluded from receiving awards under the rsp  the company will determine at the date of award 
whether the award will be subject to a performance target and the date of vesting subject to any vesting conditions the options or 
contingent share awards are exercisable up to ten years after the date of grant
the movements in options and awards during the year and prior year were
  2012
psp coip saye csosp rsp
outstanding at beginning of year 17480878 5991751 5608535 774594 513304
granted 18157456 2332514 – – –
exercised – – – – 326443
cancelled – 553763 3206060 – –
forfeited 9077106 2425678 124071 561626 27323
outstanding at end of year 26561228 5344824 2278404 212968 159538
exercisable at end of year 174233 – – – 159538
           
exercise price £ nil nil 181188 197 nil
average remaining contractual life years 92 87 13 83 85
the weighted average share price at the date of exercise for the options exercised during the year ended 30 september 2012 was £017
  2011
psp coip saye csosp rsp
outstanding at beginning of year 18686727 8600129 7294552 796123 –
granted 8021142 2995380 – 212968 518439 
exercised 417871 – – – –
cancelled – 119126 1432980 – –
forfeited 8809120 5484632 253037 234497 5135
outstanding at end of year 17480878 5991751 5608535 774594 513304 
exercisable at end of year 174233 – 2222467 – –
           
exercise price £ nil nil 181215 188234 nil
average remaining contractual life years 83 85 15 78 95
the weighted average share price at the date of exercise for the options exercised during the year ended 30 september 2011 was £181 120
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
35 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 £2129m 2011 £1886m were attributable to the pension commitments of the 
condor group condor flugdienst gmbh condor berlin gmbh and cf 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 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 from 1995 onwards participate in a company pension scheme under 
which the pension entitlements are based on the average salaries of those employees average salary plan the 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 the northern europe and west europe segments
the unfunded pension schemes are accounted for as part of liabilities for retirement benefit obligations in the balance sheet
34 sharebased payments continued
the fair value of options and awards subject to adjusted 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 year the key inputs to the models were
  2012
psp coip csosp rsp
weighted average share price at measurement date £017 £017 – –
weighted average exercise price nil nil – –
expected volatility 50 50 – –
weighted average option life years 3 3 – –
weighted average riskfree rate 03 04 – –
expected dividend yield 0 0 – –
weighted average fair value at date of grant £005 £004 – –
  2011
psp coip csosp rsp
weighted average share price at measurement date £170 £189 £165 £167
weighted average exercise price nil nil £197 nil
expected volatility 48 48 48 31
expected volatility of comparator group 25–121 25–121 25–121 na 
expected correlation with comparator group 35 35 35 na 
weighted average option life years 3 3 3 1
weighted average riskfree rate 17 17 17 08
expected dividend yield 7 6 7 7
weighted average fair value at date of grant £115 £130 £028 £156
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 directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
121
directors’ report business review
the following weighted average actuarial assumptions were made for the purpose of determining the unfunded defined benefit obligations
 
2012

2011

discount rate for scheme liabilities 414 499
expected rate of salary increases 258 165
future pension increases 151 150
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 2011 these assume a life expectancy for members currently aged 65 of 19 years  
for men and 23 years for women 
amounts recognised in the income statement in respect of these defined benefit schemes are as follows
 
2012
£m
2011
£m
current service cost 85 112 
past service cost – 03 
gain on settlements 20 24
curtailment gain 03 –
interest cost on scheme liabilities 109 113 
total included in income statement 171 204 
service costs gains on settlement and curtailment gains 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 comprehensive income
changes in the present value of unfunded pension obligations were as follows
 
2012
£m
2011
£m
at beginning of year 2278 2391 
current service cost 85 112 
past service cost – 03 
interest cost 109 113 
benefits paid 61 61
settlements 72 85
curtailments 03 –
actuarial lossesgains 371 175
exchange difference 172 20
at end of year 2535 2278 
funded defined benefit pension obligations
the pension entitlements of employees of thomas cook uk and employees in norway and the netherlands 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 year 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 the weighted 
averages of these were
 
2012

2011

discount rate for scheme liabilities 432 513
inflation rate 266 313
expected return on scheme assets 549 578
expected rate of salary increases 018 434
future pension increases 042 286 122
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
35 retirement benefit schemes continued
the thomas cook uk pension plan accounts for approximately 86 2011 90 of the total funded defined benefit obligations the mortality 
assumptions used in arriving at the present value of those obligations at 30 september 2012 are based on the pma92pfa92 tables with 
medium cohort improvements and a minimum future longevity improvement per year of 1 adjusted for recent mortality experience  
the mortality assumptions adopted for the plan liabilities indicate a further life expectancy for members currently aged 65 of 228 years  
for men and 259 years for women
on 31 march 2011 the uk defined benefit schemes closed to all active members who were given the option of joining thomas cook’s 
defined contribution scheme the closure of the schemes resulted in a cessation of future pension benefit accrual and a consequent 
curtailment gain of £258m which was recognised in the income statement for the year ended 30 september 2011
amounts recognised in the income statement in respect of these defined benefit schemes are as follows
 
2012
£m
2011
£m
current service cost 23 100 
curtailment gain – 258
expected return on scheme assets 414 421
interest cost on scheme liabilities 437 434 
total lossgain included in the income statement 46 145
service costs and curtailment gains 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 £639m 2011 £182m
actuarial gains and losses have been reported in the statement of comprehensive income
changes in the present value of funded defined benefit obligations were as follows
 
2012
£m
2011
£m
at beginning of year 8465 8788 
current service cost 23 100 
interest cost 437 434 
benefits paid 198 194
transfers – 64 
disposal of businesses 12  – 
curtailments – 258
expenses paid 24 15
contributions paid by plan participants 02 17 
actuarial lossesgains 211 474
exchange difference 22 03 
at end of year 8882 8465 
changes in the fair value of scheme assets were as follows
 
2012
£m
2011
£m
at beginning of year 7433 7034 
expected return on scheme assets 414 421 
contributions from the sponsoring companies 287 339 
contributions paid by plan participants 02 17 
actuarial gainslosses 225 239
benefits paid 198 194
transfers – 65 
disposal of businesses 11  – 
expenses paid 24 15
exchange difference 19 05 
at end of year 8109 7433  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
123
directors’ report business review
following the 2008 actuarial valuation of the thomas cook uk pension plan a sixyear recovery plan was agreed with the pension trustees 
to fund the actuarial deficit in line with that agreement thomas cook uk committed to make additional quarterly payments totalling 
£1056m through to june 2014 during the year ended 30 september 2012 thomas cook uk paid four instalments totalling £223m in line 
with the recovery plan as at 30 september 2012 the 2011 actuarial valuation had not been finalised since the year end thomas cook uk 
has reached agreement with the pension trustees it has agreed the deficit at £1252m as at 30 june 2011 and a sixyear recovery plan to  
clear this deficit deficit contributions will total circa £26m per annum including fees and expenses
the fair value of scheme assets at the balance sheet date is analysed as follows
 
2012
longterm
rate of return

2012 
£m
2011
longterm
rate of return

2011
£m
equities 66 3193 71 2799
property 49 810 56 682
fixed interest gilts 31 2251 40 2177
hedge funds 66 1439 71 1164
other 56 416 62 611
at end of year 8109 7433
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
 
2012
£m
2011
£m
present value of funded defined benefit obligations 8882 8465 
fair value of scheme assets 8109 7433
deficit on funded retirement benefit obligations 773 1032 
present value of unfunded defined benefit obligations 2535 2278 
scheme deficits recognised in the balance sheet 3308 3310 
     
this amount is presented as follows    
current liabilities 68 68 
noncurrent liabilities 3240 3242 
  3308 3310 
the cumulative net actuarial losses recognised in the statement of comprehensive income at 30 september 2012 were £3586m  
2011 £3229m
the history of the experience gains and losses of the schemes is as follows
 
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
present value of defined benefit obligations 11417 10743 11179 9930 7712 
fair value of scheme assets 8109 7433 7034 6219 5817
scheme deficits 3308 3310 4145 3711 1895 
           
experience adjustments on scheme liabilities 191 94 101 77 27 
experience adjustments on scheme assets 222 241 276 137 1166
defined contribution schemes
there are a number of defined contribution schemes in the group the principal scheme being the thomas cook uk dc pension scheme which  
is open to all uk employees the total charge for the year in respect of this and other defined contribution schemes including liabilities in respect 
of insured benefits relating to workers’ compensation arrangements amounted to £294m 2011 £252m
the assets of these schemes are held separately from those of the group in funds under the control of trustees 124
thomas cook group plc annual report  accounts 2012
notes to the financial statements continued
36 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 venture undertakings are disclosed below  
transactions between the company and its subsidiaries and associates are disclosed in the company’s separate financial statements
trading transactions
during the year group companies entered into the following transactions with related parties who are not members of the group
 
associates joint venture 
and participations

2012
£m
2011
£m
sale of goods and services 421 316 
purchases of goods and services 229 363
other income 16 05 
interest receivable 03  – 
amounts owed by related parties

232 232
provisions against amounts owed 39 42
amounts owed to related parties 32 57
  participations are equity investments where the group has a significant equity participation but which are not considered to be associates or joint ventures
 amounts owed by related parties include £118m 2011 £117m which for statutory purposes is reported as part of the associate investment
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 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 62 to 64
 
2012
£m
restated  
2011
£m
shortterm employee benefits 33 32
termination benefits – 12 
sharebased payments – 05
  33 39 
the 2011 shortterm employee benefits figure has been restated to include £05m of employer social security payments in 2012 this figure  
is £03m and is excluded from the director’s remuneration report
at 30 september 2011 termination benefits included £10m due to the former ceo of the group in relation to remuneration over his 
contractual notice period this consisted of £116744 in remuneration over the period from 1 october 2011 to 4 november 2011  
and a payment in lieu of notice made on 4 november 2011 of £851114 as disclosed in the remuneration report on page 64
37 subsequent events
there were no events between the balance sheet date and the date of approval of these financial statements that required disclosure thomas cook group plc annual report  accounts 2012
125
directors’ report corporate governance financial statements directors’ report business review
company balance sheet
at 30 september 2012
  notes
30 september
2012
£m
30 september
2011
£m
noncurrent assets      
property plant and equipment 5 16 26
investments in subsidiaries 6 20547 26198
trade and other receivables 7 5619 39
  26182 26263
current assets      
trade and other receivables 7 10609 12671
cash and cash equivalents 8 261  – 
  10870 12671
total assets 37052 38934
       
current liabilities      
trade and other payables 9 4081 2504
short term provisions  10 20  – 
    4101 2504 
 
noncurrent liabilities      
borrowings 11 6115 6359
total liabilities 10216 8863
net assets 26836 30071 
       
equity      
calledup share capital 14 600 592 
share premium account 292 292 
merger reserve 14290 15880 
hedging and translation reserves 6497 8887 
capital redemption reserve 85 85 
retained earnings surplus 5206 4468 
investment in own shares 134 133
total equity 26836 30071 
the financial statements on pages 125 to 133 were approved by the board of directors on 27 november 2012
signed on behalf of the board
michael healy
group chief financial officer
notes 1 to 19 form part of these financial statements 126
thomas cook group plc annual report  accounts 2012
company cash flow statement
for the year ended 30 september 2012
 
year ended 
30 september 
2012
£m
year ended 
30 september 
2011
£m
cash flows from operating activities    
loss before tax 5153 15258
adjustments for    
finance income 22 16
finance expense 615 485 
depreciation of property plant and equipment 02 02 
impairment of investment – 14633 
loss on disposal of assets 06 –
sharebased payments – 35
increase in provisions 20  – 
decreaseincrease in receivables 2157 2814
increase in payables 650 1359 
net cash used in operating activities 1725 1644
     
investing activities    
dividends received 2928 3035 
net cash from investing activities 2928 3035 
     
financing activities    
interest paid 615 473
dividends paid 327 918
net cash used in financing activities 942 1391
     
net decrease in cash and cash equivalents 261 –
cash and cash equivalents at beginning of year – –
effect of foreign exchange rate changes – –
cash and cash equivalents at end of year 261 –
     
liquid assets – –
cash and cash equivalents at end of year 261 – thomas cook group plc annual report  accounts 2012
127
directors’ report corporate governance financial statements directors’ report business review
company statement of changes in equity
for the year ended 30 september 2012
 
share
capital
£m
share
premium
£m
merger
reserve
£m
capital
redemption
reserve
£m
translation
reserve
£m
retained
earnings
£m
own 
shares
£m
total
£m
at 1 october 2010 577 89 30513 85 8828 1992 133 41951
loss for the year – – – – – 15229 – 15229
other comprehensive expense – – – – 59 – – 59
total comprehensive expense for the year – – – – 59 15229 – 15170
equity debit in respect of sharebased 
payments – – – – – 32 – 32
issue of equity shares net of expenses 15 203 – – – – – 218 
release of merger reserve – – 14633 – – 14633 – –
dividends paid – – – – – 925 – 925
dividends received – – – – – 4029 – 4029 
at 30 september 2011 592 292 15880 85 8887 4468 133 30071 
                 
loss for the year – – – – – 5153 – 5153
other comprehensive expense – – – – 2390 – – 2390
total comprehensive expense for the year – – – – 2390 5153 – 7543
equity credit in respect of sharebased 
payments – – – – – 20 – 20
release of merger reserve –  –  1590 –  –  1590  –  – 
purchase of own shares – – – – – – 01 01
group relief not at the standard rate of  
uk tax – – – – – 1353 – 1353
issue of equity shares net of expenses 08 – – – – – – 08
dividends received – – – – – 2928 – 2928
at 30 september 2012 600 292 14290 85 6497 5206 134 26836
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 and represents the difference between the nominal value and the fair value of the shares 
acquired following the impairment of the company’s investment in subsidiaries during the year the company has in accordance with the 
companies act 2006 relieved part of the impairment loss through a transfer from the merger reserve to retained earnings
the share premium arose in connection with the issue of ordinary shares of the company following the exercise of mytravel executive  
share options
at 30 september 2012 the company had distributable reserves of £5206m 2011 £4468m
details of the own shares held are set out in note 28 to the group financial statements 128
thomas cook group plc annual report  accounts 2012
notes to the company financial statements
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
2 loss for the year
as permitted by section 4083 of the companies act 2006 the company has elected not to present its own income statement for the year 
the loss after tax of the company amounted to £5153m 2011 £15229m loss after tax
the auditors’ remuneration for audit services to the company was £04m 2011 £03m
3 personnel expenses
 
2012
£m
2011
£m
wages and salaries 211 174 
social security costs 13 02 
sharebased payments – equity settled – 35
224 141
 
2012
number
2011
number
average number of employees of the company during the year 109 101
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 2006 and specified for audit by the financial services authority are on pages 62 to 64 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 35 of the group financial statements
4 dividends
the details of the company’s dividend are disclosed in note 10 to the group financial statements thomas cook group plc annual report  accounts 2012
129
directors’ report corporate governance financial statements directors’ report business review
5 property plant and equipment
other fixed assets
 
£m
cost  
at 1 october 2010 16
additions 14
at 30 september 2011 30
disposals 06 
exchange differences 02
at 30 september 2012 22
   
accumulated depreciation and impairment  
at 1 october 2010 02
charge for the year 02
at 30 september 2011 04
charge for the year 02
at 30 september 2012 06
   
carrying amount at 30 september 2012 16
carrying amount at 30 september 2011 26
6 investment in subsidiaries
£m
cost and net book value
at 1 october 2010 40733
adjustment in respect of sharebased payments 12
impairment 14633
exchange difference 110
at 30 september 2011 26198
adjustment in respect of sharebased payments 18
impairment 3670
exchange difference 1999
at 30 september 2012 20547
a list of the company’s principal subsidiary undertakings is shown in note 19 to the financial statements
the additions in the current year relate to sharebased payment charge related to subsidiaries’ employees
during the year the company recognised an impairment loss of £3670m in relation to its investments in subsidiaries the impairment 
primarily stems from the disposal of thomas cook india at a loss deterioration in profitability of the french and canadian businesses  
and a write off of deferred tax assets in the uk and west europe segments 130
thomas cook group plc annual report  accounts 2012
notes to the company financial statements continued
10 provisions
2012 
£m
at 1 october 2011 – 
additional provision in the year 20
at 30 september 2012 20
provisions relate to provisions for severance costs
7 trade and other receivables
 
2012
£m
2011
£m
current    
amounts owed by subsidiary undertakings 10132 12449
other receivables 38 06
deposits and prepayments 439 216
  10609 12671
     
noncurrent    
amounts owed by subsidiary undertakings 5589  – 
deposits and prepayments 30 39
  5619 39
amounts owed by subsidiary undertakings are repayable on demand the average interest on overdue amounts owed by subsidiary 
undertakings is 04 2011 04 the directors consider the fair value to be equal to the book value
9 trade and other payables
 
2012
£m
2011
£m
amounts owed to subsidiary undertakings 3689 1886
social security and other taxes 17 20
other payables 197 532
accruals 178 66
  4081 2504
the average interest on overdue amounts owed to subsidiary undertakings is 07 2011 00
amounts owing to subsidiary undertakings are repayable on demand the directors consider the fair value to be equal to the book value
8 cash and cash equivalents
 
2012
£m
2011
£m
cash at bank and in hand 261 – 
261 – 
cash and cash equivalents comprise of balances which are considered to be restricted £261m 2011 £nil is held within escrow accounts  
in denmark and norway in respect of local regulatory requirements the directors consider that the carrying amounts of these assets 
approximate their fair value
11 borrowings
borrowings comprise a €400m bond issued with an annual coupon of 675 maturing in june 2015 and a £300m bond with an annual 
coupon of 775 maturing in june 2017 thomas cook group plc annual report  accounts 2012
131
directors’ report corporate governance financial statements directors’ report business review
12 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 on pages 18 to 19 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 loss before tax by £266m 2011 increase loss before tax by 
£234m while a 5 weakening in sterling would decrease loss before tax by £266m 2011 decrease loss before tax by £234m
the carrying value of the company’s financial instruments is exposed to movements in interest rates the company estimates that a 05 
increase in interest rates would decrease loss before tax by £01m 2011 05 increase in interest rates decrease loss before tax by £12m 
while a 05 decrease in interest rates would increase loss before tax by £01m 2011 05 decrease in interest rates increase loss before  
tax by £12m
the maturity of contracted cash flows on the company’s financial liabilities is as follows
at 30 september 2012
less than 
1 year
£m
between
1 and 5 years
£m
in more
than 5 years
£m
total
£m
trade and other payables 4081 – – 4081
borrowings – 7858 – 7858
  4081  7858  –  11939 
at 30 september 2011
less than 
1 year
£m
between
1 and 5 years
£m
in more 
than 5 years
£m
total
£m
trade and other payables 2504 – – 2504
borrowings – 4321 4308 8629
  2504 4321 4308 11133
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 set at the date of the last rate reset
15 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
 
2012
£m
2011
£m
within one year 06 06
later than one year and less than five years 24 24
after five years 07 13
  37 43
14 calledup share capital
the details of the company’s share capital are the same as those of the group and are disclosed in note 28 to the group financial statements 
in this report
details of share options granted by the company are set out in note 34 to the group financial statements
13 deferred tax assets
 
2012 
£m
at 1 october 2010 16
credit to income statement 16
at 30 september 2011 –
debit to income statement –
at 30 september 2012 –
at the balance sheet date the company had unused tax losses of £375m 2011 £465m and other deductible shortterm timing differences 
of £90m 2011 £54m available for offset against future profits no deferred tax asset has been recognised in respect of unused tax losses 
and other deductible shortterm timing differences 132
thomas cook group plc annual report  accounts 2012
notes to the company financial statements continued
16 contingent liabilities
at 30 september 2012 the company had contingent liabilities in respect of counterguarantees for bank funding letters of credit and 
guarantees of amounts owed by subsidiaries amounting to £7075m 2011 £5342m this predominately relates to a guarantee on the 
drawndown portion of the group banking facility detailed in note 20 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 of £2499m 2011 £447m
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
17 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
 
2012
£m
2011
£m
transactions with subsidiaries
interest receivable 22 16 
interest payable 40 –
management fees and other expenses 127 106 
dividend income received 2928 4029 
     
yearend balances arising on transactions with subsidiaries    
loans receivable 8353 12089 
interest receivable 06 06 
other receivables 1773 354 
loans payable 3225 1465
other payables 464 421
remuneration of key management personnel
the remuneration of the directors who are the key management personnel of the company is set out in note 36 of the group  
financial statements
18 sharebased payments
the employees of the company including the directors collectively participate in all of the group’s equitysettled sharebased payment 
schemes the details relating to these schemes in respect of the company are identical to those disclosed in note 34 to the group financial 
statements and have therefore not been represented here
the sharebased payment credit of nil 2011 credit of £35m is stated net of amounts recharged to subsidiary undertakings thomas cook group plc annual report  accounts 2012
133
directors’ report corporate governance financial statements directors’ report business review
19 principal subsidiaries
 
country of
incorporation
and operation nature of the business
proportion
held by
company 
proportion
held by
group 
direct subsidiaries        
thomas cook investments 2 limited england holding company 100 100
thomas cook ag germany holding company 100 100
 
indirect subsidiaries
uk        
thomas cook airlines limited england airline 100
thomas cook retail limited england travel agent 100
thomas cook scheduled tour operations limited england tour operator 100
thomas cook tour operations limited england tour operator 100
thomas cook uk limited england tour operator 100
neilson active holidays limited england tour operator 100
central europe        
bucher reisen gmbh germany tour operator 100
tc touristik gmbh germany tour operator 500023
west europe        
thomas cook airlines belgium nv belgium airline 100
thomas cook belgium nv belgium tour operator 100
thomas cook sas france tour operator and travel agent 100
northern europe        
thomas cook airlines scandinavia as denmark airline 100
thomas cook northern europe ab sweden intermediate holding company 100
north america        
thomas cook canada inc canada tour operator 100
airlines germany        
condor berlin gmbh

germany airline 500023
condor flugdienst gmbh

germany airline 500023
corporate        
thomas cook group treasury limited england financing company 100
the company has taken advantage of the exemption under section 410 of the companies act 2006 by providing information only in relation 
to subsidiary undertakings whose results or financial position in the opinion of the directors principally affected the financial statements  
a full list of subsidiaries will be sent to companies house with the next annual return
  all risks and rewards continue to be held by the group and in accordance with accounting standards the entity has been treated as being 100 controlled and fully consolidated 
by the group 134
thomas cook group plc annual report  accounts 2012
appendix 1 – key performance indicators definitions
 revenue for the group and segmental analysis represents 
external revenue only except in the case of the airlines 
germany segmental key performance analysis where revenue 
of £3000m 2011 £3187m largely attributable to the central 
europe division has been included
 underlying profit from operations is defined as earnings  
before interest and tax and has been adjusted to exclude  
all separately disclosed items it also excludes our share of  
the results of associates and joint venture and net  
investment income
 underlying operating profit margin is underlying 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
† 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 year it excludes customers who booked thirdparty tour 
operator products through thomas cook retail channels and 
customers who booked transfers only for central and west 
europe passengers represents all tour operator passengers 
departed in the year 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 thirdparty
 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 tour operator was at selling the 
committed capacity load factor is calculated by dividing the 
departed mass market passengers in the year excluding 
accommodation only passengers by the capacity in the year
 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 one 
passenger is carried one kilometre
 average selling price for uk northern europe and north 
america represents the average selling price after discounts 
achieved per mass market passenger departed in the year 
excluding accommodation only passengers for central and 
west europe average selling price represents the average 
selling price after discounts achieved per passenger departed 
in the year
 brochure mix is defined as the number of mass market 
holidays excluding seat and accommodation only sold at 
brochure prices divided by the total number of holidays sold 
excluding seat and accommodation 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 year
‡‡‡ sold seats in airlines germany represents the total number  
of oneway seats sold on aircraft in thousands that departed 
in the year
 yield in airlines germany represents the average price per seat 
departed in the year thomas cook group plc annual report  accounts 2012
135
directors’ report corporate governance financial statements directors’ report business review
shareholder information
annual general meeting ‘agm’
the agm will be held at the lincoln centre 18 lincoln’s inn fields 
london wc2a 3ed on thursday 7 february 2013 at 1030am the last 
date for agm proxy votes to be received by the registrar is tuesday 
5 february 2013
all shareholders can submit their proxy vote for the agm 
electronically at wwwsharevotecouk to register their vote 
shareholders will need the numbers detailed on their form of proxy
alternatively shareholders who have already registered with 
shareview can submit their proxy vote by logging on to  
wwwshareviewcouk and clicking on the link to vote underneath 
their thomas cook group plc holding
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 0182
  calls to this number cost 8p per minute excluding vat from a bt landline other 
providers’ costs may vary lines are open 830am to 530pm london time monday 
to friday excluding uk public holidays
shareholders should quote the company reference number 3174  
and their shareholder reference number which can be found on 
their share certificates when contacting the registrar
shareview
to be able to access information about their shares and other 
investments online shareholders can register with shareview  
wwwshareviewcouk registration is free shareholders will need 
their shareholder reference number which is shown on their form  
of proxy and share certificate by registering for this service 
shareholders will
•	 help reduce paper print and postage costs
•	 help the environment and
•	 be able to manage their shareholding easily and securely online
once registered whenever shareholder documents are available 
shareholders will be sent a link to the appropriate website where  
the documents will be available to view or download receiving 
documents online does not affect shareholders’ rights in any way
website
the company’s corporate website wwwthomascookgroupcom 
provides information including
•	 news updates press releases and regulatory announcements
•	 investor information including the annual report financial results 
and share price information
•	 details of shareholder meetings and poll results
•	 biographies of the board of directors
•	 the company’s articles of association the terms of reference for 
the committees of the board and the board appointments policy 
and
•	 sustainability reporting
multiple accounts on the share register
if a shareholder receives two or more sets of the documents concerning 
the agm this means that there is more than one account in their name 
on the shareholder register perhaps because either the name or the 
address appears on each account in a slightly different way for security 
reasons equiniti will not amalgamate the accounts without the 
shareholder’s written consent therefore if a shareholder would like 
their multiple accounts to be combined they should write to equiniti 
at the address above detailing the different shareholder reference 
numbers and request that they be combined into one account
electronic communications
at the agm on 10 april 2008 the company passed a resolution 
allowing the company’s corporate 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 or
•	 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 company’s corporate website these 
arrangements for electronic shareholder communications provide 
shareholders with the opportunity to access information in a timely 
manner and help the company to reduce both its costs and its 
environmental impact
dividends
information on recent dividend payments is detailed below
name
final dividend for the 
financial year ended 30 
september 2009
interim dividend for the 
financial year ended 30 
september 2010
final dividend for the 
financial year ended 30 
september 2010
interim dividend for the 
financial year ended 30 
september 2011
amount per share 700p 375p 700p 375p 
record date 19 march 2010 10 september 2010 18 march 2011 9 september 2011
payment date 8 april 2010 8 october 2010 7 april 2011 7 october 2011
no further dividends have been paid or declared since the interim dividend for the financial year ended 30 september 2011 paid on  
7 october 2011 136
thomas cook group plc annual report  accounts 2012
shareholder information continued
thomas cook agmytravel 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 if you have any queries relating  
to this please contact the registrar
warning to shareholders about share fraud
share fraud includes scams where investors are called out of the  
blue and offered shares that often turn out to be worthless or 
nonexistent or an inflated price for shares they own these calls 
come from fraudsters operating in ‘boiler rooms’ that are mostly 
based abroad 
while high profits are promised those who buy or sell shares in  
this way usually lose their money
the financial services authority ‘fsa’ has found most share fraud 
victims are experienced investors who lose an average of £20000 
with around £200m lost in the uk each year
protect yourself
if you are offered unsolicited investment advice discounted shares  
a premium price for shares you own or free company or research 
reports you should take these steps before handing over any money
1 get the name of the person and organisation contacting you
2 check the fsa register at wwwfsagovukfsaregister to ensure 
they are authorised
3  use the details on the fsa register to contact the firm
4 call the fsa consumer helpline on 0845 606 1234 if there are  
no contact details on the fsa register or you are told they are 
out of date
5  search the fsa’s list of unauthorised firms and individuals to 
avoid doing business with
6 remember if it sounds too good to be true it probably is
if you use an unauthorised firm to buy or sell shares or other 
investments you will not have access to the financial ombudsman 
service or financial services compensation scheme ‘fscs’ if things 
go wrong
report a scam
if you are approached about a share scam you should tell the fsa 
using the share fraud reporting form at wwwfsagovukscams where 
you can find out about the latest investment scams you can also call 
the consumer helpline on 0845 606 1234
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 which 
specialises in using such holdings for charitable benefit 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 ukbased 
shareholders for telephone dealing call 08456 037 037 international 
telephone number 44 0121 415 7560 between 800am and 
430pm london time monday to friday excluding uk public 
holidays or visit the website wwwshareviewcoukdealing 
shareholders will need the shareholder reference number  
shown on their share certificates
analysis of shareholders as at 30 september 2012
distribution of shares by the type  
of shareholder number of holdings number of shares
nominees and institutional investors 1591 860567462
individuals 16341 25332872
total 17932 885900334
size of shareholding number of holdings number of shares
1100 9568 307123
101500 3411 821588
5011000 1152 906329
100110000 2850 11186073
10001100000 680 21315429
100001500000 127 32180739
5000011000000 46 32245252
1000001 and above 98 786937801
total 17932 885900334
registered office
6th floor south brettenham house lancaster place 
london wc2e 7en
registered number 6091951
shareholder contacts
shareholder helpline 0871 384 2154

international telephone number 44 0121 415 0182
website wwwthomascookgroupcom
registrar’s website wwwshareviewcouk
  calls to this number cost 8p per minute excluding vat from a bt landline other 
providers’ costs may vary lines are open 830am to 530pm london time monday 
to friday excluding uk public holidays the thomas cook group website provides news  
and details of the group’s activities plus links to our 
customer sites and uptodate information including
•	 cor pora te	ne ws
•	 pr esenta tions
•	 shar e	price	da ta
•	 historic	ann ual		sustaina bility	repor ts
•	 	 halfy ear	r esults	and	interim	management	sta tements
•	 ne ws	aler ts
visit us at wwwthomascookgroupcom
this report is printed on hello fat matt produced at a mill certified 
to the iso14001 and emas environmental management standards 
manufactured using responsible sources and is fsc certified  
this report is fully recyclable and biodegradable
designed and produced by black sun plc
printed by principal colour thomas cook group plc annual report  accounts 2012
thomas cook group plc
6th floor south 
brettenham house
lancaster place
london wc2e 7en
wwwthomascookgroupcom


Summary:
 8
thomas cook group plc annual report  accounts 2012
the begi n n i ng of a new era  
at thomas cook
group chief executive officer’s qa
q what can you tell us about your first 100 days 
a exciting and illuminating i’ve learned a lot and now understand 
the strengths challenges and incredible opportunities facing the 
thomas cook group 
before i joined i spent time understanding how the group is viewed 
from the outside i met with customers suppliers key contacts in the 
city shareholders our banks and the media so i was already forming 
impressions before i joined once i started on 30 july 2012 i spent 
the first two months concentrating on understanding the insideout 
view of the organisation i have visited all of our major business 
centres hosted employee briefings and held indepth senior 
management sessions and budget reviews
i spoke to customers and travelled to some of our significant holiday 
destinations to get a real sense of the service and experience our 
customers receive and i spoke at length to some of our critical 
partners service matters so much in our business – we’re not just 
delivering a product but an experience fulfilling an expectation and 
creating lasting memories our customers trust us to deliver the best 
weeks of their year and we want to be sure they’ll return and travel 
with us again and again
i wanted to learn about our business from those who know it best – 
our employees so i invited them to share their views with me 
confidentially in a short feedback survey i was delighted by both the 
quality and the number of responses i received from over 8000  
of our global team – real insights solutions as well as problems all 
characterised by refreshing honesty and passion for this business  
and our customers
i was attracted to join thomas cook by its strong brands reputation 
for customer service and the opportunity to transform the business 
by harnessing its inherent potential and building a best in class 
online capability i almost feel that my entire career experience to 
date was preparing me for the challenges at thomas cook a set of 
challenges i firmly believe we will address the world in which we 
live is changing and we must capitalise on our many existing 
strengths whilst embracing new opportunities and different ways of 
working opportunities such as the way technology is transforming 
the travel industry particularly the web and mobile this influences 
the way consumers research and book holidays our customers want 
high tech and high touch – from our stores to our websites they want 
advice from our travel experts to help them make the choices that 
are right for them we will embrace all channels to ensure our 
customers get exactly what they need how and when they need it  
as we focus on becoming easier to do business with
 “ i was attracted to join  
thomas cook by its strong  
brands reputation for  
customer service and the 
opportunity to transform  
the business by harnessing  
its inherent potential”  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
9
directors’ report business review
the thomas cook family of brands are incredibly powerful and have 
proven themselves to be resilient bouncing back from the challenges 
of the last year we will now build on the trust placed in us by  
the 23 million customers who travel with us each year to ensure we 
deliver an experience that exceeds their expectations at the same 
time we will target new market areas to keep at the forefront of  
what customers need and attract new customers 
some parts of the business are currently not performing as well as we 
need them to but there are also areas of real strength in particular 
northern and continental europe whose strong brands such as ving 
spies tjäreborg and neckermann are well known and regarded in 
their markets we will work together to utilise best practice and 
learnings and really leverage the overall strength and expertise  
of the group
ours is a target rich environment with real opportunity to take out 
cost since i joined working closely with the senior team we have 
identified £100 million of cost savings and there is more to come 
these savings will come from greater efficiency and use of 
technology not at the expense of the customer experience 
pleasingly i have not found anything which i did not expect  
the historic underperformance i now believe is largely down to 
organisational complexity and structure a lack of focus on some of 
the core business essentials and a failure to integrate our different 
businesses successfully and learn from each other as well as other 
industries and sectors when i arrived the group felt like a collection 
the begi n n i ng of a new era  
at thomas cook
 “ some parts of the business are 
currently not performing as well 
as we need them to but there are 
also areas of real strength” 
of individual businesses working in silos making it harder for us to 
succeed collectively already this has started to change – i have been 
delighted by the quality of people i have found across the business 
many leaders with a verve for change and a desire to return the 
group’s financial performance to where it needs to be inevitably 
there will be leadership changes – my usual formula is ‘a third a 
third and a third’ – that’s a third of the existing team retained a 
third coming from internal promotions and a third of the leadership 
coming in externally bringing new strengths and skills this pattern  
is already reflected in my direct report team
we have made a number of critical appointments including peter 
fankhauser appointed as uk ceo in addition to his existing role as 
ceo of continental europe to leverage his business transformation 
experience susan duinhoven who previously led our west europe 
business has been appointed to lead the group’s web transformation 
including the integration of web back into the segments whilst 
maintaining a web centre of excellence christoph debus has been 
appointed as group head of air travel to review the group’s air travel 
strategy with regard to both our airlines and our purchasing of third 
party capacity in the tour operator and scheduled businesses in our 
benelux and east europe businesses reto wilhelm has been 
appointed as managing director bringing his extensive knowledge 
and experience to help drive an improved performance and joe 
o’neill joins as group treasurer as we also strengthen our finance 
communications investor relations audit and risk teams  10
thomas cook group plc annual report  accounts 2012
group chief executive officer’s qa continued
we are driving cultural change through greater collaboration and 
changing our structure to maximise the customer experience these 
changes are happening at speed to quickly invigorate the group  
and break down organisational silos and i firmly believe the recent 
appointments i have made will facilitate this driving faster decision 
making and reducing costs through back office rationalisation 
across the group customer service will be a priority as we embed the 
mantra “if you’re not serving the customer directly then brilliantly 
serve someone who is”
this is a £95 billion turnover business with a gross profit margin of 
22 reducing to an operating margin of just 16 there is a major 
opportunity here to reduce our costs and improve profitability we 
are targeting cost reduction through structural change and we have 
already identified £100m of savings with substantial further 
opportunities to come
the principles driving our focus on reducing costs and improving 
cash management are firstly acting cohesively as a group for 
example better leveraging our purchasing power centralising where 
it makes sense to do so whilst remaining committed to the 
importance of local knowledge and relationships for our customers 
and suppliers we are also reducing costs through immediate 
selfhelp measures which include our air travel strategy as we look 
for greater integration of maintenance activities and better yield 
management of seat only sales
further savings will be driven as we reshape the organisation and 
take out layers and also by making better use of existing technology 
for example standardisation of systems across the group and the 
consolidation of technology platforms
we also have an entire initiative dedicated to improving working 
capital management focused particularly on more disciplined cash 
collection and an improved procurement strategy these measures 
are already delivering improvements we have also identified 
significant gross cash flow improvements and expect to identify  
more benefits 
in the uk the turnaround plan has delivered significant benefits and  
we are accelerating the work to look at the high operating costs  
and opportunities for cash generation 
our entire customer proposition is also under detailed review 
encompassing our distribution channels our products and our 
brands we want to continue to improve our core products to ensure 
we retain our existing customers whilst also attracting new customers 
through innovation
the work on these transformational initiatives will drive immediate 
benefits and lay the foundations for the new strategy that we will  
be sharing in the spring of 2013
the entire organisation is now mobilised around the changes 
required our top 100 managers are fully engaged with the 
objectives we are working to achieve and we are actively changing 
the culture and ways of working as our transformation process 
begins to gain momentum over 100 of our teams globally are 
already working on our transformation projects which have been  
my real focus since the start of the new financial year
q have you established a list of priorities 
a my immediate priority was to accelerate the turnaround changes 
already underway and foster the heightened sense of urgency 
needed to transform the business being relatively new to the 
industry has proven to be an advantage as i ask the naïve questions 
and bring fresh experience of other industries and i hope therefore 
a different perspective to the business there are many excellent 
travel people within the business who i can rely on for industry 
knowledge to help inform my decisions 
i had an initial list of areas i wanted to focus on when i started but 
it has been an iterative process over the first 100 days resulting in 
the creation of a series of transformational initiatives that will build 
an effective organisation address the cost and cash issues we face 
and create profitable growth whilst delivering innovation and 
excellence for our customers
we want to deliver even more to our existing loyal customer groups 
whilst targeting new customer segments and responding to the 
increasingly diverse and individual needs of today’s leisure traveller 
in the spirit of our pioneering founder thomas cook we will 
continue to differentiate ourselves 
i shared these top priorities with the top 100 managers across the 
business that make up the thomas cook leadership council ‘tclc’ 
in september 2012 and since then we have been building the teams 
who will develop our future strategy there is a real sense of urgency 
and pace of change sweeping across the group as people engage 
and connect with these initiatives that will ultimately shape our 
future direction as i have already shared we will be ready to 
announce this information to all stakeholders in the spring of 2013 
each of our key strategic initiatives now has a strong team assigned 
to move it forward with clear timelines accountabilities and 
priorities and they fall into three main areas
•	 building an effective organisation
•	 addressing costs and cash management and
•	 creating a profitable growth strategy
building an effective organisation is the most important first step  
as it will underpin all our other work without this our strategic 
initiatives in both the short and longterm might fail our cost base  
is too high and this affects operating margin performance we need 
to reduce our costs and start generating cash whilst considering 
carefully the assets we hold finally we want to grow this business 
profitably for the future we can leverage the strength of our brands 
and significant customer base to build on our popular current core 
products to attract new and existing customers the way customers 
want to interact with us is changing and we will invest in our 
technology offering to meet their high tech and high touch needs  directors’ report corporate governance financial statements
thomas cook group plc annual report  accounts 2012
11
directors’ report business review
q are the financial problems of the past year behind  
you now
a we are making progress as already shared to address the 
challenges and the business improvements in q4 are encouraging 
clearly there are challenges ahead which will take time to resolve 
but as shared we have robust plans and processes in place now and 
a critical element of our business improvement plan is to address the 
group’s cost base and cash management and we will be reducing 
costs through the immediate selfhelp measures and more structural 
longerterm changes 
the uk turnaround plan is critical to restoring the financial health  
of the business and is covered in more detail on page 22 first 
announced last year the plan is progressing well delivering £60m  
of savings in the year largely through improved yield management 
£19m and cost synergies through the integration of the cooperative 
travel business £15m and the key actions taken in the year which 
include the return of six aircraft to the lessors removing 
underperforming hotels closing 149 stores and five head office 
properties and implementing a single commercial trading platform 
with the appointment of peter fankhauser to lead the uk we  
now have one business with one ceo which will further reduce 
duplication and drive out cost the strengths and contributions  
of northern europe and germany in particular continue to be high 
and as we increase intragroup partnerships work more as a 
cohesive group and leverage best practice we hope to see similar 
performance levels across the group
eliminating duplication will enable us to leverage our global 
purchasing power more effectively whilst reducing unnecessary 
overheads 
again while the group’s current gross profit margin is a respectable 
22 our group operating profit margin is just 16 which 
demonstrates the scale of the potential within this business once  
we reduce cost and build the right organisational and operational 
capabilities this is the central driving force of all of the work we  
are currently focused on and the senior team is totally committed  
to the improvements needed and the power of the transformation  
we are undertaking 
q how do you plan to energise focus and rebuild  
thomas cook
a we are breaking down barriers to growth removing silos  
and strengthening the management team as i hope i have already 
explained and restoring our financial health to build an effective 
organisation able to deliver good returns in the future we will  
be lean with ourselves and lavish with our customers and we  
will harness technology in all its forms to drive efficiency service  
and even easier access to information 
we’ll build on the strength and promise of our iconic and much 
loved travel brands and widen our product portfolio to address the 
insatiable desire of our existing and new customers to travel more 
flexibly and cost effectively increasingly our products are designed 
to target the specific needs of our different customer segments such 
as the familyfriendly sentido and sunwing concepts or the adult  
only sunprime and sunselect hotels which are very successful  
and popular targeting different customer groups in this way  
and developing compelling new propositions affords us a very  
real opportunity to attract new customers 
even in these tougher macroeconomic conditions when disposable 
income is down 41 of consumers surveyed regard their holiday  
as an essential purchase
we will continue to offer customers a full multichannel experience 
to ensure they can reach us however and whenever they want to 
harnessing technology and the web to drive differentiation at every 
point of the holiday experience the customer’s holiday must begin 
the first time they connect with us and last until they collect their 
luggage and return home every part of the process matters in 
creating the final experience and every one of our employees  
must understand this 
internally we will build a fresh culture centred on our core values 
our ways of working and the clear message that every act we each 
take every day matters instilling a high performance culture  
of accountability is vital to our strategic transformation and  
the new ways of working will help guide and shape our future
our values
succeed as one team 
deliver for our customers  
engage each other 
drive for results  
act with integrity
every act
every day
every one
q what is your vision for thomas cook 
a i believe thomas cook will become the ‘voyager android’ of the 
future we will be there for our customers however whenever and 
wherever they are in the world we will do this through innovation 
and by working more collaboratively as a group to share and expand 
on the best of what we already have and do we’ll help them sort the 
vast array of data into meaningful value adding information – we’ll 
use our expertise and knowledge of 171 years of travel to shape 
guide and inform their decisions in this web world as they remain  
at the heart of the organisation the primary driver of all we do  
harriet green
group chief executive officer
27 november 2012
 tns uk market insights report 2012