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TUI TRAVEL PLC

ANNUAL REPORT & NOTICE OF 2010 ANNUAL GENERAL MEETING 

TUI Travel PLC ("the Company") announces that its Annual General Meeting will be held on Tuesday 9 February 2010 at 10.30am at the offices of Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB.

In connection with this, the following documents have been posted or made available to shareholders today:

    Notice of 2010 Annual General Meeting

    Annual Report & Accounts for the year ended 30 September 2009

    Proxy Form for the 2010 Annual General Meeting

These documents have also been submitted to the Financial Services Authority and will shortly be available for inspection at the FSA viewing facility situated at:

    Financial Services Authority

    25 The North Colonnade

    Canary Wharf

    London

    E14 5HS

The AGM notice, proxy form and the Annual Report & Accounts are available on the Company's website www.tuitravelplc.com.

The appendices to this announcement contain additional information which has been extracted from the Annual Report & Accounts for the year ended 30 September 2009 ("the Annual Report & Accounts") for the purposes of compliance with the Disclosure and Transparency Rules ("DTR") and should be read together with the Final Results Announcement, which can be downloaded from the Company's website www.tuitravelplc.com. This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Report & Accounts. Together these constitute the information required by DTR 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  

APPENDICES

Appendix A: Directors' responsibility statement

The following responsibility statement is repeated here solely for the purpose of complying with DTR 6.3.5. This statement relates to, and is extracted from page 48 of the Annual Report & Accounts. Responsibility is for the full Annual Report & Accounts not the extracted information presented in this announcement or the Final Results Announcement:

" Each of the Directors, the names of whom are set out on page 49 of the Annual Report & Accounts, confirms that to the best of his or her knowledge:

-    the financial statements, prepared in accordance with the applicable set of accounting

standards, give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

 -    the Directors' report includes a review of the development and performance of the business  
 and the position of the issuer and the undertakings included in the consolidation taken as a whole, 
  together with a description of the principal risks and uncertainties that they face.

The Statement of Directors' responsibilities was approved by a duly authorised Committee of the Board of Directors on 30 November 2009 and signed on its behalf by Paul Bowtell, Chief Financial Officer.

Paul Bowtell

Chief Financial Officer "

Appendix B: Principal Risks

A description of the principal risks that the Company faces is extracted from page 21 of the Annual Report & Accounts. 

"Some of the principal risks the Group is currently managing are:

Risk Type	Nature of Risk Faced	Business Response
Macro Economic (External Operating)	Decline in the economy and potential impact on consumer demand and capacity commitments.	Flexible business model (beds and aircraft) in order to adjust capacity in response to changes in demand with only 29% of group bedstock committed and 3rd party flying accounting for 28% of all tour operator capacity Majority of aircraft and shops on operating leases. 46% of all aircraft leases and 36% of shop leases due to expire in the next 3 years  Strong focus on cost control Competitive supplier scale benefits post merger Robust, aligned strategy across Group Strong balance sheet and secured lines of finance
Climate change (Strategic and Emerging)	Reducing the Group's contribution to global warming whilst operating in a carbon-intensive industry	Replacing older aircraft with new, more fuel efficient models  Significant investment in new technology like the Boeing 787  Fuel efficiency measures in engineering, flight planning and management, maintenance and ground operations  Carbon management strategy in development to reduce the Group's greenhouse gas emissions from airlines, water transport, major premises, ground transport & flagship hotel properties Preparing for regulatory proposals on climate change
Health and Safety (Internal Operating)	Accident or injury being caused to any of our colleagues or customers whilst in our care as a result of failure in our due diligence process or supplier negligence	Risk-based approach to Health and Safety due diligence for Group products and activities Destination-based quality reviews carried out for areas of high risk Industry-leading expertise employed at the centre to set policy and provide guidance Best practice sharing across Group tailored to source market need Robust airline safety management systems in place across the Group
Hedging and cost base increases (External Operating)	Potential negative impact on margin from volatility of foreign exchange and fuel prices affecting unhedged balances and other general cost base increases as a result of the economic conditions	Hedging policies in place across all source markets, controlled and monitored by Group Treasury  Flexible cost base and strong focus on fixed cost reduction and transitioning fixed to variable costs Strong relationships and contracts with key suppliers to control cost increases Standing agenda item at the monthly GMB Mainstream Committee meeting
Business Interruption / Technology Reliability (Internal Operating)	Inability to resume business operations or trading due to critical systems failure (heavy reliance on key selling systems) or business interruption scenario at any of our key locations, critically affecting our ability to service and trade	Robust, centrally supported technology for significant parts of the business Investment in disaster recovery plans and reliance testing post-merger Dedicated project team established to support the development of business continuity and disaster recovery plans across the Group
Geopolitical/ Natural Catastrophes/ Pandemic (External Operating)	Political volatility, natural catastrophes and global outbreak of Swine flu (H1N1) affecting certain destinations and/or source markets where we operate causing disruption to programme and customer experience, potential safety exposure and negative impact on destination desirability	Flexible supplier agreements allowing for capacity to be switched Balance of destination mix to minimise concentration Strong relationships with local tourism bodies and travel industry associations and government guidance obtained and used Crisis management policy established and rolled out and operational plans in place to respond to incidents Health and Safety risk assessments conducted post-incident
Liquidity & Cash Management (Internal Operating)	Management of group cash position over diverse portfolio and potential risk to cost of financing	Daily cash balances reported and monitored Strong focus on working capital management at the centre Centralised cash management system implemented across the Group Daily counterparty reviews and investment control by central team Strong relationships with banking and financing partners Key lines of finance do not expire until mid 2012  Renegotiation of shareholder loan repayment schedule Increased liquidity through Convertible Bond Offering
Supply Chain / Product Failure (External Operating)	Failure of key suppliers that we are heavily reliant on which could cause negative customer experience or loss of financial investments	Spread of financial commitments across key value chain suppliers Well established relationships with key suppliers Service levels monitored and managed accordingly  Centralised purchasing functions for key procurement areas Regular inspections of key service providers to assess health and safety, quality and sustainability
Aviation Finance Contract Commitments (External Operating)	Ability to secure adequate funding and manage capital cost of aircraft effectively	Long and well established partnerships with diverse group of institutions providing aviation financing Continued strong operating performance supports status with aviation investment and banking community Reduced order book through cancellation or deferral where possible Sourcing best market rates for financing and sale and leaseback of current deliveries "

  Appendix C: Related party transactions

The following related party transactions are extracted from pages 117 and 118 of the Annual Report & Accounts.

"Apart from with its own subsidiaries, which are included in the consolidated financial statements, TUI Travel PLC, in carrying out its ordinary business activities, maintained direct and indirect relationships with related parties including consolidated or related companies of its ultimate parent company, TUI AG. These companies delivered services to companies in the Group.

The Group also undertook transactions with its joint ventures and associated companies. These transactions related primarily to incoming agencies and hotel companies used by the Group's tour operators. The income and expenses arising from transactions with associates and joint ventures are included within the appropriate sector revenue or costs as presented in the segmental analysis.

All transactions with related parties were executed on an arms length basis and under normal conditions of trade with independent third parties.

Shareholder loan

A shareholder loan was advanced to the Company by TUI AG on 3 September 2007. The loan bears interest at EURIBOR plus a margin, currently 1.5% per annum, increasing six-monthly by 0.2% to a maximum of 2.0% per annum. The Company can make voluntary repayments at any time during the term of the loan subject to a minimum repayment of €10m and the giving of 30 days notice. The drawn balance of the loan at 30 September 2009 was €919m (30 September 2008: €1,019m), not including accrued interest payable. It is repayable in three instalments: 1 April 2010, €250m; 1 December 2010, €509m and 30 April 2011, €160m. 

Hotel Framework Agreement

As part of the relationship arrangements between the Company and TUI AG at the time of the business combination, both parties entered into the Hotel Framework Agreement, which governs the commercial relationship between TUI AG and the Company in respect of the distribution of hotel beds forming part of the hotel portfolio interests retained by TUI AG. Under the Hotel Framework Agreement, TUI Deutschland (TUI Travel German tour operating business) continues to have access to the Robinson hotel portfolio and to the distribution of such portfolio's hotel beds in Europe on the basis of the existing levels of exclusivity and seasonal arrangements between TUI Deutschland and Robinson, as practised prior to the business combination. In addition, TUI Deutschland agrees to provide the same services in relation to the distribution of the beds as it did prior to the business combination and shall be entitled to use certain Robinson trademarks in connection with these services. The Hotel Framework Agreement expires on 31 October 2011, provided that one year prior to such expiry the parties shall discuss in good faith and endeavour to agree a replacement agreement.

Trademark Licence Agreement

The Trademark Licence Agreement incorporates trademark licences granted from TUI AG to members of the TUI Tourism Group in relation to TUI Tourism's use of the TUI name and logo and other trademarks from within TUI AG's portfolio of trademarks used in the former TUI Tourism's business. Licence fees payable under each licence are an annual fee equal to 0.02 percent of the average annual gross turnover of the relevant licensee under the relevant trademarks measured over a three-year period. Total licence fees charged in the year ended 30 September 2009 were £3m (2008: £3m). Each licence's standard terms are for five years with an option for the relevant licensee to extend for a further five years on the same terms.

Details of transactions with related parties and balances outstanding at the balance sheet date are set out in the tables below:

Related Party	Revenue		Expenses
	Year ended	Year ended	Year ended	Year ended
	30 September	30 September	30 September	30 September
	2009	2008	2009	2008
	£m	£m	£m	£m
Ultimate parent TUI AG	7	4	71	78
Hotel and resort subsidiaries of TUI AG	5	2	384	349
Other subsidiaries, joint ventures   and associates of TUI AG	8	19	63	31
Joint ventures and associates of the Group	7	18	151	21
Total	27	43	669	479

Related Party	Receivables outstanding		Payables outstanding
	30 September	30 September	30 September	30 September
	2009	2008	2009	2008
	£m	£m	£m	£m
Ultimate parent TUI AG	6	107	885	840
Hotel and resort subsidiaries of TUI AG	1	3	56	52
Other subsidiaries, joint ventures   and associates of TUI AG	6	5	14	12
Joint ventures and associates of the Group	13	20	19	13
Total	26	135	974	917

Payables outstanding with related parties are reported in Notes 19 and 20 and receivables outstanding are reported in Note 16.

In accordance with IAS 24, key management functions within the Group and the Group Management Board were related parties whose remuneration had to be listed separately. The compensation paid in respect of key management personnel (including Directors) was as follows:

	Year ended	Year ended
	30 September	30  September
	2009	2008
	£m	£m
Short term employee benefits	17	18
Post-retirement benefits	2	2
Share-based payments	10	7
Total	29	27

Details of Directors' Remuneration are given in the Remuneration Report page 53. "

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