Principles and Methods underlying the Consolidated Financial Statements

General

TUI Group and its major subsidiaries and shareholdings operate in tourism.

TUI AG, based in Karl-Wiechert-Allee 23, 30625 Hanover, Germany, is TUI Group’s parent company and a listed corporation under German law. The Company is registered in the commercial registers of the district courts of Berlin-Charlottenburg (HRB 321) and Hanover (HRB 6580). The shares in the company are traded on the Frankfurt am Main and Hanover Stock Exchanges.

These consolidated financial statements of TUI AG were prepared for financial year 2025 comprising the period from 1 October 2024 to 30 September 2025. Where any of TUI’s subsidiaries have different financial years, financial statements were prepared as at 30 September in order to include these subsidiaries in TUI AG’s consolidated financial statements.

The Executive Board and the Supervisory Board have submitted a Declaration of Compliance with the German Corporate Governance Code required pursuant to section 161 of the German Stock Corporation Act (AktG) and made it permanently available to the general public on the Company’s website (www.tuigroup.com).

The consolidated financial statements are prepared in euros. Unless stated otherwise, all amounts are indicated in million euros (€m). Due to the utilisation of rounded amounts, there may be minor rounding differences in total and percentages.

The consolidated financial statements were approved for publication by TUI AG’s Executive Board on 9 December 2025.

Accounting principles

Declaration of compliance

Pursuant to Regulation EEC No. 1606/2002 of the European Parliament and Council, TUI AG’s consolidated financial statements as at 30 September 2025 were prepared in accordance with the International Financial Reporting Standards (IFRS) as applicable in the European Union. Moreover, the commercial-law provisions listed in section 315e (1) of the German Commercial Code (HGB) were also observed in preparing the consolidated financial statements.

The accounting and measurement methods and the explanatory information and Notes to these annual financial statements for financial year 2025 are generally consistent with those followed in preparing the previous consolidated financial statements for financial year 2024, except for the initial application of new or amended standards, as outlined below.

Newly applied standards

Since the beginning of financial year 2025, TUI Group has applied the following standards and interpretations, amended or newly issued by the IASB and endorsed by the EU, on a mandatory or voluntary basis:

Principles and methods of consolidation

Principles

The consolidated financial statements include all significant subsidiaries directly or indirectly controlled by TUI AG. Control exists where TUI AG has power over the relevant activities, is exposed to variable returns or has rights to the returns and has the ability to affect those variable returns through its power over the investee.

Generally, the control is exercised by means of a direct or indirect majority of voting rights. If TUI Group holds less than the majority of voting rights in a shareholding, it may exercise control due to contractual or similar agreements, as in the case of the participation in the RIUSA II Group. Due to the contractual agreements between the shareholders and the framework agreements with TUI Group as well as the considerable importance of tour operation for the economic success of RIUSA II Group, TUI Group is able to exercise a controlling influence on decisions about the most relevant activities and consequently the amount of returns. TUI Group is subject to variable returns from RIUSA II Group, in particular due to dividend payments and fluctuations in the fair value of the stake itself. RIUSA II Group is therefore consolidated although TUI Group only holds a 50% equity stake.

In assessing control, the existence and effect of potential voting rights are taken into account that are currently exercisable when decisions about the direction of relevant activities are made. Consolidation of subsidiaries starts from the date TUI gains control. When TUI ceases to control the corresponding companies, they are removed from the group of consolidated companies.

The consolidated financial statements are prepared from the separate or single-entity financial statements of TUI AG and its subsidiaries, drawn up on the basis of uniform accounting, measurement and consolidation methods and usually audited or reviewed by auditors.

Associates for which TUI Group is able to exert significant influence over the financial and operating policy decisions within these companies are accounted for using the equity method. Generally, significant influence is assumed if TUI AG directly, or indirectly, holds voting rights of between 20 to 50%.

Stakes in joint ventures are also measured using the equity method. A joint venture is a company managed jointly by TUI Group with one or more partners based on a contractual agreement, in which the parties that jointly exercise control have rights to the company’s net assets. Joint ventures also include companies in which TUI Group holds a majority or minority of voting rights but in which decisions about the relevant activities may only be taken on an unanimous basis due to contractual agreements.

The dates on which associates and joint ventures are included in or removed from the group of companies measured at equity are determined in a manner consistent with that applied to subsidiaries. At equity measurement in each case is based on the last annual financial statements available or the interim financial statements as at 30 September if the balance sheet dates differ from TUI AG’s balance sheet date. This affects 30 companies with a financial year from 1 January to 31 December and two companies with a financial year from 1 April to 31 March.

Group of consolidated companies

In financial year 2025, the consolidated financial statements included a total of 247 subsidiaries. The table below presents changes in the number of companies since 1 October 2024.

TUI AG’s direct and indirect subsidiaries, associates and joint ventures are listed under ‘Other Notes – TUI Group Shareholdings’.

22 subsidiaries were not included in the consolidated financial statements. Even when taken together, these companies are of minor significance to the presentation of a true and fair view of the financial position and performance of the Group.

Acquisitions – Divestments

Acquisitions of the current financial year

In financial year 2025, two companies were acquired. The acquisitions were immaterial and are not explained in greater detail here.

No company acquisitions were made after the balance sheet date.

Acquisitions of the prior financial year

In financial year 2024, one company was acquired under IFRS 3. The acquisition was immaterial and is not explained in greater detail here.

Divestments

Five companies were divested in financial year 2025.

The shares in Ranger Safaris Ltd, Arusha, ARP Africa Travel Ltd, Harrow, and Pollman’s tours and Safaris Ltd, Mombasa, (ARP Group) were sold by way of an agreement dated 17 February 2025 and effective as of 30 May 2025. The consideration amounts to €22.9m, consisting of a purchase price of €19.7m, immediately payable, and a variable purchase price claim provisionally amounting to €3.2m. The variable purchase price claim depends on the EBITDA delivered in financial year 2025 and was determined on the basis of ARP Group’s plan for financial year 2025. The divestment of the company resulted in the disposal of a part of the goodwill of the Musement cash-generating unit totalling €5.8m. A provisional gain on disposal of €11.7m was realised from this transaction and is carried in Other Income.

No companies were divested after the balance sheet date.

Foreign exchange translation

Transactions in foreign currencies are translated into the functional currency at the foreign exchange rates at the date of the transaction. Any gains and losses resulting from the execution of such transactions and the translation of monetary assets and liabilities denominated in foreign currencies at the foreign exchange rate at the date of the transaction are shown in the income statement, with the exception of gains and losses to be recognised in equity as qualifying cash flow hedges.

The annual financial statements of companies are prepared in the respective functional currency. The functional currency of a company is the currency of the primary economic environment in which the company operates.

Where subsidiaries prepare their financial statements in functional currencies other than the Euro, being the Group’s reporting currency, the assets and liabilities are translated at the rate of exchange applicable at the balance sheet date (closing rate). Goodwill allocated to these companies and adjustments of the fair value arising on the acquisition of a foreign company are treated as assets and liabilities of the foreign company and also translated at the rate of exchange applicable at the balance sheet date. The items of the income statement and hence the result for the year shown in the income statement are translated at the average rate of the month in which the respective transaction takes place.

Differences arising on the translation of the annual financial statements of foreign subsidiaries are reported outside profit and loss and separately shown as foreign exchange differences in the consolidated statement of changes in equity. When a foreign company or operation is sold, any foreign exchange differences previously included in equity outside profit and loss are recognised as a gain or loss from disposal in the income statement through profit and loss.

Translation differences relating to non-monetary items with changes in their fair values eliminated through profit and loss (e.g. equity instruments measured at their fair value through profit and loss) are included in the income statement. In contrast, translation differences for non-monetary items with changes in their fair values taken to equity are included in revenue reserves.

Some TUI Group subsidiaries operate their business in a hyperinflation country (previous year: equally Group companies in hyperinflationary economies). As the Euro is the functional currency for these companies, accounting in accordance with IAS 29, Financial Reporting in Hyperinflationary Economies, is not required.

The translation of the financial statements of foreign companies measured at equity follows the same principles for adjusting carrying amounts and translating goodwill as those used for consolidated subsidiaries.

Net investment in a foreign operation

Monetary items receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, essentially constitute part of a net investment in this foreign operation. Foreign exchange differences from the translation of these monetary items are recognised in other comprehensive income. As at 30 September 2025, as in the previous year, TUI Group had granted loans of this type in particular to hotel companies in North Africa and a TUI Musement entity in Mexico.

Consolidation methods

The recognition of the assets and liabilities of acquired businesses is based on the acquisition method. Accordingly all identifiable assets, all liabilities and certain contingent liabilities assumed are measured at fair value as of the acquisition date. Subsequently, the consideration for the stake is measured at fair value and eliminated against the acquiree’s revalued equity attributable to the acquired share. The option to measure the non-controlling interests at their fair value (full goodwill method) was not used.

Any excess of acquisition costs over net assets acquired is capitalised as goodwill and recognised as an asset in accordance with the provisions of IFRS 3. Any negative goodwill is recognised immediately in profit and loss and presented as other income.

When additional shares are purchased after obtaining control, the difference between the purchase price and the carrying amount of the stakes acquired is recognised directly in equity. The effects from sales of stakes not entailing a loss of control are also recognised directly in equity. By contrast, when control is obtained or lost, gains or losses are recognised in profit and loss. In the case of business combinations achieved in stages (where the acquirer held an equity interest before he obtained control), the equity stake previously held in the acquired company is revalued at the fair value applicable at the acquisition date and the resulting gain or loss is recognised in profit or loss. For transactions involving a loss of control, the profit or loss does not only comprise the difference between the carrying amounts of the disposed stakes and the consideration received but also the result from the revaluation of the remaining shares.

On loss of control of a subsidiary, the gain or loss on derecognition will be calculated as the total of the fair value of the consideration plus the fair value of any investment retained in the former subsidiary less the share of the book value of the net assets of the subsidiary. Any gains or losses previously recognised in other comprehensive income from currency translations or the valuation of financial assets and liabilities will be reclassified to the income statement. When a subsidiary is sold, any goodwill allocated to the respective subsidiary is taken into account in the calculation of the profit or loss of disposal.

The Group’s associates and joint ventures are measured at equity and included at the cost to purchase as at the acquisition date. The Group’s stake in associates and joint ventures includes the goodwill arising from the respective acquisition.

The Group’s share in profits and losses of associates and joint ventures is carried in the income statement from the date of acquisition (Share of result from joint ventures and associates), while the Group’s share in the total other comprehensive income is shown in its revenue reserves. The accumulated changes arising after the acquisition are shown in the carrying amount of the shareholding. When the share in the loss of an associated company or joint venture equals or exceeds the Group’s original stake in this company, including other unsecured receivables, no further losses are recognised. Any losses exceeding that stake are only recognised to the extent that obligations have been assumed or payments have been made for the associated company or joint venture.

Where the accounting and measurement methods applied by associates and joint ventures differ from the uniform accounting rules applied in the Group, the differences are adjusted.

Intercompany receivables and payables or provisions are eliminated, as are intercompany revenue, other income and the corresponding expenses. Intercompany results from intercompany deliveries and services are reversed through profit and loss, taking account of deferred taxes. However, intercompany losses are an indicator that an asset may be impaired. Intercompany profits from transactions with companies measured at equity are eliminated in relation to the Group’s stake in the companies. Intercompany transactions are entered into on an arm’s length basis.

Accounting and measurement methods

The consolidated financial statements are prepared according to the historical cost principle, with the exception of certain financial instruments such as financial assets and derivatives as well as plan assets from externally funded pensions benefit obligations held at fair value at the balance sheet date.

The financial statements of the consolidated subsidiaries are prepared in accordance with uniform accounting and measurement principles. The amounts recognised in the consolidated financial statements are not determined by tax regulations but solely by the commercial presentation of the financial position and performance as set out in the rules of the IASB.

Revenue recognition

TUI recognises revenue upon transfer of control over distinct goods or services to the customer. In Markets + Airline, TUI predominantly generates revenue from the sale of package holidays. The flights, hotel accommodation and other services included in a package holiday are transformed into one product for the customer through a significant integration service provided by TUI as tour operator within the meaning of IFRS 15, so that the package holiday constitutes one performance obligation for TUI. This revenue is recognised when TUI delivers the service for its customer, i.e. on a linear basis over the duration of the holiday tour, as customers consume their holiday on a pro rata basis. TUI generates further revenue from the sale of other tourist services, e.g. seat-only, accommodation-only, cruises, etc. Revenue is recognised when or as TUI has satisfied its performance obligation, either over time in relation to the duration of the journey if the services relate to a period of time, e.g. in the case of multi-day hotel stays, or at a point in time on the day of the performance of the performance obligation, e.g. for flight services on the day of the flight. Revenue from long-term contracts is recognised over the duration of the individual contract in accordance with IFRS 15.

Amendment fees do not constitute an independent performance obligation. Revenue is therefore recognised along with the delivery of the main performance obligation.

If TUI has control over the asset before it is delivered to the customer, TUI acts as the principal in relation to that service. Otherwise, TUI acts as an agent. As a principal, TUI carries the recognised revenue and costs in the income statement on a gross basis, e.g. for revenue from its own tour operator activities, for hotel revenue in own hotels, and for aviation revenue. When acting as an agent, TUI carries the relevant revenue on a net basis at the amount of the commission received, e.g. for car rental and hotel revenue for third-party hotels in which TUI does not have control over the hotel rooms. Passenger-related aviation taxes and fees charged by TUI on behalf of third parties and passed on to these third parties are carried in the income statement on a net basis.

TUI uses the practical expedient offered under IFRS 15.121(a). For open performance obligations as at the balance sheet date, TUI discloses all performance obligations for contracts with an original term of more than twelve months, i. e. at least twelve months lie between the start of the contract (in principle the booking date) and the end of the contract (in principle the end of the service).

TUI has to pay compensation to customers for flight delays or cancellations (so-called denied boarding compensation). These payments are directly related to the obligation of the flight service. Therefore these payments represent variable considerations under IFRS 15. Hence, denied boarding compensations are shown net in revenue.

Goodwill and other intangible assets

Acquired intangible assets are carried at cost. Internally generated intangible assets are capitalised at cost where an inflow of future economic benefits for the Group is probable and can be reliably measured. The cost to produce comprises direct costs and directly allocable overheads. Intangible assets with a finite service life are amortised over the expected useful life.

Intangible assets acquired as a result of business combinations are included at their fair value as at the date of acquisition and are amortised on a straight-line basis.

If there are any events or indications suggesting potential impairment, the amortised carrying amount of the intangible asset is compared with the recoverable amount. Any losses in value going beyond wear-and-tear depreciation are taken into account through the recognition of impairment charges.

Depending on the functional area of the intangible asset, amortisation and impairment charges are included under cost of sales or administrative expenses.

Intangible assets with indefinite useful lives are not amortised but are tested for impairment at least annually. In addition, impairment tests are conducted if there are any events or indications suggesting potential impairment. TUI Group’s intangible assets with an indefinite useful life consist exclusively of goodwill.

Impairment tests for goodwill are conducted on the basis of cash-generating units (CGU) or groups of cash-generating units.

Impairment charges are recognised where the carrying amount of the tested units, including the allocated goodwill, exceeds the recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and the present value of future cash flows based on continued use (value in use). The fair value less costs of disposal corresponds to the amount that could be generated between knowledgeable, willing, independent business partners after deduction of the costs of disposal.

Impairment of goodwill is shown separately in the consolidated income statement.

Property, plant and equipment

Property, plant and equipment are measured at amortised cost. The costs to purchase include costs to bring the asset to a working condition. The costs to produce are determined on the basis of direct costs and directly attributable indirect costs and depreciation.

Borrowing costs directly associated with the acquisition, construction or production of qualifying assets are included in the costs to acquire or produce these assets until the assets are ready for their intended use.

To the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset, the underlying capitalisation rate is determined on the basis of the specific borrowing cost; in all other cases the weighted average of the borrowing costs applicable to the borrowings outstanding is applied.

Depreciation of property, plant and equipment is based on the straight-line method over the useful economic life. The useful economic lives are as follows:

Moreover, the level of depreciation is determined by the residual values at the end of the useful life of an asset. The residual value assumed at first-time recognition for cruise ships is between 4% and 30% of the acquisition costs. In the financial year 2025, the assumptions regarding the residual value of the ships of Marella Cruise Ltd were changed. For further information, please refer to the Note 14 ‘Property, Plant and Equipment’. The determination of the depreciation of aircraft fuselages and aircraft engines in first-time recognition is based on a residual value of a maximum of 5% of the cost of acquisition. In addition, a residual value of 20% is used to determine the scheduled depreciation of spare parts. The payments made under a power by the hour arrangement relating to maintenance overhauls are capitalised as PPE under construction up to a maintenance event at which point the cost is transferred to the appropriate PPE category.

Both the useful lives and residual values are reviewed on an annual basis when preparing the Group financial statements. The review of the residual values is based on comparable assets at the end of their useful lives as at the balance sheet date. Any adjustments required are recognised as a correction of depreciation over the remaining useful life of the asset. Where the review results in an increase in the residual value so that it exceeds the remaining net carrying amount of the asset, depreciation is suspended. In this case, the amounts are not written back.

Any losses in value going beyond wear-and-tear depreciation are taken into account through the recognition of impairment losses. If there are any events or indications suggesting impairment, the required impairment test is performed to compare the carrying amount of an asset with the recoverable amount.

Leases

Leases are agreements transferring the right to use an identified asset for a given period of time in return for a payment. As a lessee, TUI leases moveable assets such as aircraft, vehicles and cruise ships, as well as, in particular, immoveable property such as hotel buildings and land, office buildings and travel agencies. As a lessor, TUI subleases some aircraft, travel agency and office space as well as a hotel.

TUI as Lessee

TUI recognises right-of-use assets and corresponding lease liabilities for the lease arrangements in which it is the lessee, in the statement of financial position. As an exception, TUI applies the recognition and measurement exemptions for all short-term leases and low-value asset leases. A short-term lease is a lease that has a lease term of 12 months or less and does not contain a purchase option. The lease payments for those leases are recognised as an expense in the cost of sales or in administrative expenses on a straight-line basis over the lease term or on another systematic basis.

At the inception of an agreement, TUI evaluates whether it contains a lease. Apart from traditional lease, tenancy or leasing contracts, service or capacity agreements may also fall within the scope of IFRS 16. In connection with the purchase of mixed tourism services, the rental or purchase of the largest portion of a hotel’s room capacity is identified as a lease component if TUI commits to its contract partner to purchase a fixed allotment of more than 90% of the hotel’s capacity for a period of more than 12 months, provided the agreement does not include an exemption to return committed capacity for self-marketing by the hotelier, and if therefore an irrevocable payment obligation exists. For agreements that contain one or several lease components alongside non-lease components, TUI uses the option not to separate these non-lease components, in particular for vehicle or IT leases and for hotel capacity contracts.

At the commencement date, i.e. the date from which the lessee is entitled to exercise the right to use the underlying asset, a lease liability amounting to the present value of the lease payments not yet made as at that date is recognised. The lease payments include all fixed and in substance-fixed payments less any future lease incentives to be provided by the lessor. The lease payments also include variable payments linked to an index or an interest rate as well as expected payments from residual value guarantees. Lease payments for the exercise of extension, purchase and termination options are included if the exercise of these options is assessed as reasonably certain. As a rule, the lease payments are discounted at the lessor’s interest rate implicit in the lease. If that rate is not known to TUI, the present value is determined using the incremental borrowing rate. After initial measurement, the carrying amount is increased to reflect interest on the lease liability and reduced to reflect the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The interest expense from the subsequent measurement of the lease liability is presented in the interest result. Variable lease payments not linked to an index nor to an interest rate are recognised through profit or loss in the period in which the event or condition that triggers the payment occurs.

In addition, a right-of-use asset is recognised at the commencement date. Right-of-use assets for the leased items are measured at amortised cost less cumulative depreciation/amortisation and cumulative impairment and adjusted for revaluations of the lease liability. The costs of a right-of-use asset comprise the present value of the future lease payments plus initial direct costs and the lease payments made prior to commencement less any lease incentives received and the estimated costs to be incurred to restore the leased asset to the condition required by the terms and conditions of the lease. Capitalised right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the expected useful life of the right-of-use asset. If the lease transfers ownership of the leased asset to TUI by the end of the lease term, or if the lease payments reflect the future exercise of a purchase option, the right-of-use asset is depreciated over the useful life of the leased asset. Depreciation of capitalised right-of-use assets is carried in the cost of sales or in administrative expenses.

Sale and Leaseback

For sale and leaseback transactions, TUI initially determines in accordance with IFRS 15 whether the transfer of the asset has to be accounted for as a sale. If the transfer is accounted for as a sale, TUI recognises the right-of-use asset associated with the sale and leaseback transaction, as seller and as lessee, at the proportion of the previous carrying amount that relates to the right-of-use asset retained. The gain or loss from the sale transaction is carried in profit or loss on a pro rata basis at the amount of the rights transferred to the buyer and lessor. If the transfer is not accounted for as a sale, TUI continues to recognise the legally transferred asset as before and carries a financial liability for the proceeds received.

TUI as Lessor

As a lessor, TUI classifies each lease as an operating lease or a finance lease. If TUI as a lessor has substantially all the risks and rewards incidental to ownership of the underlying asset, the lease is classified as an operating lease. If the lease transfers substantially all the risks and rewards incidental to ownership of the underlying asset to the lessee, the lease is classified as a finance lease.

For subleases, the lease classification has been made by reference to the right-of-use asset arising from the head lease in accordance with IFRS 16 and not by reference to the underlying lease asset.

The lease payments from operating leases are recognised in revenue on a straight-line basis over the lease term. Any initial direct costs incurred in obtaining the lease are added to the carrying amount of the underlying leased item and depreciated over the lease term on a straight-line basis.

For finance leases, TUI recognises a lease receivable at an amount equal to the net investment in the lease and derecognises the underlying leased asset or the right-of-use asset from the head lease. The lease payments made by the lessees are broken down into an interest portion and a redemption portion using the effective interest rate method so as to produce a constant periodic rate of interest on the balance of the net investment. The redemption portions received are deducted from the lease receivable. The interest portion of the payments received is carried in the interest result.

Financial instruments

Financial instruments are contractual rights or obligations that will lead to an inflow or outflow of financial assets or the issue of own equity instruments for one of the two contracting parties and correspondingly to an inflow or outflow of financial assets for the other contracting party. They also comprise (derivative) rights or obligations derived in particular, from non-derivative financial assets.

Non-derivative financial assets and financial liabilities

The classification and measurement of financial assets are determined on the basis of the business model assigned to manage financial assets and the related contractual cash flows. At initial recognition of financial assets, the classification comprises the categories “Financial assets at amortised cost (AC)”, “Financial assets at fair value through other comprehensive income (FVTOCI)” and “Financial assets at fair value through profit and loss (FVPL)”.

With the exception of trade receivables, non-derivative financial assets are recognized at fair value. Trade receivables are initially recognized at transaction price. When recognised for the first time, they are either classified at amortised costs or at fair value, depending on their objective. Non-derivative financial assets are classified as financial assets at amortised cost when the objective of the entity’s business model is to hold the financial assets to collect contractually agreed cash flows, and when the cash flows exclusively constitute interest and principal payments on the nominal amount outstanding.

For financial assets held at amortised cost, a loss allowance for expected credit losses is recognised in accordance with IFRS 9. Loss allowances for financial assets are based on either full lifetime expected credit losses or 12-month expected credit losses. A loss allowance for lifetime expected credit losses is required for a financial instrument if the credit risk of that financial asset has increased significantly since initial recognition or if the financial instruments are trade receivables, lease receivables or contract assets. For all other financial instruments, expected credit losses are measured at an amount equal to the 12-month expected credit losses.

IFRS 9 allows entities to apply a simplified approach inter alia for trade receivables. Lifetime expected credit losses on all these assets can be recognised at initial recognition. TUI applies the simplified approach for all trade receivables.

Impairments and reversals of impairments are recognised under ’Impairment / reversals of impairment of financial assets’ in the income statement.

The equity instruments held in the balance sheet item ‘Other financial assets’ were irrevocably designated as ‘Financial assets at fair value through OCI’ as they are held for medium- to long-term strategic objectives. These instruments are stakes in associated non-consolidated subsidiaries, equity investments and other investments. Recognising all fluctuations in the fair value in the income statement would not be in line with the Group’s strategy. They are allocated to non-current assets unless the entity intends to sell them within twelve months after the balance sheet date. Dividends from these equity instruments are recognised in the income statement unless the dividends are clearly a partial repayment of the cost to purchase the equity instrument.

The cumulative gain or loss from the subsequent measurement of the equity instruments recognised in other comprehensive income will continue to be recognised in equity even after the equity instrument has been derecognised and reclassified to revenue reserves.

All other financial assets not recognised at amortised cost or at fair value through OCI must be measured at fair value through profit and loss.

Financial assets are derecognised at the date on which the rights for payments from the assets expire or are transferred and therefore at the date on which essentially all risks and rewards of ownership are transferred. The rights to an asset expire when the rights to receive the cash flows from the asset have expired. For transfers of financial assets, it is assessed whether they have to be derecognised in accordance with the derecognition requirements of IFRS 9.

Non-derivative financial liabilities are recognised in the consolidated statement of financial position if an obligation exists to transfer cash and cash equivalents or other financial assets to another party. A non-derivative financial liability is initially recognized at its fair value. For loans taken out, the nominal amount is reduced by discounts retained and transaction costs paid and discounted over the expected remaining term of the liability. The subsequent measurement of non-derivative financial liabilities is effected at amortised cost using the effective interest method. TUI does not use the fair value option.

Financial liabilities are derecognised when the obligations specified in the contract are discharged, cancelled or expire.

All foreign exchange differences resulting from the translation of trade accounts payable are recognised in the income statement within cost of sales. Foreign exchange differences from the translation of liabilities not resulting from normal operating processes are reported under Other income / expenses, Financial expenses/income or Administrative expenses, depending on the nature of the underlying receivables or payables.

The convertible bonds on shares in TUI AG have to be accounted for as compound financial instruments. Compound financial instruments are divided into an equity and a debt component in accordance with IAS 32. The debt component shown under financial liabilities is valued, less the pro rata transaction costs and added to the repayment amount using the effective interest method. The equity component is valued at the residual value that results after deducting the amount determined for the debt component from the fair value of the entire instrument. The pro rata transaction costs of the equity component are deducted from this component. No gain or loss will result from the exercise or expiry of the relevant conversion option.

Derivative financial instruments and hedge accounting

At initial measurement, derivative financial instruments are measured at the fair value attributable to them on the date the contract is entered into and recognised in the balance sheet. Subsequent measurement is also recognised at the fair value calculated at the respective balance sheet date. The method used to recognise gains and losses depends on whether the derivative financial instrument is part of an effective hedging relationship. Where derivative financial instruments are not part of a hedging relationship in connection with hedge accounting, they are recognised through profit or loss. If an effective hedging relationship exists, the unrealised gains and losses from the fair value valuation of derivative financial instruments that are designated as hedging instruments within hedge accounting are initially recognised directly in equity.

Hedge accounting is used exclusively to hedge the exposure due to foreign currency and fuel price fluctuations in cash flows from highly probable forecast transactions (cash flow hedges). Hedges of balance sheet items (fair value hedges), i.e. hedges of the fair value of an asset or a liability which would be accounted for at amortised cost, are currently not designated in hedge accounting.

Upon entering into a transaction, the hedge relationship between the hedge and the hedged item, the risk management goal and the underlying strategy are documented. In addition, both at the beginning of the hedging relationship by using the Critical Terms Match method and on a continual qualitative basis, it is quantitatively monitored and documented whether the changes in the fair value of the derivatives used in the hedging relationship effectively compensate for the highly probable expected cash flows of the underlying transactions.

If an effective hedging relationship is to be assumed prospectively due to the Critical Terms Match method and during the hedging relationship on the basis of an economic relationship with a compensating effect between the underlying transaction and the hedging instrument over the entire term, the transaction is recognised as a hedging relationship.

TUI Group applies the provisions of IFRS 9 to hedge accounting. For hedges entered into up to 31 March 2024, the provisions of IAS 39 have been applied. All remaining hedging transactions originally designated under IAS 39 will expire in the first quarter of the upcoming financial year. The cost of hedging approach does not apply to these transactions. The method used to recognise gains and losses depends on whether the derivative financial instrument is fully or only partly designated as a hedging instrument, and on the type of underlying transaction. The effective and designated portion of the cumulative changes in the fair value of derivatives designated as cash flow hedges is recognised in a separate component of equity, in the cash flow hedge reserve. The cumulative fair value changes of the portions of a derivative financial instrument that were not designated as a hedging instrument and that were entered into on or after 1 April 2024 are presented in a separate item within equity, the cost of hedging reserve. Any changes in the cumulative fair value changes of the portions of a derivative financial instrument entered into by 31 March 2024 and not designated as a hedging instrument are recognised directly through profit or loss. Any ineffective portion of such changes in the fair value of derivative financial instruments designated in hedge accounting is immediately recognised in the income statement through profit or loss.

The cumulative gains or losses recognised in equity are generally reclassified to the income statement and recognised as income or expense in the period in which the underlying transaction affects profit or loss. In the event of hedges of a highly probable forecast transaction resulting in the recognition of a non-financial item, the cumulative gains or losses previously recognised in equity are derecognised from equity and carried as part of the acquisition cost (basis adjustment).

If a hedge expires, is sold or no longer meets the criteria of IFRS 9 for hedge accounting, the cumulative gain or loss previously recognised in equity remains in equity and is only recognised in the income statement when the originally hedged forecasted transaction occurs. If the forecasted transaction is no longer expected to take place, the cumulative gains or losses recognised directly in equity are immediately recognised through profit or loss.

More detailed information on the Group's risk management activities is provided in Note 39 as well as the ‘Risk report’ section in the Management Report.

Contractual assets and trade receivables

If TUI has fulfilled their contractual obligations, contractual assets or trade receivables are carried. Trade receivables are carried if the claim for the acquisition of the consideration is no longer subject to a condition. As a rule, this is the case when the Group is contractually entitled to issue an invoice to the customer that has not yet been paid in advance through a customer deposit. Due to the tourism business model under which customers pay for their travel services in advance, TUI generally does not have any contractual assets.

Contractual costs

The direct costs immediately resulting from obtaining a contract, e.g. sales commissions to travel agencies for sales of travel services, are capitalised as contractual costs in the statement of financial position upon payment of the commission. As a rule, the resulting expenses are recognised over the duration of the travel service in line with the associated revenue.

Inventories

The measurement method applied to similar inventory items is the average cost formula.

Emission Certificates

CO₂ certificates are recognised as intangible assets and reported under other non-financial assets. The valuation of freely allocated rights and purchased rights is carried out at cost. There is no scheduled depreciation.

Provisions are recognised for the obligation to submit emission certificates. The provisions are valued based on the average cost of the certificates intended for submission to the relevant registry.

Cash and cash equivalents

Cash and cash equivalents comprise cash, call deposits, current account balances and other highly liquid current financial assets with an original term of a maximum of three months, such as shares in money market funds. Investments in money market funds are made in shares with a stable net asset value or LVNAV (low volatility net asset value). The investment criteria of the individual money market funds, their credit ratings, historical performance and stress tests meet the criteria for cash and cash equivalents. As the contractual cash flows of the money market funds do not exclusively comprise interest and principal payments, they are measured at fair value through profit or loss.

Bank overdrafts are shown as liabilities to banks under current financial liabilities.

Equity

Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or conversion options are taken to equity on a net after-tax basis as a deduction from the issuance proceeds.

Own shares

The group’s holdings in its own equity instruments are shown as deductions from shareholders‘ equity at cost, including directly attributable transaction costs. No gain or loss is recognised in the income statement on the purchase or sale of shares. Any difference between the proceeds from sale and the original cost are taken to reserves.

Pension provisions

The pension provision recognised for defined benefit plans corresponds to the net present value of the defined benefit obligations (DBOs) as at the balance sheet date less the fair value of the plan assets. If the value of the plan assets exceeds the value of the DBO, the excess amount is shown within other non-financial assets as far as the capitalisation is not limited under the asset ceiling defined in IAS 19. The DBOs are calculated annually by independent actuaries using the projected unit credit method.

For defined contribution plans, the Group pays contributions to public or private pension insurance plans on the basis of a statutory or contractual obligation or on a voluntary basis. The Group does not have any further payment obligations on top of the payment of the contributions. The contributions are recognised under staff costs when they fall due.

Other provisions

Other provisions are formed when the Group has a current legal or constructive obligation as a result of a past event, where in addition it is probable that assets will be impacted by the settlement of the obligation and the level of the provision can be reliably determined.

Where a large number of similar obligations exist, the probability of a charge over assets is determined on the basis of this group of obligations. A provision is also recognised if the probability of a charge over assets is low in relation to an individual obligation contained in this group.

Provisions are measured at the present value of the expected expenses, taking account of a pre-tax interest rate, reflecting current market assessments of the time value of money and the risks specific to the liability. Risks already taken into account in estimating future cash flows do not affect the discount rate. Increases in provisions due to accretion of interest are recognised as interest expenses through profit or loss.

Touristic advance payments received (contract liabilities)

A contract liability is an obligation of the Group to deliver goods or services for a customer for which the customer has already delivered a performance, e.g. in the form of payment of a deposit. In the tourism business model, customers pay deposits on most travel services prior to departure. The deposits received therefore constitute contract liabilities within the meaning of IFRS 15.

Deferred taxes and income taxes

Expected tax savings from the use of tax losses carried forward assessed as recoverable in the future are recognised as deferred tax assets. Regardless of the unlimited ability to carry German tax losses forward which continues to exist, the annual utilisation is limited by the minimum taxation. Foreign tax losses carried forward frequently have to be used within a given country-specific time limit and are subject to restrictions concerning the use of these losses carried forward for profits on ordinary activities, which are taken into account accordingly in the measurement.

Income taxes are charged or credited directly to equity or other comprehensive income if the tax relates to items that are charged or credited to equity or recognised in other comprehensive income without affecting Group profit or loss.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference or an unused tax loss can be utilised.

Deferred taxes are measured at the tax rates and tax provisions applicable at the balance sheet date or adopted by law and expected to be applicable at the date of recognition of the deferred tax asset or the payment of the deferred tax liability.

Deferred and current income tax liabilities are offset against the corresponding tax assets if they exist in the same fiscal territory and have the same nature and maturity.

Information on Global Minimum Taxation

The TUI Group falls within the scope of on global minimum taxation regulations (Pillar II). According to these regulations, an additional tax (so-called top-up tax) is levied for jurisdictions that are taxed at an effective rate of less than 15 percent.

This top-up tax is an income tax within the scope of IAS 12 and is recognized under income taxes at the time it arises.

The Group has applied the temporary mandatory exception from the accounting requirements for deferred taxes (IAS 12.4A). Accordingly, no deferred taxes are reported in relation to the global minimum taxation regulations, and no related information is disclosed.

In the financial year 2025, income taxes from global minimum taxation amounting to €2.0m were recognized.

Share-based payments

Share-based payment schemes in the Group comprise both cash-settled and equity-settled schemes.

For cash-settled transactions, the resulting liability for the Group is charged to expenses at its fair value as at the date of the performance of the service by the beneficiary. Until settlement of the liability, the fair value of the liability is re-measured at every closing date and all changes in the fair value are recognised through profit and loss.

For equity-settled transactions the fair value of the awards granted is recognised under staff costs with a corresponding direct increase in equity. The fair value is determined at the point when the awards are granted and spread over the vesting period during which the employees become entitled to the awards.

Summary of selected accounting and measurement methods

The table below lists the key accounting and measurement methods used by TUI Group.

Key judgements, assumptions and estimates

The presentation of the assets, liabilities and provisions as well as contingent assets and liabilities shown in the consolidated financial statements is based on judgements, assumptions and estimates. Any uncertainties are appropriately taken into account in determining the values.

All estimates and assumptions are based on the conditions and assessments as at the balance sheet date. In evaluating the future development of business, reasonable assumptions are made regarding the expected future economic environment in the business areas and regions in which the Group operates.

Despite careful preparation of the estimates, actual results may differ from the estimate. In such cases, the assumptions and the carrying amounts of the assets and liabilities concerned, if necessary, are adjusted accordingly. As a matter of principle, changes in estimates are taken into account in the financial year in which the changes have occurred and in future periods.

Judgements

The judgements made by management in applying accounting policies that may have a significant impact on TUI Group’s assets and liabilities mainly relate to the following topics:

• Assessment of when the Group has control over an investee and therefore consolidates this investment
• Definition of whether a Group company acts as an agent or as a principal in a transaction
• Determination of whether an agreement is to be classified as a lease or contains a lease
• Determination of the term of the lease as a lessee in the event of agreements with extension or termination options

Determination of the term of the lease as a lessee

TUI determines the term of the lease based on the non-cancellable period for which the lessee has the right to use the asset, together with any periods covered by extension options, if exercise of that option by TUI is reasonably certain, as well as periods covered by termination options if TUI is reasonably certain that it will not exercise that option. Many of TUI’s individually negotiated aircraft and real estate leases contain extension or termination options.

TUI applies judgement in evaluating whether it is reasonably certain that an option to renew will be exercised or that an option to terminate the lease will not be exercised. In this context, TUI considers all relevant facts and circumstances that create an economic incentive for TUI to exercise, or not to exercise, the extension or termination option, respectively. From the commencement date, TUI remeasures the lease term if there is either a significant event or a significant change in the circumstances within our control that alters any of our assessments about what is reasonably certain. The lease term, for instance, is adjusted if an extension option is exercised or if a termination option is not exercised and if this had been considered differently in the original assessment.

For aircraft leases, we determine the end of the lease term on the basis of the contractually agreed return date. For medium- to long-term property agreements, e.g. office buildings, hotels or travel agency leases, options to renew the lease are included in the lease term to the extent to which TUI presumes that the future exercise of the option is reasonably certain in the individual case.

For information on potential future lease payments relating to periods after the exercise date for extension or termination options, please refer to Note 15.

Assumptions and estimates

Assumptions and estimates that may have a material impact on the amounts reported as assets and liabilities in TUI Group are mainly related to the following balance sheet-related facts and circumstances:

• Assumptions for use in impairment tests, in particular for goodwill and property, plant and equipment
• Effect of climate-related risks on the useful lives and the measurement of assets
• Impact of geopolitical risks and uncertainties on measurements of assets
• Determination of the fair values for acquisitions of companies and determination of the useful lives of acquired intangible assets
• Determination of useful lives and residual carrying amounts of property, plant and equipment
• Determination of actuarial assumptions to measure pension obligations
• Recognition and measurement of other provisions
• Determination of the incremental borrowing rate used to measure lease liabilities
• Recoverability of future tax savings from tax losses carried forward and tax-deductible temporary differences
• Measurement of tax risks
• Recoverable amounts of touristic prepayments
• Determination that the package holiday represents a performance obligation due to the significant integration service
• Determination of period-related revenue recognition on a straight-line basis over the duration of the trip
• Determination of the expected credit losses (ECL) of financial instruments

Assumptions for use in impairment tests, in particular for goodwill and property, plant and equipment

The impairment tests are performed on the basis of future discounted cash inflows derived from the medium-term corporate planning. Both the derivation of future cash inflows and the determination of the interest rate are heavily influenced by assumptions and estimates and are associated with uncertainties. In addition assumptions and estimates regarding the financial impact of climate-related risks were made, which are described further below.

The determination of future cash surpluses is based on the following assumptions regarding the development of TUI’s business: In financial year 2025, TUI achieved a further year-on-year increase in customer numbers. Revenue increased by more than 4%, while underlying EBIT grew by more than 9% versus financial year 2024. Further growth in revenues and underlying EBIT is expected for financial year 2026. Growth and cost base reduction are planned through the transformation of the Markets + Airline into an integrated global curated leisure marketplace. Additionally, it is assumed that increased use of online sales channels and especially the app, the provision of dynamic production capacities for flights and accommodation, and investments in digitalization will lead to improved results. In the medium term, an improvement in the adjusted EBIT margin of the Markets + Airline to over 3% is expected. In the Cruises segment, results are expected to rise until the 2028 financial year, particularly due to the expansion of the TUI Cruises fleet. TUI Cruises commissioned a new ship in spring 2025 and will expand its fleet to nine ships (excluding the five ships of the Hapag-Lloyd Cruises brand) by 2026 with the delivery of another vessel. The additional shipbuilding contracts signed on 29 September 2025 will not affect results within the three-year plan, as deliveries are scheduled for 2031 and 2033. In September 2025, Marella Cruises withdraw from its shipbuilding capacities. Accordingly, the impairment assessment for Marella Cruises has been conducted under the premise that the company will continue its operations utilizing the current fleet. Therefore, the future discounted cash flows attributable to the remaining useful life of this fleet are utilized for the purposes of the impairment test. Plans for the Hotels & Resorts segment include further earnings growth through asset-right capacity expansion, for example by management and franchise agreements and in equity companies. Furthermore, investments in own hotels are planned. The development of TUI Musement depends, firstly, on the development of customer numbers in the Markets + Airline sector. Meanwhile, TUI Musement is expected to generate growth by expanding its own and direct distribution, both online and via the app.

Other key factors are the weighted average cost of capital after income taxes (WACC), on which discounting is based, the sustainable growth rate and the growth in perpetuity. Changes in these assumptions may have a significant impact on the recoverable amount and the amount of any impairment loss.

The weighted average cost of capital after income taxes (WACC), on which discounting is based, was derived from external capital market information about comparable companies. The cost of capital to Markets + Airline was increased by an additional risk premium of 2.4% (previous year: 2.4%). This additional risk premium was based on an analysis of internal and external market expectations and reflects the elevated uncertainty with regard to medium- and long-term market developments. Additional country-specific risk premiums are included, in particular, in the measurement of individual hotels. For further details on the determination of WACC refer to the section ‘Goodwill’.

Finally, we have implemented sensitivity analyses to estimate the uncertainty associated with the assumptions on which the impairment tests are based. The sensitivities and their impact on the fair value result exclusively from the adjustment of individual parameters. Possible compensatory measures were not taken into account. Sensitivities have been calculated for changes of the WACC and sustainable growth in perpetuity. In addition, sensitivity analyses have been carried out for a general increase or decrease of future cash flows and for material climate related risks. For further details refer to the section ‘Goodwill’.

Effect of climate-related risks on the useful lives and the measurement of assets

Overview of climate related risks

The tourism industry faces significant impacts from climate change. As temperature rises the attractiveness of certain destinations might decline. Extreme weather events due to climate change might damage our assets and might lead to increased cancellations of holidays. Political and legal developments wil increase the expenses for emission certificates and customer preferences might change. Climate change might also present opportunities for TUI, for example extending the touristic season in summer destinations or to diversify to new regions. All these changes will impact the financial performance of TUI and will have a more significant impact long term.

As a result of climate-related risks TUI has committed in 2023 to the Science Based Targets initiative (SBTi) to reduce emissions by 2030 in comparison to a baseline 2019. Our targets are:

• Reduction of CO₂e per revenue passenger kilometre by 24% by 2030
• Reduction of absolute CO₂e from our cruise operations by 27.5% by 2030
• Reduction of absolute CO₂e from TUI Hotels & Resorts by 46.2% by 2030

Furthermore, it is the commitment of TUI to achieve net-zero emissions by 2050. The reduction of emissions will be accomplished with investments in new technologies and the use of fuel with less CO₂ emissions.

To assess the impact of climate-related risks on our financial performance and business model TUI has conducted a qualitative and quantitative climate risk assessment in the Financial Year 2023. A number of assumptions underpin this assessment regarding changes to the intensity and frequency of weather related events, technological development, development of energy and emission certificate prices and the development of knowledge on global warming. The assumptions are reviewed and adjusted as necessary. The impact of climate-related risks was assessed for two scenarios, one scenario which implies a global warming of approximately 4.3°C and a scenario which implies a global warming of approximately 1.5°C, both by 2100. The analysis was carried out for the periods up to 2030, 2040 and 2050. The level of uncertainty of the results of the analysis increases over time.

Given the uncertainty TUI has applied critical estimation and judgment in the evaluation of the impact of climate-related risks regarding the recognition and measurement within its financial statements which are described below.

Effect of climate-related risks on the useful lives of assets

The useful lives of assets can be affected by climate-related risks in different ways:

• Physical changes in the climate like an increased frequency and intensity of acute events (storms, fire and floodings) as well as long term trends like increased temperature might impact our assets.
• Transitional changes related to the transition to a low-carbon economy including policy, legal, technology and market changes might affect the use of our assets.

In the assessment of the impact of the climate change on the useful lives of our assets TUI applied the following assumptions and estimates:

The impact of physical risks on our aircraft and our cruise ships is assumed to be low. Both assets could be used flexibly, and itineraries or flight routes could be adjusted. The main risk relates to the commitment of TUI to decarbonize its business. However, all aircraft in the current aircraft fleet have the capability to utilise sustainable aviation fuel (SAF). In addition, the useful lives of our aircraft, which are mainly leased and recognized as right of use assets, end before 2050 so that TUI could replace the aircraft with new technologies such as hydrogen powered aircraft. Likewise, our cruise ships can either already utilise sustainable marine fuel (SMF) or can be converted to do so. Accordingly, TUI concluded that climate-related risks do not affect the useful life of aircraft or cruise ships.

TUI also assessed the useful lives of our hotels in light of climate related risks. Based on the aforementioned analysis TUI concludes that the risk from acute weather events like storms, fire and floodings will increase only to a level which is still manageable through insurance and the large and regional spread of our hotels & resorts portfolio. Furthermore, the increase of these risks will most likely occur in the long term so that our leased hotels with a relatively short useful life are less affected. Based on this analysis TUI concludes that none of our hotels will have a reduced useful life due to sea level rise. The risk for our hotels relating to the decarbonization of our business is assumed to be low as there exists already technology to produce carbon neutral energy for example from renewable sources such as solar panels or wind turbines. The useful lives of our hotels could also be affected by consumer behaviour reacting to e.g. increased temperatures. Certain destinations might see a reduced number of tourists in the long term, especially in the peak season e.g. in summer in the Mediterranean. However, it is assumed that the shoulder seasons in spring and autumn will become broader which will mitigate this effect. In addition, TUI has the ability to steer our customers to our owned Hotels and to manage reduced numbers of guests through reduction in use of 3^rd party capacity. Overall, TUI does not see any impact of more climate-related risks on the useful lives of hotels.

Overall useful lives and residual values have not been amended in the previous and reporting year as a result of climate related risks.

Impact of climate-related risks on the measurement of deferred tax assets in relation to losses carried forward

TUI applies a five-year planning horizon derived from its medium-term corporate planning when determining the usability of tax losses carried forward and deductible temporary differences. Medium-term climate-related risks are factored into the measurement of deferred tax assets in relation to losses carried forward. Accordingly, the considerably higher charges that will occur in the long term do not impact the measurement of deferred tax assets in relation to losses carried forward.

Impact of climate-related risks on impairment tests, in particular for goodwill and property, plant and equipment

When performing impairment tests, the discounted future financial charges determined on the basis of the above-mentioned climate-related risk analysis were deducted from the discounted future cash flow surpluses calculated based on our medium-term planning. Due to the long-term nature of these future charges and uncertain technological and regulatory developments, the charges determined in this manner are subject to a high level of uncertainty.

The underlying assumption is that until 2030 TUI will reduce its climate-damaging emissions in accordance with the SBTi and will subsequently follow a linear path to achieving net-zero emissions by 2050. It is likewise assumed that the emissions of our suppliers are reduced for the period up to 2050. These will be achieved in particular by gradually replacing aircraft fuel and bunker oil with fuels that do not cause climate-damaging emissions. The expectation here is that these fuels will be available in sufficient quantities. This assumption depends on the development of technologies and production capacities and is therefore subject to elevated uncertainty. A key estimate concerns price movements for fuels without greenhouse gas emissions. Currently the prices for these fuels are far higher than conventional fuels. In contrast to the previous year, it is now anticipated that the prices for fuels with no greenhouse gas emissions will significantly exceed those of conventional fuels. The prior year's assumption had been that prices would converge by 2050. This revised expectation is based on the incorporation of various estimates regarding future price developments, as well as procurement experience with such fuels.

Technological innovation, such as in the form of hydrogen-powered aircraft, is not taken into account. Greater fuel efficiency was only considered insofar as it relates to the planned fleet renewal in aviation or else can be achieved by means of known technologies such as underwater coatings on cruise ships. Fleet expansion in the Cruises segment at TUI Crusies has also been factored in. In the segment Hotels & Resorts, it is assumed that emission reductions will be achieved by means of existing and continued investments in renewable energies, such as solar panels.

This reduction in greenhouse gas emissions will be underpinned by a public regulatory framework encompassing everyone, including TUI’s suppliers, leading in particular to a reduction in free emission allowances or an increase in the price of emission certificates. While harmful gas emissions will be reduced in the manner described above, rising prices for emission certificates will generate substantial financial charges before the expenses for emission certificates drop to zero in 2050. The calculation of these financial charges reflects TUI’s own costs, and the costs of emission certificates passed on by suppliers.

In addition, physical risks from climate-related one-off events such as storms or floods or long-term developments such as rising temperatures, affecting the Hotels & Resorts segment, were taken into account. Average annual charges were determined based on external studies. It is expected that the financial impact of these climate-related risks is relatively low.

Overall, the use of low-emission fuels and rising prices for emissions will lead to significant financial charges, particularly for energy-intensive aviation operations in the Northern Region, Western Region, and Central Region segments. The Cruises segment will also be impacted. In Hotels & Resorts segment, the burden will be relatively low; in fact, the autonomous generation of energy, such as by means of solar power, may even generate cost savings.

One key assumption, then, concerns the extent to which costs for low-emission fuels and emission certificates can be passed on to customers. TUI assumes that the reduction in greenhouse gas emissions will generate general price increases (green inflation). TUI additionally benefits from opportunities to pass on costs across the entire value chain. Overall, TUI therefore assumes that it will be able to pass on 90% of the costs in aviation, a sector that is particularly affected, and 95% in other sectors.

In the light of the uncertainties regarding the long-term financial burden from climate-related risks, TUI has calculated sensitivities for the particularly affected Markets + Airline. These are presented in the section on ‘Goodwill’. The sensitivities relate to assumptions on the development of climate-related risks in general, the development of prices for alternative fuels and emission certificates and the potential for passing on climate change-related costs to our customers. Overall, TUI does not regard climate-related risks as a triggering event for carrying out impairment tests.

Impact of geopolitical risks and uncertainties on measurements of assets

Geopolitical risks and uncertainties arising from geo- and economic-political conflicts, pandemics, and natural disaster – such as the Russian war of aggression against Ukraine, armed conflicts in the Middle East, or U.S. trade and tariff policies – may adversely impact TUI’s operating performance and financial position. The asset valuation is based on the following key assumptions:

Crises and wars, for example in the Middle East or Ukraine, may lead to volatility in fuel prices, which directly affects operating costs for our cruise ships and aircraft. A significant portion of the expenditure within the Markets + Airline is denominated in foreign currencies other than the functional currency of the respective unit. Consequently, exchange rate fluctuations and volatile fuel prices caused by geopolitical incidents could have an impact on future net cash inflows. The valuation of the assets of these businesses assumes that TUI’s hedging strategy effectively mitigates the impact of fuel price volatility and foreign exchange risk. For further information on the risk management of TUI see section ‘Financial instruments’.

Subdued macroeconomic growth and inflationary pressures due to geo- and economic-political conflicts may increase price elasticity among customers, a trend further amplified by the transparency of online platforms and artificial intelligence-driven booking platforms. This risk primarily affects the Markets + Airline. As a tour operator, these units typically enter into fixed contractual commitments for flight and hotel capacity prior to the season, creating exposure to underutilization risk or distressed pricing in the event of declining demand. The valuation of the assets of these businesses incorporates the assumption that the accelerated roll-out of dynamic packaging solutions – where TUI does not pre-commit to fixed capacity – as well as the strategic transformation of Markets & Airline into an integrated platform with cross-border capacity allocation will mitigate this risk. For the impairment test of assets within Markets + Airline, a discount rate (WACC) including a risk premium of 2.4% has been applied to reflect amongst others these uncertainties. Sensitivity analyses performed on the goodwill impairment tests for the Northern Region, Western Region, and Central Region did not indicate any impairment (see section ‘Goodwill’).

Geopolitical risks in destinations primarily affect assets within the Hotels & Resorts segment. Political instability or anti-tourism movements may lead to decrease in demand for certain destinations, resulting in lower occupancy rates of hotels. The valuation of assets in Hotels & Resorts assumes that such disruptions are temporary only and therefore have a limited impact on the valuation of hotels held as long-term investments. In addition, TUI can offer hotels in other destinations. Furthermore, TUI retains the flexibility to prioritize its owned hotel portfolio to optimize occupancy and mitigate valuation risk. TUI has implemented emergency response and business continuity plans that minimize operational disruption and reduce risks to our reputation and financial integrity. The board assumes that TUI will maintain destination acceptance through social and environmentally responsible tourism practices and strategic partnerships with local stakeholders. Given the inherent unpredictability of these risks, country-specific risk premiums embedded in the discount rate for individual hotel valuations serve to capture these uncertainties in the impairment assessment.

The impact of natural disasters on assets, particularly within Hotels & Resorts, is assessed as minor due to comprehensive insurance coverage and therefore does not affect the valuation.

Within the Cruises segment geopolitical risks exist comparable to those in Markets + Airline, particularly in relation to fuel price volatility and exchange rate fluctuations. These risks are actively mitigated through TUI’s comprehensive hedging strategy. Local risks, such as natural disasters or regional conflicts, are assessed as having a limited impact, as cruise itineraries and destination ports can be adjusted flexibly in response to such events.

Business acquisitions and intangible assets

In accounting for business combinations, the identifiable assets, liabilities and contingent liabilities acquired have to be measured at their fair values. In this context, cash flow-based methods are regularly used, which may lead to different results depending on the underlying assumptions. In particular, some judgement is required in estimating the economic useful lives of intangible assets and determining the fair values of contingent liabilities.

Detailed information on business acquisitions and useful lives of intangible assets is provided in the section ‘Acquisitions – divestments’ in the section on ‘Principles and methods of consolidation’ and in the section on ‘Goodwill and other intangible assets’ of the section ‘Accounting and measurement methods’.

Property, plant and equipment

The measurement of wear-and-tear to property, plant and equipment items entails estimates. The carrying amount of property, plant and equipment as at 30 September 2025 totals €4,133.3m (previous year €3,697.4m). Material assumptions and estimates are the determination of useful lives and residual carrying amounts of property, plant and equipment. The effects of climate-related risks are also taken into account here. From the analysis to review the amounts carried, an evaluation is carried out on a regular basis to assess whether there are any indications of a potential impairment. These indications relate to a number of areas and factors, e.g. the market-related or technical environment but also physical condition. If any such indication exists, management must estimate the recoverable amount on the basis of expected cash flows and appropriate interest rates.

More detailed information on the useful lives and residual values of property, plant and equipment items is provided in the section ‘Property, plant and equipment’ in the section ‘Accounting and measurement methods’.

Pension provisions

As at 30 September 2025, the carrying amount of provisions for pensions and similar obligations totals €618.6m (previous year €664.4m). For those pension plans where the plan assets exceed the obligation, other non-financial assets amounting to €95.0m are shown as at 30 September 2025 (previous year €75.4m).

In order to determine the obligations under defined benefit pension schemes, actuarial calculations are used which rely on underlying assumptions concerning life expectancy and the discount rate.

At the balance sheet date, the fair value of the plan assets totals €1,878.6m (previous year €2,140.7m). As assets classified as plan assets are never available for short-term sale, the fair values of these plan assets may change significantly up to the realisation date.

Detailed information on actuarial assumptions is provided in Note 29.

Other provisions

As at 30 September 2025, other provisions amount to €1,361.1m (previous year €1,330.3m). When recognising and measuring provisions, assumptions to a considerable content regarding the probability of occurrence, maturity and level of risk are required.

Determining whether a current obligation exists is usually based on review by internal or external experts. The amount of provisions is based on expected expenses, and is either calculated by assessing the specific case in the light of empirical values, outcomes from comparable circumstances or ranges of possible claims, or else estimated by experts. Due to the uncertainties associated with assessment, actual expenses may deviate from estimates so that unexpected charges may result.

More detailed information on Other provisions is provided in the Notes to the statement of financial position in Note 30.

Lease liabilities

As at 30 September 2025, lease liabilities worth €2,454.5m (previous year €2,639.8m) were carried, reflecting the present value of the future lease payments as at that date. The interest rate implicit in the lease can only be easily determined in exceptional cases. In all other cases TUI therefore uses its own incremental borrowing rate to measure the lease liability. The incremental borrowing rate is the interest rate TUI would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. Determining the incremental borrowing rate therefore regularly involves estimates regarding the interest rate the Group would have to pay. In this context, estimates are required, for instance, to determine the interest the Group companies would have to pay if no observable interest rates are available, or if adjustments are required regarding the specific agreed terms and conditions such as the transaction currency or contract term. TUI determines the incremental borrowing rate using observable inputs (bond yields and CDS quotations) and makes specific adjustments for individual companies (e.g. country risk premiums).

Deferred tax assets

As at 30 September 2025, deferred tax assets totalling €348.9m (previous year €389.2m) were recognised. Prior to offsetting against deferred tax liabilities, deferred tax assets total €677.1m, including an amount of €168.4m (previous year €209.7m) for recognised losses carried forward. The assessment of the recoverability of deferred tax assets is based on the ability of the respective Group company to generate sufficient taxable income. TUI therefore assesses at every balance sheet date whether the recoverability of expected future tax savings is sufficiently probable in order to recognise deferred tax assets. The assessment is based on various factors including internal forecasts regarding the future earnings situation of the Group company. TUI uses a five-year planning horizon to derive the recoverability of tax loss carryforwards and deductible differences. If the assessment of the recoverability of deferred tax assets changes, the carrying amount of deferred tax assets will be reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable profit will be available.

More detailed information on deferred tax assets is available in the Notes to the statement of financial position in Note 20.

Income taxes

The TUI Group is liable to pay income taxes in various countries. Key estimates are required when determining income tax liabilities, including the probability, the timing and the size of any amounts that may become payable. For certain transactions and calculations the final tax charge cannot be determined during the ordinary course of business. After taking appropriate external advice, the Group makes provisions or discloses contingencies for uncertain tax positions based on the probable or possible level of additional taxes that might be incurred. The level of obligations for expected tax audits is based on an estimation of whether and to what extent additional income taxes will be due. Judgements are corrected, if necessary, in the period in which the final tax charge is determined.

Recoverable amounts of touristic prepayments

As at 30 September 2025, the carrying amount of touristic prepayments totals €1,109.8m (previous year €1,086.1m). The assessment of the recoverable amounts of touristic prepayments made to hoteliers requires judgement about the volume of future trading with hoteliers and the credit worthiness of those hoteliers. To assess the recoverability of touristic prepayments, TUI considers the financial strength of those hoteliers, the quality of the hotels as well as the demand for each hotel and the relevant destination during the past and in forthcoming seasons.

Financial instruments

When measuring ECL of financial instruments under IFRS 9 TUI uses, besides historical information, reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers. The uncertainty remains that this future ECL will not be in line with actual default rates due to market development.