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STENA AB FINANCIAL REPORT 2013
STENA ABFINANCIAL REPORT 2013
CONTENTS
DIRECTORS’ REPORT 1
GROUP
CONSOLIDATED INCOME STATEMENTS 6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 7
CONSOLIDATED BALANCE SHEETS 8
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 10
CONSOLIDATED STATEMENTS OF CASH FLOWS 11
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12
PARENT COMPANY
INCOME STATEMENTS 67
BALANCE SHEETS 68
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 69
STATEMENTS OF CASH-FLOW 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70
PROPOSED TREATMENT OF UNAPPROPRIATED EARNINGS 74
AUDIT REPORT 75
FIVE-YEAR SUMMARY 76
STENA AB 2013 1
DIRECTORS’ REPORT
General information about the business
The Stena Group is one of the largest family owned companies
in Sweden and operates in five business areas: Ferry opera-
tions, Drilling, Shipping, Property and other investments within
Adactum.
Ferry operations, which are one of the world´s largest inter-
national passenger and freight ferry services, are operated by
Stena Line in Scandinavia, the North Sea, the Irish Sea and the
Baltic Sea.
The Drilling business, with semi-submersible rigs and drill-
ships, is operated by Stena Drilling from its head office in
Aberdeen, Scotland and through its world wide global organi-
sation with offices in the US, Norway, Cyprus, Luxembourg,
West Africa, Egypt, Brazil and Australia.
The shipping business is operated by Stena RoRo for RoRo
and RoPax ferry market activities, and by Stena Bulk for tanker
market activities and Stena LNG for LNG (Liquefied Natural
Gas) market activities. Stena RoRo’s head office is located in
Gothenburg. Stena Bulk’s head office is located in Gothenburg
and offices in Houston, Cyprus and branch offices in Singapore
and Rio de Janeiro. Stena LNG has its head office located in
Gothenburg and an office in Cyprus. The ship ping business also
includes manning and crewing of vessels by Northern Marine
Management which head office is located in Glasgow. Northern
Marine Management also have offices in Manila, Mumbai,
Singapore, St Petersburg, Gothenburg, Hamburg, Houston
and Aberdeen. Technical maintenance and development is
managed by Stena Teknik in Gothenburg.
Stena Property, based in Gothenburg, owns properties in
Gothenburg, Stockholm and Malmö and is one of the largest
private property owners in Sweden. The international property
part of the business, based in Amsterdam, has properties in
the Netherlands, France, Luxembourg, Hungary, USA, the
United Kingdom and Germany.
Stena Adactum, located in Gothenburg, invests in compa-
nies not directly related to the core business of Stena and has
Ballingslöv, S-Invest, Envac, Mediatec and Stena Renewable
in the portfolio.
Stena Finance works from Gothenburg, Luxembourg, Cyprus,
Zug, Amsterdam, London and Singapore.
The parent company of the group is Stena AB (publ), Co.
Reg. ID. 556001-0802. The company is a limited company
with its registered office in Gothenburg, Sweden. The head
office’s address is Masthuggskajen, 405 19 Göteborg, Sweden.
The year in summary
• Another year of high operational performance within
all sectors.
• Continued operational growth.
– Total income SEK 30.2 billion compared to SEK 27.4 billion
in 2012.
– Consolidated EBITDA (income from operation before depre-
ciations) excluding net valuation of investment properties
and sale of assets, is the highest EBITDA ever, in creased by
10% to SEK 7.7 billion compared to 2012.
– EBITDA has increased in all sectors compared to 2012,
mainly for the ferry operations, LNG, Property and
Adactum operations.
– Income before taxes amounted to SEK 2.1 billion compared
to SEK 1.8 billion in 2012, including net gain on sale of
assets amounting to MSEK 76 and MSEK 90, respectively.
• Healthy balance sheet with a solidity of 33% as of
31 December 2013.
• Ferry operations improved the EBITDA, excluding restructur-
ing expenses MSEK 121 by MSEK 372 in 2013 compared to
2012. It was achieved by strategic acquisitions, tonnage
changes and continued improvements in the current opera-
tion. The focus forward is to increase the revenues on our
routes at the same time as the business is reviewed for cost
reduction actions.
• Stena Drilling has had another strong year with an average
commercial utilization of more than 97%. Despite two SPS
during the year, the net income was on the same level as
last year. Stena Drilling has a strong contract coverage for
the coming years with four out of seven units of our drilling
fleet contracted to 2018 or beyond.
• Stena Bulks operation in Stena Weco continued to improve
during 2013. However, the market has been continuously
weak with low tanker rates.
• Stena LNG generated good results in 2013 due to new
strong contracts and high utilisation of the fleet.
• Stena RoRo showed a continued high utilization of the fleet
and has during the year also worked with chartering out
or selling vessels no longer in the operation of the Ferry
Operations.
• Stena Property continued to be profitable during 2013. The
occupancy rate was high in Sweden was, on average, 97%.
• Stena Adactum had another profitable year in all business
areas and improved the total result compared to last year at
the same time as business development and expansion were
performed. During 2013, Stena Renewable has completed
further new windmills and owned 86 windmills as per
31 December 2013.
• Available liquidity remains high. The credit profile of the
group is strong, due to long term securitization of the credit
facilities.
2 STENA AB 2013
DIRECTORS’ REPORT
Significant business events
Ferry Operations
As of 1 January 2013, Mr. Carl-Johan Hagman became
Managing Director of Stena Line Holding B.V. Mr. Carl-Johan
Hagman is also responsible for Shipping of the Group and
Managing Director of Stena Rederi AB.
In May 2013, Stena Voyager was sold to Stena Recycling
in Landskrona, Sweden. The vessel had already been written
down and was sold without any effect on the result.
During the year, Stena Line has continued their work
re gard ing increased profitability by increased revenue and
lowered costs.
Drilling
In March 2013, Stena Carron extended the charter for Statoil/
Sonangol, which expired at the end of 2013, for a new three-
year period.
In May 2013, a three-year contract was signed with Tullow
Oil Plc for Stena DrillMAX, following its five-year SPS (Special
Periodic Survey), which was completed in May 2013.
On 26 June 2013, we ordered two new semi-submersible
Moss CS60 drilling rigs from Samsung Heavy Industries in
South Korea with an option to cancel one unit. The contractual
delivery dates of these vessels are March 2016 and September
2016, respectively. The capital cost for each unit is estimated to
be approximately MUSD 800.
In 2013, the drillship Stena Forth has received an extension
of the contract from Hess for up to an additional five years
starting from 29 October 2014.
Bulk
In January 2013 the newbuilt Suezmax vessel Stena Sunrise
was delivered from the Samsung yard in South Korea.
In March 2013, Stena Bulk declared two options to,
to gether with the JV partner Golden Agri Resources, build
two IMOIIMAX vessels. In total, Stena Bulk has ordered
8 IMOIIMAX vessels in collaboration with partners.
LNG
In June 2013, we entered into a new contract for the LNG
carrier Stena Blue Sky for a contract period until 2015.
RoRo
In January 2013, Stena Baltica was sold through a hire-
purchase contract to an Italian ferry operator, SNAV Spa Italy,
in Napels for a profit of MSEK 23.
In May 2013, the RoPax vessel Stena Alegra was acquired
for MSEK 89. The vessel has been employed within the Stena
Line route network until October 2013, and in November 2013
was chartered out on a bareboat charter.
In December 2013, another three RoPax vessels were
acquired, Stena Egeria, Stena Partenope and Stena Trinacria,
for a total investment of MEUR 69.5.
Other shipping
In January 2013, Northern Marine Management Ltd acquired
the remaining shares of its joint venture (50%) partner Austen
Maritime Group. The Group is consolidated as a subsidiary as
from 1 January, 2013.
In March 2013 a new ferry route was opened between
Sokcho in South Korea and Zarubino and Vladivostok in Russia.
This is a step towards an expansion on the Asian markets.
Adactum
Ballingslöv International AB has in January 2013 acquired all
shares in the English kitchenmaker Southdown Kitchen Ltd,
that has the brand name Manhattan Furniture. Through this
acquisition Ballingslöv International is strengthening its
position on the English market.
In the first quarter of 2013, Mediatec was split into two
separate groups, Mediatec Broadcast and Mediatec Solutions.
During 2013, Adactum increased its ownership in the two
companies and as of 31 December 2013 Adactum held a
62.5% stake in Mediatec Broadcast and a 63.5% stake in
Mediatec Solutions.
During 2013, Stena Renewable put 53 windmills into opera-
tion, which increased the installed effect with 223 MW with a
production capacity of 0.7 TWh. Total amount of windmills as
of 31 December 2013 were 86.
Property
In August 2013, we acquired a commercial fully let office prop-
erty, with a total size of approximately 3,000 sqm, in London in
the U.K. for a total investment of MGBP 15.6.
During the summer of 2013, Stena Realty signed a lease with
Jacobs Engineering, one of the world’s largest companies for
technology consultation, for approximately 8,000 sqm in a
newly built house in Houston. In the end of 2013 the chemistry
and energy group Sasol also signed a lease of 17,500 sqm.
Because of the new lease Stena is constructing another build-
ing in Houston. The investments in Houston amounts to
approximately MUSD 100 and both leases are long-term leases.
The construction of the new office building is expected to be
completed in the third quarter of 2014.
In 2013 the final stage of Ängby Park in west Stockholm was
completed. Ängby Park consists of 320 rental apartments that
STENA AB 2013 3
has been finalized in different stages since 2011. The occu-
pancy rate was high during 2013, on average 97%. In Sweden
the occupancy rate for residential properties was 98% and
83% for commercial properties. The occupance rate abroad
was, on average 78% due to a weak Dutch market.
During 2013 properties were sold for a total gain of MSEK 51.
Finance
On 5 March 2013 we called for repayment of the Senior Note
with remaining debt MUSD 128.8, due 2016. The payment
was done on 5 April 2013.
Subsequent events
In January 2014, the Ropax vessel Dieppe Seaways, was
acquired. The vessel is a sister vessel to Stena Superfast VII and
Stena Superfast VIII. Dieppe Seaways is on a charter to DFDS
Seaways until November 2014.
In January 2014, a ten year bond of MUSD 600 was issued.
The purpose of this transaction was to extend existing profile
of amortization and pay off outstanding amounts under our
credit facility.
In February 2014 another ten year bond of MUSD 350 and
MUSD 650 was issued in a so called Term loan B, which is a
seven year loan with low rate of amortization. The securities
for both bond and loan consists of the units Stena DrillMAX
and Stena Carron. The purpose of this transaction is to extend
existing profile of amortization and increase liquidity. As a
result of the transaction the available facilities in existing RCF
(Revolver Credit Facility) of MUSD 1,000 will be reduced to
MUSD 600.
In February 2014, Stena Line acquired the operation on the
route Rosslare (Ireland) – Cherbourg (France). The acquisition
will benefit the network as well as improve Stena Line’s strate-
gic position in the southern part of Ireland. The operation will
be taken over as from April 2014.
System for internal control and risk management
regarding the financial reporting
This description of Stena’s internal control and risk manage-
ment regarding financial reporting has been prepared in
accordance with the Annual Accounts Act in Sweden.
The Board of Directors is responsible for the company’s
internal control, the overall aim of which is to safeguard the
company’s assets and thereby its shareholder’s investment.
Stena uses the COSO framework as a basis for internal con-
trol with respect to financial reporting. The COSO framework,
which is issued by the Committee of Sponsoring Organizations
of the Treadway Commission, is made up of five components;
control environment, risk assessment, control activities, infor-
mation and communication as well as monitoring. The imple-
mentation of the COSO framework was executed during 2007
when the Stena AB Group for the first time became compliant
with the American legislation “Sarbanes-Oxley Act 404”.By
repayment of the bond on 5 March 2013, the Stena AB Group
was deregistered from SEC and is no longer required to report
in accordance with the Sarbanes-Oxley Act 404. Stena has,
however, kept the COSO framework for the work with the
internal control regarding the financial reporting.
Control environment
The Board of Directors have the overall responsibility for inter-
nal control of financial reporting. The control environment
forms the basis of internal control, because it includes the cul-
ture that the Board and management communicate and by
which they work. The control environment is made up primar-
ily of integrity, ethical values, expertise, management philoso-
phy, organisational structure, responsibility and authority, poli-
cies and guidelines as well as routines.
Of particular importance is that management documents,
such as internal policies and guidelines exist in significant areas
and that these provide employees with solid guidance. Exam-
ples of important policies and guidelines within Stena are
“Code of Conduct”, “Power Reserved List”, “Principles, con-
victions and basic values for Stena AB”, “Finance Policy” and
“Financial Manual” that defines the accounting and reporting
regulations. These policies and guidelines have been made
available to all relevant employees through established infor-
mation and communi cation channels.
Furthermore, the Board has appointed an Audit Committee,
whose primary task is to ensure compliance with established prin-
ciples for financial reporting and internal control and that ap p-
ropriate relations are maintained with the company’s auditors.
Risk Assessment
Stena carries out regular risk assessments in order to review
the risks of errors within its financial reporting. The risk assess-
ment of financial reporting aims to identify and evaluate the
most significant risks that affect internal control over financial
reporting in the Group’s companies and processes.
During the year the Group’s overall risk assessment was
up dated in order to obtain a general idea of the main risks.
To limit risks there are appropriate policies and guidelines as
well as processes and control activities within the business.
The risk assessment is updated on an annual basis under the
4 STENA AB 2013
DIRECTORS’ REPORT
direction of the “Corporate Governance” staff function and
the results are reported to the Audit Committee.
Control activities
The most significant risks identified regarding financial report-
ing are managed through various control activities. There are a
number of control activities built into every process to ensure
that the business is run effectively and that financial reporting
provides a true and fair view.
The control activities, which aim to prevent, find and correct
potential inaccuracies, include account reconciliations, authori-
zations, and monthly accounts as well as analysis of these.
IT systems are scrutinized regularly during the year to en sure
the validity of Stena’s IT systems with respect to financial
reporting.
Information and communication
Policies and guidelines are of particular importance for accu-
rate accounting and reporting and also define the control
activities to be carried out. Stena’s policies and guidelines
relating to financial reporting are updated on an ongoing basis
and available to all employees concerned on Stena’s intranet.
Information and communication relating to financial reporting
is also provided through training. The Group holds internal
seminars and conferences regularly, with a focus on quality
assurance in financial reporting and governance models.
Monitoring
The Board of Directors and the Audit Committee continuously
evaluate the information provided by the executive manage-
ment team, including information on internal control. The
Audit Committee’s task of monitoring the efficiency of internal
control by the management team is of particular interest to
the Board. This work includes checking that steps are taken
with respect to any problems detected and suggestions made
during the assessment by the external and internal auditors.
The work on internal control during the year has further
increased awareness of internal control within the Group
and improvements are being made on continuous basis.
Internal audit
The Groups “Corporate Governance” staff function works as
the Group’s internal audit function and reports to the Audit
Committee and the deputy CEO. The function focuses on pro-
actively developing and enhancing internal control over the
financial reporting as well as examining the effectiveness of
the internal control. The “Corporate Governance” function
plans the work in consultation with the Audit Committee and
regularly reports the findings of its examinations to the Com-
mittee. The unit communicates continuously with Stena’s
external auditors on matters concerning internal control.
Major Shareholders
All of the issued and outstanding voting shares of Stena AB
were owned as following as of 31 December 2013:
Name of beneficial ownerNumber of
sharesPercentage ownership
Dan Sten Olsson 25,500 51.0
Madeleine Olsson Eriksson 9,250 18.5
Stefan Sten Olsson 12,250 24.5
Gustav Eriksson 3,000 6.0
The holders listed above have sole voting and investment power
over the shares beneficially owned by them. Dan Sten Olsson,
Stefan Sten Olsson and Madeleine Olsson Eriksson are siblings.
Gustav Eriksson is the son of Madeleine Olsson Eriksson.
Dan Sten Olsson is the only officer or director of Stena AB
who owns any voting shares of Stena AB. All shares of Stena
AB have the same voting rights.
Future developments
The Group’s overall business is expected to continue in the
same direction over the coming year and to the same extent
as in 2013.
Research and development
The Group executes vessel construction development via
Stena Teknik. The Group also makes payments to universities
and the Sten A Olsson Foundation for Research and Culture,
whose purpose include promoting scientific research and
development.
Environment
The Group conducts several environment related projects
with the purpose of reducing our general environmental
impact. Since shipping comprises a large part of Stena’s
activities, one of our major challenges is to develop more
efficient vessels. The most important measure for Stena’s
shipping divisions is to reduce energy consumption in relation
to work performed.
Environmental thinking is also fundamental for Stena
Fastigheter that deals with consideration for the tenants and
safeguarding of the world’s limited resources. The initiative to
cut energy consumption continued and targets were set for
each building.
Since the implementation of the Environmental Code, the
port operation run by Stena Line Scandinavia AB has become
STENA AB 2013 5
subject to permit requirements. The permit mainly regulates
noise. These requirements have been met.
Financial risks
For financial risks, see Note 1, Summary of Significant Ac count-
ing Principles and Note 30 Financial instruments and risk
management.
Staff
In 2013, the average number of employees was 11,347 com-
pared to 10,565 on 31 December 2012. A vital factor for real-
izing Stena Group’s vision is its employees, their expertise,
enthu siasm and skills.
Future development depends on the Company retaining
its position as an attractive employer. To support this goal the
Company strives for a working climate where energy, passion
and respect for the individual are the guiding principles. An
intra group attitude survey is carried out every year and the
number of satisfied employees is rising steadily. Every em ploy ee
must attend a career development meeting once a year. For
more information about employees see Note 32.
Sales and results
Consolidated income for 2013 amounted to MSEK 30,240,
in cluding profit from vessel sales of MSEK 25 and property
sales of MSEK 51. For 2012 the consolidated income amounted
to MSEK 27,388, including profit from vessel sales of MSEK 24
and property sales of MSEK 66. The profit before tax for the
year was MSEK 2,148 with a net profit of MSEK 1,910. For
2012 the profit before tax amounted to MSEK 1,777 with a
net profit of MSEK 1,735.
Financing and liquidity
Liquid assets and short-term investments on 31 December
2013 amounted to MSEK 3,747, of which MSEK 2,401 was
available. On 31 December 2012 liquid assets and short-term
investments amounted to MSEK 3,676, of which MSEK 1,779
was available. Along with marketable securi ties and available
credit facilities, the total available amount on 31 December
2013 was SEK 12.2 billion versus SEK 14.8 billion on 31
December 2012.
In 2012 we refinanced the RCF of USD 1 billion with matu-
rity in 2018. The utilization of the facility on 31 December
2013 was MUSD 625, of which MUSD 6 is for guarantees.
On 31 December 2012 the utilization was MUSD 644, of
which MUSD 5 was for guarantees. In 2010 we entered into a
RCF with a guarantee provided by the EKN (the Swedish
Export Credit) for MSEK 6,660. The facility was utilized with
MSEK 6,436 on 31 December 2013 and utilized with MSEK
5,173 on 31 December 2012. Loan amortization over the year
amounted to MSEK 4,946. In 2012 MSEK 3,103 was amor-
tized.
In January 2014, a bond of MUSD 600 was issued. The
purpose of this transaction was to extend existing profile of
amortization and pay off outstanding amounts under our
credit facility.
In February 2014 another bond of MUSD 350 and MUSD
650 was issues in a so called Term loan B, which is considered
a loan with low rate of amortization. The securities for both
bond and loan consists of the units Stena DrillMAX and Stena
Carron. The purpose of this transaction is to extend existing
profile of amortization and increase liquidity. As a result of the
transaction the available facilities in existing RCF of MUSD
1,000 will be reduced to MUSD 600.
Total consolidated assets increased during the year to
MSEK 108,212 compared to MSEK 104,900 31 December
2012. Capital expenditure in tangible and intangible fixed
assets amounted to MSEK 7,169. In 2012 capital expenditures
amounted to MSEK 10,917. The consolidated debt/equity
ratio, defined as net interest-bearing liabilities in relation
to net interest-bearing liabilities, shareholders’ equity and
de ferr ed tax liabilities was 55% 31 December 2013 and 57%
31 December 2012.
Total retained earnings on 31 December 2013 was MSEK
35,586, of which MSEK 1,914 was the net profit for the year.
Parent Company
Revenues for the year amounted to MSEK 136 and the result
before tax was MSEK 33. In 2012 the revenues amounted to
MSEK 149 and the result before tax to MSEK 203, whereof
dividends from subsidiaries were MSEK 1,137.
The Board propose a dividend of MSEK 200 to the share-
holders, with the remaining profit to be carried forward, see
page 74.
The Group´s and the Parent Company´s earnings, liquidity
and financial position are described in the following income
statements, cash-flow statements and balance sheets, and in
the notes relating to them.
6 STENA AB 2013
GROUP
CONSOLIDATED INCOME STATEMENTS
Years ended 31 December
2012 2013 2013Note MSEK2) MSEK MUSD1)
Revenues
Ferry operations 10,395 11,164 1,737
Drilling 7,011 7,146 1,112
Shipping 2,426 2,568 399
Investment properties 2,454 2,564 399
New Businesses – Adactum 4,977 6,453 1,004
Other 21 45 7
Total revenues 27,284 29,940 4,658
Net gain on sales of assets 4 90 76 12
Total other income 90 76 12
Net valuation on investment properties 12 14 224 35
Total income 3 27,388 30,240 4,705
Direct operating expenses
Ferry operations (8,110) (8,520) (1,326)
Drilling (3,122) (3,036) (472)
Shipping (1,296) (1,503) (234)
Investment properties (843) (847) (132)
New Businesses – Adactum (3,593) (4,338) (675)
Other (1) (8) (1)
Total direct operating expenses (16,965) (18,252) (2,840)
Gross profit 10,423 11,988 1,865
Selling expenses 17 (1,276) (1,167) (182)
Administrative expenses 5 (1,997) (2,798) (435)
Depreciation and amortization 3 (3,749) (4,136) (643)
Income from operations 3, 32 3,401 3,887 605
Share of associated companies´ results 6 18 (51) (8)
Dividends received 99 60 9
Gain (loss) on sale of securities 485 444 68
Interest income 438 489 76
Interest expense (2,357) (2,386) (371)
Foreign exchange gain/loss (65) (41) (6)
Other financial income/expense (242) (254) (39)
Finance net 7 (1,624) (1,739) (271)
Income before taxes 1,777 2,148 334
Income taxes 8 (42) (238) (37)
Profit for the year 1,735 1,910 298
Earnings attributable to:
Equity holders of the Parent Company 1,732 1,914 299
Non-controlling interests 13 3 (4) (1)
Net income 1,735 1,910 298
1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
STENA AB 2013 7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended 31 December
2012 2013 2013MSEK2) MSEK MUSD1)
Profit for the year 1,735 1,910 298
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
This year’s change in fair value reserve, net of tax 325 366 57
This year’s change in net investment hedge, net of tax (175) 722 112
Change in currency translation differences (808) 355 55
Items that will not be reclassified to profit or loss:
Remeasurements of post employment benefit obligations (10) 443 68
This year’s change in revaluation reserve 13 2
Other comprehensive income for the year (668) 1,899 294
Total comprehensive income for the year 1,068 3,809 592
Other comprehensive income attributable to:
Owners of the company 1,072 3,813 593
Non-controlling interest (4) (4) (1)
Total comprehensive income for the year, net of tax 1,068 3,809 592
1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
See also Note 20 and 21
8 STENA AB 2013
CONSOLIDATED BALANCE SHEETS
31 December
2012 2013 2013Note MSEK2) MSEK MUSD1)
Assets
Non-current assets
Intangible assets 9
Goodwill 2,201 2,372 369
Brands 724 704 110
Rights to routes 698 726 113
Other intangible assets 286 353 55
Total intangible assets 3,909 4,155 647
Tangible fixed assets
Vessels 10 40,708 40,956 6,372
Construction in progress 10 2,647 2,450 381
Equipment 10 2,260 3,930 611
Buildings and land 10 892 962 150
Ports 11 1,817 3,261 507
Total tangible fixed assets 48,324 51,559 8,021
Investment properties 12 26,658 27,831 4,330
Financial fixed assets
Investment in associated companies 6 1,073 934 145
Investment included in SPEs 13 5,170 4,311 671
Marketable securities 14 5,118 4,243 660
Other non-current assets 15, 21 3,526 3,904 607
Total financial fixed assets 14,887 13,392 2,083
Total non-current assets 93,778 96,937 15,081
Current assets
Inventories 16 692 716 111
Trade debtors 17 2,823 2,849 443
Other current receivables 17 1,802 1,793 279
Prepaid expenses and accrued income 17 2,129 2,170 338
Short-term investments 18 2,095 1,694 264
Cash and cash equivalents 19 1,581 2,053 319
Total current assets 11,122 11,275 1,754
Total assets 3 104,900 108,212 16,835
1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
GROUP
STENA AB 2013 9
31 December
2012 2013 2013Note MSEK2) MSEK MUSD1)
Shareholders´ equity and liabilities
Equity attributable to shareholders of the company 20
Share capital 5 5 1
Reserves (2,884) (449) (70)
Retained earnings 31,335 33,542 5,218
Net income 1,732 1,914 298
Equity attributable to shareholders of the company 30,188 35,013 5,447
Non-controlling interest 280 262 41
Total equity 30,468 35,274 5,488
Non-current liabilities
Deferred income taxes 21 4,011 3,940 613
Pension liabilities 22 1,226 649 101
Other provisions 768 707 110
Long-term debt 23 46,113 45,287 7,045
Debt included in SPEs 13 3,974 3,944 614
Senior Notes 24 5,154 5,324 828
Capitalized lease obligations 25 764 642 100
Other non-current liabilities 26 934 722 112
Total non-current liabilities 62,944 61,215 9,523
Current liabilities
Short-term debt 23 2,724 4,616 718
Senior Notes 24 838
Capitalized lease obligations 25 203 231 36
Trade accounts payable 1,764 1,722 268
Income tax payable 35 243 38
Other current liabilities 3,249 1,655 257
Accrued costs and prepaid income 27 2,675 3,256 507
Total current liabilities 11,488 11,723 1,824
Total equity and liabilities 104,900 108,212 16,835
Pledged assets and commitments and contingent liabilities
Pledged assets 28 65,075 66,155 10,292
Commitments and contingent liabilities 28 3,843 3,301 514
1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
10 STENA AB 2013
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
GROUP
Equity attributable to the owners of the parent company
MSEKShare
capital Reserves1)
Retained earnings
including net income Total
Non- controlling
interests
Total share-holders’
equity
Closing balance at 31 December 2011 5 (2,233) 32,415 30,186 211 30,397
Effects of changes in accounting principles2) (796) (796) (796)
Balance at 1 January 2012 (restated) 5 (2,233) 31,619 29,390 211 29,601
Change in fair value reserves 325 325 325
Change in net investment hedge (175) (175) (175)
Change in translation reserve (801) (801) (7) (808)
Remeasurement of post employment benefit obligation (10) (10) (10)
Other comprehensive income (651) (10) (661) (7) (668)
Net income 1,732 1,732 3 1,735
Total comprehensive income (651) 1,722 (1,071) (4) 1,067
Dividends (260) (260) (260)
Transfer to charitable trust (14) (14) (14)
Sale of non-controlling interests 73 73
Closing balance as of 31 December 2012 5 (2,884) 33,067 30,188 280 30,467
Effect of changes in accounting principles3) 1,012 189 1,201 28 1,229
Balance at 1 January 2013 (restated) 5 (1,872) 33,256 31,389 308 31,696
Change in fair value reserves 366 366 366
Change in net investment hedge 722 722 722
Change in revaluation reserve (20) 33 13 13
Change in translation reserve 355 355 355
Remeasurement of post employment benefit obligation 443 443 443
Other comprehensive income 1,423 476 1,899 1,899
Net income 1,914 1,914 (4) 1,910
Total comprehensive income 1,423 2,390 3,813 (4) 3,809
Dividends (189) (189) (189)
Acquisition of non-controlling interests (42) (42)
Closing balance at 31 December 2013 5 (449) 35,457 35,013 262 35,274
1) See Note 202) Effects of changes in accounting principles for pensions, in accordance to the updated accounting standard IAS 19 Employee benefits3) Effects of changes in valuation of ports, from cost method to revaluation method
STENA AB 2013 11
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended 31 December
20122) 2013 2013Note MSEK MSEK MUSD1)
Net cash flows from operating activities
Net income 1,735 1,910 297
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3 3,749 4,136 643
Net valuation of investment properties (14) (224) (35)
Share of affiliated companies´ results (18) 51 8
Dividend from associated companies 20 23 4
Gain on sale of assets 4 (90) (76) (12)
Loss/gains on securities, net (485) (444) (69)
Unrealized foreign exchange losses/gains 286 482 75
Deferred income taxes 8 (231) (49) (80)
Provision for pensions (194) (109) (17)
Other non cash items 366 165 26
Net cash flows from trading securities (88) 75 12
Cash flow from operations before changes in working capital 5,036 5,940 924
Changes in working capital
Receivables (70) (68) (11)
Prepaid expenses and accrued income (161) (125) (19)
Inventories (50) 6 1
Trade accounts payable 429 (154) (24)
Accrued costs and prepaid income (187) 350 54
Income tax payable (168) (17) (3)
Other current liabilities 205 (915) (142)
Net cash provided by operating activities 5,034 5,017 780
Net cash flows from investing activities
Purchase of intangible assets (388) (147) (23)
Cash proceeds from sale of tangible fixed assets 4 1,198 534 83
Capital expenditure on tangible fixed assets (10,529) (7,022) (1,092)
Purchase of subsidiary, net of cash acquired 29 (187) (13) (2)
Investments in affiliated companies (73)
Proceeds from sale of securities 4,456 7,505 1,168
Purchase of securities (6,008) (5,084) (791)
Increase of noncurrent assets (67) (392) (60)
Decrease of noncurrent assets 30 12 2
Other investing activities 15 24 4
Net cash used in investing activities (11,553) (4,583) (712)
Net cash flows from financing activities
Proceeds from issuance of debt 7,622 3,676 572
Principal payments on debt (3,103) (4,946) (769)
Net change in borrowings on line-of-credit agreements 3,943 1,228 191
Principal payments on capitalized lease obligations (1,331) (238) (37)
Net change in restricted cash accounts (275) 484 75
Dividends paid (260) (189) (29)
Other financing activities 29 (107) (34) (5)
Net cash provided by/used in financing activities 6,489 (19) (2)
Effect of exchange rate changes on cash and cash equivalents 24 57 9
Net change in cash and cash equivalents (6) 472 74
Cash and cash equivalents at beginning of year 19 1,587 1,581 245
Cash and cash equivalents at end of year 19 1,581 2,053 319
1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
GROUP
12 STENA AB 2013
Basis of preparation
The consolidated financial statements have been prepared in accord-
ance with International Financial Reporting Standards (IFRS) as adopted
by the EU. In addition RFR 1 Supplementary Rules for Groups, has been
applied, issued by the Swedish Financial Reporting Board.
In accordance with IAS 1, the companies of the Stena Group apply
uniform accounting principles, irrespective of local legislation. The prin-
ciples below have been applied consistently for all the years covered by
this Financial Report. Conversion to IAS 33, Earnings Per Share, is not
applied, since Stena AB is not a listed company.
The Parent Company’s financial statements have been prepared
according to the same accounting principles applied for the Group.
All exceptions are described in the section “Parent Company’s acc-
ounting principles”.
The Financial Report and Consolidated Financial Statements are
approved for issue by the Board of Directors on 28 April 2014. The
balance sheets and income statements were approved by the Annual
General Meeting on 28 April 2014.
In conjunction with the preparation of these financial statements,
senior management has made estimates and assumptions which affect
the carrying amounts of assets and liabilities, as well as contingent lia-
bilities at the date of the financial statements and recognised revenues
and costs. The actual future outcome of specific transactions may
differ from the outcome estimated at the date of preparation of this
financial statements. Differences of this type will impact the outcome
of financial statements in forthcoming accounting periods. Areas
involving a high degree of assessment, which are complex or in which
the assumptions and estimations are of material significance to the
consolidated financial statements are stated in Note 2.
Assets and liabilities are accounted for at historical acquisition values,
except certain financial assets and liabilities and investment properties
that are valued at fair value and ports that are recognized according to
revaluation model. Financial assets and liabilities valued at fair value are
derivative instruments, financial assets classified as financial assets val-
ued at fair value through the income statement or financial assets held
for sale.
Solely for the convenience of the reader, the 2013 financial state-
ments have been translated from Swedish kronor (SEK) into United
States dollars (USD) using the 31 December 2013 rate, USD 1.00 = SEK
6.4279.
New or amended accounting standards 2013
During the year 2013, no new or amended IFRS standards have had
any particular impact on the group accounting, except for below:
– IAS 19 Employee Benefits (Amendments). IAS 19 prescribes the
accounting and disclosure by employers for employee benefits. The
amended standard requires an entity to regularly determine the pre-
sent value of defined benefit obligations and the fair value of plan
assets and to recognize the net of those values in the financial state-
ments as a net defined benefit liability. The amended standard
removes the option to use the corridor approach previously used by
the Group. The standard also requires an entity to apply the discount
rate on the net defined benefit liability (asset) in order to calculate the
net interest expense (income). The standard thereby removes the use
of an expected return on the plan assets. All changes in the net
defined benefit liability (asset) are recognized as they occur, as follows:
(i) service cost and net interest in profit or loss; and (ii) remeasurement
in other comprehensive income.
The standard has had the following impact on the presentation of
the Group´s financial results and position: All historical actuarial gains
or losses are now included in the measurement of the net defined
benefit liability. This initially increased the liabilities of the Group and
reduced the equity (after deduction for deferred tax). Changes in the
net defined benefit liability from changes in, e.g., discount rate and
mortality rate are presented in other comprehensive income. The
removal of the expected return reduced the financial items with the
difference between the expected return and the discount rate applied
on the plan assets. For the opening balance of 2012, the changes
increased the net defined benefit liability by MSEK 1,060 and reduced
equity by MSEK 796. The modified net interest calculation and the
removal of the amortization of the actuarial losses increased the
income for the period by MSEK 20. The standard was applied as of
1 January 2013, with full retrospective application. The impacts on
the 2013 accounts are in all major aspects similar to 2012.
– Ports are recorded for in accordance with the revaluation model in
IAS 16 since 1 January 2013. Ports are carried at a revalued amount,
being its fair value at the date of revaluation less subsequent deprecia-
tion and impairment. The change in accounting principles increased
the value of the ports with MSEK 1,363, whereof MSEK 122 on acqui-
sition costs and MSEK 1,241 on accumulated amortization, and
increased the revaluation reserve in equity with MSEK 1,012 after tax.
Basis of consolidation
The consolidated financial statements has been prepared in accordance
with the principles set forth in IAS 27, consolidated and separate finan-
cial statements and include Stena AB and all subsidiaries, defined as
companies in which Stena AB, directly or indirectly, owns shares repre-
senting more than 50% of the voting rights or, in any other way, has a
controlling influence.
As regards companies acquired or divested during the year, the
following applies:
• Companies acquired during the year have been included in the
consolidated income statement as of the date upon which control
was gained.
• Companies divested during the year are included in the consolidated
income statement until the date upon which Stena’s control ceased.
The Group’s consolidated financial statements include the financial
statements for the Parent Company and its directly or indirectly owned
subsidiaries after:
• elimination of intercompany transactions and
• amortisation of acquired surplus values.
NOTESAmounts are shown in MSEK unless otherwise stated.
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
STENA AB 2013 13
Equity in the Group includes equity in the Parent Company and the
portion of equity in the subsidiaries arising after the acquisition.
Non-controlling interest is recognised in equity as a separate cate-
gory. Non-controlling interest share of profit/loss for the year is specified
following the net profit/loss for the year in the income statement.
Business combinations and goodwill
Stena applies IFRS 3 (revised 2009) Business Combinations, for acquisi-
tions, prior acquisitions, before 1 January 2010, are not restated.
All business combinations are accounted for in accordance with pur-
chase method. This method entails that the assets, liabilities and con-
tingent liabilities owned by the acquiring company at acquisition date
are valued to determine their group acquisition value. The valuation
method requires that estimates have to be made. The valuation of
acquired land, buildings and equipment is carried out either by an
external party or by an internal party on the basis of available market
information. The reporting of financial assets and liabilities, as well as
inventories,
is based on available market information. The fair value of significant
intangible fixed assets is determined either with the help of independent
valuation experts or internally, through the use of generally accepted
valuing methods, which are usually based on future cash flows.
Acquisition of investment properties and vessels, in companies with
only assets, are accounted for as an asset deal.
In the event that the acquisition cost exceeds the market value of
the identified assets, liabilities and contingent liabilities, the difference
is accounted for as goodwill.
In the event that the fair value of the acquired net assets exceeds
the acquisition cost, the acquirer shall identify and value the acquired
assets again. Any remaining surplus in a revaluation shall immediately
be taken up as income. The acquisition analysis (the method utilised for
the allocation of acquisition cost to acquired identified net assets and
goodwill), shall, in accordance with IFRS, be completed within twelve
months of acquisition date. Once the acquisition analysis has been
reviewed and approved by management, goodwill is allocated to cash
generating units and impairment testing is carried out at least once per
year from the date upon which this allocation is completed. If the
acquisition is achieved in stages, the goodwill value is decided at the
time when the control has been transferred. Previous shares are valued
to fair value and the change in value is accounted for in the Income
statement. Goodwill is not amortized.
Transaction costs, exempt from transaction costs which is assignable
to equity- or liability instruments, are reported as costs in the Income
Statements. For acquisitions before 1 January, 2010 transaction costs
have been capitalized. Conditional purchase-sum is reported according
to fair-value at the date of acquisition. If the conditional purchase-sum is
classified as equity-instrument, no revaluation is carried out and the
adjustment is reported in equity. For other conditional purchase-sum,
these are revalued each quarter and the variation is reported in the
Income Statement.
Associated companies and jointly controlled entities
(equity-accounted investments)
The equity method of accounting is used for companies in which the
Company owns shares representing between 20% and up to a maximum
of 50% of the voting rights and/or has a significant interest. This method
entails that investments are initially reported at acquisition value. The
Group´s investment in associated companies includes goodwill identified
on acquisition, net of any accumulated impairment loss. See “Impairment
of non-financial assets” including Goodwill below. The carrying amount
is subsequently increased or decreased to reflect the owner company’s
share of the associated companies’/Joint Ventures gains or losses after
the acquisition. In the Group Balance Sheet these assets are accounted
for as “Investments in associated companies” (Financial assets – see
note 6) and “Other non-current assets” (Operational assets – see note
15). The Group’s share of the associated companies’ net income is
reported in the consolidated income statement under the line “Result
from associated companies”, in the finance net. Received dividends are
settled against the book value of the respective participations.
Joint ventures are, in accounting, the companies in the Group that,
through common cooperation agreements with one or several parties,
have common control of the operation, both operationally and financially.
Special purposed entities (SPE)
Special purposed entities (SPE) are consolidated in the group accounts
according to SIC 12 and they are consolidated, when the group has a
significant economic impact of the SPE. Definition of significant eco-
nomic impact is if the group stands behind the majority of the risks
which are related to the SPE and its assets or if it has the right to keep
the majority of the rewards in the SPE.
Acquisition with non-controlling interest
Acquisition with non controlling interest arise when less than 100%
is acquired. This kind of acquisition is reported as a proportion of the
acquired net assets. The acquisition is reported as a transaction within
equity i.e. between the owner of the parent company and the non-
controlling interest. Therefore no goodwill arise in this kind of trans-
actions. The change in non-controlling interest is based on the propor-
tional share of the net assets.
Translation of foreign operations
The functional currency of the parent company, as well as the reporting
currency, and the reporting currency of the Group is Swedish krona
(SEK). All foreign subsidiaries report in their functional currencies, the
currency used in the primary economic environment of the companies.
In consolidation, all balance sheet items have been translated into SEK
at the closing rate of exchange. Profit/loss items have been translated
using average exchange rates.
Transactions in foreign currency
Foreign currency transactions are converted to the functional currency
at the exchange rate prevailing on the transaction day. The functional
currency is the currency of the primary economic environment in which
the company generates and expends cash. Monetary assets and liabili-
GROUP
14 STENA AB 2013
ties in foreign currencies are converted to the functional currency at the
exchange rate prevailing on the closing date. Ex change differences which
arise are reported in the Income Statement. Non monetary assets and
liabilities which are reported at historical cost, are revaluated at trans-
action date. Non monetary assets and liabilities which are reported at
fair value are revalued to the functional currency at the exchange rate
ruling at the time for revaluation at fair value.
Segment reporting
Operating income is reported in such a manner as to correspond with the
internal reporting submitted to the Chief operating decision-maker. The
Chief operating decision-maker is the function responsible for the alloca-
tion of resources and the assessment of the operating segments’ results.
In the Group, this function has been identified as Stena AB’s Board of
Directors, which make strategic decisions.
The Group’s segments, its business areas, have implemented systems
and procedures to support internal control and reporting. This forms the
basis of the identification of primary risks and the varying returns that
exist in the business, and is based on the various business models for the
Group’s end clients. The segments are responsible for operating profit/
loss, EBITDA (operating income before amortisation) and for those assets
utilised in their operations, whilst net financial income, taxes and equity
are not reported per segment. Operating profit/loss and assets for the
segment are consolidated in accordance with the same principles as the
rest of the Group as a whole. Sales between segments take place on
market conditions and at market prices. The Stena Group’s business
areas and, thereby, its Segments are:
• Ferry operations
• Drilling operations
• Shipping operations
• Property operations
• New businesses – Adactum
Revenue recognition
Revenue includes the fair value of amounts received or to be received
regarding services and goods sold in the Group’s operating activities.
Revenue is reported excluding value added tax, returns and discounts
and after elimination of internal Group sales.
The Group reports revenue when the amount can be measured in a
reliable way, it is probable that future economic benefits will be gener-
ated to the Company and specific criteria have been fulfilled for each
of the Group’s operations. Revenue amounts are not considered to be
reliably measurable until all commitments regarding sales have been
met or have fallen due. The Group bases its judgements on historical
outcome, thereby considering the type of client, type of transaction,
and special circumstances in each individual case.
The Group’s shipping and drilling revenues are derived from charter
contracts. Revenue is recognised evenly within the charter period.
Provisions are made in advance for any ongoing loss contracts.
Revenues from the Group’s ferry operations consist of ticket sales,
onboard sales, and freight revenues and are recognised in the period
in which services are rendered.
Rental income from the Company’s investment properties opera-
tions is derived from leases and is recognised on a straight line basis
over the life of the leases.
Sales of goods are recognised at the date upon which the Group
company sells a product to the customer in accordance with the terms
of sale. Sales are usually paid for in cash or by credit card.
Contract assignments in progress from operations within the
Adactum Group are recognised according to the percentage of com-
pletion method on all of the assignments in which outcome can be
calculated in a satisfactory manner. Revenues and costs are reported
in the income statement in relation to the assignment’s degree of com-
pletion. The degree of completion is determined on the basis of assign-
ment costs incurred in relation to the estimated assignment costs for
the entire assignment. Anticipated losses are expensed immediately.
Customer Loyalty Programmes, addresses the accounting by Stena
Line and Blomsterlandet that operate customer loyalty programmes
under which the customer can redeem credits for awards such as free
or discounted goods or services. The fair value of the total consideration
received in the initial sales transaction is allocated between the award
credits and the sale of the goods or services. The revenue related to
the award credits granted is recognised in the income statement when
the risk of a claim being made expires.
Sales of vessels and investment properties are recognised in other
income. Revenue recognition takes place when all material benefits
and risks have been transferred to the buyer.
Interest income is recognised as income in the finance net distrib-
uted over the term with application of the effective interest method.
Dividend income is recognised when the right to payment is
received and reported in the financial net.
Tangible fixed assets
Tangible fixed assets are recognised in the balance sheet when, on
the basis of available information, it is likely that the future economic
bene fit associated with the holding accrues to the Group and the
acquisition cost of the asset can be reliably calculated.
Ports are carried at a revalued amount according to the revaluation
model in IAS 16, being its fair value at the date of revaluation less subse-
quent depreciation and impairment. If a revaluation result in an increase
in value, it is credited to other comprehensive income and accumulated
in equity under the heading “revaluation surplus”. A decrease arising as
a result of a revaluation are recognised as an expense.
Vessels, equipment and buildings used in business operations are
recorded at acquisition cost less accumulated depreciation and any
impairment charges. Acquisition expenditure is capitalised upon acqui-
sition. Repairs and maintenance costs for tangible fixed assets are
charged to the income statement for the year.
Dry-docking costs for vessels are capitalized and amortized over a
period of two to five years.
For vessels, the Company uses appraisals carried out by independent
vessel brokers for impairment assessment. If a review indicates that the
net book value of an asset exceeds its recoverable amount, discounted
cash flows based upon estimated capital expenses and future expected
earnings are utilised. Assets having a direct joint income, e.g. a ferry
CONT. NOTE 1
STENA AB 2013 15
route, the smallest cash generating unit is used. If a write-down
requirement arises on balance sheet date, the recoverable amount of
the asset is estimated and the asset is impaired to this value. Impairment
is reversed if any change is made to the calculations used to determine
recoverable amount.
Construction in progress includes advance payments, as well as
other direct and indirect project costs, including financial expenses,
which are capitalized on the basis of the actual borrowing cost.
Buildings used in business operations is split into buildings and land
and refer to properties used by the Company in its own operations.
Tangible fixed assets are depreciated according to plan, using the
straight-line method. The residual values and useful lives of the assets
are tested on every balance sheet date and adjusted when needed.
No depreciation is carried out regarding land.
The residual values are estimated to zero. All assets are divided to
components.
Depreciation takes place from the date upon which the asset is ready
for use and over the following periods:
Vessels:
Drilling rigs 20 years
Drilling rig vessels 20 years
Crude oil tankers 20 years
RoRo vessels 20 years
RoPax vessels 20 years
Superferries 20 years
LNG carriers 20 years
HSS vessels 10–20 years
Other tangible fixed assets:
Buildings 50 years
Port terminals 20–50 years
Windmills 20 years
Equipment 3–10 years
Investment property
Investment properties are reported at fair value in accordance with the
fair value model in IAS 40. Investment properties, that is properties
held in order to generate rental income or increase in value or a combi-
nation of these, are valued continuously with the fair value model
(estimated market value). These properties are initially valued at
acquisition cost. Fair value is based on the estimated market value on
balance sheet date, which means the value at which a property could
be transferred between well informed parties that are independent of
each other and that have an interest in the transaction being carried
out. Changes in fair value are reported in the income statement, with
an impact on changes in value of properties.
The term investment properties, which mainly includes residential
and office buildings, also includes land and buildings, land improve-
ments and permanent equipment, service facilities etc in the building
or at the site.
Sales and purchases of properties are reported when the risks and
rewards associated with ownership are transferred to the buyer from
the seller, which normally takes place on the day of taking possession
as long as this does not conflict with the conditions of the sales contract.
Profit or loss arising upon the sale or disposal of investment proper-
ties is composed of the difference between the net proceeds from sale
and the most recently determined valuation (carrying amount based on
the most recently determined translation to fair value). Income arising
from sales or disposals is reported in the income statement as net gain
on sale of assets.
In the event that Stena utilises a portion of a property for its own
administration, such a property will only be considered to be an invest-
ment property if an insignificant portion is used for administrative
means. In any other case, the property will be classified as a building
used in business operations, and be accounted for in accordance with
IAS 16 – Property, Plant & Equipment.
Additional expenses are added to the carrying amount only when
it is likely that future economic benefits associated with the asset will
accrue to the Company and when acquisition cost can be reliably
calculated. Other expenses are recognized as costs in the period in
which they arise. One decisive factor for the assessment of when an
additional expense may be added to the carrying amount is whether
this expense refers to the replacement of identified components, or
parts of these, in which case such expenses are capitalized. Expenses
are also added to carrying amount in cases where new components
are created.
The valuation of investment properties at fair value (assessed market
value) utilises an internal valuation model which has been quality
assured through the reconciliation of assumptions with external prop-
erty values, as well as through external valuation. The internal valua-
tion is determined on an earnings basis, which means that each indi-
vidual property’s net rental income is divided by the required return by
market yield for the property in question. Assumptions have been
made in the calculation of net rental income regarding operating and
maintenance expenses, as well as vacancies. These assumptions are
based on market assumptions of those cash flows. However, historical
outcome, budget and normalised costs have been a part of these con-
siderations. Different required returns have been utilised for different
markets and types of properties.
Intangible assets
Goodwill
Goodwill is comprised of the amount by which the acquisition cost
exceeds the fair value of the Group’s portion of the acquired subsidi-
ary’s identifiable net assets at acquisition date. Goodwill on the acqui-
sition of subsidiaries is recognized as an intangible asset. Goodwill is
tested annually for impairment and is recognized at acquisition cost
less accumulated impairment losses.
Impairment of goodwill is not reversed. Profit or loss on the disposal
of a unit includes the remaining carrying amount of the goodwill refer-
ring to the unit divested.
Goodwill is allocated to cash generating units during impairment
testing. This allocation refers to those cash generating units, determined
in accordance with the Group’s operating segments, which are expected
to benefit by the business combination in which the goodwill item arose.
GROUP
16 STENA AB 2013
Trademarks
Trademarks acquired are reported at fair value on acquisition date.
Amortisation is performed over periods of 10 respectively 40 years.
Trademarks have a definable useful lifetime and are reported at
acquisition value less accumulated amortization. Amortization takes
place from the date on which the trademark was acquired by the Stena
Group over its estimated useful lifetime, as follows:
Kvik 40 years
Ballingslöv 40 years
Sembo 10 years
IT investments
Acquired software is capitalized on the basis of acquisition and imple-
mentation costs. These costs are amortized over the asset’s useful life,
which is judged to be between three and five years, in accordance with
the straight line method. Useful life is reviewed on a yearly basis.
Distribution agreements
Distribution agreements are reported at acquisition cost, less accumu-
lated amortization. Amortization takes place according to the straight
line method over the asset’s estimated useful life of 10 years. Useful
life is reviewed on a yearly basis.
Rights to routes
Rights to routes is capitalized on the basis of acquisition and amortized
over the assets useful life, which is judged to be 20 years, in accordance
with the straight line method. Useful life is reviewed on a yearly basis.
Customer relations
Customer relations are reported at acquisition cost, less accumulated
amortization. Amortization of customer relations takes place according
to the straight line method over the asset’s estimated useful life of
5 years. Useful life is reviewed on a yearly basis.
Maintenance of intangible assets
Expenses for maintenance of intangible assets are expensed as they arise.
Impairment of non-financial assets
Assets with indeterminable useful lives, goodwill, are not amortized;
rather they are reviewed on a yearly basis with consideration of any
impairment requirements. Assets that are amortized or depreciated are
tested with consideration of impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recover-
able. Impairment is carried out in the amount by which the asset’s car-
rying amount exceeds its recoverable amount. The recoverable amount
is the higher of the asset’s fair value, less selling expenses, and its value
in use. In the assessment of impairment requirements, assets are
grouped on the lowest level at which there exist separate identifiable
cash flows (cash generating units).
For other non-financial assets other than goodwill that have previ-
ously been impaired, an assessment is carried out on each balance
sheet date to determine whether a reversal should be made.
Borrowing expences
Borrowing expenses, for completing of so called qualifying assets, are
capitalized on the acquisition value of the qualifying asset. A qualified
asset is an asset which takes a certain amount of time to complete.
Borrowing expenses on loans specified for the qualifying asset are cap-
italized on the asset.
Accounting for subsidies
Any subsidies (government grants) received in conjunction with new
acquisitions of vessels, properties or port installations are reported as
a decrease of the acquisition cost; subsidies relating to operating activi-
ties reduce the corresponding costs. Recognition takes place when the
subsidy can be reliably calculated. For Swedish-flagged vessels em ployed
in international shipping activities, the company has received subsidies
equal to all security costs and income taxes payable by the employers
on behalf of employees who work on board such vessels. The amounts
received have reduced personnel costs.
Fixed assets held for sale
Fixed assets are classified as assets held for sale when their carrying
amounts will be recovered through a sales transaction and a sale is
considered highly likely. They are recognized at the lowest of book
value and fair value less selling costs if their carrying amount will be
recovered primarily through a sales transaction and not through
continuous usage.
Financial assets and liabilities
General
A financial instrument is any form of agreement which giving rise to
a financial asset in a company and a financial liability or equity instru-
ment in another company. Financial assets in the consolidated balance
sheet consist of cash and cash equivalents, trade debtors, other finan-
cial assets, shares and derivative assets. Financial liabilities are material-
ised through requirements regarding the repayments of cash or of
other financial assets. In the consolidated balance sheet, financial
liabilities consist of trade accounts payable, loans, financial leasing
liabilities, bonds and derivative liabilities.
Accounting
Financial assets and liabilities are reported in the balance sheet when
the Group becomes party to the instrument’s contractual terms. Finan-
cial assets and liabilities are reported on settlement date, with the
exception of derivatives, which are reported on trade date. Financial
instruments are initially reported at fair value, which usually corre-
sponds to acquisition cost on acquisition date. Transaction costs are
included in the acquisition cost of all financial instruments not valued
at fair value in the income statement. Netting of financial liabilities and
assets only takes place when there is a contractual possibility and when
the intention is to net the gross amounts of the liabilities or assets.
CONT. NOTE 1
STENA AB 2013 17
Financial expenses
Financial expenses are reported in the period in which they arise.
Financial expenses regarding new construction projects of vessels and
properties are capitalized as a portion of the acquisition cost. Expenses
for the financing of long-term loans and credits are deferred and
amortized over the expected term of the financing.
Derecognition
Financial assets are derecognized in the balance sheet when the agreed
rights to cash flows have ceased or been transferred and when essen-
tially all the risks and advantages associated with the ownership of the
financial asset have been transferred. Financial liabilities are derecog-
nized from the balance sheet when they have been extinguished.
Realized result is defined as proceeds from sales less the net book
value as of the previous year end.
Classification of financial assets
Financial assets in the Group are divided into the following categories:
• Financial assets at fair value through the income statement
– Trading
– Assets classified as financial assets at the acquisition date at fair
value through the income statement
• Financial assets held for hedging purposes
• Financial assets held to maturity
• Available-for-sale financial assets
• Loans receivable and trade debtors
The basis for classification is formed of the aim of the acquisition of
the financial instrument. The classification is carried out by senior
management on initial recognition date.
Financial assets at fair value through the income statement
Financial assets belonging to this category are valued and continuously
reported at fair value through the income statement.
The category is divided into two subcategories:
1) trading and 2) assets classified as financial assets at fair value
through the income statement at acquisition date. Trading consists of
financial assets acquired with the primary intention of being sold in the
short term and those derivative instruments to which hedge account-
ing is not applied. The trading shares are classified as short-term invest-
ments in the balance sheet and changes in fair value are reported in
the income statement under gains (loss) on securities.
Fair value option is applied, because the investments are managed
and their performance, are evaluated on a fair value basis in line with
the Groups investment policy. These assets are classified as Marketable
securities in the balance sheet and changes in fair value are reported in
the income statement under gains (loss) on securities.
Internally, the Group follows up and reports on these assets on the
basis of their fair values and, consequently, considers that this valuation
and recognition in the income statement and balance sheet provides
readers of the Financial Report with the most relevant information.
Financial assets, classified as financial assets at fair value through the
income statement at acquisition date, are classified as current assets if
they are expected to be realized within 12 months of balance sheet date.
Assets held to maturity
Held-to-maturity financial assets are non-derivative financial assets
with fixed or determinable payments and fixed maturities that the
Group’s management has the positive intention and ability to hold to
maturity. If the Group were to sell other than an insignificant amount
of held-to-maturity financial assets, the whole category would be
tainted and reclassified as available for sale. Held-to-maturity assets
are measured at amortized cost and interest revenue is recorded in the
income statement using the effective interest rate method. Held-to-
maturity financial assets are included in non-current assets, except for
those with maturities less than 12 months from the balance sheet date,
which are classified as current assets.
Assets in this category are classified as Investments in SPEs in the
balance sheet.
Loan receivables and trade debtors
Loans and receivables are financial assets that are not designated as
derivatives, that have fixed or fixable payments and that are not listed
on an active market. Receivables are reported under current assets,
with the exception of receivables with a maturity date later than 12
months after balance sheet date which are classified as financial fixed
assets. Loans receivables and trade debtors are listed in the balance
sheet under other receivables and trade debtors. Assets in this cate-
gory are valued at amortized cost, with allowances for bad debt losses
and loan losses, when applicable.
Available-for-sale financial assets
Investments in certain shares (with the exception of participations in
subsidiaries and associated companies) and bonds are categorised as
available-for-sale financial assets when the investments are not held
for trading. These assets are classified as Marketable securities or other
non-current assets in the balance sheet. Period changes in fair value,
with the exception of impairment charges, are reported in other com-
prehensive income for these instruments and are cumulated in the fair
value reserve which is a specific component of equity. When these
financial instruments are sold, the accumulated gains or losses are
reclassified through other comprehensive income and are recognized
in the income statement.
Assets in this category are recognised as other long-term securities,
other long-term assets and investments in securities.
Receivables and liabilities in foreign currency
Transactions in foreign currency are translated in accordance with
current exchange rates per transaction date.
Both in the individual Group companies and in the Group’s annual
accounts, receivables and liabilities in foreign currency are translated
at the closing rate of exchange. Related exchange rate differences on
current payments are included in operating income, while differences
GROUP
18 STENA AB 2013
in financial receivables and liabilities are reported among financial
items. All exchange rate differences affect net profit/loss for the year.
An exception is formed by that portion of the difference consisting of
an effective hedging of net investments, where recognition takes place
directly against comprehensive income.
Translation differences on non-monetary financial assets and liabili-
ties, such as equities held at fair value through the income statement,
are recognised in the income statement as part of the fair value gain
or loss. Translation differences on non-monetary financial assets, such
as equities classified as available for sale, are included in the available-
for-sale reserve in comprehensive income. The following currency
exchange rates have been applied in the Group’s annual accounts:
Average rates
2012 2013 Change in %
USD 6.7754 6.5140 (4)
GBP 10.7340 10.1863 (5)
EUR 8.7053 8.6494 (1)
Closing rates
2012 2013 Change in %
USD 6.5104 6.4279 (1)
GBP 10.5865 10.6529 1
EUR 8.5843 8.8567 3
Financial liabilities
Financial liabilities in the group are divided into the following categories:
• Financial liabilities at fair value through the income statement,
held for trading
• Other financial liabilities
The basis for classification is formed based on the purpose of the
acquisition of the financial instrument. The classification is carried out
by senior management on initial recognition date.
Other financial liabilities
Other financial liabilities in the balance sheet consist of senior notes,
other long-term interest bearing debt, other non-current liabilities,
short-term interest bearing debt, trade accounts payable, debt in SPEs
and other current liabilities.
Financial liabilities are recognised initially at fair value, net of trans-
action costs incurred. Financial liabilities are subsequently stated at
amortized cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income statement
over the period of the liabilities using the effective interest method.
The liabilities in the balance sheet, long-term and short term debt,
debt in SPEs and senior notes are initially reported at fair value, net
after transactions costs and, subsequently, at amortized cost.
Loan amounts are reported as liabilities in the balance sheet,
where liabilities with a term of over 12 months are reported as long-
term and all others as short-term.
The early redemption of liabilities reduces the outstanding liabili-
ties by a nominal principal loan amount. Any premiums or discounts
are taken up as income.
Derivative financial instruments and hedge accounting
The Stena Group is hedging oil price risk and cash-flow interest rate
risk and foreign exchange risk related to net assets in foreign opera-
tions as well as in highly probable forecasted transactions in foreign
currency. The Group uses options and swaps to hedge oil price risk,
interest rate swaps to hedge interest rate risk, foreign currency forward
contracts to hedge foreign exchange risk.
Derivatives are initially recognized at fair value on the date a deriva-
tive contract is entered into and are subsequently remeasured at their
fair value. The method of recognising the resulting gain or loss de pends
on whether the derivative is designated as a hedging instrument, and if
so, the nature of the item being hedged. The group designates certain
derivatives as either:
(a) hedges of a particular risk associated with a recognised asset or
liability or
(b) a highly probable forecast transaction (cash flow hedge); or
(c) hedges of a net investment in a foreign operation
(net investment hedge).
The group documents at the inception of the transaction the relation-
ship between hedging instruments and hedged items, as well as
its risk management objectives and strategy for undertaking various
hedging transactions. The group also documents its assessment, both
at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions are highly effective in offsetting
changes in fair values or cash flows of hedged items. The effectiveness
of a hedge has to be in the range of 80%–125%.
Currency swap agreements are valued at market rates, unrealised
exchange gains are recognised in the balance sheet as current receiva-
bles, and unrealised exchange losses are presented as current liabilities.
The fair values of various derivative instruments used for hedging
purposes are disclosed in Note 31. Movements on the hedging reserve
in shareholders’ comprehensive income are shown in the Consolidated
Statements of Changes in Shareholders Equity. The full fair value of a
hedging derivative is classified as a non-current asset or liability when
the remaining hedged item is more than 12 months, and as a current
asset or liability when the remaining maturity of the hedged item is
less than 12 months.
Cash flow hedging
For the Stena Group’s hedges of oil price risk in bunker-oil (bunker
hedges), the cash flow interest rate risk in floating rate debt- and
foreign currency risk in highly probable forecasted purchase and/or
sales transactions, cash flow hedge accounting is applied. The hedged
item consists of a highly probable forecast consumption of bunker
fuels, highly probable forecast cash flow in foreign currencies and the
floating interest rate cash outflows of issued debt instruments.
The Group is exposed to the price of bunker fuels for vessel operations
and uses a fixed price contract, swaps and options to hedge its oil price
CONT. NOTE 1
STENA AB 2013 19
risk. Hedging contracts are regularly entered into, so as to match the
underlying cost of delivery of bunker fuel. Hedging instruments (oil
options and futures in the case of bunker hedges and interest rate
swaps in cash of interest rate hedges), forming an effective hedge, are
measured at fair value with changes in fair value regards to the hedged
risk reported through other comprehensive income and is cumulated in
the hedge reserve until the hedged item affects the income statement,
that is, when the purchase takes place or when the interest rate pay-
ment is made. In conjunction with the purchase, when the accumu-
lated fair value of the hedging instruments is removed from the hedg-
ing reserve and is reclassified through other comprehensive income it
is, reported in item direct operating expenses in the income statement
as an adjustment of the cost of bunker fuel for the current period or as
part of interest rate expense in cash of interest rate hedges.
Positive or negative fair values of the derivatives are accounted for
as an other non-current asset or other non-current liability. The short-
term part of the hedged item is accounted for as other current receiva-
bles or other current liabilities.
The accounting for cash flow hedges of interest rate risk and foreign
currency risk in highly probable forecasted transactions in foreign cur-
rency follows the same principles as the above described policy for the
bunker hedges.
Changes in fair value of the hedging instruments are accounted for
through other comprehensive income and are cumulated in the
hedged reserve. The cumulative changes in fair values are reclassified
through other comprehensive income into the income statement in the
same period as the hedged items affects the income statement and is
presented in the same line item as the hedged item.
It is Group’s policy that duration and dates of maturity for financial
instruments which are held and classified as hedge contracts for
interest – and FX exposure should correspond with the underlying
exposure’s dates of maturity.
Results of operations from all types of financial derivative instru-
ments, with the exception of those contracts referring to financial
trading, are reported as an adjustment of the revenue or costs for
the period and for those transactions the contracts are designated
to hedge.
When hedge accounting is terminated but the hedged item is still
expected to occur, the previous cumulated unrealised changes in fair
value are continued to be recognised in the fair value reserve until the
hedge item is recognised in the income statement. Then the change in
fair value is reclassified through other comprehensive income into the
in come statement.
If an underlying asset or liability is sold or redeemed, the pertaining
financial instruments are market valued and the result is reported as an
adjustment of the market or redemption value of the underlying asset
or liability.
Hedging of net investments
Hedging of net investments in foreign operations is reported in the
same manner as cash flow hedges. The gains or losses attributable to
the effective part of the hedging are reported through other compre-
hensive income and is cumulated in the translation reserve. Gains or
losses attributable to the ineffective portion of hedging are directly
reported in the income statement as financial items.
Accumulated gains or losses are reclassified through other compre-
hensive income and reported in the income statement when the for-
eign operations, or portions of these operations, are sold.
Fair value determination of financial instruments
valued at fair value in the balance sheet
(i) Financial instruments listed on an active market
(level 1 measurement)
For financial instruments listed on an active market, fair value is deter-
mined on the basis of the asset’s listed buying current bid-rate on bal-
ance sheet date, with no addition for any transaction costs (for exam-
ple brokerage) on acquisition date. A financial instrument is considered
to be listed on an active market if the listed prices are easily available on
a stock exchange, with a trader, broker, industry organization, company
providing current price information or supervisory authority, and if these
prices represent actual and regular market transactions carried out under
arm’s length conditions. Any future transaction costs from disposals are
not considered. The fair value of financial liabilities is determined on
the basis of the listed selling rate.
(ii) Valuation techniques using observable market data
(level 2 measurement)
If the market for a financial instrument is not active, the Company
determines fair value by utilising a valuation technique. The valuation
techniques employed are based, as far as possible, on market informa-
tion, with company specific information being used to the least extent
possible. The Company calibrates valuation techniques at regular inter-
vals and tests their validity by comparing the outcome of these valu-
ation techniques with prices from observable current market trans-
actions in the same instruments. The valuation models applied are
cali brated so that fair value on initial recognition date amounts to the
transaction price, with changes in fair value subsequently being contin-
uously reported on the basis of changes in the underlying market risk
para meters.
(iii) Valuation techniques using significant unobservable data
(level 3 measurement)
If there are no similar financial instruments on a quoted market and no
observable pricing information from the market, the valuation is based
on an estimated discounted cash flows. Fair value is determined by
hypothesizing what a market price would be if there was a market
i.e. calculated fair value is a prediction instead of an observation.
Offsetting of Financial Instruments
Financial assets and liabilities are accounted at gross amount in the
balance sheet. See Note 31 for information about financial instruments
subject to offsetting, i e where there is a legal right to offset the
accounted amount or is an intention to simultaneously realize the
asset and liability.
GROUP
20 STENA AB 2013
Impairment of financial assets
The Group makes an assessment on each balance sheet date regarding
whether there exists any objective evidence that an impairment require-
ment has arisen for a financial asset or a group of financial assets. In
regards of shares classified as available-for-sale assets, any significant
or extended decline in the fair value of a share to a level below its
acquisition value is regarded as an indication that an impairment
requirement exists.
If such evidence is present for available-for-sale financial assets,
the accumulated loss – calculated as the difference between acquisi-
tion cost and current fair value, less any previous impairment charges
reported in the income statement – is reclassified from equity to the
income statement. Impairment of equity instruments, which is reported
in the income statement, is not reversed through the income statement.
Reversal of impairment of bonds is recorded in the Income Statement
on the same line as the impairment. Bonds are impaired when insol-
vency exists for the counterpart. Reversal of impairment of bonds is
recorded in the Income Statement on the same line as the impairment.
Income taxes
General
The Group’s total tax consists of current tax calculated on taxable
profit and deferred tax. Current tax and changes in deferred tax are
reported in the income statement, with the exception of those
deferred taxes reported directly against other comprehensive income.
Deferred tax includes unutilised deficits from the translation of tax
assessment to current tax rates, and other temporary differences
between book residual value and fiscal residual value. The tax value of
unutilised loss carry-forward is capitalized to the degree it is probable
that this will entail lower tax payments in the near future.
Significant assessments are required from management in the calcu-
lation of income tax liabilities, income tax receivables and deferred tax
for provisions and receivables. This process requires the assessment of
the Group’s tax exposure of current tax and the adoption of temporary
differences created by various taxation and accounting regulations. In
particular, management must assess the likelihood that deferred tax
assets can be settled against surpluses in future tax assessment see
also Note 2.
Current tax
All companies within the Group calculate income tax in accordance
with the tax regulations and ordinances in force in those countries
where the profit is taxed.
Deferred taxes
The Group uses the balance sheet method to calculate deferred taxes.
The balance sheet method implies that deferred tax assets and liabilities
are valued according to the tax rates adopted or announced on bal-
ance sheet date and which are expected to apply to the period in
which the acquisition is executed or the liability settled. The tax rates
are applied to the existing differences between the accounting or fiscal
value of an asset or liability, as well as to loss carry forwards.
These loss carry forwards can be used to reduce future taxable income.
Deferred tax assets are reported to the extent that it is probable
that a sufficient taxable surplus will exist to allow for accounting of
such receivables.
Leasing
Any leasing agreements in which the economic risks and benefits
associated with ownership are essentially transferred to the lessee are
defined as financial leases.
Assets leased under financial leasing agreements are classified in the
consolidated balance sheet as tangible fixed assets. The commitment to
pay future minimum lease payments is reported as long and short-term
liabilities. The assets are depreciated according to plan, while rental
payments are reported as interest and repayments of liabilities.
Other leased assets are reported as operating leasing agreements,
which implies that the leasing charges are expensed over the term of
the lease on the basis of utilisation.
Inventories
Inventories are valued at the lower of acquisition cost, according to the
first-in, first-out method (FIFO), or net realisable value, less deductions
for any obsolescence. The acquisition cost for finished goods, products
in process and work in progress consists of raw materials, direct salaries,
other direct expenses, and related indirect manufacturing expenses
(based on normal manufacturing capacity). The net realisable value is
the estimated sales price in the operating activities, with deductions for
applicable variable selling expenses. Inventories mainly include bunker
fuel, spare parts, merchandise for onboard sale, products for bars and
restaurants onboard the vessels and finished goods and products in pro-
gress. Costs for inventories include transfers from comprehensive income
of any gains or losses from cash flow hedges that comply with the
conditions for hedge accounting as regards purchases of raw material.
Trade debtors
Trade debtors are reported at amortized cost reduced by any provision
for uncollectibility. A write-down of trade debtors is made when there
exist objective evidence that the Group will be unable to receive all
the amounts that are due in accordance with the original conditions
of the receivable. The amount of the allocation consists of the differ-
ence between the asset’s carrying amount and the present value of
estimated future cash flows, discounted by the effective interest rate.
The allocated amount is reported in the income statement.
Accounts payable
Accounts payable are initially reported at fair value and subsequently
at amortized cost.
Trade payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business from suppliers. Accounts
payable are classified as current liabilities if payment is due within one
year or less. If not, they are presented as non-current liabilities.
Cash and cash equivalents
Cash and cash equivalents include cash and bank balances with an
original maturity of three months or less.
CONT. NOTE 1
STENA AB 2013 21
Employee benefits
Post-employment benefits, such as pensions and other benefits, are
predominantly settled by the means of regular payments to independent
authorities or bodies thereby assuming pension commitments towards
the employees – that is to say, through so-called defined contribution
plans. The Company thus pays set fees to a separate legal entity and
has no commitment to pay any further fees. Expenses are charged to
the Group’s income statement, as administration costs, at the rate that
the benefits are earned. The remaining portion of post-employment
benefits consists of defined benefit plans, in which the commitments
remain with the Company. Remuneration to employees and former
employees is paid on the basis of salary at retirement date and number
of years of service. The Company bears the risk for ensuring that the
remuneration undertaken is paid. For defined benefit plans, the
Company’s costs and the value of outstanding commitments on
balance sheet date are calculated on the basis of actuarial assumptions
intended to determine the present value of issued commitments.
The amount recognized in the balance sheet is the net total of the
estimated present value of the commitments and the fair value of the
plan assets, either as a provision or as a long-term financial receivable.
In cases in which a surplus in a plan cannot be fully utilised, only
that portion of the surplus that the company can recover through
decreased future contributions or repayments is recognised. The setoff
of a surplus in a plan against a deficit in another plan is allowed only if
a company has the right to utilise a surplus in a plan to settle a deficit
in another plan, or if the commitments are to be settled on a net basis.
The pension expense and the pension commitment for defined bene-
fit pension plans are calculated annually by independent actuaries.
The commitment consists of the present value of expected future pay-
ments. The most important actuarial assumptions are stated in Note 22.
Actuarial gains and losses may result upon determination of the pre-
sent value of the defined benefit commitment and the fair value of
plan assets. These result either from differences between the actual
return and expected returns, or changes in assumptions. Changes in
the present value of the obligations due to revised actuarial assump-
tions and experience adjustments on the obligation are recorded in
other comprehensive income as remeasurements. The actual return
less calculated interest income on plan assets is also included in the
other comprehensive income as remeasurements. Past-service costs are
recognised immediately in income for the period. The described account-
ing principle is only applicable for group accounting. The parent com-
pany and the subsidiaries apply local rules and accounting principles.
Provisions
Generally, provisions are reported when there is an undertaking as a
result of a historical event, in which it is probable that an outflow of
resources will be required to settle the undertaking and the amount
can be reliably estimated. Provisions are made in the amount that rep-
resents the best estimate of the amount required to settle the existing
commitment on the balance sheet date. Where there is doubt in the
estimates referring to forthcoming events outside the Group’s control,
the actual outcome may differ significantly.
When a commitment does not meet the criteria for recognition in
the balance sheet, it may be considered to comprise a contingent liabil-
ity and be disclosed. These commitments derive from historical events
and their existence will be confirmed only when one or several uncer-
tain future events, which are not entirely within the Group’s control,
take place or fail to take place. Contingent liabilities also include exist-
ing commitments where an outflow of resources is not likely or a suffi-
ciently reliable estimate of the amount cannot be made.
New IFRS issued but not effective for the financial year
beginning 1 January 2013 and not early adopted
The following standards have been adopted by the group for the first
time for the financial year beginning on or after 1 January 2013 and
have a material impact on the group:
– IFRS 10, ”Consolidated financial statements” builds on existing prin-
ciples by identifying the concept of control as the determining factor in
whether an entity should be included within the consolidated financial
statements of the parent company. The standard provides additional
guidance to assist in the determination of control where this is difficult
to assess. The Group will apply IFRS 10 for the accounting year com-
mencing on 1 January 2014. The Group has not yet evaluated the full
impact on the financial report.
– IFRS 11, “Joint arrangements” focuses on the rights and obligations
of the parties to the arrangement rather than its legal form. There are
two types of joint arrangements: joint operations and joint ventures.
Joint operations arise where the investors have rights to the assets and
obligations for the liabilities of an arrangement. A joint operator
accounts for its share of the assets, liabilities, revenue and expenses.
Joint ventures arise where the investors have rights to the net assets of
the arrangement; joint ventures are accounted for under the equity
method. Proportional consolidation of joint arrangements is no longer
permitted. The Group has not yet evaluated the full impact on the
financial report.
– IFRS 12, “Disclosures of interests in other entities” includes the dis-
closure requirements for all forms of interests in other entities, includ-
ing joint arrangements, associates, structured entities and other off
balance sheet vehicles. The Group will apply IFRS 12 for the accounting
year commencing on 1 January 2014. The Group has not yet evaluated
the full impact on the financial report.
– IFRS 9, “Financial instruments”, addresses the classification, measure-
ment and recognition of financial assets and financial liabilities. IFRS 9
was issued in November 2010 and October 2011. It replaces the parts
of IAS 39 that relate to the classification and measurement of financial
instruments. IFRS 9 requires financial assets to be classified into two
measurement categories: those measured as at fair value and those
measured at amortised cost. The determination is made at initial rec-
ognition. The classification depends on the entity’s business model for
managing its financial instruments and the contractual cash flow char-
acteristics of the instrument. For financial liabilities, the standard
retains most of the IAS 39 requirements. The main change is that, in
cases where the fair value option is taken for financial liabilities, the
part of a fair value change due to an entity’s own credit risk is recorded
GROUP
22 STENA AB 2013
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSEstimates and judgements are evaluated continuously and are based
on historical experience and other factors, including expectations of
future events that are considered reasonable under the prevailing
circumstances.
The Board of Directors and Company management make estimates
and assumptions concerning future developments in conjunction with
the preparation of the annual accounts, in accordance with generally
accepted accounting principles. The resulting accounting estimates
will, by definition, rarely be equal to the actual results. Those estima-
tions and assumptions implying a significant risk for material adjust-
ments in the carrying amounts of assets and liabilities during the next
financial period are discussed below.
a) Impairment testing for intangible assets
According to IFRS, intangible assets are to be defined as having either
definite or indefinite lives. Intangible assets with indefinite useful lives
are not amortized but instead tested annually for impairment. Good-
will, according to IFRS, has by definition an indefinite useful life and is
therefore not amortized. Acquired trademarks have been deemed to
have definite useful lives and are amortized over a period of 10 respec-
tively 40 years.
Assets with indefinite useful lives
Goodwill is subject to annual impairment testing according to the
described accounting principle in Note 1. The recoverable amount for
cash-generating units have been determined by calculating value in
use. These calculations require the use of estimates which affects
future cash flows and the determination of a discount rate, see Note 9.
As of 31 December 2013, the net booked value of goodwill amounts
to MSEK 2,372 as compared to MSEK 2,201 as of 31 December 2012.
Assets with definite lives
Acquired trademarks rights to routes and other intangible assets which
are amortized are tested annually for impairment when there are indi-
cators that the intangible asset should be impaired. Important indica-
tors are:
– Significant decline in the economic environment.
– Decline of the operating result compared to historic and budgeted
operating results.
See also Note 9.
in other comprehensive income rather than the income statement,
unless this creates an accounting mismatch. The group is yet to assess
IFRS 9’s full impact. The Group will also consider the impact of the
remaining phases of IFRS 9 when completed by the Board.
There are no other IFRSs or IFRIC interpretations that are not yet eff-
ect ive that would be expected to have a material impact on the Group.
Parent Company accounting principles
The Parent Company applies the Swedish Annual Accounts Act and the
Swedish Financial Reporting Board’s recommendation RFR 2, Accounting
for Legal Entities.
The Parent Company primarily applies the principles regarding con-
solidated financial statements described above. The discrepancies
arising between the principles applied by the Parent Company and the
Group result from limitations in the possibilities of applying IFRS in the
Parent Company due to the Annual Accounts Act and, in some cases,
due to taxation legislation.
The most significant differences between the accounting principles
applied by the Group and the Parent Company are shown below.
The Parent Company applies RFR 2, which includes the exception in
the application of IAS 39, which concerns accounting and valuation of
financial contracts of guarantee in favour of subsidiaries and associated
companies. Available for sale shares are accounted according to ÅRL
4:14d. Valuation changes in available for sale shares are accounted
for in the finance net in the Income Statement. Hedge accounting is
not applied.
Shares in subsidiaries are recorded at acquisition cost, reduced by
any impairment.
Group contributions are accounted for in the income statement
after the financial net.
In the Parent Company, in accordance with the Swedish Annual
Accounts Act, the equity is split between restricted and unrestricted equity.
CONT. NOTE 1
STENA AB 2013 23
As of 31 December 2013, the net book value of trademarks right to
routes and other intangible assets amounts to MSEK 1,783, as com-
pared to MSEK 1,708 as of 31 December 2012.
b) Impairment testing of vessels
Twice a year, or if an indication of an impairment requirement exists,
the Group makes an assessment of whether or not a write-down
requirement exists as regards the value of vessels. See further the
description under Note 1, “Impairment of non-financial assets”.
The recoverable amount is determined on the basis of external valu-
ations and calculations of value in use where impairment indications
has been found. These calculations are based on estimated future cash
flows.
c) Retirement benefits
The Group sponsors defined benefit pension plans in the United Kingdom,
Sweden and the Netherlands. The pension calculations are based on
actuarial assumptions about e g discount rate, mortality rate, inflation
and future pension and salary increases. Changes in assumptions directly
affect the present value of the defined benefit obligation and costs and
revenues associated to pensions. An analysis of sensitivity of the most
essential assumptions is presented in Note 22, Employee benefits.
d) Deferred taxes
In the preparation of the financial statements, Stena prepares a cal cu-
lation of income tax, including a calculation of every fiscal area in
which the Group operates, as well as of deferred taxes attributable
to temporary differences.
Deferred tax assets that are primarily attributable to loss carry for-
wards and temporary differences are reported if the tax assets can be
expected to be recovered through future taxable income. Changes in
the assumptions regarding forecast future taxable income, as well as
changes in tax rates, may result in significant differences in the valua-
tion of deferred taxes.
e) Provisions
Generally, provisions are reported when there is an undertaking as
the result of a historical event, where it is likely that an outflow of
resources will be required to settle the undertaking and a reliable
amount can be reliably estimated.
Provisions are made in the amount that represents the best estimate
of the amount required to settle the existing commitment on balance
sheet date. Where there is doubt in the estimates referring to forth-
coming events outside the Group’s control, the actual outcome may
differ significantly.
When a commitment does not meet the criteria for reporting in the
balance sheet, the amount can be considered to comprise a contingent
liability and be disclosed. These commitments originate from events that
have taken place and their existence will be confirmed only when one
or several uncertain future events, which do not lie entirely within the
Group’s control, take place or fail to take place. Contingent liabilities also
include present commitments where an outflow of resources is not likely
or a sufficiently reliable estimate of the amount cannot be made.
f) Fair value of financial instruments
The Group calculates discounted cash flows for different available-for-
sale financial assets which are not traded on an active market.
g) Valuation of investment properties
The fair value of an investment property can only assertively be set at
the date of sale. The valuation of investment properties is based on
accepted principles and assumptions, therefore, the fair value is not the
exact value but an estimate. In a normal market the fair value of a
property is within a range of +/–5% to 10% and in a less liquid market
the range can be larger. For the Group a fair value within the range of
+/–5% is equal to +/– MSEK 1,392.
GROUP
24 STENA AB 2013
We are active internationally, primarily in the areas of ferry operations,
offshore drilling, shipping, real estate and new businesses. There are
no significant transactions between the operating segments.
Ferry operations are conducted in Scandinavia, the North Sea, the Irish
Sea and the Baltic Sea under the “Stena Line”, Scandlines and HH fer-
ries brand name in Scandinavia, the UK, Germany, Estonia, Poland, the
Netherlands and Ireland. We are one of the world’s largest ferry opera-
tors. The business currently consists of 22 strategically located ferry
routes, 40 vessels, and six ports in Scandinavia, the United Kingdom
and the Netherlands.
Ferry revenues are primarily generated from: (i) travel, which con-
sists primarily of ticket sales for passengers and private cars, package
tours and hotel sales; (ii) onboard sales, which consists primarily of
cabin occupancy, retail sales, restaurants, bars, arcades, gaming and,
on our Norway–Denmark route, duty and tax free sales; and (iii) freight,
which consists primarily of trailer and truck transportation. Direct oper-
ating expenses for ferry operations consist mainly of personnel costs,
costs of goods sold on the vessels, bunker fuel costs, vessel charter
costs, commissions, package tour costs and other related costs.
Drilling is operated through Stena Drilling, headquartered in Aberdeen,
Scotland. We are one of the world’s leading companies in the develop-
ment and operation of offshore drilling rigs and drillships. We currently
own and operate two third generation and one fifth generation semi-
submersible drilling rigs and four sixth generation ultra-deepwater
drillships whereof one ice-classed vessel.
Drilling revenues consist of charter hires for drilling rigs and drillships.
Direct operating expenses for drilling consist primarily of personnel
costs, insurance, maintenance and catering costs.
Shipping operations consists of the ownership and chartering of crude
oil and petroleum product tankers and Roll-on/Roll-off vessels. To sup-
port these activities, we are also engaged in the design, purchase, sale,
management and crewing of such vessels.
Stena Bulk is one of the world’s leading tanker shipping companies. We
develop pioneering tankers to meet the customers’ need for safe trans-
portation and innovative logistics. We currently control a fleet of approxi-
mately 80 tankers and are active in all segments of the tanker market.
Stena RoRo provides vessels, innovative solutions and project manage-
ment. Our customers are operators and ship owners around the world.
Northern Marine Management (“NMM”) is the Company’s interna-
tional ship management company based in Glasgow, Scotland, with a
world-wide customer base. With an extensive portfolio of clients and
a wide range of vessels under management, NMM is a market leader
in quality services. NMM operates a diverse high-tech fleet approxi-
mately 100 ships from its worldwide network of offices including
Aberdeen, Gothenburg, St Petersburg, Hamburg, Houston, Manila,
Mumbai, Singapore and Glasgow.
Stena Teknik is a common resource for all maritime areas within our
group. The operation consists of new construction and conversion pro-
jects, marine technical advice and purchasing, as well as research and
development within marine areas.
3. SEGMENT INFORMATION
Shipping revenues consist primarily of charter hires for owned and
chartered in vessels and management fees for vessels managed by us.
Direct operating expenses for shipping consist primarily of vessel
charter costs, fuel costs, personnel costs, insurance and other related
vessel costs.
Real Estate operations relate to investments through unrestricted
subsidiaries in residential and commercial real estate. The properties
are mainly located in Sweden and the Netherlands.
We own a total of 2.0 million sqm, mainly in Sweden, about
192,000 sqm are managed on behalf of affiliated companies. The
property portfolio consists of approximately 20,700 apartments and
commercial properties. We are one of Sweden’s largest privately-
owned property companies.
Real estate revenues consist of rents for properties owned and
management fees for properties managed by us. Real estate expenses
consist primarily of maintenance, heating and personnel costs.
New Businesses – Adactum include long-term investments in listed as
well as private companies, in new businesses outside our traditional
lines of business through our unrestricted subsidiary Stena Adactum.
Our objective is to create value in industries outside of our core busi-
ness by building strong, profitable companies that can create platforms
for new business opportunities within the group. As of 31 December
2013 Stena Adactum had direct investments in five private companies,
(of which 4 are fully owned and 1 owned to 63%) and two listed asso-
ciated companies. The five subsidiaries are all operating in different
range of businesses:
• “Blomsterlandet” through which the Company is creating a chain for
gardening products of retailers with one of Sweden’s most extensive
range of indoor and outdoor plants.
• “Envac” which operates automated household and municipal waste
collection systems with activities in 30 countries.
• “Stena Renewable” through which the Company commence success-
ful operations of Sweden’s largest land-based wind power generating
plan, in Sweden. In total 86 wind power systems (windmills) have
been installed and are in operation.
• “Ballingslöv” which is an international group in the field of kitchens,
bathrooms and storage products with an ambition to become one of
the leading players in the European market. The Company has one
manufacturing site in Ballingslöv, one in the United Kingdom and five
in Denmark.
• “Mediatec” is one of the leading companies in Europe within Media
technology such as big screens and other technical solutions
at fairs and events.
Other operations includes non-allocated central administration costs.
Primary measures of profitability for all these segments are “Income
from operations” and “EBITDA”. These measurements are also the
information reported to the Company’s Chief operating decision-
maker. In the Group this function has been identified as Stena AB’s
Board of Directors, which make strategic decisions.
STENA AB 2013 25
Income from operations by segment
Years ended 31 December
MSEK 20123) 2013
Ferry operations
Operations 36 270
Net gain on sale of vessels 2
Total ferry operations 36 272
Drilling
Operations 1,761 1,561
Net gain on sale of vessels 14
Total Drilling 1,775 1,561
Shipping operations
RoRo operations (41) (65)
Net gain on sale of vessels (5) 23
Total RoRo (46) (42)
Tanker operations (38) (99)
Impairment charges1) (132)
Net gain on sale of vessels 15
Total Tanker (155) (99)
LNG operations 329 412
Total LNG 329 412
Other shipping operations (18) (118)
Total shipping2) 110 153
Property
Operations 1,406 1,512
Net valuation on investment properties 14 224
Net gain on sale of investment properties 66 51
Total property 1,486 1,787
New Businesses – Adactum
Operations 319 440
Total New Businesses – Adactum 319 440
Other (325) (326)
Income from operations 3,401 3,887
1) Impairment charges of MSEK 132 in 2012, to estimated value in use, which are included in the operating expenses for the tanker operation, were recorded for the shares in the associated company Paradise Holding
2) Income from operations include result from joint ventures (see Note 15) of MSEK 57 and MSEK 94 in 20123) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
GROUP
26 STENA AB 2013
CONT. NOTE 3 Reconciliation between EBITDA and Income from operations by segment
Years ended 31 december
MSEK 20121) 2013
Ferry operations EBITDA 1,274 1,525
Depreciation and amortization (1,238) (1,253)
Income from operation 36 272
Drilling EBITDA 3,424 3,335
Depreciation and amortization (1,649) (1,774)
Income from operation 1,775 1,561
Shipping operations EBITDA 768 856
Depreciation and amortization (658) (703)
Income from operation 110 153
Property EBITDA 1,477 1,568
Net valuation of investment properties 14 224
Depreciation and amortization (5) (5)
Income from operation 1,486 1,787
New Businesses – EBITDA 506 816
Adactum Depreciation and amortization (187) (376)
Income from operation 319 440
Other EBITDA (313) (301)
Depreciation and amortization (12) (25)
Income from operation (325) (326)
Total EBITDA 7,136 7,799
Net valuation of investment properties 14 224
Depreciation and amortization (3,749) (4,136)
Income from operation 3,401 3,887
Depreciation and amortization by segment
Years ended 31 December
MSEK 2012 2013
Ferry operations 1,238 1,253
Drilling 1,649 1,774
Shipping operations RoRo vessels 266 282
Tanker operations 118 139
LNG 263 254
Other shipping 11 28
Total shipping 658 703
Property 5 5
New Businesses – Adactum 187 376
Other 12 25
Total 3,749 4,136
1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
STENA AB 2013 27
Depreciation and amortization expense consists of the following components
Years ended 31 December
MSEK 2012 2013
Vessels 3,070 3,330
Equipment 422 498
Buildings and land 39 42
Ports 82 119
Total tangible fixed assets 3,613 3,989
Intangible assets 136 147
Total 3,749 4,136
Depreciation and amortization expense includes amorti zation of assets under capitalized leases amounting to MSEK 39 and MSEK 681 for the years
ended 31 December 2013, and 2012, respectively.
Investments in tangible fixed assets by segment
Years ended 31 December
MSEK 2012 2013
Ferry operations 1,655 344
Drilling 5,895 3,361
Shipping operations RoRo vessels 616 674
Tanker operations 179 415
LNG operations 51 19
Other shipping 28 22
Total shipping 874 1,130
Property 1,405 1,104
New Businesses – Adactum 1,247 1,080
Other 1 33
Total 11,077 7,052
Total assets by segment
As of 31 December
MSEK 20121) 2013
Ferry operations 17,779 17,917
Drilling 26,060 27,659
Shipping operations RoRo operations 2,852 2,725
Tanker operations 2,522 2,827
LNG operations 4,325 4,037
Other shipping operations 633 724
Total shipping 10,332 10,313
Property 28,237 29,969
New Businesses – Adactum 8,556 9,534
Other 13,936 12,820
Total 104,900 108,212
1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
GROUP
28 STENA AB 2013
Geographic information
The Groups shipping operations within Stena RoRo, Stena LNG and
Stena Bulk are mainly conducted between ports all over the world by
short- and long-term contracts. These activities are not allocated to a
geographic area. The ferry operations and the property operations are
conducted in Scandinavia and the rest of Europe. The Company’s drilling
operations are conducted in the North Sea (Scandinavia and Europe,
respectively) but also in markets outside Europe. The Company´s invest-
ments in SPEs are included in Other markets.
Total revenue per geographic area
Years ended 31 December
MSEK 2012 2013
Scandinavia 12,469 13,164
Europe, other 8,510 8,085
Other markets 3,983 6,594
Shipping 2,426 2,397
Total 27,388 30,240
Total assets per geographic area
As of 31 December
MSEK 20121) 2013
Scandinavia 36,682 39,492
Europe, other 30,070 29,634
Other markets 11,773 12,610
Shipping 26,375 26,476
Total 104,900 108,212
1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
4. SALE OF TANGIBLE FIXED ASSETSYears ended 31 December
MSEK 2012 2013
Vessels Cash proceeds from sale of vessels 163 335
Net book value of vessels sold (139) (310)
Net gain on sale of vessels 24 25
Investment properties Cash proceeds from sale of properties 445 295
Net book value of properties sold (379) (244)
Net gain on sale of properties 66 51
Total Cash proceeds from sale of vessels and property 608 630
Net book value of assets sold (518) (554)
Total gain 90 76
Total cash proceeds include sales costs of MSEK 2 and MSEK 4, which is not included on the line “cash proceeds from sale of tangible fixed assets”
in the consolidated statement of cashflow for 2013 and 2012, respectively. Furthermore, the vessel Stena Baltica was sold as a hire-purchase contract
during 2013 which also is an explanation by comparison with the consolidated statement of cashflows, MSEK 155.
CONT. NOTE 3
STENA AB 2013 29
5. ADMINISTRATIVE EXPENSES
For the year ended 31 December 2013, administrative expenses include R&D costs amounting to MSEK 47. For the year ended 31 December 2012,
administrative expenses include R&D costs amounting to MSEK 63. Fees and other remuneration to auditors and advisors are set forth below.
Years ended 31 December
Fees to the auditors 2012 2013
Audit fees 26 20
Audit-related fees 2
Tax advisor services 20 2
Other fees 2 1
Total 50 23
Audit fees to other auditing firms 1
Group Total 50 24
6. INVESTMENT IN ASSOCIATED COMPANIESInvestments in associated companies relate to major strategic invest-
ments. Results from other associated companies, having a more direct
link to normal operations, are included in direct operating expenses.
See Note 3.
As of 31 December 2013, the investment in Midsona AB (publ) rep-
resents 23.5% of the capital and 25.1% of the votes. The total market
value of the investment as of 31 December 2013 was MSEK 155. As of
31 December 2012 the total share of the market value was MSEK 72.
The Company´s share of results amounted to MSEK 12 in 2013 and
MSEK 9 in 2012.
As of 31 December 2013, the investment in Gunnebo AB (publ)
represents 26.2% of the capital and the votes. The market value of the
investment as of 31 December 2013 and 2012 was MSEK 794 and
MSEK 486, respectively. The Company´s share of results in 2013
amounted to MSEK 27 and MSEK 5 in 2012.
In December 2012 further 9.5% were acquired to a share of 52%
in the investment in MPP Mediatec Group and the company is, as an
effect of the transaction, accounted for as subsidiary.
After further acquisition of shares the total share of the company
was 57.7% as of 31 December 2012. As of 31 December 2012
Mediatec is accounted for as a subsidiary. The Company´s share of
results in 2012, until the company became a subsidiary was MSEK 11.
The investments in Midelfart Sonesson and Gunnebo are pledged as
security for bank debt.
In 2011, the subsidiary Stena Investment Sarl invested MSEK 106 in
Wisent Oil & Gas Plc (renamed from Silurian Hallwood Plc), which is an
oil exploration company. The value of the investment as of 31 Decem-
ber 2011 was MGBP 10. During 2012 Stena Investment invested further
MGBP 7. During 2013 the shares have been written down by MSEK 90.
The Company´s share of results in 2013 amounted to MSEK (49) and
MSEK (7) in 2012. As per 31 December 2013 and 2012 the investment
represents 30% of the capital and votes.
Audit fees relate to examination of the annual report, financial account-
ing and the administration by the Board and the President as well as
other tasks related to the duties of a company auditor. Tax services
include both tax consultancy and tax compliance services. All other
tasks are defined as other fees.
The fees for 2013 refer to PWC whereas the fees for 2012 refer
to KPMG.
GROUP
30 STENA AB 2013
Investments in associated companies
As of 31 December
MSEK 2012 2013
Opening balance 1,374 1,073
Investments 67
Reclassification to subsidiary (351)
Share of profit 18 (3)
Write down (48)
Exchange differences (15) (27)
Other changes (20) (61)
Closing balance 1,073 934
For the years ended 31 December 2013 and 2012, Investments in associated companies include Goodwill amounting to MSEK 342, respectively.
The Group’s share of the results of its associates and its total assets (including goodwill) and liabilities are as follows:
MSEKCountry of
incorporation Assets Liabilities Revenues Profit/(loss) % Interest held Group result
2012
Midsona AB (publ) Sweden 1,184 498 869 35 23% 9
Gunnebo AB (publ) Sweden 4,252 2,600 5,236 22 26% 5
MPP Mediatec Group AB Sweden 1) 1) 1) 1) 1) 11
Wisent Oil & Gas Plc Jersey 202 12 0 (13) 30% (7)
Total 18
MSEKCountry of
incorporation Assets Liabilities Revenues Profit/(loss) % Interest held Group result
2013
Midsona AB (publ) Sweden 1,172 462 916 51 23% 12
Gunnebo AB (publ) Sweden 4,335 2,872 5,271 102 26% 27
Wisent Oil & Gas Plc Jersey 68 13 0 (141) 30% (90)
Total (51)
1) Accounted for as a subsidiary as of 31 December 2013
CONT. NOTE 6
STENA AB 2013 31
The gain on termination of leases in 2012 relate partly to the financ-
ing of the DrillMAX vessel Stena Carron and partly to termination
of other financial leases.
7. TOTAL FINANCE NET Years ended 31 December
MSEK 2012 2013
Share of associated companies’ result (please find Note 6) 18 (51)
Dividends received from share holdings 82 48
Dividends received from financial fixed assets 17 12
Total Dividends 99 60
Realized result from sale of trading shares (8) (52)
Realized result from sale of available sale shares 12 70
Realized result from sale of financial instruments measured at fair value through the income statement 74 223
Realized result from security investments (20) 119
Unrealized result from sale of trading shares 17 20
Unrealized result from sale of financial instruments measured at fair value through the income statement 119 64
Gain on termination of leases 291
Total Gain (loss) on sale of securities 485 444
Interest income from investments in SPEs 198 207
Other interest income 240 282
Total Interest income 438 489
Interest expense from investments in SPEs (55) (127)
Other Interest expense (2,302) (2,259)
Total Interest expense (2,357) (2,386)
Exchange differences pertaining to trading operations 30 (4)
Translation difference (95) (37)
Total Foreign Exchange gains (65) (41)
Deferred finance costs (104) (97)
Commitment fees (39) (38)
Bank charges (44) (23)
Capitalized internal guarantee fees 8
Other financial items (26) (26)
Other financial expenses from investments in SPE’s (37) (70)
Total other financial income/expense (242) (254)
Finance net (1,624) (1,739)
There has been no material inefficiency in our cash-flow hedges.
Deferred financing costs include costs for the issuances of Senior
Notes, revolving credit facilities, finance leases etc. See Note 30.
GROUP
32 STENA AB 2013
8. INCOME TAXES
Income before taxes was distributed geographically as follows:
Years ended 31 December
MSEK 20121) 2013
Sweden 15 86
Rest of the world 1,762 2,062
Total income before taxes 1,777 2,148
Current tax
For the period, Sweden (4) (19)
Adjustments previous years, Sweden (35)
For the period, rest of the world (202) (213)
Adjustments previous years, rest of the world (31) (55)
Total current tax (272) (287)
Deferred tax
For the period, Sweden 198 234
Adjustments previous years, Sweden 2 (1)
For the period, rest of the world 3 (14)
Adjustments previous years, rest of the world 27 (170)
Total deferred tax 230 49
Total income taxes (42) (238)
1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
The reconciliation of the difference between the statutory tax rate in Sweden
and the effective tax rate is explained below:
Years ended 31 December
Percentage 2012 2013
Statutory income tax rate 26 22
Differences in foreign tax rates (23) 7
Taxes related to previous years 3 1
Increase in loss carried forward without recognition of deferred tax (5)
Expenses not deductible 1 1
Non-taxable income (1) (2)
Tax losses not recognized 9 1
Restructuring (9) (18)
Change in tax rate, net (11) (1)
Other 6 5
Effective income tax rate 1 11
The principle reason why the effective income tax rate is lower than the statutory income tax rate for 2013 and 2012 is that the inter national ship-
ping activities and capital gains, sales of financial instruments, are to a large extent tax exempt in many countries. During the year the Company have
reversed provisions for law suits that has gained legal force.
STENA AB 2013 33
9. INTANGIBLE FIXED ASSETS
MSEK GoodwillTrade-marks
Rights to routes
Distribution agreements
Customer relations
IT invest-ments1)
Other in -tangible
assets1) Total
Acquisition costs
Opening balance as per 1 January 2012 1,556 834 354 513 10 681 3,948
Purchase of company (Note 29) 481 74 555
Additions 179 308 77 564
Disposals (6) (6)
Transfers 156 (199) 5 (38)
Translation differences (33) (4) (6) (4) (47)
Closing balance as of 31 December 2012 2,333 830 730 314 10 759 4,976
Additions 231 98 46 375
Disposals (39) (39)
Transfers (85) 61 10 (14)
Translation differences 26 3 12 1 1 43
Closing balance as of 31 December 2013 2,505 833 803 314 10 829 47 5,341
Accumulated amortization
Opening balance as per 1 January 2012 (52) (85) (9) (200) (8) (545) (899)
Purchase of company (Note 29) (82) (82)
Translation differences (2) 1 1 5 5
Disposals 4 4
Transfers 42 (4) 38
Current year amortization (22) (23) (25) (2) (61) (133)
Closing balance as of 31 December 2012 (132) (106) (32) (182) (10) (605) (1,067)
Translation differences (4) (1) (2) (1) (8)
Disposals 33 33
Transfers 3 3
Current year amortization (22) (45) (25) (55) (147)
Closing balance as of 31 December 2013 (133) (129) (77) (207) (10) (629) (1) (1,186)
Net book value as of 31 December 2012 2,201 724 698 132 0 154 3,909
Net book value as of 31 December 2013 2,372 704 726 107 0 200 46 4,155
1) Reported as other intangible assets in the balance sheet
GROUP
34 STENA AB 2013
Goodwill is allocated to the Group’s cash-generating units
(CGUs) identified by segment. A segment-level summary of
the goodwill allocation is presented below.
As of 31 December
MSEK 2012 2013
New businesses – Adactum 1,697 1,903
Ferry operations 504 430
Other 39
Total 2,201 2,372
Impairment testing of goodwill is conducted annually and whenever
conditions indicate that impairment may be necessary. The recovera-
ble value for cash generating units is based on the calculated value in
use. The key assumptions used for calculated value in use are discount
rate and growth rate.
The discount rate before tax used in Adactum was 7–9%. The growth
rate for revenues used in Adactum has been individually assessed for
each company and year until 2022. During this period growth rate
fluctuates between 3–8% until 2016 and 2% after 2016 until 2022. For
subsequent periods growth rate for revenues is estimated to have
a growth corresponding to 1.5%. This growth rate is based on reasona-
ble prudence. These assumptions are based on existing operation.
An extended time for prognosis can be verified as all companies
have been in operation for a substantial time and have a well-estab-
lished business model. Adactum has a long-term ownership perspec-
tive and are working to further develop the companies through active
ownership and financial strength without any disposals of companies.
The same principles were applied within Adactum last year.
Within Ferry Operations impairment testing of goodwill for ferry lines
and for the travel operation within Stena Line Travel Group has been
performed. The discount rate used for Stena Line Travel Group was
7.5% before tax and the growth rate for revenues has been individually
assessed for each company. The average growth rate used was 4%.
Goodwill that has been acquired within ferry operations during the
fourth quarter of 2012 have been tested for each route. The tax dis-
count rate for ferry routes was 6% while the growth rate has been
deemed to be 2%, for the next five years. For the next period the
growth rate varies between 0–2%.
As of 31 December 2013, the recoverable values based on value in
use of the cash generating units were found not to fall short of their
net booked values in any test and therefore the related goodwill was
not impaired.
A number of sensitivity tests have been made in order to examine
possible need for impairment. For these sensitivity tests the used dis-
count rate was 1% higher than above described discount rate. Also
when applying these estimates no goodwill impairment is indicated
for material cash generating units.
Trademarks
Trademarks are mainly related to the segment Adactum. During 2013
impairment testing has been performed for all trademarks within
Adactum. The tests have been performed according to the same
procedure as for establishing the recoverable value for goodwill, see
description above. The discount rate before tax used for the individual
trademarks was 7.5%. The growth rate for revenues used until year
2016 was 3–5%. For subsequent periods growth rate for revenues is
estimated to have a growth corresponding to 1%. None of the per-
formed tests indicated any impairment for trademarks. The trademarks
are annually depreciated.
CONT. NOTE 9
STENA AB 2013 35
10. TANGIBLE FIXED ASSETS
MSEK VesselsConstruction in
progressOther
equipment1) Windmills1)Buildings and land Total
Acquisition costs
Opening balance as per 1 January 2012 49,688 5,290 4,366 693 1,543 61,580
Purchase of company (Note 29) 160 1,564 54 1,778
Additions 2,615 6,641 279 57 76 9,668
Disposals (372) (2) (343) (517) (14) (1,248)
Transfers 8,302 (8,820) (25) 274 (101) (370)
Translation differences (2,063) (462) (149) (36) (2 ,710)
Closing balance as of 31 December 2012 58,330 2,647 5,692 507 1,522 68,698
Purchase of company (Note 29) 258 74 63 395
Additions 2,510 2,482 243 754 56 6,045
Disposals (2,211) (161) (110) (29) (12) (2,523)
Transfers 1,089 (2,484) (174) 1,085 (19) (503)
Translation differences (35) (34) 22 17 (30)
Closing balance as of 31 December 2013 59,941 2,450 5,747 2,317 1,627 72,082
Accumulated depreciation
Opening balance as per 1 January 2012 (15,503) (2,652) (104) (604) (18,863)
Purchase of company (Note 29) (132) (1,115) (2) (1,249)
Disposals 233 105 40 378
Translation differences 641 81 16 738
Transfers 209 128 (1) 336
Current year depreciation (3,070) (373) (49) (39) (3,531)
Closing balance as of 31 December 2012 (17 622) (3,826) (113) (630) (22,191)
Purchase of company (Note 29) (46) (41) (3) (90)
Disposals 1,990 101 16 5 2,112
Translation differences 28 (37) (9) (18)
Transfers (5) 264 14 273
Current year depreciation (3,330) (392) (106) (42) (3,870)
Closing balance as of 31 December 2013 (18,985) (3,931) (203) (665) (23,784)
Net book value as of 31 December 2012 40,708 2,647 1,866 394 892 46,507
Closing balance as of 31 December 2013 40,956 2,450 1,816 2,114 962 48,298
1) Recorded as equipment in the balance sheet
The insured value of the whole vessel fleet as of 31 December 2013 was
MSEK 52,837, as compared to MSEK 50,247 as of 31 December 2012.
As of 31 December 2013, construction in progress includes new
orders of two IMOMAX-vessels and two drilling rigs. The drilling rigs
were ordered from Samsung in South Korea on the 26 June 2013 for
delivery in March and September 2016, with an option to cancel one
rig. The estimated cost is MUSD 800 per unit. Construction in progress
also includes investments in windmills in Sweden.
Altogether the vessel orders at Samsung valued to MSEK 5,065. In
the closing value for construction in progress an advance of MSEK 752
to the shipyard and MSEK 227 for windmill projects are included. Capi-
talized interest of MSEK 65 and other capitalized costs of MSEK 1,406
are also included.
The amount of interest capitalized on vessel projects and on vessels
was MSEK 51 and MSEK 55 for the years ended 31 December 2013
and 2012, respectively. The amount of interest capitalized on wind mill
projects and on windmills was MSEK 26 and MSEK 27 for the years
ended 31 December 2013 and 2012, respectively.
Valuation certificates issued on 31 December 2013 by independent
valuation institutions indicate that the values in the vessel fleet exceeds
net book value with MSEK 5,315, as compared to MSEK 6,809 as
of 31 December 2012. Part of the vessels net booked value as of
31 December 2013 refers to vessels held in accordance with financial
leasing agreements, see Note 25.
GROUP
36 STENA AB 2013
11. PORTS
MSEK Ports
Acquisition costs
Opening balance 2,643
Additions 5
Transfers 111
Translation differences (21)
Closing balance as of 31 December 2012 2,738
Revaluation 122
Additions 1
Disposal (2)
Transfers 461
Translation differences 25
Closing balance as of 31 December 2013 3,345
Accumulated depreciation
Opening balance (848)
Translation differences 8
Current year depreciation (82)
Closing balance as of 31 December 2012 (922)
Revaluation 1,241
Translation differences (13)
Disposals 2
Transfers (273)
Current year depreciation (119)
Closing balance as of 31 December 2013 (84)
Net book value as of 31 December 2012 1,816
Net book value as of 31 December 2013 3,261
The group owns ports in Sweden, the United Kingdom and the
Netherlands. Ports are used in our own regime and includes ports,
terminal buildings etc.
As of 1 January 2013 the Group changed accounting principle in
regards to valuation of ports from cost method to revaluation method.
It had an effect of MSEK 1,363 increase in value of ports, MSEK 122
allocated at cost and MSEK 1,241 allocated at depreciation. In conjunc-
tion to the revaluation, a transfer from equipment and land to ports
was made in regards to the port located in the Netherlands. The net
value of the transfer was MSEK 188.
In determining fair value independent assessors was used for the
ports in the United Kingdom and the Netherlands. In determining fair
value of ports in Sweden an internal valuation model was used.
The closing balance as of 31 December 2013 had been MSEK 1,939
if ports had been valued at cost.
STENA AB 2013 37
12. INVESTMENT PROPERTIES
As of 31 December
MSEK 2012 2013
Opening balance as of 1 January 25,429 26,367
Additions 1,193 809
Reclassification construction in progress 244 289
Disposals (378) (239)
Unrealized fair value adjustments 14 224
Exchange differences (135) 176
Fair value as of 31 December 26,367 27,626
Investment Properties – Construction in progress
Opening balance as of 1 January 324 291
Additions 211 203
Reclassification construction in progress (244) (289)
Closing balance at fair value 291 205
Total fair value of Investment properties as of 31 December 26,658 27,831
Investment Property – impact on the result
For the years ended 31 December
MSEK 2012 2013
Rental Income 2,357 2,396
Direct cost (847) (848)
Valuation of investment properties 14 224
Total 1,524 1,772
Investment properties are residential and commercial properties.
Valuation of the investment properties is performed at year end
and at each quarter by assessing each individual property’s fair value.
The valuation method is based on the direct yield method and the net
operating income is based on market rental income with a deduction
for rental vacancy level of 0 to 1% for residential properties and 0 to
15% for commercial properties. This assessment consideration of type
of property, technical standard and type of construction has been
taken. The assessment of the yield requirements is based on informa-
tion obtained about the market yield requirements in respect of the
purchase and sale of comparable properties in similar locations.
At the valuation as of 31 December 2013, the following rates of
returns have been used.
Rate of return, %
Location Residential Commercial
Sweden 2.50–6.00 5.00–8.00
Eurozon n/a 6.00–12.00
The estimated market value of investment properties is MSEK 27,831
of which MSEK 24,297 are attributable to Swedish properties. Last
year the estimated market value of investment properties was MSEK
26,658, of which MSEK 23,055 was attributable to Swedish properties.
To guarantee the valuation, external valuations have been obtained
from DTZ. The external valuations cover 20% of the total property
value in absolute terms but these selected properties represent 70%
of the properties in terms of property types, technical standard and
building design. A comparision between the internal and external valu-
ations reveals that the internal valuation are within a normal +/– 10%
range compared to the external valuation.
GROUP
38 STENA AB 2013
13. INVESTMENT IN SPEs
Since late 2002, the Company has invested in variable interest entities
(“SPEs”). The SPEs have invested in different debt securities, in cluding
high yield bonds. The SPEs have issued debt securities which are
secured by their assets.
The investments in the CDO (“Collateral Debt Obligation”) and CLO
(“Collateral Loan Obligation”) started in December 2002 (CDO2002),
August 2003 (CLO2004) and October 2005 (CLO2006). They were
established during 2003, June 2004 and August 2006. The third CLO
was started in November 2006 (CLO2007) but not fully established and
has been gradually unwound. A new fourth CLO was started in October
2012 (CLO2012) and was established in March 2013. The Company’s
risk is limited to its equity investment.
The first investment in the CDO2002 (“Collateral Debt Obligation”)
was unwound during 2011. The CLO2004 and CLO2007 are both
expected to be unwound during 2014.
There are other investors except Stena in the “SPEs”. The non-
controlling interest share of the results is deducted in the income
statement while the minority part of total equity is shown as a liability
in the balance sheet.
The non- controlling interest for the remaining CLOs has been partly
reduced during 2012, now being 5% and 5% respectively. The corre-
sponding amounts for 2012 was 15.4% and 11.3% respectively. The
non-controlling interest in CLO2007 is 5%. The latest CLO will have a
non-controlling interest of 20%.
The assets and liabilities of the SPEs are consolidated in our financial
statements, although the debt of the SPEs is a non-recourse to Stena.
The consolidation of the SPEs has had the following impact:
Years ended
MSEK 2012 2013
Earnings attributed to Equity holders of the Parent Company 84 115
Non-controlling interest 4 14
Net income 88 129
As of 31 December
2012 2013
Investments in SPEs1) 5,170 4,311
Short-term investments2) 619 385
Other assets 66 58
Total assets 5,856 4,754
Shareholders’ equity 453 612
Minority interest 26 27
Total shareholders’ equity 479 639
Debt of SPEs3) 3,974 3,944
Other debt 1,403 171
Total liabilities 5,377 4,115
Total shareholders’ equity and liabilities 5,856 4,754
As of 31 December
MSEK 2012 2013
The investment in SPEs are classified as follows:Corporate Fixed Income Bonds are classified as “available for sale”and are revalued in other comprehensive income 447 219
Senior Bank Debt are classified as “held to maturity” and are kept at cost in the balance sheet. 4,723 4,092
Total 5,170 4,311
1) Investment in SPEs are recorded at market value with gains and losses recorded to profit and loss. Investments in these securities are recorded to market value with gains and losses recorded to comprehensive income. The corporate loans are recorded at cost in the balance sheet and tested for impairment at each reporting date. The market value of the corporate loans is MSEK 39 lower than cost.
2) Refers to cash and cash equivalents in the SPEs. This cash is not available to the Company and is therefore included as restricted cash.3) Debt of SPEs refers to secured notes issued by the SPEs and secured bank loans borrowed by the SPEs. These obligations are secured by pledges of the assets of the SPEs
and are not guaranteed by the Stena AB Group
STENA AB 2013 39
Marketable securities as of 31 December classified as follows:
MSEK
Industrial sector 2012 2013
CDO/CLO 959 1 023
Oil & Gas 556 505
Funds 459 472
Banks 480 298
Pharmaceuticals 188 276
Oil & Gas Services 685 261
Retail 260 238
Software solution 97 122
Diversified Financial services 139 99
Shipping 87
Automanufactures 76 86
Homebuilder 74 81
Real estate 81 81
Energy production 49 77
Telecommunication 122 66
Food 36 65
Electronics 105 63
Biotechnology 50 62
Health care products 73 53
Machinery 70 51
Metal fabricate/hardware 124 50
Internet 73 38
Media 22 24
Forest products/paper 133 21
Investment companies 166 14
Power and automation technology 11 13
Construction 12
Agriculture 5
Mining 21
Equipment 9
Total listed shares 5,118 4,243
14. MARKETABLE SECURITIES As of 31 December
MSEK 2012 2013
Opening balance 3,465 5,118
Additions 2,997 2,057
Disposals (2,069) (3,123)
Reclassification 515
Revaluation of financial assets through the income statement 161 (335)
Revaluation of financial assets through other comprehensive income 230 398
Translation differences (181) 128
Investment at the end of year 5,118 4,243
MSEK 2012 2013
Marketable securities are classified as:
Financial assets at fair value through the income statement 1,835 898
Available-for-sale financial assets, valued in other comprehensive income 3,283 3,345
Total 5,118 4,243
Marketable securities refer to the Stena AB groups listed shares, these are recorded at fair value.
As of 31 December 2013 shares with a book value of MSEK 1,015 have been pledged as security for bank debt. As of 31 December 2012,
shares with a book value of MSEK 931 were pledged as security for bank debt.
GROUP
40 STENA AB 2013
15. OTHER NONCURRENT ASSETS
MSEKDeferred
tax assets1)Other
receivables1) Available for
sale sharesOther shares
Deferred costs Total
Opening balance as per 1 January 2012 892 1,192 1,666 604 377 4,731
Effects of change in accounting principles 96 (707) (611)
Additions 84 77 10 29 279 479
Disposals (3) (291) (19) (28) (266) (607)
Revaluation through the income statement (36) 15 (21)
Revaluation through other comprehensive income (2) (84) (86)
Share of profit (loss) 13 (111) (98)
Dividend received (5) (14) (19)
Reclassification 34 (515) (481)
Translation differences (21) 355 (47) (31) (17) 239
Closing balance as of 31 December 2012 1,048 622 1,034 449 373 3,526
Additions 76 651 121 49 74 971
Disposals (483) (78) (41) (45) (647)
Revaluation through the income statement 7 (124) (67) (184)
Revaluation through other comprehensive income 36 135 171
Share of profit (loss) 57 57
Dividend received (9) (9)
Reclassification (15) (8) (5) (28)
Translation differences 1 37 17 (7) 48
Closing balance as of 31 December 2013 627 1,267 1,137 539 335 3,904
1) Amounts for 2012 have been restated due to changed accounting standard for pensions, IAS 19 Employee benefits, see Note 1
Deferred tax assets mainly relate to unutilized tax losses carried for-
ward. Reclassifications include netting against deferred tax liabilities.
See Note 8.
Other receivables as of 31 December 2013 include surplus in pension
schemes of total MSEK 160 and MSEK 72 for 2012, see Note 22.
Other receivables related to holdings of non-listed shares, other
associates and bonds.
Available for sale shares include investment in non-listed shares.
These shares are accounted for as Available for sale shares valued
through the comprehensive income.
Companies held between 20% and 50%, and that are not Available
for sale shares valued through Comprehensive income, are accounted
for as other associated companies. These constitute the collaborative
arrangements of the Group in terms of pooling of business and joint
ventures that operate in shipping. Strategic holdings are accounted for
as associates in the balance sheet and in Note 6. During 2012 the share
of Paradise Holding was written down by MSEK 131 corresponding
MUSD 19.5.
The share of these companies´ results is included in direct operating
expenses. See Note 6 and Note 3.
STENA AB 2013 41
Available for sale shares
As of 31 December 2013
MSEKNo. of shares
or % held Book value
Held by parent company:
Alligator 3,345,231 23
Total available for sale shares in the Parent company 23
Held by subsidiaries:
ING DUTCH OFFICE FUNDS C.V. The Netherlands 5.0% 675
Airport Real Estate Basis Fonds C.V. The Netherlands 20.2% 309
Chase Private Equity Fund United Kingdom 100% 96
Other 34
Total available for sale shares 1,137
Other shares
MSEKNo. of shares
or % held Book value
Asahi Stena Tankers Pte Ltd Singapore 50%
Golden Stena Weco Singapore 50% 18
Partrederiet SUST I DA Norway 50% 42
Partrederiet SUST III DA Norway 50% 62
Stena Ugland Shuttle Tankers Norway 50%
Nordic Rio LLC Marshall Islands 50% 53
Stena Sonangol Suezmax pool LLC Marshall Islands 50%
Navion Gothenburg LLC Marshall Islands 50% 13
Paradise Libya 35% 106
Glacia Limited Bermuda 50% 108
RoRo Partners Ltd Bermuda 49%
Stena Weco Denmark 50% 126
Other 11
Total other shares 539
16. INVENTORIES
As of 31 December
MSEK 2012 2013
Bunker and lubricating oil 111 117
Inventories of goods for sale 202 228
Raw materials and consumables 213 209
Products in progress 45 29
Finished products 121 133
Total 692 716
GROUP
42 STENA AB 2013
Book value of Short-term investments corresponds to fair value.
Market able debt and equity securities are classified as “Financial assets
at fair value through profit or loss”.
Certain marketable debt and equity securities and restricted cash
amounting to MSEK 4 at 31 December 2013 and MSEK 3 at 31 Decem-
ber 2012 have been pledged as security for bank debt. See Note 28.
18. SHORT-TERM INVESTMENTS
As of 31 December
MSEK 2012 2013
Marketable debt and equity securities, trading 198 348
Restricted cash 1,897 1,346
Total 2,095 1,694
19. CASH AND CASH EQUIVALENTS
As of 31 December
MSEK 2012 2013
Cash & bank 1,546 1,977
Short term deposits 35 76
Total 1,581 2,053
Short-term deposits are defined as bank deposits that have original maturities of up to three months.
17. SHORT-TERM RECEIVABLES
As of 31 December
MSEK 2012 2013
Trade debtors
Accounts receivable are classified on the basis of their due date:
Outstanding but not due 2,037 2,168
Due up to 30 days 373 327
Due more than 30 days 413 354
Total 2,823 2,849
Other current receivables
Related parties (Note 34) 1 7
Other short-term receivables 1,801 1,786
Total 1,802 1,793
Prepaid expenses and accrued income
Prepaid expenses 610 591
Accrued income 1,519 1,579
Total 2,129 2,170
Total short-term receivables 6,754 6,812
Book value of trade debtors corresponds to fair value. The total allowance for doubtful trade receivables was MSEK 116 as of 31 December 2013
and MSEK 75 as of 31 December 2012. Selling expenses as of 31 December 2013 include costs for doubtful receivables of MSEK 28 and MSEK 2
as of 31 December 2012.
Restricted cash as of 31 December 2013 includes MSEK 386 of cash
and cash equivalents in the SPEs (see Note 13) which is not avail able to
the Company. As of 31 December 2012 such restricted cash amounted
to MSEK 619. Other restricted cash represents bank accounts that have
been pledged to cover various long-term liabilities and commitments
of the Company.
STENA AB 2013 43
Fair value reserve
This reserve arises on the valuation of available-for-sale financial assets.
When an available-for-sale asset is sold, the portion of the reserve that
relates to that financial asset, and is effectively realized is recognized in
the income statement. When an available-for-sale asset is impaired,
the portion of the reserve that relates to that financial asset is recog-
nized in the income statement.
Hedging reserve
Hedge accounting is applied on purchase of bunker fuel, interest costs,
transactions in other currency than functional currency and invest-
ments in subsidiaries.
The reserve contains gains and losses that arise from hedge revalu-
ations that is considered effective hedges. The cumulative deferred
gain or loss is recognized in the income statement when the hedged
transaction impacts the income statement.
Revaluation reserve
This reserve includes revaluation of ports. The revaluation amount
consists of the fair value of the ports at the time of revaluation. Con-
currently with depreciations of ports the revaluation reserve is released
with the same amount as the depreciation of the surplus value from
the revaluation.
If the carrying value of the port is higher due to revaluation, the
increase in value will be accounted for in other comprehensive income.
If the carrying amount of the port is lower due to revaluation, the
decrease in value will be accounted for in the income statement.
Translation reserve
Exchange differences relating to the translation from the functional
currencies of the Stena Group’s foreign subsidiaries into SEK are
accumulated to the translation reserve. Upon the sale of a foreign
operation, the accumulated translation amounts are recycled to the
income statement and included in the gain or loss on the disposal.
20. EQUITY
Dividends paid per share (SEK):
2012 5,200
2013 3,780
Specification of the reserves:
MSEKFair value
reserveHedging
reserveRevaluation
reserveTranslation
reserve Total
Opening balance as per 1 January 2012 (466) (752) (1,015) (2,233)
Change in fair value reserve, net of tax 325 325
Change in hedging reserve, net of tax
– valuation of bunker hedges (24) (24)
– valuation of interest hedges (189) (189)
– valuation of currency hedges (71) (71)
– hedge of net investment in foreign subsidiaries 109 109
Change in translation reserve, net of tax (801) (801)
Closing balance as of 31 December 2012 (141) (927) (1,816) (2,884)
Effects of changes in accounting principles1) 1,012 1,012
Change in fair value reserve, net of tax 366 366
Change in hedging reserve, net of tax
– valuation of bunker hedges (37) (37)
– valuation of interest hedges 916 916
– valuation of currency hedges (34) (34)
– hedge of net investment in foreign subsidiaries (123) (123)
Change in revaluation reserve, net of tax (20) (20)
Change in translation reserve, net of tax 355 355
Closing balance as of 31 December 2013 225 (205) 992 (1,461) (449)
1) Effect of change in valuation method for ports
44 STENA AB 2013
GROUP
21. DEFERRED TAXES
As of 31 December
MSEK 20121) 2013
Deferred tax liabilities
Tangible fixed assets 3,826 4,292
Financial fixed assets 36 181
Provisions 601 425
Other 57 61
Total deferred tax liabilities 4,520 4,959
Deferred tax assets
Tangible fixed assets 313 277
Tax loss carry forwards 1,894 2,304
Financial fixed assets 158 101
Provisions 140 130
Other 4
Less deferred tax assets not recognized (947) (1,170)
Total deferred tax assets recognized 1,558 1,646
Net deferred tax liability 2,962 3,313
Out of which:
Deferred tax assets (Note 15) 1,048 627
Deferred tax liabilities 4,011 3,940
Deferred taxes have been calculated net on a country basis. Net deferred tax assets are shown as Other noncurrent assets.
Calculation of deferred taxes is based on local nominal tax rate.
20121) 2013
MSEK
Taxes charged to income statement
Taxes charged to com-prehensive income
Total taxes
Taxes charged to income statement
Taxes charged to com-prehensive income
Total taxes
Current taxes (272) (272) (287) (287)
Deferred taxes 230 269 499 49 (321) (272)
(42) 269 227 (238) (321) (559)
The Company’s gross value of tax loss carry forwards are as follows:
As of 31 December
MSEK 2012 2013
Sweden 4,453 4,434
Rest of the world 5,377 6,499
Total 9,830 10,933
Out of total loss carry forwards, amounting to MSEK 10,933, can MSEK 6,709 be carried forward indefinitely. Tax loss carry forwards of MSEK 4,224
expire between 2014 and 2022. Total unaccounted carry forwards amounts to MSEK 5,364 in 2013 and MSEK 4,956 in 2012.
1) 2012 has been restated due to revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1
STENA AB 2013 45
22. EMPLOYEE BENEFITS
Post-employment benefits, such as pensions, healthcare and other
benefits are mainly settled by means of regular payments to independ-
ent authorities or bodies that assume pension obligations and adminis-
ter pensions through defined contribution plans. The remaining post-
employment benefits are defined benefit plans; that is, the obligations
remain within the Company. Costs and obligations at the end of a
period for defined benefit plans are calculated based on actuarial
assumptions and measured on a discounted basis. The assumptions
include discount rate, inflation, salary growth, long-term return on
plan assets, mortality rates and other factors. Discount rate assump-
tions are based on long-term high quality bonds, government bond
yield and, for Sweden, mortgage bonds at year end. The assets consist
mainly of long-term high corporate bonds, government bonds and
equities and the asset allocation for each pension scheme is defined in
an investment policy document. Defined benefits plans relate mainly
to subsidiaries in the UK operations. Other large-scale defined benefit
plans apply for salaried employees in Sweden (mainly through the
Swedish PRI pension plan) and employees in The Netherlands.
Expenses included in the income from operations include current
year service costs, past service costs, net interest income or expense
and gains and losses on settlements. Expenses are recognized as other
operating expenses or administrative expenses, depending on the
function of the employee. Remeasurement effects are recognized
in Other comprehensive income.
Some features of the main defined benefit plans are described below.
United Kingdom
Stena Line Holding Group’s pension schemes cover around 80% of the
Groups total defined benefit obligation in the UK. Stena Line Ltd par-
ticipates in one company-funded defined benefit pension scheme and
two industry wide defined benefit schemes, Merchant Navy Ratings
Pension Fund (MNRPF) and Merchant Navy Officers Pension Fund
(MNOPF). The Group estimates its share in MNRPF to 19% (32%) and
in MNOPF to 12% (11%), based on information from the Trustees.
In 2001, the trustee of the MNRPF adopted a deficit repair scheme
and under this scheme the Group’s share of the deficit contributions
was around 32% with half of the contributions payable by other
employers who were making voluntary contributions. However the
agreement with the voluntary employers expired 2006, and as a result
the Group’s share of the deficit contributions increased to around
60%. The Group initiated court proceedings against the Trustee of the
MNRPF to establish how the deficit in the MNRPF should be allocated
between the various employers. The Court of Appeal upheld in 2011,
the decision made by High Court, that deficit contributions can be
required from all employers who have ever participated in the MNRPF,
including companies that no longer employ any members. As a result
of the Court of Appeals decision, the non-contributing employers
can also be required to contribute funds to reduce the deficit. The
Trustee of the MNRPF has proposed provisional figures illustrating the
Group´s share of the deficit at approximately 19%. It is estimated that,
after taking into account the deficit contributions that the Group has
paid from 2001 to 2012, some of the contributions paid may be repay-
able, and based on the funding deficit as of 31 March 2012, the Group
will have no further deficit contributions to pay over the life of the
existing Recovery Plan. The payments made by the Group during 2011
and 2012, amounting to MSEK 306, were paid into an escrow account,
and cannot be used by any other member of the plan. The balance
on the escrow account is recognized as a reduction of the net debt.
The reduction of the share to 19% has been accounted for in the
Group from 2013 and the impact of reduced net debt is recognized
in Other compre hensive income.
The company scheme provides benefits which are linked to each
members final salary at the earlier of their date of leaving or retirement.
The benefits provided by the two industry schemes are linked to each
members career average salary. All schemes are closed to new members.
The funding position of each scheme is reassessed every three years
and a schedule of contributions is put in place, following consultation
with the employers, which sets out the regular contributions payable
along with any deficit contributions required to meet any shortfall of
the assets when compared with the liabilities. The trustee determines
the investment strategy which is subject to consultation with the
employers. The assets of all schemes are managed on behalf of the
trustee by independent fund managers.
The operation of each scheme is governed by a Trust Deed and
Rules and the schemes are managed through a trustee company, the
boards of which are composed of representatives of the employers
and the members and, in some cases, independent trustees.
Sweden
The main defined benefit plan in Sweden is the collectively agreed
pension plan for white collar employees, ITP 2 plan. According to an
inter pretation from the Swedish Financial Reporting Board, this is a multi-
employer defined-benefit plan. For fiscal year 2013, the Group did not
have access to information from Alecta that would have enabled this
plan to be recognized as a defined-benefit plan. Accordingly, the plan
has been recognized as a defined-contribution plan. The premium for
the defined benefit plan is individually calculated and is mainly based on
salary, accrued pension and expected remaining period of service.
The collective consolidation level measures the apportionable assets
in relation to the insurance commitment, based on Alecta’s calculation
model, which doesn´t comply with IAS 19. According to Alecta’s con-
solidation policy for defined-benefit pension insurance, the collective
46 STENA AB 2013
GROUP
CONT. NOTE 22
consolidation level is normally allowed to vary between 125% and
155%. If Alecta’s collective consolidation level is below 125% or higher
than 155% measures must be taken to create opportunities for the
consolidation level to return to an accepted level.
If the consolidation level falls short or exceeds the normal interval one
measure may be to increase the contract price for new subscription and
expanding existing benefits or introduce premium reductions. Alecta’s
consolidation ratio amounts to 148% for 2013 and 129% for 2012.
Other defined benefit pension plans in Sweden are mainly funded
by pension foundations. There is no lowest funding requirement. Bene-
fits are paid directly by the Group and not from the foundation assets.
Netherlands
The defined benefit pension plan in Netherlands is an indexed average
salary benefit pension plan and is open for new entrants. The plan is
fully funded.
Information per country as of 31 December 2012 Sweden United Kingdom The Netherlands Total
Reporting in the balance sheet
Present value of funded and unfunded obligations 488 8,575 202 9,265
Fair value of plan assets (215) (7,678) (219) (8,112)
Total (surplus)/deficit 273 897 (17) 1,153
Whereof reported as
Other non-current assets 51 4 17 72
Pension liabilities 324 901 1,226
Total funding level for all pension plans, % 44% 90% 108% 88%
Amounts included in the income statement
Current service cost 8 34 3 45
Net interest cost 10 62 (4) 68
Administration costs 1 55 56
Remeasurements (gain)/loss 13 (7) 7 13
Total expense (gain) for defined benefits 31 145 6 182
Major assumptions for the valuation of the liability
Life expectancy, year
Male – currently aged 65 19.6 21.1 22.0
Female – currently aged 65 22.8 23.7 24.2
Inflation, %1) 2.0 2.7 2.0
Discount rate, % 3.5 4.7 3.6
1) Inflation for UK concerns RPI. Used CPI is 1.0 lower than RPI for 2013. For 2012 the used CPI was 0.9 lower than RPI
STENA AB 2013 47
Information per country as of 31 December 2013 Sweden United Kingdom The Netherlands Total
Reporting in the balance sheet
Present value of funded and unfunded obligations 469 7,763 237 8,468
Fair value of plan assets (270) (7,463) (260) (7,992)
Total (surplus)/deficit 199 300 (23) 476
Whereof reported as
Other non-current assets 89 47 24 160
Pension liabilities 288 347 1 636
Total funding level for all pension plans, % 58% 96% 110% 94%
Amounts included in the income statement
Current service cost 8 36 6 50
Past service cost 2 2
Net interest cost 9 26 (1) 35
Administration costs 30 30
Remeasurements (gain)/loss (74) (477) (5) (556)
Total expense (gain) for defined benefits (57) (385) 2 (439)
Major assumptions for the valuation of the liability
Life expectancy, year 19.6 21.0 22.1
Male – currently aged 65 22.8 23.4 24.3
Female – currently aged 65 2.0 3.2 2.0
Inflation, %1) 4.0 4.7 3.5
Discount rate, %
Average duration of the obligation is 14.5 years
1) Inflation for UK concerns RPI. Used CPI is 1.0 lower than RPI for 2013. For 2012 the used CPI was 0.9 lower than RPI
Reconciliation of change in present value of defined benefit obligation for funded and unfunded obligations 2012 2013
Opening balance, 1 January 9,210 9,265
Purchase of company 42
Current service cost 45 50
Past service cost 2
Administration cost 56 30
Interest expenses 455 362
Remeasurement arising from changes in financial assumptions 148 211
Remeasurement arising from changes in demographic assumptions (58) (45)
Remeasurement from experience (158) (281)
Remeasurement from changed share in pension plan (1,007)
Contributions by plan participants 6 6
Benefits paid (350 (248)
Exchange differences (89) 81
Settlements and other
Closing balance as of 31 December 9,265 8,468
48 STENA AB 2013
GROUP
Reconciliation of change in the fair value of plan assets 2012 2013
Opening balance, January 1 7,878 8,112
Purchase of company 0 31
Interest income 387 327
Remeasurement arising from changes in assumptions (81) (34)
Remeasurement from changed share in pension plan 0 (533)
Contributions by plan participants 6 6
Employer contributions 191 195
Benefits paid (191) (182)
Exchange differences (77) 70
Settlements and other (1) 0
Closing balance as of 31 December 8,112 7,992
CONT. NOTE 22
Sensitivity analysis on defined benefit obligation Sweden United Kingdom The Netherlands Total
Longevity +1 year 13 225 6 244
Inflation +0.5% 40 440 23 503
Discount rate +0.5% (45) (557) (20) (622)
Discount rate –0.5% 45 557 23 625
Below is the sensitivity analysis for the main financial assumptions and
the potential impact of the present value of the defined pension obli-
gation. The sensitivity analysis is not meant to express any view by
Stena of the probability of a change. The analyses are based on a
change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the
assumptions may be correlated.
2012 2013
Market value of plan assets by category Quoted Non-quoted Total Quoted Non-quoted Total
Equity 2,484 106 2,590 2,445 113 2,558
Bonds 4,417 4,417 4,261 4,261
Property 222 222 285 285
Qualifying insurance 22 22 38 38
Cash and cash equivalents 862 862 543 306 849
Total 7,784 328 8,112 7,287 704 7,992
Investment strategy and risk management
Through the defined benefit pension plans and post-employment
medical plans, the group is exposed to a number of risks.
The plan liabilities are calculated using a discount rate. If plan assets
underperform this yield, this will create a deficit. The Group manages
the allocation and investment of pension plan assets with the aim of
decreasing total pension cost over time. This means that certain risks
are accepted in order to increase the return. The investment horizon is
long-term and the allocation ensures that the investment portfolios are
well diversified. The Board of Stena approves the limits for asset alloca-
tion. The final investment decisions are taken by the local trustee that
consults with Stena.
Increased longevity and inflation are the principle risks that may
increase the future pension payments and, hence, increase the
pension obligation. The Group monitors continuously discount rate,
in flation and mortality assumptions to ensure that the plan assets
match the obligations.
STENA AB 2013 49
Issued Maturity Fair value
As of 31 December Carrying amount (MSEK)
As of 31 December
MSEK Nominal Outstanding Interest 2012 20132012
MSEK2013
MSEK
2004–2016 MUSD 250 MUSD 0 7.00% MUSD 130 838
2007–2017 MEUR 300 MEUR 300 6.125% MEUR 318 MEUR 324 2,575 2,657
2007–2019 MEUR 102 MEUR 102 5.875% MEUR 105 MEUR 109 876 903
2010–2020 MEUR 200 MEUR 200 7.875% MEUR 217 MEUR 228 1,703 1,764
Total 5,992 5,324
Whereof
Long-term Senior Notes 5,154 5,324
Short-term Senior Notes 838
24. SENIOR NOTES
In November 2004, the Company issued MUSD 250 of notes at an
interest rate of 7.0% with maturity on 1 December 2016.
In February 2007, we decided to issue bonds on the European mar-
ket. In February 2007, the Company completed an offering of MEUR
300 of the Senior Notes at an interest rate of 6.125% due 2017.
In February 2007, the Company completed an offering of MEUR 102
at an interest rate of 5.875% Senior Notes due 2019.
In March 2010, we completed an offering of MEUR 200 of Senior
Notes at an interest rate of 7,875% due 2020.
On 5 March 2013 a bond, due in 2016, with remaining amount of
MUSD 128,8 was revoked. The payment was made on 5 April 2013.
Regarding the covenants of the loans, see Note 30.
25. LEASES
Company as lessee
The operating lease obligations include chartering of crude oil tankers
on a timecharter basis, chartering of ferries principally on a bareboat
basis, as well as obligations related to rentals of properties and ports.
Rental expense for operating leases were as follows
Years ended 31 December
MSEK 2012 2013
Rental expense 1,605 1,263
23. BANK DEBT
2012 2013
MSEK Current Non-current Total Current Non-current Total
Property loans 422 12,313 12,735 843 11,835 12,678
Other loans 2,013 23,400 25,413 3,442 21,857 25,299
Revolving credit facilities 290 10,399 10,689 331 11,595 11,926
Total 2,725 46,112 48,837 4,616 45,287 49,902
Schedule for repayment of bank debt is presented in Note 30, Liquidity risks.
The carrying amounts of the group’s borrowings are denominated in the following currencies
As of 31 December
MSEK 2012 2013
SEK 12,754 14,265
GBP 1,191 1,135
USD 24,172 23,715
EUR 10,095 10,115
Other currencies 625 673
Total 48,837 49,903
Regarding assets pledged, see Note 28.
50 STENA AB 2013
GROUP
CONT. NOTE 25
2012 2013
MSEK CostAccumulated depreciation Net book value Cost
Accumulated depreciation
Net book value
Vessels 42,153 (11,454) 30,699 42,402 (12,682) 29,720
Real estate 26,658 26,658 27,831 27,831
Total 68,811 (11,454) 57,357 70,233 (12,682) 57,551
As of 31 December 2012 the future minimum rentals to be received under
non-cancellable operating leases were as follows:
2012
MSEK Vessels Real estate Total
2013 5,078 733 5,811
2014 4,292 559 4,851
2015 3,285 416 3,701
2016 2,660 295 2,955
2017 553 207 760
2018 and thereafter 365 239 604
Total minimum lease rentals 16,233 2,449 18,682
Company as lessor
The Company leases properties and certain vessels to third parties under operating leases. Operational leasing mainly refers to vessels on bareboat
and time charter basis. The cost, accumulated depreciation and net book value of these assets held for lease as of 31 December, were as follows:
As of 31 December 2012 the future minimum lease commitments under non-cancellable
operating leases and capital leases were as follows
2012
MSEK Operating leases Capital leases
2013 1,282 203
2014 1,059 207
2015 726 147
2016 600 31
2017 538 331
2018 and thereafter 1,978 48
Total minimum lease commitments 6,183 967
As of 31 December 2013 the future minimum lease commitments under non-cancellable
operating leases and capital leases were as follows:
2013
MSEK Operating leases Capital leases
2014 1,096 231
2015 713 179
2016 531 70
2017 470 370
2018 372 10
2019 and thereafter 1,911 13
Total minimum lease commitments 5,093 873
The financial leases of the Group comprises of one RoPax-vessel. The cost for vessels subject to financial leasing contracts was as of 31 december
2013 MSEK 530 and as of 31 December 2012 MSEK 499. Net carrying value was MSEK 484 for 2013 and MSEK 492 for 2012.
STENA AB 2013 51
26. OTHER NON-CURRENT LIABILITIES
As of 31 December
MSEK 2012 2013
Prepaid income 150 113
Other liabilities 784 609
Total 934 722
Repayment of non-current liabilities is required according to the following schedule:
More thanMSEK 1–3 years 3–5 years 5 years Total
Prepaid income 75 7 31 113
Other liabilities 105 8 496 609
Total 180 15 527 722
27. ACCRUED COSTS AND PREPAID INCOME
As of 31 December
MSEK 2012 2013
Accrued costs
Charter hire/running costs 12 165
Interest costs 380 490
Accrued personnel costs 536 363
Other accrued costs 1,102 1,462
2,030 2,480
Prepaid income
Prepaid charter hire 32 43
Other prepaid income 613 733
645 776
Total accrued costs and prepaid income 2,675 3,256
As of 31 December 2013 the future minimum rentals to be received under
non-cancellable operating leases were as follows:
2013
MSEK Vessels Real estate Total
2014 8,787 722 9,509
2015 7,774 583 8,357
2016 4,732 462 5,194
2017 962 323 1,285
2018 217 217
2019 and thereafter 575 575
Total minimum lease rentals 22,255 2,882 25,137
The information for real estate relates to office buildings and excludes residential properties since most residential leases have a three month period.
52 STENA AB 2013
GROUP
Contingent liabilities
As of 31 December
MSEK 2012 2013
Guarantees 3,388 2,830
Other contingent liabilities 455 471
Total 3,843 3,301
Commitments
Guarantee obligations mainly relate to guarantees for property loans,
vessel projects in associated companies and warranty obligations for
delivered equipment.
Future minimum lease commitments relating to operating leases of
vessels, ports etc amount to MSEK 1,096 for 2014 and MSEK 3,997
from 2015. See Note 25. As of 31 December 2013, a total of six vessels
were on order from shipyards. The total contract amount for these
vessels amounts to MSEK 1,336. Yard payments of MSEK 259 have
been made in respect of these contracts.
In addition to the information above there are also on-going tax
issues within the Group with tax authorities.
28. PLEDGED ASSETS, COMMITMENTS AND CONTINGENT LIABILITIES
Pledged assets
Pledged assets represent assets securing various financings. These assets can only be used by the party benefitting from
the pledge if there is an event of default under the respective financing documents or the appropriate remedy period has elapsed.
The following assets have been pledged as securities for bank debt
As of 31 December
MSEK 2012 2013
Shares in subsidiaries 5,737 6,134
Mortgages on vessels 32,772 34,198
Mortgages on properties 15,971 15,944
Chattel mortgages 1,273 1,994
Investment in affiliated companies 1,028 1,028
Marketable securities 931 1,015
Trade debtors 391 386
Short term investments 3 118
Reservation of title 52 52
Assets pledged, other 1,747 975
Total assets pledged for normal bank debt 59,905 61,844
Investment in SPEs 5,170 4,311
Total assets pledged for bank debt 65,075 66,155
Long-term and short-term debt and capitalized lease obligations 49,804 50,776
Debt in SPEs 3,974 3,944
Total debt and capitalized lease obligations 53,778 54,720
In addition, certain guarantees have also been issued to cover various liabilities and commitments.
STENA AB 2013 53
29. CONSOLIDATED STATEMENTS OF CASH FLOWSIn 2013 seven acquisitions were competed. In Adactum Ballingslöv acq-
uir ed Southdown Kitchen Furniture, S-Invest acquired three companies
and Renewable acquired Old Harbour Holding AB. Furthermore Austen
Maritime Services Pte Ltd and Ormudden Invest AB have been acquired.
The most essentials acquisitions for the group
are described below :
Austen Maritime Services Pte
On 18 January 2013 Northern Marine Management Ltd acquired the
remaining 50% in the JV Austen Maritime Services Pte Ltd and Francois
Marine Services Pte Ltd. Francois Marine Services Pte Ltd was at the
time of the acquisition a subsidiary to Austen Maritime Services Pte Ltd
due to a pre-acquisition. Austen Group is based in Singapore with 24
employees within Austen and 47 employees within Francois . The
group specializes in the supply of products, services and catering ser-
vices to all types of vessels. The total acquisition is one of the steps to
increase the market share in Singapore and the Far East. The purchase
price for Austen Maritime Services Pte Ltd with the subsidiary Francois
Marine Services Pte Ltd was MSEK 36 and the difference between the
purchase price paid and the adjusted fair value of acquired net assets
amounting to MSEK 36 is classified as goodwill. The revenue included
in the consolidated statement of comprehensive income since
18 January 2013 contributed by Austen Maritime Services Pte Ltd
and subsidiary was MSEK 401. The companies also contributed profit
of MSEK 46 over the same period.
Southdown Kitchen Furniture Ltd
3 January 2013 Ballingslöv International AB acquired 100% of the UK
kitchen manufacturer company Southdown Kitchen Furniture Ltd and
its subsidiaries. Southdown Kitchen Furniture Ltd, operates under the
brand Manhattan Furniture. Manhattan Furniture has been one of the
fastest growing kitchen manufacturers in the United Kingdom during
the last years. The group has approximately 250 employees and the
headquarter is located in Lancing, West Sussex in UK. The acquisition is
in line with Adactum´s strategy to make long-term investment to build
strong and profitable companies. The total purchase price was MSEK
140 and the difference between the purchase price paid and the
adjusted fair value of acquired net asset MSEK 128 refers to goodwill.
The revenue included in the consolidated statement of comprehensive
income since 3 January 2013 contributed by Southdown Kitchen Ltd
was MSEK 426. Southdown Kitchen Ltd also contributed with a profit
of MSEK 25 during the same period.
MSEK 2013
Assets and liabilities acquired:
Intangible assets
Tangible fixed assets 305
Financial fixed assets 5
Inventories 21
Current receivables 157
Cash and cash equivalents 314
Other provisions
Long-term debt (240)
Current liabilities (315)
Deferred tax (183)
Acquired net assets 64
Goodwill 275
Rights to routes
Non-controlling interest
Purchase price (339)
Deferred purchase price 11
Cash and cash equivalents in the acquired businesses 314
Effect on the Group’s cash and cash equivalents (13)
Total expenses related to acquisitions amounted to MSEK 6 and have been reported as direct operating expenses.
For 2012 the total expenses related to acquisitions amounted to MSEK 10.
The total value of the acquired assets and liabilities is presented in the below table. The acquisitions are presented accumulated since they separately
not are deemed as material. All acquired assets and liabilities were reported according to IFRS, at the time of the acquisition.
54 STENA AB 2013
GROUP
Interest payments Year ended 31 December
MSEK 2012 2013
Interest, paid 2,440 2,468
Interest, received 438 489
Paid tax
Cash paid for taxes in 2013 was MSEK 124, as compared to MSEK 185 in 2012.
CONT. NOTE 29
30. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENTThis note describes the financial risk management in the Stena Group.
Accounting principles for financial instruments are described in Note 1
and the financial information for the year 2013 and 2012 are described
in Note 31. Other notes that include information used in Note 30 and
31 is Note 13 Investments in SPEs, Note 14 Marketable securities, Note
15 Other noncurrent assets and Note 18 Short-term investments.
Financial instruments in the Stena Group consist of bank loans,
derivatives, finance lease contracts, accounts payable, accounts receiv-
able, bonds, shares and participations as well as cash and short-term
investments.
The primary risk deriving from trading of financial instruments are
market risks including interest-rate risk, currency risk and price risk,
Credit risk and Liquidity risk. All of these risks are handled in accord-
ance with an established financial policy.
Financial risk factors
The Group’s activities expose it to a variety of financial risks. The
Group’s overall risk management policy focuses on the unpredictability
of the financial markets and aims to minimise potential adverse effects
on the Group’s financial results.
The Group employs derivative instruments to hedge exposure to
certain risks.
Risk management is handled by a central finance department,
Stena Finance, in accordance with policies determined by the Board of
Directors. Stena Finance identifies, evaluates and hedges financial risks
in close co-operation with the Group’s operating units. The Board of
Directors prepares written policies for both overall risk management
and for risk management of specific areas such as currency risk, inter-
est rate risk, credit risk, the utilisation of derivative and non-derivative
financial instruments and the investment of excess liquidity.
The Group uses financial instruments to reduce the risk of major
adverse effect on its results from price changes in currency, interest
rates and oil markets.
As a basic principle fixed assets are financed with long-term funding
in the form of issued bonds, bank debt and leasing liabilities. Each sub-
sidiary’s assets are financed in local currency and to the extent that
assets and liabilities in foreign currency cannot be matched, the net
exposure is hedged with financial derivative contracts.
To achieve a desired currency mix and interest fixing profile the
Group uses various types of interest rate derivatives such as fixed rate
swaps and cross currency interest rate swaps. Interest rate options are
also used either to cap or to lock in a range of the interest rate level.
Currency risks also arise when converting foreign currency denomi-
nated Income Statement or Balance Sheet items to SEK and when con-
verting cash flows in foreign currency. These risks are reduced by hedg-
ing with forward foreign exchange contracts or with currency options.
Fluctuations in the price of bunker fuel, which predominantly affects
Ferry operations, are managed by fixed price agreements with the
supplier for the various grades of bunker fuels or by using financial
derivatives for crude oil.
As part of its tanker operations the Group also uses, to a limited
extent, contracts for freight rates and forward freight agreements.
Financial risk management is carried out within the scope of the
Group’s financial policies and manuals mainly by the treasury unit
in Sweden.
Market risk – Interest rate risks
The Group holds fixed assets mainly in ships and real estate in USD,
SEK, EUR and GBP and as a consequence the debt portfolio and the
accompanying interest rate risks are distributed by the same currencies.
In order to manage this risk and to achieve desired interest rate levels
the Company’s management makes regular assessments of the interest
rate risks. This exposure is adjusted with interest rate derivatives which
to the largest possible extent are matched against the maturity profiles
of the underlying debt.
Financial instruments for interest rates, such as futures, swaps or
different types of interest rate options, are used to hedge future inter-
est rate payments. Interest income or interest expenses under these
contracts are allocated to specific periods and reported as an adjust-
ment of the interest expense on the underlying liability. The Group
reports accrued interest at the end of the accounting period, calculated
in accordance with the conditions in the contracts. Generally, the
Financing activities
Other financing activities includes repayment of share capital amount-
ing to MSEK 27 to the minority in the SPEs. In 2012 other financing
activities included cost for financing the Revolver credit facility amount-
ing to MSEK 85.
STENA AB 2013 55
underlying liabilities have a longer duration than the financial hedging
contracts and allocation of accrued interest over a period of time is
carried out as long as the hedging contracts are considered to form an
effective portion of the Group’s overall risk management.
Market risk – Currency risks
The Group is exposed to the risk of fluctuations in foreign currency
exchange rates due to the international nature and scope of its opera-
tions. A substantial portion of the Group’s revenues and expenses are
denominated in USD, but also in GBP and EUR.
The Group’s foreign currency risk arises from:
– the Group’s investment in foreign subsidiaries’ net assets
(equity exposure)
– certain financial assets and liabilities (translation exposure when
converting such balances to each group’s functional currency) and
– fluctuations in exchange rates on the value of the Group’s sales and
purchases in foreign currencies (transaction exposure).
The Group’s policy is to hedge its translation exposure which mainly
arises from USD and EUR borrowing in companies with SEK as their
functional currency. The Group also hedges parts of its transaction
exposure in USD, GBP, EUR, CAD, PLN, NOK, AUD and DKK from
future cash flows from its ferry operations and offshore drilling opera-
tions. In the ferry operation sale mainly relates to CAD, EUR, PLN, NOK
and DKK and purchase to USD. In the offshore drilling operation pur-
chase mainly relates to GBP and AUD.
Translation differences from net investments
Translation differences from the exposure of net assets in foreign sub-
sidiaries are reported directly in the Group’s equity. Derivative instru-
ments attributable to this exposure, such as currency swaps, currency
forward agreements or currency option contracts, are valued at fair
value. These hedge contracts are valued and reported directly against
comprehensive income if the hedges are considered to be effective. If
hedges are no longer considered to be effective the translation differ-
ence are recognized in the finance net.
The interest rate differential is reported as interest income or inter-
est expenses in the Group’s net financial income.
The book value of our net assets of subsidiaries denominated in a for-
eign currency, as of December 31 2013, was approximately SEK 25.6 bil-
lion. The net assets are expressed mainly in Swedish kronor, U.S. dollars,
Euro and British pounds. A 1% change in the value of the SEK against
each of the functional currencies of our subsidiaries would affect our
shareholders’ equity as of December 31, 2013 by MSEK 256.
Translation differences from translation exposure
Monetary assets and liabilities in foreign currency are translated at the
closing rate of exchange. Derivative instruments attributable to the
financial hedging of the value of these balance sheet items, such as
currency swaps, currency forward agreements or currency option con-
tracts, are valued at fair value, which includes translation at the closing
rate of exchange, while changes in fair value are reported gross as
exchange rate differences in the Group’s net financial income, where
the translation of monetary assets and liabilities is also reported. Inter-
est rate differential from currency swaps or forward agreements are
reported as interest income or interest expenses in the Group’s net
financial income. According to the Group’s finance policy, 100% of
such exposure should be hedged.
Translation differences from transaction exposure
Realized results from currency forward agreements or currency option
contracts, including paid or received premiums from option contracts,
which are intended to hedge expected or contracted future cash flows
in foreign currency, are allocated to a particular period and reported as
an adjustment of the underlying transaction when it takes place. The
hedge contracts are valued and reported directly against comprehen-
sive income if an effective hedge. According to the Group’s finance
policy, 0–100% of such exposure should be hedged.
Market risk – Price risk
Oil price risk
The Group is exposed to the price of bunker fuel used for the opera-
tion of its vessels and uses forward contracts, swaps and options to
hedge its oil price risk. Hedge contracts are regularly entered into to
match the underlying costs of deliveries of bunker fuel. The hedge con-
tracts are valued and reported directly against comprehensive income
if an effective hedge. The results of these contracts are allocated to
specific periods and matched against underlying exposure. The con-
tracts are settled on a monthly basis and reported as an adjustment of
the cost for bunker fuel for the current period.
For the current route, ferry operations have an annual consumption
of marine bunker fuel and gas oil which combined converts to an
annual volume of about 2.8 million barrels crude oil. A part of this is
hedged on a consecutive basis. All contracts are settled monthly at a
volume corresponding to the underlying consumption.
Equity price risk
The majority of all equity holdings within Short-term investments and
Marketable securities are traded at an active market at an exchange,
hence no illiquidity, counterparty risk or other uncertainty discounts
have been applied. A total risk limit for investment and trading in equi-
ties, equity indices and bonds has been approved by the Board of Direc-
tors and the utilizations of the limits is monitored on a daily basis. The
risk mandate are allocated per trader/portfolio, reflecting a 10 % over-
night adverse price movement. As a complement to the price risk meas-
urement, specific risk, sector risks and geographic risks are followed up
and reported. A minimum share of the total financial investments
should be made in liquid securities. The Finance policy also governs
what type of financial instruments that are approved. In order to
reduce the credit risk when investing in corporate bonds, there are
certain approved limits for credit rating of the issuer.
Our portfolio of equities is well diversified, both in terms of markets
and industries. Investments are made within the boundaries of our
finance policy in terms of risk- and loss limits. As of 31 December 2013,
a change of +/–10% in the unrealised value of all our equity holdings
within Short-term investments and Marketable securities, would have
56 STENA AB 2013
GROUP
CONT. NOTE 30
The following table summarizes the notional volume and credit risks of financial derivative instruments
As of 31 December 2012 As of 31 December 2013
MSEKNotional amount Credit risk
Notional amount Credit risk
Currency forward contracts and swaps 20,767 85 26,857 54
Currency options 77 1
Interest rate forward contracts and swaps 33,244 34,642 87
Interest rate options 2,870 13 3,871
Commodity fixed price swaps – oil 1,958 189 2,026 143
Commodity options – oil 73
Total 58,912 287 67,473 285
an effect of +/–MSEK 125 on profit before tax and +/–MSEK 335 rec-
ognised in other comprehensive income less deduction of deferred tax.
Trading activities
The Company also buys and sells certain types of derivative financial
instruments with the objective of generating profits on a short-term
basis. Such financial instruments that are not used in the Company’s
program of interest rate and foreign currency risk management are
referred to as ‘trading’ for purposes of this disclosure. All trading posi-
tions are taken within the limits of the Company’s financial trading
policy. All positions are recorded at fair value and the unrealized gains
and losses are part of the result of the period.
Credit risks
In our operating activities, credit risks occur in the form of receivables
on customers. In our Ferry operations, credit checks are regularly made
on our customers using well known credit-rating agencies. If the credit
worthiness of the customer is not satisfactory according to the credit
policy, payment in cash is required. In our Offshore Drilling operations,
our customers have generally high credit ratings. Our RoRo vessels are
typically chartered out on a time or bareboat charter. Although such
charterhire is paid in advance and we have the contractual right to
withdraw the vessel and cancel the charter contract if payment is not
received within a certain time, before entering into a charter agree-
ment the credit worthiness of the charterer is investigated using well
known credit-rating agencies. If the credit worthiness is not satisfac-
tory a guarantee is required from the charterer, e.g. in the form of
a bank guarantee.
In our tanker operations where a spot charter arrangement is made,
the charterer is scrutinized before the contract is signed in accordance
with our QA system rules. If the charterer is not considered “first class”
or has certain remarks on his payment possibility, chartering of the ves-
sel can either be denied, or the charterer can be offered to provide a
bank guarantee, or to pay the freight before discharge of the cargo
(called BBB). In a period charter arrangement the charterhire is paid in
advance. If the charterhire is not paid within a certain time we have the
right to withdraw the vessel and cancel the charter contract. Regarding
buy and sell arrangements of vessels the procedures are dictated by
the buy/sale contract (MOA) where a vessel is not released to a buyer
until the full payment has been received into sellers’ bank account.
In our Property operations, both residential and commercial tenants
make the rental payments in advance. Nevertheless, a credit check is
always made on new tenants, residential as well as commercial, and
commercial tenants are put on regular “credit-watch” throughout the
rental period. If the potential tenant does not fulfill the criteria set out
in our finance policy, the tenant can either be denied a rental contract
or be asked to make additional pre-payment or provide a bank guaran-
tee (commercial tenants).
All financial instruments are entered into with counterparties who
are considered to be creditworthy institutions and terms and condi-
tions are documented. In the normal course of business, none of the
parties demand collateral for credit exposure from financial instru-
ments. All financial derivatives are traded within the framework of
established ISDA agreements, where positive and negative market val-
ues are netted. In the tables below credit risk refers to net positive
market values per counterparty.
Liquidity risks
Liquidity risk is managed by maintaining an adequate level of cash,
cash equivalents and available financing through unutilized committed
credit facilities and the possibility to sell short term marketable hold-
ings in equities and bonds. Due to the dynamic character of the busi-
ness, the need for financing flexibility is satisfied by arranging part
of the company’s funding in the form of committed Revolving Credit
Facilities, under which short term requirements for liquidity can
be met.
The management regularly monitors the company’s liquidity
reserves, based on anticipated cash flows. This is carried out on both
operational company level and centrally at the treasury department in
line with best practice and the limits set up for on a group wide basis.
Furthermore, it is the policy of the group to calculate future cash flows in
all major currencies and quantify the liquidity needed to meet those cash
flows, to monitor balance sheet liquidity ratios in relation to both internal
and external minimum levels and to maintain plans for debt financing.
STENA AB 2013 57
As of 31 December 2013, MSEK TotalLess than
1 yearBetween 1
and 2 yearsBetween 2
and 5 yearsMore than
5 years Not specified
Property loans 12,678 843 779 794 10,262
Other bankloans 25,299 3,442 5,562 5,840 10,455
Revolving Credit Facility 11,392 11,392
Other credit facilities 534 331 203
Senior Notes 5,324 2,657 2,667
Financial leasing debt 873 231 179 450 13
Operational leasing debt 5,093 1,096 713 1,373 1,911
Trade accounts payable 1,722 1,722
Derivatives 1,211 257 144 485 325
Total 64,126 7,922 7,377 11,599 25,633 11,595
The table below shows the group’s financial debts, sorted by the
remaining years until the agreed maturity date. The figures shown in
the table are based on agreed confirmations and constitute undis-
counted cash flows. Cash flows in foreign currency is converted to
SEK by using the closing exchange rates.
Property loans consists principally of bank mortgage loans on real
estate, buildings and land in the Company’s real estate business seg-
ment. These loans are denominated in SEK and EUR, respectively.
Other loans consist of long term bank loans used to finance the acqui-
sition of vessels and other assets. They are denominated in USD, GBP,
EUR and SEK, respectively.
As of December 2004 the Company has a Revolving Credit Facility
of USD 1 billion. The facility was renegotiated in September 2012 and
carries a maturity of 5.5 years and proceeds was used to refinance the
$1 billion “old” facility dated 8 December 2004. Obligations under
the facility are secured mainly by mortgages on certain vessels. Bor-
rowings under the facility bear interest at a rate based on LIBOR plus
an applicable margin based on the utilization of the facility. The facility
imposes certain covenants regarding levels of working capital, cash and
cash equivalents and interest coverage ratio. As of 31 December 2013,
the utilized portion of the facility was MUSD 625, of which MUSD 619
was actually drawn and MUSD 6 used for issuing of bank guarantees.
As of 31 December 2012 the utilized portion of the facility was MUSD
506, of which MUSD 501 was actually drawn and MUSD 5 used for
issuing of bank guarantees.
As of 2007, the Company has an additional Revolving Credit Facility
of MUSD 200. This facility was renegotiated during 2013 and the credit
line increased from MUSD 200 to MUSD 300. The utilized portion of
the facility as of 31 December 2013, was MUSD 146. As of 31 December
2012, the utilized portion of the facility was MUSD 138.
As of 2010, the Company has an additional Revolving Credit Facili-
ties of MSEK 6,660 Revolving Credit Facility with Svenska Handels-
banken and Nordea and guaranteed by EKN. As of 31 December 2013,
the utilized portion of the facility was MSEK 6,436. As of 31 December
2012 the utilized portion of the facility was MSEK 5,173. As of 31
December 2012 the Company had a total of MSEK 5,551 in unutilized,
mainly uncommitted, overdraft facilities and other similar lines of
credit, as compared to MSEK 7,825 as of 31 December 2012 including
unutilized portions of Revolving Credit Facilities.
“Not specified” includes borrowings and utilized credit lines that
have formal repayment dates in 2014. These loans have been classified
as long-term because it is the intention of the Company to refinance
these loans on a long-term basis. “Not specified” also includes the uti-
lized portion of the Revolving Credit Facilities.
The revolving credit facility imposes various financial and operating
covenants. The principal financial covenants (i) require us to maintain
current assets and committed undrawn facilities in an amount greater
than or equal to 125% of consolidated current liabilities, (ii) require us
and our subsidiaries to maintain minimum cash and cash equivalents of
not less than MUSD 100, (iii) require our net debt to be no greater than
65% of the capitalization, and (iv) require us to maintain ownership of
the security parties that, at the date of execution of the credit facility
agreement, are members of the Stena AB group.
58 STENA AB 2013
GROUP
31. FINANCIAL INSTRUMENTS
Financial instruments per category
Financial instruments measured at fair value through profit and loss Financial instruments
MSEK
As of 31 December 2012Fair value
optionHeld for trading1)
Deriva-tives
held for hedging
Held to maturity
Available for sale
Loans and receivables
Other financial liabilities
Totalcarrying
value
Total fair
value
Assets
Marketable securities 1,835 3,283 5,118 5,118
Other noncurrent assets 1,034 1,034 1,034
Trade debtors 2,823 2,823 2,823
Short-term investments 198 1,897 2,095 2,095
Investments in SPEs 4,723 447 5,170 5,117
Other receivables 94 400 494 494
Total 1,835 292 400 4,723 4,764 4,720 16,734 16,681
Liabilities
Senior notes 5,992 5,992 6,333
Other Long-term interest bearing debt 46,877 46,877 46,877
Short-term interest bearing debt 2,927 2,927 2,927
Trade accounts payable 1,764 1,764 1,764
Debt in SPEs 3,974 3,974 3,974
Other liabilities 279 1,710 1,989 1,989
Total 279 1,710 61,534 63,523 63,864
As of 31 December 2013
Assets
Marketable securities 898 3,345 4,243 4,243
Other noncurrent assets 1,137 1,137 1,137
Trade debtors 2,849 2,849 2,849
Short-term investments 348 1,346 1,694 1,694
Investments in SPEs 4,092 219 4,311 4,272
Other receivables 80 667 747 747
Total 898 428 667 4,092 4,701 4,195 14,981 14,942
Liabilities
Senior notes 5,324 5,324 5,850
Other Long-term interest bearing debt 45,929 45,929 45,929
Short-term interest bearing debt 4,847 4,847 4,847
Trade accounts payable 1,722 1,722 1,722
Debt in SPEs 3,944 3,944 3,944
Other liabilities 216 995 1,211 1,211
Total 216 995 61,766 62,977 63,503
1) Held for trading includes exchange contracts for hedging translation exposure, but not included in hedge accounting, reported in other liabilities, MSEK (35) and MSEK (49) in 2012 and interest rate contracts for hedging interest, but not included in hedge accounting, reported in other liabilities, MSEK (101) and MSEK (136) in 2012
This note describes the financial outcome from financial instruments in the Stena Group. Accounting principles for financial instruments are
described in Note 1 and financial risk management is described in Note 30.
STENA AB 2013 59
Financial instruments at fair value
For short term assets and liabilities in Loans and receivables and Other
financial liabilities we assume the carrying value and fair value to be
the same. For senior notes the fair value is based on quoted prices and
for other long term liabilities we assume that the fair value would not
materially impact the carrying value. For the rest of the Group’s finan-
cial instruments (excluding investments in SPEs, please see not 13)
the table below shows the fair value in different levels as of December
2012 and 2013, respectively.
The different levels indicate to what extent the market value has
been used when calculating the fair value.
Investments in level 1 consist of equity shares and fixed income clas-
sified as held for trading, fair value option or financial assets available
for sale. The financial instruments are traded on an active market and
the fair value is determined on the basis of the asset’s listed current
bid-rate on the balance sheet date.
Financial instruments in level 2 consist of foreign exchange contracts
and interest rate swaps entered for trading or hedging purpose. The
valuation of interest rate swaps are made using discounted cash flows
based on forward interest rates in observable yield curves. Level 2
also consists of financial assets available for sale and the fair value is
received from external party. Regarding loans in level 2 the fair value
is determined by the nominal amount as long as the underlying value
of the loan has not materially been changed.
Investments in level 3 consist of equity securities and debt invest-
ments. For equity securities we calculate the value based on estimated
discounted cash-flows. Fair value is determined by hypothetical deter-
mine what the market price would have been if there would have been
a market for these instruments. For debt investments we estimate
the value based on the nominal amount taking into consideration the
credit risk of the loan.
As of 31 December 2012 As of 31 December 2013
Level 1 Level 2 Level 3Total
balance Level 1 Level 2 Level 3Total
balance
Assets
Financial assets at fair value through profit or loss
– Trading derivatives 94 94 80 80
– Trading securities 1,980 53 2,033 1,226 21 1,247
Derivatives used for hedging 400 400 667 667
Available-for-sale financial assets
– Equity securities 1,508 748 1,034 3,290 1,617 842 1,041 3,500
– Debt investments 939 88 1,027 804 81 96 981
Total assets 4,427 1,383 1,034 6,844 3,647 1,691 1,137 6,475
Liabilities
Financial liabilities at fair value through profit or loss
– Trading derivatives 280 280 216 216
Derivatives used for hedging 1,710 1,710 995 995
Total liabilities 1,990 1,990 1,211 1,211
Specification of financial instruments in Level 3
MSEKAs of 31 December 2012
Equity security Real Estate Fund 1
Equity security Real Estate fund 2
Equity security Other
Debt investment Convertible loan Total
Opening balance 1 January 2012 771 274 450 1,495
Total unrealized gains/losses
– recognised in profit or loss
– recognised in other comprehensive income (48) (33) (3) (84)
Proceeds from acquisitions and sales, net 1 1
– whereof realised result 15 15
Reclassification from Level 2 (332) (332)
Translation differences (29) (10) (7) (46)
Closing balance as of 31 December 2012 694 231 109 1,034
60 STENA AB 2013
GROUP
CONT. NOTE 31
As of 31 December 2013
Opening balance 1 January 2013 694 231 109 1,034
Total unrealized gains/losses
– recognised in profit or loss (44) (44)
– recognised in other comprehensive income 47 69 19 135
Impairment recognised in profit or loss (87) (87)
Proceeds from acquisitions and sales, net (21) 101 80
– whereof realised result (23) (23)
Translation differences 21 9 (6) (5) 19
Closing balance as of 31 December 2013 675 309 57 96 1,137
There where no transfers between Level 1–3 during 2013.
The table below shows information about the fair value measurements of level 3 instruments
As of 31 December 2013
Funds DescriptionFair value at 31 December 2013
Valuation techniques
Unobservable inputs
Range of unobserva-ble inputs (probability weighted average)
Relationship of unobservable inputs to fair value
Sensitivity analyses
ING DutchOffice FundsC.V.
The fund invests in prime office real estate only in the Netherlands, and consist of 56 pro-perties
MSEK 675 Estimated discounted cash flows
Future develop-ment of the occupancy rates
The vacancy rate is inserted in the range of 7,5% – 12,5% (weighted average of 8,25%)
The change in the properties occupancy rates lead to a lower / higher fair value
If the vacancy rated is changed with +/– 10% the effect on the fair value will be MSEK +/– 13
Airport RealEstate BasisFunds C.V.
The Schiphol fund consist 16 properties (offices and ware-houses) located on Schiphol Airport grounds in the Netherlands
MSEK 309 Estimated discounted cash flows
Future develop-ment of the occupancy rates
The vacancy rate is inserted in the range of 3,4% – 7,4% (weighted average of 5,4%)
The change in the properties occupancy rates lead to a lower / higher fair value
If the vacancy rated is changed with +/– 10% the effect on the fair value will be MSEK +/– 2
Converti-ble loan
Long term loan MSEK 96 Estimated discounted cash flows
Interest level and credit risk
Market interest rate in average 6.5%
The change in interest rate or credit risk lead to a lower/higher fair value
If the interest rate including credit risk is changed with +/– 100 points the effect on the fair value will be MSEK +/– 1
As of 31 December 2013 a change of +/– 10% in the unrealized value of all our assets in the Level 3 category, would have an effect of +/– MSEK 15
(as of 31 December 2012 +/– MSEK2) on profit before tax and +/– MSEK 99 (as of 31 December 2012 +/– MSEK 101) recognized in other compre-
hensive income.
The table below shows the financial derivatives that are included in ISDA agreements and subject for netting.
MSEK
As of 31 December 2013Financial assets/liabilities, gross
Netted balances
Amounts shown in balance sheet
Financial instruments included in ISDA agree-
ments but not nettedFinancial
instruments, net
Derivative financial assets 747 0 747 500 247
Derivative financial liabilities (1,211) 0 (1,211) (500) (711)
Total (464) 0 (464) 0 (464)
STENA AB 2013 61
Fair value
The table below summarizes the fair value of balance sheet items in
the case where the fair value differs from the carrying value.
The investment in SPEs are classified as follows: Corporate Fixed
Income Bond are classified as “available for sale” and are revalued in
other comprehensive income. Senior Bank Debt are classified as “held
to maturity” and are kept at cost in the balance sheet. To determine the
market values for the Corporate Fixed Income Bonds the company uses
generally accepted public market pricing sources.
The fair value of Senior notes has been calculated by using prices
from Bloomberg.
MSEK2012
Carrying value2012
Fair value2013
Carrying value2013
Fair value
Assets
Investments in SPEs 5,170 5,117 4,311 4,272
Liabilities
Senior notes 5,992 6,333 5,324 5,850
Interest rate hedge contracts
Outstanding interest rate contracts for hedging of the interest rate exposure
MSEK 2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
Contracts excluding SPE
Interest rate swaps floating to fixed
– receivable position 3,000 47 12,143 467
– payable position 29,593 (1,648) 22,389 (872)
Interest rate caps
– receivable position 629 0 633 0
– payable position 1,000 (16)
Interest rate collar
– payable position 2,000 (131) 2,000 (91)
Contracts SPE
Interest rate swaps floating to fixed
– payable position 651 (12)
Interest rate caps
– receivable position 241 18 238
Total 36,114 (1,726) 38,403 (512)
Whereof the fair value of the instruments used in hedge accounting,
excluding CDO/CLOs, amounts to MSEK (411) as of 31 December 2013
and MSEK (1,595) as of 31 December 2012 and is included in other
current liabilities against the hedge reserve.
The SPEs are investing in different debt securities, see Note 13, and to
reduce the potential negative effects on the actual values of these enti-
ties, interest rate contracts have been entered into at an amount equal
to that of the underlying fixed rate bonds.
62 STENA AB 2013
GROUP
CONT. NOTE 31
Currency hedge contracts
The following two tables summarize the contractual net amounts of the Company’s forward exchange and option contracts to hedge the translation
and transaction exposures. Notional amount is gross amount.
Outstanding currency hedge contracts for translation and equity exposure
MSEK2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
Currency forward contracts
– receivable position 12 0 170 3
– payable position 548 (2) 274 (5)
Currency swap contracts
– receivable position 7,107 148 10,028 87
– payable position 7,582 (104) 11,455 (135)
Total 15,249 42 21,927 (50)
Whereof the fair value of the instruments used in hedge accounting for equity exposure, amounts to MSEK (25) as of 31 December 2013 (MSEK 91
as of 31 December 2012) and is included in other current liabilities (other current assets) against the hedge reserve.
Outstanding currency hedge contracts for transaction exposure
MSEK2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
Currency forward contracts
– receivable position 1,119 36 323 13
– payable position 1,054 (23) 696 (9)
Currency swap contracts
– receivable position 1,140 60 1,368 42
– payable position 2,205 (67) 1,846 (83)
Total 5,518 6 4,233 (37)
Whereof the fair value of the instruments used in hedge accounting for transaction exposure, amounts to MSEK (27) as of 31 December 2013 and
MSEK 19 as of 31 December 2012 and is included in other current liabilities (other current assets) against the hedge reserve.
STENA AB 2013 63
The table below shows the hedging contracts divided by currency. Notional amount is net amount.
Hedge accounting contracts for transaction exposure
MSEK2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
SEK companies
USD 643 (4) 656 (4)
EUR 622 (7) (434) (6)
NOK (121) 2 (111) 1
Other (26) 2 125 2
USD companies
GBP 318 15 607 11
NOK 421 37 54 0
AUD 63 0
EUR companies
USD 468 5 476 (19)
CAD (549) (3) (266) 31
SEK (36) 22 0
Other 248 (19)
GBP companies
EUR 85 (2) 450 (35)
USD 615 (6) (27) (6)
DKK companies
USD 47 (1) 45 (2)
Total 2,735 19 1,660 (27)
Oil price contracts
Outstanding hedge contracts for bunker fuel exposure
MSEK2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
Raw material swap contracts
– receivable position 1,957 183 2,026 135
Raw material option contracts bought call 293 3
Raw material option contracts sold put (219) (1)
Total 2,031 185 2,026 135
The fair value of the instruments used in hedge accounting for bunker fuel exposure, amounts to MSEK 135 as of 31 December 2013 and MSEK 183
as of 31 December 2012 and is included in other current assets against the hedge reserve.
Trading contracts
Outstanding derivative contracts for trading activities
MSEK2012
Notional amount2012
Fair value2013
Notional amount2013
Fair value
Foreign exchange spot and forwards 914 (1) 697 0
Currency options1 4 0 77 0
Interest rate instruments 171 (1) 123 0
Total 1,089 (2) 897 0
1) The notional amount is deltaadjusted
64 STENA AB 2013
GROUP
32. PERSONNEL
The following table presents the average number of employees of the Company:
2012 2013
Total No. of females Total No. of females
Parent Company:
Board, CEO, Executive vice president 3 3
Other employees 27 16 30 17
Subsidiaries in Sweden 4,251 1,717 4,440 1,779
Total Sweden 4,281 1,733 4,473 1,796
Subsidiaries outside of Sweden
Great Britain 2,150 550 2,441 587
The Netherlands 721 78 698 111
Denmark 884 364 833 345
Germany 164 73 358 141
Ireland 32 21 21 15
Norway 74 35 135 37
Poland 48 36 44 32
Switzerland 5 4 16 7
Spain 137 16 128 14
Portugal 11 2 10 1
France 11 2 10 1
Luxembourg 9 5 8 4
China 93 14 93 14
Singapore 46 12 157 71
Korea 102 10 137 19
United States 26 8 24 8
Brazil 3 8
India 82 39 94 43
United Arab Emirates 68 4 74 4
Thailand 19 3
Lithuania 6 2 33 24
Australia 4 1 11 1
Russia 8 7 9 8
Other 14 3 33
Shipborne employees 1,586 18 1,481 8
Total outside of Sweden 6,284 1,304 6,875 1,498
Total Group 10,565 3,037 11,348 3,294
Shipborne employees refers to drilling and shipping activities, which are performed world wide. For Ferry operations (Stena Line), such persons
have been allocated by country. The total number of shipborne employees in Stena Line in 2013 was 3,790 as compared to 3,773 in 2012.
STENA AB 2013 65
For Swedish-flagged vessels employed in international shipping activi-
ties, the Company has received a subsidy equal to all social security
costs and income taxes payable by the employers on behalf of employ-
ees who work on board such vessels. The amount of this subsidy in
2013 was MSEK 378, out of which MSEK 345 related to the ferry oper-
ations. In 2012, the amount of the subsidy was MSEK 372, out of
which MSEK 300 related to the ferry operations. The amounts received
have reduced personnel costs.
Remuneration of Chief Executives
Salaries of MSEK 12 were paid to the Chief Executive Officer and
the Executive Vice President in 2013 and MSEK 12 in 2012. The
correspond ing pension charges amounted to MSEK 7 in 2013 and
MSEK 6 in 2012. The aggregate compensation paid by the Stena AB
to its directors (a total of ten persons, CEO included) amounted to
MSEK 8 in 2013 and MSEK 9 in 2012. Of total salaries paid to other
employees MSEK 42 were paid to other officers than the Chief Executive
Officer, the Executive Vice President and the board members in 2013
(a total of eight persons) and MSEK 51 in 2012.
The Chief Executive Officer has retirement conditions allowing
retirement from 65 years of age with a salary of 65% of the salary then
valid. The period of notice from either parties is 12 months. Severance
pay amounts to a maximum of 24 months salary. The board members
of Stena AB were paid KSEK 300 in 2013, out of which KSEK 50 was
paid to the Chairman of the Board and KSEK 25 was paid to the Chief
Executive Officer. In 2012, the board members of Stena AB were paid
KSEK 300, out of which KSEK 50 was paid to the Chairman of the
Board and KSEK 25 was paid to the Chief Executive Officer.
The Chairman of the Board has in addition invoiced KSEK 2,781 and
KSEK 2,715 for consultations for the years 2013 and 2012 respectively.
In the Board of Directors, 80% are men (80% in 2012) and 20%
women (20% in 2012). 88% of other senior executives are men and
12% are women. In 2012 90% where men and 10% were women.
Total personnel costs
2012 2013
MSEKParent
company Subsidiaries TotalParent
company Subsidiaries Total
Wages, salaries and other remuneration 43 4,381 4,424 48 5,048 5,096
Pension costs 11 388 399 11 421 432
Other social charges 17 520 537 18 614 632
Total 71 5,289 5,360 77 6,083 6,160
66 STENA AB 2013
GROUP
33. RELATED PARTY TRANSACTIONS
We have entered into various transactions with other companies in
the Stena Sphere, which includes the companies wholly owned by
the Sten Allan Olsson family in Sweden, Sessan and Stena Metall and
their respective subsidiaries. Another significant company within the
Stena Sphere is Concordia which is 52% owned by Sessan. Shares in
Concordia are listed on NASDAQ OMX Stockholm. The significant trans-
actions between the Company and its affiliates are described below.
All transactions have been made at arm’s length.
Concordia
Concordia and the Company (indirectly through Stena Bulk AB, a
wholly owned subsidiary of the Company) are parties to an allocation
agreement (the “Allocation Agreement”) pursuant to which Concordia
may elect to participate 100%, 50% or not to participate in business
opportunities identified by Stena Bulk relating to the chartering of
crude oil tankers. The net outcome of the agreement, including results
of forward contracts, was in 2013 and 2012 SEK 0, respectively.
We provide certain services to Concordia such as administration,
marketing, commercial management, insurance and technical support
for Concordia’s owned and chartered vessels, including administration
of jointly chartered vessels, offices and office services for Concordia’s
personnel and certain financial and other services. We earned fees for
these services of MSEK 35 in 2012 and MSEK 38 in 2013.
Sessan
Since June 1999, we have served as the business manager of Sessan
for its 50% participation in a Norwegian partnership that owns the
shuttle tanker Stena Sirita, which is chartered on a two-year charter
until 2015. In 2003, we also became the business manager of Sessan
for its 50% participation in the shuttle tanker Stena Spirit, which is
chartered pursuant to a 15-year contract to Petrobras in Brazil.
We earned total fees for these services of MSEK 1.3 in 2012 and
MSEK 1.3 in 2013.
In December 2002, we sold the remaining 50% of the RoPax vessel
Stena Jutlandica to Sessan who acquired the first 50% of this vessel
from us in 1996. The vessel is chartered back under an operating lease,
for which we paid charterhire of MSEK 59 in each of the years 2012
and 2013, respectively.
Stena Metall
We purchase a substantial part of our bunker fuel from Stena Metall.
Such purchases aggregated MSEK 2,335 and MSEK 1,753 in 2012 and
2013, respectively.
We provide management and other services to Stena Metall. We re -
ce iv ed MSEK 1 in each of the years 2012 and 2013 for these services.
Stena Metall has paid Stena Line UK MSEK 62.6 for the financial
year ended 31 December 2013 and MSEK 97 for the financial year ended
31 December 2012, for charters of two vessels – Stena Superfast VII and
Stena Superfast VIII. The vessels have been re charter ed to Stena Line
Irish Sea for MSEK 90 in 2013 and MSEK 141 in 2012. In 2013 Stena
Rederi AB acquired the company owning the vessels for MSEK 47.
As per December 2012, Stena Renewable sold two wind mill parks
to Stena Metall for MSEK 486. Stena Renewable will continue to give
management services to the companies and the annual fee is MSEK
2.6, which has been paid in 2013.
Olsson Family
We rent office space from members of the Olsson family. In each of
the years 2012 and 2013, we paid MSEK 40 and MSEK 40, respectively,
in respect of such properties.
We manage certain properties owned by members of the Olsson
family. In the years 2013 and 2012, members of the Olsson family paid
us MSEK 17 and 16, respectively, for such management services.
We have sold the property Lomma 25:96 for MSEK 7,425, to
Fastighets AB Kalvringen, owned by the family.
We have agreed to pay Dan Sten Olsson an annual indexed re tire-
ment benefit for life.
34. SUBSEQUENT EVENTS
In January 2014 the RoPax vessel Dieppe Seaways was acquired. Die-
ppe Seaways is a sister vessel to Stena Superfast VII and Stena Super-
fast VIII. Dieppe Seaways is currently on a charter to DFDS Seaways
from acquisition date until November 2014.
In January 2014 a ten year bond of MUSD 600 was issued. The pur-
pose of this transaction was to extend our amortization profile and pay
outstanding amounts under our existing credit facility.
In February 2014 another ten year bond of MUSD 350 was issued
and a MUSD 650 Term loan B was issued which is a seven year loan
with low rate of amortization. The guarantee for both bond and loan
consists of the units Stena DrillMAX and Stena Carron. The purpose of
this transaction was to extend existing profile of amortization and
increase liquidity. As a result of this transaction the available facilities
in our existing RCF of MUSD 1,000 will be reduced to MUSD 600.
In February 2014 Stena Line acquired the operation on the route
Rosslare (Ireland) – Cherbourg (France). The acquisition will benefit
the network as well as improve Stena Line’s strategic position in the
southern part of Ireland. The operation will be taken over as from
April 2014.
STENA AB 2013 67
Years ended 31 December
MSEK Note 2012 2013
Revenues 1 149 136
Administration expenses 2 (187) (199)
Other operational income (42) 32
Income from operations (80) (31)
Result from shares in Group companies 3 1,337
Result from securities and receivables accounted for as tangible fixed assets 4 123 (42)
Other interest income and similar profit/loss items 5 255 237
Interest expense and similar profit/loss items 6 (472) (810)
Finance net 1,043 (615)
Group contribution 7 (760) 679
Income before tax 203 33
Taxes 8 158 (10)
Net income 361 (23)
Parent Company
INCOME STATEMENTS
68 STENA AB 2013
PARENT COMPANY
Parent Company
BALANCE SHEETS As of 31 December
MSEK Note 2012 2013
Assets
Tangible fixed assets
Shares in Group companies 9 15,651 15,801
Long-term receivables, Group companies 9 7,392 8,497
Marketable securities 10 188 342
Other non-current assets 10 478 459
Total financial fixed assets 23,709 25,099
Total non-current assets 23,709 25,099
Current assets
Short-term receivables, Group companies 1,599 820
Other receivables 89 20
Prepaid expenses and accrued income 11 35 54
Total short-term receivables 1,723 894
Cash and cash equivalents
Total current assets 1,723 894
Total assets 25,432 25,993
Shareholders’ equity and liabilities
Shareholders’ equity
Share capital, 50,000 shares, SEK 100 each 5 5
Statutory reserve 2 2
Total restricted equity 7 7
Retained earnings 12,528 12,699
Net income 361 23
Total unrestricted equity 12,889 12,722
Total shareholders’ equity 12,896 12,729
Non-current liabilities
Long-term debt 12 5,187 5,331
Senior Notes 13 5,154 6,436
Pensions and other non-current liabilities 8 12
Total non-current liabilities 10,349 11,779
Current liabilities
Senior Notes 13 838
Trade accounts payable 11 9
Current liabilities, Group companies 1,179 1,262
Other current liabilities 5 40
Accrued costs and prepaid income 14 154 174
Total current liabilities 2,187 1,485
Total shareholders´ equity and liabilities 25,432 25,993
Pledged assets 15 none none
Commitments and contingent liabilities 15 20,636 20,597
STENA AB 2013 69
Parent Company
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYMSEK Share Capital
Statutory reserves
Retained earnings and net income Total
Equity as of 31 December 2011 5 2 12,890 12,897
Dividend (260) (260)
Transfer to charitable trust (14) (14)
Repayment of the capital in Group Contribution (89) (89)
Net Income 361 361
Equity as of 31 December 2012 5 2 12,888 12,895
Dividend (189) (189)
Net Income 23 23
Equity as of 31 December 2013 5 2 12,722 12,729
Parent Company
STATEMENTS OF CASH-FLOW Years ended 31 December
MSEK Note 2012 2013
Net cash flows from operating activities
Net income 361 23
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized result on financial instruments (14) 238
Unrealized foreign exchange (gains)/losses (328) 155
Deferred income taxes 8 (158) 10
Group contributions 760 (679)
Other non cash items 15 6
Cash flow from operations before changes in working capital (636) (247)
Changes in working capital
Receivables within Group companies (2,015) 2,300
Other receivables (35) (21)
Other current liabilities 408 18
Net cash provided by/used in operating activities (1,006) 2,050
Net cash flows from investing activities
Proceeds from sale of securities and long-term receivables, net (462) (423)
Increase of long-term receivables, Group companies (3,316) (1,105)
Net cash provided by/used in investing activities (3,778) (1,528)
Net cash flows from financing activities
Dividend (260) (189)
Group contributions received/paid, net 220 (760)
New borrowings 5,173 1,265
Principal payments on debt (248) (838)
Other financing activities (101)
Net cash provided by/used in financing activities 4,784 522
Net change in cash and cash equivalents 0 0
Cash and cash equivalents at beginning of year 0 0
Cash and cash equivalents at end of year 0 0
70 STENA AB 2013
PARENT COMPANY
Parent Company
NOTES
1. REVENUESThe revenues in the parent company refer to services made for Group Companies. For 2013 the revenues were MSEK 136, whereof 88% from Group
Companies. For 2012 the revenues were MSEK 149, whereof 94% from Group Companies.
2. ADMINISTRATION EXPENSESFees to the auditors Years ended 31 December
MSEK 2012 2013
Audit services 5 5
Tax services 3 1
Total 8 6
3. RESULT FROM SHARES IN GROUP COMPANIESDuring 2012 a dividend was received from Stena International S.A. amounting to MSEK 1,137.
4. RESULT FROM SECURITIES AND RECEIVABLES ACCOUNTED FOR AS TANGIBLE FIXED ASSETS
Years ended 31 December
MSEK 2012 2013
Unrealized result from financial instruments 14 (132)
Exchange differences (86) (27)
Interest income 195 117
Total 123 (42)
Of the total interest income MSEK 117 came from Group companies. In 2012, MSEK 180 came from Group Companies.
All amounts in MSEK. Accounting principles, see Note 1 in the Consolidated Notes.
Audit fees relate to examination of the annual report, financial
accounting and the administration by the Board and the President as
well as other tasks related to the duties of a company auditor.
Tax services include both tax consultancy and tax compliance services.
All other tasks are defined as other fees.
The fees for 2013 refer to PwC whereas the fees for 2012 refer to KPMG.
STENA AB 2013 7 1
5. OTHER INTEREST INCOME AND SIMILAR PROFIT/LOSS ITEMS Years ended 31 December
MSEK 2012 2013
Intercompany interest income 51 170
Interest income from derivatives 68 67
Unrealized change in value of short-term derivatives 136
Total 255 237
6. INTEREST EXPENSE AND SIMILAR PROFIT/LOSS ITEMS Years ended 31 December
MSEK 2012 2013
Interest expense (589) (641)
Unrealized change in value of short-term derivatives (157)
Exchange differences 126 (5)
Amortization of deferred financing costs (8) (6)
Other financial expenses (1) (1)
Total (472) (810)
Of the total interest expenses MSEK (144) came from Group Companies. In 2012, MSEK (139) came from Group Companies.
7. GROUP CONTRIBUTIONThe company has in 2013 received Group contributions amounting
to MSEK 779 from AB Stena Finans and given MSEK 100 to Stena
Line Scandinavia AB. The company has in 2012 received Group
contributions amounting to MSEK 200 from Stena Fastigheter AB and
given MSEK 650 to Stena Don AB and MSEK 300 to AB Stena Finans.
8. INCOME TAXES Years ended 31 December
MSEK 2012 2013
Income before tax 203 33
Deferred tax 158 (10)
Total taxes 158 (10)
The reconciliation of the difference between the statutory tax rate
in Sweden and the effective tax rate are set forth below
Statutory income tax rate (53) (7)
Expenses not deductible (5) (3)
Non taxable income, received dividend 300
Non taxable/non deductible result of shares (92)
Effect of change in tax rate 8
Tax income/tax expense 158 (10)
Tax paid is shown in note 29 in the Consolidated Notes.
72 STENA AB 2013
PARENT COMPANY
The subsidiaries´ share of larger
Group companies
Located inOwnership,
%
Stena Bulk AB Göteborg 100
Stena Line Scandinavia AB Göteborg 100
Stena Line Holding BV The Netherlands 100
Stena Holland BV The Netherlands 100
Stena Line Ltd The UK 100
Stena Drilling (Holdings) Ltd The UK 100
Stena North Sea Ltd The UK 100
Stena Ropax Ltd The UK 100
Stena Switzerland AG Switzerland 100
Stena Maritime AG Switzerland 100
A complete list of the companies in the Group has been delivered to
the Swedish companies registration office.
The Parent company has the following long-term receivables
on Group companies
MSEKAs of 31 December, 2013
Booked value
Stena Rederi AB 710
AB Stena Finans 6,437
Stena Adactum AB 1,350
Total long-term receivables Group companies 8,497
Opening balance as of 1 January 2013 7,392
New receivables 1,264
Change in receivables (150)
Exchange differences (9)
Closing balance as of 31 December 2013 8,497
10. OTHER FINANCIAL FIXED ASSETSMarketable securities
MSEK
Opening balance as of 1 January 2013 188
Additions 284
Reclassification (133)
Exchange differences 3
Closing balance as of 31 December 2013 342
Marketable securities regard long-term holdings of listed shares (see Note 14 in the Consolidated Notes).
Other long-term assets
MSEKDeferred tax
receivablesOther long-term
receivablesOther long-term
securitiesCapitalized
costs Total
Opening balance as of 1 January 2013 432 8 22 16 478
Additions 3 3
Valuation to fair value 3 (2) 1
Disposal (10) (13) (23)
Closing balance as of 31 December 2013 422 11 23 3 459
Other long-term securities relate to holding non-listed shares (see Note 15 in the Consolidated Notes). Capitalized costs consist of costs for issuing
bonds. These costs are allocated to the loans remaining duration (see Note 6 in the Consolidated Notes).
9. SHARES IN GROUP COMPANIES As of 31 December
MSEK Reg.ID Located inShare,
%Amount of
shares in 000´sBooked value
2012Booked value
2013
Stena Rederi AB 556057-8360 Göteborg 100 25 590 590
AB Stena Finans 556244-5766 Göteborg 100 500 550 550
Stena Fastigheter AB 556057-3619 Göteborg 100 119 2,935 2,935
Stena Adactum AB 556627-8155 Göteborg 100 500 1,714 1,864
Stena International S.A. Luxembourg 100 4,768 9,862 9,862
Total shares in Group companies 15,651 15,801
Stena AB has paid MSEK 150 to Stena Adactum AB as share holders contribution.
STENA AB 2013 73
11. PREPAID EXPENSES AND ACCRUED INCOME As of 31 December
MSEK 2012 2013
Prepaid expenses 18 10
Accrued income 17 44
Total 35 54
12. OTHER LONG-TERM DEBTThe amount is regarding the utilization of credit facility. For information about the credit facility guaranteed by Svenska Exportkreditnämnden
(see Note 23 in the Consolidated Notes).
13. SENIOR NOTESFor information about the Senior Notes (see Note 24 in the Consolidated Notes).
14. ACCRUED COSTS AND PREPAID INCOME As of 31 December
MSEK 2012 2013
Accrued interest expense 140 147
Accrued vacation salaries and social security debt 11 12
Other accrued expenses 3 3
Deferred income 12
Total 154 174
15. PLEDGED ASSETS, COMMITMENTS AND CONTINGENCIES As of 31 December
MSEK 2012 2013
Guarantees, subsidiaries 19,911 20,161
Guarantees, other 725 436
Total 20,636 20,597
16. PERSONNELFor more information about employees, salaries, other remunerations and social securities for employees (see Note 32 in the Consolidated Notes).
74 STENA AB 2013
PARENT COMPANY
PROPOSED TREATMENT OF UNAPPROPRIATED EARNINGSThe following funds in the Parent company are available to the Annual General Meeting (SEK thousand)
Retained earnings 12,699,323
Net income 23,208
Unrestricted equity 12,722,531
The Board of Directors propose the following:
A dividend to the shareholders 200,000
A dividend to Sten A Olssons Foundation for Culture and Science and other public good purposes as a gift according to the Companies Act Chapter 17 Paragraph 5 10,000
A dividend to the Swedish Sea Rescue Society as a gift according to the Companies Act Chapter 17 Paragraph 5 10,000
To be carried forward 12,502,531
Total 12,722,531
Göteborg, 28 April 2014
Lennart Jeansson Dan Sten Olsson
Chairman of the Board Managing Director
Gunnar Brock Anne-Marie Pouteaux Christian Caspar
Board member Board member Board member
Lars Westerberg Jörgen Lorén Mahmoud Sifaf
Board member Employee representative Employee representative
Our Audit Report has been released on 28 April 2014
Peter Clemedtson Johan Rippe
Authorised Public Accountant Authorised Public Accountant
STENA AB 2013 75
Report on the annual accounts and consolidated accounts
We have audited the annual accounts and consolidated accounts
of Stena AB for the year 2013.
Responsibilities of the Board of Directors and the Managing
Director for the annual accounts and consolidated accounts
The Board of Directors and the Managing Director are responsible for
the preparation and fair presentation of these annual accounts and
consolidated accounts in accordance with International Financial
Reporting Standards , as adopted by the EU, and the Annual Accounts
Act, and for such internal control as the Board of Directors and the
Managing Director determine is necessary to enable the preparation of
annual accounts and consolidated accounts that are free from material
misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these annual accounts and
consolidated accounts based on our audit. We conducted our audit in
accordance with International Standards on Auditing and generally
accepted auditing standards in Sweden. Those standards require that
we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the annual accounts and
consolidated accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the annual accounts and consoli-
dated accounts. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstate-
ment of the annual accounts and consolidated accounts, whether due
to fraud or error. In making those risk assessments, the auditor consid-
ers internal control relevant to the company’s preparation and fair
presentation of the annual accounts and consolidated accounts in
order to design audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Board of Direc-
tors and the Managing Director, as well as evaluating the overall pres-
entation of the annual accounts and consolidated accounts.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinions
In our opinion, the annual accounts have been prepared in accordance
with the Annual Accounts Act and present fairly, in all material re spects,
the financial position of the parent company as of 31 December 2013
and of its financial performance and its cash flows for the year then
ended in accordance with the Annual Accounts Act. The consolidated
accounts have been prepared in accordance with the Annual Accounts
Act and present fairly, in all material respects, the financial position of
the group as of 31 December 2013 and of their financial performance
and cash flows for the year then ended in accordance with Interna-
tional Financial Reporting Standards, as adopted by the EU, and the
Annual Accounts Act. A corporate governance statement has been
prepared. The statutory administration report and the corporate gov-
ernance statement are consistent with the other parts of the annual
accounts and consolidated accounts.
We therefore recommend that the annual meeting of shareholders
adopt the income statement and balance sheet for the parent com-
pany and the group.
Other matters
The audit of the annual accounts for the year 2012 was performed by
another auditor who submitted an auditor´s report dated April 29,
2013, with unmodified opinions in the Report on the annual accounts
and consolidated accounts.
Report on other legal and regulatory requirements
In addition to our audit of the annual accounts and consolidated
accounts, we have also audited the proposed appropriations of the
company’s profit or loss and the administration of the Board of Direc-
tors and the Managing Director of Stena AB for the year 2013.
Responsibilities of the Board of Directors
and the Managing Director
The Board of Directors is responsible for the proposal for appropria-
tions of the company’s profit or loss, and the Board of Directors and
the Managing Director are responsible for administration under the
Companies Act.
Auditor’s responsibility
Our responsibility is to express an opinion with reasonable assurance
on the proposed appropriations of the company’s profit or loss and on
the administration based on our audit. We conducted the audit in
accordance with generally accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors’ proposed
appropriations of the company’s profit or loss, we examined the Board
of Directors’ reasoned statement and a selection of supporting evi-
dence in order to be able to assess whether the proposal is in accord-
ance with the Companies Act.
As a basis for our opinion concerning discharge from liability, in
addition to our audit of the annual accounts and consolidated acc-
ounts, we examined significant decisions, actions taken and circum-
stances of the company in order to determine whether any member
of the Board of Directors or the Managing Director is liable to the com-
pany. We also examined whether any member of the Board of Directors
or the Managing Director has, in any other way, acted in contravention
of the Companies Act, the Annual Accounts Act or the Articles of
Association.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for my opinions.
Opinions
We recommend to the annual meeting of shareholders that the profit
be appropriated in accordance with the proposal in the statutory admin-
istration report and that the members of the Board of Directors and the
Managing Director be discharged from liability for the financial year.
Göteborg 28 April 2014
Peter Clemedtson Johan Rippe
Authorized Public Accountant Authorized Public Accountant
To the annual meeting of the shareholders of Stena AB (publ), corporate identity number 556001-0802
AUDITOR’S REPORT
76 STENA AB 2013
GROUP
FIVE-YEAR SUMMARY
MSEK 2009 2010 2011 2012 2013
Revenues 27,812 27,150 27,968 27 388 30,240
EBITDA excluding sale of assets 7,238 7,073 6,512 7,060 7,947
Income from operations 4,002 3,558 4,578 3,401 3,887
Share of affiliated companies’ results 24 131 60 18 (51)
Income before taxes 2,344 2,680 2,779 1,777 2,148
Vessels 27,257 28,753 34,185 40,708 40,956
Investment properties 24,040 24,148 25,753 26,658 27,831
Other noncurrent assets 28,591 29,842 27,494 26,412 28,150
Cash and cash equivalents/short-term investments 4,877 5,792 4,255 3,676 3,747
Other current assets 7,440 6,403 6,909 7,446 7,528
Shareholders’ equity including deferred income taxes 32,829 33,505 34,645 34,479 39,214
Other provisions 3,042 2,580 2,332 1,994 1,356
Other noncurrent liabilities 48,952 52,176 52,382 56,939 55,919
Current liabilities 7,382 6,677 9,237 11,488 11,723
Total assets 92,205 94,938 98,596 104,900 108,212
Cash flow from operations 7,084 5,065 4,895 5,034 5,017
Net cash used in investing activities (6,456) (9,681) (5,579) (11,553) (4,583)
Net cash provided by/used in financing activities (907) 5,151 559 6,489 (19)
Net change in cash and cash equivalents (248) 482 (78) (6) 472
Number of employees, average 10,236 9,847 10,242 10,565 11,348
Number of vessels1) 91 91 106 117 137
1) Excluding new buildings and external ship management
The Annual Review, the Financial Report and the Sustainability Report are available online at www.stena.com.
Printed reports are provided by birgitta.sandh@stena.com.
Solberg.
Photos and images: Katja Andersson, Dan Ljungsvik, Peter Mild, Per-Anders Hurtigh, Johan Palmborg etc.
Printing: Falk Graphic.
STENA AB FINANCIAL REPORT 2013
CARE“ CARE NURTURES WELLBEING, INNOVATION AND PERFORMANCE AND IS THE FOUNDATION FOR EVERYTHING WE DO”
Dan Sten Olsson
Stena AB (publ)SE-405 19 Göteborg, SwedenTelephone +46 31 85 50 00 www.stena.com
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