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Stena ABFinancial Report 2011

Stena AB (publ)SE-405 19 Göteborg, Telephone +46 31 85 50 00

www.stena.com

CAreInnovAtIon &PerformAnCeBusiness conceptTo use our competence in, above all, service,

trading and ships, to make money in the business

areas shipping, ferry lines, offshore, real estate

and finance.

To take care of our most important asset in the

long term, our “clients”, in such a way that we

con tribute to their development as well as that

of society.

Client relations• Always client’s first choice

• Leading in quality and quality-assuring partner

• Always efficient and effective with our own

resources as well as resources belonging to others

• Clearly delegated business responsibility

We are committed to comply with the standards

formulated by the Logistics & Transportation

Cor porate Citizenship Initiative (L&TCCI) of the

World Economic Forum.

Responsibility in our business relationshipsBy building long-term relationships with our

cus tomers, suppliers and subcontractors, we are

committed to delivering high-quality and best-

value services.

We will meet the highest standards of security

through our value chain and strive to ensure that

trust is the basis of all our relationships in society.

We are committed to meeting the expectations

of our customers in respect of responsible business

practice.

Progressively, we will share with our business

partners these Principles of Corporate Citizenship

and we may withdraw from a business relationship

if we consider that the standards we uphold are

not being met by a business partner.

ENERGY AND CARE

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 74

Statements of Cash-flow 74

Balance Sheet 75

Statements of Changes in Shareholders Equity 76

Notes to the financial statements 77

Proposed treatment of unappropriated earnings 82

Audit report 83

Five-year summary 84

The Annual Review and the

Financial Report can be ordered from

birgitta.sandh@stena.com

or downloaded from www.stena.com

NOR

DICECOLABEL

341 165Solberg. Photo and image: Katja Andersson, Dan Ljungsvik, Peter Mild, Conny Wickberg, Per-Anders Hurtigh, Johan Palmborg and others. Print: Falk Graphic.

Stena AB 2011 1

General information about the business

The Stena AB Group is an international Group that runs pas-

senger and freight ferry services, together with activities in

offshore, shipping, property and finance.

The Group also invest in other businesses which are not

the core business of Stena.

Ferry routes are operated by Stena Line in Scandinavia, the

North Sea and the Irish Sea and by Scandlines AB in Öresund

and the southern Baltic.

The offshore business, with semi-submersible rigs and drill-

ships, is operated by Stena Drilling from its head office in Aber-

deen and through its world wide global organization with

offices in Houston, 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 and LNG (Liquefied Natural Gas) activities. Stena RoRo’s

and Stena Bulk’s head offices is located in Göteborg. Stena

Bulk has also offices in Houston, Cyprus and a branch office in

Singapore. The shipping business also includes manning and

crewing of vessels by Northern Marine Management based in

Glasgow with offices in Manila, Mumbai, Singapore, St Peters-

burg, Gothenburg and Aberdeen. Technical maintenance and

development is managed by Stena Teknik, based in Göteborg.

Stena Property, based in Göteborg, mainly owns properties

in Göteborg, Stockholm and Malmö. 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 Göteborg, invests in compa-

nies not directly related to the core business of Stena. Stena

Finance works from Göteborg, 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 Göteborg, Sweden. The head office’s

address is Masthuggskajen, 405 19 Göteborg, Sweden.

The year in summary

• Another year of high operational performance within

all business areas.

• Continued operational growth.

– The total income increased by 3% to SEK 28.0 billion

compared to SEK 27.2 billions 2010.

– Consolidated EBITDA, including net valuation of invest-

ment properties, increased by 13% to SEK 8.2 billion

compared to 2010.

– EBITDA has increased mainly with the sale of the drilling

rig Stena Tay. The profit on the sale amounted to SEK

1.5 billion.

– The turnover and the result have been negatively

impacted by the strengthening of the SEK versus the

USD and EUR.

– Income before taxes improved by 4% to SEK 2.8 billion

compared to SEK 2.7 billion in 2010.

• Healthy balance sheet with an indebtedness of 55% as of

31 December 2011.

• Working capital decreased which lead to a considerable

improvement of our liquidity.

• Stena Line had another challenging year 2011, and the

freight volumes have not yet returned to the levels prior to

the recession. During the year, Stena Line completed its

largest movement of vessels ever, closed down unprofitable

routes, acquired two new routes and opened a new port

on the Irish Sea to be able to meet the demand and prepare

for the future.

• Stena Drilling’s results increased due to the sale of the rig

Stena Tay and continued high utilization of the whole

fleet.

• Stena Bulk improved their results compared to 2010 and

successfully entered into a JV with Danish Weco. However,

the market was continuously weak with low tanker rates.

• Stena Bulk entered into the LNG market, which has proven

to be very successful.

• Stena RoRo showed continued high utilization rates and

has during the year worked with Stena Line’s many new-

buildings, vessel movements and conversions.

• Stena Property continued to be profitable with a very high

occupancy rate, about 99% for residential properties and

85% for commercial premises.

• Stena Adactum had another profitable year in all business

areas. During the year, Stena Renewable completed the

construction of a new wind farm with 11 windmills and put

them into operation. Further investments are planned.

• Available liquidity remains strong, as is the credit profile

of the Group secured long-term credit facilities. The refi-

nancing needs are limited during 2012, and financing is in

place for the majority of the remaining capex for the new-

building program.

DIreCtorS’ rePort

2 Stena AB 2011

Significant business events

Ferry operations

In 2010, Stena Line entered into a slot charter agreement

with DFDS on the Esbjerg–Harwich and Esbjerg–Immingham

routes. Consequently, as of January 2011, Stena Line also

offers freight services between Denmark and UK.

In December 2010, Stena Line acquired from DFDS two

routes on the Irish Sea: Liverpool–Belfast and Heysham–Bel-

fast. Since the acquisition was subject to a formal approval

from the Irish and British competition authorities, these

routes were held separately from our other business until

approval was given end of June 2011. The two routes have

been consolidated as of third quarter 2011.

Effective 1 January 2011, Stena Line acquired the Danish

travel agency DTF (Dansk Total Ferie), a market leading

travel agency for vacations by car in Denmark.

In January 2011 and September 2011, respectively, Stena

Transporter and Stena Transit, two new built RoPax vessels,

were delivered from Samsung Heavy Industries in Korea. The

vessels operate on the Hoek van Holland–Killingholme route.

In May 2011, three vessels, Stena Leader, Stena Pioneer

and Stena Seafarer were sold for an aggregate profit of SEK

26 million.

In May 2011, the English Court of Appeal affirmed a High

Court ruling that contributions to repair the deficit in the

Merchant Navy Ratings Pension Fund can be required from

any company that has participated in the Fund, including

companies that no longer employ any members. In the late

1990s, the Fund was found to have a deficit. Stena Line has

been providing funds to reduce the deficit. As a result of the

Court of Appeals decision, the non-contributing employers

will also be required to contribute funds to reduce the deficit

and the Company’s future contributions will be significantly

reduced.

In July 2011, the vessel Stena Lynx was sold for a price of

EUR 3.8 million, with delivery in October 2011.

In November 2011, the new port Loch Ryan in Cairnryan

in Scotland was opened. The Cairnryan–Belfast route is now

operated with two chartered in superfast ferries.

Offshore Drilling

In March 2011, the drilling rig Stena Tay was sold with deliv-

ery in October 2011. The sale generated a net profit of SEK

1.5 billion. Stena Tay joined the Stena Drilling fleet in 1999

and has operated in various locations worldwide, including

in the US Gulf of Mexico, Brazil, Angola and Nigeria.

During 2011, we entered into several new charter contracts.

We successfully entered into a new contract for our drilling unit

Stena DrillMAX with commencement in direct continuation of

its current contract, i.e. from early 2012, and an estimated

duration of 15–18 months plus four one-well options.

The drilling unit Stena Spey was awarded a contract that

commenced in the first quarter of 2012 and will continue

until mid fourth quarter of 2012.

We entered into a new contract for our drilling unit Stena

Clyde which commenced in the first quarter of 2012 and is

expected to last until at least mid fourth quarter 2012.

In December 2011, we successfully signed a five-year con-

tract for our enhanced ice-classed drillship Stena IceMAX

delivered in April 2012.

Crude oil and petroleum product transportation

In March 2011, Stena Bulk Denmark Aps and Dannebrog

Rederi A/S signed a joint venture agreement regarding the

ownership in Stena Weco A/S. The new joint venture,

which commenced operation as of mid April 2011, charters,

manages and operates a fleet of 30–40 MR (Handy and

Medium Range) product tankers.

In May 2011, we acquired three LNG (Liquefied Natural

Gas) vessels for a total purchase price of USD 667 million.

The first vessel, Stena Blue Sky, was built in 2006 and is on

a charter to Gazprom until first quarter 2013. The second

and third vessels, Stena Clear Sky and Stena Crystal Sky, are

newly built and were delivered in May 2011. The two latter

are currently on charter to BP and British Gas as from July

2011. We have successfully signed a three-year (plus one-

year option) contract for Stena Clear Sky which commenced

in direct continuation of its previous charter in March 2012.

In September 2011, we took delivery of the newly built

Suezmax vessel Stena Superior from the Samsung shipyard

in Korea. The vessel entered into operations in the Stena

Sonangol Suezmax pool.

In November 2011, we took delivery of our second Suezmax

newbuilding vessel Stena Suede from the Samsung shipyard in

Korea. Stena Suede has successfully commenced operations

for Total, who has contracted the vessels for 5 years.

Roll-on/Roll-off Vessel Operations

In February 2011, the vessel Highlanders was delivered to the

Canadian company Marine Atlantic Inc. on a charter for a min-

imum of five years. Highlanders has been rebuilt in the same

way as her sister vessel Blue Puttees, which was delivered in

December 2010, meaning that the vessel has been shortened

by 12 meters and has had its passenger capacity increased.

Blue Puttees and Highlanders operate between North Sydney,

Nova Scotia and Port aux Basque, Newfoundland.

Stena AB | Directors’ Report

Stena AB 2011 3

In April 2011, Stena RoRo acquired the vessel Dublin Sea-

ways from DFDS for EUR 24 million. The vessel has been

renamed Stena Feronia.

Property

During 2011, Stena Property sold properties for SEK 307

million. In July 2011 one property was purchased in London

for an amount of GBP 35 million.

New Businesses – Adactum

Ballingslöv: In the fourth quarter of 2011, Ballingslöv

acquired the Swedish company Macro, a manufacturer of

shower systems with a yearly turnover of approximately SEK

100 million and 40 employees.

Envac: In 2011 the company won a number of prestigious

orders such as Western & Fish Harbour in Helsinki, Finland

and Clichy-Batignolles in Paris, France.

Blomsterlandet: In the first quarter of 2011, Blomster-

landet acquired Ella Trädgård in Stockholm with two shops

and a turnover of approximately SEK 45 million.

Stena Renewable: During 2011, a new wind farm with 11

wind turbines was built and put into operation in Mjölby and

Boxholm municipalities. Stena Renewable has committed to

invest in three further wind farms and are planning for addi-

tional investments.

Subsequent events

In February 2012 we sold Stena Navigator and in March

2012 we sold Stena Carribean.

In January 2012, one property was purchased in London

for an amount of GBP 21 million.

The fourth DrillMax vessel, the enhanced ice-classed ultra-

deepwater drillship Stena IceMAX, was delivered in April 2012.

In March 2012, we signed a time charter contract with

LNG Shipping S.p.A. The time charter is for our LNG car-

rier, Stena Crystal Sky and the contract period is 40

months. LNG Shipping S.p.A, is a wholly owned by the

Italian Energy Company, ENI.

In April, 2012 we acquired four modern RoPax vessels,

Stena Mersey, Stena Lagan, Norman Voyager and Watling

Street. The first two vessels were already on bare-boat

charter to Stena Line and the other two vessels are on

charter to LD Lines and Scandlines A.G, respectively.

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.

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 made during 2007

when the Stena AB Group for the first time became compliant

with the American legislation “Sarbanes-Oxley Act 404”.

Control environment

The Board of Directors have the overall responsibility for

internal control of financial reporting. The control environ-

ment forms the basis of internal control, because it includes

the culture that the Board and management communicate

and by which they work. The control environment is made

up primarily of integrity, ethical values, expertise, manage-

ment philosophy, organizational structure, responsibility and

authority, policies 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.

Examples of important policies and guidelines within Stena

are “Code of Conduct”, “Power Reserved List”, “Principles,

convictions 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 information and communi cation channels.

Furthermore, the Board has appointed an Audit Committee,

the primary task is to ensure compliance with established princi-

ples for financial reporting and internal control and that appro-

priate 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

assessment of financial reporting aims to identify and evalu-

ate 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

updated 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

direction of the “Corporate Governance” staff function and

the results are reported to the Audit Committee.

4 Stena AB 2011

Control activities

The most significant risks identified regarding financial

reporting are managed through various control activities.

There are a number of control activities built into every pro-

cess to ensure that the business is run effectively and that

financial reporting provides a fair and true picture. The con-

trol activities, which aim to prevent, find and correct poten-

tial inaccuracies, include account reconciliations, authoriza-

tions, and monthly accounts as well as analysis of these.

IT systems are scrutinized regularly during the year to

ensure the validity of Stena’s IT systems with respect to finan-

cial 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 finan-

cial reporting is also provided through training. The Group

holds internal seminars and conferences regularly, with a

focus on quality assurance in financial reporting and gover-

nance models.

Monitoring

The Board of Directors and the Audit Committee continu-

ously evaluate the information provided by the executive

management team, including information on internal con-

trol. The Audit Committee’s task of monitoring the effi-

ciency 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 exter-

nal and internal auditors. The work on internal control dur-

ing 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 proactively developing and enhancing internal control

over the financial reporting as well as examining the effec-

tiveness of the internal control. The “Corporate Gover-

nance” function plans the work in consultation with the

Audit Committee and regularly reports the findings of its

examinations to the Committee. The unit communicates

continuously with Stena’s external auditors on matters con-

cerning internal control.

Major Shareholders

All of the issued and outstanding voting shares of Stena AB

were owned as following as of 31 December 2011:

Name of beneficial ownerNumber of

sharesPercentage ownership

Dan Sten Olsson 25,500 51.0

Madeleine Olsson Eriksson 12,250 24.5

Stefan Sten Olsson 12,250 24.5

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.

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 2011.

Research and development

The Group executes vessel construction development via

Stena Teknik. The Group also makes payments to universi-

ties 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 rela-

tion 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.

Stena AB | Directors’ Report

Stena AB 2011 5

Since the implementation of the Environmental Code, the

port operation run by Stena Line Scandinavia AB has

become subject to permit requirements.

Financial risks

Financial risks, see Note 1, Summary of Significant Account-

ing Principles and Note 31 Financial instruments and risk

management.

Staff

On 31 December 2011, the headcount was 10,242 com-

pared to 9,847 on 31 December 2010. A vital factor for

realizing Stena Group’s vision is its employees, their exper-

tise, enthusiasm 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 intragroup attitude

survey is carried out every other year and the number of

satisfied employees remains at a high level. Every employee

must attend a career development meeting once a year.

For more information about employees see Note 33.

Sales and results

Consolidated income for 2011 amounted to SEK 27,968 mil-

lion, including profit from vessel sales of SEK 1,577 million

and property sales of SEK 106 million. For 2010 the consoli-

dated income amounted to SEK 27,150 million, including

profit from vessel sales of SEK 2 million and property sales

of SEK 187 million. The profit before tax for the year was

SEK 2,779 million with a net profit of SEK 2,526 million. For

2010 the profit before tax amounted to SEK 2,680 million

with a net profit of SEK 2,566 million.

Financing and liquidity

Liquid assets and short-term investments on 31 December

2011 amounted to SEK 4,255 million, of which SEK 1,736

million was available. On 31 December 2010 liquid assets

and short-term investments amounted to SEK 5,792 million,

of which SEK 2,067 million was available. Along with mar-

ketable securities and available credit facilities, the total

available amount on 31 December 2011 was SEK 15.8 billion

versus SEK 15.8 billion on 31 December 2010.

The Revolving Credit Facility of USD 1,000 million entered

into in December 2004 was renegotiated in January 2006,

with the final maturity date extended until January 2013.

The utilization of the facility on 31 December 2011 was USD

802 million, of which USD 26 million is for guarantees. On

31 December 2010 the utilization was USD 909 million, of

which USD 25 million was for guarantees. During 2010

Stena entered into a new Revolving Credit Facility with a

guarantee provided by the EKN (the Swedish Export Credit)

for SEK 6,660 million. The facility was unutilized on 31

December 2011 and 2010, respectively. Loan amortization

over the year amounted to SEK 2,452 million. In 2010 SEK

6,491 million was amortized.

Total consolidated assets increased during the year to SEK

98,596 million compared to SEK 94,938 million 31 Decem-

ber 2010. Capital expenditure in tangible and intangible

fixed assets amounted to SEK (10,692) million. In 2010 capital

expenditures amounted to SEK (10,189) million.

The consolidated debt/equity ratio, defined as net inter-

est-bearing liabilities in relation to net interest-bearing liabil-

ities, shareholders’ equity and deferred tax liabilities was

55% 31 December 2011 and 53% 31 December 2010.

Total retained earnings on 31 December 2011 was SEK

32,547 million, of which SEK 2,526 million was the net

profit for the year.

Parent Company

Revenues for the year amounted to SEK 124 million and the

result before tax was SEK 125 million, of which dividends

from subsidiaries were SEK 190 million and group contribu-

tion received SEK 220 million. In 2010 the revenues

amounted to SEK 100 million and the result before tax to

SEK 149 million, whereof dividends from subsidiaries were

SEK 190 million.

The Board propose a dividend of SEK 260 million to the

shareholders and SEK 14 million to Sten A Olssons Fundation

for Culture and Science and other public good purposes as a

gift according to the Companies Act Chapter 17, paragraph

5, with the remaining profit to be carried forward. Last year

the dividend was SEK 240 million to the share holders and

SEK 14 million to Sten A Olssons Fundation for Culture and

Science.

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 2011

Consolidated Income Statements

Years ended 31 December

2010 2011 2011In million Note SEK SEK USD1)

RevenuesFerry operations 9,092 9,684 1,401

Drilling 7,777 6,546 947

Shipping 2,651 2,595 375

Investment properties 2,380 2,368 342

New Businesses – Adactum 4,630 4,732 684

Other 7 10 1

Total revenues 26,537 25,935 3,750

Net gain on sales of assets 4 189 1,683 243

Total other income 189 1,683 243

Net valuation on investment properties 12 424 350 51

Total income 3 27,150 27,968 4,044

Direct operating expensesFerry operations (7,117) (7,703) (1,114)

Drilling (2,959) (2,736) (396)

Shipping (2,517) (1,895) (274)

Investment properties (885) (829) (120)

New Businesses – Adactum (3,306) (3,381) (489)

Other (4) (1)

Total direct operating expenses (16,784) (16,548) (2,394)

Gross profit 10,366 11,420 1,650

Selling expenses 17 (1,202) (1,298) (188)

Administrative expenses 5 (1,902) (1,927) (278)

Depreciation and amortization 3 (3,704) (3,617) (523)

Income from operations 3, 33 3,558 4,578 661

Share of associated companies´ results 6 131 60 9

Dividends received 38 64 9

Gain (loss) on sale of securities 445 (69) (10)

Interest income 477 394 57

Interest expense (1,798) (1,914) (277)

Foreign exchange gain/loss 48 36 5

Other financial income/expense (219) (370) (54)

Finance net 7 (878) (1,799) (261)

Income before taxes 2,680 2,779 400

Income taxes 8 (114) (253) (37)

Profit for the year 2,566 2,526 363

Earnings attributable to: Equity holders of the Parent Company 2,568 2,476 356

Non-controlling interests 13 (2) 50 7

Net income 2,566 2,526 363

1) Unaudited–Note 1

Stena AB | Group

Stena AB 2011 7

Consolidated Statements of Comprehensive Income

Years ended 31 December

2010 2011 2011In million SEK SEK USD1)

Profit for the year 2,566 2 526 363Other comprehensive incomeChange in fair value reserve, net of tax 159 (214) (31)

Change in Cash flow hedges, net of tax 216 (813) (118)

Change in currency translation differences (2,450) (147) (21)

Change in equity hedge, net of tax 191 (96) (11)

Equity method, net of tax (50)

Other comprehensive income for the year 632 1,256 182

Other comprehensive income attributable to:owners of the company 642 1,264 183

non-controlling interest (10) (8) (1)

Total comprehensive income for the year 632 1,256 182

1) Unaudited–Note 1

See also Note 20 and Note 21

8 Stena AB 2011

Consolidated Balance Sheets

31 December

2010 2011 2011In million Note SEK SEK USD1)

AssetsNon-current assetsIntangible assets 9

Goodwill 1,286 1,504 218

Trademarks 772 749 108

Distribution agreements 358 313 45

Other intangible assets 150 483 70

Total intangible assets 2,566 3,049 441

Tangible fixed assetsVessels 10 28,753 34,185 4,944

Construction in progress 10 6,335 5,290 765

Equipment 10 2,462 2,303 333

Buildings and land 11 841 939 136

Ports 11 1,042 1,795 260

Total tangible fixed assets 39,433 44,512 6,438

Investment properties 12 24,354 25,753 3,724

Financial fixed assetsInvestment in associated companies 6 1,205 1,374 198

Investment included in SPEs 13 6,175 4,548 658

Marketable securities 14 4,130 3,465 501

Other non-current assets 15, 21 4,880 4,731 684

Total financial fixed assets 16,390 14,118 2,041

Total non-current assets 82,743 87,432 12,644

Current assetsInventories 16 645 632 91

Trade debtors 17 2,754 3,218 465

Other current receivables 17 1,116 1,611 233

Prepaid expenses and accrued income 17 1,888 1,448 210

Short-term investments 18 4,127 2,668 386

Cash and cash equivalents 19 1,665 1,587 230

Total current assets 12,195 11,164 1,615

Total assets 3 94,938 98,596 14,259

1) Unaudited–Note 1

Stena AB | Group

Stena AB 2011 9

31 December

2010 2011 2011In million Note SEK SEK USD1)

Shareholders´ equity and liabilitiesEquity attributable to shareholders of the company 20

Share capital 5 5 1

Reserves (1,096) (2,366) (342)

Retained earnings 27,709 30,071 4,350

Net income 2,566 2,476 356

Equity attributable to shareholders of the company 29,184 30,186 4,365Non-controlling interest 264 211 31

Total equity 29,448 30,397 4,396

Non-current liabilitiesDeferred income taxes 21 4,057 4,248 614

Pension liabilities 22 1,088 962 139

Other provisions 23 1,492 1,370 198

Long-term debt 24 38,190 38,720 5,600

Debt included in SPEs 13 5,140 4,143 599

Senior Notes 25 6,256 6,236 902

Capitalized lease obligations 26 1,644 1,481 214

Other non-current liabilities 27 946 1,802 261

Total non-current liabilities 58,813 58,962 8,527

Current liabilitiesShort-term debt 24 1,649 2,842 411

Capitalized lease obligations 26 225 222 32

Trade accounts payable 1,313 1,281 185

Income tax payable 130 92 13

Other current liabilities 1,024 2,175 315

Accrued costs and prepaid income 28 2,336 2,625 380

Total current liabilities 6,677 9,237 1,336Total equity and liabilities 94,938 98,596 14,259

Pledged assets and commitments and contingent liabilitiesPledged assets 29 60,439 64,117 9,273

Commitments and contingent liabilities 29 2,510 2,663 385

1) Unaudited–Note 1

10 Stena AB 2011

Consolidated Statements of Changes in Shareholders’ Equity

Attributable to equity holders of the company

SEK millionShare

capitalFair value reserve1)

Hedging reserve1)

Translation reserve1)

Retained earnings

including Net income Total

Non- controlling

interestTotal

equity

Closing balance as per 31 December 2009 5 (303) 52 1,031 28,087 28,872 311 29,183Acquired non-controlling interest 96 96

Acquisition of subsidiary (133) (133)

Exchange differences arising on the translation of foreign operations (2,442) (2,442) (8) (2,450)

Change in Hedgings reserve, net of tax

– bunker hedge 153 153 153

– interest swap hedge 63 63 63

Change in fair value reserve, net of tax 159 159 159

Change in net investment hedge, net of tax 191 191 191

Equity method (50) (50) (50)

Other comprehensive income 159 407 (2,442) (50) (1,926) (8) (1,934)Net income 2,568 2,568 (2) 2,566

Total comprehensive income 159 407 (2,442) 2,518 642 (10) 632Dividend (316) (316) (316)

Transfer to charitable trust (14) (14) (14)

Closing balance as per 31 December 2010 5 (144) 459 (1,411) 30,275 29,184 264 29,448

Divestment of non-controlling interest (31) (31)

Acquisition of non-controlling interest (30) (30)

Exchange differences arising on the translation of foreign operations (147) (147) 58 (89)

Change in Hedgings reserve, net of tax

– bunker hedge (16) (16) (16)

– interest swap hedge (797) (797) (797)

Change in fair value reserve, net of tax (214) (214) (214)

Change in net investment hedge, net of tax (96) (96) (96)

Other comprehensive income (214) (909) (147) (1,270) 58 (1,212)Net income 2 526 2,526 (50) (2,476)

Total comprehensive income (214) (909) (147) 2 526 1,256 8 1,264Dividend (240) (240) (240)

Transfer to charitable trust (14) (14) (14)

Closing balance as per 31 December 2011 5 (358) (450) (1,558) 32,547 30,186 211 30,397

1) See also Note 20

Stena AB | Group

Stena AB 2011 11

Consolidated Statements of Cash Flows Years ended 31 December

2010 2011 2011In million Note SEK SEK USD1)

Net cash flows from operating activitiesNet income 2,566 2,526 363

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 3 3,704 3,617 523

Net valuation of investment properties (424) (350) (51)

Share of affiliated companies´ results (131) (60) (9)

Dividend from associated companies 10 1

Gain on sale of assets 4 (189) (1,683) (243)

Loss/gains on securities, net (445) 69 10

Unrealized foreign exchange losses/gains (159) 329 48

Deferred income taxes 8 (77) 14 2

Provision for pensions (449) (168) (24)

Other non cash items (62) 227 33

Net cash flows from trading securities (58) 178 26

Cash flow from operations before changes in working capital 4,276 4,709 679

Changes in working capitalReceivables 784 (226) (33)

Prepaid expenses and accrued income (78) 538 78

Inventories (62) 44 7

Trade accounts payable 59 (218) (31)

Accrued costs and prepaid income 162 199 29

Income tax payable (13) (77) (11)

Other current liabilities (63) (74) (11)

Net cash provided by operating activities 5,065 4,895 707

Net cash flows from investing activitiesPurchase of intangible assets (30) (41) (6)

Cash proceeds from sale of tangible fixed assets 4 895 3,593 520

Capital expenditure on tangible fixed assets (10,159) (10,651) (1,540)

Purchase of subsidiary, net of cash acquired 30 (127) (186) (27)

Investments in affiliated companies (117) (17)

Proceeds from sale of securities 5,883 5,048 730

Purchase of securities (5,987) (3,056) (442)

Increase of noncurrent assets (405) (357) (52)

Decrease of noncurrent assets 251 175 25

Other investing activities (2) 13 2

Net cash used in investing activities (9,681) (5,579) (807)

Net cash flows from financing activitiesProceeds from issuance of debt 6,250 3,827 554

Principal payments on debt (6,491) (2,452) (354)

Net change in borrowings on line-of-credit agreements 6,245 (1,375) (199)

Proceeds from new capitalized lease obligations 618

Principal payments on capitalized lease obligations (136) (231) (33)

Net change in restricted cash accounts (688) 1,186 172

Dividends paid (316) (240) (35)

Other financing activities 30 (331) (156) (23)

Net cash provided by/used in financing activities 5,151 559 82

Effect of exchange rate changes on cash and cash equivalents (53) 47 7

Net change in cash and cash equivalents 482 (78) (11)Cash and cash equivalents at beginning of year 19 1,183 1,665 241Cash and cash equivalents at end of year 19 1,665 1,587 230

1) Unaudited–Note 1

12 Stena AB 2011

Stena AB | Group

Basis of preparation

The consolidated financial statements have been prepared

in accordance with International Financial Reporting Stan-

dards (IFRS) as adopted by the EU. In addition RFR 1 Supple-

mentary 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 principles 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 accounting principles”.

The Financial Report and Consolidated Financial State-

ments were approved for issue by the Board of Directors

on 27 April 2012. The balance sheets and income state-

ments were approved by the Annual General Meeting on

27 April 2012.

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 liabilities at the date of

the financial statements and recognised revenues and costs.

The actual future outcome of specific transactions may dif-

fer 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 assess-

ment, which are complex or in which the assumptions and

estimations are of material significance to the consolidated

financial statements are stated in Note 2.

The Group’s financial statements are based on acquisition

cost, with the exception of available-for-sale financial assets,

financial assets and financial liabilities valued at fair value

through the income statement and investment properties,

which are recognised at fair value.

Solely for the convenience of the reader, the 2011 finan-

cial statements have been translated from Swedish kronor

(SEK) into United States dollars (USD) using the 31 Decem-

ber 2011 Noon Buying Rate of the Federal Reserve Bank of

New York of USD 1.00 = SEK 6.9146 .

During the year 2011, no new or amended IFRS standards

have had any particular impact on the group accounting.

Basis of consolidation

The consolidated financial statements has been prepared in

accordance with the principles set forth in IAS 27, consoli-

dated and separate financial statements and include Stena

AB and all subsidiaries, defined as companies in which Stena

AB, directly or indirectly, owns shares representing 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.

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 sepa-

rate category. Non-controlling interest share of profit/loss

for the year is specified following the net profit/loss for the

year in the income statement.

NotesAmounts are shown in SEK millions unless otherwise stated.

1 Summary of Significant Accounting Principles

Stena AB 2011 13

Business combinations and goodwill

Stena applies IFRS 3 (revised 2009) Business Combinations, for

acquisitions, prior acquisitions, before 1 January 2010, are

not restated. All business combinations are accounted for in

accordance with purchase method. This method entails that

the assets, liabilities and contingent liabilities owned by the

acquiring company at acquisition date are valued to deter-

mine 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 avail-

able market information. The fair value of significant intan-

gible fixed assets is determined either with the help of inde-

pendent 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 com-

panies 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 liabil-

ities, 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 alloca-

tion 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 acquisi-

tion analysis has been reviewed and approved by manage-

ment, 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. 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 car-

ried 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 subse-

quently increased or decreased to reflect the owner compa-

ny’s share of the associated companies’ gains or losses after

the acquisition. The Group’s share of the associated compa-

nies’ net income is reported in the consolidated income

statement under the line “Result from associated compa-

nies”, in the finance net. Received dividends are settled

against the book value of the respective participations.

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 economic 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

14 Stena AB 2011

Stena AB | Group

owner of the parent company and the non-controlling inter-

est. Therefore no goodwill arise in this kind of transactions.

The change in non-controlling interest is based on the pro-

portional share of the net assets.

Translation of foreign operations

The functional currency of Stena AB and the Group is the

Swedish krona (SEK). All foreign subsidiaries report in their

functional currencies, the currency used in the primary eco-

nomic 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 trans-

lated using average exchange rates.

Transactions in foreign currency

Foreign currency transactions are converted to the func-

tional currency at the exchange rate prevailing on the trans-

action day. The functional currency is the currency of the pri-

mary economic environment in which the company

generates and expends cash. Monetary assets and liabilities

in foreign currencies are converted to the functional cur-

rency 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 transaction date.

Non monetary assets and liabilities which are reported to fair

value are revalued to the functional 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 corre-

spond with the internal reporting submitted to the Chief

operating decision-maker. The Chief operating decision-maker

is the function responsible for the allocation 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 takes strategic decisions.

The Group’s segments, its business areas, have imple-

mented 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 busi-

ness, and is based on the various business models for the

Group’s end clients. The segments are responsible for oper-

ating profit/loss, EBITDA (operating income before amorti-

sation) 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 generated 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.

Cont. Note 1

Stena AB 2011 15

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.

Customer Loyalty Programmes, addresses the accounting

by Stena Line 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 trans-

action 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.

Rental income from the Company’s investment properties

operations is derived from leases and is recognised on a

straight line basis over the life of the leases. Sales and pur-

chases 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.

Sales of goods are recognised at the date upon which the

Group company sells a product to the customer in accor-

dance 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 per-

centage of completion 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 completion. 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.

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

distributed 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 benefit associated with the holding

accrues to the Group and the acquisition cost of the asset

can be reliably calculated.

Vessels, equipment and buildings used in business opera-

tions are recorded at acquisition cost less accumulated

depreciation and any impairment charges. Acquisition

expenditure is capitalised upon acquisition. 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 amor-

tized over a period of two to five years.

For vessels, the Company uses appraisals carried out by

independent vessel brokers. 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 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 down to this value.

Impairment is reversed if any change is made to the calcula-

tions 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 port terminals 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 use-

ful 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.

16 Stena AB 2011

Stena AB | Group

Depreciation takes place from the date upon which the

asset is ready for use and over the following periods:

Vessels:

Drilling rigs 15–20 years

Drilling rig vessels 15–20 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 50 years

Windmills 20 years

Equipment 3–10 years

Investment property

Investment properties are reported at fair value in accor-

dance 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 combina-

tion of these, are valued continuously with the fair value

model (estimated market value). These properties are ini-

tially 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 state-

ment, with an impact on changes in value of properties.

The term investment properties, which mainly includes

residential and office buildings, also includes land and build-

ings, land improvements 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 invest-

ment properties 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 consid-

ered to be an investment 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 associ-

ated 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 addi-

tional 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 property values, as well as

through external valuation. The internal valuation is deter-

mined on an earnings basis, which means that each individual

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, his-

torical outcome, budget and normalised costs have been a

part of these considerations. 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 acquisi-

tion cost exceeds the fair value of the Group’s portion of

the acquired subsidiary’s identifiable net assets at acquisi-

tion date. Goodwill on the acquisition of subsidiaries is

recognized as an intangible asset. Goodwill is tested annu-

ally 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

Cont. Note 1

Stena AB 2011 17

the remaining carrying amount of the goodwill referring to

the unit divested.

Goodwill is allocated to cash generating units during

impairment testing. This allocation refers to those cash gen-

erating 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.

Trademarks

Trademarks acquired are reported at fair value on acquisi-

tion 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 esti-

mated 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 implementation 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 accumulated amortization. Amortization takes place

according to the straight line method over the asset’s esti-

mated 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 rela-

tions 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. Useful life is based on historical

experience of the utilisation of similar assets, area of appli-

cation and other specific characteristics of the asset.

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 are tested with consideration of impairment

whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable. Impairment is

carried out in the amount by which the asset’s carrying

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 impair-

ment 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 previously been impaired, an assessment is carried out

on each balance sheet date to determine whether a reversal

should be made.

Accounting for subsidies

Any subsidies (government grants) received in conjunction

with new acquisitions of vessels, properties or port installa-

tions are reported as a decrease of the acquisition cost; sub-

sidies relating to operating activities reduce the corresponding

costs. Recognition takes place when the subsidy can be reli-

ably calculated. For Swedish-flagged vessels employed in

international shipping activities, the company has received

subsidies equal to all security costs and income taxes pay-

able 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 transac-

tion 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.

18 Stena AB 2011

Stena AB | Group

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 instrument in another company. Financial assets in

the consolidated balance sheet consist of cash and cash

equivalents, trade debtors, other financial assets, shares and

derivative assets. Financial liabilities are materialised 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. Financial assets and liabilities are

reported on settlement date, with the exception of deriva-

tives, which are reported on trade date. Financial instru-

ments 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 state-

ment. 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.

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 trans-

ferred and when essentially all the risks and advantages

associated with the ownership of the financial asset have

been transferred. Financial liabilities are derecognized 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 to maturity

• Loans receivable and trade debtors

• Available-for-sale financial assets

The basis for classification is formed of the aim of the acqui-

sition 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 pri-

mary intention of being sold in the short term and those

derivative instruments to which hedge accounting is not

applied. The trading shares are classified as short-term

investments in the balance sheet and changes in fair value

are reported in the income statement under gains (loss) on

securities.

Financial assets, classified as financial assets at fair value

through the income statement at acquisition date, are clas-

sified as current assets if they are expected to be realized

within 12 months of balance sheet date.

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.

Cont. Note 1

Stena AB 2011 19

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. Changes in fair

value are reported in the income statement in the financial net.

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-matu-

rity 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 bal-

ance 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 desig-

nated 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 receiv-

ables with a maturity date later than 12 months after bal-

ance 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 category 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 partici-

pations 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 comprehensive income for these instruments and are

cumulated in the fair value reserve which is a specific com-

ponent 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.

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 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 dif-

ference consisting of an effective hedging of net invest-

ments, where recognition takes place directly against com-

prehensive income.

Translation differences on non-monetary financial assets

and liabilities, 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

2010 2011 Change in %

USD 7.2049 6.4969 (10)

GBP 11.1256 10.4115 (6)

EUR 9.5413 9.0335 (5)

Closing rates

2010 2011 Change in %

USD 6.7273 6.8748 2

GBP 10.4942 10.6803 2

EUR 9.0089 8.9177 (1)

20 Stena AB 2011

Stena AB | Group

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 classifi-

cation is carried out by senior management on initial

recognition date.

Financial liabilities at fair value through

the income statement

Financial liabilities held for trading consists of derivative

instruments with a negative fair value for which hedge

accounting is not applied.

The liabilities are classified under current liabilities,

unless the group has an unconditional right to defer the

payment of the liabilities to at least 12 months after bal-

ance sheet 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 transaction 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 outstand-

ing liabilities by a nominal principal loan amount. Any pre-

miums or discounts are taken up as income.

Derivative financial instruments and hedge accunting

The Stena Group is hedging oil price risk and cash-flow

interest rate risk and foreign exchange risk related to net

assets in foreign operations as well as in highly probable

forecasted transactions in foreign currency. The Group uses

options and futures to hedge oil price risk, interest rate

swaps to hedge interest rate risk, foreign currency forward

contracts to hedge foreign exchange risk and to hedge the

foreign exchange risk in net assets in foreign operations.

Derivatives are initially recognized at fair value on the

date a derivative contract is entered into and are subse-

quently remeasured at their fair value. The method of rec-

ognising the resulting gain or loss depends 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 relationship between hedging instruments and hedged

items, as well as its risk management objectives and strat-

egy for undertaking various hedging transactions. The

group also documents its assessment, both at hedge incep-

tion 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 receivables, 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

Cont. Note 1

Stena AB 2011 21

Shareholders Equity. The full fair value of a hedging deriva-

tive 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 fore-

casted 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 prob-

able 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 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 compre-

hensive 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

payment is made. In conjunction with the purchase, when

the accumulated fair value of the hedging instruments is

removed from the hedging 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 receivables 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 currency 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

instruments, 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 income state-

ment. 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 comprehensive income and is cumu-

lated 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

comprehensive income and reported in the income state-

ment when the foreign operations, or portions of these

operations, are sold.

22 Stena AB 2011

Stena AB | Group

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 determined on the basis of the asset’s listed buying

current bid-rate on balance sheet date, with no addition for

any transaction costs (for example 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 condi-

tions. Any future transaction costs from disposals are not

considered. The fair value of financial liabilities is deter-

mined 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 tech-

nique. The valuation techniques employed are based, as far

as possible, on market information, with company specific

information being used to the least extent possible. The

Company calibrates valuation techniques at regular intervals

and tests their validity by comparing the outcome of these

valuation techniques with prices from observable current

market transactions in the same instruments. The valuation

models applied are calibrated so that fair value on initial

recognition date amounts to the transaction price, with

changes in fair value subsequently being continuously

reported on the basis of changes in the underlying market

risk parameters.

(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.

Impairment of financial assets

The Group makes an assessment on each balance sheet

date regarding whether there exists any objective evidence

that an impairment requirement has arisen for a financial

asset or a group of financial assets. As regards shares classi-

fied as available-for-sale assets, any significant or extended

decline in the fair value of a share to a level below its acqui-

sition 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 acquisition 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 insolvency exists for the coun-

terpart. 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 unuti-

lised deficits from the translation of tax assessment to cur-

rent 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 calculation of income tax liabilities, income tax receiv-

ables 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.

Cont. Note 1

Stena AB 2011 23

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 balance 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 account-

ing 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 trans-

ferred 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 real-

isable 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 oper-

ating activities, with deductions for applicable variable sell-

ing 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 progress. 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 receiv-

able. The amount of the allocation consists of the difference

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 sub-

sequently at amortized cost.

Trade payables are obligations to pay for goods or ser-

vices 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.

Employee benefits

Post-employment benefits, such as pensions and other ben-

efits, 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

24 Stena AB 2011

Stena AB | Group

are charged to the Group’s income statement, as adminis-

tration 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 calcu-

lated on the basis of actuarial assumptions intended to

determine the present value of issued commitments. The

group determines the appropriate discount rate at the end

of each year. This is the interest rate that should be used to

determine the present value of estimated future cash outflows

expected to be required to the settle the pension obligation.

In determining the appropriate discount rate, the group con-

siders the interest rates of high quality corporate bonds that

are denominated in the currency in which benefits will be

paid and that have terms to maturity approximating the

terms of the related pension obligation.

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 sur-

plus 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 benefit pension plans are calculated annually by

independent actuaries. The commitment consists of the

present value of expected future payments. The most

important actuarial assumptions are stated in Note 22.

Actuarial gains and losses may result upon determination of

the present value of the defined benefit commitment and

the fair value of plan assets. These result either from differ-

ences between the actual return and expected returns, or

changes in assumptions. The Group applies the Corridor

method which means that a portion of the accumulated

actuarial gains and losses at the end of the prior year

exceeding 10% of the greater of the present value of the

defined benefit commitment and the fair value of plan

assets is recognized in the income statement over the

expected average remaining period of service of the employees

participating in the plan The described accounting principle is

only applicable for group accounting. The parent company

and the subsidiaries apply local rules and accounting principles.

Provisions

Generally, provisions are reported when there is an under-

taking 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 represents the best

estimate of the amount required to settle the existing com-

mitment 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 rec-

ognition in the balance sheet, it may be considered to com-

prise a contingent liability and be disclosed. These commit-

ments derive from historical events and their existence will

be confirmed only when one or several uncertain future

events, which are not entirely within the Group’s control,

take place or fail to take place. Contingent liabilities also

include existing commitments where an outflow of

resources is not likely or a sufficiently reliable estimate of

the amount cannot be made.

Cont. Note 1

Stena AB 2011 25

New IFRS standards, amendments and interpretations

issued but not effective for the financial year begin-

ning 1 January 2011 and not early adopted

The following listed standards represents changes which we

currently estimate have an impact on the Group’s financial

reporting.

– IAS 19, ‘Employee benefits’ was amended in June 2011

and effective from 1 January 2013. The impact on the group

will be as follows: the corridor approach will not be permit-

ted and all actuarial gains and losses have to be recognized

in the OCI, past service costs have to be recognized immedi-

ately and the interest cost and expected return of plan

assets will be replaced by applying the same discount rate

used on the net defined benefit liability (assets). Please find

note 22 for further information.

– IFRS 9, ‘Financial instruments’, addresses the classification,

measurement and recognition of financial assets and finan-

cial liabilities. IFRS 9 was issued in November 2009 and

October 2010. It replaces the part 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 at fair value and

those measured at amortized cost. The determination is

made at initial recognition. For financial liabilities, the stan-

dard retains most of the IAS 39 requirements. The standard

is effective from 1 January 2015, and an assessment on the

estimated impact on the Group’s financial reporting is not

available.

Parent Company accounting principles

The Parent Company applies the Swedish Annual Accounts

Act and the Swedish Financial Reporting Board’s recom-

mendation RFR 2, Accounting for Legal Entities.

The Parent Company primarily applies the principles

regarding consolidated 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. Avail-

able 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.

The difference between depreciation according to plan

and fiscal depreciation is reported in the Parent Company as

accumulated accelerated depreciation which is included in

untaxed reserves. In the consolidated balance sheet, accu-

mulated depreciation is distributed between deferred tax

liabilities and equity.

Group contributions are reported in accordance with RFR 2.

Group contributions received from subsidiaries are reported

in the income statements as dividend income in the finan-

cial net. Group contributions given are reported in the

income statements as financial cost.

In the Parent Company, in accordance with the Swedish

Annual Accounts Act, the equity is split between restricted

and unrestricted equity.

26 Stena AB 2011

Stena AB | Group

2 Critical accounting estimates and judgements

Estimates and judgements are evaluated continuously and

are based on historical experience and other factors, includ-

ing expectations of future events that are considered rea-

sonable 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 princi-

ples. The resulting accounting estimates will, by definition,

rarely be equal to the actual results. Those estimations 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. Goodwill, 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 respectively 40 years.

Assets with indefinite useful lives

Goodwill is subject to annual impairment testing according

to the described accounting principle in Note 1. The recover-

able amount for cash-generating units have been deter-

mined 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 2011, the net booked value of goodwill

amounts to SEK 1,504 million as compared to SEK 1,286

million as of 31 December 2010.

Assets with definite lives

Acquired trademarks and other intangible assets which are

amortized are tested annually for impairment when there

are indicators that the intangible asset should be impaired.

Important indicators are:

– Significant decline in the economic environment.

– Decline of the operating result compared to historic and

budgeted operating results.

See also Note 9.

As of 31 December 2011, the net book value of trademarks

and other intangible assets amounts to SEK 1,545 million,

as compared to SEK 1,280 million as of 31 December 2010.

b) Impairment testing of vessels

Twice a year, or if an indication of an impairment require-

ment exists, Stena makes an assessment of whether or not a

write-down requirement exists as regards the value of ves-

sels. See further the description under Note 1, “Impairment

of non-financial assets”.

The recoverable amount is determined on the basis of cal-

culations of value in use. These calculations are based on

estimated future cash flows.

c) Retirement benefits

If the discount rate used increase/decrease by 0.25% from

management’s assessments, the carrying amount on the

pension commitments would be estimated at SEK 349 mil-

lion lower and SEK 376 million higher, respectively.

d) Deferred taxes

In the preparation of the financial statements, Stena pre-

pares a calculation 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 forwards and temporary differences are reported if

the tax assets can be expected to be recovered through

future taxable income. Changes in the assumptions regard-

ing forecast future taxable income, as well as changes in tax

rates, may result in significant differences in the valuation of

deferred taxes.

e) Provisions

Generally, provisions are reported when there is an under-

taking 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 esti-

mated.

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 forthcoming events outside the

Group’s control, the actual outcome may differ significantly.

Stena AB 2011 27

When a commitment does not meet the criteria for

reporting in the balance sheet, the amount can be consid-

ered 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 derivative instruments or other 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 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 Stena a fair value within the range of +/–5% is

equal to SEK 1,288 million.

We are active internationally, primarily in the areas of ferry

operations, offshore drilling, shipping, real estate, new busi-

nesses and finance. There are no significant transactions

between the operating segments.

Ferry operations are conducted in Scandinavia, the United

Kingdom, Germany, Poland, The Netherlands and the

Republic of Ireland under the “Stena Line”, “Scandlines”

and “HH-Ferries” brand names. We are one of the world’s

largest ferry operators. The business currently consists of 17

strategically located ferry routes, 32 vessels, and five ports

in Scandinavia, the United Kingdom and the Netherlands.

Ferry revenues are primarily generated from: (i) travel,

which consists 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 Nor-

way–Denmark route, duty and tax free sales; and (iii) freight,

which consists primarily of trailer and truck transportation.

Direct operating expenses for ferry operations consist

mainly of personnel costs, costs of goods sold on the ves-

sels, bunker fuel costs, vessel charter costs, commissions,

package tour costs and other related costs.

Offshore drilling is operated through Stena Drilling, head-

quartered in Aberdeen, Scotland. We are one of the world’s

leading companies in the development, construction and

3 Segment Information

operation of offshore drilling rigs and drillships. We cur-

rently own and operate two third generation and one fifth

generation semi-submersible drilling rigs and three sixth

generation ultra-deepwater drillships. We have also one

enhanced ultra-deepwater ice-class drillship, Stena IceMAX,

on order scheduled for delivery in the first quarter of 2012.

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 charter-

ing of crude oil and petroleum product tankers, LNG carri-

ers (Liquefied Natural Gas) and Roll-on/Roll-off vessels. To

support 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 cus-

tomers’ need for safe transportation and innovative logis-

tics. We currently control a fleet of approximately 80 tank-

ers and are active in all segments of the tanker market. We

also have one Suezmax tanker on order scheduled for

delivery in the first quarter of 2013.

Stena RoRo provides vessels, innovative solutions and

project management. Our customers are operators and ship

owners around the world.

28 Stena AB 2011

Stena AB | Group

Cont. Note 3

Northern Marine Management (“NMM”) is the Compa-

ny’s international 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 ser-

vices. NMM operates a diverse high-tech fleet of approxi-

mately 100 vessels from its worldwide network of offices

including Aberdeen, Gothenburg, St Petersburg, Hamburg,

Houston, Manila, Mumbai, and Singapore.

Stena Teknik is a common resource for all maritime areas

within our group. The operation consists of new construc-

tion and conversion projects, marine technical advice and

purchasing, as well as research and development within

marine areas.

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 ship-

ping consist primarily of vessel charter costs, fuel costs, per-

sonnel costs, insurance and other related vessel costs.

Real Estate operations relate to investments through unre-

stricted subsidiaries in residential and commercial real

estate. The properties are located in Sweden, The Nether-

lands, France, Hungary, Germany, the United States, Luxem-

bourg and, the United Kingdom.

We own a total of 2.4 million sqm, mainly in Sweden,

about 300,000 sqm are managed on behalf of affiliated

companies. The property portfolio consists of approximately

23,400 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 unre-

stricted subsidiary Stena Adactum. Our objective is to create

value in industries outside of our core business by building

strong, profitable companies that can create platforms for

new business opportunities within the group. As of 31

December 2011 Stena Adactum had direct investments in

four private companies, three associated companies

(whereof two listed companies).

The four 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

20 countries.

• “Stena Renewable” through which the Company com-

mence successful operations of Sweden’s largest land-

based wind power generating plan, near Ludvika, Sweden.

In total 33 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 ambi-

tion 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.

Other operations includes non-allocated central administra-

tion costs.

Primary measures of profitability for all these segments

are “Income from operations” and “EBITDA”. These mea-

surements are also the information reported to the Compa-

ny’s Chief operating decision-maker. In the Group this func-

tion has been identified as Stena AB’s Board of Directors,

which takes strategic decisions.

Stena AB 2011 29

Income from operations by segment

Years ended 31 December

SEK million 2010 2011

Ferry operations

Operations (79) (250)

Net gain on sale of vessels 2 16

Total ferry operations (77) (234)

Drilling

Operations 2,279 1,651

Net gain on sale of vessels 1,561

Total Drilling 2,279 3,212

Shipping

RoRo operations 35 93

Total RoRo 35 93 Tanker operations (461) (185)

Impairment charges (49)

Total Tanker (461) (234) Other shipping operations 1 70

Total shipping (425) (71)

Property

Operations 1,307 1,345

Net valuation on investment properties 424 350

Net gain on sale of investment properties 187 106

Total property 1,918 1,801

New Businesses – Adactum

Operations 210 268

Total New Businesses – Adactum 210 268

Other (347) (398)

Income from operations 3,558 4,578

Impairment charges of MSEK 49 which are included in the operating expenses for the tanker operation, were recorded for

the shares in the associated company Paradise. No impairment charges were recorded for 2010.

30 Stena AB 2011

Stena AB | Group

Reconciliation between EBITDA and Income from operations by segment

Years ended 31 December

SEK million 2010 2011

Ferry operations EBITDA 1,096 1,027

Depreciation and amortization (1,173) (1,261)

Income from operation (77) (234)

Drilling EBITDA 4,355 4,916

Depreciation and amortization (2,076) (1,704)

Income from operation 2,279 3,212

Shipping EBITDA (204) 357

Depreciation and amortization (221) (428)

Income from operation (425) (71)

Property EBITDA 1,496 1,455

Net valuation of investment properties 424 350

Depreciation and amortization (2) (4)

Income from operation 1,918 1,801

New Businesses – EBITDA 425 470

Adactum Depreciation and amortization (215) (202)

Income from operation 210 268

Other EBITDA (330) (380)

Depreciation and amortization (17) (18)

Income from operation (347) (398)

Total EBITDA 6,838 7,845Net valuation of investment properties 424 350Depreciation and amortization (3,704) (3,617)Income from operation 3,558 4,578

Depreciation and amortization by segment

Years ended 31 December

SEK million 2010 2011

Ferry operations 1,173 1,261

Drilling 2,076 1,704

Shipping: RoRo vessels 126 211

Tanker operations 86 209

Other shipping 9 8

Total shipping 221 428

Property 2 4

New Businesses – Adactum 215 202

Other 17 18

Total 3,704 3,617

Cont. Note 3

Stena AB 2011 31

Depreciation and amortization expense consists of the following components

Years ended 31 December

SEK million 2010 2011

Vessels 3,007 2,881

Equipment 481 485

Buildings, land and ports 82 99

Total tangible fixed assets 3,570 3,465

Intangible assets 134 152

Total 3,704 3,617

Depreciation and amortization expense includes amorti zation of assets under capitalized leases amounting to

SEK 690 million and SEK 756 million for the years ended 31 December 2011, and 2010, respectively.

Investments in tangible fixed assets by segment

Years ended 31 December

SEK million 2010 2011

Ferry operations 4,058 1,963

Drilling 4,030 1,458

Shipping: RoRo vessels 200 435

Tanker operations 336 5,140

Other shipping 6 62

Total shipping 542 5,637

Property 800 1,237

New Businesses – Adactum 357 436

Other 7 5

Total 9,794 10,736

32 Stena AB 2011

Stena AB | Group

Geographic information

The Company’s shipping operations include the ownership

and chartering of vessels as well as the operation and man-

agement of crude oil tankers and are performed throughout

the world. Accordingly, such revenues and assets are not

presented on a country by country basis. The ferry opera-

tions and the property operations are conducted in Scandi-

navia and the rest of Europe. The Company’s drilling opera-

tions are conducted in the Norwegian sector (Scandinavia)

and the UK sector (Europe, other) of the North Sea as well

as in the Far East and other markets. The Company´s invest-

ments in SPEs are included in Other markets.

Cont. Note 3

Total assets by segment

Years ended 31 December

SEK million 2010 2011

Ferry operations 14,837 16,130

Drilling 25,819 23,933

Shipping: RoRo operations 2,343 3,404

Tanker operations 2,379 7,568

Other shipping operations 189 340

Total shipping 4,911 11,312

Property 26,351 27,223

New Businesses – Adactum 6,708 7,385

Other 16,312 12,613

Total 94,938 98,596

Total revenue per geographic area

Years ended 31 December

SEK million 2010 2011

Scandinavia 10,873 12,305

Europe, other 7,370 6,846

Other markets 6,256 6,222

Shipping 2,651 2,595

Total 27,150 27,968

Total assets per geographic area

As of 31 December

SEK million 2010 2011

Scandinavia 34,316 35,438

Europe, other 29,448 36,570

Other markets 27,476 22,139

Shipping 3,698 4,449

Total 94,938 98,596

Stena AB 2011 33

Years ended 31 December

SEK million 2010 2011

KPMG

Audit services 21 25

Other audit related services 1 1

Tax services 25 21

Other services 2 1

Other auditors

Audit services 2

Other audit related services 1

Total 52 48

5 Administrative expenses

For the year ended 31 December 2011, administrative

expenses include R&D costs amounting to SEK 63 million.

For the year ended 31 December 2010, administrative

expenses include R&D costs amounting to SEK 56 million.

Fees and other remuneration to auditors and advisors are

set forth below.

4 Sale of tangible fixed assets

Years ended 31 December

SEK million 2010 2011

Vessels Cash proceeds from sale of vessels 65 3,249

Net book value of vessels sold (63) (1,672)

Net gain on sale of vessels 2 1,577

Investment properties Cash proceeds from sale of properties 784 310

Net book value of properties sold (597) (204)

Net gain on sale of properties 187 106

Total Cash proceeds from sale of vessels and property 849 3,556

Net book value of assets sold (660) (1,873)

Total gain 189 1,683

Total cash proceeds include sales costs of SEK 23 million and SEK 18 million, which is not included on the line “cash proceeds

from sale of tangible fixed assets” in the consolidated statement of cash flow for 2011 and 2010, respectively.

34 Stena AB 2011

Stena AB | Group

6 Investment in associated companies

Investments in associated companies relate to major strate-

gic investments. 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 2011, the investment in Midsona AB

(publ) represents 23% of the capital and 24.7% of the votes.

The total value of the market value of the investment as of

31 December 2011 was SEK 70 million. As of 31 December

2010 the total share of the market value was SEK 67 million.

The Company´s share of results amounted to SEK 7 million in

2011 and SEK (15) million in 2010.

As of 31 December 2011, the investment in Gunnebo AB

(publ) represents 25.7% of the capital and the votes. The

market value of the investment as of 31 December 2011 and

2010 was SEK 476 million and SEK 1,034 million, respec-

tively. The Company´s share of results in 2011 amounted to

SEK 60 million and SEK 46 million in 2010.

The value of the investment in MPP Mediatec Group as of

31 December 2011 was SEK 340 million and SEK 340 million

for 2010. The Company´s share of results in 2011 was SEK

(7) million and SEK (1) million in 2010. As per 31 December

2011 the investment represents 42.7% of the capital and

votes.

The investments in Midelfart Sonesson and Gunnebo are

pledged as security for bank debt.

In 2011, the subsidiary Stena Investment Sarl invested

SEK 106 million in Silurian Hallwood Plc, which is an oil

exploration company. The value of the investment as of

December 31, 2011 was MGBP 10 million. Since the com-

pany is newly started no share of results have been recorded

in 2011. As per December 31, 2011 the investment repre-

sents 20 % of the capital and votes.

Investments in associated companies

As of 31 December

SEK million 2010 2011

Opening balance 1,115 1,205

Investments 109

Revaluation 100

Share of profit 31 60

Exchange differences (2)

Other changes (39)

Closing balance 1,205 1,374

For the years ended 31 December 2011 and 2010, Investments

in associated companies include Goodwill amounting to

SEK 551 million, respectively.

Stena AB 2011 35

The Group’s share of the results of its associates and its share of the assets (including goodwill) and liabilities are as follows:

NameCountry of

incorporation Assets Liabilities Revenues Profit/(loss)% Interest

heldShare

of result1)

2010

Midsona AB (publ) Sweden 1,176 556 1,134 (67) 23% (15)

Gunnebo AB (publ) Sweden 3,735 2,129 6,384 178 26% 46

MPP Mediatec Group AB Sweden 884 619 889 (2) 43% (1)

1) As from 2010 the share of the result in the associated companies are reported for a full calender year, the share of result is from the period 1 January 2010 to 31 December 2010.

NameCountry of

incorporation Assets Liabilities Revenues Profit/(loss)% Interest

heldShare

of result

2011Midsona AB (publ) Sweden 1 176 524 1 174 32 23% 7

Gunnebo AB (publ) Sweden 3 965 2 189 5 580 230 26% 60

MPP Mediatec Group AB Sweden 846 608 902 (16) 43% (7)

Silurian Hallwood Plc Jersey 139 10 0 0 20% 0

36 Stena AB 2011

Stena AB | Group

7 Total finance net

The gain on termination of leases related to the financing of

the DrillMAX vessel Stena Carron was partly released during

2010 and 2011.

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 31.

31 december

SEK million 2010 2011

Share of associated companies’ result (please find Note 6) 131 60

Dividends received from share holdings 12 21

Dividends received from financial fixed assets 26 43

Total Dividends 38 64

Realized result from sale of trading shares (28) 103

Realized result from sale of available sale shares 121 137

Realized result from sale of financial instruments measured at fair value through the income statement. 31 (41)

Unealized result from sale of trading shares 13 11

Unrealized result from sale of financial instruments measured at fair value through the income statement 217 (365)

Gain on termination of leases 91 86

Total Gain (loss) on sale of securities 445 (69)

Interest income from investments in SPEs 332 270

Other interest income 145 124

Total Interest income 477 394

Interest expense from investments in SPEs (102) (53)

Other Interest income (1,696) (1,861)

Total Interest expense (1,798) (1,914)

Currency trading 13 (17)

Translation difference 35 53

Total Foreign Exchange gains 48 36

Deferred finance costs (63) (74)

Committment fees (34)

Bank charges (30) (28)

Capitalized internal guarantee fees 12 14

Other financial items (13) (221)

Other financial expenses from investments in SPE’s (125) (27)

Total other financial income/expense (219) (370)Finance net (878) (1,799)

Stena AB 2011 37

8 Income taxes

Income before taxes was distributed geographically as follows:

Years ended 31 December

SEK million 2010 2011

Sweden 531 670

rest of the world 2,151 2,109

Total income before taxes 2,682 2,779

Current taxFor the period, Sweden (22) (34)

Adjustments previous years, Sweden 16 0

For the period, rest of the world (198) (265)

Adjustments previous years, rest of the world 13 60

Total current tax (191) (239)

Deferred taxFor the period, Sweden 26 114

Adjustments previous years, Sweden (2) (50)

For the period, rest of the world 41 (85)

Adjustments previous years, rest of the world 12 7

Total deferred tax 77 (14)Total income taxes (114) (253)

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 2010 2011

Statutory income tax rate 26 26

Differences in foreign tax rates (14) (17)

Taxes related to previous years (3)

Expenses not deductible 2 1

Nontaxable income (3) (3)

Utilization of tax loss carry forwards 8

Restructuring (6) (5)

Other (1) 2

Effective income tax rate 4 9

Cash paid for taxes in 2011 was SEK 264 million, as compared to SEK 206 million in 2010.

The principle reason why the effective income tax rate is

lower than the statutory income tax rate for 2011 and 2010

is that the international shipping activities and capital gains,

sales of financial instruments, are to a large extent tax

exempt in many countries.

38 Stena AB 2011

Stena AB | Group

9 Intangible fixed assets

SEK million GoodwillTrade-marks

Distribu-tion agree-

ments

Cus-tomer

relationsIT invest-

mentsRights to

routes

Other intangible

assets Total

Acquisition costsOpening balance as per 1 January 2010 1 464 847 540 10 575 26 3,462

Additions 29 29

Disposals (35) (1) (36)

Transfers 9 9 18

Translation differences (93) (13) (39) (11) (6) (162)

Closing balance as per 31 December 2010 1,336 834 510 10 601 20 3,311

Purchase of company (Note 30) 199 3 35 354 591

Additions 21 45 66

Disposals (5) (5)

Transfers 5 5

Closing balance as per 31 December 2011 1,556 834 513 10 681 354 20 3,968

Accumulated amortization Opening balance as per 1 January 2010 (88) (40) (115) (4) (401) (25) (673)

Translation differences 3 10 8 5 26

Disposals 35 1 36

Current year amortization (22) (47) (2) (63) (134)

Closing balance as per 31 December 2010 (50) (62) (152) (6) (455) (20) (745)

Purchase of company (Note 30) (22) (22)

Translation differences (2) (1) (3)

Disposals 5 5

Transfers (2) (2)

Current year amortization (22) (48) (2) (71) (9) (152)

Closing balance as per 31 December 2011 (52) (85) (200) (8) (545) (9) (20) (919)

Net book value as per 31 December 2010 1,286 772 358 4 146 2,566

Net book value as per 31 December 2011 1,504 749 313 2 136 345 3,049

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.

SEK million

New businesses – Adactum 1 198

Ferry operations 306

Total 1 504

Stena AB 2011 39

Impairment testing of goodwill is conducted annually and

whenever conditions indicate that impairment may be

necessary. The recoverable 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 the year 2019. During this period the growth rate nor-

mally fluctuates between 2–5% but has in some case

exceeded this interval. For subsequent periods growth rate

for revenues is estimated to have a growth corresponding to

1.5–2%. This growth rate is based on reasonable prudence

and is estimated to be below respective industries long-term

growth rate for revenues. The same principles were applied

last year.

As of December 31, 2011, 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 there-

fore 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 discount rate was 1% higher than above

described discount rate. Also when applying these estimates

no goodwill impairment is indicated for material cash gener-

ating units

Trademarks

Trademarks are mainly related to the segment Adactum.

During 2011 impairment testing has been performed for all

trademarks within Adactum. The tests has 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

2015 was 3–5%. For subsequent periods growth rate for

revenues is estimated to have a growth corresponding to

1%. None of the performed tests indicated any impairment

for trademarks. The trademarks are anually depreciated.

40 Stena AB 2011

Stena AB | Group

10 Vessels, Construction in progress and Equipment

The movements during the years ended 31 December 2010 and 2011 are as follows:

SEK million VesselsConstruction in

progressOther

equipment Total

Acquisition costsOpening balance as per 1 January 2010 42,116 5,474 4,354 51,944

Additions 2,256 5,822 874 8,952

Disposals (585) (189) (774)

Transfers 4,076 (4,117) 34 (7)

Translation differences (2,862) (844) (280) (3,986)

Closing balance as per 31 December 2010 45,001 6,335 4,793 56,129

Additions 6,638 2,512 257 9,407

Purchase of company (note 30) 52 52

Disposals (4,394) (101) (4,495)

Transfers 1,772 (3,711) 27 (1,912)

Translation differences 671 154 31 856

Closing balance as per 31 December 2011 49,688 5,290 5,059 60,037

Accumulated depreciationOpening balance as per 1 January 2010 (14,859) (2,172) (17,031)

Purchase of company (Note 30) (4) (4)

Disposals 522 158 680

Translation differences 1,087 153 1,240

Transfers 9 15 24

Current year depreciation (3,007) (481) (3,488)

Closing balance as per 31 December 2010 (16,248) (2,331) (18,579)

Disposals 2,722 113 2,835

Purchase of company (Note 30) (40) (40)

Translation differences (202) (16) (218)

Transfers 1,106 3 1,109

Current year depreciation (2,881) (485) (3,366)

Closing balance as per 31 December 2011 (15,503) (2,756) (18,259)

Net book value as per 31 December 2010 28,753 6,335 2,462 37,550

Closing balance as per 31 December 2011 34,185 5,290 2,303 41,778

The insured value of the whole vessel fleet as of 31 December

2011 was SEK 46,480 million, as compared to SEK 45,274

million as of 31 December 2010.

As of 31 December 2011, Construction in progress inclu-

ded two newbuildings: one drillship under construction in

Korea delivered in April 2012 and one Suezmax vessel ordered

from a shipyard in Korea for delivery in 2013. Construction

in progress also includes investment in windmill parks in

Sweden. In total, the contract amount with the shipyards

amounts to SEK 6,917 million.

Yard payments of SEK 4,018 million, windmill projects

of SEK 464 million, capitalized interest of SEK 214 million

and other capitalized costs of SEK 594 million are included

in Construction in progress as of 31 December 2011.

Stena AB 2011 41

The amount of interest capitalized on construction in prog-

ress and on vessels was SEK 114 million and SEK 145 million

for the years ended 31 December 2011 and 2010, respectively.

No capitalization of interest on real estate newbuilding

has been made for 2011 or for 2010. Valuation certificates

issued on 31 December 2011 by independent valuation

institutions indicate that the values in the vessel fleet exceeds

net book value with SEK 8,058 million, as compared to SEK

9,055 million as of 31 December 2010. Part of the vessels

net booked value as of 31 December 2011 refers to vessels

held in accordance with financial leasing agreements, see

Note 26.

Equipment is specified as follows:

SEK million WindmillsOther

equipment Total

Acquisition costsOpening balance as per 1 January 2010 506 3,848 4,354

Additions 187 687 874

Disposals (189) (189)

Transfers 34 34

Translation differences (280) (280)

Closing balance as per 31 December 2010 693 4,100 4,793

Additions 257 257

Purchase of company (Note 30) 52 52

Disposals (101) (101)

Transfers 27 27

Translation differences 31 31

Closing balance as per 31 December 2011 693 4 366 5 059

Accumulated depreciationOpening balance as per 1 January 2010 (40) (2,132) (2,172)

Purchase of company (Note 30) (4) (4)

Disposals 158 158

Translation differences 153 153

Transfers 6 9 15

Current year depreciation (34) (447) (481)

Closing balance as per 31 December 2010 (68) (2,263) (2,331)

Disposals 113 113

Purchase of company (Note 30) (40) (40)

Translation differences (16) (16)

Transfers 3 3

Current year depreciation (36) (449) (485)

Closing balance as per 31 December 2011 (104) (2,652) (2,756)

Net book value as per 31 December 2010 625 1,837 2,462

Net book value as per 31 December 2011 589 1,714 2,303

42 Stena AB 2011

Stena AB | Group

11 Buildings and land together with Ports

The movements during the year ended 31 December 2010 and 2011 are as follows

SEK millionBuildings and land Ports

Acquisition costsOpening balance as per 1 January 2010 1,478 1,712

Additions 39 7

Purchase of company (Note 30) 252

Translation differences (116) (161)

Closing balance as per 31 December 2010 1,401 1,810

Additions 104

Purchase of company (Note 30) 37 16

Disposals (1)

Transfers 789

Translation differences 2 28

Closing balance as per 31 December 2011 1,543 2,643

Accumulated depreciationOpening balance as per 1 January 2010 (577) (797)

Translation differences 52 77

Current year depreciation (35) (48)

Closing balance as per 31 December 2010 (560) (768)

Purchase of company (Note 30) (8)

Translation differences (1) (16)

Current year depreciation (35) (64)

Closing balance as per 31 December 2011 (604) (848)

Net book value as per 31 December 2010 841 1,042

Net book value as per 31 December 2011 939 1,795

Buildings and land together with Ports represent the Group´s

assets used in its business including office buildings, ferry

terminals etc.

Out of the net book value as of 31 December 2011 for

buildings and land, SEK 496 million relates to Swedish build-

ings and land.

Out of the net book value as of 31 December 2010 for

buildings and land SEK 480 million relates to Swedish build-

ings and land.

Stena AB 2011 43

12 Investment properties

As of 31 December

SEK million 2010 2011

Opening balance as of 1 January 24,040 24,148

Additions 635 1,043

Transfer from construction in progress 134 70

Disposals (597) (204)

Unrealized fair value adjustments 424 350

Exchange differences (488) 22

Closing balance as of 31 December 24,148 25,429

Investment Properties – Construction in progressOpening balance as of 1 January 175 206

Additions 165 188

Transfer (134) (70)

Closing balance at fair value 206 324

Closing balance Investment Properties 31 December 24,354 25,753

Investment Property – impact on the resultFor the years ended 31 December

SEK million 2010 2011

Rental Income 2,380 2,368

Direct cost (885) (829)

Valuation of investment properties 424 350

Total 1,919 1,889

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 to1 percent for residential properties and

0 to 15% for commercial properties. This assessment con-

sideration of type of property, technical standard and type

of construction has been taken. The assessment of the yield

requirements is based on information 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 2011, the following

rates of returns have been used.

Rate of return, %

Location Residential Commercial

Sweden 3,00–6,00 5,25–8,25

Eurozon n/a 6,00–12,00

The estimated market value of investment properties is

SEK 25,753 million compare to last year SEK 24,354 million.

To guarantee the valuation, external valuations have been

obtained from DTZ Sverige and Boer Hartog Hooft in the

Netherlands. The external valuations cover 20% of the total

property value in absolute terms but these selected proper-

ties represent 60% of the properties in terms of property

types, technical standard and building design. A comparison

between the internal and external valuations reveals that

Stena’s valuations are within the value range stated by the

external valuation companies.

44 Stena AB 2011

Stena AB | Group

13 Investment in SPEs

Since late 2002, the Company has invested in variable inter-

est entities (“SPEs”). The SPEs have invested in different

debt securities, including high yield bonds. The SPEs have

issued debt securities which are secured by their assets. The

non-controlling interest share of the results is shown in the

comprehensive income while the minority part of total

equity is shown as a separate component in the equity.

The investments in the CDO (“Collateral Debt Obligation”)

and CLO (“Collateral Loan Obligation”) started in December

2002, August 2003 and October 2005. They where estab-

lished during 2003, June 2004 and August 2006. The latest

CLO was started in November 2006 and has been partly sold

during 2011.

The investment in the CDO 2002 has been unwind

during 2011 with an additional dividend of approximately

SEK 90 million.

The non-controlling interest for the remaining CLOs are

15.4%, 11.3% and 5%, respectively.

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 31 December

SEK million 2010 2011

Financial income and expense 5 382

Non-controlling interest 3 (42)

Net income 8 340

Investments in SPEs1) 6,175 4,548

Short-term investments2) 405 133

Other assets 168 111

Total assets 6,748 4,792

Retained earnings 225 19

Net income 8 340

Shareholders’ equity 233 359

Non-controlling interest 117 91

Total Equity 350 450

Debt of SPEs3) 5,140 4,143

Other debt 1,258 199

Total liabilities 6,398 4,342Total shareholders’ equity and liabilities 6,748 4,792

As of 31 December

SEK million 2010 2011

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: 1,027 477

Senior Bank Debt are classified as “held to maturity” and are kept at cost in the balance sheet. 5,148 4,071

Total 6,175 4,548

1) Investment in SPEs are recorded at market value with gains and losses recorded to profit and loss. Investments in other 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 SEK 118 million 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 2011 45

Marketable securities as of 31 December 2011 classified as follows:

SEK million

Book value

CDO/CLO 678

Oil & Gas 460

Banks 440

Oil& Gas Services 349

Comercial Services 162

Closed-end Funds 122

Telecommunication 121

Food 116

Retail 115

Pharmaceuticals 107

Metal Fabricate/Hardware 103

Forest Products/paper 81

Diversified Financial Services 80

Healthcare Products 73

14 Marketable securities

As of 31 December

SEK million 2010 2011

Opening balance 2,211 4,130

Additions 4,360 1,677

Disposals (2,368) (2,024)

Reclassification (64) 176

Revaluation of financial assets through the income statement 152 (327)

Revaluation of financial assets through other comprehensive income 152 (202)

Translation differences (313) 35

Investment at the end of year 4,130 3,465

SEK million 2010 2011

Marketable securities are classified as:

Financial assets at fair value through the income statement 2,127 2,650

Available-for-sale financial assets 2,003 815

Total 4,130 3,465

Biotechnology 58

Mining 55

Internet 53

Cosmetics 49

Electronics 46

Miscellaneous Manufacture 41

Media 32

Auto Parts & Equipment 27

Investment Companies 25

Transportation 22

Machinery 21

Real Estate 13

Auto Manufacturers 13

Semiconducturs 3

Total listed shares 3,465

Marketable securities refer to the Stena AB groups listed

shares, these are recorded at fair value.

As of 31 December 2011 shares with a book value of

SEK 0 million have been pledged as security for bank debt.

As of 31 December 2010, shares with a book value of

SEK 0 million were pledged as security for bank debt.

46 Stena AB 2011

Stena AB | Group

15 Other noncurrent assets

SEK millionDeferred

tax assetsOther

receivables Available for

sale sharesOther shares

Deferred costs Total

Opening balance as per 1 January 2010 532 891 2,099 605 528 4,655

Additions 192 432 146 258 55 1,083

Disposals (29) (155) (330) (12) (104) (630)

Revaluation through the income statement 94 9 103

Share of profit (loss) 16 16

Dividend received (14) (14)

Reclassification 10 (10) (3) (3)

Translation differences (141) 45 (176) (61) 3 (330)

Closing balance as per 31 December 2010 564 1,297 1,745 792 482 4,880

Additions 135 171 119 37 462

Disposals 477 (163) (155) (147) 12

Revaluation through the income statement 62 14 76

Revaluation through other comprehensive income (224) (210) 41 (393)

Share of profit (loss) 16 (66) (50)

Dividend received (14) (14)

Reclassification 71 65 (176) (241) (281)

Translation differences 4 6 10 14 5 39

Closing balance as per 31 December 2011 892 1,192 1,666 604 377 4,731

Deferred tax assets relate to unutilized tax losses carried for-

ward. Reclassifications include netting against deferred tax

liabilities. See Note 8.

Other receivables as of 31 December 2011 include receiv-

ables related to sales of subsidiaries amounting to SEK 181

million and surplus in pension schemes of total SEK 680 mil-

lion, see Note 22. Other receivables as of 31 December

2010 include receivables related to sales of subsidiaries

amounting to SEK 254 million and surplus in pension

schemes of total SEK 622 million.

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.

The shares in Paradise Holding have been written down

with SEK 49 million (USD 7.5 million). The share of these

companies´ results is included in direct operating expenses.

See Note 6.

Stena AB 2011 47

Available for sale shares

SEK millionNo. of shares

or % held Book value

Held by parent company:

Alligator 2,888,088 21

Ram one 152,042 169

Total available for sale shares in the Parent company 190

Held by subsidiaries:

ING DUTCH OFFICE FUNDS C.V. The Netherlands 4.8% 771

Airport Real Estate Basis Fonds C.V. The Netherlands 20.8% 274

EQT Greater China II Limited Partnership China 4.67% 171

Gothenburg VG AB Sweden 26.9% 81

Southern Rock Gibraltar 5,000,000 53

Partners Group Direct Investment Luxembourg 2,424 34

ING China Opportunity Fund Lp China 11.3% 16

Chase Private Equity Fund Cayman Islands 3,860,614 12

Other 64

Total available for sale shares 1,666

Other shares

SEK millionNo. of shares

or % held Book value

Asahi Stena Tankers Pte Ltd Singapore 50% 3

Austen Maritime Services Pte Ltd Singapore 50%

Partrederiet SUST I DA Norway 50% 43

Partrederiet SUST III DA Norway 50% 61

Nordic Rio LLC Marshall Islands 50% 41

Stena Sonangol Suezmax pool LLC Marshall Islands 50%

Navion Gothenburg LLC Marshall Islands 50% 11

Paradise Holding Libya 35% 273

Glacia Limited Bermuda 50% 91

RoRo Partners Ltd Bermuda 49%

Stena Weco Denmark 50% 81

Total other shares 604

48 Stena AB 2011

Stena AB | Group

16 Inventories

As of 31 December

SEK million 2010 2011

Bunker and lubricating oil 177 119

Inventories of goods for sale 175 179

Raw materials and consumables 173 206

Products in progress 32 36

Finished products 88 92

Total 645 632

Book value of trade debtors corresponds to fair value.

The total allowance for doubtful trade receivables was

SEK 78 million as of 31 December 2011 and SEK 94 million

as of 31 December 2010.

Selling expenses as of 31 December 2011 include costs for

doubtful receivables of SEK 11 million and SEK 6 million as

of 31 December 2010.

As of 31 December

SEK million 2010 2011

Trade debtorsAccounts receivable are classified on the basis of their due date:

Outstanding but not due 2,021 2,567

Due up to 30 days 262 231

Due more than 30 days 471 420

Total 2,754 3,218

Other current receivablesRelated parties (Note 34) 1 1

Other short-term receivables 1,115 1,610

Total 1,116 1,611

Prepaid expenses and accrued incomePrepaid expenses 453 434

Accrued income 1,435 1,014

Total 1,888 1,448

Total short-term receivables 5,758 6,277

17 Short-term receivables

Stena AB 2011 49

Book value of Short-term investments corresponds to fair

value. Marketable 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 SEK 883 million at 31 Decem-

ber 2011 and SEK 961 million at 31 December 2010 have

been pledged as security for bank debt. See Note 29.

Restricted cash as of 31 December 2011 includes SEK 133

million of cash and cash equivalents in the SPEs (see Note 13)

which is not available to the Company. As of 31 December

2010 such restricted cash amounted to SEK 405 million.

Other restricted cash represents bank accounts that have

been pledged to cover various long-term liabilities and com-

mitments of the Company.

18 Short-term investments

As of 31 December

SEK million 2010 2011

Marketable debt and equity securities, trading 403 149

Restricted cash 3,724 2,519

Total 4,127 2,668

As of 31 December

SEK million 2010 2011

Cash 1,509 1,537

Short term deposits 156 50

Total 1,665 1,587

Short-term deposits are defined as bank deposits that have original maturities of up to three months.

19 Cash and cash equivalents

50 Stena AB 2011

Stena AB | Group

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 state-

ment. When an available-for-sale asset is impaired, the

portion of the reserve that relates to that financial assetis

recognized in the income statement.

Hedging reserve

The hedging reserve represents hedging gains and losses

recognized on the effective portion of cash flow hedges. The

cumulative deferred gain or loss on the hedge is recognized

in the income statement when the hedged transaction

impacts the income statement. Hedge accounting is applied

for certain bunker fuel purchases and certain interest swap

instruments.

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):

2010 6,320

2011 4,800

Specification of the reserves:

SEK millionFair value

reserveHedging

reserveTranslation

reserve Total

Opening balance as per 1 January 2010 (303) 52 1,031 780

Exchange differences arising on the translation of foreign operations (2,442) (2,442)Change in Hedging reserve, net of tax

– valuation of bunker hedges 153 153– valuation of interest swap hedge 63 63Change in fair value reserve, net of tax

– valuation available for sale shares 159 159Change in net investment hedge, net of tax 191 191Closing balance as per 31 December 2010 (144) 459 (1,411) (1,096)

Exchange differences arising on the translation of foreign operations (147) (147)Change in Hedging reserve, net of tax

– valuation of bunker hedges (16) (16)– valuation of interest swap hedge (797) (797)Change in fair value reserve, net of tax

– valuation available for sale shares (214) (214)Change in net investment hedge, net of tax (96) (96)Closing balance as per 31 December 2011 (358) (450) (1 558) (2 366)

Stena AB 2011 51

21 Deferred Income Taxes

As of 31 December

SEK million 2010 2011

Deferred tax liabilitiesTangible fixed assets 4,336 4,118

Financial fixed assets 128 41

Provisions 268 631

Other 301 51

Total deferred tax liabilities 5,033 4,841

Deferred tax assetsTangible fixed assets 96 333

Tax loss carryforwards 2,291 2,022

Financial fixed assets 73

Provisions 169 63

Less deferred tax assets not recognized (1,017) (1,006)

Total deferred tax assets recognized 1,539 1,485

Net deferred tax liability 3,493 3,356

Out of which:

Deferred tax assets (Note 15) 564 892

Deferred tax liabilities 4,057 4,248

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.

The Company’s gross value of tax loss carryforwards are as follows:

As of 31 December

SEK million 2010 2011

Sweden 3,759 3,670

Rest of the world 5,646 5,318

Total 9,405 8,988

Most tax loss carry forwards can be carried forward indefinitely. Tax loss carry forwards of SEK 3,114 million expire

between 2012 and 2020.

2010 2011

SEK million

Taxes charged to income statement

Taxes charged to compre-

hensive income

Total taxes

Taxes charged to income statement

Taxes charged to compre-

hensive income

Total taxes

Current taxes (191) (191) (240) (240)Deferred taxes 77 493 570 (13) 401 388

(114) 493 379 (253) 401 148

52 Stena AB 2011

Stena AB | Group

22 Employee benefits

Provisions for pensions and other provisions

Post-employment benefits, such as pensions, healthcare and

other benefits are mainly settled by means of regular pay-

ments to independent authorities or bodies that assume

pension obligations and administer 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 dis-

counted basis. The assumptions include discount rate, infla-

tion, salary growth, long-term return on plan assets, mortal-

ity rates and other factors. Discount rate assumptions are

based on long-term high quality corporate bonds and

goverenment bond yield available at year end. The assets

consist mainly of long-term high corporate bonds, gover-

menent bonds and equities and the asset allocation for each

pension scheme is defined in an investment policy docu-

ment. 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 Nether-

lands.

Stena has commitments for retirement pensions and fam-

ily pensions for office personnel in Sweden which are

secured through an insurance policy with Alecta. According

to a statement from the Swedish Financial Reporting Board,

UFR 3, this is a defined benefit plan covering several

employers, and so-called multi employer plan. Alecta is cur-

rently unable to provide defined benefit accounting for such

participants, and therefore premiums paid to Alecta are

accounted for as defined contribution expense. Fees for the

years 2011 and 2010 paid covering such arrangements were

54 million and 73 million respectively . Alecta’s profit in the

form of the so-called collective consolidation level

amounted to 113% for 2011 and 146% for 2010. The collec-

tive consolidation level comprises the fair value of Alecta’s

assets as a percentage of the insurance commitments calcu-

lated in accordance with Alecta’s insurance calculation princi-

ples and assumptions which are not in conformity with IAS 19.

Due to extra contributions paid during 2010, some of the

pension schemes have a surplus value at 31 December 2011.

Paragraph 58 of IAS 19 defines how this surplus value shall

be recorded, and states an upper limit for recorded surplus

value. IFRIC 14 explains this situation further, and expands

to also incorporate an element of minimum funding req-

quirements. IFRIC 14 also describes an exeption to this rule

if the entity has an unconditioned right to refund. Comparing

the Trust Deeds of these schemes with IFRIC 14 paragraph

11(a) and paragraph 24, the conclusion is that no additional

liability is required.

In 2011, the English Court of Appeal affirmed a High

Court ruling from 2010 that contributions to repair the

deficit in the Merchant Navy Ratings Pension Fund can be

required from any company that has participated in the

Fund, including companies that no longer employ any

members. As a result of the Court of Appeals decision, the

non-contributing employers will also be required to contrib-

ute funds to reduce the deficit and the Company’s future

contributions will be significantly reduced and the Group’s

share of the deficit has also therefore been reduced.

The following tables disclose information about defined

benefit plans. The information refers to assumptions applied

for actuarial calculations, periodical costs and the value of

obligations and plan assets at year-end. The tables also

include a reconciliation of obligations and plan assets during

the year and the difference between fair values and carrying

amounts reported on the balance sheet date. Costs for pen-

sions are reported as administration costs.

Assumptions applied for actuarial calculations, %

Sweden United Kingdom Other Europe

2010 2011 2010 2011 2010 2011

Discount rate 4.25 3.75 5.50 4.90 5.20 4.90

Expected return on plan assets 5.00 5.00 7.50 5.10 4.30 3.50

Expected salary increases 3.00 3.00 3.50 3.40 3.50 3.50

Stena AB 2011 53

Obligations for pensions, net

SEK million Sweden United Kingdom Other Europe Total

Obligations for pensions, net, 1 January 2010 119 832 (8) 943

Current service costs 9 35 5 49

Interest costs 17 636 8 661

Expected return on plan assets (9) (542) (9) (560)

Actuarial gains and losses 9 45 54

Exchange differences (87) 1 (86)

Payment of pension fees from the company (15) (572) (8) (595)

Benefits paid (5) (5)

Other provisions 3 2 5

Obligations for pensions, net, 31 December 2010 128 347 (9) 466

Current service costs 7 35 5 47

Interest costs 18 466 8 492

Expected return on plan assets (10) (346) (8) (364)

Actuarial gains and losses 13 58 71

Exchange differences 9 9

Payment of pension fees from the company (12) (427) (8) (447)

Other provisions 3 9 (4) 8

Obligations for pensions, net, 31 December 2011 147 151 (16) 282

Provision for pensions, net

SEK million Sweden United Kingdom Other Europe Total

Net provisions for pensions, 1 January 2010 119 832 (8) 943Current value of funded obligations 418 11,047 154 11,619

Fair value of plan assets (195) (8,847) (169) (9,211)

Provisions, net 223 2,200 (15) 2,408

Unrecognized actuarial gains and losses (95) (1,853) 6 (1,942)

Net provisions for pensions, 31 December 2010 128 347 (9) 466Current value of funded obligations 458 8,908 153 9,519

Fair value of plan assets (200) (7,521) (191) (7,912)

Provisions, net 258 1,387 (38) 1,607

Unrecognized acturial gains and losses (111) (1,236) 22 (1,325)

Net provisions for pensions, 31 December 2011 147 151 (16) 282whereof reported as

Other non-current assets (see Note 15) (118) (545) (17) (680)Provisions for pensions 265 696 1 962

Pension costs

SEK million 2010 2011

Current service costs 49 47

Interest costs 661 492

Expected return on plan assets (560) (364)

Actuarial gains and losses 54 71

Past service cost (2) (1)

Total pension costs for defined benefit plans 202 245

Pension costs for defined contributions plans 450 366

Total pension costs 652 611

54 Stena AB 2011

Stena AB | Group

23 Other Provisions

24 Bank debt

2010 2011

SEK million Current Non-current Total Current Non-current Total

Property loans 192 12,419 12,611 906 11,584 12,490

Other loans 1,106 18,710 19,816 1,629 21,119 22,748

Revolving credit facilities 6,666 6,666 5,560 5,560

Other utilized bank credit lines 351 395 746 307 457 764

Total 1,649 38,190 39,839 2,842 38,720 41,562

Schedule for repayment of bank debt is presented in Note 31, Liquidity risks.

The carrying amounts of the group’s borrowings are denominated in the following currencies

As of 31 December

SEK million 2010 2011

SEK 12,500 12,533

GBP 292 450

USD 18,231 20,622

EUR 8,279 7,396

Other currencies 537 561

Total 39,839 41,562

Regarding assets pledged, see Note 29.

As of 31 December

SEK million 2010 2011

Opening balance 1,920 1,492

Additions 26 1

Disposals (241) (124)

Exchange differences (213) 1

Closing balance 1,492 1,370

Historical Information2007 2008 2009 2010 2011

Current value of funded obligations 11,474 9,414 11,887 11,619 9,519

Fair Value of Plan assets (10,505) (8,324) (9,169) (9,211) (7,912)

Pensions, net 969 1,090 2,718 2,408 1,607

Unrecognized actuarial gains and losses 436 31 (1,775) (1,942) (1,325)

Net provisions for pensions 1,405 1,121 943 466 282

Cont. Note 22

Stena AB 2011 55

Issued– Maturity

Fair value As of 31 December

Carrying amount (SEK million) As of 31 December

(million) Nominal Outstanding Interest 2010 2011 2010 2011

2004–2016 MUSD 250 MUSD 128.8 7.00% MUSD 121 MUSD 119 874 890

2007–2017 MEUR 300 MEUR 300 6.125% MEUR 287 MEUR 264 2,692 2,674

2007–2019 MEUR 102 MEUR 102 5.875% MEUR 93 MEUR 80 915 909

2010–2020 MEUR 200 MEUR 200 7.875% MEUR 191 MEUR 168 1,775 1,763

Total 6,256 6,236

25 Senior notes

In November 2003, the Company issued USD 175 million of

notes at an interest rate of 7.5% with maturity on 1 Novem-

ber 2013. In November 2004, the Company issued USD 250

million of notes at an interest rate of 7.0% with maturity on

1 December 2016.

In April 2010, we redeemed all our outstanding Senior

Notes due 2013, in the aggregate of USD 153.1 million at a

price of 102.5%.

In February 2007, we decided to issue bonds on the Euro-

pean market. On 8 February 2007, the Company completed

an offering of €300million of the Senior Notes at an interest

rate of 6,125% due 2017. On 14 February 2007, the Com-

pany completed an offering of EUR 102 million at an inter-

est rate of 5.875% Senior Notes due 2019.

In March 2010, we completed an offering of EUR 200 mil-

lion of Senior Notes at an interest rate of 7,875% due 2020.

Regarding the covenants of the loans, see Note 31.

26 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.

Four RoPax vessels, one Drillship and two tankers are leased

under capital leases. The gross amount of vessels under capital

leases as of 31 December 2010 and 2011 amounted to SEK

6,932 million and SEK 7,190 million, respectively. The net

book value related to these capital leases amounted to SEK

5,391 million as of 31 December 2010 and SEK 5,434 million

as of 31 December 2011.

Rental expense for operating leases were as follows

Years ended 31 December

SEK million 2010 2011

Rental expense 1,905 1,861

56 Stena AB 2011

Stena AB | Group

Company as lessorThe Company leases properties and certain vessels to third parties under operating leases. The cost, accumulated depreciation and net book value of these assets held for lease as of

31 December, were as follows

2010 2011

SEK million CostAccumulated depreciation

Net book value Cost

Accumulated depreciation

Net book value

Vessels 29,031 (9,213) 19,818 36,340 (11,726) 24,614

Real estate 24,354 24,354 25,753 25,753

Total 53,385 (9,213) 44,172 62,093 (11,726) 50,367

As of 31 December 2010 the future minimum rentals to be

received under non-cancellable operating leases were as follows

SEK million Vessels Real estate Total

2011 3,427 709 4,136

2012 1,492 590 2,082

2013 1,386 359 1,745

2014 917 214 1,131

2015 162 132 294

2016 and thereafter 67 223 290

Total minimum lease rentals 7,451 2,227 9,678

As of 31 December 2011 the future minimum lease commitments under non-cancellable operating leases and capital leases were as follows

SEK million Operating leases Capital leases

2012 1,578 222

2013 1,276 161

2014 1,048 150

2015 725 146

2016 506 224

2017 and thereafter 1,767 800

Total minimum lease commitments 6,900 1,703

As of 31 December 2010 the future minimum lease commitments under non-cancellable operating leases and capital leases were as follows

SEK million Operating leases Capital leases

2011 1,537 225

2012 719 227

2013 639 223

2014 607 215

2015 533 193

2016 and thereafter 1,957 786

Total minimum lease commitments 5,992 1,869

Cont. Note 26

Stena AB 2011 57

27 Other non-current liabilities

Repayment of non-current liabilities is required according to the following schedule:

More thanSEK million 1–3 years 3–5 years 5 years Total

Prepaid income 65 36 101

Other liabilities 1,468 165 68 1,701

Total 1,533 165 104 1,802

As of 31 December

SEK million 2010 2011

Prepaid income 65 101

Other liabilities 881 1,701

Total 946 1,802

As of 31 December 2011 the future minimum rentals to be received under non-cancellable operating leases were as follows

SEK million Vessels Real estate Total

2012 459 737 1,196

2013 358 553 911

2014 283 415 698

2015 256 265 521

2016 163 159 322

2017 and thereafter 933 204 1,137

Total minimum lease rentals 2,452 2,333 4,785

In addition to the minimum lease rentals as above, the Com-

pany has entered into lease agreements for the DrillMax

vessel Stena IceMAX and Suezmax vessels, under construction

as per 31 December 2011. The amounts in the table above

exclude amounts from the Company’s portfolio of residential

rental properties since those lease agreements are generally

cancelable within three months.

58 Stena AB 2011

Stena AB | Group

29 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

SEK million 2010 2011

Shares in subsidiaries 4,272 4,369

Mortgages on vessels 30,092 34,129

Mortgages on properties 14,853 15,421

Chattel mortgages 642 710

Investment in affiliated companies 1,015 1,027

Marketable securities 1,053 1,045

Trade debtors 336 344

Short term investments 961 883

Reservation of title 52 52

Assets pledged, other 988 1,589

Total assets pledged for normal bank debt 54,264 59,569

Investment in SPEs 6,175 4,548

Total assets pledged for bank debt 60,439 64,117

Long-term and short-term debt and capitalized lease obligations 41,708 43,265

Debt in SPEs 5,140 4,143

Total debt and capitalized lease obligations 46,848 47,408

In addition, certain guarantees have also been issued to cover various liabilities and commitments.

28 Accrued costs and prepaid income

As of 31 December

SEK million 2010 2011

Accrued costsCharter hire/running costs 241 176

Interest costs 401 464

Accrued personnel costs 362 419

Other accrued costs 731 983

1,735 2,042

Prepaid incomePrepaid charter hire 207 97

Other prepaid income 394 486

601 583

Total accrued costs and prepaid income 2,336 2,625

Stena AB 2011 59

Contingent liabilities

As of 31 December

SEK million 2010 2011

Guarantees 1,818 2,078

Other contingent liabilities 692 585

Total 2,510 2,663

Commitments

Future minimum lease commitments relating to operating

leases of vessels, ports etc amount to SEK 1,578 million for

2012 and SEK 5,322 million from 2013. See Note 26.

As of 31 December 2011, a total of two vessels were on

order from different shipyards. The total contract amount

for these vessels amounts to SEK 6,917 million. Yard pay-

ments of SEK 4,018 million have been made in respect of

these contracts.

30 Consolidated statements of cash flows

Guarantees include mainly commitments for property loans, bank guarantees for vessels in associated companies and

guarantee commitments for equipment delivered. There are also on-going tax issues with tax authorities in the Group.

Purchase of subsidiaries

Stena Line Ferries Ltd

On 1 December, 2010 Stena Line acquired 100% of the shares

in DFDS Sea Ferries Ltd, which changed the name to Stena

Line Ferries Ltd. Since the acquisition required approval from

both the Irish and the British competition authorities, which

was received in April and July 2011, the acquisition was not

presented in 2010 as a purchase of a subsidiary. Stena Line

Ferries Ltd is included in the consolidated accounts of Stena

as of July 1, 2011, within the business area Ferry operation.

The purchase price was EUR 22,3 million and was to EUR 22

million paid out on 1 December 2010. Full effect of the

acquisition is included in the table below. The headquarter

is in Belfast. The company operate the routes Belfast–Liver-

pool and Belfast–Heysham and has around 200 employees.

The difference between the purchase price paid and the

adjusted fair value of acquired net assets is EUR 39,5 million

and is classified as Rights to routes.

DTF group

On 1 January, 2011 Stena Line acquired, through its subsidiary

Sembo AB, 100% of the shares in Rejser A/S, the parent

company in the DTF group. The company has the headquarter

in Hjörring, Denmark, and 130 employees. The DTF group is

a package holiday company. The purchase price was SEK

122 million. The difference between the purchase price paid

and the adjusted fair value of acquired net assets is SEK 182

million and refers to goodwill. The goodwill is attributable

mainly to the possibilities the acquisition creates in achieving

synergies by integrate the DTF operation with Sembo present

operation.

Macro

On 7 October, 2011 Ballingslöv International AB acquired

100% of the shares in Macro International AB. The com-

pany has the headquarter in Laholm, Sweden, and 44

employees. Macro has a leading position in the bathroom

market in Sweden and Norway. The purchase price was SEK

37 million. The difference between the purchase price paid

and the adjusted fair value of acquired net assets is SEK 19

million and refers to goodwill.

Tre Trädgårdar

On 1 February, 2011 S-Invest Trading AB, the parent com-

pany of mainly the Blomsterlandet business, acquired 100%

of the shares in Tre Trädgårdar AB. The company has the

headquarter in Stockholm, Sweden, and 19 employees. Tre

Trädgårdar has two shops (Ella Trädgård) and is a garden

centre retailer. The purchase price was SEK 31 million. The

difference between the purchase price paid and the

adjusted fair value of acquired net assets is SEK 21 million

and refers to goodwill.

60 Stena AB 2011

Stena AB | Group

Interest payments Year ended 31 December

SEK million 2010 2011

Interest, paid 2,045 2,028Interest, received 476 394

Cont. Note 30

This note describes the financial risk management in the

Stena Group. Accounting principles for financial instruments

are described in Note 1 and financial outcome for the year

2011 and 2010 are described in Note 32. Other notes that

include information used in Note 31 and 32 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 leasing contracts, accounts pay-

able, accounts receivable, bonds, shares and participations

as well as cash and short-term investments.

The primary risks deriving from handling of financial instru-

ments are Market risks including interest-rate risk, currency risk

and price risk, Credit risk and Liquidity risk. All of these risks are

handled in accordance 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 mini-

mise 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 depart-

ment, Stena Finance, in accordance with policies determined

by the Board of Directors. Stena Finance identifies, evaluates

31 Financial risk factors and financial risk management

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.

Financing activities

Other financing activities includes further purchase of the shares in the subsidiary Ballingslöv International AB amounting to

SEK 53 million. As per 31 December 2011 Adactum owned 100% of Ballingslöv. For 2010 purchase of shares in Ballingslöv

amounted to MSEK 218. As per 31 December 2010 Adactum owned 96% of Ballingslöv.

SEK million 2010 2011

Assets and liabilities acquired:

Intangible assets 12

Tangible fixed assets 252 49

Financial fixed assets 3

Inventories 27

Current receivables 2 212

Cash and cash equivalents 1 15

Long-term debt (69)

Current liabilities (4) (345)

Deferred tax (25) (88)

Acquired net assets 226 (184)

Goodwill 220

Rights to routes 354

Non-controlling interest (98)

Purchase price (128) (390)

Deferred purchase price 3

Cash and cash equivalents in the acquired businesses 1 2

Effect on the Group’s cash and cash equivalents (127) (384)1

1) Regarding the acquisition of Stena Line Irish Sea Ferries Ltd an initial payment of EUR 22 million was made at completion on 1 December 2010 why this total amount does not reflect cash paid out during 2011.

Total expenses related to the acquisition amounted to SEK 35 million and have been reported as direct operating expenses.

Stena AB 2011 61

and hedges financial risks in close co-operation with the

Group’s operating units. The Board of Directors prepares writ-

ten policies for both overall risk management and for risk man-

agement of specific areas such as currency risk, interest rate

risk, credit risk, the utilisation of derivative and non-derivative

financial instruments and the investment of excess liquidity.

The Company 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 subsidiary’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 pro-

file the Company uses various types of interest rate deriva-

tives 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 cur-

rency denominated Income Statement or Balance Sheet

items to SEK and when converting cash flows in foreign cur-

rency. These risks are reduced by hedging with forward for-

eign exchange contracts or with currency options.

Fluctuations in the price of bunker fuel, which predomi-

nantly affects Ferry operations, are managed by fixed price

agreements with the supplier for the various grades of bun-

ker fuels or by using financial derivatives for crude oil.

As part of its tanker operations the Company 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 Company’s financial policies and manuals mainly by

the treasury department.

Market risk – Interest rate risks

The Company 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 Compa-

ny’s management makes regular assessments of the interest

rate risks. This exposure is adjusted with interest rate deriva-

tives 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 interest rate payments. Interest income or

interest expenses under these contracts are allocated to

specific periods and reported as an adjustment of the inter-

est expense on the underlying liability. The Group reports

accrued interest at the end of the accounting period, calcu-

lated in accordance with the conditions in the contracts.

Generally, the 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 Company is exposed to the risk of fluctuations in for-

eign currency exchange rates due to the international

nature and scope of its operations. A substantial portion of

the Company’s revenues and expenses are denominated in

USD, but also in GBP and EUR. The Company’s foreign cur-

rency risk arises from (i) the Company’s investment in for-

eign subsidiaries’ net assets (equity exposure), (ii) certain

financial assets and liabilities (translation exposure when

converting such balances to each company’s functional cur-

rency) and (iii) fluctuations in exchange rates on the value of

the Company’s sales and purchases in foreign currencies

(transaction exposure).

The Company’s policy is to hedge its translation exposure

which mainly arises from USD and EUR borrowings in compa-

nies with SEK as their functional currency. The Company also

hedges parts of its transaction exposure in USD, GBP, EUR,

CAD, PLN, NOK and DKK from future cash flows from firm

commitments such as charter vessel contracts as well as antici-

pated bunker fuel payment obligations (USD). The Company’s

transaction exposure mainly originates from its ferry operations

and offshore drilling operations. The currencies mainly used for

sale are EUR, CAD, PLN, NOK and DKK and the currencies

mainly used for purchase are USD, GBP and NOK.

Translation differences from net investments

Translation differences from the exposure of net assets in for-

eign subsidiaries are reported directly in the Group’s equity.

Results from the translation of forward currency contracts or

exchange rate differences from borrowings in foreign currency

are transferred to translation differences in net financial income

when the hedges are no longer considered to be effective.

Interest rate differential from currency swaps or forward

agreements are reported as interest income or interest

expenses in the Group’s net financial income.

The book value of our net assets of subsidiaries denomi-

nated in a foreign currency, as of 31 December 2011, was

approximately SEK 19.5 billion. The net assets are expressed

62 Stena AB 2011

Stena AB | Group

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 31 December, 2011 by SEK

195 million.

Translation differences from translation exposure

Monetary assets and liabilities in foreign currency are trans-

lated 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 for-

ward agreements or currency option contracts, 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 liabili-

ties is also reported. Interest 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 cur-

rency option contracts, including paid or received premiums

from option contracts, which are intended to hedge

expected or contracted future cash flows in foreign cur-

rency, 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 comprehensive 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

operation 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 contracts 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 contracts are

settled on a monthly basis and reported as an adjustment of

the cost for bunker fuel for the current period.

The vessels of the ferry operations have an annual con-

sumption of bunker fuel of approximately 300,000 tons and

70,000 tons of gas oil which combined converts to an

annual volume of about 2.4 million barrels. 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

All equity holdings within Short-term investments and Mar-

ketable 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 equities, equity indices and

bonds has been approved by the Board of Directors and the

utilizations of the limits is monitored on a daily basis. The

risk mandate will be allocated per trader/portfolio, reflect-

ing a 10% overnight adverse price movement. As a comple-

ment to the price risk measurement, specific risk, sector

risks and geographic risks are followed up and reported. For

liquidity purposes, 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 acceptable. 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 2011, a change of +/–10% in the

unrealised value of all our equity holdings within Short-term

investments and Marketable securities, would have an

effect of +/–SEK 280 million on profit before tax and +/–SEK

81 million recognised 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 prof-

its on a short-term basis. Such financial instruments that are

not used in the Company’s program of interest rate and for-

eign currency risk management are referred to as ‘trading’

for purposes of this disclosure. All trading positions are

taken within the limits of the Company’s financial trading

policy. All positions are recorded at fair value and the unre-

alized gains and losses are part of the quarterly results.

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

Cont. Note 31

Stena AB 2011 63

is not satisfactory according to the credit policy, payment in

cash is required. In our Offshore Drilling operations, our

customers are generally highly credit rated. 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 char-

ter contract if payment is not received within a certain time,

before entering into a charter agreement the credit worthi-

ness of the charterer is investigated using well known

credit-rating agencies. If the credit worthiness is not satis-

factory a guarantee is required from the charterer, e.g. in

the form of a bank guarantee.

In our Crude oil 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 vessel

can either be denied, or the charterer can be offered to pro-

vide 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 commer-

cial tenants make the rental payments in advance. Never-

theless, a credit check is always made on new tenants, resi-

dential 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 guarantee (commercial tenants).

All financial instruments are entered into with counter-

parties who are considered to be creditworthy institutions

and terms and conditions are documented. In the normal

course of business, none of the parties demand collateral

for credit exposure from financial instruments. All financial

derivatives are traded within the framework of established

ISDA agreements, where positive and negative market val-

ues are netted. In the table below credit risk refers to net

positive market values per counterparty.

The following table summarizes the notional volume and credit risks of financial derivative instruments

31 December 2010 31 December 2011

SEK millionNotional amount Credit risk

Notional amount Credit risk

Currency forward contracts and swaps 19,706 265 30,036 50

Currency options 45 9

Interest rate forward contracts and swaps 13,195 28,041

Interest rate options 4,135 2,888

Commodity fixed price swaps – oil 3,096 235 2,612 158

Commodity options – oil 274 185 105

Total 40,451 500 63,771 313

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 holdings in equities and bonds.

Due to the dynamic character of the business, the need for

financing flexibility is satisfied by arranging part of the com-

pany’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.

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 confirma-

tions and constitute undiscounted cash flows. Cash flows in

foreign currency is converted to SEK by using the closing

exchange rates.

64 Stena AB 2011

Stena AB | Group

As per 31 December 2011 TotalLess than

1 yearBetween 1

and 2 yearsBetween 2

and 5 yearsMore than

5 years Not specified

Property loans 12,490 906 1,224 902 9,458

Other bankloans 22,748 1,629 4,587 4,375 12,157

Revolving Credit Facility 5,560 5,560

Other credit facilities 764 307 457

Senior Notes 6,236 6,236

Financial leasing debt 1,703 222 161 520 800

Operational leasing debt 6,900 1,578 1,276 2,279 1,767

Trade accounts payable 1,281 1,281

Total 57,682 5,923 7,248 8,076 30,418 6,017

Property loans consists principally of bank mortgage loans

on real estate, buildings and land in the Company’s real

estate business segment. These loans are denominated in

SEK and EUR, respectiveley. Other loans consist of long term

bank loans used to finance the acquisition of vessels and

other assets. They are denominated in USD, GBP, EUR and

SEK, respectiveley.

Since December 2004 the Company has a revolving credit

facility of USD 1 billion. The facility was renegotiated in Janu-

ary 2006 and expires in January 2013. Obligations under the

facility are secured mainly by mortgages on certain vessels

and rigs. Borrowings under the facility bear interest at a rate

based on LIBOR plus an applicable margin based on the utili-

zation of the facility. The facility imposes certain covenants

regarding levels of working capital, cash and cash equiva-

lents and interest coverage ratio. As of 31 December 2011,

the utilized portion of the facility was USD 802 million, of

which USD 776 million was actually drawn and USD 26 mil-

lion used for issuing of bank guarantees. As of 31 December

2010 the utilized portion of the facility was USD 909 million,

of which USD 884 million was actually drawn and USD 25

million used for issuing of bank guarantees. As of 2007, the

Company has an additional revolving credit facility of USD

200 million and the utilized portion of the facility as of

31 December 2011, was USD 32 million. As of 31 December

2010, the utilized portion of the facility was USD 107 million.

During 2010, the Company entered into a new SEK 6,660

million Revolving Credit Facility with Svenska Handelsbanken

and Nordea and guaranteed by EKN. As of 31 December

2011, as well as of 31 December 2010 this facility was unuti-

lized. As of 31 December 2011 the Company had SEK 8,090

million in other unutilized, mainly uncommitted, overdraft

facilities and other similar lines of credit, as compared to

SEK 7,743 million as of 31 December 2010.

“Not specified” includes borrowings and utilized credit

lines for properties and vessels that have formal repayment

dates in 2012. 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 utilized portion of the Revolving Credit Facilities.

The revolving credit facility imposes various financial and

operating covenants upon the restricted group. Among

other things, 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 main-

tain minimum cash and cash equivalents of not less than

USD 50 million, (iii) require our net debt to be no greater

than 65% of the capitalization, and (iv) require us to main-

tain ownership of the security parties that, at the date of

execution of the credit facility agreement, are members of

the Stena Group.

Cont. Note 31

Stena AB 2011 65

32 Financial instruments

Financial instruments per category

Financial instruments measured at fair value

through income statement

SEK million

31 December 2010Fair value

optionHeld for trading1

Deriva-tives

used for hedging

Held to maturity

Available for sale

Loans and

receiv-ables

Other financial liabilities

Total carrying

value Fair value

AssetsMarketable securities 2,127 2,003 4,130 4,130

Other noncurrent assets 365 1,380 1,745 1,745

Trade debtors 2,754 2,754 2,754

Short-term investments 151 3,976 4,127 4,127

Investments in SPEs 5,148 1,027 6,175 6,088

Other receivables 123 431 554 554

Total 2,492 274 431 5,148 4,410 6,730 19,485 19,398

LiabilitiesSenior notes 6,256 6,256 5,950

Other Long-term interest bearing debt 39,834 39,834 39,834

Short-term interest bearing debt 1,874 1,874 1,874

Trade accounts payable 1,313 1,313 1,313

Debt in SPEs 5,140 5,140 5,140

Other liabilities 36 57 93 93

Total 36 57 54,417 54,510 54,204

31 December 2011

AssetsMarketable securities 2,650 815 3,465 3,465

Other noncurrent assets 53 1,442 1,495 1,495

Trade debtors 3,218 3,218 3,218

Short-term investments 149 2,519 2,668 2,668

Investments in SPEs 4,072 477 4,548 4,431

Other receivables 2 339 341 341

Total 2,703 151 339 4,072 2,734 5,737 15,735 15,618

LiabilitiesSenior notes 6,236 6,236 5,373

Other Long-term interest bearing debt 40,201 40,201 40,201

Short-term interest bearing debt 3,064 3,064 3,064

Trade accounts payable 1,281 1 281 1 281

Debt in SPEs 4,143 4,143 4,143

Other liabilities 280 1,371 1,651 1,651

Total 280 1,371 54,925 56,576 55,713

1) Held for trading includes exchange contracts for hedging translation exposure, but not included in hedge accounting, reported in Other liabilities/receivables, SEK (199) million in 2011 and SEK 120 million in 2010 and interest rate contracts for hedging interest, but not included in hedge accounting, reported in other liabilities SEK (75) million in 2011 and SEK (17) million in 2010.

This note describes the financial outcome of financial instruments in the Stena Group. Accounting principles for financial

instruments are described in Note 1 and financial risk management is described in Note 31.

66 Stena AB 2011

Stena AB | Group

Financial liabilities at fair value through profit or loss

– Trading derivatives 36 36 280 280

Derivatives used for hedging 57 57 1,371 1,371

Total liabilities 93 93 1,651 1,651

Specification of financial instruments in Level 3

Opening balance 1 January 1,906 1,588

Total unrealized gains/losses

– recognised in profit or loss 42 22

– recognised in other comperhensive income (33) 41

Proceeds from acquisitions and sales, net (12) 10

– whereof realised result (20) 8

Reclassification from level 3 (157) (176)

Translation differences (158) 10

Closing balance 31 December 1,588 1,495

As of 31 December 2011, a change of +/– 10% in the unrealized value of all our assets in the Level 3 category, would

have an effect of +/– SEK 16 million (as of 31 December 2010 +/– SEK 21 million) on profit before tax and +/– SEK 133 million

(as of 31 December 2010 +/– SEK 138 million) recognized in other comprehensive income.

31 December 2010 31 December 2011

Level 1 Level 2 Level 3Total

balance Level 1 Level 2Level

3Total

balance

Assets

Financial assets at fair value through profit or loss

– Trading derivatives 3 3 2 2

– Trading securities 2,278 157 208 2,643 2,799 53 2,852

Derivatives used for hedging 431 431 339 339

Available-for-sale financial assets

– Equity securities 1,122 423 1,321 2,866 (577) 619 1,361 1,403

– Debt investments 458 59 517 773 81 854

Total assets 3,858 1,014 1,588 6,460 2,995 960 1,495 5,450

Liabilities

Financial instruments at fair value

The table below shows the Group’s financial instruments,

excluding investments in SPEs, at fair value as of 31 Decem-

ber 2010 and 2011, respectively.

The different levels indicate to what extent the market

value has been used when calculating the fair value. In level

The majority of the financial instruments in Level 3 is relat-

ing to investments in Private Equity funds. The book value

of these funds equals the Net Asset Value (NAV) provided

by the fund manager. As we have not been provided with a

1 fair value is determined on the basis of the asset’s listed

buying current bid-rate on balance sheet date, with no addi-

tion for any transaction costs (for example brokerage) on

acquisition date. In level 2 fair value is determined by utilis-

ing a valuation technique. In level 3 fair value is based on an

estimated discounted cash flows.

specification of the different variables and assumptions

used by the fund manager when calculating the NAV, we

can not estimate the sensitivity of the different variables

used.

Cont. Note 32

Stena AB 2011 67

(SEK in millions)2010

Carrying value2010

Fair value2011

Carrying value2011

Fair value

AssetsInvestments in SPEs 6,175 6,088 4,548 4,431

Liabilities

Senior notes 6,256 5,950 6,236 5,373

Interest rate hedge contracts

Outstanding interest rate contracts for hedging of the interest rate exposure

MSEK

2010Notionalamount

2010Carryingamount

2011Notionalamount

2011Carryingamount

Contracts excluding SPEInterest rate swaps floating to fixed

– receivable position 5,884 125 1,430 32

– payable position 7,224 (203) 25,845 (1,334)

Interest rate swaps fixed to floating

– receivable position 86 4 79 2

Interest rate caps

– receivable position 4,135 16 634 2

Interest rate collar

– payable position 2,000 (119)

Contracts SPEInterest rate swaps floating to fixed

– payable position 673 (18) 687 (17)

Interest rate caps

– receivable position 643 2 254 1

Total 18,645 (74) 30,929 (1,433)

Fair value

The table below summarizes the fair value of balance sheet

items in the case where the fair value differs from the carry-

ing 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.

The fair value of the instruments used in hedge accounting,

excluding SPEs, amounts to SEK –1,358 million as of 31

December 2011 and SEK –57 million as of 31 December

2010 and is included in other current liabilites against the

hedge reserve.

Senior Bank Debt are classified as “held to maturity” and

are kept at cost in the balance sheet. To determine the mar-

ket values for the Corporate Fixed Income Bonds the com-

pany uses generally accepted public market pricing sources.

The fair value of Senior notes has been calculated by

using prices in Bloomberg.

The SPEs are investing in different debt securities, see

note 13, and to reduce the potential negative effects on the

actual values of these entities, interest rate contracts have

been entered into at an amount equal to that of the under-

lying fixed rate bonds.

68 Stena AB 2011

Stena AB | Group

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

SEK million

2010 Notional amount

2010 Carrying amount

2011 Notional amount

2011 Carrying amount

Currency forward contracts

– receivable position 1,649 79 129 1

– payable position 634 (5) 174 (1)

Currency swap contracts

– receivable position 7,672 266 6,040 188

– payable position 6,214 (77) 10,785 (400)

Total 16,169 263 17,128 (212)

The fair value of the instruments used in hedge accounting

for equity exposure, amounts to SEK (13) million as of 31

December 2011 and SEK 143 million as of 31 December

2010 and is included in other current liabilities (other current

assets) against the hedge reserve.

Cont. Note 32

Outstanding currency hedge contracts for transaction exposure

SEK million

2010 Notional amount

2010 Carrying amount

2011 Notional amount

2011 Carrying amount

Currency forward contracts

– receivable position 818 19 7,254 65

– payable position 1,401 (47) 1,152 (24)

Currency swap contracts

– receivable position 645 10 2,289 103

– payable position 514 (7) 2,213 (34)

Currency options

– receivable position 45 4

– payable position 5

Total 3,423 (25) 12,917 110

The fair value of the instruments used in hedge accounting

for transaction exposure, amounts to SEK 113 million as of

31 December 2011 and SEK (24) million as of 31 December

2010 and is included in other current assets (other current

liabilities) against the hedge reserve.

Stena AB 2011 69

Oil price contracts

Outstanding hedge contracts for bunker fuel exposure

SEK million

2010Notionalamount

2010Carryingamount

2011Notionalamount

2011Carryingamount

Raw material swap contracts

– receivable position 2,601 270 2,612 158

– payable position 495 (35)

Raw material option contracts bought call 701 83 716 117

Raw material option contracts bought put 880 34

Raw material option contracts sold put (1,307) (62) (531) (12)

Total 3,370 290 2,797 263

Hedge accounting contracts for transaction exposure

SEK million

2010 Notional amount

2010 Carrying amount

2011 Notional amount

2011 Carrying amount

SEK companies:

USD 498 (32) 921 70

EUR 180 8 865 (16)

NOK 58 3 (94) 2

Other (55) 5

USD companies:

GBP 79 (1) 769 (4)

NOK 1,039 1 760 7

AUD 17 4

EUR companies:

USD 243 (4) 426 35

CAD 820 3 (609) (17)

SEK 36 1

GBP companies:

USD 252 (6) 646 32

EUR 820 (2)

Total 3,186 (24) 4,485 113

The fair value of the instruments used in hedge accounting

for bunker fuel exposure, amounts to SEK 226 million as of

31 December 2011 and SEK 179 million as of 31 December

2010 and is included in other current assets against the

hedge reserve.

The table below shows the hedging contracts divided by currency. Notional amount is net amount.

70 Stena AB 2011

Stena AB | Group

Cont. Note 32

Trading contracts

Outstanding derivative contracts for trading activities

SEK million

2010Notionalamount

2010Carryingamount

2011Notionalamount

2011Carryingamount

Foreign exchange spot and forwards 551 3 443 (1)

Currency options1 39 2 403 0

Interest rate instruments 112 0 120 0

Commodity options 93 (3)

Total 795 2 966 (1) 1) The notional amount is delta adjusted.

33 Personnel

The following table presents the average number of employees of the Company:

2010 2011

Total No. of females Total No. of females

Parent Company: Board, CEO, Executive vice president 3 3

Other employees 25 15 23 14

Subsidiaries in Sweden 4,347 1,720 4,324 1,757

Total Sweden 4,375 1,735 4,350 1,771

Subsidiaries outside of Sweden 4,246 1,107 4,511 1,214

Shipborne employees 1,226 7 1,381 10

Total outside of Sweden 5,472 1,114 5,892 1,224Total Group 9,847 2,849 10,242 2,995

Shipborne employees refers to drilling and shipping activi-

ties, 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

2011 was 3,732 as compared to 3,749 in 2010.

Stena AB 2011 71

The following tables presents the wages, salaries and other remuneration of the employees of the Company

2010 2011

SEK millionBoard

and CEOOther

employees TotalBoard

and CEOOther

employees Total

Parent company 12 35 47 12 32 44

Subsidiaries in Sweden 57 1,447 1,504 61 1,440 1,501

Total Sweden 69 1,482 1,551 73 1,472 1,545

Subsidiaries outside of Sweden:Great Britain 32 757 789 36 677 713

The Netherlands 5 272 277 2 258 260

Denmark 9 362 371 13 377 390

Ireland 28 28 27 27

Norway 1 32 33 1 52 53

Finland 4 4

Poland 1 10 11 1 11 12

Switzerland 5 5 10 3 3 6

Spain 2 47 49 2 43 45

Portugal 3 3 3 3

France 4 4 4 4

Luxembourg 10 20 30 9 10 19

Greenland 8 8 6 6

China 6 16 22 5 19 24

Singapore 1 30 31 1 39 40

Korea 4 24 28 2 23 25

United States 2 17 19 2 17 19

Brazil 5 5 9 9

India 1 6 7 1 5 6

United Arab Erimates 2 20 22 1 21 22

Other 3 3 3 3

Shipborne employees 839 839 902 902

Total outside of Sweden 81 2,512 2,593 79 2,509 2,588Total Group 150 3,994 4,144 152 3,981 4,133

Total personnel costs2010 2011

SEK millionParent

company Subsidiaries TotalParent

company Subsidiaries Total

Wages, salaries and other remuneration 47 4,097 4,144 44 4,089 4,133

Pension costs 13 437 450 30 336 366

Other social charges 16 445 461 17 464 481

Total 76 4,979 5,055 91 4,889 4,980

For Swedish-flagged vessels employed in international ship-

ping activities, the Company has received a subsidy equal to

all social security costs and income taxes payable by the

employers on behalf of employees who work on board such

vessels. The amount of this subsidy in 2011 was SEK 332

million, out of which SEK 308 million related to the ferry

operations. In 2010, the amount of the subsidy was

SEK 406 million, out of which SEK 383 million related to the

ferry operations. The amounts received have reduced per-

sonnel costs.

72 Stena AB 2011

Stena AB | Group

34 Related Party Transactions

We have entered into various transactions with other com-

panies 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 Con-

cordia are listed on Nasdaq OMX Stockholm. The significant

transactions between the Company and its affiliates are

described below.

Concordia Maritime

Concordia and the Company (indirectly through Stena

Bulk AB, a wholly owned subsidiary of the Company) are

parties to an allocation agreement (the “Allocation Agree-

ment”) pursuant to which Concordia may elect to partici-

pate 100%, 50% or not to participate in business opportu-

nities 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 2010 SEK 0.7

million and SEK 0 million in 2011.

We provide certain services to Concordia such as adminis-

tration, 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 SEK 37 million in 2010 and SEK 31 million in 2011.

Sessan

Since June 1999, we have served as the business manager

of Sessan for its 50% participation in a Norwegian partner-

ship that owns the shuttle tanker Stena Sirita, which is char-

tered pursuant to a 10-year contract to ESSO Norway. 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 10-year contract to Petro-

bras in Brazil. We earned total fees for these services of

SEK 1.5 million in each of the years 2010 and 2011.

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 char-

tered back under an operating lease, for which we paid

charterhire of SEK 59 million in each of the years 2010 and

2011, respectively.

Stena Metall

We purchase a substantial part of our bunker fuel from

Stena Metall. Such purchases aggregated SEK 2,023 million

and SEK 2,771 million in 2010 and 2011, respectively.

Remuneration of Chief Executives

Salaries of SEK 13 million were paid to the Chief Executive

Officer and the Executive Vice President in 2011 and

SEK 12 million in 2010. The corresponding pension charges

amounted to SEK 18 million in 2011 and SEK 2 million in

2010. The aggregate compensation paid by the Stena AB to

its directors (a total of nine persons, CEO included)

amounted to MSEK 10 in 2011 same as in 2010. Of total

salaries paid to other employees MSEK 37 were paid to

other officers than the Chief Executive Officer, the Executive

Vice President and the board members in 2011 (a total of

seven persons) and MSEK 36 in 2010.

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 SEK 250,000 in 2011, out of which

SEK 50,000 was paid to the Chairman of the Board and

SEK 25,000 was paid to each of the Chief Executive Officer

and the Executive Vice President. In 2010, the board mem-

bers of Stena AB were paid SEK 250,000, out of which

SEK 50,000 was paid to the Chairman of the Board and

SEK 25,000 was paid to each of the Chief Executive Officer

and the Executive Vice President.

The Chairman of the Board has in addition invoiced SEK

3,311,000 and SEK 2,398,000 for consultations for the

years 2011 and 2010 respectively.

Women comprised 22% (22%) of the total number of

Board members. Of chief directors other than the Chief

Executive Officer, the Executive Vice President and the

board members women comprised 11% (13%).

Cont. Note 33

Stena AB 2011 73

We provide management and other services to Stena

Metall. We received SEK 1 million in each of the years 2010

and 2011 for these services.

In December 2008, we acquired the vessels Stena Nor-

dica, Stena Freighter, Stena Carrier and Mont Ventoux from

Stena Metall at market value for a total of SEK 1,443 mil-

lion. The consideration was paid through (i) the issuance of

a loan note of SEK 682 million, bearing interest at market

rate and maturing on August 31, 2010, and (ii) the assump-

tion by us of the outstanding bank loans relating to the

acquired assets for a total amount of SEK 761 million. These

loans were repaid during 2010.

Olsson family

We rent office space from members of the Olsson family. In

each of the years 2010 and 2011, we paid SEK 24 million and

SEK 39 million, respectively, in respect of such properties.

We manage certain properties owned by members of the

Olsson family. In each of the years 2010 and 2011, members

of the Olsson family paid us SEK 14 million and SEK 15 mil-

lion, respectively, for such management services.

We have agreed to pay Sten A. Olsson and Dan Sten Olsson

an annual indexed retirement benefit for life.

35 Subsequent Events

In February 2012 we sold Stena Navigator and in March

2012, we sold Stena Carribean.

The fourth DrillMax vessel, the enhanced ice-classed

ultra-deepwater drillship Stena IceMAX, was delivered in

april 2012. In December 2011, a five year contract was

signed with Shell for drilling services to be provided by

Stena IceMAX with operational commencement scheduled

for second quarter 2012.

In March 2012, we signed a time charter contract with

LNG Shipping S.p.A. The time charter is for our LNG carrier,

Stena Crystal Sky and the contract period is 40 months.

LNG Shipping S.p.A, is a wholly owned by the Italian Energy

Company, ENI.

In April, 2012 we acquired four modern RoPax vessels,

Stena Mersey, Stena Lagan, Norman Voyager and Watling

Street. The first two vessels were already on bare-boat charter

to Stena Line and the other two vessels are on charter to

LD Lines and Scandlines A.G, respectively.

74 Stena AB 2011

Stena AB | Parent Company

Years ended 31 December

SEK million Note 2010 2011

Revenues 1 100 124

Administration expenses 2 (183) (191)

Other operational income 10 9

Income from operations (73) (58)

Result from shares in Group companies 3 448 116

Result from securities and receivables accounted for as tangible fixed assets 4 401 445

Other interest income and similar profit/loss items 5 41 54

Interest expense and similar profit/loss items 6 (668) (652)

Group contribution 7 220

Finance net 222 183

Income before tax 149 125

Taxes 8 71 (63)

Net income 220 62

PArent ComPAny

Income StatementsPArent ComPAny

Statements of Cash-flow

Years ended 31 December

SEK million Note 2010 2011

Net cash flows from operating activitiesNet income 220 62

Adjustments to reconcile net income to net cash provided by operating activitiesUnrealized result on financial instruments (242) 186

Unrealized foreign exchange (gains)/losses (472) 127

Deferred income taxes (70) 63

Other non cash items 24 (1,194)

Cash flow from operations before changes in working capital (540) (756)

Changes in working capitalReceivables within Group companies 2,199 (493)

Other receivables 73 (76)

Other current liabilities (3) 123

Net cash provided by/used in operating activities 1,729 (1,202)

Net cash flows from investing activitiesProceeds from sale of securities and long-term receivables, net (750) (521)

Increase of long-term receivables, Group companies (1,010) 2,428

Net cash provided by/used in investing activities (1,760) 1,907

Net cash flows from financing activitiesDividend (330) (254)

New borrowings 1,940 4,021

Principal payments on debt (1,111) (4,216)

Other financing activities (479) (260)

Net cash provided by/used in financing activities 20 (709)

Net change in cash and cash equivalents (11) (4)

Cash and cash equivalents at beginning of year 15 4

Cash and cash equiva-lents at end of year 4 0

Stena AB 2011 75

PArent ComPAny

Balance Sheets

31 December

SEK million Note 2010 2011

AssetsTangible fixed assetsEquipment 1 1

Total tangible fixed assets 1 1

Shares in Group companies 9 13,651 15 351

Long-term receivables, Group companies 9 12,371 10 254

Marketable securities 10 4 4

Other non-current assets 10 600 500

Total financial fixed assets 26,626 26,109

Total non-current assets 26,627 26,110

Current assetsShort-term receivables, Group companies 155 760

Other receivables 216 48

Prepaid expenses and accrued income 11 40 27

Total short-term receivables 411 835

Cash and cash equivalents 4

Total current assets 415 835

Total assets 27,042 26,945

31 December

SEK million Note 2010 2011

Shareholders´ equity and liabilitiesShareholders’ equity 12

Share capital, 50,000 shares 5 5

Statutory reserve 2 2

Total restricted equity 7 7

Retained earnings 12,862 12,828

Net income 220 62

Total unrestricted equity 13,082 12,890

Total shareholders’ equity 13,089 12,897

Non-current liabilitiesSenior Notes 13 6,290 6,254

Long term liabilities, Group companies 5,922 6,178

Other non-current liabilities 14 7 7

Total non-current liabilities 12,219 12,439

Current liabilitiesTrade accounts payable 6

Current liabilities, Group companies 1,311 1,375

Other current liabilities 14 265 75

Accrued costs and prepaid income 15 158 153

Total current liabilities 1,734 1,609Total shareholders´ equity and liabilities 27,042 26,945

Pledged assets 16 none none

Commitments and contingent liabilities 16 20,084 22,400

76 Stena AB 2011

PArent ComPAny

Statements of Changes in Shareholders’ Equity

SEK million Share CapitalStatutory reserves

Retained earnings and net income Total

Equity as per 31 December 2009 5 2 13,192 13,199Dividend (316) (316)

Transfer to charitable trust (14) (14)

Net Income 220 220

Equity as per 31 December 2010 5 2 13,082 13,089

Dividend (240) (240)

Transfer to charitable trust (14) (14)

Net Income 62 62

Equity as per 31 December 2011 5 2 12,890 12,897

Stena AB | Parent Company

Stena AB 2011 77

PArent ComPAny

Notes

1 Revenues

The revenues in the parent company refer to services made

for Group Companies.

For 2011 the revenues were SEK 124 million, whereof

97% from Group Companies.

For 2010 the revenues were SEK 100 million, whereof

98% from Group Companies.

2 Administration expenses

Administration expenses include fees to the auditors and

advisors with a total of SEK 17 million whereof SEK 6 million

relates to the audit executed by KPMG. In 2010 the fees to

auditors and advisors amounted to SEK 20 million whereof

SEK 5 million were to KPMG.

3 Result from shares in Group companies

During 2011 a dividend was received from Stena Fastigheter

AB amounting to SEK 190 million. The shareholding in

shares in subsidiaries has been hedged for exchange differ-

ences with a loss of SEK (74) million for 2011.

During 2010 a dividend was received from Stena Fas-

tigheter AB mounting to SEK 190 million. The shareholding

in shares in subsidiaries has been hedged for exchange dif-

ferences with a gain of SEK 258 million for 2010.

4 Result from securities and receivables accounted for as tangible fixed assets

Years ended 31 December

SEK million 2010 2011

Unrealized result from financial instruments 1 11

Interest income 400 434

Total 401 445

Of the total interest income SEK 434 million came from Group companies. In 2010, SEK 400 million came from

Group Companies.

All amounts in SEK millions.

Accounting principles, see Note 1 in the Consolidated Notes.

78 Stena AB 2011

5 Other interest income and similar profit/loss items

7 Group contribution

Of the total interest income SEK 54 million came from Group Companies. In 2010, SEK 41 million came from

Group Companies.

The company has in 2011 received Group contribution of SEK 100 million from Stena Rederi AB and SEK 120 million from

Stena Fastigheter AB.

6 Interest expense and similar profit/loss items

Years ended 31 December

SEK million 2010 2011

Interest expense (612) (631)

Amortization of deferred financing costs (17) (19)

Expenses for repurchase of Senior Notes (28) 0

Other financial expenses (11) (2)

Total (668) (652)

Of the total interest expenses SEK (157) million came from Group Companies. In 2010, SEK (146) million came from

Group Companies.

8 Income taxes

Years ended 31 December

SEK million 2010 2011

Income before tax 149 125

Deferred tax 71 (63)Total taxes 71 (63)

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 (39) (33)

Expenses not deductible (4) (16)

Non taxable income, received dividend 50 50

Non taxable/non deductible result of shares 64 (64)

Tax income/tax expense 71 (63)

Stena AB | Parent Company

Stena AB 2011 79

9 Shares in Group Companies

As of 31 December

SEK million Located in Share, %

Amount of shares in

000´s

Booked value 2010

Booked value 2011

Stena Rederi AB Göteborg 100 25 590 590

AB Stena Finans Göteborg 100 500 550 550

Stena Fastigheter AB Göteborg 100 119 1,535 2,735

Stena Adactum AB Göteborg 100 500 1,114 1,614

Stena International S.a.r.l Luxembourg 100 4,768 9,862 9,862

Total shares in Group companies 13,651 15,351

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 Ferries 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

As of 31 December, 2011 Booked value

Stena Rederi AB 760

AB Stena Finans 987

Stena Adactum AB 1,500

Stena DrillMax IV Ltd 6,178

Stena Spey Cyprus Ltd 829

Total long-term receivables Group companies 10,254

Opening balance 12,371

New receivables 131

Amortization of receivables (2,425)

Exchange differences 177

Closing balance 10,254

Stena AB has paid SEK 500 million to Stena Adactum AB and SEK 1 200 million to Stena Fastigheter AB as share holders

contribution.

80 Stena AB 2011

10 Other financial fixed assets

Other long-term assets

SEK millionDeferred tax

receivables

Other long-term

receivables

Other long-term securities

Capitalized costs Total

Opening balance 334 7 170 89 600

Increase 10 10

Valuation to fair value 10 10

Disposal (60) (60) (120)

Closing Balance 274 7 190 29 500

Marketable securities

SEK million

Opening balance 4

Closing balance 4

Other long-term securities refer to non-listed shares (see

Note 15 in the Consolidated notes). Deferred costs include

financing costs for Senior Notes, revolving credit facilities

and capitalized lease obligations. All of these costs are

amortized over the life of the borrowings. See Note 6.

The short-term capitalized costs amounts to SEK 15 million

and SEK 33 million for 2011 and 2010, respectively.

11 Prepaid expenses and accrued income

As of 31 December

SEK million 2010 2011

Prepaid expenses 28 10

Accrued income 11 16

Other accrued income 1 1

Total 40 27

12 Equity

For information about the Charitable trust, see Statements of Changes in Shareholders Equity in the Consolidated Financial

Statements.

Long-term holdings of marketable securities regards 110,000 listed shares in the company Vitrolife.

Stena AB | Parent Company

Stena AB 2011 81

13 Senior Notes

For information about the Senior Notes, see Note 25 in the Consolidated Notes.

14 Other long-term debt and other short-term debt

Refers to external hedges.

15 Accrued costs and prepaid income

As of 31 December

SEK million 2010 2011

Accrued interest expense 140 136

Accrued vacation salaries and social security debt 8 10

Other accrued expenses 10 7

Total 158 153

16 Pledged assets, commitments and contingencies

As of 31 December

SEK million 2010 2011

Guarantees, subsidiaries 19,461 21,822

Guarantees, other 623 578

Total 20,084 22,400

17 Personnel

For more information about employees, salaries, other remunerations and social securities for employees, see Note 33 in

the Consolidated Notes.

82 Stena AB 2011

Proposed treatment of unappropriated earnings

The following funds in the Parent company are available to the Annual General Meeting (TSEK)

Retained earnings 12,827,922

Net income 62,099

Unrestricted equity 12,890,021

The Board of Directors propose the following:

A dividend to the shareholders 260,000

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 14,000

To be carried forward 12,616,021

Total 12,890,021

Göteborg, 27 April 2012

Lennart Jeansson Dan Sten Olsson Åke Plyhm

Chairman of the Board Managing Director

Gunnar Brock Anne-Marie Pouteaux Christian Caspar

Lars Westerberg Jörgen Lorén Jens Ole Hansen

Employee representative Employee representative

My Audit Report has been released on 27 April 2012

Thomas Thiel

Authorized Public Accountant

KPMG AB

Stena AB | Parent Company

Stena AB 2011 83

Report on the annual accounts and consolidated accounts

I have audited the annual accounts and consolidated accounts of

Stena AB (publ) for the year 2011.

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

My responsibility is to express an opinion on these annual accounts

and consolidated accounts based on my audit. I conducted my audit

in accordance with International Standards on Auditing and generally

accepted auditing standards in Sweden. Those standards require that

I 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 con-

solidated accounts. The procedures selected depend on the auditor’s

judgment, 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 con-

siders 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 Directors

and the Managing Director, as well as evaluating the overall presenta-

tion of the annual accounts and consolidated accounts.

I believe that the audit evidence I have obtained is sufficient and

appropriate to provide a basis for my audit opinion.

Opinions

In my opinion, the annual accounts have been prepared in accordance

with the Annual Accounts Act and present fairly, in all material

respects, the financial position of the parent company as of 31 Decem-

ber 2011 and of its financial performance and its cash flows for the

year then ended in accordance with Annual Accounts Act, and the con-

solidated accounts have been prepared in accordance with the Annual

Account Act and present fairly, in all material respects, the financial

position of the group as of 31 December 2011 and of their financial

performance and cash flows in accordance with International Financial

Reporting Standards, as adopted by the EU, and the Annual Accounts

Act. The statutory administration report is consistent with the other

parts of the annual accounts and consolidated accounts.

I therefore recommend that the annual meeting of shareholders

adopt the income statement and balance sheet for the parent com-

pany and the group.

Report on other legal and regulatory require-ments

In addition to my audit of the annual accounts and consolidated

accounts, I have examined the proposed appropriations of the com-

pany’s profit or loss and the administration of the Board of Directors

and the Managing Director of Stena AB (publ) for the year 2011.

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

My 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 my audit. I conducted the audit in

accordance with generally accepted auditing standards in Sweden.

As basis for my opinion on the Board of Directors’ proposed

appropriations of the company’s profit or loss, I 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 accor-

dance with the Companies Act.

As basis for my opinion concerning discharge from liability, in

addition to my audit of the annual accounts and consolidated

accounts, I examined significant decisions, actions taken and cir-

cumstances of the company in order to determine whether any

member of the Board of Directors or the Managing Director is liable

to the company. I 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.

I believe that the audit evidence I have obtained is sufficient and

appropriate to provide a basis for my opinion.

Opinions

I recommend to the annual meeting of shareholders that the profit be

appropriated in accordance with the proposal in the statutory adminis-

tration report and that the members of the Board of Directors and the

Managing Director are discharged from liability for the financial year.

Göteborg, Sweden

27 April 2012

Thomas Thiel

Authorized Public Accountant

To the annual meeting of the shareholders of Stena AB (publ), corp. id. 556001-0802

Audit Report – translation

84 Stena AB 2011

fIve-yeAr SummAry

SEK million 2007 2008 2009 2010 2011

Revenues 22,402 26,472 27,812 27,150 27,968

EBITDA excluding sale of assets 5,790 6,501 7,238 7,073 6,512

Income from operations 4,460 4,372 4,002 3,558 4,578

Share of affiliated companies’ results (61) (80) 24 131 60

Income before taxes 4,461 1,378 2,344 2,680 2,779

Vessels 15,343 24,391 27,257 28,753 34,185

Investment properties 22,555 23,320 24,040 24,148 25,753

Other noncurrent assets 32,457 33,136 28,591 29,842 27,494

Cash and cash equivalents/short-term investments 3,888 6,524 4,877 5,792 4,255

Other current assets 7,281 9,998 7,440 6,403 6,909

Shareholders’ equity including deferred income taxes 30,513 31,025 32,829 33,505 34,645

Other provisions 4,188 3,296 3,042 2,580 2,332

Other noncurrent liabilities 40,499 55,430 48,952 52,176 52,382

Current liabilities 6,301 7,618 7,382 6,677 9,237

Total assets 81,524 97,369 92,205 94,938 98,596

Cash flow from operations 4,586 5,381 7,084 5,065 4,895

Net cash used in investing activities (12,862) (7,397) (6,456) (9,681) (5,579)

Net cash provided by/used in financing activities 8,064 2,714 (907) 5,151 559

Net change in cash and cash equivalents (176) 723 (248) 482 (78)

Number of employees, average 8,519 9,741 10,236 9,847 10,242

Number of vessels1) 95 102 91 91 106

1) Excluding new buildings and external ship management.

Stena AB | Parent Company

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 74

Statements of Cash-flow 74

Balance Sheet 75

Statements of Changes in Shareholders Equity 76

Notes to the financial statements 77

Proposed treatment of unappropriated earnings 82

Audit report 83

Five-year summary 84

The Annual Review and the

Financial Report can be ordered from

birgitta.sandh@stena.com

or downloaded from www.stena.com

NOR

DICECOLABEL

341 165Solberg. Photo and image: Katja Andersson, Dan Ljungsvik, Peter Mild, Conny Wickberg, Per-Anders Hurtigh, Johan Palmborg and others. Print: Falk Graphic.

Stena A

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Stena ABFinancial Report 2011

Stena AB (publ)SE-405 19 Göteborg, Telephone +46 31 85 50 00

www.stena.com

CAreInnovAtIon &PerformAnCeBusiness conceptTo use our competence in, above all, service,

trading and ships, to make money in the business

areas shipping, ferry lines, offshore, real estate

and finance.

To take care of our most important asset in the

long term, our “clients”, in such a way that we

con tribute to their development as well as that

of society.

Client relations• Always client’s first choice

• Leading in quality and quality-assuring partner

• Always efficient and effective with our own

resources as well as resources belonging to others

• Clearly delegated business responsibility

We are committed to comply with the standards

formulated by the Logistics & Transportation

Cor porate Citizenship Initiative (L&TCCI) of the

World Economic Forum.

Responsibility in our business relationshipsBy building long-term relationships with our

cus tomers, suppliers and subcontractors, we are

committed to delivering high-quality and best-

value services.

We will meet the highest standards of security

through our value chain and strive to ensure that

trust is the basis of all our relationships in society.

We are committed to meeting the expectations

of our customers in respect of responsible business

practice.

Progressively, we will share with our business

partners these Principles of Corporate Citizenship

and we may withdraw from a business relationship

if we consider that the standards we uphold are

not being met by a business partner.

ENERGY AND CARE