e20vf

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F


(Mark One)
o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2009
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report For the transition period from to

Commission file number 33-99284

STENA AB (publ)

(Exact name of Registrant as specified in its charter and translation of Registrant’s name into English)

Kingdom of Sweden
(Jurisdiction of incorporation or organization)

Masthuggskajen, SE-405 19 Gothenburg, Sweden
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

None
(Title of Class)

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
7.5% Senior Notes due 2013 and 7% Senior Notes due 2016

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

50,000 ordinary shares, par value SEK 100 per share
(as of December 31, 2009)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non accelerated filer. See definition of “accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer o	Non-accelerated filer x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing. (Check one):


U.S. GAAP o		International Financial Reporting Standards as issued by the International Accounting Standards Board x		Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 o Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Introduction

Unless otherwise indicated, all references in this Annual Report to “we”, “us”, “our”, and similar terms, as well as references to the “Company” and “Stena” refer to Stena AB (publ) (“Stena AB”) and its subsidiaries. The term “Stena Sphere” refers to Stena AB, together with Stena Sessan AB (“Sessan”), Stena Metall AB (“Stena Metall”) and Concordia Maritime AB (publ) (“Concordia”), which is 52% owned by Sessan.

Forward-looking Information

This Annual Report includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified as “forward-looking statements” by the use of forward-looking terminology including terms such as “anticipate”, “should”, “likely”, “foresee”, “believe”, “estimate”, “expect”, “intend”, “continue”, “could”, “may”, “plan”, “project”, “predict”, “will” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Annual Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate.

Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:


	•	changes in general economic and business conditions;

	•	changes in laws and regulations;

	•	changes in currency exchange rates and interest rates;

	•	risks incident to vessel operations, including discharge of pollutants;

	•	introduction of competing services or products by other companies;

	•	changes in trading or travel patterns;

	•	increases in costs of operations or the inability to meet efficiency or cost reduction objectives;

	•	changes in our business strategy; and

	•	other risk factors listed in this Annual Report and in our reports filed with or submitted to the U.S. Securities and Exchange Commission (the “SEC”) from time to time.

We do not intend, and undertake no obligation, to revise the forward-looking statements included in this Annual Report to reflect any future events or circumstances. Our actual results, performance or achievements could differ materially from the results expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include those discussed under the heading “Risk factors” in this Annual Report.

PART I


Item 1.	Identity of Directors, Senior Management and Advisors

Not applicable.


Item 2.	Offer Statistics and Expected Timetable

Not applicable.


Item 3.	Key Information

The following selected consolidated financial information should be read in conjunction with and is qualified in its entirety by reference to our Consolidated Financial Statements and the notes thereto included elsewhere herein. The selected consolidated financial information for each of the years in the five-year period ended December 31, 2009 has been derived from the audited financial statements. The financial statements for the years 2005 and 2006 were prepared in accordance with accounting principles generally accepted in Sweden which were reconciled to generally accepted accounting standards in the United States. The financial statements for the years 2007, 2008 and 2009 were prepared in accordance with International Financial Reporting Standards (“IFRS”), including statements from the International Financial Reporting Interpretations Committee (“IFRIC”), as issued by the International Accounting Standards Board (“IASB”), which are applied as from January 1, 2007. See Note 1 for more information. The Consolidated Financial Statements are prepared in accordance with IFRS as adopted by the IASB.

Currency of Presentation

Stena AB maintains its consolidated financial accounts in Swedish kronor. In this Annual Report, references to “SEK” are to Swedish kronor, references to “U.S. dollars”, “dollars”, “USD”, “U.S.$” or “$” are to U.S. dollars, references to “EUR,” “€” and “euro” are to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the treaty establishing the European Community, as amended by the Treaty on the European Union, references to “GBP”, “British pounds” or “£” are to Pound sterling, and references to “DKK” are to Danish kronor. Our financial reports are presented in SEK, which is the functional currency of the Company. Unless otherwise indicated, all amounts are rounded to the nearest million. Figures in the reports are based on a consolidation system in SEK thousands. Totals in tables may not always equal the sum of the included rounded numbers as a result of rounding. For the convenience of the reader, this Annual Report contains translations of Swedish kronor amounts into U.S. dollars at specified rates. Unless otherwise stated, the translations of Swedish kronor into U.S. dollars have been made at $1.00 = SEK 7.1890, the noon buying rate as certified for customs purposes by the United States Federal Reserve (the “Noon Buying Rate”) on December 31, 2009. Unless otherwise stated, the translations of other currencies into SEK have been made at the applicable conversion rates as reported by Sveriges Riksbank, the Central Bank of Sweden, on December 31, 2009. No representation is made that these amounts have been, could have been or could be converted into such amounts at the rates indicated or at any other rates.

GLOSSARY

The following are abbreviations and definitions of certain terms commonly used in the shipping industry and this Annual Report.

Aframax tanker. Tankers ranging in size from 80,000 dwt to 120,000 dwt.

American Bureau. American ship classification society.

Annual survey. The inspection of a vessel pursuant to international conventions, by a classification society surveyor, on behalf of the flag state, that takes place every year.

Bareboat charter. The rental or lease of an empty ship, without crew, stores or provisions, with the lessee responsible for complete operation and maintenance of the vessel, including crewing.

Charter. The hire of a vessel for a specified period of time or to carry a cargo for a fixed fee from a loading port to a discharging port. The contract for a charter is called a charterparty. A vessel is “chartered in” by a lessee and “chartered out” by a lessor.

Classification society. A private self-regulatory organization that has as its purpose the supervision of vessels during their construction and afterward, in respect to their seaworthiness and upkeep, and the placing of vessels in grades or “classes” according to the society’s rules for each particular type of vessel.

Contract of affreightment. A contract between a shipowner and a shipper, whereby the shipowner undertakes to carry a cargo over a certain route on specified occasions.

Conventional, day and night ferries. Ferries designed to transport a combination of cars, trucks, freight trailers and passengers. A conventional ferry is available in two different designs: the day ferry and the night ferry. Night ferries also provide cabin accommodation for passengers.

DnV. Norwegian ship classification society.

DrillMAX. Sixth generation, high specification, ultra-deepwater drillships, designed by Stena for worldwide operations, including in harsh environments.

Drillship. A maritime vessel modified to include a drilling rig and special station-keeping equipment. The vessel is typically capable of operating in deep water, or ultra-deep water up to 10,000 or 12,000ft. A drillship must stay relatively stationary on location in the water for extended periods of time. This positioning may be accomplished with multiple anchors, dynamic propulsion (thrusters) or a combination of these.

Drydock. A large basin where fresh/sea water is pumped out after a ship docks in order to carry out cleaning and repairing of those parts of a vessel that are below the water line.

Dwt. Deadweight tonne. A unit of a vessel’s capacity for cargo, fuel oil, stores and crew, measured in metric tonnes of 1,000 kilograms. A vessel’s dwt or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

Dynamic positioning (DP). An advanced satellite navigation system that controls thrusters to maintain a vessel’s position in most weather without anchors.

Freight unit. Trucks, trailers, containers and railcars.

Gross ton. Unit of 100 cubic feet or 2.831 cubic meters.

High speed vessel (HSS). A ship, usually built from aluminium and often multi-hull, designed to have excellent motion characteristics in heavy seas. HSS vessels operate at speeds of over 30 knots and primarily target the passenger market.

Hull. The shell or body of a ship.

IFRS. International Financial Reporting Standards.

IMO. International Maritime Organization, a United Nations agency that issues international standards for shipping.

Lane meter. The number of useable length meters of lanes for cars, trailers or trucks, except with respect to RoRo vessels that do not carry cars.

Lightering. To put cargo in a lighter to partially discharge a vessel or to reduce her draft. A lighter is a small vessel used to transport cargo from a vessel anchored offshore.

Linkspan. The docking facility for the HSS vessels.

Lloyds Register. British ship classification society.

Newbuilding. A new vessel recently delivered or under construction.

Offhire. The period an offshore drilling rig or vessel is unable to perform the services for which it is immediately required under its contract. Offhire periods, which may be scheduled or unscheduled, include days spent on repairs, drydockings, special surveys, vessel upgrades, initial positioning after the purchase of a vessel and periods awaiting employment.

Protection and Indemnity (P&I) Insurance. Third party insurance obtained through a mutual association (P&I Club) formed by shipowners to provide protection from large financial loss to one member by contribution towards that loss by all members.

Panamax tanker. Tankers ranging in size from 60,000 dwt to 80,000 dwt.

Pool. A cooperation between two or more parties whereby each party supplies its vessels to the pool and the revenues from the pool are split between the pool members in proportion to the number and characteristics of tankers each delivered to the pool.

Product tankers. Vessels designed to carry a variety of liquid products varying from crude oil to clean and dirty petroleum products, acids and other chemicals. The tanks are coated, this being a requirement for some of the products carried, and the ship may have equipment designed for the loading and unloading of cargoes with a high viscosity.

Roll-on/Roll-off vessels. Vessels designed to permit trucks, freight trailers, buses, cars, and, to a certain extent, containers on chassis to drive directly onto and off the vessel, which include RoRo vessels and RoPax vessels.

RoRo vessels. Vessels designed primarily to transport freight trailers and a limited number of passengers.

RoPax vessels. Vessels designed to transport trucks, freight trailers, buses and cars, which also provide cabin accommodations for passengers. RoPax vessels are flexible and can adapt their capacity in line with seasonal variations in freight and passenger traffic.

Scrapping. The disposal of old vessel tonnage by way of sale as scrap metal.

Semi-submersible rig. Floating platforms that, by means of a water ballasting system, can be submerged to a predetermined depth so that a substantial portion of the lower hulls, or pontoons, is below the water surface during drilling operations. These rigs maintain their position over the well through the use of an anchoring system or through dynamic positioning. Semi-submersible rigs are divided into six generations, which are determined by rig design and the year of delivery of the units. Generally, first generation drilling rigs are drilling rigs that were delivered before 1973, second generation drilling rigs are drilling rigs that were delivered or upgraded between 1973 and 1981, third generation drilling rigs are drilling rigs that were delivered or upgraded between 1982 and 1985, fourth generation drilling rigs are drilling rigs

that were delivered or upgraded between 1986 and 1996, fifth generation drilling rigs are drilling rigs that were delivered or upgraded between 1997 and 2005 and sixth generation drilling rigs are drilling rigs that have been delivered or upgraded since 2006.

Senior Notes. Collectively, the Senior Notes due 2013, the Senior Notes due 2016, the Senior Notes due 2017, the Senior Notes due 2019 and the Senior Notes due 2020.

Senior Notes due 2013. Our 7.500% Senior Notes due 2013.

Senior Notes due 2016. Our 7.000% Senior Notes due 2016.

Senior Notes due 2017. Our 6.125% Senior Notes due 2017.

Senior Notes due 2019. Our 5.875% Senior Notes due 2019.

Senior Notes due 2020. Our 7.875% Senior Notes due 2020.

Service speed. The average maximum speed a vessel can reach when utilized on a daily basis.

Shuttle tankers. Tankers, usually with special fittings for mooring, that lift oil from offshore fields and transports it to a shore side storage or refinery terminal on repeated trips.

Special purpose entities (SPEs). Our investments in companies whose purpose is to make investments, primarily in high yield securities and corporate bank loans.

Spot market. The market for immediate chartering of a vessel, usually on voyage charters.

Suezmax tanker. Tankers ranging in size from 120,000 dwt to 165,000 dwt.

Superferry. RoPax vessel designed with 5,500 lane meters.

Tanker. Ship designed for the carriage of liquid cargoes in bulk with cargo space consisting of many tanks. Tankers carry a variety of products including crude oil, refined products, liquid chemicals and liquid gas. Tankers load their cargo by gravity from the shore or by shore pumps and discharge using their own pumps.

Time charter. The hire of a vessel for a specified period of time. The lessor provides the ship with crew, stores and provisions, ready in all aspects to load cargo and proceed on a voyage and pays for insurance, repairs and maintenance. The lessee pays for bunkering and all voyage related expenses including canal tolls and port charges.

Utilization rate. The total number of days an offshore drilling rig or vessel is in operation during a given period, divided by the total number of days in the period that the offshore drilling rig or vessel is owned or chartered in.

VLCC. Very large crude carrier — a tanker of 200,000 dwt to 320,000 dwt.

SELECTED FINANCIAL DATA


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2009
	SEK			SEK			SEK			USD⁽¹⁾
	(in millions)

CONSOLIDATED GROUP

INCOME STATEMENT DATA:
Total income		22,402			26,472			27,812			3,868
Direct operating expenses		(14,085	)		(16,679	)		(17,188	)		(2,390	)
Selling and administrative expenses		(2,177	)		(2,920	)		(3,207	)		(446	)
Depreciation and amortization		(1,680	)		(2,501	)		(3,415	)		(475	)
Total operating expenses		(17,942	)		(22,100	)		(23,810	)		(3,311	)
Income from operations		4,460			4,372			4,002			557
Share of associated companies’ result		(61	)		(80	)		24			3
Interest income		919			957			685			95
Interest expense		(1,739	)		(2,260	)		(1,864	)		(259	)
Other financial items⁽²⁾		882			(1,611	)		(503	)		(70	)
Income before taxes		4,461			1,378			2,344			326
Net income		3,829			1,745			2,364			329

BALANCE SHEET DATA
Cash and marketable securities⁽³⁾		11,562			9,174			7,088			987
Investments in SPEs⁽⁴⁾		9,251			9,973			8,174			1,137
Total assets		81,524			97,369			92,205			12,826
Debt in SPEs⁽⁴⁾		8,021			9,492			8,249			1,147
Other debt⁽⁵⁾		32,731			45,490			41,898			5,828
Shareholders’ equity		26,386			27,454			29,183			4,059

OTHER FINANCIAL DATA
Capital expenditures		(8,368	)		(9,696	)		(9,230	)		(1,283	)
Cash dividends paid		(550	)		(390	)		(190	)		(26	)
Cash flow from operating activities		4,586			5,381			7,084			986
Cash flow used in investing activities		(12,862	)		(7,397	)		(6,456	)		(898	)
Cash flow from financing activities		8,064			2,714			(907	)		(126	)


(1)		Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 7.1890, the Noon Buying Rate on December 31, 2009.

(2)		Other financial items refer to financial income (expense), including dividends received, gain (loss) on securities, foreign exchange gains (losses) and other financial income (expense).

(3)		Cash and marketable securities consist of cash and cash equivalents, short-term investments and marketable securities.

(4)		As of December 31, 2009, we had invested in four SPEs.

(5)		Other debt includes Senior Notes, short-term interest bearing debt, long-term interest bearing debt and capitalized lease obligations, current and non-current.

Restricted Group Data as of December 31, 2009

For the year ended December 31, 2009, Restricted Group Data represents the selected consolidated financial information excluding (i) the property business segment (other than two small properties), (ii) the business segment of Adactum, whose activities consist primarily of investing in companies outside the Company’s traditional lines of business, and (iii) our subsidiaries Stena Investment Luxembourg S.àr.l., Stena Royal S.àr.l., Stena Investment Cyprus Ltd and Mondaldi Ltd. Our real estate operations and the business of Adactum are conducted through various subsidiaries. For purposes of the indentures under which the Senior Notes were issued, these subsidiaries, together with our subsidiaries Stena Investment Luxembourg S.àr.l., Stena Royal S.àr.l., Stena Investment Cyprus Ltd and Mondaldi Ltd, are designated unrestricted subsidiaries and, as a result, are not bound by the restrictive provisions of these indentures.

In February 2007, we purchased approximately $177 million of our Senior Notes due 2012 pursuant to a tender offer and consent solicitation. Also in February 2007, we completed an offering of €300 million of Senior Notes due 2017 and €102 million of Senior Notes due 2019.

During 2007, we repurchased $4.2 million of our Senior Notes due 2013 and $78.0 million of our Senior Notes due 2016. As of December 31, 2007, we had outstanding $170.8 million principal amount of Senior Notes due 2013 and $172.0 million principal amount of Senior Notes due 2016.

During 2008, we repurchased $17.7 million of our Senior Notes due 2013 and $43.3 million of our Senior Notes due 2016. As of December 31, 2008, we had outstanding $153.1 million principal amount of Senior Notes due 2013 and $128.7 million principal amount of Senior Notes due 2016. As of March 31, 2009, there were $153.1 million of our Senior Notes due 2013 outstanding and $128.7 million of our Senior Notes due 2016 outstanding.

In March 2010, we completed an offering of €200 million of Senior Notes due 2020. Also in March 2010, we sent a redemption notice to the holders of our Senior Notes due 2013, whereby all outstanding notes in the aggregate of $153 million are redeemed in April 2010 at a price of 102.5%.

SELECTED RESTRICTED GROUP FINANCIAL DATA

The following information is presented solely for the purpose of additional analysis for investors of our results of operations and financial condition.


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2009
	SEK			SEK			SEK			USD(1)
	(in millions)

RESTRICTED GROUP

INCOME STATEMENT DATA :
Revenues from operations		17,550			20,617			20,810			2,894
Net gain on sale of vessel		253			203			149			21
Total revenues		17,803			20,820			20,959			2,915
Direct operating expenses		(11,547	)		(13,083	)		(12,912	)		(1,797	)
Selling and administrative expenses		(1,773	)		(2,109	)		(2,068	)		(288	)
Depreciation and amortization		(1,645	)		(2,376	)		(3,195	)		(444	)
Total operating expenses		(14,966	)		(17,568	)		(18,175	)		(2,529	)
Income from operations		2,838			3,252			2,784			386
Interest income		543			474			265			37
Interest expense		(643	)		(887	)		(1,032	)		(144	)
Other financial items⁽²⁾		(237	)		206			20			3
Total financial income and expense		(337	)		(207	)		(747	)		(104	)
Minority interest		(2	)		(3	)		0			0
Income before taxes		2,499			3,042			2,037			282
Net income		2,077			3,010			2,151			298


(1)		Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 7.1890, the Noon Buying Rate on December 31, 2009.

(2)		Other financial items refer to financial income (expense) including dividends received, gain (loss) on securities, foreign exchange gains (losses) and other financial income (expense).


	AS OF DECEMBER 31,
	2007		2008		2009		2009
	SEK		SEK		SEK		USD(1)
	(in millions)

RESTRICTED GROUP

BALANCE SHEET DATA:
Intangible fixed assets		177		398		300		42
Tangible fixed assets		22,744		33,541		35,619		4,954
Marketable securities		610		885		548		76
Other noncurrent assets		13,936		13,654		11,635		1,619

Total noncurrent assets		37,467		48,478		48,102		6,691

Short-term investments		2,559		3,618		2,487		346
Cash and cash equivalents		505		917		568		79
Other current assets		7,200		9,716		6,380		888

Total current assets		10,264		14,251		9,435		1,313

Total assets		47,731		62,729		57,537		8,004

Total shareholders’ equity		19,599		23,672		23,331		3,245
Deferred income taxes		1,400		778		857		119
Other provisions		4,149		3,140		2,934		408

Long-term debt		17,003		27,225		25,380		3,531
Other noncurrent liabilities		828		2,591		—		—

Total noncurrent liabilities		17,831		29,816		29,171		4,058

Short-term debt		1,115		972		1,989		277
Other current liabilities		3,637		4,350		3,046		424

Total current liabilities		4,752		5,322		5,035		701

Total shareholders’ equity and liabilities		47,731		62,729		57,537		8,004


(1)		Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 7.1890, the Noon Buying Rate on December 31, 2009.


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2009
	SEK			SEK			SEK			USD⁽¹⁾
	(in millions)

RESTRICTED GROUP

CONSOLIDATED STATEMENT OF CASH FLOW:
Net income		2,077			3,010			2,151			298
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,645			2,376			3,195			444
Loss on sale of property, vessels and equipment		(253	)		(203	)		(148	)		(21	)
(Gain)/loss on securities, net		58			(180	)		(380	)		(53	)
Unrealized foreign exchange (gains) losses		(149	)		(125	)		352			49
Deferred income taxes		335			(164	)		(218	)		(30	)
Minority interest		3			3			—			—
Other non cash items		65			(165	)		346			48
Provision for pensions		(221	)		(235	)		(198	)		(28	)
Net cash flows from trading securities		(699	)		994			(107	)		(15	)
Changes in working capital		1,377			(185	)		571			80

Net cash provided by operating activities		4,238			5,126			5,564			772

*Net cash flows from investing activities:*
Purchase of intangible assets		(37	)		(44	)		(38	)		(5	)
Cash proceeds from sale of property, vessels and equipment		821			692			249			35
Capital expenditure on property, vessels and equipment		(7,299	)		(7,878	)		(7,764	)		(1,080	)
Purchase of subsidiary net of cash acquired		—			(53	)		—			—
Proceeds from sale of securities		95			691			704			98
Purchase of securities		(233	)		(1,448	)		(70	)		(10	)
Increase of non-current assets		(38	)		(589	)		(14	)		(2	)
Decrease of non-current assets		10			424			177			25
Other investing activities		(18	)		(990	)		(44	)		(6	)

Net cash used in investing activities		(6,699	)		(9,195	)		(6,800	)		(945	)

*Net cash flows from financing activities:*
Proceeds from issuance of debt		6,915			6,418			4,079			567
Principal payments on debt		(2,352	)		(1,093	)		(721	)		(100	)
Net change in borrowings on line-of-credit agreements		440			120			(3,888	)		(541	)
Proceeds from new capitalized lease obligations		—			46			1			0
Principal payments capital lease obligations		(38	)		(686	)		(184	)		(26	)
Net change in restricted cash accounts		(692	)		(1,922	)		1,003			140
Intercompany accounts		(1,123	)		1,353			532			74
Dividends paid		(550	)		(390	)		(190	)		(26	)
Other financing activities		(313	)		618			235			33

Net cash provided by financing activities		2,287			4,464			867			121

Effect of exchange rate changes on cash and cash equivalents		22			17			20			3

Net change in cash and cash equivalents		(152	)		412			(349	)		(49	)

Cash and cash equivalents at beginning of year		657			505			917			128

Cash and cash equivalents at end of year		505			917			568			79


(1)		Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 7.1890, the Noon Buying Rate on December 31, 2009.

Exchange Rate Information

The following table sets forth, for the years and dates indicated, certain information concerning the exchange rates between Swedish kronor and US dollars based on the Noon Buying Rate. The exchange rate information is expressed in Swedish kronor per US $1.00. The following table sets forth, for the years and months indicated, certain information concerning the exchange rates between Swedish kronor and U.S. dollars based on the Noon Buying Rate. The exchange rate information is expressed in Swedish kronor per $1.00.



							Period
Year	Average⁽¹⁾		High		Low		end


2005		7.5200		8.2434		6.6855		7.9370
2006		7.3098		7.9656		6.7674		6.8342
2007		6.7575		7.1060		6.2356		6.4568
2008		6.5935		8.4858		5.8346		7.8770
2009		7.6520		9.3294		6.7491		7.1890



							Period
Month	Average⁽²⁾		High		Low		end


October, 2009		6.9576		7.0988		6.7491		7.0352
November, 2009		6.9372		7.1843		6.7655		6.9513
December, 2009		7.1415		7.361		6.7786		7.1890
January, 2010		7.1534		7.3852		7.0217		7.3852
February, 2010		7.2823		7.5200		7.0835		7.1079
March, 2010		7.1607		7.2980		7.0262		7.2613


(1)		Represents the average of the Noon Buying Rates on the last business day of each full month during the relevant period.

(2)		Represents the average of the daily Noon Buying Rates during the relevant period.

On April 26, 2010, the Noon Buying Rate for the Swedish kronor, expressed as Swedish kronor per U.S. dollar, was $1.00 = SEK 7.1846.

Risk Factors

We are subject to various risks resulting from changing economic, political, social, industry and business and financial conditions. These risks are described below:

Our level of indebtedness could limit cash flow available for our operations and could adversely affect our operations and flexibility.

As of December 31, 2009, we had outstanding consolidated indebtedness (excluding SPEs) of SEK 41.9 billion, of which SEK 15.6 billion was the obligation of unrestricted subsidiaries (as defined in the indentures governing our indebtedness). Our total interest bearing debt (excluding SPEs) as a percentage of our total capitalization (excluding SPEs) was approximately 56%. For the Restricted Group, the total interest bearing debt as a percentage of total capitalization was approximately 52%.

Our indebtedness could restrict our operations and make it more difficult for us to fulfill our obligations under our Senior Notes. Among other things, our indebtedness may:


	•	limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions of vessels or other strategic acquisitions and general corporate purposes;


	•	require us to dedicate all or a substantial portion of our cash flow to service our debt, which will reduce funds available for other business purposes, such as capital expenditures and acquisitions;

	•	limit our flexibility in planning for or reacting to changes in the markets in which we compete;

	•	place us at a competitive disadvantage relative to our competitors with less indebtedness;

	•	render us more vulnerable to general adverse economic and industry conditions; and

	•	make it more difficult for us to satisfy our financial obligations, including those relating to the notes, or be able to refinance maturing indebtedness.

Subject to compliance with various financial and other covenants imposed by our revolving credit facilities, the agreements governing our other indebtedness and the indentures governing our Senior Notes, we and our subsidiaries may incur additional indebtedness from time to time, including indebtedness to finance the purchase or completion of newbuildings and other vessels. As of March 31, 2010, the remaining cost for two Superferries we ordered from a shipyard in Germany in November 2006 was approximately €190 million, the remaining cost for the two RoPaxes we ordered from a shipyard in Korea in August 2007 was approximately €145 million, the remaining cost for the DrillMAX ICE drillship we ordered from a shipyard in Korea in April 2008, fully equipped, was approximately $900 million and the remaining cost for two Suezmax tankers we ordered from a shipyard in Korea in December 2009 was approximately $125 million.

Although certain of our indebtedness bears a fixed rate of interest, certain other of our indebtedness bears interest at rates that fluctuate with prevailing interest rates. As a result, our interest expense under such facilities could increase. In addition, future financings we may undertake may also provide for rates that fluctuate with prevailing interest rates, which could increase. We currently hedge a portion of our interest rate exposure. However, there can be no assurance that our floating rate debt will be effectively hedged or that we will continue such hedging.

Our incurrence of additional debt could further increase the risks described in this Annual Report and could result in a material adverse effect on our business, financial condition and results of operations and our ability to satisfy our obligations under the Senior Notes.

Our ability to service our debt and meet our cash requirements depends on many factors, some of which are beyond our control.

To date, we have been able to generate sufficient cash flow from operations, borrowings and refinancings to meet interest and principal payments on our indebtedness. However, our continued ability to satisfy our obligations will depend on our future operating performance and financial results that will be subject, in part, to factors beyond our control, such as interest rates and general economic, financial and business conditions, as well as other factors. If we are unable to generate sufficient cash flow to service our debt, we may be required to:


	•	refinance all or a portion of our debt;

	•	obtain additional financing;

	•	sell certain of our assets or operations;

	•	reduce or delay capital expenditures; or

	•	revise or delay our strategic plans.

If we are required to take any of these actions, it could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure you that we would be able to take any of these actions, that these actions would enable us to continue to satisfy our capital requirements or that these actions would be permitted under the terms of our various debt instruments then in effect.

The covenants in our revolving credit facilities, the agreements governing our other indebtedness and the indentures governing our Senior Notes impose restrictions on our business.

Our revolving credit facilities, the indentures governing certain of our Senior Notes and the instruments governing certain of our other indebtedness contain a number of covenants imposing significant restrictions on our business. These restrictions may affect our ability to operate our business and to take advantage of business opportunities as they arise.

These covenants include limitations on our ability and the ability of our restricted subsidiaries to, among other things:


	•	incur liens and debt or provide guarantees in respect of obligations of any other person;

	•	issue preferred stock;

	•	pay dividends or make distributions;

	•	make redemptions and repurchases of capital stock;

	•	make loans, investments and capital expenditures;

	•	prepay, redeem or repurchase debt;

	•	engage in mergers, consolidations and asset dispositions;

	•	engage in sale-leaseback transactions and affiliate transactions;

	•	change our business and issue and sell capital stock of subsidiaries; and

	•	restrict distributions from subsidiaries.

In addition, our revolving credit facilities and other loans require us to maintain a number of financial ratios. If we violate these covenants and are unable to obtain waivers from our lenders, our debt under our credit facilities and these other loans would be in default and could be accelerated by our lenders, which could result in an event of default under the indentures governing our Senior Notes and the instruments governing our other indebtedness. If our indebtedness is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us. If our expectations of future operating results are not achieved, or our debt is in default for any reason, our business, financial condition and results of operations could be materially and adversely affected. In addition, complying with these covenants may also cause us to take actions that are not favorable to holders of our Senior Notes and may make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.

Since Stena AB is a holding company, repayment of our indebtedness is dependent on cash flow generated by our subsidiaries.

Stena AB is a holding company. All of our operations are conducted by, and substantially all of our assets (including our vessels) are owned by, our subsidiaries. Repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Under the Swedish Companies Act, there are restrictions as to the ability of our subsidiaries to pay us

dividends or make loans and advances to us. The indenture governing our Senior Notes due 2016 contains covenants that restrict the ability of our subsidiaries to enter into agreements limiting distributions and transfers, including dividends; the indentures governing our Senior Notes due 2017, 2019 and 2020 do not contain these covenants. However, our real estate operations and certain of our investment activities are conducted through unrestricted subsidiaries that are not bound by restrictive provisions of these indentures and there can be no assurance that the cash flows or assets of those subsidiaries will be available to us to pay our obligations under our Senior Notes.

We conduct our real estate operations and certain investment activities through subsidiaries that are not subject to certain restrictive provisions in our indentures.

Our real estate operations and certain investment activities are conducted through various subsidiaries. For purposes of the indentures governing our Senior Notes, the subsidiaries that conduct our real estate operations (other than two small properties) and the subsidiaries that conduct a large portion of our investment activities are designated as unrestricted subsidiaries. As a result, these unrestricted subsidiaries are not bound by the restrictive provisions of our indentures. As of December 31, 2009, these unrestricted subsidiaries had outstanding indebtedness (including SPEs) of approximately SEK 23.9 billion, all of which was non-recourse to Stena AB and its restricted subsidiaries. Such debt of the real estate subsidiaries is secured by their real property interests, the debt of Adactum is secured by its investments in listed and unlisted shares, and the credit facility of Stena Royal is secured by its medium and long-term investment portfolios. Neither we nor any of our restricted subsidiaries have guaranteed payment of any of this indebtedness. There is no limitation in the indentures governing our Senior Notes on the amount of indebtedness our unrestricted subsidiaries may incur in the future. The indentures require that any indebtedness of an unrestricted subsidiary must be non-recourse to Stena AB and its restricted subsidiaries. Nevertheless, there can be no assurance that a creditor of an unrestricted subsidiary could not successfully seek satisfaction from us and our restricted subsidiaries or that, in the event of the bankruptcy of Stena AB or one or more of our unrestricted subsidiaries, a bankruptcy court would not consolidate the assets and debts of us and our restricted subsidiaries with those of the unrestricted subsidiaries.

The indenture governing our Senior Notes due 2016 contains certain limitations on our ability to make investments in unrestricted subsidiaries. As a result of these limitations, we may be unable to finance our real estate operations or our other businesses conducted through unrestricted subsidiaries in the event that these businesses require capital. Such businesses may not be able to obtain alternate sources of financing on reasonable terms or at all, particularly as any debt financing must be non-recourse to Stena AB.

In addition, because restrictions in the indenture governing our Senior Notes due 2016 prohibiting, subject to certain limitations, the creation of limitations on the ability of our subsidiaries to pay dividends do not apply to the unrestricted subsidiaries and because our real estate investments are subject to significant indebtedness, there can be no assurance that the cash flows or assets of the unrestricted subsidiaries will be available to us to pay our obligations under any of our indebtedness. All our indentures also provide for designating other of our subsidiaries as unrestricted subsidiaries. The indentures governing our other Senior Notes do not contain any prohibitions on the creation of limitations on the ability of our subsidiaries to pay dividends.

The ferry industry is highly competitive in areas where we operate.

We compete with other ferry operators and forms of transportation, including airlines, other freight carriers and fixed links such as bridges and tunnels. In particular, competition from low cost airlines has increased. Some of these other forms of transportation are faster and/or less expensive or may be more convenient than ferry service. Competition with other ferry

operators is based on the location of routes, rates charged, quality and reliability of vessels and onshore and onboard services provided. The principal effect of this competition is to affect our volumes and limit our ability to increase prices. Some of our competitors may have greater financial resources than us, be owned by governments or benefit from government subsidies. As a result, such competitors may be able to withstand price competition and price volatility better than we are.

Rising fuel prices will adversely affect the profitability of our ferry operations.

Fuel represents a significant cost incurred by us in the operation of our fleet. Fuel prices increased substantially in 2007 and in the first half of 2008 after which they declined. In 2009, fuel prices increased again and continued to be volatile. In addition, HSS vessels consume significantly more fuel than conventional ferries. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical and regulatory developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further or sustained increases in the price of fuel or reductions in supply could increase our operating expenses and have a material adverse effect on our financial condition and results of operations. Road and port blockades in the future, arising from fuel protests or other reasons, may have similar effects.

We seek to reduce our exposure to adverse changes in fuel prices by entering into hedging transactions. We primarily use swaps and options to hedge our exposure to variations in the price of fuel. However, there can be no assurance that such hedging activities will be successful, and generally our bunker fuel requirements are not fully hedged. Increases in fuel prices resulted in a decline in the profitability of operating one of our three HSS 1500 vessels on its route. We took this vessel out of service in January 2007, and it was later sold.

In addition, as a substantial portion of our existing bunker hedges will expire in the next two years, if bunker prices remain at current levels or increase, our bunker expenses will be significantly higher in future years.

Our operating results are subject to seasonal fluctuations.

Our ferry operations are highly seasonal, principally because passenger volumes are linked to tourism. The period from June through September is the peak travel season for passengers. As a result, our ferry operations generate a significantly greater portion of their revenues and substantially all of their profits in the second and third quarters and generally report losses in the first and fourth quarters.

The offshore drilling rig market is competitive, and the future demand for our drilling units is unpredictable.

The offshore drilling rig market is highly competitive. All our drilling units are currently contracted, with expiration dates ranging from the fourth quarter of 2010 to 2014. The level of demand for offshore drilling rigs has historically fluctuated significantly in connection with oil price changes. No assurances can be given with respect to future demand for such rigs or the prices at which they may be contracted after the existing contracts expire. In particular, we may not be able to secure a contract with respect to our newbuilding on order, Stena DrillMAX ICE, at all, at a price we deem acceptable or without delay after delivery.

Drilling contracts generally are awarded on a competitive bid basis with price competition as the primary factor. Some oil companies are seeking to negotiate contracts with a lower day rate and an incentive payment payable only upon achieving specified operating goals. In these cases, in the event of rig equipment failures or if we do not achieve the stated goals, our revenues will be lower. However, contracts for drilling projects are increasingly being negotiated

directly between an oil company and its preferred contractor, with suitability of equipment, quality of service, safety and price being significant factors in awarding the contract. We cannot predict the timing or extent of any changes in the industry or the future level of demand for our drilling rigs.

Charter rates, utilization levels and values for our vessels and drilling rigs may decrease.

Over the last decade, charter rates, vessel values and the general profitability of the shipping and offshore drilling industries have been volatile. There can be no assurance that charter rates or vessel values in the businesses in which we operate will be stable or increase over time. Vessel values are strongly influenced by charter rates, which in turn are influenced by the number and types of vessels generally available, costs of newbuildings, changes in trading patterns affecting the demand for particular types and sizes of vessels and technological advances in vessel design and propulsion, as well as the level and pattern of global economic growth.

In the case of our RoRo and RoPax vessels, a substantial portion of our vessel utilization has been through long-term charters. For the five years ended December 31, 2009, the RoRo and RoPax vessels have averaged a utilization rate of approximately 98%. As of March 31, 2010, all of the vessels in our Roll-on/Roll-off fleet were under charter, with expiration dates ranging from the fourth quarter of 2010 to 2013. The large number of RoRo and RoPax newbuildings ordered and delivered in the industry in recent years and the increasing demand for larger vessels have adversely impacted charter rates and the value of older, smaller and slower vessels.

For the five years ended December 31, 2009, our drilling rig utilization rate has averaged approximately 91%. All our drilling units are currently contracted with expiration dates ranging from the fourth quarter of 2010 to 2014. There can be no assurance that we will be able to enter into future rig charter contracts after our current contracts expire. Our customers may terminate some of our drilling contracts if the drilling unit is destroyed or lost or if drilling operations are suspended for a specified period of time as a result of a breakdown of major equipment or, in some cases, due to other events beyond the control of either party. In reaction to depressed market conditions, our customers may also seek renegotiation of firm drilling contracts to reduce their obligations. We expect a significant number of new drilling rigs to be delivered in the industry in the coming years, which could have a negative effect on charter rates.

For the five years ended December 31, 2009, the utilization for our fleet of chartered in, owned and finance leased tankers has averaged approximately 99%. Although we have long-term time charters in place for seven of our ten owned and finance leased tankers (including five tankers in which we have a 50% ownership interest), 19 of our 21 chartered in tankers were trading on the spot market as of March 31, 2010. There can be no assurance that rates on the spot market will not further decline, that charters on the spot market will continue to be available or that dependence on the spot market will not result in generally lower overall utilization and lower profitability. The time charters for our two finance leased tankers expire in 2011 and 2013. We expect a significant number of new tankers to be delivered in the industry in the coming years, which could have a negative effect on charter rates. In particular, we may not be able to secure a contract with respect to our two Suezmax tankers on order at all, at a price we deem acceptable or without delay after delivery.

We actively seek new charters in an effort to maintain a high level of vessel and rig utilization. However, we cannot assure you that we will be successful in renewing charter agreements, obtaining charter agreements for our newbuildings or replacing charter agreements for our existing vessels or that future charter rates will enable our vessels to be operated profitably.

Conversions of our vessels and drilling rigs, upgrades or newbuildings may be subject to delays and cost overruns.

From time to time we may undertake to add new capacity through conversions or upgrades to our vessels and drilling rigs or through new construction. These projects are subject to risks of delay or cost overruns inherent in any large construction project resulting from numerous factors, including the following:


	•	shortages of equipment, materials or skilled labor;

	•	unscheduled delays in the delivery of ordered materials and equipment;

	•	unanticipated cost increases;

	•	weather interferences;

	•	difficulties in obtaining necessary permits or in meeting permit conditions;

	•	design and engineering problems;

	•	failure to meet agreed-upon specifications; and

	•	bankruptcy or other failures of the shipyard.

The shipping industry is cyclical and subject to a variety of external factors.

Historically, the profitability of the shipping industry has been cyclical. The cyclicality of the shipping industry has been due to changes in the level and pattern of global economic growth and trading and the highly competitive nature of the shipping industry, as well as changes in the supply of and demand for vessel capacity, which impact charter rates and vessel values. The worldwide supply of vessels is influenced by the number of newbuildings and scrappings and government and industry regulation of maritime transportation practices. The overall demand for vessel capacity is influenced by global and regional economic conditions, increases and decreases in industrial and agricultural production, energy consumption, tourism patterns, political changes and armed conflicts, developments in international trade and changes in sea borne and other trading patterns. Because many of the factors influencing the supply of and demand for vessel capacity are unpredictable, the timing, direction and degree of changes in the shipping markets in which we participate, including the RoRo, RoPax, car/passenger ferry and tanker markets, as well as future charter rates and vessel values, are also unpredictable, and we cannot assure you that demand for our services or vessels will increase or even remain stable.

Our financial results may be affected by general changes in the global financial markets and economies.

The length and severity of the current economic downturn and the uncertainty caused by the global credit and liquidity crisis have adversely affected demand for some of our products and services. A continuing economic downturn could result in, among other things, a further or continued decline in freight and passenger volumes in our ferry operations, demand and charter rates for our drilling, tanker and Roll-on/Roll-off vessel fleets and demand for the products of the subsidiaries of Adactum. In addition, a continuing economic downturn could adversely affect our financial investments. A lasting downturn in the economy may have a material adverse impact on our business, financial condition and results of operations.

Our international operations expose us to risks and uncertainties arising from international political conflicts, economic conditions and other events that could negatively impact our results of operations.

Our operations are global and are affected by international economic, political and governmental conditions, especially in the countries where we and our subsidiaries are engaged in business or where our vessels operate or are registered.

Economic conditions and fluctuations in currency exchange rates among the countries in which we conduct our ferry operations affect the travel and trade patterns of our customers. We are also subject to governmental and regulatory risks, including taxation, nationalization, inflation and protectionist measures that can affect our ability to operate our current routes or alter our routes. We are further subject to political upheaval risks.

We are subject to risks pertaining to the Middle East conflict. The tankers owned, chartered in or managed by us trade from time to time in the Arabian Gulf. In the past, political and armed conflicts in this region have included attacks on tankers and other efforts to disrupt shipping in this area. Future political instability or future hostilities in this region could adversely impact our tanker operations. These circumstances may materially adversely affect our trade patterns, operations and results of operations.

Terrorist attacks or acts of war may adversely affect the markets in which we operate, our operations and our profitability.

The occurrence of acts of terrorism and any military response would likely cause instability in financial markets and disruptions in travel and trade patterns. Furthermore, terrorist attacks and military actions may result in reduced demand from our customers for our services. Acts of terrorism and regional military conflict may subject our worldwide operations to increased risks and, depending on their magnitude, could have a material adverse effect on our business.

Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Throughout 2008 and 2009, the frequency of piracy incidents increased significantly, particularly in the Gulf of Aden off the coast of Somalia. If these piracy attacks occur in areas where our vessels are deployed and which are characterized by insurers as war risk zones (as the Gulf of Aden temporarily was in May 2008) or Joint War Committee (JWC) war and strikes listed areas, premiums payable for insurance coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including costs for employing onboard security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on our operations. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

We have potential conflicts of interest with our owners that may adversely affect us.

Our owners own other companies and have other business interests. In the past, certain of these companies have engaged in the same business as or in businesses similar to those conducted by us. In the future, due to the availability of funds, restrictions contained in debt or other instruments or for other reasons, our owners may allocate a particular business opportunity, such as the acquisition of a vessel or drilling rig or the construction of a new vessel, to such other companies. In addition, our owners may make these investments or engage in these businesses directly. As a result, we would not receive any cash flow or income generated

by the investment, and such activities by our owners may result in these other companies or our owners directly competing with us.

An inability to attract or retain qualified crew members, or a loss of key members of our management team, could materially adversely affect our revenues, results of operations and prospects.

There is a limited supply of qualified crew members for our vessels and rigs. If we are unable to attract and retain sufficient qualified crew, our operations could be adversely affected.

In addition, we rely, and expect to continue to rely, upon Dan Sten Olsson, our Chief Executive Officer, and other key employees and officers for the successful pursuit of our activities. The loss of any of their services could have an adverse effect on our operations.

Most of our onboard staff and onshore shipping staff are unionized. Strikes by them may disrupt our services and adversely affect our operations.

The shipping industry in Sweden and other jurisdictions in which we operate are susceptible to industrial action due to the strong influence of maritime trade unions. While we believe that we have good relations with our work force, we cannot assure you that we will not be adversely affected by future industrial action against efforts by our management to reduce labor costs, restrain wage increases or modify work practices.

We are party to separate agreements covering substantially all our employees in our ferry operations in Sweden, the United Kingdom and The Netherlands. Generally, the terms of these agreements are for one to two years or the agreements continue until terminated or renegotiated. In the United Kingdom, we have an agreement with our labor unions for which the pay level is negotiated on an annual basis. Although we have not experienced any major strike or work stoppage in the last ten years, there can be no assurance that we will in the future be able to favorably negotiate the terms and conditions of such labor agreements or that strikes or disruptions will not occur in the future as a result of the failure to negotiate such terms or otherwise.

Currency fluctuations may have a material adverse effect on our financial position and/or our operating margins.

Although we report our results of operations in Swedish kronor, we earn a substantial portion of revenues and incur a substantial portion of expenses in other currencies, principally U.S. dollars, British pounds, Euros and Norwegian kroner. In particular, we incur significant expenses in U.S. dollars for fuel and for expenses in our tanker and offshore drilling operations, and as of December 31, 2009, approximately SEK 15 billion of our debt was denominated in U.S. dollars, excluding the debt of our SPEs. Fluctuations in the exchange rates between the U.S. dollar and other currencies could have a material effect on the amount of funds denominated in other currencies needed by us to satisfy our U.S. dollar-denominated obligations. In addition, a substantial portion of our assets and liabilities are denominated in currencies other than the Swedish kronor. As a result, these assets and liabilities will also be impacted by changes in the exchange rate between the Swedish kronor and such other currencies. Our financial results, as reported in Swedish kronor, in the past have been and in the future are expected to be significantly affected by changes in the exchange rate between the Swedish kronor and such other currencies. We seek to manage our foreign currency exposure by using forward exchange contracts. We also hedge certain of our currency exchange exposures with borrowings denominated in the same currency as the investment. However, there can be no assurance that such hedging will be successful, and foreign exchange fluctuations may have a material adverse effect on our financial results and/or our operating margins.

We utilize various financial instruments, including hedging arrangements, to manage financial risks, that may not be successful.

We have traditionally used various financial instruments as part of an overall risk management policy to seek to reduce our exposure to interest rate and foreign currency exchange fluctuations. To manage our interest rate risks, we utilize swaps, forward rate agreements, interest rate futures, options and interest rate collars. To manage our foreign currency exchange rate exposure, we utilize forward foreign currency exchange contracts, foreign currency options and currency swaps. We also hedge certain of our currency exchange exposures with borrowings denominated in the same currency as the investment. However, there can be no assurance that we will continue such hedging or that such hedging will be successful in mitigating the risk that interest rate fluctuations will have an adverse effect on our financial statements and/or operating results.

By utilizing hedging instruments, we potentially forego benefits that might result from fluctuations in currency exchange rates, declines in short-term interest rates and declines in oil prices. Additionally, we are exposed to credit risk in the event of the failure of counterparties to meet their obligations under these arrangements. The theoretical risk is the cost of replacement at current market prices of these transactions in the event of defaults by counterparties.

Although we seek to reduce the risk of non-performance by counterparties by maintaining a policy of entering into such arrangements only with highly rated institutions, one or more of our counterparties could default and this default could have an adverse effect on our results of operations.

We maintain an investment portfolio of equity and debt securities, and market fluctuations may have a material effect on our financial position and our financial results.

As of December 31, 2009, the fair value of our marketable securities and short-term investments (including restricted cash of SEK 3.3 billion) amounted to SEK 5.9 billion, as compared to SEK 7.7 billion (including restricted cash of SEK 4.7 billion) as of December 31, 2008. Our investments in equities include both publicly traded and private companies. The debt securities currently held by us are primarily floating rate notes and high yield corporate bonds. We have also invested in SPEs, which we consolidate, whose purpose is to make investments, primarily in high yield securities and bank loans. As of December 31, 2009, we had investments in four SPEs whose total assets amounted to SEK 8.2 billion, which were financed in part by U.S. dollar-denominated notes issued by the SPEs in an aggregate amount of SEK 8.2 billion (which is non-recourse to Stena AB). We seek to maintain a diversified investment portfolio to balance our exposure to various risks. However, investments are subject to various risks and fluctuations and are highly volatile and, as a result, there can be no assurance that our investment activities will be profitable.

We maintain a significant portfolio of debt and equity securities, and our experience in investments in businesses outside our traditional ferry operations, shipping, drilling and other lines of business is limited. If our investment portfolio is not successful, our financial position and results of operations could be materially and adversely affected, even if our core business is performing well.

We have less experience in evaluating and managing new investments Adactum may make than investments in our traditional lines of business.

Through Adactum, one of our unrestricted subsidiaries, we make long-term active investments in listed and private companies engaged in businesses outside of our traditional lines of business. We have less experience in evaluating new investments Adactum may make than in evaluating new investments in our traditional lines of business. In addition, these businesses are often subject to different risks than the risks associated with our traditional lines

of business. While we seek to make investments in businesses which we believe have sufficient management expertise to respond to changes in market conditions and other events and developments, we may not be able to respond effectively to developments and changes in these businesses and the markets in which they operate.

Compliance with safety, environmental and other governmental requirements may adversely affect our operations.

The shipping industry in general, and our business and the operation of our vessels in particular, are affected by a variety of governmental regulations in the form of numerous international conventions, national, state and local laws and national and international regulations in force in the jurisdictions in which such vessels operate, as well as in the country or countries in which such vessels are registered. These regulations include, but are not limited to:


	•	the United States Oil Pollution Act of 1990 (“OPA ’90”) with respect to strict liability for the discharge of oil and other materials into the environment, the issuance of certificates of financial responsibility for vessels trading in United States waters and requiring that newly constructed tankers that trade in United States waters be constructed with double hulls;

	•	the United States Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) which applies to discharge of hazardous substances (other than oil), whether on land or at sea. CERCLA applies to owners and operators of vessels and provides for cleanup, removal and natural resource damages. CERCLA’s liability regime is similar to that of OPA ’90;

	•	the International Convention on Civil Liability for Oil Pollution Damage of 1969 and the protocol of 1992 (“CLC”) entered into by certain countries (other than the United States) relating to strict liability and limitation of liability of the shipowner for pollution damage caused by the discharge of persistent oil;

	•	International Convention for the Prevention of Pollution from Ships of 1973 and Protocol 1978 (“MARPOL 73/78”) with respect to strict technical and operational requirements for tankers, including an enhanced inspection regime and the requirement that all new tankers have to be built with double hulls;

	•	Annex VI of MARPOL entered into force in May 2005 and revised in October 2008 regarding the reduction of harmful emissions from ships;

	•	International Convention for the Control and Management of Ships’ Ballast Water and Sediments (“IMO 2004”);

	•	the International Maritime Organization International Convention for the Safety of Life at Sea (“SOLAS”) of 1974 with respect to crew and passenger safety, certain safety regulations concerning car/passenger ferry and RoPax vessels and a subsequent chapter, as revised in 2000, with respect to the construction and operation of high speed craft, such as the HSS ferries, as well as recently adopted mandatory security provisions for ships engaged in international voyages and mandatory compliance with the new International Ship and Port Facility Security Code (ISPS code) and the International Safety Management (ISM) Code, which sets out guidelines for the safe operation of ships;

	•	the International Convention on Load Lines of 1966 (“ICLL”) with respect to the safeguarding of life and property through limitations on load capability for vessels on international voyages;

	•	the International Convention Relating to the Carriage of Passengers and their Luggage by Sea (the “Athens Convention”), relating to the limits of liability of carriers, which has introduced a strict liability regime with limited defenses; and


	•	the United States Maritime Transportation Security Act of 2002 (“MTSA”) with respect to vessel security.

In order to maintain compliance with existing and future laws, treaties and international agreements, we incur, and expect to continue to incur, substantial costs in meeting maintenance and inspection requirements, developing and implementing emergency preparedness procedures, and obtaining insurance coverage or other required evidence of financial ability sufficient to address pollution incidents.

Additional laws and regulations, both international and national, may be adopted as a result of oil spills and heightened security concerns, which could limit our ability to do business or increase our cost of doing business and have a material adverse effect on our operations. In addition, we are required by various governmental and regulatory agencies to obtain certain permits, licenses and certificates with respect to our operations. In the event of war or national emergency, our vessels may be subject to requisition by the government of the flag flown by the vessel without any guarantee of compensation for lost profits.

We believe our vessels are maintained in good condition in compliance with present regulatory requirements, are operated in compliance with applicable safety/environmental laws and regulations and are insured against usual risks for such amounts as our management deems appropriate. The vessels’ operating certificates and licenses are renewed periodically during each vessel’s required annual survey. However, government regulation of vessels, particularly in the areas of safety and environmental impact may change in the future and require us to incur significant capital expenditure on our vessels to keep them in compliance.

Catastrophic loss and other events in our business could adversely affect our results of operations.

The operation of any oceangoing vessel carries with it an inherent risk of catastrophic maritime disaster, mechanical failure, collision and loss of or damage to cargo.

Additionally, in the course of operating vessels, marine disasters such as oil spills and other environmental mishaps, cargo loss or damage, business interruption due to political or other developments, as well as maritime disasters not involving us, labor disputes, strikes and adverse weather conditions could result in loss of revenues, liabilities or increased costs, personal injury, loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. Damage arising from such occurrences may result in lawsuits asserting large claims. In addition, offshore drilling operations are subject to many of the same risks as shipping, including risks relating to the environment and possible catastrophic loss or liability, and are subject to the usual hazards inherent in drilling for oil and gas offshore, such as blowouts, reservoir damage, loss of well control, punchthroughs, craterings or fires.

Although we maintain insurance that we believe is consistent with industry norms against certain of these risks, including loss of life, there can be no assurance that such insurance would be sufficient to cover the cost of damages suffered by us or the loss of income resulting from any of those events. We also cannot assure you that a claim will be paid or that we will be able to obtain insurance at reasonable rates in the future. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we obtain insurance coverage for tort liability. Our payment of these calls could result in significant expenses to us which would reduce our profits or cause losses.

In the event that such claims were assessed against us, all our assets could be subject to attachment and other judicial process.

We cannot assure you that a judgment of a United States court for liabilities under United States securities laws would be enforceable in Sweden, or that an original action can be brought in Sweden against us for liabilities under United States securities laws.

We are a Swedish company, all our directors and officers are residents of Sweden and elsewhere outside the United States and most of our assets and the assets of our directors and officers are located outside the United States. As a result, it may be difficult for you to:


	•	effect service of process within the United States upon us or our directors and officers, or

	•	enforce judgments obtained in United States courts against us or our directors and officers based upon the civil liability provisions of the United States federal securities laws.

We have been advised by our Swedish counsel, Wistrand Advokatbyra Goteborg KB, that:


	•	a judgment of a United States court would not be enforceable in Sweden against us or our directors and officers, but would be accepted on an evidential basis in a Swedish legal action, and

	•	there is doubt whether an original action could be brought in Sweden against us or our directors and officers to enforce liabilities based solely upon the United States federal securities laws.


Item 4.	Information on the Company

History and Development of the Company

Stena AB was incorporated as a stock corporation of limited liability in 1897 under the laws of the Kingdom of Sweden and governed by the Swedish Company Act. Stena AB was acquired by the Sten A. Olsson family in 1967 to serve as a holding company for certain of the Olsson family’s businesses. Our principal corporate offices are located at Masthuggskajen, SE-405 19 Gothenburg, Sweden and our telephone number at that address is +46-31-855000.

We are one of the largest privately held companies in Sweden. We are owned by certain members of the Olsson family including Dan Sten Olsson, our Chief Executive Officer. The Olsson family has been involved in various aspects of the shipping business since 1946 and we are a leading participant in the worldwide shipping industry. In addition, in order to capitalize on our experience and knowledge of the shipping industry, we have expanded our activities to include other operations related to shipping.

We, together with Sessan and Stena Metall, which are also owned by Dan Sten Olsson and other members of the Sten A. Olsson family, and Concordia Maritime AB, which is 52% owned by Sessan, comprise the “Stena Sphere” of companies. The Stena Sphere of companies is engaged in shipping, ferry operations, offshore drilling, metal and paper recycling, sales of bunker fuel, real estate, financial activities and industrial operations.

We own and operate one of the world’s largest international passenger and freight ferry services and own, charter in and out, and operate drilling rigs, crude oil and petroleum product tankers and Roll-on/Roll-off vessels. We also invest in and manage residential and commercial real estate, principally in Sweden and The Netherlands. We also invest in other businesses not related to our traditional lines of business. For the year ended December 31, 2009, we generated revenues of SEK 27.8 billion including net gain on sale of tangible fixed assets of SEK 179 million and net valuation of investment properties of SEK (301) million. Cash flows from operating activities for the same period were SEK 7.1 billion.

Since January 1, 2007, our principal capital expenditures and divestitures have consisted of the purchase and sale of vessels and the purchase and sale of real estate. From January 1, 2007 through December 31, 2009, we have invested approximately SEK 18.6 billion for the purchase

of vessels and SEK 2.0 billion for the purchase of real estate. During the same period, we have sold vessels for total consideration of SEK 1.7 billion and real estate for total consideration of SEK 1.4 billion. As of the date of this Annual Report, April 30, 2010, our capital expenditures in progress consist of one drillship under construction in Korea, two Superferries under construction in Germany, two RoPax vessels under construction in Korea, two Suezmax tankers under construction in Korea and one port under construction in Scotland. We expect that the substantial portion of the purchase price of our newbuildings will be financed by the existing revolving credit facilities, new capital lease agreements, new bank loans or other financing arrangements.

Business Overview

Ferry Operations

We currently operate 18 routes with a fleet of 35 vessels in Scandinavia, the United Kingdom, Germany, Poland, The Netherlands and the Republic of Ireland under the “Stena Line”, “Scandlines” and “HH-Ferries” brand names. Our ferry operations generate revenues from: (i) travel, which consists primarily of ticket sales for passengers and private cars, package tours and hotel sales; (ii) onboard sales, which consist primarily of cabin occupancy, retail sales, restaurants, bars, arcades, gaming and, on our Norway-Denmark route, duty and tax free sales; and (iii) freight, which consists primarily of trailer and truck transportation. For the year ended December 31, 2009, we carried a total of 11.3 million passengers, 2.5 million private cars and 1.4 million freight units on our routes. For the financial year ended December 31, 2009, our ferry operations generated revenues of SEK 9.6 billion and generated operating income of SEK 445 million, including depreciation and amortization expense of SEK 1.1 billion. For the year ended December 31, 2009, ferry operation revenues were generated from travel revenues (39%), onboard sales (19%) and freight/other (42%).

Pursuant to a tax subsidy system in Sweden, our ferry operations receive a subsidy equal to all social security costs and income taxes payable by the employers on behalf of employees who work onboard Swedish-flagged vessels. The amount of this subsidy was SEK 390 million for the financial year ended December 31, 2009.

Business Activities

We generate revenue from our ferry operations from three principal business activities: travel, onboard sales and freight. The following table sets forth the revenue for each of our business areas for the three years ended December 31, 2007, 2008 and 2009.



	Year Ended December 31
(SEK in millions)	2007		2008		2009

Travel		3,372		3,661		3,726
Onboard sales		1,849		1,837		1,830
Freight/other		4,647		4,810		4,043
Net gain sale of assets		146		—		—

Total revenues		10,014		10,308		9,599

Set forth below is certain operating data for our ferry operations for the years ended December 31, 2007, 2008 and 2009.



	Year Ended December 31
Volumes (in thousands)	2007		2008		2009


Number of passengers		11,374		11,173		11,349
Private Cars		2,204		2,204		2,526
Freight units		1,621		1,575		1,360

Route Network

We currently operate 18 routes in Scandinavia, the United Kingdom, Germany, Poland, The Netherlands and the Republic of Ireland. Our routes are geographically well positioned and generally located in high traffic areas.

Sweden-Denmark. We operate ferry services on three routes. We estimate that we had an approximate 24%, 16% and 47% share of the volume of passengers, private cars and freight units, respectively, transported between Sweden and Denmark for the year ended December 31, 2009. This includes the volumes of HH-Ferries A/S (“HH-Ferries”) until August 31, 2009, when the HH-Ferries vessels were chartered out to Scandlines.

The following table sets forth the volumes of passengers, private cars and freight units on our Sweden-Denmark routes for the last three years.



	Passengers						Private cars						Freight units
(In Thousands)	2007		2008		2009		2007		2008		2009		2007		2008		2009


Gothenburg-Fredrikshavn		1,565		1,405		1,285		331		290		261		184		178		145
Varberg-Grena		168		172		163		43		43		42		39		42		38
Helsingborg-Helsingör⁽¹⁾		4,059		3,958		3,668		705		677		716		152		147		142
HH-Ferries⁽²⁾				346		1,224		—		130		436		—		25		64


(1)		Represents only 50% of volume on this route. This route is operated in partnership with Scandlines Danmark A/S.

(2)		2008 volumes as from acquisition date of October 2, 2008. 2009 volumes until August 31, 2009 when the HH-Ferries vessels were chartered out to Scandlines.

Sweden-Germany. We operate ferry services on five routes, including two routes operated in cooperation with Scandlines Deutschland GmbH. We estimate that we had an approximate 43%, 49% and 25% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Sweden and Germany for the year ended December 31, 2009.

The following table sets forth the volumes of passengers, private cars and freight units on our Sweden-Germany routes for the last three years.



	Passengers						Private cars						Freight units
(In Thousands)	2007		2008		2009		2007		2008		2009		2007		2008		2009


Gothenburg-Kiel		500		468		427		98		89		85		39		36		28
Gothenburg-Travemunde		5		5		4		—		—		—		98		80		46
Trelleborg-Sassnitz⁽¹⁾		352		343		294		88		85		75		21		19		11
Trelleborg-Rostock⁽¹⁾		169		152		131		25		21		21		80		74		63
Trelleborg-Travemunde		31		27		28		—		—		—		53		43		49


(1)		Represents only 50% of the volumes on these routes. These routes are operated under a pooling arrangement with Scandlines Deutschland GmbH.

Norway-Denmark/Germany. We operate ferry services on one route. We estimate that we had an approximate 13%, 9% and 10% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Norway and

Denmark/Germany for the year ended December 31, 2009. Because Norway is not part of the European Union, we continue to offer duty and tax free retail sales on this route.

The following table sets forth the volumes of passengers, private cars and freight units on our Norway-Denmark route for the last three years.

Passengers

Private cars

Freight units

(In Thousands)

2007

2008

2009

2007

2008

2009

2007

2008

2009

Oslo-Fredrikshavn

572

564

552

Sweden-Poland. We operate ferry services on one route. We estimate that we had an approximate 39%, 25% and 23% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Sweden and Poland for the year ended December 31, 2009.

The following table sets forth the volumes of passengers, private cars and freight units on our Sweden-Poland route for the last three years.

Passengers

Private cars

Freight units

(In Thousands)

2007

2008

2009

2007

2008

2009

2007

2008

2009

Karlskrona- Gdynia⁽¹⁾

429

375

351


(1)		In the second quarter of 2007, the RoPax vessel Finnarrow was chartered in. In the fourth quarter of 2008, the RoPax vessel Stena Nordica was taken out of service on this route.

Wales/England-Republic of Ireland. We operate ferry services on three routes. We estimate that we had an approximate 54%, 53% and 26% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Wales/England and the Republic of Ireland for the year ended December 31, 2009.

The following table sets forth the volumes of passengers, private cars and freight units on our Wales/England and the Republic of Ireland routes for the last three years.



	Passengers						Private cars						Freight units
(In Thousands)	2007		2008		2009		2007		2008		2009		2007		2008		2009


Fishguard-Rosslare		597		554		501		152		143		138		54		50		34
Holyhead-Dun Laoghaire		735		627		343		180		152		97		17		14		4
Holyhead-Dublin⁽¹⁾		410		445		673		76		84		161		155		162		149


(1)		A second vessel was added to the Holyhead-Dublin route in October 2006. In November 2008, Stena Seatrader was taken out of service and replaced by Stena Nordica with higher capacity both for freight and passengers.

Scotland/England-Northern Ireland. We operate ferry services on two routes. We estimate that we had an approximate 55%, 47% and 28% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Scotland/England and Northern Ireland for the year ended December 31, 2009.

The following table sets forth the volumes of passengers, private cars and freight units on these routes for the last three years.



	Passengers						Private cars						Freight units
(In Thousands)	2007		2008		2009		2007		2008		2009		2007		2008		2009


Stranraer-Belfast⁽¹⁾		1,217		1,104		1,109		269		244		244		115		108		102
Fleetwood-Larne		61		58		54		9		8		8		143		138		117


(1)		On November 13, 2009, a newly acquired RoPax vessel, Stena Navigator, was put into operation on the route, increasing the capacity.

England-The Netherlands. We operate ferry services on three routes. We estimate that we had an approximate 24%, 28% and 16% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between England and The Netherlands for the year ended December 31, 2009.

The following table sets forth the volumes of passengers, private cars and freight units on this route for the last three years.



	Passengers						Private cars						Freight units
(In Thousands)	2007		2008		2009		2007		2008		2009		2007		2008		2009


Harwich-Hook of Holland⁽¹⁾		428		473		469		88		96		100		173		160		138
Killingholme-Hook of Holland⁽²⁾		44		63		51		—		—		—		76		87		78
Harwich-Rotterdam		33		35		21		—		—		—		110		107		72


(1)		In January 2007, one HSS vessel was taken out of service and during the first half year 2007 two RoPax vessels operating on the route were extended to 4,100 lane meters each.

(2)		In August 2006, a newly built RoPax vessel replaced one of the existing vessels on the route and, in June 2007, a second newly built RoPax vessel replaced the remaining existing vessel on this route.

Ferry Fleet

As of March 31, 2010, our ferry fleet consisted of 35 vessels in operation and 1 vessel on charter to a third party operator. The table below sets forth certain information about our ferries as of March 31, 2010.

Ferry Fleet



	Number of		Average age
Type of vessel	vessels		(years)


HSS Vessels		3		13
Conventional Fast Ferry		1		13
Day Ferries		5		19
Night Ferries		2		26
RoRo Vessels		2		5
RoPax Vessels		23		21

Total		36		19

Newbuildings. In the third quarter of 2004, we ordered two RoPax vessels. The first vessel was delivered in August 2006, and the second vessel was delivered in June 2007. In November 2006, we ordered two Superferries of 5,500 lane meters each, currently the world’s largest in route traffic. The first is scheduled for delivery in the second quarter of 2010 and the second during the fourth quarter of 2010. In August 2007, we ordered two RoPax vessels scheduled for delivery during the second and fourth quarters of 2011.

Vessel changes. As of March 1, 2009, capacity on the Harwich-Rotterdam route was reduced when the RoPax vessel Stena Transporter was taken out of service. As of November 13, 2009, the capacity on the Stranraer-Belfast route was increased when the RoPax vessel Stena Navigator was put into operation. As of January 1, 2010, the RoPax vessel Götaland is chartered out to another operator who continues to operate the vessel on the Trelleborg-Travemünde route.

HSS vessels. We currently operate two HSS 1500s and one HSS 900. HSS vessels are designed to travel with significantly less vertical motion than other fast ferries at service speeds of up to 40 knots. The HSS 1500 is currently the largest high speed ferry in service in the world

and has the capacity to carry significant numbers of trucks, freight trailers, cars and buses and up to 1,500 passengers. The HSS 900 can carry up to 900 passengers and 210 cars or a combination of cars and buses.

Recent acquisitions and sales

In June 2009, Stena Line sold the RoRo vessel Stena Transporter, which was taken out of operation on the Rotterdam-Harwich route as of March 1, 2009.

In September 2009, Stena Line acquired the RoPax vessel Seafrance Manet, subsequently renamed Stena Navigator. The vessel was put into operation on the Stranraer-Belfast route as of November 13, 2009.

In December 2009, Stena Line acquired the RoPax vessel Skåne, operating on our Trelleborg-Rostock route.

In February 2010, we entered into an agreement to sell the RoPax vessel Götaland, with delivery scheduled for September 2010.

Sales and Marketing

Passengers and cars. Our travel service targets our marketing efforts to three groups: individual travelers, bus operators and business travelers. The travel products and services we offer consist of day trips, package trips (ferry ticket plus shore based arrangements), cruises (ferry tickets used primarily for onboard activities) and transport (only the ferry ticket). We also offer conference services and other business related services to our business travel customers.

Our sales organization is divided into national sales offices in each of the countries where we have ferry operations and is responsible for sales and reservations, sales training and route coordination. Telephone reservations are centralized at one call center in each country. Products are sold directly to consumers and through travel agents with whom we maintain various arrangements, including direct booking access. Individual customer bookings can also be made by telephone, internet, e-mail, mail, fax and directly at each of our ferry terminals.

Freight. Our freight sales organization is divided into three sales regions. The freight organization provides sales, marketing and reservation services to customers and coordinates freight services for customers seeking transportation across more than one route. Freight operations are handled by sales representatives in each country where we operate, as well as independent sales agents in other European countries.

Other Properties

Ports. We own two ports: Holyhead and Stranraer, located in England and Scotland, respectively. We also own land along the quay in Hook of Holland, The Netherlands, enabling us to control our port area at Hook of Holland. In addition, we own 50% of the capital stock of a company owning the ports of Fishguard and Rosslare, and we operate the port of Fishguard in Wales. In the case of our other routes, we use port facilities owned by third parties and pay applicable port and harbor fees.

In February 2010, we committed to invest approximately GBP 80 million in a new ferry port facility at Loch Ryan in Scotland for the future development of our Scotland-Northern Ireland route. The construction work at Loch Ryan Port is expected to take approximately 20 months and be completed in 2012. A Harbor Empowerment Order (HEO) to allow the creation of the new port has been granted by the Scottish government.

Hotels. We own one hotel in Denmark, which is marketed as part of tour packages. We have an agreement with Scandic Hotels to operate and work with us in relation to the marketing of the hotel.

Offshore Drilling

We currently own and operate two third generation and two fifth generation semi-submersible drilling rigs and three sixth generation ultra-deepwater drillships. We also have one enhanced ice-classed ultra-deepwater drillship, Stena DrillMAX ICE, on order from SHI and scheduled for delivery in the first quarter of 2012. We believe our quality of service, excellent safety record and fleet provide us with a significant competitive advantage. For the year ended December 31, 2009, our drilling operations generated revenues of SEK 8.1 billion and operating income of SEK 3.3 billion, including depreciation and amortization expenses of SEK 1.7 billion.

The table below sets forth selected information with respect to our drilling units as of March 31, 2010.

Drilling Rig Fleet

Maximum

Water

Drilling Rig/Drillship

Generation

Year Built

Depth (Ft.)

Class

Stena Clyde

3rd

⁽¹⁾

1976

1,650

DnV

Stena Spey

3rd

1983

1,500

DnV

Stena Tay

5th

1999

7,500

DnV

Stena Don

5th

2001

1,600

DnV

Stena DrillMAX

6th

2007

10,000

DnV

Stena Carron

6th

2008

10,000

DnV

Stena Forth

6th

2009

10,000

DnV


(1)		Upgraded 2^nd generation semi-submersible.

Our headquarters are in Aberdeen, Scotland with offices in Norway, Luxembourg, Cyprus and Hungary. We also have base offices in Australia, Norway, West Africa, the United States and Brazil. All of the drilling units are equipped to drill high pressure wells. As of December 31, 2009, the average age of our owned fleet was approximately 12 years.

For the five years ended December 31, 2009, our average drilling unit utilization rate was approximately 91%. The table below sets forth the average utilization rates for our drilling units for each of the past five years.

Drilling Unit Utilization



	2005		2006		2007		2008		2009


Total vessel days available		1,825		1,825		1,825		2,328		2,405
Vessel days utilized		1,591		1,683		1,714		2,171		2,106
Vessel utilization (percentage)		87.2		92.2		93.9		93.3		87.6


Offhire days planned		126		102		47		104		224
Offhire days planned (percentage)		6.9		5.6		2.6		4.5		9.3
Unutilized days		108		40		64		53		75
Unutilized days (percentage)		5.9		2.2		3.5		2.2		3.1
Average daily rates in $		154,000		241,000		329,000		404,000		470,000

The table below sets forth selected information with respect to the drilling contracts for our drilling units in operation as of March 31, 2010.



Rig/Drillship	Customer	Expected Contract Expiration Date


Stena Clyde	Apache	February 2011
Stena Don	Cairn	Mid November 2010
Stena Tay	Total	August 2011
Stena Spey	TAQA	November 2010 (plus one two-well option)
Stena DrillMAX	Repsol	December 2011 (plus a one-year option)
Stena Carron	Chevron	November 2013 (plus one three-year option)
Stena Forth	Hess	August 2014

The contracts for our drilling units typically provide for compensation on a “day rate” basis, under which we receive a fee for each day that the rig is operating under contract. Under day rate contracts, we pay the operating expenses of the rig, including wages and the costs of incidental supplies. As at March 31, 2010, the daily charter rates for our drilling rigs were as follows: Stena Clyde: $450,000; Stena Spey: $245,000; Stena Tay: $325,000 to $375,000, depending on the incentive earned and excluding dayrate adjustment related to changes in operating costs; Stena Don: $450,000 (post current 5-year SPS and mobilization to location; mobilization rate is $225,000 per day); Stena DrillMAX: $450,000 to $500,000, depending on the incentive earned and excluding dayrate adjustment related to changes in operating costs, Stena Carron: $485,000, excluding dayrate adjustment related to changes in operating costs, and Stena Forth: $498,500 to $538,500, dependent on incentive earned and dayrate adjustment related to changes in operating costs.

Newbuildings. We have ordered four DrillMAX drillships. One was delivered in December 2007, two were delivered in August 2008 and August 2009, respectively, and the fourth, the enhanced ice-classed ultra-deepwater drillship Stena DrillMAX ICE, is scheduled for delivery in the first quarter of 2012. Stena DrillMAX ICE has not been contracted yet.

Our DrillMAX drillships can move more quickly between drilling locations than semi-submersible rigs and include a second mast that enables them to perform exploration and development work more efficiently.

Competition. The offshore drilling rig market is highly cyclical and competitive, reflecting the historic oversupply of offshore drilling rigs and the ability of operators to move rigs from areas of low utilization and low day rates to areas of greater activity and relatively higher day rates. Although drilling contracts are generally awarded on a competitive bid basis with price competition as the primary factor, contracts for drilling projects are also being negotiated directly between an oil company and its preferred contractor with suitability of equipment, quality of service safety, and price being significant factors in awarding contracts.

Shipping

Our shipping operations consist of the ownership and chartering of crude oil and petroleum product tankers and Roll-on/Roll-off vessels. To support these activities, we are also engaged in the design, purchase, sale, management and crewing of these vessels. We generally collect charter hire payments monthly in advance in the case of time charters and upon completion with respect to charters on the spot market. For the financial year ended December 31, 2009, our shipping operations generated revenues of SEK 3.1 billion, including net gain on sale of vessels of SEK 148 million and generated operating income of SEK (629) million, including depreciation and amortization expenses of SEK 400 million, of which SEK 150 million was partial write-downs of three product tankers.

Crude oil and petroleum product transportation

We own, charter in and provide commercial management services for crude oil and product tankers. As of March 31, 2010, we owned three product tankers, leased two product tankers pursuant to long-term finance leases and we also had a 50% interest in one crude oil tanker and four shuttle tankers. We also have two Suezmax tankers on order from SHI scheduled for delivery in the third and fourth quarters of 2011. Through our 35% stake in Paradise Tankers we have an interest in three Panamax tankers and two Dry Cargo Panamaxes. All our owned and finance leased tankers are double hulled. As of March 31, 2010, we also chartered in 21 Product tankers, Aframax, Panamax and Suezmax tankers.

As of March 31, 2010, the average period of the charter contracts for the 21 chartered in tankers was 18 months. Of these tankers, 2 were chartered out for an average period of 60 months. The other 19 tankers are currently trading on the spot market and are partly covered by contracts of affreightment (CoA).

Our customers are generally large international oil companies, members of the Organization of Petroleum Exporting Countries and shipping companies. Our customers include BP plc, Chevron Corporation, ConocoPhillips, the Royal Dutch/Shell Group of Companies, Neste Oil and Total.

We have an allocation agreement with Concordia, pursuant to which Concordia may elect to participate fully or partially in crude oil and petroleum product tanker and bulk cargo vessel opportunities identified by us.

The table below sets forth certain information with respect to our owned and finance leased tankers as of March 31, 2010.

Owned and finance leased tankers

Year

Type of

Current charter

Tankers

Built

Type

DWT

charter

expiration date

Stena Conquest⁽¹⁾

2003

Product

47,400

Spot

n/a

Stena Conqueror⁽¹⁾

2003

Product

47,400

Spot

n/a

Stena Concert⁽¹⁾

2004

Product

47,400

Spot

n/a

Stena Caribbean⁽²⁾

2002

Product

9,996

Time

July 2011

Stena Calypso⁽²⁾

2002

Product

9,996

Time

January 2013

Stena Arctica⁽³⁾

2005

Ice Aframax

117,099

Time

December 2016

Nordic Rio⁽⁴⁾

2004

Shuttle

152,000

Bareboat

July 2017

Stena Alexita⁽⁴⁾

1998

Shuttle

127,535

Time

November 2010

Stena Natalita⁽⁴⁾

2001

Shuttle

108,073

Time

February 2011

Navion Gothenburg⁽⁴⁾

2007

Shuttle

152,000

Bareboat

July 2020


(1)		Owned tankers

(2)		Tankers held pursuant to a long-term finance lease.

(3)		Our interest is through a 50/50 joint venture with Neste Oil Oyj.

(4)		Our interest in these tankers is through two 50/50 joint ventures with TeeKay.

In addition, we have entered into 8.5-year charter agreements (with an option to extend the charter for 1.5 years) with Argo Shipping International Corp. for Stena Atlantica and Stena Antarctica, two ice-class Aframax tankers that are chartered in on a long-term bareboat charter. The charter term commenced on the delivery of the vessels from the shipyard during 2006.

The table below sets forth certain information with respect to our owned and finance leased tanker sales and purchases on an annual basis for the past five years.

Tankers sales and purchases



	2005			2006			2007			2008			2009


Fleet as of January 1		5	⁽¹⁾		8	⁽¹⁾		6	⁽³⁾		8	⁽⁴⁾		12	⁽⁴⁾
Newbuildings delivered/vessels bought		4			2			3	⁽²⁾		6			0
Vessels sold		1			4	⁽²⁾		1			2			2
Fleet as of December 31		8	⁽¹⁾		6	⁽³⁾		8	⁽⁴⁾		12	⁽⁴⁾		10	⁽⁴⁾


(1)		Includes three vessels in which we have a 50% interest.

(2)		Includes one vessel in which we have a 50% interest.

(3)		Includes four vessels in which we have a 50% interest.

(4)		Includes five vessels in which we have a 50% interest.

Recent acquisitions and sales. In October 2009, we sold two 13,000 dwt Product tankers to a third party for an aggregate price of $57 million. We acquired the vessels in 2008 for an aggregate purchase price of $56 million.

In December 2009, we ordered two Suezmaxes from SHI for an estimated total aggregate investment of $140 million. The vessels are scheduled for delivery in the third and fourth quarters of 2011.

Chartering activities. As of March 31, 2010, 19 of our 21 chartered in tankers were chartered out on the spot market. The spot market refers to a segment of the shipping market where contracts are made for single voyages. Under our contracts of affreightment, we provide transportation services for crude oil and clean oil products using designated vessels for approximately twelve months over specified routes. Under a charter on the spot market or under contracts of affreightment, the person chartering out the vessel provides the crew, captain, insurance and daily maintenance, as well as bunker, harbor dues, channel fees and any other costs in connection with the voyage. As of March 31, 2010, the total number of vessels on contracts of affreightment amounted to 5. As of March 31, 2010, 2 of our chartered in tankers were on time charter contracts with remaining periods ranging from 2 months to 6.5 years.

From January 1, 2009 until March 31, 2010, spot market rates have ranged from $12,000 to $61,000 per day for Aframax tankers, $6,000 to $23,000 per day for Panamax tankers, $5,000 to $10,000 per day for Product tankers and $16,000 to $61,000 for Suezmax tankers. Spot market rates at March 31, 2010, were $17,000 for Aframax tankers, $17,000 for Panamax tankers, $7,000 for Product tankers and $20,000 for Suezmax tankers.

Pooling arrangements. In March 2005, we entered into a Suezmax pooling agreement with Sonangol Shipping (Sonangol Shipping Girassol Ltd, Sonangol Shipping Luanda Ltd, and Sonangol Shipping Kizomba Ltd) in Angola. The revenues from the pool are split between the pool members in proportion to the number of tankers each delivered to the pool. The pool has been in operation since July 2005.

In January 2008, we entered into a Panamax pooling agreement with the same partner, Sonangol Shipping. The revenues from the pool are split between the pool in proportion to the number of tankers each delivered to the pool and a tanker index.

For the five years ended December 31, 2009, our average tanker utilization rate was approximately 99%.

The table below sets forth certain information relating to the utilization of our owned and chartered in tankers for the last five years.

Tanker utilization



	Year ended December 31,
	2005		2006		2007		2008		2009


Total tanker days available⁽¹⁾		14,083		15,851		15,550		15,826		11,054
Tanker days utilized		13,853		15,520		15,389		15,537		10,907
Tanker utilization (percentage)		98.4		97.9		99.0		98.1		98.7
Offhire days planned⁽²⁾		143		228		97		229		116
Offhire days planned (percentage)		1.0		1.5		0.6		1.4		1.0
Unutilized days		87		103		64		60		31
Unutilized days (percentage)		0.6		0.6		0.4		0.4		0.3


(1)		Total tanker days are determined by aggregating the number of days in each year we owned, chartered in or leased such tankers.

(2)		Due to planned dry-dockings.

Commercial management services. We provide commercial management services for Concordia and Sessan and other third parties. Commercial management includes arranging charters, fuel, documentation and port services, revenue collection and accounting services.

Competition. International sea borne crude tanker and product tanker transportation services are provided by two main types of operators: major oil company captive fleets (both private and state owned) and independent ship owner fleets. Many of our customers also operate their own tankers and use such tankers not only to transport their own oil, but also to transport oil for third party charterers in direct competition with operators in the tanker charter market. Chartering tankers is highly competitive and is based upon price, location, vessel quality, size, condition and acceptability of the tanker and its manager to charterers.

General Maritime. In December 2008, General Maritime and Arlington Tankers, in which we owned 1,252,988 shares, merged in a stock-for-stock combination. Shareholders of General Maritime received 1.340 shares of the surviving company for each share of General Maritime, and shareholders of Arlington Tankers received one share of the surviving company for each share of Arlington Tankers. In 2009, we sold our entire stake in the new combined company General Maritime. We currently charter four vessels from General Maritime which we previously chartered from Arlington Tankers. NMM manages these vessels. The additional charter hire arrangements and the NMM management arrangements are the same as were in effect with Arlington Tankers.

Roll-on/Roll-off Vessel Operations

Roll-on/Roll-off vessels permit trucks, freight trailers, buses, cars, and, to a certain extent, containers on chassis to drive directly onto and off the ship. Our Roll-on/Roll-off vessel operations are divided into RoPax vessels, which carry trucks, freight trailers, buses and cars and provide accommodations for passengers; and RoRo vessels, which carry predominantly freight trailers only and limited number of passengers.

Over the past five years, the fleet size within our Roll-on/Roll-off operations has ranged from six to ten vessels. As of March 31, 2010, we owned five RoRo vessels and one RoPax vessel. We also had one finance leased RoPax vessel, one RoRo vessel in which we had a 50% ownership, and we also chartered in one RoPax vessel.

For the five years ended December 31, 2009, our average Roll-on/Roll-off vessel utilization rate was approximately 98%. The table below sets forth information with respect to the utilization of our Roll-on/Roll-off vessels during the last five years.

Roll-on/Roll-off Vessel Utilization



	Year ended December 31,
	2005		2006		2007		2008		2009


Total vessel days available⁽¹⁾		3,886		3,135		3,152		2,641		2,920
Vessel days utilized⁽²⁾		3,758		3,070		3,101		2,593		2,905
Vessel utilization (percentage)⁽²⁾		96.7		97.9		98.4		98.2		99.5
Offhire days⁽³⁾		109		50		41		23		13
Offhire days (percentage)		2.8		1.6		1.3		0.9		0.4
Unutilized days		19		15		10		25		2
Unutilized days (percentage)		0.5		0.5		0.3		0.9		0.1


(1)		Total vessel days are determined by aggregating the number of days in each year we owned, chartered in or leased such vessels (hence variation in fleet size affects total number of days available).

(2)		In the case of bareboat charters, the vessel is deemed to be utilized during the entire time the vessel is on charter.

(3)		Due to planned dry-dockings.

The customers for our Roll-on/Roll-off vessels consist primarily of operators in the international freight and passenger transportation business. Because we frequently purchase and sell our Roll-on/Roll-off vessels, and because our customers charter specific vessels to suit their particular needs, our customer base varies with changes in our fleet.

Chartering activities. Our strategy is to charter our Roll-on/Roll-off vessels on either long-term time charters or bareboat charters. We seek operationally experienced and financially stable customers to charter our Roll-on/Roll-off vessels. In the case of time charters, we provide the crew, technical management and insurance coverage. In the case of bareboat charters, the charterer provides the fuel, crew, insurance and daily maintenance of the vessel. Bareboat charters also provide us with the right to inspect our vessels on a periodic basis.

The tables below set forth information about existing chartering arrangements in place with respect to our Roll-on/Roll-off and RoPax vessels, as of March 31, 2010.

RoRo Vessels



		Current charter
Vessel	Type of charter	expiration date


Crowley Shipper⁽¹⁾	Time	March 2013
Mont Ventoux⁽²⁾	Time	November 2010
Stena Foreteller	Time	December 2011
Ark Forwarder	Time	February 2012
Stena Forecaster	Time	September 2012
Stena Forerunner	Time	October 2012


(1)		In March 2008, Stena Shipper was sold to a company in which Stena holds 50% of the shares and renamed Crowley Shipper.

(2)		In December 2008, we acquired the company that owned Mont Ventoux from Stena Metall.

RoPax Vessels



		Current charter
Vessel	Type of charter	expiration date


Borja⁽¹⁾	Time	April 2011
Stena Challenger⁽²⁾	Bareboat	June 2013
Seatrade (ex Stena Seatrader)	Bareboat	December 2012


(1)		Finance leased vessel. Option exercised to acquire the vessel at the end of the three year charter in June 2010.

(2)		Chartered in vessel.

Fleet management. We order new vessels to be built, purchase existing vessels, charter vessels in, charter vessels out and sell vessels. Sales of our vessels are an integral part of our business and have provided a significant portion of our shipping revenue in past years. The market for vessel sales is highly competitive and there can be no assurance that we will be able to realize gains from the sale of vessels in the future.

The table below sets forth certain information with respect to our purchases and sales of vessels within our Roll-on/Roll-off operations and the net gain from such sales for the past five years. We do not include in the table any transfers of Roll-on/Roll-off vessels from our Roll-on/Roll-off vessel operations to our ferry operations.

Vessel Sales and Purchases Roll-on/Roll-off Operations



	2005		2006		2007		2008		2009


Fleet as of January 1		8		8		7		8		9
Newbuildings delivered		—		—		—		—		—
Vessels purchased		1		—		1		1		—
Vessels sold		1		1		1		1		1
Transfer from Ferry Operations		—		—		1		1		—
Fleet as of December 31		8		7		8		9		8
Net gain on sale of vessels (SEK in millions)		191		219		100		33		148

Recent acquisitions and sales. In June 2009, we sold the HSS vessel Stena Discovery.

Competition. The Roll-on/Roll-off vessel chartering business is very competitive. Competition among companies that charter out Roll-on/Roll-off vessels depends on several factors, such as the availability of suitable vessels, charter rates, customer service and the quality of the vessels. The large number of newbuildings ordered and delivered in the industry in recent years has significantly increased competition in our Roll-on/Roll-off vessel operations and adversely impacted charter rates and the value of older, smaller and slower vessels. Some companies may decide that it is more economical to purchase rather than charter vessels, thereby decreasing demand for our chartering operations. From time to time we sell vessels to such operators. Our competitors include other ship owners and ferry line service operators who may from time to time have an unemployed vessel.

Ship management

As part of our ongoing commitment to maintaining a high quality fleet and efficient operations, we own and operate a ship management company, NMM, which provides ship management services from offices in Glasgow, St. Petersburg, Aberdeen, Gothenburg, Houston, Singapore, Manila, Hamburg and Mumbai. Ship management includes crewing, inventory control, maintenance and technical management.

As of December 31, 2009, NMM provided services for approximately 120 vessels and approximately 6,600 seafarers for us, Concordia, Chevron, Technip and several other third parties.

Technical developments and patents

Stena Teknik, our technical division, provides design, construction and other marine technology support to our shipping and offshore drilling activities. We hold several patent registrations and applications in the United States and abroad to establish and protect our proprietary rights in the shipbuilding design industry. These patent registrations and applications relate primarily to the design and construction of the HSS ferries and hull forms.

Real estate

General. We are involved in the acquisition, selling, construction, refurbishment and management of residential and commercial properties. In the financial year ended December 31, 2009, our real estate operations, including net gain on sale of properties of SEK 31 million and net valuation of investment properties of SEK (301) million, generated revenues of SEK 2.3 billion and operating income of SEK 1.1 billion. After the adoption of IFRS accounting principles as of January 1, 2008, no depreciation is charged to our real estate operations as the properties are held at market value. Substantially all our real estate operations are conducted through our unrestricted subsidiaries. As of March 31, 2010, our real estate portfolio consisted of two segments: 275 leasehold and freehold properties in Sweden; and 53 freehold and leasehold properties located in The Netherlands, Germany, Luxembourg, France, U.S. and Hungary. The occupancy rates for our residential and commercial properties, based on square meters, were for the year ended December 31, 2009, approximately 99% and 90%, respectively. The majority (88%) of our rental income comes from our properties in Sweden; the majority of our remaining rental income is from properties located in The Netherlands. Our real estate portfolio is managed from offices located in Gothenburg, Malmo, Stockholm, Uppsala, Halmstad, Amsterdam and Sophia Antipolis in France. We also manage properties owned by the Olsson family. As of December 31, 2009, our management estimates, based on external and internal valuations, that the market value of properties owned by our real estate operations was approximately SEK 24 billion, which equals the book value of these properties.

Each of our real estate subsidiaries finances its acquisitions of property with equity contributions and individual mortgages from various commercial and mortgage banks, which are non-recourse to Stena AB and the Restricted Group.

Swedish properties. Our real estate portfolio in Sweden as of March 31, 2010, consisted of 275 residential and commercial properties totaling approximately 1.9 million square meters.

As of March 31, 2010, our residential properties consisted primarily of multi-family rental properties (approximately 21,700 units) that, in terms of square meters, comprise approximately 79% of our properties in Sweden or approximately 1.5 million square meters. Our commercial properties in Sweden consist mainly of office buildings and comprise the remaining 21% of our property portfolio in Sweden or approximately 400,000 square meters. The occupancy rates for our Swedish properties, based on square meters, were 96% for each of the years ended December 31, 2008 and December 31, 2009.

Of our Swedish properties, 40 are leased pursuant to long-term ground leases from local governments. These leases typically run for a 60 year period with a right of renewal every 40 years. Rent is renegotiated after the first 20 years and every 10 years thereafter. In practice the leases are indefinite.

International. As of March 31, 2010, our properties outside Sweden consisted of 53 commercial properties, 40 of which were located in The Netherlands. The remaining properties are located in Germany, Luxembourg, France, the U.S. and Hungary. Our non-Swedish properties total approximately 242,000 square meters. The occupancy rates for our non-Swedish properties, based on square meters, as of December 31, 2008 and December 31, 2009, were 93% and 88%, respectively.

Stena Realty B.V. also invests indirectly in real estate. We hold a 20.8% stake in the Acre Fund, which is majority owned by Schiphol Airport. The Acre Fund owns approximately 192,000 square meters of office and warehouse space at the Schiphol Airport. External bank financing is in place for 29.4% of our total investment.

As of March 31, 2010, we have invested a total of €37 million in a fund, managed by ING, for development of residential complexes in China. Today the fund is developing nine large residential areas in China totaling 2.3 million square meters. Our stake in the fund amounts to 11.25%. As of March 31, 2010, approximately 32% of our investment had been repaid by the fund to its investors as a number of projects had come to maturity.

Since 2007, we have held a stake in the ING Dutch Office Fund, which owns a portfolio of prime office buildings in The Netherlands. 80% of the offices are located in the four major Dutch cities and includes the World Trade Center in Amsterdam and the head office of Nationale Nederlanden, The Netherlands’ tallest building, in Rotterdam. Our stake in the fund amounts to 4.75%. Bank financing is in place for 55% of our investment.

In 2009, we acquired two office buildings in The Netherlands (one in The Hague and one in Utrecht) and a complex of four offices in France (Sophia Antipolis) from third parties. We also bought three office buildings in Houston from Sessan and we took delivery of a newly built office building in France (Sophia Antipolis). In 2009, we invested € 54 million in non-Swedish properties.

Property management. In Sweden, we also manage property owned by the Olsson family. We receive a fee for these services equal to 4% of the rents collected with respect to such properties. Such fee aggregated to SEK 12 million and 13 million respectively for each of the years ended December 31, 2008 and December 31, 2009.

New Businesses Adactum

General. Through our unrestricted subsidiary Adactum, we make long-term investments in listed as well as private companies in new businesses outside of our traditional lines of business. 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. We contribute mainly capital and active ownership to these businesses. In the year ended December 31, 2009, Adactum generated revenues of SEK 4.8 billion and operating income of SEK 178 million, which includes depreciation and amortization expenses of SEK 219 million. As of March 31, 2010, Adactum had direct investments in six private companies, of which three are wholly owned, one is 80% owned and two are minority held stakes, and held significant ownership interests in two listed companies. Adactum’s investments are financed through equity contributions and debt that is non-recourse to Stena AB and the Restricted Group.

Investments in private companies. In April 2004, Adactum acquired Blomsterlandet AB (“Blomsterlandet”) through which we have created a chain of retailers for gardening products with one of Sweden’s most extensive range of indoor and outdoor plants. Since our acquisition, the number of garden centers in Sweden has increased from 18 to 41. Revenue of Blomsterlandet increased in the year ended December 31, 2009, to SEK 1,076 million, representing an increase of 3% compared to SEK 1,049 million for the year ended December 31, 2008.

In June 2005, Adactum acquired Envac AB (“Envac”), which operates automated household and municipal waste collection systems with activities in more than 30 countries. Envac has grown extensively over the past year, particularly in the Asian and Middle East market. The company has entered into new markets by establishing new offices in Brazil and Canada. Revenue in Envac for the year ended December 31, 2009, was SEK 1.3 billion, the same as for the year ended December 31, 2008.

In December 2005, we ordered five wind power systems (windmills) for a total investment of SEK 140 million. Through our subsidiary Stena Renewable AB (“Stena Renewable”), in January

2007, we commenced operation of Sweden’s largest land-based wind power generating plant, near Ludvika, Sweden. In November 2007, we acquired an additional twelve wind power systems (installed at the same location) for approximately SEK 340 million. Operations of these new systems commenced in the fourth quarter of 2008. Revenue in Stena Renewable for the year ended December 31, 2009, was SEK 74 million, representing an increase of 147% compared to SEK 30 million for the year ended December 31, 2008. In April 2010, Stena Renewable acquired five new wind power systems near Härnösand, Sweden for a cash price of SEK 30 million.

In June 2007, Adactum acquired a 45% interest in MediaTec Group (“MediaTec”) for a total investment of approximately SEK 340 million. MediaTec is a newly formed group comprised of three leading Swedish companies in the media technology industry and is one of Europe’s largest groups in this field. The business areas within MediaTec are Outside Broadcast, Large Display Solutions and Event & Exhibition Technology. Revenue in MediaTec decreased in the year ended December 31, 2009, to SEK 811 million, representing a decrease of 10% compared to SEK 905 million for the year ended December 31, 2008. Adactum currently holds a 42.8% stake in MediaTec.

As of December 31, 2007, Adactum held 29% of the shares in Ballingslöv International AB (publ) (“Ballingslöv”), a company listed on the Stockholm stock exchange that operates in the manufacturing of kitchens, bathrooms and storage units. By July 2008, we had acquired an additional 51% of the shares through a takeover bid for a price of SEK 1.0 billion. As a result thereof, Ballingslöv became a subsidiary of Adactum as of the third quarter of 2008 and was subsequently de-listed. The aggregate investment of SEK 1.3 billion represents 80% of the shares. Due to the challenging market situation following the global financial crisis revenue in Ballingslöv for the year ended December 31, 2009, fell to SEK 2.3 billion, representing a decrease of 18%, compared to SEK 2.8 billion for the year ended December 31, 2008.

In October 2007, Adactum acquired 10% of the shares in SentoClone AB (“SentoClone”) for a price of SEK 55 million. In November 2008, Adactum acquired an additional 9% of the shares for a price of SEK 65 million. SentoClone is a Life Science research company focusing on the development and marketing of a method for treating cancer based on the utilization of the patient’s immune system.

Investments in listed companies. Our listed holdings held through Adactum in Gunnebo AB (publ) (“Gunnebo”) (developer of security products and systems) and Midelfart Sonesson AB (publ) (“Midelfart Sonesson”) (manufacturer of health and beauty products) had a total market value of SEK 655 million as of December 31, 2009. Additional investments were made in Gunnebo of SEK 133 million and in Midelfart Sonesson of SEK 30 million during the year ended December 31, 2009, in connection with new share issues in these companies.

In September 2008, Adactum sold its 14% stake in Gunnebo Industrier AB (publ) (“Gunnebo Industrier”) (manufacturer of chain/lifting components and fastening systems), realizing a net gain of SEK 158 million.

Investment activities

We maintain an investment portfolio of marketable securities and other short-term investments. As of December 31, 2009, the fair value of these investments (including restricted cash of SEK 3.3 billion) amounted to SEK 5.9 billion, as compared to SEK 7.7 billion (including restricted cash of SEK 4.7 billion) as of December 31, 2008. Our equity investments currently include both publicly traded and private companies. The debt securities currently held by us are primarily bank floating rate notes and bonds.

We have also invested in SPEs, whose purpose is to invest primarily in high yield securities and corporate bank loans. As of December 31, 2009, total assets of these SPEs amounted to SEK 8.2 billion, which was financed in part by U.S. dollar-denominated notes issued by the SPEs in an aggregate amount of SEK 8.2 billion.

In addition to our hedging arrangements, we actively trade in currencies and to a lesser extent in interest rates. As of December 31, 2009, the notional amounts of such instruments were SEK 332 million as compared to SEK 263 million as of December 31, 2008.

The net gain on our portfolio of debt and equity securities and investment in SPEs, together with dividends received and the results from our currency and interest rate trading activities, for the years ended December 31, 2007, 2008 and 2009, amounted to a gain of SEK 1.2 billion, a loss of SEK 1.4 billion and a gain of SEK 0.3 billion, respectively. We seek to maintain an investment portfolio that is well diversified with regards to asset classes and geographical markets to balance our exposure to various risks, and have established a series of procedures and limits designed to manage the risks of these activities on a day-to-day basis. Investments are subject to various risks and currency rates are highly volatile and, as a result, there can be no assurance that our investment activities will be profitable.

Our current policies regarding our investments include limits on leverage, limits on percentage of debt securities and certain types of equity securities in our portfolio and limits on the transaction amounts by any single trader. In the case of certain of our investments, various agreements governing our indebtedness provide that if the value of our investment decreases below an established minimum level, the lender has the right to liquidate the investment.

Classification of vessels

The hull and machinery of each of our vessels have been certified as being “in class” by its respective classification society: American Bureau, DnV or Lloyds Register. A classification society certifies that a vessel has been built and maintained in accordance with the rules of the society and is in compliance with applicable rules and regulations of the country of registry and the international conventions of which that country is a member.

The aggregate appraised value of our owned and finance leased vessels and drilling rigs, as of December 31, 2009, was approximately SEK 38.4 billion as compared with the net book value as of December 31, 2009, of SEK 27.3 billion. These appraisals were performed by independent ship appraisers who received customary fees for such services. Our vessel values generally fluctuate over time and there can be no assurance that we would be able to sell our vessels for their appraised values.

Risk of loss and insurance

General. Our business is subject to a number of risks, including mechanical failure of our vessels, collisions, property loss or damage, cargo loss or damage and business interruption due to political circumstances in foreign countries, international hostilities, terrorism or labor strikes. The operation of any ocean-going vessel or drilling rig is also subject to the inherent possibility of catastrophic marine disaster, including oil spills and other environmental mishaps, and other liabilities arising from owning and chartering out vessels or drilling rigs in international trade. Environmental legislation enacted in the United States, which imposes virtually unlimited liability upon owners, operators and bareboat charterers trading in the U.S. market for certain oil pollution accidents in the United States, has made liability insurance for trading in the U.S. market more expensive and has caused insurers to consider reducing available liability coverage.

We maintain insurance coverage in amounts consistent with industry practice. Our insurance coverage is maintained with underwriters in the insurance markets mainly in Sweden, Norway, the United Kingdom and the U.S.

Hull and machinery insurance. We maintain hull and machinery insurance, which covers the risk of damage to, or total or constructive loss of a vessel as well as damage to third parties caused by direct contact with an insured vessel. This insurance also covers claims arising from

collision with other vessels and salvage, towing and other related costs. Constructive total loss occurs when the vessel is so damaged due to a casualty that the repair costs amount to at least 80% of the insured value of the vessel. We also maintain war risks insurance, which insures the risk of damage and total or constructive total loss of an insured vessel directly caused by certain warlike situations, such as military use of weapons or terrorist activities. Coverage for areas designated from time to time as war zones may be excluded or additional premiums may be required with respect to voyages in such zones. We maintain coverage for the full value of each vessel, the value of which is updated at least annually.

We maintain civil and war risk hull and machinery insurance in respect of all Roll-on/Roll-off vessels, tankers and drilling rigs owned by us and vessels bareboat chartered in or leased by us pursuant to a long-term finance lease. The bareboat charterer of a vessel is responsible for obtaining adequate hull and machinery insurance. We obtain “innocent owner insurance” to insure against the risk that the bareboat charterer’s hull and machinery insurance, war risk insurance and protection and indemnity insurance are not valid due to any act or omission of the charterer.

Loss of hire insurance. We maintain loss of hire insurance to insure against a loss of income due to damage to the hull or machinery of any Roll-on/Roll-off vessels and tankers owned by us. Some of our drilling rigs are covered by loss of hire insurance, and vessels used in our ferry operations have loss of hire insurance at the option of the applicable route director.

Protection and indemnity (P&I) insurance. We maintain P&I insurance coverage for our shipping activities, which includes coverage against legal liability and other related expenses incurred due to the injury or death of crew, passengers and other third parties, loss or damage to cargo, damage to third party property, or pollution arising from oil or other substances. Our P&I insurance coverage is arranged through four P&I mutual insurance clubs in Sweden, Norway and the United Kingdom. As a member of the club, we may be required to pay additional premiums in arrears. Our total premium is based on our own claims record, the total claims record of the members of the club and the aggregate claims record of all clubs that are members of the international association of P&I Clubs and the clubs’ costs for reinsurance.

We maintain P&I insurance in respect of all Roll-on/Roll-off vessels, tankers and drilling rigs owned, chartered in or leased pursuant to a long-term finance lease, except for vessels bareboat chartered out. The charterer of a vessel we bareboat charter-out is responsible for obtaining adequate P&I insurance. We obtain “subsidiary P&I insurance” for vessels bareboat chartered by companies not affiliated with us in order to insure the owner of a vessel bareboat chartered out against claims.

Since February 20, 1996, the maximum exposure of all P&I clubs for liabilities to third parties has been capped at an amount based on a formula specified in the International Convention on Liability for Maritime Claims of 1976. Oil pollution coverage is also limited. Coverage for damages arising from oil pollution for vessels that are owned and bareboat chartered in is limited to $1 billion per vessel per incident. Coverage for our drilling rigs/drillships for damages arising from pollution is limited to $150 million per incident, except that coverage for Stena Clyde is limited to $100 million per incident. We believe we have adequate oil pollution coverage.

Our fleet of tankers is used to transport crude oil and petroleum products. The operation of these vessels, as well as our drilling rigs, could potentially result in an oil spill for which we could be liable. The Roll-on/Roll-off vessels owned and chartered out by us do not transport crude oil or petroleum products, but do carry significant quantities of diesel oil and other heavy oil used for fuel that, if spilled, would cause pollution and liability. In addition, vessels owned and chartered out by us could be involved in a collision with a tanker causing a spill of the tanker’s cargo for which we could be liable. See “Regulation.”

Claims experience. We have experienced some immaterial property losses over the past five years. These losses were all covered by insurance and none of these incidents resulted in a material loss or liability for us.

Adequacy of insurance. We believe that our current insurance coverage provides adequate protection against the accident-related risks involved in the conduct of our business and that we maintain appropriate levels of environmental damage and pollution insurance coverage, consistent with industry practice. However, there can be no assurance that all risks are adequately insured against, that any particular claim will be paid or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. Consistent with industry practice, our insurance policies are subject to deductibles that we believe are commercially reasonable.

Significant Subsidiaries

The following table sets forth significant subsidiaries owned, directly or indirectly as of December 31, 2009:



Name of Company	Domicile	Percentage Owned


Stena Fastigheter AB	Sweden	100%
Stena Line Scandinavia AB	Sweden	100%
Stena Adactum AB	Sweden	100%
Stena Bulk AB	Sweden	100%
Stena Rederi AB	Sweden	100%
Stena International S.ár.l.	Luxembourg	100%
Stena Holland BV	The Netherlands	100%
Stena Realty BV	The Netherlands	100%
Stena Line Holding BV	The Netherlands	100%
Stena (Switzerland) AG	Switzerland	100%
Stena Maritime AG	Switzerland	100%
Stena DrillMax I (Hungary) Kft	Hungary	100%
Stena DrillMax II Ltd Lux Branch	Luxembourg	100%
Stena Carron Cyprus Ltd	Cyprus	100%
Stena Cyprus Holding Ltd	Cyprus	100%
Stena Carron (Hungary) Kft	Hungary	100%

Regulation

General

The shipping industry in general, and our business and the operation of our vessels and drilling rigs in particular, are subject to and affected by a variety of governmental regulations, including numerous international conventions, national, state and local laws and national and international regulations in force in the jurisdictions in which such vessels and drilling rigs are registered and operate. Because such conventions, laws and regulations are often revised, we cannot predict the ultimate cost of complying with such revised conventions, laws and regulations or the impact on the resale price or useful life of our vessels and drilling rigs. We are required by various governmental and regulatory agencies to obtain certain permits, licenses and certificates with respect to our operations. Subject to the discussion below and to the fact that the kinds of permits, licenses and certificates required for the operation of the vessels and drilling rigs owned or operated by us will depend upon a number of factors, we believe that we have been and will be able to obtain all permits, licenses and certificates material to the conduct of our operations. We also foresee that the increased environmental and quality concerns of insurance underwriters, regulatory bodies and charterers will result in greater inspection and safety requirements on all vessels.

Environmental

We are subject to the laws of various jurisdictions and international conventions regarding the discharge of materials into the environment. The most onerous of such regulations are OPA ’90, CERCLA and MTSA.

OPA ’90. OPA ’90 establishes an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA ’90 affects all owners and operators whose vessels trade in the United States or its territories or possessions or whose vessels operate in United States waters, which include the United States territorial area and the two hundred nautical mile exclusive economic zone of the United States.

Under OPA ’90, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all oil spill containment and clean-up costs and other damages arising from oil spills pertaining to their vessels. The 2006 amendments to OPA ’90, as implemented by regulations effective July 31, 2009, limit the liability of responsible parties as follows:


	•	Single-hull vessels (including a single-hull vessel fitted with double sides only or a double bottom only)


	ο	a vessel of 3,000 gross tons or smaller: the greater amount of $3,200 per gross ton or $6,408,000; and

	ο	a vessel greater than 3,000 gross tons: the greater amount of $3,200 per gross ton or $23,496,000.


	•	Other vessels than single-hull vessels


	ο	a vessel of 3,000 gross tons or smaller: the greater amount of $2,000 per gross ton or $4,272,000; and

	ο	a vessel greater than 3,000 gross tons: the greater amount of $2,000 per gross ton or $17,080,000.


	•	Any other vessel


	ο	the greater amount of $1,000 per gross ton or $854,400.

These limits of liability do not apply if the incident was proximately caused by a violation of applicable United States Federal safety, construction or operating regulations or by the responsible party’s gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the oil removal activities.

In order to ensure that the responsible parties will meet the minimum liability amount imposed by OPA ’90, responsible parties must establish evidence of financial responsibility to pay. Certificates of financial responsibility have been obtained for all our owned or bareboat chartered vessels that trade in U.S. waters. We believe that if the need arises, certificates of financial responsibility for our other vessels could be obtained promptly. Guarantees from Shoreline Mutual (Bermuda) Limited and Arvak Ltd. are the primary vehicles through which we have satisfied the requirements under OPA ’90.

Owners, bareboat charterers or operators of tankers operating in United States waters are required to file vessel response plans with the Coast Guard, and their tankers are required to be operated in compliance with their Coast Guard approved plans. Such response plans must, among other things, (i) address a “worst case” scenario and identify and provide, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”, (ii) describe crew training and drills and (iii) identify a

qualified individual with full authority to implement removal actions. We have filed vessel response plans with the Coast Guard for the tankers owned or bareboat chartered by us that trade in United States waters and have received approval for all of such tankers to operate in United States waters.

Under OPA ’90, with certain limited exceptions, all newly built or converted tankers operating in United States waters must be built with double-hulls, and existing vessels which do not comply with the double-hull requirement must be phased out over a 25-year period (1990-2015), based on size, age and place of discharge, unless retrofitted with double-hulls. Notwithstanding the phase-out period, OPA ’90 currently permits existing single-hull tankers to operate until the year 2015 if their operations within United States waters are limited to discharging at the Louisiana Off-Shore Oil Platform, or off-loading by means of lightering activities within authorized lightering zones more than 60 miles offshore. All our newbuildings are double-hulls and compliant with OPA ’90.

OPA ’90 expressly provides that individual states are entitled to enforce their own pollution liability laws, even if inconsistent with or imposing greater liability than OPA ’90. There is no uniform liability scheme among the states. Some states have OPA ’90-like schemes for limiting liability to various amounts and some rely on common law fault-based remedies, while others impose strict and unlimited liability on an owner or operator. Some states have also established their own requirements for financial responsibility.

CERCLA. CERCLA applies to discharges of hazardous substances (other than oil), whether on land or at sea. CERCLA applies to owners and operators of vessels and provides for cleanup, removal and natural resource damages. CERCLA’s liability regime is similar to that of OPA ’90. We believe that we are in substantial compliance with OPA, CERCLA and all other applicable state and federal regulations applying to the waters of the United States and the ports where our vessels call.

National Pollutant Discharge Elimination System (“NPDES”). Commercial vessels operating in U.S. waters need to have an NPDES Vessel General Permit VGP for discharges to the water. The discharges eligible for coverage under the permit are routine discharges to the normal operation of a vessel. Examples of routine discharges to normal operation include deck runoff from routine deck cleaning & rain water, gray water discharges, bilge water from properly functioning oily water separators, and ballast water. Our vessels calling to U.S. ports have NPDES VGP permits.

MTSA. MTSA is intended to protect U.S. ports and waterways from a terrorist attack. It mandates that certain foreign-flagged vessels, such as liquefied natural gas (“LNG”) and oil tankers, entering U.S. waterways meet specific security requirements and comply with the International Ship and Port Security code. We believe that we are in substantial compliance with MTSA when entering U.S. waterways.

The International Maritime Organization (“IMO”). The IMO, an agency of the United Nations, is responsible for measures to improve international shipping and to prevent pollution from ships. The IMO has developed international treaties and conventions to regulate the international shipping industry which now apply to over 98% of the world’s shipping. The most important of these are mentioned below.

Convention on Civil Liability (“CLC”). Many countries other than the United States have ratified and follow the liability scheme adopted by the IMO and set out in CLC. Under CLC, a tanker’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by a discharge of persistent oil, such as crude oil, fuel oil, heavy diesel oil and lubricating oil, subject to certain complete defenses, including pollution damage resulting from an act of war, caused by a third party, or caused by the negligence or wrongful act of a government responsible for the maintenance of lights or other navigational aids. CLC liability is

currently limited to between approximately $950 and $990 per gross ton plus $7.0 million for the first 5,000 gross tons, an amount that is subject to periodic adjustment. The right to limited liability is forfeited only where pollution damage is caused by the owner’s personal act or omission committed with intent to cause such damage or recklessly and with knowledge that the damage would result. Tankers trading in the territorial waters of contracting states must provide evidence of insurance covering the maximum amount for which the owner is strictly liable. In jurisdictions where CLC has not been adopted, various legislative schemes or common law govern and liability is imposed on the basis of fault or in a manner similar to CLC.

MARPOL 73/78. Annex 1 of MARPOL 73/78 deals with the prevention of pollution from oil. MARPOL 73/78 provides stringent construction and operating standards to prevent the release of oil into the environment. Under the requirements of MARPOL 73/78, all new oil tankers built since 1996 are required to have double hulls. MARPOL 73/78 was modified following the Erika and Prestige incidents on the West Coast of Europe in 1999 and 2002, respectively. In 2002, new amendments came in to force to Annex 1 of MARPOL 73/78 that set a global timetable for the accelerated phase out of single hull tankers. These new regulations identify two categories of single hull tankers which are principally distinguished on the basis of whether they have protectively located segregated ballast tanks. Vessels fall into these categories if they are over 20,000 dwt carrying heavy oil and over 30,000 dwt carrying other oils. Category 3 tankers are tankers above 5,000 dwt but below the tonnage of category 1 and category 2 tankers. These older single hull tankers must undergo a Condition Assessment Scheme (“CAS”) survey which applies to category 1 vessels continuing to trade up to 2005 and to category 2 vessels trading after 2010. However, these amendments have been over taken by the 2003 MARPOL amendments which came into force on April 5, 2005. These amendments accelerate the final phasing out of category 1 tankers to 2005 and category 2 and 3 tankers to 2010, although depending on the age of the ship, these dates can be earlier.

All our owned and finance leased tankers are double hulled vessels and all our tankers are fully compliant with MARPOL 73/78 Annex 1 Rules. This Convention has further annexes including Annex 2 Control of Pollution by Noxious Liquid Substances, Annex 4 Prevention of Pollution by Sewage and Annex 6, Prevention of Air Pollution from Ships. All our vessels are fully compliant with all requirements of the MARPOL 73/78 and its amendments.

Annex VI of MARPOL entered into force on May 19, 2005 and subsequent amendments that will enter into force on July 1, 2010. This annex sets limits on sulphur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances. The sulphur content of fuel oil is today limited to 4.5% m/m globally with a decided global reduction to 3.5% by 2012 and a global reduction to 0.5% by 2020 or, subject a review in 2018, possibly deferred to 2025. Annex VI also contains provisions allowing for special SOx Emission Control Areas (SECAs) to be established with more stringent controls on sulphur emissions. In these areas, the sulphur content of fuel oil used onboard ships must not exceed 1.5% m/m until June 30, 2010; thereafter the sulphur content of the fuel must not exceed 1.0% until 2014. From 2015, the level is further lowered to 0.1% within SECAs. Through 2009, the English Channel, the North Sea and the Baltic are the only SECAs in the world. However, U.S. and Canada are establishing an Emission Control Area along their coastlines, with planned adoption to IMO in March 2010. The additional cost of fuel to comply with the 0.1% regulation (2015) will be significant and for shipping operators in competition with land based transport alternatives, the regulation is feared to be negative in terms of transported freight volumes. Annex VI also sets limits on emissions of nitrogen oxides (NOx) from diesel engines and prohibits deliberate emissions of ozone depleting substances, which include halons and chlorofluorocarbons (CFCs). Annex VI also prohibits the incineration onboard ship of certain products, such as contaminated packaging materials and polychlorinated biphenyls (PCBs). Our fleet is in compliance with these new requirements.

EU Directive 2005/33/EC amends the Directive 1999/32/EC as regards the sulphur content of marine fuels and entered into force on July 6, 2005. The IMO regulations on sulphur content in marine fuels under MARPOL Annex VI have, to some extent, made Directive 2005/33/EC redundant, with some notable exceptions as to the requirement on sulphur content when at berth in a EU port. The EU Directive is therefore expected to be revised during 2009/2010.

International Convention for the Control and Management of Ships’ Ballast Water and Sediments (IMO 2004), includes technical standards and requirements which should be implemented in accordance to a time schedule. All new and existing ships will have to install ballast water treatment systems before 2016.

ICLL. ICLL, which entered into force on July 21, 1968, establishes principles and rules concerning the limits to which ships may be loaded for international voyages. The provisions take into account the potential for hazards in different maritime regions and seasonal operating conditions, and designate how, where and when assigned load lines are to be marked on each ship. Generally, the ICLL applies to all ships that are greater than 24 meters (79 feet) in length (for ships built since 1966) or greater than 150 tons gross, unless otherwise exempted by the terms of ICLL. Currently each of our ferries, freight vessels, and petroleum tankers, to which the ICLL is applicable, are operating under an International Load Line Certificate demonstrating that the vessel has been surveyed and marked in accordance with ICLL within the past five years.

SOLAS. SOLAS ’74 establishes basic safety standards for the construction and operation of merchant ships engaged on international voyages (including our Roll-on/Roll-off vessels and tankers). SOLAS ’74 has been ratified by more than 90 countries. SOLAS ’74 provides safety standards for construction, machinery and electrical installations, life-saving appliances, radiotelegraphy and radiotelephony, navigation and the carriage of dangerous goods. SOLAS ’74 puts the primary responsibility for compliance on the flag state, but there are provisions which recognize certain rights and obligations of countries where the ships call.

SOLAS ’90 was adopted in 1990 to set new stability criteria for passenger carrying vessels. RoPax and car/passenger ferry vessels constructed after April 29, 1990 must be built to meet these and other requirements. RoPax and car/passenger ferry vessels that were constructed prior to April 29, 1990 were permitted to be retrofitted to comply with these SOLAS ’90 regulations in stages. In accordance with the SOLAS convention held in November 1995, all such vessels must be in full compliance with SOLAS ’90.

At the SOLAS ’95 convention, several amendments to SOLAS and IMO resolutions were adopted concerning RoRo passenger vessel stability, arrangements of bow doors, operations, communications, life-saving and search and rescue. In particular, Resolution No. 14, also known as the Stockholm Agreement, allows for regional agreements to establish specific stability requirements for RoPax and car/passenger ferry vessels. These regulations also require vessels to fulfill the SOLAS ’90 damage stability standard, which had applied to all RoRo passenger ships built since 1990 and was extended to existing ships in accordance with an agreed phase-in program. All our RoPax and car/passenger ferry vessels are currently in full compliance with SOLAS ’90 as well as the Stockholm Agreement.

Amendments to SOLAS ’74 establish greater fire safety standards for existing RoPax and multi-purpose ferry vessels and newbuildings. Our owned vessels are in full compliance with these fire and safety regulations.

Further amendments adopted to SOLAS ’74 in 2000 and 2002 stipulate, among other things, the fitting of an Automatic Identification System (AIS) and a Voyage Data Recorder (VDR) for ships engaged on international voyages. Additional security provisions adopted under SOLAS in December 2002 include mandatory compliance with the new International Ship and Port Facility Security Code (ISPS Code). Our operations are fully compliant with these requirements.

In May 1994, the International Code of Safety for High Speed Craft was added to SOLAS’ 74, and entered into force under tacit acceptance as Chapter X of the SOLAS convention held on January 1, 1996. These regulations mandate a variety of safety measures including requirements pertaining to structural stability and fire prevention. The rapid pace of development in this sector of shipping led to additional revisions of the Code of Safety for High Speed Craft in 2000, which entered into force on July 1, 2002. High Speed Craft to which these regulations apply are required to obtain a safety certificate and a permit to operate. Our HSS ferries have been designed to be in compliance with these regulations and we have obtained applicable permits and certifications during operation of these vessels.

SOLAS was further amended in May 2006 (effective January 1, 2008) with respect to Long Range Identification and Tracking (“LRIT”). SOLAS regulation on LRIT establishes a multilateral agreement for sharing LRIT information, including the ship’s identity, location and date and time of the position, for security and search and rescue purposes. The amendment contains a phased-in implementation schedule for ships constructed before the entry into force of the amendment. Our ships are in compliance with the LRIT implementation schedule.

Our drilling units are designed and constructed to meet all applicable rules and regulations for operation worldwide. Five of them are designed to operate in the harsh environments of the North Sea British sector and the North Sea Norwegian sector.

Finally, all our ships and our management companies comply with Chapter IX of the SOLAS convention entitled Management for the Safe Operation of Ships. This made the International Safety Management Code (ISM Code) mandatory and establishes safety management objectives which are to:


	•	provide for safe practices in ship operation in a safe working environment;

	•	establish safeguards against all identified risks; and

	•	continuously improve safety management skills of personnel, including preparing for emergencies.

The code requires a Safety Management System (SMS) to be established by the shipowner or manager who has responsibility for operating the ship and which establishes a policy for achieving the objectives. This includes providing the necessary resources and shore based support and a designated person ashore having direct access to the highest level of management. The code is documented and compiled in a safety management manual which is kept onboard the ship. Our vessels and management companies are all compliant with this code and are audited regularly to ensure that this remains the case.

Athens Convention. The Athens Convention has governed the liability of carriers for damage suffered by passengers carried on a seagoing vessel. The Athens Convention makes the carrier strictly liable for damage or loss suffered by a passenger if the incident causing the damage occurred during the carriage and was due to the fault or neglect of the carrier. However, the carrier may limit its liability unless the carrier acted with intent to cause such damage or recklessly and with knowledge that such damage would probably result.

The Athens Convention and the limits have been substantially altered and increased by the 2002 Protocol to the Athens Convention. The carrier is now strictly liable for the death or personal injury to a passenger with limited defenses if the carrier can prove that the incident resulted from an act of war, hostilities, civil war, insurrection or a natural phenomena of an exceptional, inevitable and irresistible character or thoroughly caused by an act of omission done with intent to cause the incident by a third party. However, if the incident occurred as a result of the fault or neglect of the carrier then the limit is increased from approximately $395,000 per passenger on each distinct occasion to approximately $632,000 per passenger (exact amounts are determined by the applicable daily conversion rate of USD to Special

Drawing Rights (SDRs), the unit of account used for liability under the Athens Convention), provided that if the carrier is responsible for an act or omission with intent to cause damage or recklessly and with knowledge that damage would result, then the right to the limit is lost. A scheme of compulsory insurance has been introduced by the Athens Convention to ensure that the carrier can meet these potential liabilities.

HNS Convention. The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances 1996 (“HNS”) is likely to come into force in the medium term. The liability aspects of HNS are based on the CLC by establishing a regime of strict liability and the registered shipowner’s right to limit liability. However, the HNS goes further than the CLC in that it covers not only pollution damage, but also the risks of fire and explosion including loss of life or personal injury as well as loss or damage to property. HNS substances include oil, liquefied gases and other dangerous, hazardous or harmful materials. The present limits of liability are between U.S. $500 and U.S. $2,000 per gross ton though it is likely that these limits will increase once HNS is ratified and comes into force.


Item 4A.	Unresolved Staff Comments

Not applicable.


Item 5.	Operating and Financial Review and Prospects

General

The following discussion and analysis should be read in conjunction with the “Selected Financial Data” section of Item 3 and our Consolidated Financial Statements and the Notes thereto. Our Consolidated Financial Statements as of December 31, 2008 and 2009, and for each of the years in the three-year period ended December 31, 2009, have been prepared in accordance with IFRS as issued by the IASB.

We generate revenue primarily from our ferry operations, chartering out our drilling rigs, tankers, and Roll-on/Roll-off vessels and managing tankers, selling vessels and from real estate rentals. The period from June through September is the peak travel season for passengers in our ferry operations. Chartering activities are not significantly affected by seasonal fluctuations, but variations over the year may occur, among other things, as a consequence of vessel utilization rates, dry-docking and charter rates. Any sale or acquisition of vessels, drilling rigs or real estate also may have an impact on our results in each period.

Significant events

Ferry operations

In March and June 2007, Stena Britannica and Stena Hollandica returned to service after having been lengthened. The investments related thereto amounted to SEK 344 million and SEK 544 million, respectively.

In June 2007, the newly built RoPax vessel, Stena Traveller, was delivered by the Norwegian shipyard, Fosen, and put into service on Stena Line’s route Hoek van Holland-Killingholme.

In August 2007, two RoPax vessels were ordered from the Samsung Heavy Industries Co., Ltd (“SHI”) shipyard in Korea. The estimated aggregate investment is approximately € 220 million with expected delivery in the first and third quarters of 2011.

In August 2007, Stena Carrier was sold to Stena Metall with a gain of SEK 116 million. The vessel was chartered back for a period of ten years.

In November 2007, Stena Searider was sold to an Italian shipping company with a gain of SEK 30 million.

In January 2008, we acquired 100% of the shares in Sembo, a Swedish package holiday company, for SEK 61 million.

In January 2008, we acquired the day ferry Stena Aurora, operating on the Helsinborg-Helsingör route.

In October 2008, we acquired the Swedish ferry operator HH Ferries from Sessan for SEK 61 million.

In December 2008, we acquired the RoRo vessels Stena Carrier and Stena Freighter as well as the RoPax vessel, Stena Nordica, from Stena Metall.

In June 2009, we sold the RoRo vessel Stena Transporter, which was taken out of operation on the Rotterdam-Harwich route as of March 1, 2009.

In September 2009, we acquired the vessel Seafrance Manet, subsequently renamed Stena Navigator. This vessel was put into operation on the Stranraer-Belfast route in November 2009.

In December 2009, we exercised our option to acquire the RoPax vessel Skåne, operating on our Trelleborg-Rostock route.

Offshore Drilling

In December 2007, Stena DrillMAX, the first ultra-deepwater DrillMAX drillship, was delivered by SHI and commenced a four-year charter to Repsol.

In May 2008, we ordered a fourth “ice-classed” ultra-deepwater DrillMAX vessel, to be named Stena DrillMAX ICE, from SHI. The total investment is approximately $1.2 billion with delivery scheduled for in the first quarter of 2012.

In August 2008, Stena Carron, the second DrillMAX drillship, was delivered by SHI and commenced a five-year charter to Chevron.

In August 2009, Stena Forth, the third DrillMAX drillship, was delivered by SHI and commenced a five-year charter to Hess.

Shipping

Crude oil and petroleum product transportation

In June 2007, we purchased two new-built 16,500 dwt Product tankers for an aggregate purchase price of $37.5 million. These vessels were delivered by Taizhou Maple Leaf Shipyard in Zhejiang, China, during the third quarter of 2007 and sold in November 2007 and January 2008, respectively, to a third party for $20 million each.

In 2007, we invested SEK 32 million in the shuttle tanker segment by acquiring a 50% share of Navion Gothenburg, a new-built Suezmax tanker converted into a shuttle tanker. The remaining 50% is owned by Teekay Corporation (“Teekay”). The vessel was delivered in July 2007 and was chartered out to Petrobras for a period of thirteen years.

In October 2007, we signed an agreement to acquire three medium range tankers, Stena Italica (subsequently renamed Stena Concert), Stena Conqueror and Stena Conquest that we already chartered from the seller. The aggregate purchase price for all three vessels was $151 million and the vessels were delivered in the first quarter of 2008.

In May 2008, we acquired an Aframax tanker, Stena Confidence. The vessel was sold in July 2008, realizing a net gain of SEK 167 million.

In September 2008, we acquired two 13,000 dwt product tankers for an aggregate purchase price of $56 million. In October 2009, the vessels were sold to a third party for an aggregate price of $57 million.

In October 2008, we acquired a 35% stake in the privately held Greek shipping company Paradise Tankers Holding Corp for $52 million. The acquisition provides us with full commercial control of three newly built Panamax tankers and two dry-cargo bulk carriers.

In December 2009, we ordered two Suezmaxes from SHI for an estimated aggregate investment of $140 million. The vessels are scheduled for delivery in the third and fourth quarters of 2011.

Roll-on/Roll-off Vessel Operations

In May 2007, we took delivery of the vessel Stena Ausonia, subsequently renamed Borja, from the Visentini shipyard in Italy on a three year charter. We have exercised an option to acquire this vessel at the end of the three year charter in May 2010 for € 45 million.

In August 2007, the vessel Mont Ventoux was sold to Stena Metall and chartered back for a period of ten years.

In March 2008, we sold the RoRo vessel Stena Shipper (subsequently renamed Crowley Shipper) for $11.5 million to a company in which we hold a 50% interest.

In December 2008, we acquired the vessel Mont Ventoux from Stena Metall.

In December 2008, Stena Seatrader (renamed Seatrade) was chartered to the Greek company Ventouris Ferries on a hire purchase basis.

In June 2009, we sold the HSS vessel Stena Discovery.

Real Estate

In July 2007, we invested € 100 million in a 7.07% share in the ING Dutch Office Fund, which owns a portfolio of prime office buildings in the Netherlands.

In 2007, we acquired properties for approximately SEK 455 million, mainly in Stockholm and Gothenburg. During the same period, properties were sold for SEK 343 million, with a net gain of SEK 97 million.

In 2008, we acquired properties for approximately SEK 1.1 billion. During the same period, properties were sold for SEK 851 million, with a net gain of SEK 169 million.

In 2008, we acquired a property in Hungary, which is a new country for our property investments.

In 2009, we acquired three office buildings in Houston from Sessan for SEK 179 million.

In 2009, we acquired properties for approximately SEK 425 million. During the same period properties were sold for approximately SEK 214 million with a net gain of SEK 31 million.

New Businesses Adactum

In June 2007, we acquired a 45% share in the MediaTec for SEK 340 million. MediaTec is a group consisting of three leading Swedish companies in the media technology sector and is one of Europe’s largest groups in this business.

In October 2007, we acquired a 10% share in SentoClone for SEK 55 million. In November 2008, we acquired an additional 9% of the shares for SEK 65 million. SentoClone is a life research company that focuses on developing and marketing a method for treating cancer based on the use of a patient’s own immune systems.

In November 2007, we ordered 12 windmills through our subsidiary Stena Renewable for approximately SEK 340 million. The windmills commenced operation in the fourth quarter of 2008.

In May 2008, we launched a bid for the outstanding shares in the affiliated company Ballingslöv. As a result, we increased our interest in Ballingslöv to 80.2% as of July 2008. Ballingslöv has been accounted for as a subsidiary from the third quarter of 2008.

In September 2008, we sold our stake in Gunnebo Industrier , realizing a net gain of SEK 158 million.

In 2008, we wrote down the shares in the associated company Gunnebo by SEK 140 million due to the decreased market value of the shares.

In October 2009, Gunnebo announced a guaranteed rights issue of approximately SEK 500 million which was completed in December 2009. We invested approximately SEK 130 million.

In October 2009, Midelfart Sonesson announced a new share issue of SEK 127 million which was completed in December 2009. We invested approximately SEK 30 million.

Financial activities

In February 2007, we completed an offering of €300 million of our Senior Notes due 2017. We used a portion of the proceeds of the offering to repurchase approximately $177 million of our Senior Notes due 2012 and the remaining proceeds were used for general corporate purposes.

In February 2007, we completed an offering of €102 million of our Senior Notes due 2019. The proceeds were used for general corporate purposes.

In September 2007, our unrestricted subsidiary Stena Royal entered into a new $350 million secured revolving credit facility with Svenska Handelsbanken AB (publ) and Nordea Bank Sweden AB (publ). The facility matures on September 28, 2012. The medium and long-term investment portfolios of Stena Royal are pledged as security for the facility. The facility includes a cross-default provision ($30 million threshold) with respect to debt of Stena AB, Stena Royal or any present or future subsidiary of Stena AB.

In 2007, we repurchased $4.2 million of our Senior Notes due 2013 and $78 million of our Senior Notes due 2016. The notes carry an interest rate of 7.5% and 7%, respectively. After these repurchases, we had outstanding $170.8 million of our Senior Notes due 2013 and $172 million of our Senior Notes due 2016.

In the first quarter of 2008, we repurchased $18 million of our Senior Notes due 2013 and $43 million of our Senior Notes due 2016. As of December 31, 2009, we had outstanding $153 million of our Senior Notes due 2013 and $129 million of our Senior Notes due 2016.

In early 2008, the financial leases for Stena DrillMAX and the RoPax vessels Stena Trader and Stena Traveller were terminated.

In December 2008, General Maritime Corporation (“General Maritime”) and Arlington Tankers Ltd. (“Arlington Tankers”), in which Stena owned 1,252,988 shares, merged in a stock-for-stock combination. Shareholders of General Maritime received 1.340 shares of the surviving company for each share of General Maritime held, and shareholders of Arlington Tankers received one share of the surviving company for each share of Arlington Tankers held.

In December 2009, we completed the sale of our entire stake in General Maritime, which resulted in an aggregate loss of SEK 149 million.

In 2008, we acquired 11,191,939 shares (representing 3.7% of the voting rights) in Meda AB (publ.) (“Meda”) for SEK 392 million. Stena Sessan AB had an option to acquire these shares at a minimum price of SEK 38.50 per share.

In 2008, we invested in the Weavering Capital Macro Fixed Income fund. On March 11, 2009, the British hedge fund company Weavering Capital UK decided to close its Macro Fixed Income fund due to liquidity problems. The auditing firm PricewaterhouseCoopers has been appointed as liquidators. We do not expect to be able to recoup this investment. Accordingly, our entire investment of $10 million was written down in March 2009.

In May 2009, we sold our shares in Meda for SEK 598 million. Sessan’s option to acquire the shares was settled for a cash payment of SEK 165 million to Sessan.

In August 2009, the financial lease for Stena Forth was terminated.

Results of Operations


	Year ended December 31,
	2007			2008			2009
	(SEK in millions)

CONSOLIDATED GROUP
Income Statement Data:
Total revenues		22,402			26,472			27,812
Direct operating expenses		(14,085	)		(16,679	)		(17,188	)
Selling and administrative expenses		(2,177	)		(2,920	)		(3,207	)
Depreciation and amortization		(1,680	)		(2,501	)		(3,415	)

Income from operations		4,460			4,372			4,002
BUSINESS SEGMENT DATA
Revenues:
Ferry operations		9,868			10,309			9,599
Drilling operations		3,842			6,087			8,112
Shipping Roll-on/Roll-off vessels		412			426			473
Crude Oil tankers		3,264			3,547			2,401
Other Shipping		154			198			214

Total Shipping		3,830			4,171			3,088
Property operations		1,989			2,085			2,335
New Businesses operations		2,118			3,694			4,797
Other		8			48			3

Total revenues		21,655			26,394			27,934
Other income:
Net gain on sale of assets		350			372			179
Net valuation on investment properties		397			(294	)		(301	)

Total other income		747			78			(122	)

Total income		22,402			26,472			27,812
Income (Loss) from Operations:
Ferry operations		1,267			781			445
Impairment charges		—			(63	)		—
Net gain (loss) on sale of vessels		146			—			—

Total Ferry operations		1,413			718			445
Drilling operations		1,389			2,388			3,250
Net gain on sale of vessels		—			—			—

Total Drilling operations		1,389			2,388			3,250
Shipping: Roll-on/Roll-off vessels		86			104			102
Net gain on sale of vessels		100			33			148

Total Roll-on/Roll-off vessels		186			137			250
Crude oil tankers		109			135			(736	)
Impairment charges		—			(85	)		(150	)
Net gain on sale of vessels		7			170			—

Total crude oil tankers		116			220			(886	)
Other shipping		(13	)		16			7

Total Shipping		289			373			(629	)


	Year ended December 31,
	2007			2008			2009
	(SEK in millions)

Property operations		1,041			1,163			1,338
Net valuations on investment properties		397			(294	)		(301	)
Net gain on sale of properties		97			169			31

Total Property		1,535			1,038			1,068
New Businesses operations		108			107			178
Other		(274	)		(252	)		(310	)

Total		4,460			4,372			4,002
Depreciation & Amortization:
Ferry operations		1,007			1,064			1,119
Drilling		493			1,016			1,665
Shipping: Roll-on/Roll-off vessels		105			107			141
Crude oil tankers		18			167			247
Other shipping		14			13			12

Total Shipping		137			287			400
Property		—			—			2
New Businesses operations		39			125			219
Other		4			9			10

Total		1,680			2,501			3,415

Comparison of the year ended December 31, 2009 to the year ended December 31, 2008

Currency effects

In the year ended December 31, 2009, approximately 29% of our total expenses were incurred in U.S. dollars and approximately 30% were incurred in SEK. The reported gross revenues and expenses were influenced by changes in the currency rates. The exchange rates as used for consolidation purposes are as follows:



	January-December		January-December
Average rates:	2008		2009		Change


U.S. $		6.5808		7.6457		16	%
British pound		12.0912		11.9260		(1	)%
Euro		9.6055		10.6213		11	%



	As of December 31,		As of December 31,
Closing rates:	2008		2009		Change


U.S. $		7.8212		7.1553		(9	)%
British pound		11.4303		11.5704		1	%
Euro		10.9500		10.2506		(6	)%

Revenues

Total revenues increased SEK 1,540 million, or 6%, in the year ended December 31, 2009, to SEK 27,934 million from SEK 26,394 million in the year ended December 31, 2008, as a result of increased revenues in the drilling, Roll-on/Roll-off vessels, property and new businesses,

Adactum operations, together with the strengthening of the U.S. dollar and the euro against the SEK, partly offset by reduced revenues from the ferry and tanker operations.

Ferry operations. Ferry revenues are primarily generated from ticket sales, freight haulage and on board sales. Revenues from ferry operations decreased SEK 710 million, or 7%, in the year ended December 31, 2009, to SEK 9,599 million from SEK 10,309 million in the year ended December 31, 2008, mainly due to reduced revenues from the freight business due to lower volumes of freight units, partially offset by increased revenues from the travel business and onboard sales due to higher volumes of cars and passengers, together with the strengthening of the euro against the SEK.

Drilling. Drilling revenues consist of charter hires for our drilling units. Revenues from drilling operations increased SEK 2,025 million, or 33%, in the year ended December 31, 2009, to SEK 8,112 million from SEK 6,087 million in the year ended December 31, 2008, mainly due to operations of the second and third DrillMAX vessels, Stena Carron and Stena Forth, delivered in August 2008 and August 2009, respectively, a new contract at higher day rates for Stena Clyde and a planned off hire period for Stena Spey due to the five-year special periodic survey the first quarter 2008, together with the strengthening of the U.S. dollar against the SEK, partly offset by a planned off hire period for Stena Tay due to the five-year special periodic survey in the third and fourth quarter of 2009, together with the re-delivery of the bareboat chartered drilling unit Songa Dee to its owners Songa Offshore AS in March 2009. The change in day rates reflects new charter contracts and the market conditions in effect at the time a charter is made in the particular geographic area.

Shipping. Shipping revenues primarily represent charter hires for our owned and chartered in vessels and management fees for vessels we manage. Revenues from shipping operations decreased SEK 1,083 million, or 26%, in the year ended December 31, 2009, to SEK 3,088 million from SEK 4,171 million in the year ended December 31, 2008.

Revenues from crude oil tankers decreased SEK 1,146 million, or 32%, in the year ended December 31, 2009, to SEK 2,401 million from SEK 3,547 million in the year ended December 31, 2008, mainly due to lower charter rates in the spot market and a smaller fleet, offset in part by the strengthening of the U.S. dollar against the SEK. In the year ended December 31, 2009, we operated an average of 32 tankers (chartered in or owned), compared to an average of 40 tankers in the year ended December 31, 2008.

Revenues from chartering out Roll-on/Roll-off vessels increased SEK 47 million, or 11%, in the year ended December 31, 2009, to SEK 473 million from SEK 426 million in the year ended December 31, 2008, mainly due to the strengthening of the Euro against the SEK, partly offset by the sale of the RoRo vessel Stena Shipper in the first quarter of 2008.

Revenues from Other Shipping increased SEK 16 million, or 8%, in the year ended December 31, 2009, to SEK 214 million from SEK 198 million in the year ended December 31, 2008, mainly due to the strengthening of the U.S. Dollar against the GBP, partly offset by a one-time SEK 19 million payment received in 2008 in connection with a settlement of a patent dispute.

Property. Property revenues consist of rents for properties owned and management fees for properties we manage. Revenues from property operations increased SEK 250 million, or 12%, in the year ended December 31, 2009, to SEK 2,335 million from SEK 2,085 million in the year ended December 31, 2008, mainly due to increased rents, higher occupancy rates and an increased number of properties and, to a lesser extent, the strengthening of the euro against the SEK.

New Businesses Adactum. Adactum revenues consist of revenues from Adactum’s subsidiaries. Revenues from Adactum increased SEK 1,103 million, or 30%, in the year ended December 31, 2009, to SEK 4,797 from SEK 3,694 million in the year ended December 31, 2008,

mainly due to the consolidation of Ballingslöv as of July 2008, together with increased business activities in Blomsterlandet and Stena Renewable, partly offset by reduced revenues from Envac. Of the total revenues in the year ended December 31, 2009, SEK 2,317 million related to Ballingslöv, SEK 1,076 million related to Blomsterlandet, SEK 1,328 million related to Envac and SEK 74 million related to Stena Renewable, as compared to SEK 1,285 million related to Ballingslöv, SEK 1,049 million related to Blomsterlandet, SEK 1,330 million related to Envac and SEK 30 million related to Stena Renewable in the year ended December 31, 2008.

Other income

Net valuation on investment property. As a result of revaluation to fair value according to IAS 40 “Investment properties”, we had net losses of SEK (301) million for the year ended December 31, 2009, as compared to net losses of SEK (294) million for the year ended December 31, 2008, mainly due to a general decrease in investment property market values.

Net Gain on Sale of Assets

Net Gain on Sale of Vessels, Shipping. In the year ended December 31, 2009, gains of SEK 148 million were recorded on the sales of the HSS vessel Stena Discovery and the RoPax vessel Stena Transporter. In the year ended December 31, 2008, gains of SEK 203 million were recorded on the sale of a product tanker, sale of the product tanker Stena Confidence and the sale of the RoRo vessel Stena Shipper.

Net Gain on Sale of Properties. In the year ended December 31, 2009, gains of SEK 31 million were recorded on the sale of properties. In the year ended December 31, 2008, gains of SEK 169 million were recorded on the sale of properties.

Direct operating expenses

Total direct operating expenses increased SEK 509 million, or 3%, in the year ended December 31, 2009, to SEK 17,188 million from SEK 16,679 million in the year ended December 31, 2008, mainly as a result of increased operating expenses in the Drilling, Property and New Businesses Adactum operations, together with the strengthening of the U.S. dollar and the Euro against the SEK.

Ferry operations. Direct operating expenses for ferry operations consist principally of personnel costs, costs of goods sold on the vessels, bunker fuel costs, vessel charter costs, commissions, package tour costs and other related costs. A significant portion of these costs are of a fixed nature and do not vary as a result of changes in our seasonal requirements. Direct operating expenses for ferry operations decreased SEK 450 million, or 6%, in the year ended December 31, 2009, to SEK 7,033 million from SEK 7,483 million in the year ended December 31, 2008, mainly due to lower costs for products together with decreased expenses for bunker fuel and our cost saving projects, partly offset by the strengthening of the Euro against the SEK. Direct operating expenses for ferry operations for the year ended December 31, 2009 were 73% of revenues, the same as for the year ended December 31, 2008.

Drilling. Direct operating expenses for drilling consist primarily of personnel costs, fuel costs, insurance, maintenance and catering costs. Direct operating expenses for drilling operations increased SEK 464 million, or 21%, in the year ended December 31, 2009, to SEK 2,722 million from SEK 2,258 million in the year ended December 31, 2008. The increase is mainly due to costs related to the operation of the second and third DrillMAX vessels Stena Carron and Stena Forth, together with increased personnel expenses and costs for maintenance and repair, and the strengthening of the U.S. dollar against the SEK, partly offset by the re-delivery of the bareboat chartered drilling unit Songa Dee to its owner Songa Offshore AS in March 2009 and a planned off hire period for Stena Tay, together with positive operational exchange differences due to the strengthened U.S. dollar. Direct operating expenses from

drilling operations for the year ended December 31, 2009, were 34% of drilling revenues, as compared to 37% for the year ended December 31, 2008.

Shipping. Direct operating expenses for shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs. Direct operating expenses for shipping operations decreased SEK 205 million, or 6%, in the year ended December 31, 2009, to SEK 3,124 million from SEK 3,329 million in the year ended December 31, 2008.

Direct operating expenses associated with crude oil tankers decreased SEK 247 million, or 8%, in the year ended December 31, 2009, to SEK 2,880 million from SEK 3,127 million in the year ended December 31, 2008, mainly due to lower business activity and a reduced fleet, offset in part by the strengthening of the U.S. dollar against the SEK. Direct operating expenses for crude oil operations for the year ended December 31, 2009, were 120% of revenues, as compared to 88% for the year ended December 31, 2008. Direct operating expenses for crude oil tankers include time-charter costs, which normally are fixed for periods between 6 months and up to 5 years in advance, while revenues in the spot market vary with each voyage.

Direct operating expenses with respect to Roll-on/Roll-off vessels increased by SEK 8 million, or 4%, in the year ended December 31, 2009, to SEK 190 million from SEK 182 million in the year ended December 31, 2008, mainly due to the strengthening of the Euro against the SEK, offset by the purchase of the RoRo vessel Mount Ventoux, which earlier was chartered in from Stena Metall, together with the sale of the RoRo vessel Stena Shipper in the first quarter of 2008. Direct operating expenses for Roll-on/Roll-off vessels for the year ended December 31, 2009, were 40% of revenues, as compared to 43% for the year ended December 31, 2008.

Direct operating expenses with respect to Other Shipping increased SEK 34 million in the year ended December 31, 2009, to SEK 54 million from SEK 20 million in the year ended December 31, 2008, mainly due to the strengthening of the U.S. Dollar against the GBP, together with increased wage expense due to a larger workforce and other business in Northern Marine Management.

Property. Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses for property operations increased SEK 65 million, or 9%, in the year ended December 31, 2009, to SEK 804 million from SEK 739 million in the year ended December 31, 2008, mainly due to higher costs for maintenance and an increased number of properties. Direct operating expenses from property operations for the year ended December 31, 2009, were 34% of property revenues, as compared to 35% for the year ended December 31, 2008.

New Businesses Adactum. Direct operating expenses for Adactum consist of expenses from Adactum’s subsidiaries. Direct operating expenses for Adactum operations increased SEK 618 million, or 22%, in the year ended December 31, 2009, to SEK 3,476 million from SEK 2,858 million in year ended December 31, 2008, mainly due to the consolidation of Ballingslöv as of July 2008. Of the total operating expenses in the year ended December 31, 2009, SEK 1,517 million related to Ballingslöv, SEK 972 million related to Blomsterlandet, SEK 979 million related to Envac and SEK 11 million related to Stena Renewable, as compared to SEK 904 million related to Ballingslöv, SEK 977 million related to Blomsterlandet, SEK 975 million related to Envac and SEK 2 million related to Stena Renewable in the year ended December 31, 2008. Direct operating expenses for Adactum operations for the year ended December 31, 2009, were 72% of revenues, as compared to 77% for the year ended December 31, 2008.

Selling and administrative expenses

Selling and administrative expenses increased SEK 287 million, or 10%, in the year ended December 31, 2009, to SEK 3,207 million from SEK 2,920 million in the year ended December 31, 2008, mainly due to the consolidation of Ballingslöv as of July 10, 2008, together with the

strengthening of the U.S. dollar and the euro against the SEK, partly offset by reduced personnel costs. Excluding Ballingslöv, selling and administrative expenses were unchanged in the year ended December 31, 2009 as compared to the year ended December 31, 2008. Total selling and administrative expenses in the year ended December 31, 2009 were 12% of total revenues as compared to 11% in the year ended December 31, 2008.

Depreciation and amortization

Depreciation and amortization charges increased SEK 914 million, or 37%, in the year ended December 31, 2009, to SEK 3,415 million from SEK 2,501 million in the year ended December 31, 2008, mainly as a result of depreciation charges for the second and third DrillMAX vessels Stena Carron and Stena Forth, the consolidation of Ballingslöv as of July 10, 2008, and to a lesser extent, depreciation charges related to other vessels and the start up of a new wind power park. The strengthening of the U.S. dollar with respect to the SEK, which impacted depreciation charges primarily on drilling units that are denominated in U.S. dollars, contributed to the increase in the depreciation and amortization charges. Depreciation and amortization charges in the year ended December 31, 2009 also included impairment charges of SEK 150 million related to three medium range crude oil tankers. Depreciation and amortization charges in the year ended December 31, 2008 also included impairment charges of SEK 85 million related to three medium range crude oil tankers and SEK 63 million related to one RoPax vessel.

Financial income and expense, net

Financial income and expense, net increased by SEK 1,336 million in the year ended December 31, 2009, to SEK (1,658) million from SEK (2,994) million in the year ended December 31, 2008.

Share of affiliated companies’ results in the year ended December 31, 2009 refers to our portion of the results of Midelfart Sonesson, Gunnebo and MediaTec. As of December 31, 2009, our interest in the capital of Midelfart Sonesson was 23.0%, our interest in the capital of Gunnebo was 25.7% and our interest in the capital of MediaTec was 42.7%. Share of affiliated companies’ results in the year ended December 31, 2008 refers to our portion of the results of Midelfart Sonesson, Gunnebo, MediaTec and Ballingslöv until it was accounted for as a subsidiary as of the third quarter of 2008. As of December 31, 2008, our interest in the capital of Midelfart Sonesson was 22.9%, our interest in the capital of Gunnebo was 25.3% and our interest in the capital of MediaTec was 42.7%.

Net gain (loss) on securities in the year ended December 31, 2009 was SEK (81) million, of which SEK (701) million related to net realized losses on marketable securities and equity securities and investments in SPEs, SEK 510 million related to net unrealized gains on marketable securities and SEK 110 million related to the termination of the financial lease of Stena Carron. Net gain (loss) on securities in the year ended December 31, 2008 was SEK (1,785) million, of which SEK (815) million related to net realized losses, SEK (1,995) million related to net unrealized losses and SEK 1,025 million related to the termination of the financial leases for Stena DrillMAX and the RoPax vessels Stena Trader and Stena Traveller.

Interest income decreased by SEK 272 million in the year ended December 31, 2009, to SEK 685 million from SEK 957 million in the year ended December 31, 2008. Interest income related to the investments in SPEs decreased by SEK 190 million to SEK 477 million from SEK 667 million partly due to lower investments in interest bearing assets.

Interest expense decreased SEK 396 million to SEK (1,864) million in the year ended December 31, 2009, from SEK (2,260) million for the year ended December 31, 2008. Interest expense for the investments in SPEs decreased SEK 151 million to SEK (214) million from SEK (365) million. Higher interest expenses for investments related to the delivery of the second and

third DrillMAX drillships Stena Carron and Stena Forth were offset by a decline in interest expenses from valuation of interest rate swaps of SEK 192 million (compared to a decline of SEK 78 million for the year ended December 31, 2008) and the weakening of the U.S. dollar against the SEK for the year ended December 31, 2009.

During the year ended December 31, 2009, we had foreign exchange losses, net of SEK (282) million. During the year ended December 31, 2008, we had foreign exchange gains, net of SEK 582 million.

Other financial income (expense) of SEK (201) million for the year ended December 31, 2009 includes SEK (67) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and a loss of SEK (163) million related to bunker hedges. Other financial income (expense) of SEK (693) million for the year ended December 31, 2008 included SEK (84) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and SEK (524) million related to the bunker hedges.

Income taxes

Income taxes for the year ended December 31, 2009 were SEK 20 million, consisting of current taxes of SEK (210) million and deferred taxes of SEK 230 million. Income taxes for the year ended December 31, 2008, were SEK 367 million (tax benefit), consisting of current taxes of SEK (253) million and deferred taxes of SEK 620 million. The provision for taxes is based upon the applicable tax rates in the various jurisdictions where revenues are generated.

Comparison of the year ended December 31, 2008 to the year ended December 31, 2007

Currency effects

Our revenues and expenses, reported in Swedish kronor, are significantly affected by fluctuations in currency exchange rates, primarily relative to the U.S. dollar, the British pound and the euro. We seek to mitigate the impact of potential adverse foreign currency exchange fluctuations by matching, to the extent possible, revenue and expenses in the same currency. In addition, we enter into certain derivative financial instruments. Approximately 32% of our total revenues are generated in U.S. dollars and approximately 23% are generated in SEK. Approximately 31% of our total expenses are incurred in U.S. dollars and approximately 30% are incurred in SEK. Although we seek to hedge the net effects of fluctuations, the reported gross revenues and expenses are influenced by changes in currency exchange rates. The exchange rates as used for consolidation purposes are as follows:



	January-December		January-December
Average rates	2007		2008		Change


U.S. $		6.7607		6.5808		(3	)%
British pounds		13.5281		12.0912		(11	)%
Euro		9.2481		9.6055		4	%



Closing rates	December 31, 2007		December 31, 2008		Change


U.S. $		6.4342		7.8212		22	%
British pounds		12.8146		11.4303		(11	)%
Euro		9.4508		10.9500		16	%

Revenues

Total revenues from operations increased SEK 4,739 million, or 22%, in the year ended December 31, 2008, to SEK 26,394 million from SEK 21,655 million in the year ended December 31, 2007, as a result of increased operating revenues in all business segments, partly offset by the weakening of the British pound against the SEK.

Ferry operations. Ferry revenues are primarily generated from ticket sales, freight haulage and on board spending. Revenues from ferry operations increased SEK 441 million, or 4%, in the year ended December 31, 2008, to SEK 10,309 million from SEK 9,868 million in the year ended December 31, 2007, mainly due to higher revenues from the freight and travel business due to higher ticket and freight prices, partly offset by the weakening of the British pound against the SEK, together with decreased revenues from onboard sales due to lower volumes of passengers.

Offshore Drilling. Drilling revenues consist of charter hires for our drilling rigs. Revenues from drilling operations increased SEK 2,245 million, or 58%, in the year ended December 31, 2008, to SEK 6,087 million from SEK 3,842 million in the year ended December 31, 2007, mainly due to the commencement of operations for the first and second DrillMAX vessels delivered, Stena DrillMAX and Stena Carron, together with a new contract at higher day rates for the Stena Spey, partly offset by an offhire period for the Stena Spey in the first quarter 2008. The change in day rates reflects new charter contracts and the market conditions in effect at the time a charter is made in the particular geographic area.

Shipping. Shipping revenues primarily represent charter hires for our owned and chartered in vessels and management fees for vessels managed by the Company. Revenues from shipping operations increased SEK 341 million, or 9%, in the year ended December 31, 2008, to SEK 4,171 million from SEK 3,830 million in the year ended December 31, 2007.

Revenues from crude oil tankers increased SEK 283 million, or 9%, in the year ended December 31, 2008, to SEK 3,547 million from SEK 3,264 million in the year ended December 31, 2007, mainly due to higher charter rates in the spot market, partly offset by the weakening of the U.S. dollar with respect to the SEK. In the year ended December 31, 2008, we operated an average of 40 tankers (chartered in or owned), compared to 41 tankers (chartered in or owned) in the year ended December 31, 2007.

Revenues from chartering out Roll-on/Roll-off vessels increased SEK 14 million, or 3%, in the year ended December 31, 2008, to SEK 426 million from SEK 412 million in the year ended December 31, 2007, mainly due to the delivery of the new built RoPax vessel Borja in May 2007, partly offset by the sale of the RoRo vessel Stena Shipper in the first quarter of 2008.

Property. Property revenues consist of rents for properties owned and management fees for properties managed by the Company. Revenues from property operations increased SEK 96 million, or 5%, in the year ended December 31, 2008, to SEK 2,085 million from SEK 1,989 million in the year ended December 31, 2007, mainly related to changes in the portfolio of properties and higher rents.

New Businesses Adactum. Adactum revenues consist of revenues from Adactum’s subsidiaries. Revenues from Adactum increased SEK 1,576 million, or 74%, in the year ended December 31, 2008, to SEK 3,694 million from SEK 2,118 million, in the year ended December 31, 2007, mainly due to the consolidation of Ballingslöv as of July 2008, together with increased business activity in all other subsidiaries. Of the total revenues in the year ended December 31, 2008, SEK 1,285 million were related to Ballingslöv, SEK 1,049 million to Blomsterlandet, SEK 1,330 million to Envac and SEK 30 million to Stena Renewable as compared to SEK 961 million related to Blomsterlandet, SEK 1,137 million related to Envac and SEK 17 million related to Stena Renewable in the year ended December 31, 2007.

Other income

Net valuation on investment property. As a result of revaluation to fair value according to IAS 40 “Investment properties”, we had net losses of SEK 294 million in the year ended December 31, 2008, as compared to SEK net gains of SEK 397 million for year ended December 31, 2007, mainly due to increased maintenance and sales and purchases of new properties and a general decrease in investment property market values.

Net gain/loss on sale of assets

Net Gain on Sale of Vessels, Ferry Operations. In the year ended December 31, 2008, no vessel sales were made. In the year ended December 31, 2007, gains of SEK 146 million were recorded on the sale of the vessels Stena Carrier and Stena Searider.

Net Gain on Sale of Vessels, Shipping. In the year ended December 31, 2008, gains of SEK 203 million were recorded on the sale of a product tanker, the sale of Stena Confidence and the sale of the RoRo vessel Stena Shipper. In the year ended December 31, 2007, gains of SEK 107 million were recorded on the sale of the RoRo vessel Mont Ventoux and on the sale of one of two newbuilt product tankers, delivered from a shipbuilder in China.

Net Gain on Sale of Properties. In the year ended December 31, 2008, gains of SEK 169 million were recorded on the sale of properties. In the year ended December 31, 2007, gains of SEK 97 million were recorded on the sale of properties.

Direct operating expenses

Total direct operating expenses increased SEK 2,594 million, or 18%, in the year ended December 31, 2008, to SEK 16,679 million from SEK 14,085 million in the year ended December 31, 2007, mainly as a result of increased operating expenses in all operations except for shipping operations and the property business.

Ferry operations. Direct operating expenses for ferry operations consist principally of personnel costs, costs of goods sold on the vessels, fuel costs, vessel charter costs, commissions, package tour costs and other related costs. A significant portion of these costs are of a fixed nature and do not vary as a result of changes in our seasonal requirements. Direct operating expenses for ferry operations increased SEK 860 million, or 13%, in the year ended December 31, 2008, to SEK 7,483 million from SEK 6,623 million in the year ended December 31, 2007, mainly due to increased expenses for bunker, personnel and port operations. Direct operating expenses for ferry operations for the year ended December 31, 2008, was 73% of revenues, as compared to 67% for the year ended December 31, 2007.

Offshore Drilling. Direct operating expenses for drilling consist primarily of personnel costs, fuel costs, insurance, maintenance and catering costs. Direct operating expenses from drilling operations increased SEK 529 million, or 31%, in the year ended December 31, 2008, to SEK 2,258 million from SEK 1,729 million in the year ended December 31, 2007. The increase is mainly due to costs related to the operation of the first two DrillMAX vessels Stena DrillMAX and Stena Carron, together with increased personnel expenses and costs for maintenance and repair for the rigs. Direct operating expenses from drilling operations for the year ended December 31, 2008, were 37% of drilling revenues as compared to 45% for the year ended December 31, 2007.

Shipping. Direct operating expenses for shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs. Direct operating expenses from shipping operations increased SEK 155 million, or 5%, in the year ended December 31, 2008, to SEK 3,329 million from SEK 3,174 million in the year ended December 31, 2007.

Direct operating expenses associated with crude oil tankers increased SEK 147 million, or 5%, in the year ended December 31, 2008, to SEK 3,127 million from SEK 2,980 million in the year ended December 31, 2007, mainly due to increased expenses resulting from higher market rates for chartered in vessels and bunker fuel costs. Direct operating expenses for crude oil operations for the year ended December 31, 2008, were 88% of revenues, as compared to 91% for the year ended December 31, 2007. Direct operating expenses for crude oil tankers include time-charter costs, which are fixed for periods between 6 months and up to 10 years in advance, while revenues in the spot market vary with each voyage.

Direct operating expenses with respect to Roll-on/Roll-off vessels decreased SEK 5 million, or 3%, in the year ended December 31, 2008, to SEK 182 million from SEK 187 million in the year ended December 31, 2007, mainly due to the sale of the RoRo vessel Stena Shipper in the first quarter of 2008, offset by the delivery of the newbuilt RoPax vessel BORJA in May 2007 and charter hire costs for the RoRo vessel Mont Ventoux, which was sold and chartered back in August 2007. Direct operating expenses for Roll-on/Roll-off vessels for the year ended December 31, 2008, were 43% of revenues as compared to 45% for the year ended December 31, 2007.

Property. Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses from property operations decreased SEK 45 million or 6% in the year ended December 31, 2008, to SEK 739 million from SEK 784 million in the year ended December 31, 2007, mainly related to increased planned maintenance, activated to the balance sheet according to IFRS standards, which results in reduced operating expenses, partly offset by increased extra single maintenance costs during 2008 of SEK 50 million. Total direct operating expenses from property operations in the year ended December 31, 2008, were 35% of property revenues, as compared to 39% for the year ended December 31, 2007.

New Businesses Adactum. Direct operating expenses for Adactum consist of expenses from Adactum’s subsidiaries. Direct operating expenses from Adactum operations increased SEK 1,102 million, or 63%, in the year ended December 31, 2008, to SEK 2,858 million from SEK 1,756 million in the year ended December 31, 2007, mainly due to the consolidation of Ballingslöv as of July 2008, together with increased business activity in all subsidiaries. Of the total operating expenses in the year ended December 31, 2008, SEK 904 million were related to Ballingslöv, SEK 977 million to Blomsterlandet, SEK 975 million to Envac and SEK 2 million to Stena Renewable as compared to SEK 874 million related to Blomsterlandet, SEK 872 million to Envac and SEK 1 million to Stena Renewable in the year ended December 31, 2007. Direct operating expenses for Adactum operations for the year ended December 31, 2008, were 77% of revenues, as compared to 83% for the year ended December 31, 2007.

Selling and administrative expenses

Selling and administrative expenses increased SEK 742 million, or 34%, in the year ended December 31, 2008, to SEK 2,920 million from SEK 2,178 million in the year ended December 31, 2007, mainly due to the consolidation of Ballingslöv as of July 10, 2008, together with increased personnel and consultancy costs and higher costs for advertising. Excluding Ballingslöv, selling and administrative expenses increased 19% in the year ended December 31, 2008. Total selling and administrative expenses in the year ended December 31, 2008, were 11% of total revenues, as compared to 10% for the year ended December 31, 2007.

Depreciation and amortization

Depreciation and amortization charges increased SEK 821 million, or 49%, in the year ended December 31, 2008, to SEK 2,501 million from SEK 1,680 million in the year ended December 31, 2007, mainly due to depreciation charges for the two first delivered DrillMAX vessels Stena DrillMAX and Stena Carron, together with other new vessels delivered and the

consolidation of Ballingslöv as of July 10, 2008. The weakening of the U.S. dollar against the SEK, which primarily impacted depreciation charges on drilling rigs, which are denominated in U.S. dollars, partly offset the increase in depreciation and amortization charges.

Financial income and expense, net

Financial income and expense, net decreased by SEK 2,995 million in the year ended December 31, 2008, to SEK (2,994) million from SEK 1 million in the year ended December 31, 2007.

Share of associated companies’ results in the year ended December 31, 2008, refers to our portion of the results of Midelfart Sonesson, Gunnebo, MediaTec and Ballingslöv until it was accounted for as a subsidiary as of the third quarter of 2008. Share of associated companies’ results in the year ended December 31, 2007, refers to our portion of the results of Midelfart Sonesson, Ballingslöv, Gunnebo and MediaTec. As of December 31, 2008, our ownership of Midelfart Sonesson was 22.9%. As of December 31, 2007, our ownership of Midelfart Sonesson was 22.4% and the ownership in Ballingslöv was 28.6%. In the year ended December 31, 2008, Adactum increased its ownership in the listed company Gunnebo to 25.3%. In the year ended December 31, 2007, Adactum ownership in Gunnebo was 24.9%. In June 2007, Adactum acquired a 45% interest in MediaTec for a total investment of SEK 338 million. In the year ended December 31, 2008, its ownership decreased to 42.8%.

Net gain (loss) on securities in the year ended December 31, 2008, was SEK (1,785) million, of which SEK (815) million related to realized losses on marketable debt and equity securities, SEK (1,995) million related to unrealized gains and losses and SEK 1,025 million related to the termination of the financial leases for Stena DrillMAX and the RoPax vessels Stena Trader and Stena Traveller. Net gain (loss) on securities in the year ended December 31, 2007, was SEK 950 million, of which SEK 656 million related to realized gains on marketable debt and equity securities and SEK 294 million related to unrealized gains and losses.

Interest income in the year ended December 31, 2008, increased SEK 38 million to SEK 957 million from SEK 919 million in the year ended December 31, 2007.

Interest expense for the year ended December 31, 2008, increased SEK 521 million to SEK (2,260) million from SEK (1,739) million for the year ended December 31, 2007. This includes interest expense for the debt in SPEs, which decreased SEK (51) million to SEK (365) million from SEK (416) million, partly as a result of the investment in the SPEs. Other interest expense increased SEK 572 million to SEK (1,895) million from SEK (1,323) million, due to increased financing of investments.

During the year ended December 31, 2008, foreign exchange gains (losses), net amounted to SEK 582 million, of which gains of SEK 340 million were derived from currency trading and gains of SEK 242 million from translation differences. In the year ended December 31, 2007, foreign exchange gains (losses), net amounted to SEK (49) million, of which gains of SEK 34 million were derived from currency trading and losses of SEK (83) million from translation differences.

Other financial income (expense) of SEK (693) million for the year ended December 31, 2008, includes expenses of SEK (84) million related to amortization of the deferred financing charges for our Senior Notes, the $1 billion revolving credit facility, bank loans, capital lease obligations and investments in SPEs and SEK (524) million related to bunker hedges. Other financial income (expense) of SEK (230) million for the year ended December 31, 2007, includes expenses of SEK (97) million for the repurchase of the Senior Notes due 2012 and SEK (59) million related to amortization of the deferred financing charges for our Senior Notes, the $1 billion revolving credit facility, bank loans, capital lease obligations and investments in SPEs.

Income taxes

Income taxes for the year ended December 31, 2008, were SEK 367 million (tax benefit), consisting of current taxes of SEK (253) million and deferred taxes of SEK 620 million. The effective tax rate in 2008 was approximately (27)%. Income taxes for the year ended December 31, 2007, were SEK (632) million (tax expense), consisting of current taxes of SEK (151) million and deferred taxes of SEK (481) million. The effective tax rate in 2007 was approximately 14%. The provision for taxes is based upon the applicable tax rates in the various jurisdictions where revenues are generated.

Liquidity and capital resources

Our liquidity requirements principally relate to servicing of debt, financing the purchase of vessels and other assets and funding of working capital. In prior years, we met our liquidity requirements with cash on hand, cash flows from operations, borrowings under various credit facilities and other financing and refinancing arrangements.

As of December 31, 2009, we had total cash and marketable securities of SEK 7,088 million as compared with SEK 9,174 million as of December 31, 2008.

For the year ended December 31, 2009, cash flows provided by operating activities amounted to SEK 7,084 million as compared to SEK 5,381 million in the year ended December 31, 2008. For the year ended December 31, 2009, cash flows used in investing activities amounted to SEK (6,456) million, including SEK (9,169) million related to capital expenditures. For the year ended December 31, 2008, cash flows used in investing activities amounted to SEK (7,397) million, including SEK (9,642) million related to capital expenditures. For the year ended December 31, 2009, cash flows used in financing activities amounted to SEK (907) million. For the year ended December 31, 2008, cash flows provided by financing activities amounted to SEK 2,714 million.

Total interest bearing debt as of December 31, 2009, was SEK 41,898 million, excluding debt in SPEs, as compared with SEK 45,490 million as of December 31, 2008. Interest bearing debt in SPEs as of December 31, 2009, was SEK 8,249 million as compared with SEK 9,492 million as of December 31, 2008. As of December 31, 2009, $168 million was utilized under the $1 billion revolving credit facility, of which $24 million was used for issuing bank guarantees and letters of credit. As of December 31, 2008, a total of $676 million was utilized under this facility, of which $18 million was used for the issuing of bank guarantees and letters of credit. There were no amounts outstanding under the $350 million revolving credit facility entered into by Stena Royal S.à r.l. (“Stena Royal”), a subsidiary in the unrestricted group, as of December 31, 2009 as compared with $90 million outstanding as of December 31, 2008. In June 2009, Adactum entered into a revolving credit facility of SEK 450 million. As of December 31, 2009 the utilized portion of this facility was SEK 200 million.

We believe that, based on current levels of operating performance and anticipated market conditions, cash flow from operations, together with other available sources of funds, including refinancings, will be adequate to make required payments of principal and interest on outstanding debt, to permit proposed capital expenditures, including newbuildings, other vessel acquisitions, and our commitment with respect to the Loch Ryan facility, and to fund anticipated working capital requirements.

Construction in Progress

Total construction in progress, which includes a DrillMAX drillship and other vessels on order as of December 31, 2009, was SEK 5,649 million as compared to SEK 7,555 million as of December 31, 2008. The remaining capital expenditure commitment for newbuildings on order as of December 31, 2009, was SEK 8,714 million, of which SEK 4,245 million is due during 2010

and SEK 4,469 million is due during 2011. Financing for approximately 75% of this unpaid balance has already been arranged. We plan to finance the remainder of this unpaid balance, together with additional expenses and financing costs, through cash from operations, existing revolving credit facilities, new capital lease agreements, new bank loans or other financing arrangements.

Long-Term Financial Obligations and Other Contractual Obligations

Our long-term financial obligations as of December 31, 2009, were as follows:



	Payments due by period

			Less than						More than		Not
	Total		one year		1-2 years		3-5 years		5 years		specified

	(SEK million)

Property loans		13,741		298		1,031		889		11,523
Other bank loans		17,813		939		3,424		2,109		11,341
Revolving credit facility		1,033										1,033
Other credit facilities		439		304								135
Senior Notes		6,147						1,100		5,047
Capital leases		2,043		135		181		204		1,523
Other interest bearing debt		682		682
Operating leases		7,037		1,751		1,541		1,036		2,709
Trade accounts payable		1,311		1,311
Total		50,246		5,420		6,177		5,338		32,143		1,168

Off Balance Sheet Arrangements

One of our subsidiaries and TeeKay have each guaranteed the performance of the obligations of one of the Stena/TeeKay joint ventures under a charter agreement with Esso Norway. Our liability under this guarantee is limited to 50% of any claim caused by the non-performance of the joint venture. We and TeeKay have also guaranteed the repayment by the other Stena/TeeKay joint ventures of loans from a group of banks. Our liability under these loans is limited to 50% of the amount outstanding under the loan agreements, including interest, charges, expenses and damages. As of December 31, 2009, the outstanding total loan amounts were $101 million.

Trend information

Charter rates for RoRo and RoPax vessels and freight volumes and rates in Northern Europe increased in the period between 2001 and July 2008. In particular, freight volumes increased by an average of approximately 5% per year during the period. Demand, driven by increases in global and regional trade, increased charter rates and freight volumes and rates on these vessels. Freight volumes in Northern Europe have in the past increased by approximately two times GDP growth in this area and a general economic downturn or slowdown could lead to decreased freight volumes and rates for our ferry operations and lower charter rates for our chartered out RoRo and RoPax vessels. As of the third quarter of 2008, freight volumes and rates and charter rates began to fall as a result of the global recession. All of our RoRo and RoPax vessels are on fixed charter contracts with expirations ranging from November 2010 (for one vessel) to 2013. In 2009, approximately 58% of the revenues of our ferry line business were generated by non-freight business. Going forward, the RoRo and ferry line freight businesses are exposed to the current economic climate and competition for customers’ products. There can be no assurance that freight volume and rates and charter rates will not decrease from current levels or that we will be able to charter our RoRo and RoPax vessels when our current charter contracts expire.

Charter rates for tankers increased in the period between February 2008 and August 2008 which marked the end of a “super cycle” for the tanker market. Demand, driven by increases in global trade and demand for crude oil, significantly increased charter rates. In October 2008, charter rates began to fall as a result of increased capacity and reduced demand for crude oil. By the end of 2008, rates stabilized at a lower level which generally continued during 2009. The decline in charter rates was also affected by the expected over-capacity of available tankers. Going forward, the tanker industry is exposed to the projected decrease in worldwide oil consumption, possible further decreases in OPEC production and deliveries of additional newbuildings. Our tankers subject to long term charters are not expected to be affected by the current events in the tanker market until the current charters expire. Tankers trading in the spot market are subject to changes in the demand for vessels and changes in market rates.

Charter rates for drilling rigs increased in the period between 2005 and 2008, primarily driven by increased offshore exploration and development activities as a consequence of increased demand for oil and depletion of existing offshore fields. In particular, charter rates for newer, larger rigs that are equipped to operate in deep water have increased over the last few years. In 2009, new charter rates were slightly affected by lower crude prices, reduced exploration as a result of lower exploration budgets on the part of oil companies and reduced forecasted demand for oil. All of our seven drilling units are on time charter with expirations ranging from November 2010 to 2014. Our DrillMAX newbuilding on order is not currently contracted. The unit is scheduled to be delivered during the first quarter of 2012. The demand for drilling units has been volatile and demand for drilling units and charter rates historically have fluctuated significantly with long-term sustained oil price changes. There can be no assurance that we will be able to obtain charters for our newbuilding not currently subject to charter at rates equal to our current day rates. We also cannot assure you that we will be able to charter our drilling units when our current charter contracts expire.

Application of Critical Accounting Policies

Our financial reporting up to 2007 was prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP). Effective from January 1, 2008, Stena prepares the financial reports in accordance with IFRS and IFRIC, as issued by IASB.

The change of accounting standards also includes a change of one comparative year meaning that opening balance in accordance with IFRS is January 1, 2007.

The preparation of our consolidated financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets, liabilities and provisions at the date of the financial statements and the reported amounts of sales and expenses during the periods presented. The accounting principles applied by us that are deemed to be critical are discussed below.

Vessels lives. Our vessels represent our most significant assets, together with our investment properties, and we state them at cost less accumulated depreciation. Depreciation of vessels, which includes depreciation of vessels under capital leases, is computed using the straight-line method over estimated service lives of 10 to 25 years. Significant vessel improvement costs are capitalized as additions to the vessel rather than being expensed as a repair and maintenance activity. Should certain factors or circumstances cause us to revise our estimate of vessel service lives, depreciation expense could be materially lower or higher. If circumstances cause us to change our assumptions in making determinations as to whether vessel improvements should be capitalized, the amounts we expense each year as repairs and maintenance costs could increase, partially offset by a decrease in depreciation expense.

Investment properties. Our investment properties, that is properties held in order to generate rental income or increase in value or a combination of these, are valued continuously at fair value (estimated market value). These properties are initially valued at acquisition cost.

Fair value is based on the estimated market value on balance sheet date, which means the value at which a property could be transferred between well-informed parties that are independent of each other and that have an interest in the transaction being carried out. Changes in fair value are reported in the income statement, with an impact on changes in value of properties.

Impairment of Goodwill. Goodwill is comprised of the amount by which the acquisition cost exceeds the fair value of the Group’s portion of the acquired subsidiary’s identifiable net assets at acquisition date. Goodwill is tested annually for impairment and is recognised at acquisition cost less accumulated impairment losses. Goodwill is allocated to cash generating units during impairment testing. This allocation refers to those cash generating units, determined in accordance with the Group’s operating segments, which are expected to benefit by the business combination in which the goodwill item arose.

Impairment of non-financial assets. We review long lived assets used in our business and investments in affiliated companies on an annual basis for impairment, or whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. An impaired asset is written down to its estimated fair value if the decline is deemed to be permanent. We estimate fair value based on independent appraisals, sales price negotiations, active markets, if available, and projected future cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value using these methods is subject to numerous uncertainties, which require our significant judgment when making assumptions of revenues, operating costs, selling and administrative expenses, interest rates and general economic business conditions, among other factors.

Derivative instruments and hedging measures. We apply hedge accounting to reduce the risks associated with the volatility of the reported result which would, otherwise, arise as a consequence of the valuation of the derivative at fair value, while the hedged item, in normal cases, has yet to be recognized in the balance sheet (cash flow hedges) or recognized in the balance sheet at amortized cost.

All derivatives that do not meet the hedging criteria are marked to fair market values that are generally determined based on quoted market prices or market quotes for the same or similar financial instruments.

Impairment of financial assets. We make an assessment on each balance sheet date regarding whether there exists any objective evidence that a write-down requirement has arisen for a financial asset or a group of financial assets. As regards shares classified as available-for-sale assets, any significant or extended decline in the fair value of a share to a level below its acquisition value is regarded as an indication that a write-down 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 subtracted from equity and reported in the income statement. Impairment of equity instruments, which is reported in the income statement, is not reversed in the income statement.

Accounting policies

Except as described below, the accounting policies applied are consistent with those applied to the annual financial statements for the year ended December 31, 2008, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following revised standard is mandatory for the first time for the financial year beginning January 1, 2009.


	•	IAS 1 (revised), “Presentation of financial statements”. The revised standard prohibits the presentation of items of income and expenses (that is “non-owner changes in equity”) in the statement of changes in equity, requiring “non-owner changes in equity” to be presented separately from owner changes in equity. All “non-owner changes in equity” are required to be shown in a performance statement.

Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income).

We have elected to present two statements: an income statement and a statement of comprehensive income. Other new statements with implementation beginning in 2009 have either been implemented prior to 2009 or have no effect on the consolidated financial reports of Stena AB.

IFRS that have been issued but are not yet effective

The following standards and amendments to existing standards have been published and are mandatory for the group’s accounting periods beginning on or after January 1, 2010 or later periods, but the group has not early adopted them:


•	IFRIC 17, ’Distribution of non-cash assets to owners’ (effective on or after July 1, 2009). The interpretation is part of the IASB’s annual improvements project published in April 2009. This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. IFRS 5 has also been amended to require that assets are classified as held for distribution only when they are available for distribution in their present condition and the distribution is highly probable. The group and Company will apply IFRIC 17 from January 1, 2010. It is not expected to have a material impact on the group’s or the Company’s financial statements.
•	IAS 27 (revised), ’Consolidated and separate financial statements, (effective from July 1, 2009). The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognized in profit or loss. The group will apply IAS 27 (revised) prospectively to transactions with non-controlling interests from January 1, 2010.
•	IFRS 3 (revised), ‘Business combinations’ (effective from July 1, 2009). The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. The group will apply IFRS 3 (revised) prospectively to all business combinations from January 1, 2010.
•	IAS 38 (amendment), ‘Intangible Assets’. The amendment is part of the IASB’s annual improvements project published in April 2009 and the group and Company will apply IAS 38 (amendment) from the date IFRS 3 (revised) is adopted. The amendment clarifies guidance in measuring the fair value of an intangible asset acquired in a business combination and it permits the grouping of intangible assets as a single asset if each asset has similar useful economic lives. The amendment will not result in a material impact on the group’s or the Company’s financial statements.
•	IFRS 5 (amendment), ’Measurement of non-current assets (or disposal groups) classified as held-for-sale’. The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment provides clarification that IFRS 5 specifies the disclosures

required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. It also clarifies that the general requirements of IAS 1 still apply, particularly paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of IAS 1. The group and Company will apply IFRS 5 (amendment) from January 1, 2010. It is not expected to have a material impact on the group’s or the Company’s financial statements.

•

IAS 1 (amendment), ‘Presentation of financial statements’. The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment provides clarification that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The group and Company will apply IAS 1 (amendment) from January 1, 2010. It is not expected to have a material impact on the group’s or the Company’s financial statements.


Item 6.	Directors, Senior Management and Employees

Under the Swedish Companies Act of 2005, our board of directors has ultimate responsibility for our organization and the management of our affairs. Our Articles of Association provide for a board of directors elected by our shareholders of not fewer than three nor more than nine directors and not more than three deputy directors. Swedish law provides for the appointment of additional directors by the unions representing our employees. All directors, other than union appointees, are elected by resolution of a general meeting of shareholders. The term of office of a director is one year, but a director may serve any number of consecutive terms. Directors may be removed from office by a general meeting of shareholders at any time, and vacancies on the board, except when filled by a deputy director, may only be filled by shareholder resolution. Each year, one director is elected chairman of the board by resolution of a meeting of the board of directors. Deputy directors may attend the board meetings, but may only vote in place of a director who is absent.

The following table sets forth the name, year of birth and position of each of our directors as of March 31, 2010.



Name	Year born		Title


Lennart Jeansson		1941	Chairman of the Board of Directors
Dan Sten Olsson		1947	Chief Executive Officer and Director⁽¹⁾
Sune Carlsson		1941	Director
Åke Plyhm		1951	Director
Anne-Marie Pouteaux		1951	Director
Jörgen Lorén		1961	Director (Employee Representative)
Jens Ole Hansen		1951	Director (Employee Representative)
Pia Carlsson		1969	Deputy Director (Employee Representative)


(1)		For details of Mr. Dan Sten Olsson’s share ownership, see section “Principal Shareholders.”

Certain biographical information about each of our directors and executive officers and certain other key employees of Stena AB is set forth below.

Lennart Jeansson was appointed chairman of the board of Stena AB in 2000. Mr. Jeansson also serves as a director on the board of Stena Metall. Mr. Jeansson is chairman of the boards of BIL Sweden, Haléns Holding, Handel & Industri AB, the Volvo Pensionsstiftelse and chairman of Sixth Swedish National Pension Fund. Mr. Jeansson also serves as director of Volvo Lastvagnar

AB, Volvo Construction Equipment and Orkla ASA. Mr. Jeansson is a member of the Swedish Council for the Sale of Shares in State-owned Companies.

Dan Sten Olsson has served as chief executive officer and a director of Stena AB since 1983. Mr. Olsson also serves as member or chairman of the board of a majority of the main companies in the Stena Sphere. Mr. Olsson is also Chairman of the Board of the Swedish Ship Owner’s Association. Mr. Olsson has been employed by Stena AB since 1972.

Sune Carlsson has served as a director of Stena AB since June 2008. Mr. Carlsson is a former President and CEO of AB SKF and Executive Vice President of ASEA AB and ABB Ltd. Mr. Carlsson is chairman of the board of Atlas Copco AB and also serves as a director of Investor AB and Autoliv Inc.

Åke Plyhm has served as a director of Stena AB since June 2008. Mr. Plyhm also serves as a member of the board of directors of Stena Line Holding BV. Mr Plyhm is chairman of the board of Aditro AB and SentoClone and also serves as a director of the board of Saab Combitech AB, ITH/Immune Therapy Holdings and Litorina Holding AB. Mr. Plyhm is a member of the board of the Swedish Enterprise Federation.

Anne-Marie Pouteaux has served as a director of Stena AB since February 2008. Mrs. Pouteaux is a partner of Wistrand Advokatbyrå Göteborg KB and is also a member of the board of directors of Stena Bulk AB.

Jörgen Lorén has served as a director of Stena AB, representing Stena AB employees affiliated with the Swedish Ship Officers’ Association, since 2006. Mr. Lorén is a Master Mariner and has been employed in our ferry operations since 1985.

Jens Ole Hansen has served as a director of Stena AB, representing Stena AB employees affiliated with the Swedish Seamen’s Union, since 1992. Mr. Hansen is a boatswain and has been employed in our ferry operations since 1974.

Pia Carlsson has served as a deputy director of Stena AB, representing Stena AB employees affiliated with the Swedish Union of Commercial Employees, since 2009. Ms. Carlsson is a freight forwarding agent and has been employed in our ferry operations since 1990.

Other Key Employees

Christel Armstrong Darvik (born 1953) has served as Managing Director of Stena Fastigheter AB since October 1, 2006. She is the chairman of the board of directors of Stena Realty BV and a member of the board of directors of Specialfastigheter Sverige AB and Svenska Mässan. Mrs. Armstrong Darvik has been employed in the Stena Sphere since 2006.

Gunnar Blomdahl (born 1955) has served as Managing Director of Stena Line Holding B.V. since January 2003. He has held a number of senior management positions at Stena Line since 1997, including as Area Director in charge of Stena Line’s Irish Sea operations from 2001 to 2003.

Peter Claesson (born 1965) has served as Director of Finance of Stena AB since January 1, 2008. Mr. Claesson is a member of the board of directors of many of our companies, Meda and of the mutual insurer The Swedish Club. Mr. Claesson has been employed in the Stena Sphere since 2008.

Claes Davidsson (born 1950) has served as Director of Ship Management and HR since 2003. Mr. Davidsson also serves as chairman of NMM in Glasgow, Scotland and of Austen Maritime PTE Ltd., Singapore. Mr. Davidsson has been employed in the Stena Sphere since 1983.

Staffan Hultgren (born 1961) has served as Vice President and Deputy CEO of Stena AB since January 1, 2010. He also serves as the principal financial officer of Stena AB. Previously he served as Director of Business Administration of the Company. Mr. Hultgren is a member of the board

of directors of many of our companies. Mr. Hultgren has been employed in the Stena Sphere since 2004.

Hugh Ferguson (born 1954) has served as Managing Director of NMM since January 1, 2010. From 2007 to 2009 he served as General Manager of NMM. Mr. Ferguson is a member of the board of directors of several of our companies. Mr. Ferguson has been employed in the Stena Sphere since 1984.

Harry Robertsson (born 1956) has served as Technical Director of Stena Rederi since 1999. Mr. Robertsson has worked in the technical department of Stena Rederi since 1996. From 1984 to 1996 he held positions in a shipyard and in marine consultancy firms.

Ulf Ryder (born 1952) has served as Managing Director of Stena Bulk since 1983 and as a director of Stena Bulk since 1982. Mr. Ryder is a member of the board of directors of several of our companies. Mr. Ryder has been employed in the Stena Sphere since 1982.

Bo Severed (born 1955) has served as Managing Director of Stena RoRo since 2008. Mr. Severed is a member of the board of directors of several of our companies. He was a member of the board of Stena Line Holding BV from 1998 to 2008. Mr. Severed has held various executive positions within Stena Line including Managing Director from 1998 and 2003. Mr. Severed was employed in the Stena Sphere during the majority of the years 1988 to 2003 and then rejoined the Stena Sphere in 2008.

Martin Svalstedt (born 1963) has served as Managing Director of Stena Adactum since 2002. Mr. Svalstedt also serves as chairman of Ballingslöv, Envac, Gunnebo, MediaTec and Stena Renewable and as board member in Gislaved Folie AB and Stena Adactum.

Tom Welo (born 1947) has served as Managing Director of Stena Drilling Ltd. since 1995. Mr. Welo is a member of the board of directors of several of our companies.

Compensation of Directors

For the year ended December 31, 2009, the aggregate compensation paid by Stena AB to its directors (a total of eight persons) amounted to approximately SEK 14 million.

Audit Committee

Following a decision by the board on December 20, 2006, we established an audit committee. At the same time, the board approved the charter for the audit committee.

Lennart Jeansson (chairman of the board of Stena AB), John Lindkvist (Chief Financial Officer of Stena Metall AB), Staffan Hultgren (Vice President and Deputy CEO of Stena AB) and Anne-Marie Pouteaux (external counsel to the Company and member of the board of Stena AB) are members of the audit committee. Mr. Lennart Jeansson acts as chairman of the audit committee.

Pursuant to the charter, the overall objectives and responsibilities of the audit committee are to assist the board in fulfilling its oversight responsibility relating to the Company’s accounting matters, the system of internal controls, the management’s monitoring and controlling of business risks, corporate governance activity and legal and regulatory requirements to the extent applicable to financial matters.

The audit committee is appointed by and can be removed by the board of directors and shall have at least three meetings per year.

Employees

The chart below sets forth the average number of employees in each of our principal business areas for the three years ended December 31, 2009.



	2007		2008		2009


Ferry operations		5,710		5,778		5,798
Drilling		755		968		1,002
Shipping		738		842		817
Property operations		261		279		286
New businesses Adactum		968		1,791		2,253
Other		87		84		80

Total		8,519		9,742		10,236

In addition to the employees referred to above, NMM employed approximately 4,800 persons in 2009 in external ship management services, as compared to 4,816 persons in 2008 and 4,842 persons in 2007.

We have good relations with our work force and the labor unions representing our employees.

Options

No options exist to purchase securities from us.


Item 7.	Major Shareholders and Related Party Transactions

Major Shareholders

All of the issued and outstanding voting shares of Stena AB were owned as follows as of March 31, 2010:



Name of beneficial owner	Number of shares		Percentage ownership


Dan Sten Olsson		25,500		51.0	%
Madeleine Olsson Eriksson		12,250		24.5	%
Stefan Sten Olsson Holding Ltd		12,250		24.5	%

The holders listed above have sole voting and investment power over the shares beneficially owned by them. Dan Sten Olsson and Madeleine Olsson Eriksson are brother and sister. Stefan Sten Olsson Holding Ltd. is a company incorporated in the British Virgin Islands whose sole shareholder is the Stena Trust. The settlor and sole beneficiary of the Stena Trust is Mr. Stefan Sten Olsson. Stefan Sten Olsson is the brother of Dan Sten Olsson and Madeleine Olsson Eriksson.

Dan Sten Olsson is the only officer or director of Stena AB who owns any voting shares of Stena AB. All shares of Stena AB have the same voting rights.

Our Articles of Association contain a restriction on the transfer of our shares. Pursuant to the articles, a person who was not previously a shareholder and to whom shares have been transferred (except in the case of a transfer of shares through inheritance, will or gift to lineal descendants of Sten A. Olsson and the late Birgit Olsson) is obligated to offer such shares to the other shareholders. If any person other than the current shareholders of Stena AB as of December 30, 1993 or lineal descendants of Sten A. Olsson and the late Birgit Olsson acquires 48% or more of the voting power of Stena AB, then the remaining shareholders have the right to put all or a part of their shares to such shareholder at a price equal to the highest price per share paid by such shareholder. Under the Articles of Association, a vote of at least 75% of shares represented at the annual general meeting of our shareholders is required to amend this

put provision. In addition, under the Swedish Companies Act, shareholder resolutions in the ordinary course of business require the vote of a majority of shares voting thereon, and extraordinary items (including amendments to the Articles of Association other than the amendment to the put option described above) require support by shareholders holding at least two-thirds of the votes cast as well as two-thirds of all shares present or represented at the shareholders meeting. Holders of at least 10% of the outstanding shares have the right to require us to pay dividends within certain statutory parameters.

Related Party Transactions

We have entered into various transactions with other companies in the Stena Sphere, which includes the companies wholly owned by the Sten Allan Olsson family in Sweden, Sessan and Stena Metall and their subsidiaries. Another significant company within the Stena Sphere is Concordia which is 52% owned by Sessan. Shares in Concordia are listed on Nasdaq OMX Stockholm. The significant transactions between the Company and its affiliates are described below.

Concordia

Concordia and the Company (indirectly through Stena Bulk AB, a wholly owned subsidiary of the Company) are parties to an allocation agreement (the “Allocation Agreement”) pursuant to which Concordia may elect to participate 100%, 50% or not to participate in business opportunities identified by Stena Bulk relating to the chartering of crude oil tankers. No allocations were made in 2007, 2008 or 2009. The net outcome of the agreement, including results of forward contracts, was SEK 0 million in each of the years 2007, 2008 and 2009.

We provide certain services to Concordia such as administration, marketing, commercial management, insurance and technical support for Concordia’s owned and chartered vessels, including administration of jointly chartered vessels, offices and office services for Concordia’s personnel and certain financial and other services. We earned fees for these services of SEK 25 million in each of the years 2007 and 2008, respectively, and SEK 34 million in 2009.

Sessan

Since June 1999, we have served as the business manager of Sessan for its 50% participation in a Norwegian partnership that owns the shuttle tanker Stena Sirita, which is chartered 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 Petrobras in Brazil. We earned total fees for these services of SEK 1.5 million in each of the years 2007, 2008 and 2009.

In 2001 and 2002, Sessan acquired all shares in the shipping company HH-Ferries in the south of Sweden. The acquisition was partly financed by an interest bearing credit facility from us. As of December 31, 2007, DKK 219 million was outstanding under this facility. In October, 2008, HH Ferries was acquired by Stena Line. The purchase price was SEK 61 million and at the same time the loan was repaid.

In December 2002, we sold the remaining 50% of the RoPax vessel Stena Jutlandica to Sessan who acquired the first 50% of this vessel from us in 1996. The vessel is chartered back under an operating lease, for which we paid charterhire of SEK 59 million in each of the years 2007 and 2008, respectively, and SEK 45 million in 2009.

Sessan has invested in shares in Meda. In 2008, there was a new share issue in the amount of SEK 1,511 million. Stena AB guaranteed the new share issue. The new share issue was oversubscribed and Stena AB did not need to honor its guarantee. However, Stena Investment Cyprus acquired 11,191,939 shares (3.7% of the votes) in Meda for SEK 392 million. Sessan had

an option to acquire these shares at a minimum price of SEK 38.50 per share, which was settled with a cash payment of SEK 165 million.

In 2009, we acquired three office buildings in Houston, the U.S., from Sessan for SEK 179 million.

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall. Such purchases aggregated SEK 1,781 million, SEK 3,012 million and SEK 1,941 million in 2007, 2008 and 2009, respectively.

We paid charterhire for vessels to Stena Metall at an amount of SEK 89 million for 2007 and of SEK 139 million for 2008. There were no charters in 2009.

We provide management and other services to Stena Metall. We received SEK 1 million in each of the years 2007, 2008 and 2009 for these services.

In 2007, two vessels, Stena Carrier and Mont Ventoux, were sold to Stena Metall at market value and chartered back under operational leases.

In December 2008, we acquired the vessels Stena Nordica, Stena Freighter, Stena Carrier and Mont Ventoux from Stena Metall at market value for a total of SEK 1,443 million. 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 assumption by us of the outstanding bank loans relating to the acquired assets for a total amount of SEK 761 million.

Olsson Family

We rent office space from members of the Olsson family. In each of the years 2007, 2008 and 2009, we paid SEK 40 million, SEK 45 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 2007, 2008 and 2009, members of the Olsson family paid us SEK 12 million, SEK 12 million and SEK 13 million, respectively, for such management services.

We have agreed to pay Sten A. Olsson and Dan Sten Olsson an annual indexed retirement benefit for life.


Item 8.	Financial Information

Consolidated Financial Statements

See “Item 18. Financial Statements” and pages F-1 through F-80.

Legal Proceedings

In August 2007, Transocean Offshore Deepwater Drilling Inc. (“Transocean”) brought a patent infringement suit against Stena Drilling Limited (“Stena Drilling”) in the United States District Court for the Southern District of Texas (“the Texas Action”). Transocean alleged that Stena Drilling infringed four U.S. patents owned by Transocean by virtue of certain acts of selling and/or offering for sale the Stena DrillMAX I and III vessels. In September 2007, Stena Drilling answered Transocean’s complaint and filed a motion to dismiss the Texas Action on jurisdictional grounds. In May 2008, Stena Drilling’s motion to dismiss the Texas Action was granted and Transocean’s claims against Stena Drilling were dismissed for lack of jurisdiction.

In November 2008, Transocean filed a second patent infringement suit against Stena Drilling in the United States District Court for the Southern District of Texas (the “second Texas Action”),

originally naming Stena Drilling, Stena DrillMAX Limited and Stena DrillMAX III Limited as defendants, and later adding Stena DrillMax I Limited and Stena DrillMax I (Hungary) Kft as additional defendants (the “Stena Defendants”). In the second Texas Action, Transocean alleges that the Stena Defendants infringed four U.S. patents owned by Transocean by virtue of certain acts of selling, offering for sale and/or using the DrillMAX I vessel in the United States and selling and/or offering for sale the DrillMAX III vessel within the United States. The Stena Defendants answered Transocean’s complaint in the second Texas Action in December 2008 and July 2009 by alleging non-infringement, invalidity and unenforceability of Transocean’s patent claims. Stena DrillMAX III Limited (“Stena III”) also filed a motion to dismiss Transocean’s claims against it on jurisdictional grounds, which was denied. The second Texas Action has been administratively stayed since August 2009, pending a ruling of a Federal appeals court in another case involving Transocean and a third party and the same patents in which the lower court found the four Transocean patents to be invalid.

We believe it is highly unlikely that any unfavorable outcome in this case will materially impact Stena Drilling’s ability to perform its obligations under the current charter contracts for the DrillMAX vessels.

We are also a party to various routine legal and regulatory proceedings arising in the ordinary course of business. Such claims are generally covered by insurance, subject to customary deductibles. We do not believe that any liabilities that may result from such legal proceedings will, in the aggregate, have a material adverse effect on our financial condition or results of operations.

Dividends

We paid a cash dividend of SEK 550 million, SEK 390 million and SEK 190 million for the years ended December 31, 2007, 2008 and 2009, respectively. The dividends are made out of unrestricted earnings in the shareholders’ equity and paid out the year after the respective financial year.


Item 9.	The Offer and Listing

Not applicable.


Item 10.	Additional Information

Organization

We are a stock corporation of limited liability organized under the laws of the Kingdom of Sweden and governed by the Swedish Companies Act. Our registered office is in the Commune of Gothenburg, Västra Götaland County, Sweden. We are entered in the Swedish Company Register under number 556001-0802.

Articles of Association

Our Articles of Association in Swedish, together with an English translation, have been filed as Exhibit 1.1 to this Annual Report. Section 3 of our Articles of Association states that the object of Stena AB is to conduct shipping operations, ship brokerage and the chartering of vessels as well as trading in ships, metals and scrap iron, the operating of recreational and leisure facilities and other activities consistent with such operations, owning and administering fixed property and owning shares or participating in operating companies that own and administer real or moveable property. Additionally, we may engage in the research and marketing of medical and pharmaceutical products as well as activities consistent with such objectives.

Directors

Under the Swedish Companies Act, a director may not participate in matters regarding agreements between the director and Stena AB and agreements between third parties if the director has a material interest in the matter that conflicts with the interest of Stena AB. In addition, if a director represents, either individually or together with any other person, a legal entity, such director may not participate in discussions with respect to agreements between Stena AB and such legal entity. However, a director’s recusal is not required in instances where the company is entirely owned, directly or indirectly, by the director or where the transaction giving rise to the potential conflict of interest involves the company and another entity that is part of a related group of the company.

A director may not vote in matters affecting his or any member of the board of directors’ compensation for work related to the board of directors. Compensation related to a director’s position as a board member may only be approved by shareholders at a general meeting. With respect to the powers of directors, Swedish law provides that the board of directors represents Stena AB and is, therefore, authorized to undertake obligations on our behalf. Decisions on major borrowings, for example, shall thus be taken by the board of directors. The execution of such decisions has been entrusted by the board of directors to the joint exercise of two directors. Neither our Articles of Association nor Swedish law affect a director’s retirement or non-retirement based on the age of the director. Additionally, directors are not required to own shares in us in order to qualify as directors of us.

Shareholder Rights

We have only one class of shares. Each share is entitled to one vote per share. There are no cumulative voting rights. Every shareholder is entitled to receive a pro rata share of any dividends declared based on the number of shares owned. If we are liquidated, the proceeds thereof will first be paid to our creditors. Any remaining amount will be distributed among the shareholders, pro rata to the number of shares held by each shareholder. The Articles of Association do not contain any provisions relating to the establishment of a sinking fund nor do they contain any provisions that discriminate against any existing or future shareholder as a result of such shareholder owning a substantial number of our shares.

In order to change the rights of shareholders, our Articles of Association must be amended. Under the Swedish Companies Act, shareholder resolutions in the ordinary course of business require the vote of a majority of shares voting thereon, and extraordinary items (including amendments to the Articles of Association other than the amendment to the put option described below) require support by shareholders holding at least two-thirds of the votes cast as well as two-thirds of all shares present or represented at the shareholders meeting. Holders of at least 10% of the outstanding shares have the right to require us to pay dividends within certain statutory parameters.

General Meetings

Our Articles of Association require an ordinary general meeting once a year within six months after the end of the fiscal year. Notice to convene the annual general meeting shall be given by announcement in Post-och Inrikes Tidningar and in Svenska Dagbladet or another national newspaper no earlier than six weeks and at the latest four weeks prior to the meeting. The agenda of the annual general meeting includes, among other things, the election of chairman of the meeting; preparation and confirmation of the electoral register; presentation of the annual financial report, auditors’ report and, if applicable, the consolidated financial report and the consolidated auditors’ report; and election of the board of directors, auditors and deputy director. Anyone entitled to vote, or such person’s representative, may participate and vote at the meeting.

Ownership and Transfer Restrictions

There are no limitations under Swedish law or in our Articles of Association on the right of persons who are not citizens or residents of Sweden to own or vote our stock. However, our Articles of Association contain a restriction on the transfer of our shares. Pursuant to the Articles of Association, a person who was not previously a shareholder and to whom shares have been transferred (except in the case of a transfer of shares through inheritance, will or gift to lineal descendants of Sten A. Olsson and his wife, the late Birgit Olsson) is obligated to offer such shares to the other shareholders. If any person other than the current shareholders of Stena AB as of December 30, 1993 or lineal descendants of Sten A. Olsson and the late Birgit Olsson acquires 48% or more of the voting power of Stena AB, then the remaining shareholders have the right to put all or a part of their shares to such shareholder at a price equal to the highest price per share paid by such shareholder. Under the Articles of Association, a vote of at least 75% of shares represented at the annual general meeting of our shareholders is required to amend this put provision.

Change in Control

There are no provisions in our Articles of Association that would have an effect of delaying, deferring, or preventing any change in control of us and that would only operate with respect to a merger, acquisition or corporate restructuring involving us or any of our subsidiaries.

Disclosure of Shareholdings

Our Articles of Association do not require shareholders to disclose their shareholdings in us.

Material Financial Contracts

Revolving credit facility. On December 8, 2004, Stena Holland BV (formerly Stena International B.V.) and Stena (Switzerland) AG (“SSAG”) entered into a $1 billion secured revolving credit facility with a syndicate of financial institutions, for which J.P. Morgan plc, Svenska Handelsbanken AB (publ), Nordea Bank AB (publ), Citigroup Global Markets Limited, DnB NOR Bank ASA and HSBC Bank plc act as lead arrangers and Svenska Handelsbanken AB (publ.) acts as facility agent. The revolving credit facility was made available for the purposes of refinancing Stena Holland BV’s existing debt, including the 2002 and 2001 revolving credit facilities, together with certain other vessel financings, and to provide financing for general corporate purposes. Stena Holland BV’s and SSAG’s obligations under the revolving credit facility are guaranteed by Stena AB and certain of its subsidiaries.

The final maturity of the revolving credit facility is January 28, 2013. Borrowings under the revolving credit facility bear interest at a rate equal to the aggregate of LIBOR plus an applicable margin, which ranges from 0.60% to 0.725% depending on the level of utilization of the facility. Interest is payable at the end of the interest period of each advance, although if an advance has a term of more than six months, interest is payable at six-month intervals. The facility gives the option to drawdown advances for periods of one, two, three or six months, or for other periods with the consent of the lenders. Commitment fees and guarantee indemnity fees will be based on the level of utilization of the facility.

The obligations of Stena Holland BV and SSAG under the revolving credit facility are secured by, among other things, first priority security interests on Stena Baltica, Stena Carisma (and its linkspans), Stena Clyde, Stena Don, Stena Danica, Stena Europe, Stena Forecaster, Stena Forerunner, Stena Foreteller, Stena Forwarder, Stena Germanica, Stena Nautica, Stena Saga, Stena Scandinavica, Stena Scanrail, Stena Spey, Stena Tay, and the Holyhead and Stranraer ports. In the event that an asset securing the revolving credit facility is sold or declared a total loss, availability under the revolving credit facility will, unless appropriate replacement collateral is provided within 270 days, be reduced by the lesser of net sale or net loss proceeds and the

amount required to bring the security value of the remaining collateral (net of any debt secured by a prior mortgage therein) to 140% of the facility amount.

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 maintain minimum cash and cash equivalents of not less than $50 million, (iii) require our net debt to be no greater than 65% of the capitalization, and (iv) require us to maintain ownership of the security parties that, at the date of execution of the credit facility agreement, are members of the Stena AB group.

As of December 31, 2009, the amount of indebtedness under the revolving credit facility was $144 million plus $24 million used in connection with guarantees and letters of credit.

Adactum secured bank facility. On June 30, 2009, Adactum entered into a new secured revolving credit facility with Svenska Handelsbanken AB (publ) and Nordea Bank Sweden AB (publ) with a total principle amount of SEK 450 million. The facility matures on June 30, 2012 and bears interest at a rate based on Stockholm Interbank Offered Rates plus an applicable margin of 3.0%. Adactum may select an interest period of one, three, six or twelve months every time it borrows funds under the facility. Interest is payable at the end of the relevant interest period. The facility includes a cross-default provision ($15 million threshold) with respect to debt of Stena, Adactum or any present or future subsidiary of Stena. As of December 31, 2009, SEK 200 million under the facility was utilized. The facility is non-recourse to Stena AB.

Stena Royal S.à r.l. secured bank facility. On September 28, 2007, Stena Royal entered into a new $350 million secured revolving credit facility with Svenska Handelsbanken AB (publ) and Nordea Bank Sweden AB (publ). The facility matures on September 28, 2012. The facility bears interest at a rate based on LIBOR, EURIBOR or Stockholm Interbank Offered Rates, as applicable depending on currency drawn down, plus an applicable margin of 0.45% to 0.70%, depending on the ratio between the aggregated drawn down amount and the value of the underlying security. Stena Royal may select every time it borrows funds under the facility an interest period of three or six months or such other period as may be agreed up to a maximum of twelve months. Interest is payable at the end of the relevant interest period. The medium and long-term investment portfolios held by Stena Royal are pledged as security for the facility. The facility does not include any cross-default provision. As of December 31, 2009, $0 million was utilized under the facility.

Debt in SPEs. As of December 31, 2009, we had investments, through unrestricted subsidiaries, in four SPEs: Canyon Capital CDO-2002 Ltd, Canyon Capital CLO-2004 Ltd, Canyon Capital CLO-2006 Ltd and Canyon Capital CLO-2007 Ltd. The assets and liabilities of the SPEs are consolidated in our financial statements, although the debt of the SPEs is non-recourse to Stena.

As of December 31, 2009, Canyon Capital CDO-2002 Ltd, Canyon Capital CLO-2004 Ltd and Canyon Capital CLO-2006 Ltd, had issued senior secured notes to fund their portfolio investments in the U.S. high yield bond and corporate loan markets.

As of December 31, 2009, the total outstanding debt of all SPEs was SEK 8.2 billion. The remaining funding for the SPEs has been provided by the Company and other investors as subordinated secured notes and preferred share capital.

Canyon Capital CDO-2002 Ltd issued senior secured notes maturing in May 2014, consisting of $222 million Class A notes, $10.9 million Class B notes and $11.2 million Class C notes. The Class A and B notes bear interest at a variable interest rate of LIBOR, plus a margin of 0.60% and 3.75%, respectively, and the Class C notes bear a fixed interest rate of 12.88%. Interest is payable semiannually. Canyon Capital CLO-2004 Ltd issued notes maturing in October 2016, consisting of $200 million Class A1 notes, $77.5 million Class A2 notes, $36 million Class B notes, $29 million

Class C notes and $16 million Class D senior secured notes. The Class A, B, and C notes bear interest at a variable interest rate of LIBOR, plus a margin of 0.37%, 1.25% and 2.50%, respectively, and the Class D notes bear a fixed interest rate of 12.88%. Canyon Capital CLO-2006 Ltd issued senior secured notes maturing in August 2020, consisting of $266 million Class A notes, $15.2 million Class B notes, $22.8 million Class C notes, $22.8 million Class D notes and $13.3 million Class E notes. The notes bear interest at a variable rate of LIBOR plus a margin of 0.25-0.27% for Class A notes and 0.42%, 0.70%, 1.60% and 3.75% for Class B, C, D and E notes, respectively. Interest is payable semi-annually. Each series of notes is secured by the underlying securities held by the issuing SPE. Canyon Capital CLO-2007 is currently being restructured including reduction of assets and refinancing of existing funding. Current funding, maturing in 2011, bears interest at a variable rate of LIBOR, plus a margin of 1.75% from March 2010.

Senior Notes due 2013 and Senior Notes due 2016. As of December 31, 2009, we had outstanding $153 million principal amount of 7.5% Senior Notes due 2013 and $129 million principal amount of 7% Senior Notes due 2016. In 2007, we repurchased $4.2 million of our Senior Notes due 2013 and $78 million of our Senior Notes due 2016. The 7.5% Senior Notes, issued in November 2003, mature on November 1, 2013, and interest is payable semi-annually on May 1 and November 1 of each year. The 7.5% Senior Notes are redeemable at our option, in whole or in part, at any time on or after November 1, 2008. The 7% Senior Notes, issued in November 2004, mature on December 1, 2016, and interest is payable semi-annually on June 1 and December 1 of each year. The 7% Senior Notes are redeemable at our option, in whole or in part, at any time on or after December 1, 2009. The indentures governing the notes contain certain covenants with respect to, among other things, limitations on consolidated and subsidiary debt and preferred stock, limitations on restricted payments and investments, limitations on restrictions concerning distributions and transfers by subsidiaries, limitations on liens and guarantees, limitations on business activities and limitations on mergers, consolidations and certain sales and purchases of assets. The notes are unsecured obligations of Stena AB and rank pari passu in right of payment with Stena AB’s other unsubordinated indebtedness.

Senior Notes due 2017, Senior Notes due 2019 and Senior Notes due 2020. As of December 31, 2009, we had € 300 million principal amount of 6.125% Senior Notes due 2017 outstanding and € 102 million principal amount of 5.875% Senior Notes due 2019 outstanding. In addition, as of March 31, 2010, we had € 200 million principal amount of 7.875% Senior Notes due 2020 outstanding. The 6.125% Senior Notes, issued in February 2007, mature on February 1, 2017, and interest is payable semi-annually on February 1 and August 1 of each year. The 5.875% Senior Notes, issued in February 2007, mature on February 1, 2019, and interest is payable semi-annually on February 1 and August 1 of each year. The 7.875% Senior Notes, issued in March 2010, mature on March 15, 2020, and interest is payable semi-annually on March 15 and September 15 of each year. The indentures governing these notes contain certain covenants with respect to, among other things, limitations on consolidated and subsidiary indebtedness and limitations on liens on capital markets indebtedness. The notes are unsecured obligations of Stena AB and rank pari passu in right of payment with Stena AB’s other unsubordinated indebtedness.

Change of control

The $1 billion revolving credit facility as well as certain vessel financings provide that the failure of immediate members of the Olsson family or their legal representatives to own at least 75% of the voting equity in Stena AB, which failure is not cured within 90 to 120 days, triggers a mandatory prepayment of all outstanding advances and the termination of the facility unless all the lenders under such facility agree otherwise. Also, if Stena AB ceases to own, directly or indirectly, 100% of the equity in Stena International S.á.r.l. and/or SSAG, then all amounts outstanding under the $1 billion revolving credit facility become immediately payable on demand, and upon such demand the facility terminates. In addition, the SEK 450 million

Adactum facility will become payable on demand if Stena AB ceases to own, directly or indirectly, 100% of the equity in Adactum.

The indentures governing all of our Senior Notes require Stena AB to make an offer to purchase all notes outstanding under such Indenture at 101% of their principal amount if shareholders ultimately controlled by the Olsson family do not directly or indirectly beneficially own or control at least 50% of the voting equity in Stena AB.

Other

Property-related debt. As of December 31, 2009, we had bank facilities and mortgage loans secured by the real estate, buildings and land in our real estate business segment of approximately SEK 13.7 billion that are denominated in SEK and euros, with maturities from 2010 through 2025. These facilities and loans are non-recourse to Stena AB.

Other interest bearing debt. As of December 31, 2009, we were obligated with respect to the guarantees of lease obligations and certain loans used to finance the acquisition of vessels and other assets in the aggregate amount of approximately SEK 20.8 billion. These are denominated in U.S. dollars, British pounds, euro and SEK.

Exchange Controls and Other Limitations Affecting Security Holders

None.

Taxation

Not Applicable.

Documents on Display

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, applicable to a foreign private issuer. In accordance with these requirements, we file reports and other information with the SEC. These materials, including the Annual Report and the exhibits thereto, may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The SEC also maintains a website that contains reports and other information regarding issuers that file electronically with the SEC. The website address is http://www.sec.gov. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 202-551-8090.


Item 11.	Quantitative and Qualitative Disclosures about Market Risk

In the course of our operations, we are exposed to various types of market risks. Our primary market risks are foreign exchange risks, interest rate risks, oil price risks, equity price risks and trading risks. We seek to manage our exposure to adverse changes in foreign currency exchange rates, interest rates and oil prices through the use of various derivative financial instruments. We conduct monitoring and control of these risks continuously in each company as well as centrally. Our positions are monitored using a variety of techniques, such as market value and sensitivity analyses. The majority of our financial transactions are carried out through the central finance functions located in Sweden, Luxembourg, Switzerland and the Netherlands, which conduct their operations within established risk mandates and limits.

Foreign Exchange Risks

We are exposed to the risk of fluctuations in foreign currency exchange rates due to the international nature and scope of our operations. Our currency risk is related to changes in contracted and projected flows of payments denominated in currencies other than the functional currency (transaction exposure), to the translation of our monetary assets and

liabilities that are denominated in such currencies (translation exposure), to the translation of net assets of foreign subsidiaries (equity exposure) and financial trading activities. The objective of our foreign exchange risk management program is to seek to manage the risk of adverse foreign exchange movements on our income and financial position.

Transaction Exposure

Our revenues and expenses, as reported in Swedish kronor, are significantly affected by fluctuations in euro and the Norwegian kronor. When the Swedish kronor appreciates against other currencies, our revenues and expenses as reported in Swedish kronor may decrease and when the Swedish kronor declines against other currencies, our revenues and expenses as reported in Swedish kronor may increase. Future changes in exchange rates may also impact our reported revenues and expenses.

We use forward exchange contracts to seek to hedge against the risk of adverse movements in currency exchange rates of future payment flows from firm commitments such as bunker fuel purchases. Contracts related to hedging of anticipated sales and purchases of foreign currency normally do not exceed 12 months.

Translation Exposure

Our policy is to hedge our translation exposure risk primarily on our net exposures by currency. Our management regularly reviews our assets and liabilities that are denominated in foreign currency and determines the net amount that is subject to risk of adverse foreign currency fluctuations.

We seek to manage our exposure from the risk of adverse foreign currency fluctuations arising from certain assets and liabilities denominated in foreign currencies. Group companies operate in local currencies or in U.S. dollars. Our financial exposure is managed through us generally maintaining loans and investments in the same currency. In companies with loans and investments in foreign currencies, hedging is carried out in accordance with our financial policy. We primarily use forward exchange contracts and currency swaps and, to a lesser extent, purchased foreign currency options to manage our foreign currency translation exposure.

After taking into account hedging instruments as above, we recorded net translation exchange gains/(losses) of SEK 241 million and SEK (313) million for the financial years ended December 31, 2008 and 2009, respectively. This equals 0.25% and (0.34%) of total assets of SEK 97.4 billion and SEK 92.2 billion as of December 31, 2008 and 2009, respectively.

Equity Exposure

When we prepare our consolidated financial statements, the net assets of our foreign subsidiaries and part of our affiliated companies are translated to Swedish kronor at the exchange rate in effect on the date of the balance sheet. To the extent that the currency exposure from the net assets of certain foreign subsidiaries is hedged, we use foreign exchange contracts. We record translation differences arising from net assets of foreign subsidiaries directly to stockholders’ equity.

The book value of our net assets of subsidiaries denominated in a foreign currency, as of December 31, 2008 and 2009, was approximately SEK 18.6 billion and SEK 18.1 billion, respectively. The net assets are expressed mainly in Swedish kronor, Euro, British pounds and U.S. dollars. A 1% change in the value of the Swedish kronor against each of the functional currencies of our such subsidiaries would affect our shareholders’ equity as of December 31, 2009 by SEK 180 million. In 2009, our shareholders’ equity decreased by SEK (2.1) billion due to exchange rate differences and after net impact of equity hedge adjustments (see also our Consolidated Statement of Changes in Shareholders’ Equity).

Bunker Fuel Exposure

Our expenses are also significantly affected by fluctuations in the price of bunker fuel oil used for propulsion, primarily in our ferry operations.

We use fixed price swaps and, to a lesser extent, option contracts to seek to hedge against the risk of adverse movements in the price of oil. Contracts related to hedging of bunker fuels normally extend to 12 to 24 months but can be for terms of up to three years based on management’s assessment of acceptable risk levels and future oil prices (see also Note 34 in our Consolidated Financial Statements).

Financial Trading Activities

We also from time to time buy and sell certain types of derivative financial instruments with the objective of generating profits based on short-term differences in price. We refer to such financial instruments that are not used in our program of interest rate and foreign currency risk management as ‘trading’ for purposes of this Annual Report. All trading instruments are subject to market risk; that is, the risk that future changes in market conditions may make an instrument less valuable. We are a party to a variety of interest rate and foreign currency contracts in our trading activities.

We recorded net gains from currency and interest rate trading activities of SEK 92 million and SEK 49 million for the financial years ended December 31, 2008 and 2009, respectively.

Interest Rate Risks

We use several types of financial instruments to seek to manage our interest rate risk, such as interest rate swaps, futures, options and collars. The extent of our use of these financial instruments is determined by reference to the net exposure of our debt that is subject to interest rate risk and management’s views regarding future interest rates. We use such financial instruments to seek to achieve a desired interest rate on our interest-bearing liabilities. For example, all our interest rate swaps convert floating rate debt to a fixed rate of interest, and for those instruments changes in interest rates may affect the value of the interest rate swaps. However, interest expense in our income statement is recorded at the fixed interest rate swap agreement and, accordingly, is not affected by the change in interest rates.

At the end of 2009, our interest-bearing assets, consisting mainly of cash and cash equivalents and marketable securities, were to a large extent invested in interest-bearing securities with short maturities. Before any effects of hedging contracts, our interest-bearing debt consisted of approximately 40% floating rate borrowings, 15% fixed rate borrowings and 45% fixed rate bond loans and other property loans. The floating rate borrowings are normally fixed for a period of three to six months. A number of financial instruments were in place as of December 31, 2009, to manage these interest rate risks, including interest rate swaps to effectively convert floating rate borrowings to fixed rate borrowings.

Equity Securities Rate Risks

At December 31, 2009, the fair value of our marketable securities and short-term investments (excluding restricted cash) amounted to SEK 2.6 billion. The potential change in fair value resulting from a hypothetical 1% change of prices would be SEK 26 million. Under IFRS, movements in fair value of these investments will result in an immediate change to our financial statements.


Item 12.	Description of Securities Other than Equity Securities

Not applicable.

PART II


Item 13.	Defaults, Dividend Arrearages and Delinquencies

Not applicable.


Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.


Item 15.	Controls and Procedures

Evaluation of Controls and Procedures. An evaluation of our disclosure controls and procedures was conducted as of December 31, 2009, (the “Evaluation Date”) under the supervision of our Chief Executive Officer and Principal Financial Officer.

Limitations on Effectiveness of Controls. Our Chief Executive Officer and Principal Financial Officer do not expect that our disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Effectiveness of Disclosure Controls. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Principal Financial Officer have concluded that, as of the Evaluation Date and subject to the limitations discussed above, our disclosure controls and procedures are effective.

Changes in Internal Controls. Since the Evaluation Date, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Effectiveness of Internal Control Over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of the Evaluation Date based on the framework in COSO, The Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation of our internal control over financial reporting, the Company’s management has concluded that, as of the Evaluation Date and subject to the limitations discussed above, our internal control over financial reporting is effective.


Item 16A.	Audit Committee Financial Expert

On April 25, 2008, our Board of Directors determined that Staffan Hultgren qualifies as an “audit committee financial expert” within the meaning of Item 16A of this Annual Report. Mr. Hultgren is our Vice President, Deputy CEO and Principal Financial Officer and is, therefore, not “independent”.


Item 16B.	Code of Ethics

On April 23, 2004, our Board of Directors adopted a code of ethics (the “Code of Ethics”) that applies to our Chief Executive Officer, Chief Financial Officer, Chief Controller and Chief Accounting Officer. A copy of the Code of Ethics is filed as an exhibit to the Annual Report filed June 14, 2004. We have amended our code of ethics to provide that the code now applies to our Chief Executive Officer, Principal Financial Officer, Director of Business Administration, Director of Finance and Chief Accounting Officer. A copy of our amended code is filed as an exhibit to the Annual Report filed April 29, 2008.


Item 16C.	Principal Accountant Fees and Services

Fees and Services

Aggregate fees for professional services rendered by auditors and advisors for the years ended December 31, 2008 and 2009 were:



SEK in million	2008		2009


KPMG:
Audit fees		20		24
Tax service fees		20		32
Other audit related service fees		6		8

Total KPMG		46		64

Other auditors
Audit fees		2		3
Tax service fees		11		11
Other service fees		5		12

Grand total		64		90

The audit fees for the years ended December 31, 2008 and 2009, were for professional services rendered for the annual audits of our Consolidated Financial Statements, statutory audits required by Sweden and foreign jurisdictions, quarterly reviews, issuance of consents and the review of documents filed with the Securities and Exchange Commission. The other audit related service fees for the years ended December 31, 2008 and 2009 include fees for supporting guidelines concerning accounting practices and standards.

Tax service fees for the years ended December 31, 2008 and 2009, were for services performed in connection with income tax compliance, consulting and tax research services and assistance with tax audits.

The Other service fees category for the years ended December 31, 2008 and 2009, includes fees primarily related to other general consulting.

Pre-Approval Policies

Our Board of Directors has adopted policies and procedures for the approval of audit and non-audit services rendered by our independent auditors, KPMG AB (“KPMG”). The policies and procedures require that any non-audit related services performed for the Company by KPMG shall be pre-approved by the Board of Directors. Under the policy, at the beginning of each year, the Board of Directors reviews a list of audit and non-audit related services that are subject to general pre-approval, determines limits of estimated fees per project for general pre-approval and the limits of estimated fees for interim pre-approval by a designated member of the Board. All services not within the pre-approved limits require pre-approval by the Board of Directors at their regular Board meetings except if circumstances require, interim pre-approval

PART III


Item 17.	Financial Statements

Not applicable.


Item 18.	Financial Statements

The following financial statements and schedules, together with the reports of KPMG thereon, are filed as part of this Annual Report.


	Page

Consolidated Financial Statements — Stena AB (publ)
Index to the Consolidated Financial Statements		F-1
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Income Statements for each of the years in the three-year period ended December 31, 2009		F-3
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2009		F-4
Consolidated Balance Sheets as of December 31, 2008 and 2009		F-5
Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2009		F-7
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2009		F-8
Notes to the Consolidated Financial Statements		F-9
Schedules to Stena AB Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Schedules		S-1
Schedule II — Valuation and Qualifying Accounts		S-2
Schedule III — Property and Accumulated Depreciation		S-3

Other Schedules have been omitted because the required information is not applicable or is included in our Consolidated Financial Statements.


Item 19.	Exhibits

The following exhibits are filed as part of this Annual Report.


Exhibit
Number


	1	.1	Articles of Association of the Company in Swedish, together with an English translation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form F-4 (file number 333-102110) filed with the SEC on December 20, 2002 (the “2002 Registration Statement”)).*

	2	.1	Indenture dated as of November 23, 2004, between the Company and JPMorgan Chase Bank, N.A., as trustee, relating to the Company’s 7% Senior Notes due 2016 (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form F-4 (file number 333-121464) filed with the SEC on December 20, 2004 (the “2004 Registration Statement”)).*

	2	.2	Indenture dated as of February 8, 2007, between the Company and Deutsche Bank AG, as trustee, relating to the Company’s 6.125% Senior Notes due 2017*


Exhibit
Number


	2	.3	Indenture dated as of February 14, 2007, between the Company and Deutsche Bank AG, as trustee, relating to the Company’s 5.875% Senior Notes due 2019*

	2	.4	Indenture dated as of March 16, 2010, between the Company and Deutsche Bank AG, as trustee, relating to the Company’s 7.875% Senior Notes due 2020.**

	4	.1	Facility Agreement dated December 8, 2004, between Stena International BV and Stena (Switzerland) AG as Borrowers and Citigroup Global Markets Ltd., DnB NOR Bank ASA, HSBC Bank Plc, J.P. Morgan Plc, Nordea Bank Sverige AB publ, and Svenska Handelsbanken AB (publ).*

	4	.2	Registration Rights Agreement, dated November 27, 2002, between the Company, J.P. Morgan Securities Inc., ABN AMRO Incorporated, Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. (incorporated by reference to Exhibit 4.3 to the 2002 Registration Statement).*

	4	.3	Registration Rights Agreement, dated December 2, 2003, between the Company, J.P. Morgan Securities Inc., ABN AMRO Bank N.V., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 4.3 to the 2003 Registration Statement).*

	4	.4	Registration Rights Agreement, dated November 23, 2004, between the Company and J.P.Morgan Securities Inc. and Citigroup Global Markets Inc. (incorporated by reference to Exhibit 4.3 to the 2004 Registration Statement).*

	4	.5	Multi Currency Revolving Credit Facility, dated September 28, 2007, between Stena Royal S.ar.l. and Svenska Handelsbanken AB (publ).*

	4	.6	Amendment No. 1 to Multi Currency Revolving Credit Facility, dated December 17, 2007, between Stena Royal S.ar.l. and Svenska Handelsbanken AB (publ).*

	8		List of Subsidiaries of the Company.**

	11	.	Code of Ethics relating to the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer of Stena AB (publ) (incorporated by reference to Exhibit 11 to the Company’s annual report on Form 20-F filed with the SEC on June 14, 2004.)*

	11	.1	Amended Code of Ethics relating to the Chief Executive Officer, Principal Financial Officer and Chief Accounting Officer of Stena AB (publ).*

	12	.1	Certification of Dan Sten Olsson, Chief Executive Officer of Stena AB, dated April 30, 2010.**

	12	.2	Certification of Staffan Hultgren, Principal Financial Officer of Stena AB, dated April 30, 2010.**

	13	.1	Certification of Chief Executive Officer and Principal Financial Officer of the Company pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**


*		Previously filed with the SEC and incorporated herein by reference.

**		Filed herewith.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Stena AB:

We have audited the accompanying consolidated balance sheets of Stena AB (the “Company”) and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2009, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

As discussed in Note 38 to the consolidated financial statements, the Company changed its basis of accounting to IFRS as issued by the IASB during the year ended December 31, 2008. Consequently, the Company’s consolidated financial statements for 2007 referred to above have been restated to conform with IFRS as issued by the IASB. Prior to adoption of this new basis of accounting, the Company prepared financial statements in accordance with accounting principles generally accepted in Sweden.

Gothenburg, Sweden

April 23, 2010

KPMG AB

Thomas Thiel

F-2

Stena AB Group

Consolidated Income Statements



			Years ended 31 December
			2007			2008			2009			2009
In million	Note		SEK			SEK			SEK			USD¹⁾


Revenues
Ferry operations				9,868			10,309			9,599			1,335
Drilling				3,842			6,087			8,112			1,129
Shipping				3,830			4,171			3,088			429
Investment properties				1,989			2,085			2,335			325
New Businesses — Adactum				2,118			3,694			4,797			667
Other				8			48			3


Total revenues				21,665			26,394			27,934			3,885
Net gain on sales of assets		4		350			372			179			25


Total other income				350			372			179			25


Net valuation on investment properties		14		397			(294	)		(301	)		(42	)


Total income		3		22,402			26,472			27,812			3,868


Direct operating expenses
Ferry operations				(6,623	)		(7,483	)		(7,033	)		(978	)
Drilling				(1,729	)		(2,258	)		(2,722	)		(379	)
Shipping				(3,174	)		(3,329	)		(3,124	)		(434	)
Investment properties				(784	)		(739	)		(804	)		(112	)
New Businesses — Adactum				(1,756	)		(2,858	)		(3,476	)		(483	)
Other				(19	)		(12	)		(29	)		(4	)


Total direct operating expenses				(14,085	)		(16,679	)		(17,188	)		(2,390	)


Gross profit				8,317			9,793			10,624			1,478


Selling expenses		19		(764	)		(1,131	)		(1,305	)		(181	)
Administrative expenses		5		(1,413	)		(1,789	)		(1,902	)		(264	)
Depreciation and amortization		3		(1,680	)		(2,501	)		(3,415	)		(475	)


Income from operations		3, 35		4,460			4,372			4,002			558
Share of associated companies’ results		6		(61	)		(80	)		24			3
Result from securities and receivables accounted for as fixed assets		7		1,064			(1,990	)		(265	)		(37	)
Other interest income and similar profit/loss items		8		944			1,383			836			116
Interest expense and similar profit/loss items		9		(1,946	)		(2,307	)		(2,253	)		(313	)


Finance net				1			(2,994	)		(1,658	)		(231	)


Income before taxes				4,461			1,378			2,344			327


Income taxes		10		(632	)		367			20			3
Profit for the year from continuing operations				3,829			1,745			2,364			330
Earnings attributable to:
Equity holders of the Parent Company				3,808			1,752			2,401			334


Minority interests				21			(7	)		(37	)		(4	)


Net income				3,829			1,745			2,364			330


1)		Unaudited-Note 1

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-3

Stena AB Group

Consolidated Statements of Comprehensive Income



	Years ended 31 December
	2007			2008			2009
In million	SEK			SEK			SEK


Profit for the year		3,829			1,745			2,364
Other comprehensive income
Change in fair value reserve, net of tax		(66	)		(2,077	)		939
Change in Cash flow hedges, net of tax		3			(1,328	)		626
Change in currency translation differences		(58	)		3,192			(2,097	)
Change in equity hedge, net of tax		265			(201	)		107
Other comprehensive income for the year, net of tax		3,973			1,331			1,939
Other comprehensive income attributable to:
owners of the company		3,964			1,302			1,995
minority interest		9			29			(56	)
Total comprehensive income for the year		3,973			1,331			1,939

See also Note 11.

As of 31 December 2009, the net booked value of trademarks and other intangible assets amounts to SEK 1.413 million, as compared to SEK 1.526 million as of 31 December 2008.


b)	Impairment testing of vessels

Twice a year, or if an indication of an impairment requirement exists, Stena makes an assessment of whether or not a write-down requirement exists as regards the value of vessels. See further the description under Note 1, headed “Impairment of non-financial assets”.

The recoverable amount is determined on the basis of calculations of value in use. These calculations are based on estimated future cash flows. Impairment charges of SEK 150 million were recorded for three crude oil tankers during 2009. If the estimated discount rate, a so-called WACC interest rate, had been 1% higher than the assumed interest rate of 7.5%, it would not have produced a further impairment requirement on the carrying amount.


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 435 million lower and SEK 481 million higher, respectively.


d)	Deferred taxes

In the preparation of the financial statements, Stena prepares 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 regarding forecast

F-27

2 — Critical accounting estimates and judgements — continued

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 undertaking as the result of a historical event, where it is likely that an outflow of resources will be required to settle the undertaking and a reliable amount can be reliably estimated. Provisions are made in the amount that represents the best estimate of the amount required to settle the existing commitment on balance sheet date. Where there is doubt in the estimates referring to forthcoming events outside the Group’s control, the actual outcome may differ significantly.

When a commitment does not meet the criteria for reporting in the balance sheet, the amount can be considered to comprise a contingent liability and be disclosed. These commitments originate from events that have taken place and their existence will be confirmed only when one or several uncertain future events, which do not lie entirely within the Group’s control, take place or fail to take place. Contingent liabilities also include present commitments where an outflow of resources is not likely or a sufficiently reliable estimate of the amount cannot be made.


f)	Fair value of 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 1,202 million.

3 — Segment Information

We are active internationally, primarily in the areas of ferry operations, offshore drilling, shipping, properties and new businesses — Adactum. 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 18 strategically located ferry routes, 36 vessels and four ports in Scandinavia and the UK.

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 consist primarily of retail sales, restaurants, bars, gaming and, on our Norway-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 vessels, bunker fuel costs, vessel charter costs, commissions, package tour costs and other related costs.

Offshore drilling is operated through Stena Drilling, headquartered in Aberdeen, Scotland. We are one of the world’s leading companies in the development, construction and operation of offshore drilling rigs and drillships. We currently own and operate two third generation and

F-28

3 — Segment Information — continued

two fifth generation semi-submersible drilling rigs and three sixth generation ultra-deepwater drillships. We have also one enhanced ultra-deepwater ice-class drillship, Stena DrillMAX ICE, 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 consist of the ownership and chartering of crude oil and petroleum product tankers 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, with eight offices in eight countries, is one of the world’s leading tanker shipping companies. We develop pioneering tankers to meet the customers’ need for safe transportation and innovative logistics. We currently control a fleet of approximately 65 tankers and are active in all segments of the tanker market. We also have two Suezmax tankers on order scheduled for delivery in the third and fourth quarters of 2011.

Stena RoRo provides vessels, innovative solutions and project management. Our customers are operators and ship owners around the world.

Northern Marine Management (“NMM”) is the Company’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 services. NMM operates a diverse high-tech fleet of approximately 120 vessels from its worldwide network of offices including Aberdeen, Glasgow, 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 construction 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 shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs.

Property operations relate to investments in residential and commercial properties primarily in Sweden and The Netherlands.

We own a total of 2.1 million sqm, mainly in Sweden, and manage a further 300,000 sqm on behalf of related companies. The property portfolio consists of approximately 24,500 apartments and commercial properties. We are one of Sweden’s largest privately-owned property companies.

Property revenues consist of rents for properties owned and management fees for properties managed by us. Property 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 subsidiary Stena Adactum. Our objective is to create value 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 2009, Stena Adactum had direct investments in six private companies, of which three are wholly owned and one is 80% owned, and held significant ownership interest in two listed companies.

F-29

3 — Segment Information — continued

The four subsidiaries are all operating in different range of businesses:


•	“Blomsterlandet” through which the Company is creating a chain of retailers with one of Sweden’s most extensive range of indoor and outdoor plants.

•	“Envac” which operates automated household and municipal waste collection systems with activities in 30 countries.

•	“Stena Renewable” through which the Company commence successful operations of Sweden’s largest land-based wind power generating plant, near Ludvika, Sweden. In total 17 wind power systems (windmills) have been installed and are in operation at this location.

•	“Ballingslöv” which is an international group in the field of kitchens, bathrooms and storage products with an ambition to become one of the leading players in the European market. Ballingslöv has one manufacturing site in Sweden, one in Great Britain and five in Denmark.

Other includes non-allocated central administration costs.

Income from operations by segment



	Years ended 31 December
SEK million	2007			2008			2009


Ferry operations
Operations		1,267			781			445
Impairment charges					(63	)


Net gain on sale of vessels		146


Total ferry operations		1,413			718			445
Drilling
Operations		1,389			2,388			3,250


Total Drilling		1,389			2,388			3,250
Shipping
RoRo vessels		86			104			102
Net gain on sale of vessels		100			33			148


Total RoRo		186			137			250
Tanker operations		109			135			(736	)
Impairment charges					(85	)		(150	)
Net gain on sale of vessels		7			170


Total Tanker		116			220			(886	)
Other shipping		(13	)		16			7


Total shipping		289			373			(629	)
Property
Operations		1,041			1,163			1,338
Net valuation on investment properties		397			(294	)		(301	)
Net gain on sale of investment properties		97			169			31


Total property		1,535			1,038			1,068
New Businesses — Adactum
Operations		108			107			178
Total New Businesses — Adactum		108			107			178
Other		(274	)		(252	)		(310	)


Income from operations		4,460			4,372			4,002

F-30

3 — Segment Information — continued

Impairment charges of SEK 150 million were recorded for three crude oil tankers during 2009.

Impairment charges of SEK 148 million were recorded for three crude oil tankers and one RoPax vessel during 2008.

All impairment charges are accounted for as depreciation.

Reconciliation between EBITDA* and Income from operations by segment



		Years ended 31 December
SEK million		2007			2008			2009


Ferry operations	EBITDA		2,420			1,782			1,564
	Depreciation and amortization		(1,007	)		(1,064	)		(1,119	)


	Income from operation		1,413			718			445
Drilling	EBITDA		1,882			3,404			4,915
	Depreciation and amortization		(493	)		(1,016	)		(1,665	)


	Income from operation		1,389			2,388			3,250
Shipping	EBITDA		426			660			(229	)
	Depreciation and amortization		(137	)		(287	)		(400	)


	Income from operation		289			373			(629	)
Property	EBITDA		1,535			1,038			1,070
	Depreciation and amortization								(2	)


	Income from operation		1,535			1,038			1,068
New Businesses —	EBITDA		147			232			397
Adactum	Depreciation and amortization		(39	)		(125	)		(219	)


	Income from operation		108			107			178
Other	EBITDA		(270	)		(243	)		(300	)
	Depreciation and amortization		(4	)		(9	)		(10	)


	Income from operation		(274	)		(252	)		(310	)
Total	EBITDA		6,140			6,873			7,417
	Depreciation and amortization		(1,680	)		(2,501	)		(3,415	)


	Income from operation		4,460			4,372			4,002


*		EBITDA equals herein Income from operations before depreciation and amortization. EBITDA is not a measure in accordance with IFRS and should not be used as an alternative to cash flows or as a measure of liquidity and should be read in conjunction with the consolidated statements of cash flows contained in our consolidated financial statements.

F-31

3 — Segment Information — continued

Depreciation and amortization by segment



		Years ended 31 December
SEK million		2007		2008		2009


Ferry operations			1,007		1,064		1,119
Drilling			493		1,016		1,665
Shipping:	RoRo vessels		105		107		141
	Tanker operations		18		167		247
	Other shipping		14		13		12


	Total shipping		137		287		400
Property							2
New Businesses — Adactum			39		125		219
Other			4		9		10


Total			1,680		2,501		3,415

Depreciation and amortization expense consists of the following components



	Years ended 31 December
SEK million	2007		2008		2009


Vessels		1,389		2,096		2,790
Equipment		157		232		396
Buildings, land and ports		49		67		78


Total tangible fixed assets		1,595		2,395		3,264
Intangible assets		85		106		151


Total		1,680		2,501		3,415

Depreciation and amortization expense includes amortization of assets under capitalized leases amounting to SEK 555 million, SEK 271 million and SEK 170 million for the years ended 31 December 2009, 2008 and 2007, respectively.

Investments in tangible fixed assets by segment



		Years ended 31 December

SEK million		2007		2008		2009


Ferry operations			1,240		2,880		2,217
Drilling			5,179		4,777		5,393
Shipping:	RoRo vessels		1,111		257		12
	Tanker operations		275		1,353		115
	Other shipping		6		1		2


	Total shipping		1,392		1,611		129
Property			941		1,357		1,281
New Businesses — Adactum			176		408		127
Other			15		9		22


Total			8,943		11,042		9,169

Additions in 2009 for property includes SEK 424 million related to ongoing newbuilding projects for real estate. For the years ended 31 December 2008 and 2007, additions for property included SEK 292 million and SEK 89 million, respectively, related to ongoing newbuilding projects for real estate. See Note 14.

F-32

3 — Segment Information — continued

Total assets by segment



		Years ended 31 December

SEK million		2008		2009


Ferry operations			12,974		13,017
Drilling			23,237		25,342
Shipping:	RoRo vessels		1,875		2,184
	Tanker operations		2,807		2,143
	Other shipping		170		188


	Total shipping		4,852		4,515
Property			25,767		26,043
New Businesses — Adactum			6,911		6,606
Other			23,628		16,682


Total			97,369		92,205

Geographic information

The Company’s shipping operations include the ownership and chartering of vessels as well as the operation and management 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 operations and the property operations are conducted in Scandinavia and the rest of Europe. The Company’s drilling operations 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 investments in SPEs are included in Other markets.

Total revenue



	Years ended 31 December
SEK million	2007		2008		2009


Scandinavia		9,975		11,129		11,386
Europe, other		6,405		7,169		7,726
Other markets		2,192		4,003		5,464
Shipping		3,830		4,171		3,236


Total		22,402		26,472		27,812

Total assets



	Years ended 31 December
SEK million	2008		2009


Scandinavia		35,431		32,896
Europe, other		22,511		20,658
Other markets		34,764		35,370
Shipping		4,663		3,281


Total		97,369		92,205

F-33

4 — Sale of tangible fixed assets



		Years ended 31 December
SEK million		2007			2008			2009


Vessels	Cash proceeds from sale of vessels		793			686			183
	Net book value of vessels sold		(540	)		(483	)		(35	)


	Net gain on sale of vessels		253			203			148
Investment properties	Cash proceeds from sale of properties		364			868			214
	Net book value of properties sold		(267	)		(699	)		(183	)


	Net gain on sale of properties		97			169			31
Total	Cash proceeds from sale of vessels and property		1,157			1,554			397
	Net book value of assets sold		(807	)		(1,182	)		(218	)


Total gain			350			372			179

Total cash proceeds include sales costs of SEK 39 million, SEK 7 million and SEK 19 million, which are not included in the consolidated statement of cash flow for 2009, 2008 and 2007, respectively.

5 — Administrative expenses

For the year ended 31 December 2009, administrative expenses include R&D costs amounted to SEK 50 million. For the years ended 31 December 2008 and 2007, administrative expenses included R&D costs amounted to SEK 32 million and SEK 22 million, respectively.

Fees and other remuneration to auditors and advisors are set forth below.



	Years ended 31 December
SEK million	2007		2008		2009


KPMG
Audit fees		21		20		24
Tax services		25		20		32
Other audit related services		7		6		8
Other auditors
Audit fees				2		3
Tax services		14		11		11
Other services		9		5		12


Total		76		64		90

6 — Investment in associated companies

Investments in associated companies relate to major strategic investments. Results from other associated companies, having a more direct link to normal operations, are included in direct operating expenses.

In 2004, the Company invested in more than 20% of the Swedish listed company Midelfart Sonesson AB (publ), which therefore is accounted for as an associated company. As of 31 December 2009, the investment represents 23.0% of the capital and 24.7% of the votes. The total value of the market value of the investment as of 31 December 2009 was SEK 123 million. As of 31 December 2008, the total share of the market value was SEK 57 million. The Company’s share of results amounted to SEK 12 million in 2009 and SEK 4 million in 2008. During 2009, we invested SEK 30 million in Midelfart.

F-34

6 — Investment in associated companies — continued

In May 2007, the Company invested in further shares in Gunnebo AB (publ). The share of capital increased to more than 20% and was accounted for as an associated company. As of 31 December 2009, the investment represents 25.7% of the capital and the votes. The market value of the investment as of 31 December 2009 and 2008 was SEK 533 million and SEK 179 million, respectively. The Company’s share of results in 2009 amounted to SEK 10 million and SEK (116) million in 2008. During 2009, we invested SEK 130 million in Gunnebo.

In June 2007, the company acquired 45% of the share capital in the newly formed company MPP Mediatec Group. The value of the investment as of 31 December 2009 and 2008 was SEK 340 million and SEK 338, respectively. The Company’s share of results in 2009 was SEK 2 million and SEK 7 million in 2008. As per 31 December 2009 the investment represents 42.7% of the capital and votes.

In 2003, the company acquired 19.9% of the shares in Ballingslöv AB (publ.). In 2005 further shares were acquired and the ownership increased to 22.5% and the investment were consequently treated as an associated company.

During 2006-2007 the investment increased gradually to 28.6%. Between May and July 2008 shares were acquired through a formal takeover bid in Ballingslöv AB (publ.) and the ownership increased to 80.2%. As a result hereof Ballingslöv AB (publ.) became a subsidiary of the Company as from the third quarter and was subsequently delisted.

The investments in Midelfart and Gunnebo are pledged as security for bank debt. The results of these companies are reported with a three month time lag.

Investments in associated companies



	As of 31 December
SEK million	2007			2008			2009


Opening balance		397			1,403			932
Increase — reclassification to associated company		501
Investments		738			406			162
Revaluation		(61	)		(141	)
Dividend		(12	)		(38	)
Share of profit		(60	)		60			24
Exchange differences		(11	)		(28	)		(3	)
Other movements		(89	)
Reclassifications to subsidiaries					(730	)


Closing balance		1,403			932			1,115

For the year ended 31 December 2009, Investments in associated companies include Goodwill amounting to SEK 411 million. For the year ended 31 December 2008, Investments in associated companies include Goodwill amounting to SEK 404 million.

F-35

6 — Investment in associated companies — continued

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



	Country of —								Profit/			%		Share of
Name	incorporation		Assets		Liabilities		Revenues		(loss)			Interest held		result


2007
Midelfart Sonesson AB (publ)		Sweden		1,538		1,039		1,659		(322	)		22		(107	)
Gunnebo AB (publ)		Sweden		4,837		3,695		7,025		128			25		5
MPP Mediatec Group AB		Sweden		845		577		316		(17	)		45		(2	)
Ballingslöv International AB (publ)		Sweden		2,388		1,532		2,892		211			29		43


2008
Midelfart Sonesson AB (publ)		Sweden		1,427		922		1,458		17			23		4
Gunnebo AB (publ)		Sweden		5,262		4,189		6,903		115			25		(116	)
MPP Mediatec Group AB		Sweden		1,061		765		905		12			43		7
2009
Midelfart Sonesson AB (publ)		Sweden		1,338		631		1,354		54			23		12
Gunnebo AB (publ)		Sweden		4,336		2,923		6,788		(205	)		26		10
MPP Mediatec Group AB		Sweden		922		643		811		(21	)		43		2

7 — Result from securities and receivables accounted for as financial fixed assets



	Years ended 31 December
SEK million	2007			2008			2009


Dividends		112			109			18
Realized result from sale of available for sale shares					(34	)		(713	)
Realized result from sale of financial instruments measured at fair value through the income statement		550			(746	)		128
Unrealized result from financial instruments¹⁾		423			(1,372	)		438
Interest income		173			175			123
Exchange differences		(194	)		(122	)		(259	)


Total		1,064			(1,990	)		(265	)

¹⁾ Unrealized result from financial instruments measured at fair value through the income statement.

Dividends refers to dividend income from financial assets held at fair value through income statement and available for sale shares valued through other comprehensive income.

F-36

8 — Other interest and similar profit/loss items



	Years ended 31 December
SEK million	2007			2008			2009


Dividends		98			177			43
Realized result from sale of trading shares		106			(35	)		(117	)
Unrealized result from financial instruments¹⁾		(128	)		(848	)		244
Interest income from investments in SPEs		661			667			477
Gain on termination of leases					1,025			110
Other interest income		85			115			84
Exchange differences		122			282			(5	)


Total		944			1,383			836

Dividends refers to dividend income from shares held for trading. The provision for income related to the financing of the DrillMAX vessel Stena Carron was partly released during 2009. The provision for income related to the financing of the DrillMAX vessel Stena DrillMAX I and the vessels Stena Traveller and Stena Trader was resolved during 2008 when the leasing contracts were terminated.

There has been no material inefficiency in our cash-flow hedges.

1) Unrealized result from financial instruments by category are as follows:



	Years ended 31 December
SEK million	2007			2008			2009


Trading shares		(128	)		(623	)		71
Bunker hedges					(225	)		173


		(128	)		(848	)		244

9 — Interest expense and similar profit/loss items



	Years ended 31 December
SEK million	2007			2008			2009


Interest expenses from investments in SPEs		(416	)		(365	)		(214	)
Other interest expenses		(1,271	)		(1,815	)		(1,843	)
Unrealized result of valuation of interest swaps		(52	)		(81	)		194
Amortization of deferred financing costs		(59	)		(83	)		(67	)
Bank charges		(20	)		(20	)		(33	)
Realized losses on bunker oil derivatives held for trading					(299	)		(162	)
Exchange differences		23			421			(18	)
Other financial items		(151	)		(65	)		(110	)


Total		(1,946	)		(2,307	)		(2,253	)

Deferred financing costs include costs for the issuances of Senior Notes, revolving credit facilities, finance leases etc. See Note 34.

F-37

10 — Income taxes

Income before taxes was distributed geographically as follows:



	Years ended 31 December
SEK million	2007			2008			2009


Sweden		897			733			(180	)
Rest of the world		3,564			645			2,524


Total income before taxes		4,461			1,378			2,344
Current tax
For the period, Sweden		(10	)		(29	)		(29	)
Adjustments previous years, Sweden		(1	)		(1	)
For the period, Rest of the world		(277	)		(249	)		(208	)
Adjustments previous years, Rest of the world		137			26			28


Total current tax		(151	)		(253	)		(210	)
Deferred tax
For the period, Sweden		(116	)		86			129
Adjustments previous years, Sweden					265
For the period, Rest of the world		(294	)		323			(5	)
Adjustments previous years, Rest of the world		(71	)		(54	)		106
Total deferred tax		(481	)		620			230


Total income taxes		(632	)		367			20

Cash paid for taxes in 2009 was SEK 54 million, as compared to SEK 90 million in 2008 and SEK 176 million in 2007.

The reconciliation of the difference between the statutory tax rate in Sweden and the effective tax rate are set forth below:



	Years ended 31 December
Percentage	2007			2008			2009


Statutory income tax rate		28			28			26
Differences in foreign tax rates		(8	)		(22	)		(9	)
Taxes related to previous years		(1	)					3
Losses not currently utilized		1			26
Expenses not deductible		3			5			1
Nontaxable income		(6	)		(29	)		(16	)
Utilization of tax loss carry forwards		(1	)					(2	)
Restructuring		(5	)		(30	)		(1	)
Other		3			(5	)		(3	)


Effective income tax rate		14			(27	)		(1	)

The principle reason why the effective income tax rate is lower than the statutory income tax rate for 2007, 2008 and 2009 is that the international shipping activities and capital gains, sales of financial instruments, are to a large extent tax exempt in many countries.

F-38

11 — Intangible fixed assets

The movements during the years ended 31 December 2008 and 2009 are as follows:



																Other
							Distribution			Customer			IT			intangible
SEK million	Goodwill			Trademarks			agreements			relations			investments			assets			Total


Acquisition costs
Opening balance as per 1 January 2008		602												403			41			1,046
Purchase of company (Note 33)		986			860			560			10			67			2			2,485
Additions		2												53			1			56
Translation differences		(25	)											(1	)		7			(19	)


Closing balance as per 31 December 2008		1,565			860			560			10			522			51			3,568
Additions		7												53						60
Disposals		(88	)		(6	)											(21	)		(115	)
Transfers														2						2
Translation differences		(20	)		(7	)		(20	)					(2	)		(4	)		(53	)


Closing balance as per 31 December 2009		1,464			847			540			10			575			26			3,462
Accumulated amortization
Opening balance as per 1 January 2008		(71	)											(251	)		(34	)		(356	)
Purchase of company (Note 33)					(4	)		(47	)					(34	)					(86	)
Translation differences		18																		18
Current year amortization					(14	)		(24	)		(2	)		(53	)		(13	)		(106	)


Closing balance as per 31 December 2008		(53	)		(18	)		(71	)		(2	)		(338	)		(48	)		(530	)
Translation differences		(1	)					3						1			4			7
Disposals		(21	)														21
Transfers														1						1
Current year amortization		(13	)		(22	)		(47	)		(2	)		(65	)		(2	)		(151	)


Closing balance as per 31 December 2009		(88	)		(40	)		(115	)		(4	)		(401	)		(25	)		(673	)
Net book value as per 31 December 2008		1,512			842			489			8			184			3			3,038
Net book value as per 31 December 2009		1,376			807			425			6			174			1			2,789

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.


New businesses — Adactum			1,238
Ferry operations			138
Total			1,376

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

F-39

11 — Intangible fixed assets — continued

and growth rate. The discount rate before tax used in Adactum was 7.7-9%. The growth rate for revenues used in Adactum has been individually assessed for each company and year until the year 2018. During this period the growth rate normally fluctuates between 2-5% but has in some cases 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.

As of December 31 2009, the recoverable values based on value in use of the cash-generating units were found not to fall short of their net booked values in any test and therefore the related goodwill was not impaired.

A number of sensitivity tests have been made in order to examine possible need for impairment. For these sensitivity tests the discount rate used was 1% respectively 2% higher than above described discount rate. Also, when applying these estimates, no goodwill impairment is indicated for material cash-generating units.

Trademarks

Trademarks are mainly related to the segment New Businesses — Adactum. During 2009, impairment testing has been performed for all trademarks within Adactum. The tests have been performed according to the same procedure as for establishing the recoverable value for goodwill, see description above. The discount rate before tax used for the individual brands was 9%. The growth rate for revenues used until year 2014 was 3-10%. 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.

F-40

12 — Vessels, Construction in Progress and Equipment

The movements during the years ended 31 December 2008 and 2009 are as follows:



				Construction
SEK million	Vessels			in progress			Equipment			Total


Acquisition costs
Opening balance as per 1 January 2008		26,690			5,821			1,816			34,327
Additions		6,089			3,473			428			9,990
Purchase of company (Note 33)		173			1			803			977
Disposals		(978	)					(71	)		(1,049	)
Transfers		3,003			(3,365	)		99			(263	)
Translation differences		3,740			1,625			211			5,576


Closing balance as per 31 December 2008		38,717			7,555			3,286			49,558
Additions		4,351			3,267			664			8,282
Disposals		(1,578	)		(4	)		(87	)		(1,669	)
Transfers		3,281			(4,714	)		657			(776	)
Translation differences		(2,655	)		(455	)		(166	)		(3,276	)


Closing balance as per 31 December 2009		42,116			5,649			4,354			52,119
Accumulated depreciation
Opening balance as per 1 January 2008		(11,347	)					(1,084	)		(12,341	)
Disposals		495						64			559
Purchase of company (Note 33)		(120	)					(560	)		(680	)
Additions		(232	)								(232	)
Translation differences		(1,099	)					(108	)		(1,207	)
Transfers		73						7			80
Current year depreciation		(2 096	)					(232	)		(2,328	)


Closing balance as per 31 December 2008		(14,326	)					(1,913	)		(16,239	)
Disposals		1,547						60			1,607
Translation differences		615						79			694
Transfers		95						(2	)		93
Current year depreciation		(2,790	)					(396	)		(3,186	)


Closing balance as per 31 December 2009		(14,859	)					(2,172	)		(17,031	)
Net book value as per 31 December 2008		24,391			7,555			1,373			33,319
Closing balance as per 31 December 2009		27,257			5,649			2,182			35,088

The insured value of the whole vessel fleet as of 31 December 2009 was SEK 46,147 million, as compared to SEK 44,372 million as of 31 December 2008.

As of 31 December 2008, Construction in progress included seven newbuildings: two RoPax-vessels, “Superferries”, under construction in Germany for delivery in 2010; one drillship under construction in Korea for delivery in 2011; two RoPax ships under construction in a shipyard in Korea for delivery in 2011; and two Panamax vessels ordered from a shipyard in Korea for delivery in 2012. Construction in progress also includes construction of real estate in Stockholm, Gothenburg and Malmö. In total, the contract amount with the shipyards amounts to SEK 13,584 million. Yard payments of SEK 4,871 million, real estate projects of SEK 175 million (valued at fair value), capitalized interest of SEK 124 million and other capitalized costs of SEK 479 million are included in Construction in progress as of 31 December 2009.

The amount of interest capitalized on construction in progress was SEK 284 million and SEK 412 million for the years ended 31 December 2009 and 2008, respectively.

F-41

12 — Vessels, Construction in Progress and Equipment — continued

No capitalization of interest on real estate newbuildings has been made for 2009. Capitalization of interest amounted to SEK 2 million as of 31 December 2008.

Valuation certificates issued on 31 December 2009 by independent valuation institutions indicate that the values in the vessel fleet exceed net book value by SEK 11,139 million, as compared to SEK 18,201 million as of 31 December 2008.

Part of the vessels net book value as of 31 December 2008 refers to vessels held in accordance with financial leasing agreements, see Note 29 Leases.

Equipment is specified as follows:



				Other
SEK million	Windmills			equipment			Total


Acquisition costs
Opening balance as per 1 January 2008		140			1,676			1,816
Additions					428			428
Purchase of company (Note 33)					803			803
Disposals					(71	)		(71	)
Transfers					99			99
Translation differences					211			211


Closing balance as per 31 December 2008		140			3,146			3,286
Additions		8			656			664
Disposals					(87	)		(87	)
Transfers		358			299			657
Translation differences					(166	)		(166	)


Closing balance as per 31 December 2009		506			3,848			4,354
Accumulated depreciation
Opening balance as per 1 January 2008		(7	)		(1,077	)		(1,084	)
Disposals					64			64
Purchase of company (Note 33)					(560	)		(560	)
Translation differences					(108	)		(108	)
Transfers					7			7
Current year depreciation		(7	)		(225	)		(232	)


Closing balance as per 31 December 2008		(14	)		(1,899	)		(1,913	)
Disposals					60			60
Translation differences					79			79
Transfers					(2	)		(2	)
Current year depreciation		(26	)		(370	)		(396	)


Closing balance as per 31 December 2009		(40	)		(2,132	)		(2,172	)
Net book value as per 31 December 2008		126			1,247			1,373
Net book value as per 31 December 2009		466			1,716			2,182

F-42

13 — Buildings and land together with Ports

The movements during the year ended 31 December 2008 and 2009 are as follows:



	Buildings
SEK million	and land			Ports


Acquisition costs
Opening balance as per 1 January 2008		753			1,876
Additions		203			16
Disposals		405
Transfers		47
Translation differences		63			(203	)


Closing balance as per 31 December 2008		1,471			1,689
Additions		62
Purchase of company (Note 33)
Transfers
Translation differences		(55	)		23


Closing balance as per 31 December 2009		1,478			1,712
Accumulated depreciation
Opening balance as per 1 January 2008		(394	)		(784	)
Purchase of company (Note 33)		(102	)
Translation differences		(51	)		87
Transfers		(5	)
Current year depreciation		(21	)		(46	)


Closing balance as per 31 December 2008		(573	)		(743	)
Translation differences		29			(9	)
Transfers
Current year depreciation		(33	)		(45	)


Closing balance as per 31 December 2009		(577	)		(797	)
Net book value as per 31 December 2008		898			946
Net book value as per 31 December 2009		901			915

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 2009 for buildings and land, SEK 488 million relates to Swedish buildings and land. The tax assessment value for these buildings and land amounted to SEK 921 million.

Out of the net book value as of 31 December 2008 for buildings and land, SEK 265 million relates to Swedish buildings and land. The tax assessment value for buildings and land last year amounted to SEK 916 million. Ports are only located in Great Britain, therefore, the tax assessment value is not presented.

F-43

14 — Investment properties



	As of 31 December
SEK million	2008			2009


Opening balance as of 1 January		22,555			23,320
Additions		1,065			857
Reclassification construction in progress		141			655
Disposals		(699	)		(183	)
Unrealized fair value adjustments		(294	)		(301	)
Exchange differences		552			(308	)


Closing		23,320			24,040

Investment Property — impact on the result



	As of 31 December
SEK million	2008			2009


Rental Income		2,085			2,335
Direct cost		(739	)		(804	)


Total		1,346			1,531

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 a combination of comparable sales method and a direct capitalization method which is an income approach. The net operating income is based on the actual numbers, with an adjustment to market rental income with a deduction for a long term rental vacancy level for residential and commercial properties. The operating costs are the actual costs, adjusted to reflect the long term situation and how other investors think in an investment situation. In the assessment, consideration 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 2009, the following rates of return 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 24,040 million compared to last year SEK 23,320 million.

In connection with this 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 properties represent 80% 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.

The tax assessment value for the Swedish properties for the year ended 31 December 2009 amounted to SEK 16,023 million, of which land represented SEK 4,702 million. For the year

F-44

14 — Investment properties — continued

ended 31 December 2008, the tax assessment value for these properties amounted to SEK 15,649 million, of which land SEK 4,562 million.

15 — Investment in SPES

Since late 2002, the Company has invested in special purpose 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 minority share of the results is deducted in the income statement while the minority part of total equity is shown as minority interest 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 were established during 2003, June 2004 and August 2006. The latest CLO was started in November 2006 and is not yet fully established. The minority interests in the CDO/CLOs are 13.7%, 15.4%, 11.3% and 5%, respectively.

The consolidation of the SPEs has had the following impact:



	Years ended 31 December
SEK million	2008			2009


Financial income and expense		(43	)		(351	)
Minority interest		8			41


Net income		(35	)		(310	)
Investments¹⁾		9,973			8,174
Short-term investments²⁾		1,290			1,091
Other assets		240			333


Total assets		11,503			9,598
Retained earnings		574			518
Net income		(35	)		(310	)


Shareholders’ equity		539			208
Minority interest		181			128


Total Equity		720			336
Debt of SPEs³⁾		9,492			8,249
Other debt		1,291			1,013


Total liabilities		10,783			9,262


Total shareholders’ equity and liabilities		11,503			9,598
The investment in SPEs are classified as follows:
Corporate Fixed Income Securities classified as “available for sale” and revalued in other comprehensive income:		1,268			1,347
Senior Bank Debt classified as “held to maturity” and kept at cost in the balance sheet.		8,705			6,827


Total		9,973			8,174


1)		Investment in SPEs are recorded at market value with gains and losses recorded to income statement. Investments in other securities are recorded to market value with gains and losses recorded to other 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 656 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.

F-45

16 — Marketable securities



	Years ended 31 December
SEK million	2008			2009


Opening balance		7,674			2,650
Additions		2,732			961
Disposals		(5,807	)		(2,138	)
Reclassification		192
Revaluation of financial assets through the income statement		(1,474	)		363
Revaluation of financial assets through other comprehensive income		(1,146	)		497
Translation differences		479			(122	)


Investment at the end of year		2,650			2,211
Marketable securities are classified as:
Financial assets at fair value through the income statement		1,923			1,398
Available-for-sale financial assets		727			813


Total		2,650			2,211

Marketable securities refer to the Stena AB groups investments in listed shares, these are recorded at fair value.

As of 31 December 2009, shares with a book value of SEK 0 million have been pledged as security for bank debt. As of 31 December 2008, shares with a book value of SEK 700 million were pledged as security for bank debt.

Marketable securities as of 31 December 2009 are as follows:



SEK million	No. of shares		Book value


Held by parent company:
Vitrolife		110,000		4
Total				4

Corral Finans FRN		50,616,400		374
Sberbank		10,150,000		200
Schlumberger		420,000		196
Telenor		831,000		83
Technip		150,000		76
Novo Nordisk		162,000		74
Brightside		25,789,473		73
Eos Russia BTA		1,799,884		70
HYP Renaissance		10,000,000		69
Comstar		1,695,102		66
Alfa Laval		650,000		64
Outotec		247,000		62
Carlsberg		99,456		53

F-46

17 — Other noncurrent assets



	Deferred			Other-			Available for			Other			Deferred
SEK million	tax assets			receivables			sale shares			shares			costs			Total


Opening balance as per 1 January 2008		641			2,341			1,757			139			557			5,435
Additions		2			821			711			352			635			2,521
Disposals		(2	)		(113	)		(119	)					(648	)		(882	)
Revaluation through the income statement		337			(12	)		(31	)								294
Share of profit (loss)											109						109
Dividend received											(20	)					(20	)
Reclassification		(527	)		(730	)											(1,257	)
Translation differences					(780	)		212			107			32			(429	)


Closing balance as per 31 December 2008		451			1,527			2,531			686			576			5,771
Additions		437			190			128			1			544			1,300
Disposals		(568	)		(804	)		(283	)		(7	)		(568	)		(2,230	)
Revaluation through the income statement		(88	)		(6	)		(195	)								(289	)
Share of profit (loss)											14						14
Dividend received											(24	)					(24	)
Reclassification		287			(36	)											251
Translation differences		13			20			(81	)		(65	)		(24	)		(138	)


Closing balance as per 31 December 2009		532			891			2,099			605			528			4,655

Deferred tax assets relate to unutilized tax losses carried forward. Reclassifications include netting against deferred tax liabilities. See Note 10.

Other receivables as of 31 December 2009 include receivables related to sales of subsidiaries amounting to SEK 354 million. Other receivables as of 31 December 2008 include receivables related to sales of subsidiaries amounting to SEK 1,063 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 other shares valued through comprehensive income, are accounted for as other associated companies. The share of these companies’ results is included in direct operating expenses. See Note 6.

F-48

17 — Other noncurrent assets — continued

Available for sale shares:



SEK million		No. of shares or % held			Book value


Held by parent company:
Alligator			2,054,588			15
Ram one			148,632			155
						170
Held by subsidiaries:
SentoClone	Sweden		19	%		120
Remora	Norway		2,379,670			29
REC ASA	Norway		5,000,000			53
ING DUTCH OFFICE FUNDS	Netherlands		7	%		926
Schiphol Real Estate CV	Netherlands		540			311
China Opportunity Fund	China		6	%		270
EQT China	China		5	%		43
Chase Private Equity Fund	Cayman Islands		3,729,232			17
ICE Canyon emerging market CLO	Cayman Islands		10	%		70
Southern Rock	Gibraltar		5,000,000			58
Other						32


Total available for sale shares						2,099

Other shares



SEK million		No. of shares or % held			Book value


Örgryte Bostads AB & Co KB	Sweden					3
Austen Maritime Services Pte Ltd	Singapore		50	%
Partrederiet SUST I DA	Norway		50	%		45
Partrederiet SUST III DA	Norway		50	%		36
Stena Ugland Shuttle Tankers	Norway
Nordic Rio LLC	Marshall Islands		50	%		27
Stena Sonangol Suezmax pool LLC	Marshall Islands		50	%
Navion Gothenburg LLC	Marshall Islands		50	%		19
Paradise	Liberia		35	%		391
Glacia Limited	Bermuda		50	%		72
RoRo Partners Ltd	Bermuda		49	%		1
Caribbean partners	Bermuda					11


Total other shares						605

18 — Inventory



	As of 31 December
SEK million	2008		2009


Bunker and lubricating oil		110		120
Inventories of goods for sale		187		168
Raw materials and consumables		226		177
Products in progress		57		50
Finished products		95		100


Total		675		615

F-49

19 — Short-term receivables



	As of 31 December
SEK million	2008		2009


Trade debtors
Accounts receivable are classified on the basis of their due date:
Outstanding but not due		3,148		2,790
Due up to 30 days		257		206
Due more than 30 days		244		288


Total		3,649		3,284

Other receivables
Related parties (Note 36)		144		1
Other short-term receivables		3,388		1,720


Total		3,532		1,721

Prepaid expenses and accrued income
Prepaid expenses		769		510
Accrued income		925		1,310
Total		1,694		1,820


Total short-term receivables		8,875		6,825

Book value of trade debtors corresponds to fair value. The total allowance for doubtful trade receivables was SEK 94 million as of 31 December 2009 and SEK 91 million as of 31 December 2008.

Selling expenses as of 31 December 2009 include costs for doubtful receivables of SEK 30 million, and SEK 42 million as of 31 December 2008.

20 — Short-term investments



	As of 31 December
SEK million	2008		2009


Marketable debt and equity securities, trading		380		355
Restricted cash		4,713		3,339


Total		5,093		3,694

Book value of Short-term investments corresponds to fair value. Marketable debt and equity securities are classified as “Financial assets at fair value through the income statement”.

Certain marketable debt and equity securities and restricted cash amounting to SEK 979 million at 31 December 2009 and SEK 1,343 million at 31 December 2008 have been pledged as security for bank debt (see Note 32).

Restricted cash as of 31 December 2009 includes SEK 1,091 million of cash and cash equivalents in the SPEs, which is not available to the Company. As of 31 December 2008 such restricted cash amounted to SEK 1,290 million (see Note 15). Other restricted cash represents bank accounts that have been pledged to cover various long-term liabilities and commitments of the Company.

F-50

21 — Cash and cash equivalents



	As of 31 December
SEK million	2008		2009


Cash		1,206		1,106
Short term deposits		225		77


Total		1,431		1,183

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

22 — Fixed assets held for sale

Fixed assets held for sale referred in 2008 to two tankers from the segment Crude oil tankers with a net book value of SEK 448 million and the fast ferry Stena Discovery from the segment Ferry operations which was fully impaired. These assets were recorded at the lower of carrying amount and fair value with a deduction for selling costs, which in 2008 did not lead to any impairment. These three vessels were sold in 2009.

23 — Equity



Dividend paid per share (SEK):


2008			7,800
2009			3,800

Specification of the reserves:

Fair value

Hedging

Translation

SEK million

reserve

Total

Closing balance as per December 31, 2007

835

847

(46

)

1,636

Exchange differences arising on the translation of foreign operations, net of tax

3,156

3,156

Change in Hedging reserve, net of tax

- valuation of bunker hedges

(607

)

(607

)

- taken to income statement, operating expenses

(582

)

(582

)

- valuation of interest swap hedge

(139

)

(139

)

Change in fair value reserve, net of tax

- valuation available for sale shares

(2,077

)

(2,077

)

Change in net investment hedge, net of tax

(201

)

(201

)

Closing balance as per December 31, 2008

(1,242

)

(682

)

3,110

1,186

Exchange differences arising on the translation of foreign operations, net of tax

(2,079

)

(2,079

)

Change in Hedging reserve, net of tax

- valuation of bunker hedges

585

585

- valuation of interest swap hedge

Change in fair value reserve, net of tax

- valuation available for sale shares

939

939

Change in net investment hedge, net of tax

107

107

Closing balance as per December 31, 2009

(303

)

1,031

780

F-51

23 — Equity — continued

Fair value reserve

This reserve arises on the valuation of available-for-sale financial assets. When an available-for-sale asset is sold, the portion of the reserve that relates to that financial asset, and is effectively realized, is recognized in the income statement. When an available-for-sale asset is impaired, the portion of the reserve that relates to that financial asset is 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 operating, the accumulated translation amounts are recycled to the income statement and included in the gain or loss on the disposal.

24 — Deferred income taxes

The net deferred tax liability of the Company consists of the following:



	As of 31 December
SEK million	2008			2009


Deferred tax liabilities
Tangible fixed assets		3,943			3,767
Financial fixed assets		89			95
Provisions		275			442
Other		414			463


Total deferred tax liabilities		4,721			4,767

Deferred tax assets
Tangible fixed assets		123			36
Tax loss carryforwards		1,956			2,447
Financial fixed assets		276			51
Provisions		288			255
Other					21
Less deferred tax assets not recognized		(1,042	)		(1,157	)


Total deferred tax assets recognized		1,601			1,653

Net deferred tax liability		3,120			3,114
Out of which:
Deferred tax assets (Note 17)		451			532
Deferred tax liabilities		3,571			3,646

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.

F-52

24 — Deferred income taxes — continued

2008

2009

Taxes charged to

comprehensive

Total

Taxes charged to

comprehensive

Total

SEK million

income statement

income

taxes

income statement

income

taxes

Current taxes

(253

)

(253

)

(210

)

(210

)

Deferred taxes

620

(254

)

366

230

(116

)

114

367

(254

)

113

(116

)

(96

)

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



	As of 31 December
SEK million	2008		2009


Sweden		2,724		3,196
Rest of the world		8,457		6,107


Total		11,181		9,303

Most tax loss carryforwards can be carried forward indefinitely.

Tax loss carryforwards of SEK 4,522 million expire between 2010 and 2018.

25 — 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 payments 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 discounted basis. The assumptions include discount rate, inflation, salary growth, long-term return on plan assets, mortality rates and other factors. Discount rate assumptions are based on long-term high quality corporate bonds and government bond yields available at year end. The assets consist mainly of long-term high corporate bonds, government bonds and equities and the asset allocation for each pension scheme is defined in an investment policy document. Defined benefits plan relate mainly to subsidiaries in the UK operations. Other large-scale defined benefit plans apply for salaried employees in Sweden (mainly through the Swedish PRI pension plan) and employees in The Netherlands.

Stena has commitments for retirement pensions and family 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 currently 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 year 2009 and 2008 paid covering such arrangements were SEK 30 million, respectively. Alecta’s profit in the form of the so-called collective consolidation level amounted to 141% for 2009 and 112% for 2008. The collective consolidation level comprises the fair value of Alecta’s assets as a percentage of the insurance commitments calculated in accordance with Alecta’s insurance calculation principles and assumptions which are not in conformity with IAS 19.

F-53

25 — Employee Benefits — continued

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 pensions are reported as administration costs.



	Sweden				Great Britian				Other Europe
Assumptions applied for actuarial calculations, %	2008		2009		2008		2009		2008		2009


Discount rate		4.00		4.00		6.50		5.75		5.80		5.20
Expected return on plan assets				5.00		7.50		7.50		5.10		5.10
Expected salary increases		3.00		3.00		3.75		3.50		3.50		3.50



Pension costs	As of 31 December
SEK million	2008			2009


Current service costs		57			40
Interest costs		673			633
Expected return on plan assets		(690	)		(578	)
Actuarial gains and losses		(1	)		10


Total pension costs for defined benefit plans		39			105
Pension costs for defined contribution plans		322			394


Total pension costs		361			499



Obligations for pensions, net
SEK million	Sweden			Great Britain			Other Europe			Total


Obligations for pensions, net, 1 January 2008		55			1,350						1,405
Current service costs		8			44			5			57
Interest costs		14			651			8			673
Expected return on plan assets		(12	)		(670	)		(8	)		(690	)
Actuarial gains and losses		(1	)								(1	)
Exchange differences					(151	)		1			(150	)
Payment of pension fees from the company		(13	)		(250	)		(8	)		(271	)
Benefits paid		(4	)								(4	)
Business combination		55			36						91
Other provisions					11						11


Obligations for pensions, net, 31 December 2008		102			1,021			(2	)		1,121



Current service costs		10			26			4			40
Interest costs		16			609			8			633
Expected return on plan assets		(8	)		(562	)		(8	)		(578	)
Actuarial gains and losses		10									10
Exchange differences					12						12
Payment of pension fees from the company		(9	)		(271	)		(10	)		(290	)
Benefits paid		(5	)								(5	)
Other provisions		3			(3	)


Obligations for pensions, net, 31 December 2009		119			832			(8	)		943

F-54

25 — Employee Benefits — continued



Provision for pensions, net
SEK million	Sweden			Great Britain			Other Europe			Total


Net provisions for pensions, 1 January 2008		54			1,351						1,405
Current value of funded obligations		390			8,880			144			9,414
Fair value of plan assets		(155	)		(8,009	)		(160	)		(8,324	)
Provisions, net		235			871			(16	)		1,090
Unrecognized actuarial gains and losses		(133	)		150			14			31


Net provisions for pensions, 31 December 2008		102			1,021			(2	)		1,121
Current value of funded obligations		417			11,306			164			11,887
Fair value of plan assets		(182	)		(8,810	)		(177	)		(9,169	)
Provisions, net		235			2,496			(13	)		2,718


Unrecognized acturial gains and losses		(116	)		(1,664	)		5			(1,775	)


Net provisions for pensions, 31 December 2009		119			832			(8	)		943


whereof reported as
Other non-current assets		(113	)		(57	)		(9	)		(179	)
Provisions for pensions		232			889			1			1,122



Historical Information	2007			2008			2009


Current value of funded obligations		11,474			9,414			11,887
Fair Value of Plan assets		(10,505	)		(8,324	)		(9,169	)
Pensions, net		969			1.090			2,718
Unrecognized actuarial gains and losses		436			31			(1,775	)
Net provisions for pensions		1,405			1,121			943

26 — Other provisions



	As of 31 December
SEK million	2008			2009


Opening balance		2,713			2,029
Additions		387			922
Disposals		(1,284	)		(953	)
Exchange differences		213			(78	)


Closing balance		2,029			1,920

Other provisions for 2009 and 2008 relate to provisions for income related to the financing of the DrillMAX vessels Stena Carron and Stena Forth. The provisions will be resolved during the time of the future leasing periods.

27 — Bank debt



	2008						2009
SEK million	Current		Noncurrent		Total		Current		Noncurrent		Total


Property loans		327		13,159		13,486		298		13,443		13,741
Other loans		660		15,383		16,043		939		16,874		17,813
Revolving credit facilities				5,843		5,843				1,033		1,033
Other utilized bank credit lines		402		286		688		304		135		439


Total		1,389		34,671		36,060		1,541		31,485		33,026

F-55

27 — Bank debt — continued

Schedule for repayment of bank debt is presented in note 34, Liquidity risks.

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



	As of 31 December
SEK million	2008		2009


SEK		12,534		12,636
GBP		771		643
USD		15,784		12,863
EUR		6,016		6,295
Other currencies		955		589


Total		36,060		33,026

Regarding assets pledged, see note 32.

28 — Senior notes

In November 2003, the Company issued USD 175 million of notes at an interest rate of 7.5% with maturity on 1 November, 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 2008 USD 18 million and USD 43 million, respectively, was repaid. As of 31 December 2009, Stena had outstanding USD 153 million principal amount of 7.5% Senior Notes due 2013 and USD 129 million principal amount of 7% Senior Notes due 2016.

In February 2007, we issued bonds on the European market. On 8 February 2007, the Company completed an offering of EUR 300 million at an interest of 6.125% of the Senior Notes due 2017.

On 14 February 2007, the Company completed an offering of EUR 102 million at an interest rate of 5.875% of the Senior Notes due 2019. As of 31 December 2009, we had outstanding EUR 300 million principal amount of 6.125% Senior Notes due 2017 and EUR 102 million principal amount of 5.875% Senior Notes due 2019.

The notes in the USA are unsecured but certain ratios between operating income and interest expense must be fulfilled in order to ensure further borrowing possibilities. These ratios do not include the property operations and certain financial investments.

For the notes in Europe there are no pledged securities, however there is one condition that the interest cover ratio should be 2:1.

The indentures governing our Senior Notes due 2013 and 2016 contain covenants that restrict the ability of our subsidiaries to enter into agreements limiting distributions and transfers, including dividends; the indentures governing our Senior Notes due 2017, 2019 and 2020 do not contain these covenants.



										Carrying amount
						Fair value				(SEK million)
Issued-Maturity						As of 31 December				As of 31 December
SEK million	Nominal		Interest			2008		2009		2008		2009


2003-2013		USD 175		7.50	%		USD 101		USD 155		1,206		1,100
2004-2016		USD 250		7.00	%		USD 82		USD 121		1,014		926
2007-2017		EUR 300		6.125	%		EUR 124		EUR 260		3,285		3,075
2007-2019		EUR 102		5.875	%		EUR 36		EUR 84		1,117		1,046


Total											6,622		6,147

F-56

28 — Senior notes — continued

29 — 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 buildings and ports.

Rental expense for operating leases were as follows:

Years ended 31 December

SEK million

2007

2008

2009

Rental expense

2,991

2,863

2,510

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 2007, 2008 and 2009 amounted to SEK 7,990 million, SEK 8,471 million and SEK 7,925 million, respectively. The net book value related to these capital leases amounted to SEK 7,461 million, SEK 7,626 million and SEK 6,619 million as of 31 December 2007, 2008 and 2009, respectively.

As of 31 December 2008 the future minimum lease commitments under non-cancellable operating leases and capital leases were as follows:



SEK million	Operating leases		Capital leases


2009		2,733		135
2010		1,674		615
2011		868		88
2012		577		80
2013		549		242
2014 and thereafter		2,881		966


Total minimum lease commitments		9,282		2,126

As of 31 December 2009 the future minimum lease commitments under non-cancellable operating leases and capital leases were as follows:



SEK million	Operating leases		Capital leases


2010		1,751		135
2011		956		93
2012		585		88
2013		530		86
2014		506		118
2015 and thereafter		2,709		1,523


Total minimum lease commitments		7,037		2,043

F-57

29 — Leases — continued

Company as lessor:

The 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:



	2008							2009

			Accumulated							Accumulated
SEK million	Cost		depreciation			Net book value		Cost		depreciation			Net book value


Vessels		24,151		(6,552	)		17,599		28,609		(7,853	)		20,756
Real estate		23,320					23,320		24,040					24,040


Total		47,471		(6,552	)		40,919		52,649		(7,853	)		44,796

As of 31 December 2008 the future minimum rentals to be received under non-cancellable operating leases were as follows:



SEK million	Vessels		Real estate		Total


2009		7,518		713		8,231
2010		5,781		639		6,420
2011		1,854		467		2,321
2012		2,068		298		2,366
2013		817		165		982
2014 and thereafter				253		253


Total minimum lease rentals		18,038		2,535		20,573

As of 31 December 2009 the future minimum rentals to be received under non-cancellable operating leases were as follows:



SEK million	Vessels		Real estate		Total


2010		5,503		1,759		7,262
2011		3,527		1,631		5,158
2012		1,559		653		2,212
2013		1,441		210		1,651
2014		950		128		1,078
2015 and thereafter		227		222		449


Total minimum lease rentals		13,207		4,603		17,810

In addition to the minimum lease rentals as above, the Company has entered into lease agreements for the DrillMax vessel Stena DrillMax ICE and two Suezmax vessels, currently under construction.

The amounts in the table above exclude amounts from the Company’s portfolio of residential rental properties since those lease agreements are generally cancellable within three months.

F-58

30 — Other noncurrent liabilities



	As of 31 December
SEK million	2008		2009


Prepaid income		103		88
Other liabilities		2,551		1,075


Total		2,654		1,163

Repayment of noncurrent liabilities is required according to the following schedule:



					More than
SEK million	1-3 years		3-5 years		5 years		Total


Prepaid income		26		8		54		88
Other liabilities		1,007		19		49		1,075


Total		1,033		27		103		1,163

31 — Accrued costs and prepaid income



	As of 31 December
SEK million	2008		2009


Accrued costs
Charter hire/running costs		399		350
Interest costs		605		368
Accrued personnel costs		252		331
Other accrued costs		819		701


		2,075		1,750
Prepaid income
Prepaid charter hire		184		37
Other prepaid income		585		447


		769		484
Total accrued costs and prepaid income		2,844		2,234

32 — 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.

F-59

32 — Pledged assets, commitments and contingent liabilities — continued

The following assets have been pledged as securities for bank debt:



	As of 31 December
SEK million	2008		2009


Shares in subsidiaries		1,897		2,904
Mortgages on vessels		21,722		28,113
Mortgages on properties		15,376		15,890
Chattel mortgages		463		487
Investment in affiliated companies		752		914
Marketable securities		700
Trade debtors		391		358
Short term investments		1,343		979
Reservation of title		52		52
Assets pledged, other		795		739


Total assets pledged for normal bank debt		43,491		50,436
Investment in SPEs		9,973		8,174


Total assets pledged for bank debt		53,464		58,610
Long-term and short-term debt and capitalized lease obligations		38,186		35,069
Debt in SPEs		9,492		8,249


Total debt and capitalized lease obligations		47,678		43,318

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

Commitments

Future minimum lease commitments relating to operating leases of vessels, ports etc amount to SEK 1,751 million for 2010 and SEK 5,286 million from 2011. See Note 29.

As of 31 December 2009, a total of seven vessels were on order from different shipyards. The total contract amount for these vessels amounts to SEK 13,584 million. Yard payments of SEK 4,871 million have been made in respect of these contracts.

For credit risks relating to oil derivative contracts the Company has posted collateral of SEK 168 million in 2009 which is presented as restricted cash under short-term investments, see note 20.

Contingent liabilities



	As of 31 December
SEK million	2008		2009


Guarantees		752		1,879
Other contingent liabilities		2,306		1,901


Total		3,058		3,780

Guarantees include mainly newbuilding projects in associated companies and guarantee commitments for equipment delivered.

There are also on-going tax issues with tax authorities in the Group.

F-60

33 — Consolidated statements of cash flows

Purchase of subsidiaries

No subsidiaries were purchased during 2007 or 2009. The description below refers only to acquisitions during 2008.

Ballingslöv:

On 16 May 2008, Stena Adactum made a public cash offer to acquire the remaining shares in the affiliated company Ballingslöv AB (publ). Adactum increased its interest in the share of capital of Ballingslöv from 28.6% to 48% during the second quarter of 2008. After closing of the bid for Ballingslöv, Adactum had increased its interest in the share of capital of Ballingslöv to 80.2% as of 31 December 2008. Ballingslöv has been accounted for as a subsidiary as of the third quarter of 2008.

The acquisition of Ballingslöv is in line with Adactum’s strategy to make long-term investments to build strong and profitable companies. Ballingslöv had at the time for the acquisition 1,446 employees. Ballingslöv is an international group in the field of kitchens, bathrooms and storage products with an ambition to become one of the leading players in the European market. Ballingslöv has one manufacturing site in Ballingslöv in Sweden, one in Great Britain and five in Denmark. The total purchase price was SEK 1,321 million, of which SEK 1,034 million related to acquisitions during 2008. The costs directly linked to the acquisition amounted to SEK 5 million.

The difference between the purchase price paid and the adjusted fair value of acquired net assets, with deduction for minority interest was SEK 644 million and refers to goodwill. The value of the goodwill was finalised in 2009 and did not lead to any adjustment.

Ballingslöv’s total income and EBITDA for 2008 and from the date of the acquisition until 31 December 2008 were SEK 1,285 million and SEK 55 million, respectively. If Ballingslöv had been acquired at 1 January 2008, the corresponding figures would have been SEK 2,774 million and SEK 232 million, respectively.

Sembo:

On 1 January 2008, Stena Line acquired 100% of the shares in Sembo AB. Sembo has the headquarter in Helsingborg and had at the time of the acquisition 55 employees. Sembo is a package holiday company. The acquisition is in line with Stena Lines strategy to strengthen and develop the products supplied. The acquisition enabled Stena Line to offer more than 200 new destinations throughout Europe. The purchase price was SEK 61 million. The difference between the purchase price paid and the adjusted fair value of acquired net assets was SEK 37 million and refers to goodwill. The value of the goodwill was been finalized in 2009 and did not lead to any adjustment.

Sembos total income and EBITDA for 2008 and from the date of the acquisition until 31 December 2008 were SEK 330 million and SEK (2) million respectively.

Steneo AB (HH Ferries):

On 1 October 2008, Stena Line Holding BV acquired 100% of the shares in Steneo AB, including the subsidiaries Helsingborg-Helsingör Shipholding A/S, HH-Ferries A/S and HH-Ferries AB. The Steneo Group had at the time of the acquisition 200 employees. Steneo is the holding company in the group and HH-Ferries runs the ferry route Helsingborg-Helsingör with two ferries. The acquisition creates possibilities in achieving synergies by combining and integrate the HH Ferry operation with Stena Lines present operation. The purchase price was SEK 61 million. The difference between the purchase price paid and the adjusted fair value of acquired net assets

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33 — Consolidated statements of cash flows — continued

was SEK 191 million and refers to goodwill. The value of the goodwill was finalized in 2009 and did not lead to any adjustment.

Steneo’s total income and EBITDA for 2008 and from the date of the acquisition until 31 December 2008 were SEK 58 million and SEK (8) million, respectively. If Steneo had been acquired at 1 January 2008, the corresponding figures would have been SEK 279 million and SEK 2 million, respectively.

The total value of the acquired assets and liabilities is presented in the below table which also shows the cash flow impact of the acquisitions. All acquired assets and liabilities were reported according to IFRS, alternatively no differences compared to IFRS, at the time of the acquisition.



							Adjusted
SEK million	Book value			Adjustment to fair value			fair value


Assets and liabilities acquired:
Intangible assets		370			990			1,360
Tangible fixed assets		505			24			529
Financial fixed assets		128						128
Inventories		280						280
Current receivables		541						541
Cash and cash equivalents		165						165
Provisions		(207	)					(207	)
Long-term debt		(1,266	)					(1,266	)
Current liabilities		(510	)					(510	)
Deferred tax					(283	)		(283	)


Acquired net assets		6			731			737
Minority interest								(167	)
Goodwill								872
Purchase price								(765	)
Costs directly linked to the acquisitions								(5	)
Cash and cash equivalents in the acquired businesses								165

Effect on the Group’s cash and cash equivalents								(605	)

Cash payments

Year ended 31 December

SEK million

2007

2008

2009

Interest

2,327

2,594

2,341

34 — Financial instruments and risk management

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 minimize potential adverse effects on the Group’s financial results. The Group employs derivative instruments to hedge exposure to certain risks.

Risk management is handled by a central finance department, Stena Finans, in accordance with policies determined by the Board of Directors. Stena Finans identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board of Directors prepares written policies for both overall risk management and for risk management of specific areas such as currency risk, interest rate risk, the utilization of derivative and non-derivative financial instruments and the investment of excess liquidity.

F-62

34 — Financial instruments and risk management — continued

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 profile the Company uses various types of interest rate derivatives such as fixed rate swaps and cross currency interest rate swaps. Interest rate options are also used either to cap or to lock in a range of the interest rate level.

Currency risks also arise when converting foreign currency denominated P/L or balance sheet items to SEK and when converting cash flows in foreign currency. These risks are reduced by hedging with forward foreign exchange contracts or with currency options.

Fluctuations in the price of bunker fuel, which predominantly affects the Ferry operations, are managed by fixed price agreements with the supplier for the various grades of bunker fuels or by using financial derivatives for crude oil.

As part of the tanker operations the Company also uses, to a limited extent, contracts for freight rates, forward freight agreements.

The financial risk management is carried out within the scope of the Company’s financial policies and manuals mainly by the treasury units in Switzerland and Sweden.

Credit risks

In our operating activities, credit risks occur in the form of receivables on customers. In our Ferry operations, credit checks are regularly made on our customers using well known credit-rating agencies. If the credit worthiness of the customer is not satisfactory according to the credit policy, payment in cash is required. In our Offshore Drilling operations, our customers 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 charter contract if payment is not received within a certain time, before entering into a charter agreement the credit worthiness of the charterer is investigated using well known credit-rating agencies. If the credit worthiness is not satisfactory 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 being 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 provide a bank guarantee, or to pay the freight before discharge of the cargo (called BBB). In a period charter arrangement the charterhire is paid in advance. If the charterhire is not paid within a certain time we have the right to withdraw the vessel and cancel the charter contract.

Regarding buy and sell arrangements of vessels the procedures are dictated by the buy/sale contract (MOA) where a vessel is not released to a buyer until the full payment has been received into sellers bank account.

In our Property operations, both residential and commercial tenants make the rental payments in advance. Nevertheless, a credit check is always made on new tenants, residential as well as commercial, and commercial tenants are put on regular “credit-watch” throughout the rental period. If the potential tenant does not fulfill the criteria set out in our finance policy, the

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34 — Financial instruments and risk management — continued

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 dealt with counterparties 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 values are netted.

In the tables 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 2008

31 December 2009

Notional

Credit

Notional

Credit

SEK million

amount

risk

amount

risk

Currency forward contracts

29,472

536

17,285

103

Interest rate swaps

8,722

6,748

Interest rate options

4,048

3,910

Commodity fixed price swaps — oil

1,764

1,334

Forward freight agreements

Total

44,051

541

29,277

103

Interest rate risk management

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 Company’s management makes regular assessments of the interest rate risks. This exposure is adjusted with interest rate derivatives which to the largest possible extent are matched against the maturity profiles of the underlying debt.

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34 — Financial instruments and risk management — continued

The following tables summarize the interest rate contracts for hedging of the interest rate exposure of the Company’s debt portfolio in various currencies:

As of 31 December 2008

Type of

Notional amounts

Option

Length of

instrument

Currency

SEK million

Receive rate, %

Pay rate, %

bought/sold

contract

Swap

SEK

1,400

3m Stibor

3.23-3.63

November 2015

Swap

GBP

1,829

6m Libor

GBP real rate²

⁾

June 2013

Cap

SEK

3,500

3m Stibor

4.00

bought

November 2011

Swap

EUR

438

3m Euribor

6m Euribor

November 2009

Swap

USD

1,564

3m Libor

3.66-3.72

June 2011

Swap

EUR

108

5.52

6m Euribor+1.19

December 2012

Swap

EUR

400

6m Euribor

3.83-4.12

March 2017

Cap

EUR

438

3.25

6m Euribor

bought

October 2010

Cap

EUR

110

6m Euribor

3.25

bought

March 2010

Swap

GBP

460

3m Libor

6.03

January 2011

Swap

EUR

567

3m Libor +0.86

3m Libor -0.14

May 2028

Swap

USD

1,955

7.00

4.75+(BMA

)¹⁾

December 2016

Total

12,769

As of 31 December 2009

Type of

Notional amounts

Option

Length of

instrument

Currency

SEK million

Receive rate, %

Pay rate, %

bought/sold

contract

Swap

SEK

1,400

3m Stibor

3.23-3.63

November 2015

Swap

USD

3,363

3m Libor

2.77-3.72

July 2014

Cap

SEK

3,500

3m Stibor

4.00

bought

November 2011

Swap

EUR

179

3m Stibor

4.38

October 2012

Swap

SEK

3m Stibor

4.65

October 2012

Swap

EUR

5.52

6m Euribor +1.19

December 2012

Swap

EUR

629

6m Euribor

2.74-4.12

March 2017

Cap

EUR

308

3.25

6m Euribor

bought

October 2010

Cap

EUR

103

6m Euribor

3.25

bought

March 2010

Swap

GBP

466

3m Libor

6.03

January 2011

Swap

EUR

531

3m Libor +0.86

3m Libor -0.14

May 2028

Total

10,658


1)	BMA= Index return based on the interest rate differential between USD Libor and US Municipality bonds.

2)	Consists of two swaps which results in net transaction whereby Stena pays a fixed real rate in GBP.

For interest rate instruments where interest rate flows and maturities are matched with underlying debt, hedge accounting is used. Total nominal amount of interest rate instruments where hedge accounting is applied amounts to SEK 5,022 million as of 31 December 2009 (SEK 3,969 million as per 31 December 2008). In addition to interest instruments as above, the SPEs investing in different debt securities, see note 15, have also entered into certain hedging instruments. To reduce the potential negative effects on the actual values of these entities, interest swaps have been entered into at an amount equal to that of the underlying fixed rate bonds.

F-65

34 — Financial instruments and risk management — continued

The following table summarizes interest rate swaps entered into for this purpose:

Amount

As of 31 December 2009:

Currency

(SEK in millions)

Receive rate %

Pay rate %

Length of contract

Swap

USD

498

6m Libor

4.85

November 2010

Cap

USD

419

Strike 10.00

November 2012

Swap

USD

716

3m Libor

5.03

October 2015

Cap

USD

265

Strike 7.00

December 2015

Foreign currency risk management

The Company is exposed to the risk of fluctuations in foreign 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 US dollars, but also in GBP and EUR. The Company’s foreign currency risk arises from (i) the Company’s investment in foreign subsidiaries’ net assets (equity exposure), (ii) certain financial assets and liabilities (translation exposure when converting such balances to each company’s functional currency) 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 borrowings in companies with SEK and EUR as their functional currency.

The Company also hedges parts of its transaction exposure in USD, GBP, EUR, NOK and DKK from future cash flows from firm commitments such as charter vessel contracts as well as anticipated bunker fuel payment obligations (USD). The Company’s transaction exposure mainly originates from the Ferry operations.

The following two tables summarize by major currency the contractual net amounts of the Company’s forward exchange and option contracts to hedge the translation- and transaction exposures. The tables contain both forward foreign exchange contracts and currency options.

Outstanding currency hedge contracts for translation and equity exposure — net positions



	2008				2009
SEK million	Purchased		Sold		Purchased		Sold


USD				3,000				3,559
EUR		8,062				4,591
GBP				1,554				1,032
DKK				171				170
NOK				294				251
SEK				2,962		608
Other				81				187


Total		8,062		8,062		5,199		5,199

The book value of our net assets of subsidiaries denominated in a foreign currency, as of December 31 2009, was approximately SEK 18.1 billion. The net assets are expressed mainly in Swedish kronor, Euro, British pounds and U.S. dollars. A 1% change in the value of the SEK against each of the functional currencies of our subsidiaries would affect our shareholders’ equity as of December 31, 2009 by SEK 180 million.

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34 — Financial instruments and risk management — continued

Outstanding currency hedge contracts for transaction exposure — net positions



	2008				2009
SEK million	Purchased		Sold		Purchased		Sold


USD		2,323				453
EUR				957				156
GBP				979				117
NOK		70						243
SEK				336		21
Other				121		42


Total		2,393		2,393		516		516

Bunker fuel risk management

The Company seeks to reduce its risk from changes in the price of bunker fuel, primarily related to the Ferry operations, through a combination of swaps and options. The vessels of the ferry operations have an annual consumption of bunker fuel of approximately 300,000 tons of fuel oil and 100,000 tons of gas oil which combined converts to an annual volume of about 2.6 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. The following table presents the notional amounts of financial instruments used for fuel risk management as of 31 December each year.

Outstanding hedge contracts for bunker fuel exposure



	2008		2009
SEK million	Notional amount		Notional amount


Fixed price swaps (Bought fixed, sold floating)		1,833		1,396
Bought call options		2,631		547
Bought put options		141		75
Sold call options		1,245		209
Sold put options		1,019		220

Freight rate management

The Company seeks to reduce its risk from changes in the price of tanker freight rates through the use of freight forward agreements (FFA’s). The Company enters into contracts as a means to reduce or change the market exposure for chartered in tonnage. The maximum tenor of the contracts are 12 months. The following table presents the notional amounts of financial instruments used for freight rate management. No such contracts were outstanding as of 31 December 2009.

2008

2009

Notional

Credit

Notional

Credit

SEK million

amount

risk

amount

risk

OTC traded swaps

Trading activities

The Company also buys and sells certain types of derivative financial instruments with the objective of generating profits on a short-term basis. Such financial instruments that are not

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34 — Financial instruments and risk management — continued

used in the Company’s program of interest rate and foreign currency risk management are referred to as ‘trading’ for purposes of this disclosure. All trading positions are taken within the limits of the Company’s financial trading policy. All positions are recorded at fair value and the unrealized gains and losses are part of the quarterly results. A summary of the results of the Company’s trading activities on derivative financial instruments is shown below.



	2008						2009
	Net gain/			Notional			Net gain/		Notional
SEK million	(loss)			amount			(loss)		amount


Foreign exchange spot and forwards		83			319			14		493
Currency options ¹⁾		10			(56	)		20		47
Interest rate instruments		(1	)					24
Commodity swaps
Commodity options								87		116


Total trading		92			263			145		656

1) The notional amount is delta adjusted

Financial instruments per category



	Financial
	instruments
	measured at
	fair value through
	profit or loss
					Derivatives used						Loans		Other		Total		Total
SEK million					for hedge						and		financial		carrying		fair
31 December 2009	Fair value option		Held for trading		accounting		Held to maturity		Available for sale		receivables		liabilities		value		value


Assets
Marketable securities		1,398								813						813		813
Other noncurrent assets		364								1,749						2,113		2,113
Trade debtors												3,284				3,284		3,284
Short-term investments				112								3,583				3,694		3,694
Investments in SPEs								6,827		1,347						8,174		7,518
Other receivables				9		103										112		112


Total		1,762		121		103		6,827		3,909		6,867				18,190		17,534


Liabilities
Senior notes														6,147		6,147		5,498
Other Long-term interest bearing debt														34,075		34,075		34,075
Short-term interest bearing debt														1,676		1,676		1,676
Trade accounts payable														1,311		1,311		1,311
Debt in SPEs														8,249		8,249		8,249
Other liabilities				73		246


Total				73		246								51,458		51,458		50,809

Equity price risk

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 2009, a change of +/- 10% in the unrealized value of all our equity holdings within Short-term investments and Marketable securities, would have an effect of +/- SEK

F-68

34 — Financial instruments and risk management — continued

109 million on profit before tax and +/- SEK 81 million recognized in other comprehensive income less deduction of deferred tax.

The table below shows the Group’s assets and liabilities measured at fair value as of 31 December 2009.

Financial instruments per category

SEK million

31 December 2009

Level 1

Level 2

Level 3

Total

Assets

Financial assets at fair value through profit or loss

- Trading derivatives

−1

- Trading securities

1,664

157

1,847

Derivatives used for hedging

103

Available-for-sale financial assets

- Equity securities

766

1,749

2,562

- Debt investments

1,347

Total assets

3,776

213

1,906

5,895

Liabilities

Financial liabilities at fair value through profit or loss

- Trading derivatives

Derivatives used for hedging

246

Total liabilities

319

Specification of financial instruments in Level 3

Opening balance 1 January 2009

2,373

Total gains/losses

- recognized in profit or loss

−9

- recognized in other comprehensive income

−229

Acquisition value

Proceeds from sales

−143

Movements from level 3

Movements to level 3

Translation differences

−86

Closing balance 31 December 2009

1,906

Profit or loss recognized in 2009 for assets recognized in the closing balance 31 December 2009

−23

As of 31 December 2009, 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 on profit before tax and +/- SEK 175 million recognized in other comprehensive income.

The table below summarizes the fair value of balance sheet items in the case where the fair value differs from the carrying value and in addition, the fair value of all financial derivative instruments. When establishing the fair value, the quoted market prices as of 31 December have been used.

The fair value calculation is based on the closing price, i.e., the market value that would have been received or paid if such instrument was sold or terminated on the closing date. The fair

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34 — Financial instruments and risk management — continued

values of financial derivatives with an effective hedge are recorded directly against shareholders’ equity after deduction of tax effects.



	2008						2009

	Carrying			Fair			Carrying			Fair
SEK million	value			value			value			value


Liabilities
Senior notes		6,622			3,183			6,147			5,498
Derivative financial instruments
Held for trading purposes
Currency derivatives		5			5			10			10
Commodity derivatives		(222	)		(222	)		(73	)		(73	)
Held for purposes other than trading:
Interest rate risk management		(403	)		(403	)		(221	)		(221	)
Foreign currency risk management		752			752			103			103
Bunker fuel risk management		(668	)		(668	)		(25	)		(25	)

Liquidity risks

Liquidity risk is managed by maintaining an adequate level of cash and cash equivalents, available financing through unutilized committed credit facilities and the possibility to close 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 company’s funding in the form of committed Revolving Credit Facilities, under which short term requirements for liquidity can be met.

The management regularly monitors the company’s liquidity reserves, based on anticipated cash flows. This is carried out on both operational company level and centrally at the treasury department in line with best practice and the limits set up for on a group wide basis. Furthermore, it is the policy of the group to calculate future cash flows in all major currencies and quantify the liquidity needed to meet those cash flows, to monitor balance sheet liquidity ratios in relation to both internal and external minimum levels and to maintain plans for debt financing.

The table below shows the group’s financial debts and the net market value of derivatives classified as financial short term debt, sorted by the remaining years until the agreed maturity date. The figures shown in the table are based on agreed confirmations and constitute undiscounted cash flows.

Cash flows in foreign currency is converted to SEK by using the closing exchange rates.

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34 — Financial instruments and risk management — continued



			Less than		Between 1 and 2		Between 2 and 5		More than		Not
As per 31 December 2009	Total		1 year		years		years		5 years		specified


Property loans		13,741		298		1,031		889		11,523
Other bankloans		17,813		939		3,424		2,109		11,341
Revolving Credit Facility		1,033										1,033
Other credit facilities		439		304								135
Debt in SPEs		6,147						1,100		5,047
Other interest bearing debt		682		682
Financial leasing debt		2,043		135		181		204		1,523
Operational leasing debt		7,037		1,751		1,541		1,036		2,709
Trade accounts payable		1,311		1,311


Total		50,246		5,420		6,177		5,338		32,143		1,168

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 and with maturities through 2013 and beyond. 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 and with maturities through 2013 and beyond.

The Company has a revolving credit facility of USD 1 billion. The facility was renegotiated in January 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 utilization of the facility.

As of 31 December 2009, the utilized portion of the facility was USD 168 million, of which USD 144 million was actually drawn and USD 24 million used for issuing of bank guarantees. As of 31 December 2008, the utilized portion of the facility was USD 676 million, of which USD 658 million was actually drawn and USD 18 million used for issuing of bank guarantees. As of 2007, the Company has an additional revolving credit facility of USD 350 million and the utilized portion of the facility as of 31 December 2009, was USD 0 million. As of 31 December 2008, the utilized portion of the facility was USD 90 million. As of 31 December 2009 the Company had SEK 1,719 million in other unutilized, mainly uncommitted, overdraft facilities and other similar lines of credit, as compared to SEK 1,748 million as of 31 December 2008.

“Not specified” includes borrowings and utilized credit lines for properties and vessels that have formal repayment dates in 2009. 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.

F-71

35 — Personnel

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



	2008				2009

	Total		No. of females		Total		No. of females


Parent Company:
Board, CEO, Executive vice president		3				4
Other employees		24		13		24		14
Subsidiaries in Sweden		4,460		1,879		4,578		1,819
Total Sweden		4,487		1,892		4,606		1,833
Subsidiaries outside of Sweden:
Great Britain		1,764		502		1,899		515
The Netherlands		759		118		749		112
Denmark		585		237		827		301
Ireland		82		31		74		29
Norway		92		41		83		53
Poland		62		41		55		35
Switzerland		7		1		8		1
Spain		150		25		152		23
Portugal		12		3		12		3
France		8		3		8		3
Luxembourg		13		2		19		2
Russia		2		1		2		1
China		86		17		102		18
Singapore		40		12		41		11
Korea		75		8		81		9
United States		29		7		34		9
India		89		35		91		37
United Arab Emirates		48		8		55		7
Other		6		3		4
Ship borne employees		1,345		3		1,334		7
Total outside of Sweden		5,254		1,098		5,630		1,176


Total group		9,741		2,990		10,236		3,009

Shipborne employees refers to drilling and shipping activities, which are performed world wide. For Ferry operations (Stena Line), such persons have been allocated by country. The total number of shipborne employees in Stena Line in 2009 was 3,833 as compared to 3,836 in 2008.

F-72

35 — Personnel — continued

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



			2007				2008						2009

	Board		Other				Board		Other				Board		Other
SEK million	and CEO		employees		Total		and CEO		employees		Total		and CEO		employees		Total


Parent company		8		29		37		8		35		43		8		30		38
Subsidiaries in Sweden		41		1,145		1,186		49		1,315		1,364		52		1,461		1,513


Total Sweden		49		1,174		1,223		57		1,350		1,407		60		1,491		1,551


Subsidiaries outside of Sweden:
Great Britain		17		650		667		28		724		752		39		750		789
The Netherlands		5		262		267		5		269		274		5		283		288
Denmark		2		78		80		7		229		236		13		401		414
Ireland				36		36				37		37				38		38
Norway		1		56		57		1		53		54		1		55		56
Poland		1		10		11		1		12		13		1		11		12
Switzerland		6		2		8		7		2		9		7		4		11
Spain		2		45		47		2		48		50		2		52		54
Portugal				2		2				3		3				3		3
France				3		3				4		4				4		4
Luxembourg		4		8		12		4		18		22		9		27		36
Russia				1		1				3		3
China		2		12		14		3		14		17		5		21		26
Singapore		1		3		4		4		14		18		1		28		29
Korea		1		11		12		2		22		24		4		19		23
United States		3		22		25		6		31		37		5		42		47
India				5		5		1		4		5		1		6		7
United Arab Emirates		7				7		3		19		22		5		21		26
Other				5		5				3		3				2		2
Ship borne employees				672		672				784		784				926		926


Total outside of Sweden		52		1,883		1,935		74		2,293		2,367		98		2,693		2,791


Total group		101		3,057		3,158		131		3,643		3,774		158		4,184		4,342



	2007						2008						2009
Total personnel costs
	Parent						Parent						Parent
SEK million	company		Subsidiaries		Total		company		Subsidiaries		Total		company		Subsidiaries		Total


Wages, salaries and other remuneration		37		3,121		3,158		43		3,731		3,774		38		4,304		4,342
Pension costs		12		307		319		13		309		322		11		383		394
Other social charges		14		402		416		16		455		471		16		475		491


Total		63		3,830		3,893		72		4,495		4,567		65		5,162		5,227

For Swedish-flagged vessels employed in international shipping activities, the Company has received subsidies 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 the subsidies in 2009 was SEK 421 million, of which SEK 390 million related to the ferry operations. In 2008, the amount of the subsidy was SEK 456 million, of which SEK 427 million related to the ferry operations. The amounts received have reduced personnel costs.

F-73

35 — Personnel — continued

Remuneration of Chief Executives

Salaries of SEK 11 million were paid to the Chief Executive Officer and the Executive Vice President in 2009 and SEK 9 million in 2008. The corresponding pension charges amounted to SEK 3 million in 2009 and SEK 7 million in 2008. The aggregate compensation paid by the Stena AB to its directors (a total of ten persons) amounted to SEK 14 million in 2009 and SEK 11 million in 2008. Of total salaries paid to other employees SEK 37 million were paid to other officers than the Chief Executive Officer, the Executive Vice President and the board members in 2009 (a total of seven persons) and SEK 37 million in 2008.

The Chief Executive Officer and the Executive Vice President have retirement conditions allowing retirement from 60 years of age with a salary of 65% of the salary then valid. The period of notice for the Company is 12 and 24 months, respectively. Severance pay amounts to a maximum of 24 months salary. The board members of Stena AB were paid SEK 275,000 in 2009, 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 2008, the board members of Stena AB were paid SEK 220,000, of which SEK 40,000 was paid to the Chairman of the Board and SEK 20,000 was paid to each of the Chief Executive Officer and the Executive Vice President.

The Chairman of the Board has invoiced SEK 2,199,000 and SEK 2,769,000 for consultations for the years 2009 and 2008, respectively.

Women comprised 20% in 2009 and 2008 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% for 2009 and 2008.

36 — Related party transactions

We have entered into various transactions with other companies in the Stena Sphere, which includes the companies wholly owned by the Sten Allan Olsson family in Sweden, Sessan and Stena Metall and their subsidiaries. Another significant company within the Stena Sphere is Concordia which is 52% owned by Sessan. Shares in Concordia are listed on NASDAQ OMX Stockholm. The significant transactions between the Company and its affiliates are described below.

Concordia

Concordia and the Company (indirectly through Stena Bulk AB, a wholly owned subsidiary of the Company) are parties to an allocation agreement (the “Allocation Agreement”) pursuant to which Concordia may elect to participate 100%, 50% or not to participate in business opportunities identified by Stena Bulk relating to the chartering of tanker vessels. No allocations were made in 2007, 2008 or 2009. The net outcome of the agreement, including results of forward contracts, was SEK 0 million in each of the years 2007, 2008 and 2009.

Sessan

Since June 1999, we have served as the business manager of Sessan for its 50% participation in a Norwegian partnership that owns the shuttle tanker Stena Sirita, which is chartered pursuant to a 10-year contract to ESSO Norway. In 2003, we also became the business manager of Sessan for

F-74

36 — Related party transactions — continued

its 50% participation in the shuttle tanker Stena Spirit, which is chartered pursuant to a 10-year contract to Petrobras in Brazil. We earned total fees for these services of SEK 1.5 million in each of the years 2007, 2008 and 2009.

In 2001 and 2002, Sessan acquired all shares in the shipping company HH-Ferries in the south of Sweden. The acquisition was partly financed by an interest bearing credit facility from us. As of 31 December 2007, DKK 219 million was outstanding under this facility. In October 2008, HH Ferries was acquired by Stena Line. The purchase price was SEK 61 million and at the same time the loan was repaid.

In 2009, we acquired three office buildings in Houston, from Sessan for SEK 179 million.

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall. Such purchases aggregated SEK 1,781 million, SEK 3,012 million and SEK 1,941 million in 2007, 2008 and 2009, respectively. We paid charterhire for vessels to Stena Metall at an amount of SEK 89 million for 2007 and of SEK 139 million for 2008. There were no charters in 2009.

We provide management and other services to Stena Metall. We received SEK 1 million in each of the years 2007, 2008 and 2009 for these services. In 2007, two vessels, Stena Carrier and Mont Ventoux, were sold to Stena Metall at market value and chartered back under operational leases. In December 2008, we acquired the vessels Stena Nordica, Stena Freighter, Stena Carrier and Mont Ventoux from Stena Metall at market value for a total of SEK 1,443 million. The consideration was paid through (i) the issuance of a loan note of SEK 682 million, bearing interest at market rate and maturing on 31 August 2010, and (ii) the assumption by us of the outstanding bank loans relating to the acquired assets for a total amount of SEK 761 million.

Olsson Family

We rent office space from members of the Olsson family.

In each of the years 2007, 2008 and 2009, we paid SEK 40 million, SEK 45 million and SEK 39 million, respectively, in respect of such properties.

We have agreed to pay Sten A. Olsson and Dan Sten Olsson an annual indexed retirement benefit for life.

F-75

37 — Significants events after the end of the year

In February 2010, we entered into an agreement to sell the RoPax vessel Götaland, with delivery scheduled for September 2010.

In March 2010, we issued a ten-year Euro bond in the amount of EUR 200 million with a coupon of 7.875% and maturity in 2020.

On 26 March 2010, a redemption notice was sent to the holders of our 7.5% Senior Notes due 2013 whereby all outstanding notes in the aggregate principle amount of USD 153 million are redeemed in April 2010 at a price of 102.5%. In April 2010, Stena Renewable acquired five new wind power systems near Härnösand, Sweden, for a cash price of SEK 30 million.

38 — Reporting in accordance with IFRS as from 2008

The Stena AB Group’s financial reporting through 2007 were prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP). Effective from 1 January, 2008 Stena prepares its financial reports in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) as issued by the IASB.

Effective from 1 January, 2008 the parent company prepares its financial reports in accordance with RFR 2, Accounting for legal entities. Due to the nature of the company’s operation the transition has not had any significant impact.

Stena AB (publ.) has since 1995 issued Senior Notes in the USA. As a result, the Group files an annual report with the SEC. In accordance with the Swedish and American rules, companies that change accounting principles into IFRS have to report one comparative year. This means that the opening balance is 1 January, 2007.

The below presentation is focused on the areas where Stena AB Group’s current accounting principles are affected by the implementation of IFRS. The most significant areas are further explained in the opening balance as of 1 January, 2007 and the restatement of balance sheet and income statement for the year ended 2007.

Restatements and transition effects, First-time adoption of International Financial Reporting Standards (IFRS 1)

In accordance with IFRS’s transitions rules, (IFRS 1) restatement of previous periods have been made. The general rule is that restatement of the financial reporting for the periods after the transition date should be made as if IFRS has been applied historically. There are, however, certain exemptions from the general rule of which Stena has chosen. These exemptions are further described in the accounting principles;


•	Non-amortization of intangible assets with indefinite useful lives

•	Post Employee benefits

•	Cumulative translation differences

F-76

38 — Reporting in accordance with IFRS as from 2008 — continued

Significant changes in accounting principles, which has an impact on the Group’s financial reports

Minority interests

In accordance with IAS 27, minority interests are presented as a separate component of shareholders’ equity and is included in the net income of the year in the income statement.

Non-amortization of intangible assets with indefinite useful lives

According to Swedish GAAP, all intangible assets have been amortized over their estimated useful lives. In accordance with IFRS, intangible assets which are considered to have indefinite useful lives have not been amortized. These kind of assets are tested annually for impairment. Stena AB Group has chosen not to apply IFRS 3, Business Combinations retrospectively according to the IFRS transition rules. Stena AB Group has decided that intangible assets with indefinite useful lives should include only goodwill which is why amortization charged to the income statement under Swedish GAAP for the period 1 January, 2007 and for the year 2007 are reversed and added back to the carrying value of goodwill.

Post Employee benefits

In accordance with IFRS 1, transition rules, actuarial gains and losses arising prior to 1 January, 2007 could be set to zero and charged to equity. Stena AB Group has applied this rule to all pension plans in the opening balance as of 1 January, 2007.

Financial Instruments

In accordance with the Swedish Annual Accounts Act, it is possible to account for financial instruments at fair value so there are only a few adjustments which are made in accordance with IFRS. The bunker hedges have previously not been accounted for in accordance with Swedish GAAP i.e. they have been treated as off-balance items.

The Group applies hedge accounting for effective contracts so these are accounted for through equity according to IFRS. For foreign exchange hedges, hedge accounting is not applied why these results are reported through Income Statement according to IFRS.

Properties

At the date of transition to IFRS, Properties are accounted at fair value in accordance with IAS 40, Investment properties, fair value adjustments are reported as other income and expenses and repair and maintenance cost according to plan should be reversed and reported as capitalized expenses. No depreciations are made on Properties. The properties are tested annually for impairment. Depreciations for the period 1 January, 2007 and for the year 2007 have been added back to the carrying value. Impairment tests have been made as of 1 January, 2007 and 31 December, 2007.

Net gain sale of assets

Sale of assets is not the core business so this sale is reported net as other income in accordance with IAS 18, Revenues.

F-77

38 — Reporting in accordance with IFRS as from 2008 — continued

Cumulative translation differences

IFRS 1 provides an option how to treat the effects of Changes in Foreign Exchange Rates. A first time adopter can set the cumulative translation difference to zero for foreign operations and this option has been applied in the Stena AB Group for the opening balance 1 January, 2007.

Definition of liquid funds in the consolidated cash flow statements

The definition of liquid funds in the Stena AB Group’s consolidated cash flow statements is identical to the definition in IAS 7, Cash flow statements. Liquid funds consist of cash, bank assets and short term investments which can be converted to cash within 90 days.

Restated Consolidated Balance Sheets



			Swedish							Swedish
			GAAP		IFRS			IFRS		GAAP		IFRS			IFRS
SEK million	Note		1 January 2007		adjustments			1 Jan. 2007		31 Dec. 2007		adjustments			31 Dec. 2007


Intangible assets		a		688		41			729		620		70			690
Vessels, buildings and equipment		b		18,058		95			18,153		23,245		102			23,347
Property		c, k		16,453		4,872			21,325		16,995		5,560			22,555
Investments in affiliated companies				397					397		1,403					1,403
Investments in SPE’s				7,341					7,341		9,251					9,251
Marketable securities				5,802					5,802		7,674					7,674
Other non current assets		d, g, h		3,520		815			4,335		5,474		(39	)		5,435


Total fixed assets				52,259		5,823			58,082		64,662		5,693			70,355
Inventories				317					317		418					418
Trade debtors				2,007					2,007		2,670					2,670
Other receivables		d, g		1,617		(72	)		1,545		2,444		753			3,197
Prepaid expenses and accrued income		b		871		(95	)		776		1,098		(102	)		996


Total short-term receivables				4,812		(167	)		4,645		6,630		651			7,281
Short-term investments				2,462					2,462		3,180					3,180
Cash and cash equivalents				884					884		708					708


Total assets				60,417		5,656			66,073		75,180		6,344			81,524
Shareholders’ Equity and Liabilities
Share Capital				5					5		5					5
Reserves				1,743		(263	)		1,480		2,457		(842	)		1,615
Retained earnings				12,500		4,621			17,121		15,455		5,311			20,766
Net income				4,339					4,339		3,389		440			3,829
Minority interest		f		162					162		171					171


Total shareholders’ equity		e		18,749		4,358			23,107		21,477		4,909			26,386
Non-current liabilities
Long-term debt		g		18,427					18,427		23,335		(23	)		23,312
Debt in SPE’s				6,302					6,302		8,021					8,021
Senior Notes		g		2,905		(17	)		2,888		6,012		(39	)		5,973
Capitalized lease obligations				1,246					1,246		2,307					2,307
Other noncurrent liabilities				932					932		886					886
Provisions for Pension		h		2,205		(411	)		1,794		1,886		(411	)		1,475
Other provisions				1,668					1,668		2,713					2,713
Deferred income taxes		i		1,709		1,737			3,446		2,219		1,908			4,127
Total noncurrent liabilities				35,394		1,309			36,703		47,379		1,435			48,814
Short-term debt				642					642		985					985

F-78

38 — Reporting in accordance with IFRS as from 2008 — continued

Swedish

GAAP

IFRS

GAAP

IFRS

SEK million

Note

1 January 2007

adjustments

1 Jan. 2007

31 Dec. 2007

adjustments

31 Dec. 2007

Senior Notes

1,211

(12

)

1,199

Capitalized lease obligations

154

Trade accounts payable

1,036

1,113

Income tax payable

166

116

Other

424

599

Accrued costs and prepaid income

2,757

3,357

Total current liabilities

6,274

(12

)

6,262

6,324

Total liabilities

41,668

1,285

42,953

53,703

1,435

55,138

Total shareholders’ equity and liabilities

60,417

5,656

66,072

75,180

6,344

81,524

Restated Consolidated Income statements



			Swedish						IFRS
SEK million	Note		31 December 2007			Adjustments			2007


Revenues		j		22,005			(350	)		21,655
Other income		c, j		48			747			795
Total direct operating expenses		k		(15,820	)		93			(15,727	)
Selling and administration expenses		a, l		(2,363	)		216			(2,147	)
Other operating expenses				(117	)					(117	)
Share of affiliated companies’ results				(61	)					(61	)


Income from operations				3,692			706			4,398
Gain (loss) on securities, net				1,141						1,141
Interest income				945						945
Interest expense		m		(1,878	)		(145	)		(2,023	)


Total financial income and expenses				208			(145	)		63
Minority interest				(21	)		21


Income before taxes				3,879			582			4,461
Income taxes				(490	)		(142	)		(632	)


Net income				3,389			440			3,829
Minority Interests							(21	)		(21	)


Net income after minority interest				3,389			419			3,808

Notes:


a		In accordance with IFRS 3, Business Combinations, intangible assets are divided in two categories; those with definite useful life and those with indefinite useful life. Goodwill is in accordance with IAS 38, Intangible assets, an asset with indefinite useful life so amortizations should not be applied. Goodwill is tested annually for impairment. The restatements and transition effects attributable to this accounting change therefore result in reversal of goodwill amortization charged to the income statement for the period 1 January, 2007 to 31 December, 2007. Amortization of goodwill was as of 1 January, 2007, SEK 41 million and for 31 December, 2007, SEK 70 million which has been reversed and therefore increased the carrying amount.

b		Adjustments of capitalized expenses related to periodic repair and maintenance of vessels and rigs i.e. dry-docking. These expenses have been capitalized during different periods and therefore there is an adjustment between prepaid expenses and fixed assets, vessels.

c		Properties are reported at fair value from date of transition 1 January, 2008. In accordance with current accounting principles, properties have been reported at net book value and the effects attributable to this accounting change is as of 1 January, 2007, SEK 4,872 million and for 31 December, 2007, SEK 5,560 million. The changes in fair value are reported as other income and the impact during 2007 is SEK 397 million.

d		At date of transition into IFRS, the bunker fuel hedges have been reported at fair value and the total impact is SEK 771 million as of 1 January, 2007 and SEK 776 million for 31 December, 2007.

F-79

38 — Reporting in accordance with IFRS as from 2008 — continued


e		Reconciliation of shareholders’ equity

		Specification of changes in equity, net after tax, according to IFRS:



Group	1 January 2007			31 December 2007


Goodwill		41			70
Pensions		288			288
Bunker fuel hedge		579			582
Property at fair value		3,450			4,005
Translation reserve		(842	)		(842	)
Retained earnings		842			842
Interest hedges					(36	)


Total adjustments on shareholders’ equity		4,358			4,909


f		In accordance with Swedish GAAP, the minority interests are reported after shareholders’ equity but in accordance with IFRS the minority is a component of the shareholder’s equity.

g		Adjustment regarding capitalized borrowing costs which, in accordance with IAS 23, Borrowing Costs, should be reported together with the loan to which it relates.

h		Adjustment of defined benefit plans, which means that actuarial gains and losses could be set to zero in the opening balance as of 1 January, 2007. This principle is applied on all defined benefit plans.

i		Specification of deferred taxes

		The impact on deferred taxes according to IFRS. The effective tax rate is on average 28%.



Group	1 January, 2007		31 December, 2007


Pensions		123		123
Bunker fuel hedge		193		194
Property at fair value		1,421		1,555
Interest hedges				36


		1,737		1,908


j		Adjustment regarding sale of fixed assets between revenues and other income as of 31 December, 2007. The sale of fixed assets were vessels SEK 253 million and properties SEK 97 million.

k		Adjustment in accordance with IAS 40 regarding capitalization of repair and maintenance in according to plan.

l		Reversal of amortization and depreciation related to goodwill and properties.

m		Hedge accounting is not applied for foreign exchange hedges which is why these are reported through the income statement.

F-80

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Stena AB (publ)

Under date of April 23, 2010, we reported on the consolidated balance sheets of Stena AB (publ) and subsidiaries (“the Company”) as of December 31, 2009 and 2008, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2009, which are included in the Company’s Annual Report on Form 20-F for the year 2009. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

Gothenburg, Sweden

April 23, 2010

KPMG AB

Thomas Thiel

Authorized Public Accountant

S-1

Stena AB and Consolidated Subsidiaries
Property and Accumulated Depreciation
December 31, 2009


			Market		Initial cost		Costs				Accumulated			Net book
Description	Encumbrances		Value		to company		capitalised		Total		Depreciation			value
Property data	(Mortgages)
	TSEK
			TSEK		TSEK		TSEK		TSEK		TSEK			TSEK

SFAB, enclosure no 1		3,284,575		5,436,300
SFNAB, enclosure no 2		716,211		1,184,800
SFSAB, enclosure no 3		1,134,945		2,390,700
SFHKB, enclosure no 4		369,250		810,600
SFFAB group, enclosure no 5		5,699,965		10,196,100
Total Stena Fastigheter group		11,204,946		20,018,500
SRBV, enclosure no 6		1,508,699		2,489,103
SPBV, enclosure no 7		1,067,935		1,706,831
Total Stena Realty group		2,576,634		4,195,934
Assets under construction				−174,848
Total real estate		13,781,580		24,039,586
Stena Line, enclosure no 8		80,449				764,227		−26,084		738,143		(420,829	)		317,314
Adactum, enclosure no 9		163,626				605,572		−1,989		603,583		(132,939	)		470,644
NMM, Glasgow		5,369				52,465		19		52,484		(12,495	)		39,989
Stena Drilling, Aberdeen						36,235		29,279		65,514		(10,168	)		55,346
Stena UK, London						782		70		852		(351	)		501
Scan-Port, Germany						18,221		−1,164		17,057		0			17,057
Total buildings and land		249,444				1,477,502		131		1,477,633		(576,782	)		900,851
Total		14,031,024		24,039,586		1,477,502		131		1,477,633		−576,782			900,851

SCHEDULE III

Property and Accumulated Depreciation

December 31, 2009


			Market		Date of		Date
Description	Encumbrances		value		construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Järnbrott 126:4		34,200		66,000		1961		01/01/81
Kallebäck 7:8		10,505		12,100		1964		01/01/81
Kallebäck 12:4		9,000		24,700		1960		31/12/83
P-huset på Masthugget 712:30		0		24,900
Stampen 26:2		112,500		147,200		1988		01/01/94
Järnbrott 164:22		39,000		54,500		1966		01/02/94
Sannegården 15:4		9,759		17,700		1973		01/01/83
Sannegården 15:5		18,750		90,400		1973		01/01/83
Sannegården 22:19		3,115		24,300		1973		01/01/83
Partille 3:234-5		0		200				01/01/83
Askim 229:2		120,000		256,500		1968/98		01/01/00
Askim 70:1		0		200		1968/98		01/01/00
Askim 59:38		0		1,000		1968/98		01/01/00
Järnbrott 144:5		8,625		28,000		1963		01/08/83
Kallebäck 4:1		36,950		60,800		1963		01/08/83
Kobbegården 257:3		45,000		75,100		1970		01/08/81
Kobbegården 257:1		60,000		19,100		1970		01/08/81
Kobbegården 257:2		45,000		112,600		1970		01/08/81
Kobbegården 151:2		0
Lerum Hallegården 1:246		0		700
Askim 70:2-3		75,375		156,100		1968		01/08/81
Kobbegården 6:139		0		20,300		1974		01/03/86
Gullbergsvass 5:11		78,000		98,400		1988		01/04/94
Kobbegården 6:3		195,000		288,200		1970		12/97
Helsingör 10		39,500		77,000		1964		01/05/81
Kockum 20		8,996		34,600		1960		01/05/81
Kockum 21/22		23,700		45,900		1962		01/01/82
Bilden 10		21,000		22,100		1963		04/84
Almen 20		24,375		39,900		1966		05/81
Frans Suell 14		135,000		261,800		1906/36		02/91
Solbacken 22		10,475		9,100		1964		05/92
Pilåkern 1		83,700		210,000		1959		05/81
Pilåkern 2		0		400		1960/70		05/81
Almen 16		5,400		20,800		1961		05/81
Leonard 1		194,000		280,100		1970		11/00
Abel 14		80,000		203,900		1973		11/00
Abel 15		45,000		0		1973		11/00
Korpen 39		0		16,600		1960/70		01/99
Laboratorn 4		16,800		33,900		1960/70		01/99
Professorn 12		11,900		19,400		1960/70		01/99
Hilleröd 12		5,250		35,000		1962		01/81
Solbacken 13		0		12,900		1965		06/86
Hymnen 1		22,400		41,200		1960/70		05/94

SCHEDULE III

enclosure 1

Property and Accumulated Depreciation

December 31, 2009


			Market		Date of		Date
Description	Encumbrances		value		construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Kantaten 1		42,000		72,100		1960/70		05/94
Kantaten 2		33,600		68,100		1960/70		05/94
Kantaten 3		37,800		75,800		1960/70		05/94
Kantaten 6		27,300		50,400		1960/70		05/94
Monbijou 18		50,000		86,400				2008
Bjärred 40:22		11,900		11,900				2008
Bjärred 9:6, 9:9-10		55,700		68,100				2008
Karstorp 22:19		0		2,800				2008
Karstorp 22:31		0		2,800				2008
Lomma 28:46		23,000		26,800				2008
Lomma 30:55		5,200		11,600				2008
Lomma 35:61		5,300		5,900				2008
Vinstorp 26:50-52		24,500		29,600				2008
Vinstorp 28:29, 33:1		24,400		24,500				2008
Docenten 6		13,500		23,900		1960/70		01/97
Laboratorn 2		20,700		37,000		1960/70		01/97
Professorn 9		19,400		31,500		1960/70		01/97
Professorn 11		21,800		38,100		1960/70		01/97
Laboratorn 3		21,800		40,500		1960/70		01/97
Altona 20 & 21		113,000		150,000		1966		09/98
Pontus 20		97,225		180,100		1935		04/01
Luggude 8		20,000		40,100		1967		04/01
Hämplingen 15		12,750		25,500		1964		04/01
Utanverket 13		48,750		72,700		1958		04/01
Kolga 6		55,000		92,700		1935		04/01
Ryttmästaren 17		0		57,300		1970		02/04
Fältspaten 1		60,000		101,100		1982		02/04
Hjälten 3		124,000		142,800				2005
Hjälmen 3		81,200		87,500				2005
Gropen 2		26,400		47,000				2005
Grottan 16		14,400		29,700				2005
Gnistan 13		12,800		26,300				2005
Gästgivaren 3		11,200		22,800				2005
Gårdsten 58:1		284,175		268,800				2006
Tynnered 13:2		225,000		271,700				2006
Gårda 18:21		32,500		55,600				2009
Gårda 19:7		0		113,200				2007
Total SFAB		3,284,575		5,436,300

SCHEDULE III

enclosure 1

Property and Accumulated Depreciation

December 31, 2009


			Market		Date of		Date
Description	Encumbrances		value		construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Erstavik 26: 8		20,800		38,900		1971-75		12/96
Erstavik 26: 9		21,078		29,200		1971-75		12/96
Erstavik 26: 10		20,500		26,400		1971-75		12/96
Erstavik 26: 11		47,500		80,300		1971-75		12/96
Erstavik 26: 12		44,900		77,400		1971-75		12/96
Erstavik 26: 13		42,100		70,900		1971-75		12/96
Erstavik 26: 14		37,200		62,200		1971-75		12/96
Erstavik 26: 15		36,208		61,100		1971-75		12/96
Erstavik 26: 16		36,700		62,500		1971-75		12/96
Erstavik 26: 17		36,800		61,800		1971-75		12/96
Erstavik 26: 18		41,200		67,400		1971-75		12/96
Erstavik 26: 20		7,000		10,000		1971-75		12/96
Erstavik 26: 28		14,700		22,900		1971-75		12/96
Erstavik 26: 29		15,225		23,400		1971-75		12/96
Erstavik 26: 30		14,800		12,200		1971-75		12/96
Erstavik 26:109		40,600		68,600		1971-75		12/96
Erstavik 26:110		40,800		65,400		1971-75		12/96
Erstavik 26:111		37,600		63,900		1971-75		12/96
Erstavik 26:113		38,900		63,200		1971-75		12/96
Erstavik 26:115		38,900		66,100		1971-75		12/96
Erstavik 26:117		41,500		71,500		1971-75		12/96
Erstavik 26:118		41,200		72,300		1971-75		12/96
Erstavik 26:434		0		7,200		1971-75		12/96
TOTAL SFNAB		716,211		1,184,800

SCHEDULE III

enclosure 2

Property and Accumulated Depreciation

December 31, 2009


			Market			Date of		Date
Description	Encumbrances		value			construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Blackebergs Gård 1		41,475		49,600			1902		04/00
Hägern Större 16		245,000		454,600			1990		04/00
Tempelriddareorden 1		17,500		36,100			1964		12/01
Tempelriddareorden 2		12,110		25,300			1964		12/01
Tempelriddareorden 3		32,900		66,100			1964		12/01
Tempelriddareorden 4		26,600		55,900			1964		12/01
Tempelriddareorden 6		12,950		23,900			1964		12/01
Tempelriddareorden 7		32,900		69,700			1964		12/01
Tempelriddareorden 8		16,450		31,900			1964		12/01
Tempelriddareorden 9		19,950		41,500			1964		12/01
Söderbymalm 3:468		177,910		226,100					12/02
Gröna rutan 1		1,750		500			1964		12/01
Skansen 18		23,750		665,800			1970		09/05
Ekebo 8:2		53,500		52,800					2008
Ekebo 8:3		0		(5,500	)				2008
Ekebo 8:4		0		(30,700	)				2008
Ekebo 8:5		39,700		65,700					2008
Ekebo 8:8		97,100		155,700					2008
Vilunda 6:39		103,400		154,400					2008
Eksätra 1		40,697		56,900					2008
Eksätra 2		26,250		35,700					2008
Högsätra 9		30,750		49,500					2008
Jungruholmen 2		69,179		87,400					2008
Björksätra 1		13,125		21,800					2008
TOTAL SFSAB		1,134,945		2,390,700

SCHEDULE III

enclosure 3

Property and Accumulated Depreciation

December 31, 2009


			Market		Date of		Date
Description	Encumbrances		value		construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Haninge Söderbymalm 6:9		15,000		34,300		1955		07/01
Haninge Söderbymalm 6:10		28,000		51,900		1956		07/01
Haninge Söderbymalm 3:328		9,000		21,300		1956		07/01
Haninge Söderbymalm 3:329		10,000		24,100		1956		07/01
Haninge Söderbymalm 3:333		9,000		20,300		1957		07/01
Haninge Söderbymalm 3:372		9,000		25,000		1964		07/01
Haninge Söderbymalm 3:337		49,250		113,900		1964		07/01
Haninge Söderbymalm 9:1		29,000		73,800		1964		07/01
Haninge Söderbymalm 9:2		26,000		67,700		1964		07/01
Haninge Söderbymalm 6:13		10,500		28,600		1964		07/01
Haninge Söderbymalm 6:14		33,750		59,600		1964		07/01
Haninge Söderbymalm 6:15		18,250		28,200		1962		07/01
Haninge Söderbymalm 6:16		6,000		18,100		1962		07/01
Haninge Söderbymalm 7:16		56,500		118,900		1963		07/01
Haninge Söderbymalm 3:395		14,750		31,200		1967		07/01
Haninge Söderbymalm 3:476		45,250		93,700		1985		07/01
Totalt SFHKB		369,250		810,600

SCHEDULE III

enclosure 4

Property and Accumulated Depreciation

December 31, 2009


			Market		Date of		Date
Description	Encumbrances		value		construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Höken 56, 57, Malmö		78,370		136,300		1984		2004
Jerusalem 69, 70 Malmö		38,250		60,200		1966		2004
Möllebacken 23, Malmö		81,106		172,000		1983		2004
Stralsund 33, Malmö		90,102		211,500		1974		2004
Björnen 4, Malmö		25,715		41,400		1986		2004
Gabriel 9, Malmö		74,573		144,500		1985		2004
Mården 3, Malmö		56,361		113,200		1988		2004
Axel 33, Malmö		163,307		389,400		1988		2004
Bornholm 6, Malmö		77,337		139,900		1975		2004
Granen 14, Malmö		28,293		60,500		1979		2004
Fretten 11, 13 Malmö		88,167		167,500		1979		2004
Nötskrikan 17, Malmö		43,669		77,200		1900		2004
Jägaren 1, Nöbb. 2:15		0		14,300		1980		2004
Jägaren 2-3		250,000		148,000		1973		2004
Villebrådet 1		0		66,500		1973		2004
Kilen 18, Lund		0		173,600		1990		2004
Kilen 19, Lund		66,385		103,600		1992		2004
Cedern 17		92,240		69,600		1970		2004
Danzig 22		15,975		24,600		1961		2004
Elefanten 41		91,948		137,600		1989		2004
Hermodsdal 2		21,675		35,500		1963		2004
Lars 4		14,790		23,500		1958		2004
Mjödet 11		75,225		113,800		1968		2004
Stacken 11		21,420		38,100		1960		2004
Vårdkasen 2		11,050		15,600		1968		2004
Hörby Häggenäs 9:62		0		200		Other		2004
Tolered 129:25-26, 35-36, 122:2-3		80,750		299,400		1960		2004
Gårdsten 62:17		196,000		232,900
Järnbrott 117:5-6		282,200		430,700		1962		2004
Kortedala 92:5, 92:8, 93:2		70,550		106,900		1958		2004
Kortedala 105:5		41,752		57,700		1957		2004
Kortedala 105:3 mfl		157,998		217,400		1956		2004
Johanneberg 39:15		140,269		202,700		1981		2004
Backa 7:12 mfl		142,450		204,500		1965		2004
Backa 886:694-695		0		7,500		Other		2004
Tynnered 27:9		557,600		815,700		1967		2004
Prästhult 1:6		0		200		Land		2004
Tolered 157:2, 158:9, 162:2, 163:2		183,600		288,300		1960		2004
Jursta 3:5 och Jursta 3:6		0		30,800		Other		2004

SCHEDULE III

enclosure 5

Property and Accumulated Depreciation

December 31, 2009


			Market			Date of		Date
Description	Encumbrances		value			construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Jursta 3:6		0		0			Other		2004
Kungsängen 7:6, Uppsala		32,400		65,100			1961		2004
Luthagen 80:1, Uppsala		125,600		259,400			1991		2004
Kvarngärdet 15:1, Uppsala		204,000		32,700			1963		2,004
Kvarngärdet 16:1, Uppsala		0		123,800			1963		2,004
Kvarngärdet 16:2, Uppsala		0		0			1963		2,004
Kvarngärdet 17:1, Uppsala		0		112,600			1963		2,004
Kvarngärdet 17:2, Uppsala		0		0			1963		2,004
Kvarngärdet 18:1, Uppsala		0		33,200			1963		2,004
Kvarngärdet 18:2, Uppsala		0		76,300			1963		2,004
Kvarngärdet 19:1, Uppsala		0		50,300			1963		2,004
Kvarngärdet 19:2, Uppsala		0		(800	)		1963		2,004
Kvarngärdet 19:3, Uppsala		0		(700	)		1963		2,004
Brahehus 1, Malmö		59,450		128,500			1957		2004
Holmen 1, Malmö		116,564		179,500			1982		2004
Martallen 25, Sthlm		8,466		12,900			1931		2004
Martallen 26, Sthlm		7,826		9,700			1932		2005
Källsmora 1:92 (ryttarfastighet)		0		400			1929		2004
Wahrenberg 11		155,200		275,500			1939		2004
Sjukhuset 3		222,510		371,300			1950		2004
Tornet 10		81,280		67,000			1969		2004
Tornet 11		0		13,100			1969		2004
Tornet 12		0		60,100			1969		2004
Vale 9		12,000		25,800			1961		2004
Odinslund 6		70,000		97,900			1925		2004
Dalkarlshugget 2		127,500		266,900			1967		2004
Rosenbrödet 1		0		49,600			1963		2004
Smörrutan 1		26,500		78,700			1964		2004
Wienerbrödet 1		79,500		136,400			1907		2004
Wienerkransen 3, 4		52,105		150,000			1889		2004
Wienerkransen 1		0		45,700			1888		2004
Stativet 4		138,000		274,400			1942		2004
Jakobsberg 2:1164		36,000		46,500			1989		2004
Järvakrogen 2		9,500		11,900			Other		2004
Sikreno 8		6,205		6,100			1924		2004
Stockshem 10		0		76,500			1903		2004
Täckeråker 1:8, 1:9, 2:11		85		0			1991		2004
Täckeråker 2:11, 2:14		36		2,600			Other		2004
Pylonen 1		0		38,400			1972		2004

SCHEDULE III

enclosure 5

Property and Accumulated Depreciation

December 31, 2009


			Market			Date of		Date
Description	Encumbrances		value			construction		acquired
Property data	(Mortgages)
	TSEK
			TSEK

Archimedeslaan		71,797		107,858			1996		03/06
Atoomweg		76,949		89,307			1979		07/02
Brain Park 30		41,442		63,019			1988		05/04
Brain Park 80		13,505		28,336			1989		11/89
Brain Park 120		18,689		41,846			1989		11/89
Breguetlaan		27,996		38,417			1992		04/06
Cessnalaan		34,663		52,012			1997		01/006
Eisenhowerlaan		26,477		36,490			1979		01/02
Euclideslaan		0		64,959			1992		09/09
Haspelslaan		53,816		67,053			1986		07/01
Hogehilweg 6		42,766		54,506			1986		07/06
Keizersgracht		16,047		72,954			1750		10/88
Kiotoweg		48,522		67,637			2002		08/02
Koninginnegracht 10		29,811		50,353			1984		06/98
Koninginnegracht 12		40,770		44,302			1984		06/98
Koninginnegracht 13		18,555		41,376			1990		12/97
Koninginnegracht 14		35,877		47,729			1994		09/01
Koninginnegracht 23		28,876		40,315			1971		01/02
Lichtenauerlaan		36,105		53,311			1997		03/04
Max Euwelaan		42,279		55,968			1988		05/04
Markthalle		17,221		53,485			1987		12/87
Nacap		27,534		37,008			1989		07/89
Nacap01		91,963		98,615			1989		11/05
New York 3, Lijnden		35,292		43,824			2001		12/01
New York 9, Lijnden		31,895		39,625			2001		12/01
Nieuwezijds Kolk		52,098		68,277			1996		04/05
Parkstraat		0		76,386			1880		10/09
Park Voorn		51,806		75,867			1989		10/89
Park Voorn 9		17,573		38,793			1989		02/06
Paviljoensgracht		59,580		73,179			1981		12/99
San Francisco, Lijnden		1,978		2,885			2002		03/02
Scheveningseweg		33,717		52,893			1988		04/04
Schipolweg		47,834		80,449			1986		12/02
Stadhouderskade		67,908		212,714			1928		10/96
Rooseveltweg		30,813		54,749			1995		06/03
Rooseveltweg 11		44,249		62,108			2002		08/06
Veraartlaan		21,451		26,046			1978		08/99
Volmerlaan		41,884		33,140			1978		02/90
Westblaak		43,196		117,817			1976		12/06
Wilhelminalaan		38,321		108,596			1979		05/97
Zeestraat		47,442		53,665			1982		10/00
Eliminering				(38,763	)
Total SRBV		1,508,699		2,489,103

SCHEDULE III

enclosure 6

Property and Accumulated Depreciation

December 31, 2009


			Initial cost		Costs					Accumulated			Net book		Date of	Date
Description	Encumbrances		to company		capitalised			Total		Depreciation			value		construction	acquired
Property data	(Mortgages)		Buildings and land		Improvements
	TSEK		TSEK		TSEK			TSEK		TSEK			TSEK

Hotel Fredrikshavn		80,449		335,526		(29,297	)		306,229		(218,041	)		88,188
Hotel Grenå
Other buildings, Denmark				97,156		(5,924	)		91,232		(80,639	)		10,593
Hook of Holland				118,829		7,243			126,072		(47,788	)		78,284
Port of Helsingborg				57,579					57,579		(54,228	)		3,351
Port of Gothenburg				36,608					36,608		(22,675	)		13,933
Port of Loch Ryan				109,925		2,817			112,742					112,742
Other				2,604		(923	)		1,681		7,543			9,224
Justering				6,000					6,000		(5,000	)		1,000
Total Stena Line		80,449		764,227		(26,084	)		738,143		(420,829	)		317,314

SCHEDULE III

enclosure 8

Property and Accumulated Depreciation
December 31, 2009


			Initial cost		Costs					Accumulated			Net book		Date of		Date
Description	Encumbrances		to company		capitalised			Total		Depreciation			value		construction		acquired
Property data	(Mortgages)		Buildings and		Improvements
			land
	TSEK
													TSEK

Göteborg Backa 170:2		29,400		27,349		376			27,725		(4,148	)		23,577				2001-06
Strand Norum 33:4		8,250		12,503		0			12,503		(1,496	)		11,007				2004-01
Borås Ryda 9:13		600		2,540		0			2,540		(404	)		2,136
Vänersborg Galeasen 1		4,000		6,665		0			6,665		(1,654	)		5,011				1995-01
Umeå Tolvmansgården 4		5,250		7,580		0			7,580		(707	)		6,873				2006-09
Stockholm Bromma Hjässan 18		18,900		27,556		0			27,556		(828	)		26,728		2008-12		2007-11
Stockholm Nacka Sicklaön 349:5		12,600		20,402		26			20,428		(732	)		19,696		2009-01
Mölnlycke Solsten 1:153		21,000		35,627		526			36,153		(964	)		35,189		2009-08
Linköping Glaset 2		0		10,191		345			10,536		0			10,536				2008-12
Stockholm Lidingö 3:390 (ofri grund)		0		2,720		4,214			6,934		(339	)		6,595				2008-09
Arendal Rud 2:6 (ofri grund, pantsatt arrendekontrakt)		0		8,688		0			8,688		(1,735	)		6,953				1999-01
Uppsala Valsätra 1:12 (ofri grund, pantsatt arrendekontrakt)		0		16,303		0			16,303		(2,001	)		14,302				2005-06
Investment in rented property		0		18,716		888			19,604		(2,633	)		16,971
Total S-Invest		100,000		196,840		6,375			203,215		(17,641	)		185,574
Envac		0		693					693		(411	)		282
Balingslöv		63,626		408,039		(8,364	)		399,675		(114,887	)		284,788
Total Other		63,626		408,732		(8,364	)		400,368		(115,298	)		285,070
Total Adactum		163,626		605,572		(1,989	)		603,583		(132,939	)		470,644
Arendal Rud 2:6 (ofri grund, pantsatt arrendekontrakt)		5,000
Uppsala Valsätra 1:12 (ofri grund, pantsatt arrendekontrakt)		10,500
		*15,500*

SCHEDULE III

enclosure 9


		Page

PART I
Item 1.	Identity of Directors, Senior Management and Advisors		3
Item 2.	Offer Statistics and Expected Timetable		3
Item 3.	Key Information		3
Item 4.	Information on the Company		23
Item 4A.	Unresolved Staff Comments		47
Item 5.	Operating and Financial Review and Prospects		47
Item 6.	Directors, Senior Management and Employees		67
Item 7.	Major Shareholders and Related Party Transactions		70
Item 8.	Financial Information		72
Item 9.	The Offer and Listing		73
Item 10.	Additional Information		73
Item 11.	Quantitative and Qualitative Disclosures about Market Risk		78
Item 12.	Description of Securities Other than Equity Securities		80

PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		81
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		81
Item 15.	Controls and Procedures		81
Item 16A.	Audit Committee Financial Expert		81
Item 16B.	Code of Ethics		82
Item 16C.	Principal Accountant Fees and Services		82
Item 16D.	Exemptions from the Listing Standards for Audit Committees		83
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		83
Item 16F.	Change in Registrant’s Certifying Accountant		83
Item 16G.	Corporate Governance		83

PART III
Item 17.	Financial Statements		84
Item 18.	Financial Statements		84
Item 19.	Exhibits		84
EX-2.4
EX-8
EX-12.1
EX-12.2
EX-13.1


Item 16D.	Exemptions from the Listing Standards for Audit Committees


Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers


Item 16F.	Change in Registrant’s Certifying Accountant


INDEX	Page


Report of Independent Registered Public Accounting Firm		F-2

Consolidated Income Statements for each of the years in the three-year period ended December 31, 2009		F-3

Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2009		F-4

Consolidated Balance Sheets as of December 31, 2008 and 2009		F-5

Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2009		F-7

Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2009		F-8

Notes to Consolidated Financial Statements		F-9



	Attributable to equity holders of the company
												Retained
												earnings
			Fair									including
	Share-		value			Hedging			Translation			Net						Minority			Total
SEK million	capital		*reserve^)**			*reserve^)**			*reserve^)**			income			Total			interest			equity


Closing balance as per 31 December 2006		5		901			579						21,460			22,945			162			23,107


Exchange differences arising on the translation of foreign operations, net of tax										(46	)					(46	)		(12	)		(58	)


Share of associated company													(89	)		(89	)					(89	)
Change in Hedgings reserve, net of tax
- bunker hedge valuation							3									3						3
Change in fair value reserve, net of tax				(66	)											(66	)					(66	)
Change in net investment hedge, net of tax							265									265						265


				(66	)		268			(46	)		(89	)		67			(12	)		55
Net income													3,808			3,808			21			3,829


Total comprehensive income				(66	)		268			(46	)		3,719			3,875			9			3,884
Dividend													(550	)		(550	)					(550	)
Transfer to charitable trust													(55	)		(55	)					(55	)


Closing balance as per 31 December 2007		5		835			847			(46	)		24,574			26,215			171			26,386
Acquired subsidiary																			167			167
Exchange differences arising on the translation of foreign operations, net of tax										3,156						3,156			36			3,192
Change in Hedgings reserve, net of tax
- bunker hedge valuation							(1,189	)								(1,189	)					(1,189	)
- interest swap hedge							(139	)								(139	)					(139	)
Change in fair value reserve, net of tax				(2,077	)											(2,077	)					(2,077	)
Change in net investment hedge, net of tax							(201	)								(201	)					(201	)
				(2,077	)		(1,529	)		3,156						(450	)		36			(414	)
Net income													1,752			1,752			(7	)		1,745
Total comprehensive income				(2,077	)		(1,529	)		3,156			1,752			1,302			29			1,331
Dividend													(390	)		(390	)					(390	)
Transfer to charitable trust													(40	)		(40	)					(40	)


Closing balance as per 31 December 2008		5		(1,242	)		(682	)		3,110			25,896			27,087			367			27,454
Exchange differences arising on the translation of foreign operations, net of tax										(2,079	)					(2,079	)		(19	)		(2,098	)
Change in Hedgings reserve, net of tax
- bunker hedge							585									585						585
- interest swap hedge							42									42						42
Change in fair value reserve, net of tax				939												939						939
Change in net investment hedge, net of tax							107									107						107
				939			734			(2,079	)					(406	)		(19	)		(425	)


Net income													2,401			2,401			(37	)		2,364
Total comprehensive income				939			734			(2,079	)		2,401			1,995			(56	)		1,939


Dividend													(190	)		(190	)					(190	)
Transfer to charitable trust													(20	)		(20	)					(20	)
Closing balance as per 31 December 2009		5		(303	)		52			1,031			28,087			28,872			311			29,183


•	IFRS 7 ’Financial instruments — Disclosures’ (amendment) — effective 1 January 2009. The amendment requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy. The change in accounting policy only results in additional disclosures.

•	IAS 1 (revised). ‘Presentation of financial statements’ — effective 1 January 2009. The revised standard prohibits the presentation of items of income and expenses (that is, ’non-owner changes in equity’) in the statement of changes in equity, requiring ’non-owner changes in equity’ to be presented separately from owner changes in equity in a statement of comprehensive income. As a result the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. Comparative information


	has been represented so that it also is in conformity with the revised standard. The change in accounting policy only impacts presentation aspects.


•	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.


•	Ferry operations

•	Drilling operations

•	Shipping operations

•	Property operations

•	New businesses — Adactum


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
HSS vessels and other fast ferries			10-20 years


Other tangible fixed assets:

Other ferries			25 years
Buildings			50 years
Port terminals			50 years
Equipment			3-10 years


	—	Assets classified as financial assets at the acquisition date at fair value through the income statement


•	Assets held to maturity

•	Loans receivable and trade debtors

•	Available-for-sale financial assets



	Average rates				Change in

	2008		2009		%


USD		6.5808		7.6457		16
GBP		12.0912		11.9260		(1	)
EUR		9.6055		10.6213		11


•	Financial liabilities at fair value through the income statement, held for trading

•	Other financial liabilities


•	Cash flow hedging and

•	Hedging of foreign net investments


(i)	Financial instruments listed on an active market (level 1 measurement)


(ii)	Valuation techniques using observable market data (level 2 measurement)


(iii)	Valuation techniques using significant unobservable data (level 3 measurement)


	controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. The group will apply IFRS 3 (revised) prospectively to all business combinations from 1 January 2010.


—	IFRS 5 (amendment), ’Measurement of non-current assets (or disposal groups) classified as held-for-sale’. The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment provides clarification that IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. It also clarifies that the general requirement of IAS 1 still applies, particularly paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of IAS 1. The group will apply IFRS 5 (amendment) from 1 January 2010. It is not expected to have a material impact on the group or company’s financial statements.

—	IAS 1 (amendment), ‘Presentation of financial statements’. The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment provides clarification that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The Group will apply IAS 1 (amendment) from 1 January 2010. It is not expected to have a material impact on the financial statements of the Group.

—	IFRS 9 Financial instruments have been published in three parts: Classification and Measurement , Impairment and Hedge accounting, which will replace IAS 39 with effective date 1 January, 2013. Earlier adoption is permitted given endorsement. Other new, amended and interpretations will not have any material effect on the financial statements of the Group.


—	Significant decline in the economic environment.

—	Decline of the operating result compared to historic and budgeted operating results.



			Book
SEK million	No. of shares		value


Alstom		104,000		52
Comba Telecom		5,935,400		50
Esprit Holdings		1,050,000		50
Q-cells		407,000		48
Explorer Financial Fund		33,999		47
Procter & Gamble		102,900		45
Sistema		290,000		44
Ebay		245,900		41
Iofina		5,195,000		32
SAP		90,000		31
East Capital Explorer		450,000		30
Hexagon		275,005		29
Geely Automobile		6,500,000		26
Xinyu Hengdeli		9,591,000		26
China Highspeed Transmission		1,265,000		22
Vestas		47,868		21
Remora		2,379,670		21
Renewable Energy		329,482		18
Want Want Holding		3,500,000		18
Black Earth Farming		700,000		16
Other				80
Total listed shares				2,211


	Balance at									Balance at
	Beginning				Companies					End
Description	of Year		Additions		acquired		Deductions			of Year
			(SEK in thousands)

Allowance for Doubtful Accounts:

December 31, 2008		38,617		41,681		17,839		(6,964	)		91,173
December 31, 2009		91,173		30,225		—		(27,190	)		94,208