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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006

OR

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

	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.
9.625% Senior Notes due 2012, 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, 2006)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes         No

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.

Yes         No

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         No

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			Accelerated filer			Non-accelerated filer

Indicate by check mark which financial statement item the registrant has elected to follow: Item 17         Item 18

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         No

TABLE OF CONTENTS

						Page
PART I
Item 1.			Identity of Directors, Senior Management and Advisors					2
Item 2.			Offer Statistics and Expected Timetable					2
Item 3.			Key Information					2
Item 4.			Information on the Company					22
Item 4A.			Unresolved Staff Comments					44
Item 5.			Operating and Financial Review and Prospects					44
Item 6.			Directors, Senior Management and Employees					58
Item 7.			Major Shareholders and Related Party Transactions					61
Item 8.			Financial Information					63
Item 9.			The Offer and Listing					63
Item 10.			Additional Information					64
Item 11.			Quantitative and Qualitative Disclosures about Market Risk					68
Item 12.			Description of Securities Other than Equity Securities					70
PART II
Item 13.			Defaults, Dividend Arrearages and Delinquencies					71
Item 14.			Material Modifications to the Rights of Security Holders and Use of Proceeds					71
Item 15.			Controls and Procedures					71
Item 16.			[Reserved]					71
Item 16A.			Audit Committee Financial Expert					71
Item 16B.			Code of Ethics					71
Item 16C.			Principal Accountant Fees and Services					72
Item 16D.			Exemptions from the Listing Standards for Audit Committees					72
Item 16E.			Purchases of Equity Securities by the Issuer and Affiliated Purchasers					72
PART III
Item 17.			Financial Statements					73
Item 18.			Financial Statements					73
Item 19.			Exhibits					73

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Introduction

Unless otherwise indicated, all references in this Annual Report to ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ and similar terms, as well as references to the ‘‘Company,’’ refer to Stena AB (publ) (‘‘Stena AB’’) and its subsidiaries.

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 industry 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, including among others, 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 of costs of operations or the inability to meet efficiency or cost reduction objectives; changes in our business strategy; and various other factors listed in this Annual Report and in our reports filed with the Securities and Exchange Commission (the ‘‘SEC’’) from time to time. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. We do not intend, nor assume any obligation, to revise these forward-looking statements to reflect any future events or circumstances.

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, 2006 has been derived from the audited financial statements. The Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in Sweden (‘‘Swedish GAAP’’), which differs, in certain significant respects, from generally accepted accounting principles in the United States (‘‘US GAAP’’). Reconciliation of such differences which significantly affect the determination of stockholders’ equity as of December 31, 2005 and 2006 and net income for the years ended December 31, 2004, 2005 and 2006 is set forth in Note 31 to our Consolidated Financial Statements.

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Currency of Presentation

Stena AB maintains its Consolidated Financial Statements in Swedish kronor. In this Annual Report, references to ‘‘SEK’’ are to Swedish kronor, references to ‘‘US dollars,’’ ‘‘dollars,’’ ‘‘US$’’ or ‘‘$’’ are to US dollars, references to ‘‘EUR’’, ‘‘euro’’ or ‘‘€’’ 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 European Union, references to ‘‘DKK’’ are to Danish Kronor, references to ‘‘NOK’’ are to Norwegian Kronor and references to ‘‘pounds sterling’’, ‘‘GBP’’ or ‘‘£’’ are to British pounds. For the convenience of the reader, this Annual Report contains translations of Swedish kronor amounts into US dollars at specified rates. No representation is made that the Swedish kronor amounts have been, could have been or could be converted into US dollars at the rates indicated or at any other rates. Unless otherwise stated, the translations of Swedish kronor into US dollars have been made at $1.00 = SEK 6.8342, the noon buying rate in New York City for cable transfers in Swedish kronor as certified for customs purposes by the Federal Reserve Bank of New York (the ‘‘Noon Buying Rate’’) on December 31, 2006. 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, 2006. 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 used in this Annual Report on Form 20-F.

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

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.

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. Drillships typically carry larger payloads than semi-submersible drilling rigs.

Drydock.    A large basin where fresh/sea water is pumped out to allow a ship to dock in order to carry out cleaning and repairing of those parts of a vessel which 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.

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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.

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.

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 co-operation 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 tanker.    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 of some of the products carried, and the ship may have equipment designed for the loading and unloading of cargoes with a high viscosity.

RoPax vessels.    Vessels designed to transport trucks, freight trailers, buses and cars and which also provide cabin accommodations for passengers.

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

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 a computer-controlled thruster system.

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

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between 1973 and 1981, third generation drilling rigs are drilling rigs that were delivered between 1982 and 1985 and fourth generation drilling rigs are drilling rigs that have been delivered since 1986. Fifth generation drilling rigs are drilling rigs that have been delivered since 1997. Sixth generation drilling rigs are drilling rigs that have been delivered after 2005.

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

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

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

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.

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

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

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SELECTED FINANCIAL DATA

			YEAR ENDED DECEMBER 31,
			2002						2003						2004						2005						2006						2006
			SEK						SEK						SEK						SEK						SEK						USD(1)
			(in millions)
CONSOLIDATED GROUP(2)
INCOME STATEMENT DATA (SWEDISH GAAP):
Total revenues					13,425						13,619						16,721						19,619						22,895						3,350
Direct operating expenses					(9,020	)					(9,333	)					(10,943	)					(12,631	)					(13,547	)					(1,982	)
Selling and administrative expenses					(1,468	)					(1,522	)					(1,761	)					(1,861	)					(2,127	)					(311	)
Depreciation and amortization					(1,764	)					(1,742	)					(1,790	)					(2,734	)					(2,634	)					(386	)
Total operating expenses					(12,252	)					(12,597	)					(14,494	)					(17,226	)					(18,308	)					(2,679	)
Income from operations					1,173						1,022						2,227						2,393						4,587						671
Share of affiliated companies’ result					51						—						17						21						27						4
Gain on sale of affiliated company					601						—						—						—						—						—
Interest income					212						85						382						567						737						108
Interest expense					(1,036	)					(824	)					(1,135	)					(1,395	)					(1,649	)					(241	)
Other financial items(3)					(1	)					212						965						876						1,027						150
Minority interest					1						2						(77	)					(21	)					(23	)					(3	)
Income before taxes					1,001						497						2,379						2,441						4,707						689
Net income					1,031						510						2,359						2,268						4,339						635
BALANCE SHEET DATA (SWEDISH GAAP):
Cash and marketable securities(4)					3,499						4,568						5,088						9,252						9,148						1,338
Investments in VIEs(5)					—						—						4,440						5,753						7,341						1,074
Total assets					30,664						30,127						46,311						54,812						60,417						8,840
Debt in VIEs(5)					—						—						3,925						4,844						6,302						922
Other debt(6)					14,756						14,826						23,024						26,793						24,469						3,580
Stockholders’ equity(7)					11,589						11,470						13,419						15,132						18,587						2,720
OTHER FINANCIAL DATA (SWEDISH GAAP):
Capital expenditures					(2,359	)					(3,148	)					(3,343	)					(5,152	)					(8,148	)					(1,192	)
Cash dividends paid					(50	)					(60	)					(70	)					(195	)					(215	)					(32	)
Cash flow from operating activities					2,143						1,790						1,456						2,403						3,567						522
Cash flow from investing activities					936						(3,556	)					(5,331	)					(2,948	)					(7,287	)					(1,066	)
Cash flow from financing activites					(3,164	)					1,444						4,536						1,850						1,092						159
CONSOLIDATED AMOUNTS (US GAAP):
Income from operations					1,106						1,171						2,340						2,165						3,635						532
Net income					1,413						316						1,852						2,008						3,016						441
Total assets					30,401						30,761						45,319						55,229						60,282						8,821
Stockholders´equity					10,671						10,954						11,982						14,913						17,551						2,568

(1) Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.8342, the noon buying rate on December 31, 2006.

(2) The Consolidated Group includes from 2004 the Bostads AB Drott group (‘‘Drott’’) and investments in variable interest entities (‘‘VIEs’’).

(3) Other financial items refer to financial income (expense) including dividends received, gain (loss) on securities, foreign exchange gains (losses) and other financial income (expense), In 2005 we changed our accounting policy to value financial instruments at market value. The accounts for 2003 and 2004 have been restated.

(4) Cash and marketable securities consists of cash and cash equivalents, short-term investments and marketable securities.

(5) As of December 2006 we had invested in three VIEs, whose purpose is to invest primarily in high yield securities and corporate bank loans. Due to changes in Swedish GAAP in 2005, these VIEs are consolidated as subsidiaries. The accounts for 2004 have been restated.

(6) Other debt includes short-term debt, long-term debt and capitalized lease obligations, current and non-current.

(7) Certain pension liabilities, which were previously accounted for as contingent liabilities, have been recorded as pension liabilities in the consolidated balance sheet as of December 31, 2005 and as of December 31, 2006. The change has been recorded directly against shareholders’ equity and deferred tax liabilities, respectively.

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Restricted Group Data as of December 31, 2006

We issued $200 million 9.625% Senior Notes due 2012 in November, 2002, $175 million 7.5% Senior Notes due 2013 in December, 2003 and $250 million 7% Senior Notes due 2016 in November, 2004. In 2004, 2005 and 2006 we repurchased $12 million, $6 million and $5 million principal amount of the 9.625% Senior Notes due 2012, respectively. For the year ended December 31, 2006 Restricted Group Data represents our selected consolidated financial information, excluding the real estate operations (other than one small property) and three subsidiaries, Stena Finanzverwaltungs AG, Stena Investment Luxembourg SARL and Stena Adactum AB, whose activities consist primarily of investing in securities and in companies outside our traditional lines of business. Our real estate operations are conducted through various subsidiaries. For purposes of the indentures under which these senior notes were issued, the subsidiaries through which the property operations are conducted (other than the three small properties), together with Stena Finanzverwaltungs AG, Stena Investment Luxembourg SARL and Stena Adactum AB, 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 9.625% senior notes due 2012 pursuant to a tender offer and consent solicitation. Also in February 2007, we completed an offering of €300 million of 6.125% senior notes due 2017 and €102 million of 5.875% senior notes due 2019. For purposes of the indentures pursuant to which these notes where issued, the subsidiaries mentioned above are also designated as unrestricted subsidiaries and, as a result, are not bound by the provisions of these indentures. As of the date of this Annual Report, we are seeking consents from the holders of our senior notes due 2013 and 2016 to amend the indentures relating to these notes. Such amendments require the consent of the holders of a majority in principal amount of each of such senior notes.

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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,
			2004						2005						2006						2006(1)
			SEK						SEK						SEK						USD
			(in millions)
RESTRICTED GROUP
INCOME STATEMENT DATA (SWEDISH GAAP):
Revenues from operations					14,397						15,352						16,731						2,448
Net gain on sale of vessel					656						316						2,313						338
Net gain on sale of properties					33						145						63						9
Total revenues					15,086						15,813						19,107						2,795
Direct operating expenses					(9,998	)					(10,761	)					(11,289	)					(1,652	)
Selling and administrative expenses					(1,653	)					(1,586	)					(1,776	)					(260	)
Depreciation and amortization					(1,697	)					(2,357	)					(2,401	)					(351	)
Total operating expenses					(13,348	)					(14,704	)					(15,455	)					(2,263	)
Income from operations					1,738						1,109						3,641						532
Share of affiliated companies´results					19						—						—						—
Interest income					168						224						292						43
Interest expense					(751	)					(690	)					(753	)					(110	)
Other financial items(2)					343						658						371						54
Total financial income and expense					(240	)					192						(90	)					(13	)
Minority interest					(57	)					(1	)					(2	)					0
Income before taxes					1,460						1,300						3,549						519
Net income					1,695						1,298						3,332						487

(1) Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.8342, the noon buying rate on December 31, 2006.

(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), In 2005 we changed our accounting policy to value financial instruments at market value. The accounts for 2004 have been restated.

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			YEAR ENDED DECEMBER 31,
			2005						2006						2006(1)
			SEK						SEK						USD
			(in millions)
RESTRICTED GROUP
BALANCE SHEET DATA (SWEDISH GAAP):
Intangible fixed assets					307						222						32
Tangible fixed assets					17,007						17,569						2,571
Marketable securities					370						456						67
Other noncurrent assets					5,285						11,396						1,668
Total noncurrent assets					23,069						29,643						4,338
Short-term investments					1,369						1,243						182
Cash and cash equivalents					3,608						657						96
Other current assets					5,416						3,885						568
Total current assets					10,393						5,785						846
Total assets					33,462						35,428						5,184
Total stockholders’ equity					13,556						15,689						2,296
Deferred income taxes					247						420						61
Other provisions					1,876						3,822						559
Long-term debt					14,120						9,796						1,433
Other noncurrent liabilities					91						881						129
Total noncurrent liabilities					14,211						10,677						1,562
Short-term debt					680						1,798						263
Other current liabilities					2,892						3,022						443
Total current liabilities					3,572						4,820						706
Total stockholders’ equity and liabilities					33,462						35,428						5,184

(1) Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.8342, the noon buying rate on December 31, 2006.

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			2004						2005						2006						2006
			SEK						SEK						SEK						USD(1)
			(in millions)
RESTRICTED GROUP
CONSOLIDATED STATEMENT OF CASH FLOW:
Net income					1,695						1,298						3,332						488
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					1,697						2,357						2,401						351
Share of affiliated companies´ results					(19	)					—						—						—
(Gain)/loss on sale of property, vessels and equipment					(686	)					(461	)					(2,376	)					(348	)
(Gain)/loss on securities, net					(293	)					(682	)					(289	)					(42	)
Unrealized foreign exchange (gains) losses					(160	)					112						(124	)					(18	)
Deferred income taxes					(333	)					2						49						7
Minority interest					57						1						2						0
Other non cash items					9						(117	)					(311	)					(46	)
Net cash flows from trading securities					(605	)					86						645						95
Changes in working capital					(403	)					(212	)					299						44
Net cash provided by/(used in) operating activities					959						2,384						3,628						531
Net cash flows from investing activities:
Purchase of intangible assets					(162	)					(78	)					(20	)					(3	)
Cash proceeds from sale of property, vessels and equipment					2,403						1,406						4,585						671
Capital expenditure on property, vessels and equipment					(2,901	)					(3,176	)					(6,367	)					(932	)
Purchase of subsidiary net of cash acquired					(3,183	)					(756	)					3						0
Sale of subsidiary					—						325						—						—
Proceeds from sale of securities					2,951						591						6						1
Purchase of securities					(1,236	)					(456	)					(94	)					(14	)
Increase of non-current assets					(111	)					(130	)					(148	)					(22	)
Decrease of non-current assets					18						14						12						2
Other investing activities					132						32						32						5
Net cash used in investing activities					(2,089	)					(2,228	)					(1,992	)					(292	)
Net cash flows from financing activities:
Proceeds from issuance of debt					2,171						148						2,220						325
Principal payments on debt					(1,735	)					(222	)					(245	)					(36	)
Net change in borrowings on line-of-credit agreements					1,675						3,243						(4,024	)					(589	)
Principal payments capital lease obligations					(42	)					(41	)					(39	)					(6	)
Net change in restricted cash accounts					(10	)					37						(382	)					(56	)
Intercompany accounts					65						(1,634	)					(1,553	)					(227	)
Dividends paid					(70	)					(195	)					(215	)					(31	)
Other financing activities					(244	)					(245	)					(122	)					(18	)
Net cash provided by financing activities					1,810						1,091						(4,360	)					(638	)
Effect of exchange rate changes on cash and cash equivalents					1						57						(228	)					(33	)
Net change in cash and cash equivalents					681						1,304						(2,952	)					(432	)
Cash and cash equivalents at beginning of year					1,623						2,304						3,609						528
Cash and cash equivalents at end of year					2,304						3,608						657						96

(1) Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.8342, the noon buying rate on December 31, 2006.

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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.

YEAR ENDED DECEMBER 31,			AVERAGE(1)						HIGH						LOW
2002					9.6571						10.7290						8.6950
2003					8.0351						8.7920						7.1950
2004					7.3320						7.7725						6.5939
2005					7.5200						8.2434						6.6855
2006					7.3098						7.9656						6,7674
November 2006					—						7.2754						6.8609
December 2006					—						6.9204						6.7674
January 2007					—						7.0829						6.7818
February 2007					—				7.1177						6.9140
March 2007					—				7.1345						6.9285
April 2007					—				7.0272						6.6756

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

On April 30, 2007, the Noon Buying Rate for the Swedish kronor, expressed as Swedish kronor per U.S. dollar, was $1.00 = SEK 6.6934.

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, 2006, we had outstanding consolidated indebtedness (excluding VIEs) of SEK 24.5 billion ($3.6 billion), of which SEK 12.9 billion ($1.9 billion) was the obligation of unrestricted subsidiaries (as defined in the indentures governing our indebtedness). Our total debt (excluding VIEs) as a percentage of our total capitalization was approximately 57%. For the restricted group, the debt as a percentage of total capitalization was approximately 43%.

Our indebtedness could restrict our operations and make it more difficult for us to fulfill our obligations under the 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 facility, the agreements governing our other indebtedness and the indentures governing

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our senior notes, we and our subsidiaries may incur additional indebtedness from time to time, including to finance the purchase or completion of newbuildings and other vessels. As of March 31, 2007, the total remaining cost for our newbuilding program was $1.4 billion plus €561 million. The remaining cost for the RoPax vessel on order from a shipyard in Norway, fully equipped, was approximately €30 million. In March 2006, we entered into an agreement to acquire a newbuilt RoPax vessel from an Italian shipyard with expected delivery in May 2007. As of March 31, 2007, the remaining cost for the vessel, fully equipped, was approximately €65 million. As of March 31, 2007, the remaining unpaid cost of two RoPax super ferries we ordered from a shipyard in Germany in November 2006 was approximately €400 million. As of March 31, 2007, the aggregate remaining cost for our three DrillMAX drillships on order from a shipyard in Korea, fully equipped, was approximately $1.4 billion, and the remaining cost of extension of the second of two of our RoPax vessels was €66 million. The first of our RoPax vessels being extended was redelivered to us in March 2007 at a cost of €42 million.

Although certain indebtedness of ours bears a fixed rate of interest, certain other indebtedness of ours 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 such 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.

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

Although there can be no assurances, we believe that the level of borrowings available to us combined with cash from our operations will be sufficient to provide for our cash requirements. To date, we have been able to generate sufficient cash flow from operations, borrowings and refinancing 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 notes impose restrictions on our business.

Our revolving credit facilities, the indentures governing our senior notes due 2013 and 2016 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

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operate our business and to take advantage of business opportunities as they arise. The restrictions these covenants place on us 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.

The indentures governing our senior notes due 2017 and 2019 also contain covenants with respect to, among other things, limitations on consolidated and subsidiary debt and limitations on liens in respect of capital market indebtedness.

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 the revolving credit facilities would be in default and could be accelerated by our lenders. 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 notes and may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions.

Because 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 indentures governing our senior notes due 2013 and 2016 contain covenants that restrict the ability of our subsidiaries to enter into any agreement limiting distributions and transfers, including dividends; the indentures governing our senior notes due 2017 and 2019 do not contain these covenants. However, our real estate operations and certain of our investment activities are conducted through unrestricted subsidiaries which 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 the 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 one small property) and the subsidiaries that

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conduct certain 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, 2006, these unrestricted subsidiaries had outstanding indebtedness (including VIEs) of approximately SEK 19.2 billion ($2.8 billion), all of which was non-recourse to Stena AB and its restricted subsidiaries; in the case of the real estate subsidiaries, such debt was secured by their real property interests. Neither we nor any of our restricted subsidiaries have guaranteed payment of any of this indebtedness. There is no limitation in the indentures 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 indentures governing our senior notes due 2013 and 2016 contain certain limitations on our ability to make investments in unrestricted subsidiaries.

In addition, because the covenant of the indentures governing our senior notes due 2013 and 2016 prohibiting, subject to certain limitations, the creation of limitations on the ability of our subsidiaries to pay dividends does 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 unrestricted subsidiaries will be available to us to pay our obligations under any of our indebtedness. All our our indentures also provide for designating other of our subsidiaries as unrestricted subsidiaries.

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

We compete with other ferry operators and with different providers 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. In the case of competition with other ferry operators, such competition is based on the location of the routes, the rates charged, the quality and reliability of the vessel and the 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 better able to withstand price competition and price volatility than we are.

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

Fuel represents a significant cost incurred by us in the operation of our fleet. 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 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. In recent years, prices for fuel have increased substantially and have been volatile. Further or sustained increase 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 resulting in loss of carryings.

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 at times our bunker fuel requirements are not fully hedged. Increases in fuel prices have required us

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to take impairment charges with respect to our three HSS 1500 vessels, one of which was taken out of service in January 2007 because it is unprofitable to operate that vessel on its route at current bunker fuel prices. The depreciation and amortization charges in the year ended December 31, 2006 included an impairment charge of SEK 710 million and SEK 765 million in the year ended December 31, 2005 related to the HSS vessels.

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, except our drillship ordered in October 2006 for delivery in the second quarter of 2009, are currently under contract, with expiration dates ranging from 2008 to 2011. 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.

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 suitability of equipment 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, RoPax and car/passenger ferry vessels, a substantial portion of our vessel utilization has been through long-term charters. For the five years ended December 31, 2006, the RoRo vessels have averaged a utilization rate of approximately 97%. As of December 31, 2006, all of the vessels in our fleet of seven owned RoRo and RoPax vessels (including one RoRo vessel in which we have a 49% ownership interest) were under charter, with expiration dates ranging from 2007 to 2012. 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, 2006, our drilling rig utilization rate has averaged approximately 84%. All our drilling units are currently under contract, except our drillship

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ordered in October 2006 for delivery in the second quarter of 2009, with expiration dates ranging from 2008 to 2011. 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.

For the five years ended December 31, 2006, the utilization for our fleet of chartered in, owned and finance leased tankers has averaged approximately 98%. Although we have long-term time charters in place for five of our six owned and finance leased tankers (including three tankers in which we have a 50% ownership interest), 29 of our 34 chartered in tankers were trading on the spot market as of March 31, 2007. There can be no assurance that rates on the spot market will not 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 2007 and 2011.

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

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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 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 and therefore could have a material adverse affect on our 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.

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 such 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 determine to 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. In such event, we would not receive any cash flow or income generated by the investment, and such activities by our owners may result in such other companies or our owners directly competing with us.

In the case of corporate opportunities and conflicts of interest, Swedish corporate law requires our directors to act in our best interests. Our board of directors is advised by Swedish counsel with respect to such matters. Our eight directors and one deputy director include four directors who are neither employees nor officers of Stena AB and three directors, including our deputy director, who are appointed by the trade unions representing our employees.

The loss of the services of our key employees could materially adversely affect our revenues, results of operations and prospects.

We rely, and expect to continue to rely, upon Dan Sten Olsson, our Chief Executive Officer, and Svante Carlsson, our Chief Financial Officer, as well as certain other key employees for the

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successful pursuit of our activities. The loss of any of their services could have an adverse effect on our operations. We do not maintain life insurance with respect to Messrs. Olsson or Carlsson.

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. We negotiate labor agreements for our offshore drilling operations separately 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 statements 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 US dollars, British pounds, euro and Norwegian kroner. In particular, we incur significant expenses in US dollars for fuel and for expenses in our tanker operations, and as of December 31, 2006, approximately $1.1 billion of our debt was denominated in US dollars, excluding the debt pertaining to our VIEs. Fluctuations in the exchange rates between the US dollar and other currencies could have a material effect on the amount of funds denominated in other currencies needed by us to satisfy our US 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 statements and/or our operating margins.

We utilize various financial instruments, including hedging arrangements, to manage financial risks, which 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

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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 believe the possibility of non-performance by counterparties is remote (given that we maintain a policy of entering into such arrangements only with highly rated institutions), the impact of such a default may have an adverse effect on our result of operations.

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

As of December 31, 2006, the fair value of our marketable securities and short-term investments (including restricted cash of SEK 882 million) amounted to SEK 8.3 billion, as compared to SEK 5.5 billion (including restricted cash of SEK 357 million) as of December 31, 2005. Our investments in equities include both publicly traded and private companies. The debt securities currently held by us are primarily bank floating rate notes and high yield government and corporate bonds from emerging markets. We have also invested in VIEs; which we consolidate, whose purpose is to make investments, primarily in high yield securities and bank loans. As of December 31, 2006, we had investments in three VIEs who’s total assets amounted to SEK 8.1 billion, which was financed by US dollar denominated notes issued by the VIEs in an aggregate amount of SEK 6.3 billion (which is non-recourse to Stena). In early 2007, we invested in a new, fourth VIE. 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.

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) 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 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 (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 are built with double hulls;

	•	the International Maritime Organization International Convention for the Safety of Life at Sea of 1974 (SOLAS) with respect to crew and passenger safety, certain safety

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		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 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), which by its recent protocol has significantly increased the limits of liability of carriers and has introduced a strict liability regime with limited defenses; and

	•	the U.S. Marine Transportation Security Act of 2002 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 from single-hull tankers and due to 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 quasi-governmental 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 liabilities of 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

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be sufficient to cover the cost of damages suffered by us or the loss of income resulting from a vessel being removed from operation. 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.

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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. Stena AB was acquired by the Sten A. Olsson family in 1967 to serve as a holding company for certain of the 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 Stena Sessan AB (‘‘Sessan’’) and Stena Metall AB (‘‘Stena Metall’’), which are also owned by Dan Sten Olsson and other members of the Sten A. Olsson family, and Concordia Maritime AB (‘‘Concordia’’), 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 and charter drilling rigs, Roll-on/Roll-off vessels and crude oil and petroleum product tankers. We also invest in and manage residential and commercial real estate, principally in Sweden and The Netherlands. For the year ended December 31, 2006, we generated revenues of SEK 22.9 billion including net gains on sale of assets of SEK 2.5 billion. Cash flows from operating activities for the same period were SEK 3.6 billion.

Since January 1, 2004, our principal capital expenditures and divestitures have consisted of the purchase and sale of vessels, the purchase and sale of real property and the acquisition of other companies. From January 1, 2004 through December 31, 2006, we have invested approximately SEK 12.0 billion for the purchase of vessels, SEK 4.2 billion for the purchase of real estate and SEK 3.8 billion for the acquisitions of the Drott, Blomsterlandet and Envac Centralsug AB (‘‘Envac’’) companies. During the same period, we have sold vessels for total consideration of SEK 7.3 billion and real estate for total consideration of SEK 4.8 billion. As of the date of this Annual Report, April 30, 2007, our capital expenditures in progress consist of three drillships under construction in Korea, one RoPax vessel under construction in Norway, two SuperFerries under construction in Germany, one newbuilt RoPax vessel that we have entered into an agreement to buy from an Italian shipyard and the lengthening of one of our RoPax vessels. We expect that the substantial portion of the purchase price of our newbuildings will be financed by the existing revolving credit facility, new capital lease agreements, new bank loans or other financing arrangements.

Business Overview

Ferry Operations

We operate 18 routes with a fleet of 34 vessels (excluding the HSS vessel Stena Discovery that was taken out of service in January 2007) in Scandinavia and the United Kingdom under the ‘‘Stena Line’’ and ‘‘Scandlines’’ brand names. Our ferry operations generate revenues from three principal business activities: (i) travel, which consists primarily of ticket sales for passengers and private cars, package tours and hotel sales; (ii) onboard sales, which consists primarily of 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

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ended December 31, 2006, we carried a total of 11.4 million passengers, 2.2 million private cars and 1.6 million freight units on our routes. For the year ended December 31, 2006, our ferry operations generated revenues of SEK 9.4 billion and operating income of SEK 393 million, including impairment charges for our HSS vessels of SEK 710 million due to high oil prices. Total depreciation and amortization expense (including impairment charges) amounted to SEK 1.6 billion for the year ended December 31, 2006. Ferry operation revenues were generated from travel revenues (35%), onboard sales (19%) and freight/other (46%).

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 412 million for year ended December 31, 2006.

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, 2004, 2005 and 2006.

			Year Ended December 31,
(SEK in millions)			2004						2005						2006
Travel					3,240						3,139						3,248
Onboard sales					2,120						1,828						1,795
Freight/other					3,664						4,078						4,370
Total revenues					9,024						9,045						9,413

Set forth below is certain operating data for our ferry operations for the years ended December 31, 2004, 2005 and 2006.

			Year Ended December 31,
Volumes (in millions)			2004						2005						2006
Number of passengers					12.5						11.5						11.4
Private cars					2.4						2.2						2.2
Freight units					1.4						1.5						1.6

Route Network

We currently operate 18 routes in Scandinavia and the United Kingdom. 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 23%, 14% and 39% share of the volume of passengers, private cars and freight units, respectively, transported between Sweden and Denmark for the year ended December 31, 2006.

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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Gothenburg-Fredrikshavn					1,947						1,597						1,569						397						342						330						170						161						166
Varberg-Grena					124						170						170						29						39						42						21						40						39
Helsingborg-Helsingör(1)					4,240						4,009						3,933						756						711						693						138						137						142

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

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Sweden-Germany.    We operate ferry service on five routes, including two routes operated in cooperation with Scandlines Deutschland GmbH. We estimate that we had an approximate 43%, 47% and 27% 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, 2006.

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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Gothenburg-Kiel					476						474						487						92						94						93						34						35						35
Gothenburg-Travemunde					3						4						4						—						—						—						78						82						89
Trelleborg-Sassnitz(1)					354						330						331						81						79						79						18						18						18
Trelleborg-Rostock(1)					157						166						164						26						27						25						59						67						70
Trelleborg-Travemunde(2)					46						35						28						—						—						—						51						54						44

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

(2) In April 2005, one of the two RoPax vessels was redelivered to its owner. To make up for this lost capacity, Stena Line entered into an agreement with a third party to buy deck-space on such party’s ships for our customers.

Norway-Denmark.    We operate ferry service on one route. We estimate that we had an approximate 10%, 6% and 8% 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, 2006. 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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Oslo-Fredrikshavn					592						487						488						61						52						49						15						16						16

Sweden-Poland.    We operate ferry service on one route. We estimate that we had an approximate 41%, 30% and 31% share of the passengers, private cars and freight units volume, respectively, transported on Roll-on/Roll-off vessels between Sweden and Poland for the year ended December 31, 2006.

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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Karlskrona-Gdynia(1)					420						361						413						65						72						74						62						73						87

(1) Stena Baltica, which operates on this route, was rebuilt during spring 2005 to increase car-deck capacity.

Wales/England-Republic of Ireland.    We operate ferry services on three routes. We estimate that we had an approximate 55%, 54% and 27% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Wales or England and the Republic of Ireland for the year ended December 31, 2006.

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

			Passengers																		Private cars																		Freight units
(In Thousands)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Fishguard-Rosslare					614						589						584						153						142						139						45						52						57
Holyhead-Dun Laoghaire					888						850						760						191						184						170						36						38						24
Holyhead-Dublin(1)					354						343						426						62						60						78						115						136						152

(1) A second vessel was added to the route Holyhead-Dublin in October 2006.

Scotland/England-Northern Ireland.    We operate ferry services on two routes. We estimate that we had an approximate 56%, 53% and 37% 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, 2006.

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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Stranraer-Belfast					1,321						1,236						1,212						268						260						261						128						125						125
Fleetwood-Larne(1)					50						62						58						9						9						8						95						134						138

(1) We commenced operations on the Fleetwood-Larne route in April 2004.

England-The Netherlands.    We operate ferry services on three routes. We estimate that we had an approximate 31%, 33% and 19% 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 year ended December 31, 2006.

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)			2004						2005						2006						2004						2005						2006						2004						2005						2006
Harwich-Hook of Holland(1)					849						738						736						196						160						153						155						161						165
Killingholme-Hook of Holland(2)					26						26						32						—						—						—						57						58						61
Harwich-Rotterdam					34						39						37						—						—						—						129						135						130

(1) In January 2007, one HSS vessel was taken out of service and during the first half year 2007 the two ropaxes on the route will be extended to 4,100 lm each.

(2) In August 2006, a newly built Ropax vessel replaced one of the existing vessels on the route.

Ferry Fleet

As of March 31, 2007 our ferry fleet consisted of 35 vessels including one HSS vessel taken out of operation in January 2007. The table below sets forth certain information about our ferries as of March 31, 2007.

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Ferry Fleet

Type of vessel			Number of vessels						Average age (years)
HSS Vessels					4						11
Conventional Fast Ferry					1						11
Day Ferries					3						16
Night Ferries					2						24
RoRo Vessels					2						3
RoPax Vessels					23						22

Newbuildings.    In the third quarter of 2004 we ordered two RoPax vessels. The first vessel was delivered in August 2006, and the second vessel is scheduled for delivery in May 2007. In November 2006 we ordered two RoPax ‘‘super ferry’’ vessels of 5,500 lane meters, the world’s largest in route traffic. The first is scheduled for delivery in the beginning of 2010 and the second during the second half of 2010.

Conventional, day and night ferries.    Our fleet of conventional day and night ferries is designed to transport a combination of cars, trucks, freight trailers and passengers. This type of ferry comes in two different designs, the day ferry and the night ferry. Night ferries provide cabin accommodation for passengers.

HSS vessels.    We currently operate two HSS 1500s and one HSS 900. We own another HSS 1500 vessel which was taken out of service in January 2007 due to an increase in fuel prices and a decline in passenger traffic volumes. 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.

RoRo vessels.    The RoRo vessel is designed primarily to transport freight trailers and a limited number of passengers, primarily truck drivers.

RoPax vessels.    RoPax vessels are designed to transport trucks, freight trailers, buses and cars and also provide accommodation for passengers. RoPax vessels are flexible and can adapt their capacity in line with seasonal variations in freight and passenger traffic. During the peak passenger season, the RoPax vessel acts as a ferry for passengers and cars and, during the low season, we operate this type of vessel as a freight ferry.

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 (ferry ticket including a vehicle transport). 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 four 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.

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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 October 2003, we entered into an agreement with P&O relating to, among other things, the acquisition of a 50% ownership interest in P&O’s port in Cairnryan in Scotland. The completion of the acquisition is conditioned upon, among other things, finalizing construction designs for the redevelopment of the port, negotiating construction contracts related thereto, obtaining financing on satisfactory terms and obtaining necessary permits from Scottish planning and environmental authorities. In the case of our other routes, we use port facilities owned by third parties and pay applicable port and harbor fees.

Hotels.    In July 2005, we sold one of our two owned hotels in Denmark. The remaining hotel is marketed as part of tour packages. We have an agreement with Scandic Hotels to operate the hotel, Scandic Hotels also work with us in relation to the marketing of the hotel.

Offshore Drilling

We own and operate two third generation and two fifth generation semi-submersible drilling rigs. We sold Stena Dee (renamed Songa Dee), a fourth generation rig, on May 2, 2006 to Songa Offshore ASA and currently bareboat-charter the rig to enable us to fulfill our contract with Norsk Hydro. We believe our quality of service, excellent safety record and fleet provide us with a significant competitive advantage. For the year ended December 31, 2006, our drilling operations generated, including a net gain on sale of assets of SEK 1.5 billion, revenues of SEK 4.5 billion, operating income of SEK 2.3 billion, and had depreciation and amortization expenses of SEK 633 million.

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The table below sets forth selected information with respect to our drilling rigs as of March 31, 2007.

Drilling Rig Fleet

Drilling Rig

Generation

Year Built

Maximum Water Depth (Ft.)

Class

Owned

Stena Clyde

3rd

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

Chartered

Songa Dee (formerly Stena Dee)

4th

1984

1,500

DnV

Our headquarters is in Aberdeen, Scotland with a sub-office in Bergen, Norway. We also have base offices in Australia, Norway, Nigeria and Houston. All of the drilling rigs are equipped to drill high pressure wells. As of December 31, 2006, the average age of our fleet was approximately 18 years.

The table below sets forth the average utilization rates for our drilling rigs for each of the past five years.

Rig Utilization

			2002						2003						2004						2005						2006
Total vessel days available					1,825						1,825						1,830						1,825						1,825
Vessel days utilized					1,578						1,337						1,457						1,591						1,683
Vessel utilization (percentage)					86.5						73.3						79.6						87.2						92.2
Offhire days planned					37						132						83						126						102
Offhire days planned (percentage)					2.0						7.2						4.5						6.9						5.6
Unutilized days					210						356						290						108						40
Unutilized days (percentage)					11.5						19.5						15.9						5.9						2.2
Average daily rates					135,000						144,000						131,000						154,000						241,000

The table below sets forth selected information with respect to our drilling contracts as of March 31, 2007.

Rig			Customer			Expected Contract Expiration Date
Stena Clyde			Peak			May 2007
			Apache			May 2008 (plus six-month option)
Stena Spey			Chevron			June 2009/2010(1)
Songa Dee			Norsk Hydro			July 2008 (plus six-month option)
Stena Tay			Total			January 2010 (plus one-year option)
Stena Don			Statoil ASA			December 2009 (plus one-year option)

(1) 2 or 3 Years Firm from June 2007.

The contracts for our drilling rigs typically provide for compensation on a ‘‘day rate’’ basis, under which we receive a fixed 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, 2007, the daily charter rates for our drilling rigs were as follows: Stena Clyde: $170,000; Stena Spey: $146,000; Stena Tay: $425,000 to $475,000 depending on the incentive earned;Stena Don: $431,000; Songa Dee: $171,000.

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Newbuildings.    In August 2005 we entered into a contract with Samsung Heavy Industries (SHI), Korea, for the construction of an ultra deepwater dynamically positioned drillship (Stena DrillMAX), which is scheduled for delivery in December 2007. We exercised an option in March 2006 for a second DrillMAX vessel for delivery in June 2008, and in October 2006 we exercised an option for a third DrillMAX vessel for delivery in June 2009. Our DrillMAX vessels can move more quickly between drilling locations than semi-submersible rigs and include a second derrick that enable them to perform exploration and development work more efficiently.

As of March 31, 2007 financing is in place for 80% of the total investment for all three drillships by way of a combination of Export Credit Agency financings, bank financing and mezzanine debt.

We have a contract with Repsol for the first DrillMAX vessel for four years firm with a one year option at day rates of $450,000 to $500,000, depending on the incentive earned, and a contract with Chevron for our second drillship for a minimum of three years firm, with options up to eight years at agreed day rates ranging from $515,000 for three years to $422,000 for eight years. The length of contract will be declared prior to commencement.

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 Roll-on/Roll-off vessels and crude oil and petroleum product tankers. 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 year ended December 31, 2006, our shipping operations generated, including net gain on sale of assets of SEK 830 million, revenues of SEK 5.1 billion, operating income of SEK 1.2 billion, and had depreciation and amortization expenses of SEK 145 million.

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; RoRo vessels, which carry predominantly freight trailers only and limited number of passengers; and car/passenger ferry vessels.

Over the past five years, our RoRo and RoPax fleet size ranged from six to eight vessels. As of March 31, 2007, we owned six RoRo vessels. We also had a 49% ownership in one RoRo vessel.

For the five years ended December 31, 2006, our average Roll-on/Roll-off vessel utilization rate was approximately 97%. The table below sets forth information with respect to the utilization of our Roll-on/Roll-off vessels, including the vessels chartered to Stena Line, during the last five years.

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Roll-on/Roll-off Vessel Utilization

			Year ended December 31,
			2002						2003						2004						2005						2006
Total vessel days available(1)					2,348						3,059						3,250						3,886						3,135
Vessel days utilized(2)					2,272						2,948						3,188						3,758						3,070
Vessel utilization (percentage)(2)					96.8						96.4						98.1						96.7						97,9
Offhire days(3)					7						43						47						109						50
Offhire days (percentage)					0.3						1.4						1.4						2.8						1,6
Unutilized days					69						68						15						19						15
Unutilized days (percentage)					2.9						2.2						0.5						0.5						0,5

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

(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 and damage.

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 vessels as of March 31, 2007.

RoRo Vessels

Vessel			Type of charter			Current charter expiration date
Stena Shipper			Time			February 2008
Stena Forwarder			Time			February 2012
Stena Foreteller			Time			May 2011
Stena Forecaster			Time			September 2012
Stena Forerunner			Time			October 2012
Mont Ventoux			Time			November 2007
RoRo Gothica(1)			Time			October 2007

(1) In October 2004, Stena Gothica was sold to a company in which Stena hold 49% of the shares and re-named RoRo Gothica.

RoPax Vessels

Vessel			Type of charter			Current charter expiration date
Stena Challenger(1)			Bareboat			June 2010

(1) 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.

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The table below sets forth certain information with respect to our purchases and sales of Roll-on/Roll-off vessels 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.

Roll-on/Roll-off Vessel Sales and Purchases

			2002						2003						2004						2005						2006
Fleet as of January 1					7						8						8						8						8
Newbuildings delivered					1						2
Vessels purchased											1						2						1
Vessels sold											3						3						1						1
Transfer from Ferry Operations																	1
Fleet as of December 31,					8						8						8						8						7
Net gain on sale of vessels (SEK in millions)					—						64						273						191						213

Newbuilding program.    Newbuildings ordered for Stena’s ferry operations are managed by the RoRo division. We have a contract for the purchase of two additional RoPax vessels which we ordered in 2005. However, as a result of the builder’s delay in performance, we have not made any payment for these vessels and we do not expect that this contract will be fulfilled. Accordingly, where we disclose amounts payable by us for newbuildings in this Annual Report we do not include these two vessels.

Recent acquisitions and sales.    In March 2006, we entered into an agreement to acquire a newbuilt RoPax vessel from the Visentini shipyard in Italy. The vessel is expected to be delivered in May 2007. In April 2006 we sold the RoPax vessel Svealand.

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.

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, 2007, we lease two product tankers pursuant to long-term finance leases and have 50% interests in one crude oil tanker and three shuttle tankers. All our owned and finance leased tankers are double hulled. As of March 31, 2007, we also chartered in 34 Product, Aframax, Panamax and Suezmax tankers.

As of March 31, 2007, the average period of the charter contracts for the 34 chartered in tankers was 23 months. Of these 34 tankers, five were chartered out at an average period of 21 months. The other 29 tankers are currently trading on the spot market.

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

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The table below sets forth certain information with respect to our owned and financed leased tankers as of March 31, 2007.

Owned and Finance Leased Tankers

Tankers			Year Delivered						Type			DWT
Stena Caribbean(1)					2002				Product					10,000
Stena Calypso(1)					2002				Product					10,000
Stena Arctica(2)					2005				Ice Aframax					117,000
Nordic Rio(3)					2004				Shuttle					152,000
Stena Alexita(3)					1998				Shuttle					128,000
Stena Natalita(3)					2001				Shuttle					108,000

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

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

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

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

Tankers Sales and Purchases

			2002						2003						2004						2005						2006
Fleet as of January 1					3	(2)					4	(2)					4	(2)					5	(3)					8	(3)
Newbuildings delivered					2												5	(1)					4						2
Vessels sold					1												4						1						5	(1)
Fleet as of December 31					4	(2)					4	(2)					5	(3)					8	(3)					6	(4)

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

(2) Includes two vessels in which we have a 50% interest

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

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

The table below sets forth certain information with respect to our tanker charters as of March 31, 2007.

Charters for Owned and Finance Leased Tankers

Tanker			Type of Charter			Current charter expiration date
Stena Caribbean			Time			July 2011
Stena Calypso			Time			November 2007
Stena Arctica			Time			December 2016
Nordic Rio			Bareboat			July 2017
Stena Alexita			Time			November 2008
Stena Natalita			Time			March 2009

In addition, we have entered into 10-year charter agreements 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 by us. The charter term commenced on the delivery of the vessels from the shipyard during 2006.

Recent acquisitions and sales.    Two Panamax tankers were delivered from the shipyard in February 2006 and June 2006, respectively. Both vessels were sold to a third party upon delivery from the shipyard and are chartered back to us from the new owner for a period of 30 months.

Our owned ice-class Aframax tanker was sold to a Joint Venture company with Neste Oil, in which we have a 50% interest, in August 2006. The vessel is on time charter to Neste Oil for a period of ten years.

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Two product tankers were sold to Arlington and delivered to the new owners in January 2006. The vessels were chartered back to us from the new owner for a period of three years with options for an additional 4.5 years.

Chartering activities.    As of March 31, 2007, 29 of our 34 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 party 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, 2007, the total volume of contracts of affreightment amounted to 15-20 voyages per month of 30,000 – 40,000 dwt each. As of March 31, 2007, five of our chartered in tankers were on time charter contracts for periods between 5 months and ten years.

From January 1, 2007 until March 31, 2007, spot market rates have ranged from $31,000 to $53,000 per day for Aframax tankers, $31,000 to $44,000 per day for Panamax tankers, $25,000 to $32,000 per day for Product tankers and $34,000 to $107,000 for Suezmax tankers. Spot market rates as of March 31, 2007 were $52,000 for Aframax tankers, $33,000 for Panamax tankers, $32,000 for Product tankers and $107,000 for Suezmax tankers.

In March 2005, we entered into a Suezmax pooling agreement with Sonangol Shipping (Sonangol Shipping Girassol Ltd, Sonangol Shipping Luanda Ltd, Sonangol Shipping Kizomba Ltd) in Angola. The revenues from the pool will be 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.

For the five years ended December 31, 2006, our average tanker utilization rate was approximately 98%. 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,
			2002						2003						2004						2005						2006
Total tanker days available(1)					5,572						7,165						10,026						14,083						15,851
Tanker days utilized					5,486						7,047						9,666						13,853						15,520
Tanker utilization (percentage)					98.4						98.4						96.4						98.4						97.9
Offhire days(2)					86						118						360						230						331
Offhire days (percentage)					1.6						1.6						3.6						1.6						2.1

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

(2) Due to scheduled and unscheduled dry-dockings and damage.

There can be no assurance that our tankers that trade on the spot market will continue to be employed or that rates obtained by us will cover costs associated with the operation of such tankers.

Commercial management services.    We provide commercial management services for Concordia and Sessan and to 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.

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Arlington.    In November 2004 we sold two Product tankers and our 75% interests in two Panamax tankers to Arlington Tankers Ltd. (‘‘Arlington’’), a public company organized with Concordia. The purchase price for the two Product tankers and our interests in the Panamax tankers was approximately $169 million in cash and 690,421 common shares of Arlington, which represent approximately 4.5% of the total outstanding shares of Arlington. The common shares of Arlington trade on the New York Stock Exchange under the symbol ATB. In connection with this sale, we agreed to time charter the four tankers from Arlington for a period of five years with options to extend each charter for three additional years in extension terms of one year each. Under each charter, we pay a fixed charter rate which increases over the term of the charters. We also pay an additional amount equal to 50% of the amount by which the time charter revenue we earn from the operation of these vessels, less certain expenses, exceeds the charterhire we pay to Arlington or 50% of the amount by which agreed-upon spot market rates for vessels of these types exceed the rates we pay under our time charters for these vessels, depending on our use of the vessels.

We also agreed with Arlington, in certain circumstances at Arlington’s option, to take over the remaining terms of the time charters of two V-Max VLCC tankers that Concordia sold to Arlington concurrently with the sale of tankers, after the end of the third year and prior to commencement of the fourth year of such charters. These vessels are currently time chartered to Concordia for five years, plus an option to extend each charter for three additional years in one year extension terms. Under the agreement, we would pay the same time charter rate (which includes the additional hire referred to above) as is currently provided in Concordia’s time charters with Arlington. Our subsidiary, Northern Marine Management, has agreed to manage all six of Arlington’s tankers during the terms of the charters for a fixed daily fee per vessel that increases 5% annually.

We sold two additional Product tankers to Arlington in January 2006. In connection with this sale, we agreed to time charter both vessels from Arlington for a period of three years with options to extend each charter for 54 additional months in extension terms of 30 months and thereafter one year each. Under each charter, we pay a fixed charter rate that increases over the term of the charters. Northern Marine Management has agreed to manage all six of Arlington’s tankers during the terms of the charters for a fixed daily fee per vessel that increases 5% annually.

We also agreed with Arlington to adjust the charter periods for the vessels sold in 2004, from five years each, to four years for two of the vessels and six years for the other two vessels.

As of March 31, 2007 we owned approximately 4.9% of Arlington’s outstanding shares. This amount does not include the approximate 9.9% of Arlington’s outstanding shares owned by Concordia.

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, Northern Marine Management, which provides ship management services from offices in Glasgow, Scotland, Houston, Singapore and India. Ship management includes crewing, inventory control, maintenance and technical management.

As of December 31, 2006, Northern Marine Management provided services for approximately 100 vessels through approximately 5,500 seafarers for us, Concordia, Chevron, Technip and several other third parties.

Technical developments & 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

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proprietary rights in the shipbuilding design industry. These patent registrations and applications relate primarily to the design and construction of the HSS ferries.

Real estate

General.    We are involved in the acquisition, selling, constructing, refurbishment and management of residential and commercial properties. For 2006, our real estate operations, including net gain on sale of properties of SEK 194 million, generated revenues of SEK 2.2 billion, and operating income of SEK 952 million, which include depreciation and amortization expenses of SEK 174 million. Substantially all our real estate operations are conducted through our unrestricted subsidiaries. As of March 31, 2007, our real estate portfolio consisted of two segments: 286 leasehold and freehold properties in Sweden and 47 freehold and leasehold properties located in The Netherlands, Germany, Luxembourg and France. A substantial majority (89%) 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, Umea, Halmstad, Amsterdam and Sophia Antipolis in France. We also manage real property owned by the Olsson family. As of December 31, 2006, our management estimates, based on external and internal valuations, that the market value of properties owned by our real estate operations was approximately SEK 22 billion.

Each of our real estate subsidiaries finances its acquisitions of real property with individual mortgages from various commercial and mortgage banks.

Swedish properties.    Our real estate portfolio in Sweden as of March 31, 2007 consisted of 286 residential and commercial properties totaling approximately 1,870,000 square meters.

In 2006, we invested SEK 960 million in new properties and improvements to existing properties. As of March 31, 2007, our residential properties consisted primarily of multi-family rental properties (approximately 21,000 units) that, in terms of square meters, comprise approximately 79% of our properties in Sweden or approximately 1,469,000 square meters. Our commercial properties in Sweden consist mainly of office buildings and warehouse properties and comprise the remaining 21% of our property portfolio in Sweden or approximately 401,000 square meters. The occupancy rate for our Swedish properties based on square meters as of December 31, 2005 and December 31, 2006 was 98%.

Of our Swedish properties, 41 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.

Other.    As of March 31, 2007, our other properties consisted of 47 commercial properties, 40 of which were located in The Netherlands. The remaining properties are located in Germany, Luxembourg and southern France. Our non-Swedish properties total approximately 194,000 square meters. The occupancy rates for our non-Swedish properties, based on square meters, as of December 31, 2005 and December 31, 2006 were 89% and 88%, respectively. Stena Realty B.V. also invests indirectly in real estate. It holds a 10.50% stake in the Acre Fund, which is majority owned by Schiphol Airport. The Acre Fund owns approximately 195,000 square meters of office and warehouse space at the Schiphol Airport. Stena Realty BV also owned as at December 31, 2006 a 9% stake in the Stockholm Stock market quoted company Ruric which develops and invests in real estate in St. Petersburg Russia. Our shareholding in Ruric was sold in March 2007.

During 2006 we committed to invest SEK 140 million in a fund managed by ING that will develop residential complexes in China.

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. For each of the years ended December 31, 2005 and December 31, 2006, such fees aggregated SEK 13 million.

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Other businesses

General.    Through our unrestricted subsidiary Stena Adactum (‘‘Adactum’’), we invest in new businesses outside our traditional lines of business. For the year ended December 31, 2006, the Adactum operations, generated revenues of SEK 1.7 billion, which includes SEK 836 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 853 million related to Envac, and operating loss of SEK (0.2) million, which include depreciation and amortization expenses of SEK 69 million. Adactum makes long-term investments in listed companies as well as private companies. In April 2004, Adactum acquired Blomsterlandet and in June 2005, Adactum acquired Envac. Both Blomsterlandet and Envac are fully consolidated. In December 2005, we entered into a contract through Adactum to acquire five wind power systems (windmills). Operation of the windmills commenced in early 2007.

Investment activities

We maintain an investment portfolio of marketable securities and other short-term investments. As of December 31, 2006, the fair value of these investments (including restricted cash of SEK 882 million) amounted to SEK 8.3 billion, as compared to SEK 5.5 billion (including restricted cash of SEK 357 million) as of December 31, 2005. 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 VIEs, whose purpose is to invest primarily in high yield securities and corporate bank loans. Due to changes in Swedish GAAP in 2005, these VIEs are consolidated as subsidiaries. As of December 31, 2006, we had invested in three VIEs who’s total assets amounted to SEK 8.1 billion, which partly was financed by US dollar denominated notes issued by the VIEs in an aggregated amount of SEK 6.3 billion. In early 2007, we invested in a new, fourth VIE.

In addition to our hedging arrangements, we actively trade in currencies and to a lesser extent in interest rates. As of December 31, 2006, the notional amounts of such instruments were SEK 47 million as compared to SEK 657 million as of December 31, 2005.

The net gain on our portfolio of debt and equity securities and investment in VIEs together with dividends received and the results from our currency and interest rate trading activities, for the years ended December 31, 2004, 2005 and 2006, amounted to a gain of SEK 1.1 billion, a gain of SEK 1.0 billion and a gain of SEK 1.1 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 we believe are designed to manage the risks of these activities on a day-to-day basis. Investments are subject to various risks, 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 of Shipping, Det Norske Veritas or Lloyds Register of Shipping. 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 Roll-on/Roll-off vessels (including those used in our ferry operations), crude oil tankers and drilling rigs as of December 31, 2006, was approximately

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SEK 21 billion as compared with the net book value as of December 31, 2006 of SEK 10.3 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 United States.

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. 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 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 substance. 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

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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 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. In February 2004 one of our ferries was involved in a collision with another vessel. Insurance covered the damages to the vessel but not the loss of business, which was partly transferred to other routes.

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 commercially reasonable deductibles.

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Significant Subsidiaries

The following table sets forth significant subsidiaries owned, directly or indirectly as of December 31, 2006:

Name of Company			Domicile			Percentage Owned
Stena Bulk AB			Sweden					100
AB Stena Finans			Sweden					100
Stena Fastigheter AB			Sweden					100
Bostads AB Drott			Sweden					100
Stena Line Scandinavia AB			Sweden					100
Stena Adactum AB			Sweden					100
Stena Don AB			Sweden					100
Stena International SARL			Luxembourg					100
Stena Line Holland BV			The Netherlands					100
Stena Line Ltd			United Kingdom					100
Stena Drilling (Holdings) Ltd			United Kingdom					100
Stena Switzerland AG			Switzerland					100
Stena Maritime AG			Switzerland					100
Stena Finanzverwaltungs AG			Switzerland					100
Stena Tay (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 thereof on the resale price or useful life of our vessels and drilling rigs. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations. Subject to the discussion below and to the fact that these 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 believe 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 in the United States are the Oil Pollution Act of 1990, or OPA ‘90 and the Comprehensive Environmental Response Compensation and Liability Act, or CERCLA.

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

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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. OPA ‘90 limits the liability of responsible parties to the greater of $1,200 per gross ton or $10 million per tanker. 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 ensure, 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 new buildings are 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.

IMO.    The International Maritime Organization (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.

CLC.    Many countries other than the United States have ratified and follow the liability scheme adopted by the IMO and set out in the International Convention on Civil Liability for Oil

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Pollution Damage of 1969 and Protocol of 1992 (CLC). Under the 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. Liability is currently limited to between approximately $915 and $930 per gross ton plus $6.5 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 the 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 the CLC.

MARPOL 73/78.    Annex 1 of the International Convention for the Prevention of Pollution from Ships 1973 and Protocol 1978 deals with the prevention of pollution from oil. The Convention provides stringent construction and operating standards to prevent the release of oil into the environment. Under the requirements of the Convention, 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 the Convention which set a global timetable for the accelerated the 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 or not. Vessels fall into these categories if they are over 20,000 tons deadweight carrying heavy oil and over 30,000 tons deadweight carrying other oils. Category 3 tankers are tankers above 5,000 tons 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 apply 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 5 April 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 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 Convention and amendments.

Annex VI entered into force on 19 May 2005. This new 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 limited to 4.5% m/m globally. The annex 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. 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). The Annex 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 July 6, 2005. The 2005/33/EC Directive to a great extent mirrors the Marpol Annex VI regulation on sulphur oxide emissions and sulphur emission control areas and was originally drafted as a means to speed up the ratification of Marpol Annex VI in compliance with the amended EU Directive.

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ICLL.    The International Convention on Load Lines of 1966 (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 the Convention. 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 the ILCC within the past five years.

SOLAS.    The International Convention for the Safety of Life at Sea (SOLAS) 1974 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 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.

The SOLAS convention of 1990 (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 IMO SOLAS conference held in November 1995, all such vessels must be in full compliance with SOLAS ‘90.

At the 1995 SOLAS Conference, several amendments to SOLAS and IMO resolutions were adopted concerning RoRo passenger vessel stability, arrangements of bow doors, operations, communications, lifesaving 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 Convention 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.

Our drilling units are designed and constructed to meet all applicable rules and regulations for operation world-wide. Three of them are designed to operate in the harsh environment of

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the North Sea British sector, including Stena Don and Songa Dee, which are also designed to operate in the North Sea Norwegian sector environment.

Norway has the most demanding rules and regulations in the world. In order to work on the Norwegian Continental Shelf, Stena Don has been fully certified to meet the regulations of the Norwegian Petroleum Directorate (NPD). Stena Don also meets all the regulations of the Norwegian Maritime Directorate (NMD) for ‘‘marine’’ equipment, systems and arrangement and is also in compliance with all relevant regulations for operation on the British Continental Shelf. Stena Don is classed with Det Norske Veritas and has all applicable class notations, including class notations for dynamic positioning and drilling systems.

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 all are compliant with this Code and are audited regularly to ensure that this remains the case.

Athens Convention.    The International Convention relating to the Carriage of Passengers and their Luggage by Sea (PAL) 1974 has governed the liability of carriers for damage suffered by passengers carried on a seagoing vessel. The regime 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 his liability unless the carrier acted with intent to cause such damage or recklessly and with knowledge that such damage would probably result.

The original convention and the limits have been substantially altered and increased by the 2002 Protocol to the 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 US $360,000 per passenger on each distinct occasion to approximately US $580,000 per passenger, 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 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 (HNS) 1996 is likely to come into force in the medium term. The liability aspects of the Convention 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

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materials. The present limits of liability are between US $500 and US $2,000 per gross ton though it is likely that these limits will increase once the Convention is ratified and comes into force.

Item 4A.	Unresolved Staff Comments

None.

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. The Consolidated Financial Statements have been prepared in accordance with Swedish GAAP which differs in certain significant respects from US GAAP. For a discussion of the significant differences between Swedish GAAP and US GAAP and a reconciliation of net income and stockholders’ equity from Swedish GAAP to US GAAP, see Note 31 to the Consolidated Financial Statements.

We generate revenue primarily from our ferry operations, chartering out our Roll-on/Roll-off vessels, tankers and drilling rigs, 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 and real estate also may have an impact on our results in each period.

Significant events

Ferry Operations

In the third quarter of 2004 we ordered two RoPax vessels from a shipyard in Norway for use by Stena Line. The newbuilding process is managed by our RoRo division. The first of these vessels was delivered in August 2006 and commenced operations on our Killingholme – Hoek van Holland route as Stena Trader. The second vessel is expected to be delivered in May 2007.

In November 2006, we entered into a contract with Aker Yards in Germany to build two Super Ferries to be used by Stena Line. The total investment is approximately €460 million, of which €400 million remains to be paid as of December 31, 2006. Deliveries are scheduled for the first and third quarter of 2010. The contract includes options for two additional vessels of the same type.

The depreciation and amortization charges in the year ended December 31, 2006, included an impairment charge of SEK 710 million related to the HSS vessels.

Shipping

Roll-on/Roll-off vessel operations.    In March 2006, we entered into an agreement to acquire a newbuilt RoPax vessel from the Visentini shipyard in Italy. The vessel is expected to be delivered in May 2007. In April 2006, we sold the RoPax vessel Svealand.

Crude oil and petroleum product transportation.    In addition to the four tankers sold to Arlington in 2004, we sold two additional product tankers to Arlington which were delivered in January 2006. The vessels were chartered back to us for a period of three years with options for an additional 4.5 years.

Two Panamax tankers were delivered from the shipyard in February 2006 and June 2006, respectively. Both vessels were sold to a third party upon delivery from the shipyard and are chartered back to us from the new owner for a period of 30 months.

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Our owned ice-class Aframax tanker was sold to a joint venture company with Neste Oil, in which we have a 50% interest, in August 2006. The vessel is on time charter to Neste Oil for a period of ten years.

Offshore drilling

In August 2005, we ordered a drillship, Stena DrillMAX, from the SHI shipyard in Korea for delivery at the end of 2007. The total investment is expected to be approximately $600 million. 80% of our investment in this vessel is financed by a combination of Export Credit Agency financings, bank financing and mezzanine debt.

In March 2006, the Company ordered a second Stena DrillMAX vessel from the SHI shipyard in Korea. The total investment is expected to be approximately $630 million, with delivery scheduled for mid-2008. In October 2006, we entered into financing arrangements for this drillship structured in the same way as the financing for the first drillship.

In May 2006, the Company sold the drilling rig Stena Dee to the Norwegian company Songa Offshore for a net consideration of $267.3 million. The rig was chartered back to us for a period to end no later than 2008 to complete its present charter contract with Norsk Hydro.

In October 2006, the Company ordered a third Stena DrillMAX vessel from the SHI shipyard in Korea. The total investment is expected to be approximately $710 million with delivery in June 2009. In March 2007, we entered into financing arrangements for this drillship structured similarly to the financing for the first two DrillMAX vessels for 80% of the total investment.

Real estate

In the year ended December 31, 2006, we acquired properties for approximately SEK 1.6 billion, mainly in Gothenburg, Stockholm and the Netherlands. During the same period properties were sold for approximately SEK 674 million.

Other businesses

In April 2004, our subsidiary Adactum acquired the Swedish chain store S-Invest AB (‘‘Blomsterlandet’’), a garden center and flower business for SEK 172 million, of which SEK 26 million is to be paid in 2009.

In June 2005, Adactum acquired Envac Centralsug AB (‘‘Envac’’), a company in the automated waste collection business that develops and sells underground network systems for the transportation of municipal and commercial waste. The cost of the acquisition was approximately SEK 577 million. Envac operates in 16 countries and had sales in 2005 and 2006 of SEK 785 million and SEK 853 million, respectively.

Financial activities

In February 2007, we purchased approximately $177 million of our 9.625% senior notes due 2012 pursuant to a tender offer and consent solicitation. Also in February 2007, we completed an offering of €300 million of 6.125% senior notes due 2017 and €102 million of 5.875% senior notes due 2019. As of the date of this Annual Report, we are seeking consents from the holders of our senior notes due 2013 and 2016 to amend the indentures relating to these notes. Such amendments require the consent of the holders of a majority in principal amount of each of such senior notes.

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Results of Operations

			Year ended December 31,
			2004						2005						2006
			(SEK in millions)
CONSOLIDATED GROUP
Income Statement Data (Swedish GAAP):
Total revenues					16,721						19,619						22,895
Direct operating expenses					(10,943	)					(12,631	)					(13,547	)
Selling and administrative expenses					(1,761	)					(1,861	)					(2,127	)
Depreciation and amortization					(1,790	)					(2,734	)					(2,634	)
Income from operations					2,227						2,393						4,587
BUSINESS SEGMENT DATA
Revenues:
Ferry operations					9,024						9,045						9,413
Net gain (loss) on sale of vessels					11						—						—
Total Ferry operations					9,035						9,045						9,413
Drilling operations					1,429						1,871						3,027
Net gain on sale of vessels					—						—						1,483
Total Drilling operations					1,429						1,871						4,510
Shipping Roll-on/Roll-off vessels					383						458						373
Net gain on sale of vessels					273						191						219
Total Roll-on/Roll-off vessels					656						649						592
Crude Oil tankers					2,994						3,804						3,764
Net gain on sale of vessels					372						124						611
Total crude oil tankers					3,566						3,928						4,375
Other Shipping					115						143						146
Total Shipping					4,137						4,720						5,113
Property operations					1,357						1,882						1,970
Net gain on sale of properties					110						813						194
Total Property					1,467						2,695						2,164
Other					653						1,288						1,695
Total					16,721						19,619						22,895
Income (Loss) from Operations:
Ferry operations					535						(7	)					393
Net gain (loss) on sale of vessels					11						—						—
Total Ferry operations					546						(7	)					393
Drilling operations					(227	)					(2	)					774
Net gain on sale of vessels					—						—						1,483
Total Drilling operations					(227	)					(2	)					2,257
Shipping:    Roll-on/Roll-off vessels					62						104						89
Net gain on sale of vessels					273						191						219
Total Roll-on/Roll-off vessels					335						295						308
Crude oil tankers					780						742						284
Net gain on sale of vessels					372						124						611
Total crude oil tankers					1,152						866						895
Other shipping					(13	)					(7	)					(8	)
Total Shipping					1,474						1,154						1,195
Property operations					499						579						758
Net gain on sale of property					110						813						194
Total Property					609						1,392						952
Other					(175	)					(144	)					(210	)
Total					2,227						2,393						4,587
Depreciation & Amortization:
Ferry operations					864						1,578						1,613
Drilling					575						590						633
Shipping: Roll-on/Roll-off vessels					100						124						99
Crude oil tankers					58						41						34
Other shipping					7						11						12
Total Shipping					165						176						145
Property					153						337						174
Other					33						53						69
Total					1,790						2,734						2,634

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Comparison of the year ended December 31, 2006 to the year ended December 31, 2005

Currency effects

Our revenues and expenses are significantly affected, as reported in Swedish kronor (SEK), by fluctuations in currency exchange rates, primarily relative to the US 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. Revenues in our ferry operations are mainly generated in SEK, British pounds, Euro, Norwegian kronor and Danish kronor. Approximately 40% of our total revenues are generated in US dollars and approximately 30% of are generated in SEK. Approximately 35% of our total expenses are incurred in US dollars and approximately 30% are incurred in SEK. Although we seek to hedge the net effects of such 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:

Average rates			January-December 2005						January-December 2006						Change
US $					7.4775						7.3766						(1	)%
British pounds					13.5782						13.5752						0	%
Euro					9.2849						9.2549						0	%

Closing rates			December 31, 2005						December 31, 2006						Change
US $					7.9525						6.8725				(14)%
British pounds					13.7325						13.4875				(2)%
Euro					9.4300						9.0500				(4)%

Revenues

Total revenues increased SEK 3,276 million, or 17%, in the year ended December 31, 2006 to SEK 22,895 million from SEK 19,619 million in the year ended December 31, 2005, mainly as a result of gains on sale of vessels and increased operating revenues in almost all business segments, partly offset by decreased gains on sale of properties.

Ferry operations.    Ferry revenues are primarily generated from ticket sales, freight haulage and on board sales. Revenues from ferry operations increased SEK 368 million, or 4%, in the year ended December 31, 2006 to SEK 9,413 million from SEK 9,045 million in the year ended December 31, 2005, due to increased volumes in the freight business activity, partly offset by decreased volumes in passengers, cars and onboard sales.

Offshore Drilling.    Drilling revenues consist of charter hires for our drilling rigs. Revenues from drilling operations increased SEK 1,156 million, or 62%, in the year ended December 31, 2006 to SEK 3,027 million from SEK 1,871 million in the year ended December 31, 2005, mainly due to new contracts at higher day rates for Stena Tay and Stena Clyde, as well as higher utilization rates across the fleet. The change in dayrates reflects new charter contracts and the market conditions in effect at the time a charter is made in the particular geographic area.

Net Gain on Sale of Vessels, Drilling.    In the year ended December 31, 2006 gains of SEK 1,483 million were recorded on the sale of the drilling rig Stena Dee. In the year ended December 31, 2005, no vessel sales were made.

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 decreased SEK 122 million, or 3%, in the year ended December 31, 2006 to SEK 4,283 million from SEK 4,405 million in the year ended December 31, 2005.

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Revenues from chartering out Roll-on/Roll-off vessels decreased SEK 85 million, or 19%, to SEK 373 million from SEK 458 million mainly due to the sale of the RoPax vessels Pride of Aquitaine in October 2005, Svealand in April 2006, and the redelivery of Vasaland in April 2006, partly offset by higher charter hire received for Stena Challenger and Mont Ventoux.

Revenues from crude oil tankers decreased SEK 40 million, or 1%, to SEK 3,764 million from SEK 3,804 million. In the year ended December 31, 2006, 42 tankers were operated (chartered or owned), compared to 39 tankers in the year ended December 31, 2005.

Net Gain on Sale of Vessels, Shipping.    In the year ended December 31, 2006, gains of SEK 830 million were recorded on the sale of the RoPax vessel Svealand and the tanker vessels Stena Contest, Stena Concept, Stena Compass, Stena Compassion and Stena Arctica. In the year ended December 31, 2005, gains of SEK 315 million were recorded on the sale of the RoRo vessel Pride of Aquitaine and on the crude oil tanker Stena Antarctica.

Property.    Property revenues consist of rents for properties owned and management fees for properties managed by us. Revenues from property operations increased SEK 88 million, or 5%, in the year ended December 31, 2006 to SEK 1,970 million from SEK 1,882 million in the year ended December 31, 2005, mainly related to increased number of properties and increased rents.

Net Gain on Sale of Properties.    In the year ended December 31, 2006, gains of SEK 194 million were recorded on the sale of properties. In the year ended December 31, 2005, gains of SEK 813 million were recorded, mainly related to properties acquired in the purchase of Drott.

Other.    Other revenues in the year ended December 31, 2006 were SEK 1,695 million, which includes SEK 836 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 853 million related to Envac, a company in the automated waste collection business acquired in May 2005. Other revenues in the year ended December 31, 2005 were SEK 1,288 million which includes SEK 747 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 523 million related to Envac.

Direct operating expenses

Total direct operating expenses increased SEK 916 million in the year ended December 31, 2006 to SEK 13,547 million from SEK 12,631 million in the year ended December 31, 2005, or 7%, as a result of increased operating expenses in all operations except for the Ferry Operations and the RoRo 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 decreased SEK 166 million, or 3%, in the year ended December 31, 2006 to SEK 6,399 million from SEK 6,565 million in the year ended December 31, 2005, mainly due to decreased personnel related costs. The decrease is also due to a an impairment charge related to the HSS vessels of SEK 55 million, recorded in the year ended December 2005. Direct operating expenses for ferry operations for the year ended December 31, 2006 was 68% of revenues, as compared to 73% for the year ended December 31, 2005.

Offshore Drilling.    Direct operating expenses for drilling consist primarily of personnel costs, insurance, maintenance and catering costs. Direct operating expenses from drilling operations increased SEK 331 million, or 30%, in the year ended December 31, 2006 to SEK 1,443 million from SEK 1,112 million in the year ended December 31, 2005. The increase is mainly due to higher expenses for Stena Tay and Stena Clyde, related to their new contracts in the US Gulf of Mexico/Nigeria and Australia, respectively. Direct operating expenses from drilling operations for the year ended December 31, 2006 were 48% of drilling revenues as compared to 59% for the year ended December 31, 2005.

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

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from shipping operations increased SEK 371 million, or 12%, in the year ended December 31, 2006 to SEK 3,437 million from SEK 3,066 million in the year ended December 31, 2005.

Direct operating expenses with respect to Roll-on/Roll-off vessels decreased SEK 34 million, or 18%, in the year ended December 31, 2006 to SEK 153 million from SEK 187 million in the year ended December 31, 2005, mainly due to the sale of the RoPax vessel Svealand in April 2006 and the redelivery of Vasaland in April 2006. Direct operating expenses for Roll-on/Roll-off vessels for the year ended December 31, 2006 were 41% of revenues, the same as for the year ended December 31, 2005.

Direct operating expenses associated with crude oil tankers increased SEK 405 million, or 14%, in the year ended December 31, 2006 to SEK 3,276 million from SEK 2,871 million, 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, 2006 were 87% of revenues, as compared to 75% for the year ended December 31, 2005. 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.

Property.    Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses from property operations increased SEK 76 million, or 9%, in the year ended December 31, 2006 to SEK 886 million from SEK 810 million in the year ended December 31, 2005, mainly related to an increased number of properties and increased heating costs. Total direct operating expenses from property operations in the year ended December 31, 2006 were 45% of property revenues, as compared to 43% for the year ended December 31, 2005.

Other.    Other direct operating expenses in the year ended December 31, 2006 were SEK 1,382 million, which includes SEK 761 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 615 million related to Envac, a company in the automated waste collection business acquired in May 2005. Other direct operating expenses in the year ended December 31, 2005 were SEK 1,078 million, which includes SEK 693 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 375 million related to Envac.

Selling and administrative expenses

Selling and administrative expenses increased SEK 266 million, or 14%, in the year ended December 31, 2006 to SEK 2,127 million from SEK 1,861 million in the year ended December 31, 2005, mainly due to expenses in Envac, acquired in May 2005, together with increased personnel costs. The increase is also related to costs of SEK 52 million referring to the acquisition bid of the German/Danish Company Scandlines. Total selling and administrative expenses in the year ended December 31, 2006 were 9% of total revenues, as compared to 10% for the year ended December 31, 2005.

Depreciation and amortization

Depreciation and amortization charges decreased SEK 100 million, or 4%, in the year ended December 31, 2006 to SEK 2,634 million from SEK 2,734 million in the year ended December 31, 2005. Depreciation and amortization charges in the year ended December 31, 2006 includes impairment charges related to the HSS vessels of SEK 710 million. Depreciation and amortization charges in the year ended December 31, 2005 included impairment charges related to the HSS vessels of SEK 765 million and impairment charges for real estate of SEK 180 million. The decrease in total depreciation and amortization is mainly due to decreased impairment charges.

Share of affiliated companies´ results

Share of affiliated companies´ results in the year ended December 31, 2006 and December 31, 2005 refers to our portion of the results of Midelfart Sonesson AB (publ) and Ballingslöv AB (publ).

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Financial income and expense, net

Financial income and expense, net increased by SEK 68 million in the year ended December 31, 2006 to SEK 116 million from SEK 48 million in the year ended December 31, 2005.

Net gain (loss) on securities in the year ended December 31, 2006 was SEK 982 million, of which SEK 532 million related to realized gains on marketable debt and equity securities and SEK 450 million related to unrealized gains and losses. Net gain (loss) on securities in the year ended December 31, 2005 amounted to SEK 921 million, of which SEK 211 million related to realized gains on marketable debt and equity securities and SEK 710 million related to unrealized gains and losses.

Interest income in the year ended December 31, 2006 increased SEK 170 million to SEK 737 million from SEK 567 million in the year ended December 31, 2005, mainly related to increased interest income in our investments in VIEs.

Interest expense for the year ended December 31, 2006 increased SEK 254 million to SEK (1,649) million from SEK (1,395) million for the year ended December 31, 2005. This includes interest expense for the debt in VIEs, which increased SEK 143 million to SEK (342) million from SEK (199) million, partly as a result of the investment in the VIEs. Other interest expense increased SEK 111 million to SEK (1,307) million from SEK (1,196) million.

During the year ended December 31, 2006, foreign exchange gains (losses), net amounted to SEK 110 million, of which gains of SEK 7 million from currency trading and gains of SEK 103 million from translation differences. In the year ended December 31, 2005, foreign exchange gains (losses), net amounted to SEK (3) million, of which gains of SEK 22 million from currency trading and losses of SEK (25) million from translation differences.

Other financial income (expense) of SEK (167) million for the year ended December 31, 2006 includes SEK (45) million related to amortization of the deferred financing charges for senior notes, the $1 billion revolving credit facility, bank loans, capital lease obligations and investments in VIEs. Other financial income (expense) of SEK (121) million for the year ended December 31, 2005 includes SEK (57) million related to amortization of deferred finance charges.

Income taxes

Income taxes for the year ended December 31, 2006 were SEK (368) million, consisting of current taxes of SEK (299) million and deferred taxes of SEK (69) million. The effective tax rate in 2006 was approximately 8%. Income taxes for the year ended December 31, 2005 were SEK (173) million, consisting of current taxes of SEK (88) million and deferred taxes of SEK (85) million. The effective tax rate in 2005 was approximately 7%.The provision for taxes is based upon the applicable tax rates in the various jurisdictions where revenues are generated.

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Comparison of the year ended December 31, 2005 to the year ended December 31, 2004

Currency effects

Our revenues and expenses are significantly affected, as reported in Swedish kronor (SEK), by fluctuations in currency exchange rates, primarily relative to the US 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. Revenues in our ferry operations are mainly generated in SEK, British pounds, Euro, Norwegian kronor and Danish kronor. Approximately 30% of our total revenues are generated in US dollars and approximately 35% of are generated in SEK. Approximately 35% of our total expenses are incurred in US dollars and approximately 30% are incurred in SEK. Although we seek to hedge the net effects of such 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:

Average rates			January-December 2004						January-December 2005						Change
US $					7.4960						7.4775				0%
British pounds					13.4560						13.5782				1%
Euro					9.1268						9.2849				2%

Closing rates			December 31, 2004						December 31, 2005						Change
US $					6.6125						7.9525						20	%
British pounds					12.7100						13.7325						8	%
Euro					9.0070						9.4300						5	%

Revenues

Total revenues increased SEK 2,898 million, or 17%, in the year ended December 31, 2005 to SEK 19,619 million from SEK 16,721 million in the year ended December 31, 2004, as a result of increased revenues in all business areas.

Ferry operations.    Ferry revenues are primarily generated from ticket sales, freight haulage and on board spending. Revenues from ferry operations increased SEK 21 million in the year ended December 31, 2005 to SEK 9,045 million from SEK 9,024 million in the year ended December 31, 2004, due to increased volumes in the freight business activity, partly related to the acquisition of the Fleetwood-Larne ferry operation on the Irish Sea acquired from P&O in April 2004, partly offset by decreased volumes in passengers, cars and onboard sales.

Net Gain on Sale of Vessels, Ferry Operations.    In the year ended December 31, 2005, no vessel sales were made. In the year ended December 31, 2004 gains of SEK 11 million were recorded on the sale of the Stena Gothica.

Drilling.    Drilling revenues consist of charter hires for our drilling rigs. Revenues from drilling operations increased SEK 442 million, or 31%, in the year ended December 31, 2005 to SEK 1,871 million from SEK 1,429 million in the year ended December 31, 2004, mainly due to new contracts at higher dayrates for the Stena Dee and the Stena Spey, which had offhire periods in the year ended December 31, 2004, partly offset by lower revenues for the Stena Tay due to an offhire period in 2005 to install new equipment. The change in dayrates 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 us. Revenues from shipping operations increased SEK 913 million, or 26%, in the year ended December 31, 2005 to SEK 4,405 million

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from SEK 3,492 million in the year ended December 31, 2004. Revenues from chartering out Roll-on/Roll-off vessels increased SEK 75 million to SEK 458 million from SEK 383 million, or 20%, mainly due to charter hire received for the Linda Rosa/Mont Ventoux which was delivered in January 2005 and charter hire received for the Stena Challenger which was chartered in from January 2005. Revenues from crude oil tankers increased SEK 810 million, or 27%, in the year ended December 31, 2005 to SEK 3,804 million from SEK 2,994 million in the year ended December 31, 2004, mainly due to charter hire received for the additional tankers chartered in and charter hire received for the six tanker newbuildings delivered in the period January 2004 to April 2005. In the year ended December 31, 2005, 39 tankers were operated (chartered or owned), compared to 33 tankers in the year ended December 31, 2004.

Net Gain on Sale of Vessels, Shipping.    In the year ended December 31, 2005, gains of SEK 191 million were recorded on the sale of the RoRo vessel Pride of Aquitaine and SEK 124 million on the crude oil tanker Stena Antarctica. In the year ended December 31, 2004, gains of SEK 273 million were recorded on the sale of the RoRo vessels Chieftain, Stena Timer and Stena Tender and the RoPax vessels Stena Traveller and European Envoy and gains of SEK 372 million on the sale of four crude oil tankers to Arlington.

Property.    Property revenues consist of rents for properties owned and management fees for properties managed by us. Revenues from property operations increased SEK 525 million, or 39%, in the year ended December 31, 2005 to SEK 1,882 million from SEK 1,357 million in the year ended December 31, 2004, due to the acquisition in August 2004 of Drott, which had revenues for the year ended December 31, 2005 of SEK 952 million as compared to SEK 428 million for the year ended December 31, 2004.

Net Gain on Sale of Properties.    In the year ended December 31, 2005, gains of SEK 813 million were recorded on the sale of properties. Properties sold mainly relate to Drott. In the year ended December 31, 2004, gains of SEK 110 million were recorded.

Other.    Other revenues in the year ended December 31, 2005 were SEK 1,288 million, which includes SEK 747 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 523 million related to Envac, a company in the automated waste collection business acquired in May 2005. Other revenues in the year ended December 31, 2004 were SEK 653 million, which relate almost entirely to Blomsterlandet.

Direct operating expenses

Total direct operating expenses increased SEK 1,688 million in the year ended December 31, 2005 to SEK 12,631 million from SEK 10,943 million in the year ended December 31, 2004, or 15%, as a result of increased operating expenses in all operations except for the Ferry Operations and the RoRo 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 decreased SEK 142 million, or (2%), in the year ended December 31, 2005 to SEK 6,565 million from SEK 6,707 million in the year ended December 31, 2004, mainly due to decreased expenses for costs of goods sold on the vessels and package tour costs together with lower charter and redundancy costs, partly offset by higher personnel costs. Direct operating expenses for ferry operations for the year ended December 31, 2005 was 73% of revenues, as compared to 74% for the year ended December 31, 2004.

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 166 million, or 18%, in the year ended December 31, 2005 to SEK 1,112 million from SEK 946 million in the year ended December 31, 2004, mainly due to increased

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expenses for the Stena Dee, which was offhire in 2004, and partly due to increased personnel costs in Norway for the Stena Don. Direct operating expenses from drilling operations for the year ended December 31, 2005 were 59% of drilling revenues as compared to 66% for the year ended December 31, 2004.

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 854 million, or 39%, in the year ended December 31, 2005 to SEK 3,066 million from SEK 2,212 million in the year ended December 31, 2004. Direct operating expenses with respect to Roll-on/Roll-off vessels decreased by SEK 2 million in the year ended December 31, 2005 to SEK 187 million from SEK 189 million in the year ended December 31, 2004, mainly due to reduced charterhire for the Svealand, which previously was chartered in but acquired by us in June 2004, and the sale of the RoRo vessels Stena Tender and Stena Timer in June 2004, partly offset by increased expenses for the Linda Rosa/Mont Ventoux and the Stena Challenger. Direct operating expenses associated with crude oil tankers increased SEK 855 million, or 42%, to SEK 2,871 million from SEK 2,016 million, mainly due to increased expenses resulting from a larger fleet and increased market rates for chartered in vessels. Direct operating expenses for crude oil operations for the year ended December 31, 2005 were 75% of revenues, as compared to 67% for the year ended December 31, 2004. 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.

Property.    Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses from property operations increased SEK 301 million, or 59%, in the year ended December 31, 2005 to SEK 810 million from SEK 509 million in the year ended December 31, 2004, mainly due to the acquisition in August 2004 of Drott, which had direct operating expenses for the year ended December 31, 2005 of SEK 433 million as compared to SEK 131 million for the year ended December 31, 2004. Total direct operating expenses from property operations in the year ended December 31, 2005 were 43% of property revenues, as compared to 38% for the year ended December 31, 2004.

Other.    Other direct operating expenses in the year ended December 31, 2005 were SEK 1,078 million, which includes SEK 693 million related to the garden center and flower business ‘‘Blomsterlandet’’ and SEK 375 million related to Envac, a company in the automated waste collection business acquired in May 2005. Other direct operating expenses in the year ended December 31, 2004 were SEK 569 million which relates almost entirely to Blomsterlandet.

Selling and administrative expenses

Selling and administrative expenses increased SEK 100 million, or 6%, in the year ended December 31, 2005 to SEK 1,861 million from SEK 1,761 million in the year ended December 31, 2004, mainly due to increased expenses in the drilling and shipping areas due to increased business activities and the acquisition of Envac. Total selling and administrative expenses in the year ended December 31, 2005 were 10% of total revenues, as compared to 11% for the year ended December 31, 2004.

Depreciation and amortization

Depreciation and amortization charges increased SEK 944 million, or 53%, in the year ended December 31, 2005 to SEK 2,734 million from SEK 1,790 million in the year ended December 31, 2004, mainly due to impairment charges related to the HSS vessels of SEK 765 million and impairment charges for real estate of SEK 180 million together with depreciation for Drott and Envac. Depreciation and amortization charges in the year ended December 31, 2004 included impairment charges related to a hotel in the ferry operations of SEK 52 million and a building in the property segment of SEK 21 million.

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Share of affiliated companies´ results

Share of affiliated companies´ results in the year ended December 31, 2005 refer to our portion of the results of Wilh. Sonessons AB (publ) and Ballingslöv AB (publ). Share of affiliated companies´ results in the year ended December 31, 2004 refer to our portion of Drott´s results in the period from May 13 to August 10, 2004, after which Drott is consolidated as a subsidiary, together with our portion of the results of Wilh. Sonessons AB (publ).

Financial income and expense, net

Financial income and expense, net decreased by SEK 164 million in the year ended December 31, 2005 to SEK 48 million from SEK 212 million in the year ended December 31, 2004.

Net gain (loss) on securities in the year ended December 31, 2005 was SEK 921 million, of which SEK 211 million related to realized gains on marketable debt and equity securities and SEK 710 million related to unrealized gains and losses. Net gain (loss) on securities in the year ended December 31, 2004 amounted to SEK 1,060 million, of which SEK 218 million related to realized gains on the sale of shares in the property company Fabege AB, SEK 484 million related to the sale of shares in Song Networks and SEK 131 million related to other realized gains on securities and SEK 227 million related to unrealized gains and losses.

Interest income in the year ended December 31, 2005 increased SEK 185 million to SEK 567 million from SEK 382 million in the year ended December 31, 2004, mainly related to increased interest income in our investments in VIEs.

Interest expense for the year ended December 31, 2005 increased SEK 260 million to SEK (1,395) million from SEK (1,135) million for the year ended December 31, 2004, mainly related to interest expense in the newly acquired companies Drott and Envac as well as interest expense for those acquisitions as such, together with interest expense in our investments in VIEs.

During the year ended December 31, 2005, foreign exchange gains (losses), net amounted to SEK (3) million, of which gains of SEK 22 million from currency trading and losses of SEK (25) million from translation differences. In the year ended December 31, 2004, the Company had foreign exchange gains (losses), net of SEK (107) million, of which SEK 8 million from currency trading and SEK (115) million from translation differences.

Other financial income (expense) of SEK (121) million for the year ended December 31, 2005 includes SEK (57) million related to amortization of the deferred financing charges for senior notes, the $1 billion revolving credit facility, bank loans, capital lease obligations and investments in VIEs. Other financial income (expense) of SEK (24) million for the year ended December 31, 2004 includes SEK (82) million related to amortization of deferred finance charges and SEK 100 million relating to amortization of the excess of SEK 658 million of the acquisition price of the Stena Line 10.625% Senior Notes due 2008 acquired in late 2000 over their redemption price.

Income taxes

Income taxes for the year ended December 31, 2005 were SEK (173) million, consisting of current taxes of SEK (88) million and deferred taxes of SEK (85) million. Income taxes for the year ended December 31, 2004 were SEK (20) million, consisting of current taxes of SEK (133) million and deferred taxes of SEK 113 million. 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 debt, financing the purchase of vessels and other assets and funding working capital. We have in prior years met our liquidity requirements with cash on hand, cash flows from operations, borrowings under various credit facilities and financing and refinancing arrangements.

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As of December 31, 2006, we had total cash and marketable securities of SEK 9,148 million as compared with SEK 9,252 million at December 31, 2005. We have also invested in VIEs, whose purpose is to invest primarily in high yield securities and corporate bank loans. Due to changes in Swedish GAAP in 2005, these VIEs are consolidated as subsidiaries. As of December 31, 2006, we had invested in three VIEs who’s total assets amounted to SEK 8,073 million compared to SEK 6,213 million as of December 31, 2005.

Cash flows provided by operating activities increased to SEK 3,567 million in 2006 from SEK 2,403 million in 2005. Cash flows used in investing activities in 2006 amounted to SEK (7,287) million including capital expenditure of SEK (8,148) million. Cash flows used in investing activities in 2005 amounted to SEK (2,948) million including capital expenditure of SEK (5,152) million and purchase of subsidiaries of SEK (518) million. Cash flows provided by financing activities in 2006 amounted to SEK 1,092 million as compared with SEK 1,850 million in 2005.

Total interest bearing debt as of December 31, 2006 was SEK 24,469 million excluding the debt in the VIEs as compared with SEK 26,793 million at December 31, 2005. Interest bearing debt in the VIEs as of December 31, 2006 was SEK 6,302 million as compared with SEK 4,844 million at December 31, 2005. Total debt decreased partly due to the strengthening of the closing rate of the SEK against the US dollar and to a lesser extent versus the Euro. As of December 31, 2006, $402 million was utilized under the $1 billion revolving credit facility, of which $16 million was used for issuing of bank guarantees.As of December 31, 2005, a total of $859 million was outstanding under this facility, of which $10 million was used for issuing of bank guarantees. See ‘‘Description of other indebtedness’’ for further description of our credit facilities.

Our remaining capital expenditure commitment for newbuildings on order as of December 31, 2006 was SEK 12,423 million ($1,818 million), of which SEK 5,378 million ($787 million) is due within the next twelve months, SEK 3,863 million ($565 million) is due during 2008 and SEK 3,182 million ($466 million) is due in 2009 and thereafter. The Company plans to finance the unpaid balance, together with additional expenses and financing costs, through cash from operations, existing revolving credit facility, capital lease agreements, new bank loans or other financing arrangements; financing for 63 % of the unpaid balance has already been arranged.

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 and other vessel acquisitions, and to fund anticipated working capital requirements.

Long-Term Financial Obligations and Other Contractual Obligations

Our long-term financial obligations as of December 31, 2006 were as follows:

			Payments due by period
			Total						Less than one year						1-3 years						4-5 years						More than 5 years						Not specified
			(SEK million)
Long-term debt, including current maturities					23,185						1,853						1,397						764						16,286						2,885
Debt in VIEs					6,302												395						1,216						4,691
Capital leases					1,284						38						77						82						1,087
Operating leases					7,191						2,319						2,279						1,334						1,259
Purchase obligations					12,713						5,668						7,045
Other non-current liabilities					932												771						34						127
Total					51,607						9,878						11,964						3,430						23,450						2,885

Our commercial commitments are listed in Note 25 of our consolidated financial statements and relate mainly to purchase obligations for newbuildings.

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Off Balance Sheet Arrangements

One of our subsidiaries and Ugland have each guaranteed the performance by one of the Stena/Ugland joint ventures of its obligations 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 Ugland have also guaranteed the repayment by the other Stena/Ugland joint venture of a loan from a group of banks. Our liability under this loan is limited to 50% of the amount outstanding under the loan agreement, including interest, charges, expenses and damages. As of December 31, 2006, the outstanding total loan amount was $37 million.

Application of Critical Accounting Policies

Our Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP), which differ in certain significant respects from generally accepted accounting principles in the United States (US GAAP). The principal differences between Swedish GAAP and US GAAP are further discussed in Note 31 to our Consolidated Financial Statements.

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 and impairment.    Our vessels represent our most significant assets 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.

Impairment of long-lived 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.

Financial instruments.    Under Swedish GAAP, we apply hedge accounting for all transactions that are economically hedged. Such transactions are hedged on-balance sheet or off-balance sheet by transactions with matching principal or notional amounts, interest rates and currencies, such that our exposure to changes in net values of such transactions due to movements in interest or exchange rates is hedged.

The fair market values for our derivative financial instruments are generally determined based on quoted market prices or market quotes for the same or similar financial instruments.

Recent US GAAP accounting pronouncements

In June 2006, FASB Interpretation No. 48 ‘‘Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109’’ (FIN 48) was issued. FIN 48 requires tax benefits from

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an uncertain position to be recognised if it is ‘more likely than not’ that the position is sustainable, based on its technical merits. The interpretation also requires qualitative and quantitative disclosures, including discussion of reasonably possible changes that might occur in recognised tax benefits over the next 12 months, a description of open tax years by major jurisdiction, and a roll-forward of all unrecognised tax benefits. FIN 48 first applies for the Company from January 1, 2007. The Company is currently assessing the impact of adopting FIN 48.

In February 2006, the FASB issued Statement of Financial Accounting Standard (‘‘SFAS’’) 155 ‘‘Accounting for Certain Hybrid Financial Instruments’’ (SFAS 155). SFAS 155 provides entities with relief from having to separately determine the fair value of an embedded derivative that would otherwise have to be bifurcated from its host contract in accordance with SFAS 133. SFAS 155 allows an entity to make an irrevocable election to measure such a hybrid financial instrument at fair value in its entirety, with changes in fair value recognised in earnings. Additionally, SFAS 155 requires that interest in securitised financial assets be evaluated to identify whether they are freestanding derivatives or hybrid financial instruments containing an embedded derivative that requires bifurcation (previously these were exempt from SFAS 133). SFAS 155 is effective for all financial instruments acquired, issued or subject to a re-measurement event occurring after the beginning of an entity’s first fiscal year that begins after 15 September 2006. The Company is currently assessing the impact of adopting SFAS 155.

In September 2006, the FASB issued SFAS 157 ‘‘Fair Value Measurements.’’ SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The statement emphasizes that fair value is a market-based measurement and not an entity-specific measurement. It also establishes a fair value hierarchy used in fair value measurements and expands the required disclosures of assets and liabilities measured at fair value.’’ SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this on the Company’s financial condition, results of operation or liquidity.

In September 2006, the FASB issued SFAS 158 ‘‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,’’ an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS 158 requires employers to recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. Secondly, it requires employers to measure the plans assets and obligations that determine its funded status as of the end of the fiscal year. Lastly, employers are required to recognize changes in the funded status of a defined benefit postretirement plan in the year that the changes occur with the changes reported in comprehensive income. During 2006, the Company adopted the recognition and disclosure provisions of SFAS 158, which resulted in a SEK 312 million decrease in accumulated other comprehensive income and shareholders equity, a SEK 445 million increase in accrued pension liability, and a SEK 133 million decrease in deferred income taxes. The Company will adopt the measurement date provisions of SFAS 158 for the fiscal year ended December 31, 2008.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115 (‘‘SFAS 159’’) which permits entities to choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. The following balance sheet items are within the scope of SFAS 159:

•	Recognized financial assets and financial liabilities unless a special exception applies

•	Firm commitments that would otherwise not be recognized at inception and that involve only financial instruments

•	Non-financial insurance contracts

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•	Host financial instruments resulting from separation of an embedded non-financial derivative instrument from a non-financial hybrid instrument

SFAS 159 will be effective for fiscal years beginning after November 2007 with early adoption possible but subject to certain requirements. The Company is currently assessing the impact of adopting SFAS 159.

Reconciliation of Swedish GAAP to US GAAP

The differences in net income and stockholders’ equity between Swedish GAAP and US GAAP result primarily from differing accounting treatments for disposal of assets, depreciation of properties, investments in securities, financial instruments, purchase accounting, pensions and other items. See Note 31 of the notes to our Consolidated Financial Statements for a reconciliation of net income and stockholders’ equity from Swedish GAAP to US GAAP and a discussion of such differences.

Net income determined in accordance with US GAAP would have been SEK 1,852 million in 2004, SEK 2,008 million in 2005 and SEK 3,016 million in 2006 as compared to SEK 2,359 million, SEK 2,268 million and SEK 4,339 million of net income determined under Swedish GAAP for the years ended December 31, 2004, 2005 and 2006, respectively.

Stockholders’ equity determined in accordance with US GAAP would have been SEK 14,913 million and SEK 17,551 million at December 31, 2005 and 2006, respectively. Under Swedish GAAP, stockholders’ equity was SEK 15,132 and SEK 18,587 million at December 31, 2005 and 2006, respectively.

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 stockholders 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 stockholders. 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 stockholders at any time, and vacancies on the board, except when filled by a deputy director, may only be filled by stockholder 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 and executive officers as of March 31, 2007.

Name			Year born			Title
Lennart Jeansson			1941			Chairman of the Board of Directors
Dan Sten Olsson			1947			Chief Executive Officer and Director(1)
Svante Carlsson			1948			Chief Financial Officer, Executive Vice President and Director
Jan Carlstein			1938			Director
Bengt Olof Eriksson			1937			Director
Stefan Lindskog			1951			Director
Jörgen Lorén			1961			Director (Employee Representative)
Jens Ole Hansen			1951			Director (Employee Representative)
Anna-Lena Myhr			1944			Deputy Director (Employee Representative)

(1) For details of Mr. Dan Sten Olsson’s share ownership, see Item 7.

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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 and the Volvo Pensionsstiftelse and deputy chairman of Sixth Swedish National Pension Fund. He also serves as director of Volvo Lastvagnar AB, Volvo Construction Equipment, Svenskt Näringslov and Orkla ASA.

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 significant 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.

Svante Carlsson has served as chief financial officer since 1984, Executive Vice President of Stena AB since 1989 and a director of Stena AB since 1984. Mr. Carlsson also serves as a member of the board of directors of many other companies in the Stena Sphere. He has been employed by Stena AB since 1975.

Jan Carlstein has served as a director of Stena AB since late 1999 and managing director of Stena Metall from 1975 to August 31, 1999. Mr. Carlstein also serves as a member of the board of directors of Stena Metall.

Bengt Olof Eriksson has served as a director of Stena AB since May 1997 and served as Managing Director of Stena Fastigheter, a subsidiary of Stena AB, from 1981 to 1997. Mr. Eriksson also served as a member of the board of directors of Stena Fastigheter from June 1997 to June 2006.

Stefan Lindskog has served as a director of Stena AB since 1988. Mr. Lindskog is a partner of Wistrand Advokatbyra Stockholm KB and is also a member of the board of directors of Stena Metall.

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 Seamens’ Union, since 1992. Mr. Hansen is a boatswain and has been employed in our ferry operations since 1974.

Anna-Lena Myhr has served as a deputy director of Stena AB, representing Stena AB employees affiliated with the Swedish Union of Commercial Employees, since 1999. Ms. Myhr is a salary clerk and has been employed in our ferry operations since 1973.

Other Key Employees

Christel Armstrong Darvik (born 1953) has served as managing director of Stena Fastigheter since October 1, 2006. She is a member of the board of directors of Specialfastigheter Sverige AB. 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 and, prior to that, as head of the Sweden-Germany route and sales and marketing director for Stena Line’s Scandinavian operations.

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

John Helgesson (born 1945) has served as managing director of Stena Fastigheter since June 1, 1997 and as a director of Stena Fastigheter since 1997. Mr. Helgesson also serves as a

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director of the Swedish Property Owner’s Association and the Scandinavian International Property Association. Mr. Helgesson resigned as managing director of Stena Fastigheter in October 2006 and now serves as chairman of Stena Realty and vice chairman of Stena Fastigheter AB.

Staffan Hultgren (born 1961) has served as chief controller of Stena AB since July 2004. Mr. Hultgren also serves on the board of directors of many of our companies. Mr. Hultgren has been employed in the Stena Sphere since 2004.

Kenneth MacLeod (born 1943) has served as managing director of Northern Marine since 1991. Mr. MacLeod also serves as a member of the board of directors of Swecal Ltd, one of our subsidiaries, and several other companies. Mr. MacLeod has been employed in the Stena Sphere since 1983.

Harry Robertsson (born 1956) has served as technical director of Stena Rederi since 1999. Mr. Robertsson is a Naval Architect M.Sc. and has worked in the technical department of Stena Rederi since 1996. From 1984 to 1996 he has 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 also serves as a member of the board of directors of Northern Marine. Mr. Ryder has been employed in the Stena Sphere since 1982. In May 2006 Mr. Ryder was appointed deputy managing director of Stena Rederi.

Christer Schoug (born 1956) has served as shipping coordinator in Stena Rederi since 2005 and since May 2006 as director and managing director of Stena RoRo AB and deputy managing director of Stena Rederi. Mr. Schoug also serves as vice chairman of Northern Marine Management in Glasgow, Scotland. Mr. Schoug has been employed in the Stena Sphere since 1995.

Martin Svalstedt (born 1963) has served as managing director of Adactum since 2002. Mr. Svalstedt also serves as chairman of Gislaved Folie AB, S-Invest Trading AB and Midelfart Sonesson AB, and as board member in Gunnebo AB, Ballingslöv International AB, Envac Centralsug AB and Adactum.

Tom Welo (born 1947) has served as managing director of Stena Drilling Ltd. since October 1995. Mr. Welo has a Master of Science in Naval Architecture and Marine Engineering.

Compensation of Directors

For the year ended December 31, 2006, the aggregate compensation paid by the Stena AB to its directors (a total of nine persons) amounted to approximately SEK 12 million. For the year ended December 31, 2005, the aggregate compensation paid by the Stena AB to its directors amounted to approximately SEK 12 million.

Audit Committee

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

Lennart Jeansson (chairman of the board of Stena AB), Jan Carlstein (member of the board of Stena AB), Staffan Hultgren (chief controller for Stena AB) and Anne-Marie Pouteaux (outside counsel to the Company and company secretary in 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.

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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.

			2004						2005						2006
Ferry Operations					5,324						5,540						5,564
Drilling					590						649						665
Shipping					577						569						626
Property Operations					267						264						283
Other					387						656						907
Total					7,145						7,678						8,045

For 2004, ‘‘Other’’ in the table above includes 327 persons employed in ‘‘Blomsterlandet’’ which was acquired in 2004. For 2005, ‘‘Other’’ in the table above includes 403 persons employed in ‘‘Blomsterlandet’’ and 183 persons employed in ‘‘Envac’’ which was acquired in 2005. For 2006, ‘‘Other’’ in the table above includes 439 employed in ‘‘Blomsterlandet and 388 persons employed in ‘‘Envac’’. In addition to the employees referred to above, Northern Marine Management employed 4,475 persons in 2006 in external ship management services, as compared to 4,172 persons in 2005 and 3,053 persons in 2004.

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

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, 2007:

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.

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 his wife 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 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

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by such shareholder. Under the articles, 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 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, Stena Sessan AB (‘‘Sessan’’) and Stena Metall AB (‘‘Stena Metall’’) and their subsidiaries. Another significant company within the Stena Sphere is Concordia Maritime AB (‘‘Concordia’’) which is 52% owned by Sessan. Shares in Concordia are listed on the Stockholm Stock Exchange. The significant transactions between the Company and its affiliates are described below.

Concordia

Concordia and the Company through Stena Bulk AB (‘‘Stena Bulk’’), 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 0% in business opportunities identified by Stena Bulk relating to the chartering of crude oil tankers. No agreements were made in 2005 or 2006. The net outcome of the agreement including results on forward contracts was a loss of SEK 1 million in 2004 and a loss of SEK 1 million in 2005 and SEK 0 million in 2006.

We provide certain services to Concordia such as administration, marketing, insurance and technical support for Concordia’s owned and chartered vessels, including administration of jointly chartered vessels, office and office services for Concordia’s personnel and certain financial and other services. We earned fees equal to SEK 17 million, SEK 13 million and SEK 25 million in 2004, 2005 and 2006 respectively, for these services.

Sessan

Since June 1999, we have served as the business manager for Sessan for its 50% participation in a Norwegian partnership that owns the shuttle tanker Stena Sirita that is chartered pursuant to a 10-year contract to ESSO Norway. In 2003, the Company also became the business manager for Sessan for its 50% participation in the shuttle tanker Stena Spirit that is chartered pursuant to a 15-year contract to Petrobras in Brazil. We earned total fees of SEK 1 million in each of the years 2004, 2005 and 2006 for these services.

In 2001 and 2002, Sessan acquired all shares in the shipping company HH Ferries in the south of Sweden. The acquistion was partly financed by an interest bearing credit facility from us. As of December 31, 2006, DKK 213 million was outstanding under this facility as compared to DKK 211 million as of December 31, 2005.

In December 2002, we sold to Sessan the remaining 50% of the RoPax vessel Stena Jutlandica. Sessan acquired the first 50% of this vessel from us in 1996. The vessel is chartered back as an operating lease, for which we paid charterhire of SEK 61 million for each of the years 2004 and 2005 and SEK 59 million for 2006.

Sessan has invested in shares in the company Meda AB (‘‘Meda’’). In 2005, a new share issue in Meda was guaranteed by the Company. In connection with the new issue, the Company purchased shares in Meda. Sessan had the option to buy these shares at a price of 10% above the price paid by the Company. This option was exercised in 2006.

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In 2003 we granted an interest bearing loan of SEK 10 million to Sessan to finance the acquisition of shares in an unrelated company. During the year, Stena aquired shares in Ballingslöv at a market value of SEK 35 million from Sessan. At the same time the loan of SEK 10 million was repaid.

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall. Such purchases aggregated SEK 726 million, SEK 1,127 million and SEK 1,840 million in 2004, 2005 and 2006, respectively.

We paid charterhire for vessels to Stena Metall equal to SEK 46 million in 2004 and SEK 63 million each of the years 2005 and 2006.

We provide management and other services to Stena Metall. We received SEK 1 million in each of the years 2004, 2005 and 2006 for these services.

Olsson Family

We rent office space from members of the Olsson family. In 2004, 2005 and 2006. we paid SEK 28 million, SEK 29 million and SEK 32 million, respectively, in respect of such properties.

We manage certain properties owned by members of the Olsson family. In 2004, 2005 and 2006, members of the Olsson family paid us SEK 11 million, SEK 13 million and SEK 12 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.

In 2004, we acquired properties in Sweden, that were subsequently sold to the Olsson family at a value of SEK 587 million. This transaction had no impact on our consolidated accounts.

In 2005, the Company sold a property to the family of SEK 96 million. The sale was made at market price.

In 2006, we acquired shares in Gunnebo and Gunnebo Industrier at a market value of SEK 18 million from the family.

Item 8.    Financial Information

Consolidated Financial Statements

See ‘‘Item 18. Financial Statements’’ and pages F-1 through F-59.

Legal Proceedings

We are a party to various routine legal 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 70 million, SEK 195 million and SEK 215 million for the years ended December 31, 2004, 2005 and 2006, respectively. The dividends are made out of unrestricted earnings in the stockholders equity and paid out the year after the respective financial year.

Item 9.    The Offer and Listing

Not applicable.

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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 which 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 for example major borrowings 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

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amendments to the Articles 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 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 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, 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 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 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, 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 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

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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 Shipper, Stena Spey, Stena Clyde, Stena Tay, Stena Saga, Stena Nautica, Stena Don, Stena Forwarder, Stena Baltica, Stena Carisma (and its linkspans), Stena Danica, Stena Discovery, Stena Europe, Stena Forecaster, Stena Forerunner, Stena Foreteller, Stena Germanica, Stena Scandinavica, Stena Scanrail, Stena Searider, Stena Seatrader 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 us and certain of our subsidiaries. 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 capitalisation, 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, 2006, the amount of indebtedness under the revolving credit facility was $386 million and $16 million used in connection with guarantees and letters of credit. As of December 31, 2005, a total of $859 million was utilized under this facility, of which $10 million was used for issuing of bank guarantees.

Adactum secured bank facility.    On October 16, 2006, 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 October 16, 2009. It bears interest at a rate based on Stockholm Interbank Offered Rates plus an applicable margin of 0.75%. Stena 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 that provides that an event of default occurs if we, Adactum or any present or future subsidiary of Stena AB fail to pay our respective indebtedness when due in respect of such debt that exceeds $15 million. As of December 31, 2006, SEK 160 million was utilized.

Debt in VIE’s.    As of December 31, 2006 we had investment in three VIEs: Canyon Capital CDO-2002, Canyon Capital CLO-2004 and Canyon Capital CLO-2006. In early 2007, we invested in a new, fourth VIE. The assets and liabilities of the VIEs are consolidated in our financial statements, although the debt of the VIEs is non-recourse to Stena.

As of December 31, 2006, Canyon Capital CDO-2002 Ltd, Canyon Capital CLO-2004 Ltd and Canyon Capital CLO-2006 Ltd (created in August 2006), had issued senior secured notes to fund their portfolio investments in the US high yield bond and corporate loan markets. The total outstanding debt for all three VIEs as of December 31, 2006 amounted to SEK 6,302 million, as compared with SEK 4,844 million as of December 31, 2005. The remaining funding for the VIEs has been provided by the Company and other investors as subordinated 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, $11.1 million Class B notes and $11.2 million Class C notes. The Class

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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, $68.5 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. All notes are secured by the underlying securities held by each VIE.

9.625% Senior Notes, 7.5% Senior Notes and 7% Senior Notes.    As of December 31, 2006, we had $177 million principal amount of 9.625% senior notes due 2012 outstanding, $175 million principal amount of 7.5% senior notes due 2013 outstanding and $250 million principal amount of 7% senior notes due 2016 outstanding. In February 2007, we purchased approximately $177 million of our 9.625% senior notes due 2012 pursuant to a tender offer and consent solicitation, representing approximately 99% of these outstanding senior notes. 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 these senior notes contain certain covenants with respect to, among others, 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. Since Stena AB is a holding company and all our operations are conducted through our subsidiaries, the notes are structurally subordinated to all existing and future liabilities (including trade payables) of the subsidiaries, including those under the revolving credit facility.

6.125% Senior Notes and 5.875% Senior Notes.    On February 8, 2007, we completed an offering of €300 million of our 6.125% senior notes due 2017 and on February 14, 2007, we completed an offering of €102 million of our 5.875% senior notes due 2019. Interest is payable semi-annually on February 1 and August 1 of each year. The indentures governing the notes contain certain covenants with respect to, among others, 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. Since Stena AB is a holding company and all our operations are conducted through our subsidiaries, the notes are structurally subordinated to all existing and future liabilities (including trade payables) of the subsidiaries, including those under the revolving credit facility.

Consent solicitation for senior notes due 2013 and 2016.     As of the date of this Annual Report, we are seeking consents from the holders of our senior notes due 2013 and 2016 to amend the indentures relating to these notes to conform the covenants in these notes. Such amendments require the consent of the holders of a majority in principal amount of each of such senior notes.

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Change of control

The 2004 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 Sarl and/or SSAG, then all amounts outstanding under the 2004 revolving credit facility become immediately payable on demand, and upon such demand the facility terminate. In addition, the SEK  450 million Stena Adactum facility will become payable on demand if Stena AB ceases to own, directly or indirectly, 100% of the equity in Stena 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, 2006, we have bank mortgage loans on the real estate, buildings and land in our real estate business segment of approximately SEK 12.3 billion that are denominated in SEK and EUR with maturities from 2008 through 2024.

Other.    As of December 31, 2006, we were obligated with respect to lease obligations and certain loans used to finance the acquisition of vessels and other assets in the aggregate amount of approximately SEK 4.5 billion. These are denominated in US dollars, British pounds and euros.

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 web site that contains reports and other information regarding issuers that file electronically with the SEC. The web site 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. All 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. The information presented below should be read in conjunction with Note 27 to our consolidated financial statements.

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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 currency exchange rates, primarily in relation to the US dollar and, to a lesser extent, the British pound, the 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 charter vessel contracts. 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 US 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 (25) million and SEK 102 million for the financial years ended December 31, 2005 and 2006, respectively. This equals 0.05% and 0.2 % of total assets of SEK 54,812 million and SEK 60,417 million as of December 31, 2005 and 2006, respectively.

Equity Exposure

When we prepare our consolidated financial statements, the net assets of our foreign subsidiaries and part of 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 foreign subsidiaries, as of December 31, 2005 and 2006, was approximately SEK 9.6 billion and SEK 12.8 billion, respectively. The net assets are expressed mainly in Swedish kronor, Euro, British pounds and US dollars. A 1% change in the value of the

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Swedish kronor against each of the functional currencies of our foreign subsidiaries would affect our shareholders’ equity as of December 31, 2006 by SEK 128 million. In 2006, our shareholders’ equity decreased by SEK 858 million due to exchange rate differences (see also Note 18 to our audited consolidated financial statements).

Bunker Fuel Exposure

Our expenses are also significantly affected by fluctuations in 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 18 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 27 in our audited 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 22 million and SEK 7 million for the financial years ended December 31, 2005 and 2006, 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 2006, 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 55% floating 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, 2006 to manage these interest rate risks, including interest rate swaps to effectively convert floating rate borrowings to fixed rate borrowings.

Equity Price Risk

At December 31, 2006, the fair value of our marketable securities and short-term investments (excluding restricted cash) amounted to SEK 7.4 billion. The potential change in fair value resulting from a hypothetical 1% change of prices would be SEK 74 million. Under current GAAP, 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.

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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, 2006 (the ‘‘Evaluation Date’’) under the supervision of our Chief Executive Officer and Chief Financial Officer.

Limitations on Effectiveness of Controls.    Our Chief Executive Officer and Chief 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 Chief 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.

Item 16.    [Reserved]

Item 16A.    Audit Committee Financial Expert

On April 25, 2007, our Board of Directors determined that Staffan Hultgren qualifies as an ‘‘audit committee financial expert’’ within the meaning of Item 16A of Form 20-F. Mr. Hultgren is our chief controller and is therefore not ‘‘independent’’.

Item 16B.    Code of Ethics

On April 23, 2004, our Board of Directors adopted a 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.

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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, 2005 and 2006 were:

			2005						2006
KPMG:
Audit fees					25						23
Audit related fees					2						1
Tax fees					18						17
All other fees					6						2
Total KPMG					51						43
Other auditors
Tax fees					10						16
All other fees					5						4
Grand total					66						63

The audit fees for the years ended December 31, 2005 and 2006 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 audit related fees for the years ended December 31, 2005 and 2006 include fees for supporting guidelines concerning accounting practices and standards.

Tax fees for the years ended December 31, 2005 and 2006 were for services performed in connection with income tax compliance, consulting and tax research services and assistance with tax audits.

The all other fees category for the year ended December 31, 2005 and 2006 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 Bohlins 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 may be obtained from the designated Board member. The designated Board member is required to report any interim pre-approvals to the entire Board at the next scheduled Board meeting.

During 2006, none of the audit-related fees, tax fees or all other fees paid by us to KPMG were approved pursuant to the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

Item 16D.    Exemptions from the Listing Standards for Audit Committees

Not   Applicable.

Item 16E.    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not   Applicable.

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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
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, 2006			F-3
Consolidated Balance Sheets as of December 31, 2005 and 2006			F-4
Consolidated Statements of Changes in Stockholders´ Equity for each of the years in the two-year period ended December 31, 2006			F-6
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2006			F-7
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 27, 2002 between the Registrant and JPMorgan Chase Bank, as trustee, relating to the Company’s 9.625% Senior Notes due 2012 (incorporated by reference to Exhibit 4.1 to the 2002 Registration Statement).*
2.2			Indenture dated as of December 2, 2003 between the Company and JPMorgan Chase Bank, as trustee, relating to the Company’s 7.5% Senior Notes due 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form F-4 (file number 333-111353) filed with the SEC on December 19, 2003 (the ‘‘2003 Registration Statement’’)).*

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2.3			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’’)). *
2.4			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 **
2.5			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 **
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).*
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.)*
12.1			Certification of Dan Sten Olsson, Chief Executive Officer of Stena AB, dated April 30, 2007.**
12.2			Certification of Svante Carlsson, Chief Financial Officer of Stena AB, dated April 30, 2007.**
13.1			Certification of Chief Executive Officer and Chief 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.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

Date: April 30, 2007			STENA AB (publ)

By: /s/ Dan Sten Olsson                      

Name: Dan Sten Olsson
Title: Chief Executive Officer

By: /s/ Svante Carlsson                         

Name: Svante Carlsson
Title: Chief Financial Officer

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FINAL

Consolidated Financial Statements

Stena AB (publ)

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, 2006			F-3
Consolidated balance sheets as of December 31, 2005 and 2006			F-4
Consolidated statements of changes in stockholders´ equity for each of the years in the two-year period ended December 31, 2006			F-6
Consolidated statements of cash flows for each of the years in the three-year period ended December 31, 2006			F-7
Notes to consolidated financial statements			F-9

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors,
Stena AB (publ)

We have audited the consolidated balance sheets of Stena AB (publ) and subsidiaries as of December 31, 2005 and 2006, and the related consolidated statements of income and cash flows for each of the years in the three year period ended December 31, 2006 and the related consolidated statements of changes in stockholders equity for each of the years in the two year period ended December 31, 2006. 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 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 misstatements. An audit includes examining, on a test basis, 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 present fairly, in all material respects, the financial position of Stena AB (publ) and subsidiaries as of December 31, 2005 and 2006, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2006 in conformity with generally accepted accounting principles in Sweden.

Generally accepted accounting principles in Sweden vary in certain significant respects from generally accepted accounting principles in the United States. Information relating to the nature and effect of such differences is summarized in Note 31 to the consolidated financial statements.

Gothenburg, Sweden
April 25, 2007
KPMG Bohlins AB

Thord Elmersson
Authorized Public Accountant

F-2

Table of Contents

Consolidated Income Statements
Years ended December 31, 2004, 2005 and 2006

(In millions)			Note			2004 SEK						2005 SEK						2006 SEK						2006 USD (unaudited- Note 1)
Revenues:
Ferry
Operations								9,024						9,045						9,413						1,377
Net gain on sale of vessels			3					11
Total ferry operations								9,035						9,045						9,413						1,377
Drilling
Operations								1,429						1,871						3,027						443
Net gain on sale of vessels			3																	1,483						217
Total drilling								1,429						1,871						4,510						660
Shipping
Operations								3,492						4,405						4,283						627
Net gain on sale of vessels			3					645						315						830						121
Total shipping								4,137						4,720						5,113						748
Property
Operations								1,357						1,882						1,970						288
Net gain on sale of properties			3					110						813						194						29
Total property								1,467						2,695						2,164						317
Other								653						1,288						1,695						248
Total revenues			2					16,721						19,619						22,895						3,350
Direct operating expenses:
Ferry operations								(6,707	)					(6,565	)					(6,399	)					(936	)
Drilling								(946	)					(1,112	)					(1,443	)					(211	)
Shipping								(2,212	)					(3,066	)					(3,437	)					(503	)
Property								(509	)					(810	)					(886	)					(130	)
Other								(569	)					(1,078	)					(1,382	)					(202	)
Total direct operating expenses								(10,943	)					(12,631	)					(13,547	)					(1,982	)
Selling and administrative expenses			4					(1,761	)					(1,861	)					(2,127	)					(311	)
Depreciation and amortization			2					(1,790	)					(2,734	)					(2,634	)					(386	)
Total operating expenses								(14,494	)					(17,226	)					(18,308	)					(2,679	)
Income from operations			2					2,227						2,393						4,587						671
Share of affiliated companies´ results			5					17						21						27						4
Financial income and expense:
Dividends received								36						79						103						15
Gain (loss) on securities, net			6					1,060						921						982						144
Interest income								382						567						737						108
Interest expense								(1,135	)					(1,395	)					(1,649	)					(241	)
Foreign exchange gains (losses), net			7					(107	)					(3	)					110						16
Other financial income (expense), net			8					(24	)					(121	)					(167	)					(25	)
Total financial income and expense								212						48						116						17
Minority interest			3,12					(77	)					(21	)					(23	)					(3	)
Income before taxes								2,379						2,441						4,707						689
Income taxes			9					(20	)					(173	)					(368	)					(54	)
Net income								2,359						2,268						4,339						635

F-3

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Consolidated Balance Sheets
December 31, 2005 and 2006

						December 31
(In millions)			Note			2005 SEK						2006 SEK						2006 USD (unaudited- Note 1)
ASSETS
Noncurrent assets:
Intangible assets			10					806						688						101
Tangible fixed assets:			11
Vessels								13,585						10,277						1,504
Construction in progress								1,280						5,658						828
Equipment								626						628						92
Property								17,275						17,948						2,626
Total tangible fixed assets								32,766						34,511						5,050
Financial fixed assets:
Investment in affiliated companies			5					332						397						58
Investment in VIEs			12					5,753						7,341						1,074
Marketable securities			13					3,295						5,802						849
Other noncurrent assets			14					1,440						3,520						515
Total financial fixed assets								10,820						17,060						2,496
Total noncurrent assets								44,392						52,259						7,647
Current assets:
Inventories								325						317						46
Short-term receivables
Trade debtors			15					2,092						2,007						294
Other receivables			15					1,156						1,617						237
Prepaid expenses and accrued income			15					890						871						127
Total short-term receivables								4,138						4,495						658
Short-term investments			16					2,213						2,462						360
Cash and cash equivalents			17					3,744						884						129
Total current assets								10,420						8,158						1,193
Total assets			2					54,812						60,417						8,840
STOCKHOLDERS´ EQUITY AND LIABILITIES
Stockholders’ equity:			18
Capital stock								5						5						1
Reserves								926						842						123
Retained earnings								11,933						13,401						1,961
Net income								2,268						4,339						635
Total stockholders’ equity								15,132						18,587						2,720
Minority interest			12					131						162						24
Provisions:			19
Deferred income taxes								1,517						1,709						250
Pension liabilities								1,882						2,205						323
Other provisions								46						1,668						244
Total provisions								3,445						5,582						817

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						December 31
(In millions)			Note			2005 SEK						2006 SEK						2006 USD (unaudited- Note 1)
Noncurrent liabilities:
Long-term debt			20					19,773						18,427						2,696
Debt in VIEs			12					4,844						6,302						922
Senior Notes			21					4,821						2,905						425
Capitalized lease obligations			22					1,325						1,246						182
Other noncurrent liabilities			23					286						932						136
Total noncurrent liabilities								31,049						29,812						4,361
Current liabilities:
Short-term debt			20					834						642						94
Senior Notes			21											1,211						177
Capitalized lease obligations			22					40						38						6
Trade accounts payable								902						1,036						152
Income tax payable			9					198						166						24
Other current liabilities								533						424						62
Accrued costs and prepaid income			24					2,548						2,757						403
Total current liabilities								5,055						6,274						918
Total stockholders´ equity and liabilities								54,812						60,417						8,840

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Consolidated Statements of Changes in Stockholders´ Equity
Years ended December 31, 2005 and 2006

(SEK in millions)			Capital stock			Restricted reserves						Unrestricted reserves						Total
Balance as of December 31, 2004			5					763						12,651						13,419
Dividend paid														(195	)					(195	)
Transfer to charitable trust														(30	)					(30	)
Change of accounting principles for pensions														(1,075	)					(1,075	)
Revaluation of financial instruments														303						303
Transfers between reserves								96						(96	)
Exchange differences								67						375						442
Total changes in equity before net income								163						(718	)					(555	)
Net income														2,268						2,268
Balance as of December 31, 2005			5					926						14,201						15,132
Dividend paid														(215	)					(215	)
Transfer to charitable trust														(25	)					(25	)
Reclassifications														177						177
Change of accounting principles for pensions														(349	)					(349	)
Revaluation of financial instruments														386						386
Transfers between reserves								(82	)					82
Exchange differences								(2	)					(856	)					(858	)
Total changes in equity before net income								(84	)					(800	)					(884	)
Net income														4,339						4,339
Balance as of December 31, 2006			5					842						17,740						18,587

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Consolidated Statements of Cash Flows
Years ended December 31, 2004, 2005 and 2006

(In millions)			Note			2004 SEK						2005 SEK						2006 SEK						2006 USD (unaudited- Note 1)
Net cash flows from operating activities:
Net income								2,359						2,268						4,339						635
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			2					1,790						2,734						2,634						386
Share of affiliated companies´ results								(17	)					(21	)					(27	)					(4	)
(Gain)/loss on sale of tangible fixed assets			3					(763	)					(1,128	)					(2,512	)					(368	)
(Gain)/loss on securities, net								(1,060	)					(921	)					(982	)					(144	)
Unrealized foreign exchange (gains)/losses								(144	)					138						(142	)					(21	)
Deferred income taxes			9					(113	)					85						69						10
Minority interests								78						21						23						3
Other non cash items								141						(8	)					(332	)					(49	)
Net cash flows from trading securities								(605	)					(428	)					229						34
Cash flow from operations before changes in working capital								1,666						2,740						3,299						482
Changes in working capital:
Receivables								2						(821	)					(589	)					(86	)
Prepaid expenses and accrued income								(311	)					43						(17	)					(2	)
Inventories								(43	)					(52	)					6						1
Trade accounts payable								33						219						167						25
Accrued costs and prepaid income								(15	)					246						398						58
Income tax payable								52						55						(11	)					(2	)
Other current liabilities								72						(27	)					314						46
Net cash provided by operating activities								1,456						2,403						3,567						522
Net cash flows from investing activities:
Purchase of intangible assets								(174	)					(78	)					(21	)					(3	)
Cash proceeds from sale of tangible fixed assets			3					2,565						4,570						5,023						735
Capital expenditure on tangible fixed assets			2					(3,343	)					(5,152	)					(8,148	)					(1,192	)
Purchase of subsidiary, net of cash acquired			26					(3,917	)					(518	)
Proceeds from sale of subsidiary			26					587
Investments in affiliated companies														(67	)					(49	)					(7	)
Proceeds from sale of securities								6,108						4,227						7,043						1,031
Purchase of securities								(7,008	)					(5,777	)					(10,968	)					(1,605	)
Increase of noncurrent assets								(255	)					(130	)					(148	)					(22	)
Decrease of noncurrent assets								18						14						12						2
Other investing activities								88						(37	)					(31	)					(5	)
Net cash used in investing activities								(5,331	)					(2,948	)					(7,287	)					(1,066	)
Net cash flows from financing activities:
Proceeds from issuance of debt								5,822						1,277						6,076						889
Principal payments on debt								(2,017	)					(1,549	)					(404	)					(59	)

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(In millions)			Note			2004 SEK						2005 SEK						2006 SEK						2006 USD (unaudited- Note 1)
Net change in borrowings on line-of-credit     agreements								1,401						2,287						(3,842	)					(562	)
Principal payments on capitalized lease     obligations								(42	)					(41	)					(39	)					(6	)
Net change in restricted cash accounts								(51	)					23						(610	)					(89	)
Dividends paid								(70	)					(195	)					(215	)					(32	)
Other financing activities								(507	)					48						126						18
Net cash provided by financing activities								4,536						1,850						1,092						159
Effect of exchange rate changes on cash     and cash equivalents								1						59						(232	)					(34	)
Net change in cash and cash equivalents								662						1,364						(2,860	)					(419	)
Cash and cash equivalents at beginning of     year								1,718						2,380						3,744						548
Cash and cash equivalents at end of year								2,380						3,744						884						129

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

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Note 1    Summary of Significant Accounting Principles

The consolidated financial statements present the financial position and results of operations of Stena AB (publ) and consolidated subsidiaries (the ‘‘Company’’) and are prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP).

Solely for the convenience of the reader, the 2006 financial statements have been translated from Swedish kronor (SEK) into United States dollars ($) using the December 31, 2006 Noon Buying Rate of the Federal Reserve Bank of New York of $1.00 = SEK 6.8342.

Basis of consolidation

The consolidated financial statements include Stena AB and all subsidiaries, defined as companies in which Stena AB, directly or indirectly, owns shares representing more than 50% of the voting rights or in another way has a controlling influence. Intercompany transactions are eliminated on consolidation. Acquisitions are accounted for in accordance with the acquisition accounting method, whereby any excess values are allocated to the under-lying assets up to market value and any further excess value is accounted for as goodwill. These allocations can be adjusted in arrears to reflect the conditions at the time of acquisitions. Such adjustments are to be introduced without delay but no later than in the financial year following the acquisition.

Foreign exchange

Assets and liabilities of foreign subsidiaries are translated at year end exchange rates and income statement items are translated at average exchange rates prevailing during the year, except for sale of vessels, which are translated at the average exchange rate for the quarter in which the vessel is delivered. Exchange differences arising on the translation of financial statements of foreign subsidiaries are taken directly to stockholders’ equity.

Assets and liabilities in foreign currency in a legal entity are translated at year end exchange rates. Any resulting exchange differences on bank loans etc are accounted for as financial income/expense while any differences from cash paid or received in foreign currencies are included in the operating result.

The following exchange rates have been used for consolidation purposes:

			Average rates																		Closing rates
			2005						2006						%						2005						2006						%
USD					7.4775						7.3766						(1	%)					7.9525						6.8725				(14%)
GBP					13.5782						13.5752						0	%					13.7325						13.4875				(2%)
EUR					9.2849						9.2549						0	%					9.4300						9.0500				(4%)

Investment in associated companies

The equity method of accounting is used for companies in which the Company owns shares representing between 20% and up to a maximum of 50% of the voting rights and/or has a significant influence. The Company records its proportionate share of the net income (loss) of these associated companies´ results in the consolidated income statement as Share of affiliated companies´ results or in Direct operating expenses. Investments in affiliated companies that relates to major strategic investments are recorded as Share of affiliated companies´ results. Results from other associated companies, having a more direct link to normal operations, are included in direct operating expenses. Dividends received are recorded as a reduction of the carrying value.

Estimates and concentrations

The preparation of financial statements in accordance with Swedish GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at

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Note 1    Summary of Significant Accounting Principles — continued

the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such best estimates.

The Company operates in the shipping and offshore drilling industries which historically have been cyclical with corresponding volatility in profitability and vessel values. Vessel values are strongly influenced by charter rates which in turn are influenced by the level and pattern of global economic growth and the world-wide supply and demand for vessels. The spot market for tankers is highly competitive and charter rates are subject to significant fluctuations. Dependence on the spot market may result in lower utilization. In addition, the Company’s ferry operations are highly seasonal. Each of these factors are important considerations associated with the Company’s determination of the carrying amount of owned vessels. The Company seeks to mitigate the effect of such factors by various means such as by obtaining long-term charter contracts.

Revenue recognition

The Company’s shipping and drilling revenues are derived from charter contracts. Revenue is recognized evenly within the charter period. Provision is made in advance for any on-going loss contracts. Revenues from the Company’s ferry operations consist of ticket sales, onboard sales and freight revenues and are recognized in the period services are rendered. Rental income from the Company’s real estate operations is derived from leases and is recognized on a straight line basis over the life of the leases. All revenues are accounted for when the economic benefit can be accurately calculated net after any discounts. Sale of vessels and properties are accounted for at delivery, when all main risks and benefits are transferred to the buyer. Net gain (loss) on sale of vessels and properties are included as a component of revenues.

Construction contracts regarding projects for external parties are accounted for according to the percentage of completion method, i e to include a portion of expected results. Any expected losses are expensed.

Sale of goods is accounted for at the time of delivery to the customer according to the terms of sale.

Dividends on shares are accounted for when received in cash and are included in financial income and expense in the income statement.

Depreciation and amortization

Tangible fixed assets are depreciated over their total estimated economic useful lives using the straight-line method from the date when the asset is ready for use and over the following periods:

Vessels
Drilling rigs			10-20 years
Crude oil tankers			20 years
RoRo vessels			20 years
RoPax vessels			20 years
HSS vessels and other fast ferries			10-20 years
Other ferries			25 years
Other tangible fixed assets:
Buildings for own use			50 years
Equipment			3-5 years

Properties included in the Company´s real estate operations are depreciated at 1% annually based upon acquisition values.

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Note 1    Summary of Significant Accounting Principles — continued

Intangible assets are normally amortized over 5 years but over up to 20 years in cases where the economic life is estimated accordingly. This relates to investments in ferry routes and trademarks, that are entered into on a long term basis, and to special purpose-built software systems, that based on experience have a useful life exceeding 5 years.

Financial expenses

Financial expenses is accounted for in the the period to which it relates. Financial expenses related to construction of vessel newbuildings is capitalized as part of the cost of investment. Direct costs for raising new loans or credit facilities are capitalized and amortized over the life of the underlying credit.

Financial instruments

To qualify for deferral hedge accounting of unrealized gains and losses on financial instruments, such instruments must be designated and effective as a hedge of an underlying asset or liability or firm commitment or anticipatory transaction. Management reviews the correlation and effectiveness of financial instruments on a periodic basis. Financial instruments that do not meet the criteria for hedge accounting treatment are marked-to-market. Unrealized results are recognized in the income statement except for certain long-term investments, for which the unrealized results are recorded directly to stockholders´ equity. It is the Company’s policy that terms and contractual maturities of financial instruments which are designed to hedge interest rate and foreign currency exposures correspond to the terms, and where appropriate, the maturities of the underlying hedged transactions.

Results from all types of financial derivative instruments, with the exception of those used for financial trading purposes, are either recorded as an adjustment of the value of the underlying asset or liability or as an adjustment of the revenue or expense of such item and in such period the financial instrument is intended to hedge.

Realized gains and losses that result from the early termination of financial instruments are deferred and included in (i) the determination of the carrying value of the underlying asset or liability in the consolidated balance sheet or (ii) the income statement when the anticipated transaction actually occurs. If an underlying asset or liability is sold or settled, any related financial instrument is then marked-to-market and the resulting unrealized gain or loss is recorded as part of the gain or loss on sale or settlement of the underlying item.

Premiums paid for the purchase of foreign currency and interest rate options are recorded as a prepaid expense in the consolidated balance sheet and are amortized as an adjustment of the underlying revenue or expense over the term of the agreement.

Foreign exchange risk management

Equity exposure

Exchange rate differences arising from the translation of financial statements of foreign subsidiaries are taken directly to stockholders’ equity. Exchange differences from borrowings in foreign currency or forward contracts designated as a hedge of such exposure are taken directly to stockholders’ equity to match the exchange difference of the related net investment in the foreign subsidiary. Any premiums or discounts from foreign exchange or swap contracts are recognized as an adjustment of the Company’s net interest expense.

Translation exposure

Monetary assets and liabilities denominated in foreign currencies arising in the normal course of business are translated at the year end exchange rates and any foreign exchange rate forwards,

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Note 1    Summary of Significant Accounting Principles — continued

currency swaps or options contracts used as hedges of such items are equally marked to market at the same rate and the results thereto are recorded as an adjustment of the value of the underlying asset or liability. Any premiums or discounts from foreign exchange or swap contracts are recognized as an adjustment of the Company’s net interest expense.

Transaction exposure

Realized results from foreign exchange forward contracts or from currency option contracts, including premiums paid or received, that are used to hedge firm commitments or anticipated transactions in foreign currency are deferred and recognized as an adjustment of such transaction when it actually occurs. Any premiums or discounts from foreign exchange or currency swap contracts are included in the operating result.

Interest rate risk management

Interest rate derivative instruments such as interest rate forward contracts, swaps or options are used to hedge future interest payments. The interest receivable and interest payable under the terms of any interest rate derivative contracts are accrued and recorded as an adjustment to the interest expense of the underlying debt obligation.

The Company accounts for the amounts due from or payable to the counterparties of such instruments on an accrual basis at each reporting date based on amounts computed by reference to the respective contracts. Generally, the maturity dates of the hedged debt extends beyond the contractual term of the hedge contracts. Accrual accounting is used over the contractual life of interest rate swaps or options that are used in connection with the Company’s overall program of interest rate management as long as such hedge contracts are considered effective in managing the Company’s interest rate risk.

Bunker fuel risk management

The Company has exposure to the price of bunker fuels used for the operation of its vessels and uses forward contracts and options to hedge its oil price risk. Hedges are regularly taken out to match the underlying cost of physical bunker fuel supplies. Results from such hedge contracts are deferred and recognized as an adjustment of such cost when it actually occurs.

Taxes

Taxes are divided into current taxes and deferred taxes. Deferred income taxes include the tax effect of unutilized tax losses calculated at current tax rates and other temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. Deferred tax assets are recognized to the extent that it is more likely than not that an asset will be realized.

Accounting for subsidies

Subsidies received in connection with the acquisition of vessels and properties are deducted from the cost of the investment while subsidies related to operations reduce the corresponding costs. Subsidies are recognized in the accounts when they can be properly estimated.

Intangible assets

Goodwill in connection with the acquisition of companies and investments in special administrative software are included as intangible fixed assets and accounted for at cost less accumulated amortization. Internally generated direct costs in connection with such investments are recorded as cost.

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Note 1    Summary of Significant Accounting Principles — continued

Tangible fixed assets

Tangible fixed assets are included in the balance sheet when the economic benefit to the Company can be established and the cost can be properly calculated.

Property, vessels and equipment are recorded at cost less accumulated depreciation. Additional depreciation is recorded on impairment, if deemed to be permanent. Repair and maintenance costs are expensed as incurred. Dry-docking costs for vessels are capitalized and amortized over the time until the next dry-docking. Dry-docking costs for ferries are capitalized as prepaid expenses and amortized as direct operating expenses due to their annual nature, while dry-docking costs for other vessels are capitalized as cost of the vessel and depreciated.

On-going projects include advance payments made as well as other direct and indirect project costs including capitalized finanical expenses, using the Company’s current available rate of borrowing for the applicable project. All other interest costs are expensed in the income statement.

Properties are split into real estate and buildings. Buildings and port terminals refer to buildings for use by the Company in its own business.

Impairment of tangible fixed assets and intangible assets

The carrying values of tangible fixed assets and intangible assets are reviewed on an on-going basis. For vessels, the Company uses appraisals carried out by independent international vessel brokers for such reviews. For properties, estimates are based on internal or external valuations. If a review indicates that the carrying value of an asset may not be recoverable, discounted cash flows based upon estimated capital expenses and future expected earnings are used as primary indicators of potential impairment. Assets having a direct joint income, e.g a ferry route, is the smallest cash generating unit used. If, on the balance sheet date, an asset has been impaired, the recoverable amount of the asset is estimated. The asset is written down to its estimated fair value. A similar approach is used for intangible assets.

Leasing

When the Company enters into a lease or other similar arrangement which includes taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a capital lease. Such leased assets are classified in the balance sheet as tangible fixed assets. The present value of the future minimum lease payments is recorded as a capital lease obligation. The assets are depreciated according to plan while rent payments are apportioned between the interest element which is charged to operations and the capital element that is recorded as a reduction of the capital lease obligation.

Other leased assets are recorded as operating leases. The lease charges for such leases are expensed in the period to which they relate.

Financial fixed assets

Marketable securities including long-term bonds and equities are valued at market, whereby the current year unrealized results are included in the income statement as gain (loss) on securities, except for certain strategic holdings, where the result in booked directly to stockholders´ equity.

Investments in other noncurrent securities are recorded at cost. Available information is used to review the carrying value. A portfolio of similar assets is written down to its estimated fair value if the decrease in value is deemed to be permanent. Previously recorded write-downs are reversed when no longer appropriate.

Inventories

Inventories are carried at the lower of cost (FIFO) or market value after any obsolescence. Inventories mainly include bunker fuel, spare parts and merchandise for sale on-board as well as products for bars and restaurants on ferries.

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Note 1    Summary of Significant Accounting Principles — continued

Receivables

Trade debtors and other receivables are recorded at cost after reduction for doubtful receivables. Receivables due after more than 12 months are recorded as noncurrent.

Construction contracts regarding projects for external parties are accounted for as accrued income using the percentage of completion method.

Short-term investments

Short-term investments include marketable debt and equity securities and restricted cash blocked for guarantees and other obligations. Valuation is carried at market. Gains and losses are included in the income statement as gain (loss) on securities.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Provisions for pensions

In accordance with the Swedish accounting standard RR 29 Employee Benefits, defined benefit plans are accounted for by the use of consistent principles.

Post-employment benefits, such as pensions 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, which means that the obligations remain within the Company. Costs and the obligations at the end of the period for defined benefit plans are calculated based on actuarial assumptions and measured on a discounted basis.

The amount recognised in the balance sheet is the net total of the present value of the obligations and the fair value of plan assets as either a provision or a long-term financial asset. In those circumstances when a surplus in a plan can not be fully used, only the portion of the surplus that the enterprise can recover through decreased future contributions or repayments is recognised. Set-off of a surplus in a plan against a deficit in another plan is only allowed if an enterprise has the right to use a surplus in a plan to settle a deficit in another plan, or if the obligations are to be settled on a net basis.

The pension cost and the pension obligation for defined benefit pension plans is calculated annually by independent actuaries. The obligation consists of the present value of expected future payments. The most important actuarial assumptions are stated in note 19.

Actuarial gains and losses may result upon determination of the present value of the defined benefit obligation and the fair value of plan assets. These result either from differences between the actual return and expected returns, or changes in assumptions. The portion of the accumulated actuarial gains and losses at the end of the prior year, that exceeds 10% of the larger of the present value of the defined benefit obligation and the fair value of plan assets is recognised in the result over the expected average remaining service period of the employees participating in the plan. The accounting principle described above is only applied in the consolidated financial statements. The parent company and subsidiaries report defined benefit pension plans in accordance with local rules and guidelines in the respective country.

The Company participates in different multi-employer plans in Great Britain. One of the plans has been accounted for as defined contribution plan but new information about this scheme makes it possible to account this as a defined benefit plan. The change has been treated according to RR 5 and URA 44 as a change in accounting principle as from October 1, 2006.

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Note 1    Summary of Significant Accounting Principles — continued

Senior notes and bank debt

Nominal amounts are recorded as debt in the balance sheet. Debt due within 12 months is included as current debt and remaining debt as noncurrent. Direct costs for raising new debt are deferred and amortized over the length of the credit.

Any prepayment of debt reduces the nominal amount as recorded. Premiums or discounts are recorded in the income statement.

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Note 2    Segment Information

The Company is active internationally, primarily in the areas of ferry operations, drilling, shipping, property and finance. Ferry operations are performed through Stena Line in the Scandinavian, the North Sea and the Irish Sea areas and through Scandlines in Öresund and the south of the Baltic Sea. Drilling includes the ownership and operation of a fleet of semi-submersible drilling rigs and is operated from Aberdeen in Scotland. Shipping includes the ownership and chartering of Roll-on/Roll-off vessels and crude oil tankers. To support these activities, the Company is also engaged in the management and crewing as well as the design and rebuilding of such vessels. The property operations relate to investments in residential and commercial real estate, principally in Sweden but partly also in The Netherlands, France, Luxembourg and Germany. Other business activities include financial activities and investments in other business areas through the unit Stena Adactum, as well as non-allocated central administration costs. A primary measure of profitability for all these segments is income from operations. There are no significant transactions between the operating segments.

						Year ended December 31,
(SEK in millions)						2004						2005						2006
Income from operations by segment:
Ferry Operations								587						813						1,103
			Impairment charges					(52	)					(765	)					(710	)
			Additional operating expenses											(55	)
			Net gain on sale of vessels					11
			Total ferry operations					546						(7	)					393
Drilling								(227	)					(2	)					774
			Net gain on sale of vessels																	1,483
			Total Drilling					(227	)					(2	)					2,257
Shipping:			Roll-on/Roll-off vessels					62						104						89
			Net gain on sale of vessels					273						191						219
			Total					335						295						308
			Crude oil tankers					780						742						284
			Net gain on sale of vessels					372						124						611
			Total					1,152						866						895
			Other shipping					(13	)					(7	)					(8	)
			Total shipping					1,474						1,154						1,195
Property:			Operations					520						759						758
			Impairment charges					(21	)					(180	)
			Net gain on sale of properties					110						813						194
			Total property					609						1,392						952
Other								(175	)					(144	)					(210	)
Income from operations								2,227						2,393						4,587

As a consequence of the high oil prices, impairment charges related to the HSS vessels were recorded of SEK SEK 710 million in 2006 and SEK 765 million in 2005. In 2005, additional direct operating costs related to the HSS vessels of SEK 55 million and impairment charges for real estate for SEK 180 million were also recorded. In 2004, impairment charges for real estate of SEK 21 million and of buildings in the ferry operations of SEK 52 million were recorded. All impairment charges are accounted for as depreciation.

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Note 2    Segment Information — continued

						Year ended December 31,
(SEK in millions)						2004						2005						2006
Depreciation and amortization by segment:
Ferry operations								864						1,578						1,613
Drilling								575						590						633
Shipping:			Roll-on/Roll-off vessels					100						124						99
			Crude oil tankers					58						41						34
			Other shipping					7						11						12
			Total shipping					165						176						145
Property								153						337						174
Other								33						53						69
Total								1,790						2,734						2,634

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Depreciation and amortization expense consists of the following components:
Vessels					1,364						2,084						2,121
Equipment					90						173						137
Property					294						393						234
Total tangible fixed assets					1,748						2,650						2,492
Intangible assets					42						84						142
Total					1,790						2,734						2,634

Depreciation and amortization expense includes amortization of assets under capitalized leases amounting to SEK 91 million, SEK 90 million and SEK 92 million for the years ended December 31, 2004, 2005, and 2006, respectively.

						Year ended December 31,
(SEK in millions)						2004						2005						2006
Capital expenditure by segment:
Ferry operations								721						409						1,438
Drilling								515						1,197						4,519
Shipping:			Roll-on/Roll-off vessels					616						474						32
			Crude oil tankers					1,005						1,067						353
			Other shipping					5						24						104
			Total shipping					1,626						1,565						489
Property								459						1,889						1,625
Other								22						92						77
Total								3,343						5,152						8,148

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Note 2    Segment Information — continued

Capital expenditures in 2006 for property includes SEK 230 million related to ongoing newbuilding projects for real estate. See note 11.

			Year ended December 31,
(SEK in millions)						2005						2006
Total assets by segment:
Ferry operations								9,645						8,933
Drilling								6,959						11,336
Shipping:			Roll-on/Roll-off vessels					1,995						2,386
			Crude oil tankers					2,365						983
			Other shipping					273						79
			Total shipping					4,633						3,448
Property								16,023						17,118
Other								17,552						19,582
Total								54,812						60,417

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 VIEs are included in Other markets.

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Revenues:
Scandinavia					6,806						8,509						8,390
Europe, other					5,101						5,628						7,499
Other markets					677						762						2,177
Shipping					4,137						4,720						4,829
Total					16,721						19,619						22,895

			Year ended December 31,
(SEK in millions)			2005						2006
Total assets:
Scandinavia					28,062						22,717
Europe, other					7,362						16,275
Other markets					11,885						18,752
Shipping operations					7,503						2,673
Total					54,812						60,417

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Note 3    Sale of tangible fixed assets

						Year ended December 31,
(SEK in millions)						2004						2005						2006
Vessels			Cash proceeds from sale of vessels					2,069						863						4,335
			Net book value of vessels sold					(1,413	)					(548	)					(2,022	)
			Net gain on sale of vessels					656						315						2,313
Equipment			Cash proceeds from sale of equipment					1						3						6
			Net book value of equipment sold					(4	)					(3	)					(5	)
			Net gain (loss) on sale of equipment					(3	)											1
Real Estate			Cash proceeds from sale of properties					495						3,629						674
			Net book value of properties sold					(385	)					(2,816	)					(480	)
			Net gain on sale of properties					110						813						194
Buildings			Cash proceeds from sale of buildings																	6
			Net book value of buildings sold																	(2	)
			Net gain on sale of buildings																	4
Total			Cash proceeds from sale of vessels, equipment and property					2,565						4,495						5,021
			Net book value of assets sold					(1,802	)					(3,367	)					(2,509	)
			Total gain					763						1,128						2,512

The net gain on sale of vessels in 2004 includes 100% of the results from the sale of two vessels, each owned by companies that are 25% owned by the joint venture partner Fram Shipping. Fram Shipping´s share of the gain is included in the income statement as minority interest.

Net gain (loss) on sale of equipment and buildings is included in direct operating expenses.

Total cash proceeds include sales costs of SEK 75 million and SEK 2 million, which is not included in the consolidated statement of cash flow for 2005 and 2006, respectively.

Note 4    Selling and administrative expenses

For the year ended December 31, 2006, selling and administrative expenses include SEK 300 million relating to central administration expenses. Selling expenses include costs for doubtful receivables of SEK 24 million. For the year ended December 31, 2005, selling and administrative expenses included SEK 231 million of central administration expenses and selling expenses included costs for doubtful receivables of SEK 14 million.

			Year ended December 31,
(SEK in millions)			2004						2005						2006
KPMG
Audit fees					16						25						23
Audit related fees					2						2						1
Tax consultancy fees					13						18						17
Other					6						6						2
Other auditors
Tax consultancy fees					8						10						16
Other					1						5						4
Total					46						66						63

Note 5    Affiliated companies

Investments in affiliated 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. See note 14.

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In 2004, the Company invested in more than 20% in the Swedish listed company Midelfart Sonesson AB (publ) (the name was changed from Wilh. Sonessons AB in 2006), which therefore is accounted for as an affiliated company. As of December 31, 2006, the investment represents 22.7% of the capital and 26.4% of the votes. As of December 31, 2005 the investment represented 23.2 % and 26.7% of the votes. The market value of the investment as of December 31, 2006 was SEK 243 million. As of December 2005 the market value was SEK 247 million. The Company´s share of results amounted to SEK 0 million in 2006 and SEK 3 million in 2005.

In June 2005, the Company invested in further shares of the Swedish listed company Ballingslöv AB (publ), which therefore is accounted for as an affiliated company. As of December 31, 2006, the investment represents 25.0 % of the capital and the votes. As of December 31, 2005 the investment represented 22.5 %. The market value of the investment as of December 31, 2006 and 2005 was SEK 545 million and SEK 386 respectively. The Company´s share of results as per December 31, 2006 and 2005 amounted to SEK 27 million and SEK 18 million respectively.

The investments in Sonesson and Ballingslöv are pledged as security for bank debt. The results of these companies are reported with a three month time lag.

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Note 6    Gain (loss) on securities, net

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Investment in VIEs
Total net gain (loss)					104						26						3
Marketable securities
Proceeds					4,239						421						2,125
Gross gains					1,144						342						915
Gross losses					(307	)					(19	)					(121	)
Total net gain (loss)					837						323						794
Short-term investments
Proceeds					4,504						8,396						6,648
Gross gains					176						671						467
Gross losses					(57	)					(99	)					(282	)
Total net gain (loss)					119						572						185
Total net gain (loss) on securities					1,060						921						982

Note 7    Foreign Exchange Gains (Losses)

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Currency trading activities, net					8						22						7
Translation differences					(115	)					(25	)					103
Total					(107	)					(3	)					110

Foreign exchange gains (losses) consist of gains and losses incurred in connection with the Company’s foreign currency trading activities (see Note 27) and gains and losses arising from the translation of amounts in foreign currencies and transactions denominated in foreign currencies.

Note 8    Other Financial Income (Expense)

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Amortization of deferred financing costs					(82	)					(57	)					(45	)
Bank charges					(12	)					(13	)					(15	)
Release of reserve for ferry operations					100
Other items					(30	)					(51	)					(107	)
Total					(24	)					(121	)					(167	)

Deferred financing costs include costs for the issuances of Senior Notes, revolving credit facilities, finance leases etc. See note 14. All of these costs are amortized over the life of the borrowings.

The reserve for ferry operations relates to the excess of the carrying value of the Stena Line $300 million Senior Notes over their redemption price in late 2000. This excess value was released from 2001 to 2004.

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Note 9    Income Taxes

Income before taxes was distributed geographically as follows:

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Sweden					580						1,167						2,288
Rest of the world					1,782						1,253						2,392
Share of affiliated companies´ results					17						21						27
Total income before taxes					2,379						2,441						4,707

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Current:
For the period, Sweden					(19	)					(11	)					(54	)
Adjustments previous years, Sweden					(6	)
For the period, Rest of the world					(114	)					(85	)					(308	)
Adjustments previous years, Rest of the world					6						8						63
Total current tax					(133	)					(88	)					(299	)
Deferred:
For the period, Sweden					(393	)					202						11
Adjustments previous years, Sweden					(56	)					(58	)					79
For the period, Rest of the world					101						(54	)					(199	)
Adjustments previous years, Rest of the world					461						(175	)					40
Total deferred tax					113						(85	)					(69	)
Total income taxes					(20	)					(173	)					(368	)

Cash paid for taxes in 2006 was SEK 92 million, as compared to SEK 74 million in 2005.

The reconciliation of the difference between the statutory tax rate in Sweden and the effective tax rate are set forth below:

			Year ended December 31,
(Percentages)			2004						2005						2006
Statutory income tax rate					28						28						28
Differences in foreign tax rates					(5	)					(2	)					(6	)
Taxes related to previous years					(6	)					(2	)					(1	)
Losses not currently utilized					4						7						4
Expenses not deductible					3						6						2
Nontaxable income					(6	)					(15	)					(9	)
Utilization of tax loss carryforwards					(1	)					(3	)					(3	)
Restructuring					(17	)					(24	)					(7	)
Share of affiliated companies´ results					(1	)					5
Other					2						7
Effective income tax rate					1						7						8

The principle reason why the effective income tax rate is lower than the statutory income tax rate is that international shipping activities and results from sales of shares are tax exempt in many countries.

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Note 10    Intangible fixed assets

(SEK in millions)			Goodwill						Other intangible assets						Total
Acquisition cost at the beginning of year					576						442						1,018
Purchase of company					5												5
Additions											21						21
Translation differences					(1	)					(1	)					(2	)
Acquisition cost at the end of year					580						462						1,042
Accumulated amortization at the beginning of year					(51	)					(161	)					(212	)
Current year amortization					(41	)					(101	)					(142	)
Accumulated amortization at the end of year					(92	)					(262	)					(354	)
Net book value at the beginning of year					525						281						806
Net book value at the end of year					488						200						688

Goodwill related to ferry operations and the acquisition of ferry routes in the Irish Sea is amortized over 7 years. Goodwill related to Blomsterlandet and Envac is amortized over 10 and 20 years, respectively. Investments in other intangible fixed assets include an on-line reservation system in the ferry operations, which is amortized over 7 years. Remaining intangible assets are amortized over 5 years.

Note 11    Tangible fixed assets

The movements during the year ended December 31, 2006 are as follows:

(SEK in millions)			Vessels						Construction in progress						Equipment						Property						Total
Acquisition cost at the beginning of year					22,225						1,280						804						18,314						42,623
Other additions					976						5,489						158						1,525						8,148
Disposals					(2,955	)											(41	)					(523	)					(3,519	)
Transfers					700						(703	)					94						(91	)
Translation differences					(1,603	)					(408	)					(70	)					(150	)					(2,231	)
Acquisition cost at the end of year					19,343						5,658						945						19,075						45,021
whereof capitalized interest					625						226												20						871
Accumulated depreciation at the beginning of year					(8,640	)											(178	)					(1,039	)					(9,857	)
Disposals					933												36						41						1,010
Translation differences					762												41						26						829
Transfers																	(79	)					79
Current year depreciation					(2,121	)											(137	)					(234	)					(2,492	)
Accumulated depreciation at the end of year					(9,066	)											(317	)					(1,127	)					(10,510	)
Net book value at the beginning of year					13,585						1,280						626						17,275						32,766
Net book value at the end of year					10,277						5,658						628						17,948						34,511

The insured value of the whole vessel fleet as of December 31, 2006 was SEK 19,227 million, as compared to SEK 21,612 million as of December 31, 2005.

As of December 31, 2006, Construction in progress included six newbuildings: one RoRo-vessel under construction in Norway for delivery in 2007; three drillships under construction in Korea for delivery in 2007, 2008 and 2009; and two RoPax ships ordered from a shipyard in Germany for

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Note 11    Tangible fixed assets — continued

delivery in 2010. Construction in progress also included rebuilding of two RoPax-vessels (‘‘extension program’’) and the construction of real estate in Stockholm. In total, the contract amounted with the shipyards amounts to SEK 17,162 million. Yard payments of SEK 5,146 million, real estate projects of SEK 229 million, capitalized interest of SEK 226 million and other capitalized costs of SEK 57 million are included in Construction in progress as of December 31, 2006.

The amount of interest capitalized on construction in progress was SEK 14 million, SEK 34 million and SEK 239 million for the years ended December 31, 2004, 2005 and 2006, respectively. Additionally, SEK 1 million was capitalized on real estate newbuildings for 2005. No capitalization was made in 2006.

Write-ups of vessels were made in 1996 against corresponding write-downs of other vessels. As of December 31, 2005, total write-ups were SEK 15 million, all related to the drilling rig Stena Dee. After the sale of this rig in 2006, the remaining write-ups were expensed.

Property is specified as follows:

(SEK in millions)			Real estate						Buildings and land						Total
Acquisition cost at the beginning of year					16,515						1,799						18,314
Other additions					1,395						130						1,525
Disposals					(503	)					(20	)					(523	)
Transfers					(91	)											(91	)
Translation differences					(102	)					(48	)					(150	)
Acquisition cost at the end of year					17,214						1,861						19,075
Accumulated depreciation at the beginning of year					(699	)					(340	)					(1,039	)
Disposals					23						18						41
Transfers					79												79
Translation differences					6						20						26
Current year depreciation					(170	)					(64	)					(234	)
Accumulated depreciation at the end of year					(761	)					(366	)					(1,127	)
Net book value at the beginning of year					15,816						1,459						17,275
Net book value at the end of year					16,453						1,495						17,948

Real estate relates to the commercial properties operated by the business unit Stena Fastigheter. The total estimated market value for the real estate as of December 31, 2006 exceeds the net book value. Out of the net book value as of December 31, 2006 for real estate, SEK 14,217 million relates to Swedish properties, of which land represents SEK 1,350 million. The tax assessment value for these properties amounted to SEK 11,478 million, of which land represents SEK 4,035 million. Land represents SEK 1,275 million of the net book value as of December 31, 2005 of SEK 14,152 million related to Swedish properties. The tax assessment value for these properties last year amounted to SEK 11,183 million, out of which land SEK 3,969 million.

Buildings and land represent the group´s assets used in its business including office buildings, ferry terminals etc.

Note 12    Investment in VIEs

Since late 2002, the Company has invested in variable interest entities (‘‘VIEs’’). The VIEs have invested in different debt securities, including high yield bonds. The VIEs have issued debt securities which are secured by their assets. As of 2005, Swedish GAAP has changed the way in which the VIEs are consolidated. The minority share of the results is deducted in the income statement while the minority part of total equity is shown as a liability in the balance sheet.

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Note 12    Investment in VIEs — continued

The consolidation of the VIEs has had the following impact:

(SEK in millions)			2005						2006
Financial income and expense					162						145
Minority interest					(19	)					(19	)
Net income					143						126
Investment in VIEs					5,753						7,341
Short-term investments					316						486
Other assets					144						246
Total assets					6,213						8,073
Retained earnings					694						968
Net income					143						126
Total stockholders’ equity					837						1,094
Minority interest					124						152
Debt of VIEs					4,844						6,302
Other debt					408						525
Total liabilities					5,252						6,827
Total stockholders´ equity and liabilities					6,213						8,073

Short-term investments refer to cash and cash equivalents in the VIEs. This cash is not available to the Company and is therefore included as restricted cash.

Debt of VIEs refers to secured notes issued by the VIEs and secured bank loans borrowed by the VIEs. These obligations are secured by pledges of the VIEs assets and are not guaranteed by the Company.

The underlying equities and bonds in the VIEs are recorded at market. Together with other strategic investments, unrealized gains and losses are recorded directly to stockholders´ equity. See note 13.

Note 13    Marketable securities

(SEK in millions)			Bonds						Strategic equity shares						Total
Opening balance					852						2,443						3,295
Additions											3,473						3,473
Disposals					(164	)					(1,759	)					(1,923	)
Reclassification					(639	)					745						106
Revaluation of financial instruments											1,134						1,134
Translation differences					(49	)					(234	)					(283	)
Investment at the end of year											5,802						5,802

Financial instruments are valued at market.

As of December 31, 2006 shares with a book value of SEK 1,025 million have been pledged as security for bank debt. As of December 31, 2005, shares with a book value of SEK 706 million were pledged as security for bank debt.

Reclassification refers to transfer from noncurrent to short-term regarding bonds and from short-term to noncurrent regarding shares.

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Note 13    Marketable securities — continued

Strategic equity shares include long-term investments in listed shares as follows:

(SEK in millions)			No. of shares						Book value
Held by parent company
Bioinvent					2,240,000				24
Vitrolife					110,000				4
Total									28
Strategic investments
Gunnebo					8,001,320				644
Gunnebo Industrier					1,191,324				240
Oriflame					500,000				141
Arlington Tankers					690,421				111
Other investments
Lukoil					382,000				232
Sandvik					4,383,800				436
Dogus Otomotive					1,979,629				55
Vyksa Metallurgical plant					9,507				91
Chelyabinsk Pipe					3,118,194				71
Explorer Financial Fund					20,500				114
Schibsted					842,400				206
Assa Abloy					1,200,400				179
Vestas Wind Systems					1,235,400				358
Munters					112,000				36
Lindab					2,800,000				365
Toyota Motor					137,000				63
Expro					3,293,594				393
H&M B					400,000				138
Alstom					141,000				131
Volvo A					807,600				392
Orkla					280,000				108
H&M (Bonds)					170,000,000				316
Ruric					416,242				145
HSBC Growth Fund					3,269,831				200
Vallourec					139,000				165
Schlumberger					180,000				79
Sberbank					4,850				114
Sistema					290,000				64
Other									187
Total listed shares									5,802

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Note 14    Other noncurrent assets

Other Noncurrent Assets

(SEK in millions)			Deferred tax assets						Other receivables						Shares						Deferred costs						Total
At the beginning of year					249						277						600						314						1,440
Additions											1,763						133						270						2,166
Disposals					(22	)					(38	)											(167	)					(227	)
Revaluation through the income statement											(6	)					29						(45	)					(22	)
Reclassification					158						3						20												181
Translation differences					(6	)					(6	)					(28	)					22						(18	)
At the end of year					379						1,993						754						394						3,520

Deferred tax assets relate to unutilized tax losses carried forward. Reclassifications include netting against deferred tax liabilities. See note 19.

Other receivables as of December 31, 2006 include receivables related to sales of subsidiaries amounting to SEK 1,548 million. The purchase price has been determined but there have not been any payments during 2006. Other receivables as of December 31, 2005 include a loan to a related party of SEK 10 million. The loan has been repaid during 2006.

Shares include investments in non-listed shares and associated companies.

Deferred costs include financing costs for Senior Notes, revolving credit facilities and capitalized lease obligations. All of these costs are amortized over the life of the borrowings.

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Note 14    Other noncurrent assets — continued

Shares are specified as follows:

(SEK in millions)						No. of shares or % held			Book value
Held by parent company:
Alligator						1,510,470			29
Amplus						895,719			121
Prostalund						2,741,862			39
Ram one						117,565			131
Örgryte Idrottssällskap						1,000,000			10
Health Invest						500,000			55
Univits						3,088,670			2
									387
Held by subsidiaries:
Örgryte Bostads AB & Co KB			Sweden						3
Partrederiet SUST I DA			Norway			50%			33
Partrederiet SUST III DA			Norway			50%			49
Ugland Stena Storage A/S (USS)			Norway			50%
Schiphol Real Estate CV			Holland			540			167
Stena Ugland Shuttle
Tanker Ltd (SUST)			Cayman Islands			50%
Chase Private Equity Fund			Cayman Islands			3,634,257			24
Glacia Limited			Bermuda			50%			54
RoRo Partners Ltd			Bermuda			49%
Austen Maritime Services Pte Ltd			Singapore			50%			8
China Opportunity Fund			China			5.71%			18
EQT China			China			4.72%			2
Nordic Rio LLC			Marshall Islands			50%			9
Total non listed shares									754

Companies held between 20% and 50%, and that are not strategic, are accounted for as other associated companies. The share of these companies´ results is included in direct operating expenses. See note 5.

Note 15    Short-term receivables

			As of December 31,
(SEK in millions)			2005			2006
Trade debtors			2,092			2,007
Related parties (Note 29)			270			259
Other short-term receivables			886			1,358
Total other recievables			1,156			1,617
Prepaid expenses			497			321
Accrued income			393			550
Total			890			871
Total short-term receivables			4,138			4,495

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Note 15    Short-term receivables — continued

The total allowance for doubtful trade receivables was SEK 52 million as of December 31, 2005 and SEK 46 million as of December 31, 2006.

Note 16    Short-term investments

			As of December 31,
(SEK in millions)			2005			2006
Marketable debt and equity securities			1,856			1,580
Restricted cash			357			882
Total			2,213			2,462

Certain marketable debt and equity securities amounting to SEK 192 million at December 31, 2005 and SEK 547 million at December 31, 2006 have been pledged as security for bank debt. See Note 25.

Restricted cash as of December 31, 2006 includes SEK 486 million of cash and cash equivalents in the VIEs, which is not available to the Company. As of December 31, 2005 such restricted cash amounted to SEK 315 million. Other restricted cash represents bank accounts that have been pledged to cover various long-term liabilities and commitments of the Company.

Note 17    Cash and cash equivalents

			As of December 31,
(SEK in millions)			2005			2006
Cash			877			752
Short term deposits			2,867			132
Total			3,744			884

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

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Note 18    Stockholders’ equity

The authorized share capital of Stena AB consists of 200,000 ordinary shares with a par value of SEK 100 of which 50,000 shares have been issued and fully paid.

The changes in stockholders’ equity for the period December 31, 2003 to December 31, 2006 are as follows:

(SEK in millions)			Capital stock						Restricted reserves						Unrestricted reserves						Net income						Total
Balance as of December 31, 2003					5						583						10,897						510						11,995
Allocation of last year´s result																	510						(510	)
Change of accounting principles in 2004																	(257	)											(257	)
Dividend paid																	(70	)											(70	)
Transfer to charitable trust																	(10	)											(10	)
Revaluation of financial instruments																	(387	)											(387	)
Transfers between reserves											201						(201	)
Exchange differences											(21	)					(190	)											(211	)
Net income																							2,359						2,359
Balance as of December 31, 2004					5						763						10,292						2,359						13,419
Allocation of last year´s result																	2,359						(2,359	)
Dividend paid																	(195	)											(195	)
Transfer to charitable trust																	(30	)											(30	)
Change of accounting principles for pensions																	(1,075	)											(1,075	)
Revaluation of financial instruments																	303												303
Transfers between reserves											96						(96	)
Exchange differences											67						375												442
Net income																							2,268						2,268
Balance as of December 31, 2005					5						926						11,933						2,268						15,132
Allocation of last year´s result																	2,268						(2,268	)
Dividend paid																	(215	)											(215	)
Transfer to charitable trust																	(25	)											(25	)
Reclassification																	177												177
Revaluation of financial instruments																	386												386
Change of accounting principles for pensions																	(349	)											(349	)
Transfers between reserves											(82	)					82
Exchange differences											(2	)					(856	)											(858	)
Net income																							4,339						4,339
Balance as of December 31, 2006					5						842						13,401						4,339						18,587

Restricted reserves include the equity part of untaxed reserves (net of applicable deferred taxes) and legal reserves.

Reclassification refers to investments in VIEs.

Regarding pensions see note 19.

The board of directors of the Company has proposed that the stockholders approve at the forth-coming stockholders´ meeting in 2007 a dividend of SEK 550 million and a transfer of SEK 55 million to the Sten A. Olsson Foundation for Culture and Science, established in October 1996

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Note 18    Stockholders’ equity — continued

to make contributions to art and science projects. Since 1996, the Stena Sphere has contributed SEK 195 million to the foundation and further support to this charitable trust is anticipated when needed.

The exchange differences relate to the impact of fluctuations of foreign currencies, in particular EUR, GBP and USD. See note 1. As of December 31, 2006, accumulated exchange differences since January 1, 2002 amounted to SEK (1,700) million. As of December 31, 2005, accumulated exchange differences since January 1, 2002 amounted to SEK (842) million.

The accumulated revaluation of financial instruments as per December 31, 2006 amounts to SEK 901 million and as per 31 December 2005 to SEK 515 million.

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Note 19    Provisions

(SEK in millions)			Deferred income taxes						Provisions for pensions						Other provisions						Total
Opening balance					1,517						1,882						46						3,445
Changes in accounting principle for pensions					(148	)					498												350
Reclassification					158																		158
Payment of pension fees and benefit paid											(167	)											(167	)
Other provisions					(60	)					(12	)					1,625						1,553
Changes in non-current assets											21												21
Transfers through income statement					243						15						(3	)					255
Exchange differences					(1	)					(32	)											(33	)
Closing balance					1,709						2,205						1,668						5,582

Provisions for pensions have increased in connection with change in accounting principles related to Great Britain. See below. Deferred taxes related to this as well as to the introduction of new accounting principles for financial instruments have adjusted the opening balance for deferred taxes while changes in the year are included in the income statement. The increase in other provisions relate to provisions for income related to the financing of the drillships Stena DrillMax I and II. The provisions will be dissolved during the time of the future leasing periods.

The reclassifiction refers to net accounting against deferred tax assets. See note 14.

The net deferred tax liability of the Company consists of the following:

			As of December 31,
(SEK in millions)			2005						2006
Deferred tax liabilities:
Tangible fixed assets					2,092						2,124
Financial fixed assets					206						388
ta bort rad
Other					91						261
Total deferred tax liabilities					2,389						2,773
Deferred tax assets:
Tangible fixed assets					136						481
Tax loss carryforwards					1,182						815
Financial fixed assets					77						623
Provisions					306						40
Other											122
Less deferred tax assets not recognized					(580	)					(638	)
Total deferred tax assets recognized					1,121						1,443
Net deferred tax liability					1,268						1,330
Out of which:
Deferred tax assets (Note 14)					249						379
Deferred tax liabilities					1,517						1,709

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Note 19    Provisions — continued

Deferred taxes have been calculated net on a country basis. Net deferred tax assets are shown as Other noncurrent assets.

The Company’s tax loss carryforwards are as follows:

			As of December 31,
(SEK in millions)			2005			2006
Sweden			1,989			1,248
Rest of the world			2,707			1,973
Total			4,696			3,221

Most tax loss carryforwards can be carried forward indefinitely. Tax loss carryforwards of SEK 275 million expire between 2007 and 2012.

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. Defined benefits plans relate mainly to subsidiaries in the UK operations. Other large-scale defined benefit plans apply for salaried employees in Sweden (mainly through the Swedish PRI pension plan) and employees in The Netherlands.

The Company participates in different multi-employer plans in Great Britain. One of the plans has been accounted for as defined contribution plan but new information about this scheme makes it possible to account this as a defined benefit plan. The change has been treated according to RR 5 and URA 44 as a change in accounting principle as from October 1, 2006.

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.

Assumptions applied for actuarial calculations %			Sweden						Great Britain						Other Europe
			2005			2006			2005			2006			2005			2006
Discount rate			3.50			3.90			5.00			5.20			4.25			3.75
Expected return on plan assets			—			—			7.50			7.50			4.50			4.50
Expected salary increases			3.25			3.00			3.75			3.95			3.85			3.50

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Note 19    Provisions — continued

Pension costs (SEK in millions)			2005						2006
Current service costs					53						45
Interest costs					149						502
Expected return on plan assets					(154	)					(533	)
Actuarial gains and losses					2						1
Pension costs for defined benefit plans					50						15
Pension costs for defined contribution plans					231						237
Total pension costs					281						252

Obligations for pensions, net (SEK in millions)			Sweden						Great Britain						Other Europe						Total
Obligations, January 1, 2005					104						295						(12	)					387
Change in accounting principles					(1	)					1,536						1						1,536
Balance sheet, net, January 1, 2005					103						1,831						(11	)					1,923
Current service costs					5						41						7						53
Interest costs					9						135						5						149
Expected return on plan assets					(5	)					(144	)					(5	)					(154	)
Actuarial gains and losses					1						1												2
Exchange differences											23						1						24
Payment of pension fees from the company					(7	)					(90	)					(6	)					(103	)
Benefits payed					(3	)					(29	)					(1	)					(33	)
Other provisions					(13	)					(1	)											(14	)
Obligations for pensions, net, December 31, 2005					90						1,767						(10	)					1,847
Change in accounting principles											498												498
Balance sheet, net, October 1, 2006					90						2,265						(10	)					2,345
Current service costs					7						32						6						45
Interest costs					9						487						6						502
Expected return on plan assets					(7	)					(520	)					(6	)					(533	)
Actuarial gains and losses											1												1
Exchange differences											(30	)					(1	)					(31	)
Payment of pension fees from the company					(7	)					(151	)											(158	)
Benefits payed					(3	)											(6	)					(9	)
Other provisions					(1	)					(1	)					(11	)					(13	)
Obligations for pensions, net, December 31, 2006					88						2,083						(22	)					2,149

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Note 19    Provisions — continued

Provisions for pensions (SEK in millions)			Sweden						Great Britain						Other Europe						Total
Net provisions for pensions, January 1, 2005					104						295						(12	)					387
Current value of funded obligations					126						9,125						135						9,386
Fair value of plan assets					(36	)					(7,729	)					(135	)					(7,900	)
Provisions, net					90						1,396												1,486
Unrecognized acturial gains and losses											371						(10	)					361
Net provisions for pensions, December 31, 2005					90						1,767						(10	)					1,847
Current value of funded obligations					227						12,448						131						12,806
Fair value of plan assets					(193	)					(10,723	)					(132	)					(11,048	)
Provisions, net					34						1,725						(1	)					1,758
Unrecognized acturial gains and losses					54						358						(21	)					391
Net provisions for pensions, December 31, 2006					88						2,083						(22	)					2,149
whereof reported as
Other non-current assets					(34	)											(22	)					(56	)
Provisions for pensions					122						2,083												2,205

Note 20      Bank debt

(SEK in millions)			2005 Total			2006 Current			2006 Noncurrent			2006 Total
Property loans			11,211			38			12,300			12,338
Other loans			1,648			311			3,280			3,591
Revolving credit facilities			6,753						2,656			2,656
Other utilized bank credit lines			995			293			191			484
			20,607			642			18,427			19,069

Repayment of bank debt:

(SEK in millions)			Property loans			Other loans			Total
2007			38			604			642
2008			375			485			860
2009			273			264			537
2010			391			191			582
2011			41			141			182
2012 and thereafter			11,182			2,199			13,381
Not specified			38			2,847			2,885
Total			12,338			6,731			19,069

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 2012 and beyond. Other loans consists 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 2012 and beyond.

The Company has a revolving credit facility of $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. The facility imposes certain covenants regarding levels of working capital, cash and cash equivalents and interest coverage ratio. As of December 31, 2006, the utilized portion of the facility was $402 million, of which $386 million was actually drawn and $16 million used for issuing of bank guarantees. As of December 31, 2005, the utilized portion of the facility was $859 million, of which $849 million

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Note 20      Bank debt — continued

was actually drawn and $10 million used for issuing of bank guarantees. As of December 31, 2006 the Company had SEK 1 416 million in other unutilized, mainly uncommitted overdraft facilities and other similar lines of credit, as compared to SEK 700 million as of December 31, 2005.

‘‘Not specified’’ includes borrowings and utilized credit lines for properties and vessels that have formal repayment dates in 2007. 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 Facility of $1 billion.

Regarding assets pledged, see note 25.

Note 21      Senior notes

In November 2002, the Company issued $200 million of notes at an interest rate of 9.625% with maturity on December 1, 2012. As of December 31, 2006, the Company had repurchased approximately $22.7 million of these notes.

In December 2003, the Company issued $175 million of notes at an interest rate of 7.5% with maturity on November 1, 2013. In November 2004, the Company issued $250 million of notes at an interest rate of 7.0% with maturity on December 1, 2016. As of December 31, 2006, total Senior Notes amounted to $602 million. As of December 31, 2005, total Senior Notes amounted to $607 million.

In February 2007, the Company issued European Senior Notes through an offering of €300 million of notes at an interest rate of 6.125% due February 1, 2017. At the same time the remaining 9.625% Senior Notes due 2012 of $177 million were repurchased. Another offering was issued in February 2007 of € 102 million of notes at an interest of 5.875% and issue price 98.5%, due on February 1, 2019.

The Senior Notes are unsecured obligations of Stena AB and rank pari passu in right of payment with the Company’s other unsubordinated indebtedness and senior in right of payment to all subordinated indebtedness of the Company. The indentures for Senior Notes due 2012 and 2013 contain certain covenants with respect to, among others, the following matters: (i) limitations on consolidated and subsidiary debt and preferred stock; (ii) limitations on restricted payments, investments and liens; (iii) limitations on restrictions concerning transfers and sales by subsidiaries, limitations on certain asset distributions and other items. The indentures for the Senior Notes due 2017 and 2019 contain certain covenants with respect to, among other matters: (i) limitations on consolidated and subsidiary debt and (ii) limitations on liens in respect of capital markets indebtedness.

Note 22      Leases

Company as lessee:

The operating lease obligations include chartering of crude oil tankers on a timecharter basis, chartering of ferries principally on a bareboat basis, as well as obligations related to rentals of properties and ports.

Rental expense for operating leases were as follows:

			Year ended December 31,
(SEK in millions)			2004			2005			2006
Rental expense			1,807			2,619			2,980

Two RoPax vessels and two tankers are leased under capital leases. The gross amount of vessels under capital leases as of December 31, 2005 and 2006 amounted to SEK 1,832 million and SEK 1,756 million, respectively. The net book value related to these capital leases amounted to SEK 1 550 million as of December 31, 2005 and SEK 1,393 million as of December 31, 2006.

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Note 22      Leases — continued

As of December 31, 2006 the future minimum lease commitments under noncancellable operating leases and capital leases were as follows:

(SEK in millions)			Operating leases			Capital leases
2007			2,319			38
2008			1,366			38
2009			913			39
2010			703			40
2011			631			42
2012 and thereafter			1,259			1,087
Total minimum lease commitments			7,191			1,284

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 December 31, 2006 was as follows:

(SEK in millions)			Cost			Accumulated depreciation			Net book value
Vessels			9,529			4,032			5,497
Real estate			17,214			761			16,453
Total			26,743			4,793			21,950

As of December 31, 2006 the future minimum rentals to be received under noncancellable operating leases were as follows:

(SEK in millions)			Vessels			Real estate			Total
2007			4,341			662			5,003
2008			3,896			516			4,412
2009			2,988			269			3,257
2010			544			175			719
2011			352			131			483
2012 and thereafter			494			173			667
Total minimum lease rentals			12,615			1,926			14,541

In addition to the minimum lease rentals as above, the Company has entered into lease agreements for the Stena Drillmax I and the Stena DrillMax II, 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 cancelable within three months.

Note 23      Other noncurrent liabilities

			As of December 31,
(SEK in millions)			2005			2006
Prepaid income			52			113
Other liabilities			234			819
Total			286			932

Prepaid income as of December 31, 2006 includes SEK 34 million relating to the net proceeds of a financial charter agreement entered into in 1997/1998 and which is amortized over the remaining charter period. As of December 31, 2005, these net proceeds amounted to SEK 41 million.

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Note 23      Other noncurrent liabilities — continued

Other noncurrent liabilities include a net debt amount to SEK 690 million regarding capital leases for the drillships Stena DrillMax I and II.

Repayment of noncurrent liabilities is required according to the following schedule:

(SEK in millions)			1-3 years			3-5 years			More than 5 years			Total
Prepaid income			20			20			73			113
Other liabilities			751			14			54			819
Total			771			34			127			932

Note 24      Accrued costs and prepaid income

			As of December 31,
(SEK in millions)			2005			2006
Accrued costs			2,188			2,210
Prepaid income			360			547
Total			2,548			2,757

Note 25      Pledged assets, commitments and contingent liabilities

Pledged assets

The following assets have been pledged as securities for bank debt:

			As of December 31,
(SEK in millions)			2005			2006
Mortgages on vessels			14,472			10,046
Mortgages on properties			13,535			14,202
Chattel mortgages			14			137
Investment in affiliated companies			302			352
Marketable securities			706			1,025
Trade debtors			398			344
Short term investments			192			547
Reservation of title			52			52
Total assets pledged for normal bank debt			29,671			26,705
Investment in VIEs			5,753			7,341
Total assets pledged for bank debt			35,424			34,046
Normal bank debt and capitalized lease obligations			21,972			20,353
Debt in VIEs			4,844			6,302
Total bank debt and capitalized lease obligations			26,816			26,655

Commitments

Future minimum lease commitments relating to operating leases of vessels, ports etc amount to SEK 2,319 million for 2007 and SEK 4,872 million from 2008. See Note 22.

As of December 31, 2006, a total of seven vessels were on order from different shipyards. Two vessels were being rebuilt (extension program). The total contract amount for these vessels

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Note 25      Pledged assets, commitments and contingent liabilities — continued

amounts to SEK 17,569 million. Yard payments of SEK 5,146 million have been made in respect of these contracts. In addition, the Company has made commitments regarding financial investments at an amount of SEK 290 million.

Contingent liabilities

			As of December 31,
(SEK in millions)			2005						2006
Guarantees					2,074						1,209
Other contingent liabilities					159						16
Total					2,233						1,225

Guarantees include mainly newbuilding projects in associated companies and guarantee commitments for equipment delivered.

Note 26      Consolidated statements of cash flows

Purchase of subsidiaries

			As of December 31,
(SEK in millions)			2004						2005						2006
Assets and liabilities acquired:
Intangible assets					121						390
Tangible fixed assets					11.226						9
Financial fixed assets					10						5
Inventories					75						49
Current receivables					345						344
Cash and cash equivalents					18						59
Total assets					11.795						856
Provisions					1.564						5
Long-term debt					58						3
Current liabilities					6.774						260
Total provisions and liabilities					8.396						268
Minority interest					25						1
Total consideration					3.374						587
Less: Provision					(26	)					(10	)
Purchase price paid					3.348						577
Less: Cash aquired					(18	)					(59	)
Reduction of cash and cash equivalents					3.330						518

In 2004, companies were acquired and subsequently sold at a value of SEK 587 million. This has not affected the balance sheet and is therefore not included above.

In 2006, no subsidiaries were purchased.

Cash payments

			Year ended December 31,
(SEK in millions)			2004			2005			2006
Interest			1,053			1,430			1,845

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Table of Contents

Note 27      Financial instruments and risk management

The Company has operations and assets in a number of countries in and outside of Europe. Consequently, the Company’s profits and revenues are affected, when measured in SEK, by fluctuations in currency exchange rates, primarily relative to the US dollar, the Euro and the British pound sterling. When the SEK appreciates against other currencies, the Company’s profit from foreign operations, reported in SEK, may decrease. Likewise, when the SEK declines against other currencies, the Company’s profit from foreign operations reported in SEK may increase. The Company also has exposure to market risks from changes in interest rates. Certain financial instruments are used by the Company to manage these foreign currency and interest rate risks as summarized below. The Company also maintains trading positions in a variety of financial instruments unrelated to its risk management activities which are also discussed below.

Notional Amounts and Credit Exposure

The notional amounts of derivative financial instruments presented in this Note represent face or contractual amounts and are therefore not a measure of the exposure of the Company through its use of such financial instruments. The actual amounts exchanged are calculated on the basis of the notional amounts and the other terms of the financial instruments which relate to interest rates, exchange rates, oil prices, securities prices, or financial and other indexes.

The Company is exposed to credit related losses in the event that counterparties to the derivative financial instruments do not perform according to the terms of the contract. In the opinion of management, the counterparties to the financial instruments are creditworthy financial institutions and other parties and the Company does not expect any significant loss to result from nonperformance. The Company, in the normal course of business, does not demand collateral. The credit exposure of interest rate and foreign exchange contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting arrangements.

Interest Rate Risk Management

The Group uses various financial instruments to manage its interest rate risk as summarized in the table below:

			As of December 31,
(SEK in millions)			2005 Notional Amount			2005 Credit Exposure			2006 Notional Amount			2006 Credit Exposure
Interest rate swaps			6,412			58			7,700			19
Interest rate options			1,541			5			4,258			76
Total			7,953			63			11,958			95

The extent of the utilization of interest rate products is determined by reference to the Company’s net exposure of its debt subject to interest rate risk and management’s views regarding future interest rates. The Company uses interest rate instruments to seek to achieve a desired interest rate and risk profile on a portfolio of debt. The interest rate contracts as of December 31, 2006 are part of an interest rate hedge strategy whereby the Company hedges the loan portfolio related to its assets. These contracts run on a consecutive basis to hedge the loan portfolio for a period of between 1 and 5 years. The amount of the loan portfolio hedged was SEK 12,929 million as of December 31, 2006. The borrowings in this debt portfolio are denominated primarily in USD, EUR and SEK and have maturity dates ranging from 2007 to 2012 and onwards. As of December 31, 2006, the interest rates ranged from 3.48% to 9.63%.

Interest rate swap agreements allow the Company to synthetically adjust floating rate receivables or borrowings into fixed rates or vice versa. Under the interest rate swaps, an agreement is made with a counterparty to exchange, at specified intervals, the difference between fixed rate and

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Note 27      Financial instruments and risk management — continued

floating rate interest, (such as the London, Stockholm or Amsterdam Inter-bank Offered Rate or LIBOR, STIBOR and AIBOR respectively), calculated by reference to an agreed notional principal amount.

The Company uses interest rate swaps to seek to achieve a desired interest rate on a portfolio of debt. The contractual terms of the interest rate swaps are determined by the management based upon assessment of several factors such as the prediction of future interest rates, the maturity and currency of the underlying debt portfolio, the cost of the interest rate swap and other factors.

The Company also uses interest rate options to reduce the impact of changes in interest rates on its net interest rate exposure. Interest rate futures are commitments to either purchase or sell designated financial instruments at a future date for a specified price and may be settled in cash or through delivery. Interest rate options grant the purchaser, for a premium payment, the right to either purchase from or sell to the writer a financial instrument under agreed terms. The writer of the option receives a premium for bearing the risk of adverse interest rate movements. Interest rate options are used when the rates available to the Company under swap agreements are too high relative to management’s views of the level of future interest rates.

The Company has used interest rates swaps and interest rate options to hedge a portion of interest rate risk on debt financing real estate properties. The following tables summarize the Company’s interest rate swaps and options:

Interest rate swaps

As of December 31, 2005:

Notional amount (SEK in millions)

Currency

Receive rate

Pay rate %

Length of contract

700

SEK

3 month STIBOR

4.6

June 2006

371

EUR

6 month EURIBOR

6 month EURIBOR+168 bp

August 2005-September 2009

106

EUR

5.52

6 month EURIBOR+1.19 bp

December 2012

604

GBP

3 month LIBOR

5.5 first 7 years

January 2028

448

GBP

3 month LIBOR

3 month LIBOR -0,14

May 2028

795

USD

3 month LIBOR

2.83 – KO 6.5

June 2008

1,193

USD

3 month LIBOR

3.005 -3.09 Knock Out at 6.5

September 2008

795

USD

9.63

3 month LIBOR+4.9925

December 2012

200

SEK

1.72

3.25

November 2010

1,200

SEK

1.70-1.72

3.23-3.63

November 2015

Total

6,412

As of December 31, 2006:

Notional amount (SEK in millions)

Currency

Receive rate

Pay rate %

Length of contract

1,400

SEK

3.03-3.05%

3.23-3.63

November 2015

306

EUR

6m Euribor

6m Euribor+1.68

September 2009

96

EUR

5.52%

6m Euribor+1.19

December 2012

289

EUR

6m Euribor

3.83-3.92

October 2013

453

EUR

6m Euribor

4.133

December 2014

593

GBP

3m Libor

5.5

January 2011

440

GBP

3m Libor

3 month LIBOR -0.14

May 2028

1,718

USD

3m Libor

2.83 – max 6.5

September 2008

687

USD

9.63%

3m Libor+5.0

December 2012

1,718

USD

7%

4.75+(BMA) *

December 2016

Total

7,700

* BMA = Indexed return based on the interest difference between LIBOR and US municipality bonds

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Note 27      Financial instruments and risk management — continued

Interest rate options

As of December 31, 2005:

Notional amount (SEK in millions)

Currency

Receive rate

Pay rate %

Length of contract

700

SEK

3 month STIBOR

5.60

June 2006

94

EUR

6 month EURIBOR

3.25

March 2010

371

EUR

6 month EURIBOR

5.5

September 2008

376

EUR

3.25

6 month EURIBOR

January-October 2010

Total

1,541

As of December 31, 2006:

Notional amount (SEK in millions)

Currency

Receive rate

Pay rate Strike rate %

Length of contract

3,500

SEK

3m Stibor

4.0

November 2011

91

EUR

6m Euribor

3.25

March 2010

305

EUR

6m Euribor

strike 5,50

September 2008

362

EUR

3.25%

6m Euribor

October 2010

Total

4,258

The following tables are a summary by major currency of the portfolio of debt in respect of which the Company utilizes interest rate swaps and options:

As of December 31, 2005:

Currency

Amount (SEK in millions)

Maturity

Interest rates %

SEK

1,402

January 2006 - June 2006

2.00-4.325

EUR

1,907

January 2006 - May 2028

1.45-2.84

USD

8,271

January 2006 - December 2012

4.89-9.63

GBP

604

January 2028

6.04

Total

12,184

As of December 31, 2006:

Currency

Amount (SEK in millions)

Maturity

Interest rates %

SEK

3,560

January 2007 - June 2007

3.48-7.75

EUR

2,112

January 2007 - May 2028

3.90-5.52

USD

6,680

January 2007 - December 2012

5.92-9.63

GBP

592

January 2028

5.32

Total

12,944

In addition to interest instruments as above, the VIEs investing in different debt securities, see note 12, 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 a volume similar to the underlying fixed rate bonds.

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Note 27      Financial instruments and risk management — continued

The following table summarizes interest rate swaps entered into for this purpose:

As of December 31, 2006:

Currency

Amount (SEK in millions)

Receive rate

Pay rate %

Length of contract

swap

USD

1,260

6m Libor

4.85

May 2010

swap

USD

275

3m Libor

5.03

October 2015

The same contracts were also outstanding as of December 31, 2005.

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. The Company’s foreign currency risk arises from (i) fluctuations in exchange rates on the value of the Company’s sales and purchases in foreign currencies (transaction exposure), (ii) certain financial assets and liabilities (translation exposure when converting such balances to each company’s functional currency) and (iii) the Company’s investment in foreign subsidiaries’ net assets (equity exposure). The Company’s policy is to hedge a substantial part of its transaction exposure from future cash flows from firm commitments such as charter vessel contracts as well as anticipated bunker fuel payment obligations. All realized and unrealized gains and losses of hedges of transaction exposures are deferred and recognized in the period the hedged cash flows are received. Management also regularly reviews the Company’s assets and liabilities that are denominated in foreign currencies and determines the net amount that is subject to risk of adverse foreign currency fluctuations. The Company’s policy is to hedge its translation risk on its net exposures, using foreign exchange contracts.

The Company primarily uses forward exchange contracts and, to a lesser extent, purchased currency options and currency swaps to manage its foreign currency risk.

The following table presents the notional amounts and credit exposure of financial instruments used for foreign currency risk management as of December 31 each year:

(SEK in millions)			2005 Notional amount			2005 Credit exposure			2006 Notional amount			2006 Credit Exposure
Foreign exchange forward contracts			8,896			59			12,246			195
Foreign exchange options			2,094			86			6,155

The following table summarizes by major currency the contractual net amounts of the Company’s forward exchange and option contracts in Swedish kronor. Foreign currency amounts are translated at rates current at the reporting date. The ‘buy’ amounts represent Swedish kronor equivalent of commitments or options to purchase foreign currencies, and the ‘sell’ amounts represent the Swedish kronor equivalent of commitments or options to sell foreign currencies. The forward exchange contracts and currency swaps described in the table below are used by the Company (i) to manage its foreign currency transaction and translation risk with respect to future cash flows from firm charter vessel contracts and anticipated payments for bunker fuels and (ii) to manage its translation risk from net financial assets and liabilities in foreign currencies. The cash flows from the charter vessel contracts are denominated primarily in USD, EUR and GBP whereas payments for bunker fuels are denominated in USD. The Company’s borrowings are primarily funded in USD but hedged to the desired effective borrowing currency.

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Note 27      Financial instruments and risk management — continued

(SEK in millions)			2005 Buy			2005 Sell			2006 Buy			2006 Sell
USD						1,416			1,606			187
NOK			512			480			181			487
SEK						1,919						2,952
DKK						384						640
EUR			4,767			564			3,824			118
GBP			469			934			176			1,239
JPY						27						51
OTH			119			143			30			143
Total			5,867			5,867			5,817			5,817

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 division have an annual consumption of bunker of 350,000 tons of fueloil and 130,000 tons of gasoil. These amounts summarizes to an annual volume of about 3.5 millions barrels. A substatial part of this is hedged on a consecutive basis. All contracts are settled monthly with volume corresponding to the underlying consumption. The following table presents the notional amounts and credit exposure of financial instruments used for fuel risk management as of December 31 each year.

(SEK in millions)			2005 Notional amount			2005 Credit exposure			2006 Notional amount			2006 Credit Exposure
Bunker fuel swaps			1,604			1,822			765			771
Bunker fuel options			389

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 Agreeements (FFA’s). The Company enters into hedge contracts for a portion of the expected freight volume for a period of up to 12 months. The following table presents the notional amounts and credit exposure of financial instruments used for freight rate management as of December 31 each year:

(SEK in millions)

2005 Notional amount

2005 Credit exposure

2006 Notional amount

2006 Credit Exposure

OTC traded swaps

10

60

Trading Activities

The Company also buys and sells certain types of derivative financial instruments with the objective of generating profits based on short-term differences in price. Such financial instruments that are not used in the Company’s program of interest rate and foreign currency risk management are referred to as ‘trading’ for purposes of this disclosure. All trading instruments are subject to the market risk, including that future changes in market conditions may reduce the value of an investment. The Company is a party to a variety of interest rate and foreign currency contracts in its trading activities. A summary of the results of the Company’s trading activities on derivative financial instruments is shown below.

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Note 27      Financial instruments and risk management — continued

(SEK in millions)			2005 Net gain/ (loss)						2005 Notional amount						2006 Net gain/ (loss)						2006 Notional amount
Forward exchange contracts					1						169						(4	)					47
Currency options written					19						159						20
Currency options bought					(5	)					80						(4	)
Interest swaps					7						249						(5	)
Total trading					22						657						7						47

Quoted market prices are used as the fair values of financial instruments used or held for trading purposes. If quoted market prices are not available, fair values are estimated on the basis of dealer quotes, pricing models or quoted prices for financial instruments with similar characteristics.

Concentrations of Credit Risk

Credit risk represents the accounting loss that would be recognized at each reporting date if counterparties to contracts failed to perform as agreed. Concentrations of credit risk, whether on or off balance sheet, arise from financial instruments for groups of customers or counterparties when they have similar characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions or other conditions. The Company does not have a significant exposure to any individual customer or counterparty or significant concentrations of credit risk.

Fair value of Financial Instruments

FASB Statement No. 107, ‘Disclosures about Fair Value of Financial Instruments,’ requires the disclosure of estimated fair values for all financial instruments, both on- and off-balance sheet, for which it is practicable to estimate fair value. The Company has used a variety of methods and assumptions, which were based on market conditions and risks existing at the time, to estimate the fair value of the Company’s financial instruments as of December 31, 2005 and 2006. For certain instruments, including cash and cash equivalents, accounts payable and accruals, and short term debt, it was assumed that the carrying amount approximated fair value due to the short maturity of those instruments. Quoted market prices or dealer quotes for the same or similar financial instruments were used to estimate the fair value for marketable securities, long-term investments and long term debt. Other techniques, such as estimated discounted cash flows or replacement cost have been used to determine fair value for the remaining financial instruments. The estimated fair value of the Company’s off-balance sheet financial instruments are primarily based on settlement values. These values represent the estimated amount that would be received or paid in the event of termination of the contract taking into consideration the current interest rates, the credit worthiness of the counterparties and current foreign currency exchange rates.

(SEK in millions)			2005 Carrying value						2005 Fair value						2006 Carrying value						2006 Fair value
Liabilities
Senior Notes					4,821						4,776						4,116				4,241
Derivative financial instruments Held for trading purposes											(2	)
Held for purposes other than trading:
Interest rate risk management:					63						63						95				95
Foreign currency risk management:					145						145						182				182
Bunker risk management											1,822										771

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Note 28    Personnel

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

			2005 Total			No. of females			2006 Total			No. of females
Parent Company:
Board, CEO, Executive vice president			3						3
Other employees			10			3			15			6
Subsidiaries in Sweden			3,788			1,602			3,856			1,601
Total Sweden			3,801			1,605			3,874			1,607
Subsidiaries outside of Sweden:
Great Britain			1,612			459			1,671			457
The Netherlands			743			131			758			121
Denmark			170			109			178			113
Ireland			95			36			93			36
Norway			90			49			99			50
Poland			47			32			49			32
Switzerland			4			1			6			1
Spain			71			16			134			28
Portugal									6			3
France									4			1
Luxembourg									2
Russia			4			1			3			1
China			20			2			52			11
Singapore			6			1			18			4
Korea			13			1			29			4
United States			23			6			22			6
India			70			36			68			38
United Arab Erimates									14			4
Other			16			3			15			2
Shipborne employees			893			6			950			10
Total outside of Sweden			3,877			889			4,171			922
Total group			7,678			2,494			8,045			2,529

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 2006 was 3,471 as compared to 3,508 in 2005.

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Note 28    Personnel — continued

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

			2005									2006
(SEK in millions)			Board and CEO			Other employees			Total			Board and CEO			Other employees			Total
Parent Company			7			18			25			8			22			30
Subsidiaries in Sweden			30			1,014			1044			34			1,071			1105
Total Sweden			37			1,032			1069			42			1,093			1135
Subsidiaries outside of Sweden:
Great Britain			19			558			577			18			609			627
The Netherlands			8			254			262			8			258			266
Denmark			2			68			70			2			71			73
Ireland						34			34						35			35
Norway			1			40			41			1			46			47
Poland						6			6			1			8			9
Switzerland			9			2			11			9			2			11
Spain			1			21			22			2			40			42
Portugal															2			2
France															2			2
Luxembourg												1			1			2
Russia						5			5						11			11
China						5			5			2			10			12
Singapore			1			1			2			1			10			11
Korea						3			3			2			7			9
United States			3			24			27			2			30			32
India						3			3						3			3
United Arab Erimates												1			4			5
Other						11			11						10			10
Shipborne employees						461			461						510			510
Total outside of Sweden			44			1,496			1,540			50			1,669			1,719
Total group			81			2,528			2,609			92			2,762			2,854

Total personnel costs			2005									2006
(SEK in millions)			Parent company			Subsidiaries			Total			Parent company			Subsidiaries			Total
Wages, salaries and other remuneration			24			2,585			2,609			30			2,824			2,854
Pension costs			12			269			281			4			248			252
Other social charges			10			370			380			11			378			389
Total			46			3,224			3,270			45			3,450			3,495

For Swedish-flagged vessels employed in international shipping activities, the Company has received a subsidy equal to all social security costs and income taxes payable by the employers on behalf of employees who work on board such vessels. The amount of this subsidy in 2006 was SEK 443 million, out of which SEK 412 million related to the ferry operations. In 2005, the amount of the subsidy was SEK 424 million, out of which SEK 402 million related to the ferry operations. The amounts received have reduced personnel costs.

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Note 28    Personnel — continued

Remuneration of Chief Executives

Salaries of SEK 9 million were paid to the Chief Executive Officer and the Executive Vice President in 2006 and SEK 10 million in 2005. The corresponding pension charges amounted to SEK 6 million in 2006 and SEK 5 million in 2005. 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 200,000 in 2006, out 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. In 2005, the board members of Stena AB were paid SEK 158,000, out of which SEK 30,000 was paid to the Chairman of the Board and SEK 15,000 was paid to each of the Chief Executive Officer and the Executive Vice President. The Chairman of the Board has invoiced SEK 375,000 and SEK 350,000 for consultations for the years 2006 and 2005, respectively.

Note 29    Related Party Transactions

The Company has 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, Stena Sessan AB (‘‘Sessan’’) and Stena Metall AB (‘‘Stena Metall’’) and their subsidiaries. Another significant company within the Stena Sphere is Concordia Maritime AB (‘‘Concordia’’) which is 52% owned by Sessan. Shares in Concordia are listed on the Stockholm Stock Exchange. The significant transactions between the Company and its affiliates are described below.

Concordia

Concordia and the Company through Stena Bulk AB (‘‘Stena Bulk’’), 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 0% in business opportunities identified by Stena Bulk relating to the chartering of crude oil tankers. No agreements were made in 2005 or 2006. The net outcome of the agreement including results on forward contracts was a loss of SEK 1 million in 2004, a loss of SEK 1 million in 2005 and SEK 0 million in 2006.

The Company provides certain services to Concordia such as administration, marketing, insurance and technical support for Concordia’s owned and chartered vessels, including administration of jointly chartered vessels, office and office services for Concordia’s personnel and certain financial and other services. The Company earned fees equal to SEK 17 million, SEK 13 million and SEK 25 million in 2004, 2005 and 2006 respectively, for these services.

Sessan

Since June 1999, the Company has served as the business manager for Sessan for its 50% participation in a Norwegian partnership that owns the shuttle tanker Stena Sirita that is chartered pursuant to a 10-year contract to ESSO Norway. In 2003, the Company also became the business manager for Sessan for its 50% participation in the shuttle tanker Stena Spirit that is chartered pursuant to a 15-year contract to Petrobras in Brazil. The Company earned total fees of SEK 1 million in each of the years 2004, 2005 and 2006 for these services.

In 2001 and 2002, Sessan acquired all shares in the shipping company HH Ferries in the south of Sweden. The acquistion was partly financed by an interest bearing credit facility from the Company. As of December 31, 2006, DKK 213 million was outstanding under this facility, as compared to DKK 211 million as of December 31, 2005.

In December 2002, the Company sold to Sessan the remaining 50% of the RoPax vessel Stena Jutlandica. Sessan acquired the first 50% of this vessel from the Company in 1996. The vessel is chartered back as an operating lease, for which the Company paid charterhire of SEK 61 million for each of the years 2004 and 2005 and SEK 59 million for 2006.

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Note 29    Related Party Transactions — continued

Sessan has invested in shares in the Swedish company Meda AB (‘‘Meda’’). In 2005, a new share issue in Meda was guaranteed by the Company. In connection with the new issue, the Company purchased shares in Meda. Sessan had the option to buy these shares at a price of 10% above the price paid by the Company. This option was utilized during 2006.

In 2003, the Company granted an interest bearing loan of SEK 10 million to Sessan to finance the acquisition of shares in an unrelated company. During the year, the Company aquired shares in Ballingslöv at a market value of SEK 35 million from Sessan. At the same time the loan of SEK 10 million was repaid.

Stena Metall

The Company purchases a substantial part of its bunker fuel from Stena Metall. Such purchases aggregated SEK 726 million, SEK 1,127 million and SEK 1,840 million in 2004, 2005 and 2006, respectively.

The Company paid charterhire for vessels to Stena Metall at an amount of SEK 46 million in 2004 and of SEK 63 million each of the years 2005 and 2006.

The Company provides management and other services to Stena Metall. The Company received SEK 1 million in each of the years 2004, 2005 and 2006 for these services.

Olsson Family

The Company rents office space from members of the Olsson family. In 2004, 2005 and 2006, the Company paid SEK 28 million, SEK 29 million and SEK 32 million, respectively, in respect of such properties.

The Company manages certain properties owned by members of the Olsson family. In 2004, 2005 and 2006, members of the Olsson family paid the Company SEK 11 million, SEK 13 million and SEK 12 million, respectively, for such management services.

The Company has agreed to pay Sten A. Olsson and Dan Sten Olsson an annual indexed retirement benefit for life.

In 2004, the Company acquired properties in Sweden, that were subsequently sold to the Olsson family at a value of SEK 587 million. This transaction had no impact on the consolidated accounts for the Company.

In 2005, the Company sold a property to the family of SEK 96 million. The sale was made at market price.

During the year, the Company aquired shares in Gunnebo and Gunnebo Industrier at a market value of SEK 18 million from the family.

Note 30    Subsequent events

On February 8, 2007, the Company completed an offering of €300 million of the 6.125% Senior Notes due 2017. The Company used a portion of the proceeds of the offering of the notes to repurchase approximately $177 million of the 9 5/8% Senior Notes due 2012 in a tender offer and consent solicitation.

Pursuant to our tender offer and consent solicitation, the Company amended the indenture governing our 9 5/8% Senior Notes due 2012 to eliminate the principal restrictive covenants.

On February 14, 2007, the Company completed an offering of €102 million of our 5.875% Senior Notes due 2019.

In March 2007, the Company commenced a solicitations of consents from the holders of the Senior Notes due 2013 and 2016.

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Note 30    Subsequent events — continued

In March 2007 the Company entered into financing arrangements for the third drillship on order, structured similarly to the financings of the first two drillMAX vessels.

Note 31    US GAAP Information

The accompanying consolidated financial statements have been prepared in accordance with Swedish GAAP which differs in certain significant respects from US GAAP. The following is a summary of the adjustments to net income and stockholders’ equity that would have been required if US GAAP had been applied instead of Swedish GAAP in the preparation of the consolidated financial statements.

			Year ended December 31,
(SEK in millions)			2004						2005						2006
Net income under Swedish GAAP					2,359						2,268						4,339
Adjustments to reconcile to US GAAP:
Disposal of assets(a)					(365	)					80						(295	)
Depreciation of properties(b)					(109	)					(34	)					(153	)
Investments in securities(c)					(76	)					(388	)					(503	)
Investment subsidies(d)					16						—						—
Financial instruments(e)					549						1,295						(1,011	)
Purchase accounting Stena Line(f)					(67	)					34						111
Business combinations(g)					15						33						35
Pensions(h)					(42	)					(1,533	)					(494	)
Deferred costs(i)					15						15						13
Capital lease transaction(j)					(492	)					73						766
Investments in VIEs(k)					132						—						—
Others					15						16						36
Tax effect of US GAAP adjustments					(98	)					149						172
Net income under US GAAP					1,852						2,008						3,016

			As of December 31,
(SEK in millions)			2005						2006
Stockholders’ equity under Swedish GAAP					15,132						18,587
Adjustments to reconcile to US GAAP:
Disposal of assets(a)					(370	)					(664	)
Depreciation of properties(b)					(515	)					(668	)
Financial instruments(e)					1,822						771
Purchase accounting Stena Line(f)					(330	)					(219	)
Business combinations(g)					48						83
Pensions(h)					(71	)					(512	)
Deferred costs(i)					(13	)					—
Capital lease transaction(j)					(766	)					—
Others					(56	)					(20	)
Tax effect of cumulative US GAAP adjustments					32						193
Stockholders’ equity under US GAAP					14,913						17,551

Those differences which have a material effect on consolidated net income and stockholders’ equity are described as follows:

(a) Disposal of assets – Disposed assets may have different carrying values under US GAAP resulting in a different gain or loss on disposal than under Swedish GAAP. After consolidation

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Note 31    US GAAP Information — continued

of Stena Line as of October 31, 2000, this includes gains on sales of certain vessels to Stena Line in 1988 to 1995, which under Swedish GAAP have been eliminated to the extent of the Company’s 46% investment. For US GAAP purposes, the Company eliminates all of such gains. A disposal of an asset resulting in a gain in accordance with Swedish GAAP may not qualify as a sale under US GAAP but as a sale-lease back transaction. A gain is deferred under Swedish GAAP when there is a sale-lease back transaction where the lease is determined to be a finance lease, but the gain is recognized if the lease is determined to be an operating lease. Under US GAAP the gain is also deferred when the lease is determined to be an operating lease. The gain is deferred over the life of the lease. For US GAAP purposes, the gain recognized on the Company’s sale of tankers to Arlington Tankers Ltd is the amount of SEK 316 million for the year ended December 31, 2004 has been deferred and is being amortized over five years, the life of the lease. In 2006 Stena Contest, Stena Concept, Stena Compass och Stena Compassion were sold and the gain on the sale- and leaseback will be realeased over the charter periods until 2008. The gains amounted to SEK 108, 106, 161 and 157 millions, respectively.

(b) Depreciation of properties – Under Swedish GAAP, properties in the Company’s real estate operations are depreciated at 1%. Under US GAAP, all properties are depreciated over their estimated useful lives. For US GAAP purposes, depreciation for the real estate properties is based on periods of 50 years.

(c) Investments in securities – Under Swedish GAAP, the Company changed the accounting principles 2005 for the valuation of financial instruments at market. The accounts for 2004 have been restated. Changes in the market value of certain marketable securities are revalued through the income statement. Under US GAAP, changes in the market value of these investments are classified as ’available for sale’ securities and are recorded as a separate component of equity, net of applicable deferred taxes.

(d) Investment subsidies – Under Swedish GAAP, government investment subsidies related to the financing of vessels are recorded as income upon receipt of cash. Under US GAAP, investment subsidies are netted against the cost of the vessel effectively reducing depreciation expense over the economic useful life of the vessel. The Company sold the vessel during 2004 and the remaining adjustment to US GAAP was accounted for as an additional gain on sale of vessels during 2004.

(e) Financial instruments – Under Swedish GAAP, the Company changed the accounting principles 2005 for the valuation of financial instruments at market and the result is recorded as a separate component in the equity. The accounts for 2004 have been restated. Unrealized gains and losses on forward exchange contracts and foreign currency options which hedge future bunker fuel risks are deferred and recognized only when realized. Under US GAAP, unrealized gains and losses on such contracts which do not qualify for hedge accounting treatment would be recognized as income or loss when they occur. Management has concluded that none of the Groups’ hedges of financial exposure qualify for hedge accounting under US GAAP during 2006. In accordance with US GAAP, all outstanding derivative instruments are therefore valued at fair value. The gains and losses that thereby arise are included when calculating income.

(f) Purchase accounting Stena Line – For US GAAP purposes, the acquisition of the additional 12% of Stena Line in October 2000 should be accounted for as a step acquisition. Thus, for US GAAP purposes, the Company’s carrying value of its prior 46% interest in Stena Line does not change; that is, carryover basis is used for that portion of the investment in Stena Line. Under step acquisition accounting, the additional 12% tranche of Stena Line acquired in 2000 would be recorded at fair value based upon the purchase price paid for shares of Stena Line of SEK 8 per share. The increase in depreciation expense amounted to SEK 11 million, SEK 11 million

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Note 31    US GAAP Information — continued

and SEK 11 million for the years ended December 31, 2004, 2005 and 2006, respectively. In connection with the Company’s offer for shares of Stena Line, the Company also agreed to repurchase the outstanding Senior Notes of Stena Line for 80% of their redemption value. The difference between the book value of those Senior Notes and the reacquisition price paid by the Company was SEK 658 million. The price paid by the Company to acquire the Senior Notes is deemed to be the fair value of the notes due to the proximity of the two transactions. The excess of the carrying value of these notes over their fair value represents negative goodwill resulting from the acquisition of Stena Line by the Company. Under Swedish GAAP, such negative goodwill has been amortized into income over four years. However, For US GAAP purposes, the excess of the fair value of an acquired business over its purchase price (i.e., negative goodwill) is applied as a reduction of the carrying value of acquired long-lived assets. The reduction of the carrying value of the acquired Stena Line long-lived assets results in a lower depreciation expense for US GAAP purposes on the Stena Line long-lived assets, primarily vessels, as compared to Swedish GAAP. The reduction in depreciation expense amounted to SEK 45 million for each of the years ended December 31, 2004, 2005 and 2006, respectively.

(g) Business combinations – Accounting of acquisitions of certain subsidiaries under Swedish GAAP differs from US GAAP. The difference is attributable primarily to reporting and amortization of goodwill. In accordance with SFAS 142 ‘‘Goodwill and Other Intangible Assets’’, goodwill and other intangible assets with indefinite useful lives should not be amortized but rather evaluated for impairment annually. Accordingly, the amortization of goodwill reported under Swedish GAAP has been reversed in the determination of Net income and Shareholders’ equity under US GAAP. Furthermore, impairment tests have been performed for existing goodwill. No impairment loss has been recognized as a result of these tests.

(h) Pensions – The Company has certain Swedish and British pension arrangements that are not multiemployer or non-participating insurance arrangements funded through payments to a separate pension foundation. Effective in 2004, provisions for employee benefits in the consolidated statements of the Company are accounted for in accordance with RR29 Employee Benefits, which conforms in all significant respects with IAS 19 Employee Benefits. See further Note 1 and Note 19. In accordance with US GAAP, pension benefits should be accounted and disclosed for in accordance with SFAS No. 87 ‘‘Employers Accounting for Pensions’’ and SFAS No. 132 ‘‘Employers Disclosure about Pensions and Other Post-retirement Benefits.’’ The differences between the accounting principles used by the Company (Swedish GAAP) and US GAAP pertain to different transition dates, and recognition of past service cost and minimum liability adjustments. Certain pension liabilities for employees within the UK ferry operations of the company were previously accounted for as contingent liabilities due to the lack of information on the portion of the liability attributable to the Company. New information was released for this pension scheme in 2005 and the portion of the liability attributable to the Company has been recorded as pension liabilities in the consolidated balance sheet. Under Swedish GAAP, the change has been recorded directly against stockholders’ equity and deferred tax liabilities, respectively. From October 1, 2005 the pension scheme will be accounted for as a multiple-employer plan. For U.S. GAAP purposes, the change in 2005 is viewed as the withdrawal from a multi-employer plan and the establishment of a multiple-employer plan with the unfunded benefit obligation of SEK 1,536 million as of October 1, 2005 being recognized, net of tax SEK 1,075 million, immediately in net income. Certain pension liabilities for employees within the UK ferry operations of the company were previously accounted for as contingent liabilities due to the lack of information on the portion of the liability attributable to the Company. New information was released for this pension scheme in 2006 and the portion of the liability attributable to

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Note 31    US GAAP Information — continued

the Company has been recorded as pension liabilities in the consolidated balance sheet. Under Swedish GAAP, the change has been recorded directly against stockholders’ equity and deferred tax liabilities, respectively. From October 1, 2006 the pension scheme will be accounted for as a multiple-employer plan. For U.S. GAAP purposes, the change in 2006 is viewed as the withdrawal from a multi-employer plan and the establishment of a multiple-employer plan with the unfunded benefit obligation of SEK 498 million as of October 1, 2006 being recognized, net of tax SEK 349, immediately in net income. SFAS 158 ‘‘Employers’ accounting for defined benefit pension and other postretirement plans’’ was issued by the FASB in September 2006. Statement SFAS 158 requires an employer to recognize the funded status of pension and other postretirement benefit plans (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The adoption of SFAS 158 resulted in a charge to equity reported in accordance with US GAAP with SEK 312 million. This Statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position for fiscal years ending after December 15, 2008, with limited exceptions. Stena is in the process of evaluating their processes and the changes required to meet these requirements.

(i) Deferred costs – The Company was party to litigation regarding a claim by Statoil, the charterer of the Stena Don, pertaining to the delivery of the rig. The Company had initiated a lawsuit against Statoil in May 2003 in relation to the use and payment for additional variable deckload, insurance payments and certain matters in relation to the dayrates and use of certain equipment. In October 2003, the Company reached a settlement with Statoil. The settlement resulted in the resolution of amounts that had been previously invoiced by the Company but had not been paid by Statoil. The Company also agreed to withdraw its legal claims against Statoil. Under Swedish GAAP, costs that are related to long-term contracts of long-lived assets may be capitalized and amortized over the life of the related contract if the costs are related to the maintenance of the contract and can be recovered from the cash flow of the contract. For US GAAP purpose, the costs incurred as a result of amounts that were not recoverable in the ultimate settlement with Statoil must be expensed. As per 31 December, 2006 the total provison has been released.

(j) Capital lease transaction – Since 1996, the Company has leased certain vessels from two special purpose leasing entities. The leases were each accounted for as capital leases and accordingly, the Company recorded an asset and a corresponding lease obligation on its balance sheet for both Swedish and US GAAP. In December 2003, the Company acquired the special purpose leasing entities for consideration of GBP 7 million. The leasing entities acquired by the Company had existing bank indebtedness of GBP 105 million which pursuant to the share purchase agreements the Company was obliged to procure repayment, and a deferred tax liability of GBP 45 million. The Company immediately paid the bank indebtedness. Also in December 2003, the Company transferred the vessels to a wholly owned subsidiary which, pursuant to existing law, increased the tax basis of the vessels and reduced the associated deferred tax liability. Accordingly, for US GAAP purposes, the deferred tax liability at December 31, 2003, has been reduced in accordance with the provisions of the relevant tax law in effect at that date. The effect of the reduction of the deferred tax liability is recorded as an adjustment to the carrying value of the vessel for US GAAP purposes which creates a book basis difference in the vessel when compared to Swedish GAAP. The reduction of the carrying value of the vessels will result in lower depreciation expense for US GAAP purposes as compared to Swedish GAAP. Under Swedish GAAP the benefit from the resolvement of the deferred tax liability is recorded as an income tax benefit in 2004. In addition, approximately SEK 28 million of costs associated with the

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Note 31    US GAAP Information — continued

establishment of the post-acquisition structure were capitalized for Swedish GAAP in 2003. Under US GAAP, such costs are considered to be period costs and are expensed as incurred. These costs have been expensed under Swedish GAAP during 2004 and thereby reversing the adjustment under US GAAP.

During 2006 the HSS vessels have been written-down in Swedish GAAP and under US GAAP these write-downs were reversed since there is no longer a book value difference. The total write-down in accordance with US GAAP has been realeased.

(k) Investment in VIEs
The company changed the Swedish GAAP accounting principle for consolidation of VIE’s in 2005. VIE’s are consolidated now for Swedish as well as for US GAAP in 2005. The difference in 2004 net income was due to the change in accounting principles under Swedish GAAP that allowed the transition to be recorded as a cumulative effect in shareholders equity and under US GAAP to be recorded in net income. The Company choose not to restate the unrealized portion of the gain in securities in Swedish GAAP. This adjustment was made in prior year’s for US GAAP purposes.

The condensed consolidated financial statements under US GAAP are presented as follows:

Income statement – US GAAP			Year ended December 31,
(SEK in millions)			2004						2005						2006
Total revenues					15,955						18,491						20,388
Net gain sale of vessels					291						395						2,018
Net gain sale of property					113						935						194
Direct operating expenses					(10,447	)					(11,525	)					(14,469	)
Selling and administrative expenses					(1,803	)					(3,393	)					(2,621	)
Depreciation and amortization					(1,769	)					(2,738	)					(1,875	)
Total operating expenses					(14,019	)					(17,656	)					(18,965	)
Income from operations					2,340						2,165						3,635
Share of affiliated companies’ results					17						21						27
Interest income					382						567						738
Interest expense					(1135	)					(1,395	)					(1,649	)
Other financial items					1,015						695						484
Total financial income and expense					262						(133	)					(427	)
Minority Interest					(57	)					(21	)					(23	)
Income taxes					(710	)					(24	)					(196	)
Taxes
Net income					1,852						2,008						3,016

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Note 31    US GAAP Information — continued

Balance sheet – US GAAP			As of December 31,
(SEK in millions)			2005						2006
Intangible fixed assets					806						688
Tangible fixed assets					31,372						33,616
Marketable securities					3,284						5,791
Investment in VIE´s					5,753						7,341
Other noncurrent assets					3,594						4,688
Total noncurrent assets					44,809						52,124
Short-term investments					2,213						2,462
Cash and cash equivalents					3,744						884
Other current assets					4,463						4,812
Total current assets					10,420						8,158
Total assets					55,229						60,282
Total stockholders’ equity					14,913						17,551
Minority Interest					131						162
Deferred income taxes					1,485						1,516
Pension liabilities					1,953						2,718
Other provisions					46						1,667
Long-term debt					29,928						25,995
Other noncurrent liabilities					883						1,515
Total noncurrent liabilities					30,811						27,510
Short-term debt					1,709						4,776
Other current liabilities					4,181						4,382
Total current liabilities					5,890						9,158
Total stockholders´ equity and liabilities					55,229						60,282

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Note 32    Additional US GAAP Disclosures

Certain disclosures and financial statement classifications required under US GAAP and the US Securities and Exchange Commission rules and regulations would be different from the amounts disclosed on a Swedish GAAP basis. The following information is presented on a US GAAP basis for US GAAP presentation purposes.

(a) Income Taxes

The net deferred tax liability of the Company computed on a US GAAP basis consists of the following:

			As of December 31,
(SEK in millions)			2005						2006
Deferred tax liabilities:
Property, vessels and equipment					2,091						2,124
Investments					666						580
Other					88						261
Total deferred tax liabilities					2,845						2,966
Deferred tax assets:
Property, vessels and equipment					327						710
Tax loss carryforwards					1,182						815
Investments					599						647
Provisions					77						173
Other					—						122
Total deferred tax assets					2,185						2,334
Less deferred tax assets not recognized					(581	)					(638	)
Net deferred tax assets					1,604						1,829
Net deferred tax liability under US GAAP					1,241						1,137
Out of which
Deferred tax assets					244						379
Deferred tax liability					1,485						1,516
Net deferred tax liability					1,241						1,137

The valuation increased/(decreased) by SEK 773 million, SEK (736) million and SEK 57 million during the years ending December 31, 2004, 2005 and 2006, respectively.

The determination of the amount of unrecognized deferred tax liability in respect of the cumulative amount of undistributed earnings of subsidiaries that would be taxed on remittance is not practicable.

(b) Long-term Debt

For Swedish GAAP purposes, certain borrowings that have formal repayment dates in 2006 have been classified as long-term because the Company intends to refinance those borrowings on a long-term basis. See Note 20. Those borrowings which amount to SEK 835 million and SEK 2,885 million at December 31, 2005 and 2006 respectively would be classified as short-term in a US GAAP consolidated balance sheet.

(c) Net gain on sale of vessels and property

For Swedish GAAP purposes net gain on sale of vessels and property are included as a component of revenues. For US GAAP purposes these net gains would be excluded from revenues and included as a separate component of income from operations.

(d) Comprehensive Income

The Company has adopted Statement of Financial Accounting (‘‘SFAS’’) No. 130, ‘‘Reporting Comprehensive Income’’, which establishes standards for the reporting and presentation of

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Note 32    Additional US GAAP Disclosures — continued

comprehensive income and its components in a full set of financial statements. Comprehensive income generally encompasses all changes in stockholders’ equity (except those arising from transactions with the owners) and includes net income (loss), net unrealized capital gains or losses and available for sale securities and foreign currency translation adjustments. Comprehensive income in accordance with US GAAP was as follows:

			Comprehensive Income (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2003						(1,800)
Net income			1,852
Available for sale securities			99			99
Minimum liability, pensions			82			82
Foreign currency translation adjustment			(210)			(210)
Comprehensive income 2004			1,823
Balance as of December 31, 2004						(1,829)
Net income			2,008
Available for sale securities			116			116
Minimum liability, pensions			326			326
Foreign currency translation adjustment			441			441
Comprehensive income 2005			2,891
Balance as of December 31, 2005						(946)
Net income			3,016
Adoption of SFAS 158, pensions						(312)
Available for sale securities			498			498
Foreign currency translation adjustment			(887)			(887)
Comprehensive income 2006			2,627
Balances as of December 31, 2006						(1,647)

The tax effect in comprehensive income was SEK (25) million, SEK (29) million and SEK (144) million in 2004, 2005 and 2006, respectively.

(e) Pensions

Pension cost, on the defined benefit plans, calculated in accordance with US GAAP includes the following:

			Year ended December 31,
(SEK in millions)			2004			2005			2006
Service cost			41			53			45
Interest cost			133			149			502
Change in pension plans			—			1,536			498
Expected return on plan assets			(143)			(199)			(533)
Net amortization and deferral			42			122			(66)
Net periodic pension cost			73			1,661			446

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Note 32    Additional US GAAP Disclosures — continued

The changes in benefit obligation are as follows:

			As of December 31,
(SEK in millions)			2005						2006
Benefit obligation at beginning of year					2,488						9,364
Service cost					53						45
Interest cost					149						502
Actuarial gain (loss)					126						(54	)
Change in pension plans					6,598						3,284
Benefit paid					(33	)					(9	)
Translation difference					(17	)					66
Benefit obligation at end of year					9,364						13,198
Funded status					(9,364	)					(13,198	)
Additional minimum liability					—						—
Amounts recognized in the consolidated balance sheets as accrued pension liability					9,364						13,198

The change in fair value of plan assets are as follows:

			As of December 31,
(SEK in millions)			2005						2006
Assets at beginning of year					2,105						8,006
Actual return on plan assets					199						603
Company contributions					62						97
Members contributions					4						4
Change in pension plans					5,062						2,786
Benefits paid					(33	)					(167	)
Actuarial gain (loss)					426						(391	)
Other					181						111
Assets at end of year					8,006						11,049

Assumptions used in the calculation of pension obligations are as follows:

			2004			2005			2006
Weighted discount rate			5.25%			4.25-5.00%			3.90%-5.20%
Expected long-term rate of return on assets			7.1%			4.50-7.50%			7.50%
Rates of increase in compensation levels			3.75%			3.25-3.85%			3.00-3.95%

(f) Recent issued U.S. accounting standards

In June 2006, FASB Interpretation No. 48 ‘‘Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109’’ (FIN 48) was issued. FIN 48 requires tax benefits from an uncertain position to be recognised if it is ‘more likely than not’ that the position is sustainable, based on its technical merits. The interpretation also requires qualitative and quantitative disclosures, including discussion of reasonably possible changes that might occur in recognised tax benefits over the next 12 months, a description of open tax years by major jurisdiction, and a roll-forward of all unrecognised tax benefits. FIN 48 first applies for the Company from January 1, 2007. The Company is currently assessing the impact of adopting FIN 48.

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Note 32    Additional US GAAP Disclosures — continued

In February 2006, the FASB issued Statement of Financial Accounting Standard No. 155 ‘Accounting for Certain Hybrid Financial Instruments’ (SFAS 155). SFAS 155 provides entities with relief from having to separately determine the fair value of an embedded derivative that would otherwise have to be bifurcated from its host contract in accordance with SFAS 133. SFAS 155 allows an entity to make an irrevocable election to measure such a hybrid financial instrument at fair value in its entirety, with changes in fair value recognised in earnings. Additionally, SFAS 155 requires that interest in securitised financial assets be evaluated to identify whether they are freestanding derivatives or hybrid financial instruments containing an embedded derivative that requires bifurcation (previously these were exempt from SFAS 133). SFAS 155 is effective for all financial instruments acquired, issued or subject to a re-measurement event occurring after the beginning of an entity’s first fiscal year that begins after 15 September 2006. The Company is currently assessing the impact of adopting SFAS 155.

In September 2006, the FASB issued SFAS 157 ‘‘Fair Value Measurements.’’ SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The statement emphasizes that fair value is a market-based measurement and not an entity-specific measurement. It also establishes a fair value hierarchy used in fair value measurements and expands the required disclosures of assets and liabilities measured at fair value.’’ SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this on the Company’s financial condition, results of operation or liquidity.

In September 2006, the FASB issued SFAS 158 ‘‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,’’ an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS 158 requires employers to recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. Secondly, it requires employers to measure the plans assets and obligations that determine its funded status as of the end of the fiscal year. Lastly, employers are required to recognize changes in the funded status of a defined benefit postretirement plan in the year that the changes occur with the changes reported in comprehensive income. During 2006, the Company adopted the recognition and disclosure provisions of SFAS 158, which resulted in a SEK 312 million decrease in accumulated other comprehensive income and shareholders equity, a SEK 445 million increase in accrued pension liability, and a SEK 133 million decrease in deferred income taxes. The Company will adopt the measurement date provisions of SFAS 158 for the fiscal year ended December 31, 2008.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115 (‘‘SFAS 159’’) which permits entities to choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. The following balance sheet items are within the scope of SFAS 159:

	•	Recognized financial assets and financial liabilities unless a special exception applies

	•	Firm commitments that would otherwise not be recognized at inception and that involve only financial instruments

	•	Non-financial insurance contracts

	•	Host financial instruments resulting from separation of an embedded non-financial derivative instrument from a non-financial hybrid instrument

SFAS 159 will be effective for fiscal years beginning after November 2007 with early adoption possible but subject to certain requirements. The Company is currently assessing the impact of adopting SFAS 159.

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Schedule I

Report of Independent Registered Public Accounting Firm on Schedules

The Board of Directors
Stena AB (publ)

Under date of April 25, 2007, we reported on the consolidated balance sheets of Stena AB (publ) and subsidiaries as of December 31, 2005 and 2006, and the related consolidated statements of income and cash flows for each of the years in the three-year period ended December 31, 2006, and the related statement of changes in stockholders’ equity for each of the years in the two year period ended December 31, 2006, as contained in the Annual Report on Form 20-F for the year 2006. 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 audit.

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 25, 2007
KPMG Bohlins AB

Thord Elmersson
Authorized Public Accountant

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Schedule II

Stena AB and Consolidated Subsidiaries
Valuation and Qualifying Accounts
Years ended December 31, 2004, 2005 and 2006

Description			Balance at Beginning of Year						Additions						Companies acquired						Deductions						Balance at End of Year
			(SEK in thousands)
Allowance for Doubtful Accounts:
December 31, 2004					20,825						8,841												(3,656	)					26,010
December 31, 2005					26,010						17,342						19,626						(10,746	)					52,232
December 31, 2006					52,232						22,198												(28,012	)					46,418

Notes:

Additions includes foreign currency translation effect

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Schedule III

Stena AB and Consolidated Subsidiaries
Property Cost and Accumulated Depreciation
December 31, 2006
(SEK in millions)

Notes:

(1)   Gross amount at which carried at end of the year:

			Year ended December 31,
			2004						2005						2006
			(SEK in millions)
Balance at beginning of year					8,158						19,476						18,314
Additions:
Purchase of companies					11,298						(524	)					0
Additions					490						1,969						1,525
Foreign currency effect					(51	)					408						(150	)
					19,895						21,329						19,689
Deductions:
Disposals					423						2,977						523
Transfers					(4	)					38						91
					419						3,015						614
Balance at end of year					19,476						18,314						19,075

(2)   Accumulated depreciation:

			Year ended December 31,
			2004						2005						2006
			(SEK in millions)
Balance at beginning of year					533						777						1,039
Depreciation charged					294						393						234
Properties sold					(38	)					(161	)					(41	)
Transfers											(22	)					(79	)
Foreign currency effect					(12	)					52						(26	)
					777						1,039						1,127
Net book value					18,699						17,275						17,948

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Stena AB and Consolidated Subsidiaries
Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Net book value
Property data			(Mortgages) TSEK						TSEK						TSEK						[ 1 ] TSEK						[ 2 ] TSEK
SFAB, enclosure no 1					2,639,545						3,137,624						664,109						3,801,733						(276,738	)					3,524,995
SFNAB, enclosure no 2					716,211						517,435						22,622						540,057						(49,473	)					490,584
SFSAB, enclosure no 3					742,495						932,354						36,784						969,138						(47,586	)					921,552
SFHKB, enclosure no 4					369,250						351,345						48,631						399,976						(16,095	)					383,881
SFFAB group, enclosure no 5					5,553,983						8,604,222												8,604,222						(210,328	)					8,393,894
Total Stena Fastigheter group					10,021,484						13,542,980						772,146						14,315,126						(600,220	)					13,714,906
SRBV, enclosure no 6					1,757,627						1,975,410						57,891						2,033,302						(131,805	)					1,901,496
SPBV, enclosure no 7					449,337						775,749						89,468						865,217						(29,759	)					835,458
Total Stena Realty group					2,206,964						2,751,159						147,360						2,898,519						(161,565	)					2,736,954
Total real estate					12,228,447						16,294,139						919,506						17,213,645						(761,785	)					16,451,860
Stena Line, enclosure no 8											1,531,081						11,772						1,542,853						(343,246	)					1,199,608
Adactum, enclosure no 9											229,404												229,404						(6,014	)					223,390
NMM, Glasgow											59,034												59,034						(9,232	)					49,802
Stena Drilling, Aberdeen											13,236												13,236						(6,886	)					6,350
Scan-Port, Germany											15,059												15,059												15,059
Euro-Port, Denmark											1,266												1,266												1,266
Total buildings and land											1,849,080						11,772						1,860,852						(365,378	)					1,495,475
Total											18,143,219						931,278						19,074,497						(1,127,162	)					17,947,335

SCHEDULE III

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encum- brances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of con- struction						Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Järnbrott 126:4					33,699						3,071						2,888						5,959						(78	)					1961						01/01/81				100 years
Kallebäck 7:8					10,505						4,042						497						4,539						(316	)					1964						01/01/81				100 years
Högsbo 8:9					4,690						3,793						9,775						13,568						(2,824	)					1971						01/01/81				100 years
Kallebäck 12:4					9,000						4,740						585						5,325						(378	)					1960						31/12/83				100 years
Kvillebäcken 12:2					9,200						18,600						3,396						21,996						(2,147	)					1961						30/09/84				100 years
Biskopsgården 46:4					16,680						13,305						14,020						27,325						(3,059	)					1968/73						31/12/85				100 years
Stampen 26:2					97,500						58,549						5,786						64,335						(6,073	)					1988						01/01/94				100 years
Järnbrott 164:22					39,000						26,771						649						27,420						(2,915	)					1966						01/02/94				100 years
Sannegården 15:4					9,759						0						10,913						10,913						(1,124	)					1973						01/01/83				100 years
Sannegården 15:5					18,750						23,450						−14,068						9,382						(194	)					1973						01/01/83				100 years
Sannegården 22:19					3,115						0						2,400						2,400						(241	)					1973						01/01/83				100 years
Partille 3:234-5					0						96						1						97						0												01/01/83				100 years
Askim 70:4-6					120,000						159,164						4,922						164,086						(8,779	)					1968/98						01/01/00				100 years
Askim 70:1					0						1						0						1						0						1968/98						01/01/00				100 years
Askim 59:38					0						1,000						56						1,056						(72	)					1968/98						01/01/00				100 years
Kardemumman 1-2					15,000						17,306						335						17,641						(837	)					1990						01/07/00				100 years
Ugglum 14:15					4,000						5,835						2,686						8,521						(786	)					1982						01/04/88				100 years
Linkärven 6					0						10,484						−5,038						5,446						(949	)					1990						01/04/90				100 years
Järnbrott 144:5					8,625						3,887						263						4,150						(212	)					1963						01/08/83				100 years
Kallebäck 4:1					36,950						4,708						2,711						7,419						(136	)					1963						01/08/83				100 years
Kärra 78:3					16,420						8,444						7,950						16,394						(1,792	)					1973						01/04/86				100 years
Kobbegården 257:3					28,500						7,990						1,584						9,574						(361	)					1970						01/08/81				100 years
Kobbegården 257:1					30,000						16,426						3,091						19,517						(2,039	)					1970						01/08/81				100 years
Kobbegården 257:2					25,000						−1,124						0						−1,124						1,162						1970						01/08/81				100 years

SCHEDULE III
enclosure 1

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encum- brances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of con- struction						Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Askim 70:2					27,181						26,435						0						26,435						(2,546	)					1968						01/08/81				100 years
Askim 70:3					48,195						−7,387						6,145						−1,242						1,284						1968						01/08/81				100 years
Kobbegården 6:139					0						7,225						11,345						18,570						(1,805	)					1974						01/03/86				100 years
Högsbo 8:10					550						5,207						−56						5,151						(225	)					1960						01/01/90				100 years
Gullbergsvass 5:121					78,000						88,227						15,309						103,536						(11,844	)					1988						01/04/94				100 years
Kobbegården 6:3					195,000						146,028						34,235						180,263						(14,078	)					1970						12/97				100 years
Helsingör 10					39,500						5,350						3,816						9,166						(441	)					1964						01/05/81				100 years
Kockum 20					8,996						2,030						1,516						3,546						19						1960						01/05/81				100 years
Kockum 21/22					23,700						4,543						2,907						7,450						(377	)					1962						01/01/82				100 years
Bjurö 9					4,500						4,781						8,770						13,551						(1,339	)					1964						11/82				100 years
Järnet 2					4,050						15,041						4,795						19,836						(14,166	)					1991						12/83				100 years
Bilden 10					21,000						2,773						17,231						20,004						(2,048	)					1963						04/84				100 years
Almen 20					24,375						3,309						9,303						12,612						(737	)					1966						05/81				100 years
Frans Suell 14					135,000						45,932						149,056						194,988						(20,118	)					1906/36						02/91				100 years
Frans Suell 8					0						23,170						−23,170						0						0						1900/79						02/94				100 years
Frans Suell 10					0						24,000						−24,000						0						0						1900/79						02/95				100 years
Brudbuketten 6					0						6,698						3,197						9,895						(795	)					1991						05/92				100 years
Solbacken 22					10,475						7,418						3,711						11,129						(967	)					1964						05/92				100 years
Flygfältet 3					3,940						4,566						2,493						7,059						(695	)					1960/70						05/95				100 years

SCHEDULE III
enclosure 1

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encum- brances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of con- struction						Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Pilåkern 1					83,700						14,549						21,487						36,036						(2,251	)					1959						05/81				100 years
Pilåkern 2					125						269						1,399						1,668						(93	)					1960/70						05/81				100 years
Almen 16					5,400						3,383						−1,101						2,282						(6	)					1961						05/81				100 years
Leonard 1					194,000						202,039						64,012						266,051						(18,226	)					1970						11/00				100 years
Abel 14					80,000						142,313						15,326						157,639						(9,764	)					1973						11/00				100 years
Abel 15					45,000						0												0						0						1973						11/00				100 years
Korpen 39					9,000						14,631						776						15,407						(658	)					1960/70						01/99				100 years
Laboratorn 4					16,800						29,251						867						30,118						(1,446	)					1960/70						01/99				100 years
Professorn 12					11,900						20,663						1,573						22,236						(1,201	)					1960/70						01/99				100 years
Frukten 9					790						6,445						0						6,445						(249	)					1960/70						01/99				100 years
Flygfältet 8					0						−187						3,067						2,880						(2	)					1961						07/87				100 years
Flygfältet 2					0						4,950						−2,987						1,963						(652	)					1961						07/87				100 years
Flygfältet 7					6,000						7,468						0						7,468						(423	)					1989						08/00				100 years
Hilleröd 12					5,250						2,202						536						2,738						(180	)					1962						01/81				100 years
Nyborg 22					32,000						8,070						1,798						9,868						(539	)					1968						08/82				100 years
Solbacken 13					2,700						4,386						4,204						8,590						(1,063	)					1965						06/86				100 years
Bronsyxan 16					0						14,281						4,258						18,539						(1,711	)					1975						10/87				100 years
Hymnen 1					22,400						10,278						14,797						25,075						(2,367	)					1960/70						05/94				100 years
Kantaten 1					42,000						12,618						20,151						32,769						(2,601	)					1960/70						05/94				100 years
Kantaten 2					33,600						8,600						15,298						23,898						(2,044	)					1960/70						05/94				100 years
Kantaten 3					37,800						13,142						17,601						30,743						(2,907	)					1960/70						05/94				100 years
Kantaten 6					27,300						11,313						16,057						27,370						(2,350	)					1960/70						05/94				100 years

SCHEDULE III
enclosure 1

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encum- brances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of con- struction						Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Docenten 6					13,500						10,039						10,193						20,232						(1,987	)					1960/70						01/97				100 years
Laboratorn 2					20,700						13,550						12,375						25,925						(2,405	)					1960/70						01/97				100 years
Professorn 9					19,400						14,272						11,467						25,739						(2,570	)					1960/70						01/97				100 years
Professorn 11					21,800						18,486						10,353						28,839						(2,845	)					1960/70						01/97				100 years
Laboratorn 3					21,800						18,811						12,274						31,085						(2,989	)					1960/70						01/97				100 years
Altona 20 & 21					113,000						92,661						77,785						170,446						(30,985	)					1966						09/98				100 years
Pontus 20					97,225						127,844						1,619						129,463						(6,775	)					1935						04/01				100 years
Sporren 4					49,000						85,995						513						86,508						(45,370	)					1958						04/01				100 years
Luggude 8					20,000						27,500						0						27,500						(1,244	)					1967						04/01				100 years
Hämplingen 15					12,750						17,015						399						17,414						(1,051	)					1964						04/01				100 years
Utanverket 13					48,750						70,107						629						70,736						(3,579	)					1958						04/01				100 years
Kolga 6					55,000						75,428						2,989						78,417						(3,704	)					1935						04/01				100 years
Ryttmästaren 17					0						32,874						0						32,874						(1,165	)					1970						02/04				100 years
Fältspaten 1					60,000						83,032						0						83,032						(3,025	)					1982						02/04				100 years
Masthugget 712:30											17,000						0						17,000						(1,232	)											2005				100 years
Ongoing project											−21,988						33,601						11,613						(116	)											2005				100 years
Other											447						2,073						2,520						303												2005				100 years
Other																	4,452						4,452						(45	)											2005				100 years
Hjälten 3					124,000						193,705												193,705						(1,997	)											2005				100 years
Hjälmen 3					81,200						60,415						1,446						61,861						(631	)											2005				100 years
Gropen 2					26,400						28,690												28,690						(297	)											2005				100 years
Grottan 16					14,400						9,855						820						10,675						(110	)											2005				100 years
Gnistan 13					12,800						8,927												8,927						(92	)											2005				100 years
Gästgivaren 3					11,200						10,220												10,220						(105	)											2005				100 years
Halmstad 6:4 mfl					0						188												188						(2	)											2005				100 years
Gårdsten 58:1											546,000												546,000						(5,005	)											2006				100 years
Tynnered 13:2											260,000												260,000						(1,950	)											2006				100 years
Total SFAB					2,639,545						3,137,624						664,109						3,801,733						(276,738	)

SCHEDULE III
enclosure 1

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired			Life on which depreciation is computed
Property data			(Mortgages) TSEK						Buildings and land TSEK						Improvements TSEK						TSEK						TSEK
Erstavik     26:   8					20,800						16,032						688						16,720						(1,650	)					1971-75				12/96			100 years
Erstavik     26:   9					21,078						17,149						700						17,849						(1,744	)					1971-75				12/96			100 years
Erstavik     26: 10					20,500						16,552						785						17,337						(1,717	)					1971-75				12/96			100 years
Erstavik     26: 11					47,500						32,632						1,010						33,642						(3,169	)					1971-75				12/96			100 years
Erstavik     26: 12					44,900						31,121						164						31,285						(2,832	)					1971-75				12/96			100 years
Erstavik     26: 13					42,100						27,907						430						28,337						(2,568	)					1971-75				12/96			100 years
Erstavik     26: 14					37,200						24,969						160						25,129						(2,276	)					1971-75				12/96			100 years
Erstavik     26: 15					36,208						24,594						97						24,691						(2,238	)					1971-75				12/96			100 years
Erstavik     26: 16					36,700						24,541						138						24,679						(2,236	)					1971-75				12/96			100 years
Erstavik     26: 17					36,800						25,221						631						25,852						(2,318	)					1971-75				12/96			100 years
Erstavik     26: 18					41,200						30,169						105						30,274						(2,744	)					1971-75				12/96			100 years
Erstavik     26: 20					7,000						4,311						81						4,392						(402	)					1971-75				12/96			100 years
Erstavik     26: 28					14,700						16,128						627						16,755						(1,644	)					1971-75				12/96			100 years
Erstavik     26: 29					15,225						16,264						678						16,942						(1,661	)					1971-75				12/96			100 years
Erstavik     26: 30					14,800						16,212						878						17,090						(1,722	)					1971-75				12/96			100 years
Erstavik     26:109					40,600						27,675						206						27,881						(2,527	)					1971-75				12/96			100 years
Erstavik     26:110					40,800						28,578						627						29,205						(2,703	)					1971-75				12/96			100 years
Erstavik     26:111					37,600						24,571						163						24,734						(2,239	)					1971-75				12/96			100 years
Erstavik     26:113					38,900						26,058						116						26,174						(2,371	)					1971-75				12/96			100 years
Erstavik     26:115					38,900						26,618						167						26,785						(2,425	)					1971-75				12/96			100 years
Erstavik     26:117					41,500						27,035						180						27,215						(2,462	)					1971-75				12/96			100 years
Erstavik     26:118					41,200						26,924						158						27,082						(2,450	)					1971-75				12/96			100 years
Erstavik     26:434											6,174						3,197						9,371						(1,375	)					1971-75				12/96			100 years
Erstavik     26:488											0												0						0						1971-75				12/96			100 years
Ongoing projects																	10,636						10,636						0
TOTAL SFNAB					716,211						517,435						22,622						540,057						(49,473	)

SCHEDULE III
enclosure 2

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired			Life on which depreciation is computed
Property data			(Mortgages) TSEK						Buildings and land TSEK						Improvements TSEK						TSEK						TSEK
Blackebergs Gård 1					41,475						20,920						3,545						24,465						(1,028	)					1902				04/00			100 years
Hägern Större 16					350,000						400,516						1,982						402,498						(25,623	)					1990				04/00			100 years
Tempelriddareorden 1					17,500						26,144						90						26,234						(1,333	)					1964				12/01			100 years
Tempelriddareorden 2					12,110						17,482						70						17,552						(893	)					1964				12/01			100 years
Tempelriddareorden 3					32,900						49,556						163						49,719						(2,528	)					1964				12/01			100 years
Tempelriddareorden 4					26,600						38,642						74						38,716						(1,967	)					1964				12/01			100 years
Tempelriddareorden 6					12,950						19,326						69						19,395						(986	)					1964				12/01			100 years
Tempelriddareorden 7					32,900						48,879						146						49,025						(2,492	)					1964				12/01			100 years
Tempelriddareorden 8					16,450						25,177						82						25,259						(1,284	)					1964				12/01			100 years
Tempelriddareorden 9					19,950						31,505						52						31,557						(1,604	)					1964				12/01			100 years
Söderbymalm 3:468					177,910						155,000						28,147						183,147						(7,604	)									12/02			100 years
Gröna rutan 1					1,750						3,218						8						3,226						(164	)					1964				12/01			100 years
Skansen 18					0						95,989												95,989						(80	)									09/05			100 years
Ongoing projects																	2,356						2,356						0
TOTAL SFSAB					742,495						932,354						36,784						969,138						(47,586	)

SCHEDULE III
enclosure 3

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired			Life on which depreciation is computed
Property data			(Mortgages) TSEK						Buildings and land TSEK						Improvements TSEK						TSEK						TSEK
Haninge Söderbymalm 6:9					15,000						13,390						253						13,643						(538	)					1955				07/01			100 years
Haninge Söderbymalm 6:10					28,000						24,720						2,682						27,402						(1,092	)					1956				07/01			100 years
Haninge Söderbymalm 3:328					9,000						9,270						1,657						10,927						(426	)					1956				07/01			100 years
Haninge Söderbymalm 3:329					10,000						11,330						2,035						13,365						(516	)					1956				07/01			100 years
Haninge Söderbymalm 3:333					9,000						9,270						933						10,203						(407	)					1957				07/01			100 years
Haninge Söderbymalm 3:372					9,000						10,300						1,667						11,967						(474	)					1964				07/01			100 years
Haninge Söderbymalm 3:337					49,250						44,290						7,182						51,472						(2,083	)					1964				07/01			100 years
Haninge Söderbymalm 9:1					29,000						29,870						4,949						34,819						(1,388	)					1964				07/01			104 years
Haninge Söderbymalm 9:2					26,000						28,840						4,886						33,726						(1,345	)					1964				07/01			105 years
Haninge Söderbymalm 6:13					10,500						14,573						2,554						17,127						(671	)					1964				07/01			100 years
Haninge Söderbymalm 6:14					33,750						26,030						4,430						30,460						(1,233	)					1964				07/01			100 years
Haninge Söderbymalm 6:15					18,250						15,624						2,449						18,073						(722	)					1962				07/01			100 years
Haninge Söderbymalm 6:16					6,000						8,331						1,235						9,566						(379	)					1962				07/01			100 years
Haninge Söderbymalm 7:16					56,500						47,694						8,057						55,751						(2,196	)					1963				07/01			100 years
Haninge Söderbymalm 3:395					14,750						13,523						2,175						15,698						(630	)					1967				07/01			100 years
Haninge Söderbymalm 3:476					45,250						44,290						1,094						45,384						(1,995	)					1985				07/01			100 years
Ongoing projects																	393						393						0
Totalt SFHKB					369,250						351,345						48,631						399,976						(16,095	)

SCHEDULE III
enclosure 4

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Accumulated Depreciation						Date of construction			Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land
			TSEK						TSEK						TSEK
Höken 56, 57, Malmö					78,370						117,740						(5,921	)			1984					2004				100 years
Jerusalem 69, 70 Malmö					38,250						74,515						(2,839	)			1966					2004				100 years
Möllebacken 23, Malmö					81,106						121,751						(6,227	)			1983					2004				100 years
Stralsund 33, Malmö					90,102						137,777						(4,401	)			1974					2004				100 years
Björnen 4, Malmö					25,715						39,531						(1,047	)			1986					2004				100 years
Gabriel 9, Malmö					74,573						114,590						(3,085	)			1985					2004				100 years
Mården 3, Malmö					56,361						86,656						(2,282	)			1988					2004				100 years
Axel 33, Malmö					177,181						272,258						(7,333	)			1988					2004				100 years
Bornholm 6, Malmö					77,337						119,012						(3,026	)			1975					2004				100 years
Granen 14, Malmö					28,293						39,878						(4,759	)			1979					2004				100 years
Fretten 11, 13 Malmö					88,167						134,199						(4,925	)			1979					2004				100 years
Nötskrikan 17, Malmö					43,669						65,776						(3,129	)			1900					2004				100 years
Jägaren 1, Nöbb. 2:15					12,981						15,174						(4,097	)			1980					2004				100 years
Jägaren 2-3, villebrådet 1 Lund					94,843						129,526						(11,327	)			1973					2004				100 years
Kilen 18, Lund					108,976						152,156						(9,694	)			1990					2004				100 years
Kilen 19, Lund					66,385						93,919						(7,401	)			1992					2004				100 years
Cedern 17					99,240						46,797						(2,725	)			1970					2004				100 years
Danzig 22					15,975						25,728						(1,193	)			1961					2004				100 years
Elefanten 41					72,000						101,906						(8,527	)			1989					2004				100 years
Hermodsdal 2					21,675						31,335						(1,815	)			1963					2004				100 years
Lars 4					14,790						27,652						(1,257	)			1958					2004				100 years
Mjödet 11					75,225						101,424						(7,569	)			1968					2004				100 years
Stacken 11					21,420						30,191						(1,712	)			1960					2004				100 years
Vårdkasen 2					11,050						15,173						(976	)			1968					2004				100 years
Hörby Häggenäs 9:62					0						220						(3	)			Other					2004				100 years

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Accumulated Depreciation						Date of construction			Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land
			TSEK						TSEK						TSEK
Tolered 129:25 mfl.					80,750						210,513						(16,789	)			1960					2004				100 years
Järnbrott 117:5 mfl.					282,200						378,930						(33,354	)			1962					2004				100 years
Kortedala 92:5 mfl.					70,550						106,420						(21,418	)			1958					2004				100 years
Kortedala 105:5					41,752						60,488						(4,458	)			1957					2004				100 years
Kortedala 105:3 mfl					157,998						231,214						(14,564	)			1956					2004				100 years
Johanneberg 39:15					140,269						205,620						(5,500	)			1981					2004				100 years
Backa 7:12 mfl					142,450						181,734						(5,112	)			1965					2004				100 years
Backa 886:694-695					0						328						(4	)			Other					2004				100 years
Tynnered					557,600						711,904						(27,762	)			1967					2004				100 years
Prästhult 1:6					0						210						(2	)			Land					2004				100 years
Tolered					183,600						250,250						(23,194	)			1960					2004				100 years
Jursta 3:5 och Jursta 3:6					0						22,969						(257	)			Other					2004				100 years
Jursta 3:6					0						34						(0	)			Other					2004				100 years
Kungsängen 7:6, Uppsala					32,400						52,644						(11,210	)			1961					2004				100 years
Luthagen 80:1, Uppsala					125,600						206,620						(17,588	)			1991					2004				100 years
N Kvarngärdet, Uppsala					204,000						287,312						(18,965	)			1963					2004				100 years
Brahehus 1, Malmö					59,450						107,148						(8,503	)			1957					2004				100 years
Holmen 1, Malmö					90,400						137,316						(14,329	)			1982					2004				100 years
Stora Björnen 11					7,604						12,017						(328	)			Other					2004				100 years
Vittran 1					57,000						81,605						(2,259	)			Other					2004				100 years
Lantbon 15					1,500						30,120						(834	)			Other					2004				100 years
Handlaren 24					22,262						28,097						(766	)			Other					2004				100 years
Båtsmannen 1-2					12,590						19,873						(531	)			Other					2004				100 years
Geväret 3-5 & 7					18,407						21,905						(594	)			Other					2004				100 years
Gärdet 16 & 18					7,712						8,532						(230	)			Other					2004				100 years
Ingenjören 6					7,129						9,210						(250	)			Other					2004				100 years
Laxen 23					3,456						4,362						(117	)			Other					2004				100 years
Nämndemannen 1					4,113						5,524						(148	)			Other					2004				100 years
Tegen 2-4					14,473						17,351						(471	)			Other					2004				100 years
Täfteå 10:202					0						8,617						(240	)			Other					2004				100 years
Aspgärdan 19					13,300						19,667						(525	)			Other					2004				100 years

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Accumulated Depreciation						Date of construction			Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land
			TSEK						TSEK						TSEK
Flyttfågeln 2					56,600						81,608						(2,135	)			Other					2004				100 years
Hygget 1					31,100						35,000						(13,181	)			Other					2004				100 years
Jägaren 4					7,000						3,717						(98	)			Other					2004				100 years
Jägaren 5					16,400						27,380						(723	)			Other					2004				100 years
Järven 18					10,000						7,834						(207	)			Other					2004				100 years
Järven 19					10,300						22,000						(6,510	)			Other					2004				100 years
Krukan 15					23,000						28,574						(859	)			Other					2004				100 years
Leoparden 2					12,100						11,778						(317	)			Other					2004				100 years
Leoparden 4					10,300						19,214						(520	)			Other					2004				100 years
Spetsen 15					5,700						7,953						(209	)			Other					2004				100 years
Spetsen 16					10,300						14,136						(375	)			Other					2004				100 years
Tranan 2-3					11,500						20,048						(509	)			Other					2004				100 years
Masen 9					1,516						18,356						(487	)			Other					2004				100 years
Sofiehem 2:156					19,000						9,541						(232	)			Other					2004				100 years
Flyttfågeln 11					20,000						27,835						(445	)			Other					2004				100 years
Hygget 75					5,000						16,899						(271	)			1951					2004				100 years
Martallen, Sthlm					7,826						27,838						(1,117	)			1931					2004				100 years
Källsmora 1:92 (ryttarfastighet)					0						349						(5	)			1929					2004				100 years
Wahrenberg 11					155,200						218,275						(17,549	)			1939					2004				100 years
Sjukhuset 3					222,510						275,664						(28,868	)			1950					2004				100 years
Tornet 10-12					81,940						118,381						(19,069	)			1969					2004				100 years
Vale 9					20,000						40,582						(4,666	)			1961					2004				100 years
Odinslund 6					62,900						80,980						(5,915	)			1925					2004				100 years
Danderyd 3:95					0						1,887						(1,624	)			1965					2004				100 years
Dalkarlshugget 2					127,500						175,181						(4,421	)			1967					2004				100 years
Rosenbrödet 1					0						21,626						(554	)			1963					2004				100 years
Smörrutan 1					26,500						34,209						(882	)			1964					2004				100 years
Wienerbrödet 1					79,500						110,742						(2,892	)			1907					2004				100 years
Wienerkransen 3					52,105						78,292						(1,978	)			1889					2004				100 years
Wienerkransen 1					0						37,399						(1,014	)			1888					2004				100 years
Stativet 4					138,000						256,736						(13,832	)			1942					2004				100 years

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Accumulated Depreciation						Date of construction			Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land
			TSEK						TSEK						TSEK
Jakobsberg 2:1164					36,000						53,053						(6,277	)			1989					2004				100 years
Järvakrogen 2					9,500						15,159						(377	)			Other					2004				100 years
Sikreno 8					6,205						4,121						(109	)			1924					2004				100 years
Stockshem 10					0						77,037						(15,345	)			1903					2004				100 years
Skansen 18					0						632,965						(6,330	)			1970					2005				100 years
Täckeråker 1:8, 1:9, 2:11					85						1,539						(37	)			1991					2004				100 years
Täckeråker 2:14					36						4,548						(57	)			Other					2004				100 years
Pelaren – Uppdelad i Pylonen 1 och Tornet 1					0						45,514						(455	)			2005					2004				100 years
Näsbypark 73:5					0						345						(3	)			1990					2004				100 years
Sfären 1-9, Solna					235,000						278,350						(108,088	)			1938					2004				100 years
Tvålflingan 5					0						195,624						(36,737	)			1973					2004				100 years
Autopiloten 5,9, Stockholm					21,996						26,427						(20,567	)			Other					2004				100 years
Stockhem 11					76,415						74,563						(67,496	)			Other					2004				100 years
Wahrenberg 9-10					132,700						194,527						(132,568	)			Other					2004				100 years
Other											285,170						25,004
Elim on consolidation Dec 31, 2004											(628,152	)					628,152
Total SFFAB					5,553,983						8,604,222						(210,328	)

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired			Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Archimedeslaan					66,745						98,907						0						98,907						(1,644	)					1996				03/06			100 years
Atoomweg					77,097						81,889						6						81,896						(5,446	)					1979				07/02			100 years
Brain Park 30					49,253						55,995						3,396						59,391						(987	)					1988				05/04			100 years
Brain Park 80					22,090						17,850						1,416						19,266						(4,976	)					1989				11/89			100 years
Brain Park 120					34,925						24,650						5,810						30,460						(7,017	)					1989				11/89			100 years
Breguetlaan					30,161						37,123						0						37,123						(369	)					1992				04/06			100 years
Cessnalaan					32,139						47,625						0						47,625						(749	)					1997				01/006			100 years
Eisenhowerlaan					21,088						30,169						199						30,369						(2,420	)					1979				01/02			100 years
Haspelslaan					51,296						72,758						415						73,172						(2,343	)					1986				07/01			100 years
Ottho Heldringstraat					76,509						45,358						715						46,074						(3,876	)					1990				01/90			100 years
Hogehilweg 6					48,335						59,493						0						59,493						(663	)					1986				07/06			100 years
Keizersgracht					33,897						37,211						5,089						42,300						(3,634	)					1750				10/88			100 years
Kiotoweg					49,208						53,109						−839						52,270						(4,269	)					2002				08/02			100 years
Koninginnegracht 10					24,233						16,955						11,443						28,398						(1,534	)					1984				06/98			100 years
Koninginnegracht 12					33,835						27,734						10,893						38,626						(1,550	)					1984				06/98			100 years
Koninginnegracht 13					26,100						30,403						17						30,420						(1,556	)					1990				12/97			100 years
Koninginnegracht 14					34,679						49,422						0						49,422						(1,556	)					1994				09/01			100 years
Koninginnegracht 23					22,352						32,190						0						32,190						(2,552	)					1971				01/02			100 years
Lichtenauerlaan					44,094						50,476						1,165						51,641						(2,665	)					1997				03/04			100 years
Max Euwelaan					50,548						55,739						3,461						59,200						(2,782	)					1988				05/04			100 years
Markthalle					46,272						82,525						−2,537						79,988						(37,155	)					1987				12/87			100 years
Nacap					25,158						29,789						1,661						31,449						(2,728	)					1989				07/89			100 years
Nacap01					95,025						103,773						14						103,787						(2,189	)					1989				11/05			100 years
New York, Lijnden, 2 ihop					68,014						75,441						198						75,639						(1,959	)					2001				12/01			100 years
Nieuwezijds Kolk					60,274						68,602						42						68,645						(1,809	)					1996				04/05			100 years
Park Voorn					43,996						55,704						0						55,704						(5,179	)					1989				10/89			100 years
Park Voorn 9					16,956						25,126						0						25,126						(319	)					1989				02/06			100 years
Paviljoensgracht					60,358						67,965						952						68,917						(2,773	)					1981				12/99			100 years

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired						Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
San Francisco, Lijnden					7,857						22,649						−14,303						8,346						(613	)					2002						03/02						100	years
Scheveningseweg					38,975						39,730						4,630						44,361						(1,962	)					1988						04/04						100	years
Schipolweg					104,075						66,802						24						66,826						(5,202	)					1986						12/02						100	years
Stadhouderskade					68,557						74,093						6,113						80,207						(4,263	)					1928						10/96						100	years
Rooseveltweg					35,596						38,931						1,609						40,540						(2,325	)					1995						06/03						100	years
Rooseveltweg 11					47,299						58,218						0						58,218						(327	)					2002						08/06				100 years
Veraartlaan					22,787						24,164						1,950						26,114						(1,102	)					1978						08/99				100 years
Volmerlaan					95,441						41,959						14,295						56,254						(4,130	)					1978						02/90				100 years
Westblaak					0						67,887						0						67,887						(42	)					1976						12/06				100 years
Wilhelminalaan					50,286						59,330						57						59,387						(3,448	)					1979						05/97				100 years
Zeestraat					42,118						47,666						0						47,666						(1,690	)					1982						10/00				100 years
					0						0						0						0						0
Elim on consolidation
Dec 31, 2004											0												0						0
Total SRBV					1,757,627						1,975,410						57,891						2,033,302						(131,805	)

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Initial cost to company						Costs capitalised						Total						Accumulated Depreciation						Date of construction						Date acquired			Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land						Improvements
			TSEK						TSEK						TSEK						TSEK						TSEK
Hogehilweg					45,250						69,353						4,561						73,914						(2,019	)					1986				09/05			100 years
Rue Brasseur, Luxemburg					158,909						155,697						−4,035						151,662						(15,943	)					1992				04/92			100 years
Sophia Antipolis, Nice					14,359						15,509						3,341						18,851						(2,055	)					1989				03/90			100 years
Schiessstrasse, Duesseldorf					59,922						70,820						8,826						79,646						(4,063	)					1990				06/89			100 years
WTC Sophia Antipolis					93,338						74,631						69,235						143,866						(7,155	)					1990				12/00			100 years
Font de´l orme					29,594						28,061						7,495						35,556						(504	)					1989				09/03			100 years
Les Deux Arcs					93,215						123,282						45						123,327						(38	)					2003				12/04			100 years
Marco Polo					176,475						238,397						0						238,397						(1	)					2003				12/06			100 years
Total SPBV					449,337						775,749						89,468						865,217						(29,759	)

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances			Initial cost to company						Costs capitalised			Total						Accumulated Depreciation						Date of construction			Date acquired			Life on which depreciation is computed
Property data			(Mortgages)			Buildings and land						Improvements
			TSEK			TSEK						TSEK			TSEK						TSEK
Hotel Fredrikshavn								269,633									269,633						(174,162	)									50 years
Hotel Grenå								0									0						0										50 years
Other buildings, Denmark								79,293									79,293						(66,362	)									50 years
Port of Stranraer								160,465									160,465						(53,714	)									20 years
Port of Holyhead								1,122,521				10,428					1,132,949						(333,376	)									20 years
Port of Fishguard								232,122									232,122						(91,854	)									20 years
Other								0				1,344					1,344						(1,252	)									20 years
Hook of Holland								53,874									53,874						(37,693	)									20 years
Port of Helsingborg								57,579									57,579						(46,096	)									20 years
Port of Gothenburg								36,608									36,608						(19,750	)									20 years
Elim on consolidation
Oct 31, 2000								(387,919	)								(387,919	)					387,919
Elim on consolidation
Dec 31, 2002								(54,000	)								(54,000	)					54,000
Other								(39,094	)								(39,094	)					39,094
Total Stena Line								1,531,081				11,772					1,542,853						(343,246	)

SCHEDULE III
enclosure 5

Table of Contents

Property and Accumulated Depreciation
December 31, 2006

Description			Encumbrances						Total						Accumulated Depreciation						Date of construction			Date acquired			Life on which depreciation is computed
Property data			(Mortgages)						Buildings and land
			TSEK						TSEK						TSEK
Backa 170:2					29,400						26,593						(2,296	)									50 years
Olskroken 35:5					12,500						9,488						(1,374	)									50 years
Strand Norum 33:4					8,250						12,350						(706	)									50 years
Ryda 9:13					600						2,471						(181	)									50 years
Galeasen 1					4,000						6,010						(632	)									50 years
Umeå Tolvmansgården 4					0						6,189						(56	)									30 years
Stockholm Hjässan 18					0						8,500						0										30 years
Nacka Sicklaön 349:5					0						3,825						0										30 years
Arendal Rud 2:6 (ofri grund, pantsatt arrendekontrakt)					0						8,459						(985	)									50 years
Valsätra 1:12 (ofri grund, pantsatt arrendekontrakt)					0						16,302						(439	)									30 years
Investment in rented property					0						9,437						1,276										10-20 years
Surplus value Olskroken					0						1,501						(240	)									50 years
Energy											117,596						0										20 years
Envac											683						(381	)									20 years
Total Adactum					54,750						229,404						(6,014	)

SCHEDULE III
enclosure 5